GLAUKOS Corp

Previous wording

We are an ophthalmic pharmaceutical and medical technology company focused on developing novel, dropless platform therapies and commercializing associated products for the treatment of glaucoma, corneal disorders, and retinal disease. We first developed Micro-Invasive Glaucoma Surgery (MIGS) as an alternative to the traditional glaucoma treatment paradigm, launching our first MIGS device commercially in 2012. We also offer commercially a proprietary bio-activated pharmaceutical therapy for the treatment of a rare corneal disorder, keratoconus, that was approved by the U.S. Food and Drug Administration (FDA) in 2016. We received FDA approval in December 2023 for our first procedural pharmaceutical product, theiDose TR,* an intracameral procedural pharmaceutical therapy designed to continuously deliver 24/7 therapeutic levels of a proprietary formulation of travoprost inside the eye for extended periods of time, and we began commercializingiDose TR* in a controlled manner in February 2024. We are developing a portfolio of platforms to support ongoing pharmaceutical and medical device innovations. Products and 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 such as keratoconus, dry eye and refractive vision correction; and retinal diseases such as neovascular age-related macular degeneration, diabetic macular edema, and retinal vein occlusion.

Current wording

We are an ophthalmic pharmaceutical and medical technology company focused on developing novel, dropless platform therapies and commercializing associated products for the treatment of glaucoma, corneal disorders, and retinal disease. We first developed Micro-Invasive Glaucoma Surgery (MIGS) as an alternative to the traditional glaucoma treatment paradigm, launching our first MIGS device commercially in 2012. In 2024, we commenced commercial launch activities foriDose TR, an intracameral procedural pharmaceutical implant designed to continuously deliver therapeutic levels of a proprietary formulation of travoprost inside the eye for extended periods of time. We also offer commercially a proprietary bio-activated pharmaceutical therapy for the treatment of a rare corneal disorder, keratoconus, that was approved by the United States (U.S.) Food and Drug Administration (FDA) in 2016. Beyond our approved products, we continue to develop and advance a robust pipeline of novel, dropless platform technologies designed to advance the standard of care and improve outcomes for patients suffering from chronic eye diseases.

Previous wording

We incurred net losses for the three and nine months ended September 30, 2024 of $21.4 million and $112.8 million, respectively, and incurred net losses of $30.4 million and $97.9 million for the three and nine months ended September 30, 2023 respectively. As of September 30, 2024, we had an accumulated deficit of $711.9 million.

Current wording

We incurred net losses for the three months ended March 31, 2025 and March 31, 2024 of $18.1 million and $40.8 million respectively. As of March 31, 2025, we had an accumulated deficit of $763.6 million.

Previous wording

In connection with ongoing macroeconomic conditions, including inflation, supply shortages or delays, changes in supply and demand, foreign exchange rate fluctuations and other conditions that have led to disruptions in commerce and pricing stability, some of our vendors are continuing to experience supply challenges, both in the acquisition of raw materials as well as due to labor shortages and other disruptions. These challenges have occasionally led to longer lead times and delays of certain components needed for the manufacture of our products, in some cases requiring us to find alternative sources for materials. As a result of these supply chain challenges and ongoing inflationary pressures, we have experienced higher costs for certain components and raw materials. Additionally, in the latter part of 2023 and into the third quarter of 2024, these supply challenges generally stabilized; however, if these supply issues persist or worsen in the future, they could impact our ability to ship some of our products to our customers, or bring some of our pipeline products to market, in a timely manner. We expect some supply challenges and higher costs to continue throughout 2024.

Current wording

During the last twelve months, global and regional economies have experienced, in connection with ongoing macroeconomic conditions, inflation, supply shortages or delays, changes in supply and demand, foreign exchange rate fluctuations, new or increased tariffs, and other conditions that have led to disruptions in commerce and pricing stability. Additionally, some of our vendors are continuing to experience supply challenges, both in the acquisition of raw materials as well as due to labor shortages and other disruptions. These challenges have occasionally led to longer lead times and delays of certain components needed for the manufacture of our products, in some cases requiring us to find alternative sources for materials. As a result of these supply chain challenges and ongoing inflationary pressures, we have experienced higher costs for certain components and raw materials. While these supply challenges have generally stabilized over the course of 2024, if these supply issues persist or worsen in the future, they could impact our ability to ship some of our products to our customers, or bring some of our pipeline products to market, in a timely manner. We expect some supply challenges and higher costs of certain components and raw materials to continue throughout 2025. The U.S. government recently announced tariffs on product imports from certain countries, including higher tariffs levels on those imported from Canada, Mexico and China. These actions have resulted, and are expected to further result, in retaliatory measures on U.S. goods by those countries and others. While we believe our exposure to these recently announced tariffs and the potential escalation of trade disputes is limited as we primarily source our raw materials and product components from the U.S., these tariffs could pose a risk to our business that could affect our net sales and cost of sourcing materials. We will continue to evaluate the impacts of tariffs on our business and results of operations.

