This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk17: in the listen-only mode. Later, we will conduct a question and answer session. To ask a question, please press star 1 on your telephone keypad. To note, this call is being recorded. An archived replay will be available online in the investor relations section at .glawcos.com. I will now turn the call over to Chris Lewis, Vice President of Investor Relations and Corporate Affairs.
spk04: Thank you and good afternoon. Joining me today are Glawcos 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, 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, 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 filing for more information about these risk factors. You'll find these documents in the investor relations 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 Globcos' ongoing results of operations, particularly when compared to underlying results from period to period. Please report to the tables at our earnings press release available in the investor relations section of our website for a reconciliation of these measures for the most directly comparable GAAP financial measure. With that, I will turn the call over to Globcos Chairman and CEO, Tom Burns.
spk15: All right, thanks Chris. Good afternoon and thank you all for joining us. Today, Globcos reported record second quarter consolidated net sales of $95.7 million, up 19% on a reported basis and 20% on a constant currency basis versus the year-go quarter. As a result of our strong performance, we are raising our full year 2024 net sales guidance range to $370 to $376 million versus $357 to $365 million previously. Our second quarter record results were broad-based, with growth being driven by both our U.S. and international glaucoma franchises, where we continue to accelerate efforts to expand access to interventional glaucoma tools for the benefit of physicians and patients. Our goal to advance and improve glaucoma care by earlier intervention continues 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. Within our U.S. glaucoma franchise, we delivered record second quarter sales of $49.8 million on strong -over-year growth of 26%, driven once again by strong growth within our overall ISTEN portfolio, led by ISTEN Infinite, along with early but growing contributions from iDoSTR. The utilization of ISTEN Infinite for glaucoma patients that have failed medical and surgical therapy continues to expand as our ongoing clinical education efforts and improving market access landscape takes hold. Importantly, during the second quarter, five of the seven max issued draft makes LCDs that establish coverage for ISTEN Infinite that is consistent with our original reconsideration request. We have actively supported industry efforts to encourage areas of improvement in these draft LCDs and look forward to their finalization as we expect it will be an important step in unlocking the remaining Medicare Advantage and commercial plan coverage for ISTEN Infinite. Turning to iDoSTR, I'm pleased to report that we successfully advanced execution of our detailed launch plans for this first of its kind intracameral procedural pharmaceutical that was designed to deliver glaucoma drug therapy for up to three years. Outcomes and feedbacks from early cases continue to be very positive and reaffirms our view that with the launch of iDoSTR, we are pioneering a brand new therapeutic category that has the potential to reshape glaucoma management as we know it today. During the quarter, we successfully expanded access of iDoSTR to all of our sales field personnel while continuing to target those surgeon facilities comfortable utilizing a miscellaneous drug code. In addition to our commercial efforts, the launch has been supported by a growing set of clinical literature now consisting of seven different peer-reviewed publications highlighting iDoSTR as a transformative new treatment alternative for patients suffering with glaucoma and ocular hypertension. As you know, a key element to the stage gating of our iDoSTR commercial launch is market access. As scheduled, the unique permanent J code for iDoSTR J7355 became effective earlier this month on July 1, 2024. This now effective J code is expected to increase patient access and will allow us to train plans to future ways of surgeons and facilities. We're also advancing efforts to secure professional fee coverage and payment with VAX as well as establish commercial and Medicare Advantage coverage now that the permanent J code is effective. As noted in the past, we expect increasing adoption as reimbursement confidence is gained by our customers over the remainder of 2024 and more specifically in the fourth quarter heading into 2025. Earlier this month, CMS issued their proposed 2025 facility fee and professional fee rules that has drafted largely maintain the 2024 reimbursement assignments and rates associated with our procedures. Finally, as promised, we've now engaged the FDA in a formal regulatory dialogue regarding the re-administration of iDoSTR and beyond that remain on track to commence a phase three clinical trial for iDoSTREx, our next generation iDoSThereby by the end of 2024. Moving on, our international glaucoma franchise delivered record sales of $26.1 million on year over year growth of 17% on a reporting basis and 21% on a constant currency basis. This strong growth was once again broad-based as we continue to scale our international infrastructure and execute our plans to drive makes forward as a standard of care in each region and major market in the world. During the quarter, we also finalized a new French CEPS agreement that provides for adjusted rebate tiers and successfully expanded the addressable patient population to reflect the growing adoption of ISPEN to JECW in France. The net effect of this new agreement was favorable to our second quarter reported revenues and is expected to remain a tailwind for the remainder of 2024. While we remain in the early stages of expanding our IG initiatives globally, our efforts are progressing well, evidenced by several recent international regulatory approvals, including for ISPEN to JECW in China and standalone usage indication for ISPEN to JECW in Japan, alongside the approvals of both ISPEN Infinite and Preserve Well in Brazil earlier this year. And finally, our Cornell Health franchise delivered sales of $19.8 million on 7% -over-year growth, including for Phytrex and then sales of $16.7 million. As discussed last quarter, our second quarter results reflect the impact of Phytrex realized revenues as a result of our entry as a company into MDRP. 