Harrow, Inc. (HROW) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary indicates strong growth in key revenue segments like IHEEZO and TRIESENCE, with positive guidance for the future. Despite a decline in VEVYE revenue, prescription volumes are up, and ASPs are expected to rise. The Q&A section reveals management's confidence in growth strategies and upcoming launches, although some uncertainty remains around biosimilar timing. Overall, the positive growth outlook and strategic initiatives suggest a likely positive stock price movement.
Key Financial Performance
Total Revenue $63.7 million, a 30% increase over the second quarter of 2024 and a sequential increase of 33% from the first quarter of 2025. The increase was driven by deeper market penetration across core growth drivers and the implementation of the VEVYE Access for All initiative.
Adjusted EBITDA $17 million with $5 million of net income. This highlights the operating leverage built into the business, with stable costs despite revenue growth.
VEVYE Revenue $18.6 million, a 13% decrease from the first quarter of 2025. The decrease was due to normalization in average selling price (ASP) after changes in business rules implemented at the beginning of the year. However, prescription volumes grew by 66% sequentially.
IHEEZO Revenue $18.3 million, a 251% increase from the first quarter of 2025. The growth was driven by momentum from the retina pivot strategy and expanded distribution through group purchasing organization agreements.
TRIESENCE Revenue $5.2 million, a 447% increase from the first quarter of 2025. The growth was attributed to accelerating volumes and growing market share within the retina community.
ImprimisRx Revenue $21.5 million, a 7% increase from the first quarter of 2025. This business is stable and cash-generating, performing as expected.
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Operating Highlights
VEVYE: Achieved 66% growth in prescription volumes quarter-over-quarter due to the VEVYE Access for All initiative. Revenue for the second quarter was $18.6 million, with expectations to generate over $60 million in revenue for the second half of 2025. Captured 7.8% of the national dry eye disease market.
IHEEZO: Revenue increased by 251% from the first quarter of 2025, reaching $18.3 million. Gained momentum in the retina market with a 25% growth in unit volume quarter-over-quarter. Expanded distribution through group purchasing organization agreements.
TRIESENCE: Achieved 32% quarter-over-quarter growth in volumes and captured more market share. Revenue for the second quarter was $5.2 million, a 447% increase from the first quarter of 2025. Plans to expand into the ocular inflammation market.
BYQLOVI: Acquired U.S. rights to BYQLOVI, a novel FDA-approved steroid for postoperative inflammation and pain following ocular surgery. Expected to launch in Q1 2026.
Samsung Biosimilars Portfolio: Acquired U.S. rights to Samsung's ophthalmic biosimilars portfolio, including BYOOVIZ and OPUVIZ, FDA-approved biosimilars referencing Lucentis and EYLEA. Positioned to compete in the large anti-VEGF therapy market.
Revenue Growth: Total revenue for Q2 2025 was $63.7 million, a 30% increase year-over-year and a 33% sequential increase. First half of 2025 generated $111.6 million in revenue, with guidance of over $280 million for the year.
Operational Leverage: Commercial infrastructure is delivering profits with minimal additional costs as demand increases for key products like VEVYE and IHEEZO.
Strategic Acquisitions: Acquired BYQLOVI and Samsung's ophthalmic biosimilars portfolio to strengthen product offerings and market presence.
Market Penetration: Focused on expanding market share for VEVYE, IHEEZO, and TRIESENCE through strategic alliances, new account growth, and enhanced distribution networks.
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Risk or Challenges
Regulatory Risks: The company's ability to make commercially available its FDA-approved products and compounded formulations and technologies, as well as obtaining FDA approval for certain drug candidates in a timely manner or at all, poses a significant risk.
Revenue Growth Dependency: The company’s financial goal of achieving $250 million in quarterly revenue by 2027 is heavily dependent on the success of its current and future product launches, which may face market adoption challenges.
