GLAUKOS Corp Q1 FY2025 Earnings Call

Welcome to Glaukos Corporation First Quarter 2025 Financial Results Conference Call. Copies of the Company's press release and quarterly summary document, both issued after the market close today, are available at www.glaukos.com. As a reminder, all lines are muted until the end of today's presentation where we will have a question-and-answer session. This call is being recorded and an archived replay will be made available online in the Investor Relations section of www.glaukos.com. I will now turn today's call over to Chris Lewis, Vice President of Investor Relations and Corporate Affairs. Please go ahead.

Thank you and good afternoon. Joining me today are Glaukos Chairman and CEO, Tom Burns; President and COO, Joe Gilliam; and CFO, Alex Thurman. Similar to prior quarters, the Company has posted a document on its Investor Relations website under the Financials and Filings Quarterly Results section titled Quarterly Summary. This document is designed to provide the investment community with a summarized and easily accessible reference document that details key facts associated with the quarter, the state of the Company's business objectives and strategies, and any forward statements or guidance we may make. This document is designed to be read by investors before the regularly scheduled quarterly conference call. As such, for this call we will make brief prepared remarks and transition into a question-and-answer session. To ensure ample time and opportunity to address everyone's questions, we request that you limit yourself to one question and one follow up. If you still have additional questions, you may make it back into the queue. Please note that all statements other than statements of historical facts made on this call that address activities, events or developments we expect, believe or anticipate will or may occur in the future are forward-looking statements. These include statements about our plans, objectives, strategies and prospects regarding, among other things, our sales, products, pipeline, technologies and clinical trials, U.S. and international commercialization, market development efforts, the efficacy of our current and future products, competitive market position, regulatory strategies and reimbursement for our products, financial condition and results of operations as well as the expected impact of general macroeconomic conditions, including foreign currency fluctuations on our business and operations. These statements are based on current expectations about future events affecting us and are subject to risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Therefore, they may cause our actual results to differ materially from those expressed or implied by forward-looking statements. Review today's press release and our recent SEC filings for more information about these risk factors. You'll find these documents in the Investor Relations section of our website at www.glaukos.com. Finally, please note that during today's call, we will also discuss certain non-GAAP financial measures, including results on an adjusted basis. We believe these financial measures can facilitate a more complete analysis and greater transparency into Glaukos' ongoing results of operations, particularly when comparing underlying results from period to period. Please refer to the tables in the earnings press release available in the Investor Relations section of our website for a reconciliation of these measures to their most directly comparable GAAP financial measure. With that, I will turn the call over to Glaukos Chairman and CEO, Tom Burns.

