Q4 2024 Glaukos Corp Earnings Call
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Speaker Change: 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.
Speaker Change: Joining me today are Glockos Chairman and CEO Tom Burns, President and COO Joe Gilliam and CFO Alex Thurman. Similar to prior quarters, the company has posted a document on its investor relations website under the financials and filings quarterly results section titled quarterly summary.
Speaker Change: This document is designed to provide the investment community with a summarized and easily accessible reference document that details the key facts associated with the quarter, the state of the company's business objectives and strategies, and any forward statements or guidance we may make.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: These include statements about our plans, objectives, strategies, and prospects regarding, among other things, our sales, products, pipeline technologies, and clinical trials.
Speaker Change: U.S. and international commercialization, market development efforts, the efficacy of our current and future products, competitive market position, regulatory strategies and reimbursement for our products, financial condition and results of operations, as well as the expected impact of general macroeconomic conditions.
including foreign currency fluctuations on our business and operations.
Speaker Change: 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.
Speaker Change: 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 Gloucosta's ongoing results of operations, particularly when comparing underlying results from period to period.
Speaker Change: Please refer to the tables in the earnings press release available in the investor relations section of our website for reconciliation of these measures to their most directly comparable GAAP financial measure.
Speaker Change: With that, I will turn the call over to Galapagos Chairman and CEO, Tom Burns.
Tom Burns: Thanks, Chris. Good afternoon and thank you all for joining us today. Today, Glocko's reported record. Fourth quarter consolidated net sales of $105.5 million, up 28% versus the year ago quarter.
Tom Burns: These results reflect a continued acceleration of our business and cap off a successful year of global execution, both from a commercial and development perspective, leaving us ideally positioned to sustain our momentum and execute our strategic plans in 2025 and beyond.
Tom Burns: For the full year 2024, consolidated record net sales of $383.5 million grew 22% versus 2023.
Tom Burns: We have also introduced full year 2025 net sales guidance range of $475 to $485 million.
to transform vision by pioneering novel.
Tom Burns: droplets platforms that can meaningfully advance the standard of care and improve outcomes for patients suffering from sight-threatening chronic eye diseases.
Speaker Change: At Gold Coast, we are in the business of pioneering entirely new marketplaces within ophthalmology. Innovation is at the core of everything we do.
Speaker Change: Our mantra, We'll Go First, embodies our commitment and determination to take chances, push the limits of science, and disrupt the legacy treatment paradigms in glaucoma, rare disease, and retinal diseases through our pursuit of game-changing technologies.
Speaker Change: and reduce drug burden for the benefit of physicians and patients.
Speaker Change: Our goal to advance and improve glaucoma treatment by driving earlier intervention continues to build momentum as we educate surgeons and thought leaders globally to organically drive this broader evolution in the standard of care for the benefit of patients.
Speaker Change: While we remain in the early stages of these IG efforts, we are encouraged with the increasing levels of clinical interest for this paradigm-changing evolution.
Speaker Change: Within our U.S. Glaucoma franchise, we delivered record fourth-quarter net sales of $56.3 million on strong year-over-year accelerating growth of 45%, driven primarily by growing contributions from IDOS-TR.
Speaker Change: As we pass the one-year anniversary of our controlled launch of ITOS-TR, I could not be more pleased with our team's execution of our plans for this first-of-its-kind intracameral procedural pharmaceutical that was designed to continuously deliver glaucoma drug therapy for up to three years.
Speaker Change: Over the course of 2024, we accomplished several key objectives that together create a strong foundation to support our future high-dose growth plans that include, one,
Speaker Change: developing and implementing a superlative training program to support a growing number of trained surgeons and accounts.
Speaker Change: Two, building an expanding set of clinical literature now consisting of nine different peer-reviewed publications highlighting IDOS-TR as a transformative new treatment alternative for patients suffering with glaucoma and ocular hypertension.
Speaker Change: And three, establishing key market access objectives to create an optimal reimbursement environment through a permanent J-code, a facility fee, a published ASP from CMS, building professional fee coverage and payment from MACS, and expanding commercial and Medicare Advantage coverage.
Speaker Change: Most importantly, clinical outcomes and product feedback from a growing number of cases and trained surgeons.
Speaker Change: continue to be very positive and reaffirms our view that with the launch of IDOS-TR, we are pioneering a brand new therapeutic category that has the potential to reshape glaucoma management as we know it today.
Speaker Change: Coming off of our national sales meeting earlier this month, the energy and excitement from our sales team and commercial organization Varitos TR, and our broader interventional glaucoma strategy was profound.
Speaker Change: Our primary near-term focus remains on broadening market access among MACs, commercial, and Medicare Advantage payers. While there is certainly more work to do here, particularly as we expand efforts into the commercial arena over the course of 2025 and beyond,
Speaker Change: We are encouraged by the overall progress our teams are making to support increased reimbursement confidence through more streamlined and consistent J-code coverage and payment in the majority of MACs to date with more to come.
