Good afternoon. My name is Julianne, and I will be your conference operator today. At this time, I would like to welcome everyone to Glaukos's first quarter 2022 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Chris Lewis, Vice President of Investor Relations and Corporate Affairs, you may begin your conference. Thank you, and good afternoon. Joining me today are Glaukos's Chairman and CEO, Tom Burns, President and COO, Joe Gilliam, and CFO, Alex Thurman. Before we begin, we wanted to remind you of a change in the way we plan to handle our quarterly earnings disclosures and calls starting with this one. 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 provide the investment community with a summarized and easily accessible reference document that details the key facts associated with the quarter, the state of the company's business objectives and strategies, and any forward statements for guidance we may make. This document has been and will continue to be provided alongside the company's earnings press release, and it's designed to be read by investors before the regularly scheduled quarterly conference call. As such, beginning this quarter, we will make very brief prepared remarks and quickly transition into a question-and-answer session. It is our goal that this change will make our quarterly earnings process more efficient and impactful for the investment community going forward. To ensure ample time and opportunity to address everyone's questions, we request that you limit yourself to one question and one follow-up. 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 are forward-looking statements. These include statements about our plans, objectives, strategies, and prospects regarding, among other things, our sales, our products, pipeline technologies, U.S. and international commercialization, integration, and market development efforts, the efficacy of our current and future products, our competitive market position, our regulatory strategies and reimbursement for our products, financial condition and results of operations, as well as the expected impact of the COVID-19 pandemic 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. 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's 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 reconciliation of these measures to their most directly comparable GAAP financial measure. With that, I will turn the call over to Glaukos's Chairman and CEO, Tom Burns. All right. Thanks, Chris. Good afternoon, and thank you all for joining us today, and we certainly hope everyone is safe and doing well. Today, Glaukos reported first quarter net sales of approximately $68 million, flat versus the year-ago quarter and up 1% on a constant currency basis. Our first quarter performance reflects solid execution across our global glaucoma and corneal health franchises amidst continued COVID-19-related volatility and headwinds globally and U.S. combo cataract glaucoma dynamics associated in particular with the 2022 CMS final physician fee reimbursement rates that became effective on January 1, 2022. From a commercial perspective, we've been very pleased with the execution of our strategies and the resiliency of our U.S. combo cataract franchise in the face of the reimbursement headwinds thus far in 2022. During the latter part of this first quarter, we launched our iAccess device that has both minimally invasive and tissue-sparing features that will allow customers perform goniotomy procedures. We also look forward to bringing iPRIME to customers soon as well. Our international glaucoma and corneal health franchises continue to deliver strong results as we develop these important businesses. We are raising our 2022 net sales guidance range to $270 million-$275 million versus $265 million-$275 million previously, given our better than expected first quarter results and latest forward outlook. On the development front, we continue to advance our pipeline. Following the recent clearances of iAccess and iPRIME, the FDA 510(k) review of iStent infinite is continuing, and we remain focused on a potential midyear clearance for this important product. iDose TR and Epioxa or iLution activities remain on track for NDA submissions and targeted FDA approvals in 2023. The iLution phase two clinical trials for dry eye and presbyopia are well underway. The FDA did recently notify InnFocus, a Santen company, that its PRESERFLO MicroShunt PMA submission is non-approvable. While the MicroShunt is not a material potential driver of our near-term business, this outcome is disappointing given our early positive commercial experience with this product in Canada and Australia and encouraging surgeon feedback globally as they seek alternatives for late-stage glaucoma treatment. We intend to engage with the FDA to determine optimal clinical and regulatory next steps. Before we open up to questions, I'd like to reiterate our conviction in our long-term strategic vision. We anticipate and are planning for a robust