Glaukos Q3 2023 Earnings Call Transcript

There are 14 speakers on the call.

Operator

Welcome to the Glaukos Corporation Third Quarter 2023 Financial Results Conference Call. Copies of the company's press release and quarterly summary document, both issued after the market closed today, are available at www.glaukos.com. Followed by the number 1 on your telephone keypad. This call is being recorded and an archived replay will be available online in the Investor Relations section at www.glaukos.com. I I'll now turn the call over to Chris Lewis, Vice President of Investor Relations and Corporate Affairs.

Speaker 1

Thank you, and good afternoon. Joining me today are Glaukos' Chairman and CEO, Tom Burns President and COO, Joe Gilliam and CFO, Alex Thurman. Similar to prior quarters, the company has posted a document on its Investor Relations website under the Financials and Filings Quarterly Results section titled Quarterly Summary. This document is designed to provide the investment community with a summarized and easily accessible reference document that details the key effects associated with the quarter, state of the company's business objectives and strategies and any forward statements or guidance we may make. This guidance this document is designed to be read by investors for their regularly scheduled quarterly conference call.

Speaker 1

As such, for this call, we will make brief prepared remarks and transition into a question and answer session. To ensure ample time and opportunity to address everyone's question, Please note that all statements other than statements of historical facts made on this call that address activities, events or developments we expect, believe or anticipate will or may occur in the future are forward looking statements. These include statements about our plans, objectives, strategies and prospects regarding, among other things, our sales, products, pipeline technologies and clinical trials, U. S. And international commercialization, market development efforts, efficacy of our current and future products, our 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.

Speaker 1

These statements are based on current expectations about future events affecting us and are subject to risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Therefore, they may cause our actual results to differ materially from those expressed or implied by forward looking statements. Review today's press release and our recent to see filings for more information about these risk factors. You'll find these documents in the Investors section of our website at www.glaukos.com. Finally, please note that during today's call, we will also discuss certain non GAAP financial measures, including results on an adjusted basis.

Speaker 1

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

Speaker 2

Okay. Thanks, Chris. Good afternoon and thank you all for joining us today. Today, Glaukos reported 3rd quarter consolidated net sales of approximately $78,000,000 up 10% versus the year ago quarter. These 3rd quarter results reflect continued strong performance and the execution across our key franchises globally.

Speaker 2

Given these results and our latest forward outlook, we are raising our 2023 net sales guidance range to $307,000,000 to $310,000,000 versus $304,000,000 to $308,000,000 previously. From a commercial perspective, strong execution of key strategies within each of our core franchises drove the solid performance. Within our U. S. Glaucoma franchise, we delivered sales of $38,100,000 on growth of 2% year over year as we experienced more pronounced seasonality headwinds in August, offset by continued strength in July September.

Speaker 2

Consistent with prior quarters, we continue advancing iSpent Infinite ahead of establishing formal MAC coverage and payment. On that front, just last week, WPS, one of the 7 MAX published an updated MIGS LCB with a future effective date of December 24, 2023 that provides coverage for iSpent infinite consistent with FDA approval and our reconsideration request. We are pleased with this final outcome as it relates to iStent infinite, but we're disappointed and other aspects of the LCD that severely restricts clinical decision discretion for surgeons fighting a site threatening disease. Looking ahead, the remaining 6 MAX have all taken preliminary steps to assess iSpend Infinite coverage, including 4 through proposed LCDs and 2 with local coverage articles. We continue to monitor the various MAC processes and policies as they advance and are ultimately finalized in the future as we remain supportive of expanding broad access to interventional glaucoma tools for physicians and for patients.

Speaker 2

While we await the release of CMS's 2024 final rules, we remain encouraged that As part of the 2024 proposed rule, the CPT code used to cover iSpend Infinite in standalone procedures 671T was lifted to APC-five thousand four hundred and ninety two and APC assignment for combined cataract plus trabecular bypass procedures 66,989 and 66,991 was proposed to move to a newly restructured ATC 5,493. If finalized as proposed, we do believe these changes, while positive for our customers and our procedures, may create some transient disruptions to ordering patterns in late 2023 ahead of becoming effective on January 1, 2024. Moving on, our international glaucoma franchise delivered sales of 20,300,000 on strong broad based year over year growth of 23% on a reported basis and 20% on a constant currency basis. The strong growth was once again broad based as we continue to scale our international infrastructure and execute our plans to drive MIGS forward as standard of care in each region and every major market in the world. While we focused on our near term execution, we are also accelerating efforts to support one of our founding missions at Glaukos, which is to advance glaucoma care by driving intervention of therapies earlier in the treatment paradigm for glaucoma disease and in turn pioneering a new standalone market over time.

