Conference. I'm Mike Sarcone. I'm an analyst on the medical supplies and devices team here. This is a session for Glaukos. With us from the company today, we have Alex Thurman, CFO, and Chris Lewis, Head of IR. Gentlemen, thanks for joining. Thanks for having us, Mike. Yeah, thanks, Mike. Sorry, just catching my breath. Take your time. All right. Get in some water. Yeah. Hot topic here, the recent LCD proposal. I'm sure that's all anyone's asking you about, so maybe can you kick us off with some comments about how you're thinking about it? Absolutely, thanks again for hosting us, and thanks for all of you for coming out this morning to listen to a little bit about Glaukos. Appreciate the question. Nice way to ease into the morning with a, "Let's talk about the LCD." I guess what I'll say from our perspective is, obviously, the LCD was a bit of a surprise to us given where we are in the life cycle of iDose, but that being said, as we've looked at it and we've talked about it internally and with investors, there's a few things that we feel that need to be addressed within the LCD. The primary thing is around the requirement that the draft LCD had that was going to require both failed drops and a failed SLT in order to get iDose. What we'd like to explain to the MACs when we have the chance to do so in the open comment period, is to try and educate them to show them that there are actually cohorts of patients that aren't eligible to get a drop, and there are another cohort of patients that aren't eligible to get an SLT. When you combine that with an and statement, now all of a sudden you've got a multiplier effect on those patients that actually wouldn't be eligible for an iDose because of those conditions and the requirement in the draft LCD. That's one thing we want to address. There's a number of other things that we'll address with them. It's interesting that they decided to put on re-administration, for example, a requirement to wait two years to get re-administered when our FDA label says one year, and it was studied that way. That's kind of interesting. It's kind of arbitrary in our minds, kind of where did they come up with that idea? We'll work to address that with the MACs. Obviously, you can imagine as a company, we've rallied the troops, to provide and to gather the clinical data that we'd like to support, or propose to support our positions in changing that LCD. We've obviously gone out to our customers and our physicians, to get them and their thoughts and to get their support on board as we go through this process. Finally, our CEO and the President have been talking with the presidents of the societies, the different societies within ophthalmology, all of which are very supportive in our efforts and will be participating as well as we go through this open comment period. Great. That's really helpful, Alex. I guess you talked about these next steps of addressing this proposal. Do you have a rough sense for will any potential comment letters from any of the societies be public, or is that something we have to wait to see, and what are our rough timelines there for when we could see statements of support? Yeah. Certainly over the next month here, each of the five MACs that included proposals here will have open meetings, so those are certainly, I'm sure, an area of interest for investors to listen into. There I'm sure you're going to hear a lot of what Alex was talking about in terms of educating the MACs, in terms of the clinical points I think we want to make for patients and getting access ultimately. The open comments, I believe, do become public at some point. I don't know if it's a real-time or they're ultimately posted at some point after the open comment period closes. Got it. Well, it's great to hear that you've already started to hear some support from societies and from the surgeon community. Alex, you mentioned, and I think it's a good point, that there's some patients who just can't get SLT. Do you have any idea for the rough sense of what proportion of patients who would be iDose candidates wouldn't qualify for SLT? It's interesting because it's certainly something that wasn't on our radar previously, and when we sell an iDose, we sell it to the customer. We don't know what patient it's going into or doesn't. What we can do is we've looked at some data that one of the high volume surgeons did, Dr. Savak Teymoorian, and in that data, he showed that about one third of his patients were not eligible for SLT, and the other two thirds were. That's a data point we're obviously going through now and trying to collect that data. Regardless, what's most interesting about the SLT procedure is there are roughly 650,000 SLTs done every year, and that's a procedure that's been around for at least a decade. You've got six and a half million people that have gotten an SLT over the last 10 years, and the statistics will show you that about 50% of those patients will fail after two years, meaning the SLT effect wears off. 75% will have failed that SLT within five years, all of which then become eligible candidates for iDose. Got it. No, that makes sense. I have to ask this question. I think I know the answer, in terms of your iDose volumes today, do you have a rough sense of how many occur pre and post SLT? Maybe a follow-up to that is we've done some calls, and it was kind of high volume cataract and refractive surgeons, right? They have one thing to say. You've done some calls? Yeah. We've done some calls. Well, as you know, we don't always have that. Sure. perfect visibility into. We sell into the account, Ultimately the surgeons have discretion in terms