Glaukos Corporation

Welcome to Glowcoast Corporation's first quarter 2026 financial results conference call. Copies of the company's press release and quarterly summary document, both issued after the market closed today, are available at www.glowcoast.com. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question, simply press star 1 on your telephone keypad. To withdraw your question, press star 1 again. This call is being recorded, and an archived replay will be available online in the Investor Relations section at www.gloukos.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 Glocko's 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 be read by investors before the regularly scheduled quarterly conference call. To ensure ample time and opportunity to address everyone's questions, we request that you limit yourself to one question and one follow-up. you still have additional questions, you may get back into the queue. Please note that all statements, other than statements of historical factors made on this call, 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, for sales, products, pipeline technologies, and clinical trials, U.S. and international commercialization, market development efforts, product approvals, 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, putting 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. Please review today's press release and our recent SEC filings for more information about these risk factors. You'll find these documents in the investor relations section of our website at www.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 Glockos' ongoing results of operations, particularly when comparing underlying results from period to period. Please refer to the tables and earnings press release available in the investor relations section of our website for a reconciliation of these measures to their most directly comparable GAAP financial measure. With that, I will turn the call over to Glockos Chairman and CEO, Tom Burns.

Okay, thank you, Chris. Good afternoon, and thank you all for joining us. Today, Glockos reported record first quarter consolidated net sales of $150.6 million, up 41% on a reported basis and 39% on a constant currency basis versus the year-ago quarter. As a result of our first quarter outperformance, we are raising our full year 2026 net sales guidance to 620 to 635 million compared to 600 to 620 million previously. Our first quarter results reflect strong execution across our global commercial and development priorities, highlighting the commitment of our teams, strength of our differentiating technology platforms, and our continued progression as an increasingly diversified leader in ophthalmology. Looking ahead, We believe we are well positioned to sustain this momentum driven by two transformational growth drivers, including the continued advancement of the interventional glaucoma treatment paradigm with iDoseTR and the launch of Epiaxa, establishing a new standard in interventional keratoconus and rare diseases. Together, these compelling and durable market opportunities reinforce our confidence in delivering a best-in-class growth profile well into the next decade. as we continue to invest in and advance a robust industry-leading pipeline while remaining disciplined in capital allocation, focusing on ROI-driven investments to support our near-term objectives of continued operating leverage and cash flow breakeven. Now let's discuss our first quarter results in more detail. Within our U.S. glaucoma franchise, we delivered record first quarter net sales of $93.5 million on strong year-over-year growth of 58%, driven by growing contributions from IDOS-TR, which generated sales of approximately $54 million in the first quarter. IDOS-TR continues to deliver strong clinical outcomes that meaningfully improve patients' lives, driving strong physician interest and adoption. From an execution standpoint, we remain focused on our key initiatives, including expanding our base of trained surgeons and active accounts, increasing utilization, broadening market access, scaling targeted commercial investments, and expanding body of clinical evidence. On that last point, EidosTR is supported by a robust and growing body of clinical evidence demonstrating strong efficacy, safety, and durability of effect. This now includes 22 peer-reviewed publications, complemented by a broad portfolio of active Phase IV studies across diverse real-world clinical settings, further reinforcing its consistent performance in real-world practice. Importantly, INOS-TR is serving as the foundation for a broader shift towards earlier interventional glaucoma care. Our efforts to educate surgeons and key opinion leaders globally are gaining traction and helping to drive a steady evolution in the standard of care. This momentum was evident at recent major industry meetings, including AGS and ASCRS, where engagement and enthusiasm around interventional glaucoma and our novel therapies were notably strong and growing. To support these efforts, we continue to invest in our commercial organization and infrastructure to expand disease awareness and education, while enabling our customers to effectively adopt and operationalize interventional care into their clinical practice. Moving on, our international glaucoma franchise delivered record net sales of $35.8 million on year-over-year growth of 23% on a reported basis and 16% 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 and export as a standard of care in each region and major market in the world. As previously discussed, we continue to expect new competitive product trialing headwinds in some of our major international markets as we progress through 2026, partially offset by growing contributions from ISEN Infinite following its EU MDR certification and associated European commercial launch late last year. We also expect the currency tailwinds to abate going forward based on the current rate environment. And finally, our corneal health franchise delivered net sales of 21.3 million on year-over-year growth of 15%, including for Trexa and very early Epioxa net sales of 17.7 million. At the end of the first quarter, we are delighted to announce commercial availability of Epioxa, our novel groundbreaking advancement in corneal cross-linking for the treatment of keratoconus, a rare site-threatening disease, that is currently far too often underdiagnosed, undiagnosed, and untreated. We believe Epioxa represents a transformative innovation in keratoconus care, offering an incision-free alternative to traditional corneal cross-linking procedures, as it does not require the removal of the corneal epithelium, the outermost layer of the front of the eye. This novel, oxygen-enriched, topical therapeutic, bioactivated by UV light, is designed to reduce the pain associated with removal of the epithelium, streamline the procedure, and minimize recovery, all while delivering clinically meaningful outcomes and exceptional value to patients, providers, and the healthcare system. The response we've received from surgeons in the broader ophthalmic community since FDA approval and the more recent initial commercial launch activities has been very encouraging. As we've discussed, with the launch of Epioxa, we have redefined our go-to-market approach to better address this site-threatening disease and truly expand patient care and access. Importantly, with this launch, we are substantially increasing our investments in patient awareness, education, and access while addressing the longstanding challenges of underdiagnosis and undertreatment that have affected this rare disease community. As with all pharmaceutical launches, initial patient access will be gated by typical payer adoption headwinds and hurdles, but we've been encouraged by the progress we've made in short order through the early days of our launch. First, I'm proud to report that we have successfully established and continue to selectively expand a broad-reaching site of care network. Our acquired O2N systems are already actively deployed across locations serving roughly 65% of the US population. with a pipeline progressing through various approval processes that we expect will expand our treatment center reach to approximately 95%. Looking ahead, we will continue evolving this network to bring treatment access closer to patients as reimbursement and drug acquisition pathways become further established and streamlined. Next, we continue to make considerable progress with payers to secure access pathways or policy coverage for Epioxa. with several plans having already updated or are in the process of updating their policies to include this novel therapy. These efforts are translating into expanded access with pathways now established for more than 100 million covered commercial lives in the United States, including with four of the five largest payers reflecting encouraging initial receptivity of Epioxus clinical value. While we expect the pace of policy adoption to build over time, we remain focused on driving broader coverage across both commercial payers and Medicaid programs to support more streamlined access pathways over time. Earlier this month, we achieved another important market access milestone as CMS assigned a product-specific J-code for Apioxa consistent with our expectations and in response to our application. The new code, J2789, is scheduled to take effect on July 1, 2026, and we believe it will help streamline the reporting and reimbursement process for Epioxa among U.S. payers over time. Until then, we anticipate Epioxa will be commercially available under a new technology miscellaneous J-code and anticipate measured adoption over this initial period until the permanent J-code is in place and solidified operationally by providers in our specialty pharmacy. Beyond market access, we're proud to lead the way once again in forging a new path for interventional care to Congress by advancing targeted marketing and DTC initiatives to drive awareness, education, and earlier detection supported by greater optometric engagement and strengthened advocacy partnerships. Finally, We've launched a co-pay assistance program for eligible patients and are operationalizing a specialty pharmacy partner network in support of Epioxa patients. As you can see, we are very excited by the significant potential Epioxa offers to patients living with keratoconus. While Epioxa remains in the early stages of its launch, our teams are energized and executing with focus. and we're encouraged by the solid progress we're making against our core launch priorities. Beyond Epioxy, we continue to advance a broad and differentiated clinical pipeline across our five novel therapeutic platforms, encompassing 13 publicly disclosed programs and additional undisclosed assets supported by a robust portfolio of active clinical and phase four studies. This includes ongoing pivotal trials for iDose T-Rex, iStent Infinite in mild to moderate patients, and the Pressor Flow Microshump, an active phase two trial for Iolution Demodex Blufferitis, ongoing development for our iLink platform, including a planned market introduction of our KC screening device later this year, and our promising earlier stage rental assets. Overall, we remain on track with our clinical timelines and encouraged by the progress across our complete portfolio. In conclusion, at Glockos, we're in the business of pioneering new marketplaces within ophthalmology for the benefits of patients. Our record first quarter performance highlights the strength of our strategy and execution as we continue evolving into an increasingly diversified ophthalmic leader with moldable transformational growth drivers in IDOS-TR and Epioxa, and advance our mission to transform vision therapies for the benefits of patients worldwide. So with that, I'll open the call for questions. Operator?

