Glaukos Corporation

there will be a question and answer session. If you would like to ask a question, simply press star followed by 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 .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 Glauco's Chairman and CEO Tom Burns, President and COO Joe Gilliam, and CFO Alex Thurmond. 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 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, U.S. 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 and 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. We'll review today's press release and our recent SEC filings for more information about these risk factors. You'll find these documents in the Investors section of our website at .globcos.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 Glocko's 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 measures. With that, I will turn the call over to Glocko's Chairman and CEO, Tom Burns.

Okay, thanks, Chris. Good afternoon and thanks to all for joining us today. Today, Glocko's reported record first quarter consolidated net sales of 85.6 million, up 16% versus the year-ago quarter. As a result of our strong start to the year, we are increasing our full year 2024 net sales guidance range to 357 to 365.5%. Versus 350 to 360 million previously. These record results were broad-based with 20% -over-year growth achieved in both our US and international glaucoma franchises, where we continue to accelerate efforts to expand access to intervention glaucoma tools for the benefit of physicians and patients. Our goal to advance and improve glaucoma care by driving earlier intervention to continue to build momentum as we lead and work closely with surgeons and thought leaders globally to organically drive this broader evolution in the standard of care. These efforts were on full display at the AGS conference in late February, and more recently at the ASCRS meeting last month, where the interest and excitement levels for intervention glaucoma and our technologies were palpable. Within our US glaucoma franchise, we delivered first quarter sales of 42 million on strong -over-year growth of 20% driven by ISDENT Infinite and our overall ISDENT portfolio. Market receptivity and adoption of ISDENT Infinite remains strong as we continue to pioneer and lead the intervention glaucoma paradigm shift. In parallel, we continue to advance key market access initiatives to support consistent and dependable professional key payment with five of the seven MACs, now including CPT code 0671 on the latest fee schedules. During the first quarter, we also commenced the initial phases of our controlled launch plan for iDOS TR, our 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 procedural pharmaceutical designed to deliver glaucoma drug therapy for up to three years. I could not be more pleased with how the early stages of this launch have gone. Our initial target wave of 15 surgeons all successfully completed their initial iDOS TR procedures during the first quarter and the early feedback and outcomes have been very positive. As a reminder, these early access surgeons provide valuable insight to our training and field teams that helps to optimize training and skills transfer to our sales force and surgical community, supporting our expanded training and broader launch efforts over the course of 2024. In addition to training, a key element to the stage gating of our iDOS TR commercial launch is market access, where there have been several recent positive reimbursement developments designed to support fulsome coverage and payment for the iDOS TR procedural pharmaceutical over time. So first, CMS assigned a unique permanent J code for iDOS TR J7355, said to become effective on July 1st, 2024. This new J code, once effective, is expected to increase patient access here in the United States and should provide more streamlined, consistent and dependable coverage and payment for iDOS TR as we advance and ultimately accelerate our initial commercial launch activities. Second, CMS assigned the CPT codes that are designed to be used to cover the procedural component of iDOS TR 0660T and 0661T to ambulatory payment classification or APC 5492, effective April 1st, 2024. This translates into a national average facility fee of nearly $3,900 in the house HOPP setting and more than $2,000 in the ASC setting. Third, we have participated in several initial education meetings with MAX as part of our efforts to secure professional fee coverage and payment over the course of 2024 and fourth, we successfully entered into the Medicaid drug rebate program or MDRP. And finally, fifth, we have successfully commenced early initiatives to secure coverage for commercial and Medicare Advantage plans, efforts that we plan to accelerate in the second half of 2024 after the J-code is effective. So in summary, the response we received from surgeons in the broader athletic community since FDA approval and the more recent initial commercial launch activities 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 are excited to now be building the strong foundation of bringing this transformative technology to market and expand the treatment alternatives for patients suffering with glaucoma and ocular hypertension. Moving on, our international glaucoma franchise delivered record sales of 25.2 million on year over year growth of 20% on a reported basis and 21% 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 things forward as the standard of care in each region and every major market in the world. We remain in the early stages of expanding our IG initiatives globally ahead of what we hope will be supported by a healthy cadence of new product approvals and expanding market access in the years to come. And finally, our corneal health franchise delivered sales of 18.4 million on 4% year over year growth, including Phatrex sales of 15.1 million on a year over year growth of 7%. These first quarter results do include in particular the impact of our entry as a company into MDRP. These dynamics were anticipated and will continue to impact Phatrex, realize revenues going forward. Shifting gears, we continue to prudently invest in and successfully advance our 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. This includes EpiOXA, our next generation corneal cross-linking therapy for which we continue to progress towards trial completion in the second phase three pivotal trial and remain on track for data readout of the second half of this year, supporting our targeted NDA submission by the end of 2024. We continue to make enrollment progress in several important clinical trials, including one, a PMA pivotal trial for Einstein infinite in mild to moderate glaucoma patients. Two, a phase two A study for Ilyusha travel frost with an initial data readout expected later this year. Three, phase two trials for I-Link third generation therapy. And four, a first in human clinical development program for GLK 401, our introvertrial multi-kinase inhibitor retinal program in wet AMD patients. We also remain on track to commence a phase three study for iDose T-Rex, our next generation iDose therapy by the end of 2024. Beyond these clinical activities, our development teams continue to pursue potential game changing early stage programs across the areas of glaucoma, retina, and rare disease. So in conclusion, I'm pleased with the strong start to the year given our team's solid execution. I'd like to thank the nearly 1000 glucose employees who remain dedicated to the work and advancing our strategic plans. We look forward to continue to sustain and build upon the growing momentum in our business over the coming quarters and years. Our foundation is strong and our teams are energized as we are ideally positioned to continue transforming vision for the benefits of patients worldwide. So with that, I'll open the call for questions. Operator.

