Advertisement

Q4 2023 Glaukos Corp Earnings Call

Participants

Alex R. Thurman; Senior VP & CFO; Glaukos Corporation

Thomas Stephan; Analyst; Stifel Financial Corp.

Ryan Benjamin Zimmerman; Analyst; BTIG, LLC

Larry Biegelsen; Analyst; Wells Fargo Securities, LLC

Matt O'Brien; Analyst; Piper Sandler & Co.

Alan Gong; Analyst; JPMorgan Chase & Co.

Joanne Karen Wuensch; Analyst; Citigroup Inc.

David Saxon; Analyst; Needham & Company, LLC

Sam Brodovsky; Analyst; Truist Securities

Presentation

Operator

Welcome to the Glaukos Corporation's Fourth Quarter and Full Year 2023 financial results conference call. Copies of the Company's press release and quarterly summary document both issued after the market close today are available at www.glaukos.com. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one. Again, this call is being recorded and an archived replay will be available online in the Investor Relations section at www.glaukos.com.
I'll now turn the call over to Chris Lewis, Vice President of Investor Relations and Corporate Affairs. Please go ahead.

ADVERTISEMENT

Thank you and good afternoon. Joining me today are Bob is Chairman and CEO, Tom Burns, President and CFO, Joe Gilliam, and CFO, Alister. Similar to prior quarters, the Company has posted a document on its Investor Relations website under the Financials & Filings Quarterly Results section titled Quarterly summary.
This document is designed to provide the investment community with the summarize an 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-looking statements or guidance we may make.
This document is designed to be read by investor or the regularly scheduled quarterly conference call as such for this call, and we will make brief prepared remarks and transition into a question and answer session to ensure ample time and opportunity to address everyone's questions.
We request that you limit yourself to one question and one follow. 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 products, pipeline technologies, clinical trials, US and international commercialization market development efforts, the efficacy of our current and future products, competitive market positions, regulatory strategies and reimbursement for our products, financial condition and results of operations, as well as the expected impact of general macroeconomic conditions, including foreign currency fluctuations 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 bridge and predict and many of which are beyond our control, therefore, and 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 Investors 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' ongoing results of operations, particularly when comparing underlying results from period to period. Please refer to the tables in our earnings press release available on the Investor Relations section of our website for a reconciliation of these measures to their most directly comparable GAAP financial measure.
And with that, I'll turn the call over to Glaukos' Chairman and CEO, Tom Burns.