The reminder to ask a question, press star 1 on your telephone keypad. And our first question comes from the line of Tom Steven with Staple. Please go ahead.

Great. Hey, guys. Thanks for the questions. Nice quarter. First one on Epiox, Tom or Joe, maybe if you can talk about early findings, one, on sort of how initial experiences in sort of the claims and prior auth processes are going, and two, what demand in the market looks like sort of from an early utilization standpoint, you know, maybe based on what you're seeing in the Epioxa patient portal, and then I'll have a quick follow-up.

Sure. Thanks, Tom. It's Joe. I'll start off there. You know, I think Tom gave you some of the higher-level stats, the progress we're making with the Epioxa launch, both in terms of the two fundamental, you know, I think foundational items, both our site and care network as well as the broader payer pathways. Underlying that, which I think you're asking a good question, is the process of making your way through that. And clearly, it's hard to judge too much on that until we get into the post-J code period, because at this point, you're dealing with a miscellaneous code. So all systems around that, if you will, are by definition slower than normal as you adjudicate on a claim by claim basis. But I will say that we've been very encouraged by those sites of care who've come online, as Tom referenced, and the patient flow that's coming from that and into our portal and the hub, as you say, as a leading indicator of what it can mean for the clinical demand associated with an epion therapy like epioxin. So as we make our way through that and we see those claims get adjudicated, which we've seen positive claims get through the process and also those procedures get done now, we're encouraged by what I'll call the leading indicator in terms of that funnel as it develops.

Got it. That's great. And then follow-up just on IDOS, really solid in the quarter. Joe, maybe to stick with you, can you just talk about drivers of the strength? And it'd be great if you could maybe also discuss kind of Noridian and Novitas versus the remaining max and what you're seeing in kind of each of those two pools, if you will. Thanks.

