The once-high-flying stock could lose 30% of its value this year as Glaukos loses its monopoly on the ocular stent, according to a report today in Barron’s. The San Clemente, Calif.-based company’s iStent, which won FDA approval in June 2012, was the only microstent for treating glaucoma approved for the U.S. market.
But that all changed last year, when the Cypass stent Alcon acquired when it bought Transcend Medical won FDA approval in July. A next-generation device from Glaukos, the iStent Inject, isn’t likely to appear in the U.S. until the 2nd half of 2018, the newspaper reported.
GKOS shares, which had risen 150% to roughly $50 since June 2015 – 300 times expected earnings and 10 times forecast sales – were off -6.7% to $48.07 apiece today in mid-afternoon trading.
“Although Glaukos dominates the stent market in minimally invasive glaucoma surgery, it is still a small company reliant on just 1 product for the foreseeable future, as bigger rivals emerge,” according to Barron’s. “That’s a prescription for disappointment, and a potentially steep stock price decline.”
That said, Glaukos surpassed expectations on Wall Street with its 4th quarter and 2016 results, swinging to profits of $134,000 on sales of $33.2 million, for top-line growth of 63.6%.
The company posted no earnings for the quarter, which beat Wall Street’s consensus, which expected losses of -1¢ and revenue of $29.4 million.
For the full year, Glaukos swung to profits of $4.5 million, or 12¢ per share, on sales of $114.4 million, on sales growth of 59.5%.
For its part, Novartis is reportedly eyeing a sale for Alcon, acquired from Nestle for $52 billion in 2010. Alcon’s sales have struggled in recent years and the company has undergone changes to its leadership team. New division head Mike Ball has been charged with halting the company’s revenue slide in case the unit is sold.
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