Q4 2022 Glaukos Corp Earnings Call

Welcome to the go out close Corporation fourth quarter and full year 2022 financial results conference call copies of the Companys press release and quarterly summary document both issued after the market close today are available at Www Dot glaucoma dotcom.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks will be a question and answer session. If you'd like to ask a question. During this time you can press star one on your telephone keypad, if you'd like to remove yourself from the queue. You can press star one again.

This call is being recorded and an archived replay will be available online at the Investor Relations section at Www Dot glucose dotcom.

I will now turn the call over to Chris Lewis, Vice President of Investor Relations and corporate Affairs. Please go ahead.

Thank you and good afternoon, joining me today are <unk>, 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 our Investor Relations website under the financials and filings quarterly result section titled Quarterly summary this.

<unk> is designed to provide the investment community with a summarized and easily accessible referenced document that details the key facts associated with quarter. The state of the Companys business objectives and strategies and any forward statements or guidance. We may make this document is designed to be read by investors before the regularly scheduled earnings call as such for this.

Call, we will make brief prepared remarks and transition into a question and answer session to ensure ample time and opportunity to address everyone's questions. We request that you limit yourself to one question and one follow up if you still have additional questions you may get back into the queue.

Please note that all statements other than statements of historical facts made on this call that address activities events or developments, we expect believe or anticipate will or may occur in the future are forward looking statements.

Statements about our plans objectives strategies and prospects regarding among other things our sales products pipeline technologies U S and international commercialization integration and market development efforts, the efficacy of our current and future products, our competitive market position regulatory strategies and reimbursement for our products.

<unk> financial condition and results of operations as well as the expected impact of the COVID-19 pandemic 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.

Today's press release, and our recent SEC filings for more information about these risk factors.

Youll find these documents in the investors section of our website at Www Dot Glafkos Dot 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 facilitate a more complete analysis and greater transparency into glaucoma is ongoing results of operations, particularly when comparing underlying results from period to period. Please.

Refer to the tables in our earnings press release available on 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 glaucous, Chairman and CEO Tom Burns.

Okay. Thank you Chris good afternoon to everyone and thank you for joining us today.

Today, <unk> reported fourth quarter net sales of approximately $71 $2 million.

And full year 2022, net sales of approximately $283 million.

We are also introducing a 2023 net sales guidance range of 290 million to $295 million based on the latest foreign currency exchange rates.

Alex will discuss our financial results and outlook in more detail later in the call.

Overall I am proud of our performance this past year as our results exceeded our initial expectations.

Reflects solid execution across our glaucoma and corneal health franchises in the face of reimbursement headwinds and a challenging macroeconomic environment I'd like to recognize the continued dedication and resiliency of our teams around the globe, who remained steadfastly committed to their work.

Take a minute to highlight some of the key accomplishments we achieved in 2022.

One we showcase the resiliency of our U S glaucoma combo cataract franchise in the face of significant reimbursement headwinds two we strengthened our core franchises with the U S. Commercial introduction of several novel Ophthalmic technologies, including access high Prime and Istent infinite.

Three we continue to grow and expand our international glaucoma and corneal health businesses.

Four we advanced our near term pipeline, most notably with a positive idose TR phase III topline data that will be the basis for an imminent NDA submission.

Five we progressed earlier stage R&D programs with two phase II <unk> studies, and other preclinical program developments and <unk>.

Finally, we expanded our global operations and infrastructure to support our long term growth goals with the Buildout of our new headquarter campus in Aliso Viejo, our corneal innovation center outside of Boston and our state of the art hybrid pharmaceutical manufacturing facility based in San Clemente.

Yeah.

Our achievements in 2020 to leave us excited about our prospects and well positioned for the next phase of our pioneering journey as we sunset CMS related combo cataract headwinds and position the portfolio for sustainable topline growth beginning this year and the years ahead.

From a commercial perspective in 2023, we will continue to execute our strategies that fueled the resiliency of our U S. Glaucoma combo cataract franchise in 2022.

Alongside our combo cataract efforts, we anticipate advancing high prime an istent infinite latter pending the establishment of Mac coverage and payment.

In parallel we are investing in our founding mission eclogue host, which is to transform glaucoma therapy by driving earlier treatment intervention for glaucoma disease progression, which in turn will greatly increased our standalone market opportunity over time.

While we are bullish on the long term prospects for these efforts we have remain prudent in our initial 2023 guidance as it remains early in revenue contributions in 2023 versus 2024 and beyond remain uncertain.

Within our international glaucoma, and corneal health franchises, we plan to continue developing these important businesses by driving deeper penetration adoption and access for our Migs and <unk> technologies around the globe.