cadence of new dropless platform and product introductions over the coming years that have the potential to fundamentally transform glaucoma over time and meaningfully advance the standard of care and improve outcomes for patients suffering from sight-threatening diseases. We are continuing to invest in glaucoma to scale our team and to advance our mission to transform vision with disruptive, dropless, game-changing platform innovations. We are excited about our prospects and confident in our ability to execute our plans in the years to come. With that, I'll open the call to questions. Operator? Thank you. As a reminder to ask a question, please press star followed by the number one on your telephone keypad. Our first question comes from Andrew Brackmann from William Blair. Please go ahead. Your line is open. Hey, guys. Afternoon. Thanks for the questions. I like this new format, so congrats to Chris and the team for putting all this together. Maybe just to start here and have you sort of address the elephant in the room on multiple procedure reimbursement. You know, obviously, the stock has been sort of under pressure to a degree because of that, and investors are certainly sort of having questions around that. So can you just sort of talk to us sort of about your thoughts on that topic, specifically how you're viewing the landscape there with iAccess and iPRIME and just what it means for your business? Thanks. Thanks, Andrew, and Chris passes along his sincere thanks as well. Well, there's a lot in that. Obviously, there's been a lot of, I think, investor-related activity on this, so I'll try to cover, you know, the sort of core topics, and if you've got follow-ups, we can handle it. I think as it relates first maybe to iAccess, and just as a reminder for investors, you know, reimbursement is determined by the procedure performed and not the device itself. You know, we believe iAccess has features that allow surgeons to perform a goniotomy procedure that would meet the definition of CPT code 65820 if they deem it medically necessary and reasonable. As you think about iPRIME, similarly, we believe surgeons can use the iPRIME device to perform procedures that meet the definition of CPT code 66174 if they deem it to be medically necessary and reasonable at their own discretion. To the heart of your question as it relates to the pairing of procedures, You know, the AAO has really already weighed in formally on the subject of pairing these procedures where a surgeon feels it's medically necessary to maximize the clinical benefit for patients. In March 2022, they put a Savvy Coder bulletin out that stated if a canaloplasty is performed in conjunction with a stent and cataract, then you should bill 66174 and 66991 as being appropriate. More recently in April of this year, they also released a bulletin that if a goniotomy is performed in conjunction with stents and cataracts, then you should bill 65820 + 6691 as is appropriate. I think, you know, Andrew, at the end of the day. You know, when you put all this together, it appears many surgeons are increasingly turning to multiple procedures now that they have the tools to do so and to provide the max benefit to their patient given this is a sight-threatening disease. Ultimately, our goal is to provide surgeons with truly minimally invasive alternatives to maximize the overall patient benefit and hopefully grow the overall markets while doing so. I think hopefully that provides a little more clarity to some of the information flow that's been running in the investment community. Certainly. Thanks for that, Joe. Maybe if I could just sort of switch topics here for a second, I hate to be so sort of near-term focused. As it sort of relates to guidance, you beat the quarter, you beat the street by pretty handily $7 million or so in the quarter, but only raising the full year range by, I think it's $2.5 million. Can you just sort of talk to us about and give us sort of any additional detail with respect to the process or changes in assumptions for that updated range? Thanks, guys. Yep, sure. Thanks, Andrew. I think, well, look, first, we provided guidance for the year and not the quarter. While it's fair to say we were pleased with the first quarter results and how it turned out versus our expectations coming into the year, you know, really acknowledge that. Also to state largely, that performance was without the benefit of new products, I think, on the positive side as we think about the setup for the remainder of the year. Having said that, it's still early in the context of, you know, the risks that we described entering this year. Namely, the U.S. pro fee cuts, the impact of those, and competition globally. Change doesn't happen all in a single quarter. We know competition will continue to get their sea legs as the year goes on, and we have other factors we have to think about. You know, the FX considerations here, some of the macroeconomic dynamics that are playing out there. As much as we don't like