Q1 2020 Earnings Call
[music].
Glaukos corporations first quarter Twentytwenty financial results conference call.
A copy of the company's press release issued after the market. So today, it's available at Www Dot Glaukos dotcom.
All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question answer session. If he would like to ask a question. During this time simply by Stein and the number one on your telephone keypad. If he would like to withdraw your question. Please press the pound <unk>. Thank you. This call is being recorded and an archived replay.
He will be available online in the Investor Relations section Www Dot cockles Dot Com I will now turn the call over to Chris Lewis Director of Investor Relations incorporates tragedy in development. Please go ahead.
Thank you and good afternoon, joining me today are blockers, President and CEO, Tom Burns CFO, Joe Gilliam, and COO, Chris Calcaterra. Following our prepared remarks, we'll open the call to questions to ensure ample time and effort you need to adjust everyone's questions. Your question are you limit yourself to one question and one follow up do you still have additional questions you may get back.
Secondly, the Q.
Please note that all statements other than statements of historical facts made on this call that address activities events or developments. We expect believe we 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 product.
When technologies are U.S. and international commercialization efforts the efficacy of our current and future products are competitive market position financial condition and results of operations as well as you expected impact of the Kobin 19 pandemic on our business in operations. These statements are based on current expectations about future events effect.
In 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 results to differ materially from those expressed or implied by forward looking statements read todays press release, and our recent SEC filings, including the risks.
Factor section on our most recent form 10-K for more information about these risk factors you find these documents in the Investor section of our website at Www Glaukos Dotcom. Finally, please note that during today's call will also discuss certain non-GAAP financial measures, including results on an adjusted basis Weve.
Lead these financial measures can facilitate a more complete analysis and greater transparency into Glaukos is ongoing results of operations, particularly when comparing underline results from period to period.
Please refer to the tables in our earnings press release that is available in the investors relations section of our web site for a reconciliation of these measures to their most directly comparable GAAP financial measure with that I would like to turn the call over to Glaukos, President and CEO Tom Burns.
Thank you Chris Good afternoon, and thank you for joining us today.
The criminal virus global pandemic has created an unprecedented time for all of us in different ways, both professionally and personally.
I want to start by saying on behalf of everyone at Glaukos that our Hearts go out to all those affected by Cobot 19, and we are especially grateful for the healthcare workers and first responders or selflessly, serving on the front lines.
Before we talk about our first quarter performance in the current trends in our business.
I want to provide an update on what we've been doing that glaukos in response to this rapidly changing environment.
I have been thoroughly impressed with response and resiliency of our employees around the world, who make up the strong foundation of our disruptive franchises in glaucoma, Kornya health and retinal disease.
Despite negative personal and professional impacts induced by cold and 19, our employees have initiated a new fundraising campaign through the Glaukos charitable foundation that allows us to contribute money to charitable organizations, providing relief for those affected by this pandemic.
Core, especially thank them for their dedication and commitment to maintaining their important work to move the company their families in their communities forward. During this challenging time I.
I am confident we will get through this together and emerge and even stronger more efficient and more capable company.
As a current situation emerge we immediately developed and implemented implemented business contingency and can continuity plans beginning in the first half of March and executed on several key initiatives as the current prices began to unfold globally in mid to late March.
Our response plans regarded by several key priorities first to protect the health and safety of our employees and their families.
Second to support our customers third to preserve jobs globally fourth to protect core research and development projects and finally fifth maintain our strong financial and operating position. Following this pandemic.
As many of you know a safety first Montrose at the core of our company's foundation.
And our patient centric mission yet these past few months of greatly expanded the importance of that commitment in really an entirely different way.
Our top priority has been to protect the health and safety of our employees and their families our customers and their patients our clinical investigators are suppliers in the communities in which we operate.
While the majority of our employees have been required to work from home. We have maintained streamline manufacturing assembly processes in order to consistently provide product to our customers who depend on us.
Glaukos employees involved in such operation critical processes have been organized into a number of small ships.
Shifts designed to minimize the time anyone individuals required to be on site.
We've implemented numerous health and safety protocols that are sites following CDC guidance and local regulations and we'll update those as needed going forward.
Im pleased to say that both of our main sites continue to operate during this period, albeit differently and our supply chains have experienced minimal disruption to date.
In order to sustain us through this period of uncertainty or maintain jobs in our strong capital position as we come out of this pandemic.
We have implemented a number of cost containment measures.
These include substantial reductions in discretionary spending and capital expenditures.
Temporary salary reductions for our executive team senior leadership and many other throughout the company as well as other employment actions and Joe will elaborate of these later.
