On mixed Q2 results, Glaukos announces Avedro buy

Glaukos (NYSE:GKOS) posted its second-quarter financial results this week and reported that it plans to acquire Avedro in an effort to build out its corneal health franchise.

Avedro develops single-use drug formulations designed to strengthen corneal tissue and stop the progression of a degenerative corneal ectatic disease known as keratoconus. According to the Mass.-based company, the total U.S. market for its keratoconus therapy is roughly $3 billion.

“Avedro is an ideal fit for Glaukos’ core strengths in creating and disrupting ophthalmic markets with novel therapies that address important unmet clinical needs of practitioners and patients,” Glaukos president & CEO Thomas Burns said in prepared remarks.

“Avedro is extremely pleased with the potential to become part of Glaukos, a highly-respected ophthalmic organization with a successful track record forging new markets with disruptive technologies like our keratoconus pharmaceutical therapies,” Reza Zadno, Avedro’s president & CEO, added. “Glaukos already has deep customer relationships with the majority of our target accounts, and a large, seasoned field organization that can unite with our team to accelerate awareness, adoption and utilization of our novel platform. In addition, Glaukos will bring its extensive clinical and regulatory resources to bear to help advance our promising pipeline therapies.”

For the three months ended June 30, Glaukos posted a net loss of -$6.3 million on sales of $58.6 million, for revenue growth of 36% compared with same period last year.

Adjusted earnings per share were -17¢, behind the consensus on Wall Street. The company topped sales estimates, though – analysts were looking for sales of $56.2 million.

“We are very pleased with the company’s record second quarter financial performance, along with the significant clinical and regulatory progress we continue to make to advance and expand our transformative pipeline,” Burns said in a statement. “We remain focused on execution as we build upon our solid foundation to transform Glaukos into a global ophthalmic pharmaceutical and device leader capable of providing novel treatment options for the benefit of patients worldwide.”

Without including the impact of its pending Avedro purchase, Glaukos increased its 2019 sales guidance from $225 – $230 million to $226 – $231 million.

GKOS shares were trading at $65.00 apiece today in afternoon activity, down -11%.