Okay. Thank you, Chris. Good afternoon and thank you all for joining us today. Glaukos reported today record fourth quarter consolidated net sales of $82.4 million, up 16% on a reported basis and 15% on a constant currency basis versus the year ago quarter.
For the full year 2023, consolidated net sales of nearly $315 million from 11% on a reported basis and 12% on a constant currency basis versus 2022. We are also reaffirming our full year 2024 net sales guidance range of $350 million to $360 million. These record results, which further exceeded.
Our preliminary preannouncement from early January were driven by broad-based double digit growth across our glaucoma and corneal health franchises globally. Our strong fourth quarter performance capped off a successful year of execution, both from a commercial and development perspective, leaving us ideally positioned as we enter into what should be a transformative period for our Company in the years to come.
From a commercial perspective, strong execution of key strategies within each of our core franchises drove the solid performance within our US glaucoma franchise, we delivered sales of $38.7 billion on growth of 10% year-over-year, driven primarily by the continued commercial rollout of ICE and Internet TV market.
Receptivity and adoption of high-speed Internet remained strong with surgeon feedback, most commonly highlighting the benefits of its three stent solution, favorable safety profile and streamlined injector system alongside our commercial efforts, we also continue to advance key market access initiatives for high-speed Internet with all MACs covering on a case by case basis, including two with LC. is in place. We will continue to monitor the various MAG processes and policies as we remain supportive of expanding broad access to intervention of our common tools for physicians and for patients.
Moving on our international glaucoma franchise delivered sales of $21.9 billion on strong year-over-year growth of 25% on a reported basis and 23% on constant currency basis. Strong growth was once again, again broad based as we continue to scale our international infrastructure and execute our plans to drive mix forward standard of care in each region, region and every major market in the world.
And finally, our corneal health franchise delivered record sales of $21.8 million or 19% year-over-year growth, including Photrexa record sales of $19.2 million on a year over year growth of 26% as our key initiatives continue to take hold in support of this important business.
Shifting gears to the development front, as you know, during the fourth quarter, we were delighted to announce FDA approval of Eidos TR by revolutionary micro invasive injectable therapy designed to lower intraocular pressure in patients with open-angle glaucoma or ocular hypertension, high-dose TR is a first of its kind intracameral procedure pharmaceutical designed to deliver a glaucoma drug therapy for up to three years following approval.
Our teams have been hard at work executing the initial phases of our detailed coordinated launch plan. In conjunction with these efforts, we're pleased to announce that just last week, multiple surgeons successfully completed their first commercial cases of ISTR. We're happy to report. All of these cases went extremely well and the early feedback from the small group of surgeons has been very positive.
Looking ahead, we plan to continue advancing a methodical controlled launch over the first half of 2024 with a primary focus on surgeon training and establishing market access as we refine and optimize our training and skill transfer to our sales force and surgical community. We will continue to expand our training and broader launch efforts over the course of 2024. We are in a powerful position to leverage our established best in class for our common sales force and commercial organization to drive the Hydro launch.
Speaking of which earlier this month, we held our global sales meetings for most of the focus here in the US was on pace and in an ISTRA. was evident throughout the productive meeting that our core common sales force is excited and prepared to execute our plan. Alongside that, we are progressing several market access reimbursement initiatives designed to drive fulsome coverage and payment for the ISTR. procedure pharmaceutical over time on that front.
First, we successfully submitted our permanent J code application in late December, which should allow rates to become effective in the second half of 2024 based on the CMS' cycle for J codes. Until then, we are launching ISTL. with the temporary miscellaneous C code anticipate measured adoption over this initial period until the permanent J-code is in place and we've expanded our surgeon training initiatives.
Next, we are working to establish payment for the new Category three code in oh six zero t. that will cover the procedural component of ISTR. This includes the establishment of the facility fee through an APC classification from CMS, which we expect to become effective April first. We will also be working with MACs to secure professional fee coverage and payment over the course of 2024.
Finally, our Eidos TR commercial launch will be supported by a robust set of peer-reviewed literature during the fourth quarter. The first Eidos tail publication was published in the Journal of Drugs and summarizes the Phase IIb three year outcomes.
More recently, another TR manuscript published in ophthalmology and therapy highlighted favorable Phase three 12-month results. Looking ahead, there are an additional 10 articles to be published plan to be published in leading journals, including a manuscript that was just accepted by ophthalmology, which highlights high doses of TR.s Phase three, three months results.
So to summarize the response we received from surgeons and the broader oncology community. Since we announced FDA approval for ISTR. has been overwhelmingly positive and reaffirms our view that with the launch of ISTR. We are pioneering a brand new category of procedural pharmaceuticals that has the potential to reshape. I'll call them as soon as we know today. We are excited to now be in the initial phases of bringing this transformative technology to market and in doing so, expanding the treatment alternatives for patients suffering with glaucoma and ocular hypertension.
Beyond high-dose, we continue to prudently invest in and successfully advance our robust pipeline of novel promising platform technologies that we believe have the ability to significantly expand our addressable markets and fundamentally transform our company over time. This includes at the OXO, our next-generation corneal cross-linking therapy for which we continue to progress towards trial completion in the second Phase three pivotal study and remain on track for data readout in the second half of this year, supporting our targeted NDA submission by the end of 2024.
In terms of our earlier-stage pipeline, we commenced three new clinical trials during the fourth quarter of 2023, including one a PMA clinical trial for iStent infinite in mild-to-moderate glaucoma patients to a Phase IIa study for dilution, travoprost and three of first in human clinical development program for GLK. oral one, our intravitreal multi-kinase inhibitor retinol program in wet AMD patients.
In 2024 will continue to drive our robust pipeline forward with additional plans, which include commencing a US IDE trial for the Presto for MicroShunt, commencing a Phase three study for a high-dose TREX., our next-generation high-dose therapy, and finally, completing enrollment in our Phase two trials for our elite third generation therapy.
So as you can see, we have a lot to be excited about when it comes to the significant potential value that we believe our pipeline programs may create. At the same time. As we've discussed, we continue to prioritize the cadence of our investments as we strive to strike the right balance of risk based spending and our capital position now and in the future.
In conclusion, I think it's fitting to remind you of our company mantra will go first, which for us is more than just a company tag line rather than something that defines who we are as an organization and how we lead every day we are ready to deliver in 2024 and beyond as we execute our commercial launch plans for high-dose TR., along with iStent infinite, our foundation is strong, and we are ideally positioned to continue transform the vision for the benefit of patients worldwide.
So with that, I'll open the call to questions.
Operator queue at this time.

