Glaukos Corporation

Welcome to Glucose Corporation's first quarter 2021 financial results conference call. A copy of the company's press release issued after the market closed today is available at www.glucose.com or http://www.glucose.com. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. This call is being recorded and an archived replay will be available online in the investor relations section at www.glocos.com or http://www.glocos.com. I will now turn the call over to Chris Lewis, Senior Director of Investor Relations and Corporate Strategy and Development.

Thank you and good afternoon. Joining me today are Glauco's President and CEO, Tom Burns, CFO, Joe Gilliam, and COO, Chris Calcaterra. Following our prepared remarks, we'll open the call to questions. To ensure ample time and opportunity to address everyone's questions, we request that you limit yourself to one question and one follow-up. If you still have additional questions, you may get back into the queue. 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, our products, our pipeline technologies, our U.S. and international commercialization, integration and market development efforts, the efficacy of our current and future products, our competitive market position, financial condition, and results of operations, as well as the expected impact of the COVID-19 pandemic 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. 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 section of our website at www.glowcoast.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 Glaucos' ongoing results of operations, particularly when comparing underlying results from period to period. Please refer to the tables in our earnings press release that is available in the investor section of our website for reconciliation of these measures to the most directly comparable GAAP financial measure. With that, I'll turn the call over to Glaucos President and CEO, Tom Burns.

Thank you, Chris. Good afternoon to everyone and thank you for joining us today. We hope everyone is staying safe and doing well. As we pass the anniversary of the initial pandemic-related shutdowns and reflect on this past year that has challenged all of us in extraordinary ways, I am confident that we have evolved into a more efficient and stronger company, well-positioned to advance our mission and execute our ambitious plans. We remain focused on our near-term execution as we drive new adoption and deeper penetration globally for transformative MIGS and ILINC solutions. At the same time, this company is advancing novel platforms with the goal of disrupting conventional treatment paradigms, improving the existing standard of care, and enriching the lives and treatment alternatives for patients worldwide. We continue to invest in and advance our fulsome pipeline based on our core platforms, where we anticipate and are planning for a robust cadence of new product introductions over the coming years that have the potential to significantly expand our addressable market opportunities. We are confident that the investments we're making today will drive Glaucos forward as a unique strategic vision care leader with tremendous potential for long-term growth and profitability. Today, Glaucos reported first quarter net sales of $68 million, up 23% versus the year-ago quarter. Joe will discuss our financial results and forward outlook in more detail later in the call, but I will begin that discussion here by providing an update on the continued commercial progress and the market conditions overall. Fueling our strong start to the year was solid execution on our key strategic initiatives across our glaucoma and cornea health franchises globally. We have been pleased with the continued strong recovery trends in the market overall and our business specifically through the first quarter and into April. While first quarter procedural recovery trends were somewhat volatile and remained fairly variable based on geography, I have been encouraged by how physicians' offices, ASCs, and hospitals continue to navigate the new normal as we progress closer to a more stable market environment, leaving us cautiously optimistic for our ongoing improvement from here through the remainder of this year. During the first quarter, we advanced the U.S. commercial rollout of the iStent Inject W, our newest MEGS technology designed to offer ophthalmic surgeons the same established safety and efficacy of iStent Inject, with added benefits designed to optimize stent visualization, streamline implantation, and deliver procedural predictability. The feedback and real-world results for iSpent InjectW remain very positive, which reaffirms our confidence in the commercial prospects. In fact, 99.8% of our Inject sales in the first quarter were iSpent InjectW, strong evidence of both our rapid commercial rollout progress and the overall marketplace acceptance of this important technology. The successful iSENSE InjectW rollout, along with improving market recovery dynamics, have allowed us increasing in-person access to practices and accounts, although still on a more limited basis than before the pandemic. As a result, we have been pleased by the continued strength of our new surgeon training activities throughout the