While we execute upon these commercial and market development strategies for our core franchises. We also continue to successfully invest in and advance our robust pipeline of novel promising platform technologies that we believe has the ability to significantly expand our addressable markets and fundamentally transform our company over time.

Jim.

Starting with Idose, our clinical and regulatory teams have made great progress preparing our NDA and we are on track for a submission this month.

Earlier this year, we were delighted to announce results for the Idose TR exchange trial, which included a second administration of Idose TR and the removal of the original tiara implant with the second Idose TR, demonstrating a favorable safety profile over a 12 month evaluation period.

Additionally, no subject in the exchange trial exhibited a greater than 30% endothelial cell loss over the extended evaluation period of more than five years on average we look forward to including this data set which will augment the powerful phase III data results in our upcoming NDA to support that.

Safety and Tolerability of re dosing high dose patients over time.

This further adds to our market leading body of clinical evidence supporting the best in class benefit to risk calculus of our micro invasive technologies over other competitive alternatives.

In addition to our NDA preparation for Idose. We are also already well underway with the team of cross functional leaders across our commercial and market access organization in the preparation and planning of the Idose TR commercial launch targeted for next year.

Shifting gears, we also recently announced positive clinical updates for several of our corneal health pipeline programs.

First we commenced subject enrollment in the second phase III confirmatory trial for <unk>. Our next generation corneal cross linking therapy for the treatment of keratoconus and are targeting an enrollment completion by the end of this year as.

As we advance our clinical plans for <unk>.

We remain well positioned to serve keratoconus patients with our first generation corneal cross linking therapy for <unk> or <unk>, which remains the only FDA approved treatment shown to slow or halt the progression of keratoconus.

Second we announced promising initial results from the first in human Phase Iia clinical trial for <unk> 301.

Lucian dry eye disease program.

<unk> hundred one as a sterile ophthalmic topical cream to be applied to the eyelid for the treatment of the signs and symptoms of dry eye disease.

Based on these encouraging observations we are planning to commence our phase <unk> trial for <unk> 301 later this year.

We are also evaluating the phase Iia data for <unk> 302 are <unk> Presbyopia program, while we continue to closely monitor the evolving market conditions associated with available presbyopic therapies.

Finally in addition to these pipeline developments, where we also anticipate several additional pipeline milestones over the course of 2023, including a now open IND for high Lucian Travoprost, a first in human retinal trial and an IV label expansion study for Istent infinite.

As you can see we have a lot to be excited about when it comes to the significant potential value that we believe our pipeline programs may create.

So in conclusion, our mission at glaucoma to truly transform vision by pioneering novel <unk> platforms that can meaningfully advance the standard of care and improve outcomes for patients suffering from sight threatening chronic eye diseases innovation is at the core of everything we do.

Our mantra will go first embodies our commitment and determination to take chances.

The limits of science and to disrupt the legacy treatment paradigms in glaucoma corneal disorders, and retinal diseases through our pursuit of game changing technologies.

I believe our foundation has never been stronger and our prospects never quite as promising.

I am confident we have the right people strategy infrastructure pipeline and balance sheet to execute our plans and deliver on our future aspirations and so with that I'll open the call to Alex to briefly discuss our forward outlook.

Thanks, Tom.

I will now make a few comments on the state of our markets and opportunity today and how we believe things are unfolding for 2023.

Our initial 2023 net sales guidance of $290 million to $295 million takes into account. The continued estimated impact on U S. Glaucoma volumes related to professional fee reimbursement cuts for combination cataract trabecular bypass surgery versus other more invasive alternatives.

While January one marked the anniversary of when these initial cuts became effective not all physician behavior changes at once.

Second we continue to expect combo cataract Migs competition globally.

And third while pricing dynamics remain.

Largely stable across each of our major business areas.

As Tom mentioned earlier, our ability to successfully bring to market and commercialize our newer technologies.

And interventional glaucoma strategy more broadly.

<unk> in the early stages and therefore, we have assumed relatively modest contributions at this point of the year.

While we continue to be bullish on our newer technologies and their market opportunities overtime. Our assumption is for these products contributions to be more weighted towards the second half of the year.

And with that I'll open the call to questions operator.

Thank you as a reminder, everyone that is star one on your telephone we will take our first question from Ryan Zimmerman with BTG.

Wow I'm honored that the first question I. Thank you.

Okay.

Yes.

So wanted to just.

Ask couple of questions, particularly on the guidance I think the street is going to be really focused on this coming out of tonight's call.

We're looking for something I think meaningfully ahead of where you guys guided for 'twenty three.

And.

And I appreciate that not all physician behavior changed Alex and I appreciate those comments.

But you are coming into this year with stable.

Reimbursement dynamics.

Easy comps from the past year, and so how I guess.

Components of this question.

How many how much of the physician customer base do you think you're through.