of how they use it, in terms of the patient, and in terms of the procedure, whether it's a standalone or combo cataract. We're trying to gather additional data there and visibility, stay tuned on that front. I think, yeah, we'll see. I think various surgeons have different algorithms, I think glaucoma is obviously a heterogeneous disease. There's not a one-stop shop in terms of treatment paradigm. Certainly, I think if you talk to glaucoma specialists, I think the majority of them, for their eligible patients, certainly position SLT as a first-line intervention. I think the stats around how many are actually done a year would affirm that. You talk to some higher volume cataract surgeons, for example, they may not do it. I don't think that necessarily means those patients haven't had SLT before. I think you have to add that into the consideration list there. I think certainly what we know is SLT is a well-established first-line intervention. There's a lot of patients that have undergone it and continue to get that procedure every year. Got it. If you think about what the optimal outcome of this process could look like, what you'd hope to see in terms of the final LCD, what does that look like for you? Optimal would be a full revision, obviously. I think, in seriousness, I think that what we would like to move them towards is an LCD that's in line with clinical practice, that allows for the opportunity for a patient that may not be eligible for SLT or not eligible for drop to be carved out and eligible for iDose, to not require them to have the "and" between the two, because there's no data out there that suggests that having an SLT before an iDose is preferable to vice versa or et cetera. To get rid of the "and" and make it an "or" would be part of that process and that journey. To get the re-implantation back on label is something. Again, it's not a real big changer from a modeling perspective, but it just seems odd that it's not in line with the label. The last piece around combination with a MIGS device, I think there you just need to wait until, as we've talked about, we started a phase IV clinical trial on that very point as soon as iDose was approved, and we're in the final stages of that with data that'll be ready next year. We'd like to educate them on that if they're willing to listen. If not, then we'll wait until that data's finalized and if the LCD goes final at the end of the year or the beginning of next year, it won't be very long until we'll have that data ready and we can do a reconsideration request to provide the safety and efficacy of those combination products. Yeah. That's an interesting point. It's something I did want to ask about. You're running two of these studies, so it seems to me like it'd be beneficial for the MACs to kind of wait till those read out and see the clinical evidence. Are the readouts there next year, right, I believe? Next year we'll have that iDose plus infinite data, and we'll have that available and get published. I guess you can have your scenarios of what happens here if a final LCD is issued and then ultimately become effective. That's typically, from the starting point, a 7-12 month process. In fairly short order, if that were to go through as proposed on that point, we'd be able to submit a reconsideration request on that in terms of that combination therapy. One point that I'll just add is if you listen to the CAC meeting last November, iDose is a drug at its heart of it. It's a travoprost implant. From a mechanism of action standpoint, it acts as a drug. Very different and complementary than the surgical MIGS devices that really go after the trabecular meshwork and the outflow mechanism. I think there's a lot of clinical interest and appetite for these to be done together. I think ultimately for the patient, that could be a good thing to slow the progression in a more aggressive manner. We'll see how receptive the MACs are to that. Certainly, I think even before the RCT kind of phase IV studies, you're going to see a lot of peer-reviewed publications from surgeons in terms of retrospective case series, et cetera, as you've started to see at various society meetings. Even in the iDose in combination with cataract setting, I think you guys are running a phase IV there as well. I think we've seen data, it might have been individual practitioner, I think maybe Dr. Teymoorian has posted stuff, his own series that showed a pretty significant IOP reduction for iDose and combo cataracts. You already have some data that shows it's really efficacious. Yeah, certainly. I think we've shared that. I think it's in our IR presentation. You've seen profound IOP reductions of 10-11 millimeters of mercury when it's done in combination, which is even better than what we've seen historically on some of the other prior therapies. We've been very encouraged by that. If the proposal were finalized as it stands today, could you just help us think about what are the moving pieces and how that might impact your business on both the iDose and iStent side in 2027? Yeah, I think I'd go back to what I was saying earlier about the SLTs, because I think most investors are focused on that SLT step at it. The fact that there's just a lot of patients out there that have had that in the past that have failed, because the statistics would prove that out, and those all would be eligible for iDose. I think if the LCD were to finalize as is, then obviously there would be a period where the company would need to refocus their strategy to target those particular SLT customers or SLT patients and focus on those through either DTC advertising or reach out