Market Competition: The ophthalmic market is highly competitive, with the company needing to compete aggressively in the biosimilars market and against established products in the dry eye and retina treatment segments.
Supply Chain Risks: The company is preparing to bring a second manufacturing site online to strengthen its supply chain, but any delays or issues in scaling manufacturing capacity could impact product availability and revenue.
Economic and Market Uncertainties: Economic conditions and market dynamics, such as pricing pressures and reimbursement challenges, could adversely affect the company’s profitability and growth.
Strategic Execution Risks: The company’s growth strategy, including its reliance on acquisitions like BYQLOVI and the Samsung biosimilars portfolio, requires seamless integration and execution to achieve projected benefits.
Product-Specific Risks: Products like VEVYE and IHEEZO are critical to the company’s revenue growth, but their success depends on market penetration, stable ASPs, and refill rates, which may not meet expectations.
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Guidance & Outlook
Revenue Guidance for 2025: The company expects to generate more than $280 million in revenue for 2025, with approximately $169 million anticipated in the second half of the year. The second half of the year is traditionally stronger than the first half.
Quarterly Revenue Goal by 2027: The company aims to achieve a $250 million revenue quarter by the end of 2027.
VEVYE Revenue Guidance for 2025: VEVYE is expected to generate over $100 million in annual revenue for 2025, with more than $60 million anticipated in the second half of the year.
IHEEZO Revenue Guidance for 2025: IHEEZO is expected to surpass $50 million in revenue for 2025.
TRIESENCE Revenue Growth: TRIESENCE is expected to expand into the ocular inflammation market, particularly cataract surgery, with unit demand growth anticipated to show in the fourth quarter of 2025 and into 2026.
BYQLOVI Launch: BYQLOVI, a newly acquired FDA-approved steroid, is expected to launch in the first quarter of 2026.
Biosimilars Portfolio Launch: The company plans to launch BYOOVIZ and OPUVIZ, biosimilars referencing Lucentis and EYLEA, respectively, in the near future.
VEVYE Market Penetration: VEVYE has captured a 7.8% share of the national dry eye disease market and is expected to continue its growth trajectory.
IHEEZO Growth Strategy: IHEEZO is entering a new phase of accelerated growth, supported by the IHEEZO for All strategy and expanded distribution through GPO relationships.
TRIESENCE Market Expansion: TRIESENCE will expand into the ocular inflammation market, with significant growth expected in 2026.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you explain the business rule changes for VEVYE and how they impact ASPs?
A:Mark L. Baum explained that the business rules for VEVYE have been tweaked slightly but are performing well. The VEVYE Access for All program allowed patients to access the product at a lower cost, stabilizing ASPs. The expansion of the network with Apollo Care is expected to capture more high-value patients, leading to a bias upward in ASPs by the end of the year.
Q:What are the expectations for the biosimilar portfolio, particularly the LUCENTIS biosimilar?
A:Andrew R. Boll expressed excitement about the biosimilar portfolio, particularly BYOOVIZ, which is expected to launch in 2026. The product has an existing market and a strong go-to-market strategy. However, specific timing and details are pending due to the transition period with Samsung and their prior partner.
Q:What drove the growth in new prescriptions for VEVYE in Q2, and what are the expectations for growth for the rest of the year?
A:Mark L. Baum stated that about 7,000 units came from Klarity-C switchers, who have been loyal refillers. Growth has been cautious due to supply chain constraints, but the company plans to invest more heavily in VEVYE by the end of the year, setting up for strong growth in 2026.
Q:How does the company plan to achieve the assertive growth guidance for the Specialty Branded and TRIESENCE segment?
A:Mark L. Baum mentioned that TRIESENCE has strong coverage and a decent WACC price. The company expects to double revenue levels for ex-TRIESENCE products by the end of the year. TRIESENCE is gaining traction in the retina market and is expected to perform well in the ocular inflammation market by Q4.
Q:What is the outlook for VEVYE's ASP and unit volume growth?
