GLAUKOS Corp Q3 FY2025 Earnings Call

Ladies and gentlemen, thank you for standing by. My name is Colby, and I'll be your conference operator today. At this time, I would like to welcome you to the Glaukos Corporation's Third Quarter 2025 Financial Results Conference Call. Copies of the company's press release and quarterly summary document, both issued after the market closed today, are available at www.glaukos.com. Please note, this call is being recorded, and an archived replay will be available online in the Investor Relations section at www.glaukos.com. I'll now turn the call over to Chris Lewis, Vice President of Investor Relations and Corporate Affairs.

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 be read by investors before the regularly scheduled quarterly conference call. 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, product approvals, 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. Please review today's press release and our recent SEC filings for more information about these risk factors. You'll find these documents in the Investors 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.

Okay. Thanks, Chris. Good afternoon to everyone and thank you all for joining us today. In addition to discussing our record third quarter results today, we're also excited to provide an update on Epioxa, our groundbreaking advancement in corneal cross-linking for the treatment of keratoconus, following the FDA approval that we announced last week. Let's first start with the record quarter. Today, Glaukos reported record third quarter consolidated net sales of $133.5 million, up 38% on a reported basis or 37% on a constant currency basis versus the year ago quarter. As a result of our strong performance, we are raising our full year 2025 net sales guidance range to $490 million to $495 million compared to $480 million to $486 million previously. Our third quarter record results reflect a sustained growth acceleration in our business, driven by growing iDose TR adoption and utilization, along with our broader Interventional Glaucoma, or IG, initiatives globally. Within our U.S. Glaucoma franchise, we delivered record third quarter net sales of $80.8 million on strong year-over-year growth of 57%, driven by growing contributions from iDose TR, which generated sales of approximately $40 million in the third quarter. iDose TR, a first of its kind intracameral procedural pharmaceutical designed to continuously deliver glaucoma drug therapy for up to 3 years, continues to build commercial momentum, supported by positive clinical outcomes and surgeon feedback that 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. Our teams continue to make great progress in the execution of our detailed launch plans for iDose TR, and we're encouraged with the continuing growing momentum. Moving on, our International Glaucoma franchise delivered net sales of $29.4 million on a year-over-year growth of 20% on a reported basis and 17% on a constant currency basis. This strong growth was once again broad-based as we continue to scale our international infrastructure and execute our plans to drive MIGS forward as the standard of care in each region and major market in the world. Last month, we were pleased to commence commercial launch activities for iStent infinite in our key European markets at the ESCRS Annual Meeting in Copenhagen. Surgeons' initial interest levels for iStent infinite were very high during the meeting, reaffirming our view that EU MDR certification for our iStent infinite will help us not only maintain and grow our presence in Europe, but also advance and accelerate our broader IG initiatives globally in the years to come. And finally, our Corneal Health franchise delivered net sales of $23.3 million on year-over-year growth of 13%, including Photrexa net sales of $20.3 million. As discussed previously, our third quarter results reflect the continued impact of Photrexa realized revenues as a result of our entry as a company into the Medicaid Drug Rebate Program. Our record third quarter results reflect strong execution against our key strategic priorities and are a testament to our evolution into a more diversified ophthalmic leader with transformational growth drivers that span across multiple geographies and disease states as we advance the standard of care in glaucoma and rare disease with iDose TR. Beyond that, we continue to advance a robust pipeline that supports our long-term best-in-class growth potential while remaining disciplined in capital allocation, focusing on ROI-driven investments and operational efficiency. This quarter, we saw continued gross margin accretion and maintain a strong balance sheet with $278 million in cash and no debt. Now let's shift to our Corneal Health pipeline. As you know, last week, we were delighted to announce the FDA approval of Epioxa, a groundbreaking advancement in corneal cross-linking for the treatment of keratoconus, a rare sight-threatening disease that is currently far too often undiagnosed and untreated. This approval marks a significant milestone for Glaukos and ushers in a new standard of care for keratoconus patients and practitioners with the first and only FDA-approved topical drug therapy that does not require removal of the corneal epithelium, the outermost layer of the front of the eye. As a reminder, Epioxa utilizes a proprietary combination of an oxygen-enriched novel therapeutic that is bioactivated by UV light in an incision-free procedure. This is a result of more than a decade of research focused on slowing or halting the progression of keratoconus while significantly improving patient comfort and minimizing recovery time to provide a new way forward for patients afflicted with this sight-threatening rare disease. The FDA approval is based on results from 2 prospective multicenter, double-masked Phase III pivotal trials that randomized a total of over 400 patients. Both trials successfully achieved their prespecified primary efficacy endpoints and demonstrated favorable tolerability and safety profiles. Keratoconus is a debilitating eye condition characterized by progressive thinning and weakening of the cornea that is often most aggressively advancing in patients under the age of 30. If left untreated, it can lead to loss of visual function and even blindness, and is one of the leading causes of corneal transplants in the United States. Approximately 90% of cases of keratoconus are bilateral and as many as 20% of untreated keratoconus patients ultimately require a corneal transplant. Conventional keratoconus treatments such as eyeglasses or contact lenses address visual symptoms only and do not slow or halt underlying disease progression. Before we discuss our plans for Epioxa, it's important to understand the historical journey of Photrexa, our first-generation cross-linking therapy that unlike Epioxa requires the removal of the corneal epithelium. The FDA approval of Photrexa as an orphan drug was a major breakthrough back in 2016 as it became the first and only FDA-approved pharmaceutical therapy shown to slow or halt keratoconus progression. Following our nearly $0.5 billion acquisition of Avedro in 2019, we have subsequently deployed several hundred million dollars in commercial and R&D investments to grow our Corneal Health franchise, driving new clinical trials, expanding our sales force and commercial reach, strengthening market access capabilities, and enhancing patient education and support programs. These efforts have successfully resulted in Photrexa becoming the standard of care as excellent real-world outcomes have helped preserve vision for tens of thousands of patients. While our disciplined commercial execution has delivered meaningful progress and our investments have made a real impact on patients' lives over the past 6 years, the unfortunate reality is that the access to proper care still remains far too limited, evidenced by the fact that we are still only treating about 10,000 patients annually with Photrexa today. We estimate fewer than 1 in 5 actively diagnosed unstable keratoconus patients are getting access to Photrexa today, and many more are never diagnosed at all, an unacceptable reality for patients that we must change moving forward. To make matters worse, only 13% of treated patients are under the age of 18, which is when many patients are most vulnerable to significant disease progression and vision loss. Further, given the invasive nature and extended recovery associated with the current Photrexa procedure, many patients elect to delay or defer treatment. We estimate that as many as 40% of confirmed cases delay or decline Photrexa