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 data readout in the second half of this year for the second phase three pivotal study supporting our NDA submission that remains on target for the 2024. Beyond EpiOXA, we also continue to make incursion progress across our robust portfolio of clinical and preclinical programs focused in the areas of glaucoma, retina, and rare disease, where our milestone targets and associated timelines remain on track and unchanged versus previous disclosures. We remain excited about 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. On that front, during the second quarter, we opportunistically executed a transaction to exchange 230 million dollars in principal amount or 80 percent of our capital. This convert originally issued in June 2020 during the height of the pandemic has proved to be a beneficial financial instrument that provides us with the financial flexibility to continue investing on our pipeline through COVID and other reimbursement-related uncertainties. In conclusion, I'm pleased with the strong commercial development execution of our teams that have demonstrated so far this year. We look forward to continue to build upon the growing momentum in our business over the course of the coming quarters and years. Our foundation is strong and we are ideally positioned to continue transforming vision for the benefit of our patients worldwide. So with that, I'll open the call for questions.
spk17: Operator? All right, and just as a reminder to ask a question, please press star followed by the number one on your telephone keypad. Our first question comes from the line of Tom Steffen from Stifle. Please go ahead.
spk16: Great. Hey guys, thanks for the questions and congrats on a nice order. Maybe I'll start with IDOS. Any comments on 2Q24 sales contribution or instead maybe anti-color on the base is growth in US glaucoma if you prefer to give that. And then if you could also comment on three Q trends you're seeing with the J code now in place, that'd be fantastic.
spk02: All right, thanks Tom and thanks for the comments. Not even a softball warm up before we dive into IDOS questions, but happy to start there and then we can take it further as you guys deem. I'll start with the overall US glaucoma performance. Obviously Tom alluded to the strength there with growth once again accelerating in the second quarter to 26% on a -over-year basis. And that was driven both by mid-teens growth yet again from our ISIN portfolio and infinite standalone utilization in particular alongside better than expected contributions from IDOS TR. I think the second part of your question is we think about the third quarter with the J code in place and now we've kind of worked our way through the first month of that. I think it's important to say, I mean obviously we continue to be positive about the progress we're making with IDOS launch in general, a ton of which happened in the second quarter as we make our way through July that continues. In some respects Q3 as we've said all along is a bit of a, I'll call a reset moment as you get the J code in place. And on the positive side you'll have some accounts where their administration will now allow those first cases once the J code has been established entering the quarter. You know frequently though you also need to see that get billed and and ultimately see reimbursement working before you'll fully open that up and those same dynamics hold true for many of the accounts that did their first procedures on the miscellaneous code during the second quarter. So I think as we make our way through here you hope to continue knocking down those hurdles and really see that momentum build from where we were at certainly in the first half of the year.
spk16: Got it that's great. So just as a quick follow-up if I dial in maybe 16-17 percent growth in the core U.S. glaucoma business I'm arriving at around call it nine million of IDOS is that fair? And then my follow-up would just be just on profitability for break even on a cash flow basis is at some point in 2025 for total company maybe a reasonable target as we think about high-dose secretion you know really starting to take hold in a more meaningful way. Thanks for taking the questions.
spk02: Yeah thanks Tom I'll start and then I'll turn it over to Alex for the profitability side of that. I don't think the the math that you did there I know you're trying to do the fly as we're doing that that guys I don't think the math quite shakes out that way so you can you can redo that. I'm not going to comment and endorse a specific number on it other than just to reiterate what we said when you kind of look at the overall growth profile of the business driven by mid-teens growth from ICIP portfolio and the rest being you know larger than expected contributions from IDOS. Alex you want to
spk05: talk about profitability? Yeah profitability Tom it's obviously a great question and top of mind and so as we look forward we've always said that the company would look at profitability and on the other side of IDOS we're getting there and to your point you talked about 2025 and that's going to be a key year for us as far as IDOS ramps up. You know our goal internally to be quite frank is to get back to a place where we are getting to cash flow break even and then starting to generate cash as opposed to having a focus on profitability in the near term. As Tom mentioned in his opening remarks we've got a rich pipeline there's a lot of value there there's lots of investments to be made but we really would like to get back to cash flow break even and then you know start to build up that cash flow over time and I do think in 2025 we should start to see some
spk07: of that occur.