to our customer physicians, et cetera. I think that overall, while there might be a little hiccup in that transition period, that the long-term objective of iDose and the market opportunity is still really large. If you think about that 6 million patients out there, do the math, it's a large market opportunity regardless. Obviously, our focus when we started this journey was on the 12 million eyes that are out there that are actively diagnosed and treated today with glaucoma, most of which are on drops. As you know, and as the company has really focused on this interventional glaucoma idea and trying to change the paradigm, we want to go after that. If the LCD were finalized, I think there's still a really large opportunity for us within iDose. Yeah, I would just add, just look at the first quarter results, right? We had a really strong, you could say inflectionary type quarter in the first quarter with iDose. I think we've really been encouraged with what we've seen there. You've got to remember, it's still early. NGS, which is one of the larger MACs, just came on late last year, so we're just starting to see the benefit there. Palmetto just got priced a month or two ago, so that's going to start to layer in over the course of the year. Then certainly, we're still early on the commercial and Medicare Advantage fronts, and those are large opportunities as we look ahead. I think we continue to feel good about the underlying health and growth potential of iDose, regardless of where the LCD ultimately shakes out. Got it. Yeah, I did want to ask about that, Chris. The MA front, the Medicare Advantage. This LCD does provide a path toward coverage there. Do you have a rough sense for how many lives are under the Medicare Advantage, and what kind of timelines could be in unlocking that if this were finalized? Yeah. Certainly, there's a pathway. Ultimately, Medicare Advantage plans typically are required to cover Medicare policies over time. Each one acts a little bit different. Yeah, we actually already have pretty robust coverage, both on commercial and Medicare Advantage, which I think is a bit underappreciated. This more or less solidifies that and fills the gaps where coverage policies aren't actually intact for Medicare Advantage, but certainly clarifies that and solidifies that over time in that population. Got it. That's helpful. Alex, you made a reference to the longer-term outlook here and the longer-term TAM. I did want to ask, when you think about that TAM longer term, how do you parse out relative contributions in the various settings? How important is the combo cataract versus standalone versus iDose plus a MIGS stacking? I think the first two really are very important and are out there today, right? Certainly, when you have a MAC that has established the facility fee and the professional fee, and the utilizations are starting to creep up, there's an easy pathway for that physician to do it in combination with cataract surgery. He's already in the eye. If that patient has glaucoma conditions, iDose is a very elegant and simple solution. That's an important marketplace for us. Obviously, the standalone is where we're focused. I'll remind everyone that we've played in that combo cataract market for 10 years or 12 years when we first launched our initial iStent, but it's a much smaller market, right? There's only about 500,000 total eyes that are available today that have glaucoma and cataracts at the same time, and that is still somewhat under-penetrated. I think there's only about 200,000 or 250,000 procedures done today. We're trying to play in this larger standalone market that you referenced, which is the 12 million eyes that are out there, that are really, again, being treated, most of which with drops. As we've talked about, it's still amazing to me to think about the statistics around the drops, that 90% of patients are not compliant with their drops. There's reasons for that. There's all the side effects that go along with the drops. There's forgetfulness, there's shaky hands, there's red eyes, there's dry eyes, et cetera. We need to have that interventional glaucoma mindset really start to kick in, and I think our customers are starting to buy in on that. You hear it a lot more out there in the marketplace, not only from Glaukos, but from other companies as well, the importance of that, and let's go after that. Got it. Can you just remind us, I think you've said kind of a rough sense of the mix today for Glaukos is majority standalone, then behind that is combo cataract, and then distant third is MIGS stacked. Is that right? Yeah, that's our read. Again, visibility-wise, we don't have perfect sense into that. Certainly the combo cataract, as we've been on record saying and in line with our expectations, is certainly growing. The initial focus was that standalone market, to build the market, build the professional fees, and establish that as a standalone intervention. You're more so as those get established and meeting the surgeon where they are, and that increasingly in the combo cataract setting as well. Got it. When you think about, again, I think my last one on the proposal, I promise. If docs were prohibited from stacking MIGS, how do you think about the interplay of that selection for the doctors between iDose and MIGS, and I guess, what's the decision tree there? No, it's a great question. Before I even get to that answer, again, I'll remind everyone here, there is no clinical reason to prevent that stacking if you kind of just take a step back. You've got iDose as a drug. The design and the purpose of the iDose is to slow down the inflow of the