Question and Answer Session

Operator

Thomas Stephan, Stifel.

Thomas Stephan

Thanks for the questions. Tom maybe I'll start with guidance, Joe or Alex, any framework you can provide and how much of Eidos is factored into 2024 guidance? And then also, what are some of the key inputs supporting that outlook?

Sure, David. It's Joe. I'll start off the balance of debt and color he can come. Maybe maybe first, I'll start with a macro perspective on the guidance itself. I mean, obviously, we were we were pleased to see the business continue to deliver. And that momentum as we exited 2023, we're entering 2024 and I think that the guidance we established overall on really implies another year of accelerating growth as we focus on putting in place that really the foundational building blocks that we believe will enable the next really decade of growth for our company.
And I said this, I think on one of the calls, either around the investor conference really this year or in December when we first gave guidance, there are a variety of scenarios and drivers for our business in 2024 and even within the US glaucoma franchise, of which Eidos is really one of those. And so I certainly acknowledge and respect the importance of trying to dive a little bit deeper on the specificity around the numbers associated with Eidos. I think it's a little early to get too granular.
There clearly is going to be an increasingly material driver as we make our way through the year. And certainly as we enter 2025. And at some point here in the coming quarters, we'll provide additional disclosure on the actual revenues of Eidos as we really transition from, as Tom said, that, but early access phase into it into a full launch.

Thomas Stephan

Got it. Makes sense.
That's fair.
And then just on the high-dose label, I know it's only been a couple of months since approval by that time. Any updates on the label as it relates to single administration? Have you've been able to gather, I guess, any additional color from FDA on their decision and then maybe more importantly what the path forward for Glaukos is from here in that regards.
Thanks for taking the questions.

Yes, Tom, we have been answered. And so let me first say that that we're poised for success today, given the current label, even with the current limitation in all our channel checks with our clinicians and surgeons, we see no impediment to the appetite for the use of the algos product. And so that's very encouraging. But to answer your question directly, we're in the process of records that repositioning to the FDA for RE administration of the Eidos device. And as you're probably aware, within cedar right now, the drug division, there's a changing of the guard.
And so we're waiting for that transition to happen and the dust to settle. And then we'll put our competition before that court. And we're hopeful for a successful conclusion in the event that we're not remember that we already have Eidos T-Rex, which again, it contains approximately twice the amount of medication of the high dose that's planned to enter clinical trial by the end of the year. And so by our best thinking, we're targeting a commercial approval for that product in 2028.
So if you think about it, that Eidos T regs could become the next reimplementation product for our current Eidos products and initiatives. So I feel like we're covered in all respects. I feel good about our path forward. We're hopeful to be successful or we petition the FDA. We have a sophisticated argument to make to them. And having said that, we're covered in either of them.

Thomas Stephan

Very helpful.
Thanks.
You're welcome.
Thanks, Tom.

Operator

Ryan Benjamin, BTIG.

Ryan Benjamin Zimmerman

All right. I'm going to trying to ask a similar question on Eidos in a different way and press my luck here a little bit. But when you talk about the controlled launch guys, what does that mean what how many surgeons are you trying to get comfortable with it now? Does you know, at what point do you transition to a broader launch and regardless of maybe reimbursement milestones that are up ahead, just to help us kind of frame how much experience you're looking for with high-dose initially?
A right.

It gets Joe.
We've tried not to have get a hit a whammy here, but I will give you a little bit of color around kind of where we're at, where we're going I hope it's consistent with what we talked about during the original approval call it. Right now we're officially in the early access phase of the launch and on the great news as Tom mentioned in the prepared remarks, we now have the first procedures having been completed last week as a part of that. And that's a big step organizationally for through our national sales meeting, and we've begun that early access phase with a handful of docs.
And I think the it's important to note that it is limiting the scope, the goal of that early access phase is really designed to help us refine our training algorithms and establish confidence within our sales force and iron out any early market access challenges that inevitably come with a product launch like this, we will transition in the coming months to a broader launch. But like we've said in the past, that really goes from crawling to walking to jogging to running the objective there is that as we move into those early launch phase that we've got all of our reps, how starting with their starter cases, training one maybe two doctors at the beginning. And then as they continue to refine their algorithms and their experience will open that up more broadly as we get into the second half, it clearly, as we've said before, starts to hit a stride as you get into the fourth quarter. And that's by design because it also happens to match up with where you expect the market access side of the equation to start to provide a little bit more clean path forward to as you've got a fully established J code, published a PEA and all the things that come alongside that. So it really will be a some what I'll call it linear release, if you will, of our efforts between now and that Q4 timeframe where we hope to start really running within Sprint into 2025.

