Glaukos Corporation

We ask to please limit yourselves to one question and one follow-up. This call is being recorded and an archive replay will be available online in the investor relations section at www.glockos.com. I will now turn the call over to Chris Lewis, Vice President of Investor Relations and Corporate Affairs. Please go ahead.

Thank you and good afternoon. Joining me today are Glockos 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 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, 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 filings for more information about cloudcoast.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 CloudCoast's ongoing results of operations, particularly when comparing underlying results from period to period. Please refer to the tables in the earnings press release available in the investor relations section of our website for reconciliation of these measures to their most directly comparable GAAP financial measure. With that, I will turn the call over to Glaucos Chairman and CEO, Tom Burns.

Thanks, Chris. Good afternoon, and thank you all for joining us today. Today, Glaucos reported record fourth quarter consolidated net sales of 105.5 million, up 28% versus the year-ago quarter. These results reflect a continued acceleration of our business and cap off a successful year of global execution, both from a commercial and development perspective, leaving us ideally positioned to stay in our momentum and execute our strategic plans in 2025 and beyond. For the full year 2024, consolidated record net sales of $383.5 million grew 22% versus 2023. We have also introduced full year 2025 net sales guidance range of $475 to $485 million. Our record performance in the fourth quarter and full year of 2024 reflects our unwavering dedication to advancing our mission to transform vision by pioneering novel, dropless platforms that can meaningfully advance the standard of care and improve outcomes for patients suffering from sight-threatening chronic eye diseases. At Glockos, we are in the business of pioneering entirely new marketplaces within ophthalmology. Innovation is at the core of everything we do. Our mantra, We'll Go First, embodies our commitment and determination to take chances, push the limits of science, and disrupt the legacy treatment paradigms in glaucoma, rare disease, and retinal diseases through our pursuit of game-changing technologies. Our fourth quarter and full-year record of results were primarily driven by both our U.S. and international glaucoma franchises, where we continue to accelerate efforts to pioneer and develop the interventional glaucoma, or IG, marketplace with new standalone therapies designed to slow disease progression and reduce drug burden for the benefit of physicians and patients. Our goal to advance and improve glaucoma treatment by driving earlier intervention continues to build momentum as we educate surgeons and thought leaders globally to organically drive this broader evolution in the standard of care for the benefit of patients. While we remain in the early stages of these IG efforts, we are encouraged with the increasing levels of clinical interest for this paradigm-changing evolution. Within our U.S. glaucoma franchise, we delivered record fourth-quarter net sales of 56.3 million on strong year-over-year accelerating growth of 45%, driven primarily by growing contributions from IDOS-TR. As we pass the one-year anniversary of our controlled launch of IDOS-TR, I could not be more pleased with our team's execution of our plans for this first-of-its-kind intracameral procedural pharmaceutical that was designed to continuously deliver glaucoma drug therapy for up to three years. Over the course of 2024, we accomplished several key objectives that together create a strong foundation to support our future IDOS growth plans that include, one, developing and implementing a superlative training program to support a growing number of trained surgeons and accounts. Two, building an expanding set of clinical literature now consisting of nine different peer-reviewed publications highlighting IDOS-TR as a transformative new treatment alternative for patients suffering with glaucoma and ocular hypertension. And three, establishing key market access objectives to create an optimal reimbursement environment through a permanent J-code, a facility fee, a published ASP from CMS, building professional fee coverage and payment for a max, and expanding commercial and Medicare Advantage coverage. Most importantly, clinical outcomes and product feedback from a growing number of cases and trained surgeons continue to be very positive and reaffirms our view that with the launch of EidosTR, we are pioneering a brand new therapeutic category that has the potential to reshape glaucoma management as we know it today. Coming off of our national sales meeting earlier this month, the energy and excitement from our sales team and commercial organization for IDOS-TR and our broader interventional glaucoma strategy was profound. Our primary near-term focus remains on broadening market access among MACs, commercial, and Medicare Advantage payers. While there is certainly more work to do here, particularly as we expand efforts into the commercial arena over the course of 2025 and beyond. We are encouraged by the overall progress our teams are making to support increased reimbursement confidence through more streamlined and consistent J-code coverage and payment in the majority of MACs to date with more to come. Alongside this, we're also making good progress securing professional fee coverage and payment with three of the seven MACs now including CPT code 0660T in their professional fee schedules at rates in line with our expectations and generally consistent with comparable standalone glaucoma procedures. As noted in the past, we expect increasing adoption as reimbursement confidence is gained by our customers over the course of 2025. This will further be supported by our plan to accelerate marketing investments as the universe of trained surgeons and accounts continue to expand. While we advance our IDOS-TR efforts commercially, we also plan to expand the robust body of clinical evidence for IDOS-TR. On that front, we recently announced several positive IDOS clinical studies. First, a new 36-month follow-up analysis of IDOS-TR's two phase three pivotal clinical trials demonstrating sustained substantial ILP reductions as approximately 70% of IDOS-TR subjects remain well controlled on the same or fewer ILP-lowering topical medications at 36 months after single administration of