Q2 2023 Glaukos Corporation Earnings Call

Welcome to Qualcomm's Corporation second quarter, 2023 financial results conference call copies of the company's press release and quarterly summary document both issued after the market closed today are available at www dot glucose dotcom.

After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad to withdraw your question Press Star. One again this call is being recorded and an archived replay will be available online in the Investor Relations section at Www.

But you don't go out coast Dot Com I will now turn the call over to Chris Lewis, Vice President of Investor Relations and corporate Affairs.

Thank you and good afternoon, joining joining me today are <unk>, chairman and CEO , Tom Burns, President and CEO , Joe Gilliam, and CFO , Alex Thurman similar to prior quarters. The company has posted a document on its investor relations website under the financials and filings quarter results section titled Quarterly summary.

<unk> is designed to be to provide the investment community with the summarized and easily accessible referenced document that details the key effects associated with the quarter. The state of the company's business objectives and strategies and any forward statements or guidance. We may make this document is designed to be read by investors before the regularly scheduled quarterly conference.

Call as such for this call we will make brief prepared remarks and transition into a question and answer session to ensure ample time and opportunity to address everyone's questions. We request that you limit yourself to one question and one follow up if you still have additional questions you may get back into the queue. Please note that all statements other than statements of historical facts made on this call.

The address activities events or developments, we expect believe or anticipate will or may occur in the future are forward. Looking statements. These include statements about our plans objectives strategies and prospects regarding among other things our sales products pipeline technologies and clinical trial U S and international commercial.

Asian market development efforts efficacy of our current and future products competitive market position regulatory strategy is a reimbursement for our products finally, its financial condition and results of operations as well as the expected impact of general macroeconomic conditions, including foreign currency fluctuations on our business and operations.

These statements are based on current expectations about future events affecting us and are subject to risks uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Therefore, they may cause our actual results to differ materially from those expressed or implied by forward looking statements.

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

These documents in the investors section of our web site at Www backlog because 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 a more complete analysis and greater transparency into cloud customers ongoing results of operation.

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 the most directly comparable GAAP financial measure.

With that I will turn the call over to <unk>, Chairman and CEO Tom Burns.

Okay. Thanks again, Chris good afternoon to all and thank you all for joining us.

Today in glaucoma reported record second quarter consolidated net sales of $84 million up 11% versus the year ago quarter.

These second quarter results reflected record sales and continued strong performance across our international glaucoma and corneal health franchises alongside the re emerging growth in our U S. Glaucoma franchise, driven by the initial commercial launch of Istent infinite.

I'd like to congratulate the dedication and performance of our teams around the globe, who remain committed to their work and to advancing our key initiatives.

Given our solid second quarter and our latest forward outlook, we are raising our 2023 net sales guidance range to $304 billion to $308 million versus the $295 million to $300 million previously.

From a commercial perspective strong execution of key strategies within each of our core franchises drove our record quarter.

Within our U S glaucoma franchise, where we delivered sales of $39 6 million, which grew 4% year over year and 13% sequentially. We continue to advance Istent infinite ahead of establishing formal Mac coverage and payment.

That front five of the seven Max have issue proposed LCD reconsideration.

Finalized.

Would provide coverage for istent infinite consistent with FDA approval and based upon our coverage reconsideration requests.

In total all seven Max have taken preliminary steps to assess istent infinite coverage through either proposed LCD are temporary LCA updates.

Further we continue to support expanding broad access to innovative interventional glaucoma tools for physicians and we will closely monitor the various Mac policies and processes as they advance and are ultimately finalized for the future.

We Werent. We were also encouraged to see as part of the CMS is 2024 proposed rule. The CPT code used to cover Istent infinite and Standalone procedures or <unk> has been lifted to APC 549, two for my APC $5 91.

We are pleased with this initial proposal and believe as we have stated in the past that is more appropriately reflects the cost of independent and similar standalone procedures.

Separately CMS also proposed to move the APC assignment for combined cataract plus trabecular bypass procedures 66, 90, 966, 99, one to a newly restructured APC $5 493, which we also believe appropriately reflects the key.

Claims history as CMS stated in the proposed rule if finalized these changes will go into effect January one 2024.

As mentioned earlier, our international glaucoma franchise delivered record sales of $22 3 million on a strong broad based year over year growth of 25% on a reported basis and 27% on a constant currency basis.