While we are not immune from the economic impact from Cobot 19, we did luck I'd like to forego pursuing the cures Act ERP funding. So that this important source of capital could be directed to the truly small businesses in our communities that neither for survival.
We believe our cost saving initiatives paired with our strong balance sheet leave us well position to ultimately provide are essential ophthalmic therapies to customers and their patients who will return for treatment as we move passed the peak at this current crisis.
We were pleased with the strength strengthening business trends experienced as we progressed until late February February in early March.
But as healthcare system shifted resources to the treatment of cobot 19, and government restrictions on elective procedures and therapies were implemented throughout the world, we experienced material disruptions to our business.
By late March these restrictions led to increasing deferral of cataract and keratoconus procedures and global sales trends that were less than 15% of levels achieved prior to the Cobrand 19 outbreak.
Although our near term sales have been temporarily disrupted our commercial focus is not as we remain committed to deepening our customer relationships in new and creative ways.
We have sponsored customer oriented webinars hosted by well respected ophthalmic surgeons to provide our customers with value added insights into relevant hot topics such as the cares Act. The current state of electric procedures key business and operational considerations for an ophthalmic practice during this time and planning guidelines for.
Reopening.
Our sales professionals remain harder work, maintaining close engagement in dialogue with the customers.
For remote online training modules regional conference calls highlighting the performance of our technologies Interactive case based tutorials and various other customer support initiatives.
Within market access our team in conjunction with our customers continues to work with providers and payers to optimize the foot trucks to reimbursement landscape train office staff on claims and contractual processes and expand our exclaims program.
Internally, we continue to exit execute on our commercial integration plans through cross functional training key account targeting and market segmentation deployment.
While many of our customer practices have been largely shutdown. During this time, our commercial focus and customer dedication remains strong.
The enduring partnerships, we have built over the years with our customers are more important than ever.
We are proud to partner with them as they navigate through these unprecedented times.
Our commercialized ophthalmic solutions address chronic diseases diseases that only worsened as patients often treated.
Given the medical necessity of these interventions we believe most of these deferred procedures will ultimately be performed in the future as the coated 19, Pandemics us subsides.
But it remains difficult to predict the specific timing and slow of this recovery curve.
I am encouraged by the recent indications of plateauing, and even declining infection rates and best from Cobot 19 in many areas of the world along with many use states that have become the reopening process.
At the same time, we recognize the challenges and risks in the potential for unpredictable spite spikes in cobot 19 infection rates that remain ahead of a vaccine or therapeutic solution.
We continue to analyze both the cobot 19 drivers of return to treatment and customer input regarding their restart plans and processes.
Not surprisingly, we see a variety of potential scenarios for our business as ophthalmic practices begin to reopen and elective procedures return.
From a high level. We currently expect the phase than deliberate return beginning slowly in May and June two increasingly more normalized levels for cataract and keratoconus procedures by later 2020 subject to any resurgence of cobot 19 in the fall winter months.
The rate of return for elective surgery may also be driven by side of surface site restrictions and type of care with the physician office and ambulatory surgery center settings recovery before hospital based procedures.
As a reminder, all of our glaucoma technologies are used in outpatient surgeries, 80% of which in the United States are estimated to be performed in SCS.
And our for trucks to solution for Keratoconus is primarily performed in the physician's office.
The reopening process will include heightened safety protocols that ophthalmic practices to ensure the safety and is still patient confidence.
We will close to support customers as they bring capabilities back online and follow the reopening guidelines and recommendations from the CDC Corona virus test scores the American Academy of Ophthalmology, and other key societies detailing specifically how to approach to manage.
Some of the key decisions and reopening more normal practice in the post cobot 19 Euro.
We know our customers are eager to get back to work to treat their patients and we're ready to support them.
Moving on to our pipeline, which consist of 13 publicly disclosed programs and various development and clinical stages and another 10, yet to be disclosed development programs also underway.
A number of these pipeline programs are in active pivotal clinical trials, including iced, an infinite at beyond and ideals TR.
For these trials, we are actively assessing potential impacts due to cobot 19 disruption.
Our top priority within clinical operations is to protect the health and safety of our clinical field personnel investigators and participants currently enrolled in our clinical trials and in addition, we've implemented a number of measures to maintain the integrity of these trials in a manner to fully satisfy regulatory requirements.
We've worked with clinical investigators to closely monitor and to help assure patient compliance with clinical trial protocols.
And our also planning numerous virtual investigator meetings over the coming weeks.
