Executive Summary / Key Takeaways

• Glaukos Corporation is strategically transforming ophthalmic care by pioneering novel, dropless platforms in interventional glaucoma and rare corneal diseases, exemplified by the strong commercial momentum of iDose TR and the recent FDA approval of Epioxa.
• The company reported record third-quarter 2025 consolidated net sales of $133.5 million, a 38% year-over-year increase, driven by robust iDose TR adoption and global interventional glaucoma initiatives.
• Glaukos has raised its full-year 2025 net sales guidance to $490 million to $495 million and provided preliminary 2026 revenue guidance of $600 million to $620 million, signaling continued strong growth expectations.
• The FDA approval of Epioxa, an incision-free keratoconus treatment, marks a pivotal moment, with a strategic shift to discontinue Photrexa and significantly increase investments in patient awareness and access, despite anticipated near-term market disruption.
• A strong balance sheet, with $278 million in cash and no debt as of September 30, 2025, provides a solid foundation for continued R&D investments and strategic expansions, including a new manufacturing facility in Alabama.

A New Dawn in Ophthalmic Innovation

Glaukos Corporation, a specialized ophthalmic pharmaceutical and medical technology company, is at the forefront of redefining eye care. Since its inception in 1998 and its initial market entry with Micro-Invasive Glaucoma Surgery (MIGS) devices in 2012, Glaukos has consistently pursued a strategy of pioneering novel, dropless platform therapies for glaucoma, corneal disorders, and retinal diseases. This foundational commitment to innovation, encapsulated by its "We'll Go First" mantra, positions Glaukos as a transformative force in an industry ripe for disruption. The company's overarching goal is to advance the standard of care, promote earlier intervention, and ultimately improve patient outcomes, moving beyond traditional, often burdensome, treatment paradigms.

The ophthalmic market is vast, with over 20 million eyes in the U.S. affected by ocular hypertension or glaucoma, and approximately 10 million actively treated. This represents a significantly larger opportunity than the historical combination cataract and MIGS market, which typically involved around 500,000 to 700,000 eyes. Glaukos's strategy is to capture this broader market by shifting the standard of care towards interventional glaucoma (IG), where proactive, minimally invasive procedures can slow disease progression and reduce the reliance on daily eye drops. This underlying movement, largely led by Glaukos in partnership with physicians, is rapidly gaining traction, promising a decade-plus period of growth for the company and the industry as a whole.

Technological Edge: The Core of Glaukos's Moat

Glaukos's competitive advantage is deeply rooted in its differentiated technology platforms, which offer tangible benefits over conventional treatments.

iStent Family: The company's iStent micro-bypass stents were revolutionary, pioneering the MIGS category by restoring natural physiologic outflow pathways for aqueous humor. These devices offer a minimally invasive approach to glaucoma management, often integrated with cataract surgery, providing a less burdensome option for patients. The iStent infinite, indicated for patients with glaucoma uncontrolled by prior medical and surgical therapy, further expands this platform into standalone procedures.

iDose TR: A significant leap forward is iDose TR, an intracameral procedural pharmaceutical implant. This first-of-its-kind technology is designed to continuously deliver a proprietary formulation of travoprost inside the eye for extended periods, up to three years. The tangible benefits are substantial: clinical trials demonstrated sustained substantial intraocular pressure (IOP) reductions, with approximately 70% of iDose TR subjects remaining well-controlled on the same or fewer IOP-lowering topical medications at 36 months, compared to 58% of timolol control subjects. Furthermore, a Phase IV study showed iDose TR, when implanted in combination with cataract surgery, achieved a profound mean IOP reduction of 11.3 mmHg (44%) at 6 months compared to baseline. This technology aims to reduce drug burden and improve patient adherence, a critical challenge with daily eye drops.

Epioxa: The recently FDA-approved Epioxa represents a groundbreaking advancement in corneal cross-linking for keratoconus. This incision-free, topical drug therapy utilizes a proprietary combination of an oxygen-enriched novel therapeutic bioactivated by UV light. Its key benefits include eliminating the pain associated with epithelium removal, streamlining the procedure, and minimizing recovery time. Epioxa is the first FDA-approved non-invasive corneal cross-linking drug therapy, offering a superior patient experience compared to traditional methods like Photrexa.