A:Mark L. Baum stated that the current ASP levels are stable and expected to improve by the end of the year. Unit volume growth is strong, with consistent new prescriptions even during the summer lull. The company plans to invest in expanding the sales organization to drive long-term growth.
Q:What is the purpose of the IHEEZO for All program, and how does it impact ASPs?
A:Mark L. Baum explained that the IHEEZO for All program aims to provide access to all patients and build reimbursement confidence among prescribers. The program is not about free drugs but about ensuring coverage and encouraging broader adoption of IHEEZO.
Q:How does the Apollo Care agreement benefit the company?
A:Mark L. Baum stated that Apollo Care's extensive plan contracts will help capture more commercial covered prescriptions, improving ASP stability and growth.
Q:What are the plans for expanding the commercial team and infrastructure for VEVYE?
A:Mark L. Baum mentioned that the company plans to invest in expanding the sales team and marketing efforts once supply chain issues are resolved. This will help reach untapped markets and drive further growth.
Q:What is the company's strategy for TRIESENCE and other branded products?
A:Mark L. Baum highlighted the focus on the ocular inflammation market for TRIESENCE, which has strong coverage and a low out-of-pocket cost for patients. The company is also preparing to launch BYQLOVI in early 2024.
Q:What is the company's long-term vision for its product portfolio?
A:Mark L. Baum stated that the company aims to be an ophthalmic disease management solution provider, potentially expanding beyond pharmaceuticals. More details will be shared at the upcoming Investor and Analyst Day.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details about the timing and financial impact of the biosimilar launches, citing the ongoing transition period with Samsung and their prior partner. Additionally, while they expressed confidence in achieving growth targets for TRIESENCE and other branded products, they acknowledged challenges and the need for certain factors to align for success.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
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HROW Transcript
Harrow, Inc. (HROW) Q1 2026 Earnings Call Transcript
Positive5-12
The earnings call highlights strong growth in TRIESENCE and IHEEZO, with substantial unit demand increases. While revenue challenges exist due to inventory and pricing adjustments, optimistic guidance for future quarters and strategic product launches (BYQLOVI, BYOOVIZ) indicate potential growth. The Q&A section reveals analysts' positive sentiment towards sales force expansion and product demand. Despite some uncertainties, such as VEVYE's pricing issue, the overall outlook is positive due to strong product performance, strategic expansion, and expected revenue normalization, supporting a positive stock price movement prediction.
Harrow, Inc. (HROW) Q4 2025 Earnings Call Transcript
Positive3-3
The earnings call highlighted strong product development and market strategy, with plans to launch new products and expand market reach. Despite a slight revenue guidance downgrade, optimistic future projections for products like VEVYE and TRIESENCE, and positive Q&A insights, bolster sentiment. The company's focus on expanding its sales force and improving product pricing further supports a positive outlook. The lack of specific guidance for some products was noted, but overall, the strategic initiatives and optimistic projections suggest a positive stock movement.
Harrow, Inc. (HROW) Q3 2025 Earnings Call Transcript
Positive11-11
The earnings call summary and Q&A highlight strong product development and market strategy, especially with VEVYE's market penetration and new PBM coverage. Although there are concerns regarding ASP decline and inventory shortages, the overall sentiment is positive due to expected revenue growth, strategic expansions, and leverage on SG&A. The positive guidance and strategic market moves outweigh the potential risks, leading to a likely positive stock price movement.
Harrow, Inc. (HROW) Q2 2025 Earnings Call Transcript
Positive8-12
The earnings call summary indicates strong growth in key revenue segments like IHEEZO and TRIESENCE, with positive guidance for the future. Despite a decline in VEVYE revenue, prescription volumes are up, and ASPs are expected to rise. The Q&A section reveals management's confidence in growth strategies and upcoming launches, although some uncertainty remains around biosimilar timing. Overall, the positive growth outlook and strategic initiatives suggest a likely positive stock price movement.
HROW Slides
HROW Report
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