You guys good to go?
Yeah.
All right. Welcome to day one of the Stephens Conference. I'm Mason Carrico. I'm the diagnostics and medtech analyst here. Excited to have the Glaukos team with us. Here today, we've got Alex Thurman, CFO, and Chris Lewis, IR. Appreciate you guys joining us this morning.
Thanks, Mason. Thanks for having us. It's great to be here.
Maybe just to kick it off here, you reported the third quarter a few weeks ago. Maybe just start us off with a quick recap of the quarter before we dive into Q&A.
You bet. We were really pleased with the third quarter. The results were fantastic. Happy to see continued progress in the business as we think about it from all facets of the three franchises that we have. We break it down. U.S. glaucoma, we realized revenues of about $81 million, which was a 57% year-over-year growth, which was phenomenal, obviously driven by iDose, which I'm sure we'll talk about. The international business in Glaucoma posted $29 million of revenue in the quarter, which was a 20% growth rate, 17% on a constant currency basis. Still really strong growth in that franchise. Even last but certainly not least, Corneal health posting $23 million of revenue, which was 13% year-over-year growth.
When you put it all together, the quarter was $133.5 million, which was a record quarter for us and kind of like growth rates in the mid-30% or high 30% range. Again, a really strong quarter. The other pieces of the business in the quarter that we can talk about really quick was strong—well, I should not say strong, but really nice accretion in the margin profile, in the gross margin line. We got almost to 84%, which again is driven a lot by iDose and the high growth margin product that it is. We were pleased to see continued accretion in the margin that we have experienced over the course of the year as iDose has become a bigger mix of our business. Last, but again, certainly not least, is our cash balance.
We came in at $277.5 million, which was roughly just a million dollars less than Q3. As we continue to drive towards this idea of living within our means and driving towards cash flow breakeven, we're getting closer and closer to that as one of our goals in the business. Overall, again, really strong quarter, and we were pleased to see those results come through.
Got it. Thank you for that. Last quarter, 80% of iDose volumes came from the first three MACs to publish pro fees. Once a new MAC goes live, what does that typical volume ramp look like? With NGS now added to that list, how has pull-through trended so far there?
Yeah. So I think we've been really encouraged, and I think it's important to kind of reiterate what you said in that you're seeing pretty nice sequential growth so far this year with basically 50% of MACs covering the pro fee to this point in terms of it being posted. And so what you said on the third quarter call, 80% of our iDose volumes were from those three MACs: Noridian, Novitas, and First Coast, where pro fees have been posted and published for several quarters now. That was consistent with the second quarter in terms of those mix dynamics. So continued growth across all MACs, but led again by those three MACs where the pro fees have been posted and largely contributing the majority of that iDose volume to date.
What we've seen, obviously, NGS, we were really pleased to get that pro fee posted in August. In terms of your question around how those ultimately translate into that utilization pull-through, we have precedents with Noridian and Novitas. What you've seen there is that it does take some time to operationalize that. That can be on the magnitude of several months to up to a couple of quarters in terms of actually fully seeing the impact of that. That is our expectation with iDose at the same time. Why is that? There is a procedural element to this. It's not just writing a script.
When you think about the training component, the scheduling component, making sure you do a couple of cases and get the front office and back office comfortable with the billing and coding process, getting the reimbursement confidence established at the CFO level, et cetera, all those things play into ultimately starting to see that utilization pull-through once those pro fees are posted. I think our expectation as it relates to NGS is certainly that is a piece of the growth driver puzzle for iDose, certainly, as we get into exiting this year into 2026.
Got it. For the remaining three MACs, I think it's WPS, CGS, and Palmetto. How are you thinking about the sequencing and timing of pro fees of those MACs?
Yeah, we're doing everything we can in our power to get those across the finish line. It ultimately begins as a volume game, and you're continuing to see volumes grow in each of those MACs. I think that is one piece of it. You work with societies, et cetera, and have advocacy efforts at the physician level to support those processes. There is no statutory timeline in terms of when those get across the finish line, but hopefully sooner rather than later at some point.