Okay, thank you Chris. Good afternoon and thank you all for joining us. Today Glaukos reported record first quarter consolidated net sales of $106.7 million, up 25% on a reported basis, or 26% on a constant currency basis versus the year-ago quarter. We are also reaffirming our full year 2025 net sales guidance range of $475 million to $485 million as we balance our first quarter outperformance while continuing to closely monitor the global macroeconomic environment and associated uncertainties. Our first quarter record results reflect the sustained growth acceleration in our business with strong performance driven by iDose TR adoption and both our U.S. and international glaucoma franchises overall. Our continued growth trajectory globally is the result of our ongoing efforts to pioneer and develop the interventional glaucoma, or IG, marketplace with new standalone therapies designed to slow disease progression and reduce drug burden for the benefit of physicians and patients. These efforts were on full display at the AGS conference in February and more recently at the ASCRS Annual Meeting last weekend where the interest and excitement levels for interventional glaucoma and our technologies were high. While we remain in the early stages of these IG efforts, we are encouraged with the increasing levels of clinical interest for this paradigm-changing evolution. Within our U.S. glaucoma franchise, we delivered record first-quarter net sales of $59.1 million on strong year-over-year growth of 41% driven by growing contributions from iDose TR, a first-of-its-kind intracameral procedural pharmaceutical that was designed to continuously deliver glaucoma drug therapy for up to three years. Importantly, clinical outcomes and product feedback from a growing number of cases and trained surgeons continue to be very positive and reaffirms our view that with the launch of iDose TR, we are pioneering a brand new therapeutic category that has the potential to reshape glaucoma management as we know it today. Operationally, our teams continue to make great progress in the execution of our detailed launch plans for iDose TR including: first, growing the universe of trained surgeons and accounts; second, expanding utilization of the installed active surgeon base; third, broadening and streamlining market access among MACs, commercial, and Medicare Advantage payers; fourth, expanding the robust body of clinical evidence; and fifth, accelerating marketing investments to support increased patient awareness and education. Overall while we remain in the early innings, I couldn't be more pleased with the strong foundation we've built to bring this transformative technology to market and expand the treatment alternatives for patients suffering from glaucoma and ocular hypertension. Shifting to our U.S. stent business as anticipated, the five MAC LCDs implemented in the fourth quarter of 2024 continue to cause some transient turbulence in the market during the first quarter as surgeons navigate restrictions when using two main surgical devices in the same procedure. We expect this MIGS market headwind will continue over the course of 2025 as providers continue to navigate the impacts associated with these LCDs until it anniversaries later this year. Moving on, our interventional glaucoma franchise also delivered record net sales of $29 million on a year-over-year growth of 15% on a reported basis and 19% on a constant currency basis. The strong growth was once again broad based as we continue to scale our international infrastructure and execute our plans to drive MIGS boards as the standard of care in each region and major market in the world. We remain in the early stages of expanding our IG and product portfolio initiatives globally ahead of anticipated new product approvals and expanding market access in the years to come. As previously discussed, we expect that trialing new competitive products in some of our major international markets may become an increasing headwind as we progress through 2025. And finally, our corneal health franchise delivered net sales of $18.5 million, including Photrexa net sales of $15.4 million. As discussed throughout 2024, our first-quarter results reflect the continued impact of Photrexa realized revenues and as a result of our entry as a company into the Medicaid Drug Rebate Program, or MDRP. Shifting gears to our corneal health pipeline. During the first quarter, we announced FDA acceptance for review of the previously submitted NDA for Epioxa, our next-generation corneal cross-linking iLink therapy for the treatment of keratoconus, a rarely diagnosed sight-threatening disease. This important milestone brings us one step closer to providing keratoconus patients and the ophthalmic community with the first FDA approved non-invasive corneal cross-linking drug therapy that does not require the removal of the corneal epithelium, the outermost layer of the front of the eye. We look forward to working closely with the FDA in their pending review process as we progress towards the agency's established PDUFA date of October 20, 2025. Alongside this, our teams continue to make nice progress with the preparation and planning of the Epioxa commercial launch targeted for next year. It is worth reminding investors that an Epioxa approval also provides us with the opportunity to launch this pharmaceutical therapy supported by the right long-term pillars to optimize patient access, a persistent and at times frustrating challenge for us historically with Photrexa. We continue to believe that Epioxa, designed to preserve the corneal epithelium, streamline procedure times, improve patient comfort and shorten recovery time, represents a potentially meaningful advancement in the treatment paradigm for patients suffering from keratoconus. Beyond Epioxa, we're also pleased to share we recently commenced a 510(k) pivotal study under FDA IND for the PRESERFLO MicroShunt, an ab-externo system designed to help drain excess fluid from the eye and reduce intraocular pressure in refractory glaucoma patients. Our commercialization efforts of PRESERFLO in Canada, Australia, and several Latin American countries have reaffirmed the strong appetite within the global ophthalmic community for this technology as a more elegant and better-tolerated ab-externo alternative to conventional filtration surgeries for late-stage glaucoma management. Additionally, we continue to advance several other important clinical trials including: one, a PMA pivotal trial for iStent infinite in mild-to-moderate glaucoma patients; two, Phase 2 trials for our iLink third-generation therapy; three, a first-in-human clinical development for GLK-401, our intravitreal multi-kinase inhibitor retinal program in wet AMD patients, where we now also have an open U.S. FDA IND; and four, a Phase 2b/3 clinical program for iDose TREX, our next-generation iDose therapy. Finally, we remain on track to file a U.S. FDA IND to commence a clinical study for iLution Demodex blepharitis later this year. As you can see, we have a lot to be excited about when it comes to the significant potential value that we believe our pipeline programs may create. At the same time, as we consistently discuss, we continue to prioritize the cadence of our investments as we strive to strike the right balance of risk-based investments in our capital position now and in the future. To that end, we ended the first quarter of 2025 with a strong capital position with cash and equivalents of more than $303 million and no debt. This has allowed us to continue to be active on the business development front with a focus on transactions to support our existing organic growth initiatives. One such example is our recently announced expanded collaboration with Radius XR and Topcon Healthcare that enables us to accelerate our global efforts to bring the tools and software solutions needed to democratize the diagnosis of glaucoma and in turn create more efficient care networks for patients afflicted with this lifelong disease. Finally, given the ongoing conversations around tariff and geopolitical issues, we wanted to highlight that we manufacture and source our products primarily within the United States and as such we expect minimal direct exposure to the most recently implemented tariff-related policies. In conclusion, I am very pleased with the record quarter and strong momentum in our business as we continue to successfully advance our mission to truly transform vision by pioneering novel, dropless platforms that can meaningfully advance the standard of care and improve outcomes for patients suffering from sight-threatening chronic eye diseases. So with that, I'll open the call for questions.