Speaker Change: Alongside this, we are also making good progress securing professional fee coverage and payment.
Speaker Change: with three of the seven MACs, now including CPT code 0660T in their professional fee schedules at rates in line with our expectations and generally consistent with comparable stand-alone glaucoma procedures.
Speaker Change: As noted in the past, we expect increasing adoption as reimbursement confidence is gained by our customers over the course of 2025.
Speaker Change: This will further be supported by our plan to accelerate marketing investments as the universe of trained surgeons and accounts continue to expand.
Speaker Change: While we advance our IDOS-TR efforts commercially, we also plan to expand the robust body of clinical evidence for IDOS-TR.
Speaker Change: On that front, we recently announced several positive IDOS clinical studies. First, a new 36-month follow-up analysis of IDOS-TR's two Phase III pivotal clinical trials demonstrating
Speaker Change: Sustained substantial ILP reductions as approximately 70% of high-dose TR subjects remain well-controlled.
on the same or fewer ILP-lowering topical medications.
Speaker Change: and 36 months after a single administration of ITOS-TR versus 58% of Temelaw control subjects. In addition, ITOS-TR continued to demonstrate excellent tolerability and a favorable safety profile through 36 months across both Phase III trials.
Speaker Change: Second, a new six-month follow-up analysis of a phase four single-arm clinical study demonstrated IDOS-TR implanted in combination with cataract surgery.
Speaker Change: achieved a profound mean IOP reduction of 11.3 mmHg, or 44% at 6 months compared to baseline.
Speaker Change: And last, but certainly not least, we commenced a phase 2b3 clinical program for IDOS T-Rex, our next generation IDOS therapy.
Speaker Change: Eidos-T-Rex, designed to be very similar in size and form factor to the original Eidos-TR, but it has nearly twice the drug capacity.
Speaker Change: Shifting to our U.S. stent business, the utilization of iStent Infinite for glaucoma patients that have failed medical and surgical therapy continues to expand as our ongoing clinical educational efforts and improving market access landscape take hold.
Speaker Change: During the fourth quarter, five of the seven MACs implemented final updated MIGs LCDs that established coverage for ISTN Infinite that is consistent with our original reconsideration request.
Speaker Change: As anticipated, we believe these LCDs did cause some transient turbulence in the market during the fourth quarter and we expect this may continue into 2025 as providers continue to navigate the impacts associated with these LCDs.
Speaker Change: Moving on, our international glaucoma franchise also delivered record net sales of $27.9 million on year-over-year growth of 28% on a reported basis and 29% on a constant currency basis.
Speaker Change: This strong growth was once again broad-based as we continue to scale our international infrastructure and execute our plans to drive MIGs forward as the standard of care in each region and major market in the world.
Speaker Change: Consistent with prior quarters in 2024, our new French Health Authority rebate agreement was favorable to our fourth quarter reported revenues. This year-over- year growth tailwind will sunset in 2025.
Speaker Change: We remain in the early stages of expanding our IG and product portfolio initiatives globally ahead of anticipated new product approvals and expanding market access in the years to come.
Speaker Change: As previously discussed, we expect the trialing of new competitive products in some of our major international markets
Speaker Change: may become an increasing headwind this year alongside the material foreign currency exchange headwinds that emerged at the end of 2024 and have continued into 2025.
Speaker Change: And finally, our corneal health franchise delivered net sales of $21.4 million including Fratrexa net sales of $18.8 million.
Speaker Change: As discussed throughout 2024, our fourth quarter results reflect the growing impact of FRATREXA realized revenues as a result of our entry as a company into the Medicaid Drug Rebate Program, or MDRP.
Speaker Change: Going forward, we will continue to focus on expanding access for caretaker's patients suffering from this rare disease.
Speaker Change: Staying on corneal health but shifting to our pipeline, in December 2024 we are pleased to announce NDA's submission of Epioxa, our next generation corneal cross-linking eyelid therapy for the treatment of keratoconus, a site threatening disease.
Speaker Change: This submission sets up an anticipated FDA approval decision by the end of 2025.
Speaker Change: The NDA submission for Epioxa represents an important milestone for our company.
Speaker Change: as it brings us one step closer in being able to provide keratoconus patients and the ophthalmic community with the first FDA-approved, non-invasive, corneal cross-linking drug therapy that does not require the removal of the corneal epithelia, the outermost layer of the front of the eye.
Speaker Change: We look forward to working closer with the FDA in their pending review process and continue to believe that Epioxa, which has decided to reduce procedure times to improve patient comfort and shorten recovery time, represents a potentially meaningful advancement in the treatment paradigm for patients suffering from keratoconus.
Speaker Change: We are already well underway with a team of cross-functional leaders across our commercial and market access organizations in the preparation and planning of the Epoxy commercial launch targeted for next year.
Speaker Change: It is worth reminding investors that an Ephyoxa approval also provides us with the opportunity to launch a rare disease pharmaceutical supported by the right
Speaker Change: long-term pillars to optimize patient access, a persistent and at times frustrating challenge for us historically with Fortrexim.