Yeah, absolutely. I think the most encouraging thing about the results of the first quarter was it was very broad-based in terms of what drove that performance. continued expansion within the more established, I'll call it, MACs. And you referenced Norinia and Novatas. I'll put First Coast in that as well. I'll come back to that. But now you start to see NGS in particular turning on the early signs of Palmetto turning on as well, as we've more recently achieved a professional fee formally in that region. And I think also what was encouraging was a real increase, certainly in the funnel into our hub, associated with commercial and Medicare Advantage patient flow. So I think it was broad and consistent with what you would hope to expect in the context of our core initiatives. To put a finer point, I think, on your question around Neuridia and Novitas, typically I talk about that in the context of Neuridia plus Novitas and First Coast as some of the earlier adopting MACs. And in the first quarter, that was down to about 73% of the overall region volumes, if you will, from 78% in the fourth quarter. And again, that's really because as they continue to grow, you might expect the adoption curves to be picking up even faster in areas like NGS and Palmetto to offset them. Got it.

Congrats again. Thanks.

Our next question comes from the line of Adam Meder with Piper Sandler. Please go ahead.

Hey, good afternoon. Thank you for taking the questions and congrats on a great start to the year. The first one for me wanted to ask a modeling question. So, you know, nice Q1 top line B, you raised the full year outlook by more than the Q1L performance. You've given a lot of great modeling color in the past. So, Joe, maybe for you or Alex, can you just kind of pull apart the updated guidance with IDA's contribution versus the STEM business versus corneal health? And, you know, as we think about Q2 in particular, and as it relates to epiox, I would appreciate, you know, if you could give us a little bit of modeling help and then I'd follow up. Thanks.

Sure, Adam. I'll dive in, and I'll give at least some introductory comments on that front, and if folks have additional questions, we can dive in a little bit deeper. But as you said, it was a great start to the year with really each of our franchises exceeding expectations, and we made considerable high dose in particular. And as a result, we were able to raise our guidance up to the $626, $635 million range. And as you think about that in your models by franchise, a handful of perspectives, first by franchise. On the international glaucoma side, I'd say really the dynamics here are somewhat unchanged. Obviously, we expect as we move forward here, some of the currency benefits that you heard Tom call out in the prepared remarks will wane. And so we do expect that going forward, we'll see sort of high single digit growth for the remainder of this year. Now, when you put all that together, that's going to translate into low double digit growth for the full year. But the remaining quarters, we would expect single digit growth in that franchise. On the corneal health side, obviously, I think everybody knows there's a fair number of moving parts there. It was a strong first quarter, but we do continue to anticipate volatility associated with both the protrex and epioxa transition, but also the temporary and permanent JCO transition over the course of Q2 and Q3. And so when you put all that together with the performance and what we're sort of seeing, We now expect kind of high single-digit growth for this franchise for the entire year with some puts and takes in the individual quarters as we get there. And as you've heard me say in the past, we certainly expect to be exiting the fourth quarter with a pretty strong performance curve as we start to pull through Epiox in a more meaningful way. On the U.S. glaucoma side, again, another strong start to the year. We would adjust our views there probably to be more in the, I'll call it a low 30% type growth for the full year. And that's really driven by still an ongoing view that going forward we should expect kind of flattish non-hido sales going forward until we've really been proven otherwise. and uh and and continued sequential progress as we've been seeing with the with the ios launch so you put all that together and i think as you said we not only did we raise our overall guidance but we raised it for each of our underlying franchises and the drivers i will add just because you asked about i think for q2 in particular given you know there's a lot going on here and it's all it's all good but i want to make sure we've got it as dialed in as possible that you know for the u.s glaucoma franchise as i alluded to earlier in q2 i think we'd expect sort of flat consequential idose expansion in intervention glaucoma we'd expect the highest single digits as we talked about you know the effects benefit Wayne's and the cornea side I think as we sent on the last call we would expect in the second quarter to see a bit of a dip there on a year-over-year basis as we transition from protrexa to tapioxin really appreciate all the color Joe and if I can just sneak in a follow-up wanted to ask about idose and we're reaching a point now where

You have critical math from a reimbursement standpoint. So Tom or Joe, can you just maybe talk about some of the new initiatives that you're going to start to put in place here? I think you've talked about growing the commercial team, potentially looking at direct-to-consumer as we kind of get into the latter part of the year. We just love some incremental color for kind of the next chapter. Thanks again.

Yeah, you're exactly right, Adam. We've always talked about you didn't want to put some of these things into place until you start to have a more solid foundation from a reimbursement standpoint. Certainly what you're hearing in the context of our first quarter results and our guidance is increasing confidence in that foundation, both in terms of the five of the seven MACs that have now established professional fees and the teams driving incremental confidence, both on the reimbursement side as well as obviously the clinical commercial side, but also now increasingly as we move forward here on the broader commercial Medicare Advantage. You know, I think as we've talked about in the past, as we move forward here, it's about driving increased awareness for IDOS and interventional glaucoma and teams that help drive that broader environment of both education of patients as well as the process to get them treated by an interventional procedure like IDOS. We have been making significant investments for some time now in more of our reimbursement and business teams that surround the traditional sales force to really try to make sure that we can maximize both patient access and that broader awareness initiative. So I think you should expect to see more of that. Certainly as we get our way into the second half of this year and as we get closer to exiting the year and heading into next, based upon this trajectory, we're going to feel, I think, a lot more confident and starting to make some of those more offensive investments.