Ryan Benjamin Zimmerman

Second question for me. Turning to the incident. You guys are going to pursue a label expansion in mild to moderate patients. How much of that, how much is that a gating factor do you think to adoption in current usage of InfiniBand when you think about how it's being used today where it can go? And then maybe kind of talk about it in the context of both combo cataract and also standalone as you pursue that label?

You're right. I'm happy to address. And so first of all, let's talk about the study itself. So we're going to do of a multicenter prospective study, which we'll be looking at meeting our IOP reduction of greater than 20% from baseline and 12 months with a prespecified endpoint that we've negotiated with the FDA.
And so we feel like we're in a confident position, but targeted approval at the tail end of this clinical trial, given the demonstrable performance we've had with the product up to date, I think when we look at the marketplace and the TAM serially we know that the current marketplace for patients who failed on surgical medical therapy were estimating at about 200,000 patients, right
And so when we expand and we look at going into mild to moderate patients, we believe, by our estimation. So we'll be looking at an additional 400,000 to 500,000 patients that we would be covered by doing so that in and of itself gives an expression of how we intend to expand the market. I think the product will be used equally. I think as we get these up get the approvals.
I think there will be a strong initiative as we move forward with interventional glaucoma, where people will start to feel strong confidence in using this in standalone cases. And certainly our upgrades of five four, nine three on the APC side doesn't hurt us as a financial incentive for surgeons to be doing the right therapy for their patients I think as well on the combo cataract side, it makes sense was particularly when we have a broad label that surgeons will feel very comfortable down to the very early 80s of glaucoma in using this product in combination with cataract surgery. Why wouldn't you have $0.03 versus $0.02 in this case, and we showed demonstrable additive effect with those different products. So I feel like that's the way this will come on.
And one of the things that I feel very strongly about is that over time, surgeons will begin to use a stent infinite in conjunction with others. And so why do I say that? Because I said incident is showing a strong ability to reestablish physiologic outflow through the trabecular meshwork high dose works on a different part of the eye, the UBS Global system. And so using these products in combination should provide a very robust competence, oral care procedure therapy for surgeons as they move forward. And we think that within the Medicare fee for service system, there's going to be no impediments. There's two separate CPT codes, different mechanisms of action and these are different product classes.
And we think about it 50% of patients right now that use topical meds are on two or more medications. So combination therapy rules, half of the current identified diagnosed glaucoma patients. And so we think that this will be an extraordinary opportunity in combination therapy as we get into commercial payers and Medicare Advantage. There will be some restrictions just like there is with stand-alone treatments with infinite and with Eidos. But we're highly encouraged and love the double whammy of having both these harbingers and catalysts giving us the fulcrum to create the interventional glaucoma market space.

Ryan Benjamin Zimmerman

Thanks, Tom. Thank you for that question.

Okay. Thanks, Ron.

Operator

Larry Biegelsen at Wells Fargo, Wells Fargo.

Larry Biegelsen

Hey, guys, thanks for taking the question is Tom, starting up on Eidos. Obviously, the ASP. got a lot of attention when you announced it, but to hear from you, the reaction from any payers or physicians and your confidence that your prices we have prices.
Right. And just secondly, your confidence that the surgeon fee is going to be, is there going to be adequate? And I had one follow-up.

Yes, happy to address that, Larry. So as you know, we did our homework over the last couple of years. We've done multiple pharmaco-economic different approaches to the treatment of glaucoma using the high dose daily we've done. We've done mark of transition probability analysis. We met with payer groups. We licensed and looked at a lot an external group to be able to go out to payers and pre talk about the pricing of this product, although we didn't disclose what product it was.
But we talked about the nature of the attributes, and we are getting positive signals across the board. And so the short answer to your question is once we look at and show surgeons where this procedural pharmaceutical line zone, given the other procedural pharmaceuticals that have been available and codified within ophthalmology, the scores are very well somewhere in the median of those products.
As you know, ready services in three years, steroid implant used for the treatment of UBS cost on the order of $18,000 to $19,000. We know that Arysta is roughly $2,000 for a three to four-month therapy. And when the MP team start to look at that over a three-year period, you start to get quite comfortable that we were, I hope, present and how we are and how we price the product.
So having said that, the response of surgeons I think, has been Folsom has been understanding. I don't see that as an impediment. As always as we move forward, I think we're going to have open field running with Medicare fee for service. I think as we get into commercial and Medicare Advantage patients certainly they will do the same thing they did with derisked. It has some edits before using this product, but I don't I don't anticipate any impediments to utilization versus where we price the product. I think we I think we hit a resolution?

