Earnings call transcript Q4 2022

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Operator

Good afternoon. And welcome to Harrow’s Q4 2022 Earnings Conference Call. My name is MJ, and I will 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.

conference recorded. this reminder, a is being As

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

Jamie Webb

and welcome Thank Harrow’s afternoon. Operator. XXXX And you, fourth conference Good quarter year call. end earnings to

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

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

list quarterly Securities with the recent company’s the those uncertainties, risks For description Form on most subsequent filed Commission. reports of Form of and the XX-K Risk section a and please and Exchange and Factors on annual report see XX-Q

Harrow’s projections call any to is any otherwise. future conference intention or revise projected. information update time-sensitive of whether or results or financial Harrow disclaims events from accurate differ forward-looking of new only obligation statements, This because information, may and as today. contains or those materially

share. Additionally, earnings, net core income adjusted specifically as to such Harrow adjusted core referred net gross margin, and per non-GAAP EBITDA well income results, and/or financial metrics, diluted as, as core core

website. measures with which to the of any most Stockholders, A in Letter the company’s measures available non-GAAP reconciliation and included on are comparable release of the directly GAAP earnings is both

of the a you now, press earnings copy By release. have received should

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

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

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

Mark Baum

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

to all have of to want Relations review documents the corporate the better been earnings website. these Investor presentation XXXX you Stockholders quarter and section release, fourth a of encourage posted for Our I Letter results. our to company’s to understanding

consider are strategy In believe where we ophthalmic we I our will execute heading where we Stockholder help become track as been pharmaceutical have which a leading and our particular, you to company. U.S. reviewing Letters,

Many of of and Munger. am philosophers, Warren businessmen, great and and that know you Charlie I a admirer follower capitalists the Buffett American

Our Stockholder inspired Letters Mr. for Buffett’s are annual Berkshire similar by letters Hathaway.

third stands those of section more this as Relations Letter want website This history, Stockholder an out, know of a which section tortuous history our our to of we latest enter subject. describes five-years the our company, to cycle, our dedicated it to planning there of our entire and is bit is about important know for who Investor because stockholders

to you breaking remind myself In it, had scratch. important have read given When Letters I the provide as greater I if I challenges case, debacle, any these own and banking you our has what owners more hope of never Harrow. gravity, will, it building transparency you been Stockholder know really to recent of we from fellow business the

make a our into the call, jump will I few to we On right about this and business Q&A. want Harrow comments

continuing a in diligence, I the Letters, Harrow positive as tenacity in momentum. transformational creativity prior of a family, and year and that of was sense result a the promised XXXX is As Stockholder XXXX

owner. ILEVRO, the million revenue those VIGAMOX, TRIESENCE, connected our of I their NEVANAC, recent as and Harrow products we for $XXX sales new allow transfer process Here in to This Five marketing mean. reviving in and to possible, of which products working completed are applications Fab we to January, all drug what will quickly as which examples north years are a of few and begin in former for the aggregate the provided MAXIDEX detailing transaction currently

In making weeks reimbursement. topical February, reimbursement the ago, just received we ocular J-Code only temporary IHEEZO, status, pass-through received for we U.S. IHEEZO eligible a for anesthetic and permanent in the

had Codes of success IHEEZO access Combined professional’s patient should ophthalmic our strategy we hospital our with eye as outpatient allow to-date, the launch access ambulatory surgery these every enhance with traditional have greatly this will departments. the including the market they and in care, office, site the and of excellent increased May care center

we to are momentum. add not that stopping want I our

transactions M&A of an In fact, at including we closure, phases which stage. on currently various advanced working are are some that in several are

growth and consummated, We our I while if you transactions for that any deals many record can’t fuel, transactions think, year executing trajectory I believe to closing one of this be these years guarantee recent And M&A our could speaks complementary any itself. for add for will, rocket will for of to these come.

improving access core Feel our free our Letter. and which Stockholder only wins Five to ImprimisRx expect and IHEEZO it XXXX. continue and of need our with and XXXX are But a Harrow that Fab available press Harrow as review has you business release both different market prospect to grow, acquisition QX of business financial stockholders closing is to the QX QX will while numbers, and for the in our we the know subsequent beginning than

IHEEZO VIGAMOX, continued begin hands we to are Fab some weeks, Five with the as all into deeper back expect stock, the close With strategy coming acquisitions. transfer, as and execute that momentum for TRIESENCE said, we to get the comes see hopefully, we deck able these and of into our we of in on we NDAs year, this are launch we

uniquely into we and resources we have a believe breakout that The largest pure-play and year for that both have by be positioned be millions the Harrow to leveraging bottomline States, in they institutional compounded I meet us is customers should more the quality and put pharmaceutical our pharmaceutical than products place, XXXX that ophthalmic infrastructure products of Americans the the providing company high needs the United and branded of that serve. pharmaceutical XX,XXX

will to I pause questions. questions. your have our take for poll to happy now are operator We Operator?

