Welcome to Glaukos Corporation's 2nd Quarter 2018 Financial Results Conference Call. A copy of the company's press release issued after the market close today is available at www.glaukos.com. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. This call is being recorded and archived replay will be available online in the Investor Relations section at www.cloudcoast.com.
I will now turn the call over to Chris Lewis, Director of Investor Relations and Corporate Strategy and Development.
Hello, everyone. Joining me today are Glaukos' President and CEO, Tom Burns CFO, Joe Gilliam and COO, Chris Calcaterra. Following our prepared remarks, we'll open the call to questions. To ensure ample time and opportunity to address everyone's questions, we request that you limit yourself to one question and one follow-up. If you still have additional questions, you may get back into the queue.
Please note that all statements other than statements of historical facts made on this call that address activities, events or developments we expect, believe or anticipate will or may occur in the future are forward looking statements. These statements include statements about our plans, objectives, strategies and prospects regarding among other things our products, our pipeline technologies, our U. S. And international commercialization efforts, the efficacy of our current and future products and our competitive market position, financial condition and results of 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. You'll find these documents in the Investors section of our website at www.glaukos.com.
With that, I would like
to turn the call over to our President and CEO, Tom Burns.
Good afternoon and thank you for joining us today. Today, Glaukos reported 2nd quarter net sales of $43,200,000 up 5% versus the year ago quarter and up 8% sequentially. Given our solid performance through the first half of this year, we are raising our 2018 net sales guidance range to $162,000,000 to $166,000,000 versus our previous range of $160,000,000 to $165,000,000 Joe will discuss our financial results and outlook in more detail later in the call. In addition to our strong financial performance in the second quarter, we also achieved a pivotal milestone by obtaining U. S.
FDA approval of the iStent inject, our next generation trabecular micro bypass device. This approval, which we announced in June, represents a major step forward in the pursuit of our mission to transform glaucoma therapy and further strengthens our position at the forefront of microscale innovation. Coming less than 6 months after initial PMA submission, this approval came ahead of our expectations as you know and also ahead of a competitor's application that was submitted months before ours. I could not be more pleased with the dynamics that led to this exceptional outcome, namely the thoroughness of our PMA submission, the strong capabilities of our clinical and regulatory organization and our constructive working relationship with the FDA. We truly appreciate the diligent work of the FDA to conduct a thorough, thoughtful and efficient review process.
We are also grateful to the investigators and patients who participated in the clinical trial and helped to bring iStent inject to the United States. As a reminder, iStent inject is designed to optimize the natural physiologic outflow of aqueous humor by creating 2 patent bypasses through the trabecular meshwork, resulting in multi directional flow through Schlemm's canal. It includes 2 heparin coated titanium stents preloaded into an auto injection system that is designed to allow the surgeon to precisely implant stents into 2 trabecular meshwork locations through a single corneal entry in a straightforward click and release motion. The iStent inject is based on the same fluidic method of action as our 1st generation iStent, which has been implanted in more than 400,000 eyes worldwide since its introduction and has earned an outstanding reputation of demonstrated efficacy and safety. The iStent inject is quickly establishing a similarly strong track record.
It is already commercially available in numerous markets outside the United States where more than 30,000 have been implanted to date. In addition, we've already have 10 peer reviewed clinical publications and various additional studies presented at major scientific meetings that continue to confirm iStent inject's ability to achieve sustained IOP reductions that are equivalent or better than U. S. Pivotal trial results. Given these results, the elegance and facility of the implant procedure, the rapid rate of adoption in international markets and recent industry surveys that reveal profound surgeon awareness, appetite and interest, we believe the iStent inject will be a compelling new treatment option for U.
S. Ophthalmic surgeons. Over the course of 2018, we've been scaling manufacturing and building necessary launch inventories, finalizing marketing campaigns and readying the U. S. Sales organization in anticipation of iStent inject U.
S. Commercialization. We have completed the final labeling paperwork with the FDA and trained surgeons have already successfully completed several initial iStent inject procedures. We will begin our full commercial launch activities later this month, following the completion of our final sales force training activities that are currently underway. Our initial focus will be on converting our existing installed base of trained U.
S. IStent surgeons. We will follow the same blueprint that proved successful in the iStent launch, a controlled, methodical, tactical launch that relies on superlative sales rep training and skills transfer to the surgeon to achieve optimal procedural proficiency and patient safety. As we've always said, good outcomes translate into good long term utilization. I'm delighted with our team's preparations to this point and believe we have built a comprehensive and thorough launch plan that we are beginning to execute.
Joe will provide additional implications to consider around the launch of iStent inject later in the call. IStent inject represents the first of 5 distinct pipeline products targeted for U. S. Commercialization over the next 5 years, which we refer to as our 5 and 5 growth strategy. Regarding this pipeline, we have some exciting new developments we'd like to share with you today.
