GLAUKOS Corp [GKOS] Filings

10-Q 1 gkos-20240930x10q.htm 10-Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-37463

GLAUKOS CORPORATION

(Exact name of registrant as specified in its charter)


Delaware	33-0945406
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One Glaukos Way Aliso Viejo, California	92656
(Address of registrant’s principal executive offices)	(Zip Code)

(949) 367-9600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		GKOS		New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of ‘‘large accelerated filer,’’ ‘‘accelerated filer,’’ ‘‘smaller reporting company’’ and “emerging growth company” in Rule 12b-2 of the Exchange Act:

☒ Large accelerated filer

☐ Accelerated filer

☐ Non-accelerated filer

☐ Smaller reporting company

☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 31, 2024, there were 55,137,429 shares of the registrant’s Common Stock, $0.001 par value per share, outstanding.

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GLAUKOS CORPORATION

Form 10-Q

For the Quarterly Period Ended September 30, 2024

Table of Contents

		Page
PART I: FINANCIAL INFORMATION		5
Item 1.	Financial Statements	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations	6
	Condensed Consolidated Statements of Comprehensive Loss	7
	Condensed Consolidated Statements of Stockholders’ Equity	8
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38

PART II: OTHER INFORMATION		39
Item 1.	Legal Proceedings	39
Item1A.	Risk Factors	39
Item 6.	Exhibits	54




SIGNATURES		55

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Note Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act) All statements other than statements of historical or current facts included in this report are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: "may," "will," "could," "would," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "project," "potential," "continue," "ongoing" or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Any statements in this Quarterly Report on Form 10-Q regarding future operations, including our expectations for future expenses, capital expenditures and income, our expectations regarding the impact of the macroeconomic environment, our strategy for growth, product development activities, the impact of the regulatory environment, including the timing and likelihood of regulatory approvals and the impact of new or changing regulations and pricing, and market position are forward-looking statements. These forward-looking statements are based on management’s beliefs and assumptions based on the information available to management at the time of this report. Although we believe that we have a reasonable basis for each forward-looking statement contained in this report, we caution you that these forward-looking statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements.

You are urged to carefully review the disclosures we make concerning the risks we face and other factors that may affect the outcome of our forward-looking statements and our business and operating results, including the risks set forth in the “Risk Factors Summary” below and further described in the "Risk Factors" section of this report, which includes a discussion of important factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this report will prove to be accurate, and actual results may differ materially from those expressed or implied by the forward-looking statements. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. You are therefore cautioned not to place undue reliance on the forward-looking statements included in this report, which speak only as of the date of this document. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

We use Glaukos, our logo, iStent, iStent inject, iStent infinite, iPrism, iDose TR, iPRIME, MIGS, Avedro, Photrexa, iLink, KXL, Epioxa, iLution, Retina XR and other marks as trademarks. This report contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this report, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entity.

References throughout this document to “we,” “us,” “our,” the “Company,” or “Glaukos” refer to Glaukos Corporation and its consolidated subsidiaries.

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Risk Factors Summary

Investing in our securities involves a high degree of risk. The following is a summary of the principal factors that make an investment in our securities speculative or risky, all of which are further described below in the section titled “Risk Factors” in Part I, Item 1A of this report. This summary should be read in conjunction with the “Risk Factors” section and should not be relied upon as an exhaustive summary of the material risks facing our business. In addition to the following summary, you should consider the information set forth in the “Risk Factors” section and the other information contained in this report before investing in our securities.

Risks Related to Our Business

●

Failure to achieve commercial success of iDose TR could materially impact our business.

●

Downturns or volatility in general economic conditions and public health crises could harm our business.

●

Supply and/or manufacturing disruptions impacting our principal revenue-producing products could reduce our gross margins and negatively impact our operating results.

●

We may not reach sustained profitability.

●

We may fail to generate sufficient sales of our commercialized products or to develop and commercialize additional products.

●

We are subject to a variety of risks associated with our international operations.

●

We may not meet our customers’ expectations for the quality or delivery of our products, which could harm our reputation and sales.

●

If ophthalmic surgeons do not use or if they misuse our products, our business could be harmed.

●

We may fail to manage our anticipated growth effectively and may not be able to meet customer demand.

