Earnings call transcript Q3 2022

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

Operator

Good afternoon, and welcome to Harrow’s Third Quarter 2022 Earnings Conference Call. My name is Andrea, 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.

As a reminder, this conference is being recorded.

to Communications call Harrow. and like Webb, to now of Director Investor would turn over the Jamie I Relations for go ahead. Please

Jamie Webb

quarter Thank to afternoon, Good XXXX third you, call. earnings and conference operator. Harrow’s welcome

begin may forward-looking securities remarks laws. we the of the include today, you statements remind Before that me company’s meaning within federal let

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

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

the And release. margin, as the copy to income of and gross received adjusted have are adjusted net the comparable earnings and/or now A company’s with core which reconciliation you metrics, net included of as core EBITDA release will core website. is measures Harrow any specifically non-GAAP as results should to share. on Additionally, of such both financial directly in refer income press the per most well available non-GAAP stockholders, diluted earnings core letter GAAP and measures a earnings

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

L. Mark Chief Officer, Executive today’s Harrow’s Financial on are call Baum; Joining Andrew and Boll. Chief Officer, me Harrow’s

some With prior that, the over session. call over question-and-answer prepared remarks turn to go to I’d to like the to Mark

Mark L. Baum

Thanks on joining us Jamie, call. and thanks to everyone for today’s

earnings our to letter to posted of to resources forward. would presentation Our stockholders website. encourage third section to what corporate in have them. and been I for Investor intend the These Relations are going we what you quarter XXXX have all interested review anyone we accomplish great done and release,

earnings be great I’d like by to you the conference that and consequence on of of begin is I approval believe some known most back FDA events that a in Harrow Harrow transformative IHEEZO, I history. quarter the period our for and yield would I what that XXXX XX and of reminding the making given, days, said believe one what ocular that second past call, anesthesia. half of as financially including valuable good one, has is AMP-XXX for transpired the our on the in hopefully team formerly surface statement, of would

and antibiotics. achieved of a the of product for Harrow, efficacy line, the imperative sheet our enhances our X pharmaceutical is Two, Fortisite, which pivotal non-ophthalmology patent-pending U.S. a for play a Three, high-concentration which to of And refrigeration-stable, fortified MELT-XXX and compounded company. sale study based, balance pure its the Pharmaceuticals, Phase of family that be program. strategic U.S. is Melt completion focused four, ophthalmic launch

And time. market quite the product family been acquisition some certainly a progress atropine Five, patent-pending but made critical to not for least, of atropine.com the opportunities last pursuing six, formulations. of launch compounded with we’ve we help bring

goal meaningfully these pharmaceutical a our company. these any completing impact While we ophthalmic can’t one guarantee long-term of that will done, of deals close I get deals believe getting leading and of becoming we’re could U.S. any

tuned. stay So

third quarter some like also the share of our highlights I’d XXXX. September results for to XX, ended

represent chain over million quarter along a quarter, $XX.X the of of of in primarily the a with that prior supply second decrease increase as XX% and result over challenges, XXXX, the summer. Third year quarter seen historically the a slight a revenues to we’ve seasonality return

$XX.X period a Third gross third year’s for was profit quarter was over XX% the million. with increase the profit $XX.X gross year the of of for compared gross XX%, million, quarter XX%. margin XXXX Core earlier prior

million, quarter included was million of and net net XXXX the loss core $X.X loss core adjusted for year, of per EBITDA net million. of in to third $X.XX. $X.X GAAP Core third compared share and of quarter XXXX was last million results $X.X diluted loss $X.X the

made belief year that we foundation we’ve for the strategic set we the setup which a stand many progress was year the our Harrow. plan, of I foresee for is been and we pleased towards I am with working complete XXXX are nearly breakout in the built previous implementation XXXX, we my for with years by that

in pharmaceutical growth, systems others core double our higher. portfolio and early should XX IHEEZO you should first to of advancing XXXX. continue getting Fortisite, including strategy, pharmaceutical are float in of strategy revenues access meaningfully remain that team and confident we our products As market than of we expect, launch pipeline. focused that through the access place, IHEEZO, gross within successfully Harrow postlaunch should including post Concurrent with I drive atropine.com IHEEZO sources revenues to launch of infrastructure products, is and other margins in of the half the our branded place months market on from more with compounded and Harrow’s the revenue our

want do Pharmaceuticals Pharmaceuticals, quarter. that positions nice just own Eaton mention equity continue a Ophthalmics, reported meaningful Eaton Melt we to Surface and I non-controlling to but and in