Since unveiling the initial iDose travoprost Phase 2 data last September and further validating the platform's viability in early 2018 with an interim cohort showing sustained efficacy through 12 months, the response from the ophthalmic community has been extremely positive. The encouraging sentiment building around iDose Travoprost was increasingly evident at the April ASCRS meeting where the full data set was presented to the broader surgeon community for the first time. Based on overwhelmingly positive surgeon feedback, we came away from ASCRS with additional confidence that the commercial prospects for a viable continuous glaucoma drug delivery treatment option are substantial. It is now abundantly clear to us that achieving the earliest possible U. S.
Commercial entry date for iDose Travoprost should be our highest priority, given its potential for a broad label that could serve 3,000,000 USIs annually. We believe this can provide the optimal return on investment for Glaukos and our shareholders, while advancing the standard of care for the ophthalmic community and glaucoma patients. To that end, we're accelerating our clinical development work with idotestravoprost in an effort to expedite the pivotal studies required to support our NDA submission. Based on a combination of activities already undertaken in those planned, we are now targeting FDA approval for iDose 1 year earlier than our previous target, now in late 2021 to 2022 versus late 2022 to 2023 previously. The Phase 3 iDose Travelpros clinical program consists of 2 concurrent prospective randomized double blind pivotal trials, both of which will now be primarily at U.
S. Clinical sites rather than split between U. S. And OU sites as previously communicated. In order to expedite patient enrollment for the 2nd required concurrent iDose trial, travoprost trial in the U.
S, we have immediately repurposed our 20 plus iStent SA investigator sites and recruited additional investigators that are eager to participate. We plan to enroll a total of approximately 1100 ocular hypertensive or open aggregate glaucoma subjects across both U. S. IDose pivotal studies. We're happy to announce this strategy is off to a great start We've already begun patient enrollment for both of these pivotal studies.
The European investigators that were previously planning to be involved in the second iDose pivotal trial to support U. S. Approval will now be redirected to perform additional planned clinical studies that will support iDose European approvals, reimbursement and other local market support activities. In addition, our efforts to seek regulatory approvals for iDose Travelprops in Japan continue to progress as planned. The trade off of this strategic decision is to recommence recruitment of iStent S.
A. With the same U. S. Investigators once the iDose Travoprost trials are fully enrolled. By doing so, we now project the commercial launch of iStent SA towards the latter part of the planning period by 2023.
While we actively recruit our iDose pivotal trials, we will also begin recruitment for our 510 pivotal trial for the iStent Infinite, our 3 stent standalone product for advanced and refractory glaucoma patients. Following the submission of our IDE application to the FDA at the beginning of 2018, we are delighted to announce that we have finalized the trial design and protocol with the FDA for a prospective multi center single arm clinical trial and expect to begin enrolling these patients over the coming months well ahead of our initial timing expectations by year end. We continue to target FDA approval for iStent infinite in the late 2020 to 2021 time period. Finally, the 2 year patient follow-up in the pivotal trial for iStent Supra, our suprachoroidal shunt will be complete in the Q1 of 2019 and we continue to target FDA approval in 2020. As you can see by the investments we're making, I'm excited about what we're accomplishing on the pharmaceutical side of the business.
If ultimately FDA approved, we believe iDose Travoprost will not only be instrumental in addressing the challenges of patient non compliance with topical glaucoma medications, but also pave the way for a new treatment algorithm where surgeons use iDose alone or in combination with other therapies, including our suite of surgical flow devices to more effectively manage patients' IOP. What's more, we believe the powerful iDose travoprost data available thus far underscores the potential of our iDose drug delivery platform to produce future generations of sustained therapies for glaucoma and potentially other ocular diseases. To that end, we are happy to announce that we've entered into a pharmaceutical development agreement with D. Western Technology Institute to begin joint research efforts using compounds from their Rho kinase also known as ROCK inhibitor compound library. D.
Western is a highly respected in the industry as the preeminent research organization for proprietary ROCK inhibitors with a proven track record in drug discovery. We're excited to commence the initial phase of this collaborative research effort to explore potential new compounds that may be used on our novel iDose drug delivery platform. Our growing team of seasoned scientists, chemists and other experts, most of who have extensive prior experience at leading pharmaceutical companies remain actively exploring novel sustained pharmaceutical treatment options and pathways. We believe that this collaboration with D. Western will only help to further expand our pharmaceutical capabilities moving forward.
Moving on to the continued commercial progress in our direct international markets. Momentum continues to build internationally with Q2 2018 OUS sales growth of 63% year over year. Brazil, Germany, Japan and the U. K. Drove the majority of international year over year growth this quarter.
During the Q2, we are delighted to learn that after a more than 5 year process, the French Health Authority has designated iStent inject to be registered on the list ensued or add on list, which provides hospitals with the required financial reimbursement coverage to use a new technology. This inclusion was based on the evaluation of the National Committee for the Evaluation of Medical Devices and Health Technologies. With iStent inject now included in the list ensued, the next step will be to work with the French Ministry of Health's pricing committee to determine pricing, which we hope to finalize sometime next year. While we do not expect this development to have a material financial impact this year, we believe it represents a meaningful longer term opportunity abroad. And finally, regarding our patent litigation against Ivancis, all actions to date have proceeded as expected.