therapy, including procedures involving treated patients a second time. This is simply not good enough for patients, and we are determined to do better for this rare disease community. Like other rare diseases, we believe there are several key factors contributing to why keratoconus remains too often undiagnosed and untreated today, including: 1, lack of awareness and underdiagnosis; 2, misdiagnosis and a focus on managing symptoms rather than proactively treating the underlying disease; and 3, a burdensome and lengthy patient journey marked with reimbursement hurdles and fragmented care pathways. The FDA approval of Epioxa marks a pivotal moment, introducing the first incision-free treatment for keratoconus and offering a groundbreaking new therapy for patients. Just as important, it gives us the opportunity to reset and redefine our go-to-market approach to better address this sight-threatening disease and truly expand patient access. With this approval, we plan to substantially increase our investments in patient awareness and access while addressing the longstanding challenges of underdiagnosed and undertreatment that have affected this rare disease community. Our new approach includes significantly enhanced awareness, education, and detection campaigns, driven by increased engagements with the optometric community to establish KC detection centers, the development of a handheld KC screening device, and expanded advocacy partnerships alongside new patient education efforts to identify and reach patients earlier. To ensure patients move seamlessly from awareness to clinical diagnosis and treatment efficiently, we will establish a network of engaged ODs and MDs and committed Epioxa sites of care that maintain the sense of urgency that these vulnerable patients deserve. In parallel, we will launch comprehensive patient services and support programs through our patient access liaison teams to streamline care coordination, demystify the insurance approval process, and advance covered decisions where possible. These efforts are designed to support patients and families at every stage from awareness and diagnosis through ongoing treatment, making the entire journey as seamless, efficient, and patient-friendly as possible. This approval is a culmination of unrelenting research, development, and clinical efforts, and I want to thank our dedicated employees who have put in countless hours to make this approval a reality. We are also deeply grateful to the clinical investigators and participants in clinical trials who played instrumental roles in bringing Epioxa to the United States. Despite being a relatively young company, Glaukos has invested over $1 billion in R&D over the years to develop a robust pipeline focused on chronic and rare ophthalmic diseases. Our continued investment in R&D remains best-in-class, underscoring our commitment to going first and advancing the standard of care for ophthalmic patients worldwide into the future. We also just broke ground on a new 200,000 square foot research development and manufacturing facility in Huntsville, Alabama to support long-term growth and innovation, including the eventual production of Epioxa. As we hope you can see from our comments today, we are very excited by the significant potential Epioxa offers to patients living with keratoconus and believe it will deliver exceptional value to patients, providers, and the healthcare system. We've had several meaningful and informative conversations with key members of the physician and patient advocacy communities regarding this value in relation to pricing. Our approach for Epioxa reflects our commitment to responsible innovation, balancing clinical value, cost-effectiveness, and patient access. These principles help inform our pricing decision, which also reflects the significant investments we've made thus far and those we plan to make going forward for this rare disease. After several years of thorough and thoughtful evaluation based on these factors and supported by a robust set of internal pharmacoeconomic and published health economic analysis, we have established a wholesale acquisition cost for Epioxa of $78,500, which represents a significantly lower price versus nearly all other rare disease drugs, including those within ophthalmology. This is particularly true when you consider that Epioxa is unique as a single administration therapy that is capable of slowing or halting disease progression in the vast majority of patients that are diagnosed with this sight-threatening disease. We believe this not only provides a compelling value proposition for physicians and payers, but most importantly enables us to make a fundamentally different investment in patient and provider education and awareness to enable more patients over time to be properly diagnosed and treated at a younger age to preserve their needless loss of vision. Going forward, we anticipate Epioxa will be commercially available in the first quarter of 2026 under a miscellaneous J-code with a permanent J-code established by July 2026. As with all pharmaceutical launches, initial patient access will be gated by our site of care network deployment and typical payer adoption headwinds and hurdles. But we're investing in the infrastructure, teams, and processes necessary to get Epioxa to as many patients as soon as possible in 2026 and beyond. Given the significant advancement Epioxa represents in our commitment to ensuring patients gain access to state-of-the-art incision-free treatment for this rare debilitating disease, we made the decision to discontinue Photrexa commercial availability following a stage transition process in 2026. This transition will prioritize Epioxa as the primary treatment option, reflecting its safety, efficacy, and superior patient experience. Photrexa will remain temporarily available for patients unable to access Epioxa due to coverage or geographic limitations. We will transition all remaining patients through dedicated support programs designed to minimize disruption and ensure continuity of care. As we've discussed, with the launch of Epioxa, a critical focus of ours is to improve patient access to this sight-saving keratoconus treatment. With that in mind, in addition to our new awareness campaign and patient support programs discussed earlier, we will also deploy a new financial co-pay assistance program for eligible patients and intend to have a comprehensive specialty pharma option available for customers at launch. Our cross-functional teams have been hard at work putting these methodical plans together for several years now, and we are ready and excited to commence execution and make a difference in the lives of these keratoconus patients. The enthusiasm and energy for this new therapy and launch is palpable throughout our organization. In summary, Epioxa represents not just a breakthrough in science, but a breakthrough in how we deliver on our promise to provide the best possible care to patients. Epioxa is more than a product; it's a reset moment and new way forward for keratoconus care. We're proud to lead the way once again in forging a new path to drive expanded patient access and enhanced treatment standards. Finally, as discussed earlier, we are raising our 2025 revenue guidance to $490 million to $495 million versus $480 million to $486 million previously to reflect our third quarter outperformance and continued underlying momentum. We are also introducing a highly preliminary 2026 revenue guidance range of $600 million to $620 million. This preliminary outlook factors in our expectations as it relates to the continued commercial rollout for iDose TR, the surgical MIGS landscape, our International Glaucoma franchise as well as our Corneal Health franchise as we launch Epioxa and transition from Photrexa. We expect to refine this guidance range and provide additional commentary during our fourth quarter 2025 earnings call expected to be held in February 2026. In conclusion, our record quarter highlights the strength of our strategy and execution as we continue evolving into a diversified ophthalmic leader with multiple growth drivers. iDose TR is already driving meaningful growth today, and we expect Epioxa will begin to contribute in 2026 and beyond as our patient-oriented initiatives take hold. Combined with our robust pipeline that spans glaucoma, rare disease, and retina in particular, along with our disciplined investment and strong balance sheet, we're well positioned to sustain our growth momentum and advance our mission to transform vision therapies for the benefit of patients worldwide. So with that, I'll open the call for questions.

