Share price movements
Glaukos’ (GKOS) share price rose ~40.3% and closed at $62.86 on August 29. The increase was a reaction to the news from Novartis’ (NVS) Alcon business unit about the immediate and voluntary withdrawal of its CyPass Micro-Stent across the world on June 29.
In July 2016, the CyPass Micro-Stent was approved by the FDA to be used along with cataract surgery for patients suffering from mild-to-moderate primary open-angle glaucoma. However, safety data from the COMPASS-XT trial evaluating five-year post-surgery data highlighted the loss of endothelial cells in patients using the CyPass Micro-Stent compared to patients only undergoing cataract surgery. Alcon asked surgeons not to implant anymore of the stents and return used devices to the company.
The reduced competition for Glaukos’ glaucoma devices caused Robbie Marcus, a JPMorgan Chase analyst, to increase the company’s target price to $75, which implies an upside potential of ~19.3%—compared to the company’s last closing price. In the second quarter, Glaukos reported revenues close to $43.16 million—a rise of 4.6% year-over-year. The company beat the revenue estimate by $2.67 million but missed the EPS estimate by $-0.03. Glaukos updated its fiscal 2018 revenue guidance range from $160 million–$165 million to $162 million–$166 million in its second-quarter conference call.
Analysts’ recommendations for Glaukos
Of the eight analysts covering Glaukos in August, four analysts recommended a “strong buy,” two recommended a “buy,” and two recommended a “hold.” Analysts have projected Glaukos’ 12-month consensus target price to be ~$60.71, which would be a decline of ~3.4% over the company’s last closing price of $62.86.
Analysts’ recommendations for peers
Of the 26 analysts covering Novartis (NVS) in August, ~50% recommended a “buy,” ~70.8% of the 24 analysts covering Allergan (AGN) recommended a “buy,” and 78.9% of the 19 analysts covering Abbott Laboratories (ABT) recommended a “buy.”