to admit it, COVID risks still remain, as we move forward here. If you put all that together, I think we were pleased to be able to raise the bottom end by $5 million just two months after the initial guidance given everything that was, you know, facing us coming into the year. Makes sense. Thanks, guys. Thanks, Andrew. Our next question comes from Chris Cooley from Stephens. Please go ahead. Your line is open. Good afternoon, and thanks for taking the questions. Congrats on a great start to the new year, and let me just briefly also echo Andrew's sentiment. Great job to Chris and his team on this. This is such a better way to do a call, so thanks, you guys. Just in terms of my two questions, could we kinda unpack the growth a little bit that you saw in particular, I should say, the 15% decline you saw in the U.S. glaucoma franchise? Help us think a little bit there about how much of that was volume related versus price. And then as we think about, you know, stepping back up through the year, kind of what you're assuming in terms of the contribution from both iAccess and iPRIME. And then I've got a quick follow-up. All right. Thanks, Chris. Chris also thanks you for the kind comments in the beginning of your question. On the first part, I guess I would answer it this way. Pricing remained stable in the first quarter, largely stable. What you're seeing there is from a performance overall in the U.S. glaucoma segment is largely translated to volume dynamics over the course of the first quarter. Now, there's probably, you know, two things going on there. As you'll recall, COVID was still a reality globally at the beginning of the quarter in January and early February. Then, of course, on top of that, we have the dynamics around the changes in the professional fee reimbursement. What was your second question? No, that hit it. Okay. I was thinking about, you know, the second part of that was just, you know, moving ahead, kind of the contribution from iAccess and iPRIME, how that helps to bolster. Yeah. the overall domestic glaucoma franchise. I can follow up with that online. Yeah. Um. No, that's fine, Chris. I can answer that. I think. Look, as it relates to going forward, you know, we mentioned when we gave the guidance for the year at $262.5 million-$275 million, that we'd include some contribution, albeit modest, from iAccess and iPRIME and iStent infinite, under the expectations that we would see product launches from those over the course of the year, you know. I think that remains the case. I wouldn't get too far ahead of your contribution from those products at this stage. Ultimately, we'll have a lot more, I think, to say as the year progresses around how those are being adopted and utilized and what it's doing in terms of driving our top line. Great. If I could just squeeze a quickie in, just in thoughts here. You know, you clearly have a very strong cadence with iPRIME and iAccess in a controlled launch here in the second quarter moving forward. We have Epioxa and iDose coming as well. How are you thinking about the iLution platform? How will we start to see data and kinda milestones across the board there for both dry eye and presbyopia? Just trying to think about some markers we can put out there just to kinda track the progress. Thanks again. Yeah, welcome, and thanks, Chris. This is Tom. I'll answer the question on the foundational platform we have with iLution. As you know, we're excited about this as a new platform to be able to provide not only depot effect of the cream itself, but that as it penetrates the eyelid, we think the tissues itself will act as a depot, which gives an opportunity for different APIs to travel using either the autobahn of the conjunctiva or through scleral diffusion to be able to get into the front of the eye and treat anterior segment disease. With that, we have launched, as you know, two phase II clinical studies, one a 200-patient clinical study evaluating twice a day iLution pilocarpine versus placebo to be able to determine safety and efficacy looking at dry eye signs and symptoms. What we've said on ClinicalTrials.gov, I guess, is that we'd look to complete that clinical trial by May 2023, and I think we're tracking to be able to beat that pretty substantially. Likewise, we are also looking at another proprietary formulation of pilocarpine in the iLution cream to treat presbyopia. As you know, presbyopia, nearly 100 million patients in the U.S. with the disease. We plan to make a difference there if this product is proved safe and effective. We also have counseled completion of that clinical trial of May 2023, and I see that our progress leads me to believe that we'll beat that as well. That should give you some indication of what we'll be looking at. Obviously, we'll be looking at dose ranging at various concentrations in order to determine what would be appropriate to take into a phase 3 clinical trial. We hope to make a difference in the treatment of dry eye disease and presbyopia. Thank