As we continue to scale our international infrastructure, we are increasingly driving makes forward as a standard of care in each region in every major market in the world.

While we focus on our near term execution. We are also accelerating efforts to support one of our founding admissions o'clock us which is to advance glaucoma care by driving intervention of therapies earlier in the treatment paradigm for glaucoma disease and in turn pioneering a new standalone market over time.

We continue to lead and work closely with surgeons and thought leaders globally to organically drive this broader evolution in the standard of care, including through numerous events at the Aas Crs annual meeting in May and more recently at the World Glaucoma Society biannual meeting in Rome in June .

And finally, our corneal health franchise delivered record sales of $18 5 million, an 11% year over year growth, including for Trek Sir.

Record sales of $15 9 million on year over year growth of 18% as key strategic initiatives implemented throughout the past year continue to take hold in support of this important business.

Shifting gears to the development front, we continue to prudently invest in and successfully advance our robust pipeline of novel promising platform technologies that we believe have the ability to significantly expand our addressable markets and fundamentally transform our company overtime.

During the second quarter, we announced FDA acceptance of the previously submitted NDA for Idose TR, marking another important step in bringing this game changing therapy, one step closer to the patients.

We continue to be encouraged as we work closely with the FDA.

Our ongoing review process as we progressed towards the agencies established <unk> goal date of December 20.

2023.

Alongside this our teams continue to make nice progress with the preparation and planning of the Idose commercial launch targeted for early next year, including a robust set of peer reviewed literature and expect it to be published over the remainder of this year and into 2024.

Turning to the corneal health pipeline during the second quarter, we completed enrollment in the second phase III confirmatory trial for <unk>, Our next generation corneal cross linking therapy for the treatment of keratoconus.

This expeditious enrollment completion, which occurred in less than six months from trial commencement earlier. This year is a testament to the favorable risk benefit profile of this next generation therapy as well as our teams hard work in bringing this important rare disease therapy, one step closer to patients suffering from keratoconus.

<unk>, which is a sight threatening corneal disease.

We look forward to following these patients outcomes as we target NDA submission for <unk> by the end of 2024.

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 at.

At the same time as we discussed last quarter, we continue to prioritize the cadence of our investments as we strive to strike the right balance of risk based investments and our capital position now and in the future.

As evidence of that our non-GAAP SG&A and R&D operating expenses in the second quarter moderated to 6% year over year growth, reflecting some of the initial development adjustments adjustments. We've made in our earlier stage pipeline programs as we continue to prioritize our resources ahead of the anticipated.

Idose commercial launch early next year.

So in conclusion, I am very pleased with our record quarter and building momentum in our business as we continued to successfully advance our mission to truly transform vision by pioneering novel droplets platforms that can meaningfully advance the standard of care and improve outcomes for patients suffering.

And from sight, threatening chronic eye diseases.

So with that I'll open the call for questions operator.

At this time, if you'd like to ask a question simply press star followed by the number one on your telephone keypad well pause for just a moment to compile the Q&A roster.

Our first question will come from the line of Tom <unk> with Stifel. Please go ahead.

Great Hey, guys. Thanks for the questions first of all I'll start with Idose.

I guess big picture.

In your guys' minds, what does a successful launch in 2024 look like the rest of it you hear different numbers 50 million has been cited as year, one number but even if it's from reading more in the $30 million to $40 million range is that a decent starting point.

Benchmark as we try to refine our models.

For year, one idose now that we're getting much closer.

Two are hitting the market, but just any guardrails for how to think about 2020 for idose would be very helpful.

Hey, Tom It's Joe I'll start and Tom May want to add some color commentary at the end too.

As we think about Idose, and obviously I'm not going to comment on the specifics of the guardrails of any any given number how will we define success I think we are going to find success in a couple of different ways first and more broad theme of continue to drive the interventional welcome a mindset and really the need and reason for intervening with.

These safe and minimally invasive technologies, but specific to the launch you've been around the story long enough to know that our focus is on making sure that we deliver the right kind of training and the right kind of outcomes for surgeons out of the gate. So we're going to prioritize doing this the right way and doing it the right way both from the surge.