spk08: Got it okay.
spk17: Sorry I'm going to cut you off a little bit but our next question comes from the line of Larry Deegelson from Wells Fargo please go ahead.
spk10: Hey good afternoon thanks for taking the question and congrats on a nice quarter here. Joe if I look at the midpoint of the guidance range it appears you know the growth rates are pretty similar in the first half and second half. Why wouldn't growth be higher in the second half given the ramp of IDOS and I guess is your commentary on the J code earlier that IDOS sales you're not expecting to go up sequentially in Q3? Thanks
spk02: yeah thanks Larry. A couple things to unpack there you know and it really is like the guidance and seasonality I mean obviously as you alluded to we're super pleased with how the first half of 2024 shaped up and then we were able to raise our you know full your guidance by even more than the Q2 out performance. As you look to translate that into and I'll call it our growing momentum into the second half I want to point to a couple key things. The first the normal considerations around Q3 seasonality which I'm happy to elaborate on more and the FX headwinds that we called out as a part of our press release. You're also fairly aware of the continued impact of the MDRP as a headwind to our cornea franchise with the most significant of that impact likely expected in the fourth quarter. When you think about IDOS TR and the growing focus on our commercialization there we want to be a little bit cautious that as we clear the expected market market access headwinds and hurdles if you will it may dampen some of the performance we've seen the stent portfolio in the first half as our sales organization leans further and further into obviously the IDOS launch. And the last thing really is kind of what I alluded to with Tom's question which is the third quarter being a bit of a JCO transition quarter. It's really hard to pinpoint in such a small and precise period of time you know Larry when you're in a launch like this you know the the reality is that the sooner some of these things start to play their way through from a payment standpoint on the JCO in the quarter will accrue some more benefit in this quarter. But it's hard to nail that down in the context of such a precise period of time. All I can really say is that as we look at the overall launch thus far we're increasingly confident in where we're headed with this product and what it's going to mean certainly as we get into the fourth quarter and translate that into 2025 and beyond.
spk10: That's helpful. I hate to do this but a math question Joe another way of looking at it you know US glaucoma sales were up about four to five million sequentially in Q2 last year and the year before. This year US glaucoma sales are up about eight million sequentially. Should we just assume the difference this year versus prior years is primarily you know IDOS or roughly three to four million sequential increase in IDOS? Thanks for taking the question.
spk02: Yeah sure I mean I think there's a handful of ways that you could try to back into specific number that's there. I think that where you're headed on that is probably closer to reality than you know I think the early map that was suggested before. But most importantly is that we made significant progress the second quarter with IDOS and that's while having obviously the imposition of miscellaneous c code in that environment there. So again that combined with the continued clinical feedback that we've been receiving really drives that confidence we've got and how that's been translated into the
spk07: increased guidance that we gave today.
spk10: Thanks for
spk07: taking the question.
spk17: All right our next question comes from the line of Ryan Zimmerman from BTIG. Please go ahead.
spk09: Hey guys I'll keep the fastballs going and not give any softballs there. So you know Tom I want to ask about your conversations your early feedback on the administration potential with IDOS. Do you know at this point whether you needed a trial for that? Kind of where do they stand on your existing data? They include obviously re-administration. Anything that you can kind of share with us at this point that maybe you know sets up your outlook on that potential?
spk15: Yeah I'd be happy to do that Ryan. So as you know we've talked about submitted the reconsideration request. We'll begin an active dialogue with the FDA which I presume will be over the next several months. They don't have a statutory obligation to respond to us in a specific period of time and so they're not bound by typical impositions that we may go back and forth as we look at this over time. I think as I've talked about before it was kind of a late stage in our mind the decision by the FDA to restrict us to a fulsome case at the tail end of the NDA adjudication prior to our successful approval. So now we have that opportunity. So the short answer is no we don't need any additional clinical trial information or clinical trial performance to be done. I think what we need to do and what we are doing is presenting the narrative in a compelling case given the data we've already been able to perform and have available. And I think we have a strong case. Having said that we know that the overt conservatism of the FDA we suspect drew the initial decision. So I have been counseling both investors and analysts to let's not get over our skis here. We're hopeful we may not be able to make progress but we're not counting on it. So we'll make every successful effort to apply for the re-administration of the iDOS device. And what I've said before and I believe is that we have a belt and suspenders approach here. If we're successful moving forward with iDOS T-REX which we're on track to begin the clinical trials by the end of the year if you do the chronology I suspect we'll be in a position to become a de facto device and a procedural pharmaceutical re-administration component for those patients that have served the full term of their initial iDOS device. So I like where we're at. I like how we're approaching this. I think we will make a strong case and then we'll see. And I clearly will keep both you and the investment community informed once I've received a final decision from the FDA.