In terms of behavior change right I mean, how much more pain.

Does the glaucoma market I have to go through with these reimbursement cuts in your view.

And I wanted to also honed it on competition because competition has been here for a while but.

Admittedly, it's obviously got anymore.

<unk> with the introduction of high address from a major competitive player.

Three large sales force so how much is that weighing on your minds as youre thinking about guidance Tonight.

Hey, Brian It's Joe maybe I'll start off there and I appreciate the question I think.

You said it somewhat.

Burley and that if you look back on 2022.

In many ways as Tom alluded to it may have been one of our best years right. You think about the CMS cut the related headwinds from that.

Investor or even really our own expectations entering the year to finish 2020 to nearly flat to 2021 on a constant currency basis really I think speaks to the strength of our our products are.

Our commercial organization and our sales team specifically.

As proud as we are of our performance in 2022.

It may not come as a significant surprise to you and others that we want to really want to walk before we run as it relates to setting expectations for 2023, given everything that we faced.

As I think about the next layer of kind of your question in the context of the customer base.

Competitive dynamics.

We do expect those CMS cut related headwinds to slow down in the combo cataract setting.

Obviously, not all physician behavior does change at once.

But the economic based selling of those more invasive alternatives isn't necessarily going to go away, but we do expect that to slow considerably and candidly you've seen some of that even though the trends that we saw over the course of the second half of last year, where were those impacts were stabilized and slowing as we lap that going into 2022, we do expect those to.

It's slow.

I think as you unpack that further.

It's still there I think the competitive dynamics are intertwined in that I think it's less about necessarily the hydrus dynamic that you're describing that product has been on for a while we were badly against hydrogen alcon everyday we have in the past. We are today I think it's more about the more economically advantaged procedures that are out there that we have.

Experienced.

Have a tailwind over the course of 2022.

Related to CMS cuts in and how that will how that will sunset over the course of this year and I think we're trying to take a cautious stance as it relates to that activity as we enter into 2023, even though we have a fair amount of confidence as it relates to how we stand over the medium and long term.

Okay, just wanted to ask a follow up to that.

Two parts again.

One do you expect there in the market.

Jeff do you refinance procedures there economically advantageous.

Assume you're referring to <unk>, but do you expect a bigger shift.

The market to Canal Plaza this year and then the second component of my question.

Yes.

I lost my train of thought, but let me start with that.

Come back I guess.

Ryan we're not going to let you go first day more you've got two two part question.

Really.

On the first part.

No.

So as it relates to I think.

Lump it together and the more invasive pests can alloplasty goniotomy et cetera.

Thank.

There's two pieces there that I would call. The first one is similar to what I. Just said I think it doesn't really matter what that technology is obviously that the relative impact in 2023, we expect to be quite a bit less than what we experienced in 2022 as we sunset the sort of initial dynamics associate with the CMS cuts in the economic disparity that resulted.

As a part of those.

But the second piece is EBIT as we're successful ourselves that being glucose in maintaining those customers potentially with other technologies right whether that be.

I pry more or access they comment Ed obviously, a lower price point as you know and so in some respects you have to factor all those things into when Youre thinking about the dynamics as it relates to cloud specifically entering into 2023.

Okay, and then I remembered it the second part of my question. So I'm not trying to squeeze it in here, Chris I apologize, but what are the when.

When do you think about that split between corneal health and glaucoma in terms of your guide I mean, if I think about corneal health and kind of the low teens or maybe even high single digits growth. It implies glaucoma sales for this year are essentially flat.

And we can kind of split hairs exactly.

Exactly where that lands, but.

Is that the way you're thinking about the components of growth.

From a.

Contribution standpoint, amongst your two business segments. Thanks for taking my questions.

Thanks, Rod I'll save some of the broader color for others when they asked but I'll take the point of your question I would say, we have expectations a reasonable place to start the <unk>.

We estimate the corneal health business is probably for high single digit type growth.

On the international side of glaucoma, we'd expect low double digit type growth and then obviously you can you can do the math on what that means for the U S glaucoma franchise being in and around.

A flattish business over the course of 2023.

Alright, we will take our next question from Tom <unk> with Stifel.

Great Hey, guys. Thanks for the questions.

I'll start off with infinite actually.

Tom or Joe if you can talk a bit about the.

Progress you've made with establishing the Mac pro fees today, and maybe expectations for the remainder of the year, we picked up a bit from some Max I think coming in with.

Pretty attractive rates already but would love your thoughts on that.

How those efforts are progressing and what that could mean for 2023 and maybe even 2024, if we think out of that.

Yeah. Thanks, Tom It's Joe I'll start off and if Tom wants to add some color he can.

I'd break the infinite Mac related conversation down largely to two two pieces. The first is just the overall coverage of the procedure and as we've talked about for some time now that tends to be.

