Executive Summary / Key Takeaways

• Glaukos is actively pioneering the Interventional Glaucoma (IG) market with its differentiated iDose TR procedural pharmaceutical and standalone iStent infinite, aiming to shift the standard of care towards earlier intervention and reduce reliance on topical drops.
• The commercial launch of iDose TR is showing strong early traction, significantly contributing to U.S. Glaucoma revenue growth, supported by positive clinical feedback and progress in establishing reimbursement certainty (J-code, facility fees, professional fees).
• Despite overall revenue growth (25% in Q1 2025), the company faces headwinds in its U.S. stent business due to recent MAC LCDs restricting combination procedures and increasing competition, alongside foreign exchange pressures internationally and MDRP impacts in Corneal Health.
• Glaukos is investing heavily in a robust pipeline across glaucoma, corneal health (Epioxa NDA accepted, PDUFA Oct 2025), and retina, viewing these programs as future growth catalysts, and is managing its capital structure to support these initiatives with a goal of achieving cash flow breakeven.
• The company's 2025 outlook reflects confidence in the iDose ramp and international growth, balanced against U.S. stent declines and other market uncertainties, with OpEx expected to grow around 15% to fund strategic initiatives.

The Dawn of Interventional Glaucoma

Glaukos Corporation, established in 1998, has carved a unique niche in the ophthalmic market by focusing on novel, dropless platform therapies. Its foundational contribution was pioneering Micro-Invasive Glaucoma Surgery (MIGS), fundamentally altering the treatment paradigm for mild-to-moderate open-angle glaucoma. This historical success with the iStent family of devices laid the groundwork for the company's current strategic pivot: leading the charge in the emerging Interventional Glaucoma (IG) marketplace. The core idea is to move beyond traditional eye drops and late-stage surgeries towards earlier, less invasive interventions designed to slow disease progression and alleviate the significant burden of daily medication for patients.

This strategy is embodied in Glaukos's differentiated technology portfolio. The iStent family, including the latest iStent infinite, represents micro-scale devices implanted in the eye's drainage system. The iStent infinite, for instance, allows for the placement of multiple stents, offering a quantifiable advantage in restoring natural aqueous humor outflow. While specific comparative metrics against all rivals are not detailed, the technology's micro-invasive nature and targeted approach are central to its value proposition.

More recently, Glaukos has expanded its technological frontier into procedural pharmaceuticals with iDose TR. This innovative implant is designed to continuously deliver a proprietary formulation of travoprost directly inside the eye for extended periods. This targeted, sustained-release approach offers a significant potential benefit over daily eye drops, which suffer from issues like patient adherence, inconsistent dosing, and surface toxicity. The company views iDose TR as pioneering a new therapeutic category with the potential to reshape glaucoma management.

Beyond glaucoma, Glaukos has built a presence in corneal health, notably with Photrexa for keratoconus, acquired through the Avedro transaction. Its next-generation therapy, Epioxa, aims to provide a non-invasive cross-linking treatment without removing the corneal epithelium, potentially streamlining procedures, improving patient comfort, and shortening recovery times. This technological advancement, currently under FDA review with a PDUFA date in late 2025, represents a strategic move to enhance the value proposition in this rare disease area. The pipeline also extends into retinal diseases and other anterior segment disorders, leveraging platform technologies like iLution and Retinal XR.

The "so what" for investors is clear: Glaukos is not merely competing within existing markets but actively creating and leading new ones. Its technological innovation, particularly in micro-invasive devices and sustained-release pharmaceuticals, provides a differentiated offering that addresses significant unmet needs in chronic eye diseases. This focus on pioneering new treatment paradigms is the engine driving the company's long-term growth strategy, aiming to capture a larger share of the vast ophthalmic market.

Navigating a Dynamic Competitive and Reimbursement Landscape

Glaukos operates within a competitive ophthalmic market dominated by larger, more diversified players like Alcon (ALC), Johnson & Johnson (JNJ) (Vision Care), and Bausch + Lomb (BHC), as well as numerous smaller device and pharmaceutical companies. These competitors offer a range of products, including traditional surgical options, laser therapies, topical medications, and their own MIGS devices.

Compared to its larger rivals, Glaukos is a more focused, innovation-driven company. While companies like Alcon and J&J benefit from extensive global distribution networks, diversified portfolios, and significant economies of scale leading to potentially lower operating costs, Glaukos differentiates itself through its specialized micro-invasive and sustained-release technologies. Glaukos's technological edge, such as the targeted delivery of iDose TR or the multi-stent capability of iStent infinite, allows it to offer unique clinical benefits. However, this often comes with the challenge of establishing new procedures and securing adequate reimbursement in complex healthcare systems.

The reimbursement landscape, particularly in the U.S., is a critical factor shaping Glaukos's market access and competitive positioning. The company's success hinges on obtaining favorable coverage and payment rates from third-party payors, including Medicare Administrative Contractors (MACs) and commercial insurers. Recent developments highlight both progress and challenges. iDose TR successfully secured a permanent J-code (J7355) effective July 1, 2024, and its procedural CPT codes (0660T/0661T) were assigned to an appropriate Ambulatory Payment Classification (APC). Professional fees are being established with MACs, with some already publishing rates. This progress is crucial for increasing physician and facility confidence in billing and reimbursement, which is a key driver for iDose TR adoption.

However, the U.S. stent business faces headwinds. Final MAC LCDs implemented in late 2024 confirmed coverage for standalone iStent infinite but restricted the use of two different surgical MIGS devices in the same procedure. While these LCDs did not prohibit combining surgical MIGS with procedural pharmaceuticals like iDose TR, they have caused "transient turbulence" in traditional ordering patterns and may have led some customers to utilize competitive products. This, combined with the expiration of royalty income from the Hydrus Microstent (a competitor product), is expected to result in a mid-single-digit decline for Glaukos's non-iDose U.S. glaucoma revenues in 2025.