first quarter. The various virtual and digital programs we've implemented over the past year aimed to support our customers during COVID-19, also continue to be utilized in meaningful ways, and I believe these efforts have helped to deepen our customer relationships over the past year and prepare us for the future well beyond COVID-19. As a corporate pioneer of MIGS, we feel it's our responsibility to help expand access to care for all patients. As a testament to this, we were delighted to launch a new patient-centric initiative in honor of World Glaucoma Week in March, including a global education and awareness campaign designed to raise awareness around the risk and prevalence of glaucoma. We also partnered with eye care institutions across the United States to offer free glaucoma screens. We are proud to support the sight-saving work of the World Glaucoma Association through these patient and healthcare professional education initiatives. and further our goal to help make safe, effective, and impactful glaucoma care more available to a growing patient population worldwide. Outside the United States, we were pleased with the strong performance in our glaucoma franchise during the first quarter as we drive deeper penetration and broader adoption of NAICS around the globe. International growth during the first quarter was led by the recovery in the Asia Pacific region, including Japan and Australia in particular. Like the U.S., we also advanced the commercial rollout of iSpence InjectW during the first quarter in key international markets, including Australia, Japan, and several European countries. We believe the successful iSpence InjectW rollout, along with several recent accomplishments, including standalone indication approval in Australia, regulatory approval in India, and continued progress across many of our key market access initiatives, leave our international glaucoma franchise well-positioned to drive sustainable long-term growth. Going forward, we plan to continue to support and grow our quality, experienced OUS surgical sales teams while working to optimize the reimbursement coverage and payment landscapes, train surgeons, and leverage our compelling clinical data to grow MIGS adoption and drive deeper penetration in our 16 international countries where we have a direct market presence today. We are also evaluating and have been making initial investments in potential future direct and hybrid markets where favorable opportunities and reimbursement pathways exist. In Cornell Health, we have also demonstrated strong performance during the first quarter, driven by exceptional year-over-year U.S. VITREX sales growth of 51% and continued healthy momentum in new U.S. account starts. We continue to opportunistically expand our U.S. corneal health commercial team to fuel the execution of our commercial strategies and market development initiatives, including driving increased awareness of keratoconus broadly across the optometric and ophthalmic community, advancing the diagnosis of this important debilitating condition, streamlining the referral pattern from initial diagnosis to treatment, implementing customer-friendly programs to drive new account starts, optimizing reimbursement, investing in health economics to further solidify the value of corneal cross-linking to patients and health systems, and finally, training corneal health professionals on our I-Link procedure. During the second quarter, we expect to officially complete our corporate integration activities with a successful transition of our corneal health franchise onto our ERP and CRM systems. since the close of the acquisition roughly 18 months ago. While we remain in the early stages of unlocking the combined organization's full potential, we are encouraged with this performance and focused on the opportunity ahead. Shifting gears to our pipeline, our goal is to leverage our development expertise in commercial infrastructure to provide a portfolio of solutions based on key platform technologies that meet the full algorithm of customer needs. In the first quarter alone, we announced several critical clinical data milestones for three of our key pipeline programs, including first, a two-year interim analysis of our ongoing three-year IDOS-TR Phase 2b trial, showing compelling data. and further underscores the potential for this technology to safely provide multiple years of sustained glaucoma pharmaceutical therapy and 24-7 compliance to tackle the significant problem of patient non-adherence to topical glaucoma medication regimens. Second, strong 12-month IDE pivotal data for iStitch Infinite, achieving its primary efficacy endpoint and surpassing our internal expectations And third, positive phase three results for our next generation corneal cross-linking iLink Epion investigational therapy, meeting the primary efficacy endpoint and demonstrating Epion's ability to halt or reduce the progression of keratoconus without removing the outer layer of the cornea. Each of these important clinical achievements reaffirms our confidence in these programs and their future commercial prospects. For IDOS-TR, We are pleased to announce we have completed patient enrollment and randomization in the first of the two pivotal clinical studies