A six to nine month process.

And I can say there is we're on track, thus far and we're making a lot of progress, but it is still early.

As you probably know there is no statutory timelines.

You can count on there. So we're working hard every day to try to deliver that those those coverage policies as soon as practically possible.

I think as it relates to the pro fee component of that specifically.

Youre right I think you referenced there has been too.

We will call. It early data points that have been in the in the $1000 range for the pro fee.

But again those were early and they can change over time as you know whether it says the coverage policies are opened or or ultimately as volumes grow so.

I think we're encouraged by those early data points, but but there's a lot of what a game we play there.

Great. That's helpful. And then I think my second one would just be sort of back to guidance.

Joe or Alex how should we be thinking about <unk> versus two <unk> seasonality this year FX likely a tailwind.

<unk> come to age and then you have new products with Internet and I think I prime.

Being greater contributors on that front in 2019, I calculate but.

<unk> sales were around 48%.

But in 'twenty, one and 'twenty two is closer to 50 50 so.

For the splits as we build out our models do we go back to those <unk>.

2019 type levels of.

Maybe a little less seasonality in one answer is even more pronounced.

Where <unk> kind of greater than that 50% to 53%.

Level.

Yes, Thanks, Tom.

Obviously, the last couple of years, the normal seasonality trends have been pretty disrupted by by Covid and Covid related dynamics. So.

As we enter 2023 I would.

And we would expect that we should get back to something a little more normal from a underlying market seasonality perspective, you referenced some of those numbers, but so theres a lot of times on prior calls I think typically the market run something like 22% to 23% in the first quarter, 25% in the second and third and there can be a little variability there.

And 27%, 28% in the fourth quarter.

I think for glaucoma, specifically, our product cadence may play a bigger driver for US. Specifically then then then just that underlying market seasonality and quite frankly, if you think about the year. It may it may amplify that seasonality a little bit given our expectations for the second half versus the first half with.

With Istent infinite in particular.

And then hey, Tom I'll address the FX question for you. So we've kind of looked at that as well and we think again overall, we think the FX rates will be relatively neutral on our overall sales for the year. However, we do believe there'll be a headwind to us in the first half and a modest tailwind in the second half.

Got it thanks, Alex Thanks, Joe.

We'll take our next question from Larry <unk> with Wells Fargo.

Good afternoon, and thanks for taking the question.

Just one follow up on infinite.

Which is the two macs that have come out with physician fees had been about $1000, which is two <unk>.

Cataract procedures. So the question is do you expect that to stick and do you expect other macs to pay about the same.

And just any update on the <unk> supply issues and added one follow up.

Hey, Thanks, Larry I'll start off on that I don't think I would hazard.

A specific guess as to where the individual macs will come out on their pro fees. We've said for some time. Obviously this is a standalone procedure.

And so when you look at the various standalone procedures that are out there you framed one and in terms of the cataract surgery and obviously their glaucoma surgeries that go even above where where we've seen these two early data points come out. So I think there is a lot of room in there for <unk>.

Discussion with the Max and clearly.

We believe that the fair outcome, there is towards the higher end or the higher end of that range.

I think on.

You asked about high prime.

<unk>.

We've now been commercial with that product since.

Last may and and we've been working through growing pains, and and really optimizing our supply chain over time and that continues but we.

We really like the product is a part of our portfolio and see a growing opportunity with our customers over time.

Thanks for my follow up Tom on.

On Idose I'm, just curious how you think the ramp will compare to de risked at the same time post launch they were approved during COVID-19. According to Abbvie. They did about 35 million in 2021.

Do you think the ramp will be slower or faster than any thoughts on how youre thinking about pricing relative to the rest of it. Thanks.

Yes, I'd be happy to address it I think as I've said before we will have to go through the.

The normal mechanics of establishing the reimbursement for the product and that means establishing a professional fee under the category III designation it will get assigned and APC and soon after launch we will be filing for a <unk> co, which normally takes about six months since I've said from the beginning that we will look to the second.

Half of 2024 is kind of where we're really pick up traction and see this this product received what I believe will be strong adoption I don't believe I would use to Arista as a.

As a predicate in terms of adoption I think these are such in variably different products. When you look across the board how they compare.

In almost every category I think most objective observers would say that the balance would be tipped to an idose and so I guess that that will give you. Some beans of comparison just by that basis.

What I would say on the pricing is what I've said all along.

In this case Allergan has done a service to the company by establishing what they believe is a fair price for a four month by erodible implant.

And I think given the fact that you've seen our three year data Larry.

You amongst others will believe that that would be the absolute floor of what we think we would be able to to achieve in our hix fixed code of the marketplace.

