Conference Transcript - GKOS 2026-06-02

Steve Lickman, Analyst — William Blair

My name is Steve Lickman. I'm the medical technology analyst here at William Blair, who covers our next presenter, Glaucos Corporation. Before we kick off the presentation, I am required to inform you that for a complete list of research disclosures or potential conflicts of interest, please visit our website at williamblair.com. With that, we're very happy to have with us today Alex Thurman, Senior VP and CFO, and Chris Lewis, VP and Head of Investor relations after the presentation here we'll have a breakout in the richardson room with that i'm

Alex Thurman, CFO

happy to turn the mic over to alex thanks thank you steve and thank you uh william blair for allowing us to be here today to talk to you all and thank you all for coming spending your lunch hour with us um so we can talk a little bit about glaucose and uh let you know kind of what's going on. So we'll start. I'm going to have Chris read this for us. Just kidding. Let's move on. So we'll start out with kind of just a company overview. For those of you who don't know us, Glaucus has been around for about 20, a little over 20 years. And our company mission, we've got on the big box on the left there where it says we'll go first. And that really comes around because of the DNA of the company. The company was founded back you know again 20 years ago to try and solve a problem in the area of glaucoma back then glaucoma was treated very simply by if you came in and you were a patient that showed signs of glaucoma a doctor would prescribe you a set of drops you would come back after three months those drops wouldn't be working and you'd get another set of drops and then a fourth a third set of drops and finally a fourth set of drops until you just weren't able to manage your pressures on those drops, and then they would turn to a very invasive surgery where they, to say it in layman's term, would really put a hole in your eye to relieve the pressure of the fluid that was building up on the front of your eye. Our founders thought there had to be a better way to tackle this disease rather than this paradigm that was existing 20 years ago. And so they went first in that they designed the first ever stent that was designed to go into your eye and implanted it in the back of the eye that would allow the drainage to happen naturally and to get away from these gruesome surgeries to the best that they could and start to manage that. And so that became the first thing that we innovated, as we say in there, innovation is at the core of everything we do. And it solved a solution and a problem that helped patients and helped our customers, which were the physicians, to treat the disease more effectively. You see in the second bullet, there are dropless therapies. I mentioned to the fact that most of the paradigms back in those days were to prescribe more and more drops. And it was interesting because you'd start on one drop and you'd come in and your pressures were not bad or were getting worse and you'd do a second drop and a third drop. That was their very common procedure. And it wasn't until data got put together that showed, interestingly, patients weren't taking their drops. But why was that? It's so interesting that, you know, 90% of patients, data will show you, just didn't take their drops. And it was because of all the side effects and the difficulty in administering drops. And we'll talk about that a little more. And then only 50% of patients would refill their prescription, which is crazy. You've been diagnosed with a site-threatening disease, and one in two would not even fill their second prescription. And it was because of the danger, or not the danger, but the difficulties with drops and the side effects. And so we've channeled the company to be around dropless therapies. How can we treat the disease without having to rely on drops? And then last but not least, we've talked about being a proven new market pioneer. And that was really because before us, the stents and that business, there wasn't a MIGS category, a microinvasive glaucoma surgery category. So we built that market based off of the stents. And we've since progressed it to have more products, which we'll talk about over the course of the presentation. Just a little bit about us. On the left-hand side, you can see some of the stats. Last year in 2025, we had a 30% top-line growth. In the first quarter, we were at 41% growth. Our 10-year CAGR is 20% growth, and so we're a high-growth company, always trying to release or innovate and produce more products that get that in the marketplace and continue to top-line grow. We have 12 commercially approved products out in the marketplace today. When we did our IPO just over 10 years ago, we only had one, so we've obviously increased that. And then we have 13 disclosed pipeline products, up from four when we went public. And those pipeline products continue to drive the top-line growth that we experience as we continue to move those things through approvals. We are an R&D company. We pride ourselves in our pipeline and what we're doing and how we're advancing. So you can see over the last six years, we've spent almost a billion dollars, 800 million, in our R&D efforts as we continue to develop and produce more products. On the right-hand side is we've developed the company into a platform type of situation. So we have five distinct platforms upon which we try to do a cascade of products over time to continue that high growth on the top line. We've already talked about our stents, and we've got now, we're into our third generation of stents, which is called the iStent Infinite. We'll talk a little more about that. Eidos, which we'll talk about, is our first sustained pharmaceutical release. We have iLink, which most of you may know as our cross-linking or our keratoconus product, and we'll talk a little bit more about that. iLution, which is a novel drug delivery platform. We talked about the fact that we'd like to stay away from drops. And then our R&D guys were thinking, is