At this time, as a reminder to ask a question, press star one on your telephone keypad. Our first question will come from the line at the Tom Stephon with Stiefel. Please go ahead.

Great. Hey guys, thanks for the questions. Maybe I'll start on the guide. Can you maybe talk about what the changes are to the construct of the full year revenue outlook if we can begin there? And then is there any more color or I guess parameters you'd be willing to provide on what's baked in for IDOS?

Sure Tom, it's Joe. Thanks for the questions. And I'll start off with the guidance. Obviously we had a stronger than expected start to the year and we were pleased to be able to raise the full year guidance accordingly here just a couple of months after setting it for the year. I'll call it a couple of key considerations I think that are worth highlighting and then kind of hopefully draw to inclusion in terms of the expectations by the franchise. First, it obviously is very early in IDOS launch with the vast majority of the contribution expected in the latter part of the year. That hasn't changed everything that we've been doing so far in the first quarter is on track and on target and we can I'm sure talk about that more later. Some of the stint growth that we saw in the first quarter which was very strong from a -over-year basis is partially driven by the timing of the infinite launch activities last year which really accelerated in the second quarter. So I think as we move into the second and third quarters the comp from a stint standpoint starts to get a little bit more difficult. Third, obviously we all know that FX rates and the strengthening dollar have been moving against many of us from a US reporting standpoint. So we see an incremental 200 basis points of growth headwind on the international side as we move forward throughout the year based on the spot rates that exist today. And then lastly, as Tom mentioned in the prepared marks we do expect the MDRP entry related headwinds to persist for our corneal health franchise throughout the year. So you put all that together, I think we're landing in place where we are expectations for the cornea franchise are low to mid single digit growth for the year. The international glaucoma business we take up a little bit. I think the expectations there should be low to mid double digit percentage, our teens growth for the year. And that'll land you somewhere for the US glaucoma business in that high teens that maybe it's top end 20% type growth year over year. So hopefully that gives you a sense of kind of the drivers of where we're at. On your second question around I-DOS TR, I think at this point we're obviously quite early. We were very pleased to see that in mid February as we told you we would get going. And so in the second half of the quarter, we were able to get kicked off with the early access phase of our I-DOS launch. And as Tom mentioned, I'm really pleased to see our initial 15 surgeons be able to complete their case cases in Q1 in coordination with our sales and training and market access teams. And that's how we'll continue to methodically launch and slowly expand in Q2 ahead of obviously the J code being established in Q3 and ASP publication in Q4 where we start to expect a meaningful acceleration in the I-DOS related activities and volumes.

That's

great caller, thanks

Joe. And then maybe switching to the pipeline. Tom, you alluded to this a bit, but we did see in your proxy that the company is developing I-DOS TRiO, which appears might be an in-office version of the implant. If you're willing to share, can you elaborate a bit on the product, maybe the key details, sort of the portfolio fit, I guess, and then any timelines or milestones, thanks.

Yeah, I'd be happy to address that Tom. And so I think it's inevitable as we look at the evolution of the pipeline and then we'll continue to figure out ways and develop ways to have an even more minimally invasive and fast-solve procedure. So having said that, I think it's incumbent upon us to develop a product that will be able to be even more microinvasive than the current I-DOS design and have an applicator that will be able to really be able to put the I-DOS product through an incision side that's going to be able to be in the range of a 1.2 to one millimeter incision, which really gives us then the opportunity to create a self-sealing construct or a temporal clear corneal incision. And that'll be important, particularly as surgeons move to in-office procedures, which we know that they will do and which is a compelling part of our strategic plan over the course of the planning period. So we are in the process of developing an applicator that will accomplish and achieve those goals. I would say the timing we'd be looking for would be probably in late 2025 for a potential introduction. And I think that will then be timely with the effect of how we'll be moving forward to give surgeons the opportunity to be able to exercise the site of service in-office as well as the ASC.

