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Glaukos Corporation: Initiation of Research Coverage

Monday, July 20, 2015

William Blair & Company initiated research coverage of Glaukos Corporation with an Outperform rating and Aggressive Growth company profile. Glaukos is a medical technology company focused on the ophthalmology space. The company pioneered the field of micro-invasive glaucoma surgery, procedures that use micro-scale technologies to achieve sustained reduction in intraocular pressure.

Analyst Brian Weinstein estimated that the company would generate revenue of $62 million in 2015 and $80 million in 2016.

“Glaukos’s first product, the iStent, is used to treat the mild-to-moderate form of open-angle glaucoma, which we estimate affects roughly 60 million people worldwide and over 3 million people in the United States,” Weinstein said. “The initial U.S. market opportunity is about 740,000 procedures per year, with Glaukos involved in only a total number of less than 100,000 since launch in 2012. Further indications and products, along with growth in the number of patients with glaucoma, could increase the domestic market to $3.8 billion by 2019.”

“Glaukos intends to compete in the micro-invasive glaucoma surgery (MIGS) market with a portfolio of products that we believe will be unrivaled by competitors for the near term,” he said.

Weinstein added, “We believe that Glaukos could have one of the strongest organic growth profiles in our coverage universe over the next several years. We project a greater-than-30% compound annual growth rate (CAGR) for revenues through 2018 based on sales of iStent alone and expect that the evolving portfolio of products will help maintain growth at that level through at least the end of the decade.”

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Current Ratings Distribution (as of 6/30/15)

Coverage Universe
Outperform (Buy): 66%
Market Perform (Hold): 32%
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Market Perform (Hold): 3%
Underperform (Sell): 0%

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