Okay, great. Good afternoon, everyone. Tom Stephan with Stifel. Really excited to have Glaukos here with us today participating again in the forum. Joe, Alex, Chris, great to see you guys. A lot to cover. Have about 25, 30 minutes. I'm going to dive right in, obviously start with what's topical. Joe, maybe to begin with you, if you want to kick things off with just some initial comments on the iDose LCDs that we saw come through last week and what you view as the key takeaways for investors.
Sure. Thanks, Tom, for having us and a good chance to obviously address the breaking news of last week. It's an open-ended question, so I won't go through everything. I'm sure you've got additional things you want to dive into. I think as we noted it, while it was always possible, our internal and external experts did not feel it was probable given how early it was, obviously, in the iDose life cycle of the launch and given the specific facts and circumstances, if you will, following the CAC meeting that happened in October, November, that many investors participated in.
I can start off by saying, we were, in fact, surprised by the timing and emergence of the LCD late last week. We didn't have the usual smoke signals, if you will, until just days before, that we typically experience as MACs attempt to educate themselves and develop a potential policy framework. That really didn't exist in this situation. You can read into that in some ways around what that means around the level of assessment that was done in terms of soliciting clinical feedback, and developing it. We can talk about that. Now, as we go forward here, we'll engage in the same clinical evidence education process that we've all seen play out several times, and prior glaucoma coverage determination processes.
This is not the first situation over the last several years where policies have been proposed that had to have been education and additional adjustments to be made afterwards. I think maybe before we dive into some of the specifics I know you want to go into, Tom, I'll just remind everyone that the process here typically takes seven to 12 months, if you will, to play itself out entirely, depending upon where it goes. Not surprising this is really more of a 2027 factor that we'll talk about, I think, more than 2026, although there's some considerations there. I guess the final thing I would say is you can imagine we're already working closely with the societies and physician community to ensure that their clinical perspectives are represented and represented by us as well as themselves.
At the end of the day, I'm confident based on that evidence that we're going to land in an acceptable place. Let's dive into the various pieces of that that you want to talk a bit more about.
Yeah, absolutely. No, that was great. Appreciate that, Joe. I guess I'll start with the LCDs. You've obviously combed through them. Where do you believe the highest potential or highest likelihood for changes, edits, amendments, et cetera, may exist in the LCDs based on evidence, based on what I would assume would be sort of a game plan that Glaukos has during this comment period? Where do you think there can and should be changes or amendments in the LCDs?
Well, I think, Tom, that there can and should be changes in virtually every element that was included within it. Obviously, I know there's more investor focus on particular elements that the perception has more potential commercial implications on it. The reality is both from an evidence standpoint as well as a clinical standpoint, that virtually every line item has adjustments that need to be made. It probably doesn't surprise anybody who listened into the open meeting back in October, November timeframe. It's probably not surprising to those of you that did that this is not particularly thoughtful clinically throughout. I'll give just a couple of examples that maybe highlight some of the, I'll call it, more likely areas of adjustment. The first thing you have to understand is a large percentage of patients are not eligible or suitable for topical pharmaceutical therapy, period. Right?
We can spend more time on that. A large percentage of patients are not eligible or suitable for SLT, right? When you combine those together, a very large percentage of patients are not eligible or suitable for a combination of both. Even though if you talk to the average glaucoma physician, certainly ones that are not on the more leading edge of interventional glaucoma, et cetera, you'll hear things like, "I often lead with SLT or some combination of SLT or drops." It's not fighting that. It's just that when you actually go a layer deeper, you realize that that's true for a certain percentage, maybe even a majority of patients, they try to go that path. There's a very large percentage of patients who that's not actually a suitable course of care, right?
It's almost impossible, guys, right, to expect the MAC, because we'll all defend the MAC a little bit. There's no way for them to truly know all of these things across all areas of medicine. That's why there's the open comment period. There's why there's education process and ultimately that goes through it. Beyond that, obviously, we do have published literature and evidence around combining iDose with iStent infinite and a large level one study that's ongoing and enrolling now and where we expect to have results in 2027. The re-administration language, for example, while probably not a big focus of investors because for the vast majority of patients, it lasts two years or longer anyway, it's arbitrary. There's reference to the FDA label and yet doesn't follow the FDA recommendation for re-administration, it's really not based on anything that's clinical or any real rationale behind it.