Previous wording

or a portion of those costs. Physician fee payment rates for products covered by temporary Current Procedural Terminology (CPT) codes, such as ouriStent infinite andiDose TR products, are set by the multi-state, regional contractors, or Medicare Administrative Contractors (MACs), of which there are currently seven, that are responsible for administering Medicare claims. MACs have in the past, and may in the future, change coverage terms, and there can be no assurance that coverage and adequate reimbursement will be obtained from, or maintained by, the MACs.

Current wording

In the U.S., healthcare providers use separate billing codes to report the provision of medical procedures and use of supplies to third-party payors, such as government programs or private insurance, and seek reimbursement for all or a portion of those costs. Physician fee payment rates for products covered by temporary Current Procedural Terminology (CPT) codes, such as ouriStent infinite andiDose TR products, are set by the multi-state, regional contractors, or Medicare Administrative Contractors (MACs), of which there are currently seven, that are responsible for administering Medicare claims. MACs have in the past, and may in the future, change coverage terms, and there can be no assurance that coverage and adequate reimbursement will be obtained from, or maintained by, the MACs.

Previous wording

In October and November 2023, five of the seven MACs released final local coverage determinations (LCDs) confirming reimbursement coverage of the standalone procedure utilizing theiStent infinite, which received FDA clearance in August 2022, and non-coverage for certain procedures, including the ophthalmic canaloplasty procedure utilizing ouriPRIME product. These LCDs also indicated that surgical MIGS procedures should not be performed in combination with other MIGS or surgical glaucoma procedures. In December 2023, prior to their respective effective dates, those five MACs rescinded the final LCDs and determined there would be no change in the current status of coverage for MIGS. In April 2024, five of the seven MACs released draft LCDs that would confirm reimbursement coverage of the standalone procedure utilizing theiStent infinite, which received FDA clearance in August 2022, and that would confirm non-coverage for surgical MIGS procedures in combination with other MIGS or surgical glaucoma procedures. These draft LCDs were finalized in October 2024 and will take effect on November 17, 2024. The other two MACs have taken preliminary steps to assess coverage ofiStent infinite through temporary local coverage article (LCA) updates. In the case of these two MACs, coverage of theiStent infinite is currently determined on a case-by-case basis.

Current wording

In October and November 2023, five of the seven MACs released final local coverage determinations (LCDs) confirming reimbursement coverage of the standalone procedure utilizing theiStent infinite, which received FDA clearance in August 2022, and non-coverage for certain procedures, including the ophthalmic canaloplasty procedure utilizing ouriPRIME product. These LCDs also indicated that surgical MIGS procedures should not be performed in combination with other MIGS or surgical glaucoma procedures. In December 2023, prior to their respective effective dates, those five MACs rescinded the final LCDs and determined there would be no change in the current status of coverage for MIGS. In April 2024, the same five MACs released new draft LCDs that would confirm reimbursement coverage of the standalone procedure utilizing theiStent infinite, which received FDA clearance in August 2022, and that would confirm non-coverage for surgical MIGS procedures in combination with other surgical MIGS procedures (but did not prohibit coverage for use of a procedural pharmaceutical such as ouriDose TR, in combination with surgical MIGS procedures). These draft LCDs were finalized in November 2024 and took effect on November 17, 2024. The other two MACs have taken preliminary steps to assess coverage ofiStent infinite through temporary local coverage article (LCA) updates. In the case of these two MACs, coverage of theiStent infinite is currently determined on a case-by-case basis.

Previous wording

On April 2, 2024, CMS assigned a unique, permanent Healthcare Common Procedure Coding System J-code foriDose TR indicated for the reduction of intraocular pressure in patients with open-angle glaucoma or ocular hypertension. The new J-code foriDose TR, J7355, became effective July 1, 2024. J-codes are used by U.S. government and commercial payers, as well as surgeons, to streamline the billing and reimbursement process for procedural pharmaceuticals administered by a healthcare professional, such asiDose TR, along with other certain treatments. In addition to the J-code, on March 21, 2024, CMS assigned the CPT codes that are designed to be used to cover the procedural component ofiDose TR, 0660T and 0661T, to ambulatory payment classification 5492 (Level 2 Intraocular Procedures), effective April 1, 2024. The professional fees associated with aniDose TR procedure will be set by each individual MAC separately.

Current wording

government and commercial payers, as well as surgeons, to streamline the billing and reimbursement process for procedural pharmaceuticals administered by a healthcare professional, such asiDose TR, along with other certain treatments. In addition to the J-code, on March 21, 2024, CMS assigned the CPT codes that are designed to be used to cover the procedural component ofiDose TR, 0660T and 0661T, to ambulatory payment classification 5492 (Level 2 Intraocular Procedures), retroactively effective as of January 1, 2024. The professional fees associated with aniDose TR procedure have been published by three of the seven MACs.