Your first question is from the line of Tom Stephan with Stifel.

Great. Hi, guys. Thanks for taking the questions. I guess first to start off, would you be able to provide U.S. stent growth in the quarter and as a tack onto that, Joe or Tom, maybe if you can talk more about what you're seeing in terms of how doctors are reacting from a share standpoint to the LCD so far this year and expectations looking ahead for U.S. MIGS? Thanks.

Hi, Tom. It's Joe. I'll start off and then Tom can add any additional color that he might have from some conversations yet, including this past weekend at ASCRS. In the first quarter, we really saw the U.S. glaucoma business you've seen the reported overall 40 plus percent year-over-year growth and the 5% sequential growth. And as it might be expected that was entirely driven by the continued expansion of iDose TR and offset by the impact of these LCD restrictions. They were modestly more pronounced than expected on our stent franchise and in total we saw a mid-single-digit decline year-over-year. So we're going to continue to probably forecast that for the foreseeable future as we continue to navigate the potential impact of those LCD restrictions on our customers. It's somewhat uniquely challenging for us to forecast given we estimate that the LCD changes remove 10% to 15% of the MIGS volume, if you will, in 2025 when compared to 2024, but for us, that's also somewhat offset by growing standalone utilization of iStent infinite and confounded obviously by the prioritization elevated associated with iDose TR. So from a macro standpoint, despite the 10% to 15%, call it, headwind in the combo-cataract MIGS, our sense is that we're holding our own and the fact that we've experienced a mid single-digit decline in the first quarter is probably a relative positive in the context of the overall market dynamics throughout that quarter. As it relates to doctors, I think it's very specific to their own decisions and algorithms and how they make those selections. Obviously, they're disappointed by the fact that the clinical decision-making has been taken out of their hands and being determined by an insurer, in this case a medical director or a MAC, but they're navigating that and perhaps they’ll be focused more on a serial approach to glaucoma care versus trying to do it combinatorially in a single procedure.

That makes sense, really helpful. And then my follow-up is relating to iDose. I wanted to ask about Noridian specifically. It's been the most advanced MAC in terms of reimbursement. I think exiting last year was the only one with kind of streamlined J-code reimbursement and a professional fee on the fee schedule. So Joe or Tom, have you seen or are you seeing any sort of inflection or acceleration in Noridian again with reimbursement in a solid place? And then is it fair to view Noridian maybe as a sort of an analog for when the rest of the MACs come up to speed? Thanks.

Yes, Tom, I think clearly Noridian is the first case study that we can watch, assess and then extrapolate in terms of what it can mean for the other MACs as they come online. In fact, in some ways what we've been seeing as of late and Novitas and First Coast validates that assumption that the trend lines are somewhat consistent and the timelines associated with those trend lines are somewhat consistent. Sometimes as these milestones are knocked down or as the adjudication becomes more streamlined, it takes a little bit of time for that to translate both to the sales force, the customers to their scheduling and staffing as well as ultimately the procedures attached to it. But what we are seeing is continued solid and expanding growth. You referenced Noridian specifically given it was their first. And it shouldn't surprise you that despite being around 20% of the covered lives, its percentage of our overall iDose contribution is something close to double that given the dynamics of play there.

Your next question is from the line of Ryan Zimmerman with BTIG.

Hi. Good afternoon. Thank you for taking our question. Last quarter, Joe, you provided some insights into the components of guidance from a growth perspective. Now that the first quarter is behind us, the guidance remains unchanged. I would like to know your current thoughts on some of those components within your guidance, particularly focusing on the stent versus iDose franchises and their contributions, or if those still apply, please remind us of those as we consider guidance today.

Yes, I’m happy to provide that update, Ryan. The first quarter demonstrated strong performance with a 25% growth, particularly highlighting over 40% growth in the U.S. As we move through the year, there will be several adjustments that influence our overall guidance. Regarding the corneal health business, we are still assessing the impact of MDRP on this segment. At this stage, we expect to guide towards flat to low single-digit growth, noticeably ahead of what we anticipate for an exciting year in 2026 with the launch of Epioxa. This represents a slight change as we refine our projections. On the international glaucoma front, we are seeing a promising start to 2025 with strong global performance. We have adjusted our expectations to a high single-digit to low double-digit growth year-over-year as we navigate strong performance amidst macro uncertainties and challenges that all companies are facing, including competitive product launches and the effects from the modified French rebate agreement discussed for 2024. Moving to U.S. glaucoma, we now anticipate that the LCD headwinds will be consistent with what we saw in the first quarter, and the Hydrus royalty expiration may lead to a mid-single-digit decline for non-iDose revenues in 2025. When considering all these factors, we are modestly increasing our iDose expectations for the remainder of 2025 compared to what most models may have reflected before this call.

