Glaukos (GKOS) Q1 2026 Earnings Transcript

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DATE

Wednesday, April 29, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chairman and CEO — Thomas Burns
• President and CEO — Joseph Gilliam
• Chief Financial Officer — Alex Thurman
• Vice President, Investor Relations — Christopher Lewis

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TAKEAWAYS

• Consolidated Net Sales -- $150.6 million with year-over-year growth of 41% on a reported basis and 39% on a constant currency basis.
• Updated Full-Year Net Sales Guidance -- Now $620 million to $635 million, increased from prior guidance of $600 million to $620 million.
• U.S. Glaucoma Franchise Sales -- $93.5 million, representing 58% year-over-year growth.
• iDose TR Sales -- Approximately $54 million, contributing significantly to U.S. glaucoma performance.
• International Glaucoma Sales -- $35.8 million, up 23% year over year on a reported basis and 16% on a constant currency basis.
• Corneal Health Franchise Sales -- $21.3 million, with 15% year-over-year growth; includes Fetrexan and initial Epioxa sales totaling $17.7 million.
• Epioxa Site of Care Network -- Devices now serve roughly 65% of the U.S. population, with a pipeline to reach approximately 95% coverage.
• Payer Access for Epioxa -- Policies and pathways established for over 100 million commercially insured lives, including 4 of the 5 largest payers.
• Epioxa Product-Specific J-code -- Code J2789 takes effect July 1, 2026; until then, Epioxa is reimbursed under a miscellaneous technology code.
• Gross Margin -- 84% in the quarter, up by 120 basis points from the prior year; management reaffirms 84%-86% gross margin guidance for the year.
• Clinical Evidence for iDose TR -- Now includes 22 peer-reviewed publications and active Phase IV studies in varied real-world settings.
• iStent Infinite European Commercial Launch -- Enabled by EU MDR certification late last year, contributing to international growth.
• Composition of Glaucoma Regional Volumes -- Noridian and Novitas dropped to about 7% of regional volumes from 78% in the prior quarter, with pickup in other MACs such as NGS and Palmetto.
• Operating Expenses -- Expected to increase modestly from original projections due to accelerated commercial investment, while management maintains focus on operating leverage and cash flow breakeven.

SUMMARY

Glaukos Corporation (NYSE:GKOS) reported record-breaking revenue across all main franchises and materially raised annual net sales guidance in response to broad-based strength led by iDose TR and Epioxa. Management detailed rapid expansion in both surgeon training and patient coverage for new high-growth therapies, citing substantial progress in reimbursement access and site deployment. Gross margin improvement was attributed to revenue mix, with future expansion anticipated as Epioxa and iDose scale. New commercial investments aim to accelerate market education and technology adoption while supporting ongoing profitability objectives.

• Joseph Gilliam said, “the majority of patients last year still saw a stand-alone iDose procedure, but the mix is certainly shifting towards in combination with cataract or in combination with another mix.”
• Phase II studies for iDose TR are fully enrolled to assess combination use with cataract surgery and iStent Infinite; results are expected to strengthen future payer negotiations.
• Guidance for U.S. glaucoma sales (excluding iDose) remains flat year over year as management continues to monitor whether recent stability represents a sustained trend.
• Additional DTC (direct-to-consumer) investments and commercial team growth are planned for the second half, triggered by increased confidence in payer and procedural access.
• Reimplantation approval for iDose TR enabled the first successful readministration procedures this quarter, with management seeing growing future relevance.
• Permanent transition from Photrexa to Epioxa is scheduled for completion in the third quarter, with minimal commercial overlap expected thereafter.
• International launches for core platforms will be selective pending regional reimbursement and pricing dynamics.
• Specialty pharmacy is the preferred initial distribution channel for Epioxa among nonhospital U.S. customers.
• Joseph Gilliam stated, ultimately, we will have Photrexa available in limited quantities through a different mechanism where their physician may require an epi off-based procedure thereafter. But I wouldn't call that out as a real material consideration for certainly the commercial aspects of it for you all. But for those physicians who seek ongoing access to Photrexa. We do have a pathway which we're going to make it available then.

INDUSTRY GLOSSARY

• iDose TR: Sustained-release, injectable implant for controlled glaucoma therapy, providing intraocular pressure management through gradual medication delivery.
• Epioxa: Non-incisional, oxygen-enriched, UV-activated corneal cross-linking therapy for keratoconus, designed to avoid removal of the epithelium and minimize recovery time.
• MAC (Medicare Administrative Contractor): Regional authorities that process Medicare claims and set specific reimbursement and policy guidelines affecting device and drug coverage.
• J-code: Unique reimbursement code assigned to drugs and biologics under Medicare for billing and claims determination.
• Epi-On/Epi-Off: Refers to corneal cross-linking procedures performed with (Epi-On) or without (Epi-Off) removal of the corneal epithelial layer.

Full Conference Call Transcript

Christopher Lewis: Thank you, and good afternoon. Joining me today are Glaukos' Chairman and CEO, Tom Burns; President and CEO, Joe Gilliam; and CFO, Alex Thurman. Similar to prior quarters, the company has posted a document on its Investor Relations website under the Financials & Filings, Quarterly Results section tied with Quarterly Summary. This document is designed to be read by investors before the regularly scheduled quarter conference call. [Operator Instructions] 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, for sales, product, 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 to review today's press release and our recent SEC filings for more information about these risk factors. You'll find these documents in the Investor Relations section of our website at www.glaukos.com. Finally, please note that during today's call, we will also discuss certain non-GAAP financial measures, including results on an adjusted basis. We believe these financial measures can facilitate a more complete analysis and greater transparency into Glaukos' ongoing results of operations, particularly when comparing underlying results from period to period.

Please refer to the tables in our earnings press release available on the Investor Relations section of our website for a reconciliation of these measures to their most directly comparable GAAP financial measure. With that, I will turn the call over to Glaukos' Chairman and CEO, Tom Burns.