Again, I caution on investors on doing any kind of proportional analysis with pricing I can assure you that we're doing multiple pharmacodynamic studies behind the scenes, including Mark hub transitional probability analysis burden of illness analysis direct cost analysis things that we've done before I think done quite well and will be it will be in <unk>.

Right.

I'm in a position to establish a fair price following the launch of the product.

Alright, Thank you very much.

Our next question comes from George <unk> with Stephens, Inc.

Hey, Thanks for taking the question.

I guess maybe to start.

There's clearly been some some changes in terms of the.

Operating expenses that you may be you're expecting this year with the additional confirmatory study of <unk> and the associated expenses with Idose I'm. Just curious if you could give us some help on maybe.

The cadence through this year as.

As you invest ahead of Idose and then also subs.

Subsequent to that expected approval.

The investment required as you start to commercialize that that device.

You bet, George happy to do that and actually I'll take the advantage to give you a little more for you all the models.

So if you think about 2023 and what to kind of model and think about in terms of opex.

And kind of the overall P&L, we've already talked about revenues when you think about our margin our margin.

Our margin profile should continue in the same 83% to 84% range that we've done historically, so you shouldn't feel competent to continue with that with that part of the model and then for operating expenses. The way I would guide you to think about that is if you take our normalized 2022 operating.

Expenses, which when I say normalized means pull out the 10 million IP R&D that was kind of the.

Under the old rules, we would have we would have excluded it anyways.

And that leaves you with about a $313 million total operating expenses in 2022, and just assume about a 10% growth.

B you will be in the ballpark and then lastly, I'll just mention it right now while I've got you on the phone. If you think about Capex for next year, we posted $30 million of Capex in 2022 that number should come in a bit in 2023, it's.

It's probably going to come in around the range of $20 million and that should help you as you model for next year.

Okay very helpful. Thank you for that and then maybe just as a quick follow up.

Turning back to the guidance a little bit is there any additional color you could give us on.

What that assumes in terms of contribution from the additional devices by access high Prime an istent infinite this year.

Yes, Thanks, George it's Joe.

Yes, we really haven't gotten that granular with respect to individual product contributions to the any one of our franchises and in particular, the U S glaucoma business, but but I think it's fair to say.

Relatively modest contribution.

That grows over the course of 2023 and in all the factories you can imagine that drive that but in particular, it's really really.

Driven by by Istent infinite and turning on those Max.

Okay, great. Thank you all for the time.

Okay.

Our next question comes from Margaret Kaczor with William Blair.

Hey, good afternoon, guys. Thanks for taking the question.

I wanted to follow up first on on Idose, you referenced it a little bit, but maybe we can go a little deeper once it's commercialized I guess are you assuming that it's going to coexist with something like a de risked or is it kind of a different patient profile.

Now for different patient profiles are they going to compete with each other and then.

Given the 592 designation.

And do you expect I guess, most surgeons to start often the combo cataract setting or eventually in standalone as they get more comfortable.

Yes accelerate that standalone market.

Okay.

Yes, Margaret I'll be happy to answer it so first of all.

I think that I think the the <unk>.

Patient demographics, and the people that will be seeking to target the patient candidates will be similar to what the risk is currently advocating.

I do believe that we will have some pronounced advantages entering the marketplace that I've talked about before I think again any objective observation with your channel checks, you'll find that as well I think when we do launch this product I think we will see some classic adoption.

There will be a strong.

Movement towards the use of this in combination with cataract surgery I think it's a natural.

To be able to be able to place. This in combination with cataract surgery, either alone or even perhaps in combination with <unk> with a product like istent infinite where the surge is deemed medically necessary.

I do believe that there will be a parallel adoption in the standalone marketplace and as I've said before but we'll see typically is kind of a Pac man approach where people will look at.

Being able to reduce drug burden in patients who are on multiple medications to look for patients who are noncompliant to begin with as areas that bill targets to be able to provide a $24 seven option.

Compelling treatment option for the treatment of glaucoma will look for patients that.

That have underlying ocular surface surface disease.

Huge comorbidity between ocular surface disease, and glaucoma and the last thing surgeons want to do our clinicians wanted to do is to exacerbate the condition by continuing to dose multiple preserved glaucoma drops on the surface of EI. We'll also see surgeons that will want to just reduce drug burden every time, we can reduce.

Jordan burden from three to two or two to one medications or to make the medication free we substantially increase the rate of compliance in those patients, which then leads to better IOP control in the arresting of glaucoma moving forward.

I suspect we will see surgeons on the Standalone side first.

Pursued affected patients those are those are patients that have already undergone cataract surgery, and they'll want to be able to get their sea legs, there first and once they do and many.

<unk> will start there and then move quite quickly into phase <unk> patients and in these patient groups that.

They believe.

