Glaukos Announces First Quarter 2024 Financial Results

Eye

May 01, 2024 04:05 PM Eastern Daylight Time

ALISO VIEJO, Calif.–(BUSINESS WIRE)–Glaukos Corporation (NYSE: GKOS), an ophthalmic pharmaceutical and medical technology company focused on novel therapies for the treatment of glaucoma, corneal disorders and retinal diseases, today announced financial results for the first quarter ended March 31, 2024. Key highlights include:

“We continue to successfully advance our robust pipeline of novel, dropless platform technologies designed to meaningfully advance the standard of care and improve outcomes for patients suffering from chronic eye diseases.”Post this

      • Record net sales of $85.6 million in Q1 2024 increased 16% year-over-year.

      • Glaucoma record net sales of $67.2 million in Q1 2024 increased 20% year-over-year.

      • Corneal Health net sales of $18.4 million in Q1 2024 increased 4% year-over-year.

      • Gross margin of approximately 76% and non-GAAP gross margin of approximately 83% in Q1 2024.

      • Raised 2024 net sales guidance to $357 to $365 million, compared to $350 million to $360 million previously.

    “Our record first quarter results reflect successful global execution of our key strategic plans,” said Thomas Burns, Glaukos chairman and chief executive officer. “We continue to successfully advance our robust pipeline of novel, dropless platform technologies designed to meaningfully advance the standard of care and improve outcomes for patients suffering from chronic eye diseases.”

    First Quarter 2024 Financial Results

    Net sales in the first quarter of 2024 of $85.6 million increased 16% on a reported and constant currency basis, compared to $73.9 million in the same period in 2023.

    Gross margin for the first quarter of 2024 was approximately 76%, compared to approximately 76% in the same period in 2023. Non-GAAP gross margin for the first quarter of 2024 was approximately 83%, compared to approximately 83% in the same period in 2023.

    Selling, general and administrative (SG&A) expenses for the first quarter of 2024 increased 16% to $62.0 million, compared to $53.6 million in the same period in 2023. Non-GAAP SG&A expenses for the first quarter of 2024 increased 16% to $61.3 million, compared to $52.9 million in the same period in 2023.

    GAAP and non-GAAP research and development (R&D) expenses for the first quarter of 2024 decreased 13% to $30.7 million, compared to $35.2 million in the same period in 2023.

    Loss from operations in the first quarter of 2024 was $39.1 million, compared to operating loss of $33.0 million in the first quarter of 2023. Non-GAAP loss from operations in the first quarter of 2024 was $32.8 million, compared to non-GAAP operating loss of $26.8 million in the first quarter of 2023.

    Net loss in the first quarter of 2024 was $40.8 million, or ($0.82) per diluted share, compared to net loss of $34.6 million, or ($0.72) per diluted share, in the first quarter of 2023. Non-GAAP net loss in the first quarter of 2024 was $34.6 million, or ($0.70) per diluted share, compared to non-GAAP net loss of $28.4 million, or ($0.59) per diluted share, in the first quarter of 2023.

    Included in non-GAAP loss from operations, non-GAAP net loss and non-GAAP EPS for the first quarter of 2024 is an acquired in-process R&D (IPR&D) charge of $11.7 million, which caused the non-GAAP loss per diluted share to have an additional loss of ($0.24) in the first quarter of 2024.

    The company ended the first quarter of 2024 with approximately $279 million in cash and cash equivalents, short-term investments and restricted cash.

    2024 Revenue Guidance

    The company expects 2024 net sales to be in the range of $357 million to $365 million based on the latest foreign currency exchange rates.

    Webcast & Conference Call

    The company will host a conference call and simultaneous webcast today at 1:30 p.m. PT (4:30 p.m. ET) to discuss the results and provide additional information about the company’s financial outlook. A link to the webcast is available on the company’s website at http://investors.glaukos.com. To participate in the conference call, please dial 888-210-2212 (U.S.) or 646-960-0390 (international) and enter Conference ID 7935742. A replay of the webcast will be archived on the company’s website following completion of the call.