Got it, that's helpful. Thanks again.

Your next question comes from the line of Ryan Zimmerman with BTIG. Please go ahead.

Hey, good afternoon. Congrats on all the progress. I'm gonna follow up on Tom's questions that I'm sure a lot of people will be asking about I-DOS, but you gave us a little detail here on 15 surgeons kind of completing initial I-DOS TR cases. Now, many of us have been, you know, diligently in this and it would seem as though there may be more surgeons out there or at least there's a lot of excitement out there. Just to confirm, have you put I-DOS in the hands of more than the 15, number one? And then two, you know, kind of how do you think about expanding, you know, beyond that initial wave of the 15 in the second quarter until kind of that J-code's effective? And are you gating adoption in any way or kind of holding demand, you know, before that J-code is effective?

Sure, thanks, Ryan. I think the answer to the number of surgeons who've had access, and I think a little bit you're reacting to the, number one, the overall enthusiasm for I-DOS TR and some of the pent-up demand for folks to get trained and get going with it over the course of the year. But the direct answer is, yeah, now that we're sitting here on May 1st, of course we continue to expand, we're past that. The 15 number from a surgeon training perspective was as of the end of the first quarter. So you would expect us to continue to be slowly expanding that and providing more access to folks. At the same time, we're gonna do so methodically. You know, as we talked about from the outset, I think even back to the I-DOS call in December, the way we will launch this product is those early access physicians expanding that very slowly and methodically over the course of the second quarter and then really starting to open that more broadly as we get into the second half of the year with the J-code being established. At the same time and in parallel, we are working with these accounts. And so simply because the surgeon maybe hasn't completed their first case does not mean that they're not in the funnel or if you're doing channel checks, expressing their enthusiasm because they're being trained. They're back, also the administrative staff are being trained. And so we're continuing to make progress really on all those fronts as we move forward into what we think will be a pretty exciting, certainly second half and most notably fourth quarter for this year with I-DOS.

Okay, very helpful. And then, you know, kind of dovetailing off that, Joe. I mean, if you are in those accounts, you know, I'm curious what impact or pull through you're seeing as a result of the I-DOS effort on the base business. And, you know, if you could kind of tie it to this infinite growth, particularly in the US, I mean, I would venture to guess that the market is not growing anywhere near 20%. And so, you know, are you taking share? Are you, is the market growing faster now because you are spending more time in accounts? Just maybe you could elaborate on kind of the core mixed business and the resulting impact from your efforts on I-DOS.

Yeah, it's a great question. You know, so I'll provide a little bit of color. I think we'll help you triangulate in around the breakdown of the results of the first quarter for the US We did see our overall STINT portfolio, including ISTN Infinite grow in the mid teams on a -over-year basis. So the majority of what you're seeing, now obviously we did have I-DOS CR and some of those early launch activities, but the majority of the growth that you're seeing, the tune of mid teams growth, is coming from our STINT portfolio. I think it's, you know, it's, of course, very hard to dissect that down to individual percentage breakdowns. But I do think it's a little bit of all of those things that you mentioned, Ryan, I think that we are growing the market because of, as Tom mentioned, we put a lot of muscle and effort into the interventional glaucoma paradigm shift, that's not something new. We've been working on that hard over the course of the last 15 to 18 months in particular, and I think you're starting to see some of the benefit of that in terms of growing the overall market certainly faster than it would be if it was still restricted to the combination cataract setting. But at the same time, I also do think we're taking a little bit of market share, and I think the fact that we're in there with multiple new exciting technologies that help expand the portfolio of alternative for these surgeons, you can't help but benefit a little bit from that in the context of a halo obviously associated with overall portfolio, and so I think that is playing out a little bit as we make our way through the year so far. Thank you.

Your next question comes from the line of Larry Beegleson with Wells Fargo, please go ahead.

Good afternoon, thanks for taking the question and congratulations on a really strong quarter here. So Joe, you raised the guidance at the midpoint by I think the amount of the beat, why not more, and the Q2, the Q4 growth implied or implied growth is actually below the Q1 growth I think at the midpoint. Just lastly on this, how should we think about Q2, are you comfortable with consensus of, call it $88 million?

