Glaukos Corporation

Welcome to the Glockos Corporation's fourth quarter and full year 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.glockos.com. All lines have been placed on mute to prevent any background noise. 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 the star key followed by the number one on your telephone keypad. If you would like 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.glacos.com. I will now turn the call over to Chris Lewis, Vice President of Investor Relations and Corporate Affairs. Please go ahead.

Thank you, and good afternoon. Joining me today are Glacos Chairman and CEO Tom Burns, President and COO of 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 facts 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 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, 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, it 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.glaucus.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 Glaucus' 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 reconciliation of these measures to their most directly comparable GAAP financial measure. With that, I will turn the call over to Glaucos Chairman and CEO, Tom Burns.

Okay, thank you, Chris. Good afternoon, and thank you all for joining us today. Glaucos reported today record fourth quarter consolidated net sales of $82.4 million. up 16% on a reported basis and 15% on a constant currency basis versus the year-ago quarter. For the full year 2023, consolidated net sales of nearly $315 million grew 11% on a reported basis and 12% on a constant currency basis versus 2022. We are also reaffirming our full year 2024 net sales guidance range of $350 to $360 million. These record results, which further exceeded our preliminary pre-announcement from early January, were driven by broad-based double-digit growth across our glaucoma and corneal health franchises globally. Our strong four-quarter performance caps off a successful year of execution, both from a commercial and development perspective, leaving us ideally positioned as we enter into what should be a transformative period for our company in the years to come. 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 $38.7 million on growth of 10% year-over-year, driven primarily by the continued commercial rollout of iStent Infinite. Market receptivity and adoption of iStent Infinite remains strong, with surge in feedback most commonly highlighting the benefits of its three-step solution favorable safety profile, and streamlined injector system. Alongside our commercial efforts, we also continue to advance key market access initiatives for Iceland Infinite, with all MACs covering on a case-by-case basis, including two with LCAs in place. We will continue to monitor the various MAC processes and policies as we remain supportive of expanding broad access to interventional glaucoma tools for physicians and for patients. Moving on, our international glaucoma franchise delivered sales of $21.9 million on strong year-over-year growth of 25% on a reported basis and 23% on a constant currency basis. This strong growth was once again broad-based as we continued to scale our international infrastructure and execute our plans to drive MIGS forward as a standard of care in each region and every major market in the world. And finally, our corneal health franchise delivered record sales of 21.8 million on 19% year-over-year growth, including Fortrexa record sales of 19.2 million on the year-over-year growth of 26%, as our key initiatives continue to take hold in support of this important business. Shifting gears to the development front, as you know, during the fourth quarter, we were delighted to announce FDA approval of IDOS-TR, a revolutionary microinvasive injectable therapy designed to lower intraocular pressure in patients with open-angle glaucoma or ocular hypertension. IDOS-TR is a first-of-its-kind intracameral procedure pharmaceutical designed to deliver glaucoma drug therapy for up to three years. Following approval, our teams have been hard at work executing the initial phases of our detailed, coordinated launch plan. In conjunction with these efforts, we're pleased to announce that just last week multiple surgeons successfully completed their first commercial cases of ITOS-TR. We're happy to report all of these cases went extremely well and early feedback from the small group of surgeons has been very positive. Looking ahead, we plan to continue advancing a methodical controlled launch over the first half of 2024 with a primary focus on surgeon training and establishing market access. As we refine and optimize our training and skill transfer to our sales force and surgical community, we will continue to expand our training and broader launch efforts over the course of 2024. We are in a powerful position to leverage our established best-in-class glaucoma sales force and commercial organization to drive the IDOS launch. Speaking of which, earlier this month, we held our global sales meetings. where most of the focus here in the U.S. was on ice and infant and IDOS-TR. It was evident throughout the productive meeting that our glaucoma sales force is excited and prepared to execute our plan. Alongside that, we are progressing several market access reimbursement initiatives designed to drive wholesome coverage and payment for the IDOS-TR procedure of pharmaceutical over time. On that front, first, we successfully submitted our permanent J-code application in late December, which should allow for it to become effective in the second half of 2024 based on the CMS cycle for J codes. Until then, we are launching IDOS-TR with a temporary miscellaneous C code and anticipate measured adoption over this initial period until the permanent J code is in place and we've expanded our surgeon training initiatives. Next, we are working to establish payment for the new Category 3 code 0660T that will cover the procedural component of IDOS-TR. This includes the establishment of a facility fee through an APC classification from CMS, which we expect to become effective April 1st. We will also be working with MACs to secure professional fee coverage and payment over the course of 2024. Finally, our IDOS-TR commercial launch will be supported by a robust set of peer-reviewed literature. During the fourth quarter, the first iDoseTR publication was published in the journal Drugs and summarizes the Phase IIb three-year outcomes. More recently, another TR manuscript published in Ophthalmology and Therapy highlighted favorable Phase III 12-month results. Looking ahead, there are an additional 10 articles to be published, planned to be published in leading journals, including a manuscript that was just accepted by Ophthalmology which highlights IDOS-TR's phase three, three-month results. So to summarize, the response we received from surgeons in the broader ophthalmic community since we announced FDA approval for IDOS-TR has been overwhelmingly positive and reaffirms our view that with the launch of IDOS-TR, we are pioneering a brand new category of procedural pharmaceuticals that has the potential to reshape glaucoma management as we know it today. We're excited. to now be in the initial phases of bringing this transformative technology to market, and in doing so, expanding the treatment alternatives for patients suffering with glaucoma and ocular hypertension. Beyond Eidos, we continue to prudently invest in and successfully advance our robust pipeline of novel, promising platform technologies that we believe have the abilities to significantly expand our addressable markets and fundamentally transform our company over time. This includes Epioxa, our next-generation corneal cross-linking therapy, for which we continue to progress towards trial completion in the second Phase III pivotal study and remain on track for data readout in the second half of this year, supporting our targeted NDA submission by the end of 2024. In terms of our earlier stage pipeline, we commenced three new clinical trials during the fourth quarter of 2023, including... One, a PMA clinical trial for iStent Infinite in mild to moderate glaucoma patients. Two, a phase 2A study for Iolution TravelCross. And three, a first in human clinical development program for GLK401, our intravitreal multi-kinase inhibitor retinal program in wet AMD patients. In 2024, we'll continue to drive our robust pipeline forward with additional plans, which include Commencing a US IDE trial for the pressor flow microshunt. Commencing a phase three study for iDose T-Rex, our next generation iDose therapy. And finally, completing enrollment in our phase two trials for our iLink third generation therapy. 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, as we've 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. In conclusion, I think it's fitting to remind you of our company mantra, we'll go first, which for us is more than just a company tagline. Rather, it's something that defines who we are as an organization and how we lead every day. We are ready to deliver in 2024 and beyond as we execute our commercial launch plans for IDOS-TR, along with iStent Infinite. Our foundation is strong, and we are ideally positioned to continue transforming vision for the benefit of patients worldwide. So with that, I'll open the call to questions. Operator.