Glaukos Corporation Q2 2026 Earnings Call

Hello and welcome to Glaukos Corporation's second quarter 2026 financial results conference call. Copies of the company's press release and quarterly summary document, both issued after the market close today, are available at www.glaukos.com. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. This call is being recorded, and an archived replay will be available online in the investor relations section at www.glaukos.com. I will now turn the call over to Chris Lewis, Vice President of Investor Relations and Corporate Affairs.

Thank you and good afternoon. Joining me today are Glaukos Chairman and CEO, Thomas Burns, President and COO, Joseph Gilliam, and CFO, Alex Thurman. Similar to prior quarters, the company has posted a document on its investor relations website under the financials and filings quarterly results section titled Quarterly Summary. This document is designed to be read by investors before the regularly scheduled quarterly conference call. To ensure ample time and opportunity to address everyone's questions, we request that you limit yourself to only one question. Please note this is a change versus our previous calls. 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 forward-looking statements.

These include statements about our plans, objectives, strategies, and prospects regarding, among other things, our sales, products, pipeline technologies and clinical trials, U.S. and international commercialization, market development efforts, product approvals, the efficacy of our current and future products, competitive market position, regulatory strategies, and reimbursement for our products, financial condition, and results of operations, as well as the expected impact of general macroeconomic conditions, including foreign currency fluctuations on our business and 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.

Please review today's press release and our recent SEC filings for more information about these risk factors. You'll find these documents in the investor section of our website at www.glaukos.com. Finally, please note that during today's call, we will also discuss certain non-GAAP financial measures, including results on an adjusted basis. We believe these financial measures can facilitate a more complete analysis and greater transparency into Glaukos' ongoing results of operations, particularly when comparing underlying results from period to period. Please refer to the tables in our earnings press release available in the investor relations section of our website for a reconciliation of these measures to their most directly comparable GAAP financial measure. With that, I will turn the call over to Glaukos Chairman and CEO, Thomas Burns.

Okay. Thank you, Chris. Good afternoon. Thank you all for joining us today. Today, Glaukos reported record second quarter consolidated net sales of $185.6 million, up 50% on a reported basis and 49% on a constant currency basis versus the year-ago quarter. As a result of our second quarter outperformance, we are raising our full year 2026 net sales guidance to $680 million-$700 million, an increase of $60 million-$65 million over our prior guidance of $620 million-$635 million. Our second quarter results reflect strong performance across our global commercial and development priorities, underscoring the successful execution of our teams, the strength of our differentiated technology platforms, and our continued evolution as an increasingly diversified leader in ophthalmology.

Looking ahead, we believe we are well positioned to sustain this momentum, driven by two transformational growth drivers, including the further advancement of the interventional glaucoma treatment paradigm with iDose TR and the launch of Epioxa, establishing a new standard in interventional keratoconus and rare diseases. Together, these compelling and durable market opportunities reinforce our confidence in our ability to deliver a best-in-class growth and margin profile well into the next decade. At the same time, we continue to invest strategically across our industry-leading pipeline and commercial infrastructure while maintaining a focus on disciplined capital allocation to support sustained operating leverage and cash flow. While our priority remains to maximize near and long-term growth, we were pleased with our progress across our P&L in the second quarter. Let's discuss our second quarter results in more detail.

Within our U.S. glaucoma franchise, we delivered record second quarter net sales of $118.5 million on strong year-over-year growth of 64%, driven by growing contributions from iDose TR, which generated sales of approximately $74 million in the second quarter. iDose TR continues to deliver strong clinical outcomes that meaningfully improve patients' lives, resulting in strong physician interest and adoption while helping to accelerate a broader treatment paradigm shift towards earlier interventional glaucoma care. From an execution standpoint, we remain focused on our key initiatives, including expanding our base of trained surgeons and active accounts, increasing utilization, broadening market access, scaling targeted commercial investments, and expanding the robust and growing body of clinical evidence, which now includes 24 peer-reviewed publications, complemented by a broad portfolio of active phase IV studies across diverse real-world clinical settings, further reinforcing its consistent performance in real-world practice.