    Quarterly Summary Document

    The company has posted a document on its Investor Relations website under the “Financials & Filings – Quarterly Results” section titled “Quarterly Summary.” This Quarterly Summary 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 or guidance the company may make. This document is provided alongside the company’s earnings press release and is designed to be read by investors before the regularly scheduled quarterly conference call. As such, today’s conference call will be in a format primarily consisting of a questions and answers session, during which Glaukos will address any queries investors have regarding the company’s results. It is the company’s goal that this format will make its quarterly earnings process more efficient and impactful for the investment community going forward.

    About Glaukos

    Glaukos (www.glaukos.com) is an ophthalmic pharmaceutical and medical technology company focused on developing and commercializing novel therapies for the treatment of glaucoma, corneal disorders and retinal diseases. Glaukos first developed Micro-Invasive Glaucoma Surgery (MIGS) as an alternative to the traditional glaucoma treatment paradigm, launching its first MIGS device commercially in 2012, and continues to develop a portfolio of technologically distinct and leverageable platforms to support ongoing pharmaceutical and medical device innovations. Products or product candidates for each of these platforms are designed to advance the standard of care through better treatment options across the areas of glaucoma, corneal disorders and retinal diseases.

    Forward-Looking Statements

    This communication contains “forward-looking statements” within the meaning of federal securities laws. All statements other than statements of historical facts included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements are based on management’s current expectations, assumptions, estimates and beliefs. Although we believe that we have a reasonable basis for forward-looking statements contained herein, we caution you that they 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, that may cause our actual results to differ materially from those expressed or implied by forward-looking statements in this press release. These potential risks and uncertainties that could cause actual results to differ materially from those described in forward-looking statements include, without limitation, uncertainties regarding the impact of the COVID-19 pandemic or other future public health crises on our business; the impact of general macroeconomic conditions including foreign currency fluctuations; the reduced physician fee and ASC facility fee reimbursement rate finalized by CMS for 2022 and 2023 for procedures utilizing the Company’s iStent family of products and its impact on our U.S. combo-cataract glaucoma revenue;our ability to continue to generate sales of our commercialized products and develop and commercialize additional products; our dependence on a limited number of third-party suppliers, some of which are single-source, for components of our products; the occurrence of a crippling accident, natural disaster, or other disruption at our primary facility, which may materially affect our manufacturing capacity and operations; securing or maintaining adequate coverage or reimbursement by third-party payors for procedures using the iStent, the iStent inject WiAccessiPRIMEiStent infiniteiDose TR, our corneal cross-linking products or other products in development; our ability to properly train, and gain acceptance and trust from ophthalmic surgeons in the use of our products; our ability to compete effectively in the medical device industry and against current and future technologies (including MIGS technologies); our compliance with federal, state and foreign laws and regulations for the approval and sale and marketing of our products and of our manufacturing processes; the lengthy and expensive clinical trial process and the uncertainty of timing and outcomes from any particular clinical trial or regulatory approval processes; the risk of recalls or serious safety issues with our products and the uncertainty of patient outcomes; our ability to protect, and the expense and time-consuming nature of protecting our intellectual property against third parties and competitors and the impact of any claims against us for infringement or misappropriation of third party intellectual property rights and any related litigation; and our ability to service our indebtedness. These and other known risks, uncertainties and factors are described in detail under the caption “Risk Factors” and elsewhere in our filings with the Securities and Exchange Commission (SEC), including in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 23, 2024, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, which is expected to be filed with the SEC by May 10, 2024. Our filings with the SEC are available in the Investor Section of our website at www.glaukos.com or at www.sec.gov. In addition, information about the risks and benefits of our products is available on our website at www.glaukos.com. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. You are cautioned not to place undue reliance on the forward-looking statements in this press release, which speak only as of the date hereof. We do not undertake any obligation to update, amend or clarify these forward-looking statements whether as a result of new information, future events or otherwise, except as may be required under applicable securities law.