there a way to deliver the pharmaceuticals in a drop through another mechanism? And we thought there might be. And we got involved in looking at a cream, or we call it a lotion. Think of it that way, that you would just dab a little bit on your finger, put it on your eyelid, and does that effectively deliver the drugs to your eyes as opposed to using a drop? And then last but not least, we're dabbling and dipping our toes into the retina market. We've got a program underway in phase two around retina, but that's a large established market within ophthalmology, and we're excited about that. Today, we're sitting at a point, it's kind of an inflection point in the company's history where we have two revenue drivers, large revenue drivers in these two market areas, which we're calling interventional glaucoma and interventional keratoconus. And we'll talk about each of those as we move through. The first one is just if we think about, and we've talked a little bit about this, the major problem in glaucoma care is this noncompliance with drops. You can see on the left there is the traditional paradigm that I kind of spoke to where you start with drops and then you'd have more drops. About a decade ago, the SLTs, which is a laser program, those became more in vogue, so to speak, and was used in this paradigm. And then you still had to go through if that didn't work. and we know from data that about 50% of those lasers fail after two years, about 75% after five years, then you're facing these filtration surgeries where they put the hole in the eye and try to drain it that way. And I've talked about those stats on the bottom already. We're driving the marketplace to what's on the right side, which is this new interventional glaucoma treatment paradigm. and where it makes sense to now treat these patients interventionally with a procedure as opposed to just reflexively, you know, prescribing them a drop, which if used works, but we know they just don't use them for all the side effects. So you can see there the typical or what we drive towards is this laser treatment as the first line therapeut. Go ahead and do the laser. It's great. it's easy, it's in the office, it's very non-invasive for a patient, easy to get them into what we're calling the interventional glaucoma tunnel, have that conversation. Docs are very comfortable with that, and the technology's been around for a long time. But ultimately, like I said, within five years, 75% of those procedures are going to fail, and that hole is going to disappear, and that pressure is going to start to build up again. And then we would propose that then they move to a procedural pharmaceutical, which is our eye dose product, which we'll talk about, where you take the same active ingredient in those drops that slows down the production of the fluid within the front of the eye, implant that into their eye, and let that elute and deliver the drug to the eye instead of relying on the patient for their compliance. And that, in our trials, as you'll see, has been very effective in maintaining pressures over a long period of time, as opposed to you having to take a drop every day. once you're once you're past that stage then you can add to that with different tools in the mix category so we have the stent still that we can complement that again the procedural pharmaceutical is designed to stop the production of the fluid or slow that down the migs or the stent part of the solution is to open up the drainage on the back part of that and so you're you're on the outflow side and you're you're being able to continually allow that that fluid to flow and not get stuck in there and build up pressure on the front of the eye. And then you have some MIBs, which is microinvasive bleb surgery, and then that final end of stage for your really tough eyes, the filtration study, or surgery, sorry. So we feel like we, in that paradigm, we're ideally situated to handle it. We've got these products, which I'll show you right here, that will handle those areas along that journey. and it's interesting to note that a glaucoma patient on average will be in in in a practice with that disease for on average around 20 years of their life they get diagnosed somewhere in their like mid 60s to 70s that takes them to the end of life because there is no cure for glaucoma so you've got to manage it as best you can and manage that pressure so on the bottom part of that that little pathway area you've got the stents you know we've talked about the stents that will be allowed we started out in this area of combo cataract now we've advanced into standalone with eye stand infinite that allows that drainage to happen through the back part of that front of the eye and then on the top you've got the eye dose which can be the workhorse and allowing that pharmaceutical to be administered in the eye 24 7 and that is along the whole journey of your of your your disease and um and it's there it just takes that compliance danger out of the hands of the patient, and we just put it right in the eye for them. With respect to Eidos, it's designed to be long duration. You can see some of the interesting stats on here. One Eidos in our pivotal trials was shown to last up to three years for 70% of the patients. So you can imagine taking the drops out of the hands of a patient for up to three years, and that shows that they avoid taking drops 2,190 times. You can see that at the bottom. But that is a great holiday for those patients. And you talk to any of those patients, they love being off those drops. What are some of the side effects they have? A lot of times it gives them red eyes, so they look like they're hungover. A lot of times it gives them dry eyes, so it's itchy and they hate it. A lot of times it'll give them some fat atrophy in the bottom of their eyes, and so they look just kind of bloated in their eyes. It's not something they like. In fact, we've heard patients come in after having an eye dose three months, and the first thing they say is, look, doc, look at my eyes. They're not red anymore, and they're thrilled