Earlier this month, CMS issued its proposed rules for 2027, which, as drafted, largely maintain the 2026 APC assignments, associated facility payments, and relative physician fee rates associated with our procedures across both the hospital outpatient and ASC settings. As many of you know, during the quarter, five of the seven Medicare Administrative Contractors issued proposed local coverage determinations for iDose TR. We were encouraged by the overwhelming support from physicians, medical societies, and other stakeholders throughout the open meetings and public comment period, validating the meaningful clinical value that iDose TR is delivering to patients. We continue to believe that the strength of iDose TR's clinical evidence, real-world outcomes, and broad stakeholder advocacy support appropriate Medicare coverage that preserves physician decision-making and patient access. Moving on. Our International Glaucoma franchise delivered record net sales of $36.6 million on year-over-year growth of 17% on a reported basis and 16% on a constant currency basis.

The strong growth was once again broad-based as we continue to scale our international infrastructure and execute our plans to drive MIGS forward as a standard of care in each region and major market in the world. As previously discussed, we continue to expect new competitive product trialing headwinds in some of our major international markets as we progress through 2026, partially offset by growing contributions from iStent infinite following its EU MDR certification and associated European commercial launches late last year. We also expect the currency tailwinds to abate going forward based on the current rate environment. Finally, our Corneal Health franchise delivered net sales of $30.4 million on year-over-year growth of 48%, including Epioxa net sales of approximately $11 million.

Turning to Epioxa, we remain very encouraged by the early progress of our commercial launch as the first and only FDA-approved epithelium-on corneal cross-linking therapy for keratoconus. Epioxa has been met with strong interest from surgeons and the broader ophthalmic community, reinforcing our confidence in its potential to redefine the treatment paradigm for this rare, sight-threatening disease that is currently far too often undiagnosed and untreated. Our launch priorities remain centered on expanding patient access, building awareness, optimizing referral networks, and driving earlier diagnosis. We continue to make meaningful progress across each of these areas, including the ongoing expansion of our site of care network, establishing broad market access, and the implementation of our specialty pharma infrastructure and robust patient support programs. First, I'm proud to report that we've successfully established and continue to selectively expand a broad, reaching site of care network.

Our acquired O2n systems are already actively deployed across locations serving roughly 85% of the U.S. population, with a pipeline progressing through various approval processes that we expect will expand our treatment center reach to approximately 95%. Next, we continue to make considerable progress with payers to secure access pathways for policy coverage for Epioxa, with access pathways now established for more than 125 million covered commercial lives in the United States, including with the five largest payers, reflecting encouraging initial receptivity of Epioxa's clinical value. While we expect the pace of policy adoption to build over time, we remain focused on driving broader coverage across both commercial payers and Medicaid programs to support more streamlined access pathways over time. As anticipated, Epioxa's new product-specific J-code, J2789, became effective on July 1st, 2026.

While we expect it will take some time for this to be solidified operationally by providers and our specialty pharma partner, we believe this now-effective code will help streamline the reporting and reimbursement processes for Epioxa among U.S. payers over time. Beyond market access, we're proud to lead the way once again in forging a new path for interventional keratoconus by advancing targeted marketing and DTC initiatives to drive awareness, education, and earlier detection, supported by greater optometric engagement and strengthened advocacy partnerships. Finally, we've launched a co-pay assistance program for eligible patients. While we remain in the early stages of the launch, we're encouraged by the solid progress we're making against our core launch priorities and remain very excited by the significant potential Epioxa offers to patients living with keratoconus.

Beyond Epioxa, we continue to advance a broad and differentiated clinical pipeline across our five novel therapeutic platforms, encompassing 13 publicly disclosed programs and additional undisclosed assets supported by a robust portfolio of active clinical and phase IV studies. Within our iDose platform, we are advancing a phase II-B/III clinical program for iDose TREX, our next generation iDose therapy, and patient follow-up in a phase III-B study for iDose Trio with a targeted FDA approval by the end of 2027. We also continue to advance various additional phase IV studies. Within our iLink platform, we remain on track for our planned commercial introduction of our KC screening device later this year, and are preparing to commence a phase III clinical program for our third generation customized topographically guided iLink therapy in 2027.