●

We may be unable to retain or recruit qualified personnel for growth.

●

We have and may continue to enter into acquisitions, collaborations, in-licensing agreements, joint ventures, alliances or partnerships with third parties that could fail.

●

Cybersecurity incidents, service interruptions, or data corruption could materially disrupt our operations and adversely affect our business.

●

Failure to comply with data privacy and security laws could have a material adverse effect on our business.

●

Our net operating loss tax carryforwards may not be available to offset future taxable income.

Risks Related to Our Indebtedness

●

Our debt service obligations could limit our cash flow, and we may not have sufficient cash flow from our business to pay our debt obligations.

●

The conversion of the Convertible Notes, may adversely affect our financial condition and operating results.

●

The capped call transactions may affect the value of our common stock, and subject us to counterparty risk.

Risks Related to Our Regulatory Environment

●

Compliance with applicable regulations can be costly and failure to comply with such regulations could harm our business, financial condition and operating results.

●

Legislative or regulatory reform of the healthcare system could hinder or prevent our products’ commercial success.

●

Inadequate or inconsistent reimbursement for our products may adversely impact our business.

Risks Related to Our Intellectual Property

●

Failure to protect our intellectual property could substantially impair our ability to compete.

●

Intellectual property claims or litigation could be costly, time-consuming and unsuccessful and could interfere with our ability to successfully commercialize our products.

Risks Related to Our Common Stock

●

Provisions in our Certificate of Incorporation and Bylaws limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts.

●

Our Certificate of Incorporation designates the sole and exclusive forum for certain types of actions and proceedings, which could limit our stockholders’ ability to obtain a favorable judicial forum.

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

GLAUKOS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par values)


	September 30,		December 31,
	2024		2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	100,143	$	93,467
Short-term investments		162,330		201,964
Accounts receivable, net		56,408		39,850
Inventory		59,895		41,986
Prepaid expenses and other current assets		18,506		18,194
Total current assets		397,282		395,461
Restricted cash		4,733		5,856
Property and equipment, net		98,581		103,212
Operating lease right-of-use assets		27,321		27,146
Finance lease right-of-use asset		42,365		44,180
Intangible assets, net		269,418		282,956
Goodwill		66,134		66,134
Deposits and other assets		20,709		15,469
Total assets	$	926,543	$	940,414

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	11,103	$	13,440
Accrued liabilities		60,581		60,574
Total current liabilities		71,684		74,014
Convertible senior notes		56,759		282,773
Operating lease liability		30,656		30,427
Finance lease liability		69,712		70,538
Deferred tax liability, net		7,143		7,144
Other liabilities		22,080		13,752
Total liabilities		258,034		478,648

Commitments and contingencies (Note 12)

Stockholders' equity:
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding		-		-
Common stock, $0.001 par value; 150,000 shares authorized; 55,122 and 49,148 shares issued and 55,094 and 49,120 shares outstanding as of September 30, 2024 and December 31, 2023, respectively		55		49
Additional paid-in capital		1,377,825		1,059,751
Accumulated other comprehensive income		2,620		1,165
Accumulated deficit		(711,859)		(599,067)
Less treasury stock (28 shares as of September 30, 2024 and December 31, 2023)		(132)		(132)
Total stockholders' equity		668,509		461,766
Total liabilities and stockholders' equity	$	926,543	$	940,414

See accompanying notes to condensed consolidated financial statements.

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GLAUKOS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share amounts)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Net sales	$	96,670	$	78,048	$	277,982	$	232,346
Cost of sales		22,584		18,510		65,392		56,684
Gross profit		74,086		59,538		212,590		175,662
Operating expenses:
Selling, general and administrative		64,000		54,247		192,163		161,034
Research and development		34,746		33,301		99,898		101,706
Acquired in-process research and development		-		-		14,229		3,000
Total operating expenses		98,746		87,548		306,290		265,740
Loss from operations		(24,660)		(28,010)		(93,700)		(90,078)
Non-operating income (expense):
Interest income		2,700		2,710		8,611		6,252
Interest expense		(1,663)		(3,398)		(8,468)		(10,205)
Charges associated with convertible senior notes		-		-		(18,012)		-
Other income (expense), net		2,391		(1,709)		(338)		(2,978)
Total non-operating income (expense)		3,428		(2,397)		(18,207)		(6,931)
Loss before taxes		(21,232)		(30,407)		(111,907)		(97,009)
Income tax provision		177		37		885		873
Net loss	$	(21,409)	$	(30,444)	$	(112,792)	$	(97,882)
Basic and diluted net loss per share	$	(0.39)	$	(0.63)	$	(2.18)	$	(2.03)
Weighted average shares used to compute basic and diluted net loss per share		55,037		48,675		51,804		48,284

See accompanying notes to condensed consolidated financial statements.