How has utilization really evolved since launch and as these pro fees have been established? I mean, how does volume mix today? Kind of how's it trended between standalone and combo cataract? And how do you see that, I guess, evolving over the next three to five years, given your messaging around interventional glaucoma?
Yeah. Our initial focus out of the gates, as we've been pretty clear on, was standalone Medicare fee-for-service patients, given some of the reimbursement considerations, et cetera. I think you've seen the vast majority thus far be within that category. Certainly, as MACs become operational from a pro fee perspective, as we talked about earlier, you're seeing us meet those surgeons where they are. In some cases, that's in combo cataract setting or combo MIGS setting, et cetera. You've seen utilization pick up specifically in those MACs where pro fees are established in those three MACs in the other areas beyond standalone. I'd say the majority can remain standalone at this point for us.
Got it. Are the majority of patients coming off of SLT or Durysta? Are you seeing more use among patients managed only with topical drops?
Yeah. So it's a great question. What I'd say is, even though going what we're going after in the iDose business or with the iDose product, it's still relatively early in the launch, but we have seen a pretty wide variety of mix of patients that are coming in. Obviously, a lot of it is doctor-dependent and kind of what their practice entails and what they've done in the past. To your point, certainly, we have seen a large mix of post-SLT, post-Durysta patients. There are also patients that have been, for whatever reason, and there are a myriad of reasons, they're not tolerant to drops. There have been cases of those happening as well.
To be fair, as you think about it, the TAM is so large, and there's opportunities for all of us to really attack this disease and change that paradigm. We've talked about the fact that drops, just if they're used, they work great. We know from data and studies that they're just not used for, again, a myriad of reasons. Therefore, our messaging around this whole concept of interventional glaucoma and needing to intervene earlier with these patients is a key to helping to halt the disease or at least control it as best as we can.
When you think about patients that in the past have had an SLT or a Durysta, it's actually a great fact and a great pathway to iDose because a doctor has already taken the time to, let's say, have that conversation with a patient to enter into what we'll call the interventional glaucoma funnel, right? Going from a drop to something, right? SLT is a very benign procedure, but again, it's something that is in that interventional funnel, and a doctor will feel comfortable getting them there. Those procedures work, but then they wear off over time, whether that's a year or 18 months, and then they're in that funnel. What's next? An iDose becomes a very natural pathway for those patients to go to next.
Got it. You guys have mentioned that surgeon training isn't really a gating factor, but just to get a sense of where things stand, what's the latest on iDose trained surgeons? I guess how would you compare that to iStent- trained surgeons?
Yeah. We've been really pleased with the pace and cadence of trained surgeons to this point through the iDose launch. To your point, just reiterate, it hasn't been an impediment to the launch in any way. It's a very straightforward, minimally invasive procedure. Doctors are very comfortable working in the angle, doing angle-based surgery now with the evolution of where MIGS has progressed over the past 10-plus years. I think from that aspect, you don't have the heavy lift of retraining them on the anatomy and visualization and all those techniques associated with doing a procedure like this. We haven't disclosed the specifics around where we're at, but we've said it hasn't been an impediment. I think there's a lot of room for continued growth from new trained surgeons along with kind of increasing utilization of those existing trained surgeon base as well.
We've seen that play out in terms of both of those being healthy kind of drivers and contributors of the growth so far this year. We expect that to continue and see a lot of room for growth even in kind of the more established regions that we've talked about.
Got it. And then on commercial and MA plans, I mean, how many roughly, I guess, what percentage of commercially covered lives now have positive policies for iDose? How important is that progress to growth in 2026?
Yeah. So we currently have about 50% of commercial plans that cover iDose through a stated policy or whatever. And then with the other 50%, there's a large percentage of those that are silent, but still we've seen claims being paid. So there's this de facto coverage that happens with those lives. So we're getting wide coverage, let's say, overall on an overall basis. If we think about the historical stent business, which for many years was kind of our makeup, about 80% of our patients were of Medicare age. So just roughly, it's an older-aged disease. And so Medicare fee-for-service as well as Medicare Advantage would make up the bulk of patients today. And commercial, therefore, would fall out at kind of roughly 20% of patients. So while it's important for sure, I think it's still in the early innings when we get to commercial usage today.