And his perspective as well as ultimately achieving the optimal sort of reimbursement outcomes and everything else that go to drive long term success over any particular quarter or target number for the year. Obviously you know we are enthusiastic about what <unk> means for our future and we're going to make sure. We put the right building blocks in place to achieve that success.

Got it that's helpful and then to pivot to Internet maybe.

Maybe a two parter, but.

Any trends you can speak of with Internet to date, and maybe even into <unk>.

Momentum with that product here in the U S. Any color you can provide would be very helpful. And then in terms of the facility fee proposal really encouraging to see.

Over a doubling of the ASC facility fee can you just talk about what that could mean in 2024 for the product maybe more specifically do you think there's a good opportunity.

Some price on that product. Thanks.

Thanks, Tom.

I think first just in terms of the broader trends of Istent infinite and we continue to be really pleased with the momentum here as we wind our way through the formal Mac and coverage process, both with and the Medicare side as well as the commercial side is the payer side.

To see the early utilization.

In adoption the way we've seen it is really especially encouraging when you put it in the context of where we're where we're at on the reimbursement side, which.

As you know, 5% to seven Max having proposed draft draft LCD for coverage.

Largely aligned with our formulary coverage requests in the product label and the other two having addressed via local coverage articles or LCA as we're making our way through that process, but it is still early.

So.

The momentum we're seeing around Istent infinite in its utilization speaks a lot to the potential need for a product like this in the marketplace, even though we're still working our way through the formalities of achieving proper coverage from the various Max and commercial payers for that for that matter.

I think as it relates to the facility fee in 2024.

You heard Tom referenced in the prepared remarks that we're obviously pleased to see the proposed rule.

As it relates to the facility fee for infinite add combo cataract for that matter and as you know, it's pretty consistent with what we've said historically, we would expect given on the data that we see but sometimes it takes them some time to work through the.

The process and so to be here with a proposed rule were obviously pleased and what that means for 2024, as you know pricing and really get into the heart of that second question pricing our product as it's multifactorial in terms of product attributes your overall portfolio competition, and yes reimbursement and so what I can say is.

I think the proposed changes if they are finalized we will well thankfully enable facilities that do these <unk> savings procedures to receive appropriate reimbursement that makes the procedure economically feasible for them and I think patients into finishing at the end of that.

Got it thanks, Jeff.

Your next question will come from the line of Ryan Zimmerman with BTG. Please go ahead.

Hey, guys. Thanks for taking my questions and nice results here I guess I want to ask first on guidance.

If you look at kind of where the guidance is going based on results and Joe you know where I'm going with this question.

It implies kind of a step down on an absolute dollar basis in the back half of the year relative to what is historically a strong seasonal fourth quarter. So.

Any color here on kind of your thought process.

And the second part of the question is just what impact from the proposed LCD and the other two Max have you seen in numbers in this quarter in the second quarter and kind of.

What.

Effect has that had kind of on physician behavior, and then I have a follow up.

Sure Ryan obviously expected in that context, I think well, let me start first obviously it was a high quality first half.

And the second quarter from an execution expect.

Next huge standpoint, it exceeded our expectations across the board.

When you think about 2023 for us it really remains all about building the strongest foundation possible have had ahead of what we think will be a pretty transformational period for our company going forward with infinite Idose and Abbvie okta. So.

A good start in the first half, but we have a lot of work in front of US as we continue to lay that foundation I think at the outset of the year. We were we were pretty clear we wanted to walk before we ran.

Is it related to guidance and I think the update we're giving here to date probably reflects of us starting to job to use the same analogy.

What we tried to reflect in what's included and then I'll try to give a little bit of color here with.

We tried to reflect obviously the encouraging first half trends that you pointed to and what that can mean, we've also tried to factor in the fact that as we look across the landscape and you all see this even more than we do that health care procedure trends broadly feel pretty healthy and maybe even a bit elevated in the first half as.

Some of the staffing constraints that had been an issue in 2022, starting to ease a bit and that enabled accounts to work through their backlog. So our guidance. There were 44 today assumes more of a normalization of that reality in the second half.

It also assumes that we've that we've really not included any material benefit from the finalized LCD in 2023, particularly as it relates to Istent infinite and this ties a little bit into the second part of your of your question, which I'll get to in a second but what we really assume that we remain in a steady state.

