Glaukos lifts its sales outlook; retina deal could cost up to $875M

Glaukos is an eye-care company based in Aliso Viejo, California. It makes its iStent and iDose glaucoma products at a single campus in San Clemente, California.¹ It also sells Epioxa, a keratoconus treatment the Food and Drug Administration approved in 2025, and says it markets the only approved corneal cross-linking therapy.²

Two newer products drive the growth. iDose TR, a drug implant placed inside the eye, brought in about $76 million in the third quarter, and Epioxa brought in about $53 million.¹ Total third-quarter sales were $211.0 million, up 58% from a year earlier.²

Profit is new for Glaukos. It lost $18.4 million in the second quarter and carries an accumulated deficit, the running total of past losses, of about $969.3 million.¹ In the third quarter it earned $2.0 million, against a $16.2 million loss a year earlier.²

On October 8, 2026, Glaukos announced an exclusive license from RevOpsis Therapeutics, a privately held company, to develop and sell RO-104, a retina drug Glaukos now calls GLK-901.¹ The release said RO-104 had beaten approved retina drugs only in animal studies. It also said the financial terms were not disclosed.²

The glaucoma business depends on how Medicare and other payers cover procedures. Glaukos estimates that about 80% of its iDose TR and iStent procedures in the country happen in outpatient surgery centers.¹ In May 2026, five of the seven regional contractors that process Medicare claims proposed coverage rules that could put conditions on iDose TR use.² Glaukos is also suing SpyGlass Pharma and one of its executives over trade secrets, and that trial is set for January 26, 2027.³

Under the terms in the 10-Q, Glaukos paid a non-refundable upfront fee of $10.0 million.¹ It may owe up to $165.0 million in milestone payments for the lead drug and up to $175.0 million in fees and milestones for each of four more products, for a stated total of $875.0 million. RevOpsis would also get tiered royalties of 3% to 8% on sales.² In return Glaukos gets the exclusive right to develop and sell RO-104, plus rights to use RevOpsis's design platform to find and develop up to four more retina drugs.³

The listed parts add up to $865.0 million, which is $10.0 million less than the stated total. The full amount would be owed only if Glaukos takes on all four extra products and every goal is met, since each figure is an upper limit.

Sized against the company, the cash out so far is small. The $10.0 million fee is about 2.9% of the $339.8 million in cash and investments.¹ The full $875.0 million is about 112% of the 2026 sales midpoint, about 2.6 times that cash, and about 6.1% of the market value at $242.38 a share.²

Milestones are not the only cost. On the results call, management said each retina project, from a clinical point of view alone, takes more than $100 million of investment.¹ Taking all five products through trials could therefore cost Glaukos over $500 million of its own spending, apart from anything paid to RevOpsis.²

Reported profit was thin. Net income was $2.0 million in the third quarter, while the adjusted figure Glaukos prefers was $28.5 million.¹ The $26.5 million gap includes a $14.1 million one-time payment to the Regents of the University of California to settle the final payment on certain patents, $5.9 million of lawsuit costs, and $4.8 million of amortization, a non-cash charge that spreads the cost of bought technology over time.² Because Glaukos has tax losses, those adjustments carry no tax effect.³

Operating income tells the same story: $0.8 million as reported against $27.3 million adjusted. From January through September, Glaukos still lost $36.1 million.¹ The license matters here because Glaukos's adjusted figures have not stripped out upfront and milestone payments on licensing deals since 2022. So the $10.0 million fee and any later milestones count against adjusted profit too.²

Cash flow has turned positive. Operating activities brought in $40.9 million from January through September, and equipment purchases took $8.8 million, leaving about $32.1 million of free cash flow, the cash left after investment; that includes the $14.1 million Regents bill, which was accrued but not paid until October, so about $18.0 million remains once it is counted.¹ Cash and investments rose to $339.8 million at the end of the third quarter from $289.3 million three months earlier, helped by about $15.6 million from employees exercising options and buying stock.²

Some sales have not turned into cash yet. Receivables, money customers still owe, rose to $150.0 million from $108.6 million at the end of 2025, because iDose TR and Epioxa get longer payment terms.¹ The company's specialty pharmacy alone accounted for about 17% of net receivables as of September 30, 2026.²