fluid into the eye that creates the pressure. As a MIGS procedure, whether that's an iStent or something else, is designed to attack the outflow. To open up those outflows that typically get clogged and create that pressure. If you just step back and think about it logically, there's no clinical reason that those two should be prevented from working together because they're complementary in nature, and they each attack a different mechanism of action. It makes sense when the MACs came out with the anti-MIGS stacking. There you had two procedures in the same surgery going after the same part of the anatomy. That may not make sense, and it didn't make sense. There we go. If it were, to your point, I think, again, it's all about the clinical data and trying to show that it's safe, effective, and it's in the patient's best interest. That's what we're trying to do with that clinical trial so that we can allow that to happen. Yeah. I think as we think about the total package of iDose, and the outcomes doctors are seeing, the ease of use in terms of the implantation and the economic reimbursement considerations, I think we feel pretty confident in iDose. If a doctor does have to select one or the other, I think iDose wins a lot more of those than it loses. Got it. Okay. I did want to ask, you talked about the total package of iDose. You've also got iterations in the pipeline. You've got TREX, you've got TRIOs for in-office. When you think about when we ultimately have those on the market, how do you think about how much that expands the addressable opportunity versus any potential cannibalization of iDose TR? We view iDose as a platform, and iDose TR is really the first iteration of that. As you know, even beyond TREX, even beyond TRIO, I think we have five or six others in the pipeline that we haven't really talked about yet. Certainly, not resting on our laurels with TR. We're continuing to innovate as we always do across all of our platforms. I think, for TREX, for example, that's basically the same form factor and size, but you get 2x the drug payload. For doctors that see a benefit of getting rather than potentially two to three years, you get potentially double that, given the drug payload. That's obviously a pretty attractive profile for doctors via single implant, getting that type of duration. For TRIO, as we've talked about, that's an optimized, enhanced injector system. The same drug and canister, but just optimize the injector a bit to create a little bit smaller, more minimally invasive incision. We want to be agnostic in terms of site of service over time, whether it's outpatient or in the office. That would, I think, allow, along with reimbursement dynamics that we have to work through to establish reimbursement in the office setting, that would allow doctors to start to potentially use iDose in the office over time as well. Got it. Just on that, they'd still be eligible for the J-code as well in the office setting, right? Yeah. J-code. Would you envision pricing would be the same for the in-office setting, or? Yes. Okay. Maybe we can shift to Epioxa. Maybe can you talk about reimbursement progress and where things stand today, and maybe highlight how that compares versus your expectations, prior to approval? No, great question. We're excited about Epioxa for sure. I would say that the progress with the launch has gone better than expected, and is ahead of our expectations. There's three prongs to that launch. The first one you referenced, which is reimbursement or getting the payers on board. Look, we're blessed in that we have an existing product that's out there that has 99% coverage with Photrexa, and cross-linking being a standard of care that's accepted across the spectrum. With Epioxa, that somewhat makes the conversations, I'll say, easier, if I can use that word, in that you're just going into these payers and you're basically having the clinical conversation about what Epioxa is, why it's different, how it's better, and it's replacing Photrexa, which will eventually go away. We're pleased to have announced in the first quarter call that we have already over 100 million lives that have an access pathway to receiving Epioxa, and we're well along, continuing to work with all of the payers around the nation. As you know, Epioxa is definitely a commercial type of product, commercial insurance. Most of these patients are young, in their teenage years or their early 20s. We're pleased with our progress so far. Awesome. You mentioned you have Photrexa on the market. Corneal cross-linking's been around for a bit now. You do plan to sunset Photrexa over the course of 2026. Can you talk about how you're managing physician warehousing of patients who may be waiting for Epioxa availability or for physicians who are waiting for the J-code to become effective? Yeah. I think it's doctor by doctor and patient by patient. Certainly, during this transition period, we're offering both Photrexa and Epioxa. I think each doctor's a little bit different there, in terms of how they're managing that. I think we've been encouraged with the amount of initial interest that we've seen in terms of doctors putting patients in the Epioxa patient care hub, if you will. Kind of one of those leading indicators. Obviously, that starts at the prior authorization process and everything. During the miscellaneous code period right now in the second quarter, that's obviously a little bit of heavier lift to get those patients approved. We have seen patients get approved and treated, which is great, and that will hopefully get more streamlined as you run over the course of the year and the