Speaker Change: We also continue to advance a Phase II clinical program for our third-generation eye-link therapy designed to use biomechanical modeling to deliver a customized pattern cross-linking treatment tailored to each patient's unique corneal topography.
Speaker Change: Beyond our cross-linking franchise, we continue to prudently invest in and successfully advance our broader pipeline of novel, promising platform technologies that we believe have the ability to significantly expand our addressable markets and fundamentally transform our company over time.
Speaker Change: In addition to our pipeline milestones already discussed, we anticipate commencing a Phase II trial for Ilucian blepharitis, along with a U.S. IDE trial for pressure flow micro-shunt in 2025.
Speaker Change: As we've discussed, we continue to prioritize the cadence of our investments as we strive to strike the right balance of risk-based spending and our capital position now and in the future.
Speaker Change: One such area of planned investment is in our operations function, where we recently announced plans to build an expansive research development and manufacturing facility in Huntsville, Alabama to augment our current infrastructure and support our future expansion plans.
Speaker Change: Over the course of 2024 we successfully executed several transactions designed to further solidify our already strong capital position.
Speaker Change: in principal amount of our convertible senior notes due 2027, leading to a deleveraging and de-risking of our balance sheet, as well as a significant reduction in future cash interest expense.
Speaker Change: In addition, during the fourth quarter, we successfully unwound 50% of our CAP call transactions associated with this convertible node issuance, generating cash proceeds of approximately $53 million for our company.
Speaker Change: As a result, we ended 2024 in a strong capital position with cash and equivalents of roughly $324 million and no debt.
Speaker Change: In conclusion, I'd like to recognize our more than 1,000 employees around the globe for whom our company mantra of We'll Go First is more than just a company tagline. Rather, it is something that defines who we are as an organization and how we lead every day.
Speaker Change: I believe our foundation has never been stronger and our prospects never as promising. We are excited to build upon the growing momentum in our business in 2025 and beyond as we advance our mission to transform vision for the benefit of patients worldwide.
So with that, I'll open the call for questions. Operator?
Speaker Change: Thank you. We will now begin the question and answer session. At this time, I would like to remind everyone, in order to ask a question, press Par 1 on your telephone keypad. We will pause for just a moment to compile the Q&A roster.
Tom Stephen: And your next, and your first question comes from the line of Tom Stephen with Stiefel. Your line is open.
Great. Hey, guys, thanks for the questions.
Speaker Change: Tom or Joe, to start with you, can you elaborate a bit on just the trends you saw with Eidos in the quarter and then maybe observations year-to-date? Obviously a lot of investor focus on the ramp So I guess I'm just wondering if there was anything to call out in terms of new factors that have emerged of late And maybe anything that's different from plan
Speaker Change: Sure. Hi, Tom. It's Joe. I'll start, and if Tom wants to add anything, he can at the end.
Speaker Change: I would really characterize through the quarter another strong quarter of performance, really heads down execution on all fronts. That led to what I believe would be probably a doubling of IDO's TR revenues in most of your models in the quarter relative to what we saw in the third.
Speaker Change: Yeah, I think more importantly underneath that, as we think about the building blocks of what it takes to build the foundation for long-term success and kind of our progress there, first and foremost, we continue to be, you know, really pleased with
Speaker Change: the real world outcomes clinically, and that's further supported by the growing body of peer-reviewed evidence that Tom mentioned in his prepared remarks.
Speaker Change: We continue to see the number of surgeons trained expand rapidly on I-DOS and parallel the education of the office staff on the reimbursement dynamics associated with a procedural pharmaceutical like I-DOS.
Speaker Change: And then on the reimbursement front, you know, we continue to make progress in establishing confidence.
Speaker Change: It's subjective, as I've said before, but I can now say that five of the seven MACs are adjudicating and processing the J code in a normalized and efficient manner. That's really kind of emerged here over the course of the beginning of 2025, but an important, you know, milestone as we continue to make progress on that front.
Speaker Change: And finally, you know, as I think about us, you know, as we move forward here
Speaker Change: will begin to slowly and methodically roll out that commercial and Medicare Advantage policies.
Speaker Change: and support that as we enter into Q2 and certainly in the second half of the year. These are all consistent with what we've been saying now for a couple of quarters and we continue to remain on track.
Speaker Change: From a macro standpoint, as we sit here today, I think we have growing confidence on the impact that iDOS is going to have in the years ahead, including the impact it's going to have on 2025, as reflected in our guidance I'm sure we'll get into here in a bit.
Speaker Change: Of course, having said that, I'll continue to remind folks that as a procedural pharmaceutical, the adoption ecosystem is pretty complex.
Speaker Change: just as it was when we launched Iceland many years ago. So, progress from a reimbursement confidence and established pro-fee schedules are exactly that. They can sometimes take a few quarters to move the needle, but we're excited about what we just did in the fourth quarter and what it means as a setup for 2025 and beyond.