We are encouraged with the FDA his recent communication and physician on these clinical trial matters during coated 19 pandemic.
And we'll continue to collaborative work with the agency to advance our clinical programs in a safe and timely manner through ensures study viability.
The clinical trials for ice that infinite and beyond have already fully enrolled and although they may experience, some modest delays and patient follow plants.
We continue to express confidence in our previously disclosed FDA approval targets of late 2021 and 22, respectively.
Fry dose, we where we have been rapidly progressing to patient enrollment completion, the temporary closure of ophthalmic practices and deferral of elective procedures caused by Cobot 19 has led to a temporary pause on new patient enrollment.
As investigator sites begin the process of reopening to more normal ophthalmic practice, we will work with our clinical partners to reignite the enrollment momentum that we previously built.
While the situation remains fluid as of now we believe that I don't expect continued to be impacted well beyond the current shutdown as doctors focus on clearing their patient backlog over clinical trial enrollment.
We plan to provide further updates on this front as we gain additional visibility in future quarters.
Importantly, despite this transient disruption we maintain a high degree of confidence in the integrity and viability of our high dose clinical program given the trials design and protocol.
We also remain an early preparations for the potential us commercial launch of Santander Pharmaceuticals, Presser flow, Microsoft and elegant Adv external surgical implant for late stage glaucoma management.
During this time, we want to reassure our stakeholders that we're continuing to invest in our future.
We have prioritized the investments we are making to focus on our near term pipeline programs that we believe may drive significant value creation for our company over the coming years balanced by earlier stage development projects, where costs may be deferred.
That said, we continue to advance our development efforts on our core clinical stage development programs as well as our dry and retinal R&D programs.
One such investment priority is within our expanding Kornya health franchise, where I'm extremely pleased with the integration process.
And progress as we execute on our corporate milestones commercial strategies and cost synergy goals.
While we remain in the early stages of unlocking that combine organizations for potential.
We are encouraged with the markets receptivity to our fully integrated expanded commercial organization and the customer friendly initiatives, we've introduced which help drive more than triple the number of capital placements in the us during the first quarter of 2020 versus the prior year period.
These initiatives are also producing tangible results with end market access where we continue to solidify consistent payment for true for trucks us product specific J code, which is now covered for 96% of commercial payer lives.
We also making substantial progress across a number of other business fronts with key accomplishments that include heistand inject regulatory approval in Japan, a standalone indication approval in Australia.
Tariff increase in the United Kingdom.
And an average increase of 44% to over $300 on professional fee over 90 professional fee for meridian.
Our Medicare administrative contractor with jurisdiction in 13 Western Us states.
In summary, while we continue to actively monitor cobot 19 in this business disruptions I remain confident that the longer term fundamental prospects of our business remains strong as we seek to create a unique strategic vision care leader.
Building thriving franchises in glaucoma, Kornya Hall, and retinal disease with novel therapies that disrupt conventional treatment paradigms improve patient outcomes and create new robust market markets and market opportunities.
So with that I'll turn the call over to Joe to discuss our first quarter 2020 financial results Joe.
Thanks, Tom as a reminder, I will be discussing our financial performance on a non-GAAP or pro forma basis and will summarize our GAAP performance later in my prepared remarks.
I encourage each of you to review our GAAP to non-GAAP reconciliation, which can be found in today's press release as well as Investor Relations section of our web site.
Further considering the macro environment in which we're all operating I intend to handle this section of our call a bit differently than is our typical pattern.
I will attempt to provide brief perspectives on our first quarter estimates of our current operating performance and where possible build upon Tom's views on how we expect things to unfold as we progress over the course of 2020.
Glaukos net sales for the first quarter 2020 were 55.3 million and we estimate that the cobot 19 impact to our first quarter sales with approximately 9 million with more than two thirds of that impact in our US welcome a business.
In fact, as Tom noted, we add we exited March with a revenue run rate that was less than 15% of what we had experienced earlier in the month as procedures came to a virtual halt in nearly all of our major direct markets globally.
That deceleration continued particularly through mid April and our preliminary estimates for April indicate that our run rate was closer to 10% of our prior plan.
Now turning to our US glaucoma franchise, specifically, our first quarter US glaucoma sales were approximately 32.6 million, where as I noted we felt the most pronounced impact from cobot 19.
To put this in the same context as the overall business our us glaucoma revenues exited March at approximately 3% of our prior daily averages a trend that continued for the month of April.
Further as we discussed on our fourth quarter earnings call. These glaucoma results also reflect the impact from typical seasonality late 2018 promotional activity competitive dynamics in the near term impact from our integration activities across our use of acoma and courting health franchises.