Our next question comes from the line of Larry Bigelson with Wells Fargo. Please go ahead.

Good afternoon. Thanks for taking the question. I'll echo my congratulations here. Maybe one on iDose, one on Epioxa. Joe, if you could talk about how you've engaged with the MAC since the CAC meeting and last year. Any updated thoughts on the likelihood of an LCD this year and the timing of those two RCPs you're running? And I had one follow-up.

Yeah, Larry, I'll start off at the beginning, and Tom can comment on the broader studies that we're doing associated with IDOS here in a minute. So, As we think about the engagement with the MACs, I'm not sure we have a particularly different strategy here. We've always engaged in an education process to make sure they understand our technologies, how they're utilized, the labels and indications for use around them. And we continue to do that. We continue to try to diagnose where we've got ongoing, you know, I'll call it less streamlined reimbursement in areas like CGS and WPS. And we continue to have momentum in some of those conversations. So hopefully we're marching forward those two MACs in a productive way that can drive professional fee establishment similar to the other five larger MACs that have come before them. As it relates to the post-hack conversation, LCD conversation, really no changes on this front since our last call, Larry, and we've talked about it. At this point, we've not seen any signs of an LCD, and we continue to believe it would be premature at this stage of the clinical adoption curve. And having said that, obviously, by nature, these things could be unpredictable and opaque. So it certainly remains possible, even if we believe it's less probable at this point.

I think to address your question on phase four studies, Larry, that we've contemplated actually then enrolling for some time once we received NDA approval, we have done two major phase four studies. The first would be I-dose plus cataract versus cataract surgery alone to be able to demonstrate the incremental value of using I-dose in combination with cataract surgery. And that study is actually fully enrolled and we'll be following those patients over the course of this coming year. And we'll be looking to publish the data at regular intervals. And I think that will be a a very powerful supplement to the data that we currently have on hand. Again, another 22 peer-reviewed clinical trials. And I think we were largely prescient in also doing a study looking at I-dose versus I-dose plus infinite, because I want to show the incremental value of these two different mechanisms of action to be able to lower interocular pressure to supremely low target pressures, which will by all evidence, be able to afford the progression of glaucoma or progression in glaucoma. I think with both of these in hand, I think it will be timely in case in any event in the future we're challenged by any vaccine using either combination modalities of procedural pharmaceuticals plus MIGS or using idos in combination with cataract surgery.

One other thing I'll just add, Larry, I think even at a minimum on this, these studies that Tom's referencing is important in the broader payer community. So this is how you continue to expand that coverage, irrespective of MACs and LCDs, et cetera, with the individual commercial players and Medicare Advantage plans to make sure that we're optimizing that access for our patients.

Thanks. And for my follow-up on epioxid, Joe, I'm going to ask you kind of more of a big-picture question. I think from our past conversations, you felt confident that Epioxa could return to peak, you know, for Trexel levels of roughly 18 to 19,000, you know, eyes, you know, by the end of the decade. And, you know, if that's paid volume, that would be, you know, well north of a billion dollars in revenue. So I guess my question is, you still, you know, how are you feeling about, you know, achieving that? And, you know, what is the ramp to that look like? Thank you.

Yeah, Larry, I mean, I think I'll stop short of obviously making the longer-term predictions formally and just say I think we have been on record saying, you know, we view this as a, you know, potential billion-dollar-plus franchise. The pace in which we get there, you know, we'll continue to monitor as we get into the actual true commercialization, especially if we get toward the second half of this year. But, you know, I think part and parcel with that is You know, I don't think we view it just in the context of where we've been with FOTREX patient volumes. We're making the investments we're making, which are enormous moving forward, to drive increased awareness and detection and ultimately action and access in the hopes that we can treat, you know, quite frankly, far more than that. We believe that there are more than the 18,000 to 19,000 eyes at any given time that should be getting diagnosed and treated. And so from our standpoint, a lot of the DTC and the things that you've heard Tom reference, we'll be putting those investments towards hopefully growing this overall market from a volume perspective over that period of time and getting more and more of these patients treated. Thank you.

And I would just add on that, you think about what the possibilities are to build this marketplace over the planning period and really important to be able to recognize what we have beyond this planning period. Certainly at the tail end of the planning period, this would be the second generation customized algorithms that we have in place for the treatment of keratoconus. And that can't help but be market expanding if we show demonstrable changes in KMAX for these patients and have the possibility of actually increasing their best corrective visual acuity by virtue of customized algorithms that we're going to be able to dispense and use on the patients with teratoconus. So I'm very bullish, not only on the near term of all the different mechanisms we'll put in place to build the marketplace, but our possibility of having a second wind moving into the 2030s, which will increase our presence in this rare disease.

Thank you very much. Thanks, Larry.

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

on a strong start here. You know, just kind of dovetailing on some of the questions before, you know, there's been obviously a lot of investor concern about these LCD risks. I know you just addressed it. But, Tom, I guess my question is around, you know, the existing body of evidence. I'm wondering if you could kind of talk about it in contrast to the Phase 4 study and remind us what percentage, you know, now that we have, you know, quite a track record with IDOS, what percentage are you seeing today either in combination with cataract or with another MIGS in terms of the I-dose usage? And, you know, if some of the studies already bear out evidence of combinatorial usage of I-dose with other products or procedures, you know, do you think that is sufficient or the Phase IV study is really, you know, necessary to kind of, you know, refute any concerns there?