Thomas Burns: Okay. Thank you, Chris. Good afternoon, and thank you all for joining us. Today, Glaukos reported record first quarter consolidated net sales of $150.6 million, up 41% on a reported basis and 39% on a constant currency basis versus the year ago quarter. As a result of our first quarter outperformance, we are raising our full year 2026 net sales guidance to $620 million to $635 million compared to $600 million to $620 million previously. Our first quarter results reflect strong execution across our global commercial and development priorities, highlighting the commitment of our teams, strength of our differentiated technology platforms and our continued progression as an increasingly diversified leader in ophthalmology.

Looking ahead, we believe we are well positioned to sustain this momentum driven by 2 transformational growth drivers, including the continued advancement of the interventional glaucoma treatment paradigm with iDose TR and launch of Epioxa, establishing a new standard in interventional cardoconis and rare diseases. Together, these compelling and durable market opportunities reinforce our confidence in delivering a best-in-class growth profile well into the next decade as we continue to invest in and advance a robust industry-leading pipeline while remaining disciplined in capital allocation focusing on ROI-driven investments to support our near-term objectives of continued operating leverage and cash flow breakeven. Now let's discuss our first quarter results in more detail.

Within our U.S. glaucoma franchise, we delivered record first quarter net sales of $93.5 million on strong year-over-year growth of 58%, driven by growing contributions from iDose TR, which generated sales of approximately $54 million in the first quarter. IDose TR continues to deliver strong clinical outcomes that meaningfully improve patients' lives, driving strong physician interest and adoption. From an execution standpoint, we remain focused on our key initiatives, including expanding our base of trained surgeons and active accounts, increasing utilization, broadening market access, scaling targeted commercial investments and expanding body of clinical evidence. On the last point, iDose TR is supported by a robust and growing body of clinical evidence demonstrating strong efficacy, safety and durability of effect.

This now includes 22 peer-reviewed publications, complemented by a broad portfolio of active Phase IV studies across diverse real-world clinical settings, further reinforcing its consistent performance in real-world practice. Importantly, iDose TR is serving as the foundation for a broader shift towards earlier intervention of glaucoma care. Our efforts to educate surgeons and key opinion leaders globally are gaining traction and helping to drive a steady evolution in the standard of care. This momentum was evident at recent major industry meetings, including AGS and ASCRS, where engagement and enthusiasm around interventional glaucoma and our novel therapies were notably strong and growing.

To support these efforts, we continue to invest in our commercial organization and infrastructure to expand disease awareness and education, while enabling our customers to effectively adopt and operationalize interventional care into their clinical practice. Moving on, our international glaucoma franchise delivered record net sales of $35.8 million and year-over-year growth of 23% on a reported basis and 16% on a constant currency basis. The strong growth was once again broad-based as we continue to scale our international infrastructure and execute our plans to drive mix forward as a standard of care in each region and market -- major markets in the world.

As previously discussed, we continue to expect new competitive product trialing headwinds in some of our major international markets as we progress through 2026, partially offset by growing contributions from iStent Infinite following its EU MDR certification and associated European commercial launch late last year. We also expect the currency tailwinds to abate going forward based on the current rate environment. And finally, our Corneal Health franchise delivered net sales of $21.3 million on year-over-year growth of 15%, including Fetrexan and very early Epioxa sales of $17.7 million.

At the end of the first quarter, we are delighted to announce commercial availability of Epioxa, our novel groundbreaking advancement in corneal cross-linking for the treatment of cons a rare cytidine disease that is currently far too often underdiagnosed, undiagnosed and untreated. We believe Epioxa represents a transformative innovation in care comes care offering an incision-free alternative to traditional corneal cross-linking procedures, and it does not require the removal of the corneal epithelium, the outer most layer or the front of the eye.

This novel oxygen-enriched topical therapeutic bioactivated by UV light is designed to reduce the pain associated with removal of the epithelium, streamline the procedure and minimize recovery, all while delivering clinically meaningful outcomes and exceptional value to patients, providers in the health care system. Response we received from surgeons in the broader ophthalmic community since FDA approval and the more recent initial commercial launch activities has been very encouraging. As we've discussed, with the launch of Epioxa, we have redefined our go-to-market approach to better address the site threat disease and truly expand patient care and access.

Importantly, with this launch, we are substantially increasing our investments in patient awareness, education and access, while addressing the long-standing challenges of underdiagnosis and under treatment that have affected this rare disease community. As with all pharmaceutical launches, initial patient access will be gated by typical payer adoption headwinds in hurdles, but we've been encouraged by the progress we've made in the short order through the early days of our launch. First, I'm proud to report that we have successfully established and continue to selectively expand a broad-reaching site of care network.

Our acquired O2N systems are already actively deployed across locations serving roughly 65% of the U.S. population with the pipeline progressing through various approval processes that we expect will expand our treatment center reach to approximately 95%. Looking ahead, we will continue evolving this network to bring treatment access closer to patients as reimbursement and drug acquisition pathways become further established and streamlined. Next, we continue to make considerable progress with payers to secure access pathways or policy coverage for Epioxa with several plants having already updated or are in the process of updating their policies to include this novel therapy.

These efforts are translating into expanded access with pathways now established or more than 100 million covered commercial lives in the United States, including with 4 of the 5 largest payers reflecting encouraging initial receptivity of Epioxa's clinical value. While we expect the pace of policy adoption to build over time, we remain focused on driving broader commercial -- or sorry, broader coverage across both commercial payers and Medicaid programs to support more streamlined access pathways over time. Earlier this month, we achieved another important market access milestone as CMS has signed a product-specific J-code for Epioxa, consistent with our expectations and in response to our application.