J-code becomes effective. I think certainly, you're going to see a mix of both in this transition period, both Photrexa. If a patient can't wait, if their disease is rapidly progressing or they're in a pretty severe state, you'd probably just do Photrexa and not have to go through the prior authorization process on Epioxa, just from a time necessity standpoint. If a patient is maybe newly diagnosed, a more mild type disease, theoretically, why would you not want to do Epioxa, just given the advancement and not having to debride the top layer of the cornea and all the patient recovery considerations that brings. I think we've seen a mix, and obviously over the course of the third quarter, we will discontinue Photrexa commercially. We still will have it available in terms of more of a clinical patient need setting for medical necessity over time. Okay. That's helpful. Longer term, when you think about where the corneal cross-linking market could go, how do you think about how that market shakes out between specialty pharmacy versus buy and bill? What's the strategy to support a healthy buy and bill marketplace? A couple things there. Certainly, when you're dealing with a rare disease, high price, specialty pharmaceutical drug, you want to have a specialty pharmacy option for your customers. Especially in the launch phase, because they just don't want to take on the risk of that at that price point. We do have that available, and we are finding, not surprisingly, that a lot of the volumes today with Epioxa are going through the specialty pharma channel. Especially when you're in this miscellaneous code period, which we are, where that's a lot more difficult in working with the insurers to get a patient named approval done. What we expect is over time, as we get past the J-code, which will be effective on July 1st, and that coding becomes more part of everyone's contracts with their commercial insurers, and these customers continue to see and get reimbursement confidence around the fact that Epioxa is getting reimbursed, and there's a margin associated with that, then I think you'll see those more risk-averse or, sorry, risk-taking customers start to move away from the specialty pharma and move into the buy-and-bill. Because they'll want to realize the margin that they can get on the drug. We're there to support them. We've talked about part of our investments in the Epioxa launch and preparation for Epioxa was to build not only the hub that Chris was referred to and all of the patient-facing apparatus to go around that, but also teams that help our customers with that buy and bill process, understanding how that works, understanding the coding and the pre-authorization processes and the audits and the appeals and all of that stuff. We're trying to help them as best we can in a compliant way. Got it. I did want to ask briefly, we've seen some proposals, pilot programs from the Health Resources and Services Administration around can we implement a pilot where we shift some of the 340B upfront discounts to back-end rebates? I guess, how do you think about that if that were to come to fruition, and does that impact how you think the 340B channel works for Epioxa? Yeah, at the end of the day, for us, I don't think that's overly a material consideration. If anything, it's probably more of a working capital consideration for those 340B institutions, and we obviously provide, as part of the launch, elongated, flexible terms. I don't think that would really be a dynamic that would impact our business one way or the other. Got it. I did want to touch on the competitive environment in corneal cross-linking. You've been the only game in town for a while now, but we do have competitors like Epion Therapeutics. We'll see some data in 3Q. I guess, can you talk about how you view Epioxa and the competitive advantage there? Yeah. Well, certainly when you're dealing with a market in which there's a large opportunity, and we do think it's a large opportunity from the standpoint that today, over the past six years, we have only been able to treat about 10,000 patients, somewhere between 18,000, 19,000 eyes, and that's been very steady for the last six years that we've owned Photrexa. We do have data that suggests that only one in five patients are getting treated today, which would, again, doing the math, would lead you to believe there's 100,000 eyes annually that could get treated. Certainly, there's a market for that. We also think that keratoconus is a disease that's highly under-diagnosed or misdiagnosed or non-diagnosed, There may be even more eyes beyond that 100,000. It doesn't surprise us that you've got competitors, and we're prepared for that. I think we will wait and see how the data looks out. I think that you can have multiple players in the market, especially in the beginning years, and both can do well. There'll be a time and a place in the future when you get to a market penetration where market share becomes more important. I think they will play in their market, and we'll play in the same market with them. Understood. Obviously, we have a little bit of time before That'd be a 2028 potential dynamic. You do what you can here over the coming years to build the market the way you believe is best for patients and build those competitive moats over time. I think we continue to feel very confident in our position. I'd be like to ask that we've got a third-generation product that's following on Epioxa that's in clinical trials as well that we'll be presenting later in this decade. Awesome. Well, Alex, Chris, thank you very much for your time. Really appreciate it. Thanks. Thanks.