Speaker 2

We continue to lead and work closely with surgeons and thought leaders globally to organically drive this broader evolution in the standard of care, including through numerous events at the EFCRS Annual Meeting in Vienna in September and the Interventional Glaucoma Consortium in Salt Lake City in October. These efforts will once again be on full display at the coming AAO Annual Meeting being held in San Francisco this weekend. And finally, our Corneal Health franchise delivered record sales of $19,700,000 on 12% year over year growth, including Fortrexa record sales of $17,000,000 on a year over year growth of 18%, as key strategic initiatives implemented throughout the past year continue to take hold in support of this important business. Similar to our U. S.

Speaker 2

Glaucoma franchise, our U. S. Corneal Health business experienced more pronounced seasonality headwinds in August, offset by strength throughout the remainder of the quarter. Shifting gears to the development front, we continue to prudently invest and successfully advance our robust pipeline of novel promising platform technologies that we believe have the ability to significantly expand our addressable markets and fundamentally transform our company over time. Starting with iDose, we continue to be encouraged as we work closely with the FDA in their ongoing NDA review process.

Speaker 2

During the Q3, we successfully completed the required pre approval inspection or PAI of our new state of the art hybrid pharmaceutical manufacturing facility, notably with no 483 observations. For company going through this type of rigorous pharmaceutical review for the first time, I could not be more pleased with this unblemished outcome and would like to recognize our operations, development and quality teams that drove this result. Based on our productive mid cycle review meeting with the agency held in August, we remain confident in the agency's decision by the PDUFA date of of December 22, 2023. Alongside this, our teams are increasingly advancing preparation and planning efforts to support the iDose commercial launch targeted for early next year, including a robust set of peer reviewed literature expected to be published over the remainder of this year and into 2024. Our robust publication plan includes 4 manuscripts that have already been submitted to leading journals and at least 5 others that are planned for submission.

Speaker 2

Shifting gears to Epioxa, our next generation corneal cross linking therapy, We continue to advance patient follow-up in the 2nd Phase 3 pivotal study and remain on track for our targeted NDA submission by the end of 2024. Beyond high dose and EpiOXA, we recently commenced a PMA pivotal study for iSpin Infinite in the mild to moderate glaucoma population and expect to begin 1st in human clinical development for one of our retina programs along with a Phase 2a study for Eilution Travoprost by year end respectively. So as you can see, We have a lot to be excited about when it comes to the significant potential value that we believe our pipeline programs may create. At the same time and as we have discussed, we continue to prioritize the cadence of our investments as we strive to strike the right balance of risk based spending and our capital position now and in the future. We are pleased to see evidence of this again in the 3rd quarter as our non GAAP SG and A and R and D operating expenses grew at a modest 1% sequentially, reflecting some of the adjustments we've made in our earlier stage pipeline programs as we continue to prioritize our resources ahead of the anticipated iDose commercial launch early next year.

Speaker 2

So in conclusion, I am pleased with the continued execution and performance in our business as we continue to successfully advance our mission to truly transform vision by pioneering novel, dropless platforms that can meaningfully advance the standard of care and improve outcomes for patients suffering from sight threatening chronic eye diseases. Our foundation is strong and we are well positioned as we enter into what should be a transformational period for our company in the years ahead. So with that, I'll open the call to questions. Operator?

Operator

Perfect. Thank you. All right. Our first question comes from the line of Tom Steffen. Tom, please go ahead.

Speaker 3

Great. Hey, guys. Thanks for the questions. I want to start off with the LCDs. Maybe if we assume The remaining formats align with WPS.

Speaker 3

Can you guys just talk first about the ways the company from a strategic perspective is aiming to capitalize on any of the changes or just potential uncertainty that probably will ramp in the market next year? And then maybe qualitatively, how should we be thinking about any sort of net tailwind for Glaukos next year from LCDs?

Speaker 4

Hey, Tom, thanks for the questions. It's Joe. I'll start off on this From a macro standpoint, I think really I would reiterate some of what Tom said in the prepared remarks. 1st and foremost, at least in the first LCD that we've seen from WPS and what we would likely Expect to see from at least the other 4 MAX that seem to be in a similar place is most importantly coverage for Iceton Infinite. For us, it really starts there and that was the totality of our efforts around this and trying to make sure that Patients were getting access to iStent infinite, as intended.