to have it. And the product in the real world is working exceptionally well. It's gotten great clinical response from our customers on how it's working. You can see on the right-hand side that 81% of our patients in the clinical trials were three of the topical meds. And we already talked about the fact that 70% were well controlled after three years. So Eidos is just the beginning. We talked about the fact that the company's design on these five platforms, Eidos being one of them. So today we have the Eidos TR, which is the product that we were just talking about. But coming down that pipeline, we've got two other products that are in the near term. One is called Eidos Trio on the left. Trio is T-R-I-O for in office. And And it's really just taking the same Eidos canister that we have today and putting it into an injector system that's advanced and much smaller incision site so that the physicians can do it in the office in a much more confident manner. It is of note, I will say, that our existing Eidos product today can be used in the office. It does create a smaller, I'm sorry, a slightly larger incision, but the Eidos Trio is designed to make that smaller, make those surgeons more confident of doing it in the office. We ultimately would like to be site agnostic, meaning if surgeons want to go into a surgery center and an outpatient surgery center setting and do the Eidos TR, they can certainly do that. Or if they'd rather do that in the office with an Eidos Trio, We're happy to provide them that opportunity. So we're going through the process of the clinical trial with that IDOS TRIO currently. We'll get the reimbursement code set up to do that, and then they'll be free to operate and do those things in the office. The next one is the IDOS TREX. We kind of lovingly call it TREX, although it's T-R-E-X for extended. It's designed, and you can see on the picture below, the canister now, instead of having some ridges is very straight. And from a geography standpoint or geometry standpoint, just by bowing out that canister, we're able to introduce about twice as much of the drug into the canister under the theory that it would last twice as long. So we're going through the clinical trials on that. We're hoping to see, you know, durations in let's call it five to seven years as opposed to three with the iostr and the so far in the trials and the data that we've seen it's it's having a great robust iop pressure lowering effect on our on our patients then we get into the stents i talked about i-sten infinite uh i-sten infinite was the first product that we had that would allow us to go into standalone patients with glaucoma going back in the journey if you recall we started you know 20 years ago we finally were able to get the first stent approved in 2012, but the FDA was very hesitant to approve that stent on a standalone basis. They didn't like the idea of a surgeon going into an eye just to implant a stent, so they approved it in combination with cataract surgery. So for the first many, many years, all of our stents were only allowed to be implanted in combination with cataracts since the surgeon was already going to the eye to replace the cataract. And in 2022, we were able to get finally everyone comfortable that these were safe and effective. And so we have iStent Infinite, which is a three-stent solution that can go into the standalone patient or in combination with cataract, quite frankly, and be used as part of our MIGS offerings to our customers. Lots of data, lots of history there, very safe and effective on use with our patients. And as you can see on that little picture, it's very small as well. We think it is the smallest medical device ever approved by the FDA are these stents. So thinking about the market opportunity, and this goes to what I was just saying, when the company started and we were kind of constrained to the cataract combination market, you can see on the left-hand side, there's 5 million eyes that get cataract surgery, of which about 10% to 15% have glaucoma alongside. So we were playing in a market, let's call it, of 500,000 eyes that could potentially get our stent products. On the right-hand side is the overall, let's call it glaucoma market, of standalone eyes. You can see that the prevalence data would show you there's 22 million eyes out there that have glaucoma, of which only 13 million are diagnosed, of which 12 million are diagnosed and actively treated. And today, the majority, the vast majority, are treated with drops, as we've talked about. So it's a large, large, large opportunity for this glaucoma treatment and why we're so excited about the offerings that we have, both with the stents and with Eidos, to tackle this problem and keep people from going blind over time, getting them away from drops and into this more interventional approach. So the vision that our CEO has for the next 10 years with respect to interventional glaucoma and treating these patients, first is really just, he likes to go back in time, he's been around for a long time, is to talk to the surgeons and get them to buy into this idea of treating patients interventionally. And one of the things he thinks about is a lot of these customers, their bread and butter historically has been cataract surgery. They do a lot of cataract surgery. 