Yes, that makes sense, Joe, and that aligns with the numbers I'm seeing. The follow-up question concerns the pacing of iDose. We noticed the focus on iDose at ASCRS this weekend. There appears to be a significant ramp in your iDose expectations this year, partly due to MACs joining. Can you walk us through the assumptions that support the projection of increasing from what I estimate to be around $21 million this quarter to nearly double that by the fourth quarter?

Yes, sure. I mean, in some ways also, as you know, Ryan, it's not significant change in volumes that drive those numbers, obviously the doubling in volume. But at the end that we're at right now, modest changes in your assumptions can drive those types of results in your model and your forecast. But look, I think for us, underlying where we sit today is obviously the month-to-month continued progress that we've been making, including the progress we made from February into March and March into April sitting here today, if you think about what you're talking about is using the number you gave $21 million, you're already at an $85 million run rate exiting the first quarter and as you know March was probably the largest contributor of that. So as we move forward, I think we've got good momentum to continue to achieve the iDose expectations that are underneath our guidance. And maybe more specifically just thinking about the Medicare fee-for-service patient population, Tom asked about Noridian, but clearly we also are in the middle right now of turning on Novitas and First Coast. I would say that in recent weeks they've really joined the operating as expected group, which previously would have only had Noridian in it. And it took some time after the prophy schedule was established and published to reach that status. And at the same time, Palmetto and WPS today largely appear to be paying the J-code correctly and our attention and efforts in those MACs have started to shift to achieving more consistent professional fees. And even CGS and NGS have been showing early signs of J-code consistency. So I'm not quite ready to put them in alongside Palmetto and WPS. There are signs for optimism there. The translation of which in each one of those things does not necessarily mean that any one point in time, any one quarter, including the same quarter, is where you're going to see some pop. But I do believe that overall it's a consistent upward progress on market access and in turn, the commercial results that come downstream of that.

Your next question is from the line of Larry Biegelsen with Wells Fargo.

Good afternoon. Thank you for the question. Joe, regarding iDose, I'm wondering if developments on the reimbursement side have aligned with your expectations. Has it taken longer than anticipated? Additionally, are you considering adjusting the price? The initial pricing was higher than many expected. How significant of an obstacle is that? Would you contemplate an LCD to make Medicare Advantage more accessible?

So a fair amount there, Larry. Let me first say that in relation to iDose and our internal expectations, both for 2024 as well as in the first quarter 2025, the results have exceeded what our forecasting expectations were from an analytical perspective. As it relates to market access, that's a harder one to answer because while it may have aligned with some ways with what we had forecasted that underpinned our models, you always want to move faster and you always want to see streamlined adjudication quicker, whether it's on the drug side or on the professional fee side, because downstream of that patients aren't getting access to your technology, your therapy that deserve it until you've got those things streamlined. So we've been operating as an organization with a high degree of urgency, quarter in and quarter out on working through the adjudication and getting this to a place where it's more streamlined, like it is now in Noridian, Novitas and First Coast. I think that it's a misconception to think that price is the element driving the pacing of these coverage and the streamlined adjudication. It's a process that every company goes through when they have a newly established T-code, or in this case T-code and J-code to drive the volumes that are required for these MACs to both understand the underlying procedure, quantify or value that, and then feel confident enough to put it in their systems as such. And so from our standpoint, I think maybe the only thing that impacted that from a price standpoint is that it's obviously a little bigger leap for the customers in the early days, but certainly well worth that squeeze, if you will, downstream as you get into the place like we are with both Noridian, Novitas and First Coast today. I think as an LCD matter, we've seen the downsides when others have pursued LCD dynamics in and around this. And so I don't know that's the first place we would go to try to drive more streamlined adjudication. Ultimately, the Medicare Advantage policies, we have pretty significant coverage today along the similar lines of what DURYSTA has as the other procedural pharmaceutical. And so we would expect it to go down that path moving forward here in a very similar way and continue to open up those access to those patients. I don't think we need an LCD to accomplish that.

All right, I'll leave it there. Thanks for taking the question, guys.

Your next question is from the line of Allen Gong with J.P. Morgan.

Thanks for the question. Kind of piggybacking off of the tariff commentary that you provided. I think one of the concerns is that as we move into the back half of the year with kind of a pretty uncertain macro backdrop, which companies might be more or less exposed to an economic slowdown and potentially kind of like lower procedure volumes. So I guess just from your point of view, when we think about iStent and iDose, if there is an economic slowdown, how exposed do you think you are to those kinds of dynamics?