Speaker 4

And thankfully, on that front, WPS and hope that other LCDs establish that proper coverage that we requested for Iceton Infinite. Beyond that, obviously, we're disappointed in the context that the activity or the final LCD as drafted really takes a step towards removing that clinical decision making from the clinicians' hands. And so in our For us, that's going to be something that we have to work on for some time, try to make sure that we can play our part in getting those Decision making capabilities back in the hands of the surgeons who are making the call on behalf of their patients. As you think about it For us, you asked quantitatively how we think about it. I think in 2023 and remainder of this year, We expect some short term ordering volatility headwinds if you will in December especially as some accounts may prioritize non stent based procedures ahead of the final effective dates for a variety of reasons, but Most importantly, probably burning off any inventory that they have on their shelves ahead of a change in policy like this.

Speaker 4

And as we turn into 2024, What I'll say is we're evaluating the impact and we're going to continue to do so as these other LCDs are finalized. I think I would probably just say I'd caution investors in the interim As the WPS LCD, it does contain a lot of puts and takes as it relates to our product portfolio and we really have to go through The totality of that before we can comment with any more specificity on what it may or may not mean for 2024 and beyond.

Speaker 5

Got it.

Speaker 3

And maybe one quick follow-up. When you talk about kind of the short term volatility, are you starting to see that? Or I guess what's informing that view? And then maybe I can get one more quick follow-up.

Speaker 4

Yes, I wouldn't say that we're Seeing it in that way, this is more an anticipation thing. I think anytime you go into a change in reimbursement policy like that and we've seen this in the past where things have adjusted. Obviously, the customers themselves have to adjust what their either treatment algorithms are or the stock they have on their shelves. Most are not going to sit around and hold that inventory past those effective dates is what you'd expect. And so As they get closer to that date, we certainly would anticipate that they'll use that inventory up.

Speaker 4

They'll go to more of a just in time kind of ordering process and then they'll adjust as the New Year starts to unfold and they've changed whatever algorithms they have from a treatment perspective.

Speaker 3

Got it. And maybe I'll call this question to be. But pivoting to iDose, I want to ask about just doc trainings. Joe or Tom, any sense you can give us for how to think about the ramp in 2024? Will it be Kind of deliberately methodical early on as you work through establishing full reimbursement?

Speaker 3

And then what's kind of a reasonable annual cadence of doctor trainings in the 1st couple of years sort of as we refine our models. We looked back at the iStent training ramp. There were periods early on that I think you train 700, 800 physicians per year. And that's when MIGS were much less well established. But now you have what, 5,000 plus MIGS trained doctors.

Speaker 3

So for iDose, is it reasonable to think doctor trainings could approach 1,000 per year for the 1st couple of years. Thanks for taking the questions.

Speaker 4

No problem, Tommy. You stuck 3 in for 1, but we'll go ahead and honor it. So, no, it's all good. From a docs standpoint, we're going to take the same approach we've always taken. And so I wouldn't say even just the beginning.

Speaker 4

I'd say for the entirety of 2024, We're going to be methodical as it relates to driving superlative outcomes in the case of the doctors that we're training on iDose. We've always done it that way. Now obviously in those early days, let's call it in the first half of the year, that'll be even More the case and that will go out to a handful of surgeons that we know work well in these early stage training situations, make sure that we've nailed down the training algorithm for our sales force before we start to expand from there. I think the other key gating item that I would point to as it relates to the pace of training is reimbursement itself. So As you transition from a miscellaneous code to a permanent J code, as you start to establish more regular and recurring payment on the professional fee and even the facility fee side associated with iDose, more and more surgeons and their practices will be ready, willing and able to be trained.

Speaker 4

And so those things also play a role in this. You referenced historical statistics and they're accurate. I think at our peak we were training Somewhere between 70800 docs a year, on the iStent Technologies, 1st generation, a lot of which was teaching them, angle based surgery. As we move forward, I think that lift on the angle will be a little bit less. So we would have expectations that as we hit a steady run rate that we can train more doctors than that 700 to 800 historical run rate with iDose.

Speaker 4

But to get more specific in that, it's hard until we really get at that stage of the deployment.

Speaker 3

Very helpful. I'll keep it to one next time. Thanks guys.

Speaker 4

Thanks, Tom.

Operator

All right. Our next question comes from the line of Ryan Zimmerman from BTIG. Ryan, please go ahead.