R&D Pipeline and Future Innovations: Glaukos continues to invest heavily in R&D, with over $1 billion invested historically, underscoring its commitment to "going first." Key initiatives include:

• iDose TREX: A next-generation iDose therapy with nearly twice the drug capacity, currently in a Phase IIb/III clinical program. This aims to extend the duration of drug delivery or enhance efficacy.
• iDose TRIO: An improved applicator for in-office iDose implantation, targeting a ~1mm incision for a closed-chamber procedure. This design maintains chamber pressure and minimizes aqueous humor dehiscence, optimizing the in-office setting. Approval is targeted by year-end 2027, aligning with efforts to establish non-facility payment codes with MACs.
• PRESERFLO MicroShunt: An ab-externo system for refractory glaucoma, currently in a 510(k) pivotal study.
• iLution Demodex blepharitis: An IND filing and clinical trial are planned for later in 2025.
• GLK-401: An intravitreal multi-kinase inhibitor for wet AMD, in first-in-human clinical development with an open U.S. FDA IND.

These technological advancements are crucial for Glaukos's competitive moat, enabling higher average selling prices (ASPs) for products like iDose TR and Epioxa, addressing large unmet medical needs, and solidifying its market positioning as a leader in specialized ophthalmic segments.

Competitive Landscape and Strategic Positioning

Glaukos operates in a competitive ophthalmic market alongside larger, diversified players such as Alcon , Johnson & Johnson Vision Care, and Bausch + Lomb (BLCO). While these competitors benefit from broader portfolios, extensive global distribution networks, and greater scale, Glaukos carves out its niche through specialized innovation and a focused strategy.

Glaukos's micro-scale device platform and procedural pharmaceuticals offer targeted therapies that may provide greater precision and lower procedural risks compared to some broader solutions offered by rivals. For instance, the iStent platform's design for minimally invasive procedures and iDose TR's sustained drug delivery differentiate Glaukos in glaucoma care. This specialized approach allows Glaukos to aggressively target underserved areas, such as refractory glaucoma and the vast interventional glaucoma market, providing a unique value proposition of specialized expertise and potentially stronger physician relationships in these niches.

Financially, Glaukos's gross profit margin of 76.87% (TTM) reflects the premium nature of its innovative products. However, the company is currently operating at a net loss (TTM net profit margin of -18.65%) due to significant investments in R&D and selling, general, and administrative (SGA) expenses, a common characteristic of growth-oriented medical technology firms. This contrasts with the established profitability of more diversified giants like Alcon and Johnson & Johnson (JNJ), who leverage their scale for superior overall profitability and cash flow. Glaukos's low Debt/Equity ratio of 0.14 (TTM), particularly after the retirement of its convertible senior notes in 2024, demonstrates a strong balance sheet, providing a competitive advantage for funding its ambitious R&D pipeline and strategic initiatives.

Recent market dynamics, such as the Medicare Administrative Contractor (MAC) Local Coverage Determinations (LCDs) implemented in late 2024, have impacted the U.S. glaucoma market by eliminating coverage for procedures using two different MIGS devices concurrently. This has disrupted traditional customer ordering patterns and led to some utilization of competitive products, reducing U.S. Glaucoma sales volumes for the iStent family used in conjunction with cataract surgery. However, this shift has also underscored the value of standalone therapies like iDose TR and iStent infinite, which are unaffected by these specific restrictions and align with Glaukos's strategic focus on interventional glaucoma. The expiration of royalty income from the Hydrus Microstent (from Ivantis, acquired by Alcon (ALC)) further highlights the competitive pressures in the MIGS space.

Financial Performance and Liquidity

Glaukos demonstrated robust financial performance in the third quarter of 2025, reporting record consolidated net sales of $133.5 million, marking a substantial 38% increase year-over-year on a reported basis. This growth was primarily fueled by the U.S. Glaucoma franchise, which saw net sales of $80.8 million, up 57% year-over-year, largely driven by the increasing adoption of iDose TR. iDose TR generated approximately $40 million in sales in Q3 2025, reflecting strong commercial momentum. International Glaucoma also contributed significantly, with net sales of $29.4 million, growing 20% year-over-year. The Corneal Health franchise delivered net sales of $23.3 million, a 13% increase year-over-year.

The company's gross profit margin for the three and nine months ended September 30, 2025, stood at 78%, showing a modest accretion from 77% and 76% in the comparable 2024 periods, respectively. This reflects the higher net sales price of iDose TR and ongoing operational efficiencies. However, Glaukos continues to incur net losses, with a net loss of $16.2 million in Q3 2025 and $54.0 million for the nine months ended September 30, 2025. This is attributable to significant investments in selling, general, and administrative (SGA) expenses, which increased by 30% in Q3 2025 to $83.0 million, and research and development (R&D) expenses, which rose 10% to $38.1 million in the same period. These investments are critical for expanding commercial infrastructure, supporting new product launches, and advancing its pipeline.