The other thing that's an interesting fact as we think about it is when we look at the iDose pivotal trials, the two pivotal trials that we did for iDose, the actual patient mix was more closer to like 50-50 between Medicare-aged patients and commercial-aged patients, which are less than, let's say, 65 years old. I think the reason for that is glaucoma does start earlier or ocular hypertension can start earlier than 65. Just given the fact that our previous stent business was largely contained to a combo cataract, you tend to get cataracts when you're in your 60s or 70s. That is why we see that mix. We do believe over time that commercial mix will become more maybe a larger percentage and more important.
We've always talked about Med Advantage being kind of the last frontier just to cover that piece of your question. Again, while it's great for some people, the challenge with Medicare Advantage is you have a lot of plans that have out-of-pocket requirements. Unfortunately, for commercial manufacturers, we are unable by law to provide copay assistance to a Medicare Advantage patient. That becomes somewhat of a barrier for those. There are 10%-15% of Med Advantage plans that do not have out-of-pocket or very small out-of-pockets that are certainly in play here. The other factor and dynamic we talk about is a lot of Medicare Advantage patients throughout the year, they might reach their federal out-of-pocket maximum on a hip or some other surgery that they had to have.
Therefore, you tend to see they become iDose candidates maybe later in the year when they've done that.
Got it. Before we move to the CAC meeting, are you seeing utilization in ocular hypertension patients, or is it mainly glaucoma right now?
It's a great question. It's a data set that I personally haven't seen. What I will say is that certainly we've been consistent in saying that doctor adoption of interventional glaucoma and iDose will lead to patients with ocular hypertension getting treated over time. We think it's more of a longer-term journey as opposed to right now. Certainly, the TAM is large enough, and there's a lot of patients today that fit that profile to get an iDose with glaucoma. Certainly, over time, we think that it's a wide spectrum that we could treat those patients.
Got it. What were your main takeaways from the CAC Meeting? How do you interpret the tone of the discussion, some of the stakeholders' perspectives, and any areas of pushback or alignment that stood out to you guys?
Yeah. I think the meeting, and I'm sure many in this room listened to it, I think the meeting was largely in line with our expectations and how we had communicated it going into it to at least Wall Street. You heard it be largely an educational-type forum for the members and the MACs to understand broader glaucoma care. Underneath that, the new important role iDose plays within that. I think the CAC members were prepared and knowledgeable, which we were very pleased with. I think that ultimately helps patients. I think overall, it was a good productive meeting. It is another important step in the educational process, right? It comes back to, I think the physicians did a nice job reiterating the level one clinical evidence that iDose has, right?
That's what we've talked about and been consistent about. This is a drug-approved FDA pharmaceutical. It was studied as such through two 550-patient FDA-controlled phase III trials. Its label is a drug label, ocular hypertension to open-angle glaucoma, very broad label. I think all those points were well articulated by the members, and the support from them was seen through the level, the power and robustness of the level one clinical evidence that iDose carries.
Got it. We were kind of surprised to see on the MAC website, the off-label categories, I guess, that they insinuated iDose was being utilized as or utilized under. Can you give us your view on maybe the positions of the MACs or how they were viewing it? Any details there?
Yeah. I think some of those questions and the nature of some of those questions just showed why maybe a CAC meeting was needed in terms of that educational process. I think if you look at the contraindications of the FDA-approved label, we'd argue those are not contraindications. I think that ultimately comes to what the forum was for and come to understand that iDose data around iDose and how it's being used by physicians today for the benefit of patients.
Got it. Looking at past CAC meetings for devices where LCDs were not established, it seems like LCDs were often slightly more restrictive than the FDA label. I mean, based on the data that you guys have generated for iDose, are there any specific use cases that you think could face tighter coverage or maybe face more scrutiny from the MACs?
Yeah. I don't know if it does a ton to speculate. There's obviously enough of that going on from a Wall Street perspective, so I'll leave it to the investment community to do that. I would just come back to, again, the power and robustness of the level one clinical evidence that we have. We're continuing to expand that through various phase four studies, 15 of which have already been peer-reviewed published, and that will continue to expand. I think it's never fully black and white when you're trying to kind of probability weight scenarios as we go forward. There are certainly positive and negative type scenarios that may arise.