    Statement Regarding Use of Non-GAAP Financial Measures

    To supplement the consolidated financial results prepared in accordance with Generally Accepted Accounting Principles (“GAAP”), the Company uses certain non-GAAP historical financial measures. Management makes adjustments to the GAAP measures for items (both charges and gains) that (a) do not reflect the core operational activities of the Company, (b) are commonly adjusted within the Company’s industry to enhance comparability of the Company’s financial results with those of its peer group, or (c) are inconsistent in amount or frequency between periods (albeit such items are monitored and controlled with equal diligence relative to core operations). The Company uses the term “Non-GAAP” to exclude external acquisition-related costs incurred to effect a business combination; amortization of intangible assets acquired in a business combination, asset purchase transaction or other contractual relationship; impairment of goodwill and intangible assets; certain in-process R&D charges; fair value adjustments to contingent consideration liabilities and pre-acquisition contingencies arising from a business combination; integration and transition costs related to business combinations; fair market value adjustments to inventories acquired in a business combination or asset purchase transaction; restructuring charges, duplicative operating expenses, or asset write-offs (or reversals) associated with exiting or significantly downsizing a business; gain or loss from the sale of a business; gain or loss on the mark-to-market adjustment, impairment, or sale of long-term investments; mark-to-market adjustments on derivative instruments that hedge income or expense exposures in a future period; significant legal litigation costs and/or settlement expenses or proceeds legal and other associated expenses that are both unusual and significant related to governmental or internal inquiries; and significant discrete income and other tax adjustments related to transactions as well as changes in estimated acquisition-date tax effects associated with business combinations, and the impact from implementation of tax law changes and settlements. See “GAAP to Non-GAAP Reconciliations” for a reconciliation of each non-GAAP measure presented to the comparable GAAP financial measure.

    In addition, in order to remove the impact of fluctuations in foreign currency exchange rates, the Company also presents certain net sales information on a constant currency basis, which represents the outcome that would have resulted had exchange rates in the current period been the same as the average exchange rates in effect in the comparable prior period. See “Reported Sales vs. Prior Periods” for a presentation of certain net sales information on a reported, GAAP and a constant currency basis.

    GLAUKOS CORPORATION
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (unaudited)
    (in thousands, except per share amounts)
               
               
        Three Months Ended  
        March 31,  
               
        2024   2023  
    Net sales $ 85,622     $ 73,899    
    Cost of sales   20,258       18,071    
    Gross profit   65,364       55,828    
    Operating expenses:        
      Selling, general and administrative   61,975       53,650    
      Research and development   30,726       35,171    
      Acquired in-process research and development   11,729          
    Total operating expenses   104,430       88,821    
    Loss from operations   (39,066 )     (32,993 )  
    Non-operating expense:        
      Interest income   3,083       1,648    
      Interest expense   (3,450 )     (3,408 )  
      Other (expense) income, net   (1,028 )     528    
    Total non-operating expense   (1,395 )     (1,232 )  
    Loss before taxes   (40,461 )     (34,225 )  
    Income tax provision   377       401    
    Net loss $ (40,838 )   $ (34,626 )  
               
    Basic and diluted net loss per share $ (0.82 )   $ (0.72 )  
               
    Weighted average shares used to compute basic and diluted net loss per share   49,580       47,881    

    GLAUKOS CORPORATION
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (in thousands, except par values)
           
      March 31,   December 31,
      2024   2023
      (unaudited)    
    Assets      
    Current assets:      
    Cash and cash equivalents $ 42,495     $ 93,467  
    Short-term investments   230,365       201,964  
    Accounts receivable, net   46,545       39,850  
    Inventory   50,185       41,986  
    Prepaid expenses and other current assets   19,020       18,194  
    Total current assets   388,610       395,461  
    Restricted cash   5,856       5,856  
    Property and equipment, net   101,858       103,212  
    Operating lease right-of-use asset   26,683       27,146  
    Finance lease right-of-use asset   43,575       44,180  
    Intangible assets, net   281,919       282,956  
    Goodwill   66,134       66,134  
    Deposits and other assets   18,703       15,469  
    Total assets $ 933,338     $ 940,414  
           