We were encouraged by improving daily sales trends throughout the quarter prior to Koby 19, and it is worth noting that our daily results were approximately 25% higher in late February in early March when compared to the first half of the quarter.
Internationally, our glaucoma franchise delivered first quarter sales of approximately 11.6 million.
The strengthening dollar represented a currency headwind of approximately $400000 in the quarter.
The cobot 19 impact to our international Dot Com of business has varied by market as you might expect and we exited March at approximately 40% of prior daily averages a trend that continued throughout April where our preliminary estimates indicate a run rate of approximately 25% of plant.
While impacted we have seen some continued contribution from most of our major international markets, but most notably from Japan and to a lesser extent, Germany.
In Correale health first quarter net sales were 11.2 million the Korean health business exited the month of March at approximately 20% of prior daily averages a trend to continue throughout the month of April.
The first quarter performance was almost entirely driven by us were trex a year over year sales growth of 26% to 7.5 million, but we also saw near doubling of new U.S. installations in the first quarter versus 2019 average trends and as Tom mentioned earlier more than a tripling year over year and early but strong sign of the synergistic many.
Fits of our vitro transaction.
Going forward, we are encouraged by the fact that many of our key geographies are beginning the process of allowing elective procedures to restart that the vast majority of our procedures in therapies are done in the AMC and physician office setting and the we know that a patient backlog, it's been growing as a term elective in our case really are first the timing of the procedure and not the need.
And we have begun to see this is these this as.
Trends between are you expecting business have been improving slowly in recent days.
Having said that we do remain cautious on the magnitude and pace of the near term recovery environment logistics for our customers for a patient consultation in surgery perspective may have an impact in some patients, particularly the elderly may continue to wait as long as possible.
It is also worth noting that we do expect Kobin 19 to continue altering the way our existing and potential new customers engaged with our salesforce, even as elective procedures restart as such we do anticipate a continued impact to our new physician training site adoption and utilization growth initiatives across our business as Tom mentioned, we can.
Can you to pursue accretive strategies to mitigate this headwind.
Our non-GAAP gross margin in the first quarter was approximately 84% versus 87% in the same quarter in 2019, which reflect largely consistent glaucoma gross margins and mix shift towards international glaucoma sales and a full quarter of a feature contribution.
It's worth noting that our non-GAAP adjustments to costs included substantial adjustments related to a future acquisition accounting Cobot 19 related you know and estimate inventory write offs from the ended the first quarter.
Our overall non-GAAP operating expenses were approximately 64 million in the first quarter of 2020 as Tom noted earlier, we move quickly in March as the Kobin 19 situation unfolded. The actions. We took did have some benefit at the end of the first quarter and are expected to generate approximately 25 million a quarterly cash operating cost savings.
In the second quarter versus our original plan.
These savings are a combination of discretionary and variable expenditures of course and are not necessarily meant to be permanent but were designed to preserve jobs and core R&D programs. During this period.
Our non-GAAP SNA expenses in the first quarter were approximately 41.1 million, including a now full quarter impact from a vidro.
Our non-GAAP R&D expenses in the first quarter were approximately 22.9 million, reflecting the full quarter contribution of the Vidro and our expanding development programs across while coma corneal health and retina. It is worth reiterating that we continue to advance high priority projects, such as I dose at beyond I sit infinite and our lead retina dry eye and refractive.
Programs.
We finished the first quarter with a non-GAAP operating loss of 17.8 million and non-GAAP net loss of 19.2 million or 44 cents per diluted share. Our GAAP net loss was 54.1 million or $1.24 per diluted share for the first quarter of 2020.
We invested in approximately $800000 worth of the capital expenditures in the quarter and we are temporarily deferring a significant portion of our plan 2020, capex, particularly those related to facilities expansion in consolidation plans.
As of March 31st 2020, we had cash cash equivalents short term investments and restricted cash of approximately 173 million compared to 183 million at the end of 2019, we believe our strong current cash position paired with our cost reduction initiatives discussed earlier leaves us well positioned to preserve jobs and fund cordovez.
Current initiatives as we note navigate this pandemic.
As previously announced due to the rapidly evolving environment and continued uncertainties for an impact of Tobin 19, we have formally withdrawn our 2020 annual guidance and so I will not be providing you with updated specific estimates today.
Although we cannot predict a specific extent or duration of the impact of the code 19 outbreak on our future financial and operating results. We have tried to provide insights where possible into how we're thinking about the range of potential outcomes for the second quarter and the remainder of 2020 and with that I'll turn things back to Tom for a few closing remarks, alright, thanks, Joe So.