Larry Biegelsen

And the surgeon fee being adequate. And I'll just ask my follow-up. What happened what happens next with the MiGS LCD or what's the assumption in the guidance? What are you assuming, you know, for infinite case by case is not probably what you know, ideal for you? And is there any turbulence in the market still from the noise from these LCD tax fully?

Let me address I didn't address your second question on protease wanting to sell before I turn it over to Joe, if we look at what's happening with iStent infinite, which is a very likely procedure and we see a WPS. and First Coast, at least the first numbers are coming in and certainly greater than $600. And we know that cataract surgery right now, average national payment, it's about [5.25]. I think we're going to I think I'd like to believe we're going to sell somewhere in that range. Some of the ranges have been as high as $1,000 in the early innings for ICE that incident. And so as and as different MACs start to look at this procedure, I think they're going to start to crosswalk and sober pretty similarly to what we see with less than Infinity.

So I wanted to answer your question before I turn it over to Joe and Larry, I on the LCD. front, I think this is one of those scenarios, obviously that we assess, as we said, the overall guidance and there's a range of outcomes there, perhaps less certainly less material than the high-dose as you think about the drivers for 2024. But in general, I think it's at this point, largely status quo, at least for now with perhaps an overlay of being I'm cautious at the account level until more definitive clarity is establish the next steps and the timing for Mac MAP policy changes remains unclear at this point, but we do expect to hear from them again and in that regard, our priorities really remain unchanged. We're focused on protecting the rights of our customers that make clinical decisions on behalf of their sight-threatening patients. But at this stage, we're in a wait-and-see game to to determine where the Mexican mix.
Thanks a lot.

Operator

Matthew O'Brien, Matt O'Brien.

Matt O'Brien

Thanks for taking the questions. Um, you know, the Street's modeling Pride does about $27 million, $28 million this year. Is that number a good number too high too low in your opinion? And then those first cases, were they bilateral or single cases? And then I do have a follow-up.

Sorry, Matt, could you repeat that second part of the question? Because obviously what's the final vesting All right?
Yes.
So I'll start with that. They were they were all single light cases at the start here, which is what you'd expect as a part of the US launch as it relates to the high-dose number. I'll stop short of commenting specifically on where the Street's guidance is that maybe what I will do is provide a little bit more color and context around the franchises and their drivers of our overall, you know, guidance and clearly the US glaucoma franchise moves front and center. It's why you guys are focused on that.
And asking questions around Eidos, our focus there is going to continue to be driving forward first, the traditional glaucoma mindset and within that, trying to establish iStent infinite and then driving the training and market access and early adoption with items internationally, the business continues to scale that you saw in the fourth quarter.
With that comes to market access has headwinds as government payers and really seek to limit some expenditures. As you scale most recent, we've seen that emerge in Switzerland, for example, we'll see it elsewhere. We've seen in the past and it will continue to experience that in parallel, we expect to see continued efforts by competition in those markets and probably even a little bit of currency headwind as we sit here today going into the year.
And on the cornea side, while we were very pleased with the growing momentum we saw in the fourth quarter, we'll probably face some new headwinds in 2024 some of you may be aware, the $0.4 for Medicaid rebates expired on December 31. And with that, we're going to see some incremental government rebating on a year-over-year basis.
And we'll probably also see some continued device related selling headwind is that every asset gets increasingly in focus for both our customers and our sales force. If you think about that math directionally, kind of where does that put us in the in the guidance range we gave, I think that we're comfortable that the interventional glaucoma franchise should deliver kind of low-ish double digit year-over-year growth for the year on the corneal health should deliver mid single digit year-over-year growth for the year, taking into consideration what I just mentioned and then ultimately that implies the US glaucoma, some high 10s type growth, which is,
Of course, going to be weighted towards the back half of the year. So I think when you put all that together. And maybe most importantly, we did point out accelerating trends within our overall franchises and what we think is a pretty strong exit velocity, if you will, when you think about coming out of 2024 and into 2025, particularly within the US pharma business.
Okay.