Operator

with question O'Neil Markets. go first Brooks [Operator Capital Please very Instructions] Lake you Thank ahead. Street much. comes from Today’s

Brooks O'Neil

ask talk the you very so I in bit initial, expect you about just the to as your a might much. you little hoping, ownership, afternoon. impacted lot to you the month will goes it lot am unfold can. you year about have company and Mark, Thank try two plate or focused of along? first a I taking have I Good how a Five the as how to Fab and on as steps are the Obviously, keep that the there’s

Mark Baum

permitted Brooks. marketing as activities, works. NDA are the activities. sales thanks question, engage as and deal We Sure closed we for transfer to have detailing in transaction. well Until had us, way we not the the The the to

effect, seen products in level the of the we with profits consistent we So have from level transaction. these relatively close actually what before of the revenue, is

transfer we the With and believe to last transfer NDA the VIGAMOX. I NDAs likely said, that coming in months, do these believe are be see we to will going

expecting middle We sometime of the are that in the summer.

that the place us those does marketing begin former But transfers can engaged light in past. many that the to green the us green efforts. It detailing as take soon as tell what gives give I light is sales to owner that had the NDA you begin years our

these today I activities then very revenue $XXX that of that types to release products in are products it mentioned. market the when were numbers We in need plus of Those as our the the led these was that excited commercial effort. is million types believe we back and revenue doing same the for to largely organization are this

summer few in ownership. effort the think the really going levels but last tell, have be in inconsistent full of very the terms we over our in months, that this successful, we to not is its We anything will to with begin time seen steam. But prior will revenue existed impact

Brooks O'Neil

Okay. Great.

transitional so switch be a and we excited are to for over just happen the the that on approval company, I will I know drug? a I to little well am for investors what just that basic ask J-Code that IHEEZO. have as pharmaceutical all you you to it to have traditional think I the bit a for about pass-through am not me helpful for me, to doctors, let question see going hopefully means guys But to know call. and for analyst, So that IHEEZO, payers the as permanent talk

Mark Baum

clear, fees are the transitional into is cataract place pass-through really policy the a ASC Congress innovation. the be put facilitates that to environment In in capitated. that And surgery, Sure. for example,

so And pharmaceutical not for fee environment, capitated there to companies the are on companies pharmaceutical a incentives or innovate. to

what to product, of to And really who pricing so the market that receive allows so fee, product a on it up capitated bundled the innovators IHEEZO get payment like the into and with is is. outside the the the of outside and of pass-through policy depending novel payment come for

try to new these doctors like allows products innovative IHEEZO. It

the receive Xst. it fact, from be and in on fee bundled can did, April beginning outside And built so we capitated fee exemption of that so an

We are really excited about that.

calls, for million about that drug surgeries, a or out of so you make I about so when every means surgeries think As and cataract at procedures terms X in prior cataract million have in we numbers, what Harrow about said there’s of it’s five X one year.

opposed an are them approved belief as of we to our sold. the the products so excited have historically of to product be compounded we And FDA that will try that many customers,

an fee, for ASC will have their opportunity as be it which anesthetic They product. topical pay opposed also -- to to about has to what the of purchase the happens compounded for is reimbursement excited capitated when be to having a out

a with to million I that That impact procedures, period. ASC temporary or is the are permanent Now that the issued, about that respect pass-through ASC during because was the X -- said, that is could and we and a the in office J-Code there environment period. period three-year environment so as

But physicians the and that the in is that terms of is is office unlike payment use that environment. environment itself of the to no the allows J-Code for permanent the limitation in of use and for environment, what J-Code ASC to and product in years, there number the

code, payment as, have extended, to that to and we with DEXTENZA, period as be goes. to respect such pass-through demonstrate how to able We temporary in but pass-through some be may that see the intend we that of other OMIDRIA do clear. have the will extend that Now nature to environment been products

cataract now, the injection the unit particular to terms surgery Right excited potentially in size the as permanent as volumes. of we twice pass-through market about of about the three-year J-Code, are the in is well period, temporary market, which impact very intravitreal