Previous wording

On January 1, 2024, the U.S. Centers for Medicare & Medicaid Services’ (CMS’) final rules on 2024 Medicare physician fee and facility fee payment rates (2024 Final Rule) became effective. The 2024 Final Rule did not materially modify the 2023 Medicare physician fee and facility fee payment rates with respect to physician fee payment rates for procedures using ouriStent family of products in conjunction with cataract surgery but did contain increased facility fee rates for such procedures, in both the ASC and hospital settings. In addition, the 2024 Final Rule contained significant increases in the facility fee rates for ASCs and hospitals that performiStent infinite procedures in a standalone setting under its temporary Category III CPT code. In July 2024, CMS released proposed rules on 2025 Medicare physician fee and facility fee payment rates (2025 Proposed Rule) that do not materially modify the 2024 Final Rule. If adopted, the 2025 Proposed Rule would go into effect January 1, 2025.

Current wording

On January 1, 2025, the U.S. Centers for Medicare & Medicaid Services’ (CMS’) final rules on 2025 Medicare physician fee and facility fee payment rates (2025 Final Rule) became effective. The 2025 Final Rule did not materially modify the 2024 Medicare physician fee and facility fee payment rates with respect to physician fee and facility fee payment rates for procedures using ouriStent family, which 2024 payment rates contained significant increases in the facility fee rates for ASCs and hospitals that performiStent infinite procedures in a standalone setting under its temporary Category III CPT code.

Previous wording

CMS physician fee payment rate decreases have disrupted traditional customer ordering patterns and may have resulted in certain of our customers’ utilization of competitive products, which may have reduced U.S. Glaucoma sales volumes of ouriStent family of products used in conjunction with cataract surgery in each of the three and nine months ended September 30, 2024 and September 30, 2023. Our corneal health sales have experienced sporadic headwinds in recent years due to U.S. commercial payer volatility. We believe investments in our market access organization were successful in reducing volatility during the three and nine months ended September 30, 2024 and September 30, 2023, although we cannot predict whether such success will continue.

Current wording

CMS physician fee payment rate decreases, along with the finalization in late 2024 of recent LCDs issued by five of the seven MACs, have disrupted traditional customer ordering patterns and may have resulted in certain of our customers’ utilization of competitive products, which may have reduced U.S. Glaucoma sales volumes of ouriStent family of products used in conjunction with cataract surgery in each of the three months ended March 31, 2025 and March 31, 2024. Additionally, the royalty income we received pursuant to a settlement agreement entered into during 2021 with Ivantis, Inc. (acquired by Alcon in 2022) relating to sales of the Hydrus® Microstent contractually expired on April 26, 2025. Our corneal health net sales have experienced sporadic headwinds in recent years due to U.S. commercial payer volatility. We believe investments in our market access organization were successful in reducing volatility as well as the impact of revenue adjustments related to the Company’s entry into the Medicaid Drug Rebate Program (MDRP) during the three months ended March 31, 2025 and March 31, 2024, although we cannot predict whether such success will continue.

Previous wording

In addition to the foregoing, we had commercialized certain of our products for several years in the U.S. with few or no direct competitors. Other competitive products have now become available in the U.S. and globally that have impacted and may continue to impact adoption of or demand for our products. We are also aware of similar products being developed by third parties that could enter the market and increase the competitive pressures we face. These other products could achieve greater commercial acceptance or demonstrate better safety or effectiveness, clinical results, ease of use or lower costs than our products, which could adversely impact our net sales.

Current wording

In addition to the foregoing, we commercialized certain of our products for several years in the U.S. with few or no direct competitors. Other competitive products have now become available in the U.S. and globally that have impacted and are expected to continue to impact adoption of or demand for our products. We are also aware of similar products being developed by third parties that could enter the market and increase the competitive pressures we face. These other products could achieve greater commercial acceptance or demonstrate better safety or effectiveness, clinical results, ease of use or lower costs than our products, which could adversely impact our net sales.

Previous wording

Our net sales are generated primarily from sales of ouriStent family of products,Photrexa and other associated drug formulations, and royalty income. We also began commercializingiDose TR in a controlled manner in February 2024.** **Customers are primarily comprised of ambulatory surgery centers, hospitals and physician private practices, with independent distributors being used in certain international locations where we currently do not have a direct commercial presence.

Current wording

Our net sales are generated primarily from sales of ouriStent family of product,iDose TR,Photrexa and other associated drug formulations, and our proprietary bioactivation systems, as well as royalty income. Customers are primarily comprised of ambulatory surgery centers, hospitals, and physician private practices, with independent distributors being used in certain international locations where we currently do not have a direct commercial presence. We currently operate in one operating and reportable segment and our primary business activity is the development and commercialization of therapies across several end markets within ophthalmology.

