Glaukos Shares Soar After Competing Stent Removed From Market

Glaukos Corp GKOS stock skyrocketed Wednesday after one of the company’s major competitors removed its product from the market.

What Happened

Alcon announced that it's voluntarily withdrawing its CyPass Micro-Stent from the market following new data from a five-year, long-term COMPASS-XT safety study. Alcon also advised opthalmic surgeons to stop implanting the CyPass stents.

Why It’s Important

The CyPass stent was a direct competitor to the Glaukos iStent, and CyPass’ $40 to $50 million in annual revenue is now seemingly up for grabs.

“Accordingly, GKOS should return to positive annual sales growth in the U.S. in CY19 as a significant competitive headwind has been absolved,” Stephens analyst Chris Cooley said Wednesday.

Cooley reiterated an Overweight rating for Glaukos and raised the price target for the stock from $50 to $57.

William Blair analyst Brian Weinstein estimates the news could add up to $50 million to Glaukos’ $186 million in 2019 revenue.

“Overall, this should be viewed as a positive for Glaukos, as a major part of the short thesis was on competition in the core iStent market, mainly from Alcon given its size and presence in the ophthalmic world,” Weinstein said.

William Blair reiterated its Outperform rating on Glaukos.

What’s Next

Investors will be watching for any commentary from Alcon on if and when it could potentially reintroduce CyPass. They will also be watching Glaukos earnings in the next several quarters to see just how much of the CyPass business it can capture — and whether safety concerns have put a damper on the overall market.

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Photo courtesy of Glaukos.