Brooks O'Neil

Great. who to I are ask I ask just more. two am sure questions. other there am going to want people

But I expenses expect G&A So going appropriate be just that I somewhat up forward? there more R&D a should little ask the Andrew. noticed that down. guys and quarter were and may I you Can this dynamics about think talk one were bit we for will what expenses

Mark Baum

want that? Andrew, do take you to

Andrew Boll

talks Mark Yeah. lot. question. Appreciate anyways, a question. Thanks much. the always Brooks, good question say G&A for get me to hear your asking But SG&A. from to specifically you. I never on you or a to

trend as up expenses as increase Five which expenses had We kind products. for our in we the for and prepared The were bring we the Fab of year, IHEEZO throughout even of to sort the launch prepared in XXXX. these SG&A is

to to actually, lot is line. at great so of new the out see of you and a slightly kind But, that -- expense bit SG&A of the the was we started that QX our QX, the EBITDA a see which little down guidance looking adjusted with for falling XXXX, revenue in that in settle quarter,

that the it is was and big charge process as through milestone related IHEEZO approved, year, it for being year-over-year, run in we to R&D R&D we R&D to have there. a to milestone payment difference regards had $X.X had to required million prior difference the because payment, there to a IHEEZO last In big

Brooks O'Neil

curious, of plate, then truly opportunities as And company introduced. the just about with think that and business, formulations the the Fab other you the for a even me, and some you one last huge you Great. on I your have some and Five Cool. the IHEEZO have lot guys am

feel on you talk plate So crumbs more sense the fall that and about maybe you can to have your pursue acquisitions us not off? give and to of compelled confidence why put some additional us

Mark Baum

up, I And to need the really another really my but well, to all, Brooks. to and it’s answer I need is, and them That’s I first engage negotiating closed. of think thing That’s one Yeah. getting question, a them great you, papering them thing transactions. close

and wouldn’t get it over that skis. would have we So, once several. our I But line of one to of them there want mentioned get me least don’t one these at didn’t of get I I again, think are if the done, one any deals them. over let

in simply These highly And I the these will that are the there are deals think to are highly we that some purchase strategic transactions. in products. engage of as Novartis evident did not, Novartis why not deal These These answer an we first reasons these example. similar and -- way, the purchases want the be are are of strategic to transactions.

get not have too them then let’s this just me let completed conversation. afield, get and we But far will

announced, think let’s I when these of one be get one they that done. But our will deals quite stockholders pleased. see

Brooks O'Neil

taking I the Thanks -- for Yeah. for my outlook calls and my am Thanks. excited pretty questions XXXX.

Mark Baum

Thank Thank much, you, so you Brooks. Brooks.

Andrew Boll

Brooks. Thanks,

Operator

from Securities. Please with question next ahead. Riley The comes Sahil Kazmi B. go

Sahil Kazmi

Hey. Good a appreciate forward progress looking Mark, questions. transformative Andrew. afternoon, Congrats similar -- you our truly and taking really on and in to XXXX XXXX

across how a of get through? different as year expect have half a of just couple $XXX first the with, IHEEZO So here. your Can and NDAs talk second to to Maybe million. about us that high level, at million $XXX the be transferred, we the from can guidance revenue the comes the half as start launch you you reaffirmed you

Mark Baum

Yeah.

So the revenues from when well a modest I growth ImprimisRx of model, TRIESENCE think, really of I built the the and basis have we have we really out for there the And second XXXX -- we some What relative as the transaction Novartis very amount into guidance, is IHEEZO. modeled don’t in as from in much a whole Andrew so we candidly, first that our lot on in included terms essentially Novartis put I business, and think, IHEEZO. really, a either his not believe transaction. closing

expect we Five to to want a and certainly new half there to We is are first would of that biased But our towards uptake be do and will product can’t be this this Fab we this the transaction. going products be in didn’t massive from very revenues course. What successful launch, due guarantee legacy the because a do, is more instantaneous think we we product.

year, really as where think I we to the expect footing, us possibly as the to of I when second into launch And get we IHEEZO beyond. of getting a would half potentially see that’s the even want to takes and be hopefully