Note that defendants and patent matters often bring common claims or search for third party patents to buy and try to assert against the plaintiff. Public filing suggests that Ivantis is following this typical defensive playbook with the recent acquisition of several patents that originate from excimer laser technology. These patents issued from applications filed after the priority date of the patents we are asserting against Ivantis. We're not surprised by this tactic and whether or not Ivantis seeks to assert these acquired patents, we remain very confident in our positions in this matter. So with that, I'll turn the call over to Joe for a summary of the Q2 financial results.
Joe? Thanks, Tom. As noted earlier, net sales for
the Q2 of 2018 were $43,200,000 a year over year increase of 5%. The U. S. Represented 84% of our sales in the quarter and international 16%. In the U.
S, Q2 2018 sales were $36,300,000 down 2% from the same period a year ago. ASPs remained stable versus a year ago and prior quarters. Outside the U. S, 2nd quarter sales were $6,900,000 an increase of 63% from the same period a year ago. This quarter as Tom indicated, Brazil, Germany, Japan and the UK drove the majority of the year over year increase led by growing iStent inject sales.
Our gross margin in the 2nd quarter was roughly 85.7% versus 86.6% in the same quarter in 2017. As expected, we did incur some manufacturing inefficiencies during the quarter associated with the scaling of our inject inventory. We continue to expect our gross margins to remain in the mid-eighty percent range going forward as we navigate the U. S. Inject launch from an operations perspective.
SG and A expenses in the 2nd quarter rose 16 percent to $28,600,000 versus $24,700,000 in the year ago quarter. This rise reflects higher personnel and other costs related to the ongoing expansion of our domestic and global infrastructure, primarily in our commercial and international operations. R and D expenses rose 31% in the 2nd quarter to $12,600,000 versus $9,600,000 in the same year ago period, excluding the one time in process R and D charge of $5,300,000 in the Q2 of 2017. This rise reflects primarily the cost of additional personnel as we expand our pharmaceutical R and D capabilities and within clinical affairs where we are managing an increasing number of clinical studies and associated investigational site and study investigators as we commence key pivotal trials this year. We finished the 2nd quarter with a net loss of $5,400,000 or $0.15 per diluted share compared to a net loss of 3,300,000 dollars or $0.10 per diluted share in the Q2 of 2017, which included the in process R and D charge last year.
Our net loss this quarter did include other non operating unrealized foreign currency expenses associated with our intercompany loans of approximately $1,700,000 or $0.05 per share. As of June 30, 2018, we had cash, cash equivalents and short term investments of $120,100,000 compared to $113,800,000 at the end of the Q1 of 2018. As we said before, it is important to remind you that as we progress through 2018, our primary focus remains on long term growth as we prudently invest to build the MIGS market, drive increased penetration of our iStent and iStent inject platforms globally and advance our robust pipeline initiatives through the necessary clinical studies and programs. Finally, as Tom indicated earlier, we are raising our 2018 net sales guidance to $162,000,000 to 166,000,000 up from our previous range of $160,000,000 to $165,000,000 This guidance outlook takes into account the expansion of our international sales, which we now expect to be in the range of $25,000,000 to $27,000,000 for the full year, up from our previous range of $23,000,000 to $26,000,000 dollars Now that we've received the U. S.
FDA approval for Istent inject, we would like to take a moment to provide some high level comments on potential financial considerations for this important over the remainder of 2018. 1st, as previously discussed, we expect the inject launch to temporarily impact the overall pace of new doctor training as physicians may elect to wait for inject while a sales force primarily focuses on conversion of existing accounts to inject. 2nd, we expect customers will manage down their own inventory levels ahead of converting from iStent to inject, which may cause a transient disruption in ordering patterns. We expect this channel destocking will impact the Q3 and to a lesser degree the Q4. Finally, we do anticipate ordinary course sampling of inject to occur during the account conversion and training processes.
As a result, we expect Q3 net sales to be down sequentially, which has been reflected in our upwardly revised 2018 sales guidance. And with that, I'll now turn the call back to Tom.
All right. Thanks, Joe. To recap, Glaukos delivered strong financial performance in the Q2 and achieved a historic milestone with the FDA approval of iStent inject. We're extremely excited and believe we are well prepared to commence the initial commercial launch activities of iStent inject in the United States. At the same time, we continue to deepen our penetration in direct international markets, further optimize 5 and 5 pipeline strategy with the acceleration of the iDose Travoprost U.
S. Pivotal studies and expand our pharmaceutical capabilities as we continue to advance our aspirational mission to transform glaucoma therapy. We believe Glaukos' robust pipeline of 5 distinct products targeted for introduction to the U. S. Market over the next 5 years is capable of truly changing the glaucoma treatment algorithm, setting a new standard of care and positioning Glaukos for sustained competitive advantage and expanding global market that we feel will enable us to drive shareholder value for years to come.
So with that, I'll open the call to questions. Operator?
Your first question is from Bob Hopkins from Bank of America.
Thanks for taking the questions. Just first couple of questions just on the kind of on the quarter and then I wanted to ask about some of the important pipeline updates that you gave. So first just on the actual quarter, when will Istin inject be kind of in full launch? Number 1? And then number 2, could you just give us your thoughts on what you thought the market grew in Q2?
