Glaukos Has 84% Upside Potential In 2018, According To Cantor

Glaukos Corp GKOS announced the submission of a pre-market approval application for its iStent inject device on Wednesday.

The Analyst

Cantor Fitzgerald's Elemer Piros maintains an Overweight rating on Glaukos' stock with a price target boosted from $48 to $60.

The Thesis

Glaukos' filing consists of results from a two-year long pivotal trial that compared the device with cataract surgery alone among 505 patients, Piros said in a note. (See the analyst's track record here.)

The results achieved Glaukos' primary endpoint of lowering intraocular pressure by 20 percent or greater, according to Cantor Fitzgerald.

Now that the company is proceeding with the approval process, investors may want to reset their expectations for 2018 commercially and acknowledge that the iDose franchise is a major long-term growth driver, Piros said. 

Based on the analyst's estimate, the iDose franchise could achieve revenues of $1 billion at peak penetration of 15 percent in the glaucoma drug treatment landscape, the analyst said.

"While questions over competition and reimbursement dominated the last few quarters, we view the headwinds as manageable and most importantly believe investors underappreciate the long-term potential of iDose and the R&D pipeline," Piros said. "Considering that the iStent franchise drives Glaukos' current R&D pipeline, we bring to greater focus the potential of iDose with our newly introduced market model in ocular hypertension and open angle glaucoma."

Price Action

Shares of Glaukos were trading slightly down at $26.05 at the time of publication. 

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An iStent trabecular micro-bypass. Photo courtesy of Glaukos.