We can talk about it more in the context of the LCD process, but there is no certainty in terms of exactly when those will be finalized and once we know that we can obviously better quantify that potential impact that has especially as it relates istent infinite.

We have to factor in the summer seasonality, which we always do and globally in Q3 in particular and that's been more pronounced in recent years coming out of Covid.

And then the ongoing competitive dynamics, including from Alcon as well as some of the more invasive but proud of procedures and that really ties into your the second part of your question I think.

The Ltvs as proposed.

I wouldn't say, we've seen much of an impact at all from those in the context of what's happening here and now in the marketplace. They are proposed they havent changed any of the coverage rules for these products.

And so until they do I would expect that surgeons largely continue to operate.

As they have been on the basis of the reimbursement that covers that exists today.

Yes.

Okay, very thorough on that I'm going to squeeze in one more just.

An investment for shareholders. So so that's what we're doing so I wouldn't be.

Draw the wrong conclusions I would tell you that we have a tremendous capital that will employ.

Towards the significantly successful or target launch of I dose that is is a question of timing expect some of that core occur later this year and on into 2024, and so we understand the order of magnitude that this launch could me for the company.

And so I can assure you that will make the necessary capital put the necessary capital behind this launch.

To make it a success.

Understood.

Thank you.

Thanks, My Name's Graham.

Your next question comes from the lineup Larry <unk> with Wells Fargo. Please go ahead.

Hi, This is Charles on for Larry.

Congrats on the nice quarter first question, a quick follow up on guidance, what or if you could get a little thoughts on.

<unk> sales through the back half of 2023, you mentioned.

That you mentioned a little summer seasonality. So I don't know if that's implying that Q3.

Little lower in queue for is a bit of a step up but maybe some thoughts on that and then I have a quick follow up on iOS.

<unk> I think that's you you hit it was really the way you ask a question if you look.

Implied the guidance as the second half look somewhat like the first half.

And that the you know I think this summer seasonality dynamic and we've seen in recent years plays itself out here in the third quarter.

The last month of the quarter tends to drive a lot as people return back to doing procedures.

Olson way on a global basis, So we'll see how that plays out but at this point, yeah, I I would expect that the Q3 Caesar.

Bit of a downtick from that summer's seasonality.

And then that recovers in Q4.

Great and then thank you and then a follow up on Idose. So do you still expect no restrictions on repeat repeat procedures.

Approval and then also you said you plan to work towards reimbursement for items in the office setting how how <unk> how long do you think that could take after launch and do you think that's that's a big catalyst for adoption.

Charles I'll be happy to take those so your first question was on whether or not we expect to be restricted at all and exchanged and so we've answered is performed continue to.

To express confidence that that won't be an imposition for us and if you. If you recall or exchange study that we did by re concerning patients and the phase to be studied.

33 patients that we were falling over five years, and we saw no no real substantive differences between.

Treatment and control and so we feel confident that we will not have a restriction going into that study.

Now with regards to how we will go to launch again, it's important that we take this in a two full way one I want to provide site of surface.

Offering our searches to be able to do the idose both in the office and certainly in the AFC.

Call that as we get to launch.

We will be approaching Max to establish inappropriate professional fee there'll be an assignment to an APC.

That will that will then.

B typically will see that over the first half of the year on the drug payment side, you'll call will have a miscellaneous C code at lunch and we will file for a hix picks code, which in my experience and others typically takes two quarters to be able to get a former J code that J code will apply to both asc's.

And to in offices and so when we talk about an office use which we believe will become.

An important part of the use of high dose over time.

We'll need to do is to establish non facility payment and that's done by approaching the Max individually, we will need to get society specialty Society support Kols.

And what we'll do is we'll develop a practice expense work up which will be the basis for which these max will be able to consider what the professional fee will be for non facility payment in office and as you recall typically that professional fee payment is higher than the non facility because there is no.

And the non facility because there is no facility payments. So the professional fee would expect will exceed the professional fee on the side.

This is something that happens Shirley it happens case by case as we go forward with the Max so it'll be something that will occur over time.

As I said now probably since we've had our IPL. This will be an important component longer term to give the physician the physician's the ability to use in office as the site of service or what we believe will be a game changing technology.

Great. Thank you.

You're welcome.

Your next question comes from the line of George salaries with Stevens. Please go ahead.

Thanks for taking the question and congrats on on a great quarter.

