Welcome to the Glaukos Corporation’s Fourth Quarter and Full Year 2016 Financial Results Conference Call. A copy of the Company’s press release issued after the market close today is available at www.glaukos.com. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] This call is being recorded and an archived copy will be available online in the investors section at www.glaukos.com. I will now turn the call over to Sheree Aronson, Vice President of Investor Relations and Corporate Marketing. Please go ahead.

Hello, everyone. Joining me today are President and CEO, Tom Burns; Chief Financial Officer, Rich Harrison; and Chief Operating Officer, Chris Calcaterra. Following prepared remarks by Tom and Rich, all three gentlemen will take your questions. Please remember that all statements other than statements of historical facts made on this call that address activities, events or developments we expect, believe or anticipate will or may occur in the future are forward-looking statements. These include statements about our plans, objectives, strategies and prospects regarding among other things, our iStent products, our pipeline technologies, our patent portfolio, our U.S. and international commercialization efforts, the efficacy of our current and future products, our expectations regarding receipt of regulatory approvals for our pipeline products and our competitive market position, financial condition and results of operation. These statements are based on current expectations about future events affecting us and are subject to risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Therefore, they may cause our actual results to differ materially from those expressed or implied by forward-looking statements. Please review today’s press release and our SEC filing for more information about these risk factors. You’ll find these documents in the Investors section of our website at www.glaukos.com. With that, I’ll turn the call over to President and CEO, Tom Burns. Tom?

Good afternoon. Welcome and thank you everyone for joining today’s call. We finished the year with fourth quarter net sales of $33.2 million, up 64% versus $20.3 million in the same quarter in 2015. For 2016, our net sales rose 60% to a $114.4 million versus $71.7 million in 2015. For 2017, we are issuing a guidance range of $160 million to $165 million in net sales. This guidance takes into our expectation for continued dynamic growth in U.S. iStent utilization, the 2017 increase in Medicare reimbursement for iStent combination cataract procedures performed in ambulatory surgery centers, emerging MIGS competition and increased sales from international markets where we have established direct sales operations. We will talk more about our financial results and guidance later in the call. First, I’ll provide an update on execution of each of core growth objections, which are first to leverage our seasoned sales team and clinical evidence to drive U.S. iStent utilization in combination with cataract surgery; secondly, to fortifying our MIGS leadership position and expand the market with next generation iStent devices for combination cataract and standalone procedures; thirdly, advance iDose injectable drug delivery platform; and finally fourth, to enter or expand our presence in high-value international markets. I’ll begin with our progress driving U.S. iStent utilization. Once again, our most recent quarterly performance demonstrates that iStent continues to gain traction in the market as an increasing number of surgeons rely on it for a sustained IOP lowering capability and advantages over conventional glaucoma treatment options. In the fourth quarter, we continued to penetrate our target surgeon market. The roughly 5,500 ophthalmic surgeons were responsible for most of the 3.9 million cataract procedures perfumed annually in the United States. For 2016, we exceeded our goals and grew the ranks of iStent trained surgeons by…

Thanks, Tom. Good afternoon, everyone. Fourth quarter 2016 net sales rose 64% to $33.2 million versus $20.3 million in the same year ago quarter. As Tom mentioned earlier, we estimate that iStent purchases by customers ahead of the U.S. ASC reimbursement increase added approximately $2 million to our fourth quarter net sales. Fourth quarter 2016 U.S. sales grew 56%, and international sales grew 215% versus the year ago quarter. International sales represented 9% of total net sales in the fourth quarter of 2016 versus 5% in the year ago period. We finished 2016 with net sales of $114.4 million, representing a 60% increase over 2015. U.S. sales for the year grew 55% and international sales grew 135% for the year versus 2015. Also international sales represented 8% of our 2016 net sales compared to 6% in 2015. Growth in both the fourth quarter and full year were driven primarily by strong unit volumes worldwide as we trained more surgeons on the iStent procedure and increased overall iStent utilization. Our gross margins were 85% and 86% for the fourth quarter and the full year of 2016 compared to gross margins of 82% of sales for the same periods in 2015. The increase reflects higher sales relative to our fixed manufacturing costs and intangible asset amortization as well as the suspension for 2016 and 2017 of the medical device excise tax, which tax was included in our 2015 cost of sales. In the first quarter of 2017, we may see a small negative impact on our gross margin because of fourth quarter 2016 manufacturing inefficiencies recognized in our inventory at year-end, resulting from the relocation of our manufacturing facilities, even so, we continue to expect gross margins in the mid-80s as a percent of sales in 2017. Operating expenses rose 49% to…