Sahil Kazmi

J-Code reimbursement maybe talk plan to Great. you on to That’s with you then really street? strategy with And disclose thinking of status. some are the and sort getting how through about about IHEEZO hurdles of staying helpful. that the may pass-through there the the pricing you when Can or

Mark Baum

Sure.

public certain Book, is subscriptions, Red So price per actually $XXX it the is through price publicly and available unit. but the if you per is unit have

Sahil Kazmi

the kind of when of in some extent are the do data? you Excellent. both pivotal to it just an from here, And Thank you the their think kind X very much subsidiaries helpful for was know that. you Surface Phase of what program. dry discussing of can update the visibility, from then have But and to Surface, after the we you to last their see and Melt really Surface data question monetization potential next expect as about the steps Melt eye see

Mark Baum

Sure.

in So dry disease Phase believe some gave related for you. Kamran nice I his is eye and a gather and the try Aspen, what or X do to is at to drug available will video audio available that the Hosseini candidate. it I chronic recent make talk AECOS to about that publicly data there meeting

continue that spoken in Phase about as programs to I other was asset, has they program extraordinary a strategics, are X and data. with the that know he they well his data they discussions X But the towards Phase have. for work as

again, of really Phase X% a program pivotal program. and had data Pharmaceuticals, they MELT-XXX senior debt amazing efficacy report, of for They once it X on we royalty did of and terms data data. terms data, own and as this as excellent In was which in of, really well a XX% Melt piece their sedation

able worked MK, They MELT-XXX X they combination is were the Stat to program the delivery product their were tough drug, perspective do. able statistically their midazolam to from their than which using sedation alone, significantly midazolam-ketamine very show a demonstrate that is Zydis good a [ph] better sedation on technology. to Midazolam

X end the with Phase of past, is will in the to May They the in And have middle be required it confirm X indicated and against placebo. be Phase program X Phase of a FDA an has program. that meeting would meeting a the in FDA what

prospect which Melt a study. active derisked fairly placebo, So attractive very versus is a it’s for Pharmaceuticals,

company about the required. be what going would so could previously had to is And to said confirm FDA what confirm change The be FDA its they The mind. required. may would what FDA

ultimately, that out that complete itself capitalizing it see, mid-May, in the have product will expect that We happen that to and then market. company we and program, can will so to get occurs, would towards work to once that

We it Pharmaceuticals compounded It is business ImprimisRx in a the our create the first the to Melt that MKO product really through call Harrow We us sell compounded at place. lozenge. inspired Melt.

once again, is we base version would to idea there. available, compounded really the if already the that’s compounded version purchases that significant to customer a make FDA-approved so product And certainly that product, the idea that an so sell there’s available approved the the FDA prefer of and or this

novel But outside potentially many, products, MELT-XXX if the there plastics, impactful colonoscopies in approved, unlike ophthalmology, IV-free medicine, sedation other women’s health, believe, product. product, in for are many could dermatology, this be ER would some it only we ophthalmology, it’s and uses not areas of other used opioid-free as be a

Sahil Kazmi

and Thanks congrats to Excellent. for forward Really a helpful the year. overview, our later taking look following questions. on story and successful really once XXXX this again,

Mark Baum

Thank you, Sahil.

Operator

in Mark questions closing to queue, the would I like to Baum further back for remarks. no call Seeing Instructions] [Operator turn the

Mark Baum

had achievement the of as Letter the of led even also in effort more phenomenal Stockholders, to for. hoped Harrow And my you. I to than Thank dared family said the I

would and you, financial tenacity the of operational in financial including to-date days. the without have been fact possible is and it of its of all Harrow hard of whom thin, the many best would shape achievements good through of us have thick support our bad without and history and stockholders, the nor be work our with team, not Our possible that been

helping and to products eye to stay are and stockholders their professionals affordable we look needs focused pharmaceutical those of and trust on the mission for for unmet patients care us rewarding that that our their accessible, on I great make the forward their deliver patience and to serve. to

Thanks to and Harrow. your for attending for everyone today’s in call interest

Webb Investor Jamie any related our at This conclude please email have you call. If questions, will jwebb@harrowinc.com.

Operator

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

now You may disconnect.

Harrow Health (HROW) 23 Mar 232022 Q4 Earnings call transcript