Previous wording

We currently operate in one reportable segment and we sell the majority of our products through a direct sales organization in the United States. Internationally, we sell our products primarily through direct sales subsidiaries and through independent distributors in certain countries in which we do not have a direct presence or maintain a modest commercial presence. The primary end-user customers for our products are surgery centers, hospitals and physician private practices.

Current wording

We sell the majority of our products through a direct sales organization in the United States. Internationally, we sell our products primarily through direct sales subsidiaries and through independent distributors in certain countries in which we do not have a direct presence or maintain a modest commercial presence. The primary end-user customers for our products are surgery centers, hospitals and physician private practices.

Previous wording

We manufacture ouriStent family of products andiDose TR at our facilities in San Clemente, California and our KXL systems at our manufacturing facility in Burlington, Massachusetts. We contract with third-party manufacturers in the U.S. and Germany to produce ourPhotrexa and other associated corneal health drug formulations. We currently intend to maintain our manufacturing facilities at our San Clemente and Burlington locations for the foreseeable future.

Current wording

We manufacture ouriStent family of products andiDose TR at our facilities in San Clemente, California and our KXL systems at our manufacturing facility in Burlington, Massachusetts. We contract with third-party manufacturers in the U.S. and Germany to produce ourPhotrexa and other associated drug formulations. We currently intend to maintain our manufacturing facilities at our San Clemente and Burlington locations for the foreseeable future.

Previous wording

Cost of sales includes amortization of the $252.2 million developed technology intangible assets recorded as a result of our acquisition of Avedro, Inc. (Avedro) and our Celanese Agreement. Amortization expense was $5.5 million and $16.6 million for each of the three and nine months ended September 30, 2024 and September 30, 2023, respectively.

Current wording

Cost of sales has included amortization of the $252.2 million developed technology intangible assets recorded as a result of our acquisition of Avedro, Inc. (Avedro) and our sales agreement with Celanese Canada ULC (Celanese Agreement). For the three months ended March 31, 2025 and March 31, 2024, the amortization expense was $5.6 million and $5.5 million, respectively.

Previous wording

pricing, or conversely, higher product costs. Our gross margin will also be affected by manufacturing or supply chain disruptions or inefficiencies that we may experience as we attempt to manufacture our products on a larger scale, manufacture new products and change our manufacturing capacity, processes, or output. Additionally, our gross margin will continue to be affected by amortization of Avedro developed technology and Celanese Agreement intangible assets, the impact of rebates associated with government pricing programs and by royalty expenses on current or future products associated with various licensing agreements. Our gross margin in future periods may also be impacted by other factors adversely affecting our net sales in future periods such as reductions of payment rates for certain of our products and related services, and inflationary pressures.

Current wording

Our future gross profit as a percentage of net sales, or gross margin, will be impacted by numerous factors including commencement of sales of new products currently in our pipeline, or any other future products, which may have higher pricing, or conversely, higher product costs. Our gross margin will also be affected by manufacturing or supply chain costs, disruptions or inefficiencies that we may experience as we attempt to manufacture our products on a larger scale, manufacture new products and change our manufacturing capacity, processes, or output. Additionally, our gross margin will continue to be affected by amortization of Avedro developed technology and Celanese Agreement intangible assets, the impact of rebates and allowances associated with government and commercial programs and by royalty expenses on current or future products associated with various licensing agreements. Our gross margin in future periods may also be impacted by other factors adversely affecting our net sales in future periods such as the impact of government pricing programs and reductions of payment rates for certain of our products and related services, and inflationary pressures.

Previous wording

SG&A expenses include amortization of the $14.1 million customer relationships intangible assets recorded as a result of our acquisition of Avedro, Inc. (Avedro). Amortization expense was $0.7 million and $2.1 million for each of the three and nine months ended September 30, 2024 and September 30, 2023, respectively.

Current wording

SG&A expenses also included amortization of the $14.1 million customer relationships intangible assets recorded as a result of our acquisition of Avedro, Inc. (Avedro). These intangible assets were fully amortized as of December 31, 2024. Amortization expense was $0.7 million for the three months ended March 31, 2024.

Previous wording

We expect SG&A expenses to continue to grow as we increase our global sales and marketing infrastructure and general administration infrastructure. We also expect other non-employee-related costs, including sales and marketing program activities for new products, market access efforts, outside services, accounting services and general legal costs to increase as our overall operations grow. The timing of these increased expenditures and their magnitude are primarily dependent on the commercial success and sales growth of our products, as well as on the timing of any new product launches and other potential business and operational activities.

Current wording

outside services, accounting services and general legal costs to increase as our overall operations grow. The timing of these increased expenditures and their magnitude are primarily dependent on the commercial success and sales growth of our products, as well as on the timing of any new product launches and other potential business and operational activities.