I think at the end of the day, we feel have a lot of confidence that at the end of the rainbow, you'll continue to have broad patient access and coverage and support for iDose given that level one clinical evidence and the enthusiasm that doctors have for it and the game-changing nature of it for patients.
Yeah. I guess if I can speculate for a minute, if the LCD were to require something like patient documentation of drop intolerance or adherence issues or something like that, I mean, how do you think that would impact iDose utilization from a fundamental perspective? It does not seem like much given the size of the market, but how would it impact it from a fundamental perspective and really the broader messaging around interventional glaucoma? How would you address that over time?
I think it comes back to an earlier point. I do not know if it fundamentally alters our view in 2026 of iDose or 2036 as it relates to that because I think we will continue to expand the clinical evidence that we have and work through maybe any uninformed views of what may or may not come out. I think I do not know if the clinical data would suggest that. Again, we have broad evidence around that vast diversity of cohorts in those phase three studies from zero meds to three meds, etc. I think we will continue to work with societies and the MACs to educate them on all that.
Got it. Moving to Epioxa, you announced pricing of $78,500 per eye. Could you just walk us through any gross to net discounting or how we should just be thinking about, I guess, the realized ASP for that product next year?
Great question. One that's near and dear to my heart, and it's important. I think the first and most important part is to remember for investors that this is a buy-and-bill part B drug. It's not a part D, which would be a lot of those part D drugs go through PBMs and have large discounting or large rebates that are associated with them that create large gross to nets. In this case, with Epioxa, it'll be a part B buy-and-bill. There are really three, let's call them three buckets that affect the pricing or the net pricing that we will realize. The first one is with respect to Medicaid. This drug, the patient population for keratoconus that's going to get treated by Epioxa is largely a younger demographic. You're talking about kids from age 10 to maybe 30, 35.
Therefore, there tends to be commercial-aged patients and Medicaid patients that fall into that socioeconomic demographic. With Medicaid patients, we are required as a manufacturer to provide the government with a 23% discount, 23.1% to be accurate. Therefore, that's the first bucket. Depending on your mix of patients, those that fall into Medicaid will get that. The second area is around 340B hospitals. 340B hospitals, those that qualify, when they treat a patient that gets Epioxx, they also get that same statutory 23.1% discount. That's your second bucket. The last is around our copay assistance program. We have been very public in saying that if you are a commercial-aged patient and you have an out-of-pocket burden with respect to your keratoconus and Epioxa, we will cover that out-of-pocket burden 100% up to your federal out-of-pocket maximum, which makes sense.
Therefore, when you throw that in, that's your third bucket. What we've been telling investors, when you kind of have to model out the mix, it's really early. We can't really comment on the mix yet because it hasn't been basically available yet. We think our modeling would suggest that a net ASP at the end of the day would be somewhere in the range of $65,000-$70,000. It may be closer to that $70,000 out of the gate, but then over time, as those mixes kind of change and fluctuate, you get in that range.
Got it. When it comes to the billing dynamics, whether clinics will be using like a buy-and-bill model or specialty pharma distribution or some combination of the two, I guess in the buy-and-bill scenario, how do you get practices comfortable managing that upfront cost?
I think you'll see a mix. Our goal is to have obviously both of those routes available to accounts and what they feel most comfortable with based on their history and experience and the capabilities they have as a coding and billing and infrastructure at the account level. I think you'll see both. If an account is more sophisticated and has the infrastructure in place, they'll want to go through the buy-and-bill process as they get reimbursement confidence. Obviously, you get the margin associated with the drug based on their commercial contract, etc. That will be a part of it in terms of getting those contracts updated to include Epioxa over time.
For maybe the more community-based practices or accounts that do not have that type of infrastructure, certainly specialty pharmacy, I think, will be an attractive option for them to kind of de-risk that buy-and-bill process for them. They obviously do not get to account for that margin on top of the drug, but they de-risk it and ultimately help get access to those patients with the therapy.