Speaker 6

All right. I'm going to stick to the rules here and ask Just the one in the follow-up. So number 1, I'm going to ask for Tom. Tom, you're in the process, I think, of having conversations with FDA about labeling the iDose. I don't know what you're comfortable saying, but what can you say in terms of kind of where you're at and the early read on what the label could look like for iDose?

Speaker 2

Yes, Ryan. I'm happy to respond. And as you I think you stated earlier, these would be highly preliminary. And Most of these will be based on our debriefing from the mid cycle review that we had midyear. So, what I will tell you is we have yet to receive a draft label.

Speaker 2

So as we said previously, while we're confident in the strength and robustness of our clinical data, You never know for sure where the label will land and whether the FDA will view the data using the same prism as we do until that process is finalized. What I will tell you is that we remain confident that we're tracking towards the PDUFA date of December 22, But that's really as far as I can assure you at this point.

Speaker 6

Okay. Fair. I will have to wait until this 22nd December. Second question for me, just with LCDs likely finalized from what we saw with WPS the other week, I'm less concerned with how this impacts your surgical business and more interested in how you think about it derisking the iDose launch next year. How does it change your calculus on iDose and what you need to achieve next year?

Speaker 6

I mean, when we spoke kind of mid quarter, you were messaging that second half twenty twenty four really would be the inflection for iDose. But I have to imagine that this takes some pressure off of the first half of the year, because there is some benefit that will come from the LCDs. And How has that in the past week maybe shifted your thinking on the cadence for iDose next year?

Speaker 4

Yes, Ryan. I think I don't know if I would make that far of a leap in the context of the LCDs as it relates to iDose. I think the key drivers of iDose in 2024 go back to a little bit more of what I said previously. It's really going to come down to the pace in which we can and we're Comfortable training these doctors and the pace in which you establish predictable recurring Reimbursement, particularly on the facility in the pro fee side alongside of that. So you want to get through the miscellaneous Jay or C code phase, you want to get through the initial stages of determining regular and recurring Professional fees and that you're going to get paid on the facility side.

Speaker 4

I think those are the things that ultimately shift a lot more of the Shifting from the walk into the to the jog into the run to the back half of the year versus the first half. It is possible that across all of our portfolio. There'll be incremental demand, associated with procedures, whether that be stenting. But I think iDose probably won't benefit from that until certainly later in the year going into 2025.

Speaker 6

Okay. Thanks for taking the questions.

Speaker 4

Thanks, Brian.

Operator

All right. Our next question comes from the line of Larry Biegelsen from Wells Fargo. Larry, please go ahead.

Speaker 7

Hi, this is Charles on for Larry. Thanks for taking the question and congrats on the nice quarter. I want to just Follow-up on the LCD again. So I appreciate what you talked about there's puts and takes before. And so maybe wanted to follow-up on to make sure you understand the positives and negatives of that.

Speaker 7

So on the positive side, I mean, it's best in infinite and maybe the competitive procedures like canaloplasty, goniotomy, maybe some of those stents pick up some of those. But On the negative side, it sounds like we read that stents are only covered as a second line therapy. The language seems to eliminate the stacking of multiple MIGS procedures. Is that are those the puts and takes you're talking about for first there, can you confirm that? And then I have a follow-up.

Speaker 4

Okay. Yes, Charles. I think 1st and foremost, any time you have a policy like this, there's always some Inherent ambiguity in it. That's the first line. I mean, I think exactly how the MAX will adjudicate these policy changes will matter over the course of the next several years.

Speaker 4

And that's hard to always know from the literal reading of a policy that comes out like this. So I think that's one factor that folks have to take into consideration. You referenced obviously some of the adjustments that they're proposing or finalizing as it relates to canaloplasty, some of the shifts on the gonadiatomy side. When it comes to the combining of procedures, it's correct that WPS LCD does restrict the clinical decision making as it relates to the combining of these procedures. And we think it restricts the options that surgeons have in the fight against what's a multifactorial disease, using tools that have complementary mechanism of action.

Speaker 4

That is one of the puts and takes that have to be considered here and certainly is an offset to any pickup of share that you might anticipate associated with the restrictions that are being placed on canaloplasty and goniotomy and something that we're going to take our time to assess from an overall standpoint.

Speaker 7

Okay. Thank you. And then just a quick Follow-up on LCD more as it relates to iDose. So iDose wasn't specifically mentioned LCD, but it looks like I mean That they're asking for more, just more better data like they want 24 month published data for a broad label. Can you tell us when Glaukos would have 24 month data published for iDose?