Your first question comes from the line of Tom Stephan from Stifel.

I'll start off with iDose, and I wanted to ask about the CAC meeting. Tom or Joe, maybe if you can discuss just the impetus or the rationale of the CAC, maybe from what you've gathered in conversations with the MACs? And then maybe more importantly, talk to us about sort of what your views are on the potential outcomes here.

Sure. Tom, it's Joe. I'll start off. And as always, Tom can also add in any comments at the end here. I'd say that from a rationale perspective and maybe how we're viewing it from a macro standpoint is that we see this really as a step in the process of educating these MACs and really educating them all on, #1, the significant unmet need that iDose meets for glaucoma patients, as you all know; 2 and as importantly, the robust FDA and peer-reviewed Level 1 data evidence that supports its proper utilization in the care continuum; and 3, ultimately really establishing the patient access that our glaucoma patients and physicians deserve around the product. And clearly, if you think about this moving forward, you can make arguments both ways. And we've seen some of that play out, obviously, in the early commentary from the investor community. But in general, we're pretty confident that the considerable data behind iDose as an FDA-approved pharmaceutical, more high-quality evidence has been generated to support this pharmaceutical than virtually all of the glaucoma device solutions combined, including in at least 15 peer-reviewed publications, all of which support the FDA approval and the label that is, when you look at it, largely consistent with other pharmaceutical therapies in glaucoma. So I think there's a handful of different paths that can emerge as we go forward. But I think what's most important is that for these MACs, they're taking a step to make sure they understand and are educated on what we already know, which is that iDose is a game-changing solution with a lot of evidence and data behind it to change the treatment paradigm associated with the glaucoma patients here in the United States. So from that standpoint, we look forward to having that engagement and from them moving forward from a more educated basis to adjudicate the claims that come their way.

I'll just add that we have some important data to discuss. We have two Phase III clinical trials aimed at establishing the NDA submission and PMA approval involving over 1,000 patients to validate the use of iDose in standalone glaucoma patients. Additionally, we've also conducted a single-arm prospective study in combination with cataract surgery, which demonstrated significant reductions in intraocular pressure, averaging 11.3 millimeters from baseline. We're currently conducting a prospective Level 1 study comparing iDose in combination with cataract surgery against cataract surgery alone. Furthermore, we're enrolling participants in a study assessing iDose in combination with iStent infinite versus iStent infinite alone. We expect these studies to confirm our expectations of an incremental and cumulative advantage of using these products, all of which should be used according to the current label we provided.

Really appreciate that color. And then my follow-up is just on Epioxa and congrats on approval. Maybe a quick 2-parter. Can you just elaborate a bit on sort of your confidence in executing with this level of pricing just in terms of payer coverage and reimbursement? And then how should we be thinking about 2026 for Corneal Health, just as we consider the moving parts with Epioxa ramping as well as Photrexa transitioning off?