Okay. Rich, thanks. So, to recap, we are pleased with our 2016 performance and we’re confident in our ability to meet or exceed our 2017 growth objectives. Demand for iStent technology remains strong, driven by an expanding base of fully trained and implanting surgeons, a growing body of compelling real-world clinical results, reimbursement that reflects the value of iStents to physicians, patients and to the healthcare system. The regulatory approval processes for our pipeline technologies remain on track and moving forward, and we’re well-positioned to expand our reach into targeted international markets. We continue to prove our ability to execute our strategy and claim an increasing share of the $5 billion global glaucoma market. Finally, we’ve added depth, capability and strength to a senior management team that we believe will ensure an enduring leadership position for Glaukos in the years ahead. So, with that, I’ll open up to questions. Operator?

[Operator Instructions] Our first question comes from Mike Weinstein from JP Morgan, your line is open.

Good afternoon, everybody. First off, Tom and team, congratulations on another outstanding quarter. And I’m sorry, you guys were still off [ph] in your initial guidance for 2016 but I think we’re all okay with that. As we go into 2017 here, obviously every other caller’s going to have some questions relative to the guidance. And maybe one point I think it would helpful to spend a minute on is international. You did talk in your prepared remarks, Tom, how you have built out the sales force internationally; you now have reimbursement in Japan; you’ve just got the NICE ruling at the end of the year last year. My question is, is it -- what should our expectations be for development of the international business in 2017? And is it reasonable to think that your international business could or should double from a revenue standpoint?

I don’t know if you heard the one comment, but I did just indicate that we’re expecting international sales to become a more important component of our total sales in 2017 with representing 10% to 12% of total sales. So...

Okay, I understand.

So, in the guidance range, I don’t know that that quite would reflect that OUS sales are doubling, but it’s pretty darn close to that and extremely healthy.

And that would seem to be a pretty easy target, again not knowing exactly how aggressive you’ll be in pursuing Japan over the course of 2017, but that would seem to be a relatively easy target for the your international piece. Why don’t you just provide a little more color about how aggressive you want to be in some of these geographies?

Hey, Mike, This is Chris. We’re quite excited about what we’ve done. You may have heard, we’re up to 57 people now, accounting for our international business. In many of these markets such as Japan, we’re going to move a little bit slow because of the hierarchal approach that we need to follow there. In Brazil, we’re not quite ready to launch; that’ll be happening probably in the second quarter. And then, in the markets such as France, Spain, UK where we’ve gone from a distributor model to a direct model, you’re always going to go a little slower there as well because of the load in that distributors like to take at the end of the year. So, we feel that this is a number that’s achievable. We’re quite bullish on what we can do there. And our goal is always to exceed that guidance. But we felt that that was the best approach at this point in time.

With the U.S. market -- and obviously I understand the reticence on giving much color on pricing going forward. But, can you just help us a little bit with your expectations for MIGS market grow in 2017, if really [ph] you could describe it that way and how we should think about your own volumes relative to that?

Mike, I think that one’s going to be a hard one to answer directly. Today, we represent the vast majority of, if not almost all of the MIGS marketplace, and we’re expecting competition to come in during the year. So, all I would be able to say is that we think the market will grow, at least as much as we grow and potentially some additional amount for any participation that our future new competitors might add.