Previous wording

Our research and development (R&D) activities primarily consist of new product development projects, pre-clinical studies, Investigational New Drug studies, and clinical trials. Our R&D expenses primarily consist of personnel-related expenses, including salaries, fringe benefits and stock-based compensation for our R&D employees; research materials; supplies and services; in-licenses, including event-based milestones; the costs of conducting clinical studies, which include payments to investigational sites and investigators, clinical research organizations, consultants, and other outside technical services; and the costs of materials, supplies and travel. We expense R&D costs as they are incurred. We expect our R&D expenses to continue to increase as we initiate and advance our development programs, including our expanding pharmaceutical development efforts and clinical trials across the glaucoma, corneal health and retinal disease spectrums.

Current wording

Our research and development (R&D) activities primarily consist of new product development projects, pre-clinical studies, Investigational New Drug studies, and clinical trials. Our R&D expenses primarily consist of personnel-related expenses, including salaries, fringe benefits and stock-based compensation for our R&D employees; research materials; supplies and services; in-licenses, including event-based milestones; and the costs of conducting clinical studies, which include payments to investigational sites and investigators, clinical research organizations, consultants, and other outside technical services; and the costs of materials, supplies and travel. We expense R&D costs as they are incurred. We expect our R&D expenses to continue to increase as we initiate and advance our development programs, including our expanding pharmaceutical development efforts and clinical trials across the glaucoma, corneal health and retinal disease spectrums.

Previous wording

Future costs to develop these assets are expensed as R&D when incurred. We may have ongoing milestone and royalty payment obligations depending on the success, development, regulatory approval and commercialization of the proprietary technologies we have acquired.

Current wording

Our acquired in-process research and development (IPR&D) expenses generally relate to acquisitions of technologies that management determines are not a business combination and do not have any alternative future uses. Future costs to develop these assets are expensed as R&D when incurred. We may have ongoing milestone and royalty payment obligations depending on the success, development, regulatory approval and commercialization of the proprietary technologies we have acquired.

Previous wording

Non-operating expense, net primarily consists of charges associated with our Convertible Note exchange, interest expense associated with our finance lease for our Aliso Facility and for our Convertible Notes, interest income derived from our short-term investments, and unrealized gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the U.S. dollar, primarily related to intercompany loans.

Current wording

Non-operating expense, net primarily consists of interest expense associated with our finance lease for our Aliso Facility and for our previously outstanding Convertible Notes, interest income derived from our short-term investments, and unrealized gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the U.S. dollar, primarily related to intercompany loans.

Previous wording

Our tax provision is primarily comprised of state and foreign income taxes, offset by release of uncertain tax positions for which the statute of limitations has expired. Our net deferred tax liability of $7.1 million at September 30, 2024 primarily represents the excess of our indefinite-lived deferred tax liabilities over our indefinite-lived deferred tax assets. We continue to provide a full valuation allowance against our other net deferred tax assets.

Current wording

Our tax provision is primarily comprised of state and foreign income taxes, offset by release of uncertain tax positions for which the statute of limitations has expired. Our net deferred tax liability of $6.9 million at March 31, 2025 primarily represents the excess of our indefinite-lived deferred tax liabilities over our indefinite-lived deferred tax assets. We continue to provide a full valuation allowance against our other net deferred tax assets.

Previous wording

Net sales for the three months ended September 30, 2024 and September 30, 2023 were $96.7 million and $78.0 million, respectively, increasing by approximately 24% primarily related to the factors listed below.

Current wording

Net sales for the three months ended March 31, 2025 and March 31, 2024 were $106.7 million and $85.6 million, respectively, increasing by approximately 25% primarily related to the factors listed below.

Previous wording

Net sales of glaucoma products in the United States were $143.3 million and $112.8 million for the nine months ended September 30, 2024 and September 30, 2023, respectively, increasing by 30%. This increase is primarily due to the introduction of* iDose TR* and higher volumes sold of ouriStent family of products due to higher demand, primarilyiStent infinite.* *

Current wording

Net sales of glaucoma products in the United States were $59.1 million and $42.0 million for the three months ended March 31, 2025 and March 31, 2024, respectively, increasing by 41%. This increase is primarily due sales of* iDose TR*, partially offset by slightly lower volumes sold of our* iStent* family of products.

Previous wording

International sales of glaucoma products for the nine months ended September 30, 2024 and September 30, 2023 were $75.8 million and $63.7 million, respectively, increasing by 19%. The increase in international sales reflects continued broad-based growing volume in many key international markets for glaucoma procedures, primarily France, Japan, the United Kingdom and Australia, the dollar-based results of which were modestly affected by unfavorable foreign exchange rates, primarily related to the Japanese Yen, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.

Current wording

International sales of glaucoma products for the three months ended March 31, 2025 and March 31, 2024 were $29.0 million and $25.2 million, respectively, increasing by 15%. The increase in international sales reflects continued broad-based growing volume in many key international markets for glaucoma procedures, primarily France, the United Kingdom and Japan, the dollar-based results of which were slightly affected by unfavorable foreign exchange rates, primarily related to the Euro, during the quarter ended March 31, 2025, as compared to the three months ended March 31, 2024.

