Conference Transcript - GKOS 2026-06-03

Mike Sarkone, Analyst — Medical Supplies and Devices Team

I'm Mike Sarkone I'm an analyst on the medical supplies and devices team here and this is a session for Glaucos with us from the company today we have Alex Thurman CFO and Chris Lewis head of IR gentlemen thanks for joining thanks for

Alex Thurman, CFO

having us yeah thanks Mike sorry just catching my breath take your time all

Mike Sarkone, Analyst — Medical Supplies and Devices Team

right so get in some water yeah hot topic here the recent LCD proposal I'm sure that's all anyone's asking you about so maybe can you kick us off with some comments about how you're thinking about it absolutely and thanks again for uh hosting us uh and thanks you for

Alex Thurman, CFO

all of you for coming out this morning to listen to a little bit about cloud coast and appreciate the question nice way to ease into the morning with the you know let's talk about the lcd um i guess what i'll say from our our perspective is um obviously the lcd was a bit of a surprise to us given where we are in the life cycle of IDOS. But that being said, you know, as we've looked at it and we've talked about it internally and with investors, there's a few things that we feel, you know, that need to be addressed within the LCD. The primary thing is around the requirement that the draft LCD had in order that was going to require both failed drops and a failed SLT in order to get IDOS. and what you know we'd like to you know explain to to the max when we have the chance to do so in the open comment period is to try and educate them to show them that there are actually cohorts of patients that aren't eligible to get a drop and there are another cohort of patients that aren't eligible to get an SLT and when you combine that with an and statement now all of a sudden you've got a multiplier effect on those patients that actually wouldn't be eligible for an IDOS because of those conditions and the requirement in the draft LCD so that's one thing we want to address there's a you know a number of other things that we'll address with them you know it's interesting that they decided to put on re-administration for example a requirement that to wait two years to get re-administered when our FDA label says one year and it was studied that way so that's kind of an interesting it's kind of arbitrary in our minds and kind of where did they come up with that idea and so you know we'll work to address that with with the max obviously you can imagine as a company we've rallied the troops to provide and to gather the clinical data that we'd like to support or propose to support there are our positions in changing that LCD we've obviously gone out to our customers and our physicians to get them and their thoughts and and to get their support on board as we go through this process and then finally our CEO and the president have been talking with the presidents of the societies the different societies within ophthalmology all of which are very supportive in our efforts and will be participating as well as we go through this open comment period great that's

Mike Sarkone, Analyst — Medical Supplies and Devices Team

really helpful Alex I guess you know you talked about these next steps of addressing this proposal so you have a rough sense for you know will any potential comment letters from any of the societies you know be public or is that something we have to wait to see and kind of what are rough timelines there for when we could see statements of support

Chris Lewis, Head of Investor Relations

Yeah, certainly over the next month here, each of the five MACs that, you know, included proposals here will have open meetings, and so those are certainly, I'm sure, an area of interest for investors to listen into, and there I'm sure you're going to hear a lot of what Alex was talking about in terms of educating the MACs, in terms of the clinical points, you know, I think we want to make for patients in getting access, ultimately. The open comments, I believe, do become public at some point. I don't know if it's a real time or they're ultimately posted at some point after the open comment period closes.

Mike Sarkone, Analyst — Medical Supplies and Devices Team

Well, it's great to hear that you've already started to hear some support from societies and from the surgeon community. And, you know, Alex, you mentioned, and I think it's a good point, that there's some patients who just can't get SLT. Do you have any idea for, like, the rough sense of, you know, what proportion of patients who would be IDOS candidates, like, wouldn't qualify?