Speaker Change: That's great, Collar. And then my follow-up just on guidance, Joe or Alex.
Can you just elaborate a bit on the components?
Speaker Change: of the 2025 Revenue Guide between the different segments. And any color on the core U.S. STEM business growth as well would be helpful. Maybe it seems like that slowed a bit due to the LCDs and 4Q, but just any color on the components of guidance would be great. Thanks.
Speaker Change: Yeah, it did, Tom. And so let me break down kind of the how to understand, I think, the, you know, the fourth quarter. And then certainly, as we think more importantly, I think the guidance looking forward is specific to the latter part of your question.
Speaker Change: You know, we did see the new, you know, LCD restrictions slow our non-iDOS or stint growth, if you will, down to kind of the mid-single digits for the quarter.
Speaker Change: Obviously, that was more than offset by, you know, the ITOS performance that I referenced in the first part of your question. And so, as we think forward on the guidance around that specific point, and I'll save more color for, you know, other folks to ask the questions on, as we think about that guidance...
Speaker Change: We do expect those LCD headwinds and the volatility that we told you all to expect, as well as the expiration of the Hydrus royalty, to generate flat to maybe even down low single-digit growth for our non-ITOS revenues in 2025.
Speaker Change: And so when you kind of put all that together, and again, we'll talk about it a bit more throughout the call, you'll see that implying our guidance is very healthy expectations around the Eidos franchise and really growing as we've made our way into 2025 and what we think we'll accomplish this year with Eidos.
It's great Colin. Thanks Joe
Speaker Change: Your next question comes from the line of Larry Digelson with Wells Fargo. Your line is open.
Speaker Change: Hey guys, congrats on the quarter. Thanks for taking the questions. This is Simran Onford-Larry. Maybe just to follow up a bit on the 2025 guidance.
So US Glaucoma, it sounds like the core business.
Speaker Change: should continue to see some of those headwinds from the LCDs. Is that
Speaker Change: First, how do we think about cadence in terms of impact? Is that first half weighted and some return to growth in the second half? Or do you sort of expect to see depressed volumes throughout the year? And how do we think about the cadence of IDOs throughout 2025?
Speaker Change: Hi everyone, it's Joe. So maybe I'll start in reverse and just talk about seasonality for a second, then I'll get into, you know, the question around the LCD headlines.
Speaker Change: As you know, having been around the story for a while, typical seasonality patterns for us are underweight in the first quarter and sort of equal weight in the middle part of the year and then pretty heavy into the fourth quarter.
Speaker Change: Clearly, the dynamics around IDOS are going to drive an increasing weighting towards the second half. I would point investors to something that's probably a little closer to, call it 21 percent contribution in the first quarter.
Speaker Change: 23-24% in the second quarter, 25% in the third, and 30% in the fourth, and again that's really largely driven by just the continued expectations of ramp for IDOS within that.
Speaker Change: And that leads into sort of the second part of your, maybe it was the first part of your question.
Speaker Change: You know, I think we certainly would expect that the LCD headwinds would be at their peak here in the first half of the year and start to abate a little bit as we get in the second half. It certainly is getting the fourth quarter where you already experienced a little bit of that headwind related slowing in the fourth quarter of 2024. So I don't think it's just something that's equal throughout the year. I think we should see some improvement over that.
Speaker Change: But, as I said in the prior question, we do expect for the overall year, the combination
Speaker Change: of those MAC headwinds, as well as the expiration of the hydrous royalty, which really begins in the second quarter, driving flat to potentially even down to low single digits growth for the non-hydrous part of our U.S. guacoma business.
Speaker Change: Got it. That's very helpful. And maybe just a bigger picture question on how we should be thinking about EIDO sales.
Speaker Change: You know, if I look at total MIGS procedures in 2024, it looks like there were about 100,000 procedures and the patient population is only about 500 to 700,000 eyes.
Speaker Change: Could the number of IDOS procedures eventually surpass the number of implantable mixed procedures in the U.S.?
Speaker Change: I think over the medium to long term, absolutely, especially with the numbers that you just put out there, but maybe to supplement that, what you just said a bit, I think the overall, I'll call it glaucoma procedures market, which includes MIGS as we define it, maybe some of the more tissue destructive procedures, is probably more like two to two hundred fifty thousand procedures a year that are being done.
Speaker Change: That's largely, today, as you know, done in combination with cataract, and that's where you reference the $500,000 to $700,000 market.
Speaker Change: When we talk about IDOS, or quite frankly, ICD-infinite, or interventional glaucoma overall, you are going after a much, much larger market. So when we think about that, they're north of 20 million eyes at any given time that have either ocular hypertension or glaucoma in the U.S.
Speaker Change: Somewhere in the neighborhood of 13 to 14 million of those are diagnosed at any given time, and around 10 million are actively treated.