Previous wording

Net sales of corneal health products were $58.8 million and $55.9 million for the nine months ended September 30, 2024 and September 30, 2023, respectively, increasing by 5%. Of the $3.0 million increase in net sales generated by our corneal health products, $2.8 million related to an increase in U.S. net sales of Photrexa using direct sales operations, which was positively impacted by higher realized average sales prices of Photrexa along with increases in sales to existing customers and new account starts, partially offset by accrued rebates related to the impact of our participation in the Medicaid Drug Rebate Program (MDRP). Our international corneal health sales decreased $0.4 million from net sales in countries outside the U.S. during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Current wording

Net sales of corneal health products were $18.5 million and $18.4 million for the three months ended March 31, 2025 and March 31, 2024, respectively. Within net sales generated by our corneal health products, $0.8 million related to an increase in U.S. net sales of Photrexa using direct sales operations, which was positively impacted by higher realized average sales prices of Photrexa along with slight increases in sales to existing customers and new account starts, mostly offset by accrued rebates related to the impact of our participation in MDRP. Our net sales ofiLink devices in the U.S. remained consistent for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Our international corneal health sales decreased $0.1 million from net sales in countries outside the U.S. during the quarter ended March 31, 2025 as compared to the three months ended March 31, 2024.

Previous wording

Cost of sales for the three months ended September 30, 2024 and September 30, 2023 were $22.6 million and $18.5 million, respectively, reflecting an increase of approximately $3.9 million that is proportionate to the increase in net sales for the corresponding period, offset by certain new product launch manufacturing costs associated withiDose TR. Our gross margin was 77% for three months ended September 30, 2024 and 76% for the three months ended September 30, 2023.

Current wording

Cost of sales for the three months ended March 31, 2025 and March 31, 2024 were $24.3 million and $20.3 million, respectively, reflecting an increase of approximately $4.1 million that is generally proportionate to the increase in net sales for the corresponding period. Our gross margin was 77% for three months ended March 31, 2025 and 76% for the three months ended March 31, 2024.

Previous wording

Of the total $9.8 million increase in SG&A expenses for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, $4.7 million related to increased compensation and related employee costs, with $2.9 million of the incremental amount related to an increase in stock-based compensation expense, the majority of which was associated with certain performance equity awards that were achieved during the quarter. The residual increase primarily relates to enhancements of various customer and patient support functions, our business intelligence function, and growth in our commercial infrastructure in glaucoma and corneal health, along with increased travel, meetings and accompanying costs as business activities have expanded.

Current wording

Of the total $8.7 million increase in SG&A expenses for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, $4.3 million related to increased compensation and related employee costs, with $1.2 million of the incremental amount related to an increase in stock-based compensation expense, the majority of which was associated with certain performance equity awards that were achieved during the quarter. The residual increase primarily relates to enhancements of various customer and patient support functions, our business intelligence function, and growth in our commercial infrastructure in glaucoma and corneal health, along with increased travel, meetings and accompanying costs as business activities have expanded.

Previous wording

The remaining increase of $5.1 million primarily relates to discretionary expenses supporting the above personnel growth as well as our ongoing administrative operations, inclusive of information technology, facilities and allocated expenses.

Current wording

The remaining increase of $3.6 million primarily relates to discretionary expenses supporting the above personnel growth as well as our ongoing administrative operations, inclusive of information technology, facilities and allocated expenses.

Previous wording

During the three months ended September 30, 2024, we incurred $22.3 million in core R&D expenses and $12.4 million in clinical expenses, comprised of $20.4 million in compensation and related employee expenses with the remaining $14.3 million spent on the continued research and development, clinical studies, regulatory activities, quality assurance, clinical inventory and supplies for surgical glaucoma product candidates and pharmaceutical projects, such as next generationiDoseproducts*;* Epioxa, a pharmaceutical therapeutic system for the treatment of keratoconus without the removal of the epithelium (also referred to as “epi-on”); and our earlier stage programs for* *glaucoma, corneal, retinal and other therapeutic investments. For the three months ended September 30, 2023, we incurred $21.3 million in core R&D expenses and $12.0 million in clinical expenses, comprised of $19.3 million in compensation and related employee expenses with the remaining $14.0 million spent on the above-mentioned programs.

