This medical supply company is forecast to grow by 29.6% this year.
Glaukos Corporation (GKOS)
From Cabot Explorer
With more than 10,000 baby boomers reaching 65 each day in America, you can bet that medical services aimed at this giant group are growth markets. My daughter taking a year off between college and medical school to work with an ophthalmologist underscored this opportunity. Suffice it to say that she has a hard time getting a day off.
Specifically, many aging boomers, including me, don’t regularly get their eyes checked until they have an issue, as I did last week with some unexpected blurry vision.
This brings us to Glaukos. Based in Laguna Hills, California, Glaukos is a medical technology company focused on innovative therapies for the treatment of glaucoma, corneal disorders, and retinal diseases.
Glaucoma is both serious and common. It can develop in one or both eyes. It’s actually a group of diseases that damage the eye’s optic nerve, causing loss of vision or blindness. The disease creates pressure inside the eye. Symptoms move incrementally and, without treatment, people with glaucoma first lose their peripheral vision and can become blind.
There is no cure for glaucoma, and patients usually begin treatment with eye drops. But many eventually opt for cataract surgery. Glaucoma currently impacts three million Americans, and the usual surgery is invasive and can have serious side effects, including bleeding and retinal detachment.
In contrast, Glaukos’ revolutionary product is the iStent, a tiny L-shaped titanium implant that has helped thousands of people with glaucoma successfully manage intraocular pressure. The device received regulatory approval from the FDA in 2012. Glaukos launched its next-generation iStent inject device in 2018 and during its second-quarter earnings call, Glaukos announced that it expects the new iteration—the iStent infinite—to receive regulatory approval before the end of this year, though it has already been approved in Australia and India.
Before the pandemic, cataract procedures were performed on four million eyes annually in the U.S., with about half of those related to glaucoma.
Over the past two years, however, many medical procedures were postponed, as prospective patients were afraid of contracting COVID-19. This of course has also led to a pullback in Glaukos’ revenue growth.
That trend reversing, as the company’s second-quarter revenue soared 148%.
Glaukos has the most comprehensive pipeline in ophthalmology. New product launches will broaden its market opportunities, including acquisitions and expansion into international markets.
The timing to invest in the stock is logical since its share price is down more than 49% from its 52-week high. Its balance sheet is solid with more than $400 million in cash.
Let’s begin with a full position.
Carl Delfeld, Cabot Explorer, cabotwealth.com, 978-745-5532, September 16, 2021