Internationally, Glaukos continues to see broad-based growth in its glaucoma franchise, reflecting efforts to scale infrastructure and drive MIGS adoption. However, this segment is also subject to increasing headwinds from the trialing of new competitive products and unfavorable foreign currency exchange rates, particularly the Euro, which negatively impacted Q1 2025 growth by approximately 380 basis points.

In Corneal Health, the company's entry into the Medicaid Drug Rebate Program (MDRP) has impacted Photrexa's realized revenues, contributing to the segment's relatively flat performance in Q1 2025. This MDRP headwind is expected to persist, influencing the segment's outlook for 2025.

The competitive dynamic is thus multifaceted: Glaukos leverages its technological innovation to create new market opportunities and differentiate its products, while simultaneously navigating complex reimbursement pathways and facing pressure from larger, established players and emerging rivals. Its strategic response involves generating robust clinical evidence, actively engaging with payors, and expanding its commercial infrastructure to support the adoption of its novel therapies.

Financial Performance and Outlook

Glaukos reported record net sales of $106.7 million in the first quarter of 2025, a significant 25% increase compared to $85.6 million in Q1 2024 (26% on a constant currency basis). This growth was primarily fueled by the Glaucoma segment, which saw sales rise 31.1% to $88.1 million. U.S. Glaucoma sales were particularly strong, increasing 41% to $59.1 million, driven predominantly by the early ramp-up of iDose TR, partially offset by slightly lower iStent family volumes due to the aforementioned MAC LCD impacts. International Glaucoma sales grew 15% (19% constant currency) to $29.0 million, reflecting solid volume growth in key markets despite FX headwinds. The Corneal Health segment remained relatively flat year-over-year, with sales of $18.5 million, as increased U.S. Photrexa sales were largely offset by MDRP-related rebates.

Gross profit increased 26% to $82.3 million in Q1 2025, resulting in a gross margin of 77%, a slight improvement from 76% in Q1 2024. Cost of sales increased proportionally with revenue.

Operating expenses totaled $103.0 million in Q1 2025, a slight decrease from $104.4 million in Q1 2024 (which included $11.7 million in acquired IPRD). Selling, general, and administrative (SGA) expenses increased 14% to $70.7 million, driven by higher personnel costs, commercial infrastructure build-out, and market access efforts supporting the iDose launch. Research and development (R&D) expenses rose 5% to $32.4 million, reflecting ongoing investment in the pipeline.

The loss from operations improved significantly to $20.7 million in Q1 2025 from $39.1 million in Q1 2024. Total non-operating income, net, was $2.9 million in Q1 2025, compared to a net expense of $1.4 million in Q1 2024, primarily due to lower interest expense following the retirement of Convertible Notes in 2024 and favorable FX impacts. The net loss for Q1 2025 was $18.1 million, a substantial improvement from the $40.8 million net loss in Q1 2024.

As of March 31, 2025, Glaukos maintained a strong liquidity position with $114.3 million in cash and cash equivalents and $184.4 million in short-term investments, totaling $298.7 million. Restricted cash was $4.7 million. Net working capital stood at $376.0 million. Cash used in operating activities decreased to $18.5 million in Q1 2025 from $33.9 million in Q1 2024, reflecting the reduced net loss. Investing activities used $36.9 million, primarily due to purchases of short-term investments and capital expenditures. Financing activities provided $2.0 million, mainly from stock option exercises and ESPP purchases. The company's goal is to achieve cash flow breakeven to fund its pipeline investments.

For the full year 2025, Glaukos reaffirmed its net sales guidance range of $475 million to $485 million. This outlook implies continued strong performance driven by the iDose TR ramp and international growth, balanced against anticipated headwinds in the U.S. stent business (mid-single-digit decline), Corneal Health (flat to low single-digit growth), and ongoing macroeconomic uncertainties including FX. Management expects OpEx to grow around 15% off the adjusted 2024 base to support strategic initiatives and pipeline advancement. Quarterly pacing is expected to follow a typical ophthalmic seasonality pattern, weighted towards the second half, particularly Q4, driven by the iDose ramp.

Key risks to this outlook include the pace of iDose TR reimbursement adoption and professional fee establishment, the impact of MAC LCDs on the U.S. stent market, competitive responses, foreign currency fluctuations, and the successful execution of pipeline milestones and new product launches.

Conclusion

Glaukos stands at a pivotal juncture, leveraging its legacy in MIGS to pioneer the broader Interventional Glaucoma market with innovative therapies like iDose TR and standalone iStent infinite. The strong Q1 2025 results, particularly the significant contribution from iDose TR, underscore the early success of this strategic shift and the potential of its differentiated technology to address large, underserved patient populations. While the company continues to incur losses as it invests heavily in R&D and commercial expansion, its solid balance sheet and stated goal of achieving cash flow breakeven provide a pathway to fund future growth.

The investment thesis hinges on Glaukos's ability to successfully execute its iDose TR launch by navigating the complex reimbursement landscape and driving physician adoption, while simultaneously advancing a promising pipeline that includes the near-term potential of Epioxa and longer-term opportunities in retina and next-generation platforms. Investors should closely monitor the pace of iDose TR's commercial ramp, progress in securing consistent reimbursement across all payor segments, the impact of competitive dynamics and MAC LCDs on the U.S. stent business, and key pipeline milestones as indicators of the company's trajectory towards sustained growth and profitability.