Hey, Bob, this is Chris. I'm going to talk about the iStent inject launch. We are in the process of doing that now. We've had our first implants and we are moving forward with that program.
I think I would just add to that piece of it, Bob, that clearly as we said, we're going to have a controlled launch through the remainder of the year. And as we turn the corner into next year, we'll hopefully find ourselves in full go mode with respect to that launch. On the market growth, I think it's fair to say that we believe the market continue to grow a little above the 20% full year target in the Q2 and that was expected. Overall, we may be trending slightly above our 20% growth rate expectations for the year, but there are a lot of moving parts in the second half as you know. And we expect the second half to trend down from the first as we train for our fewer doctors and we manage through the other transitory headwinds associated with the inject launch that we've mentioned previously.
I should also note that I think at your conference actually, we commented we feel like we have a pretty good handle on the mix market today. And I think it's worth noting that as the trying and trialing or utilization of CyPass occurs, it's occurring the vast majority of the time, if not all, with existing iStent surgeons and accounts. So that gives us pretty good insight at the account level and a macro level as to what's happening in the mix market and the growth associated with it.
So two other things
I'd love you to comment on. 1 is regarding the updated guidance, which I realize you're raising a little bit. But given that the approval came a full quarter earlier, I guess I'm just a little surprised that the guidance raise isn't a bit more. So maybe if you wouldn't mind talking about in a little more detail some of the disruption that you're expecting. And then the other thing that I think people would really like to hear about is, it sounds like you've made a bit of a strategic decision on iStent SA, which I thought addressed the much larger market opportunity for you guys in terms of a standalone product.
And it seems like that's now been pushed out by 2 years. I'm just curious as to why that's happening given that it represents such a much bigger market opportunity than the one you're addressing today. So do you mind commenting on those two things? I think it'd be much appreciated.
So maybe I'll start with the comments or the question around the guidance. Clearly, the approval came ahead of our base case internal expectations, as you know, and that's all positive. But as you can see from our maintained U. S. Guidance, I'm not sure that early approval will meaningfully change 2018 as we sit here today as we navigate our way through the conversion to inject.
And I'm happy to elaborate a little bit and then answer any specific questions on the dynamics in play. But to repeat what we said in the prepared remarks, we do expect the new doctor training to be disrupted in the second half. We've always expected that now the timing is obviously a bit more clear. Probably more importantly, now I would say that what we see from the transient ordering pattern disruption and what's effectively a destocking of the channel inventory ahead of conversion is certainly an important consideration in the Q3. When you start to see that pick back up in the channel to sort of see its inventory levels return to normal is a good question.
It depends a little bit on the exact pace in which we pursue the conversion here in the coming months quarters. And then lastly, as I said, the ordinary core sampling of inject, we expect that to occur over the 3rd and 4th quarters is a bit of a headwind to the 2018 business. And then lastly, I mean, I guess, part of as we think about the overall guidance, we have to think about the OUS as well and some of the seasonality patterns there are different from the U. S. And we expect a summer slowdown in the EU.
And finally, I guess I would add that with the strength in the dollar over the last 60 to 90 days, it certainly could present a bit of a headwind when comparing the second half of the year to the first half.
And Bob, if I can, I'll address the strategic decision to reprioritize some of the clinical studies that we're doing. And I think it's important that investors understand how profoundly beneficial this can be to the company and to the investment community. When we look at iDose, we came out of the ASCRS meeting and we had present the interim cohort data at 1 year to the ophthalmic audience for the first time, again, which showed that iDose reduced intraocular pressures from 7.9 to about 8.5 millimeters of mercury at 1 year. The response was overwhelming and reconfirmed our belief that this is going to be an incredible product in the hands of ophthalmologists. And so as we look at the opportunity, to me there's orders of magnitude difference between the iDose opportunity as we stated all along.
We presented data that iDose is going to address approximately $3,000,000 annual opportunities for implantation in the United States versus roughly 500,000 for iStent inject SA. So we look at that, we're looking at a broad label for iDose, which should be all the way from ocular hypertensive to moderate open angle glaucoma, which really gives us the benefit of covering the full portfolio of glaucoma patients. And again, this is a potential annuity product that people will use continually and that we hope reinsert on depletion of the drug and medication. So the opportunity is profound in terms of an annuity product. IStent inject SA is a very important product.
It will cover pseudophathic patients in the mild to moderate glaucoma range And it's going to serve approximately by our estimations about 500,000 patients annually. So we looked at the differences. They were profound. And when we looked at the opportunity to make the change, we did so. So what we did is we took the iStent SAE investigators that currently were dedicated to the iStent inject trial and we actually moved them to be able to introduce and to be able to be investigators for iDose.
There was unanimity of conversion of surgeons that wanted to get into the iDose trial. The other thing that's important to note is why did we move up from a year, how do we make that happen? Well, as we saw along the European pivotal trial for iDose wasn't going to start until the end of this year. And then as we all know, we'd be able to get IRB approvals and Ministry of Health approvals in Europe are far more onerous and lengthy than they are here in the United States. So the European trial was a long tent in the pole in order to be able to fully realize these 2 concurrent trials and submit our NDA.