Got it. As you think about that launch, roughly how many sites of care do you expect up and running at launch early next year? How many are you targeting by midyear? Maybe what are you looking for by year-end?
Yeah. I think we'll give you more color as we actually get into the launch. I think certainly a focus of ours over the past year plus going into approval and to launch as we get into next year has been identifying and targeting the right sites of care and establishing that site of care network that really will serve as the foundation to launch this product. You look at Photrexa volumes, you look at other things to identify those and ultimately target those and tier those. We'll have certain tiers and priorities in terms of where we go first. Ultimately, you want to provide as much access as you can to patients over time. That is certainly an element of that.
Your initial site of care network, as we talked about on the call, you'll want to have buy-in from the account at the account level, at the physician level, etc., in terms of prioritizing keratoconus. It's a largely undiagnosed or untreated disease today. Part of that is realizing the importance of keratoconus, the site-threatening disease that keratoconus is and the impact it can have on patients' lives. That starts really at the primary care level with the ODs in this case, right? Having them understand and being able to identify and diagnose that. Part of that will be kind of a handheld screening tool that we're working on that should help them in that early kind of upfront diagnosis process and ultimately walking them through that journey in terms of ultimately getting referred to the right MD or corneal specialist and ultimately get treated.
I think there is a lot that goes into it. We are certainly going to, I think, take a pretty centralized approach out of the gates, as you can imagine, and expand from there.
Got it. Maybe I'll stop to see if there's any questions from the room. We're keep going here. All good? All right. From a capital standpoint, what exactly does a practice need in order to offer it? Can existing systems be upgraded? I mean, is it just an O2 tank and goggles? Or what does it require exactly?
Yeah. With the beauty of this new procedure and being able to really avoid the removal of the epithelium, there is a new box. Customers that want to do Epioxa will need to acquire a new box. The goggles and the oxygen, that's a separate part, but that comes all part of the kit. That is part of a key differentiation, we think, with the Epioxa, the ability to infuse oxygen with the light coming from the box and to make that corneal cross-linking effective. I guess short answer or long answer to a question is yes, they'll need a new box.
Got it. Okay. How do you plan to approach that? I mean, is this an outright purchase? Can you do some sort of trade-in or upgrade pathway? I mean, how do you see it playing out?
Yeah. It's important to us that we want patients to gain access to the treatment. Therefore, we do not want capital to be an impediment to customers acquiring the necessary equipment and to treat patients. We're going to make it as easy and as seamless as we can. We'll have different programs. Customers, if they want to purchase a box, they can do so. We will sell it to them. It's not super expensive. We'll sell it to them at a legally compliant cost, but we're not looking to make a giant profit off of it. There also will be a program that they can trade in their existing Photrexa box for a new O2N box and get credit towards the new box through a trade-in. We'll also offer just a simple leasing program.
If they want to just lease on a month-to-month basis, we'll offer the O2N system that they can do it that way.
Got it. You kind of said already that you're unsure about how mix plays out, but I guess I'll ask it anyway. You're discontinuing Photrexa. It's a staged process throughout 2026. I mean, initially, at least, how are you thinking about what the mix of volumes will end up being next year?
Yeah. Ultimately, we'll see how it plays out in 2026 specifically. Hard to pinpoint exactly where we're at today. But our goal, certainly over the course of 2026, Vitrexa will be available to customers. We'll lead with Epioxa, as you can imagine, given the advancement in therapy for patients, the non-invasive nature, that recovery associated with it, just being such a significant advancement in therapy for patients. You obviously lead with that as it becomes commercially available. As you'll experience, you'll go through kind of the pains of getting commercial coverage on board over the course of 2026. For those patients that don't have access for Epioxa, we certainly will have criteria to provide them with Photrexa.
I think as part of this, you'll also have free product under our patient assistance program, probably more so certainly than you have had in the past through that to support that transition because you ultimately want to be able to provide access to as many patients as you can. Ultimately, we'd love for that to be Epioxa. Over the course of 2026, it'll be a mix and just try to treat as many patients as you can. As you get out beyond that, certainly Epioxa will continue to be the primary focus.