We can have a superior or potentially superior treatment alternative.

Okay.

Very helpful. Thank you and then.

Then just a bigger picture macro question, we've talked about the guidance.

The puts and takes there, but I don't recall you talking about staffing. So anything that you guys are saying here recently are we in a more normalized environment now in 'twenty three or is it still a headwind.

No Mark I think it's still very much a dynamic that's in play right and I think it's been probably our quarterly summary document there we may not have referenced that in the prepared remarks, but but yes.

Throughout the practices I think ophthalmology is not immune to what youre hearing probably from other folks in the health care industry Hospital staffing administrator staffing across both ASC in the hospital setting.

It remains a challenge both in terms of finding those those folks as well as retaining them and not experience of turnover you think about the expertise that's required to successfully operated at ASC or hospital and that turnover slows them down so I think relative to what we've been through with Covid, we all feel much better going into 2023.

But that dynamic absolutely remains.

Okay. Thanks, guys.

We'll take our next question from Joanne Wuensch with Citigroup.

Hi, This is actually Anthony on for Joanne. Thank you for taking our questions first one I have is are there any details you can provide on the <unk>.

I'd trial for Infineon.

Extending the label side.

Length of follow up kind of details and then I just had a follow up after.

So sorry. The first question you had was on the infinite E. The expansion trial.

Did you want to okay, I'll be happy to cover that so what we're going to be looking to do is in fact, we're planning on meeting with the FDA in short order and that will be two to develop a treatment protocol under an IV.

Where we will be able to expand the labeling claims of Istent infinite, which you know right now is labeled for adult patients who have failed on medical and surgical therapy, and we will look to move to our earlier in the interventional treatment.

Algorithm to patients with mild to moderate open angle glaucoma. So we have already prepared.

Our approach to the FDA will be meeting with them shortly.

And we will be looking to begin that trial later this year I should mentioned just to look at.

Kind of the prowess of our portfolio I think it is important that I mentioned that just this year alone not only we will be looking at an istent infinite mild to moderate opening will be moving forward with illusion with Travoprost. As you know we have an open IND there will be meeting with the FDA to open it.

The app for the pressure flow device now that we've taken full command of the regulatory and clinical strategy for from Santander will be moving forward with the phase <unk> trial of the <unk> dry eye products based on the significantly powerful and early results we achieved in the early.

Phase two design will.

We will be moving forward with the phase one design with our exit of Nib retinal program and so there is so much under the hood here. So many good things going on.

We're going to start to see some of the fruit from this labor.

Appear certainly during this planning period.

Great. That's helpful. And then just in corneal health in the quarter.

Came in stronger than we were modeling I know last quarter you called out some.

Reimbursement headwinds can you just talk about maybe what drove that strength in the quarter I know reimbursement has improved.

Yes, I think we've talked about this for some time in the corneal health business in the U S. In particular, where we had seen increasing volatility in the commercial payer landscape and obviously whenever you see that customers tend to react and be a bit more conservative.

They think about treating patients under these various plans so.

Around the middle part of last year, we started to really put a lot more muscle into our payer relations effort and other investments in our market access organization that we talked about and I think we've seen good early returns on those investments and I think you saw that in the fourth quarter. As we were as we were exiting the year. It was a strong quarter.

<unk> north of $18 million sales and I think a record for Otrexup sales of a little north of $15 million. So we were encouraged it's still early as we deploy these.

These efforts and the investments we've been making but we were certainly encouraged by the results in the quarter.

And we will take our next question from Matthew O'brien with Piper Sandler.

Hey, this is Phil on for Matt. Thanks for taking our question for starters, just on guidance and I don't want to beat a dead horse or anything but can you give your puts and takes from only including modest contributions from new products and that's namely Istent infinite.

In the past you've expected to garner reimbursement through the first half of this year.

But has securing PFS coverage and payment been a slower process.

Previously thought.

Well, yes, I could cover the infinite component when you talk about the broader questions on guidance whatever you have got I think as I said earlier.

We said for a while this is a six to nine month process. There. There really is no statutory timeline that you can rely on we can only rely on our experience historically with the products that we brought through the Mac process.

And so far we're on track, we're making good progress, but it's still early in that process and so.

We've talked about something that is in the in the mid year Q2, Q3 type timeframe in terms of starting to really lock down the coverage there.

And I hope, we continue to be on track with that which which as I said as it relates to our guidance set this up to a more.

Half weighted performance, particularly out of Istent infinite and what it means for our U S glaucoma franchise.

Great Great and then just for my last one for Idose do you still expect a 10 month timeline here for <unk> submitted to approval or could that approval, what im really gave out could that could that approval kind of bleed into into 2024 here and I know it might be a bit too early to ask this.

As well, but that target label being so broad.