Speaker 7

And do you think the Phase 2b data will be good enough to meet qualifications or we need Phase 3 data. And just lastly, like it seems like with eliminating the stacking, would I mean, would that mean a physician would not be able to do an iStent plus iDose and get covered for it? Thanks for the question.

Speaker 4

I'll start and Tom may want to comment on this one as well. I think as it relates to iDose, 1st and foremost, it's not covered by this LCD. It's a pharmaceutical, as you know, and at this stage is not within the purview of the LCD that was released by WPS. So I think that's a different conversation entirely. And so we have to take that into consideration there.

Speaker 4

As you I think drew the line to sort of that broader evidence, I guess what I would say is I'm not sure that we will have ever if we're fortunate to get approval as we expect that we'll ever have launched a product that has more evidence behind it than iDose will at the time of the commercial launch. You've heard Tom reference on prior calls the sheer number of peer reviewed publications that we expect to have, The totality of that evidence, the number of patients within it, as well as the long term evidence that's contained within it. You'll recall that we've already shown, multi year evidence in support of iDose out of our Phase 2 studies and ultimately we'll expect to do the same over time out of our Phase 3 study. So I think the overall evidence there we feel stacks Pretty good against any request that may come from any payer including the MAX.

Speaker 2

Yes. And I would just add, I mean think about it, The Phase 2b data we've carried out now, hopefully with some impressions now out to 3 years. And those 3 years data, as we all know, show that 70% None of those patients are controlled on the same or fewer meds versus the current standard of care from a topical standpoint, timolol, which was 46. And so The data is profound. It's robust.

Speaker 2

And we believe that it will in any discussions with any payers in the future will serve us admirably to be able to receive fair and prompt payment.

Speaker 7

Great. That helps. And again, congrats on the nice quarter.

Speaker 3

Thanks, Charles.

Operator

All right. Our next question comes from the line of Matthew O'Brien from Piper Sandler. Matthew, please go ahead.

Speaker 1

Hey, this is Phil on for Matt. Thanks for taking our questions. For starters on glaucoma trends specifically, What was it about August that led to that pronounced seasonality? And how is that seasonality trending in Q4? And as it relates to guidance, what's baked into that sequential step down in revenues.

Speaker 1

Is it more a function of working down that competitive inventory ahead of these LCDs taking effect? Or is it Really more a pausing in front of CMS' final rule.

Speaker 4

Yes, I think, well, first in the context of the Q3, What we saw in August was perhaps a new normal in the context of seasonality, but it was a little bit of an aberration versus what we've seen in the last couple of years. I think it was more similar, quite frankly to what we saw back in 2019 in terms of seasonality than what we've seen in 2020 through 2022. And it really was just a softening of demand. It was across all of our U. S.

Speaker 4

Procedures, glaucoma and corneal health in a pretty similar fashion. And in both those franchises were offset by strength in both July September, strength that to your question has continued in October. When you think about how that translates into our You know, 2023 guidance, we try to take into consideration a variety of variables as we exit the year. I commented on some of them. Clearly, we expect some potential short term ordering pattern volatility and headwinds in December within our U.

Speaker 4

S. Glaucoma franchise. That's both because of the potential final LCD effective dates, but also associated, as Tom mentioned in the prepared remarks, with the 2024 final CMS rule and the increased facility fee payments as you enter into 2024, we expect there could be a little bit of disruption as folks hold off on procedures at the end of the year to do them in the Q1 where they'll be more paid a more fulsome payment. We also expect some sequential FX headwinds based upon where that's been trending in our international glaucoma business. There could be a little bit of incremental headwind in the Q4.

Speaker 4

And we may also experience some potential ordering disruptions at the end of the year in our U. S. Cornell Health business as we're going to make a variety of moves there operationally this quarter in anticipation of a potential iDose launch in early 2024. Several of those operational things that we're going to be putting in place in this quarter can impact areas like customer service and our payer relation team priorities that could create a little bit of disruption on the Corneus side as well.

Speaker 1

That's helpful. And then just to give you one that doesn't focus on iDose, can you speak further about that agreement with Stewart Therapeutics and maybe the timeline for that SP-one hundred and thirteen drug candidate?

Speaker 2

Yes, I'd be happy to address that. So Stuart has a very novel compound. It's in a very nascent Preparation, but we like the data that we saw in some of the preclinical analysis. And What Stuart has and what we hope to contemplate is a bolus injection that could aid Substantially in neuroprotection in glaucoma, which as many of you know is kind of the Holy Grail. Can you actually preserve the ganglion cells in the back of the eye given the fact that it's repeatedly being assaulted by the pressure associated with glaucoma.