Larger sales force a couple of these companies. So you seem more commercial activity, but having said all that we put a number of things in place programs initiatives.
That we felt we were starting to see the impact of in the latter part of February and first part of March.
The on that and I can't stay much more but it's more of the same that we talked about Andy coupon earnings call and we saw some positive results from some of these initiatives.
In the latter part of the quarter.
Okay got it thanks to the color of their <unk> and that just for the follow up.
Well I wanted to ask about the O.U.S. makes best mass and what you're seeing their you know it has has Europe I guess started to come back I I'm buying a better and it's still a little slow to restart and and Japan. It's under a state of emergency used to just wondering how.
You're thinking about any potential impact your business, there and in the coming months. Thanks for taking the questions guys.
Sure.
So you know Europe is that's a broad question because every country is a bit different.
We've seen a little bit have been upstart in in Germany.
Where they've Ah Ah, we're pretty steady during the coby crisis and have begun to.
Do more procedures, although not significantly more oh, Japan in the first a quarter Oh who's kind of the shining star in terms of our international business, where they it continued you operate it a pretty good clip.
They're currently on holiday right now I still can't say, Oh, how they're doing right now, but a lot of these doctors are doing their procedures in in private facilities and aren't impacted by the shut down there has been taking place in the public and private private hospitals.
Yeah, I I might add one thing quickly out which is you know I think you're up and you heard in a little bit of our prepared remarks in general under international business the trough.
On average wasn't quite as deep as it was in the United States right. So we're we're starting to see coming off the the the ground a bit in in the U.S. Your had continued to operate albeit levels far lower than what we typically a scene, but but far higher than than what we've been experience in the U.S.. So I I think that those Marcus.
I had continued to be open to a certain extent. So we would expect the recovery curve here to be a little bit slower coming off of that base as far as Japan concern is Christmas in Black and continue to watch that were obviously expecting there could be some potential disruption there based upon the the trends and the diagnosed cases in the last couple of weeks.
In that region.
Okay very Claire thank you.
Oh I sometimes.
[noise] Hi, guys cabin on for Larry did anything so much for taking the question. Another kind of recovery question. You know, we've obviously scene and number eight to dressing or return for elective procedures, but I assume they will be a challenge to motivate some of these patients to come back right away. So the question.
And is based on kind of what you're hearing from your physicians what percentage of makes procedures do you expect will eventually return.
You expect some people to drop out of the system and then I'll ask my follow up on Ron I'm completely understand your being cautious about trends in proving from April widgets appreciate any thoughts on how you're thinking about the next few corridors in the business. You mentioned that later in 2020 cataract and get back to normalize levels are you implying there that.
You think we could be back to pre cold they'd cataract needs procedure levels by Saint queue for just wanted to put a finer point on that thanks, so much guys.
Okay. Thanks, Kevin not maybe I'll start there and if Chris or time, when I ask him color. They they can I I think the way we're thinking about the trends in in clearly you know there's there's a reason here why we're we're not providing guidance because there's a a lot of uncertainty around a variety of the inputs as we go forward in any particular geography.
You know what I can comment on is what we've been seeing from a big picture standpoint, how we think about it rolling forward you know what we've been seeing as I mentioned before was you know a trough that occurred in sort of mid April a slow climb out of that across the the various areas of our business us about coma International walk home at Cornell Hell.
Oh.
And then a little bit of an uptick here in the last a handful of days in the month of May.
As we go forward, you know where to be watching like all of you what happens with a pandemic itself in each of these geography, and and how our customers really pull through both that backlog as well as bringing new patients in.
We have conversations on a daily basis with those customers.
And and and they they as you might expect want to get back to work and want to be treating these patients who need <unk>.
But we stay relatively cautious about how that in a translate into specific numbers in any given month or quarter, because we know they're facing a lot of logistics, we know that the different patients will be impacted in different ways and they may be slower to come back in what even these positions might expect so that's the the real reason for the cautiousness and that's the reason for I think what Tom said and I tried to read.
<unk> is that we expect a gradual recovery from wherever sitting at today. They kind of occurs on a month to month basis through the end of the year and we think about that into the you're active juried. Obviously is highly dependent upon a environment wish cobas not impacting a significant way, where where where we're at we we think there's the potential is getting back to <unk>.
Thing, that's close to normal, but I think I have to add to that that remember when you're thinking about normal the ability to grow the market will be impacted somewhat during this period of time too. So normal it's probably better define this kind of the the the run rate that had been being experience versus you know what was it originally applied in our our prior guides and and on the fourth quarter call.
