GKOS Stock Fell 21.41%: Why It Happened

By Amit Chowdhry ● Jul 15, 2021
  • The stock price of Glaukos Corp (NYSE: GKOS) fell 21.41% yesterday. This is why it happened.

The stock price of Glaukos Corp (NYSE: GKOS) – an ophthalmic medical technology and pharmaceutical company focused on novel therapies for the treatment of glaucoma, corneal disorders, and retinal diseases – fell 21.41%, going from a previous close of $73.57 to 57.82.  Investors are responding negatively to the Centers for Medicare and Medicaid Services (CMS) releasing its proposed physician fee schedule for the fiscal year 2022.

The proposed rule was released on July 13, 2021, and updates payment policies, payment rates, and other provisions for services furnished under the Medicare Physician Fee Schedule on or after January 1, 2022. The Proposed Rule release is followed by a 60-day public comment period closing on September 13, 2021 — which will culminate in CMS’ release of the Final Rule (expected to be announced by November 2021) for implementation on January 1, 2022. So the Proposed Rule is therefore subject to change.

The Proposed Rule and accompanying Addenda include payment rates for 2 new Category I Current Procedural Terminology (CPT) codes, including 669X2 for non-complex cataract extraction in combination with the insertion of an aqueous drainage device and 669X1 for complex cataract extraction in combination with the insertion of an aqueous drainage device. And Category I CPT Codes 669X2 and 669X1 will replace Category III codes 0191T and 0376T as the primary codes that physicians will use to seek reimbursement utilizing Glaukos’ trabecular micro-bypass technologies (iStent, iStent inject, iStent inject W) when used as approved in combination with cataract surgery.

Applying the CMS 2022 Proposed Rule’s assigned total facility Relative Value Units (RVUs) and associated conversion factor, Glaukos estimates a proposed 2022 physician fee for Category I CPT Code 669X2 of approximately $565.23 — representing incremental physician fee payment for the insertion of an aqueous draining device of approximately $34.25 versus the proposed 2022 physician fee of approximately $530.98 for Category I CPT Code 66984 (non-complex cataract surgery alone).

Oppenheimer analyst Steven Lichtman had downgraded Glaukos to “Perform” from “Outperform.” And Lichtman removed the prior $105 price target on the company shares. 

KEY QUOTE:

“We are aware of and extremely disappointed with CMS’ proposed 2022 physician fees for the new Category I codes that cover our sight-saving trabecular micro-bypass technologies used in combination with cataract surgery. While this is unwelcomed and unexpected news that we believe is unjustified, we are eager to engage with our key ophthalmic societies and are committed to exploring every option during the public comment period in hopes that medical providers across our network are paid appropriately for conducting these types of procedures. We remain steadfastly dedicated to transform the treatment of chronic eye diseases for the benefit of patients worldwide.”

— Thomas Burns, Glaukos president and chief executive officer

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.