Got it. As you kind of work to secure coverage throughout the year, what's, I guess, a realistic target in terms of the number of covered lives you could have in the back half of the year by year-end?
Yeah. It's a good question. The way I'll think about it or answer it is as follows. Today, we're blessed with Photrexa having about 95% coverage in commercial and Medicaid. It's a large percentage. As a result, the treatment of keratoconus through cross-linking is an established standard of care. That in some ways creates the conversations that you have to have with these payers on converting to Epioxa. You go in, you sit down with them, and you say, "Okay, you're already covering Photrexa. It's a cross-linking procedure. We now have a higher, better, safer, whatever you want to call it, standard of care through Epioxa. Therefore, we need you to basically cover Epioxa." We let them know that over the course of 2026, at some point, we're going to sunset PhotrexaX.
Our hope is those conversations will, again, progress over the course of the year. We will keep you informed as investors as we go through that process throughout the year. Again, our expectations would be to have significant progress throughout the course of 2026.
Got it. You guys said that you're treating 10,000 patients a year right now. How should we think about the price volume trade-offs in 2026? I guess how long do you expect it'll take for corneal health procedures to return to current volume levels? Maybe is this not as much of a dynamic because there's a mix between the two? How should we think about that?
I think you're right. I think that today, and it's been largely really consistent since we acquired this business back in 2019, you're treating 10,000 patients today, mostly bilateral. So 18,000-19,000 type per year procedure-wise. That has been largely consistent. That, by definition, is a rare disease, in this case, arguably uber rare disease. That is kind of where we're at today. I think the goal, everything we've talked about in terms of what we're going to do to invest in this category and all the things, all the strategies associated with that, including the price, is to ultimately drive that 10,000 patient number up hopefully significantly over the course of time. That is going to take years to get to, certainly. We wouldn't be doing this if we didn't feel like there was an opportunity to drive expanded patient access over time.
You look today, stats would show about one in five uncontrolled keratoconus patients are treated with Photrexa today. That alone is an opportunity in itself to expand from that 10,000 to obviously magnitudes above that. More broadly, I think a lot of the efforts will be just on that education process that we talked about earlier. Prevalence-wise, it could be higher than that in terms of what the actual number of keratoconus eyes out there are once you start to make inroads in terms of that educational process, identification, and diagnosis process and get those a little bit in a better, more healthy spot, especially earlier on. I think everything we're doing is to drive that 10,000 patient number up over time.
Now, to your point, in 2026, I think you have to bifurcate a little bit about the mix we talked about earlier in terms of what the recognized revenue units are versus maybe some of the patient assistance program, free product numbers are, etc. From a realized revenue unit perspective, obviously, units will be impacted in 2026 as you go through that coverage process. We still think corneal health for us overall will grow from a sales perspective in 2026 versus 2025, but certainly that will be driven more by price versus volumes. Ultimately, at the end of the day, we do believe, and the goal is to get to somewhere north of that 10,000 patients, whether that is 2027, 2028, or beyond. We will see how successful we are at it, but.
Got it. Maybe moving to the core MIGS business. I mean, as we move past these LCD headwinds, the Hydrus royalty expiration, how should we think about growth in the core US stent business next year? And maybe more broadly, how do you think about growth of the broader MIGS market after lapping that LCD impact?
I think the broader kind of combo cataract market, as you anniversary, I think this month, the headwinds associated with the LCD dynamics restricting two or more devices in the same procedure, you get back to a point of growth from a market unit perspective, right? I think underlying procedures have grown, but units associated with that have been impacted. That has been a headwind for a market from a unit perspective year over year. You are going to get back to a place of both underlying procedural growth and unit growth as you anniversary that headwind. That will, I think, take effect as we speak this month and certainly in 2026. I think for us, you have got to take into consideration the elements and the priorities that we are placing on the various products within our portfolio. Obviously, we have not been shy.