[noise] Super out for things to.
I didn't next question cost line of Robbie markets at J.P. Morgan [noise].
Hi, This is actually Allen and on for Robby I guess, just a little bit on the competitive side. So this is obviously like a huge impact on your business, both I'll coma and subtract so but when we think about your competitor is you know, they're generally smaller less well capitalized so in it.
Have you know maybe perverse way should we think about this impact maybe preventing an opportunity for you to really stabilizer competitive positioning.
Mm mm.
Hey, Oh, and this is Chris <unk>, you know I'm not in a position to comment on on the competition.
But what I will say is we utilize this time.
To really engage our customers we reach out to them. We provided the number of Webinars online training programs.
Specific webinars, we use this time with our market access team two engaged their office staff to work on reimbursement and to try to maximize what we can leverage or relationships. During this this downtime.
Being said that I think we continued to.
And gain support and goodwill with our customers such that wins things do open up a we're hopeful that that will bode well for us as we move forward through the summer months and into the latter part of the year.
God and then it just a quick follow up you mention briefly that you saw a tariff increase in the U.K. I would just want African elaborate on bought and then I guess just like the kind of reimbursement headwinds that you had mentioned previously last year <unk> are the dynamics round that playing out.
Yeah.
Oh and I'm glad you ask that you know there was a pretty significant reduction in the tear up in 2019 in in April they publish the new tear up in the U.K. inadequate into about 30 pounds or cross the four different codes and so that it was moving in the right direction beyond that.
<unk> other positive things that have taken place perhaps the biggest one is that noridian. The Mac here on the West Coast. There was an increase of 44% and their physician reimbursement, bringing their reimbursement aligned with all the other Max.
Additionally, in Australia, we received approval or Standalone, we're excited about that in the position payment. There is twice the what it is when in combination with cataract surgery.
So those are some very positive things that have occurred from a reimbursement standpoint.
And the question pipeline of telling block if people want it okay.
Hey, guys. Good afternoon on Alphametrics, maybe the first one <unk> there in your goal for the 500 dogs previously that you wanted to train in 2022.
You mean then.
I think previously he talking about market growth tend to 13%.
Contribution that was coming from the new docks.
Really that's gonna be pushed out was it you know 10% 20 per cent, maybe you can frame that for us that would be very helpful.
Yeah sure how John Thanks for the questions you know I I'll take the in the two pieces that you the laid out the first on the Doctor training. There is a a new target per se I mean, obviously, our sales force is going to continue trying to push forward on every front and bring you know as many a dog.
<unk> into the fold and as Christian Tom both alluded to we're we're pursuing creative strategies to make that make that happen you know in the remarks, you know I tried to reference the the reality that I expect there to be a a headwind, but it's hard to quantify that because quite frankly, you just don't know how impacted that'll be as we start where does the beginning of this restart <unk>.
That's right. So I think we'll have a better sends here as we get you know the next quarter to under our belt moving forward than than we do sitting here today.
On the on the overall, you know market growth dynamics.
What we always say is there's a lot of different scenarios, we run to come whether it's you know with respect to our market growth forecasts or are you know dark guidance in in general and they have different numbers underneath them with respect to the drivers is you're you're asking about right, whether that's new doctor growth or or same store sales you over.
Hall that in 2019, what I said was you know of the growth that we saw a higher percentage that came from same store sales utilization. If you will then new doctor ads, because we had been focused on that conversion and our sales force was spending a lot of time with existing accounts and you also recall that when we talked about that dynamic into contact.
2020, we expected to shift back we didn't know how far back, but something a little bit more normal where the the new doctor initiatives. If you will will be driving a bigger chunk of that market growth than than the same store sales initiatives.
To push a little bit there if I said.
I'm going to 2020 pretty cold.
Docks could've been three or 400 basis points out of the 1200 in market growth you would say right ballpark or any response to.
To those metrics I I'd, probably just say I wouldn't get that granular, especially in a time like this.
Okay second floor. So quickly you know you're talking about ongoing competitive environment. Some some.
Moving parts with some of the players I'm, just curious and the fourth quarter I don't think there was anything realize from a price. Joe you said it was largely volume various can you just update us on the pricing environment for mixing if that stable or any pressure you know as we currently said here today. Thanks guys.
Yeah I was let me just quickly this is Joe I mean that from a pricing environment everything remains stable in the first quarter, whether it was U.S. glaucoma or international glaucoma, our pricing remained a stable relative to the prior periods. We saw a a little bit of of of continued strength in price around.