It's arbitrary. I think across the board, there's a lot of areas that we will educate and certainly will lean in on some of the things that are most important, which I think are the things that impact patient care the most.
Got it. That's great. Joe, you mentioned kind of not seeing the usual smoke signals, maybe that is a signal of limited feedback being solicited within the surgeon community during this process by the MACs. If we think back to MIGS in 2023, there was overwhelming pushback from the societies, the physicians, as well as the manufacturers, of course. Based on your initial interactions, again, with ASCRS, American Glaucoma Society, et cetera, as well as the doctors, should we anticipate during the comment period a similar level of surgical community and society kind of support for changes and overall pushback to these LCDs?
Yeah, I think, of course, because at the end of the day, thankfully, the societies and the physician community care first and foremost about the patients and making sure they're able to get access to care based upon their clinical needs and what they determine is the optimal form of that care for those patients. Whenever you have something like this that has huge gaps in the context of what it actually means for the patient care continuum and it's not that thoughtful, you can expect that the societies and physicians alike are going to engage and passionately engage in many cases around that.
You have to remember, not just the patients that we're talking about in terms of the overall statistics, but the patients who benefit the most from all this often are in underrepresented communities, Hispanics, African Americans, et cetera, where you have high rates of glaucoma and low rates of compliance. Remember, one of the big things that is overarching, it's less specific to this exact line by line that you're probably going to take us through in terms of individual lines. Just remember that in the real world, there's several dozen studies that show that drop-based therapy doesn't work in the real world. In that context, that only 10% are truly compliant, that one of every two patients don't even fill their first prescription.
Now there's all this evidence that shows that when you actually are prescribed a drop, between 50% and two-thirds are lost to follow-up, and they have more than twice the rate of blindness as a part of that. I think, again, it goes back, there's a macro and there's a micro education process. That latter point that I'm making, there's huge passion about in the context of whether your chosen tool of choice is iDose or Durysta or MIGS or SLT for that matter. The whole purpose of that is that we didn't have options until now. Now we do, we have to do better in caring for these patients because ultimately they're not going to do it for themselves when you have an asymptomatic, slowly progressing disease.
Got it. That makes sense. Maybe to zero in, at least on probably the aspect of the LCDs that was, I'll call it most incremental or surprising for investors which was the criteria around prior SLT failure, and I should say end prior SLT failure. To start off, one of the biggest questions I've gotten and curious Glaukos' views or any data you may have. What proportion of iDose eyes do you estimate had prior SLT? Just as we try to think about the potential, I'll call it near term headwind if the LCDs were to go into effect in 2027. Do you have any sense for that kind of prior SLT exposure to iDose eyes within iDose eyes?
Yeah. I think by the nature of the question, we don't have that exact data, Tom. Similar like when we say like comm- converts, when it goes out the door, we don't know if it's going into an eye that has prior SLT or not with any objective evidence. We continue to look for different estimates of that. I think when we have that conversation, it's probably more important to talk about 2027 in that context, right? As you think about what it could or couldn't mean for us, you have to put in context that this is not a mature market. One of the positives I'll call from a Glaukos or Wall Street perspective, not so much from a patient care, but from a Glaukos and Wall Street perspective is that this is such an early part of our life cycle.
When you think about it's not like we have a big mature market where you're fully penetrated and then restrictions make that pull back. We're talking about here is at this point in time, whether it's 2026 or 2027, you're just now turning on the incremental demand associated with NGS, Palmetto GBA, hopefully with this LCD and the various things we see, WPS Health Solutions and CGS Administrators professional fees come online. Let alone commercial and Medicare Advantage and the things that are there. I think in some ways you have to first think about with all those drivers, where will 2026 land and how long of a putt is that even to the current 2027 consensus, if you will?
