HROW - Earnings call transcript Q2 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and welcome to Harrow Health's Second Quarter 2021 Earning Conference Call. My name is Ilie, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. And as a reminder this conference call is being recorded. to Communications call Harrow and like Webb, to Health. now of Director Investor would turn over the Jamie I Relations for

Jamie Webb

second Thank to call. afternoon Good quarter Health's you, conference XXXX and earnings Operator. Harrow welcome

we remarks include Federal company's Securities Before that meaning within may today, remind forward-looking let you begin the the Laws. statements of me

in such statements subject approval in a to candidates and of the Harrow beyond or are including uncertainties are the numerous risks all. many manner related filings, its and drug Forward-looking timely company's make Health's described formulations uncertainties its risks and time-to-time ability FDA from which technologies, certain and as commercially risks and SEC compounded control, to of uncertainties, available to at

those of those results Harrow Factors risks filed Form XX-K the Risk with company's the of and on today. of or because revise contains Securities and please report only Commission. differ description see subsequent materially projections and conference uncertainties, update obligation and events otherwise. Health's on whether section and XX-Q financial statements of This is projected. or may the intention from recent list most information or forward-looking as call annual or Form reports a quarterly information, any to For Exchange future new time-sensitive any disclaims accurate Harrow

comparable you copy earnings. Additionally, press site. to Harrow directly Web will is the the reconciliation received measures should of A adjusted adjusted available non-GAAP refer have a metrics, any with By stockholders and/or financial the company's to most release. GAAP earnings non-GAAP included EBITDA on measures the now of specifically letter in

the a page copy, you Web the Relations If Investor site, of www.harrowinc.com. not please go company's received to have

that, Baum; session. over to call Mark like Executive Joining go I'd to to Andrew are and to some With Boll. Harrow's Mark? L. prior the prepared Chief me Chief question-and-answer the turn over Financial on call Officer, Harrow's Mark Officer, today's remarks

Mark Baum

today. to to call Relations on listening after joining today. second of and which earnings and posted of you, section review our all Jamie XXXX for I quarter our letter to everyone stockholders, would trading close Investor of the presentation Thank just website our thanks the were encourage corporate release,

call, Q&A color optometrists, some institutions hospitals. provide the on thousands we portion supplier our since begin to ophthalmologists, continues a innovative the of and in last of May. today's to ambulatory eyecare we reliable of I'd and pharmaceutical business like thousands many country, Before hundreds additional to be centers including of Americans and Harrow across surgery spoke

our quarter of quarter of marking of result a our company of customers to record diligence was best our the results. team and in a employees, of the commitment fourth the history, quarter As dedicated affiliated financial Harrow XXXX second consecutive

an with of $XX.X period, and XX% That's are in We million quarter revenues for increase quarter of that report the this XX.X to pleased were reported the up million the from year the of in million. XXX% $X.X compared first second total XXXX. prior year revenues

In the XX.X%. a in that million, for XXXX, million first quarter of XXXX XXXX a the the significant $XX.X quarter XX.X% first another for year's increase matched of half in XX% the second ImprimisRx the increase $XXX,XXX This the loss million For business $X.X was with power XXXX of of half prior total the million of second negative depreciation, segment stock the gross of metric, year, a metric and earnings expenses prior a of separately and and the for quarter and with of compensation including revenues first in an increase important related quarter period, prior segment XXXX. of increase X.X the the of of compared over contribution and XXXX. million, ImprimisRx record over businesses, quarter the adjusted in of company of margin from $X.X demonstrates year to EBITDA of $X.X for compared from was first and to million XXXX contribution segment of Adjusted Harrow contribution record EBITDA $XX.X the based liabilities. first quarter margin our X.X of non-cash an amortization assets other million Gross was were of recorded quarter $XXX,XXX is XXXX. compared second

promise recording in to aimed In we are compounded from becoming exceed our FDA USI the revenues our approved company. to growing few ophthalmic next care strategic we vision focused on delivering pharmaceuticals results operating in addition at the execute a alignment that record on to leading business, are from products years products. revenues objective, our In where with our point they