I'll let Joe start and I might add some color. Go ahead, Joe.

Yeah, I'll start in the context of the trends that we've seen. Certainly, I think they remain consistent, Ryan, with the past commentary. The relative percentage of the procedures done today where surgeons are treating glaucoma with IDOS and at the same time in conjunction with a cataract procedure, it's growing as expected given, obviously, glaucoma has already changed the standard of care for those patients, but At the same time, our efforts remain focused on that interventional glaucoma opportunity, and we continue to see rapid growth in the number of standalone procedures. So I would say that the majority of patients last year still saw a standalone IDOS procedure, but the mix is certainly shifting towards in combination with cataract or in combination with another mix, as you might expect, because these physicians are trying to obviously do everything they can to slow the progression of a sight-threatening disease.

And I would just say, based on the question that you have, that most of the phase four studies we do, and as Joe has mentioned, are really for the payers and for movement into commercial payers and Medicare Advantage. I think surgeons, a priori, already have the confidence that putting eye dose in combination with cataract surgery is going to yield an incremental effect. I think that you'll see that in any channel checks you do. Likewise, the use of combination therapy of iDose plus an iStent Infinite, surgeons will have high confidence that they're going to treat incremental effects. So the studies we're doing are less to be able to drive that portion of the market. They're more to validate surgeons' already existing confidence in using these technologies together.

Understood. And then maybe a question for Joe and Alex even. which is just, you know, operating expense guidance and your thoughts on profitability. I mean, it's almost getting to a point where despite your best efforts, you will become profitable in kind of the next year. And I'm wondering kind of how you think about the ramp in sale or excuse me, the ramp in expenses needed for Epioxa commercialization and kind of, you know, what that does or doesn't do to your timelines, or at least in our model, our timeline, the profitability.

Hey, Ryan, it's Alex. I'll start with profitability. Again, just to reiterate what Tom had mentioned in his opening remarks, our near-term focus in managing the business, do so on a cash flow break-even and driving basically operating leverage within the P&L, which we're pleased to say we saw in the first quarter, and we're glad that that execution is happening. But as we look ahead, to your point, we certainly can – see with the commercial launches of Eidos and Epioxa that we definitely have a fairly clean line of sight towards that pathway of profitability over the next few years. To your point, some of it will depend on the ramp of these commercial launches and the associated revenues that come with it. But as we continue to manage the business towards that cash flow breakeven, you'll see from an operating spend side that we continue to reinvest in the business and reinvest in these commercial launches. And, you know, we've talked about the fact that our, um, our operating expenses will grow this year, year over year. And we feel that way, you know, and I'll just give you some commentary now that as we did overachieve in the first quarter, you know, Tom and I, and Joe talked about adding additional fuel to the fuselage and these commercial launches. So you should see those, the operating expenses take up slightly and moderate modestly from what we talked about at the beginning of the year. but still in the high teens and still showing that operating leverage overall as we progress throughout the year.

you know i think ryan the the overall you know when you hear tom and i talking about the incremental spending from dtc or otherwise it's important to note that a lot of that is by its very nature discretionary so as we look forward you know you're thinking about making those investments alongside of the significant you know growth that we're achieving and and hopefully with the uh hopes of a return on investment that makes that um certainly worth the incremental spend associated with it so We'll be in a process here where we're continuing to evaluate the effectivity of those efforts and what that return looks like before diving in with two feet, if you will, to go full spend on DTC-related efforts. We've always been pretty disciplined in how we've thought about those types of things. Okay.

Appreciate it, guys. Thank you.

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

Thanks for the question. I wanted to start off with one actually on the core U.S. glaucoma business. You know, I think iDose clearly had a really strong quarter, but, you know, underlying U.S. glaucoma also did quite a bit better than expected and grew at a healthy clip year over year, albeit also, you know, a bit of an easy comp, I believe. So, when I think about your forecast, your reiteration for flat for, you know, 2Q in the year, what are you seeing that kind of supports that outlook? Is it just conservatism or are there real challenges that you're seeing out on the market?

Yeah, Alan, thanks for the question. You're right in the context that this was the second straight quarter where we've seen the restoration of growth in that non-IDOS remainder, or as you said, I think core U.S. glaucoma franchise. So I think we've certainly seen signs of stabilization of the underlying market there. And I think that our teams are doing a great job on the performance side within that now more stabilized market. As we go forward, I think we're just not ready yet to make that call that that is, I'll call it the new normal that we're operating in. It's been an encouraging two quarters, but as we look forward here, I think it's still safer for us and for investor expectations to be in that sort of more flat year-over-year basis until we've proven otherwise on a sustained basis. There are some things in there, obviously, and I think we've benefited a little bit in the quarter from some supply chain disruptions on the competition front. It's hard to measure that. I don't think it's material, but that should subside as we move forward here. So I think we just want to play a couple more innings here of this on that side before we re-rate our view on the guidance there.