What are the various growth drivers that get you there relative to whatever headwind could potentially emerge if you believe that nothing is going to change in the current LCD, which I don't believe? If you want to take that position, I still think there are a lot of different paths you get to what that could mean for 2027, 2028, certainly beyond.
Got it. Maybe to push a little bit on the SLT, is there a range we can think about? Is it 25%? Is it 50%? Could it be 75%+ ? We've seen some real-world data, but there are I'd say varying data points a little bit. Is there any range you could possibly point to for prior SLTs, again, as we try to refine our models a little bit?
Yeah. Again, I go back to let's think about SLT in general. Depending on how you cut it, between SLT and broader laser-based therapy, there are between six and 850,000 eyes a year done with SLT or broader laser therapy. It's been that way for the better part of two decades. You have a very large prevalence pool, if you will, of some of that's repeat and all the various things are there. Either way you slice it, there's a very large pool of patients who are within that SLT framework having already been treated, and it's growing every day with the movement towards interventional glaucoma and the broader conversations that we and others are doing an unbranded way to drive that. I think there's a very large patient population.
Remember, even the numbers we're talking about in 2026, we're talking about what, 18,000, 20,000 iDose. In 2027, you're talking about 25,000, 26,000 iDose at consensus. You're dealing with a very large patient population or pool, even with SLT as a prerequisite, especially if you start to define it in the proper way and exclude those patients who are not suitable candidates. I think part of the challenge is you got to look at it, and I think the Teymourian data is out there around as one data point. Dr. Teymourian is obviously interventional approach and if you ask him in all suitable cases, he will offer SLT as the first-line therapy as a part of that patient continuum.
In his data, I think it's roughly 30% that are not eligible or not suitable for SLT, meaning that 65%, 70% of his patients are ultimately eligible in the context of SLT. You can't divorce those two parts of the conversation because ultimately that's also the reason why the policy has to be updated and adjusted in that Dr. Teymourian, who's doing it the right way in that example, has to have a path for the patients who are not suitable or eligible, whether it's for topical therapy or in his case, the SLT therapy.
Got it. What does the edit or the update around SLT, what does that look like in what you think the ideal LCD is come finalization? I guess how should investors think about the argument for why prior SLT should not be a prerequisite for iDose or why drops and SLT should not be a prerequisite? Does the company have evidence or what is the case that Glaukos wants to make if that is an objective to kind of amend that SLT commentary? What does that look like?
Well, let's flip it the other way around, and I'll answer. I think you had multiple parts in that, Tom, as you do so well. The first thing is there's no evidence to suggest that SLT should be a prerequisite to iDose. Remember, in this case, iDose is a FDA-approved pharmaceutical. It is done through a 505(b)(2) pathway, which is actually means that it's largely similar to its predicate that it's been studied, in this case travoprost. If you're acknowledging that pharmaceuticals should be a part of first-line therapy, iDose by extension is in that same class. Right? There's really no evidence to suggest that SLT. The only difference in iDose, as you know, is it solves the number one problem associated with topical-based therapy, both the side effect profile, but more importantly, non-adherence and the things that go alongside of what I already mentioned.
From that standpoint, there's not really any prerequisite to suggest it should be that way. Okay? Within that, I will say there's a whole host of different things that you go down in the context of if you were still to say, okay, and put your head in the sand that SLT should be, the fact of the matter is you have to make sure it's appropriately defined for those patients it's truly eligible and suitable for. If a patient has uveitis, ocular inflammation, the doctor can't get a good view of the TM, the patient can't sit in a slit lamp, right, to have it done. If there's morbid obesity, if they've had prior MIGS, if they have light sensitivity, tremors, other ophthalmic disease, on and on and on, right?
There's a whole host of these things that make them not candidates that you have to make sure are factored into any coverage policy or determination if you're going to have that be a part of it. By the way, the same list is actually even longer on topical medicine-based therapies as well in terms of where it's not appropriate or suitable. I think you go after all that, and I think you referenced the failure side of that too. I'm not going to repeat what I just kept on saying about where it's not clinically appropriate. Even for those patients that are eligible, if you will, and say it's a part of that, the vast majority of these patients fail. Some fail in a couple of months, some fail in a year, some two, three, five years along that way.