And by moving those into United States with apt investigators that are already primed and ready to go for iStent inject assay, we're able to move this profound opportunity up by year. We're still committed to iStent SA. We will enroll that clinical trial once we've enrolled fully enrolled the iDose trial. So to us, it was a self evident decision. Once we really put the numbers down and we realized the acclaim that we received from the ASCRS meeting, I immediately commissioned the clinical and regulatory team here to give me options on how I could get to the market quicker with iDose.
And that's why we made the decision. We think it's important and we think it's a profoundly opportunistic decision for us and for investors.
Okay. Thanks, Tom.
You're welcome, Bob.
Your next question comes from Larry Biegelsen from Wells Fargo.
Hey, guys. Thanks for taking the questions. A bunch on inject. Maybe I'll just I'll break it up here. Price premium, I think most of us are assuming about 5%.
And can you quantify the inventory drawdown that you're expecting in the Q3? And I have a bunch of follow ups on inject.
Yes, this is Joe, Larry. Hi. So I think first on your question around the pricing, I think all we've ever said is that we do expect to have a premium for what we see as a premium product. We've not quantified beyond that what our expectations are to investors. 2nd, when you think about the quantification, it's difficult to do that.
I mean, we've seen some of this actually start to occur over the course of the month of June towards the end of the Q2. So we're confident we'll continue in the Q3. The question becomes as we start rolling out the conversion itself, how quickly do those ordering patterns reestablish. So it's a difficult question to quantify other than we do know it's happening, it's happening right now, we can see it analytically and we expect it to continue in the Q3.
Thanks. And then, Tom, on inject, can you talk about what you think it means for the market, in terms of accelerating the market growth, 20% -plus this year? I'm thinking more about, let's say, 2019 and beyond. Does this acceleration come from deeper penetration, new users? What impact do you think you could have on your share?
And just when we look at the second half guidance of basically negative 4% to plus 1%, I think implied, Can you grow at a healthy rate in 2019? Thanks for taking the questions.
Hey, Larry, this is Chris. I'm going to address the market opportunity for iStent inject. We've seen that in Australia and in Canada and Germany and now the U. K, that iStent inject has had a profound impact on the growth of MIGS within those respective countries. More people are inclined to utilize this product because of its efficacy, its safety profile and the ease of use that's associated with it.
So I would expect similar results here in the United States. We've said all along that there are surgeons out there that are not as comfortable implanting in iStent as they will with the iStent inject. So we are pretty bullish on how this product will perform and the impact that it will have on the market here in the United States.
And Larry, it's Joe. I mean, I think I would add, I mean, inherent what he's Chris is just saying, clearly, it's an expectation that we should be able to take the next leg of growth in the marketplace in 2019 and beyond with this important product and its launch. As I think about the second part of your question around guidance and then how it translates into 2019, clearly we haven't given 2019 guidance yet, but there's a number of factors there. Inject is clearly part of it in the restoration of growth in our U. S.
Franchise. But you also have to think about the factor of sort of where we're at from the competitive evolution standpoint too. So with the entry of CyPass in the market in the second half of last year, you had difficult comps, if you will, through the course of 2018. As we enter into 2019, you'll have had a full year of CyPass Pass being on the market that we're comparing against. So clearly, we expect both that to translate into better market growth as well as growth for us specifically.
Thanks for taking the questions guys.
Thanks Larry.
Your next question comes from Brian Weinstein from William Blair.
Hey Hey guys, thanks for taking my questions. Tom, maybe for you on the SA, just want to confirm the reason for pushing it is really a prioritization. You didn't see anything wrong with any data, anything outside the U. S. Or any negative feedback on SA that caused you to make this decision, correct?
Not at all. I mean, we were able to look at the Phase 1 data. As you recall, we were changing our randomization schedule from 2 to 1 to 1 to 1 as we entered the expanded phase clinical trial. Because it wasn't poolable, we were able to unmask the data. We've assessed the data.
We like the fact that we have that data in hand because it will allow us to make appropriate modest changes to the clinical protocol. When we do start to enroll the clinical trial once we've subsequently concluded the investigational pivotal trial for iDose. So the answer is no. This is again, as I've said before, it clearly became a profound opportunity that was facing us to make the change. And in the end, we'll have both products.
I just want the product that has 3,000,000 eyes upfront far earlier in the commercial cycle than I want one that has a half a 1000000 patients. It's that simple.
Yes. That makes a lot of sense. But is there a reason, is it just a limited amount of time that these investigators have that you couldn't be running these things at full speed and running them kind of concurrently? Is there a reason you can't do that?
Yes, there is. I mean, these there are only so many sites that are productive. And as you look in the United States in scale, if we were to try to run those sites simultaneously, they would be cannibalizing opportunities. And I think it would just draw out and extend the range of both trials beyond what our expectation would be. And so and there's also limited resources in the company, right?
So as I look at it and I take the ability to take these and concentrate and put them fully on iDose, I can move this study up again a full year to bring it to marketplace. And once I'm done, I can turn the turrets and put these people right on ISNT SA and make good progress in that as well. So the short answer is that there would be cannibalization between the investigator groups given the protocols and this is the right decision for the company.