Sure. Thanks, Tom. Regarding the coverage and ongoing access for Epioxa patients, it’s a process that involves educating payers on the benefits of this therapy and the actual costs associated with the disease's progression. As Tom mentioned, many patients are heading towards corneal transplants and facing significant visual issues due to keratoconus. We plan to actively participate in this process and are confident that we can provide a top-notch solution for patients with keratoconus. We look forward to engaging with the payer community on this. For 2026, we provided preliminary guidance to ensure that it is considered at a broader level. As you think about Epioxa's rollout throughout the year, we have several tasks ahead, including establishing the site of care network, timing for drug availability in the first quarter, and the complexity of having a miscellaneous code during the first half of the year. Additionally, payers will need to update their systems for the J-code in the second half of the year, which coincides with customers updating their contracts. Generally, this is a slow and methodical process for ensuring proper payer coverage and patient access for any rare disease, and Epioxa will be no different. So, we anticipate starting cautiously as we move into 2026.

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

Congrats on the great quarter. Maybe just kind of piggybacking off the preliminary $600 million to $620 million for next year. That's a little bit above consensus at the midpoint, and companies don't typically guide to do so. And as we think about the different components of that revenue range versus each of those segments, and even if it's just as simple as should each of the different segments grow next year, that would be helpful.

So Adam, you were breaking up pretty substantially, but I believe that you were asking for more context or color around the guidance range of 2026 of $600 million to $620 million and probably pushing a bit for a bit more granularity around the constituent parts of that. So assuming that I'm correct on that, I'll give you that answer which is good. I think as I mentioned before, we felt like it was prudent with what we're announcing in terms of the Epioxa approval, some of what Tom announced today to make sure that we establish what I'll call is a highly preliminary view of 2026 and to really anchor ourselves around what we think entering into the year where we're at here in October. Our goal and our plan would be to provide more granular views by franchise during the fourth quarter call. But what I can say from a macro standpoint is we feel confident in this early range and that a variety of paths through each of the franchises, if you will, U.S. Glaucoma, International Glaucoma and certainly the Corneal Health franchise will enable us to meet the expectations of that $600 million to $620 million range that we've established.

I wanted to ask for just a little bit more color around the iDose performance in the quarter, really good number there. Did that MAC that onboarded in early August? Just any color on how iDose is ramping as we head into Q4? And the second part of the question is really just around the utilization and kind of which patients are getting iDose? Is this being done totally in the standalone setting? How much is coming from combination with cataract? How much is with a second mg?

Yes. The question was mainly about the iDose performance in the quarter and the details regarding standalone versus combo cataract utilization. We reported approximately $40 million in sales for iDose, a significant increase compared to the second quarter. This growth was widespread across all MAC regions, and we also saw rising utilization in early commercial and MedVantage. New doctors are adopting it, and some who previously participated in trials are now starting to provide the high dose therapy for their patients following payments they received for 2024. The quality of this growth was strong. Though I couldn't catch everything you asked, NGS came online in August, showing very early positive signs, but the quarter's mix looked similar to the second quarter, with about 80% of volumes from established MAC regions like Noridian, Novitas, and First Coast. The overall growth was balanced, but the focus remained on these established areas. With the NGS announcement, we likely won’t see its full impact until later in this quarter or next year. Regarding standalone versus combo cataract usage, we do not track those specifics directly. We provide iDose TR for glaucoma patients, but we do not know how it's used in combination surgeries. However, we have noticed that in regions with more established reimbursement records, the rate of combo cataract surgery utilization is increasing. This aligns with surgeons treating cataracts and managing glaucoma at the same time. Thus, we see some growth in the overall mix, particularly in regions with better reimbursement compared to others where we are developing.

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

I guess, Joe, I wanted to start with Epioxa. For those of us who have followed this a long time, know that when Photrexa came out with the $3,000 or so ASP, there was some pushback. So you're obviously moving a lot higher here. So what data are you going to use with payers that gives you the confidence that commercial payers will cover it? And how are you thinking about the growth in the 10,000 patients, I think you said earlier treated per year with Photrexa today over time? Do you expect to grow that? Or could you actually lose some patients to off-label corneal cross-linking treatments? And I have one follow-up.

Sure. I'll start, Larry, and then others can comment as we go forward here. But for Epioxa, I think that first and foremost, and obviously the reset moment as you heard Tom talk about, this is an education process. Just like you'll recall, to your point, having been around with Avedro back in the day as they first reimbursement around keratoconus itself with Photrexa is to remind the constituents that are out there, including the payer community, that this is a rare disease that by definition, you referenced it yourself when you're talking about 10,000 patients being treated. In fact, that's an uber-rare disease and pretty consistent with the type of treatment numbers as we understand it from indications or for other rare disease therapies in ophthalmology such as oxybate or Tepezza for thyroid eye disease. So when you compare from a payer perspective, the relative value of a single procedure that can slow or halt the disease progression of a condition like this, and you think about that patient population and the cost of the wholesale acquisition cost that Tom talked about, I think you're going to find that it compares pretty favorably to the broader rare disease landscape, including that within ophthalmology. I think more broadly than that, the conversation is one of education around what it takes to make sure that you're responsibly innovating in a category like this for rare disease and then what you have to do to drive meaningful change in awareness, in diagnosis, in detection, and in patient access, as you heard Tom talk about. This is a different way of looking at the situation, but one that we had to look inwardly and ask ourselves, what do we have to do to meaningfully change the outcomes that we're seeing in terms of too many patients not getting access to a sight-threatening therapy in the form of Photrexa. As we move forward with Epioxa, that's exactly what we're committed to do. Now you asked about the 10,000 patients. I have no doubt that in the early days as you're working your way through the inevitable payer hurdles and the various things you have to do to drive education and get access through each individual payer that we'll face some headwinds there. But clearly, as we move forward, the whole reason for what we're doing is to meaningfully expand that number. And you heard Tom reference that we today believe we're treating 1 in every 5 patients who have uncontrolled or unstable keratoconus with Photrexa today. And so I hope that in the coming years, we'll put a meaningful dent in getting to what was, by definition, an uber-rare disease with 10,000 patients to what would be merely considered a rare disease in the 50,000 patient range. And that's something that we'll be hard at work at, but it's not something that's going to be turned on overnight in 2026 for sure. But it's the reason because each one of those patients deserve to get access to an FDA-approved incision-free topical therapy that can arrest or certainly dramatically slow the progression of that disease.