I go back to what I said before, you've got a really large already existing pool of prevalence that we go after. We're just so early in our, I'll call it life cycle, that there's plenty of opportunity there to continue to grow and go. I don't personally think that's where it's going to land, right, as we go through the whole LCD process. I want you and investors to have some comfort that even in those worst-case scenarios, there's plenty of paths to make sure that we're continuing to grow the iDose franchise and grow it within a large market.
Got it. A good segue into my next question just on 2027 iDose revenue. Joe, you really explained well that you're early in this journey. There are paths to getting to consensus. I look at 2026 streets at around $240 million in iDose revs, 2027 about $335 million. If the LCDs are finalized as proposed, would it make sense for investors to haircut that 2027 number by what the math might tell us, at least are the iDose eyes that would no longer have the access due to prior SLT failure requirement? No, in that you're confident there are other means, pathways, catalysts that can make up for any of that lost revenue. Hopefully, that question makes sense. I guess the heart of it is 2027, if we were to assume finalization, should we not be bringing down our numbers or should we haircut it a bit?
Yeah, no, I appreciate the question. Tom, in some ways, you're tugging at both sides of my mind on this and that generally speaking, I never try to forgo an opportunity to get your numbers lower in the context of any situation. As they say, whether it's an IR crisis or a real crisis, take advantage of that. I have to tell you, in this situation, I just can't do it. It goes back to, I'm not going to repeat everything I just said before, but I don't think about it as much in revenues. You have to think in terms of units.
I go back to the fact that number one, it's still a little premature based upon the incredible start we had of the year and continue to be having as we move forward here on iDose, exactly how long of a putt that will be from 2026 when it finishes to what we're talking about in 2027. To think if we, again, I'm just using round numbers. If you do 18,000, 20,000 or more units, to take that to 25,000 in 2026, even with some incremental imposition, there are just multiple areas in which you go to accomplish that, right? Commercial, Medicare Advantage, the various MACs that have just now turned on, the various MACs that will continue to turn on. I just feel like sitting here today, obviously we'll always continue to evaluate that math and be looking at it.
Sitting here today, I can't take advantage of, I guess, the window you just gave me to try to adjust the expectations around the 2027 iDose revenue expectations.
Got it. That's very fair. Maybe last one here and want to spend at least a couple of minutes on Epioxa, but long-term iDose revenue, so beyond 2027, maybe thinking about peak sales, if you will. How should investors be thinking about the impact of the LCDs, again, if they're finalized as proposed? How do you weigh these dynamics when you're internally calculating what you believe peak iDose sales are?
Yeah. I think there's two different ways you got to look at that.
The first one is, I think from a Wall Street expectations perspective, in terms of what you all have in your models and the various things you've done to do your DCFs and the various things that I've seen at least, and Chris has seen, I don't think it impacts it at all because I think when you look at the underlying volumes attached to some of the peak sales estimates associated with the models, at least the published models on Wall Street, I think they all fall well within, again, what I said earlier, which is if you have 850,000 procedures a year today getting done in SLT and growing, and you've got a prevalence pool that then is measured in several million of potential eyes, if you will, that there's plenty of room to meet and exceed, I'll call it the long-term expectations that Wall Street has around this drug today.
For us, look, the way we've always looked at it is we see 12- 13 million eyes that are diagnosed and treated and 20 million eyes overall. How quickly we can close it. If you had that in place and you're driving MACs SLT utilization over the next 5-10 years, how much can we close that gap between today's reality and that prior? That would be the question that would play out in our long-term models. It shouldn't surprise anybody that our long-term models, as I sit here today, are well in excess of a lot of what we see in the context of the Wall Street models, purely because we believe interventional glaucoma is a clear pathway for the industry, and iDose is the best tool within it, and it's a really large market as we think about it sitting here today.
Got it. Last one, just to go back to the SLT criteria, just to put a bow on that. What does Glaukos think the amended SLT criteria in the LCD, what should that look like? During the comment period, what's the outcome you're going to be striving for specific to that language?