Matt O'Brien

Appreciate that, John.
And it kind of dovetails into my next question, you started covering all this, but you're just saying that I mean that's a dramatic slowdown in the US glaucoma business, excluding whatever revenues have come off, the fried dose and then kind of same thing OUS. And I know you're talking about Sweden, but I don't think it's that big of a market. Maybe I'm wrong. So why would the slowdown that dramatically. And many of these are especially corneal health, which has had a monster Q4.

So I mean, I think it just sort of caveat, let me clarify a couple of things that you just you just said there.
I think in the context, I will repeat my comments around some of the drivers there. Obviously, in each of those businesses. I'll focus on where you sit around the international and the US glaucoma side of things on the international side, but you continue to scale. It was Switzerland. It is not the largest of our European markets.
But it does matter when you're thinking about that growth dynamic when you bridge from the currency headwinds that we expect a couple of percent probably two percent-ish at this point, and you think about some of the competitive dynamics that continue to evolve out there, combine that with what is a relatively difficult first half comp, if you go back and look at our international business, it was pretty clear that we were running at elevated levels in the first half of last year despite the continued growth tailed off a little bit, but then from an absolute basis in the second half, probably and procedures started to normalize a bit on a global basis in the second half.
So you have to factor those things in as it relates to the US glaucoma, I don't think I follow that there. In fact, if you imply from what I just said in terms of high 10s growth for the year, and that's accelerating over the course of the year into the back half. So that overall, in any way you cut it is actually an accelerating performance, which is what you'd expect with both the impact from accidents and as well as obviously Eidos coming into 2024.

Matt O'Brien

Okay. We can follow up offline.
Thanks.
It's better.

Operator

Margaret Kaczor, William Blair.

Hey, good afternoon, guys. Thanks for taking the questions. I wanted to maybe start on Panacos again.
Sorry, I'm going to page number five today on this, but I wanted to see if there's any additional background on the initial surgery patient cohorts for these first few Eidos cases, these patients have been waiting for a long time in the queue or the question. Do I multiply those procedures in a day? Is there already and they see anything like that would be useful.

Thank you.
Hey, Margaret. It's Joe. I mean, obviously, it's so it's a little early with these stages having just started last week to draw any discernible trends. I think that for a majority of these patients. I would say they're clearly stand-alone patients on that. These early surgeons have deemed to be straightforward in the context of bringing them into the Eidos procedure, whether or not they were previously treated with different solutions that maybe even an item's trial, et cetera. And historically, there will be a mix of that as we get going here. But I think the most important thing there is that the surgeons out of the gate are really focused on providing a stand-alone therapy and care for these for these patients.
Correct.

Fair enough. And then I wanted to maybe move over to the Axa NDA submission by the end of the year that what's the vision for the products, kind of your expectations on timing and level setting that's maybe on the opportunity from a prevalence perspective, like procedure cost perspective, et cetera.
Thanks.

Yes, Mark, I'm happy to take that one. And so as we said before the we'll have the results for the second Phase three clinical trial by midyear. So we'll be preparing an NDA. We'll hope to be able to publish those results just before we file our NDA with the FDA will look for a 10-month period to Bayer's or thereabouts and will be approvable in the late part of 2025. And when you think about it that the US, as we've talked about before, is a highly different procedure.
The fact that I don't have to remove the corneal epithelium to be able to perform. The procedure is pretty extraordinary. The corneal epithelium when it's removed does some A. and P. someone visually utilization, it certainly is painful for the patient. And because of the extra time for visual rehabilitation. A lot of times, it's incongruent with the young patients are having this procedure, which sometimes have to defer the procedures until spring break or summer until they have a little bit more time spent at home.
And he'll so we have the opportunity with MPX of having a new formulation, which has a surfactant which aids in penetration. It has a oxygen per Fusion goggles associated with it. So it pays the eyes with oxygen, which is a really significant part of the procedure in order to get efficacy. If you're not removing the corneal epithelium and it's done at a higher irrigation rate.
So our hope and our challenge and opportunity is to be able to have this product meet the endpoint with the Phase second Phase three trial. As you know, the first Phase three trial did meet the endpoint primary endpoint from the FDA. So we're very hopeful that we're able see this with the second trial. And more importantly, we're hopeful for getting this out to patients because of those factors that I talked about, more patients for kind of want to have this procedure is going to be far more timely with their schedules. It's going to be far better in visual rehabilitation as we move forward.
So for all these reasons, what I expect. And what I will want to ensure is that we see a spike in usage and adoption with avionics and moving forward. And so for all those reasons, we're excited moving forward. And again, MPX, it is just the first stage. We already have a third generation product that's undergoing a Phase two clinical trials.
That's a laser. It will actually use a laser irradiated light, which will more prescriptively and precisely be able to define an algorithm on the surface of the eye to be able to treat keratoconus. And so if you think about it looks like it makes where we continue to innovate and protect share and move forward and build the marketplace. We already have these chess pieces in place in keratoconus as well, and we expect those to pay off both now in the future.
For sure. Thanks, Margaret.