Within our iStent surgical glaucoma platform, we are advancing a PMA pivotal trial for iStent infinite in mild to moderate glaucoma patients and recently completed patient enrollment in our 510(k) pivotal study for the PRESERFLO MicroShunt. Within our iLution platform, we recently completed patient enrollment in a phase II study for demodex blepharitis and expect to have top-line results in hand by the end of this year. Finally, within our retinal platform, we are advancing a first-in-human clinical development program for GLK-401, our intravitreal multikinase inhibitor retinal program in wet AMD patients. We believe that each of these novel differentiated platforms have the potential to generate transformative therapies that significantly improve the existing treatment paradigms for patients suffering from chronic eye diseases. In conclusion, at Glaukos, we're in the business of pioneering new marketplaces within ophthalmology.

Our record second quarter performance highlights the strength of our strategy and execution as we continue evolving into an increasingly diversified ophthalmic leader with multiple transformational growth drivers in iDose TR and Epioxa as we advance our mission to transform vision therapies for the benefits of patients worldwide. With that, I'll open the call for questions. Operator. We will now begin the question and answer session.

Please limit yourself to one question. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Thomas Stephan with Stifel. Your line is open. Please go ahead.

Great. Hey, guys. Congrats on the nice quarter here. Maybe on corneal health, nice start to that Epioxa launch. Joe, maybe for you, can you talk about, I guess, where your expectations now stand on 2026 corneal health revenue growth? I think previously it was high single digits. If you can help us understand the puts and takes as we think about the Q3 and Q4 cadence. Know the earnings summary, I think, mentions some transient headwinds in 3Q amidst the transition to Epioxa. Any more color on the cadence would be great. Congrats again. Yeah. Thanks, Tom.

Happy to jump in there. Obviously, we were very encouraged by the contribution of Epioxa in its first full quarter, really, of commercial availability. Particularly when you consider the unavoidable challenges that go along with the miscellaneous J-code period that's there. As you heard Tom mention, obviously, our primary focus today remains on those building blocks that we think really set up Epioxa for long-term success. I can certainly talk more about that as we make our way through the call here. As I think about the translation of how this plays out for the remainder of this year, and again, orienting you back to where our focus is at, is making sure that we get the right puzzle pieces in place to drive optimization in 2027 and beyond.

We know that the third quarter will come with some transition as it relates to the permanent J-code. We've talked about that for some time. You enter the third quarter having sunset largely Photrexa while launching, if you will, Epioxa in this permanent J-code setting. There will be some volatility around that. It makes it much more difficult than usual for us to forecast during that stretch. There's a wider variety of scenarios, I guess the way I would say it, around the potential outcomes of Epioxa as we transition that way throughout the third quarter, and certainly into the fourth. As we get into the fourth quarter, we have a lot more conviction that some of those J-code translation or transition-related issues Should start to get behind us.

We should start to see that uptick as we think making our way through the fourth quarter and into the beginning of next year. We're going to have some transition here while we make our way through. We may ultimately deliver terrific results. We want to make sure that we're staying somewhat conservative here as we navigate really what is a unique transition for us. For the full year, as it relates to Epioxa, or really our overall corneal health franchise, we started off this year saying we were confident we would still grow, then we ultimately, I think, upgraded that to high single digits.

now I think we're confident saying that for the overall year, corneal health should now be able to grow, call it 20% ± on a year-over-year basis. Just again, based on that strong Q2 performance and then the growing Epioxa contributions as we make our way through the remainder of the year.

Got it. Congrats again. Thanks, Tom.

Your next question from the line of Adam Maeder of Piper Sandler. Adam, your line is now open.

Hey, good afternoon. Thank you for taking the questions, and great quarter. I guess just one from me. I'm going to keep pulling on the modeling thread question. You just talked about expectations for the corneal health business. Joe, in the past, you've given a lot of really helpful color across the different segments. Just wanted to see if you could kind of provide updated thoughts on how you're thinking about iDose contribution versus the stent business versus OUS in corneal health for the second half. Thanks so much. Yeah, I'm happy to do that.

As both you and Tom alluded, we're obviously very pleased with the strong second quarter, and really each of our franchises exceeded expectations, and so as a result, we were happy to be able to raise guidance in line with what you heard Tom mention earlier to the $680 million-$700 million mark. If you think about your kind of models by franchise, and I think it requires adjustments across all the franchises given that outperformance. First on international glaucoma, I would say we've increased our expectations there now where we expect to achieve low to mid-teens year-over-year growth for the overall year. If you think about the second half dynamics within that, you do have the FX tailwinds abating.