The new code J2789 is scheduled to take effect on July 1, 2026, and we believe it will help streamline the reporting and reimbursement process for Epioxa among U.S. payers over time. Until then, we anticipate Epioxa will be commercially available under a new technology miscellaneous J-code and anticipate measured adoption over this initial period until the permanent J-code is in place and solidified operationally by providers in our specialty pharmacy. Beyond market access, we're proud to lead the way once again on forging a new path for interventional care to come by advancing a targeted marketing and DTC initiatives to drive awareness, education and earlier detection, supported by greater optometric engagement and strengthened advocacy partnerships.

Finally, we launched a co-pay assistance program for eligible patients and are operationalizing a specialty pharmacy partner network in support of Epioxa patients. As you can see, we are very excited by the significant potential Epioxa offers to patients living with keratoconus. While Epioxa remains in the early stages of its launch, our teams are energized and executing with focus, and we're encouraged by the solid progress we're making against our core launch priorities. Beyond Epioxa, we continue to advance a broad and differentiated clinical pipeline across our 5 novel therapeutic platforms encompassing 13 publicly disclosed programs and additional undisclosed assets supported by a robust portfolio of active clinical and Phase IV studies.

This includes ongoing pivotal trials for iDose TREX, iStent infinite and mild to moderate patients and the PreserFlo MicroShunt, an active Phase II trial for iLution Demodex blepharitis, ongoing development for our Link platform, including a planned market introduction of our KC screening device late this year and our promising earlier-stage rental assets. Overall, we remain on track with our clinical time lines and encouraged by the progress across our complete portfolio. In conclusion, at Glaukos, we're in the business of pioneering new marketplaces within ophthalmology for the benefits of patients.

Our record first quarter performance highlights the strength of our strategy and execution as we continue evolving into an increasingly diversified atomic leader with multiple transformational growth drivers in iDose TR and Epioxa and advance our mission to transform vision therapies for the benefits of patients worldwide. So with that, I'll open the call for questions. Operator?

Operator: [Operator Instructions] And our first question comes from the line of Tom Stephan with Stifel.

Thomas Stephan: Great. Thanks for the question. Nice quarter. First one on Epioxa, Tom or Joe, maybe if you can talk about early findings, one, on sort of how initial experiences in sort of the claims and prior of processes are going? And two, what demand in the market looks like sort of from an early utilization standpoint, maybe based on what you're seeing in the Epioxa patient portal? And then I'll have a quick follow-up.

Joseph Gilliam: Sure. Thanks, Tom. It's Joe. I'll start off there. I think Tom gave you some of the higher-level stats, the progress we're making with the Epioxa launch, both in terms of the 2 fundamental, I think, foundational items, both our side of care network as well as the broader payer pathways. Underlying that, which I think you're asking a good question is the process of making your way through that. And clearly, it's hard to judge too much on that until we get into the post J-code period because at this point, you're dealing with the miscellaneous code. So all systems around that, you will are, by definition, slower than normal as you adjudicate on a claim-by-claim basis.

But I will say that we've been very encouraged by those sites of care who come online, as Tom referenced. And the patient flow that's coming from that and into our portal in the hub, as you say, as a leading indicator of what it can mean for the clinical demand associated with an Epi-On therapy like Epioxa. So as we make our way through that, and we see those claims get adjudicated, which we've seen positive claims get through the process and also those procedures get done now. We're encouraged by, I'll call the is the leading indicator in terms of that funnel as it develops.

Thomas Stephan: Got it. That's great. And then Follow-up just on iDose, really solid in the quarter. Joe, maybe to stick with you, can you just talk about drivers of the strength? And it'd be great if you could maybe also discuss kind of Noridian and Novitas versus the remaining MAX and what you're seeing in kind of each of those 2 pools, if you will?

Joseph Gilliam: Yes, absolutely. I think the most encouraging thing about the results of the first quarter was it was very broad-based in terms of what drove that performance. It was continued expansion within the more established, I'll call it, MAX. And you referenced Noridian, Novitas subset by First Coast in that as well. I'll come back to that. But now you start to see NGS, in particular, turning on, the early signs of Palmetto turning on as well as we've more recently achieved a professional fee formally in that region. And I think also is encouraging was a real increase certainly the funnel into our hub associated with commercial and Medicare Advantage patient flow.

So I think it was broad and consistent with what you would hope to expect in the context of our core initiatives. To put a finer point, I think on your question around Noridian, Novitas, typically, I talked about that in the context of Noridian plus Novitas First Coast is some of the earlier adopting MAX. And in the first quarter, that was down to about 7% of the overall region volumes, if you will, from 78% in the fourth quarter. And again, that's really because as they continue to grow, you might expect the adoption curves to be picking up even faster in areas like NGS and Palmetto.

Operator: Our next question comes from the line of Adam Maeder with Piper Sandler.

Adam Maeder: Congrats on a great start to the year. The first one for me, I wanted to ask a modeling question. So nice Q1 top line , you raised the full year outlook by more than the Q1 outperformance. You've given a lot of great modeling color in the past. So Joe, maybe for you or Alex, can you just kind of pull apart the updated guidance with iDose contribution versus the stent business versus corneal health and as we think about Q2 in particular and as it relates to Epioxa, I would appreciate if you could give us a little bit of modeling help. And then I have a follow-up.

Joseph Gilliam: Sure, Adam. I'll dive in, and I'll give at least some introduced comments on that front. And if folks have additional questions, we could add in a little bit deeper. But as you said, it was a great start to the year. with really each of our franchises exceeding expectations, and we made considerable progress across all those fronts, including within interventional glaucoma and iDose in particular. And as a result, we were able to raise our guidance up to the $620 million to $635 million range. And as you think about that in your models by franchise on a handful of perspectives, first by franchise. On the international glaucoma side, I'd say really the dynamics here are somewhat unchanged.