Our market of was DEXYCU first achievement partnership to step Pharmaceuticals towards with the goal. our EyePoint the

We you Our if another of for big acquisition is announce announced soon. hope more And are new partnership product, NovaBay its with AMP-XXX based another Avenova prescription will, indeed. recently our was step steps and there potentially step. a to step yet

the cost All lower to common capital. During and stock I quarter, $XX million our of growth to we add in might second capital strategy dilution. our unsecured raised any fund without

anesthetic the we the acquisition total addressable of TAM, cataract and drug or candidate estimated including XX million recently States, announced rights market intravitreal United surgery to mentioned, over in AMP-XXX, in patented sell procedures and a injections. Canada I market and with annual ophthalmic the As US at topical a

to XXXX. We launch And, next submitted we months. expect to approved, to FDA plan the few late a new in if drug in AMP-XXX the be application

Another goal, component of serving customers directly eyecare Visionology excellent has made strategic through also our progress.

optimistic the of believe strategy and before becoming use sound on the care strategy our have Visionology fine in for enterprise. Our we we Based marketing robust strategy nationwide tune that both to pipeline a strong processes objectives. a additional clear to and developed functionality responsibly the new eventually be execute ease early direct-to-consumer have talent We believe needed our right to team couldn't to management of date expertise, marketing leveraged and about capital shared product opportunities, a regional who to partner the results our our employees operational remainder dedication have and and and regions the continues and XXXX. more leader raised We launch industry. promote expanding the to we soft growth, as needed and approach, national be through excited has of eye burgeoning assets future, a company's organically and achieve our very

Now, questions. will operator let's your I for our questions. to poll take pause Operator? have

Operator

from question-and-answer [Operator Jeffrey the Our today begin session. with now Cohen first We'll question Thalmann. Ladenburg comes Instructions]

Jeffrey Cohen

you? Mark Andrew. How Hi, and are

Mark Baum

We're good, to good you. with Jeff, speak

Jeffrey Cohen

going just to I'm fire or six at you. five

of week? this So filing your what's timing Q the

Andrew Boll

got The Hey, Andrew. Jeff is this Q filed today.

so X:XX, I filed. So think around got just

Jeffrey Cohen

us as pull through should think we Or you half it? Is the as the thinking of of of back we XX.X about could year? about And it. a through a got how walk should you're baseline far that how new that? kind into Okay, the think

Mark Baum

do talk question? Andrew, want that through to you

Andrew Boll

so quarter. XX.X And big building of expect the expect well. out a prior from a then, time quarter of We're is as low going seasonally Jeff obviously, then next is and that, sort that to number traditionally Yeah, be off of to QX and of we here. coming year, some the XX.X, for us. QX

Jeffrey Cohen

Okay, and got - it yeah.

Mark Baum

continues and But eyecare our world been that and in said, softer we're Andrews month on but the as traditionally as quarter. to to spot that pretty business seeing Jeff, has a be August July, the the businesses, add we of robust, the third get I into robust. I'll in quarter

Jeffrey Cohen

it. up least got revenue sense can a to behind And at top us Okay, you on better of call out X.X? contribution, little Imprimis the give breakouts or contributors perhaps few

Mark Baum

about a as couple we talk it's to through do think. in of want provide, detail Andrew, much you as filing, our specific it's disclosures - can probably I the usually

Andrew Boll

that's Yeah, whole to revenues. total lot quarters add we of with than new execute had commissions, some of addition we in the provide concentration this do that prior two a have XX% which product-by-product the Jeff, basis, - that was, detail. on But came But We a record consistent really not don't revenue - unit in about of we're quarter up going we Q, - customers, the other made did products general, growth was well. revenue this volumes. as from about that

And the us volumes accounts of in so depth customers' new stronger new we're depth on to new - in greater the units. accounts seeing and

Jeffrey Cohen

then it Okay, and got -

Mark Baum

I another Also product that's our strong. wanted add growth the really think chronic has important trend, is that been to -

it and glaucoma. formulations disease dry so that higher seeing And We're than relates see patients help to we strong rates eye as manage make, and traditionally what refill in dispense rates very to far the industry. you attention customer