Let me maybe come at it from a different approach. Obviously, you’re aware of the Street reports relative to realized pricing for you guys with the change in ASC reimbursement. Any commentary relative to some of the Street comments on the incremental pricing benefit for 2017?

I don’t know that we want to directly comment on what would some of those citations have been. Obviously, we’ve talked a lot about the way we executed the price increase, and that we are in discussions with all of our customers. Some of those discussions resulted in somewhat immediate price increases but many of those discussions also resulted in are agreeing to honor the existing longer term contracts and agreeing to enter into some contracts that involve discounting and so forth. So, I appreciate everyone’s expectations or citing potential for upside and we share their enthusiasm. But I don’t really want to comment directly on what they have said.

Okay. Let me just wrap with couple of pipeline questions. So, first on the inject phakic Phase 1. When we see that data which we are submitting to the FDA, not again that I think that there is any question about the efficacy of iStent in patients independent of cataract surgery. But, A, will we see that? And my impression is that we will not see that data, but I wanted to confirm. And then B, when you file the cataract combo PMA for inject later in this year, will we see that data prior to the FDA approval?

So, let me answer the first question, Mike. This is Tom. We’ll let you know. We are right now preparing the data set from the three months trial that we’ve done. We are looking at safety with the iStent inject. And what we are going to do is we are going to submit that and look for an extension, going to the expanded phase by the end of the year. As you know that data is masked. And so the FDA will see the safety data; we will not be privy to the efficacy data, nor will the community. So, I think that answers your first question.

Yes.

And the second question was on the PMA data with inject. And I’ll tell you that we haven’t yet made a decision. We will file the PMA prior to the end of this year, as you know, which meets our expectation. And then, we will consider what we want to do with the data and then how we bring that out and how we can bring it out for maximal and optimal impact. So, the short answer to that is we haven’t yet made a decision.

Okay. I have a lot more questions, but I’ll let others jump in. Thank you guys and again congratulations on the quarter.

Your next question comes from Bob Hopkins from Bank of America Merrill Lynch. Your line is open.

Hi. This is actually Travis Steed on for Bob. Congrats on the great quarter.

Thank you, Travis.

So, your guidance came in above, what I think we at least expected. You have a history of being pretty conservative when you give guidance. Would you say you are keeping the same conservative philosophy when it comes to 2017?

Absolutely.

Okay.

No change in our philosophy for guidance.

Okay. And then, can you maybe give color on how -- what percent of your book of business will kind of be a re-priced in Q1 and if you can get most of that done by Q2?

No. I think I can’t really give you much there. And again, it’s kind of -- it’s a work in process. Certainly, all of our customers have been -- just had discussions with -- we had. But they are all in various stages of when price increase would go into effect, how long contracts last, what the discount amounts will be associated with any long-term contracts they sign. So, I think we’re making really good progress on it but I can’t really give you much more than that.

And when you’re out talking to customers, are you seeing any shift in how they think about the suprachoroidal space? I know in the past, you’ve thought about it more as a secondary pathway, but is the surgeon community anymore open now using now it as a primary treatment method?

I would say that the early indications here that it’s pretty consistent with what we’ve been seeing all along that most physicians see this as a procedure that has a higher risk to benefit ratio and therefore they’re positioning that product within that -- within their own personal algorithm with that in mind. But again, it’s early and -- but we’re pretty pleased with what we’re seeing so far.

I would just add again that as always, we expect the glaucoma community to be a little more open to the suprachoroidal space because they’re more sanguine about some of the collaterals that can happen with imposition of some of the glaucoma therapies. And I think that’s what we’re seeing. And I do believe that the comprehensive ophthalmologist will continue to look and gravitate toward the trabecular meshwork and towards the iStent as first line therapy in combination cataract procedures.

Your next question comes from Brian Weinstein from William Blair. Your line is open.

Start out with just a penetration and kind of a utilization question. So, it doesn’t appear that you’re really calling for a lot of utilization increase in 2017 over 2016. So, can you talk about kind of penetration into physician offices, where you think you’re in terms of case volume penetration? And then, how penetrated are you to the high volume opportunity that you have with those surgeons?