that make up the Phase III clinical program. We continue to progress towards enrollment completion in the second trial and anticipate enrollment and randomization completement for this study in the second quarter. The 12-month Phase III trial results are expected to support our anticipated NDA submission for IDOS-TR in 2022, and we are targeting FDA approval for this promising technology in 2023. Regarding the pressure flow micro-shunt, in April, Santana announced the delay of FDA approval as they continue discussions with the agency. We will continue to closely monitor any developments associated with their ongoing FDA discussions and are hopeful to have more information and direction on this front as we move forward. We could not be more delighted with the outcome of the pivotal study. We are hard at work preparing for a regulatory submission over the coming months and continue to target FDA approval in late 2021. For FDON, we have successfully completed the initial transition to our new CMO partner, which we believe will provide us with the necessary infrastructure and scale upon potential commercialization of this important technology. We continue to target a US NDA submission for Epion in 2022 and FDA approval in 2023. We also continue to advance our late stage development of iPrime, a highly complimentary new VSCO delivery device designed to be a truly minimally invasive system to further support the needs of physicians and patients. Beyond these important pipeline programs, we also continue to invest in and advance our key earlier stage R&D programs, including in dry eye, retina, glaucoma, and additional undisclosed projects. While these opportunities remain in preclinical developmental stages, we are encouraged with the initial progress we're demonstrating within these platforms and associated programs. One such program is our eyelid transdermal platform, where development efforts are focused on patented cream-based drug formulations that are applied to the outer surface of the eyelid for transdermal drug delivery in glaucoma and various corneal disorders, including dry eye. Further, we recently announced an expansion to this platform with the addition of presbyopia as a new investigational application, as well as broader future development rights with Entratus to go along with the promising R&D work we've completed thus far. We aim to advance several programs using this differentiated, non-invasive, patient-friendly therapeutic approach into clinical trials. Our pipeline has the ability to fundamentally transform glucose by significantly expanding our addressable markets over time. To enable this, we've built a strong balance sheet and are aggressively expanding our global infrastructure, strengthening our pharmaceutical expertise, and upgrading our systems. I am pleased with the execution of our key strategic initiatives and believe we are well positioned to advance our mission to create novel platforms that can transform the treatment of chronic eye diseases for the benefit of patients worldwide. In doing so, we strive to create a world-class global vision care leader uniquely positioned to drive innovation across glaucoma, corneal health, and retinal disease. A core pillar of our drive to be a world-class company is an unwavering commitment to continual improvement as responsible corporate citizens. To this point, we recently released our 2020 Sustainability Report that significantly builds upon last year's inaugural assessment and highlights our continued commitment and progress on environmental, social, and governance initiatives. Over the course of 2020, we invested significant time and resources into better understanding what drives sustainability at Glockos, establishing meaningful goals to propel us forward on ESG matters, and examining how best to present our priorities to our stakeholders. Continuing to grow and enhance our ESG policies and program is a key priority for us now and into the future, and we hope our 2020 sustainability report reflects that dedication. Finally, before turning the call over to Joe, I'd like to send a sincere welcome to two exceptional women who recently joined our board of directors. Ms. Denise Torres, and Dr. Leanna Wen. With more than 25 years of management experience in pharmaceuticals, medical devices, and consumer healthcare, Denise is a highly accomplished executive who has led significant successful business transformations, including serving most recently as Chief Strategy and Transformation Officer for Johnson & Johnson's global medical device business. As a practicing emergency physician, visiting professor of health policy and management at the George Washington University School of Public Health, and former Baltimore Health Commissioner, where she led the nation's oldest continuously operating health department, Leanna is a sought after and trusted expert on a range of health policy and public health issues. Each of these extraordinary women bring a wealth of relevant experience, perspective, leadership, and wisdom. that will be invaluable to our growing global organization, and we are delighted to welcome them to the Galapagos board. So with that, I'll turn the call over to Joe to discuss our first quarter 2021 financial results. Joe.