Alex Thurman, CFO

SLT well it's interesting because it's certainly something that wasn't on our radar previously and when we sell an IDOS we sell it to the customer we don't know what patient is going into or doesn't but what we can do is we've looked at some data that one of the high volume surgeons did dr. said to Morian and in that data he showed that about one-third of his patients were not eligible for SAT SLT excuse me and the other two-thirds were so that's a data point. We're obviously going through now and trying to collect that data. But regardless, what's most interesting about the SLT procedure is there are roughly 650,000 SLTs done every year. And that's a procedure that's been around for at least a decade. So you've got six and a half million people that have gotten an SLT over the last 10 years. And the statistics will show you that about 50% of those patients will fail after two years, or meaning the SLT effect wears off. And 75% will have failed that SLT within five years, all of which then become

Mike Sarkone, Analyst — Medical Supplies and Devices Team

eligible candidates for IDOS. Got it. That makes sense. And, you know, I have to ask this question. I think I know the answer. But, you know, in terms of your IDOS volumes today, do you have a rough sense of how many occur pre and post SLT? And then maybe, you know, a follow-up to that is, you know we've done some some calls and it was kind of high volume cataract and refractive surgeons right and they have one thing to say but maybe how does that vary across the you've done some calls yeah some call well we don't as you know

Chris Lewis, Head of Investor Relations

we don't we don't always have that that's perfect visibility into you know we sell into the account and ultimately the the surgeons have discretion in terms of how they use it in terms of the patient in terms of the procedure whether it's a standalone or combo cataract, you know, we're trying to gather additional data there and visibility, so stay tuned on that front, but I think, yeah, we'll see. I think various surgeons have different algorithms, and I think glaucoma is obviously a heterogeneous disease, and there's not a one-stop shop in terms of treatment paradigm, so certainly I think if you talk to glaucoma specialists, the, you know, I think the majority of them for their eligible patients certainly position SLT as a first-line intervention, and I think the stats around how many are actually done a year would affirm that. You talk to some higher volume cataract surgeons, for example, and they may not do it. I don't think that necessarily means those patients haven't had SLT before, so I think you have to, you know, add that into the consideration list there. But I think certainly it's a, you know, what we know is SLT is a well established first line intervention. And there's a lot of patients that have undergone it and

Mike Sarkone, Analyst — Medical Supplies and Devices Team

continue to get that procedure every year. Got it. And if you think about what the optimal outcome of this process could look like, what you'd hope to see in terms of the final LCD,

Alex Thurman, CFO

you know, what does that look like for you? Optimal would be a full revision, obviously. But I think in seriousness, I think that what we would like to move them towards is an LCD that's in line with clinical practice that allows for the opportunity for a patient that maybe not be eligible for SLT or not eligible for a drop to be carved out and eligible for I-dose to not require them to have the and between the two because there's no data out there that suggests that an SLT, having an SLT before an I-DOS is preferable to vice versa or et cetera. So that would be, you know, to get rid of the and and make it an or would be part of that process and that journey. To get the re-implantation back on label is something, again, it's not a real big changer from a modeling perspective, but it just seems odd that it's not in line with the label. And then the last piece around combination with a MIGS device, I think there, you just you just need to wait until you know as we've talked about we started a phase four clinical trial on that very point as soon as IDOS was approved and we're in the final stages of that with data they'll be ready next year and so we'd like to educate them on that if they're willing to listen and if not then we'll wait until that date is finalized and if the SLR sorry if the LCD goes final at the end of the year or the beginning of next year it won't be there very long until we'll have that data ready and we can do a reconsideration request to to provide the safety and efficacy of those combination products.

Mike Sarkone, Analyst — Medical Supplies and Devices Team

Yeah, that's an interesting point. It's something I did want to ask about. You're running two of these studies, so it seems to me like it'd be beneficial for the MACs to kind of wait till those read out and see the clinical evidence. And are the readouts there next year, right, I believe?

Chris Lewis, Head of Investor Relations

Yeah, so next year we'll have that IDOS plus infinite data, and we'll have that available and get published. So I guess you can have your scenarios of what happens here if a final LCD is issued, and then ultimately become effective that's typically you know from the starting point of seven to 12 month process so in in fairly short order if that were to go through as proposed on that on that point we'd be able to submit a reconsideration request on that uh in terms of that combination therapy you know one point that i'll just add is if you listen to the cac meeting last november you know idos is a is a drug at its heart of it um in terms of you know it's a Traviprost implant so from a mechanism of action standpoint it acts as a drug very different and complementary than the surgical mix devices that really go after the trabecular meshwork and outflow mechanism so you know I think there's a lot of you know clinical interest and appetite for these to be done together and I think you know ultimately for the patient that could be a good thing to slow the progression in a more aggressive manner so we'll see how receptive the MACs are to that. Certainly, I think even before that, the RCT kind of phase four studies, you're going to see a lot of peer-reviewed publications from surgeons in terms of retrospective case series, et cetera, as you've started to see at various society meetings.