you. Thanks, Chris. Our next question comes from Larry Biegelsen from Wells Fargo. Please go ahead. Your line is open. Hi, this is Charles Ellson on for Larry Biegelsen. First, congrats on the nice quarter. I had a question on iDose. It looks like the one-year follow-up, if I have this right, for the phase III studies, is complete in June this year. Do you have a plan for disclosing the top-line results and the full data? Do you think you'll be able to present that at a, maybe a medical conference before approval? Yeah, Charles, we will. As I stated before, what we'll be looking at doing is probably looking at releasing the phase three pivotal trial both datasets in the latter part of this year. Let's call it the tail end this year or certainly by early next year. That should give you some strong indication that we're on track and that we'll have those results available. Okay. Thank you. Our next question comes from Ryan Zimmerman from BTIG. Please go ahead. Your line is open. Hey, this is Phil Dantoin on for Ryan. Can you hear me all right? We can. Yep. All right. Great. I just have two quick questions here. Just number one, there's not really consistent coverage of goniotomy combined with stents, you know, for MACs across the U.S. What is your expectation that LCDs could change both, you know, positively or negatively? Thanks, Phil. I'll start off, and if Tom wants to add anything, he certainly can. I think anytime you go through new product launches, you have a variety of things that you work through. That's no different than what we've gone through over the years with the MIGS devices with iStent inject and iStent in its original launch. We'll continue to work through those dynamics as it relates to the MIGS and keep you advised as we move forward. All right. Great. right. Great. I would just say what's been powerful lately is the release and disclosure by the academy, which has taken a position that if surgeons deem it medically necessary and reasonable, that goniotomy and stents can be used, and they codify both 65820 and the 66991 as the measures for how surgeons would use the codes to be able to code for these procedures. To me, that's a very forceful arbiter and gives us kind of a powerful way to approach these MACs to be able to influence them in a positive way going forward. Awesome. Thanks for that color. Just on my second one, you know, as far as you have a line of sight on this, what should we expect at the upcoming AMA meeting on canaloplasty? You know, why are they discussing this? What risk does this, you know, potentially present to iPRIME? Thanks. Yeah. Thanks, Phil. I think there's been a little bit of a misconception around, you know, this upcoming AMA CPT editorial, you know, panel. You know, we believe it's expected to discuss the simple addition of an example and a parenthetical to 66174, the code to basically clarify what that code should be used for example, canaloplasty. You know, the AAO asked for this given provider questions about proper terminology and ultimately that parenthetical will become effective in January of 2024. Makes sense. Thanks, guys, and congrats again on this transition to the better format, echo everyone else. Thank you. Thank you. Our next question comes from Matt O'Brien from Piper Sandler. Please go ahead. Your line is open. Hi, guys. This is Drew on for Matt. Thanks for taking the question. I guess just to start off, maybe an update on Alcon and Hydrus. Any changes so far with how that device is being marketed or anything you can speak to or have seen as far as the impact to Glaukos's that you're baking into your guidance? Yeah, thanks. Thanks, Drew. Obviously, I'll start with the latter and say, you know, we've obviously factored that in originally, all competitive dynamics, including Alcon's acquisition of Ivantis. We set our guidance for the year, and we factored it in as we thought about, you know, the raising of the bottom line of the guidance this time. We factored that in financially in our expectations for the year. I would say that, as you've heard us say before, we have a tremendous amount of respect for Alcon as an organization. You know, they obviously now have full control of the Hydrus stent. We see them in the marketplace like we have for several years now. I would expect they continue to get their sea legs over the course of the year. We'll continue to see them from a competitive standpoint, you know, not just here in the U.S., but globally. I would say it's continued sort of more of the same. Okay. That makes sense. Just, you know, thinking about that 15% decline in the U.S., it sounds like that's largely related to volumes. I assume some of that early in the year here would be, you know, temporary competitive trialing. You know, just any sense for how some of those trialing activities have gone for Glaukos if you had, you know, surgeons try other devices and come back to Glaukos? When do you expect, you know, some of that temporary trialing to begin to wind down? Thank