Yes, I believe we took that into account when deciding to keep our guidance as is. It may have been one of the main reasons we opted to maintain our guidance at the start of the year. It’s difficult to pinpoint a specific cause and effect regarding macroeconomic policy and its various impacts. In general ophthalmology, we tend to be more insulated compared to other healthcare areas, especially procedures related to glaucoma care, which are less elective. However, when the overall economy faces pressure, such as rising interest rates making it harder for people to access credit or manage their businesses, it can affect surgery centers and customer offices as they navigate an economic downturn. Therefore, it’s prudent for us to remain cautious over the next 6 to 12 months as we deal with the implications of the tariff situation and its potential impact on the economy as a whole.

Your next question is from the line of David Saxon with Needham.

Great. Good afternoon. Thanks for taking my questions. Maybe I'll do a couple on iDose. So on specifically on reimbursement, it looks like some of the iDose kind of pamphlets or guides that you have posted, it looks like it includes, like Med Advantage and commercial. So I wanted to ask on commercial coverage, like, how broad is that coverage from a covered lives perspective? What are you seeing in terms of dollar reimbursement versus what the MACs are doing? And then I don't know if you can name like the major payers, commercial payers that are most consistent.

Yes, David, obviously, I would say, first, maybe from a macro standpoint, given the progress we're making with Medicare, we have started to move forward selectively, in providing, I'll call it, customer patient access into the commercial Medicare Advantage arena. We signaled that was part of our plan, and that's something that we very slowly and methodically began to roll out over the course of, really exiting the first quarter into the second. And I would expect us to continue to be equally as methodical as we move forward here, primarily because you want to ensure that your customers have the right experience, the right tools, to navigate, this more tricky payer landscape successfully. But behind the scenes, our payer relations team, and others have been hard at work since, really, the date of approval. And so, on both the commercial as well as the Medicare Advantage side, you see coverage policies that extend out over more than 50% of the potential patient population, that are covered by those respective areas. And with the rest, you almost universally see policy silence. And so from our standpoint, we're in the process now of knocking down that same claims adjudication, doing the prior offs, and getting comfortable that it's working the way it's supposed to. And we've had some good early success in seeing claims go through with payers as large as United and as small as some of the more regional plans that are out there. So I think we're in a pretty good spot. And from a setup standpoint there, it really is much more down to methodical execution and making sure that those customers are doing it the right way in a way that's successful for their practice while they provide access to those patients for iDose.

Okay, great. That was super helpful. Thanks for that. And then in the script, you talked about expanding the iDose launch. Some of that includes training. So I wanted to ask, like, if you could give an update on the percent of kind of your core iStent accounts that you've trained on iDose. Where is the level of demand among doctors for training versus kind of the capacity of the sales force to actually do the training? Thanks so much.

Yes, I believe this is an important point. We have mentioned it before, and I'll emphasize it again. The clinical training, including OR training, dry labs, and initial procedures, is not a limiting factor in terms of our sales force's capacity or the demand from doctors. Many surgeons every day are eager to be trained and incorporate iDose into their practice, and our sales team is fully equipped to handle that demand. To address your first question, the more time-consuming and crucial part is ensuring that the entire office supporting that physician or surgery center can effectively adjudicate, process, and follow up on the claims related to the product. As they improve in this area, physicians can focus on their clinical responsibilities, which enhances our engagement in accounts and highlights the potential for iDose.

Your next question is from the line of Adam Maeder with Piper Sandler.

Good afternoon. Thank you for taking the questions. Two from me. The first one is on iDose reimplantation. I just wanted to see if there was any update there. I think you were planning to make a post-approval supplement submission to FDA in the first half of the year. So any updates on the progress you're making with FDA? And how quickly do you expect to know, I guess, kind of one way or the other? And then I had a follow-up. Thanks.

Yes, I'm happy to take this question. So yes, we talked about filing the post-approval NDA supplement in the first half. We've actually done so in the first quarter. So we've beaten that timeline. It's now with the FDA. The FDA has a six-month statutory obligation to get back to us. And so we expect to be able to hear results of their adjudication by year-end.

That's really helpful. Appreciate the color there, Tom. And one maybe for Joe or Alex, I know you guys don't give quarterly guidance, but you did give some helpful color on the last earnings call around kind of sequencing of models. So wanted to see if there's any updated thoughts in terms of kind of how you see the rest of the year playing out on the top line and specifically wondering if you had any kind of reaction or comment as it relates to Q2 revenue. iStent consensus at $116 million and Q2 iDose revenue at $25 million. Just any comment on where those figures stand? Thank you.