Obviously, we expect, as we move forward here, some of the currency benefits that you heard Tom call out in the prepared remarks will weight in. And so we do expect that going forward, we'll see sort of high single-digit growth for the remainder of this year. Now when you put all that together, that's going to translate into low double-digit growth for the full year. but the remaining quarters, we would expect single-digit growth in that franchise. On the Corneal Health side, Obviously, I think everybody knows there's a fair number of moving parts there. It was a strong first quarter.

But we do continue to anticipate volatility associated with both the TREX and Epioxa transition, but also the temporary permanent J-code transition over the course of, call it, Q2 and Q3. And so when you put all together with the performance and what we're sort of seeing we now expect kind of high single-digit growth for this franchise for the entire year. with some puts and takes in the individual quarters as we get there. And as you've heard me say in the past, we certainly expect to be exiting the fourth quarter with a pretty strong performance curve as we start to pull through Epioxa in a more meaningful way.

On the U.S. glaucoma side, again, another strong start to the year, we would adjust our views there probably to be more in the, I'll call it, low 30s type growth for the full year, and that's really driven by still an ongoing view that going forward we should expect kind of flattish non-high dose sales going forward until we've really been proven otherwise and continued sequential progress as we've been seeing with the iDose launch. So you put all that together, and I think as you said, we not only do we raise our overall guidance, but we raised the reach of our underlying franchises and the drivers.

I will add just because you asked about, I think, for Q2 in particular, given there's a lot going on here, and it's all good, but I want to make sure we've got it as do as possible. that for the U.S. glaucoma franchise, as I alluded to earlier, in Q2, I think we expect sort of flat non-iDose and that continued sequential iDose expansion. In interventional glaucoma, we'd expect the high single digits as we talked about that benefit wanes. And the corneal side, I think as we said on the last call, we would expect in the second quarter to see a bit of a dip there on a year-over-year basis as we transition from Photrexa to Epi-On.

Adam Maeder: Really appreciate all the color, Joe. And if I could just sneak in a follow-up. I wanted to ask about iDose and or reaching a point now where you have critical mass from a reimbursement standpoint. So Tom or Joe, can you just maybe talk about some of the new initiatives that you're going to start to put in place here. I think you've talked about growing the commercial team potentially looking at direct-to-consumer as we get into the latter part of the year. We just love some incremental color for kind of the next chapter.

Joseph Gilliam: Yes, you're exactly right, Adam. We've always talked about you didn't want to put some of these things into place until you start to have a more solid foundation from a reimbursement standpoint. Certainly, what you're hearing in the context of our first quarter results and our guidance is increasing confidence in that foundation, both in terms of the 5 of the 7 MAX that are now stable by professional fees and the team is driving incremental confidence both on the reimbursement side as well as, obviously, the clinical and commercial side. But also now increasingly as we move forward here on the broader commercial Medicare Advantage.

So I think as we've talked about in the past, as we move forward here, it's about driving increased awareness for iDose and interventional glaucoma and teams that help drive that broader environment of both education of patients as well as the process to get them treated by an interventional procedure like iDose. So we have been making significant investments for some time now in more of our reimbursement and business teams that surround the traditional sales force to really try to make sure that we can maximize both patient access and that broader awareness initiatives.

So I think you should expect to see more of that certainly as we get into the second half of this year and as we get closer to exiting the year and heading into next based upon this trajectory where we're going to feel, I think, a lot more confidence in starting to make some of those more offensive investments.

Operator: Next question comes from the line of Larry Biegelsen with Wells Fargo.

Larry Biegelsen: Congratulations to you. Maybe one on iDose and one on Epioxa. Joe, if you could talk about how you've engaged with the MAX since the CAC meeting last year. Any updated thoughts on the likelihood of an LCD this year and the timing of those 2 RCPs you're running? And I had one follow-up.

Joseph Gilliam: Yes, I'll start off at the beginning, and Tom can comment on the broader studies that we're doing associated with iDose here in a minute. So as we think about the engagement with the MAX, I'm not sure we have a particularly different strategy here. We've always engaged in an education process to make sure they understand our technologies, how they utilize the labels and indications for use around them. And we continue to do that. We continue to try to diagnose where we've got ongoing I'll call it, less streamline reimbursement in areas like CGS and WPS, and we continue to have momentum in some of those conversations.

So hopefully, we're marching forward those 2 MAX in a productive way,, they can drive professional fee establishment similar to the other 5 larger MACs that have come before them. As it relates to the post-CAC conversation LCD conversation, really no changes on this front since our last call, Larry, and we've talked about it. At this point, we've not seen any signs of an LCD and we continue to believe it would be premature at this stage of the clinical adoption curve. Having said that, obviously, by nature of these things can be unpredictable and okay. So it certainly remains possible even if we believe it's less probable disappoint.

Thomas Burns: And I think to address your question on Phase IV studies, Larry, that we've contemplated actually been enrolling for some time, once we receive NDA approval, we have done 2 major Phase II studies. The first would be iDose plus cataract versus cataract surgery alone to be able to demonstrate the incremental value of using iDose in combination with cataract surgery. And that study is actually fully enrolled, and we'll be following those patients over the course of this coming year. And we'll be looking to publish the data at regular intervals. And I think that will be a very powerful supplement to the data that we currently have on hand, again, another 22 peer-reviewed clinical trials.

And then I think we were largely present in also doing a study looking at iDose versus iDose plus infinite because I want to show the incremental value of these 2 different mechanisms of action to be able to lower intraocular pressure to supremely low target pressures, which will by all evidence to be able to force the progression of glaucoma or progression in glaucoma. I think with both of these in hand, I think it will be timely in case in any event in the future, we're challenged by any magazine using either combination modalities or procedural pharmaceuticals plus MIGS or using iDose in combination with cataract surgery.

Joseph Gilliam: One other thing I'll just add, Larry, I think even at a minimum on this these studies that Tom's are referencing as important as the broader payer community. So this is how you continue to expand that coverage irrespective of MAX and LCDs, et cetera, with the individual commercial players in Medicare Advantage plans to make sure that we're optimizing that access for our patients.