Mike Sarkone, Analyst — Medical Supplies and Devices Team

And even in the eye dose in combination with cataract setting, like I think you guys are running a phase four there as well. I think we've seen data. It might have been an individual practitioner like I think maybe dr. Tomorian has posted stuff his own series that showed a pretty significant IOP reduction for idos and combo cataracts you already have some data that shows it's it's really efficacious

Chris Lewis, Head of Investor Relations

yes certainly I think we've we've shared that it's it's I think it's in our IR presentation but you've you've seen profound IOP reductions of 10 to 11 millimeters of mercury witness that in combination which is even better than what we've seen historically on the some of the other prior therapies so we've

Mike Sarkone, Analyst — Medical Supplies and Devices Team

been very encouraged by that and then you know if the proposal were finalized as it stands today you know could you just help us think about what are the moving pieces and and how that might impact your business on both the Eidos and i-stent side and in 2027 yeah I think I'd go back to what I was saying

Alex Thurman, CFO

earlier about the SLTs because I think most investors are focused on that SLT step at it and the fact that there's just a lot of patients out there that have had that in the past that have failed because the statistics would prove that out and those all would be eligible for IDOS and I think if the LCD were to finalize as is then obviously there would be a period where the company would need to refocus their strategy to target those particular SLT customers or SLT patients and and focus on those through either DTC advertising or reach out to our customer physicians, et cetera. But I think that overall, while there might be a little hiccup in that transition period, that the long-term objective of IDOS and the market opportunity is still really large. I mean, if you think about that kind of six million patients out there, do the math, it's a large market opportunity regardless. Obviously, our focus when we started this journey was on the 12 million eyes that are out there that are actively diagnosed and treated today with glaucoma, most of which are on drops. And as you know, and as the company is really focused on this interventional glaucoma idea and trying to change the paradigm, you know, we want to go after that. But if the LCD were finalized, I think there's still a really large opportunity for us with an eye dose.

Chris Lewis, Head of Investor Relations

Yeah, I would just add, I mean, just look at the first quarter results, right? We had a really strong, you know, you can say inflectionary type quarter in the first quarter with IDOS. So I think we've really been encouraged with what we've seen there. And you've got to remember it's still early. You know, NGS, which is one of the larger maxes, came on late last year. So we're just starting to see the benefit there. Palmetto just got priced, you know, a month or two ago. So that's going to start to layer in over the course of the year. And then certainly we're still early on the commercial and Medicare Advantage fronts, and those are large opportunities as we look ahead. So I think we continue to feel good about the underlying health and growth potential of IDOS, regardless of where the LCD ultimately shakes out.

Mike Sarkone, Analyst — Medical Supplies and Devices Team

Got it. Yeah, you know, I did want to ask about that, Chris. the MA front, the Medicare Advantage, you know, this LCD does provide a path toward coverage there. Do you have a rough sense for how many, you know, lives are under the Medicare Advantage and what kind of timelines could be in unlocking that if this were finalized?

Chris Lewis, Head of Investor Relations

Yeah, so certainly there's a pathway. Ultimately, Medicare Advantage plans typically are required to cover Medicare policies over time. Each one acts a little bit different. But, yeah, it would certainly, you know, we actually already have pretty robust coverage, both on commercial and in Medicare Advantage, which I think is a bit underappreciated. So this more or less solidifies that and fills the gaps where coverage policies aren't actually intact for Medicare Advantage, but certainly clarifies that and solidifies that over time in that population. Got it.

Mike Sarkone, Analyst — Medical Supplies and Devices Team

That's helpful. And Alex, you made a reference to kind of the longer-term outlook here and the longer-term TAM. I did want to ask, when you think about that TAM longer-term, how do you parse out relative contributions in the various settings? You know, how important is the combo cataract versus standalone versus Eidos plus a MIGs stacking?