Yes, happy to, Adam. I think, as you know, from a seasonality perspective, ophthalmology tends to be 23%, 24% in the first quarter, 24%, 25% in the second, and similar in the third, maybe down a touch. And then the remainder, anywhere from 27% to as much as 29%, 30% in the fourth. Obviously, ours gets up into a little bit because of the launch dynamics with iDose. And sitting here today, I would probably point you to something, obviously, the first quarter represents about 22% of the midpoint of our guidance, and the second quarter will probably be somewhere in the 23%, 24% neighborhood, followed by 24%, 25% in the third and call it 28% to 30%, in the fourth quarter. And again, the exact pacing and sequencing of iDose is going to be the key determinant of that, on top of what is the underlying seasonality.

Your next question is from the line of Joanne Wuensch with Citibank.

Thank you so much for taking the question. And you actually set it up great. So the quarterly pace for the remainder of the year, I think if I back into the guidance commentary, you raised maybe the iDose guidance by about $5 million. Could you confirm if that's correct? And also, do you think about the ramp over the subsequent quarters? Thanks.

Yes. Joanne, I think what I'd probably say is, we'll get that specific, but clearly, I said we raised, underlying and implied this is a modest raise the iDose expectations. And clearly, we expect from month to month and quarter to quarter to continue to see the progress. I think when you unpack some of the earlier guidance that I gave and some of the commentary around the various parts of our business, cornea, interventional, the stents, et cetera, and the seasonality, you'll get pretty close to where you need to be from a pacing standpoint.

Your next question is from the line of Margaret Andrew with William Blair.

Hey, good afternoon guys. Thanks for taking the questions. Two, both around the stents side of the business. So, we were at ASCRS. We did see some data kind of around the benefits of combo procedures for patients. I guess, what do you guys think of these datasets? Are they incremental? Are they more meaningful? Can they have an impact on the current LCD? Or what steps, I guess, is the industry taking to potentially overturn it and timing of that?

I think from a macro standpoint, you ultimately have to combat that with evidence, right. And so, growing evidence, you referenced some, Margaret, around studies that are done by individual practices, groups of practices, manufacturers like Glaukos, ultimately are what help overturn, if you will, restrictions on clinical decision-making, which is what you saw with the LCD in November. So I think you should expect to see more of that, from us and from others and from practitioners themselves, because we all know that clinically, it makes sense to attack this progressive disease from multiple angles. And so shame on us if we're not generating evidence to support that.

And I would just add on that. If you think about it, we have been in the driver's seat in combination therapy for some time in multiple modalities. I think many of you are aware that we already have completed a Phase 4 clinical trial that compares the iStent infinite plus iDose versus infinite. And our hope and expectation is that study will be able to generate data that will not only convince the operating clinician to go to a place where they already want to go, which is to combine two different modalities to be able to lower target pressures with a single procedure, but also be able to actively support any MAC commercial or Medicare Advantage adjudication in the future. So we try to be prescient in doing these studies well in advance of the market trends that we see that are developing in front of us.

Okay. That's helpful. Thank you. And then just as we look at guidance on stent growth and apologies if you sort of referenced it, but I'm going to try to get a finer point on it. The stent growth, I think you previously guided to for U.S. kind of flat to down low single-digits. Is guidance now more solidly kind of in that down low single-digit range for U.S. stents? And anything that we should think about from a comp perspective throughout the year, for that specifically? Thanks.

Yes, Margaret. I did allude to it, but I'll put a finer point on it. The underlying expectation or guidance right now is that for the non-iDose business, obviously, the vast majority of which is spent, so that will be down mid-single-digits for 2025. That's based upon what we saw in the first quarter and a continuation of that trend. And then, again, the puts and the takes around that are obviously the restriction impacts in combination with cataract surgery, which are partially offset in our case by contingent growth in the standalone side of our stent business. But net-net, we expect the non-iDose revenues in the U. S. to be down mid-single-digit, frankly.

Your next question is from the line of Richard Newitter with Truist Securities.

Hi, thanks for taking the questions. So just can you elaborate a little bit on what assumptions you have for the remainder of the year with respect to your slightly higher iDose guide with respect to kind of what needs to be in place for additional pro fee coverage? Or can you more or less get to the numbers that you have with the level of reimbursement that you have now and just physicians getting more comfortable going forward? I'm just trying to get a sense for kind of what needs to happen to get to the iDose numbers in your model.