spk09: Okay and then my second question is just around what you're seeing today with adoption of iDOS. And what I want to understand is are you seeing competitive switches from Drista? Are you seeing the adoption of iDOS either before drops, after drops, before SLT? Can you just kind of talk about where iDOS is shaping up in kind of that treatment paradigm? Thank you for taking the question.
spk02: Yeah Ryan I'll start and Tom may want to add color on this too. You know grand calls around exactly when and where it's being adopted. But I'll comment a little bit on where we expect it to be adopted. And from that standpoint you know when you think about the label that exists with iDOS we would expect it to be you know a early option for intervention in standalone patients regardless of their disease severity going forward. And to your point I think each surgeon will have a different view on the algorithm which they deploy it. Some will likely you know follow SLT, some will follow Drista, some will put it in front of that. But I think in general what you're seeing with the overall interventional glaucoma shift is a mindset towards more proactive therapy for these patients and not relying on disease progression following years of increasing drop therapy. And I think all parties will benefit from that and in particular
spk07: iDOS TR and Glaucoma.
spk08: Thanks guys. Our next question comes from the line at Matthew O'Brien
spk17: from Piper
spk08: Sandler.
spk17: Please go ahead.
spk06: Hey this is Phil on for Matt. Thanks for taking our questions and congrats on the record quarter. Just for starters I think Q1 saw 15 total implanting surgeons with about six weeks total of rollout. Any update on the implanting surgeon base in Q2? And just to keep the quick math train rolling here I think we triangulated about just under one iDOS per surgeon per week in Q1. Is that the right way to think about things and especially in Q2?
spk02: Yeah so I think Phil what I would say there is that as we pretty much everything with the launch has gone exactly as we planned and exactly as we told you we intended to execute. Of course anything can happen but so far so good from that standpoint. You know across the board on the market access related items you know we've seen the facility fee turn obviously in Q2 the J code and Q3 we're making you know professional fee progress. We saw the first of which to the schedules in the New Indian region come out this past quarter. So the wheels of progress can be grind on each of those fronts. If you think about it from a commercial sales standpoint we opened up you know our early access program which is what you were referencing when we had a planned sort of launch with the top 10 to 15 surgeons in the first quarter. We've opened that up to our entire US glaucoma sales force in the second quarter as you heard Tom reference and we saw a lot of progress as a part of that as referenced or as seen in our evidence by our early our results. You still have headwind of practices that are comfortable with the gymnastics required with executing against the miscellaneous drug code and so I wouldn't underestimate that and I just think that taking a step beyond that in the context of how many surgeons been trained and the average procedures per week I think it's just a little premature for that. That's something that we'll start to get a much better handle on the trending of and decide how we communicate with that to you all as we
spk07: as we kind of make our way through the year and start heading into 2025.
spk06: That makes sense thank you and then just my follow-up on iDose as the excitement grows beyond it call it friends and family and the broader glaucoma a glaucoma user base any competitive competitive MIGS switches pulled over by iDose adoption from competitors and and thoughts on maybe a core stent halo effect that you might see as iDose adoption grows.
spk02: Yeah I mean I think that in general we've invested an awful lot of capital and time to generate an exceptional amount of data that surrounds all of our products and whether that be the the legacy you know iCin, iCin inject in combination with cataract or iCin infinite now iDose I think the totality of that portfolio is pretty compelling to practices they think about the evolution of their care for these patients and I certainly hope that we're benefiting from that and as you referenced the sort of halo effect the ability to to treat patients first and foremost with iDose and ultimately as the disease progresses with with iCin infinite is a pretty compelling
spk07: value proposition that I think we're just now beginning to capitalize on. Thanks so much.
spk08: All right our
spk17: next question comes from the line of Alan Gong from JP Morgan. Please go ahead.