Sticking with I know, you've obviously had some success with ice can internet adoption. Despite working through some of the the reimbursement processes with the Max but I'm just curious as it relates to Idaho is there anything we can kind of take from that commercialization of iPhone infinite and apply to be expected to commercialization of I dose.

I know, we're still waiting on approval and it's a little bit more complicated than infinite and a lot of ways, but you know what what could demand for idose look like prior to reimbursement fully coming together and how do you expect that sort of progress.

Yeah, I mean, I think it's hard to draw a direct line between the experience with one product Chris the next given they have different <unk>.

Labels are different indications in different patient populations that they're targeting Ah I think the the thing that you can take from infinite is.

Our commitment to doing it the right way to being methodical and the way we launch these products and the way that we train our surgeons and the way that we make our way through the reimbursement process over a couple of decades, we've earned a lot of experience and going through this process of launching new products into into white spaces and I think.

<unk> in some respects will be another example of that as we go forward.

Think we there's enough variables in play there that.

We'll address what we expect from 2024 for example, when when we get to our guidance for that year versus getting ahead of that now at this point.

Okay that that makes sense [laughter], maybe switching gears a little bit you also recently announced an agreement with radius X R and I'm just curious if you could get some additional details on that day deal any incremental costs, you're expecting this you're associated with that and then also maybe once assumed from that.

Guidance.

Yeah.

So I'll be I'll start in reverse order I think from a <unk> standpoint is pretty immaterial I wouldn't call it anything out and the <unk> and and from a from a guidance perspective, yeah. It's factored in there I wouldn't call that has a particular material driver of the guidance at this stage.

But what really is behind radius and why we're doing it is is we've talked about some time about our role in pioneering these markets and growing the markets and part of that is trying to make sure that we're helping to democratize testing and screening in a way that identifies these patients and <unk>.

<unk> them wherever they are first presenting themselves from our side of service standpoint, whether it be an optometrist, whether it be retail optometrist like a walmart optical or or ultimately obviously in the MD setting that that they are getting access to technologies that can efficiently and easily test them for the site.

Nick diseases, and hopefully identifying the more early.

And getting them the kind of care that they that they need and deserve.

Sooner rather than later today as it stands you know in many of these optometry centers in particular alongside of even some modest they they're limited in terms of the diagnostic capabilities of when and where they actually deploy the diagnostic technology. They have to really test these patients and so our hope is that by putting some.

Incremental muscle behind the technology that we think is truly <unk>.

Best in class and radius that we can help democratize and really drive that screening and diagnostic side of the equation.

Okay. That's really really helpful. Thank you all for the time and congrats again.

It's George.

Your next question comes from the line I'm Joanne.

Please go ahead.

Can afternoon, and thank you for taking my question.

I'm curious about two things one is at what stage are you comfortable sharing with us.

But the a S. P. S for I desk has we've heard a number of different numbers tossed around and then the second question. I have is <unk> is really strong and I'm curious whether or not there is pent up demand or in your region. You opened up any stocking and would you be.

Surprised if this can continue for the remainder of the year. Thank you.

Thanks to you and I'll take the first part of the question so with regards to high dose pricing.

We are still contemplating what that price will be in and as I've said, all along we are being highly contemplative. We're looking at Markov transition probability analysis burden of illness analysis on factoring in what the rest of the charge over $2000 in a J code performance of therapy and I'm also.

Looking at surgical pharmaceuticals, both on the end tears segment side and on the rebel side.

Which I think will guide me and the basis for what I think will be a fair and compelling price.

I would expect you not to hear that price until we are FDA approved.

And so we will be contemplating that will take our time, we'll make sure we get it right and then and then some short time. After FTA approval, you will you will hear and will disclose the pricing for items.

And on the the international side, it really wasn't other standout record quarter, and 27% constant currency growth year over year and 6% sequentially.

It was broad base Joanne across all of our regions.

Really I think reflects that strong execution by our teams globally. If you think about it we're really pioneering a change the standard of care in each of these markets just like we've been doing in the U S for some time and all of the various markets that we're in today are in a little bit different stage of that and and all the things that you know we've done here to build a mixed marketplaces.

Exist today in terms of the broader support both in the community the surgical treatment algorithms.

