Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Glaukos Corp (NYSE:GKOS) reported record fourth-quarter consolidated net sales of $105.5 million, up 28% year-over-year.
• The company achieved full-year 2024 consolidated net sales of $383.5 million, reflecting a 22% growth compared to 2023.
• Glaukos Corp (NYSE:GKOS) introduced a full-year 2025 net sales guidance range of $475 to $485 million.
• The company is pioneering new marketplaces within ophthalmology, focusing on novel dropless platforms to improve patient outcomes.
• Strong growth in the US glaucoma franchise with record fourth-quarter net sales of $56.3 million, driven by the success of iDose TR.

Negative Points

• The company faces potential headwinds from foreign currency exchange fluctuations and competitive product trials in international markets.
• There are ongoing challenges with reimbursement dynamics, particularly in expanding market access for iDose TR.
• The expiration of the Hydros royalty is expected to impact non-iDose revenues, potentially leading to flat or low single-digit growth in 2025.
• The company anticipates transient turbulence in the market due to new LCD restrictions affecting non-iDose stent growth.
• Glaukos Corp (NYSE:GKOS) is navigating the impact of the Medicaid Drug Rebate Program (MDRP) on its Corneal Health franchise, which may affect growth.

Q & A Highlights

• Warning! GuruFocus has detected 6 Warning Signs with GKOS.

Q: Can you elaborate on the trends you saw with IOS in the quarter and any observations year-to-date? A: Joe Gilliam, President and COO, explained that the quarter showed strong performance with a likely doubling of IOS TR revenues compared to the third quarter. The company is pleased with clinical outcomes and the growing body of peer-reviewed evidence. They are expanding the number of trained surgeons and educating office staff on reimbursement dynamics. Progress is being made with 5 of the 7 Macs processing the J code efficiently, and they plan to roll out commercial and Medicare Advantage policies methodically throughout the year.

Q: Could you elaborate on the components of the 2025 revenue guide between different segments and any color on the core US STEM business growth? A: Joe Gilliam noted that the new LCD restrictions slowed non-IOS stent growth to mid-single digits in the fourth quarter. For 2025, they expect LCD headwinds and the expiration of the Hydras royalty to result in flat to potentially down low single-digit growth for non-IDOS revenues. The guidance implies healthy expectations for the IOS franchise, with significant growth anticipated in 2025.

Q: How should we think about the growth outlook for the international segment in 2025? A: Joe Gilliam stated that international growth is expected to be in the high single digits for 2025. This slowdown is due to FX headwinds, potential trialing of competitive products in Japan and France, and the lapping of the French rebate agreement tailwind. The MDR approval for Infinite in Europe could drive upside to the guidance.

Q: Can you provide an update on the IOS Trio and its commercial timeline? A: Tom Burns, Chairman and CEO, explained that IOS Trio is a modification of the existing applicator, aiming to reduce incision size to about 1 millimeter. A small safety study is required by the FDA, and the product is expected to be available in 2026. This aligns with their approach to establish appropriate payments for the modified code, enabling in-office procedures.

Q: How are you addressing the high cost of carrying inventory for IOS in different facilities? A: Joe Gilliam mentioned that they mitigate the carrying cost with longer dated terms, common in pharmaceutical launches. Larger hospital systems require more administrative processes, while ASCs are more nimble. They have been more indexed towards ASCs but expect progress in hospital adoption in 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.