On Wednesday, Citi upgraded shares of Glaukos Corporation (NYSE:GKOS) from Neutral to Buy, while also raising the price target to $162 from the previous $132. The upgrade comes with a positive outlook on the company's iDose product, which has been gradually gaining traction since its launch.
"With iDose sales likely inflecting next year along with a steady cadence of catalysts, we are upgrading GKOS to Buy from Neutral," analysts at Citi said.
Glaukos' iDose, a device for treating glaucoma, has seen its revenue double in the third quarter of 2024 to approximately $8 million, compared to the second quarter. The analysts noted that the sales growth is a strong start, considering the company's deliberate approach to training physicians, establishing reimbursement, and fostering adoption.
The coverage of iDose by local Medicare Administrative Contractors (MACs) is pivotal for its sales momentum. Currently, one MAC has adopted full coverage with a professional fee schedule, and others are in various stages of adoption. This progress is expected to significantly improve iDose access by the start of 2025.
Looking ahead, several potential catalysts could further enhance Glaukos' stock value in the coming year. These include the potential approval of Epioxa (Epi-On) by the end of 2025, with a projected mid-2026 launch, and promising data for the company's Retina XR IVT multi-kinase inhibitor in treating wet age-related macular degeneration (AMD (NASDAQ:AMD)).
The new price target of $162 is based on an 8-9 times multiple of the base 2025 estimated enterprise value/revenue, plus an increased net present value (NPV) for iDose.
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