We estimate currently that we’re in the mid-teens from a penetration standpoint versus the cataract surgery volume indication that we have. And we see that there’s a lot of upside in the numbers that we’ve given you guys. It’s a combination of increased surgeon adoption, it’s a combination of same-store sales growth as well as picking up new surgeons. And we think we’re very bullish about the growth and that we’ll continue to see that penetration rate increase.

When you talked about the number of trained surgeons, I think you said 700 is the goal in 2017, that’s a U.S. number I believe. Can you talk a little bit about number of trained surgeons outside the U.S. and on what base or what total that is at this point?

Yes. We do measure that, that’s something that we’re having communicated. And given that it’s OUS, it’s very different. What’s the growth rate is in the U.S. compared to what we’re going to do in Japan or in the France et cetera, it’s going to be very different based on the market dynamics of how people adopt there, what the reimbursement rates are and so forth. So, at this time, we’re not going to present those numbers but it’s something that we’re measuring.

And then last question from me is with your cash balance continuing to grow and obviously you guys are projecting some good cash flow for next year, what’s -- what do you guys think about is the best use of that cash? I mean, there’s not much M&A that guys can do. Is it expanding sales force, increasing marketing if you have more money? What do you do with this growing cash balance? Thank you.

Yes. Thanks, Brian. Good question. I think the game plan is going to stay the same. Our game plan has been to focus on investing in our business, investing in OUS markets -- marketing programs. We are going to be spending more money next year on operating expenses in total. I would expect at least the same kind of percentage increase in SG&A as we had this past year. I would probably give some soft guidance on R&D that you would not be surprising to see R&D expense cost go up versus in percentage terms versus what we experienced this past year, as new clinical trials get started and as we get into expansion phases on some of these studies. So, we look at using cash for those. Obviously, we are going to be generating more cash from our growing commercial operations. And as you mentioned, it could result in an increase in cash, it may not necessarily but it could. It just depends on the pace of growth in revenues versus expenses. And I think M&A will always be something that is in our mind. We are opportunistic, we look at things. We have looked last things. And if we saw something made sense for our business and met the extremely high hurdle that we would require to even consider an opportunity like that, then we would have some cash available to do it. But just to get we are very comfortable, we recognize that we have got -- we think -- we’re biased of course. We think we have an incredible asset here. We are very pleased with the performance and how this Company has been doing. And now the last thing we want to do is take a chance on some potential deal that does not pass all of our test and make total sense for the business.

Your next question comes from Larry Biegelsen from Wells Fargo. Your line is open.

I think one pipeline product that wasn’t asked about earlier in terms of data presentation is iDose data. Are we going to see that at AAO? And then I had a couple of follow-ups.

The answer to that is invariably no. You won’t see it at AAO. We are continuing to enroll that clinical trial. What I have said repeatedly is that best case we would have data by the end of the year. And given the pace of enrollment, which I find to be quite favorable, I think we are going to meet that best case. So, I think we will have data available by the end of the year. But as you know for us to get into the queue for the academy, that would be several months in advance of that November meeting. And so, I would not look for the data to be presented at the American Academy ofOphthalmology.

Fair enough. And then, Tom, just two more from me here. International, 10% to 12% of sales this year. So, I guess at the mid-point, that’s about 2% above where you were in 2016. Is that kind of the incremental kind of how you see international as a percent of sales over time; in other words, increasing as a percent of overall? How do you want us to think about international kind of as a percent, looking beyond 2017? And just lastly, any updated thoughts on the upcoming decision to pursue temporary category 3 code expansion versus applying for a category 1 code? Thanks for taking the questions.