We're leading with iDose, as you can imagine, for several reasons. I think for us, that will continue to be the primary first-line approach for reps, for planning purposes. Not to say that the iStent line is not an important part of the portfolio and certainly is an important part of surgeons' treatment algorithms and very complementary in nature, we think. I think for us, we'll continue to place priority on that. I think we've kind of talked about the non-iDose piece within the U.S. glaucoma business kind of being kind of flattish or versus maybe the low to mid-single-digit kind of market growth that underlying cataract surgery procedural volumes typically kind of follow.
Yeah, that makes sense. Are you seeing cannibalization of iStent by iDose in terms of actually what's getting utilized? Beyond maybe rep focus, are you seeing it being utilized together, or is there actual cannibalization going on?
It's hard to exactly tell, right, because we sell products in an account, and you don't always know how they're being used and what type of procedure, whether they're being used together. I think anecdotally, you're probably seeing a little bit of both of those. Certainly, we think, to my earlier point, we think the mechanisms of action from a stenting perspective being outflow and from an iDose pharmaceutical perspective being production of aqueous humor, we think those are very complementary. I think a lot of doctors, and you've probably heard some recently, talk about that. I think how that ultimately plays in in terms of how those MIGS dynamics progress, we'll see. I do think we'll continue to prioritize iDose. Does that come at the cannibalization of some iStent volumes for us, perhaps? Again, I think we would take that trade-off for obvious reasons.
I think investors would support that.
Yeah. I tend to agree. You have laid out preliminary 2026 revenue, $600 million-$620 million. You have kind of talked on the U.S. iStent business a bit. Could you just, as much as you are willing, lay out some of the building blocks for how we should think about that across some of the key segments, iDose, the stent business, corneal health, international?
Mason, you can ask, but I'll stop sort of getting into too much detail. That is mostly because we did not share that detail on our third-quarter call. A couple of things to remember. I mean, we were obviously excited or encouraged to share that range of 2026 guidance on a third-quarter call, which is typically early for us. That was really around the launch of Epioxa, or sorry, the launch and the approval of Epioxa and the announcement around the price and just making sure that investors understood the dynamic that Chris was just describing around kind of the volume and the pricing mix.
I think the most important takeaways from the fact that we have pre-announced, if you want to call it a pre-announcement of that range of 2026 guidance, is the fact that now Glaukos is in a position where we have multiple revenue drivers to get there. Between iDose and Epioxa, both with large market opportunities, both with a lot of room to grow over the next several years, it gave us the confidence to be able to announce that early and to do that. Anyways, I think I'll just kind of leave it at that at this point.
Yeah. Fair enough. You reported 84% gross margin in Q3. iDose is growing as a percentage of sales. You've got Epiox ramping. Margin outlook seems pretty positive. How should we be thinking about margin scaling from here? What offsets, I guess, if any, should we be taking into consideration?
Yeah. I mean, it's a great question. We're very blessed, as I said earlier, to have a business that has products that throw up a very high margin like iDose and Epioxa. And as we've talked about, we've been able to see the progression of that gross margin over the course of this year as iDose has become a greater mix of our business. We expect as Epioxa comes into that play as well, that that will be an accretive item to our gross margin profile over the next, let's call it, several years. We do expect that margin to continue to increase. The only offsets, again, are some of our international business and other things. Other products have a lower margin profile.
Obviously, iDose and Epioxa being the biggest growth drivers and the ability to have the largest share of that mix will naturally, and we expect it to help increase our gross margin over time. If you just think more down the P&L, I mean, to be fair, with those types of level of gross margins, we expect in the midterm that we should and could be a 30%-35% operating margin business. That still allows us to reinvest heavily at world-class levels in our R&D pipeline, which we have not even talked about. We have a very robust and fulsome R&D pipeline that still needs feeding. We will drive towards that in the midterm.
In the near term, I've always said, and we've alluded to it today, that especially with the launch of Epioxa and the investments that are going to be required to really identify patients and build that patient access and treat those patients, that our near-term goals will continue to be, as we call it, live within our means, balancing the revenues that are generated against those investments on the operating expense line and really drive towards kind of a cash flow break-even approach in the near term. That'll shift over time as the business grows and we head towards that midterm profile that I just spoke of.
Got it. Any last questions from anyone in the room? If not, we can wrap it there.
All right. Thank you for having us.