spk11: Hi this is actually Rohin on for Alan. Thanks for taking our question. I was hoping that you could elaborate a bit more on what you meant by reset in third quarter. Obviously I understand the J code transition but in light of that when do you kind of expect to get to a full launch for iDose and how do you expect to generate exiting 2024 into 2025?
spk02: Yeah Rohin it's Joe. I think first I'll start the elaboration on it. I think a launch like this there's rarely a single black and white event that creates the unlocking. I think the J code as we've always alluded is an important component of that. I think as you get into the fourth quarter you have the J code with the published ASP. That's an important component of that. As the fees continue to be established and become more solidified that's an important component of that. I think as you continue to move forward quite frankly as I said earlier we're going to have more accounts I think start to open up. We've already seen that where they're just more comfortable operating the J code environment than a C code. But they're still going to want to see a payment or two before they really allow the surgeons to run and do what they want clinically. So you have to kind of overcome that first basic hurdle and establish reimbursement confidence whether that's through the payment of the miscellaneous C code and those claims are outstanding or it's the payment of the J code as we get going. Sitting here today obviously for those folks who've done procedures the month of July they'll have just now been submitting those and those things will start to be adjudicated and paid over the course of the quarter. It gets very difficult for us to then translate how quickly that also translates into increased surgical volumes and clinical adoption based on the clinical merits of the product versus the I'll call it the reimbursement confidence piece. That's why you've heard us consistently say that the third quarter is a positive step in the right direction but it is a transition into what we think will translate into growing momentum in the fourth quarter going into 2025. I'd probably stop short of quantifying that specifically but as you think about your models and you're working on our guidance and what we've implied through the commentary for the third and fourth quarter I think that starts to give you a sense of what that means for Eidos as
spk07: we exit the year and enter next.
spk08: Great thank you. Our next question comes from the line of
spk17: Harrison Parsons from
spk18: Stevens.
spk17: Please
spk18: go ahead. Hi good afternoon this is Harrison I'm for George and thanks for taking the questions. I wanted to start on your guidance and specifically the domestic glaucoma revenue segment of that. I was wondering if for the remainder of 2024 if you know the base stenting business we should expect that same mid-teens growth and then you know whatever is incremental that that should be from Eidos. Is that the way we should be thinking about it?
spk02: Well Harrison I think I might make a slight tweak to what you just said. I think it was asked a little bit earlier one of the things that we're anticipating or at least preparing for as a part of providing guidance today is that as our team increasingly focuses on the Eidos TR you know commercialization you know that could create some growth headwinds if you will relative to what we experienced the first half in our raw portfolio in the U.S glaucoma. So set a different way I think we've seen obviously a strong pattern emerge in the first half of mid-teens type growth in our stent portfolio and I'm not sure that we're counting on that obviously as we make our way through the second half and the attention increasingly turns to Eidos TR. I do think I can provide a little bit more color in terms of the directional growth you know by franchise to help here. I think as we think about it for the full year and the revised guidance I would expect the cornea business to deliver low single-digit growth for 2024 and I'd expect international glaucoma business to continue along the strong trajectories had and to ultimately deliver low to mid-teens growth for the year reflecting the strong first half performance and if you do that math it implies U.S glaucoma -over-year growth of sort of the high 20s to approaching nearly 30 percent on a -over-year basis
spk07: when it's all said and done for 2024.
spk18: Okay got it yeah that's that's helpful. So I wanted to move towards the Salesforce strategy. I know you've talked about a phased launch there. I know all of your reps are calling on surgeons now but could you give any more color on how many surgeons each rep is going after? Is it just their top one or two and I guess what I'm really asking is when are we going to be at a full sprint there with all of your Salesforce going out to all of their accounts?
spk02: Yeah sure and every member of our sales team will find themselves in a slightly different part of their own trajectory as it relates to the launch but the way I would characterize it is what we said in the last call. You start off by enabling the first handful for some it's one or two for others a couple more surgeon targets getting comfortable with that getting the sea legs associated with launching a product like like idos and then ultimately as we get to the third quarter you start to open that up in waves. Again I'm at this point it's a little less focused on the exact number of surgeons that we're enabling with the Salesforce and then I think the unlocking if you will of it has a lot more to do with when they start to see the payment flow through of the code and for those who've already done it under this one in C code environment the C code.
spk18: Great
spk08: thanks for taking the questions. Our next question comes from the line of Margaret Caxor
spk17: from William & Blair please go ahead.