That's helpful. I guess just for my follow-up, it truly is related. I guess I'm just thinking ahead as many people probably are 2027, 2028, 2029 at $78,000 and 10,000 patients, and I assume 90% done bilaterally, the numbers get pretty big. Is there anything else? I mean, could you be doing 20,000 eyes in 2027, Joe? And should we be using an ASP of $78,000? Help us frame that beyond '26 for hopefully obvious reasons; these are big numbers.

Yes, I think it's important to consider a blended average over time. I wouldn't use $78,500 in your long-term models. Clearly, we are part of the Medicaid rebate program, and we provide discounts for that patient population. So, when thinking about a blended weighted average cost of capital, we'll discuss that more as we prepare to make the drug available. We've shared our preliminary views on 2026, but I'm not going to go into detail for 2027 and beyond just yet. I can share general targets we aim for over time to significantly improve outcomes for those patients. Additionally, whatever assumptions you make in your models for the next several years should also account for the necessary investments to ensure we drive awareness, education, and detection needed to achieve the outcomes you’re referring to in 2027 and later.

Your next question comes from the line of Ryan Zimmerman from BTIG.

So maybe for you, Joe, a little bit on iDose. In the absence of the CAC meeting and kind of the permutations that could come out of that, I'm wondering if you could talk a little bit about how you think about the ramp of iDose. And I ask that kind of in the context of 2026. And do we think of iDose following the similar progression in kind of a linear fashion through 2026 and beyond? Is there a point at which you see an inflection occurring where kind of the scales tip, if you will? I'm wondering if you could kind of speak to that and kind of how you guys think internally about the progression and adoption of iDose over time?

Yes, Ryan, I think that the world we live in is obviously multidimensional relative to when we're building models or we're trying to do this, and there's a lot of varying puts and takes when you think about that. But what we've clearly established is plus or minus a pretty solid linear type launch in its early days. I think it's hard to assess that without looking at the constituent parts of that, right? And as you said in the context of 2026, we sit here today having put up $40 million of revenue in the third quarter with, as I said earlier, 80% of that volume coming from the Medicare regions that represent about 50% of covered lives. So I think as we go forward, the CAC meetings, all the other education efforts that we're doing with these individual MACs to establish proper and appropriate fee coverage moving forward, that simply getting the Medicare arena to the right place alone continues to leave us optimistic around what that means for 2026 and certainly beyond. And that's before, and I think you're touching on it a little bit, you start to think about that broader utilization that we're starting to see in some accounts across all patients who deserve to get access to iDose irrespective of what insurance type they have, whether that's commercial, whether that's Medicare Advantage, or certainly Medicare fee-for-service or other areas. So as we make our way through and more and more folks is focused simply on treating the disease and less on the insurance type, I think that's when they're able to start focusing on really driving meaningful awareness in the standard-of-care shift that we think iDose represents for these patients' benefit. But until you get to that place where you've got a little bit more stability, if you will, around that broader, call it, market access landscape, it's hard for physicians to really focus holistically on the clinical care continuum. But once you get there, I don't want to say it will be an inflection, but I think it's what underpins our bullish optimism of what iDose will mean for Glaukos, for our customers and for our patients, not just for 2026, but for the next decade as we continue to change the standard of care.

Regarding the CAC meeting, the agenda and questions were posted a few days ago. I don't want to put you on the spot, Joe, but I'm going to ask this anyway. The questions suggest that the studies may not have been long enough. Do you have any thoughts on that? You mentioned this earlier, so do you believe you will need to educate them on the strong evidence presented by the total data? Is there a misunderstanding about this? Or do you think the urgency behind this is due to the rapid development compared to previous efforts in legacy MIGS? I'm trying to grasp why this has unfolded so quickly early in the launch cycle of iDose.

Yes. I think part of what you're talking about in answer to the latter is that we've also been trying to aggressively educate and advocate on behalf of our customers. I think if you take a step back, Ryan, and you think about how much enthusiasm there is in the clinical community around iDose and what it means for their patients and the outcomes they're seeing, all the things that led to the optimism that extends from that for you all in the investment community, that also leads to those physicians advocating to make sure that they're getting properly paid and the coverage associated with it. And I think a combination of that is probably what has led them to want to ask the questions of the broader advisory committee to make sure they understand. Anytime you go into one of those sessions, there's going to be questions within that that makes sense in the context of the way we or our physician customers look at this and other questions that do not. And I think this preliminary question list reflects exactly that. There are some in there that you can understand that where they're trying to understand the overall fit of iDose into the treatment paradigm, and they want to ask that question of a group of network of experts, if you will. But there are others in there that clearly show they have not yet quite understood both the data of which there's a lot. And so I don't hold that against anyone. That's an education process that has to take place here in the coming weeks, months, if not years, as we continue to try to streamline that broader reimbursement coverage.

Your next question comes from the line of Allen Gong from JPMorgan.