Current wording

During the three months ended March 31, 2025, we incurred $22.9 million in core R&D expenses and $9.4 million in clinical expenses, comprised of $21.5 million in compensation and related employee expenses with the remaining $10.8 million spent on the continued research and development, clinical studies, regulatory activities, quality assurance, clinical inventory and supplies for surgical glaucoma product candidates and pharmaceutical projects, such as next generationiDoseproducts*;* Epioxa, a pharmaceutical therapeutic system for the treatment of keratoconus without the removal of the epithelium (also referred to as “epi-on”); and our earlier stage programs for* *glaucoma, corneal, retinal and other therapeutic investments. For the three months ended March 31, 2024, we incurred $18.4 million in core R&D expenses and $12.3 million in clinical expenses, comprised of $17.8 million in compensation and related employee expenses with the remaining $12.9 million spent on the above-mentioned programs.

Previous wording

During the nine months ended September 30, 2024, we issued $5.0 million of our common stock and paid approximately $5.1 million in cash, in connection with the asset acquisition of 100% of the outstanding equity interests in a clinical stage biopharma company focused on developing novel therapeutics for ophthalmic diseases, including all related patents and patent applications, technology and know-how. Also included in IPR&D for the nine months ended September 30, 2024 is $1.3 million of contingent consideration related to our Sales Agreement with Celanese and our $2.5 million upfront payment related to our aforementioned License Agreement, pursuant to which we obtained an exclusive, worldwide license to develop and commercialize drug products incorporating certain proprietary technology.

Current wording

During the three months ended March 31, 2024, we issued $5.0 million of our common stock and paid approximately $5.1 million in cash, in connection with the asset acquisition of 100% of the outstanding equity interests in a clinical stage biopharma company focused on developing novel therapeutics for ophthalmic diseases, including all related patents and patent applications, technology and know-how. We may have ongoing milestone payments based on achieving certain clinical and regulatory milestones depending on the success of the development and approval of the proprietary technologies.

Previous wording

We had non-operating income, net of $3.4 million and non-operating expense, net of $2.4 million for the three months ended September 30, 2024 and September 30, 2023, respectively. The change primarily relates to a decrease of $1.7 million in interest expense on our Convertible Notes, and a change in unrealized foreign currency amounts recognized of approximately $4.7 million due to intercompany loan balances denominated in, and impacted by, changes in foreign currency exchange rates, as compared to the three months ended September 30, 2023.

Current wording

We had non-operating income, net of $2.9 million and non-operating expense, net of $1.4 million for the three months ended March 31, 2025 and March 31, 2024, respectively. The change primarily relates to a decrease of $2.3 million in interest expense on our Convertible Notes, and a change in unrealized foreign currency amounts recognized of approximately $2.0 million due to intercompany loan balances denominated in, and impacted by, changes in foreign currency exchange rates, as compared to the three months ended March 31, 2024.

Previous wording

Our effective tax rate for the nine months ended September 30, 2024 and September 30, 2023 was (0.79)% and (0.90)%, respectively. For each of the nine months ended September 30, 2024 and September 30, 2023, we recorded a provision for income taxes of $0.9 million, respectively, which was primarily comprised of state and foreign income tax expense, offset by release of uncertain tax positions for which the statute of limitations has expired.

Current wording

Our effective tax rate for the first quarter of 2025 and 2024 was (1.83)% and (0.93)%, respectively. For the three months ended March 31, 2025 and March 31, 2024, we recorded a provision for income taxes of $0.3 million and $0.4 million, respectively, which were primarily comprised of state and foreign income tax expense, offset by release of uncertain tax positions for which the statute of limitations has expired.

Previous wording

We plan to fund our operations, commitments for capital expenditures and other short and long-term known contractual and other obligations* *using existing cash and investments and, to the extent available, cash generated from commercial operations as well as cash generated from employee stock option exercises and purchases under our Employee Stock Purchase Program. Included within our existing cash and investments balances are the remaining net proceeds from the Convertible Notes issued in June 2020 (after payment for the related capped call transactions).

Current wording

We plan to fund our operations, commitments for capital expenditures and other short and long-term known contractual and other obligations* *using existing cash and investments and, to the extent available, cash received from commercial operations as well as cash generated from employee stock option exercises.

Previous wording

Our cash, cash equivalents and short-term investments totaled approximately $262.5 million and our restricted cash totaled approximately $4.7 million as of September 30, 2024.

Current wording

As of March 31, 2025, our cash, cash equivalents and short-term investments totaled approximately $298.7 million and our restricted cash totaled approximately $4.7 million.

Previous wording

Our short-term liquidity requirements primarily consist of regular operating costs, R&D project funding, capital expenditures as we continue the development of our manufacturing facilities and office spaces, operating and financing lease obligations, government rebate obligations, payment of the Redemption Price and accrued but unpaid interest related to our Convertible Notes if not converted, interest payments related to our Convertible Notes, and other firm purchase commitments. As of September 30, 2024, we had net working capital of $325.6 million, which indicates that our current assets are sufficient to cover our short-term liabilities.

Current wording

Our short-term liquidity requirements primarily consist of regular operating costs, R&D project funding, capital expenditures as we continue the development of our manufacturing facilities and office spaces, operating and financing lease obligations, government rebate obligations, and other firm purchase commitments. As of March 31, 2025, we had net working capital of $376.0 million, which indicates that our current assets are sufficient to cover our short-term liabilities.