spk13: Hey guys good afternoon thanks for taking the questions. I'm going to keep on the idos train at least for the first one you know as we think about the number of accounts that implanted idos and the doc trainings that you've done on the back end you know you're sort of referencing the j-code and all these catalysts that should you know hopefully unlock more of those. I guess A do you expect a meaningful increase in implanters versus kind of what we saw in the Q2 case and then at what point do you hit a consistent quarter run rate for doc training or you know you've got kind of infinite capacity you know no pun intended where that can go.
spk02: Thanks Margaret I'm going to sound a little bit like a broken record I think here but in many ways the the gating item here to that consistency I'll call you to call it of the ramp and the number of doctors being trained in any given quarter etc. is is really based upon when we start to see the consistent and recurring and predictable you know payment of the j-code and we expect that in you know relatively short order let me be clear but from that standpoint as you enter the third quarter it's a normal grinding of the process if you will as the max for example bring the j-code online as they start to adjudicate these things and pay them in a in a you know more typical payment cycle that the account can count on at that point administrators stop becoming the ones who are dictating access to the product and it becomes adopted from the from the clinical side and the things that we all know the benefits that we all know exists for utilization of of idf tr and that's the reason why I think when you all do your surveys you see such positive feedback from the surgeons who are thinking about it from a clinical standpoint how they would adopt that and I think as we get ourselves you know through through the third quarter and certainly as we enter into the fourth quarter and exit the year I think we're going to can start to see a lot more um clinical adoption versus uh you know I'll call it market access or reimbursement related conservatives
spk13: okay and then you know I'll switch over to infinite because you guys you know you keep referencing the success of that is it fair to assume that infinite still remains larger than I do I just at this point or not and then you know as we think about what's driving that interest for internet at this point can you talk to you know types of accounts number of accounts that have adopted and how or what is in your guidance over the course of the year that's implied thanks
spk07: uh absolutely I mean I
spk02: think first absolutely our stent portfolio and iStent infinite remain um the dominant component of our overall uh portfolio if you just think back to what I said earlier in the call with mid-teens growth on a -over-year basis that that that it just implies it's obviously the the largest chunk of our us glaucoma revenue bases that exist today now I do expect we all do expect that will shift pretty quickly here as idos continues to ramp but as we sit here today infinite is still the largest contributor to the overall portfolio on the us glaucoma side you know what's driving it I think it's exactly what it's intended for you know as as the we entered into this year and coverage was there and established in a much more predictable recurring way our customers started to focus on the intended use case of the product which is for those patients who fail you know surgical medical therapy and if you think about it for those patients it just makes sense to intervene first with infinite before moving on to more invasive procedures is what you'd want for for your your family member in the same situation I think as our sales force is able to have that clinical conversation with these customers you see more adoption of of our surgeons
spk07: utilizing exactly as it was intended
spk08: okay thank you guys our next question comes from the line of David Saxon from
spk17: Needham please go ahead
spk03: hey guys this is Joseph on for David two questions I guess on idos and I'll just ask them together um in the quarter gross margin improvement how much of that was maybe driven by idos and then looking just like towards the launch throughout the rest of the year is there any plans on you know hiring on the back of of the idos launch you had mentioned maybe that the broader portfolio could see some headwinds from attention there so I was just wondering if that was you know
spk05: okay hey hey Joseph is Alex I'll take the first question on the margin so we did have a little bit of a modest -over-year increase in margin it fell within our expected range of 82 84 percent and so I wouldn't say idos was a major driver of that in fact quite honestly you know the idos facility that we turned on tends to be right now a headwind to our margin as we tend to see these efficiencies in manufacturing as you scale of production on these product launches so at this point we expect to see the margin creation continue to expand over the course of next year on the back of the idos as it fully launches
spk02: and as it relates to the sales force and hiring plans I think we've always been consistent how we look at this and we're going to stick stay true to the same approach we've had for a long time now which is we're always evaluating territories and opportunities where territories get to a scale that it makes sense to grow our sales force we have no plans as it stands here today to make wholesale changes to the size of the structure of our force but I would expect that over time organically we'll be we'll be adding folks to support the needs of the glaucoma business
spk03: okay great yeah that's all from us and congrats on record quarter
spk08: thank you
spk03: thank
spk17: you our next question comes from the line of joanne from city bank please go ahead
spk12: good afternoon and thanks for taking the question and congrats on the quarter I want to ship yours just a little bit to oh us migs I'm curious what is going on there that's driving you know let's call it xfx 20 plus kind of growth and also if my memory is correct when you gave initial 2024 revenue guidance it was for that segment to be uploaded in the teens seems like that may need to be updated or the second half is really to have a problem thank you