$88 million. Yeah Larry, so I think in the, I'll try to take it to order which you asked it, but the context of why not more than the beat, well over the course of the two months, I'm not so sure since our original guidance that things have changed markedly versus the expectations and what we saw coming into the year. We've executed on everything we expected to and done a little bit better than that, and so we wanted to make sure that that was reflected in the raised guidance, but when you think about getting ahead of that, so much of that obviously is driven by expectation around I-DOS in particular, and as I've said and we've said for some time now, that's for the most part a second half phenomenon that we expect to play out. So I'm not sure sitting here today, we would make a significant change to our expectations around I-DOS and what it'll do in the second half, but we certainly continue to execute against realizing that opportunity at that point in time. If you think about Q2, I alluded to this a little bit in the question around the guidance, our first quarter did benefit a bit from two things. One, on the international side, currency was a little bit more favorable than it's going to be going forward. We see an incremental 200 basis points or 2% of headwind on that international growth number as we enter the second quarter than what we experienced in the first given the strengthening of the dollar. And second, we really more fulsomely launched ISIT Infinite in the second quarter of last year. So from a year of year comp standpoint, it gets a little bit more challenging as we enter the second quarter and beyond than it was in the first from a growth standpoint. So I think you put those things together and you'll see why and where we landed. The last thing I'll say on that is from a seasonality standpoint, when you kind of think about the overall guidance, you know, we, as you know, we expected our typical seasonality patterns to be a bit disrupted this year by the growing ISIT Infinite standalone and of course, Eidos utilization in the second half. And the net effect of that is obviously to shift a bit more the contribution of the year to the second half and in particular the fourth quarter. And if I were to try to put percentages around that, I might do something like the following, you know, 23, 24% in Q1, 24 to 25% in Q2 and Q3 and 26 to 28% of the year in Q4. I think if you follow that, you'll get to a pretty good place in the context of the seasonality expectations that we have for 2024.

That's helpful. And Joe, just to follow up on the Eidos ramp. I mean, how should we think about the ramp, you know, and what's gonna cause that inflection in Q4? Is it the J code coming into effect July 1st until we'll see an inflection in Q3? Just, it sounds like the contribution in Q1 was relatively small. How do you see, you know, what's going to drive the adoption through the year? Thanks.

Yeah, I mean, obviously our expectations, I think would be that the contribution in the first quarter was relatively small. I mean, we launched it in mid February and gave early access and we're on schedule for all that. I think we'll continue to expand that over the course of Q2. But to the heart of your question, there are really two significant unlocking events, if you will, from an adoption perspective. The first happens on July 1st when you have the J code come into place. There's obviously a lag effect there in terms of procedures being scheduled and the execution towards that J code. But then as you get into the fourth quarter and the ASP is also published, at that point you have a much more, I'll call it automated payment system from a Medicare standpoint. When you have the established J code and a published ASP, it really enables a much more normalized process for reimbursement at the account level. And we expect that to be pretty important in the unlocking, obviously, of surgeons really being able to run and do eye dose in all the patients that they think are appropriate for the technology.

Thanks a lot.

Your next question will come from the line of Matt O'Brien with Piper Sandler. Please go ahead.

Afternoon, thanks for taking the questions. Maybe just to follow up a little bit on Larry's question there on the performance of eye dose in Q1 and yes, you're gonna get a million eye dose questions on the call. But if I look at, if I think about the base business maybe growing somewhere in the mid teens, if I back that out, I'm looking at somewhere around something like a seven figure performance in the first quarter, as said another way, over a million dollars. Is that about the right number? And that's just on 15 docs, right? Just kind of trialing it, trying to figure out the J code. Is that in the ballpark?

Well, I'm not gonna get too specific in endorsing any one number, but obviously you've got the overall growth of the US-Qualcomm franchise and you've got that the STID portfolio grew in the mid teens from a year over year standpoint. So you as you've done can do the applied math on that. I'll just reiterate what we said. I mean, it's in the day, there were 15 implanting surgeons in the first quarter. They had about a half of a quarter to do those procedures and based on the timing of our launch. And it was encouraging to see both most importantly, the enthusiasm for the outcomes for those patients after they had done their initial implantations of eye dose. And they managed to provide us exactly what we need to kind of pearls and information that help us, dial in our training and ultimately establish confidence with our Salesforce as they execute on a growing basis over the course of the next several quarters.

Got it. And then the follow-ups just on the profitability side. Joe, I think you said historically, once you had launched that profitability, the gross margin was good this quarter. Should we expect that to dip a little bit as I dose ramps and then improve meaningfully going forward or nicely going forward? And then the spend also was much better than we were expecting just given all the activities around eye dose here in the quarter. So can we start to see profitability start to ramp pretty meaningfully over the next maybe 18 months? Thanks.

Hey, Matt, it's Alex. I'll go ahead and take those questions. So we'll start with gross margin. Yeah, we were pleased with 83% in the quarter for sure. But as we mentioned in the last call, and I'll say it again, as you know, when you launch a new product, it's bound to see some inefficiencies in the operations as you start to ramp up that product and the manufacturing and all the costs that are associated with that. So what we would tell you or what I would guide you to is some level of a range. We've always said 83, 84, we hope to continue to play in that range this year, but there should be or could be some volatility as we go through the next couple of quarters and eye dose gets ramped up. And then we think about the margin, being accretive over time with eye dose for sure. And we would look forward to that accretion and seeing some of that next year. On the operating side, you're right, we were pleased with the 92, if I back out the ICRND charge of 11.7 million. So that was nice. The one thing I'll just say on the expense side is that in Q1 of last year, the R&D spend was much higher than normal because we had all of the eye dose pre-NDA activities that were happening as well as a large PDUFA fee payment that needed to be made. And so that kind of explains a little bit of the slow down if you're comparing on a euro-rear basis.