Yeah. I'm not going to get into the, I'll call it public adjudication of exactly what we're going to ask and the various things there in the societies, and it's also a little bit early in that. I'll say, and I'll go back to what we just got done talking about. At a bare minimum, if you're going to land on SLT as a criteria within it, you've got to have the right criteria attached to it around patients that are eligible or suitable for that therapy, period. Right? Obviously from our standpoint, and I think most physicians, et cetera, you'd prefer because it's a multifactorial disease, right? There's always so many tailed patients, et cetera. There's no proof out there, evidence that suggests that SLT should be first line over iDose, period, as a pharmaceutical and a sustained pharmaceutical.
Obviously that is a part of what we want to go make sure we educate, but even if we lose on that point, if you will, for some reason, then the most important thing is that the criteria is properly included around patients that are eligible and suitable.
Okay. Makes sense. I guess one final one here. Obviously the LCD language, it essentially says drop failure to medications and failure on prior SLT. As we think about the LIGHT study supporting SLT as first line and in lieu of drops, that data suggests that it should be or. Is that something the company and societies might pursue in changing the LCD language being rather than drop failure and SLT failure, there's an argument to be made that for the iDose LCD it should be or instead of and? Is that something that's plausible as an outcome here for what the amendment might look like, and is Glaukos going to pursue that or no?
At a bare minimum, yes. I mean, you referenced, Tom, part of it. I should've also noted that a lot of the SLT evidence that's out there even today is on mild patients. It's not actually the standard of care when it comes to more moderate and advanced patients, of which 50% of patients overall are. There's a whole host of things that are there. But even to your point of or, there's the evidence that you cited plus what I said before. You have a large group of patients who are unsuitable for topical therapy, and you have a large percentage of patients, and I would argue all patients are not suitable for topical, but set that aside. There's a percentage of patients that are not suitable for the SLT. When you have an and statement, you have a multiplier effect.
Now the policy itself is not suitable in that context for an even larger percentage of patients because of the combined groups of each of those, and that's just not acceptable from a physician society or from that standpoint, Glaukos perspective.
Got it. Last minute or two, I'll, I guess ask for sort of a final word and the stock has been under a lot of pressure, kind of accelerating pressure a little bit. There, I guess from the investment perspective, there's uncertainty out there, notably around SLT. I guess, is it right now a wait and see with that uncertainty or talk about Glaukos' level of confidence, this may be an overreaction a bit, and that possibly investors are kind of missing the forest for the trees here?
Well, sure, Tom. You already said it. In large part, I suppose in some respects we're not surprised. I think those folks who are experts in developing short theses, et cetera, know how to take advantage of a situation like this as that certainty is there. The way I look at it is you have to believe that based upon historical facts, that the LCD that's proposed will either be optimized or go away in some form, right? Be delayed as a part of it all, just based upon the clinical evidence that's out there and things around that.
I think that it's an interesting period here, if you will, where it's, for those who do the work, a very interesting investment window because what's going to happen here is that come the end of the next month, it's going to be cleaned up, it'll be there, and then the combined results that we continue to have, the growth drivers we've got both within glaucoma, within iDose within glaucoma, within Epioxa, and what I would argue is statistically speaking, a much likelier outcome, which is favorable to the draft LCD, then I think at some point there you obviously have a whole lot more tailwinds than you do headwinds in the context.
I hope people take advantage of this, I'll call it technical trading dynamic to build a strong position for what we think are two major secular growth drivers for the next decade plus in Glaukos. This may be one of the last windows people get to jump into the stock as a part of that. Look, everybody has to do their own work around that. Obviously, we have a high degree of conviction about what we're doing right now, executing both in the core business as well as the education of the MACs around this LCD on that particular part of the business. We continue to have I think largely blue skies ahead of us, and we're going to continue to drive forward as fast and hard as we can within that.
Perfect. Great note to end on, Joe, Alex, Chris, good to see you guys as always, and looking forward to catching up soon.
All right. Thanks, Tom.
Take care. Bye, guys.