Stifel 2026 Healthcare Conference - GLAUKOS CORP

Explicit Guidance:

• FY2026 total company revenue guidance: ~$800 million (implied by the $630M OPEX guidance being ~25% below 2027 street estimates of ~$800M, though explicit revenue numbers for 2026 were not re-stated in this specific transcript, the context implies a trajectory leading to $1B in 2027).
• FY2026 Operating Expenses (OPEX) guidance: $630 million.
• FY2027 Total Company Revenue target: $1 billion.
• FY2027 Operating Expense Growth: Management indicates ~25% year-over-year OPEX growth is a fair estimate for models, driven by DTC marketing, commercial infrastructure expansion, and R&D pipeline investments.

Business-Segment Outlook:

• Epioxa (Corneal Cross-Linking):
  • Market Expansion: Objective to treat 50,000–100,000 diagnosed eyes annually in the U.S., up from the previous 18,000–20,000 run-rate established by Photrexa/Intevox.
  • 2027 Volume Target: Aiming to reach the 18,000–20,000 annual eye treatment run-rate as a "floor" and potentially significantly higher if payer access and disease awareness initiatives succeed.
  • Commercialization: Significant investment in disease awareness (e.g., Stephen Curry partnership) planned through 2027 to drive patient identification and access.
  • Payer Dynamics: Expect continued process-oriented headwinds (timeliness of payments, prior authorization) but anticipate overall policy trends favoring established cross-linking standards.
• Eidos (Interventional Glaucoma):
  • FY2026 Guidance Implication: Sequential growth from Q3 to Q4 is expected to be modest (low $280M range for full year), driven by historical seasonality (busy cataract schedules, Medicare Advantage dominance).
  • Q4 2026 Dynamics: Anticipated to mirror Q4 2025 trends with cataract-dominant schedules and potential delays in scheduling.
• iLink Gen 3 (Topo-Guided Custom Cross-Linking):
  • Clinical Milestones: Phase 2 studies ongoing; Phase 3 pivotal trials scheduled to commence in 2027.
  • Goal: Enhance visual acuity outcomes beyond current Epioxa capabilities (halting progression only vs. visual improvement).
  • Timeline: No specific commercial launch date provided for 2027 or 2030, but commitment to fast-track enrollment and commercialization pending data.

Market and Competitive Outlook:

• Market Structure: Management views the corneal cross-linking category as a "rising tide" where responsible competitors can coexist; competition is not viewed as a zero-sum game given the low market penetration (rarely diagnosed disease).
• Competitive Strategy: Focus remains on offense (disease awareness, finding undiagnosed patients) rather than share war, as the market is viewed as far from a share-conversation stage.
• Eidos Reimbursement: Confidence in "drug-as-procedure" status similar to gene therapies (e.g., Luxturna) and specialized drugs that are the primary procedure rather than ancillary.

Macro / Industry Outlook:

• CMS Policy (Pass-Through): Management expects CMS to evaluate bundling for the hospital setting following the mid-next-year pass-through expiration but believes:
  • Outcomes will likely be neutral or minimal impact due to available APC assignments.
  • Hospital volumes for Eidos are low; procedures are largely shifting to Ambulatory Surgical Centers (ASCs).
  • Contagion risk to the ASC setting regarding bundling is "very minimal."
• Reimbursement Environment: Acknowledges process headwinds (payment timing, J-code loading) and holdout MACs (e.g., WPS, CGS) affecting professional fee access, but expects progress as the category matures.

Strategic Initiatives:

• Disease Awareness: Increased investment in patient education and awareness campaigns in 2027 to identify undiagnosed keratoconus patients.
• Commercial Infrastructure: Plans to expand commercial infrastructure, hubs, and support functions in 2027 to support scaling of Epioxa and Eidos launches.
• Pipeline Investment: Continued funding of 14 disclosed R&D programs with specific greenlighting of new programs anticipated in 2027.
• Cost Management: Will not hold back on growth investments; OPEX is expected to scale flexibly with revenue. Digital marketing is a flexible lever to increase spend rapidly if revenues exceed expectations.

Risks and Headwinds to Outlook:

• Payer Tactics: Insurance carriers may use process delays, prior authorization, and policy tweaks to slow adoption rates despite favorable medical data.
• Seasonality: Q4 typically faces reduced procedure volumes due to cataract schedules and patient benefit expirations (insurance expirations pushing procedures into the new year).
• Execution Variability: Uncertainty regarding the speed of payer access approval and the timeline for realizing the 18k–20k eye run-rate in 2027.
• Q4 Volume Dynamics: Potential for "end-of-year" delays where patients defer procedures to the new year due to benefit expirations, moderating Q4 growth.
• Regulatory/Bundling: Low-probability risk of CMS bundling Eidos in hospital settings, though management views this as manageable given ASC shift and "procedure-drug" classification.

Management Tone on the Future:

• Confidence Level: High confidence in the long-term growth profile of both Epioxa and Eidos. Management expresses being "very good" about the trajectory for 2027.
• Strategic Philosophy: Explicitly prioritizes top-line growth and market expansion over short-term quarterly profitability management.
• Patience Call: Management urges investors to "have some patience" regarding the ramp to 20k+ annual treatments, acknowledging a "learning curve" in payer processes and disease identification.
• Flexibility: Willing to adjust OPEX spend upward quickly if revenues exceed expectations, particularly in digital marketing, while R&D ramp-ups are slower to deploy.

Miscellaneous:

• Q3 Performance Reference: Q3 Epioxa sales ($53M) and Eidos sales ($76M) cited as strong, but management cautions against over-analyzing sequential growth curves in the "early days" of the launch.
• Eidos Seasonality: Clarification that Q3 sequential decline in ophthalmology procedures is a factual reality; Eidos performed well sequentially despite this headwind.
• Regulatory Clarification: Corrected a misconception that CMS finalized bundling for Eidos immediately; noted that bundling evaluation occurs mid-next year upon pass-through expiry.