Palmetto GBA announcement creates uncertainty for Glaukos, says BTIG

BTIG analyst Ryan Zimmerman notes that Palmetto GBA announced via an email and posted on its website that the implementation of their MIGS local coverage decisions, or LCDs, would not become final on January 29, 2024 as previously expected and that instead Palmetto is tentatively removing the LCD and maintaining the current status of coverage for MIGS. However, the firm also notes that this posting has since been removed from the Palmetto GBA website and that the LCD in question, L37531, is still listed on the CMS website with a future effective date of January 29, 2024. All of this leaves the firm with “several questions,” including whether the LCD be removed, if the MAC once again changed its thinking, if the other MACs follow suit and what is the potential impact for Glaukos (GKOS). The firm ultimately believe that if the MACs walk back their changes to MIGS coverage, Glaukos’ iDose trajectory wouldn’t be impacted, but upside to numbers in the stent business would be hampered by the loss of competitive share gains. Palmetto’s active LCD provides coverage of Alcon’s (ALC) Hydrus, Glaukos’ iStent and iStent inject, and AbbVie’s (ABBV) XEN45, added the analyst, who keeps a Buy rating and $90 price target on Glaukos shares.