IDOS-TR versus 58% of Temelon control subjects. In addition, IDOS-TR continued to demonstrate excellent tolerability and a favorable safety profile through 36 months across both Bay Street trials. Second, a new six-month follow-up analysis of a Phase IV single-arm clinical study demonstrated IDOS-TR implanted in combination with cataract surgery achieved a profound mean IOP reduction of 11.3 millimeters of mercury, or 44%, at six months compared to baseline. And last, but certainly not least, we commenced a phase 2B3 clinical program for IDOS-T-REX, our next-generation IDOS therapy. IDOS-T-Rex designed to be very similar in size and form factor to the original IDOS-TR, but it has nearly twice the drug capacity. Shifting to our US stent business, the utilization of iStent Infinite for glaucoma patients that have failed medical and surgical therapy continues to expand as our ongoing clinical educational efforts and improving market access landscape take hold. During the fourth quarter, five of the seven MACs implemented final updated MIGS LCDs that establish coverage for iStent Infinite that is consistent with our original reconsideration request. In addition, these final LCDs also eliminated coverage for cases that utilize two different MIGS devices in the same procedure. As anticipated, we believe these LCDs did cause some transient turbulence in the market during the fourth quarter, and we expect this may continue into 2025 as providers continue to navigate the impacts associated with these LCDs. Moving on, our international glaucoma franchise also delivered record net sales of $27.9 million on year-over-year growth of 28% on a reported basis and 29% 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 the standard of care in each region and major market in the world. Consistent with prior quarters in 2024, our new French Health Authority rebate agreement was favorable to our fourth quarter reported revenues. This year-over-year growth tailwind will sunset in 2025. We remain in the early stages of expanding our IG and product portfolio initiatives globally ahead of anticipated new product approvals and expanding market access in the years to come. As previously discussed, we expect the trialing of new competitive products in some of our major international markets may become an increasing headwind this year alongside the material foreign currency exchange headwinds that emerged at the end of 2024 and have continued into 2025. And finally, our corneal health franchise delivered net sales of 21.4 million, including Fortrexa net sales of 18.8 million. As discussed throughout 2024, our fourth quarter results reflect the growing impact of Fortrexa realized revenues as a result of our entry as a company into the Medicaid Drug Rebate Program, or MDRP. Going forward, we will continue to focus on expanding access for keratoconus patients suffering from this rare disease. Staying on corneal health but shifting to our pipeline, in December 2024, we were pleased to announce NDA submission of Epioxa, our next-generation corneal cross-linking eyelid therapy for the treatment of keratoconus, a sight-threatening disease. This submission sets up an anticipated FDA approval decision by the end of 2025. The NDA submission for epioxide represents an important milestone for our company, as it brings us one step closer in being able to provide keratoconus patients and the ophthalmic community with the first FDA-approved, non-invasive, corneal cross-linking drug therapy that does not require the removal of the corneal epithelium, the outermost layer of the front of the eye. We look forward to working closely with the FDA in their pending review process and continue to believe that Epioxa, which is designed to reduce procedure times to improve patient comfort and shorten recovery time, represents a potentially meaningful advancement in the treatment paradigm for patients suffering from keratoconus. We are already well underway with a team of cross-functional leaders across our commercial and market access organizations in the preparation and planning of the Epioxa commercial launch targeted for next year. It's worth reminding investors that an Epioxa approval also provides us with the opportunity to launch a rare disease pharmaceutical supported by the right long-term pillars to optimize patient access, a persistent and at times frustrating challenge for us historically with Fortrexa. We also continue to advance a phase two clinical program for our third generation iLink therapy designed to use biomechanical modeling, to deliver a customized pattern cross-linking treatment tailored to each patient's unique corneal topography. Beyond our cross-linking franchise, we continue to prudently invest in and successfully advance our broader 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. In addition to our pipeline milestones already discussed, we anticipate commencing a phase two trial for Iolution Blepharitis, along with a US IDE trial for Press-to-Flow Microshunt in 2025. 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. One such area of planned investment is in our operations function, where we recently announced plans to build an expansive research development and manufacturing facility in Huntsville, Alabama, to augment our current infrastructure and support our future expansion plans. Over the course of 2024, we successfully executed several transactions designed to further solidify our already strong capital position, including the retirement of the full $287.5 million in in principal amount of our convertible senior notes due 2027, leading to a deleveraging and de-risking of our balance sheet, as well as a significant reduction in future cash interest expense. In addition, during the fourth quarter, we successfully unwound 50% of our cap call transactions associated with this convertible note issuance, generating cash proceeds of approximately $53 million for our company. As a result, we ended 2024 in a strong capital position with cash and equivalents of roughly $324 million and no debt. In conclusion, I'd like to recognize our more than 1,000 employees around the globe for whom our company mantra of We'll Go First is more than just a company tagline. Rather, it is something that defines who we are as an organization and how we lead every day. I believe our foundation has never been stronger. and our prospects never as promising. We are excited to build upon the growing momentum in our business in 2025 and beyond as we advance our mission to transform vision for the benefit of patients worldwide. So with that, I'll open the call for questions. Operator?