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GLAUKOS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited)

(in thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Net loss	$	(21,409)	$	(30,444)	$	(112,792)	$	(97,882)
Other comprehensive income:
Foreign currency translation (loss) income		(510)		561		478		822
Unrealized income on short-term investments		939		590		977		2,917
Other comprehensive income		429		1,151		1,455		3,739
Total comprehensive loss	$	(20,980)	$	(29,293)	$	(111,337)	$	(94,143)

See accompanying notes to condensed consolidated financial statements.

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GLAUKOS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands)


						Accumulated
				Additional		other
	Common stock			paid-in		comprehensive		Accumulated		Treasury stock			Total
	Shares	Amount		capital		income		deficit		Shares	Amount		equity
Balance at December 31, 2023	49,148	$	49	$	1,059,751	$	1,165	$	(599,067)	(28)	$	(132)	$	461,766
Common stock issued under stock plans, net	672		1		13,364		-		-	-		-		13,365
Asset acquisition through issuance of common stock	55		-		5,000		-		-	-		-		5,000
Stock-based compensation	-		-		11,165		-		-	-		-		11,165
Other comprehensive income	-		-		-		272		-	-		-		272
Net loss	-		-		-		-		(40,838)	-		-		(40,838)
Balance at March 31, 2024	49,875	$	50	$	1,089,280	$	1,437	$	(639,905)	(28)	$	(132)	$	450,730
Common stock issued under stock plans, net	724		1		8,818		-		-	-		-		8,819
Issuance of common stock in exchange for convertible senior notes	4,253		4		244,084		-		-	-		-		244,088
Stock-based compensation	-		-		11,313		-		-	-		-		11,313
Other comprehensive income	-		-		-		754		-	-		-		754
Net loss	-		-		-		-		(50,545)	-		-		(50,545)
Balance at June 30, 2024	54,852	$	55	$	1,353,495	$	2,191	$	(690,450)	(28)	$	(132)	$	665,159
Common stock issued under stock plans, net	270		-		9,910		-		-	-		-		9,910
Stock-based compensation	-		-		14,420		-		-	-		-		14,420
Other comprehensive income	-		-		-		429		-	-		-		429
Net loss	-		-		-		-		(21,409)	-		-		(21,409)
Balance at September 30, 2024	55,122	$	55	$	1,377,825	$	2,620	$	(711,859)	(28)	$	(132)	$	668,509


						Accumulated
				Additional		other
	Common stock			paid-in		comprehensive		Accumulated		Treasury stock			Total
	Shares	Amount		capital		(loss) income		deficit		Shares	Amount		equity
Balance at December 31, 2022	47,782	$	48	$	997,470	$	(2,975)	$	(464,406)	(28)	$	(132)	$	530,005
Common stock issued under stock plans, net	187		-		1,301		-		-	-		-		1,301
Stock-based compensation	-		-		10,184		-		-	-		-		10,184
Other comprehensive income	-		-		-		1,650		-	-		-		1,650
Net loss	-		-		-		-		(34,626)	-		-		(34,626)
Balance at March 31, 2023	47,969	$	48	$	1,008,955	$	(1,325)	$	(499,032)	(28)	$	(132)	$	508,514
Common stock issued under stock plans, net	444		-		(702)		-		-	-		-		(702)
Acquired in-process R&D acquired through the issuance of common stock	-		-		3,000		-		-	-		-		3,000
Stock-based compensation	-		-		9,873		-		-	-		-		9,873
Other comprehensive loss	-		-		-		938		-	-		-		938
Net loss	-		-		-		-		(32,812)	-		-		(32,812)
Balance at June 30, 2023	48,413	$	48	$	1,021,126	$	(387)	$	(531,844)	(28)	$	(132)	$	488,811
Common stock issued under stock plans, net	335		1		7,656		-		-	-		-		7,657
Stock-based compensation	-		-		10,484		-		-	-		-		10,484
Other comprehensive income	-		-		-		1,151		-	-		-		1,151
Net loss	-		-		-		-		(30,444)	-		-		(30,444)
Balance at September 30, 2023	48,748	$	49	$	1,039,266	$	764	$	(562,288)	(28)	$	(132)	$	477,659

See accompanying notes to condensed consolidated financial statements.