How should we think about that initial adoption I think youre really targeting what early stage ocular hypertension to late stage disease. So how should we think about that initially.

Let me take the first part of your question first.

The second part first.

Label is under the 500 <unk> designation it'll be for the reduction of interaction ocular pressure.

In ocular hypertension and open angle glaucoma.

The label is invariably wide, which wed love for several reasons it will allow us to segment the market and the targets in a sophisticated way, where we think we can achieve the earliest and best adoption for patients.

In terms of the filing for <unk>.

The NDA, we will be filing our NDA as I said imminently and it'll happen this month and typically what the FDA will do is establish up to do.

Filing date statutory date in which they commit to finish the approval process for the FDA approval of your product and we are targeting that approval continue to target that to be before the end of the year and things always change and move into 2024.

Clearly thats always a possibility, but it's not one that.

That we that we believe will happen.

Great. Thank you.

We will take our next question from David Saxon with Needham <unk> Company.

Hi, good afternoon, thanks for taking the questions maybe.

Maybe I'll start with glaucoma.

I mean last year, you, obviously lost a lot of share to plastic Goniotomy cases, so just wanted to ask how youre thinking about the opportunity to recapture that share Kevin.

So can I prime continue to ramp in the back half.

Are there any reasons why docs you lost one come back to the platform, especially now that you have more products in the bag.

Yes.

As I said earlier I think when we look back on this year.

It's hard not to be proud of how things turned out relative to expectations. As we were entering it and as I said I think it really speaks to the strength of our products and our commercial organization.

I think those same things hopefully will benefit us as we continue on our journey here in 2023, and we continue to add.

More access to these products through Istent infinite and really providing what we think are best in class alternatives to customers that have been our customers for a long time, and so I think that ultimately will be stand to benefit from that and the impact of that we will see not just 2023, but hopefully 'twenty 'twenty four and beyond.

Yeah.

Okay, great. Thank you.

I mean, we've heard some larger companies talk about it large cataract backlog, which I imagine you'd benefit from so just wanted to hear your view on that and maybe what's assumed in guidance in terms to potentially seeing above normal migs market growth in 2003, and thanks so much.

Yes.

So it's always hard to predict how those things play out when they play out how much that impact that has in any given quarter or period of time.

I think a lot of that ties back to the question that we received earlier around staffing and some of the constraints. There. So we've certainly seen amongst a pretty large group of the practices that they or their backlog or are there time to scheduling of procedures is continues to extend out.

Lot of Thats because of staffing constraints right. So as they've tried to get back to a more normalized schedules in many cases staff turnover or lack of administrative or or staff and slow them down and so they schedule out a little bit further so I think it's certainly a potential tailwind.

Exactly when that plays out for the marketplace is a little harder to predict.

Great. Thank you.

Our next question comes from Steven Lichtman with Oppenheimer.

Hi, guys. This is drawn on for Steve just wanted to ask a few guys are looking for any incremental headwinds from the <unk> from the last physician fee schedule reimbursement cuts.

Staffing I know you already gave some colors about that but how are you thinking about that in terms of 'twenty three guidance.

And then I have a follow up if that's okay.

Yes, I mean, I think the question Youre asking is largely centered around the U S. Glaucoma franchise and I think we've tried to factor in pretty much all of the dynamics our expectations around.

Any continued headwinds associated with the CMS profi cuts staffing.

Staffing considerations or new product.

Launches in an additional coverage and reimbursement for some of those so I think all of those things are really wrapped into our expectations.

We'll repeat one thing I said earlier, which is that given all that we've been through and kind of what we see in front of us we've taken a conscious effort here to try to really walk before we run as it relates to setting those expectations for 2023.

Okay.

If I can just.

Hello, Amit hopefully not exactly what people are asked before but I wanted to call corneal health business you guys have been it's been growing steadily for a while and it's been really really great. How are you guys looking at that in the future.

<unk>.

Looking at that taking maybe a much bigger chunk of your business.

How are you thinking about.

The second trial, that's going on the repeat trial phase.

For FP on and what are your expectations for it in terms of how thats going with enrollment.

Understood.

Finish it up.

Sure Rod I'll start off that if Tom was that he can I think.

As we think about 2023, specifically in the corneal health franchise.

Yes, it's reasonable to estimate high.

High single digit type type growth for now and we talked earlier in the call about some of the investments we've been making in some of the early return we've been seeing on that certainly in the fourth quarter.

And I think that should continue to benefit us in the coming year.

It probably will likely be offset a little bit in the short term by by enhancements that we've been making to our copay assistance program.

Which is a gross to net adjustment and the diversion of some of our patients into that <unk> trial.

You've asked about.

And as I think Tom said earlier, and we've been pretty clear where we're now.

