Glaukos Corporation

Welcome to Glowcoast Corporation's second 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.glowcoast.com. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. To withdraw your question, press star one again. This call is being recorded and an archived replay will be available online in the investor relations section at www.glaucos.com. I will now turn the call over to Chris Lewis, Vice President of Investor Relations and Corporate Affairs.

Thank you and good afternoon. Joining me today are Glaucos 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 quarter 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, the state of the company's business objectives and strategies, and any forward statements or guidance we may make. This document is designed to be read by investors before the regularly scheduled quarterly conference call. 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 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, products, pipeline technologies and clinical trials, US and international commercialization, market development efforts, 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. 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.glaucos.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 and our earnings press release available in the investor relations section of our website for a reconciliation of these measures to the most directly comparable GAAP financial measure. With that, I will turn the call over to Glaucos Chairman and CEO, Tom Burns.

Okay, thanks again, Chris. Good afternoon to all, and thank you all for joining us. Today, Glaucos reported record second quarter consolidated net sales of $80.4 million, up 11% versus the year-ago quarter. These second quarter results reflected record sales and continued strong performance across our international glaucoma and corneal health franchises, alongside the re-emerging growth in our U.S. glaucoma franchise, driven by the initial commercial launch of Ice Done Infinite. I'd like to congratulate the dedication and performance of our teams around the globe who remain committed to their work and to advancing our key initiatives. Given our solid second quarter and our latest forward outlook, we are raising our 2023 net sales guidance range to $304 million to $308 million versus the $295 to $300 million previously. From a commercial perspective, strong execution of key strategies within each of our core franchises drove our record quarter. Within our U.S. glaucoma franchise, where we delivered sales of 39.6 million, which grew 4% year-over-year and 13% sequentially, we continue to advance iStent Infinite ahead of establishing formal MAC coverage and payment. On that front, five of the seven MACs have issued proposed LCD reconsiderations that, if finalized, would provide coverage for iStent Infinite consistent with FDA approval and based upon our coverage reconsideration requests. In total, all seven MACs have taken preliminary steps to assess iSPENT Infinite coverage through either proposed LCDs or temporary LCA updates. Further, we continue to support expanding broad access to interventional glaucoma tools for physicians and will closely monitor the various MAC policies and processes as they advance and are ultimately finalized in the future. We were also encouraged to see, as part of the CMS's 2024 proposed rule, the CPT code used to cover ISTENT Infinite and standalone procedures, 0671T, has been lifted to APC 5492 from APC 5491. We are pleased with this initial proposal and believe, as we have stated in the past, that is more appropriately reflects the cost of infinite and similar standalone procedures. Separately, CMS also proposed to move the APC assignment for combined cataract plus trabecular bypass procedures 66989 and 66991 to a newly restructured APC 5493, which we also believe appropriately reflects the claims history as CMS stated in the proposed rule. If finalized, these changes will go into effect January 1, 2024. As mentioned earlier, our international glaucoma franchise delivered record sales of $22.3 million on a strong broad-based year-over-year growth of 25% on a reported basis and 27% on a constant currency basis. As we continue to scale our international infrastructure, we are increasingly driving MIGS forward as a standard of care in each region and every major market in the world. While we focus on our near-term execution, we are also accelerating efforts to support one of our founding missions at Glaucus, 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. 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 ASCRS annual meeting in May and more recently at the World Glaucoma Society biannual meeting in Rome in June. And finally, our corneal health franchise delivered record sales of 18.5 million on 11% year-over-year growth including Protrexa record sales of 15.9 million on 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. Shifting gears to the development front, we continue to prudently invest in 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. During the second quarter, we announced FDA acceptance of the previously submitted NDA for IDOS-TR, marking another important step in bringing this game-changing therapy one step closer to patients. We continue to be encouraged as we work closely with the FDA in their ongoing review process as we progress towards the agency's established PDUFA goal date of December 22, 2023. Alongside this, our teams continue to make nice progress with the preparation and planning of the IDOS 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. Turning to the corneal health pipeline, during the second quarter we completed enrollment in the second phase three confirmatory trial for Epioxa, our next generation corneal cross-linking therapy for the treatment of keratoconus. This expeditious enrollment completion, which occurred in less than six months from trial commencement earlier this year, is a testament to the favorable risk-benefit profile of this next generation therapy, as well as our team's hard work in bringing this important rare disease therapy one step closer to patients suffering from keratoconus, which is a site-threatening corneal disease. We look forward to following these patients' outcomes as we target NDA submission for Epioxa by the end of 2024. 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 as we discussed last quarter, we continue to prioritize the cadence of our as we strive to strike the right balance of risk-based investments and our capital position now and in the future. As evidence of that, our non-GAAP SG&A and R&D operating expenses in the second quarter moderated to 6% year-over-year growth, reflecting some of the initial development adjustments we've made in our earlier stage pipeline programs as we continue to prioritize our resources ahead of the anticipated high-dose commercial launch early next year. So in conclusion, I'm very pleased with the record quarter and building momentum in our business as we continue to successfully advance our mission to truly transform vision by pioneering novel droplets platforms that can meaningfully advance the standard of care and improve outcomes for patients suffering from sight-threatening chronic eye diseases. So with that, I'll open the call for questions. Operator?