Hey, Larry. It’s Rich. Maybe I’ll take the first question and let Tom address the second. So, as far as the international component of our sales, we obviously know a lot of large companies out there that are in med-tech or ophthalmology that have some pretty substantial OUS components in their business. Compared to them, we’re still a relatively small company. And I think that we should keep our expectations in line with what we think could be reality within the next few years. So, we’re looking to get above 10% here for 2017. If I look out a few years, maybe two to three, maybe even five, I think what we ought to be thinking about is maybe getting to 15% to 20% in that range. And then, this is always something we can continue to watch as we go forward. If we continue to have as much favorable market indications, and reimbursement et cetera in OUS markets, it’s very possible that Tom and Chris will decide that they want to accelerate even further some of our efforts into other markets internationally that could help us get beyond that. But, I think somewhere in that range is what we ought to be thinking.

And then, Larry, I’ll answer the second question. So, one of the things that I’ve consistently said is we’d look to make a decision on the CPT code, and looking to convert from a category 3 to a category 1 by mid-year. And the aim is CPT committees various times -- sometimes will put these on a panel several months in advance of sun setting the category 3 codes. And so, in this case in February, the AMA added 0191T, 0253T, and 0376T to its docket for consideration and for deliberation. And so we saw an opportunity and we took it; we went to the MACPT committee. We asked for an extension, we have the full endorsement of the American Academy of Ophthalmology as well as other supporting tasks that we brought to the table. That decision is under consideration. We believe we had a favorable meeting, and we’ll know in the next several weeks whether or not we’re successful in extending the category 3 code for an additional five years.

Your next question comes from Matthew O’Brien from Piper Jaffray. Your line is open. Matthew O’Brien: Rich, specifically on Q1, you had the $2 million buy-in in Q4 last year, but Q4 2015 was a little bit softer than you had seen, which had a big sequential increase in Q1 of 2016. So, I’m just trying to figure out, do we back out the 2 million bucks that you did in Q4 and then grow that modestly sequentially or do you want it more flat in Q1 versus Q4 when you adjust out that $2 million?

As much as I’d love to answer your question directly Matt, I’m going to take a kind of a different way to approach it. We really don’t give quarterly color, certainly not specific guidance on quarters. We give a little bit of information to help you in your own modeling and things that you ought to consider. And I think the information that we’ve always talked about in terms of there’s some seasonality in ophthalmology which has a little bit of pressure on Q1, I think you should take that into account. I think you should also take into account the $2 million that was purchased in Q4. And that’s probably about all I can really comment on to your question. Matthew O’Brien: Fair enough, okay. Heading over to the gross margin side of things. Can you give us a sense for the pressure you’re going to see on the gross margin side in 2017 from selling more OUS and that manufacturing inefficiency? Because I would have thought, now that you’re going to have great margins, but with the pricing increase that that metric could take higher. So, can you just give us a sense for what types of pressure you’re going to see this year?

Yes. I’m not too concerned about the pressure from our international expansion. We -- because we’re selling direct in most of the markets that we’re expanding into OUS, we’re enjoying average selling prices that are not that far -- not many standard deviations away from what we enjoy in the U.S. Some countries, we might get a little bit less, there may be some countries where we get a little bit more. So, when you combine that with what we’re seeing on ASC pricing in 2017, I’m not too worried about pressure on margin because of the international and U.S. mix. I am not real worried about the pressure in Q1 from the manufacturing inefficiencies as well. I think we’re talking about maybe something as little as a couple percentage points, a percent or two in the margin that we could see in Q1. But sometimes, Wall Street and analysts can see 1 point or 2 deviation on gross margin. I think that we got a trend here. And I just wanted to give everyone a little bit of heads-up comfort that we had some manufacturing inefficiencies as we moved our operations late in Q3 and into Q4. We know that our inventory values per item went up a little bit because of that, and that will get sold through in the first quarter. So, that’s how I characterize that and put some brackets around it. Matthew O’Brien: And then last one for me, and you sort of addressed this a little bit, Rich. The commentary that don’t be surprised if we’re breakeven or lose a little money here in 2017, was a little bit surprising, given the strong top-line outlook. And so, when I do the math on it, it looks like it’s $10 million to $12 million of incremental SG&A and R&D spend. Where is a majority of that spend going? And I think specifically on the R&D side, is that going to be an area that’s going to be a pretty big source of spending over the next several years, so you’re not going to get a lot of leverage out of that line item specifically over the next several years?