Larry Biegelsen: And for my follow-up on Epioxa, Joe, I'm going to ask you kind of more of a big picture question. I think from our past conversations, you felt confident that Epioxa could return to peak Photrexa levels of roughly 18,000 to 19,000 eyes by the end of the decade. And if that's paid volume, that would be well north of $1 billion in revenue. So I guess, my question is you still -- how are you feeling about achieving that? And what is the ramp to that look like?

Joseph Gilliam: Yes, Larry, I mean, I think I'll stop short of obviously making the longer-term predictions formally and just say I think we have been on record saying we view this as a potential $1 billion-plus franchise the pace in which we get there, we'll continue to monitor as we get into the actual true commercialization, especially if we get towards the second half of this year. But I think part and parcel of that is I don't think we view it just in the context of where we've been with Photrexa patient volumes.

We're making the investments we're making, which are enormous moving forward to drive increased awareness and detection and ultimately action and access in the hopes that we can treat, quite frankly, far more than that. We believe that there are more than the 18,000 to 19,000 eyes at any given time that should be getting diagnosed and treated. And so from our standpoint, a lot of the DTC and the things that you've heard Tom reference, we'll be putting those investments towards hopefully growing this overall market from a volume perspective over that period of time and getting more and more of these patients treated.

Thomas Burns: And I would just add on that, if you think about what the possibilities are to build this marketplace over the planning period, and it's really important to be able to recognize what we have beyond this planning care, certainly at the tail end of the planning period, this would be the second-generation customized algorithms that we have in place for the treatment of keratoconus that can't help but the market expanding if we show demonstrable changes in K-MAX for these patients. and have the possibility of actually increasing their best corrected visual acuity by virtue of customized algorithms that we're going to be able to dispense and use on these patients with keratoconus.

So I'm very bullish not only on the near term of all the different mechanisms we're putting in place to build the marketplace, but our possibility of having a second wind moving into the 2030s, which will increase our presence in this rare disease.

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

Ryan Zimmerman: Congrats on strong start here. Just kind of dovetailing on some of the questions before. There's been obviously a lot of investor concern about these LCD risk. I know you just addressed it. But Tom, I guess my question is around the existing body of evidence. I'm wondering if you could kind of talk about it in contrast to the Phase IV study. And remind us what percentage now that we have quite a track record with iDose, what percentage are you seeing today either in combination with cataract or with another MIG in terms of the iDose usage?

And if some of the studies already bear out evidence of combinatorial usage of iDose with other products or procedures, do you think that is sufficient or the Phase IV study is really necessary to kind of refute any concerns there?

Thomas Burns: I'll let Joe start and I might add some color. Go ahead, Joe.

Joseph Gilliam: Yes. I'll start on the -- in the context of the trends that we've seen. Certainly, I think they remain consistent, Ryan, with the past commentary. The relative percentage of the procedures done today where surgeons are treating glaucoma with iDose and at the same time, in conjunction with the cataract procedure, it's growing as expected, given obviously, Glaukos has already changed the standard of care for those patients. But at the same time, our efforts remain focused on that interventional glaucoma opportunity, and we continue to see rapid growth in the number of stand-alone procedures.

So I would say that the majority of patients last year still saw a stand-alone iDose procedure, but the mix is certainly shifting towards in combination with cataract or in combination with another mix as you might expect, because these physicians are trying to obviously do everything they can to slow the progression of the sight-threatening disease.

Thomas Burns: And I would just say, based on the question that you have, most of the Phase IV studies we do and as Joe has mentioned, are really for the payers and for moving into commercial payers and Medicare Advantage. I think surgeons a priority already have the confidence that putting iDose in combination with cataract surgery is going to yield an incremental effect. I think that you will see that in any channel actually do. Likewise, the use of combination therapy of iDose plus an iStent infinite, surgeons will have high confidence that they're going to treat incremental effect. So the studies we're doing are less to be able to drive that portion of the market.

They're more to validate surgeons already existing confidence in using these technologies together.

Ryan Zimmerman: Understood. And then maybe a question for Joe and Alex even, which is just operating expense guidance and your thoughts on profitability. I mean it's almost getting to a point where despite your best efforts, you will become profitable in kind of the next year. And I'm wondering kind of how you think about the ramp in sales -- or excuse me, the ramp in expenses needed for Epioxa commercialization and kind of what that does or doesn't do to your time lines or at least in our model, our time line to profitability?

Alex Thurman: Ryan, it's Alex. I'll start, and I'll start with profitability. Again, just to reiterate what Tom had mentioned in his opening remarks, our near-term focus in managing the business do so on a cash flow breakeven and driving basically operating leverage within the P&L, which we're pleased to say we saw in the first quarter, and we're glad that, that execution is happening. But as we look ahead to your point, we certainly can see with the commercial launches of iDose that we definitely have a fairly clean line of sight towards that pathway of profitability over the next few years.

To your point, some of it will depend on the ramp of these commercial launches and the associated revenues that come with it. But as we continue to manage the business towards that cash flow breakeven, you'll see from an operating expense side that we continue to reinvest in the business and reinvest in these commercial launches. And we've talked about the fact that our operating expenses will grow this year, year-over-year. And we feel that way. And I'll just give you some commentary now that as we did overachieve in the first quarter, Tom and I and Joe have talked about adding additional fuel to fuselage and these commercial launches.

So you should see the operating expenses tick up slightly and modestly from what we talked about at the beginning of the year, but still in the high teens and still showing that operating leverage overall as we progress throughout the year.

Joseph Gilliam: I think, Ryan, the overall -- when you hear Tom and I talking about the incremental spending from DTC or otherwise, it's important to note that, a lot of that is by its very nature discretionary. So as we look forward, you're thinking about making those investments alongside the significant growth that we're achieving and hopefully with the hopes of a return on investment that makes that certainly worth the incremental spend associated with it. So we'll be in a process here where we're continuing to evaluate the effectivity of those efforts and what that return looks like before diving in with 2 feet, if you will, to go full spend on DTC related efforts.