spk02: yeah
spk07: hi joanne I'll
spk02: start in on the ladder first when we started the year what we said or at least on the last call was that you should expect low to mid double digit growth from that international business and on this call today I referenced you know low to mid teens growth so in fact there for the year that does imply a step up in the overall growth profile you know I can point to a couple things you you heard tom reference obviously the the french agreement but I think the the biggest thing there continues to be the blocking and tackling of our teams across the markets out there we're still in the relatively you know early innings of changing the standard of care in the combination cataract market in many of these areas and we're just now starting to turn on new product introductions and approvals that you heard tom reference as well as beginning to follow that with increasing focus on the interventional lancoma opportunity and standalone care of these patients proactively just as we're doing here in the U.S. so I think we continue to be enthusiastic about the opportunity outside of the United States and in these international markets having said that you've always got currency considerations there we have competitive launches we've been dealing with that for the last couple of years we continue to see that now and and that takes time to work through as folks try and trial and and hopefully ultimately come back to products they know and trust in the glucose portfolio so we feel confident about where we're headed with that franchise and and I think the increased guidance in that area reflects that
spk12: thank you for that and the timeline for bringing idos outside the United States what would that be and have a great evening
spk02: thanks Joanne yeah from an idos standpoint the first thing you do is get the approval in the United States and that was the focus and then from there you shift your attention in our case to evaluating various markets internationally that's a complex environment as you know in the context of the world where reference pricing and things like that exist and so I think we'll be cautious about how we approach idos tr and the timing of any you know market entries outside the U.S. for now but we'll keep you updated
spk07: as we as we continue to make progress on that evaluation
spk17: our next question comes from a line of rich newitter from truest securities please go ahead
spk06: all right excuse me thanks for taking the questions maybe just going back over the the component of the you know the bridge the guidance range from old to new you gave some color that I just want to make sure I'm getting all the pieces correct it sounds like international glaucoma has a bit of a call-up you just said low double bidges to mid teams and obviously your U.S. glaucoma is you know high 20 percent below 30 and that's a call-up too but it sounds like that you know you're getting some of the maybe the incremental idos contribution masked by you know commercial sales not distraction but time trade-offs from the rest of the glaucoma portfolio is there anything else in there did I get the pieces right can you put any quantification around those
spk02: yeah so I think taking a step back just to confirm the first part of what you said I think the the punch line is in the the revised guidance it's guiding up on the international side it's guiding up on the U.S. glaucoma side and and you know from a macro standpoint if you think about it we beat the quarter I think by something like seven million and when you look at the midpoints we raised our guidance by by 12 and so I all of that is incremental if we think about the overall growth profile of the business you know from the cornea side the the low single digit is probably a tick down from where we were at on our prior calls all really related to our entry to the Medicaid or every day program which we've talked about on previous calls I think from a U.S. standpoint you largely captured that that right what I what I said was you know as you can imagine our sales force is going to be increasing leading into the idos tr launch it's going to take an increasing amount of their time as they're turning on and training surgeons as we make our way through the second half and while I hope this doesn't happen we're preparing for financially in our guidance some dampening of the growth profile we saw in the first half in our stem
spk07: portfolio
spk06: got it that's that's really helpful and you know appreciate you're not giving us a specific idos number for 2q but you know whatever that number is you know call it four whatever million whatever it may be you know in an ideal world if you were in our shoes would you would you ideally like to see the consensus modeling roughly flatish kind of sequential and then get a big uptick in 4q or spread it out a little bit flight uptick 3q bigger uptick 4q can you just you know any kind of directional help there it might help calibrate content as well as it to where you might want it
spk02: yeah I mean I think it's a good question so if you just focus and zero in on seasonality not with any specific product in mind but just seasonality of the business as you as you know the underlying procedure demand tends to favor q2 and q4 over q1 and q3 in ophthalmology in general in recent years we've seen a sequential q2 to q3 step down of several million dollars and and I think we would expect that at least to be the starting trend line again this year as the as you've heard me say the relative next leg up from an growth standpoint is likely to be weighted more towards q4 as we've indicated you know for some time as I also mentioned it's really hard when you're the way that the launch lines up to be quite so precise in the context of exactly what will occur in the third quarter versus the fourth and so I think from that standpoint it makes sense for us to be a little bit conservative while we're obviously planning for you know more optimistic