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GLAUKOS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)


	Nine Months Ended September 30,
	2024		2023
Operating Activities
Net loss	$	(112,792)	$	(97,882)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		8,181		6,455
Amortization of intangible assets		18,729		18,684
Noncash lease expense		3,194		3,218
Amortization of debt issuance costs		662		1,030
Deferred income tax benefit		(1)		(15)
Loss on disposal of fixed assets		64		881
Stock-based compensation		36,898		30,541
Unrealized foreign currency losses		490		991
Amortization of premium on short-term investments		(3,187)		(1,041)
Other liabilities		4,894		2,231
Acquired in-process R&D acquired through the issuance of common stock		5,000		3,000
Inducement expense related to exchange of convertible senior notes		17,412		-
Changes in operating assets and liabilities:
Accounts receivable, net		(16,476)		(3,535)
Inventory		(18,161)		(2,903)
Prepaid expenses and other current assets		(318)		(2,355)
Accounts payable and accrued liabilities		(4,406)		(6,149)
Other assets		(2,008)		(244)
Net cash used in operating activities		(61,825)		(47,093)
Investing activities
Purchases of short-term investments		(123,091)		(193,538)
Proceeds from sales and maturities of short-term investments		166,891		238,735
Purchases of property and equipment		(4,567)		(16,034)
Proceeds from disposal of property and equipment		38		-
Investment in company-owned life insurance		(3,227)		(2,147)
Net cash provided by investing activities		36,044		27,016
Financing activities
Proceeds from exercise of stock options		29,509		6,624
Proceeds from share purchases under Employee Stock Purchase Plan		7,416		6,278
Payment of employee taxes related to vested restricted stock units		(4,833)		(4,646)
Principal paid on finance lease		(665)		(517)
Net cash provided by financing activities		31,427		7,739
Effect of exchange rate changes on cash and cash equivalents		(93)		520
Net increase (decrease) in cash, cash equivalents and restricted cash		5,553		(11,818)
Cash, cash equivalents and restricted cash at beginning of period		99,323		126,603
Cash, cash equivalents and restricted cash at end of period	$	104,876	$	114,785
Supplemental disclosures of cash flow information
Taxes paid, net of refunds	$	1,165	$	1,218
Interest paid on convertible senior notes	$	3,953	$	3,953
Other interest paid	$	3,393	$	3,237
Supplemental schedule of noncash investing and financing activities
Convertible senior notes exchanged for common stock, net of debt issuance costs	$	226,676		-
Purchases of property and equipment included in accounts payable and accrued liabilities	$	114	$	3,201

See accompanying notes to condensed consolidated financial statements.

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GLAUKOS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Organization and Basis of Presentation

Organization and business

Glaukos Corporation (Glaukos or the Company), incorporated in Delaware on July 14, 1998, is 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 diseases. The Company first developed Micro-Invasive Glaucoma Surgery (MIGS) as an alternative to the traditional glaucoma treatment paradigm, launching its first MIGS device commercially in 2012. The Company also offers 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. The Company received FDA approval in December 2023 of its first procedural pharmaceutical product, the iDose TR, and began commercializing the product in a controlled manner in February 2024. The Company is developing a portfolio of platforms to support ongoing pharmaceutical and medical device innovations. Products or 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.

The accompanying condensed consolidated financial statements include the accounts of Glaukos and its wholly-owned subsidiaries. The Company translates the financial statements of its foreign subsidiaries using end-of-period exchange rates for assets and liabilities and average exchange rates during each reporting period for results of operations. All intercompany balances and transactions among the consolidated entities have been eliminated in consolidation.

Basis of presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted (GAAP) in the U.S. for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X.