Got it, thank you.

Your next question comes from the line of George Sellers with Stevens. Please go ahead.

Hey, thanks for taking the question. Maybe sticking with the eye dose theme, could you just provide some additional color on maybe where you're seeing early utilization in the first quarter and also quarter to date here in the second quarter, if that's in conjunction with stenting procedure or another mixed procedure, and then also what stage of the disease progression these patients who are receiving an eye dose are?

Hey, George, it's Joe. I think at this point, when you're early in a product launch like this, you try to keep it as simple as possible. The more variables you introduce, the more challenging it becomes in terms of both education of the sales force as well as for the accounts and the execution on there. And so as you know, and as we've said in the past, the primary goal there is for clean standalone utilization of eye dose. Now, having said that, have we seen surgeons for clinical reasons do it either in combination with cataract surgery or in combination with eye stent infinite? The answer is yes, we have, based upon the clinical needs of those patients. And so we will continue to monitor that and bringing it forward. So I think we're really sticking very close to the playbook that we had prescribed as we drive this forward. And we'll continue to see surgeons expand the use case of eye dose as we go forward. Utilization itself and the trends associated with it, very different from account to account. Those accounts who have experience in billing miscellaneous codes, we've seen them really start to utilize eye dose more fulsomely. For those with a little less experience, they'll start, they'll try, they'll do a handful and then wait for the payments to pull through before they green light that broader adoption.

Okay, that's really helpful, Keller. And then maybe going back to a prior question on this call, how should we think about surgeon training progressing sort of going forward? What's your capacity for number of surgeons you'd be able to train on a quarterly basis, particularly as we think about maybe the fourth quarter and into 2025?

Well, if you look back, if you think about the training from a Salesforce standpoint in our various products, I think that the peak that we achieved was now quite some time ago from a STEM standpoint where we were doing seven to 800 surgeons a year. I think one of the big differences with eye dose is that the majority of the surgeons that we're training have already gone through angle-based surgery. And so from that standpoint, those early cases that are really designed to teach them or re-teach them the nuance of angle-based surgery, you have a lot less of that. So I think that we're gonna set aggressive targets for the commercial organization to train as many doctors as possible. Certainly, if we get in the fourth quarter, we're going to 2025. And we'll dial that in for you all as we get into that phase and we start to really see what the Salesforce can achieve quarter in and quarter out.

Okay, great. I'll leave it there and thank you all again for the time.

Your next question will come from the line of Alan Gong with JP Morgan. Please go ahead.

Thanks for the question. Just one on eye dose as well. You talked about how you're working to get coverage from Medicare and commercial plans. A question that I've been getting is just concerns around the co-pay in areas of Medicare and commercial where the -of-pocket is not necessarily covered. How do you plan to address that in cases where you can't provide some additional financial cushion, I suppose, and where supplemental insurance isn't as prevalent?

Yeah, Alan, something that we spend an awful lot of time obviously thinking about and assessing and analyzing in detail as a team well before we set the price and certainly launched eye dose. I'd break it down this way. Obviously, within the Medicare -for-service world, which a significant obviously portion of the relevant lives here exist, the vast, vast majority of those patients actually have some degree of supplemental coverage. It can vary from a lot of different places, whether it's supplemental from Medicaid or whether it's from commercial plans or other supplemental coverage plans that they may have. So for the vast majority of those patients, you'll have really little to no -of-pocket. The second major bucket you allude to is obviously within the commercial arena. And for that, we'll be approaching that similar any drug launch or the vast majority of drug launches out there where we will have full copay assistance such that from that standpoint, patient economics will not be an impediment to the utilization of eye dose in that payer arena. And the last frontier for us, and quite frankly, for most procedures and pharmaceuticals today, will be Medicare Advantage, where a larger percentage of those patients have a higher -of-pocket, both in terms of the percentage as well as the overall maximum. And that's something that is not unique to obviously eye dose or cloud because of that perspective. There are a decent percentage of those patients who do have no to low copay. And for those who have higher, you tend to see them get treated more in the later part of the year when they may have already exhausted their -of-pocket maximums earlier in the year with whatever procedures might have arisen over the course of that year.

Our next question will come from the line of Joanne Wench with Citigroup. Please go ahead. Good evening,

and thank you for taking the questions. I have two. The first one has to do with iSend Infinite. I mean, that seems to be getting lost a little bit in the eye dose focus. How is that doing and what percentage of the procedures today are in standalone procedures versus concomitant? And then I do have to ask about that eye dose and you've been seeing street models and things like that. How are you feeling about full year contribution for eye dose? And I wanna just make sure that expectations are set accordingly. Thank you.