recently viability of line attention the want the clinical and in MELT-XXX. percentage to Phase Melt completed few product of we candidates. efficacy study Christmas, large is is of should special report confidence commercial very in Melt at and have expected between study patients of a we safety which of next This to X their own to pivotal come great results us top data, and call tremendous which a Pharmaceuticals, it’s to weeks. Thanksgiving enrollment also in I a the This and because Harrow interest

others. bit read stockholders, which a becoming and/or these I and meaningful on And each color issues And of to and Once is them. provide quarter. if would a more considering you encourage or They are letter again, transparency to stockholder quite consistent stockholder a is published attempt Harrow, our our company. a you’re there of level our to

operator happy your said, that questions. now pause I we Operator? questions. take With our for have are to will poll to

Operator

Instructions] will come ahead. the question begin now question-and-answer Ladenburg Please session. Thalmann. our We’ll go And [Operator of Jeffrey Cohen first from

Jeffrey Cohen

are Mark, How and Hi, Jamie. you? Andrew

Mark L. Baum

to Good Good. speak you with Jeff.

Jeffrey Cohen

questions few from So end. a our

your MELT-XXX. comment on clarifying So last just

Phase top was which you then data, pivotal? could to lead pivotal or that’s X line did So a say that

Mark L. Baum

X This pivotal the program is that FDA. the is And with essentially program. discussed safety a study efficacy Phase the we

far so And efficacy goes, as this the is pivotal as program.

Jeffrey Cohen

And finally Okay. timely a they agency what basis? far that as the could mean Melt [ph] got on for as

Mark L. Baum

we obviously, to that approvable a NDA only was XXX the the that the timing, from the which the data an of the we and at to ketamine program We program. I stockholder assess way looks combination program terms them what our out it take or dataset that are letter look the the once weeks. In data a really it standpoint, supports yield a produce here midazolam need the receive pathway need could yield next the midazolam, what then to as But XXX in should for an like for to have your each was filing. going designed few shorter are said see dataset And is program, read either for that’s to And be in could answer far period to program, pathways we question project. could actually The the product. forward the study each designed, themselves a different directly XXX product. believe

many the been what compounded in product a a It’s allude of of the study cataract in would be would’ve many terms value for in the letter, to where we medication just be I as might because times. in combination thousands to we product for stockholder have think very surgery our the of the product, complete market years. of as XXX those the sold of safety uptake MELT-XXX clear But Phase somewhat have that, And administered tried a program like the hundreds of a the I understanding programs, version and compounded commercial particularly we extended X. to

for And so, a customer that paying large is a base there’s from product capitated know that that we do surgery. cataract the fee,

offer finally, believe far to we And an as the goes approved it outside surgery applications sedation as have whether go next can it’s think that year ophthalmic the MELT-XXX change MELT-XXX we saying really in without the or analgesia them arena. going if And we FDA game we’re so of product, environment. and program year after, far the the the then cataract program,

number a large of can and I they think, opportunities. difference, so health make And women’s in in big market a very

Jeffrey Cohen

nature? platform? would Okay. is one it. the you imagine talk Got use you SKUs about could Fortisite in many and Mark, formulation How time

Mark L. Baum

Fortisite talking from We there Fortisite. they meeting, talk believed about were of able the We booth product, reactions initially one but one AAO about physician of first our at an you see the know meeting envisioned opportunity We had hopefully at to and started to you product. the visited built and the technology be of versions we customers they more could products. we to practices. customers, be to to Once some discussions believe impactful Fortisite, gave Fortisite, with our us their Fortisite will about ideas family that a I

or two we would three Fortisite provided think year even additional of stockholder But next available. about color really Fortisite I again to some see versions about me in a are letter. not And so, excited made Fortisite and it surprise once

been able been never that had penetrate value It’s accounts to Fortisite. open we new without customers. a up able customer some great We’ve to to before

users, We’re has and the feedback really tremendous. excited from our it clinical feedback been about the

usage anticipated really we we saving far conditions. had band that just broader Fortisite they’re as well, going of for think the excited than site be and we originally are to about is a So it, narrow of

We’ll things launch, the still about So just has early in It’s we’re it. excited but tremendous. play the see feedback been out. how

letter, market. stockholder brought a the in the most it we said I to I that have As feedback received have for positive product ever is

Jeffrey Cohen

I for that you cash so million received last helpful. X of more from One That’s if charge Super. just if – could a was Andrew, year Sintetica reclassification. this

certainly If just far at us XXXX for beyond? the and adjusted adjusted walk and hitting and high through perhaps commentary teens maybe as that clarify the as year some impact full that level then its could margins you then the range, margins on

Andrew Boll

XXXX thanks a to just correct? for Sure. change to clarify, the and about getting think I the asking couple the I number, you’re always And question. from Jeff you. EBITDA I adjusted want like

Jeffrey Cohen

Yes.