Got it. And then Chris for you on inject, can you talk about what the typical training process is going to look like number of cases that people are going to have to do and what the trialing amount kind of per doc that we should be thinking about would be for utilization of product?
Sure. We're committed as we always are to superlative skill transfer to the surgeons. The people that we're focusing on right now, the customers that we're focusing on right now are iStent users. So the training will be a bit modified compared to what it's been in the past. They've already been through the visualization anatomy by manual technique training.
Now we're really focusing with these guys and gals on the iStent inject itself and the nuances there. So typically, that will take roughly 5 cases. It could be more. And we go in there. We do a dry lab like we do with iStent the night before, and then we proctor them in surgery.
And it may take one day, 2 days, 3 days, whatever it takes to make sure that they're proficient at implanting this device so that they get good outcomes so that we get continued business from these customers. As it relates to new surgeons, they will get the full blown training program that we have done in the past, where they'll be taking a webinar at their convenience, they'll get to dry lab. And I would expect that those cases to be in the anywhere from 10 to 20 range depending on the physician.
Thanks guys.
Okay. Thanks Brian.
Your next question comes from Robbie Marcus from JP Morgan.
Hi, this is actually Christian on for Robbie. Maybe just one on what you're seeing in the competitive landscape in terms of your raised guidance for the year. How are you thinking about advances coming on? Do you still expect them to receive FDA approval later this year? And then beyond that, how do you think about the market in terms of having 3 competitors there just from a high level?
Hey, Christian, this is Chris. We have no reason to believe that they won't get approval this year. We're prepared for that. In fact, we've been training the sales reps on that entry. So similar to what happened with CyPass, we expect them to go to our customers who are already trained.
We expect them to provide anywhere from 5 to 10 samples for surgeons to try that. We expect that most of our surgeons will try it. There is an appetite for trialing new products in the ophthalmic community. So similar to CyPass, we expect that they will do that and that the majority of those physicians will be iStent or iStent inject customers.
And I would just add that, you can imagine that we factored that into our thinking around the guidance for the remainder of the year. It's obviously difficult to know exactly when that trying and trialing activity will start to occur, But we've looked at a variety of scenarios and incorporate that into our thinking around guidance.
And then just one on kind of the clinical strategy here with the update on the call, it's been very helpful. In terms of transitioning these primary investigators from working on the SA trial to now moving them to iDose, is there any kind of timing, how long does it take for them to really turn the light switch off on SA and on an eye dose? And if you could just walk us through that process? Thanks.
Yes, I'd be happy to. I mean, the very important and good news is we've already begun enrolling in the clinical trial for the iStent SAA investigators that have converted over to iDose. So it's been relatively seamless. Obviously, what they have to do is once they get the new protocols, they have to we have to do site visits and then we have to get IRB approval. That's all been done.
And so we were able to do that in a very efficient manner. So both of these pivotal trials start at the same time. And that's important because remember, when these trials finish up, it doesn't help us if one finishes several months in advance to the other because we need both trials to finish in order to submit our NDA. So I would say the process was seamless. I would actually say that there was a strong appetite and delight among against or with most investigators on making the change.
And we were very, very pleased by that. So the studies have already begun. And I should tell you that we've already enrolled our 1st iDose clinical study patients as of today.
Great. And yes, congrats on a good quarter. Thanks.
Thank you.
Your next question comes from Matthew O'Brien from Piper Jaffray.
Good afternoon. Thanks for taking the questions. Tom, can we just stick on this iDose topic a bit more and sorry for beating the dead horse here, but the push out on SA is going to be concerning for investors. But the acceleration in the timing for iDose, I think offsets that just given the TAM there comparatively speaking. So can you talk a little bit about the ability of this group now to get a lot more patients through faster.
What gets you to 2021 in terms of approval versus 2022? What were some lever points there? And when can we expect some new data readouts given the advanced or the accelerated timing?
Yes. So let me address and just tell you again that as we look at the iDose clinical trial and we evaluate where we could pull the levers to be able to bring this forward. Again, it's important to note as I've told the investment community before that the European pivotal trial for iDose would start later this year, right? And we were already set for mid year launch as you know of the U. S.
Trial. So the European trial already lagged and we are prepared for that. But then when we looked at the Ministry of Health approvals and the IRBs and kind of the onerous nature of getting these sites qualified, there's a potential for those to go further out than we would have liked. Okay. So the European trial was the long tent in the long pole in the tent.
And so by taking the investigators that were on iStent SA and moving them over with the beneficiary of the kind of superlative IRB path that we already laid out for the 1st pivotal phase in which we're well acquainted. And we're able to seamlessly move those investigators into this pivotal trial and so that both of these commenced at the same time. My hope is that they finish relatively in order for us to be able to submit our NDA earlier. So as we do our target approach of when we think this would be available, we gained a full year. And again, as I look at the $3,000,000 sorry, dollars 3,000,000 patient annual opportunity, that's an annuity that will keep on giving.
To me, the decision was straightforward and easy. And that's why we made the change. Okay.
And what gets you to 2021 versus 2022?