Operator

Alan Gong, JPMorgan Chase & Co

Alan Gong

Again, thanks for the question. I just had one quick one to start off. Just on, I guess your seasonality heading into next year, you ended the year with a stronger than expected quarter. Some of the headwinds that you had feared might have been a little better than expected. And I understand that you don't want to provide high-dose, but just thinking about the underlying business ex Eidos, should we think of it as basically being fairly normal year from a seasonality perspective?

I think down and it's hard to parse those between the two, but I'll do my best. But I think as you know, in normalized conditions, you typically see 20% to 23% of our revenues in the first quarter, 25%, the second 24% to 25% in the third and call it 26% to 28% in the fourth.
And not surprisingly, we do expect that those patterns that pretty disruptive this year, five, the combination of both with growing Infinity business. So as we continue to turn on the market access side of that equation as well as most materially diagnose launch over the course of 2024. I think the net effect of that should be a fairly material shifting of the seasonality, if you will, to the second half and in particular the fourth quarter. So it's not entirely that disruptive that entirely driven by high dose, but that is by far the biggest driver of it was shift away from our traditional seasonality patterns.

Alan Gong

Got it. And then when I think about the margins for you this year, how should we think about what kind of leverage you can get from a dose?
It's the 1st year of launch I imagine it might be a little limited, but my sense is that this ultimately be quite a profitable device for you. So now that we think about the fact that you've ramped that infinite and you're going to be ramping at dose? Where can gross margin SG&A R&D goes here?

Yes. So Alan, thanks for the question.
So you're right, we do expect those to be accretive in our gross margin over time.
And to your second point, you know, for now, we caution you with some conservatism as there could be some modest volatility in the margin as we ramp up Viteos and go through a new product launch and the associated scaling that happens from a manufacturing standpoint. But that said, we expect the overall probably 2024 gross margin to land in that upper end of what we've always said was it 83% to 80% range. So we're thinking probably plus or minus 84% for the year.

Operator

We'll move next to Joanne Wuensch at Citi.

Joanne Karen Wuensch

Thank you very much for taking the question to one has to do also with the expense side of the income statement since you're investing so much in not just research and development, but also in launching multiple new products. How do we think about operating expenses for 2024, and I'll toss my second question on at the same time, one of the things I'm trying to figure out is how physicians are going to be spending their time do you think of the IDA launch as maybe cannibalizing more traditional mix procedures?
I'm complementary?
Or how do we think about them how the physician spends his or her time having now multiple types of products to use things You bet.

Alex R. Thurman

Hey, Joanna, this is Alex.
I'll start with your OpEx question.
So I think the way to think about 2024 is and to expect that both to your point, both SG&A and R&D will grow in this year as we continue to invest in our high-dose launch and the pipeline.
The way I would counsel you to think about it is to start with our baseline 2023 adjusted operating expenses, which excludes the IPR&D. And that number was about $360 million, and then I would assume about a 10% growth off of that base.
So that would apply in 2024 OpEx, just shy of about $400 million for the year. And then as it relates to Eidos and the sort of overall procedure dynamics within the practice framework, I think the right way to answer that is to look at it, both of the short and the longer-term, certainly over the short term, as we're driving training and that initial launch, I don't expect it to have a significant impact to obviously the dynamics within the practice and how they handle the time between traditional big products and the new class of procedural pharmaceuticals.
Certainly, as we move forward, you can expect that with success, I think Eidos likely will cannibalize to a certain extent some of those traditional mix procedures that surgeons get more and more confident and utilizing the product and the reimbursement associated with et cetera, and utilize it, whether it's standalone product or in combination with cataract surgery or companies with other procedures.
As Tom mentioned earlier, depending on the needs of that individual patient. But over the long term, our expectation is that items really becomes the cornerstone of the interventional glaucoma paradigm that we've talked about the past. And we would expect more and more practices, both through the investment of new surgeons as well as shifting of their own allocation of time for them to be spending more and more time treating glaucoma patients with minimally invasive solutions just like Eidos and others. And we put forward and we are putting forward a significant amount of investment to drive that change in the standard of care over the course of many years as we move forward here.

