Thomas W. Burns: Okay. Thanks, Ryan.
Operator: We’ll take our next question from Larry Biegelsen at Wells Fargo.
Larry Biegelsen: Hey, guys. Thanks for taking the question. Tom, starting up on the iDose, obviously the ASP got a lot of attention when you announced it. Love to hear from you the reaction from any payers or physicians and your confidence that you’ve priced this right? And just secondly, your confidence that the surgeon fee is going to be adequate? And I have one follow-up.
Thomas W. Burns: Yes. I’d be happy to address that, Larry. So as you know, we did our homework over the last couple of years. We’ve done multiple pharmacoeconomic, different approaches to the treatment of glaucoma using the iDose therapy. We’ve done Markov transition probability analysis. We met with payer groups. We licensed and looked at 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 lines up, given the other procedural pharmaceuticals that have been available and codified within ophthalmology, this squares off very well somewhere in the median of those products.
As you know, Retisert, which is a three year steroid implant used for the treatment of uveitis, cost on the order of $18,000 to $19,000 We know that [Derista] (ph) is roughly $2,000 for a three to four month therapy. And when you impede it you start to look at that over a three year period, you start to get quite comfortable that we were, I hope, pressured in how we price the product. So having said all that, the response of surgeons, I think has been fulsome, has been understanding. I don’t see that as an impediment at all 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 [Derista] (ph), have some edits before you’re using this product.
But I don’t anticipate any impediments to utilization versus where we price the product. I think we hit it right where we should have.
Larry Biegelsen: And the surge in fee being adequate, I’ll just ask my follow-up. What happens next with the MIGS LCD or what’s the assumption in the guidance? What are you assuming for infinite? Case by case is not probably what ideal for you? And is there any turbulence in the market still from the noise from this LCD? Thanks.
Thomas W. Burns: Let me address I didn’t address your second question on prophyse. Let me do so before I turn it over to Joe. If we look at what’s happening with iStent infinite, which is a very like procedure and we’d see at WPS and First Coast at least, the first numbers are coming in at certainly greater than $600, and we know that cataract surgery right now average national payment is about $5.25. I think 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 iStent infinite. So as different MACs start to look at this procedure, I think they’re going to start to cross walk this over pretty similarly to what we see with iStent infinite. So I wanted to answer your question before I turn it over to Joe.
Joseph E. Gilliam: Hi Larry, on the LCD front, I think this is one of those scenarios obviously that we assess as we set the overall guidance and there’s a range of outcomes there perhaps certainly less material than iDose 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 cautious at the account level until more definitive clarity is established. The next steps and the timing for MAC policy changes remains unclear at this point, but we do expect to hear from them again. And, and in that regard, our priorities really remain unchanged. We’re focused on protecting the rights of our customers to make clinical decisions on behalf of their site threatened patients. But at this stage, we’re in the waiting game to determine where the MAC go next.
Larry Biegelsen: Thanks a lot.
Operator: We’ll go next to Matthew O’Brien at Piper Sandler.
Matthew O’Brien: Good afternoon. Thanks for taking the questions. The Street’s modeling for iDose 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 eye cases? And then I do have a follow-up.
Joseph E. Gilliam: Sorry. Matt, can you repeat that second part of the question? Oh, single eye. Yeah. For the rest of the Single eye. Yep. Yeah. So I’ll start with that. They were they were all signal I cases to at the start here, which is what you’d expect as a part of, the iDose launch. As it relates to the iDose number, I’ll stop short of commenting specifically on where the Street’s guidance is at. Maybe what I will do is provide a little bit more color and context around the franchises and their drivers of our overall guidance. And clearly, the US glaucoma franchise moves, front and center to why you guys are focused on that and asking questions around iDose. Our focus there is going to continue to be driving forward first the interventional glaucoma mindset.
And within that, trying to establish iStent infinite and then driving the training and market access and and early adoption with with iDose. Internationally, the business continues to scale, as you saw in the fourth quarter. With that, it comes to market access headwinds as government payers really seek to limit expenditures as you scale. Most recently, we’ve seen that emerge in Switzerland, for example. We’ll see it elsewhere. We’ve seen it in the past, and we’ll 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.
As some of you may be aware, the $0 floor for Medicaid rebates expired on December 31st. 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 headwinds as the efficacy 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 guidance range we gave? I think that we’re comfortable that interventional glaucoma franchise should deliver kind of lowish double digit year-over-year growth for the year, that 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 teens type growth, which is, of course, going to be weighted towards the back half of the year.
So I think as you put all that together and maybe most importantly, it points out accelerating trends within our overall franchises and what we think, is a pretty strong exit loss, if you will, when you think about coming out of 2024 and into 2025, particularly within that US glaucoma business.
Matthew O’Brien: Okay. Appreciate that, Joe. And then that kind of ducktails into the next question. You started covering all this, but in what you’re just saying, but I mean that’s a dramatic slowdown in the US glaucoma business excluding whatever revenues would come up before iDose 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 they slowdown that dramatically in many of these areas, especially Cornell Health, which has had a monster Q4?