Jeffrey Cohen

had gross feel it had, to margins, then it, you the like for about pretty looks number? looked what lift okay. mid do going low we quarter Got forward? large XXs little a like How a of and beat commentary that any you this on And

Mark Baum

new the that to think where I We're think are two you for baseline we mentioned percentage be should baseline, low XXs. word the point I a hitting consistently a or margins in of - us. mid within

Although deliver to are And would we still XXs. percentage We I a we at is when happy to see But these or types is delivering to committed on can a want point predicted years in be we're that in the margins. the look the of always we ago, And that few team were we back quite I XXs tend margins that. the improve can from where even two. that. And do. is believe team this now. they strongly that within we what

from as I approved said, for as more baseline to I FDA see more gross think new a comes products, opposed our to think margins But as I you'll revenue down. us. up float continue and

Jeffrey Cohen

you revenues through we per beyond? And saw and about for through Okay, and lastly, got QX think it. Thanks. us, basis or or any order ASPs on that about trends a any that you trends should QX talk could

Mark Baum

Yeah, same revenues order so the our level. XXXB were around you, Jeff. per the - Thank

been have sort all-time but think I highs. may right a at of they down smidge, even they're

minutes increase were key quarter. increases, without was and that Andrew this the I number of did what the the a joined new ago We revenue platform. way. that And really think few drivers in all price by that a meaningful critical mentioned what customers the of a is is point this

during period. accounts that seeing we within were price have. no there increases density So we're also this And these greater

per mile cataract So procedure, products surgery, pharmaceutical take don't so and more LASIK more more about well. and glaucoma of to per per We ordering want want procedure. the a we've that per be us talked calls retina we wide, from opportunity prior as accounts inch surgery, revenue an on deep to are

better So our we else we with product there we can opportunity, what help provide or customer clear. And be provide them with with customer, a as to products good a attempting buy of than they we we for can would more from. seek to are they any our that feel our philosophy need. anyone like want If is a to of product customers

want we So procedure. to for of and customers capture revenue our that there be more per

Jeffrey Cohen

commentary. the for Thanks it. got Okay,

Mark Baum

Jeff. you, Thank

Operator

from Capital comes question Brooks O'Neil next Street with Our Lake Markets.

Brooks O'Neil

Good seen little just was afternoon, about COVID a XQ hoping on recognizing forward. you topic been you I talk results. congratulations of that COVID bit has what how nationally a you've some guys interest going terrific could and your and expect impact business in a that

Mark Baum

impact, a are then record quarter period more Brooks. the revenue COVID obviously about and QX incredible and of of then QX on QX Well, And XXXX in of most the that followed spread aware records real of and first and COVID in that to you thanks the the XXXX. now quarter XXXX. We variant and concern and it quarter we period. XXXX business I'm but like. with QX, for question it QX a were the recent Delta always of our up have reminded fortunate certainly there's the in obviously was When had the say media We record attention COVID concern XXXX, the again, of QX, fourth lot in of impact in after impact not

We that lot in have up not patterns. show a seen of ordering

surgeons, take seen cataract Most example, in surgery centers. place We closed down. have ambulatory not the of for offices surgeries,

we heard in not fortunately. what we electric have year, on that so saw XXXX, is And QX saw seeing things which not of procedures, we of any bans last the of

not in into we that quarter, have and period, even the lot the impact of not see far of last really things a coming COVID certainly impact. August, we third we the the have months, so through but the month that so doesn't And COVID, won't in mean of really seen seen July in

Brooks O'Neil

other correctly, you hearing just pent helped any think you demand up and so might just follow sure have this that you as surgery, be stuff there don't from I'm eye eye kind satisfied quarter any being you quarter? to Great, of that visit of hurt to opposed as this on actually

Mark Baum

without some in likely probably a the five and is for that No the pent we capacity and this We, feel of not are up one quarterly demand last around - we are period. that question. of so believe way to up demand and demand that year the to think a us from there same quarter. don't But be colleagues talked will we cases in of all, so estimates satisfied believe pent don't place that do all that do exists first of over called or the we've we demand up million space, believe hitting or see that one But very quarter. up the not six quarters pent take definitely also pent