Speaker 2

So it is a novel compound, proprietary. It's very early, like I like to say, terribly exciting, terribly early. Stewart Pharmaceuticals, this is both. But again, It's again, it further validates the fact that we go first. We're making an effort here to break ground in a whole new area of glaucoma treatment and we're hopeful that this advances into a formal clinical trial.

Speaker 2

Thanks so much.

Operator

All right. Our next question comes from the line of Joanne Wuensch. Joanne, please go ahead.

Speaker 8

Thank you very much for taking the question and congrats on the quarter. I'd like to talk about something a little bit less exciting, which is expenses. I did not hear an update maybe on what you think your operating expenses could be. And then as you think about a product launch, this is the time of year that we start thinking about 2024. How do you sort of dovetail preparing and then launching, everything that you've got in your pipeline, including iDose, not just this year, but next?

Speaker 8

Thank you.

Speaker 9

Hey, Joanna, this is Alex. I'll start with the operating expense question. And so I mean, first of all, we were pleased to see the operating expenses for the quarter come in as they did just shy of $87,000,000 which was only up modestly 1% sequentially. So we were happy with that. Again, as we've talked about in the past, we've been Very focused on making initial adjustments to our pipeline and anticipation of iDose and basically trying to allocate are resources towards that as we prioritize our balance sheet and capital allocation.

Speaker 9

You asked about the Q4 OpEx. And so basically what I would guide you to do at this point is we would expect a modest sequential increase in the Q4 to what we saw in this quarter, which is actually in line with what we've seen in the past. Typically from a if you want to call it a seasonality standpoint, the Q4 tends to rise up a little higher than the Q3. That should put us, for total for the year, somewhere around what we had guided to, which was a 10% or a little over 10% increase from last year, again excluding all of the IPR and D charges.

Speaker 4

And then as it relates to I think the second part of your question, Joanne, which I'm not sure if that was more towards the expense side or the overall planning. But yes, we're obviously we've been in product launch planning mode for quite some time We're now getting into the finer points of what that means from an expense perspective going into next year how we balance that against other priorities. We do have a lot going on. Thankfully, we think there's a lot of opportunity with those with each of those. And We're going to be putting quite a bit behind iStent infinite as we enter into 2024 with hopefully more fulsome reimbursement covered and then ultimately, iDose on the commercial side, while we continue to invest in our what we think is a pretty full pipeline of rich opportunities.

Speaker 8

So just to push a bit, is the 10% increase annually in 2024 a reasonable starting point? Or is it much higher than that given Everything else.

Speaker 9

I think we'll comment on that, Joanne, when we get to the next quarter's call and we talk about our guidance in 2024 and what the operating expense profile would look like.

Speaker 8

That's fair. Thank you.

Operator

Yes. All right. Our next call comes from the line of David from Needham. David, please go ahead.

Speaker 5

Great. Good afternoon, guys, and thanks for taking my questions. Maybe I'll start with a quick one on iDose. So you guys obviously completed the inspection and mid cycle review in August. You mentioned A draft label.

Speaker 5

So when do you expect to receive that? And when you do, is that something you're going to share with the investment community? And then aside from that, any other milestones to call out before December 22?

Speaker 2

Hey, David, I'm happy to answer that. So, we would expect to receive the draft labeling in the near term, let's call it the next several days. And that begins the process. And that process is the FDA gives their best estimate of what they think the label should be based on the data that we're reviewing. And then ordinarily and routinely, there is provision for response from the company to shape that label or to contest it to the extent that they disagree with the FDA's position.

Speaker 2

So there will be a period of negotiation, which will occur prior to the PDUFA date and the final, we hope, favorable FDA clearance. And I think as you can probably respect That will be something that will be done privately and that we won't share prior to the PDUFA date Targeted clearance.

Speaker 5

Okay, got it. Thanks. And so I guess no other milestones after that. And then I'll just throw my second question in here. In the document you posted, it looks like you got a PreziRFLOW study starting in the first half of next year, does this address the concerns the FDA had raised previously?

Speaker 5

And then what's your estimate on timing to potential approval of that product? Thanks so much.

Speaker 2

Well, I'll be happy to address it as best I can. I mean, I wouldn't I put it as saying that we've taken a more, I believe a novel approach in relooking at how we might evaluate the safety and efficacy of the presser fluid device given our substantial experience in the area. So we've had those discussions. We're finalizing an IDE with the FDA And we are encouraged that we'll reach a conclusion, a successful conclusion to opening up that study and beginning to study That product in the early part of next year, certainly within the first half. This will be a second bite of the apple.