Fully into that process of enrolling patients for the IP oxo clinical trial, that's underway I think thats. The only comment I'd make is we found out from the FDA that they would require the second clinical study I think it was late.

In late October timeframe, and we moved Heaven and Earth and we already began enrolling patients beginning in January we have over a couple of thousand sites already committed in a rolling Theyre looking at getting 40 up and running in.

In short order and we are moving to have this fully enrolled by the end of the year.

We do the math from there, we'll look to target having a commercially approvable product in the U S by the end of 2025.

Okay. Thank you guys so much.

Okay.

We will take our next question from Allen Gong with J P. Morgan.

Hi, I just had a quick one since I think a lot of them were present questions have been asked but when.

I think about my answer anything beyond that <unk> been putting a lot more emphasis on ice and infinite.

When it comes to access and I'm priming of the former of which is already contributing at least a little bit.

Why shouldn't we be expecting to see more contribution from those products in 2023, especially given the success, we've seen from kind of similar products in the category.

Yes, I mean, we've seen.

Contribution from both I Prime anti access right. Both in 2022 and as we move forward here in 2023, and I think each will continue to grow.

Grow as the year goes on.

I think it's just that at this stage of the game, we don't want to get too ahead of ourselves as it relates to the trends and dynamics there as they can.

Go forward, but we do certainly feel confident that the portfolio of alternatives that we've got.

<unk>.

<unk> will serve us well as we make our way through 2023 and go into 2024 and beyond.

Sorry. This is slipping a quick follow up.

I'm sure you're tired of hearing about it but and I get the reimbursement landscape has continued to have a bit of noise here, especially when it comes to a more invasive techniques do you have any thoughts on that how it may be impacting your competition and how it could impact to your own portfolio going forwards.

I think we've been on the record for I don't know how long now, saying that there was going to be a lot of moving parts as it relates to the reimbursement landscape and whether that was obviously part of it with our with our own trabecular bypass code's going through the category one conversion or some of the evolution that's been happening with respect to whether it's can help last year whether it.

Goniotomy or all the various alternatives in between I think that the reimbursement landscape and payers generally are continuing to refine their own algorithms around what they think is supportable.

From a reimbursement standpoint.

When I look at it from our standpoint, that's the benefit of having the portfolio and so we have all of the tools that are available to these surgeons and depending upon the individual Mac or a payer or hopefully most importantly, the patient need.

We have a solution that hopefully can meet those those.

Patients algorithm or the surgeons algorithm.

Alright, we will move onto our next question from Anthony Petrone with Mizuho group.

Thanks.

I'll start with a question on infinite and then a follow up on Idose infinite maybe just curious how we should think about standalone versus combo cataract playing out over time and certainly if you if we do secure possess.

<unk> fees similar in line with where the first two macs have come in.

We assume that combo cataract dramatically gets cannibalized over the next few years in favor of.

Standalone and would that actually improve your pricing and then I'll have a follow up on Idose.

Yes, Hi, Anthony I don't know that that is really a trend that I would call out as a significant one going forward.

The expectations at least for US is that if a patient is being treated for.

For cataract and Theyre comorbid glaucoma, the surgeon is much more likely still to treat both at the same time handle that patient in one one visit versus decoupling, it which I think is partially what you are suggesting may may occur there may be some of that but I don't think thats really the primary trend that I would call out.

I think we're more focused on with Istent infinite.

It's really something you've heard Tom talk a lot about which is.

It was the founding of our company. The idea that we can we can truly drive interventional glaucoma mindset and start treating these patients in a standalone manner.

Regardless irrespective, whether they've got cataracts or not that's where our focus is at is providing what we think is a terrific solution for these surgeons to really intervene on behalf of patients.

That's helpful and on Idose should should we expect an AD comm panel.

Perhaps ahead of the producer date and when we think ahead to reimbursement we look at the risks.

They have a direct physician office reimbursement channel, but they also leveraged specialty pharmacy.

So we should we expect the same for Idose.

Okay.

I think with reimbursement I think you've seen how we handle these issues in the past we have a comprehensive approach we've got a really strong.

Payer group and market access group that's available I think.

You will know that this is going to be a buy and bill procedure in the marketplace.

And you can expect that we will have both options available for practices to purchase this in buy and bill directly or to go through specialty pharma. So we've already thought through those machinations will have a full sophisticated plan up and ready available launch and we expect again to have a very meaningful launch.

Gaining truly again in the second half of 2024.

And then maybe on the AD com.

Are you expecting an advisory committee meeting.

I do not.

Okay. Thanks.

Okay well.

I want to thank you all for your time and attention today and for your continued support of <unk>.

Thank you for your interest and wish you a good day, thanks and goodbye.

And that does conclude todays presentation. Thank you for your participation and you may now disconnect.

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