Well, thanks Joanne. I think first, I appreciate the question iSend Infinite. You know, it does get lost a little bit in the shuffle of eye dose, and yet it's an essential part of what we're doing every day right now in driving what we believe is sort of a shift in the standard of care towards interventional approaches and interventional glaucoma. To the heart of your question, of course, it's a little difficult to quantify with precision, and we don't have enough data to confidently say exactly how that breaks down between standalone and in combination with cataract. But I can confidently say it was a key growth driver in the quarter. And if you just look at it analytically, the reason why, you know, this is the reason why our SEND portfolio went from mid single digit growth in pretty much every quarter in 2023 to now mid teens in the first quarter of 2024. What changed there clearly was the fact that we started to establish professional fees, that the APC assignment was reassigned to a level that the facilities aren't losing money anymore, and that really enabled the surgeons to start doing what they would have loved to have been doing all along from a clinical perspective. So it was the key driver, obviously, to the first quarter as we had expected, but quite frankly, it did even better than what we thought going into that first quarter. As it relates to IDOS and the full year contribution, I don't think we've gotten that granular around how that will play, other than to continue to reiterate that, you know, right now we're in that early access phase, continue to be in that stage for at least the first half. And as you go into the third quarter, and certainly the fourth quarter, as the J-code turns on, the J-code plus the ASP reimbursement, we would expect it to become a material driver of our results. When you look at what I said earlier around the seasonality that we've expected, the shift towards the second half of the latter part, clearly the vast, vast majority of that is being driven by, you know, IDOS and increasing utilization of that as we make our way through the year.

Thank you very much. Your next question will come from the line of Margaret Caxar with William Blair. Please go ahead.

Hey, good afternoon, folks. Thanks for taking the questions. I'm gonna pile on onto infinite as well, you know, because obviously it's growing at a pretty rapid pace, or it seems like anyways. And I get that comps are getting more difficult. I know you're a little, you know, maybe not wanting to focus on sequential growth, but I guess from a dollar perspective, can you give us any sense as to whether that infinite number sequentially is accelerating, is it staying similar, et cetera? And then, you know, just a sense of penetration, right? You know, either from broader account usage and existing accounts, but, you know, no one like infinite versus, you know, trying to get into new accounts.

Yeah, Margaret, I think that from a performance standpoint, it's certainly our expectation that infinite would continue to grow sequentially just based upon the organic efforts of our sales force around driving education, awareness and training of Iced and Infinite, in particular in the standalone setting. So I think it's absolutely our expectation that that will continue to be a growing driver of our overall business. To your point, we may have varying degrees in terms of how that translates from a year of your growth perspective, just given comparable differences in 2023. But we absolutely expect it to be that. I think in terms of penetration, it's still really early. I mean, you've heard us talk about the standalone opportunity measured in a couple of hundred thousand procedures for Iced and Infinite for patients who failed medical and surgical therapy. And so, you know, just in translating even the great results we had in the first quarter, we're still very early in the overall penetration paradigm of Iced and Infinite and where it can and we expect it to be utilized.

Okay, and I'll squeeze in kind of the two, both on I-DOS as well as just to follow up on it. I think at our conference even last year, you guys had spoken to just your general enthusiasm that this is gonna be a $50, $100 million plus business over time, maybe even faster than I-DOS can get there. So I don't know if you can speak to your confidence level now that both products have launched around that commentary around timing today versus last summer. And then on the I-DOS side, you know, I'm not sure if you can give us any color around how, you know, the initial surgeons and clinicians are working I-DOS into their workflow. You know, are they focusing a day exclusively on I-DOS? You know, are these patients that have been waiting for a long time, you know, and how far out are these cases being booked? Thanks, guys.

Well, I think, Margaret, it's probably, I'm just gonna answer the last one first. I think it's probably a little bit premature to make, you know, too bold of a statement with respect to how they're working it in, you know, given where we're at in that launch curve. We certainly do have those surgeons who are now working in fulsomely in the context of how they think about an interventional approach to the treatment of patients. And they all have their own algorithms, but we're certainly seeing, you know, I-DOS VR in some of these thoughts become a prominent component of their algorithm. As it relates to ICED-INFINITE on the overall size of market, I don't think anything's changed there. I don't think we've changed our conviction. In fact, seeing the results that we've seen so far this year, it only probably increases the conviction around the ultimate use case of ICED-INFINITE, and that it should be a several hundred million dollar product from a standalone perspective for us. Again, just going back to the size of the market, you don't have to change the paradigm around an interventionalist approach for ICED-INFINITE to be utilized in those patients who fail medical and surgical therapy. Those surgeons are already there. It's about making sure that they've been trained and they have access and they're appropriately thinking about it in the context of their own algorithms. But we have a lot of confidence in where that's gonna head over the course of time.