20 years ago when they did a cataract surgery, their professional fee was $2,500. Today though, as after chipping away of it over the last 20 years, they're only getting paid about $450. And so the professional fees are shrinking. And as I mentioned, a glaucoma patient is in your practice or potentially in your practice for about 20 years. Whereas a cataract patient is typically a one and done patient, right? So if you can start to have them catch the vision that you're spending today, all of your marketing dollars and all of your efforts to acquire a patient for a one and done procedure. Whereas if you just shift your paradigm thinking over and focus on glaucoma, of which there's a large market opportunity, and they're going to to be in your practice for 20 years, and that'll give you multiple shots to help that patient with different technologies that we have, it can be a win-win for everybody. The second is around combination therapy. I mentioned that the Eidos is treating the introduction of fluid in the eye. The stents are treating the outflow side of that fluid. If you can use them in combination one with another, then it's a win-win and a better solution for patients because you're attacking it with two different mechanisms of action. We've got to get the data to support that. So we're currently undergoing clinical trials to support that usage, but we're hopeful and we're seeing, you know, doctors, you know, kind of getting more excited about that combination therapy of using, for example, an eye stent, infinite, and an eye dose in the same eye in the same procedure. And that's certainly, if I could, I'd have my mom do that as well. The next would be this in-office, you know, more and more things around ophthalmology and other med tech are, you know, to the extent you can do it in the office. That's where we see things going over time. We mentioned the opportunity that we're pursuing to get the Eidos into the office through the Eidos trio. And it just seems like as professional fees and other fees, ASC fees get cut, there's more of a drive to get in the office. It's certainly a much easier conversation with a patient to get them to undergo an intervention in the office so as the steps along the journey we think in office will be more and more of a part of the treatment algorithm and the practice the next would be to for us to continue to drive this sustained release drug delivery over the longer term so they don't have to do it as often right and we talked about t-rex as that first opportunity where if we can get it to be double the tr where a patient only has to have that happen once every six or seven years that's just better off and probably an easier conversation with them. PE groups also are becoming an increasingly more important part of this whole environment around ophthalmology in particular, where maybe you're seeing it in other practices where the PE groups are buying up small ophthalmology practices and combining them. And they at least, one of the benefits of a PE, if you can say that, is they're very savvy when it comes to financials. And so they can understand the value associated with some of these patients that are going to be in a practice for 20 years, some of the revenue opportunities that come along with that with multiple procedures over that journey. And so we do see and foresee that PE groups will become more and more an important part of this journey along the IG roadmap. And last but not least, we think that doctors will then pivot over time to become IG specialists and that they'll advertise as being an IG specialist. And just because the market is being so large and so many patients are out there that they'll want to say to these patients, hey, we're going to take you off drops, we're going to get you on this IG roadmap, and we're going to get you treated and monitor those pressures and become really good at doing that over time. This is our product roadmap. We've kind of talked about everything on this, except for one thing I'll just point out really quick. The fourth one down is Presser Flow. That is our microinvasive bleb surgery product that's in clinical trials now. We do have it approved outside the United States, and we get great feedback from surgeons outside the United States in using this product, and so we're hoping it will get through the gauntlet here in the FDA, and we'll have that to be added to the arsenal of what our customers use in the future. Okay, the second area of driver for us from a revenue and a growth perspective from the company is interventional keratoconus. Now, for some of you, you've probably never heard of it. I'd never heard of it six years when we bought a company that was treating this. And so let's talk about what it is. Keratoconus is a disease that affects the cornea and is typically found in younger patients where their corneal fibers are weak and that causes a bulging out of the cornea that distorts the vision. So many times they're kids, they're typically teenagers that start with this and today there's just not a lot of awareness about this disease what it is and if you're you can imagine if you're a mom or a dad and you have a child in high school or middle school who comes home and says i can't see the board or i can't see it anymore the first thing they do is they run down to the optometrist and they stick their kid in front of the optometrist the optometrist takes a look and realizes yeah they they they will treat it not knowing about keratoconus they will treat it as a visual acuity problem and they'll put them in some glasses They'll put them in some contact lenses. And then what happens is they'll come back in six months, and the vision's deteriorated further, and they're scratching their head what's going on. They change the prescription just because there's a lack of awareness around keratoconus and what it is. So as we see in here, one in five, we think one in five are not being diagnosed accurately with keratoconus. we say that the typical time when this happens is in teenage years however today they're not getting treated until they're in their early 30s because people are just not aware and they're trying to figure out what's going on why is the vision still distorting when i'm putting them contact lenses what's happening there and so i don't know how many years i guess it was about 10 years ago there was a company in avidro that came out with a product that would stop or halt the progression of this keratoconus with a product called Fitrexa. In 2019, Glaucos acquired this company, Avidro, and we started to work through this drug delivery. I guess there's a couple more stats on here. We talked about some of these already. And you can imagine, now, let me just talk a little bit about this product that they had called Fitrexa. Fitrexa worked. It stopped the progression of keratoconus. It's