you. Yeah. I think it's a fair question. It's a hard one to answer. I mean, I think anytime you go through a situation like the adjustment and the professional fee reimbursement, you're gonna have some disruption in you know, ordering patterns, customer trialing and trying, some of which has come back, some of which will potentially continue to be lost as physicians become aware of it. I think it remains a fluid dynamic. We're encouraged by what we saw in the first quarter and that's all reflected in the guidance we gave. Thank you. Our next question comes from Tom Stephan from Stifel. Please go ahead. Your line is open. Great. Hey, everyone. Thanks for the questions. If I can just sort of start big picture. You know, a lot of things happening in 2022 with MIGS, between new products, obviously reimbursement changes. We kind of pick up in our checks a lot that there just seems to be a bit of confusion in the marketplace among doctors. I guess, would love to hear your perspective just on sort of the state of the U.S. MIGS market today and, you know, how you believe the longer term, I guess, competitive dynamics may ultimately play out. Yeah. Thanks, Tom. I'll start off and then, Tom, if you wanna add comments. Sure. You can add to it. I think it is true that there has been a fair number of new product introductions in recent years, including some of our own here as we navigate 2022. Whenever you do that or go through that, the surgeons are gonna be evaluating what's their optimal algorithm with the products that are available and the patients and the state of disease that they have. I think it's natural that there'd be some of that here and now as we go through all this. I think you've heard us say for a long time that the part of the mission at Glaukos was to provide the full portfolio of alternatives for these surgeons as they move forward. I think those are discussions that we look forward to engaging in with these surgeons as they think about those algorithms and how our product portfolio may map against that. Ultimately, our goal is to provide, you know, the most minimally invasive alternatives and to hopefully, you know, maximize the overall patient benefit and expand the market while we do it. I would just add that as we look at this, you know, there are a number of alternatives that have entered in as surgeons kind of grapple with that and get their sea legs as to how they wanna build their own algorithms. That probably leads to some of the near-term confusion over what you're hearing from the end market. What I am very encouraged by is the movement of surgeons independently of us to the use of paired procedures to be able to arrest this sight-threatening disease. Clearly, there is a need to be able to drive to lower intraocular pressures through the use of procedures that may be either additive or synergistic to be able to get them there. Because of that, I think we've been perhaps a little prescient, and put ourselves in a very, very good position as we move forward in this marketplace. Got it. That makes sense. If I can quickly pivot just to supply chain disruptions, inflationary pressures, any updated view kind of as we sit here today or any moving parts in particular, we should be mindful of, whether it's in relation to your core portfolio or the pipeline? Then do you guys still feel comfortable with sort of that 83%-84% gross margin range you've talked about recently? Thanks, guys. Yeah. Tom, it's Joe. Maybe I'll start with some of the macroeconomic points, and then I'll turn it to Alex for the gross margin view. I think we're certainly not immune, right? The world continues to navigate new supply chain challenges each and every day. I would say that we couldn't be more proud of our organization and how they've responded to that. It's required creativity and ingenuity and all the things you can imagine to navigate that successfully. So far so good in the context of continued product supply, of continued clinical trial supply, and all the things that are going on there. You know, it's a lot harder in that context than it was pre-pandemic and some of the things that are going on. We've also seen obviously the inflation dynamics that I think many are talking about. It's playing itself out in various ways, including with suppliers and associated partners as it relates to our pipeline, and then almost everything we do here from a human resource and other perspectives. Those are very real dynamics, but so far so good in terms of our ability to navigate them. Alex? Yep. Hey, Tom. This is Alex. On the margin, the range 83%-84%, we do believe that is still the appropriate margin for the business. We did an 83 in the quarter, and that was about 160 basis points less than fourth quarter. However, that was primarily driven by geographic revenue mix and our international revenues being a much higher percentage of our overall revenue mix in the first quarter, which drove it down a little bit. As we've said historically, our international margins