We've called that out before, and we certainly expect that, and we're kind of past the, I'll call it the FX benefit now on a year-over-year basis. That will be a relative headwind as we make our way into the second half. We'll continue to navigate competitive dynamics in those international markets and some reimbursement headwinds that have emerged in Germany and Switzerland. Offset that by continued growth of PRESERFLO and Infinite and really to our overall interventional glaucoma market developments abroad. I think we're pleased to be able to increase our expectations there to low to mid-teens for the overall year. You heard me reference the corneal health side of things before, so I won't spend as much time there.

Just again, reiterating that the 20% growth year-over-year plus or minus attempts to factor in, especially in the third quarter, the impact from sunsetting Photrexa and shifting to the permanent J-code for Epioxa. It's possible we'll have a bit of an air pocket there as we make our way through this quarter. We remain confident that that air pocket will be behind us by the time we get into the fourth and moving out of the full year. Finally on the U.S. glaucoma side, we now expect full year growth of right around 50% plus or minus for that business. That's really driven by two things. Obviously, I think we now can say that we would expect for the year at least low single digit growth of our broader portfolio.

The continued expansion of iDose TR, which I think when you do all the math, you're going to land somewhere in that, I'll call it $275-$280 range for iDose in 2026.

Very helpful. Thank you. Your next question from the line of Larry Biegelsen of Wells Fargo.

Larry, your line is now open. Please go ahead. All right.

Thanks for taking the question, yeah, pretty impressive quarter here, guys. I'll be the first to ask about the iDose LCD. Since the open meetings for the iDose LCD, how has your confidence in a revised policy changed? Which provisions do you think are most likely to be changed in a potential final LCD? If the proposed LCD stayed the same, how would that impact your thinking around iDose over the next few years? Thank you. Thanks, Larry. To your point, clearly a lot's transpired on this front between the draft LCDs that came out in May, the open meetings in June, and the formal submissions in early July.

Really, I think the way we always had conviction, as you can imagine, around the evidence associated with iDose in a multitude of settings and use cases, and certainly perhaps most importantly, the study that supported the approval of iDose and all the evidence that generated a wide open label in that regard. We were encouraged, as I think many of you were, by the overwhelming support from physicians and the medical societies and even patients throughout the country. The objective and high-quality evidence that was presented really just validated our belief in the clinical value of iDose.

At this point, we certainly believe that the MACs are digesting all that evidence that was presented and submitted. While there's no statutory next step or even timing in that regard, we do believe that ultimately it should come out in a more favorable position to the extent that it is proposed as a final LCD. As I think about in the context of moving forward, what may or may not shift, I think it would be a recap of what you heard during those meetings. I think there was pretty strong opposition to the underlying criteria associated with each of the provisions. There certainly was a lot of opposition to the idea of having multiple components to the so-called the step edit associated with both drops and SLT.

You heard significant pushback around glaucoma as a disease and the right way of treating it and thinking about it clinically, really not reducing the optionality for physicians to utilize multiple tools that are complementary in the case of iDose and other MIGS. I think all of those things had compelling evidence presented and certainly are in play as it relates to the overall. As I think about the final part of your question, which is, how does this impact the years to come if it were finalized as it is? While I think it's highly unlikely that that would be the outcome of any process here, I think it's important to remind folks some things that we talked about when investors were on the road.

I think the continued strength of the business that you see in iDose today, I think shortens the putt, if you will, in the context of the bridge to the expectations that existed previously around 2027 and beyond. Maybe more importantly, even in an SLT world, I just remind investors that there are five to 600,000 SLTs done a year, and that's been being done for quite some time, meaning that there's a pretty large market there of patients, both in terms of annual incidents as well as the overall prevalence pool for iDose to continue to make a meaningful contribution.

Clearly, if something came forward that was not aligned with what we believe is appropriate clinically, not only would we object strenuously to that alongside the societies, but we would also continue to provide the evidence that we have already generated or will generate to make sure that for the long term of iDose and interventional glaucoma, that we rectify any wrongs that are part of a final proposed LCD.

All right. Thank you. Your next question from the line of Ryan Zimmerman with BTIG.