Joanne Karen Wuensch

Thank you.

Operator

David Saxon, Needham & Company.

David Saxon

Great.
Good afternoon. Thanks for taking my questions. Maybe I'll start on the US glaucoma sales force. Are you doing anything and compensation or incentive to ensure there's a focus on the iOS launch, but to also make sure they're not forgetting and like inject infinite, et cetera. So the rest of the US business doesn't come Paula?

Yes, David, the short answer is yes and included. We've got a pretty well structured strategy as it comes to compensation, both as it relates to new product launches as well as existing business. We're deploying that here is absolutely an art, not a science when it comes to doing that. But we think we've got the right balance of continuing to drive and really three things. First is you referenced the Eidos launch activities around that second, the other areas of the business in terms of revenue generation, whether that be iStent inject to award or certainly IT incident as we continue to drive that forward. And third, really incentivizing the kind of behaviors that support what I just answered the last call, which is putting in place those foundational building blocks and driving the activities that we think will expand the market over the next several years and certainly the next decade, we think about what's going to really matter to driving this business, not just in 2024 but far beyond.

David Saxon

That's helpful. And then just on the pipeline, looking at a solution and some Phase two a. and starting the fourth quarter, what are the milestones this year and for that pipeline product? And what's a reasonable expectation for when that could be commercial? Thanks so much.

Yes, Robbie, I'll answer the first part of your question. I was going to be looking at some assessing a complete assessing that clinical trial for our dilution travoprost this year. And we expect to be able to have data in hand by the end of this year, and we'll see that data will then make determinations on how we go forward into a Phase potential Phase three. So I can't answer the second part of your question, but I can't tell you. So we're excited about ambition, both with travel, possibly seeing the data as well as dilution in the use of our dry eye where we saw substantial changes in visual acuity as well as substantial improvements in tear film stability. So these are two leading candidates and API.s for this new platform that we hold it will be a significant contributor for us in the future.

David Saxon

Great.
Thanks so much.

Operator

Anthony Petrone, Mizuho Group.
You may have yourself muted hearing no response.
Sam Brodovsky, Truist Securities.

Sam Brodovsky

Hey, can you hear me okay. Forget that the Great.
Thanks for. Thanks for taking my question.

Squeeze two quick ones in on Eidos just and he had mentioned second half assumption for the J code for the permanent. Can I nail you down on whether the guidance assumes July first or October one on the ASP. Any incremental color on what the rollout the ASP. is going to be and how much we can expect in terms of gross to net or a discount there?

if you're saying it's Joe. I think maybe to put a little bit more color in terms of technical data or behind what Tom suggested by putting in that application prior to the end of the year, you would assume that the CMS cycle would deliver a J code starting July first that also translates into a reported ASPs by the by the fourth quarter, both of which each of those are incremental drivers in terms of creating a seamless, call it market access or reimbursement environment around that J code. And that overall items, as you think about, you know, the really the broader dynamic around the Eidos launch, those things are going to be real key drivers, as we've talked about alongside the training initiatives and the things that are there to come to unlock, if you will, those opportunities, we move forward and get a second question as well as the gross-to-net.
Yes. So as we talked about, we will not be doing rebating associated with the idle costs on. But where you will see that has obviously been government related program where there's standard discounts. And so over time, a portion of our revenues, we realize that, that 23% discount that's typical with government-related programs. So I think it's probably fair to say this, but we'll keep you apprised as we move forward that I realize there's P somewhere in the $13,000 range is probably a safe place to start from a modeling perspective, and we'll dial that it over time as our mix becomes more clear.

Sam Brodovsky

Thanks for taking the questions.

Operator

And it does And that does conclude the question and answer session, and I would like to turn the conference back over to management for closing remarks.

I want to thank you all for your time and attention today. And we also thank you for your continued interest and support of Glaukos.

Operator

Goodbye today's conference call. Thank you for your participation. You may now disconnect.