are a little bit lower than our U.S. margins. Given that fact pattern, you know, we still believe and we still target internally, and we would, you know, express that same sentiment to you that the 83-84 range is the correct one. Very helpful. Thanks, Alex. Thanks, everyone. Thanks, Tom. Our next question comes from Allen Gong from JPMorgan. Please go ahead. Your line is open. Hey, guys. Congrats on the good quarter. I just had a few quick ones. You know, the first one is, you obviously had very strong trends in your core glaucoma business. Was any of that stocking dynamics, you know, earlier on in the quarter as physicians and practices really prepared for, you know, things to hopefully get back to normal and for them to give you getting back to normal levels of volumes? Yeah. I think it's a good question, but the answer is no. I don't think there was really any stocking dynamics associated with the first quarter results. If anything, you had a little bit more noise associated with COVID and just the general sort of, you know, environment. Got it. I think someone already asked something kind of along the lines of this, but glad to see, you know, the bottom end of the guidance range moving up. Even if I just take the sales that you had in first quarter, you know, and annualize it, you're already at the very bottom of the range. When we think about the sequential improvement we should really be seeing as, you know, hopefully trends get a little bit better as new products launch, what are you assuming for, you know, competitive dynamics? Is it just assuming that, as you said, Alcon maybe gets a little better, a little bit more pressure from Alcon and other competitors offset by these new products and hopefully just, you know, broader trends getting better? Yeah, like, I guess, like, why isn't the top end of the range, you know, where we should be, off the back of such a strong first quarter? Thanks. Yeah. Again, I think it's fair, and we acknowledge that we were pleased with the way the first quarter played out relative to our expectations entering the year. As I said earlier, I just think it's still early in the context of the risks we face entering the year and that we still face, right? Namely the pro fee cut dynamics and just in competition generally. When you overlay some of the FX related considerations, the macroeconomic factors, the COVID risk, et cetera, quite frankly, we came into this call quite pleased that we were able to raise the bottom into the range by $5 million just sort of two months after giving our initial guidance. Our next question comes from Steven Lichtman from Oppenheimer. Please go ahead. Your line is open. Hi, this is Steven, also Steve. Thanks for taking the questions. I was wondering if you could provide any more color on the latest macro-outlook you're seeing through April relative to procedural volumes, new patient flow, and backlog. Thanks, David. Like, you know, in general, when answering that question, you have to think about it in terms of individual geographies. I think in the U.S., we've been pleased with the stability that we've seen in terms of those macro dynamics around COVID, you know, procedure flow and the things that you'd expect as we come out of the winter months and into the spring here in the U.S. Internationally, I put more markets than not into that same camp, but there are still pockets of COVID resurgence that create sometimes temporary, sometimes a little bit longer than temporary disruption in procedure volumes. I think that is something that we've gotten used to for almost, you know, over two years now being that dynamic. It's a little bit less than what we've seen in the past, but it's still a relevant dynamic to call out. Got it. Thanks. Then just one question on how we should think about the OpEx spending trend through the rest of this year. Is there any significant investments planned for additional sales reps or pipeline products that we should think about? Thanks. Hey, David, this is Alex Thurman. Happy to take that question on the OpEx. As you saw, we posted about a $70 million non-GAAP OpEx in the first quarter, which if you run that out for the year, it's about $280 million. However, you know, Joe Gilliam has said in the past and we believe this just still holds true that our business really justifies around a $300 million run rate for the year. We would, you know, encourage you to think about that and to kind of put that into your model, which also says that you're gonna see sequential increases over the year to get to that $300 level of OpEx. Great. Thank you. We have no further questions in queue. I'd like to turn the call back over to management for closing remarks. All right. This is Tom, and I wanna thank you all for your time and attention today. We again hope everyone is staying safe, and we thank you for your continued interest in Glaukos Corporation. With that, goodbye. This concludes today's conference call. Thank you for your participation. You may now disconnect.