Yeah. Well, maybe I'll book into it a little bit in the way it was asked earlier. So, if, I think the number that was thrown out was $21 million for the first quarter. So if you annualize that, you're talking about an $85 million run rate based upon the conditions that existed in the first quarter. Those conditions were obviously a solid payer, if you will, in Meridian, an emerging payer in Novitas and First Coast that really started to turn on more towards the latter part of the quarter entering into the second. And increasingly improved, if you will, adjudication of claims at WPS, Palmetto, and then later on, NGS and CGS. So underneath our assumptions is that that trend line continues where, first, they become all streamlined over the next stretch of time for the J-code and the facility. And then usually at some point thereafter, the volumes ultimately drive professional fee schedules. And in addition to that, as I mentioned, we're going to be slowly, methodically rolling out commercial Medicare Advantage. There are a lot of drivers there that can drive varying outcomes, some of which are obviously more positive than our guidance and some of which are not. I think we've tried to be, I'll call it the wide part of the bell curve, if you will, in the various scenarios in setting the guidance that we have and what that implies for iDose for the year.

Got it. And if I could just one more on the combo MIGS within a combo-cataract doing more than one MIG, is iDose getting implanted with the MIGS or in concert with goniotomy? Is that included in kind of the LCD change or is iDose actually able to get implanted on a stacked basis?

Yes, iDose, nor any procedural pharmaceuticals a part of the LCDs that were published in November and so the decisions associated with combinatorial use of that are entirely in the hands of the physicians that use the product.

Your next question is from the line of Michael Sarcone with Jefferies.

Good afternoon and thanks for taking our question. Just to start maybe following-up on Rich's question, I believe last quarter you had mentioned maybe there is just some slight benefit from commercial coverage wins baked into your expectations for iDose this year. Do you think you can comment on whether or not there have been any changes in kind of the mix of what's baked in for iDose between traditional Medicare and commercial?

I don't think our commentary, Michael, has really changed in the context of the commercial and Medicare Advantage dynamics as it was in 2025. What we tried to say last quarter as well as this one is that we're going to be very methodical in rolling this out, we're going to be methodical in rolling out access to specialty pharmacy, distribution, as well as buy and bill into this customer or these customer bases or insurance types. And so obviously we do expect some contribution over the course of the year from that. But we're really not anchoring our assumptions as it relates to our guidance or iDose results underneath it based upon positive or negatives associated with the commercial Medicare Advantage rollout. Those are things that we want to make sure that we're very methodical in doing. And so we're not pinning the forecast based upon a certain level of achievement of volumes out of those assurance types.

Understood, thank you. And then my follow-up maybe on the P&L, OpEx, any change to your expectations for about 15% year-over-year growth off the adjusted ‘24 base.

Hey Mike, this is Alex. Thanks for the question. And at this point, no, I mean we would continue to march down this path watching and balancing our investments against the revenues that are generated by iDose and the rest of the business. And so we would continue to expect that 15% or so growth off the 2024 base on OpEx for the year.

Your next question is from the line of Anthony Petrone with Mizzou Group.

Thanks. And hope everyone's doing well. Maybe question just on the Noridian region specifically iDose sticking there, U.S. iDose. If we look at the Noridian region as being sort of further along the product curve here, maybe just an idea of a heavy user in that region. Do you have sites that are getting up to say, 15, 20 units a month and even in that region are there laggards and what is the product experience been like where we do have a region where reimbursement is quite robust? And I'll have one quick follow-up.

Yes, Anthony, so for Noridian, which obviously I commented on earlier in the call from a, I'll call it macro perspective, so I'll focus on your sort of customer utilization questions. I think it's all of the above. We absolutely have customer and now growing customers if you will, that are doing the 15 to 20 a month type volume for iDose within Meridian. And we also have customers who are at very different phases of that adoption. Some are doing their first cases this week and/or might be doing just a handful but haven't fully adopted yet and haven't had it streamlined in terms of their practice and patient selection, all the various things that go into having a successful adoption within a surgical group. We also have areas within the Noridian area that are performing much more strongly than others based upon the other dynamics in the context, either hospital approvals or other things that can slow the adoption curve within even that geography where you do have streamlined coverage.

Helpful. And just a quick one here is leveraging the balance sheet. Should we think about leveraging the balance sheet to close the donut hole? That's, I would assume, more commercial coverage sort of event. But maybe just a recap on the view from Glaukos on leveraging the balance sheet to close the donut hole for iDose. Thanks.

Yes, I'll take a shot. I think I know what you're saying. The donut hole is a buy and bill product, so it’s about the donut hole, but it’s more about the patient out-of-pocket associated with commercial payer lives. And we absolutely intend, like most pharmaceutical products in the buy and bill category to have $0 copay program. So we will use the balance sheet if you will, to make sure that out-of-pocket coverage costs are not an issue to impede utilization for those commercial payer patients.

Your next question is from the line of Danielle Antalffy with UBS.

Hello, can you hear me okay?

We can, yes.