This more than coming had from to needs had allowing and the us the customers to customers more we all new we buying quarter about their platform was in the us past. satisfy that

Brooks O'Neil

Great, fantastic. that's

what additional that about any forward, kind to thinking you would might you out of you of can going forward? So secondly, to on and is kind color future? that outlook Or the continue kind just you business grow I'd get DEXYCU impact company just of What steadily that into are the hear offer how it? love to expect play

Mark Baum

took use fantastic product. opposite. outcomes produces and So, and who case all, clinical this first don't that of hear it a product Ophthalmologists today. the we is like it the We remains DEXYCU from product. on before bad the the it's heard we DEXYCU the product ophthalmologists,

has incredible team done commercial Our an job.

that of getting this even not a We've for we continue very many at have that produce success business learned a We had I said, approved if the DEXYCU One, And it's the terrific But and rewarding in financially future. products that about want We it. to terrific letter. been us stockholder talked we're short two as product FDA about do our period about times. think the time. in things. able you to same to a DEXYCUs product, in to with selling we've year that. talk for time, the in and I've

And so reimbursed DEXYCU. understand dipped they our in the what's selling toes water, commercial their the like team involved in now has product

and product, to be to now suite does. into ready, products experienced going sort time acquire we FDA fit like that out go have for that approved the like we and so comes when We that DEXYCU surgical are as We're more launch products acquire. of a it

if team. you We're so not our from And for that's a starting real value commercial will. scratch,

Brooks O'Neil

great. that's Yeah,

of and EPS talk a And comments So through I a news estimates. that there in expense significant other of us quarter? that Can the impacted income was that saw I couple us some from services item missed to understand was statement. suggesting help how noticed the the just Andrew what

Mark Baum

Absolutely.

Andrew Boll

Yeah, of of Brook's. change Eton related to in the was impact The Eton position. biggest our value certainly,

senior when as and that drove early we well that And some quarter. also secured had of Melt as most so loss of And during our loss in Surface investment paid lost off the some lender loan extinguishment SWK. we

Brooks O'Neil

how your outlook about that's for a Visionology and that Great business I love last, and bit going is and to then, just well. hear as guess I'd little what

Mark Baum

we as launch did you months know, a three ago. soft so about Great, Visionology,

core digital the we front app. And so see we've this if the front Visionology front Doctor And with built is the but Visionology technology consumers, you our back door integrated our which for you far, door, website, and digital have now visit door a door. can

iOS Store with our - of and Apple now there. can downloadable build haven't build the for ultimately providers. app distributed out for Google that to app go prescribers the eyecare and But this, Visionology can it's live We will publicized to go you but to will out network Doctor the Play users out network you store, is Android

fulfillment re-launch. from We've by has tools. the to months, our all website and system so entire like month in to site Hotjar a the tools using the with a done optimizing about feedback system, been is consumer spent amazing integrated of back that date. pharmacy, gathered of the last we And end way, So utilization, other our three

we're optimizing. and we're launching, we're So learning

so continue out measure on build build really national center process, retention a So over to for to we're telemedicine the like, put that days and direct-to-consumer service. and to and systems, optimize out the the create next plan and capability paper, operations the XX or going continue call

Drew about working. have it. of there's taking team And infancy. So future tremendous We're prescriptions, about care is, new we're of Visionology. good his there. a of And lot. done We've we're and the we amazing it's patients. its and very excited that is believe amount accomplished we're value at it things. delivering a excited But the is But it's news

Brooks O'Neil

fantastic, Great, all thanks, that for color.

Mark Baum

Thank you, Brooks.