Speaker Change: So, Eidos and Iced Infant, as well as a handful of other products with much broader labels, are all going after a much larger market in that 10 million, you know, eye market, versus the five to seven hundred thousand that we've been constrained with in combination with cataract surgery historically.
Got it, that's helpful, thank you.
Ryan Zimmerman: Your next question comes from the line of Ryan Zimmerman with BTIG. Your line is open.
Ryan Zimmerman: Hi, this is Izzy on for Ryan. Thanks for taking the questions. So I just wanted to stick with
Speaker Change: Eidos. So over the course of 2024 and as you guys have rolled out the limited launch, I was curious if you are seeing any share gains from Durista or has the growth you've seen so far been more of expansion of the market and bringing in new users?
Hi Aziz, it's Joe.
Speaker Change: I would characterize it as more overall market growth. I think we're, you know, just as an extension of the prior question that was asked by Simran.
Speaker Change: We're in such the earliest phases of a much, much larger market movement towards standalone interventional care. I think there's a lot of opportunity for many products, including obviously Dorista and iDose to be growing for the foreseeable future in lockstep. I see it as an opportunity, it's less about share. I think that the real question is as an industry, how do we continue to take share from legacy eye drops and the shortcomings that are on that front from a clinical perspective.
Speaker Change: That's helpful, thank you. And do you have any updates on the status of re-administration?
Speaker Change: Yeah, we do. I'll be happy to take that one, Izzy. This is Tom. And so, as I promised investors, this is going to be...
Speaker Change: A process that will take several months. Indeed it has. We've been in negotiation with the FDA for some time. I think we're in a good position now to be able to submit a post-approval supplement to the FDA for appeal.
Speaker Change: during the first half of this year. And the FDA has a statutory guideline of 180 days once we submit that, and so we should know by the end of this year whether we're successful or not.
Speaker Change: gave it a re-administration claim of the IDOS. I remind investors, though, that the Belt and Suspenders approach that we have
Speaker Change: of having I-Dose T-Rex already in a clinical trial and potentially being available during the planning period for commercial entry.
Speaker Change: I see that as a de facto next implantation design product for our current IDOS product. So I think either way we're covered. We continue to be hopeful, but as I have strongly said in the past, we're not counting on anything.
Understood. Thanks for taking the questions.
Speaker Change: Your next question comes from the line of Richard Newitor with Truist Securities. Your line is open.
Hi, thanks for taking the questions.
Richard Newitor: Maybe on IDOS to start here, can you give us any color on, you know, what your doctor installed base of IDOS performing?
Richard Newitor: physicians looks like but and and any anything on on how you're going to progress that training effort I know you at the last quarter said you're you're moving into
Richard Newitor: kind of a full commercial launch, and I just want to get a sense for, you know, especially exiting the quarter and you have some of the reimbursement and MAC progress being made, you know, how should we think about that in terms of the number of docs being trained?
Richard Newitor: Yeah, sure Richard. Thanks for the question. You know that that's we have not gotten that granular around the specific numbers What I can tell you is and there's a reason for that
Richard Newitor: training of doctors that relates to IDOS is not really a primary gaining item for the continued progress of that product.
Richard Newitor: The reality is that there are more than several thousand, as you know, surgeons who have
Richard Newitor: sufficient training on angle-based surgery and eye dose is an extension of that already existing training.
Richard Newitor: Of course, we make sure that they're armed with the pearls around the little nuances of a successful outcome.
Richard Newitor: with the procedure, but that's really not a gating item. We've had a lot of success in training doctors to date across the country at a pretty rapid rate. I would expect that to continue in 2025, in particular as professional fee schedules
Richard Newitor: are turned on and general reimbursement confidence continues to be solidified.
Richard Newitor: But that really has not been a gating item to date.
We do make sure.
Richard Newitor: that, as I referenced earlier, that we're also delivering, you know, the kind of training and education of office staff.
Richard Newitor: on the reimbursement dynamics associated with a procedural pharmaceutical like IDOS.
Richard Newitor: It's a little different, and so we want to make sure that we're there up front, through those early cases, afterwards, and in some ways, that is probably a bigger gating item, if you will, towards the launching and scaling of IDOS than surgical training of the doctors themselves.
Speaker Change: That's helpful. And then a similar kind of question. So we recently pulled some doctors and granted, you know, a small sample, but the utilization rate that iDOS implanters are talking about, even currently as a baseline and where they expect to go,
quite high, you know, in teens per month.
Speaker Change: Absolutely. I mean, I'm not so sure that it's changed markedly except for continuing to improve.
Speaker Change: In most cases, when an account or a doctor comes online, they might do a couple of procedures to a handful.
Speaker Change: and then wait and see, you know, how the payment mechanisms...
play out.
Speaker Change: and as they've got confidence with that, they start to scale from there. We certainly have more than just a handful of doctors, if you will, that are now doing the kind of numbers that you're talking about on a monthly basis.
Speaker Change: and our job at this stage of the launch, alongside of the reimbursement confidence.