According to help business, but that's a pretty much related to the in continued improvements around reimbursement dynamics to Tom mentioned and we've started to see that that pass through in terms of realized S.P. on the <unk> solution.
Okay.
Mm.
Oh, <unk> <unk> <unk>.
Mm.
Hi, Thanks, a lot for taking the question I hope you're all doing okay. It's one of the competition again I can start with that can you give us an update on litigation status between you and event. It seems like in the last few days there were some developments coming out of the the district court there.
[noise] Yeah, Robbie I. This is common so happy to do so the trial is you know is scheduled to begin I'm around July 28 this year.
And as you know between now and the trials really customary for both parties to fall variety of emotions and some of those motions were heard.
On Friday may 1st and with a tentative ruins that came out were quite pleased with how how those were disposed of.
We remain confident our position we know that currently in Orange County, the courts are close through mid may and they'll be prioritizing criminal cases, once they reopened but having said that we're prepared in confidence or go to trial on or around July 28th. So that's that's kind of where we are at the stage.
Mm.
Right and then yeah I can ask a little bit my my my <unk> follow ups on the the code that impact that you cited if two thirds of that within the U.S. Glaucoma Bay should we think about the remainder with they'd throw or international how about that split and then one on the pipeline I those t.
Or you know I understand that you're saying that there's going to pause in you patients, but how many patients did you have enrolled so far and kind of are you still going to be taking you know how to follow up they're going kind of what can you talk about with the the latest developments on a little longer term data that you're trying to develop around that platform, which is very <unk> yeah. Okay.
This question first Robbie and so just to talk about I notice, we were rapidly progressing to the enrollment patient trawling Roman completion.
In the latter part of this year and that meant more than mad our target expectations.
And as you know there was this temporary pause and disruption and what we're trying to balance now is to figure out.
Oh that well the interplay between the Backload of <unk> pent up demand will play against the enrollment up new patients going for it I'm encouraged with how we're in <unk>.
Or clinical investigators going forward and some of the early translation and what that's meant in terms of reigniting the trial.
Continue to be very very encouraged when we look at our fees to be data and how that continues to to come forth. As we look at continued to look at data beyond two years.
And we continue to be terribly excited about the potential of this product in the marketplace and so.
Will be some disruption clearly there'll be some delay in clinical trial Roman from our initial expectations, but we'll keep the investment community adequately informed as we discover more and the company months.
And then Robbie I'll I'll take the first part of your question and and and maybe kind of go to the punch line around each of our our our businesses starting with corneal health I think it to normalize environment, we probably would have seen something that was in that neighborhood of 12, and a half a 13 million a sales versus the 11.2, that's obviously fat.
During in a covert 19 as well as a little bit of the integration related impacts yeah in in the corridor.
On international glaucoma on a constant currency basis, I think <unk>, we probably would have landed somewhere in the 13th 13 and a half million. So you can take that as being a million to a million happen pack from cope with 19 in in that international glaucoma business.
And then in the domestic glaucoma business, there's really the two pieces, we talked about the more than two thirds impacts and coping 19, you can sort of translate into that call it sticks and a half million dollar ballpark.
I think it's also worth adding in there that you know from from an overall standpoint, we estimate that that the impact from you know we'll call. It the the the late 2019 promotional activities in the near term impact of our integration activities. It was probably somewhere between five and $6 million in the quarter above and beyond that that coping 19.
Number.
Oh.
Mm.
Great appreciate the detail and then just make one last one a picky backup Johns question on Doc training can you talk about you know, how you're you're you're either sustaining or maintaining committees protocols by either telemedicine training environment or is there anything kind of from a regulatory perspective, that's allowing you to kind of.
Came contact or print doctors to diagnose patients through that arena you guys are up with any color there would be great. Thank you very much.
Yeah. So on the training a side of things you may recall that are protocol is up for the position to do an online training course, and and I think there's seven modules involved when they do that so that's continuing.
Then part to import three or what may be a challenge moving forward, which is to do a a wet lab.
The night before dry lab typically done in Neo war, we're still going to be able to do that in many cases and some are we may not be able to and we will find alternative alternative methods of doing that and then finally is the proctoring piece.
And in some cases of the refs are already in surgery in some cases, that's going to be restricted Ah. So we have come up with some virtual a ways to approach that whether it's done virtually before or after or even in some cases might be done during.
So we're working through those as we're just getting up and started we'll see how those goes wait how's how that goes that we have some other ideas as well, but we're not restricted from a regulatory standpoint in that regard.