Well, just to reiterate, because in the initial estimations, we had already planned for Europe to lag the U. S. By moving inject SA into this pivotal trial, the investigators in the pivotal trial, we gained by our estimation a full year by not having to go through kind of the onerous approvals of Ministry of Health and IRBs as well as the start later this year. I think the European trial was lagging the U. S.
By about 6 months or so. So we picked up time, we picked up opportunity and we think this means a profound beneficial change to the business.
Okay. I'll follow-up with that question offline. And then as far as the D Western relationship goes, is that just going to be for glaucoma? Glaucoma? Are you going to go after other conditions?
And when might we start thinking about some types of products here? Is it within that 5 year time frame that you've talked about for the rest of the portfolio?
Let's talk about D Western first. I mean, as you do your homework, D Western is a Japanese publicly traded company that really is a huge purveyor of ROCK inhibitors. They already have 3 compounds that they're in committed commercial relationships with partners, one of which is approved in Japan. So this is a powerhouse in coming out with the catalog of Rho kinase inhibitors. So we were delighted that we were able to access the technology and be able to establish an agreement where in the agreement we really have an upfront technology access fee and research support fee.
And if 1 or more candidate compounds are identified that Glaukos holds exclusive right to develop these novel intercameral and topical products of these compounds really through the licensing arrangement with DWTI. So as we talked about, we have always talked about having the beakers swirling here looking for small molecules with low nanomolar concentration that are highly insoluble. We think that the opportunity with D. Western offers us a pretty good shot on goal to be able to come up with a novel Rho kinase inhibitor that may be effective in our iDose platform. So we're excited.
It's one of several options that we're looking at. But I think it's an important option. I think it also indicates the investment community just how affirmative our conviction is into moving to become a hybrid pharmaceutical medical device company.
Thank you.
Your next question comes from Jonathan Block from Stifel.
Thanks guys. Good afternoon and apologies in advance on multiple calls. So maybe I get a pass if I'm a bit redundant. But first one on iDose. Tom, can you remind us of the reimbursement landscape once you get there?
In other words, I know there's a debate if it's 2021 or 2022. But once you get there, do you need to pioneer codes and go for reimbursement at that point in time? Or is there anything that you can do to facilitate things in advance?
Yes. So when you're looking, John, at a drug, this is an NDA. The normal course of this will be able to get a J code when we get approved. That's a very straightforward process undertaken daily by multiple pharmaceutical companies. In addition, what we'll be doing is we'll be doing the work to establish a new professional fee code that's likely to be a Category 3 code, much like we've done with iStent inject and iStent Supra.
And so we want to be put clinicians in the position of being able to put in multiple products that is our iDose, iStent Infinite for instance, and possibly iStent Supra and be able to through the Medicare reduction rules still be reimbursed from a professional fee standpoint. So it's a straightforward process. It's one we're well acquainted with. And yes, we'll be prepared when and if we do receive FDA approval.
Okay. And then Joe, this one might be for you, but the long term growth trajectory of the concomitant market, I think that's going to clearly come in a greater focus now that SA pushed out. And so we had the market growing at 28% last year. You've thrown out 20% now, maybe 20% plus in 2018. But can you talk about how that evolves, the sustainability behind 20%?
I mean, does it stay there? Does it continue to decelerate? And I ask that question because when you look out over the next 3 years, this is sort of the market you're playing in, in a market that probably goes from 2 players to 3 players? Thanks for your time, guys.
Sure. Thanks, John. I mean, I guess, first I might just say that obviously by bringing forward iDose, we won't be just playing in the concomitant market that obviously would take us directly into the standalone market with the broadest label possible in that opportunity. But within the combo cataract market, your question specifically, I think earlier we talked about this a little bit with Chris where certainly as we turn towards 2019, it's hard to look that much further beyond that. The inject opportunity is market expanding, right, for all the reasons we've talked about in the past and continue to reiterate here.
Our belief is that whether it's through the increased efficacy, ease of use, the ability to really open up both the lower volume surgeons as well as some of the higher volume surgeons that have not yet converted, we feel good what that means for the market development and market growth in 2019.
Your next question comes from Chris Cooley from Stephens.
Good afternoon. Thanks for taking the questions. Apologies, I've juggling 2 calls here as well, like Jonathan, but maybe 2 for me. First, did you touch on just the contributions or the drivers, I should say, for the sequential downturn? I understand the process there from the 2Q to 3Q, but could you maybe bracket a little bit for us between the stocking, the training end market forces?
And then on the development side with DTWI, really exciting to see you moving forward on that front, but could you contrast why you selected DTWI versus another ROCK inhibitor player, which is maybe right in your own backyard, maybe a little farther along with that drug. Just kind of curious what you see in the DTWI space versus maybe others? Thanks so much.
Hi, Chris. It's Joe. I might start off with your question around the second half dynamics in the Q3. We didn't quantify some of the dynamics that you're asking about, but what I can do is sort of put them in context and maybe the order of importance. I think the number one thing that is happening in the Q3 is really this transient ordering pattern disruption that we're talking about, effectively the destocking of the channel inventory ahead of conversion.