Just as a quick follow-up to that. One question I do have is, you obviously won't get an LCD immediately after the CAC meeting, but should you get an LCD, what does that do to your coverage with the MACs that are currently holding out and the MACs that you're already working with? Will that change your relationship with the MACs that don't have you on the prophy schedule yet? Will that accelerate that process? Or will you still have to wait to get on prophy?

I believe that coverage and payment are two separate issues. The effort to accurately value the procedural component related to iDose is ongoing, and we continue to engage constructively with the three remaining MACs. With NGS now included, we have 70% of Medicare lives with established professional fees, along with significant efforts to understand how to value and price this. The process is unfolding. Your inquiry about LCDs relates more to coverage determinations. There are both positive scenarios and challenges that require us to provide more comprehensive education. However, we don't have a bias either way; our focus is on properly educating them about iDose. One clear benefit of any established LCD is that it typically leads to corresponding Medicare Advantage coverage policies. Often, commercial carriers supporting Medicare Advantage wait for formal LCDs to create their own policies. This could present opportunities if an LCD eventually arises from our work.

Your next question comes from the line of David Roman from Goldman Sachs.

I wanted just to come back to the market development and education efforts around Epioxa. So a lot of what you're laying out sounds like it actually more mirrors that of a more mass market disease and something that takes a lot of education. I don't know if it's direct-to-consumer. As I look across other sort of rare disease categories and I'm thinking more on the traditional pharmaceutical and biotech categories, there is a lot of investment around payer education and physician education. But maybe you could help us just give a little bit more flavor of some of the specifics around the investments that you're making and how we see those show up and over what time period?

Yes, David, it's Joe. I'll start with a macro perspective and then move into some specifics for your question. From a macro viewpoint, large population-based patient education initiatives often resemble the legacy direct-to-patient advertising commercials we see on television during sporting events, aimed at raising awareness. However, in the case of rare diseases, the approach is much more focused. The efforts to increase awareness and facilitate detection are similar to broader disease states but are executed in a more targeted manner to identify patients based on their individual disease journeys. A significant portion of this occurs in various digital forums where individuals are looking for answers regarding changes in their vision. It's crucial to remember, as Tom stated, that only 13% of patients under 18 are receiving treatment, while most damage often starts during the teenage years and early twenties. This disparity necessitates a stronger effort to identify patients earlier based on early symptoms that could indicate keratoconus, ensuring they receive proper access to diagnosis and care. This represents a substantial investment in both commercial and marketing strategies, not limited to direct-to-consumer initiatives, although that remains a vital aspect of our educational efforts. From a micro standpoint, currently, the majority of physicians treating Photrexa patients are from the MD community, but we rely heavily on the optometric community, where patients initially present with visual acuity concerns. With around 50,000 optometrists and various opticians acting as primary care providers, educating this community is essential, involving significant resources in digital outreach, our sales force, and other marketing activities. Additionally, when identifying patients, each case can feel like finding a needle in a haystack, particularly given the number of insurance plans available. Treating 10,000 patients means that each claim is often the first the insurer has encountered, given the large number of plans in the U.S. Therefore, it's essential to simplify the insurance process and provide thorough education and support to these patients. This is a crucial investment for us. As for how this investment will unfold, some initiatives will ramp up immediately, while others will gain momentum heading into 2026. As we establish the J-code and enhance our site of care network in the second half of the year, we aim to bolster support for patients throughout their journey, especially as we approach 2027.

Your next question comes from the line of Richard Newitter from Truist.

I might have missed it, but I just want to make sure I'm understanding the components of your updated '25 guidance and kind of how we should be thinking about the areas for 4Q and what's implied there. Can you just run through the segments? I know you provided a prior outlook for Corneal Health and I think it was flat to low single-digit growth for the year. Could you just give us a sense as to what we should be modeling for that business and what the trend should be in the kind of the iDose sequential trend?

Yes, Richard, I'm happy to address that. I haven't commented on it yet, aside from our announcement of the updated guidance range of $490 million to $495 million. To put it in context, our performance so far in 2025, particularly highlighted by the results in the third quarter, has consistently exceeded our internal forecasts, which is why we raised our expectations for the year. The main point for the fourth quarter is not new; we mentioned it in the last call. It's important to consider the anticipated challenges our Corneal Health franchise may face as we and our patients prepare for the transition from Photrexa to Epioxa. Additionally, the fourth quarter presents a more challenging year-over-year comparison for our U.S. and International Glaucoma franchises, especially as we assess where we've been in previous quarters. For International Glaucoma, the situation remains largely the same as we've discussed before. We expect low double-digit growth in the fourth quarter, considering the more difficult comparison and ongoing competitive launch challenges in several key markets. Regarding Corneal Health, I anticipate a significant year-over-year decline, which is reflected in our guidance as we manage the transition I mentioned earlier. We're already seeing early signs of this in October following the approval of Epioxa, with patients beginning to inquire about Epioxa over the existing Photrexa therapy. For U.S. Glaucoma, we expect year-over-year growth in the mid-40% range in the fourth quarter as our non-iDose business stabilizes. However, we foresee a low single-digit decline in the fourth quarter as we continue to work towards stabilization following earlier LCDs that impacted this segment. iDose TR is expected to continue its growth; though guidance suggests a slight sequential tempering compared to current trends due to many surgeons' packed cataract schedules for the rest of the year. It's too early to realize the benefits from the professional fee boost from NGS. Overall, this quarter presents a tougher year-over-year comparison for growth. However, the majority of our business remains on track, with the exception of the step back in the Corneal Health franchise as we navigate this transition.