Okay. So sorry about that guys. Just a high-level question for you guys as iDose ramps and I appreciate that the 2025 headwinds to the U.S. iStent franchise. But longer term, what do you think is, is the right way to think about the long-term growth rate for the legacy iStent franchise in an environment where iDose is hopefully ramping pretty rapidly? Like what's the right way to think about the balance of those two businesses and how quickly the legacy iStent business can grow? And I have one quick follow-up after that.

Yes, Danielle, I think there are a couple of different ways to parse that. I mean, first of all, obviously over the course of 2025 you have just the relative impact of the LCDs and as a headwind it grows, as we've alluded to and I think others in the industry have as well. But as you get past that, you're still talking about an industry segment where you're moving from a pretty small patient population in combination with cataract surgery into a very, very large potential patient population in standalone interventional glaucoma. And I think if there was one thing that we certainly took away from the AGS earlier this year and ASCRS more recently, it's that this movement in partnership with physicians and increasingly in alignment with the broader industry is we're really leading the charge that once again change the standard of care in glaucoma and improve patient outcomes. I think we have more conviction now that this transformation, as Tom alluded to an IG mindset, is well underway. If you look at the sheer number of events, symposiums and conversations and debate, it's pretty encouraging as you think about that long-term growth dynamic for doing the right thing for patients and intervening early and as needed for these patients. So that's a long-winded way of saying, I think, you have a decade-plus period here where both products like iDose as well as stents and other areas of MIGS alongside of stents can grow in tandem as more and more surgeons adopt a proactive mindset and really go after tackling this disease, which we believe is a surgical one.

Okay, got you. That makes sense. And then just a follow-up on that is iStent infinite in the standalone market development. I mean, where would you characterize how we are today? What are the barriers that you guys are still addressing there? Because that really does feel like the long-term opportunity here for iStent infinite. Thanks so much.

Yes, we agree. And I think if you think about where we're at relative to those of us in the room and in the building who were there when we were changing the standard of care and pioneering in combination with cataract surgery, I would say, and I think Tom would agree that we're well ahead of that curve from a timeline perspective in changing the standard of care as it relates to standalone procedures. Having said that, it never happens as fast as we would want or certainly you all, as investors and analysts would want. It takes changing one surgeon's not just their clinical mindset but then their operating behaviors and the things they do to educate their referral networks and ultimately getting these patients treated in an interventional way. And the good news is we're well underway on that front with quite a few early adopters that have already shifted their patterns and that's only growing. And as I mentioned, that was on full display at ASCRS and we couldn't help but be pleased with what we were saying.

Yes, I was just going to say that with what's happened just in the last really 18 months or so since we have put our really turned our turrets towards this intervention of glaucoma mindset and mind frame, you can see that in AGS, you see it at ASCS, there's clearly going to be a strong movement in the direction that we want. I think that the standalone is an incredible, unexploited opportunity not only for iStent infinite, but as you think about it and do your models in the future. As I said earlier, what I do believe strongly is that surgeons will increasingly look to be able to take and be able to place a procedural pharmaceutical in this case an iDose in combination with an infinite to be able to maximize their opportunity to lower target pressures and preserve the vision of these glaucomatous patients. And so I think you're going to see growth on both sides. I don't think they'll happen at the expense of each other. I think that these two products can work in tandem, particularly in the outer years as surgeries become increasingly comfortable placing dual modalities into the eye.

Our final question will come from the line of Patrick Wood from Morgan Stanley.

Perfect, thanks so much. I'll keep it just to one. I'd love to hear a little bit about what you guys are hearing back from the patients and also the docs’ conversations with the patients when it comes to iDose, is this a quick and easy conversation and there's quite a lot of buy-in from the patients right away? I mean it seems a fairly easy value prop to communicate, but obviously you have the doc buy-in already. I'm just curious how you feel the conversations between the docs and the patients are going and if you've had any feedback around that? Thanks.

Yes, Patrick, I think that from a physician standpoint, there is always a journey around the conversation they have with patients, in particular, where you're recommending an interventional glaucoma procedure, and in this case, obviously, iDose. But what you see is every day them getting better at that. And certainly as folks become more comfortable and confident with the outcomes which we're seeing are terrific, that enables them to then speak with that much more confidence to the patients who are walking into their practice. And recommending is something that they would do for their own eye or for their mother's eye if they were afflicted with glaucoma. And so I think we're making tremendous progress there. And most importantly, the foundation that underpins all of this is that the product is performing as advertised. And as a result of physician enthusiasm continues to grow around it. Downstream of that, they will continue to perfect how they operate, how they talk to patients, and all the various things that ultimately make this become what we think it will be. Okay. I want to thank you all for your time and attention today, and thank you as well for your continued interest and support of Glaukos. Goodbye.

This concludes today's call. Thank you for joining. You may now disconnect your lines.