Operator

Our question D'Silva from FBR. next Andrew Riley Instructions] [Operator with B. comes

Andrew D'Silva

thank you And B. the correct between I to quarter. was it's between if growth from as a standpoint these or the but line licensing launches. afternoon. apologies top and questions, my just also I the about now. was gave product customers sequentially Riley calls, you relative sequential know a as jumping I up And existing answered of context there. but comparison well better in it good for quarter, product understanding I Yeah, impressive the Securities new am primarily first to that obviously, driver very But customers, penetration you, is the the any primary with sales predominantly, saw standpoint, new XQs from sales talking

Mark Baum

Yeah.

chronic patient and then solid that, and was business refill thanks platform; related the more a for new rates. so one, our three the from meaningful we in continued accounts third two us; revenue depth There saw in Andy within growth to and drivers; care rates number for retention to very the increase So the were factor much the customers of chronic buying account, care call. more prescriptions coming

there, with It's technology really pleased drive they've so So We're factors than of we the those three to our using job. customer contributed and sequential an business helping better to all service incredible this have. doing our increase. revenue improvements team made. really ever We're that is

Andrew D'Silva

at Great back you the couple hear kind the where you involved of concentration were side and products? years just then you're and diversification almost concentration time product two Allergan, product heard you a about across that talk come there bring around products. a XX%. two then primary those that were of increased since that were to remember to XX% products on I couple of down the Can sales referenced of I with seeing out

Mark Baum

Yeah.

process the to a line the across surgery at and to an mydriasis, products case, surgeon, of a components, purchase that even that anti-sepsis, care to So now of inflammation, a making entire look hospital all would ASC, we're LASIK a retina that ophthalmic need sedation, a a taking case an case, the infection, in serve we're cataract and case. order from glaucoma take surgery

a well. LASIK in as presence big have We market in the US the

So we've process. and patients entire we formulations throughout that serve to entire process that saw built now

And offer we that so more to a there's can customer.

we didn't make of during So off fell inflammation, of that terms customers base. products We number in topical hell that only in the but make in been any not beyond impressive, would they back infection, have also that single don't a But it again we the if right I terms you're is for we us. our days. medications, injectable the sell, think of a - products customer disaster be diversification

do in points couple products. years FDA next all states. customer diversified believe very case But the base. products we and revenues that of one broad while what revenues we we will have So customer is it that the from product that have have the portfolio that exciting wanted the we national to of a our is is is I really also compound approved a really XX from now operate I think We base in exceed highlight

a and create and we additional stable source. transition so think that as more that is And revenue as more source to a revenue I make well profitable diversification going

Andrew D'Silva

useful very balance finalize Surface. your a investment to just have no accounting sheet, context, - your you this. questions longer attributed Useful I to couple in noticed anything in

periods an like the would you standpoint, that. recent it expense R&D then acquisition that context how that little see Just from bit acquisition certain over give sense of of - will a would amortized an be or think in-licensing, useful. or of around the any with AMP-XXX, about And accounting

Mark Baum

want to those? you both tackle do Andrew, of

Andrew Boll

for You bet. thanks Andy, Hey, questions. the

account the on method accounting. So investment, for service still we investment that under equity

the balance our And consolidation the value ownership percentage we at proportionally been had time the got we've of on investment in sheet, and the of a of loss. so That XXXX. then put their decreasing for value back it

had The in to up that down basically investment is we about balance. [ph] during an we've quarter, that irony now during Surface even raised valuation. the is capital at though This that successfully GAAP got Surface the quarter. now in zero exhausted quarter increase investment Pharmex

still maintaining XX%. ownership just an we're However, over position

the the to the continue is of post our are P&L. zero. more we'll no or and as negotiation sheet payments milestones, - the equity discussion milestones true will milestones, the milestones show our at And initial capitalize. the milestone correct balance will and that will few how but But probably our those much were with on So then for be, we'll discussions that accounting ones it R&D on expense like though more point run preliminary able same of even we - treatment a through as a the of auditors income to I've on through our it we with page the auditors Sintetica to be a accounting on the may be most R&D. likely that seems through value probably commercialization value and had as statement, than with There

Andrew D'Silva

help just and frame infrastructure the term with to several a useful. Perfect. the would AMP-XXX offering, medium the And last very, then built be bit? that understand But question to bit the about from in And years. a just over between just I realistic maybe that term synergies capital little how opportunity shift block you've near offering last large. a little sticking very in it's you could just market is

Mark Baum

Yeah.