Speaker Change: is to turn on both the hunting and the farming element of what I just said, and we're really just still, you know, very much in the early days of a 10-year process, if you will, of
of driving the optimization of both those factors.
We see a wide range.
Speaker Change: And when you have that, and you're going after an obvious patient need, you know where this is ultimately going. And the question is how fast can you turn on the spigots, you know, doctor by doctor and account by account.
Thank you.
Speaker Change: Your next question comes from the line of Ellen Gong with J.P. Morgan. Your line is open.
Speaker Change: Hi, thanks for the question. I guess just touching on the rest of the business, you closed out the year with another really strong quarter from International. You know, I understand that you're losing a bit of a tailwind from France next year, but how should we think about the growth outlook for 2025? And, you know, what kind of catalysts you might have in new geographies or any other epidemics to keep in mind over the course of the year?
Speaker Change: Yeah, that's a good question, Alan. You know, we did have another strong quarter, in some ways surprisingly strong quarter, from our teams internationally.
Speaker Change: delivered broad-based growth of 20% in the quarter, highlighted a year that we grew north of 20% in its entirety. Now, you referenced a couple of things, so I'll give you the puts and takes. I think as we move forward in 2025, implied in our guidance,
is something closer to high single-digit growth for that business.
Speaker Change: The slowdown of that relative to what I was describing really comes from a combination of things.
Speaker Change: first FX headwinds, probably at this point of the earnings calendar. That's not a surprise to anyone here, but it's pretty material on a year-over-year basis as we look at the setup for 2025.
Speaker Change: Second is, you know, potential trialing and trying of competitive product launches in Japan and France.
Speaker Change: That's also not new. We referenced that on our last quarterly call, and we certainly expect as, in particular, Alcon gets their feet underneath them in these markets.
that will see some impact.
Speaker Change: if not transient impact on our business there. And the last is what you referenced, the lapping of the tailwind from the amended French rebate agreement. And so when you put all those things together, that lands us on that sort of high single-digit expectation for the international glaucoma business.
Speaker Change: But that has a broader implication to many of the markets around the world for that product and reimbursement associated with it. So that probably being the single biggest one, I would say, could drive upside to the guides that we just provided.
Got it. Thank you. That's all for me.
Speaker Change: Your next question comes from the line of Mike Zarcone with Jeffries. Her line is open.
Mike Zarcone: Hey, good afternoon and thanks for taking the questions. Just to start, I was hoping you could give us an update on iDose Trio, where you stand there, and you know, any change or give us a reminder of what you're expecting on commercial timelines.
Mike Zarcone: Yeah, I'd be happy to, Mike. This is Tom. And so the iDOS trio, as we talked about, is going to be really a modification of our existing applicator.
Mike Zarcone: and we believe that it will take us right now typically the incision size
Mike Zarcone: for an IDOS implantation. It's about two and a half millimeters.
Mike Zarcone: Our hope is to get that down with IDOS-TRIO somewhere in the neighborhood of one millimeter.
Mike Zarcone: At one millimeter you have a significantly closed chamber, you have very reduced risk for any dehiscence of the aqueous humor coming out of the eye, and you're able to maintain chamber pressure. So for those reasons, we think that proportionally this will be a...
Mike Zarcone: in the favor of moving into the in-office for clinicians, which has been part of our plan during this planning period process.
Mike Zarcone: The FDA has, in the drug division, requires a small safety study to be done.
Mike Zarcone: And so we'll be in the process, mid-year or so, of beginning a small safety study with the FDA. We'll need to follow those patients for a period of time.
Mike Zarcone: And so our expectation is to have the iDOS TRIO product available in 2026.
Mike Zarcone: which is going to align quite nicely with our approach with MACs as we seek MAC-by-MAC.
Mike Zarcone: to establish the appropriate payments for this modified code to be able to give surgeons the reimbursement capability and predictability of doing these in office. So we like what we see, we like how it lines up, and we think certainly by year-end 2026 we'll have this product in the commercial marketplace.
Great. Thanks, Tom. That's helpful.
Speaker Change: follow-up for me. As you think about 2025 guidance, I guess, can you talk about
Mike Zarcone: how you're thinking about eye dose growth expectations just in the context of...
Speaker Change: Is this primarily a continuation of penetrating the Medicare population, or do you have anything baked into expectations for starting to see some benefit from any traction on the commercial side? Thank you.
Speaker Change: Yeah, Mike, I think, you know, you can imagine the lion's share, if not all, of what the expectations at this point in the year are really being driven by the continued
Speaker Change: the professional fee schedules that we expect to continue to come out as we make progress there. That really forms, I'll call it, the foundation of it. As we make our way in the latter part of the year, we do expect some commercial and Medicare Advantage volumes to come in, but I will tell you that
Speaker Change: As you can expect from us, we are going to be very, very methodical in the launch of that. You want to make sure that these customers can master that process of the prior authorizations and the various things that come along with an expansion outside of traditional Medicare fee-for-service. So, we're not going to chase...
