What happened

Shares of Glaukos Corp (NYSE:GKOS), a medical technology company focused on glaucoma treatment, were down about 9.8% as of 11:46 a.m. on Thursday in response to a second-quarter earnings report issued after the bell on Wednesday. Although sales of the company's pressure-relieving stents are surging, the market isn't pleased with the bottom line dipping into negative territory.

So what 

Second-quarter sales of Glaukos Corp's iStent and related products surged 45% higher than the same period last year, but the bottom line didn't follow the top. The company's operations lost $3.9 million during the second quarter, which is hardly what you'd expect given the $2.1 million operating profit recorded during the second quarter last year and the huge sales increase.

Frustrated man in front of a chalkboard drawing of a downward-sloping chart.

Image source: Getty Images.

Management blamed the loss on a $5.3 million in-process research and development charge associated with the recent acquisition of an intraocular pressure sensor system from DOSE Medical. I'd say the huge 63% on-year increase in sales, general, and administrative expenses during the second quarter is a bigger concern.

Now what

This was the 16th straight quarter that Glakous Corp's sales rose more than 40% from year to year. While that should be extremely encouraging, rapidly rising SG&A expenses suggest eye surgeons need a great deal of prodding to begin using the company's stents. 

During the post-earnings conference call, Glaukos stated it had trained about half of 5,500 surgeons targeted and expects to reach 700 this year. That's a huge lead over the company's only real competitor in the space at the moment, but Novartis has a great deal more resources to promote the stent it launched in the U.S. last year and more recently in the EU.

At about 10.5 times trailing-12-month sales, Glaukos shares aren't cheap. If the market gets a whiff of success for Novartis' CyPass Micro-Stent in the quarters ahead, Glaukos stock could fall much further than it has today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.