Glaukos selloff due to potentially lower payment rate, says Piper Jaffray
Piper Jaffray analyst Matt O'Brien spoke to Glaukos management about today's 10% selloff and learned that the company heard that Palmetto, which covers North Carolina, South Carolina, Virginia, and West Virginia, has proposed to lower its physician payment rate from about $500 per case to around $275. While the impact from a patient perspective would be fairly modest, any cut is "clearly a negative" and would "damper utilization rates and new physician starts" in the Southeastern U.S. territory, O'Brien tells investors in a research note. He remains "somewhat cautious" on Glaukos shares in the near-term, but believes longer term investors should start building positions at current levels. The analyst keeps an Overweight rating on the stock with a $35 price target.