Without getting too specific, I’d say I think you’re probably possibly underestimating the amount of growth we could have in our operating expenses in 2017. With all the international operations we’ve added, with what we expect to do with clinical study enrollment and clinical trials, marketing initiatives that we have, I think we could -- you could see more growth than what you’re thinking about in terms of operating expense… Matthew O’Brien: Sorry. Just to be clearly though, I think I’m modeling it up now about $20 million because of the revenue increase that you would think about $10 million to $12 million that would fall through, but just adding that 10 to $12 million is not going to fall through because you’re going to spend incrementally on something else. So, the question is what else is it you’re spending on?

Yes, I’m -- I don’t plan to directly answer the question the way you just posed it. What I’m trying to tell you is that you need to be perhaps a little bit more conservative and assume greater expense growth than what you’re thinking about. I think you also have to look at the fourth quarter where we had a very solid showing and we broke even on the bottom-line. So, you can’t look at those two factors and then not consider the possibility that we could have some losses in 2017. We are focused on growing our business and investing in our business and that will continue to be our mantra.

Your next question comes from John Block from Stifel. Your line is open.

Great, thanks guys, and good afternoon. Maybe just two questions from me. First one, just sort of big picture thoughts. And Tom, I think I get that you’re not going to comment specifically as to the magnitude of the price increase of ASC but maybe you could just comment or give us some feedback on the customer reaction. What are your reps hearing; has the reaction been muted because arguably the ASC economics are still going up, or any pushback, maybe just any color there would be helpful?

Be happy to, John. I’m going to ask Chris to take this one.

I would say by and large customers have been very pleased and understand the rationale behind the price increase and appreciate the opportunity for more revenue for themselves and profitability. All in all, it’s going well. Now, understand that this is a new and unique situation; it’s not a 5% increase or anything like that. But, all in all, we’re quite pleased with how it’s been executed and we’re pleased with how customers have taken this on.

Yes. I’ll just add too. I mean, this is obviously an area of heightened sensitivity with respect to pricing in pharmaceuticals and medical devices. And we went into that knowing this, John. And I’m extremely pleased that the rollout, the narrative of how we presented it. And I think we are going through the final phases, which we expect to really complete by the end of the first quarter and have this price adjustment carry on through 2017. So, at the senior level here, I’m very pleased with the job that Chris and his team have done.

And just one other one, just to shift back over to OUS, and maybe the competitive landscape OUS where some of these competing MIG devices have been around for a longer. Just to get any feedback or commentary, are you seeing any share shifts, how that’s been trending, are you experiencing any headway from some of these competing devices, even if it is specific to one or two international markets?

You’re correct. The XEN product has been out there for a while in some selective markets, as has the CyPass. The CyPass device, Alcon pulled back on that and it is solely bringing that out right now; they’re just focused on the U.S. The XEN device has been in some selected European countries. And as we had expected, they’re focusing on primarily glaucoma specialists and utilizing it as an alternative to trabs and tubes. But CyPass really not out there much internationally and their efforts have been in a controlled launch with selected customers here in the United States. So, no impact.

Your next question comes from Chris Lewis from ROTH Capital Partners. You line is open.

Coming back to the utilization discussion, just in terms of the same-store sales growth for this year. Can you just talk about kind of what the key strategies are to continue to drive deeper utilization per surgeon going forward?

Yes. So, it’s same as it’s been for the last 18 months or so, Chris. And that is that we really work closely with the practice to help them to identify these patients, number one. Number two, we have, as Tom mentioned in his comments. We have a number of consumer initiatives from local media programs to advertising on search engines that drive consumers to our website. And then in turn, once they get to our website, they find a doctor in their local area that does the iStent and we’re driving patients into these practices. So, it’s a number of initiatives to help physicians to find these patients, identify these patients and to increase their overall adoption rate. It’s a difficult thing to measure. And that the ultimate customer is the ASC and the hospital where a number of physicians work and you never quite know who’s leading that increased adoption within the facility. But, I’m fairly comfortable, very comfortable actually with this initiative.