At any given time, we'll have several 1,000 units estimated in the channel, if you will, from an inventory standpoint. And as we shift those accounts from iStent to inject, we expect them to manage their own inventory levels ahead of that conversion and that does disrupt the ordering pattern. 2nd, I think the in the near term is just the ordinary core sampling of inject. You can imagine again that's transitory as we sort of make the conversion. And then 3rd is really the new doctor training and the disruptions that we've talked a
lot about in the past.
Thanks.
And Chris, yes, I think you probably missed some of my statements upfront, but DWTI is an absolutely prolific purveyor of ROCK inhibitors. They've already developed 3 ROCK inhibitors that they've are in committed commercial relationship with partners, one of which is approved in Japan. And this gives us an opportunity to develop a novel proprietary compound that really fits with the iDose platform. So we can take it from its inception and be able to really customize potentially a ROCK inhibitor that will provide the right elution rate to drive therapeutic index in an intercameral fashion. So it is beyond the right decision.
They are well recognized as a very, very sterling producer of ROCK inhibitors. They've got an extensive library. When we did our due diligence, this was the right call and the right partner for us.
Super. Thanks so much.
Your next question comes from Joanne Wuensch with BMO Capital Markets.
Yes. Hi. This is Matt Henriksen in for Joanne. Just continuing on the iDose shift in trials. Now that both trials are in the U.
S, are there any other differences between the two cohorts?
Yes. So the cohorts that we have established and the protocols are nearly identical. And so we're still talking with the FDA and submitting protocol amendments to finalize, which companies normally do in the process of a clinical trial. But I will tell you that both protocols are nearly identical.
Okay, great. And then just one follow-up on iStent inject. For training surgeons that have legacy surgeons, let's call them, do you see the same trajectory of training them with iStent inject as you did with the 1st generation device? Thank you very much.
No, for existing surgeons the answer is no. I mean, obviously when it's a new surgeon, which we which all of the original iStent trainings were, that was a much longer training regimen from start to finish, including a lot more proctored cases with our sales force. But sitting here, as you're converting existing surgeons over, I think Chris has been on record in the past, saying that's really sort of 3 to 5 cases on average for these doctors to get proficient with the new procedure.
Okay. But just but the number of surgeons that you train per quarter, that trajectory will be then faster?
Okay. I'm sorry. Yes, that would be faster. I mean, so obviously, in the initial launch over the last several years and the pace in which we train surgeons, we would certainly expect to convert the existing surgeon base much more quickly than that history.
Okay, great. Thank you very much.
The next question is from Larry Vigilton from Wells Fargo.
Hey, guys. Thanks for taking the follow-up. Just one on INFINIT, one on iDose. So on INFINIT, Tom, is the trial design similar to what you expected, which you've described in the past? And I'm just wondering if INFINIT, the expedited pathway via 510 was a factor in your decision to expedite iDose and push out SA?
The indications aren't identical, Tom, but there is some overlap. And I have one follow-up on iDose.
Well, I appreciate your question because it did have an impact on our thinking. IStent infinite is a standalone opportunity and it actually is a superlative product with 3 stents as you know and you've seen some of the early data. So the clinical trial is a 510 path, again, which typically is an expedited path and we expect to be in the marketplace in the late 2020 to 2021 time period, similar to what we had initially stated for iStent SA. And so, when we do get this approval, if we are smart and we create clinical trials that in a peer review basis show the benefit of iSpend Infinite in patients across a broad spectrum of glaucoma, there is opportunity for payers to look at these peer review clinical trials and actually cover the product if we can come up with data that's commensurate with a standard of high clinical use. So it's an important opportunity.
It did go into our thinking. IStent infinite is a product that over the long term we are entirely excited about and we're going to get there in the same time period that we would with iStent in iStent S. A. So in regards to the protocol question, very we were able to move our date as you recall, I told the investment community that we would look to have approval of the iCEN Infinite 510 protocol by the end of the year. And we moved that up several months.
And in negotiations with the FDA, the protocol for the trial are for refractory patients. The FDA has been a little bit more stringent on maximally tolerated medical therapy. So we continue to enter into deliberations with them to try to expand the clinical protocol to allow us to enroll maximally tolerated patients as well. And we hope to get there. But we're excited that we're able to get there early and we're excited about the possibility for iStent infinite as a standalone product as well.
And thanks for asking.
And lastly, Tom, any reaction to the Bimatoprost SR Phase 3 data that came out earlier this quarter? Thanks for taking the questions.
Sure. No real reaction other than the product appears to perform as it has in the past. Again, this is a bioerodible that's injected into the eye and the data that I've seen of the product is designed to last typically for a period of about 4 to 6 months. And so if our data holds with Idose, we're looking at a product that is already 2x to 3x the sustainability of what we're seeing with Pharma Processor. So that's why we're entirely excited.
We like the fact that it's positioned and anchored versus kind of floating in the angle where there where we have no issues of migration. So we think that the Vimanoprost SR product is a good product and good entry, but we're terribly excited about our product.
Thanks for taking the questions guys.
Sure. Thanks Larry.
There are no further questions at this time. I will turn the call back over to the presenters.
Okay. I want to thank you all