Alex Thurman, CFO

I think the first two really are very important and are out there today, right? certainly when you have a MAC that has established the facility fee and the professional fee and utilizations are starting to creep up there's an easy pathway for that physician to do it in combination with cataract surgeries already in the eye if that patient has glaucoma conditions you know IDOS is a very elegant and simple solution so that's an important marketplace for us and then obviously the standalone is where we're focused I'll remind everyone that we've played in that combo cataract market for 10 years or 12 years when we first launched our initial eye stent but it's a much smaller market right there's only about 500,000 total eyes that are available today that have glaucoma and cataracts at the same time and that is still somewhat under penetrated I think there's only about 200 or 250,000 procedures done today and we're trying to play in this larger standalone market that you referenced which is the 12 million eyes that are out there that are really again being treated most of which with drops and as we've talked about it's amazing it's still amazing to me to think about the statistics around the drops that 90% of patients are not compliant with their drops and here they have been diagnosed with a site threatening disease but they're not taking their drops but there's reasons for that you know they there's all the side effects that go along with the drops there's forgetfulness there's shaky hands there's red eyes there's dry eyes etc and and so we need to have that interventional glaucoma mindset really start to kick in and I think our customers are starting to buy in on that you hear it a lot more out there in the marketplace not only from Glaucos but from other companies as well the importance of that and and let's go

Mike Sarkone, Analyst — Medical Supplies and Devices Team

after that can you just remind us I think you've said kind of a rough sense of the mix today for Glaucos is majority standalone then behind that is combo cataract and then distant third is MIGs stack is that right yeah that's our

Chris Lewis, Head of Investor Relations

that's our read again visibility wise we don't have perfect sense into that but certainly the combo cataract as we as we've been on record saying and in line with our expectations is certainly growing you know the the initial focus was that standalone market for to build the market build the professional fees and establish that as a standalone intervention but you're you know you're more more so as those could establish and you know meeting the surgeon where they are and that you know increasingly in the combo cataract setting as well

Mike Sarkone, Analyst — Medical Supplies and Devices Team

got it and then when you think about again I think my last one on the proposal I promise if if docs were prohibited from stacking MIGs how do you think about the interplay of of that selection for the doctors between I Eidos and MIGS, and yeah, I guess, you know, what's the decision tree there?

Alex Thurman, CFO

No, it's a great question, and before I even get to that answer, you know, again, I'll remind everyone here, there is no clinical reason to prevent that stacking if you kind of just take a step back. You've got Eidos as a drug, and the design and the purpose of the Eidos is to slow down the inflow of the fluid into the eye that creates the pressure, Whereas as a MIGS procedure, whether that's a stent or something else, is designed to attack the outflow, right, and to open up those outflows that typically get clogged and create that pressure. So if you just step back and think about it logically, there's no clinical reason that those two should be prevented from working together because they're complementary in nature, and they each attack a different mechanism of action. It makes sense when the MACS came out with the anti-MIG stacking, right, Because there you had two procedures in the same surgery going after the same part of the anatomy, right? And that may not make sense, and it didn't make sense, and so there we go. But if it were, to your point, I think, again, it's all about the clinical data and trying to show that it's safe, effective, and it's in the patient's best interest, and that's what we're trying to do with that clinical trial so that we can allow that to happen.

Chris Lewis, Head of Investor Relations

I think as we think about the total package of IDOS and the outcomes doctors are seeing, the ease of use in terms of the implantation and the economic reimbursement considerations, I think we feel pretty confident in IDOS. If a doctor does have to select one or the other, I think IDOS wins a lot more of those than it loses.

Mike Sarkone, Analyst — Medical Supplies and Devices Team

Got it. And then I did want to ask, you talked about the total package of IDOS. You've also got iterations in the pipeline. You've got Trex, you've got Trios for in-office. When you think about when we ultimately have those on the market, how do you think about how much that expands, you know, the addressable opportunity versus, you know, any potential cannibalization of IDOSTR?