And then maybe just, well, actually 2 follow-ups. Consensus for iDose for '26 is somewhere in the $220 million to $225 million range, I think. Anything you can express in terms of comfort or not kind of there, just so we can benchmark ourselves as we put preliminary numbers out there? And then the second follow-up, just on the trial time lines that you were talking about for combo cataract and MIGS plus iDose. Can you just give us a sense as to when those that are going to read out and the ones that have read out, where they are?

So I'll start, and then I'll let Tom comment on the trials associated with iDose continue to be ongoing. Really, Richard, as I mentioned earlier, I think we're going to stay with the broader guidance that we've given for next year of $600 million to $620 million. We'll talk a bit more on the constituent parts of that on the fourth quarter call. You referenced the consensus and iDose. Clearly, as we enter into next year, iDose is no longer the only, I'll call it, material variable that you all will be focused on in assessing. And so I want to make sure that we talk about that in the same context at the same time as we talk about our expectations for Epioxa and the Corneal franchise throughout the year. What I had said based on the earlier question was if you think about the third quarter results of $40 million, we're at this point already kind of on a $160 million run rate based again largely on the continued progress within the 3 MACs that have established professional fee coverages entering the quarter, that being Novitas, Noridian, and First Coast. So I feel good about the momentum in that part of the business and where it's heading and what that will mean for 2026. But we'll get more granular on the exact numbers as we set or update our guidance for the full year when we get on the fourth quarter call. Tom?

Yes, I'd be happy to answer the questions. We're looking at 2 pretty major Level 1 Phase IV clinical studies, and that's to look at iDose plus cataract versus cataract surgery alone, which we're currently enrolling. And as well, we're looking at a study that evaluates iDose plus infinite versus infinite alone. And so you can imagine the goals of both those studies will be to validate and to show the incremental advantage of using iDose in combination with cataract surgery and certainly iDose in combination with infinite versus infinite alone. So these are important studies as we go forward. And really, they're both currently under enrollment. It really will depend on when we choose to be able to show what length of data we want to show. And so I will probably prepare the investment community for a 2027 timeline, which would give us the ability to have really 6 months to a year of follow-up in each of these patients that we publish. And it may come as early as late 2026 if we choose to be able to terminate the study or, I should say, be able to look at these patients at earlier time points. Typically, 3 months would be the earliest that I'd be able to publish. So I'd set your parameters to look at a late 2026 to '27 with some very, very important follow-up clinical data for the use of iDose.

Your next question comes from Mason Carrico from Stephens.

So in the context of Epioxa pricing, can you just remind us how the bulk of Photrexa volumes are billed today? Do you guys utilize a book-and-bill strategy with clinics? And if so, how much of your volumes rely on that?

Yes, Mason, with Photrexa today, we offer both buy-and-bill acquisition options as well as specialty pharmacy. The specialty pharmacy option is something that we've really brought online primarily over the last couple of years, and that's been a growing percentage of the overall mix. But beyond that, I'm not prepared to disclose the exact mix between those. But I will say that specialty pharmacy has become an increasing material portion of the overall acquisition mix.

Your next question comes from the line of David Saxon from Needham & Co.

Can you discuss the timeline for obtaining coverage from commercial payers for Epioxa in 2026? If Photrexa is set to be phased out next year, what do you anticipate the coverage percentage will be at the end of 2026? Additionally, what is the strategy for installing new cross-linking machines for Epioxa, specifically regarding the upgrading or replacement of the currently installed machines?

Yes, David, I'll begin by discussing the capital equipment and the development of the site of care network. Epioxa will require a new piece of capital equipment and an O2 system, which we will have ready. With the approval secured, we are actively working with customers to implement this changeover. As expected in a launch of this nature, we have various options for customers to acquire, lease, or replace their existing equipment to ensure that the capital equipment aspect does not hinder their ability to provide Epioxa as a therapeutic solution. Regarding payer coverage, as mentioned in previous calls, we have been investing significantly in this area alongside our field-based reimbursement team. This team is also working diligently, similar to the efforts to establish our site of care, but focusing on educating payers through direct engagement and meetings to ensure they understand the therapy and its benefits for patients. This includes connecting with the medical community to keep them informed, ultimately aiming to secure coverage. On a positive note, this is not the first launch in this category, and many payers recognize corneal cross-linking as the standard of care for halting the progression of this sight-threatening disease. We need to inform them about the numerous patient benefits, which Tom highlighted in his remarks, emphasizing the necessity for patients to access Epioxa moving forward. This process is already in motion. We will provide updates throughout the year, although it is a bit early for us to set specific benchmarks regarding payer coverage expectations. I am optimistic that when we discuss the benefits we provide to patients, we can effectively engage with payers to enhance access throughout 2026.

Your next question comes from the line of Joanne Wuensch from Citibank.

I have so many questions. But I'm going to try and stick to my one, which is when you gave guidance for 2026, what is included in that for Epioxa? And what is included for that for iDose? I'm just trying to piece it all together because at that ASP, those numbers can ramp really fast.

Yes, thank you, Joanne. As I mentioned earlier, we want to establish an overall range for 2026 considering the Epioxa approval and the various factors involved. For now, I’ll reiterate that we are confident in that range and believe there are multiple avenues that will allow us to meet those expectations. We will provide more detailed information on our fourth quarter call regarding the different components. However, you’ve raised a valid point regarding the wholesale acquisition cost, which suggests a significant reduction in the number of patients expected to be treated with Epioxa in 2026 as we address the necessary developments, including establishing the site of care network and the miscellaneous code prior to implementing the J-code, as well as the time required to inform payers about that J-code in the second half of the year. This year will be about laying a strong foundation so that we can focus primarily on clinical care as we move into 2027.