Yeah.
Oh darn next month lineup Brian.
<unk>.
Yeah.
Yeah.
Hi, This is Brian on for Ryan. Thank you for taking the questions. So just want to ask a little bit about the vitro business for a second you know the trip playing the number of capital placements Joe.
You just talk about how that business model has changed and if you expect you know that that to normalize.
Maybe there was some the man you know some.
Docks at the ready who were looking for maybe at least type arrangement I'm just kind of curious kind of how to think about that business 0.4.
Hey, Brian This is Chris.
Early on for the last couple of quarters, we talked about capital equipment, not being impediment to the sale.
So we've have come up with a variety of different ways to approach the placement of the capital I think that had a lot to do with it and also say that that did you know we've got the glaucoma team involved you know 60 plus people.
Also talking about I linked the idling procedure in the benefits and the virtues of it and so there's more touch points I think the execution who's been superlative I think that this is is a good indication that it was a good acquisition poorest and be that the idea.
Is and and strategies and that we put in place in the execution or bearing out.
So I'm quite happy with what took place in the first quarter and hopeful that that will continue throughout the year.
I think it's a little bit probably early for us to call a trend off of off of one quarter, right, especially one quarter and wish they'd be operate in this in this disrupted environment. So what do you to watch that similar to what we were just talking about it linked to run the new Doctor training dynamics. You know we also expect some disruption headwinds in terms of you know new site.
Installations, if you will or new starts within the the corn on health business as as a as folks get back up and running a here in the as opposed to cover here.
Yeah, I'm, just going to read it read how pleased with the overall integration we look at what we've accomplished from the corporate milestones a commercial strategies and achieving the court their costs energy goals.
I think those have been prolific and I think when we look at what's happening commercially we're just starting to unlock the potential.
And that's why given Chris approval to increase the size of the sales force you might have noticed the sales force on the corner hillside.
Going up over 30% since we acquired be drunk.
You can see if a testament to how we feel Oh bullish we are and and how we are currently viewing the early stages of this acquisition.
That's that's how fulltime I appreciate that.
The time in on my <unk>, I think where you know.
Currently thinking about it you know later this year kind of your and I just want to confirm that that's still your guys thinking in terms you know central approval.
Yeah happy to address that brown. It I think it's probably fair to say that Santana is taking the position that they expect to have approval up their microphones in the fiscal year 2020, so that replace it by the end of March 2021, so that they're probably gives you a better indication of where they are half and as you can expect given the coding.
19 disruptions they haven't filed they're pretty amazed submission, although their initial target wants to get involved in the first quarter.
But they do have a conference call earnings call that will occur next week, we'll we'll both be listening in to see exactly where they are more hopeful there'll be fine that P.M.A. in very very short order.
Okay. Thanks for taking the questions.
Sure it's bright.
[noise] Hi next question on line of Anthony Jeopardy.
<unk>.
Oh, hi, Thanks, and I hope everyone's doing while I'm staying healthy maybe just a follow up to press for flow would be I stand ins and then yeah. Just just the timing there I think we had late 21. So I'm just just trying to get it.
Sense of ice 10, intonation and and really just I guess more broadly the timing for the cataract Standalone label with those two solutions and then the second question would be just on coven in packs to the I stay nice 10 inject business you know how how much of the ice then overall users are actually.
Dark at this point or says just those scene reduced procedure volumes.
So I'll be happy to take the first part of the question again, I'm going to reiterate that given Santana expectation, we'll be looking for.
Standalone capstone product the the micro shunned from San tend to be available by the end of the first quarter. This this coming year.
And we look at ice then internet as we said before we complete enrolled in October of last year, we will follow these patients for the year.
We'll walk down the the database will be filing for that product and we expect to have a commercial approval late in 2021. So those estimates have been confirmed.
And validated and we feel good about our position there Chris.
Yeah, it's <unk> on the Kobe it impacts I mean, obviously you expect it's very dependent upon the individual geography is.
And and we're such an early days here within the U.S. It obviously matters. Most you can watch the news slow in sort of guess where some of the early ordering activity is coming from in states like Texas in Arizona.
But but even in looking at that it's still feels like it's the very early days in terms of the number of customers that are ordering versus what we typically see so I I think we're we're still yeah, I can't say who's dark versus active but what I can tell you is we're still in the very very early days in terms of in terms of the restart activity broadly speaking.
[noise] helpful. Thanks.
Thanks.
Hi, trying to call back represent transfer the closing remarks.
Okay, well. Thank you so much and thank you all for your time and attention today, we hope that.