We've always been pretty disciplined in how we thought about those types of things.

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

K. Gong: Thanks for the question. I wanted to start off with one actually on the core U.S. glaucoma business. I think iDose clearly had a really strong quarter, but underlying years glaucoma also did quite a bit better than expected and grew at a healthy clip year-over-year. albeit also a bit of an easy comp, I believe. So when I think about your forecast, your reiteration for flat for 2Q and the year, what are you seeing that kind of supports that outlook? Is it just conservatism? Or are there real challenges that you're seeing out in the market?

Joseph Gilliam: Yes, Allen, thanks for the question. I mean you're right in the context that this was the second straight quarter where we've seen about the restoration of growth in that non iDose [ remainder ] or as you said, I think, core U.S. glaucoma franchise. So I think we've certainly seen signs of stabilization of the underlying market there. And I think that our teams are doing a great job in -- on the performance side within that more now more stabilized market. As we go forward, I think we're just not ready yet to make that call. that, that is, I'll call it, the new normal that we're operating in. It's been an encouraging 2 quarters.

But as we look forward here, I think it's still safer for us and for investor expectations to be in that sort of more flat year-over-year basis until we've proven otherwise on a sustained basis. There are some things in there. Obviously, I think we benefited a little bit in the quarter from some supply chain disruptions on the competition front. It's hard to measure that. I don't think it's material, but that should subside as we move forward here. So I think we just want to play a couple more innings here of this on that side before we rerate our view on guidance there.

K. Gong: Got it. And then, I guess, a follow-up, moving on to Corneal Health. You talked about how you've reached coverage of 65% of the U.S. population with line of sight to reaching 95%, I believe, the number was. How quickly do you think you can get to that 95%? Is that a target you think you can reach by the end of the year? Or is it going to maybe slow down a little bit now that you grab some of the low-hanging fruit?

Joseph Gilliam: Yes. Thanks, Allen. In some ways, it's actually been accelerating, as you might imagine, once you announced commercial availability and the transition plan becomes more real. What we've seen is more of an acceleration than a deceleration on that front. Having said that, you also know that hospital systems and even certain other customers have longer cycles for bringing on new technologies and new drugs to the pharmacy network and the like. And so I think we'll continue to make substantial progress here every month and certainly hope that we're getting there or close to that target in terms of realized side of care network by the end of the year.

Operator: And your next question comes from the line of David Roman with Goldman Sachs.

David Roman: Maybe I could just start on Epioxa here. Could you maybe talk to us a little bit about some of the specific market development efforts that you have underway. And maybe you can kind of break them into whether it's physician and practice education, patient assistance programs and then engagement and education with payers?

Joseph Gilliam: Yes. Sure, David. It's Joe. On the Epioxa side, I think about it kind of as follows. So I won't repeat what Tom has already said, and we comment on. There's a foundational element that's first and foremost, when you're kind of going through the stage of a launch. And that is that you get the Sidecar network established, affected trained and everything ready there. The second layer of that is that you're engaging with the payers in a way to establish access pathways and then ultimately from there, further streamlining and optimizing those. And then as you go alongside of that, you start to dial up, I'll call it, the more physician-related and even patient-related marketing efforts.

But you don't want to do that too soon in that life cycle until really the overall ecosystem is ready. So a lot of where we're at right now is around the last part of what you said, which is making sure that as we're having success with the site of care network and on the patient side, that the machinery in the middle is working as efficiently as possible to make sure that we're working things through the hub and through our specialty pharmacy, and we're providing that visibility to our customers and to our patients, that our co-pay assistance programs are working as they're intended.

And all the stuff that probably is a little less interesting to investors but are -- is critically important to the ultimate success here as we move forward. And as I mentioned earlier in the call, we're really encouraged by that initial burst, if you will, of patients that are going in there. And now we have to get through that process of trying to get them on therapy which can be a lengthy one when you're dealing with a miscellaneous J-code. And so navigating that is paramount for us before we get obviously the formal J-code in the second half.

David Roman: Very helpful. Maybe just a follow-up here on iDose. And I know you talked a little bit about this, but could you just talk to some extent whether there was any contribution here from having the reimplantation approval that came early in the first quarter? To what extent that may be giving physicians increased confidence implanting iDose? And how we should think longer term about the interplay between having the readministration label as an iDose TREX?

Joseph Gilliam: Yes. Well, I can confirm that we've now seen numerous successful readministration procedures as some of those earliest patients are getting out several years. It's not the predominant procedure being done. It's still a small fraction, but we've seen multiple surgeons do readministration and do so successfully. We've seen payer policy updates occur and a lot of, I'll call it, general progress on that front. So I think we're encouraged, and this is sort of in line with what we always expected that has the benefits of the initial procedure start to wane that both the patient and the provider are going to want to continue that therapy given the clear benefits to the patients.

So we're seeing that start to happen. And I think as we look out over the long run, certainly, readministration becomes a much more material part of that overall mix. every month and every quarter that we move forward here, it should be more and more relevant to what we're looking at. But out of the gate, we're encouraged by what we're seeing.

Operator: Your next question comes from Richard Newitter with Truist Securities.

Richard Newitter: Congrats on the quarter. Just wondering if you could give us any kind of color on what's happened to the provider base as this transition to Epioxa is taking place? I'm not looking for you to necessarily give us a specific number of doctors or your installed base per se. But do you guys envision just a big concentration over the next few quarters in a small number of providers' hands to getting all of this refined and figured out from a consistency on the payment standpoint? Or is this potentially going to be broader and not as concentrated than maybe what I'm suggesting, as we think through this?

Just trying to get a sense for is it really a dramatically fewer number of doctors? Or is it going to be potentially broader than that?