spk07: outcome both the third quarter as well including the fourth
spk06: okay thanks congrats in the quarter
spk07: thank you
spk08: our
spk17: next question comes from the line of Steve Lichtman from Oppenheimer please go ahead
spk14: thank you evening guys um wanted to actually ask on just on us Cornell health appreciate all of the uh the full year guidance how should we be thinking about that business after you you anniversary the MDRP do you anticipate it picking up or you have some device related headwinds you know as as we get closer to Epeon how do you think about that uh you know as we move past this
spk02: yeah it's a it's a good question Steve I think from the the Cornell health side you you you set it up correctly I first thing you do is sunset some of the Medicaid drug rebate program entry headwinds some of those could persist into 2025 as well as that adoption in the Medicaid arena continues to grow and the rebates grow alongside of them but as we get past that from a from a I'll call it a gross the net adjustment standpoint you know our expectation is that the underlying business x that dynamic should be returning back to or or exceeding the kind of growth that we've expected in the past from that franchise and what you saw in 2023 ultimately a lot of the activities that we are doing and will do would be an anticipation of preparation for a very important launch and that the OXA product as we exit 2025 enter into 2026
spk14: okay that's helpful and then um positive I how are you thinking about OpEx growth um you know now you're exiting here to queue for the year
spk05: thanks hey Steve it's Alex I'll take the OpEx question and again um you know our OpEx is trending along exactly how we were trying to guide it for the year if you recall we had said to expect OpEx to to uh grow this year around 10% off a base of about 360 million from last year that puts you at a full year OpEx around 400 million uh through the first half we have spent 192 million so if you just sequentially take a little modest step up over the next two quarters you can get to the 400 million and that's what we'd expect for the year
spk14: got it thank you guys
spk07: thanks
spk17: Steve all right now our last question comes from the line of Anthony Petrone from Mizuho please go ahead
spk01: uh thanks I'll stay on the iDose theme here and first question will be on the strategy for the 20% Medicare -for-service patients out there just doing some checks and there's a little bit of obviously uh sticker shock with the -of-pocket for those patients in in the instance where you have to use two stents so is there a balance sheet strategy to sort of close that donut hole in that 20% Medicare -for-service and then just as we look out in terms of you know iDose getting into the s-curve with its product launch you mentioned potentially some sales force ads the 400 million but could there is this a scenario once we get to 25 and certainly into 26 the sales force edition sort of level off and you really start to see that leverage benefit in the middle of the P&L uh and is that sort of the right time for that thanks
spk02: yeah thanks Anthony I think first let's take a step back something we I think we talked about on prior calls around the the payer landscape and obviously all of this was factored into the significant amount of work we did in arriving at the price point for iDose TR and and looking at it from an access standpoint in that context you have to break it down into the three constituent parts for traditional Medicare -for-service I think that's what you were 20% comment for those patients the vast vast majority of them actually have low to no out of pocket because of secondary insurance coverage so from that standpoint access for the vast majority of those patients really shouldn't be limited based upon the the price point that you're talking about the second group that I'll focus on is the commercial payer commercial pay patient population and and for that I think where you were referencing the balance etc you should expect that yes we will have a co-pay assistance program like all you know drug companies of similarly you know price drugs to take that burden off the table for those patients that have commercial insurance so from that standpoint the access to that will be gated much more by the policies and coverage of those payers and not so much the -of-pocket dynamics that you're referencing the last group will be the Medicare advantage that's not unusual to us versus any pharmaceutical or device companies out there where a significant portion of those patients both will be subject to the burden of policy restrictions as well as relatively high deductible plans and for those patients you tend to see them get treated more often than not in the later stage of the years when they've actually eaten through their their -of-pocket maximums through other procedures earlier in the year and so we'd expect for that patient population to wait more towards the back half of any any given you know fiscal year as it relates to idos sales force I think maybe I want to clarify something there when I talk about organic ads for us in there I really do mean nothing wholesale ophthalmology in general and certainly surgical ophthalmology there's quite a bit of leverage ability in that so while we'll continue to be smart and prudent about supplementing that resource where it's needed throughout the country we're not talking about something that scales infinitely or that overnight rapidly changes alongside the idos launch so our expectation would be that you would start to see the leverage if you will I think the way you ask the question sooner rather than then later as it relates to the idos
spk07: and the launch in our sales
spk01: very helpful thank you
spk17: all
spk08: right I would now like to turn it back over
spk17: to our team at glaucus for closing remarks
spk15: okay I want to thank everybody thank you all for your time and attention today and thank you for your continued interest and support in glaucus thanks and goodbye
spk17: that concludes today's conference call have a pleasant day
Disclaimer