The reimbursement dynamics in each of these all these markets are a little different places. So we're still making our way through really building and virtually all of the markets. We're in we're still very much in the growth phase of that business, we didn't add a new regions or any unique drivers here I think probably.

At the beginning of 2022 from a gross standpoint, there was still a little bit of lag effect coupled regions.

Regions still felt a little touch of Covid, They probably had those numbers a little depressing a year over year growth standpoint, but but all in all we couldn't be more pleased with the execution of the team I do expect that similar to what we talked about in terms of the macro guidance, you'll probably see a little bit more normalization of I think the same dynamics that have been please.

<unk> true here in the in the U S from Ah.

Staffing levels and getting back to business normal and clearing some of the backlog inherent in our guidance is that we will see a little bit of normalization. There in the second half not just in the U S. But globally. So we would expect that that business from a growth perspective would come in a bit in the second half relative to what we've experienced thus far in the first.

[noise].

Thank you.

Your next question will come from the line of NATO, Brian with Piper Sandler. Please go ahead.

Hey, this is Phil <unk>. Thanks for squeezing up then at the end and congrats on another great quarter, just for starters and I don't want to belabor the point here, but laying the groundwork for in early 2024 launch in Idaho, how are those conversations with back going as far as using the currently available miscellaneous J code and what I'm really <unk>.

To get at is.

That requires that preop process, so our doctor aware of how that process works and what might early utilization look like they're.

Sure Phil.

I think.

Couple of things first you can imagine that.

The reimbursement and how the dynamics with miscellaneous codes and all those various things go specific to the product.

The vast majority of our customers have been through this before in some capacity some are better at that process than others and all I can tell you is that we're.

Very prepared for that part of the launch and educating our.

Our customers as we go through that getting them comfortable with how that will work.

Ultimately as you can expect many of them will want to see it and see themselves do it successfully so we do expect that they themselves will will walk a bit before they run as as I would like to say.

But but it's something we're prepared to take care of an educated launch on our customer customer basis, but getting ahead of it in their knowledge today is more based upon their broader experience in the industry that is specific date us.

That's helpful. And then just one follow up on R&D I noticed and I know you called out some initial development adjustments and some earlier stage pipeline programs and I don't I don't think I've heard anything specifically called out there I just wanted to check if there was any impact to idose dot Trs.

Yes.

He felt this is Alex I was just kind of comment on that and it goes kind of what Tom was earlier.

Speaking about which is.

Ah sat down and we looked at our capital position, we looked at our pipeline looked at the Idose launch and what we needed to invest in for that activity. So we've started to make decisions around allocating those resources appropriately in order to really full suddenly prepare for and invest in the idose launch that's coming up.

I don't think we've gotten much more granular than that.

Yeah.

But I don't think we've said anything specific to any individual programs, but you can imagine that the idose franchise remains a top priority for us not just the first generation, but I heard you referenced T Rex and sort of the extended release portion of that and we continue to move forward full steam ahead on that front.

Makes sense. Thanks, so much.

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

Hi, guys. This is Joseph honored David.

Maybe one a nightstand.

In terms of adoption for fries and Internet.

Current I spent inject using this.

Yes, Joseph I think you are always going to see a little bit of that but you've got to put it in the context of the stage of where we're at I think at this stage. The majority if not the vast majority of that adoption utilization expansion. The standalone utilization et cetera is happening happening within customers that have been glaucoma.

Customers for some time that tends to be how you launch these things.

Anyway, and I think it's true with ice and infinite now as we continue to move forward and establish reimbursement coverage.

Certainly hope that it will expand more particularly in the glaucoma community, where this product should be well received and for folks who made today and you spend their time, a little bit more of the late stage procedures.

Tubes, and drabs and other devices that work at that stage.

You hope that that obviously they'll start to adopt iced an infinite as the coverage really picks up on the reimbursement side and they're able to run free.

[noise], Okay fair enough makes sense, maybe maybe a bigger picture question.

With.

With the products you have approved today.

What would you say your longterm growth profile is.

What do you think the glaucoma business can grow longer term you talked about perennial house growing Nino, 8% to 12% is that <unk>.

Still kind of your thinking or.

Reimbursements starts to get more specific could there be.

Upside to that to that.

Well I think there was a couple of different parts that.