revenue our of it. that about mentioned how like product. So exclamation the every And points We say if this AMP-XXX. of and completed. that the sweet cataract surgeries did of a of probably the a is in the Andy, programs expect a so look we we in is with that's US cataract presence the because year we surgeries. XX% meaningful and non-opioid AMP-XXX. an excited use at so But in about later is really the really surgeries cataract of year launch and product going from clinical itself five all in behind than XXX% offer now close surgeries of ophthalmic And the United It you one created unique touch can lot spot. this the I a we And are standard with And FDA are it's to anesthetic it the Fundamentally, States, quarter, those hopefully to to product topical file care. as before, NDA now. little a advantages over current the product we market

this customers know to of the current has this the going unique about of I of a standard overall release, to And care. space that and market, surgeries, procedures, go offer customers, we its in we you when ophthalmic think said includes we have advantages said and so intravitreal injections. set totally so well. the product we are press We're a that When and over lot our a as that cataract

But are lot a And made million cataract least sort very build It's million you're just talking related are them products of terms that's we XX But The is procedures to our agreement about market. year. economic surgery the confidential. space. the And XX%. gross big There large at ophthalmic market, in market the protections we ophthalmic XX Q. and were filed of alone. are recently by specific a way, able annually. the agreement margins, granddaddy in in So a that to the this of all a the for

we're if look going that's unit in think we a to has that That's agreement a million product. if bottom the that. And unit expect. a organization not sales believe per I We've at access the the you like patented plus out cataract that below at is, cost take product. our to it's see and be a surgery AMP-XXX, look potential And to presence a hiring $XX never and year products we had line if market. is hoping be $XXX And to approved, you'll Now, create you the a going

We have sales team. a great

We amazing team. have an commercial

lot product. the have we to a to a of self-distribute do We ability of And customers lot cataract our have surgery.

our is incredible going do think team AMP-XXX. to we So with an job

this news is the be kind is of big deal the our focus us. good able market. for that have that hopefully connected ophthalmic more we'll to a So we big, surgery But close to core in

we In the become transforming next US eyecare the much are we So intend a years, to company. company. larger few

Andrew D'Silva

I popped of as relates sorry, AMP-XXX just kind into more head that one have it question Great, my to again.

should You go the if least mentioned a at How it's sometimes product. pass think free that from status, about non-opioid it perpetually obviously, cash it it, from we thinking can standpoint, there's reimbursement we're the non-opioid about aspect then basis. now right modeling of it a through from a standpoint? And

the or just about thinking So should for payment be curious how cash was right I free or we about reimbursement. it thinking if

Mark Baum

I on localized or analgesia this that really pricing specifically our ocular not to But we're non-opioid anesthetic provides ready surgeries. a patented is would comment So reiterate strategy. product that for topical reimbursement

to if going to not And But to in physicians, the think application it more we talked importantly, we a we've need only unique patients. next think get tremendous even advantages, to and of about the step. so we to it's can front customers offers over NDA advantages better interest. think offer it's but And we care. product, be We get the of strong to And there's it. that's the FDA. standard And approved, going

about So this we're us. opportunity. excited It's game changer for

Andrew D'Silva

taking on all forward. of questions. the luck going you my much Great, Congrats very and awesome. progress good Hey, for thank really,

Mark Baum

it. appreciate really We Andy. you, Thank

Operator

the Baum That for concludes any our question-and-answer back over session. I'd like remarks. Mark turn call to closing to

Mark Baum

stockholders, the support their a you Thank questions of amazing for to you closing that listening and all service an This also vendors, your right strong faith our and to work we interest you on built let them I'm call Also, our tremendous thankful customers appreciate Harrow perseverance company once you, if numbers now. for at I hard achieve a on deliver many that Thank everyone group of jwebb@harrowinc.com. have this the hope Ilie. loyal without work for on Jamie for the goals. could and in and any employees, we Webb And our this in attending customers call. of vendors, strong and know related us. thank provide the passion incredible And stockholders, products stakeholders. that of me Health. commitment who email that again and call in of Thank belief, is are we partner today's call share will its please provide. investors you and And and conclude I'm thankful we you. never But

Operator

you conference The today's has for concluded. now Thank presentation. attending

disconnect. may You now

Harrow Health (HROW) 11 Aug 212021 Q2 Earnings call transcript