Ryan, your line is now open. Please go ahead. Thanks for taking our questions, let me echo my congrats.

Really impressive. Maybe turning back to Epioxa for a minute, Joe. You talked about some of the patient co-pay dynamics that you're standing up, I'm wondering if you could elaborate on how you think about the gross to net pricing for Epioxa over time. The second component of my question, I'll sneak in a two-parter into one question just to keep to Chris's rules. When you think about the O2 placements, and the 85% of the user base, what are you seeing? Are you seeing new users take over these systems? Are you seeing upticks in a select cohort of corneal surgeons in terms of higher utilization early on some of the early adopters? Just if you could reflect on that user base dynamic as well. Thanks for taking the questions.

Of course. I'll pretend like it was one question, Ryan, that I don't get in trouble with Chris. First, as it relates to the Epioxa kind of gross to net dynamics, obviously, that's something that we'll be watching, Alex will be watching alongside of us here as we get a bit more maturity in the market launch of Epioxa. What I think generally we've said to investors is I think a safe place out of the gate is to think about it in that kind of net $60,000 range. That's really meant primarily to include the impact of Medicaid pricing and the various other required discounts as a part of the launch. We're not necessarily doing much beyond that at this stage of the launch.

It comes down to that mix that happens with Medicaid and places like the Department of Defense and things like that. As we make our way through, we'll hone that in a bit more from there. I think $60,000 is a good place. On the O2n System side, we made a lot more progress during the quarter, and we were already well ahead of our expectations. I think at this stage, to be able to say you've got systems deployed that serve 85% of the U.S. population and that pipeline progressing towards 95% of the country, when you actually think about the country from a geographic perspective, that's about as good as it gets in terms of the way you think about an installed base, certainly at this stage of the launch.

As the J-code came online, we've seen even some of those folks who were a little bit slower in their process and approvals, picking up the pace of getting that in line going forward. I would say it's not so much about any particular cohort of patients or sites. We've got private sites. We've got parts of large groups that have sites in their network. We've got hospitals and 340B institutions that are there. There certainly are some new, but I would say it's been much more about taking a look at our prior base of customers and leaning into those folks that historically have both geographically and from a patient-focused standpoint, provided the optimum care in terms of Their treatment times, their commitment to it, the education with the optometrists in the community, and all the things you want to see to make sure that you're optimizing your network, especially in these early days where you can't afford to have a massive number of centers.

We've really leaned into what I would call the Tier 1 and Tier 2 sites, and our conversion of those have been extremely high. We're pleased with what that looks like. In terms of the early utilization, I think it's really been pretty profound in terms of the number of patients that almost all of these sites have started to put into our hub and seeking to get approval for Epioxa, given the clear benefits of that therapy over the legacy of an epi-off solution like Photrexa.

Thank you. Your next question from the line of Allen Gong with J.P.

Morgan. Alan, your line is now open. Please go ahead. Thanks for the question.

I guess starting off on a different tack, I think not only did the top line do quite well, it looks as though your performance on the P&L is also quite strong once we back out of the one-time SBC charge that you look to have recognized in SG&A. I know that in the past, the messaging really has been focused on reinvestment back into the pipeline. We saw that with R&D stepping up another $8 million sequentially. How should we think about the potential for profitability in the back half of the year? Is that something that you're willing to let fall through, or are you just going to ramp up investment even more to reflect your success?

Hey, Alan, it's Alex. I'll take that question. You're right, we were pleased with the progress that we saw in the second quarter across the entire P&L, from the margin to operating expenses to the bottom line as well, including cash generation in the quarter that we saw. Again, like we've said to investors in the past, given our company's gross margin profile, there's certainly a clear line of sight that we have today towards Glaukos seeing profitability at some point in the future. It's increasingly more and more towards the near term as we see the increased revenues from these two transformative drivers.

That said, we would remind investors that our management focus continues to be on prioritizing and prudently investing back into the commercial business to support these two transformative launches, as well as supporting the R&D pipeline and things that you saw in the quarter as we stepped up, especially in clinical, as we've grown our clinical trial programs that Tom was referencing in the prepared remarks. That is just really, again, driven to maximize both our near-term and long-term top line growth profile of the company.

Thanks. I'll just leave it at that.