Your next question comes from the line of David Saxon with Needham. Please go ahead.

Great, good afternoon. Thanks for taking my questions. A couple on IDOS as well. So it sounds like each of the 15 docs did about seven or eight in the first two months that IDOS was commercial during the quarter. So how quickly did you see the first cohort do the second and third procedures and so on? Did they wait until they got the first one? Did they got reimbursed from the first and then do five or six more? Or was it more even over the two months?

Thanks, David. I think it's a little early to do that. And I don't think sometimes, especially in the early days of launch to do that kind of the math, which I certainly respect around the seven or eight, you just see a wide variation where there are some surgeons who've done more than that, obviously. And there are others who have done one or two or three or four and then waiting for that reimbursement to come again, back to my earlier point. At this stage, it has a lot more to do with their experience with miscellaneous codes, both from a surgeon as well as a staff perspective. Then their understanding of how that will play out is driving the early adoption as much as anything else. I think over time, that reimbursement confidence is established, you start shifting a lot more to the clinical conversation of when, where, and how they're employing this. But for right now, it's coming down a lot to their experience within miscellaneous code and waiting for that payment.

Okay, got it. And then you've talked in the past about the specialty pharmacy channel. So can you talk here about kind of what the process is to get that established and how long that might take? And then thoughts on how, if at all, that drives adoption further?

Yeah, so especially pharmacy channel is not new to us. Obviously, it's an important part of our business on the Botrexa side, one in which we're continuing to optimize each and every day. But it plays a very material role in the alcoholic distribution and channel strategy associated with Botrexa. Based upon that, the establishment of that from an IDOS perspective is already there. We have all that ready. But you really don't expect to start driving the utilization within that channel until you start to turn on your commercial policies and drive that non, call it Medicare business where the specialty pharmacy channel is most beneficial. And the second underlying layer of that, obviously, is that you're always then cultivating the relationships as the specialty pharmacy provider with the various payers that are out there. And so that process will be ongoing over the course of many years as you try to optimize the coverage within that channel to benefit those commercial patients who will rely upon it. But we're ready to go. It's much more about us really unlocking or releasing the commercial side of our IDOS business before we start meaningfully making a change in the specialty pharmacy side.

Your next question will come from the line of Sam Bradowski with Truist Securities. Please go ahead.

Hey, guys. Thanks for taking the questions. Two quick ones on IDOS, and then I'll try and speak in an international one as well. First, just any update or any color you can provide on incremental data on when we may get a replacement label or how those conversations at the FDA are evolving.

Yeah, Sam, thanks for the question. Thanks for allowing me to engage after all the questions on IDOS commercial. Yeah, as we talked about, we have, I believe, prepared a really compelling proposal to submit to the FDA. We've waited. As you know, there's been a change in the guard at the FDA, and so that dust is still settling. So we will be proposing the movement towards re-administration and really in the coming days. We're hopeful to be able to get a positive response, but we're not counting on it. And I will tell you, as I said before, one of the things that the investors and analysts should be reassured by is that we have T-REX, which we're on track for beginning that clinical trial by the end of the year. And when you do any kind of chronology of when our expectation is to have that commercially available, as we talked about before, best case would be at the end of 27 into 28. And so any patient that is undergoing an ISTN implantation typically or invariably by the end of this year or early into 2025, we believe that the T-REX will become a compelling offering for re-administration for those patients.

Great, that's helpful. And then also, is there gonna be any constraints as you roll out to more doctors, any constraints we should be considering in terms of how much they can adopt over the coming months before the J-CODE, whether that be supply or otherwise?

Well, I think that it's, at least in the, I think the way you asked that question in the context of the second quarter, ahead of the J-CODE, I think it's honestly more of the same as we experienced in the second half of February, you'll see, or the second half of the first quarter, you're gonna see some who are more confident and will continue to adopt based upon the clinical flow of their practice and obviously focused on the Medicare patient population. And you'll see others who will start and do some trying and ultimately wait for payment to adopt. I don't expect there to be a meaningful inflection in the context of the second quarter as it relates to IDOS other than the fact that we'll continue to slowly expand access to those surgeons.

Great, thanks guys, I'll leave it there.

Your next question will come from the line of Anthony Patrone with Mizuho. Please go ahead.

Hey guys. This is Dimitri Talalan for Anthony. Congrats again on a great quarter. So I saw on your summary, you have had some initial educational meetings with the MACs as part of your efforts to secure professional fee coverage. Can you give us any updates from these talks? Do you have better insight on the timing of when these professional fee coverage will come through and could they come all at once from the MACs or will it be staggered? I'll have a quick follow

up. Yeah, Dimitri, I think this is ordinary course activity is we do at any time we launch new products, there's an education process just to make sure those MACs who are open to being educated on a new product like IDOS, they understand what it is and the procedure associated with the drug. And so we've been executing on those as an ordinary course. If you look back in the history of Globcosis, we've launched products, professional fees tend to take somewhere between six to nine months on average to start being at least more consistent in what they're being paid and ultimately then be put on fee schedules. And they rarely happen all at once. They tend to happen on whatever schedule and timeline the MACs themselves individually are on versus it being one fell swoop across multiple MACs at a single point in time.