Andrew Boll

their in Yes, – R&D Okay. science costs number. acquired process with including particular in in the EBITDA came companies and life that SEC some suggestions out about adjusted process recently R&D

through ran So we That $X adjusted we It upfront was EBITDA or milestone payment last up our us, reported paid and in million that million that recent showed for based purposes $X year, R&D. P&L and last we IHEEZO. our Sintetica back SEC’s on what year number life charge initially AMP-XXX we When historical means is process considered when that in acquired for R&D. that we in are putting But any acquisitions EBITDA on pulled changed in changing guidance the are adjusted We for have sort of science additional future. that. and out. for it companies methodology we the

though, now becoming any additional approved to we’re With milestone capitalize able payments. IHEEZO

So – to payment expense for capitalized. related That a the in example, we have we milestone is a QX now have approval.

run well. an sheet milestones that as P&L. the there’s we’ll hit, additional if And our intangible balance those we see quarter. assets commercial not And those you’ll increase capitalize some on will So balance sheet, expenses our in then through our this

Jeffrey Cohen

us, Okay, the questions. Got counterparty, et color the comment our $X on any lastly as taking for then cetera? the any product, backlog Thanks this far order And segment, million it. as for

Mark L. Baum

that, Thanks for Jeff.

before – our quarter for mark. we make growth, had, orders, of a ninth, I We fill actually Unfortunately, ability and quarters not. revenue a and this think we were – eight it those trying to believe have sequential did we really would’ve in I the we row hit to but

so were early – fourth that into we available inventory quarter. And these just that the was inventory becoming products sales had no of

said I to news have good that to order the revenue color able of for on really our have as had. wanted for prior growth we that, the the that many we aware have traditionally letter So our so had there’s we back bring these Jeff. Thanks once order, again, not wanted quarters stockholders stockholder in sequential orders. that But additional we were which is and to our stockholder in on make letter. And back register,

Jeffrey Cohen

again. Thanks Super.

Operator

Sahil [Operator Instructions] next our from come And Riley. of B. Kazmi go question Please will ahead.

Sahil Kazmi

of some get IHEEZO, your remind kind broadly? Jamie. working starting process afternoon, on us here the our good for questions I Hey, you strategy pricing really through that then, quarter. through Maybe on productive and Andrew, Mark, can have and Thanks to you the taking reimbursement you’re of know access market of but congratulations a methodology, just

Mark L. Baum

Yes.

office step physician’s significant higher ASC And the an is injections hospital such the two as cataract – example. for different. there product. coating the a injections, as surgery, procedures for market than are would ophthalmology, large as unit or the intravitreal procedures are in the back, those example. intravitreal significantly So to markets – well, and take those markets in cataract payment The environment first in for market of type for surgery. the But the very of as second is the be for an such each of volumes for The

be passed eligible. in example, and for the product hospital might So environment IHEEZO through a like ASC

to a a might to code. would of apply example. And for so J-code, office strategy the be In access environment, physician’s for apply one through for a part pass market want

I are well. received as mutually status passed not exclusive. products And and a that those many through They received C-codes. strategies are had said, J-code then as There ultimately initially

of ASC the environment, about product is the said, we IHEEZO I also potentially environment. in the nice and not in impact of hospital things but One the even only, believe the as that larger physician’s office is

And have But the the cataract in of where we first. to a through we’re we a work figure position target working issues. great out strong market, surgery Obviously, currently. the to doing space is want team lot so those

product the as pricing XXXX. well the the we the in out launch product ready so coming get on for we information coming half market as for months the for as And first in our initial more anticipate the of

Sahil Kazmi

relates general sort about generation how of through advantage next TAM? the bit atropine.com distributed helpful, talk the be to little And formulation, formulation then really the it facility? That’s new the Excellent. the you’re thank of on launch existing thinking can about in And based as you. a then XXXB of you that’ll competitive just the