As permitted by Form 10-Q and Article 10 of Regulation S-X, under those rules, certain footnotes and other financial information that are normally required by GAAP have been condensed or omitted. The unaudited interim financial statements have been prepared on a basis consistent with the audited financial statements. In the opinion of management, the unaudited interim financial statements reflect all adjustments necessary for the fair presentation of the Company’s financial information contained herein. All such adjustments are of a normal and recurring nature. The condensed consolidated balance sheet as of December 31, 2023 has been derived from audited financial statements at that date, but excludes disclosures required by GAAP for complete financial statements. These interim financial statements do not include all disclosures required by GAAP and should be read in conjunction with the Company’s financial statements and accompanying notes for the fiscal year ended December 31, 2023, which are contained in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (SEC) on February 23, 2024. The Company’s results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other interim period.

Recent developments

On June 14, 2024, the Company announced it had entered into separate, privately negotiated exchange agreements (Exchange Agreements) with certain holders of its 2.75% Convertible Senior Notes due 2027 (Convertible Notes), pursuant to which the Company agreed, subject to customary closing conditions, to repurchase an aggregate of $230.0 million principal amount of Convertible Notes for aggregate consideration consisting of a number of shares of the Company’s common stock, par value $0.001 per share, to be determined over an averaging period commencing on June 14, 2024, and cash in lieu of fractional shares and in respect of accrued interest on the Convertible Notes (Convertible Notes Exchange). On June 28, 2024, the Company closed the transactions contemplated by the Exchange Agreements, and the holders exchanged $230.0 million in aggregate principal amount of the Convertible Notes for consideration consisting of an aggregate of 4,253,423 shares of the Company’s common stock, and cash in lieu of fractional shares and in respect of accrued interest on the Convertible Notes. The Company accounted for the

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Convertible Notes Exchange as an induced conversion based on the nature of the conversion offer and the period of time it was offered. The Company accounted for the Convertible Notes Exchange by expensing the fair value of the common shares that were issued in excess of the original terms of the Convertible Notes. The Company reduced the balance of the Convertible Notes on the condensed consolidated balance sheets by $226.7 million, which is comprised of the reduction in Convertible Notes principal of $230.0 million, less $3.3 million in unamortized debt issuance costs. The Company also recognized a non-cash inducement charge of $17.4 million and direct transaction costs of $0.6 million recorded within charges associated with convertible senior notes on the condensed consolidated statements of operations and increased additional paid-in capital on the condensed consolidated balance sheets of $244.1 million.

On May 14, 2024, the Company entered into a License Agreement (License Agreement), pursuant to which the Company obtained an exclusive, worldwide license to develop and commercialize drug products incorporating certain proprietary technology. Per the terms of the License Agreement, the Company made a one-time upfront payment of $2.0 million and may have ongoing milestone and royalty payment obligations depending on the success of the development, regulatory approval and commercialization of the drug products. The Company also made a one-time payment of $0.5 million to obtain an option to license additional rights related to the proprietary technology. Both the $2.0 million upfront payment and the $0.5 million option payment are recorded in acquired in-process research and development (IPR&D) in the condensed consolidated statements of operations.

On March 7, 2024, the Company issued $5.0 million of its common stock and paid approximately $5.1 million in cash in connection with the acquisition of 100% of the outstanding equity interests in a clinical stage biopharma company (the Seller) focused on developing novel therapeutics for rare ophthalmic diseases, including all related patents and patent applications, technology and know-how. The Company accounted for the transaction as an asset acquisition as the set of acquired assets did not constitute a business, and the acquisition costs are recorded within acquired in-process research and development on the condensed consolidated statement of operations. Under the terms of the agreement, if these proprietary technologies are commercialized, the Company may have to make potential payments of up to $51.0 million upon the achievement of certain event-based development milestones, potential payments of up to $150.0 million upon the achievement of certain commercial sales-based milestones should annual net sales of a licensed product eventually exceed various levels, and up to a low double digit royalty on net sales. Furthermore, because the first two development milestones are payable in either cash or Company shares at the Company’s sole discretion, the Company has accrued a liability in the amount of $1.5 million related to these two milestones, which is classified as other liabilities within the condensed consolidated balance sheets, as the contingent consideration is not expected to be paid within the next twelve months. See also Note 4, Fair Value Measurements for additional details regarding this contingent consideration.