Got it. And then, I guess, follow up, moving on to corneal health. You know, you talked about how you've reached coverage of, you know, 65% of the U.S. population with, you know, a line of sight to reaching 95%, I believe the number was. How quickly do you think you can get to that 95%? Is that a target you think you can reach by the end of the year, or is it going to maybe slow down a little bit now that you've grabbed some of the low-hanging fruit? Thank you.

Yeah, thanks, Alan. In some ways, it's actually been accelerating. As you might imagine, once you announce commercial availability and the transition plan becomes more real, what we've seen is more of an acceleration than a deceleration on that front. Having said that, you also know that hospital systems and even certain other customers have longer cycles for bringing on new technologies and new drugs to the pharmacy network and the like. And so I think we'll continue to make substantial progress here every month and certainly hope that we're getting there or close to that target in terms of realized site of care network by the end of the year.

And your next question comes from the line of David Roman with Goldman Sachs. Please go ahead.

Thank you. Appreciate your taking the question. Maybe I can just start on Epioxy here. Can you maybe talk to us a little bit about some of the specific market development efforts that you have underway? And maybe you kind of break them into whether it's physician and practice education, patient assistance programs, and then engagement and education with payers?

Yeah, sure, David. It's Joe. On the epiasis side, you know, I think about it... kind of as follows. So I will repeat what Tom's already said and we've commented on. There's a foundational element that's first and foremost when you're kind of going through the stage of a launch, and that is, you know, that you get the site of care network established, effective, trained, and everything ready there. The second layer of that is that you're engaging with the payers in a way to establish access pathways, and then ultimately from there, further streamlining and optimizing those. And then as you go alongside of that, you start to dial up, I'll call it the more physician-related and even patient-related marketing efforts. But you don't want to do that too soon in that lifecycle until really the overall ecosystem is ready. So a lot of where we're at right now, is around the last part of what you said, which is making sure that as we're having success with the site and care network and on the patient side, that the machinery in the middle is working as efficiently as possible to make sure that we're working things through the hub and through our specialty pharmacy and providing that visibility to our customers and to our patients that our co-pay assistance programs are working as they're intended and all the stuff that probably is a little less interesting to investors but is critically important to the ultimate success here as we move forward. And as I mentioned earlier in the call, we're really encouraged by that initial burst, if you will, of patients that are going in there. And now we have to get through that process of trying to get them on therapy, which can be a lengthy one when you're dealing with a miscellaneous J-code. And so navigating that is paramount for us before we get, obviously, the formal J-code in the second half.

Very helpful. Maybe just a follow-up here on that. IDOS, and I know you talked a little bit about this, but could you just talk to some extent whether there was any contribution here from having the re-implantation approval that came early in the first quarter to what extent that may be giving physicians increased confidence implanting IDOS and how we should think longer term about the interplay between having the re-administration label and IDOS T-Rex?

Yeah, well, I can confirm that we've now seen numerous successful re-administration procedures as some of those earliest patients are getting out several years. It's not the predominant procedure being done. It's still a small fraction, but we've seen multiple surgeons do re-administration and do so successfully. we've seen payer policy updates um occur and a lot of uh i'll call it general progress on that front so i think we're encouraged and this is sort of in line with what we always expected that as the benefits of the initial procedure start to wane, that both the patient and the provider are going to want to continue that therapy given the clear benefits to the patient. So we're seeing that start to happen. And I think as we look out over the long run, certainly, you know, readministration becomes a much more material part of that overall mix. You know, every month and every quarter that we move forward here, it should be more and more relevant to what we're looking at. But out of the gate, we're encouraged by what we're seeing.

Great. Thanks for taking the questions.

Your next question comes from Richard Newrider with Truth Securities. Please go ahead.

Thanks for taking the questions from the quarter. Just wondering if you could give us any kind of color on what's happened to the provider base as this transition to Epioxa is taking place. I'm not looking for you to necessarily give us a specific number of doctors or your installed base per se. You know, do you guys envision just a big concentration over the next few quarters in a small number of providers' hands to getting, you know, to getting all of this refined and figured out from a consistency on the payment standpoint? Or is this potentially going to be broader and not as concentrated than maybe what I'm suggesting as we think through this? Just trying to get a sense for, you know, Is it really a dramatically fewer number of doctors, or is it going to be potentially broader than that?

And I appreciate the question, Richard. Well, first, I think the definition of how you do concentrated, I mean, I think, you know, relative to our IDOS, you know, user base, for example, inherently in keratoconus, even with potrexa, you had a relatively concentrated group of centers and sites that were doing the procedures. Now, it won't surprise you, and I think you know that with epioxa, it was our intent, obviously, to make sure that your initial site of care network is as concentrated as you can reasonably be to try to make sure you're close enough to the vast majority of the U.S. population. So inherently our wave one, if you will, efforts have been very targeted around the country in that context. But I'll tell you, in some respects, our wave one efforts have gone maybe a little too well, and that's caused us to have to accelerate some investments to meet the needs of that customer base and their patients. that are coming out of that. So there will always be earlier adopters than, you know, mid-adopters in any launch, and we'll see that here, obviously, as part of FDXA. But I'm not particularly concerned about any, you know, significant concentration issues in any one or two or even ten customers. I think it's going to be, you know, measured much more in, you know, hundreds of customers ultimately than it is in single digits.

