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Glaukos Brings New Hope To Those Suffering From Glaucoma

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Glaukos Brings New Hope To Those Suffering From Glaucoma

Glaukos Corp (NYSE: GKOS), a glaucoma medical device maker, hopes to raise $89 million in its upcoming IPO on Thursday. Glaukos will offer 6 million shares between $16 and $17 per share. The company will list on the NYSE under the ticker GKOS. At the midpoint of the offering, Glaukos market cap would be $500 million.

Started in 2001, Glaukos focuses on developing and selling breakthrough products and procedures to treat glaucoma, the world’s leading cause of blindness. Glaukos was the first to pioneer MIGS (Micro Invasive Glaucoma Surgery) to disrupt the traditional treatment method.

The company’s first MIGS device, the iStent, was launched in the July 2012, and its technology is now being leveraged to build a product pipeline to capitalize on its first mover’s advantage to treat glaucoma in a better way. iStent is the smallest medical device ever approved by the FDA.

Glaucoma And Glaukos

“Glaucoma is a group of eye diseases characterized by progressive and irreversible vision loss caused by optic nerve damage, which is most commonly associated with elevated levels of pressure within the eye or intraocular pressure,” according to Glaukos’ S-1.

Market Scope said, “More than 78 million people globally have glaucoma of which is expected to grow to more than 88 million by 2019. Of the 78 million, 4.2 million people have glaucoma in the United States, growing to 4.7 million by 2019.” Market Scope also approximates 2014 global sales of products used to treat glaucoma patients to be $4.9 billion, which will grow to $6.6 billion by 2019.

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Currently, the only proven method to treat the disease is to reduce intraocular pressure. The traditional treatment has been through prescription eye drops for life, as well surgery for serious cases. Glaukos developed MIGS as a response to the shortcomings of current treatment options. It believes MIGS are safer, preserve more eye tissue and lead to faster recovery times and fewer complications than the invasive glaucoma surgery options.

The company has sold more than 70,000 iStent devices worldwide as of the end of 2014, and it is reimbursed by Medicare and a most commercial payers.

Glaukos is working now to build a diverse portfolio of small injectable therapies to treat glaucoma which include: the iStent Inject, the iStent Supra and the iDose.

Financials

Revenue increased 118 percent from $20.9 million at the end of 2013 to $45.6 million in 2014. The increase was due to new sales growth and an increased reimbursement coverage.

Revenue increased 78 percent from $8.2 million during Q1 of 2014 to $14.7 million in Q1 2015. The company’s net loss decreased 66 percent during this time period from $ (4.34) million to $ (1.46) million.

The majority of the company’s costs come from operating expenses. SG&A grew by 65 percent from $17.1 million in 2013 to $28.1 million in 2014. Research and development costs increased by 24 percent over the same time from $15.5 million to $19.2 million.

Glaukos has $4.24 million of cash along with $28.3 million in total assets and $32.6 million in total liabilities, of which $13.7 million is long-term debt. The company’s accumulated deficit is $160 million. The company has funded its operations from equity securities, notes payable, cash exercises of stock options, warrants and cash generated from net sales. Recently, Glaukos raised $157.4 million from the sale of convertible preferred stock and has $22.3 million in debt.

Legal news site Law360 mentioned, “Glaukos is backed by funds affiliated with Domain Associates LLC, Versant Ventures, Frazier Healthcare, InterWest Partners LLC, Montreux Equity Partners, OrbiMed Private Investment and Meritech Capital Partners, which each hold more than 10 percent of Glaukos, according to the prospectus. Montreux is listed as its largest shareholder, with a 13.5 percent stake.”

Related Link: IPO Outlook For June 22-26

Pricing Info

Glaukos has a large a market for glaucoma and can capitalize on a first mover’s advantage. The competition that faces Glaukos comes from larger public companies like Alcon, Abbott Medical Optics and STAAR Surgical Company (NASDAQ: STAA).

Glaukos expects net proceeds of $66.6 million. It intends to use the proceeds in the following ways:

  • $20 million to hire additional sales, marketing and customer service personnel and expand marketing programs in both the United States and internationally.
  • $15 million to fund clinical studies for its product pipeline under development and for regulatory approval.
  • $15 million for the purchase of glaucoma-related intellectual property and other assets from DOSE Medical Corporation.

Glaukos expects to offer 5.3 million shares between $13 and $15 per share on the NYSE under the ticker GKOS. The main underwriters include JPMorgan, Bank of America Merrill Lynch and Goldman Sachs. Pricing is expected to take place Wednesday night.

Image Credit: Public Domain

 

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