Effective March 17, 2023, the Company entered into a sales agreement (Sales Agreement) with Celanese Canada ULC (Celanese) under which Celanese will make available and supply to the Company certain raw materials used to create a nanoporous membrane utilized in the iDose TR, and authorized the Company to reference its Drug Master File (DMF) with respect to such raw materials, which is required for the Company to commercialize iDose TR. The term of the Sales Agreement is four years after the iDose TR launch date in February 2024. In exchange for the ability to obtain future raw materials and the rights related to the DMF, the Company is subject to minimum compensation payments over four years of $6.3 million and potential additional royalties based on a percentage of sales of the iDose TR product. The Company recognized an intangible asset related to the minimum compensation payments at fair value of $5.2 million upon the date of acquisition, which was determined to be the iDose TR launch date. The $5.2 million is included in Intangible assets, net on the condensed consolidated balance sheets and will be amortized to cost of sales over its useful life of four years, which is the initial term of the Sales Agreement. A member of the Celanese board of directors also sits on the board of directors of the Company.

Note 2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates and assumptions used in the preparation of the accompanying condensed consolidated financial statements.

Table of Contents

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets that equate to the amount reported in the condensed consolidated statements of cash flows as of the beginning and end of nine months ended September 30, 2024 (in thousands):


	September 30,		December 31,
	2024		2023
Cash and cash equivalents	$	100,143	$	93,467
Restricted cash		4,733		5,856
Cash, cash equivalents and restricted cash	$	104,876	$	99,323

The Company’s cash and cash equivalents include cash in readily available checking and money market accounts, as well as certificates of deposit. The Company maintains balances of cash and cash equivalents at one or more financial institutions that are in excess of federally insured limits.

Recently Adopted Accounting Pronouncements

The Company has not adopted any recent accounting pronouncements that had a material impact on its condensed consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid by jurisdiction. The ASU is effective for public business entities’ annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance on its condensed consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segments Disclosures. While ASU 2023-07 requires incremental disclosures, it does not change how an entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine reportable segments. This ASU is effective for all public business entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Entities must adopt the changes to the segment reporting guidance on a retrospective basis. The Company is currently evaluating the impact of adopting this guidance on its condensed consolidated financial statements. Early adoption is permitted; however, the Company is not early adopting the standard.

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Note 3. Balance Sheet Details

Short-term Investments

Short-term investments consisted of the following (in thousands):


	At September 30, 2024
	Maturity		Amortized cost		Unrealized		Unrealized		Estimated
	(in years)		or cost		gains		losses		fair value
U.S. treasury securities	less than 2		$	122,436	$	495	$	(12)	$	122,919
Bank certificates of deposit	less than 2			6,420		10		-		6,430
Corporate notes	less than 3			18,862		201		(31)		19,032
Asset-backed securities	less than 2	<

GLAUKOS Corp [GKOS] Filings
10-Q	[2024-11]
10-Q	[2024-08]
10-Q	[2024-05-03]
10-K	[2024-02-23]
10-Q	[2023-11-01]
10-Q	[2023-08-02]
10-Q	[2023-05-04]
10-K	[2023-02-24]
10-Q	[2022-11-04]
10-Q	[2022-08-05]
10-Q	[2022-05-05]
10-K	[2022-02-28]
10-Q	[2021-11-08]
10-Q	[2021-08-05]
10-Q	[2021-05-06]
10-K	[2021-03-01]
10-Q	[2020-11-05]
10-Q	[2020-08-07]
10-Q	[2020-05-07]
10-K	[2020-03-02]
10-Q	[2019-11-06]
10-Q	[2019-08-08]
10-Q	[2019-05-08]
10-K	[2019-02-28]
10-Q	[2018-11-07]
10-Q	[2018-08-06]
10-Q	[2018-05-09]
10-K	[2018-02-28]
10-Q	[2017-11-08]
10-Q	[2017-08-07]
10-Q	[2017-05-04]
10-K	[2017-03-15]
10-Q	[2016-11-14]
10-Q	[2016-08-04]
10-Q	[2016-05-04]
10-K	[2016-03-15]
10-Q	[2015-11-12]
10-Q	[2015-08-13]
S-1	[2015-05-12]