Yep, that's helpful. And then is there any one area where the spend that you're stepping up from a position of offense, clearly, is directed now that you've had some early learning experiences? In other words, where are the frictions most notable, either to a doctor not wanting to do this, not wanting to buy Epioxa and move forward, or is it more on the pull side from the patients and the demand? Does the manned awareness increase standpoint things?

Yeah, I would say it's actually maybe a bit more. So if you think about this, there's always going to be conversations in education, both with Salesforce and the broader teams, to make sure people understand what we're doing, why we're doing it, how we're doing it as it relates to the Appianoxa launch. and certainly in the future, as we've talked about, there'll be a whole lot more of that spend oriented towards, I'll call it more growth and DTC education related. Right now, in this moment where a lot of that spend is going, it shouldn't surprise you, it's much more in that initial lift confidence and process associated with claims prosecution and adjudication. It's about making sure that customers understand how it works, that they're successfully seeking prior authorizations, that we're supporting that process where appropriate and compliant, and then ultimately getting those patients access to that care. So a lot of it's much more in the machinery, I'll call it, within the market access world than it is necessarily in marketing or even sales from that standpoint. Got it. Thank you.

Your next question comes from the line of Mason Carrico with Stevens Incorporated. Please go ahead.

Hey, this is Harrison on for Mason. Thanks for taking the questions here. Would you be willing to provide some color on the utilization of the various cohorts of surgeons trained on IDOS? Is there a portion of the surgeon base today that you would say has matured at this point with more stable utilization, or are you still seeing pretty robust utilization growth across these older cohorts of surgeons too?

Yeah, Harrison, I'm not sure I would say that we're reaching stabilization, if you will, in one cohort. I mean, if you think about it, even for some of the earliest adopters, there's still ongoing enhancements to how they think about interventional glaucoma, the amount of time they're spending on that versus other areas of their practice, let alone, as we talked about coming into this year to get on this call, the movement from the more traditional fee-for-service patient population into the commercial and Medicare Advantage world. So I think we continue to see growth across both our more mature customer base as well as certainly with the addition of new surgeons and new practices throughout the country.

know we're still pretty early in that overall uh evolution curve if you will of the idos launch got it yeah that's helpful um and then second second question here could you update us on the progress you've made this year from a commercial payer standpoint on idos i think the middle of last year you called out more than 50 percent of medicare advantage and commercial policies had a positive policy in place Where does that percentage stand today?

Yeah, so I'm not sure it's changed a significant amount this past quarter, but just to put a line in the sand, sitting here today with IDOS, we have about 99% of patients have an access pathway in the commercial and Medicare Advantage arena. To the point you made in your question, about 50% of those patients are in plans where there's a specific policy attached to it, and the remainder where there's silence, and we're certainly seeing successful pull through on that. I'll also add that in the early days of the real efforts here, We're seeing a very, very high success rate in the context of the prior authorizations that are submitted for these patients across that landscape, which is what you'd expect given the statistics I just got done citing around the broader patient access pathways.

Great. Thanks for taking the questions.

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

Great. Hey, guys, thanks for taking my questions and congrats on the quarter. I wanted to start on the specialty pharmacy channel with Oracemi. So, I mean, I'd imagine the docs doing epioxa were previously doing buy and bill with Botrexa. So, you know, maybe new to Oracemi. So, what's the feedback been from them in terms of process and, you know, whether there's any friction in that kind of change of workflow?

Yeah, David. So I think that historically speaking, it was a mix. There were certainly those customers who preferred to buy and build Votrexa and those customers who acquired it through the pharmacy channel, in this case, in our case, Orsini. And that continues going forward. I think it won't surprise you that certainly amongst our non-hospital-based customers, the vast majority certainly out of the gate are choosing to access the drug via our specialty pharmacy. And so that does mean some of them are doing this for the first time with our channel. I think it's a little too early to comment specifically around that dynamic because, again, as what I said earlier, when you're in the miscellaneous code environment, even with a perfectly streamlined, they'll call it hub and specialty pharmacy process, the process to getting that access for the patient is much more elongated. And we've only had the drug on the market now for a month. So from that standpoint, I think we're still in the early days of adjudicating those claims and getting access to the drug via the SP channel. But more to come on that. And we're certainly encouraged with the work that Orsini has been doing to make sure that they're in network with these various plans. And I think ultimately that's going to accrue to the benefit of our customers who choose that channel.

Great. Thanks for that. And then maybe one for Alex, just on the gross margin. So maybe remind us, you know, what your expectations are for the year. And then, you know, as we go through IDOS and at the OXA, looking into next year, kind of how we should think about gross margin potential. Thanks so much.

You bet. Thanks, David. I mean, we saw 84% margin in the first quarter, which was up 120 basis points from last year. So that was pleased to see that. You know, in the last call, I gave a range for the year of an expectation of 84% to 86%. And sitting here today, we still continue to feel comfortable with that guidance range for the year, with expected accretion over the course of the year as products like Epiox have become a greater share of the mix. And then to your point, looking forward in 2027, we'll comment more further when we get closer, but you would expect accretion, you know, as these products continue to ramp.

Great. Thank you.

Our next question comes from the line of Michael Sacrone with Jefferies. Please go ahead.

Hey, good afternoon, and thanks for squeezing me in here. So just to follow up on the Epioxa specialty pharmacy question, I mean, when you think about buying bill, you know, understanding that specialty pharmacy is coming first, Can you talk about, you know, options that you may have or are evaluating to enable or efficiently enable buy and bill for epioxid down the road?