Okay. And quickly on gross margin, I know you came in a little bit lower than expectations. I know that's kind of due to the launch. And do you just see that, do you see it stepping down next quarter or we see step up next quarter and kind of through the rest of the year?

Hey, Dimitri, it's Alex. I would say TBD, right? We would just, I'm kind of guiding that you keep in mind a range, maybe between 82 and 84 over the course of the year because of the volatility or potential volatilities, rollout IDOS. And so, but we, again, I'll affirm that we are competent in the creative nature of IDOS, the gross margin over time. And we should start to see that more full suddenly as we exit this year and enter next year.

Your next question will come from the line. It's Steve Lichtman with Oppenheimer & Company. Please go ahead.

Thank you. Evening, guys. Wanted to ask about the core US glaucoma business and market. You're one of the things you highlighted in your summary is potential volatility from all of the MAC movement at the latter part of 2023. Are you still seeing some aftershocks from that one way or the other? And also, if you could talk about what your expectations are looking forward, are you hearing anything with regard to what might be next, excuse me, on the MAC front?

Yeah, I think it's been relatively quiet in the context of the impact. There's probably a modest benefit to the sense side of our business as some surgeons or practices have reevaluated the tools that are being deployed based upon the objective data that's behind those tools. But I think it's a much smaller, negligible impact to the quarter versus, as we've spent a lot of time here talking about, the growing stand-alone utilization, for example. As we go forward, it's status quo for now. The MAC next steps and the timing remain unclear, but as we've said before, we do expect to hear from them again, and that stance is really unchanged. And so, as always, it's been the case historically, we'll continue to support the right of the physicians to make clinical decisions on behalf of their patients if and when we see something from these MACs.

And Joe, just quickly on OPEX, should we still target about 10% growth year over year this year?

Hey, Steve, it's Alex. I'll take that one, and thanks for the question. The answer is yes. I think the easiest way to think about it is from over the next three quarters, you should think of some kind of reasonable, sequential increases over time so that you land at the year at about a 10% growth in OPEX compared to the base in 2023, which was 360, excluding IPR meetings.

Our final question will come from the line of Michael... Our final question will come from the line of Michael Sarkone with Jeffries. Please go ahead.

Good afternoon, and thanks for squeezing me in here. Just another follow-up on iDose. Going back through the first few years of the initial iStat launch, I know you talked about, you had a year or two where you did 700 new reps trained. You also often talked about, I guess in 2015, the average rep training three surgeons per quarter. If you think about it kind of along those metrics, do you expect that the average rep today could train more surgeons than that, given that a lot of these surgeons are already trained in open angle procedures, or would it be something less than that because maybe they have more products in the back to sell? Just wanted to get your thoughts on how you're thinking about that metric.

Well, I think you largely framed it the right way, and so that's why I'm a little bit hesitant to get too specific on the pace of that training. I'll call it the tailwind from a comparable standpoint as you alluded to, we're not training the majority of these surgeons on angle-based surgeries. So from that standpoint, some of the harder elements of that training we don't have to spend as much time on. The offset to that is exactly what you said, in that we're not just simply launching a single product here in the case of iDose. We have a portfolio. There's a lot of activity around iStat Infinite. And so I think we'll have to feel our way through as the reps start hitting their full stride in terms of iDose trainings and onboarding as we exit this year and go into next year. We'll provide a little bit more context to that as we refine our own expectations.

Understood, thanks. And just one quick one. You talked about you're commencing early initiatives to secure commercial coverage for iDose. Can you give us a download on any types of conversations you're having in these early days with commercial payers and with the feedback and or receptivity is?

Yeah, those efforts are really just beginning, but there are a lot of conversations going on. In fact, there's actually a fair number of policies that have already been issued out there, even though we're not commercially trying to drive that side. Coverage has started to turn on in a variety of the commercial payer and other settings around that. I think to date what you've seen from those policies is exactly what we'd expect. And quite frankly, not all that dissimilar than if you look at the coverage policies that are out there for Derista today, of which there are plenty. So in terms of the interventional procedural pharmaceutical approaches, I think the payer community thus far has been following the playbook that they established with Derista as they think about that coverage for iDose TR.

I will now turn the call back over to the company for any closing remarks.

Okay, I wanna thank all of you for your time and attention today and continue to thank you for your continued interest and support in Glockos. With that, goodbye.

That will conclude today's call. Thank you all for joining. You may now disconnect.