Chris Lewis, Head of Investor Relations

I think it's, you know, IDOS, we view IDOS as a platform, and IDOSTR is really the first iteration of that. And as you know, even beyond T-Rex, even beyond Trio, I think we have five or six others in the pipeline that we haven't really talked about yet so certainly you know not resting on our laurels with with with TR we're continuing to innovate as we always do across all of our platforms and I think you know for T-rex for example that's basically the same form factor and size but you get 2x the the drug payload so for doctors that see a benefit of getting rather than you know potentially two to three years you get you know potentially double that given the drug payload that's obviously a pretty attractive uh profile for for doctors via single implant getting that type of uh duration you know for trio as we've talked about that's that's a optimized enhanced injector system so the same drug and and canister but just optimize the injector a bit to to create a a little bit smaller more minimally invasive uh incision That will allow, we believe, we want to be agnostic in terms of site of service over time, whether it's outpatient or in the office. And that would, I think, allow, along with reimbursement dynamics that we have to, you know, work through to establish reimbursement in the office setting, that would allow doctors to start to potentially use IDOS in the office over time as well.

Mike Sarkone, Analyst — Medical Supplies and Devices Team

Got it. And just on that, they'd still be eligible for the J code. as well in the office setting right yeah yeah j could and so would you envision like pricing would be the same for the in-office setting or yes yes and then um you know maybe we can shift uh to epioxa um maybe can you talk about reimbursement progress and and where things stand uh today you know and maybe highlight how that compares versus your expectations you know prior

Alex Thurman, CFO

to approval no great question we're excited about epioxa for sure um i would say that the progress with the launch has gone better than expected and is ahead of our expectations there's three prongs to that launch right the first one you reference which is reimbursement or getting the payers on board look at we're blessed in that we have an existing product that's out there that has 99% coverage with vitrexa and cross leaking being a standard of care that's accepted across the the spectrum and so with Epioxa that somewhat makes the conversations I'll say easier if I can use that word in that you're just going into these payers and you're basically having the clinical conversation about what epioxa is why it's different how it's better and it's replacing fitrexa which will eventually go away so we're pleased to have announced in the first quarter call that we have already over a hundred million lives that have an access pathway to receiving epioxa and we're well along you know continuing to work with all of the payers around the nation. Because as you know, Epioxa is definitely a commercial type of product, commercial insurance. Most of these patients are young in their teenage years or their early 20s. And so we're pleased with our progress so far. Awesome. And you mentioned

Mike Sarkone, Analyst — Medical Supplies and Devices Team

you have Patrex on the market. Corneal cross-linking has been around for a bit now. You do plan to sunset for tracks over the course of 2026 can you talk about how you're managing physician warehousing of patients who may be waiting for every oxa availability or you know for physicians who are waiting for the j code to become effective yeah I think it's doctor by doctor and in patient

Chris Lewis, Head of Investor Relations

by patient certainly during this transition period we're offering both footrexa and at be oxa so I think each each doctor is a little bit different there in terms of how they're managing that, but I think we've been encouraged with the amount of initial interest that we've seen in terms of patients or doctors putting patients in the Epioxa patient care hub, if you will, kind of one of those leading indicators. Obviously, that starts the prior authorization process and everything, and during the miscellaneous code period right now in the second quarter, that's obviously a little bit of a heavier lift to get those patients approved, but we have seen patients get approved and treated, which is great, and that will hopefully get more streamlined as you, you know, run over the course of the year and the J-code becomes effective. But, you know, I think certainly you're going to see a mix of both in this transition period, both Fotrexa. You know, if a patient can't wait, if their disease is rapidly progressing or they're already in a pretty severe state, you'd probably just do Fotrexa and not have to go through the prior authorization process on Epioxa, just from a time necessity standpoint if a patient is maybe you know newly diagnosed a more more more mild type type disease um theoretically why would you not want to do epioxa just given the advancement and not having to debride the top layer of the cornea and all the you know patient recovery uh considerations that brings so i think we've seen a mix and obviously over the course of the third quarter we will you know discontinue for trexas commercially we still will have it available in a in terms of a more of a clinical patient need setting for medical

Mike Sarkone, Analyst — Medical Supplies and Devices Team

necessity over time that's open and longer term when when you think about the corny where the corneal cross-linking market could go how do you think about how that market shakes out between specialty pharmacy versus buy-in bill and you know what's the strategy to support kind of a healthy buy-in bill marketplace yeah a couple things there I mean certainly