Yeah, Michael, I probably won't go too far into the details around that, but obviously there's always an ongoing education process around from our reimbursement teams and the experts within that, as well as some of our site of care teams and the like, to make sure those customers understand how the buyable process will work, the key terms and conditions that we have in terms of our payment terms and things like that, to make sure that we can enable that where customers, you know, ultimately choose to buy and build the drug. Obviously, you know, when they think about it from a business standpoint, that can be an attractive option to them when they've got the right building blocks in place to enable a buy and build activity.

Got it. Thanks, Joe. And then just a quick follow-up on that. iDose Trio, what's the latest and greatest there in terms of timelines and where we stand?

Yeah, I'll be happy to address that, Michael. As we said before, we would complete and we have completed the clinical study for iDose Trio. We'll monitor those patients over the course of this year. We plan to file by the end of this year, and we expect to be in position for targeted approval in the fourth quarter of 2027. So we're hitting on all marks and all cylinders. And as we talked about before, when we did our human factors analysis, we saw a real strong preference for this new design on the order of 90%. So we're encouraged by what we think we'll be able to bring to the marketplace and more encouraged by the ability to thrive in office use over time.

Great. Thank you. You're welcome.

Your next question comes from the line of Joanne Winch with Citi. Please go ahead.

Oh, hi. Can you hear me okay?

We can. Excellent.

You know, when we do some of our due diligence on Eidos, physicians are still pushing back or are pushing back, maybe still is the wrong word, on the price tag of it. And honestly, I'm a little confused by that since you do have the J code and you do have the reimbursement in place. So I'm sort of curious what your initial conversations are like and what the response is to that.

Yeah, I think it's, I mean, you always have customers with varying views, but I'm not so sure that that's really as material of a driver today as it was when we launched it. Anytime you launch a pharmaceutical like we have with Eidos or Epiox, there's a period where you have to make sure that your customers understand the why and how, right? But at this point, sure, there will always be some of that, but for the vast majority of the customers, certainly you can see with the results, we continue to add them and drive that forward. We can continue to overcome that challenge where it represents itself.

Thank you. And your next question comes from the line of Steven Lichman with William Blair. Please go ahead.

Thank you. Hi, guys. Just a couple of quick ones on Epioxa. First, as it relates to the transition from Portrexa, are you still anticipating Portrexa to fully sunset by the end of 3Q, or has there been any change in that plan?

No change, and we've communicated to our customers that we would expect in the third quarter to have that transition taking place. Ultimately, we will have Botrexa available in limited quantities through a different mechanism where their physician may require an epi-off-based procedure thereafter. But I wouldn't call that out as a real material consideration for certainly the commercial aspects of it for you all. But for those physicians who seek ongoing access to Botrexa, we do have a pathway in which we're going to make it available to them.

Great. Thanks, Joe. And then obviously we're at the beginning of the runway with Epioxin in the U.S., but just thinking longer term, what is the potential for expansion of your of your platforms outside of the U.S., whether it's Otrexa or with Epioxa?

Yeah, I think it's, it has to be much more selective, and it won't surprise you, you know, Steven, Today's environment where you're navigating a combination of reference-based pricing initiatives as well as other things in terms of pair dynamics and the like, there are certainly some markets internationally that can support the type of therapies that we're talking about with Epioxa and with IDOS. But also, we'll have to continue to evaluate that as the landscape shifts that we bring successor generations of products forward and bring as much of this technology over time as we can internationally. But it's not something that at the moment I would be factoring in any material way into your models.

Thanks, Joe.

Our final question comes from the line of Anthony Petrone with Mizuho Group. Please go ahead.

Congrats on the quarter. Maybe one on just keratoconus just broadly. You know, when you think about the disease state that it's just, it's under, you know, underdiagnosed, you're getting most of these patients that come in with, you know, stage two severity, you know, just thinking about the epioxa opportunity. What is the really true TAM from a patient standpoint in terms of this disease state? I know it's, you know, kind of considered an orphan disease. but I think the prevalence probably stretches to somewhere between 80 and 100,000 patients. So what is the true TAM in terms of prevalence in the U.S., and what is the diagnostic pathway to get more patients into the funnel?

Thanks. I think, Anthony, it's a great question in the context of, you know, exactly the why behind what we're trying to achieve here. So when you think about keratoconus as a condition and where we've been, The 18,000 to 20,000 eyes that have been getting treated, we believe, is likely going to be proven to be a fraction of what really should be getting caught, should be driven to detection and ultimately into therapy over time. You know, I think our best estimates here suggest that there's in keratoconic eyes a year at a minimum that are getting diagnosed and treated with epioxin cross-linking. But we're going to have to find that number out ourselves as we move forward with increased initiatives around awareness and detection and ultimately access to that therapy. But we do believe that over time that this could be proven to be more of a rarely diagnosed disease than a rare disease. But today, it operates like a rare disease, and we're going to make those investments accordingly.

With no further questions in queue, I will now hand the call back over to Glaucos Corporation for closing remarks.

Okay. I want to thank you all for your time and for your attention today, and thank you as well for your continued interest and support of Glaucos. Goodbye.

Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.