Your next question from the line of Truist Securities. Richard, your line is now open. Please go ahead. Hi, thanks for taking the questions and congrats on the quarter.

I guess I just want to ask very quick ones on iDose and one on Epioxa. I guess on iDose, this is such a substantial sequential uplift. I get that the reimbursement environment is getting better, but was there any pull forward or just consideration from your customer base on everything going on in the backdrop of the LCD? I'm just wondering if you're starting to hear or see any of that. Then on Epioxa, I'm just curious if from a 340B standpoint, is there anything that we should be thinking about from an ASP standpoint or how that might impact pricing there? Thank you. Thanks, Richard. First, on the iDose front, I felt there was no, that I'm aware of, LCD-related pull-forward dynamics in iDose.

Most of the surgeons you talk to, their schedules are pushed out well beyond even that time frame from when this came on. If you're going to see that, I think it would be something that was on the heels of actually a proposed final rule, if it were ever to come out. I don't think that was really the case. What we really saw in the quarter was the first time where, obviously, we've had meaningful growth from the beginning, but in this quarter, we really saw both an acceleration across the various MACs. I would say with the most recent additions of the professional fees in NGS and Palmetto, you saw that contribution pick up.

Maybe even more importantly or equally as important, we saw a nice uptick in activity around the commercial and Medicare Advantage patient populations, as well as more of our customers started to expand utilization of iDose into those patient populations. I would say it was a diversified performance in the quarter. The strength of it does give us a little bit of pause, I'll call it, in terms of conservatism around how we think about that into the third quarter and through the remainder of the year. We're still early in that launch as well, when you have quarters of this magnitude, you want to make sure you still stay somewhat cautious about how that will translate, certainly into a quote unquote, "seasonal down quarter" in terms of ophthalmology procedures in the third here.

As it relates to Epioxa and 340B pricing, that's really factored in as a part of the prior question that I think Ryan asked. When we think about the gross to net and what that kind of realized average ASP, and we've sort of consistently said around $60K is our starting point, that really factors in the impact of the 340B institution-related volume and the discounts associated with selling product into those institutions.

Thank you. Your next question from the line of Joanne Wuensch with Citi.

Joanne, your line is now open. Please go ahead. Thank you so much, and good evening.

I want to zero in on some of the expense management that we're looking at. In particular, gross margins have reached a new high by my math. Last quarter, you gave us 84%-86% growth margins for the year. I don't know if that's still consistent. Similarly, it looks like you are starting to leverage OpEx, what your current thoughts are for that.

Hey, Joanne, it's Alex. Thanks for the question. Yeah, we were pleased absolutely to see the continued accretion in the gross margin during the quarter. As you mentioned, it landed approximately 85%, which was up roughly, call it, 90 basis points from last quarter. That accretion was driven, as you might expect, from the growing contributions of iDose and Epioxa and the overall revenue mix. You were asking about looking ahead. We would continue to expect modest gross margin accretion over the remainder of the year, particularly in the fourth quarter as the iDose and Epioxa sales continue to become a greater share of our revenue mix. Now, that all said, we'll continue to stick with our targeted guidance range for the year of a gross margin of 84%-86%. We're holding that steady as we move forward at this point.

Our op margins? Yep. For OpEx, I'm hearing you say yes.

On operating expenses. Yep. Nope, that's exactly right. Obviously, we're encouraged to see the operating leverage in the quarter, our philosophy remains the same. We're going to continue to push our operating expenses such that we realize the leverage in the model while still investing in these priorities around commercial and R&D, that will be our philosophy going forward. Again, you couple that with the cash and what we're trying to do there, we're just trying to manage the business toward a cash flow breakeven stance, those all kind of fold together and triangulate.

Excellent. Thank you so much.

I guess, Joanne, I'll just end, just to get it out there on the record, that for operating expenses for the year now, given the outperformance on the top line, you can expect our operating expenses to land somewhere around $600 million for the year.

Thank you again. Your next question from the line of Mason Carrico with Stephens.

Mason, your line is now open. Please go ahead. Hey, guys.

Appreciate the questions here. Going back to the guide, you called out iDose revenue in the $275 million-$285 million range this year. Just to confirm, is that largely just driven by your commentary around being conservative on commercial and Medicare Advantage volumes? Is there anything else in the back half we should be aware of?

