Launch Of iDose TR And Epioxa Will Transform Eye Treatments By 2025

Key Takeaways

• Anticipated launches of iDose TR and Epioxa could significantly boost revenue and strengthen market position in glaucoma and corneal health sectors.
  
• International expansion and strategic investments enhance competitive edge, driving long-term growth through improved operational efficiency and market share gains.
  
• Regulatory changes and competitive pressures may hinder revenue growth, while reliance on approvals and reimbursement could delay expansion and impact future earnings.

Catalysts

An ophthalmic pharmaceutical and medical technology company, develops therapies for the treatment of glaucoma, corneal disorders, and retinal diseases in the United States and internationally.

• The launch and anticipated adoption of iDose TR, a novel intracameral pharmaceutical designed to provide continuous drug therapy for up to three years, could expand the glaucoma treatment market, impacting future revenue growth as reimbursement improves and market confidence is established in 2025.
  
• The potential approval and launch of Epioxa, a next-generation corneal cross-linking therapy anticipated by the end of 2025, represents a significant future revenue opportunity in the corneal health market by addressing keratoconus patients with a non-invasive treatment option.
  
• Progress in international markets, including expansions and new regulatory approvals such as MDR in Europe for iStent Infinite, could drive sales growth and market share improvements, impacting future international revenue streams.
  
• Development and commercialization of next-generation products like iDose TREX, designed with increased drug capacity, may enhance Glaukos' competitive position and product offerings, contributing to future earnings growth and market share gains.
  
• Strategic investment in a new research, development, and manufacturing facility in Huntsville, Alabama, positions Glaukos for scaled operations and supports long-term expansion plans, potentially improving operational efficiencies and net margins over time.

Glaukos Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Glaukos's revenue will grow by 26.7% annually over the next 3 years.
• Analysts assume that profit margins will increase from -38.2% today to 6.0% in 3 years time.
• Analysts expect earnings to reach $46.7 million (and earnings per share of $0.96) by about May 2028, up from $-146.4 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $69.7 million in earnings, and the most bearish expecting $22.5 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 273.9x on those 2028 earnings, up from -36.6x today. This future PE is greater than the current PE for the US Medical Equipment industry at 31.6x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.94%, as per the Simply Wall St company report.

Glaukos Future Earnings Per Share Growth

Risks

• Regulatory changes, such as the new LCD restrictions, are causing turbulence in the market, which could lead to flat or even negative growth for non-iDose revenues, potentially affecting overall revenue.
  
• The company faces significant foreign exchange headwinds in 2025, which may negatively impact international revenues and profits.
  
• Competitive market pressure, particularly from new competitive product trials in key international markets, poses a risk to market share and revenue growth.
  
• The expiration of the Hydrus royalty, alongside these LCD headwinds, poses a risk to the non-iDose revenue, which may flatten, reducing potential earnings and cash flow.
  
• Continued reliance on regulatory approvals and reimbursement coverage for products like Epioxa and iDose TRIO could delay expansion efforts and impact future revenue and earnings growth.

Valuation

• The analysts have a consensus price target of $151.615 for Glaukos based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $191.0, and the most bearish reporting a price target of just $110.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $780.3 million, earnings will come to $46.7 million, and it would be trading on a PE ratio of 273.9x, assuming you use a discount rate of 6.9%.
• Given the current share price of $93.83, the analyst price target of $151.62 is 38.1% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.