Alex Thurman, CFO

Certainly when you're dealing with a rare disease, high price, especially pharmaceutical drug, you want to have a specialty pharmacy option for your customers that will, especially in the launch phase, because they just don't want to take on the risk of that price point. So we do have that available, and we are finding, not surprisingly, that a lot of the volumes today with Epioxxer are going through the specialty pharma channel, especially when you're in this miscellaneous code period, which we are, where that's a lot more difficult in working with the insurers to get a patient named approval done. So what we expect is over time, you know, as we get past the J code, which will be effective on July 1st, and that coding becomes more part of everyone's contracts with their commercial insurers, and they continue these patients, or sorry, these customers continue to see and get reimbursement confidence around the fact that that epiox is getting reimbursed and there's a margin associated with that then I think you'll see those more risk averse or I'm sorry risk taking customers start to move away from the specialty pharma and move into the buying bill because they'll want to realize the margin that they can get on the on the drug and we're there to support them so we've talked about you know part of our investments in the Epioxa launch and and preparation for Epioxa was to build not only the hub that Chris was referred to and all of the patient facing apparatus to go around that but also teams that help our customers with that buying bill process understanding how that works understanding the coding and and the pre-authorization processes and the audits and the appeals and all of that stuff so we're trying to help them as best we can in a compliant way got it

Mike Sarkone, Analyst — Medical Supplies and Devices Team

And I did want to ask briefly, we've seen some proposals, pilot programs from the Health Resources and Services Administration around, you know, can we implement a pilot where we shift some of the 340B upfront discounts to back-end rebates? Does that, you know, I guess, how do you think about that if that were to come to fruition and does that impact how you think, you know, the 340B channel works for Epioxa?

Chris Lewis, Head of Investor Relations

yeah at the end of the day for us I don't I don't think that's overly a material consideration I mean if anything it's it's probably more of a working capital consideration for those three board 40 B institutions and we obviously provide as part of the launch you know elongated flexible terms so I don't think that would be really be a dynamic that would impact our business

Mike Sarkone, Analyst — Medical Supplies and Devices Team

one way or the other got it and then I did want to touch on the competitive environment and corneal cross-linking you know you've been the only game in town for a while now, but we do have competitors like Epion Therapeutics, you know, we'll see some data in 3Q, I guess, you know, can you talk about how you view Epioxa and the competitive advantage

Alex Thurman, CFO

there? Yeah, well, certainly when you're dealing with a market in which there's a large opportunity, and we do think it's a large opportunity from the standpoint that today, over the past six years, we have only been able to treat about 10,000 patients, somewhere between 18,000, 19,000 eyes, And that's been very steady for the last six years that we've owned Fetrexa. But we do have data that suggests that only one in five patients are getting treated today, which would, again, doing the math, would, you know, lead to you to believe there's 100,000 eyes annually that could get treated. So certainly there's a market for that. We also think that keratoconus is a disease that's highly underdiagnosed or misdiagnosed or nondiagnosed. And so there may be even more eyes beyond that 100,000. And so it doesn't surprise us that, you know, you've got competitors and we're prepared for that. I think we will wait and see how the data looks out. And I think, you know, that you can have multiple players in the market, especially in the beginning years, and both can do well. And then there will be a time and a place in the future when you get to a market penetration where market share becomes more important. But I think, you know, they will they will play in their market and we'll play in the same market with them.

Chris Lewis, Head of Investor Relations

So we have a little bit of time before that would, you know, like that'd be 20, 28 potential dynamic. And so, you know, you do what you can here over the coming years to to to build the market the way you believe is best for patients and build those competitive moats over time. But I think we continue to feel, you know, very confident in our in our position.

Alex Thurman, CFO

And I'd be like to ask that we're, you know, we've got a third generation product that's following on Epioxa that's in clinical trials as well that we'll be presenting later in this decade.

Mike Sarkone, Analyst — Medical Supplies and Devices Team

Well, Alex, Chris, thank you very much for your time.

Alex Thurman, CFO

Really appreciate it.