Yeah, Mason, there's nothing I would call out in particular around it. I think I sort of answered that before by saying that whenever you have this level of outperformance in a quarter, We certainly continue to see sequential growth and progress throughout our launch, and strong growth on a year-over-year basis. The second quarter was so strong, I think we'd like to see another quarter or two of that before we call it a trend. I think we just want to be cautious about how you translate that Q2 number into Q3 in particular.

Just knowing that volumes seasonally tend to be down in the third quarter, and given that outperformance in the second, I just would be a little bit conservative around the third quarter iDose number and give us a little bit of time to determine whether this is a trend or a bit of an outlier in the context of the strength of that print in the second quarter.

Got it. Thank you. Your next question from the line of David Saxon with Needham & Company.

David, your line is now open. Please go ahead. Great. Good afternoon.

Thanks for taking my question. Obviously a really strong quarter here. Wanted to ask my question on Epioxa, and would love if you could talk about the cadence of prior auth submissions you saw in the second quarter. Did you see any uptake in activity as the J-code became effective here in July? Then how does the backlog of PAs looking in the portal, the cases that are kind of awaiting approvals, and would love some color on just the cadence of approvals as you move through the quarter and into July. Thanks so much. David. Let me start with the second quarter and the cadence there.

As you might expect, the majority or certainly a significant portion of the $11 million of revenue that we talked about was realized towards the latter part of the quarter. That stands to reason with an FDA approval that was as we exited the first. It took time for some of those claims to make their way through the prior authorizations, the contracting around them, and ultimately to get those approved and shift those treatments to happen. I think we're now thankfully through that part of that process. Having said that, you kind of get there in June, then on July 1, a very important milestone, but one that does shift gears for us a bit is the permanent J-code being established.

You made that progress You got those patients treated, and you did that in the miscellaneous code environment. On July 1, obviously you have, it's not a full reset, if you will, but there's a partial reset there around making sure that those patients are getting access and the contracts and both the prior authorization as well as the payment approvals are happening with that permanent J-code now in place. You got to start back over a little bit, in that context and make it through. That's why we called out here on this call, the potential for volatility around the Epioxa and corneal health results in the third quarter in particular as we reset that.

I'll finish this by addressing, I think, part of your question around the backlog and that along with the things that you heard Tom mention earlier in terms of the payer network, the progress we've had there, the site of care network, and so on and so forth, in terms of the foundations of our launch. We've been extremely encouraged by the sheer number of patients that are being put in to seek approval for Epioxa. It makes us, I'll call it, very bullish around what this product can mean for us in the intermediate term. The question becomes more about how quickly can you get from where we stand today to seeing these patients get approvals and access to treatment on a more rapid basis. Certainly, as we make our way into 2027, that'll be our focus here.

The leading indicators are strong in terms of the number of patients that our providers are seeking access to Epioxa as a therapy form.

Great. Thanks much for that, Joe.

Your next question from the line of Steven Lichtman with William Blair. Steven, your line is now open. Please go ahead. Thank you.

Hi, guys, congratulations. I'm wondering on your Epioxa customers, how they're viewing the specialty pharmacy option versus buy and bill. Are we seeing most go to specialty pharmacy initially? How quickly are they getting confidence so that they're shifting to buy and bill? Obviously that's another driver over the medium term. Thanks. Yeah, absolutely. The answer to that question has very much to do with which side of care you're talking about.

There are clearly those institutions, and groups who have the experience and are much more comfortable out of the gate with the buy and bill pathway. You see them pretty much even in these early days, bypassing the specialty pharmacy option. I think as you get more into the broader community-based practices, you can imagine that they lean a little bit more heavily, if not entirely, on the specialty pharmacy option. Certainly, again, in these early days. That does not mean that we don't believe over time they won't shift some of their thinking around that versus the buy and bill pathway. It's a little early, again, thinking about we just got the permanent J-code here less than a month ago.

From that standpoint, I think for them to have that confidence, they've got to start seeing consistent and recurring approvals, even through the SP pathway, with individual payers before they're going to start thinking about whether they should buy and bill that. I think that'll be a part of the journey here, over the next several years, but one we're prepared to support.

Thanks, Joe. Your next question from the line of Anthony Petrone with Mizuho Group.