    Liabilities and stockholders’ equity      
    Current liabilities:      
    Accounts payable $ 12,752     $ 13,440  
    Accrued liabilities   59,486       60,574  
    Total current liabilities   72,238       74,014  
    Convertible senior notes   283,117       282,773  
    Operating lease liability   30,110       30,427  
    Finance lease liability   70,289       70,538  
    Deferred tax liability, net   7,144       7,144  
    Other liabilities   19,710       13,752  
    Total liabilities   482,608       478,648  
           
    Stockholders’ equity:      
    Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding          
    Common stock, $0.001 par value; 150,000 shares authorized; 49,875 and 49,148 shares issued and 49,847 and 49,120 shares outstanding as of March 31, 2024 and December 31, 2023, respectively   50       49  
    Additional paid-in capital   1,089,280       1,059,751  
    Accumulated other comprehensive income (loss)   1,437       1,165  
    Accumulated deficit   (639,905 )     (599,067 )
    Less treasury stock (28 shares as of March 31, 2024 and December 31, 2023   (132 )     (132 )
    Total stockholders’ equity   450,730       461,766  
    Total liabilities and stockholders’ equity $ 933,338     $ 940,414  

    GLAUKOS CORPORATION  
    GAAP to Non-GAAP Reconciliations  
    (in thousands, except per share amounts and percentage data)  
    (unaudited)  
                             
      Q1 2024   Q1 2023  
                             
      GAAP   Adjustments   Non-GAAP   GAAP   Adjustments   Non-GAAP  
                             
    Cost of sales $ 20,258     $ (5,523 ) (a) $ 14,735     $ 18,071     $ (5,523 ) (a) $ 12,548    
                             
    Gross Margin   76.3 %     6.5 %     82.8 %     75.5 %     7.5 %     83.0 %  
                             
    Operating expenses:                        
    Selling, general and administrative $ 61,975     $ (705 ) (b) $ 61,270     $ 53,650     $ (705 ) (b) $ 52,945    
                             
    Loss from operations $ (39,066 )   $ 6,228     $ (32,838 )   $ (32,993 )   $ 6,228     $ (26,765 )  
                             
    Net loss $ (40,838 )   $ 6,228   (c) $ (34,610 )   $ (34,626 )   $ 6,228   (c) $ (28,398 )  
                             
    Basic and diluted net loss per share $ (0.82 )   $ 0.12     $ (0.70 )   $ (0.72 )   $ 0.13     $ (0.59 )  
                             
    (a) Cost of sales adjustments related to the acquisition of Avedro, Inc. (Avedro) for amortization of developed technology intangible assets of $5.5 million in Q1 2024 and Q1 2023.
    (b) Avedro acquisition-related expenses for amortization expense of customer relationship intangible assets of $0.7 million in Q1 2024 and Q1 2023.
    (c) Includes total tax effect for non-GAAP pre-tax adjustments. For non-GAAP adjustments associated with the U.S., the tax effect is $0 given the Company’s U.S. taxable loss positions in both 2024 and 2023.
                             

    Reported Sales vs. Prior Periods (in thousands)
            Year-over-Year Percent Change Quarter-over-Quarter Percent Change
      1Q 2024 1Q 2023 4Q 2023 Reported Operations (1) Currency (2) Reported Operations (1) Currency (2)
                       
    International Glaucoma $ 25,238 $ 21,118 $ 21,857 19.5 % 21.4 % (1.9 %) 15.5 % 14.5 % 1.0 %
                       
    Total Net Sales $ 85,622 $ 73,899 $ 82,365 15.9 % 16.4 % (0.5 %) 4.0 % 3.7 % 0.3 %
    (1) Operational growth excludes the effect of translational currency
    (2) Calculated by converting the current period numbers using the prior period’s average foreign exchange rates

    Contacts

    Chris Lewis
    Vice President, Investor Relations & Corporate Affairs
    (949) 481-0510
    clewis@glaukos.com

    Original press release can be found here.

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