Previous wording

Our long-term liquidity requirements primarily consist of capital expenditures for the continued development of our manufacturing facilities and office spaces, potential future payments related to our licensing agreements, and firm purchase commitments. As demand grows for our products, we will continue to expand global operations to meet demand through investments in our manufacturing capabilities.

Current wording

Our long-term liquidity requirements primarily consist of capital expenditures for the continued development of our manufacturing facilities and office spaces, potential future payments related to our licensing agreements, and firm purchase commitments. As demand grows for our products, we will continue to expand global operations to meet demand through investments in our manufacturing capabilities. In December 2024, we reached an understanding with the city of Huntsville, Alabama to develop a new 200,000 square foot R&D and manufacturing facility. We expect construction to begin in 2026.

Previous wording

Our historical cash outflows have primarily been associated with cash used for operating activities such as the expansion of our commercial and R&D activities; purchase of and growth in inventory and other working capital needs; the acquisition of intellectual property; and expenditures related to equipment and improvements used to increase our manufacturing capacity and improve our manufacturing efficiency and for overall facility expansion.

Current wording

Our historical cash outflows have primarily been associated with cash used for operating activities such as the expansion of our commercial and R&D activities; purchase of and growth in inventory; accounts receivable and other working capital needs; the acquisition of intellectual property; and expenditures related to equipment and improvements used to increase our manufacturing capacity and improve our manufacturing efficiency and for overall facility expansion.

Previous wording

In the nine months ended September 30, 2024, our operating activities used $61.8 million in net cash and in the nine months ended September 30, 2023 our operating activities used $47.1 million of net cash.

Current wording

In the three months ended March 31, 2025 and March 31, 2024, our operating activities used $18.5 million and $33.9 million of net cash, respectively.

Previous wording

For the nine months ended September 30, 2024, our net cash used in operating activities reflected our net loss of $112.8 million, adjusted for non-cash items of $92.3 million, primarily consisting of inducement expense related to the Convertible Notes exchange of $17.4 million, stock-based compensation expense of $36.9 million, depreciation of $8.2 million, amortization of intangible assets of $18.7 million, noncash lease expense of $3.2 million, amortization of debt issuance costs of $0.7 million, other liabilities of $5.0 million, amortization of premium on short-term investments of $3.2 million and IPR&D acquired through issuance of common stock of $5.0 million. Additionally, changes in operating assets and liabilities resulted in a net use of cash of $41.4 million, which resulted primarily from an increase in inventory of $18.2 million, an increase in accounts receivable of $16.5 million, an increase in other assets of $2.0 million, a decrease in accounts payable and accrued liabilities of $4.4 million, partially offset by a decrease in prepaid expenses and other current assets of $0.3 million.

Current wording

For the three months ended March 31, 2024, our net cash used in operating activities reflected our net loss of $40.8 million, adjusted for non-cash items of $29.4 million, primarily consisting of stock-based compensation expense of $11.2 million, depreciation of $2.7 million, amortization of intangible assets of $6.2 million, noncash lease expense of $1.1 million, amortization of debt issuance costs of $0.3 million, allowance for doubtful accounts of $0.2 million, other liabilities of $2.5 million, accretion of discount of $1.1 million and IPR&D acquired through issuance of common stock of $5.0 million. Additionally, changes in operating assets and liabilities resulted in a net use of cash of $22.4 million, which resulted primarily from increases in accounts receivable of $7.3 million, an increase in inventory of $8.6 million, an increase in other assets of $2.2 million, an increase in prepaid expenses and other current assets of $0.9 million, and a decrease in accounts payable and accrued liabilities of $3.6 million.

Previous wording

In the nine months ended September 30, 2024 and September 30, 2023 our investing activities provided $36.0 million and $27.0 million of net cash, respectively.

Current wording

In the three months ended March 31, 2025 and March 31, 2024 our investing activities used $36.9 million and $29.4 million of net cash, respectively.

Previous wording

For the nine months ended September 30, 2023, we used cash of approximately $193.5 million for purchases of short-term investments, approximately $16.0 million for purchases of property and equipment, primarily related to our facilities in Aliso Viejo, California; and San Clemente, California; and approximately $2.1 million related to investments in company-owned life insurance, and we received cash of approximately $238.7 million from sales and maturities of short-term investments.

Current wording

For the three months ended March 31, 2025, we used cash of approximately $74.7 million for purchases of short-term investments, approximately $1.9 million for purchases of property and equipment, primarily related to our facilities in Aliso Viejo, California; and San Clemente, California; and approximately $0.4 million related to investments in company-owned life insurance, $0.7 million in other investing activities and we received cash of approximately $40.9 million from sales and maturities of short-term investments.