Glaukos Corporation

in a 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 www.gloucose.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 Glockos Chairman and CEO Tom Burns, President and COO Joe Gilliam, and CFO Alex Thurman. Similar to prior quarters, the company has posted a document on its investor relations website under the financials and filings 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 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 by forward linking 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 www.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 comparing underlying results from period to period. Please report in the tables at our earnings press release available on the investor relations section of our website for reconciliation of these measures for the most directly comparable GAAP financial measure. With that, I will turn the call over to Glockos Chairman and CEO, Tom Burns.

All right. Thanks, Chris. Good afternoon, and thank you all for joining us. Today, Glockos 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-ago 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. 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 driving 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 US glaucoma franchise, we delivered record second quarter sales of $49.8 million on strong year-over-year growth of 26%, driven once again by strong growth within our overall iStent portfolio, led by iStent Infinite, along with early but growing contributions from IDOS-TR. Utilization of iStent 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 MACs issued draft MIGS LCDs that established coverage for Iceland 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 Iceland Infinite. Turning to IDOS-TR. 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 IDOS-TR, 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 IDOS-TR to all of our sales field personnel while continuing to target those surgeons' 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 IDOS-TR 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 iDoseTR commercial launch is market access. As scheduled, the unique permanent J code for iDoseTR, J7355, became effective earlier this month on July 1st, 2024. This now effective J code is expected to increase patient access and will allow us to expand training plans to future waves of surges in facilities. We're also advancing efforts to secure professional fee coverage and payment with VACs, 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, as drafted, largely maintain the 2024 reimbursement assignments and rates associated with our procedures. Finally, as promised, we have now engaged the FDA in a formal regulatory dialogue regarding the re-administration of IDOS-TR, and beyond that, remain on track to commence a Phase III clinical trial for IDOS-T-REx. our next-generation eye-dose therapy 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 MACE 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 a high-spend inject W 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 iStent and JECW in China and standalone usage indication for iStent and JECW in Japan, alongside the approvals of both iStent Infinite and Preservo in Brazil earlier this year. And finally, our Cornell Health franchise delivered sales of $19.8 million on 7% year-over-year growth, including Fortrex immense sales of $16.7 million. As discussed last quarter, our second quarter results reflect the impact of Fortrex 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 end of 2024. Beyond Epioxa, we also continue to make encouraging 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 discuss, 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 in principal amount or 80% of our convertible senior notes due 2027 for common stock, helping to further solidify our already strong capital position through a deleveraging and de-risking of our balance sheet, as well as significant reduction in future cash interest expense 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 in 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 patients worldwide. So with that, I'll open the call for questions. Operator?