Speaker Change: Volume there, we're going to make sure the customers are ready and and then we're going to continue to expand there as we make our way through the year.
Great, thank you.
Speaker Change: Your next question comes from the line of Mason Perico, Wood Stevens. Your line is open.
Speaker Change: Great. Hey, thanks for the questions here. Could you talk about initial doc reception to the phase 4 data in that combo cataract trials? Then there been
Speaker Change: A noticeable change at all in utilization following you guys releasing that and then just as a second follow up there.
Speaker Change: For the MACs where payment dynamics for the J code and PROFI are farthest along, could you just talk about what utilization looks like in the combo cataract setting in those jurisdictions?
Speaker Change: Yeah, hi, Mason, it's Joe. I think, obviously, the data that we've now put out there around combination cataract utility for ITOS is terrific and sort of goes in line with what we would expect given the strength of ITOS as a stand-alone procedure and when you can add a bit of the cataract procedure in it.
Speaker Change: It's certainly taken notice, I think, you know, to the second part of your question, what you see in those Mac zones where you have.
Speaker Change: I'll call it a little bit more seasoned J-code experience around with certainty and now established professional fees, it's growth across the board. You see expansion within the accounts, the number of doctors, et cetera, doing the procedure and doing it largely in standalone.
Speaker Change: But as a percentage of the mix, you're starting to see a little bit more combo cataract, which you'd expect.
So as they've got their sea legs with the procedure.
and confidence in the outcomes.
Speaker Change: and you combine it with this data, it's only natural that they would start to utilize this as well in combination with cataract surgery for those patients that they think it qualifies for. So, we are seeing it, but I would tell you that our reason for being, obviously, is driving the much larger opportunity of interventional glaucoma and standalone procedures, but it doesn't surprise me that falling on behind that is some cataract utilization as well.
Got it. I'll keep it at that. Thanks.
Thanks, Mason.
Speaker Change: Your next question comes from the line of Anthony Petroni with Mizzoho. Your line is open.
Anthony Petroni: Thanks, maybe sticking on just the Mac dynamic here, the two Macs that...
Speaker Change: issued the the pro fees this quarter like you know when did that happen in the quarter a and
Speaker Change: in those MACs, you know, when do you think they'll catch up just in terms of billing cadence to Noridian, and then I'll have a quick follow-up.
Yeah, hi Anthony. I'd say first, the professional fee schedules...
Speaker Change: were announced in mid-January. They were, I think, retroactive to January 1.
Speaker Change: And that's one piece of that equation, a very important one. As you know, it's got to be all in their systems and adjudicated properly. Sometimes that can take a little bit of time before you start to see the recurring, consistent nature of those payments.
But we have started to see that.
Speaker Change: And then, you know, realistically, the impact of the rollout of that, and it kind of goes back to what I was saying earlier, these things don't just happen overnight, there's an education process that goes along there, there's a confidence building process that the account, the doctors see that they're being, you know, properly compensated for their time for the procedure. So it's something that rolls out over many quarters, if you will, in getting that confidence and then expanding that confidence in many more surgeons. We've seen that in reading to your point where the.
Speaker Change: professional fee schedule was was was put out earlier in the end of I think a third quarter going to the fourth quarter of last year and and we're still in the process of making sure that accounts and insurgents are aware of that that update and driving increasing utilization.
Speaker Change: clinically alongside of it. So it's a journey on that front and one that we've done many times in the past and we're we're executing quite well on I think today.
Speaker Change: And just a quick follow-up for modeling, U.S. MiGs and U.S. Corneal, the quad headwinds you referenced to Joe in a prior question, I think the message here is to essentially have U.S. MiGs maybe flat, I don't know if you were messaging down.
Speaker Change: But maybe to just touch on that a little bit, and then just, you know, the comments in the presentation there, U.S. corneal seeing some headwinds too, maybe just a little direction there would help. Thanks again.
Speaker Change: Yeah, maybe I'll just, I'll bring it all back together again for each of the franchises on the on the guidance side You know, you heard me reference earlier the seasonalities. I won't go through that again on the corneal health side you know, I think we believe that the the year-over-year growth headwind from MDRP will probably peak somewhere in Q1 certainly in the first half
Speaker Change: and then ultimately this franchise can deliver kind of low single-digit growth for the entirety of the year. Certainly ahead of what we expect will be an exciting year in 2026 with the launch of Epioxa. This year is all about navigating the continued MDRP headwinds.
Speaker Change: and sunsetting or lapping some of the impact we even saw in 2024 as we make our way through this year.
Speaker Change: So, low single-digit growth in 2025 for cornea. You heard me talk about international growth, glaucoma, and the growth expectations there of high single digits.
And then on the U.S. side...
volatility.
and the expiration of the Hydra's royalty.
Speaker Change: to generate flats that potentially down low single-digit growth for our non-ITOS revenues in 2025. Obviously, that's something we're going to watch closely and continue to update you all on as we make our way through the year.