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

I was just going to try to ask the mix case for iDose in a little different way. Joe, when you think about your internal modeling and what you're expecting for iDose maybe over the next 3 years, call it the midterm range, how do you think about the mix of iDose performed in the standalone setting versus combo cataract?

I think that's very surgeon-specific. And if you look even at the adoption we've had now, our highest volume customers today do actually very little iDose in combination with cataract surgery. Clearly as you make the product available in that wider arena, the lower-hanging fruit for some surgeons who primarily focus on cataract surgery is for them to be doing it in combination. And so I think in the intermediate term, some of that lower-hanging fruit for that portion of the community could drive the mix a little bit closer to or with a little bit more oriented towards the combo cataract setting. But certainly, as you get out into the 3-, 5-, and 10-year time horizon, the vast, vast majority of it is interventional in nature and standalone being the key driver of our long-term opportunity.

Your next question comes from the line of Anthony Petrone from Mizuho Group.

Maybe one on the follow-up discussion with FDA on iDose reapplications. You mentioned in the prepared comments and the materials for the third quarter that those discussions are still ongoing. So maybe just what is the latest there? And when do you expect FDA to make some sort of announcement on the supplement for iDose reapplications? And what is really the read-through of that element of the iDose story as we head into the CAC meeting on November 12?

I'm happy to address the first part of your question. To clarify, the FDA has set the PDUFA date for January 28, 2026. We anticipate receiving a response regarding our appeal to allow readministration of the iDose device. As I've mentioned previously, we are taking a cautious approach to this matter. The development of iDose TREX, which is currently in clinical trials, is aimed at ensuring that surgeons have an alternative product available when their existing iDose implants reach the end of their lifespan in over three years. We believe we are in a strong position in this regard. While we are hopeful, I want to emphasize that we are not relying solely on the FDA's approval to proceed with the readministration.

As for the second part of your question regarding the CAC meeting and the related considerations, I believe it's an insightful inquiry. It's important to note that iDose is an FDA-approved pharmaceutical with a label and its intended use is quite similar to topical PGAs and other glaucoma treatments, which distinguishes it from a medical device. In the context of an FDA-approved pharmaceutical, the crucial factor is the contraindications associated with it. Currently, reimplantation is the main contraindication for iDose TR. This is not influenced by its usage alongside cataract surgery, other MIGS devices, or heart medications. Presently, iDose TR has an open label very much like topical PGAs. If, as Tom mentioned, we can achieve the PDUFA date concerning reimplantation, that would allow us to either remove or adjust that contraindication, significantly benefiting our access to that segment of the market.

Your next question comes from the line of Danielle Antalffy from UBS.

I attended the AAO meeting a few weeks ago and the main takeaway was a focus on developing standalone MIGS practices. I went to a lunch session dedicated to this topic. I’m interested in hearing how you think the launch of iStent infinite for standalone applications is progressing. Specifically, what percentage of the total MIGS patient population do you see as standalone? How do you envision the standalone MIGS market evolving over the next 3 to 5 years? Additionally, what logistical steps do you believe need to be taken by practices to support continued growth in this market?

Yes, Danielle, I think it's a great question and a good one here as we are wrapping up this conversation. I mean everything that we've been doing for a couple of years now and certainly as we are moving forward is around driving that standard of care towards interventional glaucoma and acting on behalf of these patients. And so from that standpoint, it doesn't surprise me, although I'm always happy to hear that as you were doing your checks and rounds at AAO, that you heard that same thing. Any time you have a profound standard of care shift, there are logistical hurdles. But the first one you have to get through is the clinical component of this and the clinical buy-in from the community. And you've heard us say this before, but I'll reiterate it, we couldn't be more happy with the receptivity from the physician community around the need to act on behalf of these patients in an interventional way. And whether that tool is iDose, whether that tool is iStent infinite, or any of the other things that might be a part of their toolkit, if you will, in trying to tackle this sight-threatening disease, it's encouraging to hear that they continue to sort of move forward. But on the logistical side, it does change. It's changing the education of the optometry referral community. It's changing the scheduling blocks. It's changing the time and allocation of that time within their OR time, their surgery centers and the like. There's a lot that goes into this over time. It's about establishing proper reimbursement and market access for the various tools that are there to treat patients the way you want to treat them as a surgeon or a physician. So each one of these things play themselves out. And none of them are overnight success stories. Each one of the things you make incremental progress every day, every week, every month, and every year. And I think it's why when we look out over a 3-, 5- or 10-year period, we're so optimistic about where this is all heading because it's all rooted in the right paradigm shift of clinical care. The rest of it we have to keep our head down and keep executing against that. And if we do that, you're talking about a market opportunity, as you heard me say many times, there are 21 million or 22 million eyes in the United States with ocular hypertension or glaucoma. 12 million to 13 million of those eyes today are already being actively treated, maybe imperfectly in the form of topical eye drops, but they're being treated. You compare that to what we're talking about in the earlier days of combination cataract and MIGS, where you had about 0.5 million eyes. So when we look at this over a prolonged period of time, we expect the vast majority of procedures irrespective of the tool to be done in that standalone and interventional glaucoma market, purely because of the relative size of those market opportunities and the clinical need for that.

Okay. Thank you all for your time and attention today. And I want to thank you for your continued interest and support of Glaukos. Goodbye.

This concludes today's conference call. You may now disconnect.