Joseph E. Gilliam: Yeah. So I mean, I think I just sort of covered that. Let me clarify a couple of things that you just you just said there. I think in the in the context, I won’t repeat my comments around some of the drivers there obviously, in each of those businesses. I’ll focus on what you said around the international, the US glaucoma side of things. On the international side, look, if you continue to scale it with Switzerland, it is not, the largest or even our European markets, but it does matter when you’re thinking about that that growth dynamic. When you bridge from the currency headwinds that we expect a couple of percent probably 2% -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. But despite the continued growth tailed off a little bit from an absolute basis in the second half probably as procedures started to normalize a bit, on a global basis in the second half. So you have to factor each of 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 teens growth for the year, and that accelerating over the course of the year into the back half, that that overall in any way you cut it is actually an accelerating performance, which is what you’d expect with both the impact from iStent infant as well as obviously iDose, coming into 2024.
Matthew O’Brien: Okay. We can follow-up offline. Thanks.
Joseph E. Gilliam: Thanks, Matt.
Operator: We’ll go next to Margaret Kaczor at William Blair.
Margaret Kaczor: Hey. Good afternoon, guys. Thanks for taking the questions. I wanted to maybe start I’m not going to speak again. Sorry. I’m going to be, you know, number five today on this. But, I wanted to see if there’s any additional background on the initial surgeon patient cohorts for these first few iDose cases. These patients that have been waiting for a long time in the queue? Are these clinicians doing multiple iDose procedures in a day? Is there already in the ASC? Anything like that would be useful. Thank you.
Joseph E. Gilliam: Hi, Margaret. It’s Joe. I mean, obviously, it’s a little early with these cases having just started, last week to draw any discernible trends. I think that for majority of these patients, I would say they’re clearly, standalone patients, that these early surgeons have deemed to be straightforward in the context of bringing them into the iDose procedure. Whether or not they were previously treated with different solutions and maybe even in iDose trial, etcetera. Historically, there’ll 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 standalone therapy and care for these patients.
Margaret Kaczor: Okay. Fair enough. And then I wanted to maybe move over to Epioxa, NDA submission, by the end of the year. What’s the vision for the products, kind of your expectations on timing and level setting us maybe on the opportunity from a prevalence perspective, placebo cost perspective, etcetera? Thanks.
Thomas W. Burns: Yes, Margaret, I’m happy to take that one. And so as we said before, we’ll have the results for the second Phase 3 clinical trial by midyear or 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. We’ll look for a 10 month PDUFA day or thereabouts and will be approvable in the late part of 2025. And when you think about it, Epioxa, as we 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 impede somewhat visual rehabilitation. 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 that are having this procedure, which sometimes have to defer the procedures until spring break or summer until they have a little bit more time to spend at home and heal.
So we have the opportunity with Epioxa of having a new formulation, which has a surfactant in it, which aids in penetration. It has an oxygen perfusion goggles associated with it. So it bathes 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 irradiation rate. So our hope and our challenge and opportunity is to be able to have this product meet the endpoint with the second Phase 3 trial. As you know, the first Phase 3 trial did meet the endpoint primary endpoint from the FDA. So we’re very hopeful that we’re able to do 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 who can want to have this procedure.
It’s 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 Epioxa moving forward. And so for all those reasons, we’re excited and moving forward. And again, Epioxa is just the first stage. We already have a third generation product that’s undergoing Phase 2 clinical trials. That’s a laser that will actually use a laser of 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, it looks like in MIGS 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 and in the future.
Margaret Kaczor: Okay. Appreciate it guys.
Thomas W. Burns: Thanks, Margaret.
Operator: We’ll move next to Allen Gong at JPMorgan.
Allen Gong: Hi, team. Thanks for the question. I just had one quick one to start off just on, I guess, seasonality heading into next year. You ended the year with a stronger than expected quarter. Some of the headwinds that you’d feared might have been a little better than expected. And, you know, I understand that you don’t want to provide iDose, but just thinking about the underlying business ex-iDose, should we think of it as basically being a fairly normal year from a seasonality perspective?
Joseph E. Gilliam: Thanks, Allen. It’s hard to parse those between the two, but I’ll do my best. I think as you know, in normalized conditions, you typically see 22%, 23% of our revenues in the first quarter, 25% in the second, 24% to 25% in the third and call it 26% to 28% in the fourth. And not surprisingly, we do expect those patterns to be pretty disrupted this year, by the combination of both the growing infinite business as we continue to turn on the market access side of that equation as well as most materially the iDose 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 disrupt is not entirely driven by iDose, but that is by far the biggest driver of a shift away from our traditional seasonality patterns.
Allen 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 iDose? It’s the first year of launch, so I imagine it might be a little limited. But my sense is that this could ultimately be quite a profitable device for you. So now that we think about the fact that you’ve ramped up infinite and you’re going to be ramping iDose, where can, you know, gross margin, SG&A, R&D go this year?