Speaker 2

And I think with our informed Kind of skill in the arts, we hope to be able to bring it to a successful conclusion. I wouldn't Comment on date, too many things will enter into when we could potentially commercialize such as rate of adoption and clinical enrollment, etcetera. But I will tell you that I feel very confident we'll be able to start that study in the first half of next year.

Operator

All right. Thank you. And our next question comes from the line of Alan Gong from JPMorgan. Alan, please go ahead.

Speaker 10

Hi, thanks for the question. I just had a quick one on the kind of iDose timing. I understand you can't really share the details the mid cycle review meeting. But you sound confident on the December timeframe. And I guess, I was wondering relative to kind of your past interactions you have today, your past Several meetings like do you feel better or worse roughly in line?

Speaker 10

I'm just asking because we've seen some FDA Approval is getting pushed out and delayed with reasons that are kind of not visible to us on this side of the table. So just curious if there's any insight you can provide, what gives you that kind of confidence?

Speaker 2

Yes, I guess I'll be happy to give as best a reasonable assurance as I can. And from everything that I'm aware of, Given the mid cycle review and searching for any potential impediments that might come up between now and the final conclusion, I feel Pretty confident that we're going to be able to move towards and we're tracking towards that date for the FDA review of December 22.

Speaker 4

Got it. And then

Speaker 10

just another question. I understand that we don't want to talk about 2024 too much now. But when we just think about the growth of the MIGS market kind of ex iDose, there's clearly been quite a few puts and takes over the last few years, hopefully 2024, there's going to be some bumpiness with the LCDs and the reimbursement changes, but how should we think about stable market growth going forward? Thank you.

Speaker 4

Yes, Alan, I'm not sure that 2024 is perhaps the right measurement period because we're obviously going to be making our way through all the puts and takes associated with these shifts on the LCD front from the various Macs. I think we've certainly settled in that aside from maybe some of the moving parts there that We're talking about an underlying market that continues to grow in a healthy fashion as MIGS becomes increasingly the standard of care in combination cataract. Our expectation would be that from a macro standpoint that starts to accelerate in the coming years again as we drive our technologies including iDose and iStent infinite into a much, much larger patient population that's served by the interventional glaucoma approach in standalone patients. So I think 2024 may be a period where some things settle out in the context of what procedures are being done where, the net effect of which as we said, we'll comment once we've got some additional work done on that front. But overall, I think that we're headed to a more favorable environment from a macro standpoint because we're going to be going after a much larger market.

Operator

All right. Thank you. And our next question comes from the line of Steven Lichtman from Oppenheimer. Steven, please go ahead.

Speaker 11

Hi, guys. This is Ron on for Steve. Congrats on the quarter. I just wanted to ask another question on Velsidian. It was just Short one hopefully since everyone else has asked everything.

Speaker 11

I know Following the LCD, you can think about maybe as a net positive since your competitors will probably lose much more business or Do you guys see also a possible trade off and as this LCD might shrink the market for MIGS in general? And how do you guys think about this New balance.

Speaker 4

Thanks. Yes, Ron. I mean, I think that's at the heart of some of what we were answering earlier is The trade off here that you have is how much the LCD itself or similar LCDs will restrict or constrain the market over the short term. Again, back to what I just said, I don't think over the long term, it will be as relevant as we're going obviously after a much larger patient population. But in the short term, the question is one of share relative Market growth and those dynamics as they shake out with all the various puts and takes in 2024.

Speaker 4

I think we're confident that ultimately this should be at least a neutral to slightly positive for our technologies because of the amount of evidence behind them and that was validated as a part of this LCD. But it's very difficult at this stage to quantify that, particularly based upon a single LCD that's come out thus far in WPS.

Speaker 11

Okay. And just one follow-up and I think nobody asked about this on iDose is Obviously, you guys can't market it yet, but will you be targeting or trying to promote it as an office based procedure or is that something that is not part of the plan.

Speaker 2

Yes, Ron, I'm happy to address that. And so as we've said from the beginning, I think just philosophically, We're agnostic to where the product, the site of surfaces and where it's used. But we do understand and there will be some advantages moving it into an in office environment. And so what our supposition and proposal will be there is to work with societies, work with the MAX over the course of 2024 into 2025 to create kind of a relative work up scale of what a non facility payment should be and then get the MAX on board to be able to reimburse at that level. And so this will be an ongoing process.