Speaker Change: But when you put all that together, I think it's going to imply in your models, initial ITOS expectations that are certainly well north of 100 million for the year, which as you would expect are more weighted towards the second half and Q4 in particular, given the continued progress we expect to make throughout the year.
Very helpful. Thanks.
Stephen Leishman: Your next question comes from the line of Stephen Leishman with OpenHiber. Your line is open.
Speaker Change: Hi, this is Ryan. I'm for Steve today. I just wanted to ask a little bit about
Speaker Change: what you guys are seeing in terms of uptake and IDOS in different facilities and systems.
Speaker Change: Given the high cost of carrying the inventory are you seeing that you know any difference between larger and smaller facilities wanting to adopt the device and you have any plans on working working with people to make sure that they can carry it to make it affordable for them?
Yeah, so, I mean, I think first off,
The relative cost and the carrying cost of it.
Speaker Change: You know, we mitigate a lot of that, as is often the case with
pharmaceutical launches as like IDO's.
Speaker Change: with longer dated terms. You've probably seen that in our accounts receivable balance. Again, very common with, you know, pharmaceutical industry standards.
And so the actual, you know, I'll call it cash.
Speaker Change: component of that for facilities, we mitigate that way and we've been pretty successful in doing it.
Speaker Change: I think there's always a delta between the administration and bureaucracy of larger hospital systems and things like that where you have to go through committees and get a lot more sign-offs, if you will, to get going, even when the physician customers themselves are ready and want to do it clinically, versus the nimbleness that exists with
Speaker Change: your average ASC customer, if you will. So I think so far, we've certainly been much more indexed, if you will, toward the ASC side of things, but we certainly expect with the progress we're making that the hospital side of our business will continue to make progress, certainly in 2025.
Great. Very helpful. Thank you.
Speaker Change: And your next question comes from the line of Daniel Antalfi with UBS. Your line is open.
Daniel Antalfi: Hey, good afternoon, everyone. Thank you so much for taking the question.
Daniel Antalfi: I just have a kind of high-level question. Sorry, I'm going to stick on IDOS for a second. You know, when we were working on our initiation, we looked back at iSTEM in the first few years of launching, and it looked like you guys sold over, call it 100,000 iSTEMs in the first three years of launching, but back in 2012, you know, 2012-2015.
So I guess my question is
Daniel Antalfi: What's different about the IDOS launch versus when you launched ICIN? I appreciate it was like 12 years ago, but that it wouldn't happen quite as quickly because obviously at a 13.5 ASP, you know, you don't need a, you know, a high volume to get to pretty big numbers. So just if you could help
Daniel Antalfi: me better understand the difference between the two launches and what the gating factors are. That would be great.
Speaker Change: Sure, and I'll start and candidly, Tom was a part of that first launch, much more than certainly I was. But when we think about the comparison here of the two, there are pluses and minuses in each, right? The most similar element of the launch is that you're pioneering a new category, period.
Speaker Change: and you're doing it in a procedural-based environment. And so that means you're not just delivering.
Speaker Change: That was true back then with ISTAT and the combination of cataract surgery, and it's true now with IDOS in the context of driving procedural, pharmaceutical, and certainly stand-alone interventional glaucoma as a general matter.
Speaker Change: Today we obviously have a lot more doctors, to the point of some of the earlier questions, who are trained on angle-based surgery. So the training element to these physicians, that hurdle is much lower than it was 10 years ago when we were in the middle of really launching iSTEM.
Speaker Change: At the same time, today, you know, we're obviously going after a much larger market, but we know that's going to take, you know, many years to continue to develop and shift the standard of care within it. Those are all positives.
Speaker Change: On the flip side, reimbursement, which was always a consideration back then as it is today, when you're dealing with a more premium-priced, you know, procedural pharmaceutical, is front and center, as are patient economics.
Speaker Change: And I would also add in that, you know, the Medicare Advantage dynamic is much more real today than it was, you know, 10 and 15 years ago.
And so we have to navigate, you know, Medicare-covered lives.
that are covered in a less...
Speaker Change: comprehensive way than traditional fee-for-service and so that that's an impact obviously to the overall opportunities there. But I think when you put it all together you know candidly there's there's a lot of apples and oranges there and it's hard to draw a direct correlation.
I think it's probably better to just focus on
Speaker Change: you know, what you think around the opportunity first within fee-for-service.
Medicare, please stay on loan patients, and combination cataract.
Speaker Change: the kinds of patients that are ideal candidates, whether they're suffering from things like mobility issues or forgetfulness or all the various things that really present more lower hanging fruit for why a surgeon would make the move in interventional glaucoma versus just prescribing more drops.
Okay, super helpful. Thank you so much.
Thank you.
Speaker Change: And that concludes our question and answer session. I would now like to turn it back over to management for closing remarks.
Speaker Change: Okay, I want to thank you all for your time and attention today and and thank you as well for your continued interest and support of Glaucos. Thanks again. Goodbye.