a drop that was put on the eye, shined with a light that that activated a cross-linking effect that strengthened those corneal fibers and held them in place. All sounds great except for one thing. In order to make it effective, the surgeon had to debride or scrape off the outer layer of the cornea, something that was painful and the recovery time was long. But when you're faced with losing your vision or having distorted vision, patients were willing to step up but not in great numbers. And so you take that along with the fact that it's a very unknown disease. And there just wasn't a lot of opportunity for us to continue to grow this market. We were treating about 18, well, it's called 10,000 patients, about 18, 19,000 eyes a year over the six years that we had this product in our bag. And despite what we could do, that's the best that we can do. A lot of that was it was not seen as a rare disease. You know, Despite it being just 10,000 patients, it wasn't seen initially as a rare disease, and it wasn't priced properly. So there was a second generation that was coming around, and it was called Epioxa. And this now has been approved. It got approved at the end of last year, and we just launched it in the first quarter. The difference, the great difference being that this one, you do not have to remove the outer layer of the epithelium or the cornea. And so this is a new topical drop that is put on the eye. You shine the light on it. You infuse some oxygen on it. And that does the same effect as Patrexa. But it allows for a much better patient experience, obviously. Recovery time is much shorter. The whole treatment time is much shorter. And so it's a win-win all around for everybody. um the nicer exciting thing about this is it allowed glaucose to completely reset how we go to market with this disease keratoconus the reason i say that is we were offered the opportunity to introduce this as a rare disease drug price it accordingly and therefore allow us to have the capital to do the things we need to do to find the patients to educate the patients and get them treated so they can stop their disease at an earlier point in their time. And so all of these things that are around this little lady right there are all the things that we're investing in with the new capital that we're going to realize on the higher price with Epioxa that allows us to attack this disease more fulsomely. I can see that. The time is going fast, Steve says. So let's get skipping ahead. You can see the launch timelines. We're in the second quarter right now. You know, we've done a great job in launching the product, creating a patient hub for our patients so that they're taken care of and through their journey, establishing a new side of care network so that we cover them geographically and make sure they have the opportunity to get treatment. We're going through the process now of payer coverage, going out to the insurance companies, replacing the existing Fitrexa with the new Epioxa, et cetera, so that we can get patients treated. There's a third generation that comes behind that. I'll just quickly say the idea here very quickly is to take a topography of the eye, find out exactly where the corneal weaknesses are, and selectively target that so that they strengthen the target instead of just kind of a random kind of a shotgun approach with epioxide. It's going to be more targeted, more rifle approach to really get a very customized treatment for each patient with their keratoconus. I'm going to just skip that. We've talked about that. We'll talk quickly about ilution again this was this idea that you can you put a pharmaceutical in a cream and put that on your eyelid we're going after our lead candidate is around the demodex blepharitis which is the same market that many of you know with tarsus and you've seen the little commercials with the lovely mites crawling around on your eyelids it's the same idea theirs is a drop ours would be the cream right can we put a cream on an eyelid or right on top of the critters and kill the critters and and attack the disease they've done a great job making awareness of that market and we hope that uh you know our product can play in that space as well and then last but not least we talked about retina all i'll say here is that it's really early but very encouraging the idea for us on this play around retina is can we design an implant that will last longer than the two to three months of therapy today and our rabbit models you can see on the bottom which are highly applicable to humans, but they can stay out three years. That might be too long for a commercial product, so we're trying to dial that in. We've gone into a phase two trial with our retina biodegradable implant, and we'll see what happens as we go through those clinical trials. Those are all the pipeline, all the products, everything that's going on in the company. You can see there's a lot happening with the Glaucos, and we're very excited about. The last slide I'll show you really quick are some numbers. You can see the revenue on the top left, how it's a cascading, a nice linear growth there. Our current guidance is 620 to 635 for 2026. So that's the midpoint at 627 and a half. Great gross margins, guys. Margins in the mid 80%. And with these pharmaceutical products, we expect accretion in the margins over the near and midterm. You can see we're diverse. We not just do glaucoma and corneal health. We also have an international practice we haven't talked about and last but not least is uh on the right hand corner on the bottom 281 million dollars of cash in the bank with no debt and so we continue to operate on a cash flow uh break even uh in the short term and then soon hopefully as these products ramp up these pharmaceutical products we'll get to the more of the cash flow generation and we'll go from there

Steve Lickman, Analyst — William Blair

and with that i'm out of time i'll turn it back over to steve thank you so much yeah thanks alex and thank you everyone for joining us and see you over at the richardson room for those that can be