Joseph Gilliam: I appreciate the question, Richard. I think -- well, first, I think on the definition of how you do concentrate it. I mean I think relative to our iDose user base, for example, inherently in keratoconus even with Photrexa, you had a relatively concentrated group of centers and sites that were doing the procedures. Now I won't surprise you and I think that with Epioxa, it was our intent, obviously, to make sure that your initial site of care network is as concentrated as you can reasonably be to try to make sure you're close enough to the vast majority of the U.S. population.

So inherently, our Wave 1, if you will, efforts have been very targeted around the country in that context. But I'll tell you, in some respects, our wave 1 efforts have gone maybe a little too well. And that's caused us to have to accelerate some investments to meet the needs of that customer base and their patients that are coming out of that. So there will always be earlier adopters than mid adopters in a launch, and we'll see that here, obviously, part of Epioxa. But I'm not particularly concerned about any significant concentration issues in any 1 or 2 or even 10 customers.

I think it's going to be measured much more in hundreds of customers ultimately than it is in single digits.

Richard Newitter: Yes. That's helpful. And then is there any one area where the spend that you're stepping up from a position of offense, clearly is directed now that you've had some early learning experiences? In other words, where are the frictions most notable either to a doctor not wanting to do this, not wanting to buy Epioxa and move forward? Or is it more on the pull side from the patients and the demand awareness increase standpoint?

Joseph Gilliam: Yes. I would say it's actually maybe a bit more -- and so if you think about this, whatever -- there's always going to be conversation in education, both the sales force and the broader teams to make sure people understand what we're doing, why we're doing it, how we're doing it as it relates to the Epioxa launch. And certainly, in the future, as we've talked about, there'll be a lot more of that spend oriented towards, I'll call it, more growth and DTC education related. Right now, in this moment, where a lot of that spend is going, it should surprise you, is much more in that initial lift, confidence and process associated with claims prosecution and adjudication.

It's about making sure that customers understand how it works that they're successfully seeking prior authorizations that were supporting that process where appropriate to plan and then ultimately getting those patients access to that care. So a lot of it is much more in the machinery, I'll call it within the market access world than it is necessarily in marketing or even sales from that standpoint.

Operator: Your next question comes from the line of Mason Carrico with Stephens Incorporated.

Harrison Parsons: This is Harrison on for Mason. Would you be willing to provide some color on the utilization of the various cohorts of surgeons trained on iDose? Is there portion of the surgeon base today that you would say has matured at this point with more stable utilization? Or are you still seeing pretty robust utilization growth across these older cohorts of surgeons, too?

Joseph Gilliam: Yes, Harrison, I'm not sure I would say that we're reaching stabilization, if you will, in any one cohort. I mean if you think about it, even for some of the earliest adopters, there's still ongoing enhancements to how they think about interventional glaucoma, the amount of time they're spending on that versus other areas of their practice, let alone, as we talked about coming into this year and again on this call, the movement from, I'll call it, the more traditional fee-for-service patient population into the commercial and Medicare Advantage world.

So I think we continue to see growth across both our more mature customer base as well as certainly with the addition of new surgeons and new practices throughout the country. So we're still pretty early in that overall evolution curve, if you will, of this launch.

Harrison Parsons: Got it. Yes, that's helpful. And then second question here. Could you update us on the progress you've made this year from a commercial payer standpoint on iDose? I think the middle of last year, you called out more than 50% of Medicare Advantage and commercial policies had a positive policy in place. Where does that percentage stand today?

Joseph Gilliam: Yes. So I'm not sure it's changed a significant amount in this past quarter, but just to put a line of sand sitting here today with iDose, we have about 99% patients have an access pathway in the commercial and Medicare Advantage arena. To the point you made in your question, about 50% of those patients are in plans where there's a specific policy attached to it and the remainder, where there's silence, we're certainly seeing successful pull-through on that.

I'll also add that in these, I call the early days of the real efforts here, we're seeing a very, very high success rate in the context of the prior authorizations that are submitted for these patients across that landscape, which is what you'd expect given the statistics I just got done citing around the broader patient access pathways.

Operator: Your next question comes from the line of David Saxon with Needham.

David Saxon: Congrats on the quarter. I wanted to start on the specialty pharmacy channel or with RCM. So I mean, I imagine the docs doing Epioxa were previously doing buy and bill with Photrexa. So maybe you were seeing you. So what's the feedback been from them in terms of process and whether there's any friction in that kind of change of workflow?

Joseph Gilliam: Yes, David. So I think that historically speaking, with the mix, there were certainly those customers who prefer to buy and bill Photrexa and those customers who acquired it through the pharmacy channel, in this case, in our case, Orsini, and that continues going forward. I think it will surprise you that certainly amongst our nonhospital-based customers the vast majority, certainly out of the gate are choosing to access the drug via our specialty pharmacy. And so that does mean some of them are doing this for the first time with our channel.

I think it's a little too early to comment specifically around that dynamic because, again, as what I said earlier, when you're in the miscellaneous code environment, even with a perfectly streamlined, I'll call it, hub and specialty pharmacy process, the process to getting that access for the patient is much more elongated. And we've only had the drug on the market now for a month. So from that standpoint, I think we're still in the early days of adjudicating those claims and getting access to the drug via the SP channel. But more to come on that. And we're certainly encouraged with the work that Orsini's been doing to make sure that they're in network with these various plans.

And I think ultimately, that's going to accrue to the benefit of our customers who choose that channel.

David Saxon: Great. And then maybe one for Alex, just on the group gross margin. So maybe remind us what your expectations are for the year. And then as we go through iDose and Epioxa looking to next year, kind of how we should think about gross margin potential?