Within your question specific to the corneal health business I think we we continue to think about that is at the moment of high single digit type growth franchise. We're encouraged by what we've seen so far in the first half will.

We'll need to see a little bit more from that business before we upgrade that if you will in terms of our growth expectations, but I think more importantly, the macro question that you're asking is to me. It's it's harder are staged to put a number out there and say we think we can grow X. The reality is is that we've been operating in.

Both sides of our business use glaucoma, and Correale health and for that matter International glaucoma inside of still relatively small markets versus what we're about to start embarking on when you think about the size of the combo cataract opportunity relative to what we can potentially achieve.

<unk> as we drive the intervention of glaucoma change in standard of care, if you will and the sheer number of patients who could benefit from that mindset relative the combo Catterick setting I think we're very it's why we're very excited about what this next chapter means for glaucoma, and where we're going to go up and I think in a similar fashion.

<unk> represents that same type of of transformational moment, if you will for us on the cornea side as we get closer and closer to hopefully that approval and launch. So we have a lot of reason for optimism about what that long term growth trajectory looks like.

Swimming in a much larger and deeper ocean as we as we move forward here and I think that's going to hopefully benefit us and you all shareholders.

Okay, great. Thank you very much thanks.

Thanks for taking our questions and congrats on a great quarter.

Your next question will come from the line escape like many with Oppenheimer. Please go ahead.

Hi, guys. This is a run on for Steve Congrats on the corner.

Just wanted to ask you guys.

<unk> task, you mentioned potential amortization of procedure volume in the second half of the year. Following what may have been work down on the backlog in the first half. So can you guys talk about a little bit about what you're hearing from the field on that front and what.

What do you think we are in terms of the backlog.

Yeah, right I think in some ways, it's what we're not hearing from the field and so if you think about it last year and we call. This out on several of our calls what we were hearing from doctors in the field was a fair amount of feedback around staffing levels and constraints and.

The turnover and the inability to hold and routine Folsom staff that enabled for example, doctors who have QR base to work in both simultaneously.

You were pretty consistently hearing that theme and I think as we turned the corner into this year as soon as we've made a long we've heard less and less of that if at all quite frankly I'm sure is obviously still exists in pockets, but it's less pronounced in I think.

The broader point around procedure trends in the backlog is almost more of a macro one when we look across the landscape and obviously you cover a lot of different industries and companies and we saw this in the first quarter you see it again the second.

It feels like in general procedure volumes have been pretty robust and I think that why can't point to any specific number or item.

Knowledge here within makes procedures in.

In general it feels like folks have been back to work and they've been working their way through and net net they're making their way through whatever backlog tended to exist. It's.

It's impossible to know exactly when that will normalize, but we felt like we made more sense to make the assumption that whatever elevation existed in the first half but that it may not continue in the second half and if it does obviously that will accrue to all of our benefits.

Oh, that's great.

And just one small follow up on Idose do.

Do you guys think there's any chance that a panel will be called for this are.

Already too late for that to happen.

Yeah.

Hey, Ron I'm happy to take that question services.

Been asked a few times before but happy to address it again [laughter]. We we currently do not believe that there'll be an advisory panel that will be requested and so.

Right now that we're moving towards our produce a date everything's on track going very well.

We just finished a pre pre approval inspection, which we believe went very very well and we will expect to file a written Congress comp.

Confirmation of that in the next few weeks and as well the FDA is meeting.

<unk> and CRH bereavement cycle review and will expect to receive some interim questions, which which will hopefully put us and really advantageous position going into the produce a date and so the short answer. Your question is no. We don't expect that there'll be an advisory panel.

Thanks, guys Congrats again.

And your next question comes from the line of Alan Gone with J P. Morgan. Please go ahead.

Hi team congrats on the gate quarter, I think a lot of the questions have been asked already so I'll just keep it to one but when I think about idose I fully understand that it's kind of hard to predict the success, but when I think about the competitive landscape. The fact that there is a.

Somewhat comparable product the profiles are clearly very different by somewhere.

Comparable product on the market already how should we really think about maybe idose benefiting from that as a secondary player whether or not we might take competitive dynamics from that early or if it is more just about expanding the market opportunity and kind of establishing hydrus add the differentiated solution. Thank you.

Well I'm happy to take the first part of this Joe answer as you will that talent I would just tell you that I really don't see tourists.