Anthony, your line is now open. Please go ahead. Thanks and congrats here on a solid quarter.

I'll keep it to Epioxa. Maybe first just on the competitive landscape as it sits today and just how it's going to evolve over time. Do you think we're in a position to gain share, I guess, from scleral lenses, which is an option here ahead of corneal cross-linking? Are you seeing those patients come in? Then there's some combination therapies under development, some private companies out there. Just if you look ahead over the next couple of years, how do you think the cross-linking specific competitive landscape will shape out, assuming we have a potential entrant again at some point next year or the year after? Thanks. I think first it's important to remind ourselves that we're at the beginning of a pretty transformational product launch and maybe even more importantly, a seismic shift in the standard of care.

When you think about what that means in terms of driving awareness and detection and access to treatment at a different level, that's obviously a large opportunity for Glaukos and for our customers and most importantly, their patients. Whenever you build a market like that, you do so expecting competition, and you hope that that incremental competition comes in the form of responsible market participants who are going to invest and hopefully help accelerate that shift in overall market growth. I think when we look at it sitting here today, we should be many, many years away from market share dynamics outweighing expansion and market growth as the key consideration.

The reality is that when you think about things like scleral lens, that's really not a competitive solution. These patients often will have scleral lens even after therapy. The point is you've stabilized and arrest the progression of a sight-threatening disease. From that standpoint, I think the fact that you've got a solution that doesn't require removing the epithelium lowers the bar for patients or for providers to act more prophylactically in the treatment of the disease. Put the scleral lens where it should be, which is postoperatively a part of continuing that vision as you move forward after a cross-linking procedure. I think that Epioxa helps us in that broader initiative in terms of solidifying cross-linking as the therapy of choice. I think ultimately we provide the investment to meaningfully change.

We've talked before about the difference between doing 18,000 to 20,000 eyes, where we ultimately believe the market could be as high as 50,000 or 100,000 annual eyes in any given year that's potentially addressable. We've got to go do the work to build that market the hard way and prove that to ourselves and to you all.

I'll add on to what Joe's saying. This is Tom. We spend lots of time and effort building new marketplaces. You can imagine we spend considerable time figuring out how to protect our market share and how to grow these marketplaces over time. It's important to point out not only how much progress we'll make with Epioxa in the near term, but we already have a second, or we call it now a third generation, customized topographically guided iLink therapy that's going to begin clinical trials in 2027. If that product performs as well as I think it will and can, we could have a product that has demonstrably greater reductions in Kmax than even what we're seeing with the current methodologies.

A preferential treatment of the peaks to allow us to create the ultimate kind of sphere in refractive indices that may be able to throw off even better, best corrected visual acuity. You can imagine not only would any competitor have to deal with a really formidable commercial team that Joe has put together, but will have to then have to deal with a demonstrably, possibly far better approach that we will have just in the near term. You can imagine in our contemplation, if we spent the time and effort to build this marketplace, we will spend that time and effort to protect it as well.

Thank you. Your next question from the line of Yi Chen with H.C.

Wainwright. Yi Chen, your line is now open. Please go ahead. Yi, are you there?

Maybe on mute. Yes, apologies.

Can you hear me? Yes.

Hi, this is Katie on for Yi. Just real quick on looking at re administration and TREX. Is what you're seeing what you kind of expected from early re-implantation data? Are you seeing any cannibalization on the devices?

I'll start if Tom wants to add something he can. I think as it relates to re administration, we're continuing to see successful procedures get done. Obviously, it's still somewhat limited because these are really for some of our earliest commercial patients that are just now getting in the window where you see that. Where they're eligible, we're seeing them get done and get done successfully. I don't see anything there in the context of cannibalization. I see that as additive in terms of the physicians and those patients determining that they want to stay on the therapy as the initial iDose wears off.

If you think about it in the context of iDose TREX in the future and the approvals there, I think that's only additive in the context of that overall algorithm for getting those patients therapy both initially as well as during a re administration procedure.

Perfect. Thank you. This concludes our question and answer session.

I will now turn the call back to the company for closing remarks.

Okay, I want to thank all of you for your time and attention today, and thank you for your continued interest and support of Glaukos. Goodbye. This concludes today's call.

Thank you for attending. You may now disconnect.