Alex Thurman: You bet. Thanks, David. I mean -- we saw 84% margin in the first quarter, which was up 120 basis points from last year. So we -- that was please to see that. In the last call, we -- I gave a range for the year of an expectation of 84% to 86%. And sitting here today, we still continue to feel comfortable with that guidance range for the year with expected accretion over the course of the year as products like Epioxa become a greater share of the mix. And then to your point, looking forward in 2027, we'll comment more further when we get closer, but you would expect accretion as these products continue to ramp.

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

Michael Sarcone: Thanks for squeezing me in here. So just a follow-up on the Epioxa specialty pharmacy question. I mean, when you think about buy and bill, understanding that specialty pharmacy is coming first, can you talk about options that you may have or are evaluating to enable or efficiently enable buy and bill for Epioxa down the road?

Joseph Gilliam: Yes, Michael, I, probably, won't go too far into the details around that. But obviously, there's always an ongoing education process around from our reimbursement teams and the experts within that as well as some of our site-of-care teams and the like to make sure those customers understand how the buyable process will work, the key terms and conditions that we have in terms of our payment terms and things like that to make sure that we can enable that where customers ultimately choose to buy and bill the drug.

Obviously, when they think about it from a business standpoint, that can be an attractive option to them when they've got the right building blocks in place to enable buy and bill activity.

Michael Sarcone: Got it. Just a quick follow-up on iDose Trio. What's the latest and greatest there in terms of time lines and where we stand.

Thomas Burns: Yes, I'd be happy to address that, Michael. The -- as we said before, we would complete and we have completed the clinical study for iDose Trio. We'll monitor those patients over the course of this year. We plan to file by the end of this year, and we expect to be in position for targeted approval in the fourth quarter of 2027. So we're hitting on all marks in all cylinders. And as we talked about before, when we did our human factors analysis, we saw a real strong preference for this new design on the order of 90%. So we're encouraged about what we think we'll be able to bring to the marketplace.

And more encouraged by the ability to drive in-office use over time.

Operator: Your next question comes from the line of Joanne with City.

Joanne Wuensch: Can you hear me okay?

Joseph Gilliam: We can.

Joanne Wuensch: Excellent. Now when we do some of our due diligence on IDS, Physicians are still pushing back or pushing back, maybe still is a wrong word, on the price tag of it. And honestly, I'm a little confused by that since you do have the J-code and you do have the reimbursement in place. So I'm sort of curious what your initial reinterested like and what the responsive to that.

Joseph Gilliam: Yes, Joanne, I think -- I mean, you'll always have customers with varying views, but I'm not so sure that, that's really a material of a driver today as it was when we launched. Any time you launch a pharmaceutical like we have with iDose or Epioxa. There's a period where you have to make sure that your customers understand the why and how, right? But at this point, sure, there will always be some of that. But for the vast majority of the customers, certainly, you can see with the results, we continue to add them and drive that forward. We can continue to overcome that challenge where it represents itself.

Operator: And your next question comes from the line of Steven Lichtman with William Blair.

Steven Lichtman: Just a couple of quick ones on Epioxa. First, as it relates to the transition from Photrexa, are you still anticipating it Photrexa to fully sunset by the end of 3Q? Or has there been any change in that plan?

Joseph Gilliam: No change and consistent with what we've communicated to our customers that we would expect in the third quarter to have that transition taking place. And ultimately, we will have Photrexa available in limited quantities through a different mechanism where their physician may require an epi off-based procedure thereafter. But I wouldn't call that out as a real material consideration for certainly the commercial aspects of it for you all. But for those physicians who seek ongoing access to Photrexa. We do have a pathway which we're going to make it available then.

Steven Lichtman: Great. And then obviously, we're at the beginning of the runway with Epioxa in the U.S., but just thinking longer term, what is the potential for expansion of your platforms outside of the U.S., whether it's Photrexa or with Epioxa.

Joseph Gilliam: Yes. I think it's -- it has to be much more selective, and it won't surprise you, Steven that today's environment where you're navigating a combination of reference-based pricing initiatives as well as other things in terms of payer dynamics and the like. There are certainly some markets internationally that can support the type of therapies that we're talking about with Epioxa and with iDose. But also, we'll have to continue to evaluate that as the landscape shifts that we bring success for generations of products forward. and bring as much of this technology over time as we can internationally. But it's not something that at the moment I would be factoring in any material way into your models.

Operator: Our final question comes from the line of Anthony Petrone with Mizuho Group.

Anthony Petrone: Congrats on the quarter. Maybe one on just keratoconus just broadly, when you think about the disease state that it's just -- it's underdiagnosed you're getting most of these patients that come in with Stage 2 severity, just thinking about the Epioxa opportunity, what is the really true TAM from a patient standpoint in terms of this disease state? I know it's kind of considered an orphan disease, but I think the prevalence probably stretches to somewhere between 80,000 and 100,000 patients. So what is the true TAM in terms of prevalence in the U.S.? And what is the diagnostic pathway to get more patients into the funnel?

Joseph Gilliam: I think, Anthony, it's a great question in the context of exactly the why behind what we're trying to achieve here. So when you think about keratoconus and as a condition in where we've been, the 18,000 to 20,000 eyes that happen getting treated, we believe is likely going to be proven to be a fraction of what really should be getting caught should be driven to detection and ultimately into therapy over time. I think our best estimates here suggests that there should be between 50,000 and 100,000 keratoconic eyes a year at a minimum that are getting diagnosed and treated with Epioxa cross-linking.

And -- but we're going to have to find that number out ourselves as we move forward with increased debt initiatives around awareness and detection and ultimately access that therapy. But we do believe that over time that this could be proven to be more of a rarely diagnosed disease than a rare disease. But today, it operates like a rare disease and we're going to make those investments accordingly.

Operator: With no further questions in queue, I will now hand the call back over to Glaukos Corporation for closing remarks.

Thomas Burns: Okay. I want to thank you all for your time and for your attention today, and thank you as well for your continued interest and support of Glaukos. Goodbye.

Operator: Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.

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