Speaker 2

It is something that we'll be committed to over time. And we want to give surgeons the ability to have the alternative of doing the product within the ASC, which we expect will be the dominant use for some time into the in office study. And then I can assure you as well that we continue to work on development programs that will continually aid our ability to move into that in office facility.

Speaker 11

Okay. Thanks guys.

Operator

All right. Thank you. And our next question comes from the line of Anthony Petrone from Mizuho Group. Anthony, please go ahead.

Speaker 12

Thanks, Gray, and congrats on a good quarter and a good momentum. Maybe just two quick ones, one on iStent Infinite, one on iDose, on iStent infinite, you mentioned in your prepared comments here on the quarter You have a mild to moderate label expansion study going on. And so how large is that study? When will it be When can we see data on that? And then quickly on iDose, when we think about label, what should we be thinking about in terms of just duration of implant, right?

Speaker 12

So the pivotal study had a 3 month primary endpoint, you had a 12 month secondary endpoint that the company I believe has data out to 5 years. So how should we be thinking about just the range of scenarios on duration of implant for iDose? Thanks.

Speaker 2

Okay. To answer the first part of the question, Anthony, and yes, we've begun the clinical study with the iSpend Infinite. And this was Our calculus to move this product into the earlier intervention and treatment and to really supplement our whole interventional glaucoma philosophy and program. And so that protocol will consist of both Fakik and pseudophakik patients that will fall under the descriptor of some mild to moderate open angle glaucoma. So we have a label now that positions iStent Infinite for patients who failed on medical and surgical prior therapy, this will allow us to open up the ability to use I'd say Infinite in the earliest phases of treatment for the treatment of glaucoma and we think will be a nice both supplemental and combinatorial alternative to the iDose device.

Speaker 2

A second question, could you repeat that again?

Speaker 12

It would be on duration of implant and label for iDose. You have your primary study at a 3 month endpoint, you had a 12 month secondary endpoint, But I believe the company has referenced data on the implant out to 5 years. So there's a wide range of scenarios there. So just any high level thinking on with the duration of the implant for iDose could be?

Speaker 2

Yes. Let me address that again. Happy to. Remember the primary The endpoint and the basis for our approval will be a 3 month determination of the iDose to show non inferiority versus topical timolol. And you've seen the data.

Speaker 2

And I think we can all agree that we have a high degree of confidence that at least we'll have a reasonable Argument to assure FDA approval and moving forward. There is no longer term pivotal endpoint for the iDose device. What we've done prior to the FDA pivotal was to conduct this robust Phase 2 data that we carried out for 3 years. That will be the basis for how we'll approach payers for how well this product works longer term. And I think we'll be assured that that data I think payers will be assured with that data that the product does indeed provide substantive coverage for patients all the way up to 3 years.

Speaker 2

When you're talking about the 5 year data, remember that was a cold set of patients from the Phase 2b study that were exchanged. So 33 patients were we pulled from that that we consented to have an exchange of the iDose device And it was there that we came up with some pretty pristine data on endothelial cell loss to show that the exchange can be done with reasonable safety and security. Thank you.

Operator

All right. And our next question comes from the line of George Sellers from Stephens. George, please go ahead.

Speaker 13

Hey, good afternoon and thanks for taking the question. Maybe just one quick one for me, But could you just remind us thinking back to 2022 and the end of 2021, how your market share of MIGS Procedures in the U. S. Shifted some reimbursement changes. And do you have a sense for where that share went?

Speaker 4

Yes, George, it's Joe. I mean if you look back at our results in 2022 on our U. S. Glaucoma franchise, Pretty consistently every quarter we were down about 15% on a year over year basis. I think that gives you a pretty good sense of At least in that time period, the share shift that occurred.

Speaker 4

Beyond that, I don't have The data in front of me in terms of where that went, but I would say that the lion's share of that went to some combination of either canaloplasty procedures or goniotomy procedures depending upon surgical preference.

Speaker 13

Okay, great. Thanks for that color and I'll leave it at just one. Thank you all for the time.

Speaker 2

Thanks, George. Thanks, George.

Operator

All right. At this time, there are no further questions. I'll turn it back over to the company.

Speaker 2

Okay. So I want to thank all of you again for your time and attention today. And we always thank you for your continued interest and for the blog post. So with that, goodbye.

Operator

That does conclude today's call. Have a pleasant day.

Earnings Conference Call
Glaukos Q3 2023
00:00 / 00:00