Something that I would take a lot of <unk>.

Comparability towards I mean, these kind of product that is a bottle roadable.

That is.

His last day in a period of four months relatively short period of time.

As shown a relatively high rate of endothelial cell loss.

Which restricts that's used to a one time use and throws off relatively high rates of hyperaemia as well do it do to us.

<unk> profile of release versus a product such as what we have which is showing basically a safety profile, where we have no one to see or limited to minimal endothelial cell loss that we see and a 3% rate of hyperemia in a product that you've seen in the fees too.

<unk> clinical trial that in 70% of patients as controlling.

Glaucoma at three years, and so I don't see a lot of comparability between the two products I don't take a lot of us tourist as a predicate.

Think where the risks of serves our interest is the fact that they did establish a J code of $2100 for four months of therapy, I think that will will serve as well going into the pricing for this product I will tell you. That's given some of the limitations of the risks I might draw some some high optimism.

Even with these limitations in place there has been a relatively strong appetite at least for the concept of ensure camera with drug delivery. So yeah. I just had I think the two things that benefit us in the Idose launch.

One specific address the one one not I think anything today.

That's helping drive that interventions glaucoma mindset is a positive.

As we continue to think about.

Driving that change in standard of care. The fact that tourist an alligator in their reps have been out talking about that.

Alongside all of the efforts that were in muscle that we're putting behind that is you know I think that continues to hopefully turn the broader industry towards what we think is the optimal course of of care for these patients.

The second thing is obviously, it's less about any competitor I think it's more about just the state of the industry you think back to when glaucoma first launched Migs.

Migs and with ice and there were a lot of basic blocking and tackling even in the combo catterick setting that the company had to go through around re.

Indicating and teaching surgeons surgical techniques that allowed them hadn't done since the residency and so as we go into any of these things, whether it's ice an infinite or idose.

The good news is news is that now surgeons understand much more fulton leave the angle based surgery and the various technical aspects and so it's much more about the features and benefits the safety profiles times talking about the individual product and what that use case is for the appropriate patients that are on <unk>.

<unk>, so I think that we enter into it with a far more educated marketplace in terms of interventionism and and we're going to we're going to obviously do our part to drive that far even faster.

And our final question will come from the line of Anthony <unk>. Please go ahead.

Thanks congratulated quoting here, maybe two quick ones one is on the on.

On the core make space and just wondering if you have any views on on how it could shape up into next year.

If non implantable mix procedures or become a non covered.

Procedure across certain Mac territory's next year, so how do you see the core space.

Volvent if that scenario plays out and then the second one real quick but just beyond the Idose label is there anything of note just on the latest fees from cloud costs on how you're thinking about duration of the implant what can be included in the label, Florida duration on Idose. Thanks.

Okay and they all started then tompkins can jump in on the second part of that.

I think.

As it relates to the proposal Cds and outcomes.

We're prepared for any scenario there that that emerges in and I'm not sure I would hazard a guess at this stage nor.

Attempt to quantify that because there's so many different factors that could play out.

As these things.

Are finalized hopefully in the coming months, if not if not quarters.

Sure.

Our focus is on building a healthy and growing market.

That benefits patients and we think supporting surgeons, making clinical decisions and not payers is optimal in that regard and so.

Really at the end of the day, if you take a long term view I think we would all agree that getting a traditional glaucoma iced an infinite and idose right is probably far more material to our future than those near term dynamics and while I understand and appreciate the question I think that's where our focus of that.

And that damn I'm happy to you and to address the second part of your question. So with regards to the label again, we are under a 505 b two regulatory path and so the likely label that in our expectation would be that it would say something effect.

For the reduction of interactive pressure and ocular hypertension.

An open angle glaucoma patients so a significantly wide open label, which will be based really on the three months Noninferiority primary efficacy endpoints that we established as a pivotal trial, we do not expect the label to specify our extended duration for that we I think we've been depression and extending the fees to be stuck.

The three years that will become the important components three year three cohort study, we did with the phase two be will allow us to approach payers to be able to substantiate the nebo for coverage and payment.

Alright helpful. Thank you.

You're welcome.

I will now turn the call back over to the company for any closing remarks.

That will conclude today's conference call me. Thank you all for joining and you may now disconnect.

[music].

Mmm.

Mmm.

[music].