And can you tell us how many reps you ended 2016 with in the U.S. and what are your plans for expansion in the U.S. sales force this year?

So, on a weighted average, we had 50 U.S. reps in the United States. We are planning on adding a few more this quarter and early next. We, as I’ve stated before, the U.S., we feel fairly comfortable where we are from a rep standpoint. But, as I’ve mentioned before, I always want to note that we are hiring additional people, not just necessarily quota-carrying reps. We added six, what we call, SAMs, strategic account managers who are focused on the teaching institutions., and this helps in a variety of ways. One, it’s a good strategic initiative for long-term growth. Two, it helps with our existing reps from a productivity standpoint, efficiency standpoint and so forth. We’ve also added in the market access area, as well as in the surgical training area. So, we’re continuing to add people but all in all, we feel pretty good about where we’re at in the United States.

Great, and then just one more from me, reimbursement question, just understanding that dynamics on the Medicare side and the reimbursement increase for ASC there. I think you said in the past that’s about 80% of your volume mix under Medicare. For the other 20% under commercial payers, can you talk about what you’re seeing in terms of reimbursement there; is it remaining consistent and what does the guidance assume on the commercial side for reimbursement this year? Thanks.

Yes. So, right now, we estimate that we have 95% of covered lives; last year at the end of the year, we picked up two major commercial payers TRICARE and Anthem and that was a big crew and a big help. And we are bullish on where we are from a coverage standpoint. And we continue to now focus on some of the local carriers and trying to get them converted over to coverage of iStent. We’ll continue to do that till 100% coverage.

Our final question comes from Joanne Wuensch from BMO Capital Markets. Your line is open.

Good afternoon. Thank you. Can we turn to the MIGS market for a moment, please, and think about when we ran our numbers, we came up with sort of a mid teens penetration rate in terms of procedures that would be appropriate, given the current labeling. Over time, how do you think that that progresses?

So, when you -- Joanne, this is Chris. So, when you’re talking about mid teens in terms of as a percentage of cataract surgery…

Cataract surgery that would be applicable with patients with glaucoma also.

I don’t see that changing much. I think it’s going to be anywhere from that 15 to 20% range; 15 on the low end and 20% on the high end.

Within practices overall. But, I think we still have overall.

Yes. You’re talking about the total addressable market?

Yes.

Yes. So, 15…

Right. So, the total addressable market, the experience has been Joanne that typically you’ll see increases -- annual increases in the total cataract volume. That’s been going on for some time. And the numbers range but they’re typically in the 3% to 5% or so increase per year. So, we’d be dealing with the 15% to 20% comorbidity aspect of that total TAM. So, when you do your calculations, you can kind of look at the total available cataract market and then be able to look at the percentage that has comorbid glaucoma, to look at somewhat of a consequential market growth rate.

Okay. I can get into this more offline I think I’m running it well. So, I apologize. Just my last question, I know we’ve touched upon competition here. But given your guidance, what do you assume in terms of competition coming into the market?

Well, Alcon is in -- the CyPass is going to have an impact, we see that impact in their activity being more pronounced in the second half of the year. We expect them to also expand globally beyond the U.S. in terms of introducing their product. The Allergan XEN product is being launched in a conservative manner in the United States. They’re doing a very controlled launch with just glaucoma specialists at this time. I expect that activity to increase as the year progresses. They’re in some selected countries, in Europe, Canada, and I would expect them to increase that activity and expand beyond those few markets as well.

That concludes our Q&A session. I would now like to turn the call back over to Tom for closing remarks.

Well, thank you, everybody. Thanks for your support, thanks for joining us today. We look forward to working with you in the future. We all appreciate your support and your continued interest in Glaukos. So, thank you and good bye everyone.

That concludes today’s conference call. You may now disconnect.