Known bills after the quarter are modest. The $10.0 million fee, the $14.1 million Regents payment made in October and about $6.7 million for a new plant in Huntsville, Alabama during the rest of 2026 add up to about $30.8 million.¹ In 2027 Glaukos expects about $35.3 million more for Huntsville and a $15.2 million purchase of a building in Aliso Viejo that is not expected to close until mid- to late-2027.² Glaukos says its cash will cover its needs for at least the next 12 months, though it may raise debt or equity later.³

Leverage is not a concern today. Glaukos has no borrowings, its convertible notes were fully retired in 2024, and its debt-like items are leases, including $68.5 million of finance lease liabilities.¹ In the third quarter it earned $2.5 million of interest income and booked $1.1 million of interest expense, so ratios such as net debt to earnings do not bite.² Total liabilities were $262.3 million against $717.3 million of shareholder equity.³

Dilution comes mostly from stock pay. Glaukos had 59,196,870 shares outstanding just before the filing, and the third quarter's diluted share count, which adds in options and stock awards, was 61.2 million.¹ It still has about $112.9 million of stock pay to expense in future periods.²

Three top officers have plans to sell stock on a preset schedule. Chief executive Thomas Burns may sell up to 280,000 shares and finance chief Alex Thurman up to 17,752 shares starting November 18, 2026, and operating chief Joe Gilliam up to 59,890 shares starting November 12, 2026.¹ Together that is 357,642 shares, about 0.6% of the shares outstanding, worth about $86.7 million at $242.38.²

Management's own goals are bolder than the results so far. It raised its 2026 sales outlook to $775 million to $785 million, up from $680 million to $700 million, and set a preliminary 2027 goal of $1 billion.¹ On the call, management said the 2027 goal includes cases where the Medicare rules are finalized close to the current proposal. It says its main focus is revenue growth, and it expects research spending to keep rising.² On the call, management guided 2026 operating expenses to about $630 million, more than 30% growth, with fourth-quarter operating expenses up 25% to 30%.³

The market cheered. Glaukos moved up 33.6% since the filing, from its $181.45 close before it to $242.38, while the S&P 500 fund moved down 0.4% over the same span.¹ That lifted its market value from about $10.7 billion to about $14.3 billion, about 18 times the 2026 sales midpoint and about 14 times the 2027 goal.² The stock had closed as low as $153.38 on September 23, 2026, but our price file starts in mid-September, so it cannot show the full one-year range.³

The bull case is strong. Sales grew 58%, adjusted operating profit reached $27.3 million in the quarter, and cash is growing with no debt.¹ The retina deal cost $10.0 million upfront for one drug and a platform that could yield four more, and the rest of the money is owed only if goals are met.²

The bear case starts with Medicare. Glaukos itself says the timing, content and impact of any final coverage rules for iDose TR are uncertain, and on the call management said the contractors have one year from their May drafts to act or drop them.¹ Second, retina is an early, costly bet: RO-104 has only animal data, each project needs more than $100 million of clinical spending, and Glaukos still lost $36.1 million from January through September.² Third, the stock gained a third in one day just as officers' sale plans open in November, and management said investor hopes for the Epioxa ramp had run a little ahead of conditions on the ground.³

The dated tests are close. The operating chief's sale plan opens November 12, 2026, and the chief executive's and finance chief's open November 18, 2026.¹ Management expects data from its retina TKI and Demodex programs by the end of 2026, the SpyGlass trial is set for January 26, 2027, and the Medicare contractors must act on or drop their iDose TR rules by May 2027, with any final rule taking effect 45 days after it is issued.²

Our call is that on November 18, 2026, the stock still closes above the line set in the question below, a line under the $242.38 it reached on October 29 but well above its $181.45 close on October 28, the day of the filing.¹ It would be wrong if a final Medicare rule sharply limits iDose TR, or if officers' selling and profit-taking pull the stock from $242.38 back toward that $181.45 close.²

The 10-Q gives only upper limits, with no schedule and no list of the events that trigger each payment. Its listed parts add to $865.0 million against a stated $875.0 million total, and it does not explain the $10.0 million difference.

The filing gives a 3% to 8% royalty range but not the sales levels at which each rate applies.

The filing says the $10.0 million was paid but not which quarter's results will carry it or on which expense line.

The license release cites only animal data, and no filing or call note gives a start date for human trials of GLK-901.

Our price file starts in mid-September 2026, and no note gives the stock's one-year high or low.