Glaukos maintains a strong liquidity position, with $278 million in cash and no debt as of September 30, 2025. Net working capital stood at $367.3 million, indicating ample current assets to cover short-term liabilities. The company's strategic financial moves in 2024, including the retirement of $287.5 million in convertible senior notes and the unwinding of 50% of capped call transactions for $53.2 million in cash, have significantly deleveraged its balance sheet and reduced future interest expenses. Management believes its existing cash and investments, coupled with cash generated from operations, will be sufficient to meet liquidity requirements for the foreseeable future, including planned capital expenditures exceeding $80 million for a new R&D and manufacturing facility in Huntsville, Alabama, starting in 2026.

Outlook and Strategic Initiatives

Glaukos has demonstrated strong confidence in its future, raising its full-year 2025 net sales guidance to $490 million to $495 million. This revised outlook reflects the robust Q3 2025 performance and continued momentum from iDose TR. For 2026, the company has introduced a preliminary revenue guidance range of $600 million to $620 million.

Key assumptions for this outlook include:

• iDose TR: Continued strong commercial rollout and sequential expansion, particularly as reimbursement confidence solidifies across MAC regions. Management expects iDose TR to be a significant growth driver for the next decade.
• Epioxa Launch: Commercialization is planned for Q1 2026, with a wholesale acquisition cost (WAC) of $78,500. This pricing is strategically set to balance clinical value, cost-effectiveness, and patient access for a rare disease, enabling substantial investments in patient and provider education. However, management anticipates a gradual ramp-up in 2026, describing it as "crawling before we walk before we jog," due to the need to establish a site-of-care network, navigate a miscellaneous J-code before a permanent one is established by July 2026, and overcome typical payer adoption hurdles. This implies a "material step-down in the number of patients being treated with Epioxa in 2026" compared to Photrexa's historical volumes.
• Corneal Health Transition: The company will discontinue Photrexa's commercial availability in 2026, prioritizing Epioxa. This transition is expected to cause "some potential transient disruption" in the U.S. Corneal Health franchise, with a "fairly material year-over-year decline" anticipated in Q4 2025 as patients defer Photrexa in anticipation of Epioxa.
• U.S. Glaucoma (non-iDose): Expected to see a "low single-digit decline in the fourth quarter" of 2025, and a "mid-single-digit decline" for the full year, primarily due to the impact of MAC LCDs and the expiration of Hydrus royalty payments.
• International Glaucoma: Projected for "low double-digit growth in the fourth quarter" of 2025, balancing continued strong performance with competitive launch headwinds and foreign currency fluctuations. For the full year 2025, high single-digit growth is expected.
• Operating Expenses: Total operating expenses for 2025 are projected to be around $460 million, representing mid-teens growth year-over-year, reflecting ongoing investments in growth initiatives.

Risks and Challenges

Despite the compelling growth narrative, Glaukos faces several pertinent risks. The commercial success of both iDose TR and Epioxa hinges on consistent reimbursement, physician adoption, manufacturing capacity, and favorable patient outcomes. The ongoing education of MACs regarding iDose TR's value and appropriate professional fees remains a critical, multi-year process. While the FDA has set a PDUFA date of January 28, 2026, for the iDose TR re-administration appeal, management remains "hopeful, but... not counting on" a positive outcome.

The transition from Photrexa to Epioxa is expected to create near-term market disruption in the Corneal Health franchise, as patients may defer treatment and the company establishes new site-of-care networks and navigates payer adoption hurdles. Unfavorable global macroeconomic conditions, including inflation, supply chain disruptions, and foreign exchange rate fluctuations, could also adversely impact financial results. Furthermore, the company's reliance on a sole manufacturing location for iStent and iDose products in San Clemente, California, and a limited number of third-party suppliers, presents a supply chain risk.

Conclusion

Glaukos Corporation stands as a compelling investment story, driven by its unwavering commitment to pioneering innovative ophthalmic therapies. The company's strategic focus on interventional glaucoma, spearheaded by the transformative iDose TR, and its groundbreaking entry into incision-free keratoconus treatment with Epioxa, are reshaping the standard of care and addressing vast unmet patient needs. Despite near-term complexities related to reimbursement education, market transitions, and competitive dynamics, Glaukos's robust pipeline, strong financial position, and disciplined investment strategy position it for sustained long-term growth. The company's technological leadership, particularly in minimally invasive devices and procedural pharmaceuticals, creates a durable competitive moat. As Glaukos continues to expand market access and drive physician adoption for its differentiated solutions, its trajectory suggests a future where it not only improves patient outcomes but also delivers significant value to discerning investors.