Mark L. Baum

condition. formulation atropine so start not traditionally is big a has to number a interesting for approved, just it frequently prescribed. the of and is working treat myopia, as labeled is specifically companies me It’s compounded. any is one products on the is are such, a It is where of are Yes, our been Well, atropine saying of areas that pediatric helpful market. really let FDA market. not and one There markets, which by very

the – So them are companies myopia and by are developing developing know the all the that we products that of the way, pediatric for of market, XXX% atropine.

ingredient to a it’s pharmaceutical So interesting treat this really condition.

not our I formulation It approved, itself is market is As significant. the said, is FDA compounded, but

of pediatric Kaiser and formulation some targeted treat said of impacted a think they of put is XX by numbers about million out that just would to people I population kids, myopia. and X.X% be this

So million you’re X talking patients. about potential

the number developing Some X of the said that and between X million are million. that of companies that is these products types somewhere

patient what bottle. our is It’s of big population. big, a in public a the $XX for, which formulation is selling overall for terms it’s So market information,

math that can the And we is market, think of how you kind $X year. billion figure certainly and so exceeds the a a out it but about market do

lot physicians, consistent we our their analysis atropine of lot have a of inception. an be serving done to the about filed overall business we from market, with is that developed we’re on serving to or market. And excited We market. the of available able operate from differentiated some We’ve very in available really a the is and is market, And a that this patients is have of We affordable, to excited and how operated that. formulation we’re in anything believe to formulation serving IP else large work that that. compounded being freedom terms which make accessible

Sahil Kazmi

That’s final great note. Great that. Thanks one. one very to much hear updates. for just Maybe the all

Mark L. Baum

we Sahil, the love way the brand. by our brand We And love atropine.com.

just think if atropine compounded the to business in to you’re be and offer going atropine.com be able to is I own atropine to fantastic.

Sahil Kazmi

certainly, dry are on so program near-term Phase at any the perspective. just publication updates was marketing could all much plans wondering from know that Yes, heard you a also eye No, specifically. the but meeting? better and disease for large not I distributing or get color Surface the appreciate on medical does but if provide anecdotally wondering a MELT-XXX, about than I X from it there data program, that the we’ve data if just

Mark L. Baum

expecting would We sure the not see some Phase sort have undergoing. They or X would published. like say say much really so. process Surface in final data really data I that the data, about about additional more that the in much actually. of – to to that that there’s or I Phase see more of the the But is don’t data X next month you’ll certainly from December, have published their do set we’re programs suspect quarter that. to

the think chronic some eye in dry positive on and in disease general. meaningful transactions serious I space. the a couple been dried side, of been has We’ve there interest in

so continue think I’ve to seen And that dry disease. seen that the ever has eye the that I’ve believe and been create Surface data has that been to data able we best on published I is chronic

a more Surface information what soon lot the take there’ll is partner now to And things coming through more with But believe work think transaction value think next assess to there’s whether a next, real what and to we going about to fairly step. here I to value So a it’s intends we a there’s or there. there process do strategic they’re to do. be

Sahil Kazmi

Excellent.

We taking again, will on much questions, Thanks here. look congratulations the a quarter productive and really very out for for that.

continued forward to progress. Looking

Mark L. Baum

you, Sahil. Thank

Operator

to remarks. over back Baum turn like Mark question-and-answer closing concludes our conference any This session. would I to the for

Mark L. Baum

to able that have and to commercialization to this and IHEEZO everyone for groundwork I support what see the products. Thank that And lay we we you, call been branded on the see, Andrea. is other able hope of is

see preparing While we the EBITDA for on positive, the remaining growth we clearly horizon. adjusted are that

pharmaceutical which one even our a customers, desire that advantage including doctors, relentless our to to level. and competitive from rivals of turn deeply better, that dedication ultimately stockholders. we serve IHEEZO allows maintain structure institutions And building customers consumer our the kind other company, in different facilitates and is down differentiate a industry, and and in to We’re these to reward serve, to our connected us this should

and idols, the Warren one have grateful from is active To with to Thanks stockholders in us soon my times their are transfer today’s And for we interest bad patient. through borrow call a to and Harrow. good forward rewarding with for market look stock our quote from to attending Buffett, the everyone them designed times, further the money of value your there hung we to patients for and for in creation. who

have email Jamie investor-related please jwebb@harrowinc.com and conclude at you will our any If Webb questions, call. this

Operator

and presentation, now you The has now disconnect. today’s for conference concluded. may you Thank attending

Harrow Health (HROW) 14 Nov 222022 Q3 Earnings call transcript