Earnings call transcript Q1 2023

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Operator

Good afternoon, and welcome to Harrow's First Quarter 2023 Earnings Conference Call. My name is Joe, and I will be your operator for today's call. [Operator Instructions] And as a reminder, this conference is being recorded today. I would now like to turn the call over to Jamie Webb, Director of Communications and Investor Relations for Harrow. Please go ahead.

Jamie Webb

operator. you, Thank welcome Call. and First XXXX Quarter Good to Conference Earnings afternoon, Harrow's

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

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

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

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

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

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

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

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

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

Mark Baum

results. to been everyone to our presentation usual have Please consider for joining if all our reviewing we've website. earnings documents and stockholder letter us of recent these execute a plan. section with you quarter company's as Jamie, to be Investor been track and thanks first stockholders reading heading understanding should want corporate most Relations to and the X-year call. our our where of today's In practice, letter posted particular, Consistent Thanks, the we're on XXXX where we for better required our release,

Andrew On past I quarterly quarter. out financial calls, the either numbers read or for the have

However, black and available all white not are of press covering, in they're but summarized includes which points the and, also your with have commentary. letter, course, release me these many in Form Please own forgive see you for to our stockholder only also on they're additional of not eyes. figures XX-Q, our access in so what

million $XX said, January. the adjusted $XXX new this With approximate with cycle in past reaffirm started I in we in the connection first and $XXX that we revenues, $XX million revenues million want that net XXXX figures of X-year in million X-year keeping to a plan, to mind to the we planning aforementioned These EBITDA. believe, of guidance achieve year can

company stockholders public an a or stockholdings. days I business have their few realize loyalty only that these overflowing select a to

last it are or day-to-day our month quarter businesses last series quarterly I our is has And calls, of that the of X-year a X-year plan not a an the these occasions, course, in report that plan, last of X-year monitor they this my progress share X-year of on our up plan, week to on In Please is Of of plan a thus, or that the opportunity sell real Part regard, share progress to the time. job the plans. to the plan. know of stock achieving easier made goals plan. my a is and never realize own. been on buy focus this

something if identify thought calls. count those is course, shortcomings on on my longer do these achievable we best, to likely me no was to happen, Of

objective? that So X-year what is

believe put this if ophthalmic United cycle, X-year one pure-play at of States. calls pharmaceutical the company Well, This largest, not I what be in the the X-year the end simply, our of planning largest, opportunity Harrow to the for. has is plan

you, team, your believe thanks that for a trust many and we, hopefully, advance please and for today If your accept appreciation in as years accomplish come. as stockholder, to then for patience this, management a can my my

from market the ocular Harrow to in Now branded we talk of with let's the and the the portfolio innovative the recent FDA-approved We U.S. those approved XX over years. ASCRS discuss professionals all our ophthalmic nearly returned launched compounded and had formally where team IHEEZO, which first meeting about from Fortisite opportunity just answer eye Fab anesthetic to as on such IHEEZO, our atropine.com. formulations expanding States care questions products the United available Five for

us of this in productive our year. get development. years. and how to to customers our things differently or the As us my can to past amazing well get needs. customers built what it's the usual, is of doing to point most to I customers. better do. happen They speak serve talking speaking how the do when you're we've your It's things tell things one company X our booth Frankly, favorite Working And and each you you one to you is their to not-so-secret sauce, to over do helping

Regarding customers early there hoped is IHEEZO had IHEEZO, our opportunity exact I had from we commentary experience the adopters to more experience about stockholder are to in on getting and letter. that Overall, an date. with IHEEZO their latest talk

name. with Fab excited see support these commit us revitalize to again talk were Harrow the excited atropine and we are our with course, CPP compounded talked said customers, or proprietary to pharmaceutical business, of especially as innovation to which important had products I compounded atropine.com. them under products And and Fortisite within ophthalmologists the product are who many our about customers also Five Generally, We about at to products. formulations, available, ongoing earlier, opportunity our

acid good networks. Under formulations I'm over recent includes ophthalmic to this the compounded with X share and innovative stores, business, nation's million which including large will a such names. XX,XXX this kicks private agreement members preservative-free care our vision includes of eye the approximately X national happy which professionals, news Tears, June next-generation healthcare of to as year, agreement, ImprimisRx atropine U.S. which national of one boric largest a Klarity-C its vision and network, well-known and off on free provide brand ImprimisRx formulations, its care stores about the Total their insurer, Related retail to practice local optical care CPP

this new for everyone success looking many a making partner to We great our years new building forward agreement with are relationship come. for to this and

States. pole My as serving I aside or summary is retina a market from in the vacuum a a this and in to macular such dedicated segments of to growing is their wet the certain and market Harrow, believe ASCRS leader from and those fill observation AMD, degeneration the their though, needs void dry that pharmaceuticals of to the as markets. leadership practices position provide AMD, age-related ophthalmologists is United help ophthalmic in optometrists serve patients. market there or That's leadership

is must continue intend do. execute, we that and though, what team Our to to

three in we a the activities words, Five us, all on for deck continued few of transferred. now back Harrow recently A the to for hands the on to towards TRIESENCE other of products. all transfer to middle be few IHEEZO. are are comments expect part stock family, items year that that beginning will summer. Harrow. soon rollout for the In are will on: products Three, Four, those commercial more the TRIESENCE transfer to NDA Fab continue were Two, NDA focused we of VIGAMOX this and One, we of whose NDAs expect the thereafter, for the latter we later

proposed Klarity-C. healthcare attractive matter for national at its related we're days, ability that Central sales pull-through a program. there's in Once customers Phase enhance scheduled Sixth, and to exact, in prices with stockholders. agreement stockholder at our be X:XX beginning on FDA actually, information that meet our program a X, our the provider Melt of regarding serve on insurance Pharmaceuticals formulations formulations, deals for in as few III program and for Five, our about MELT-XXX again, to Tuesday opportunity specifically to working to well letter. seven, June for to MELT-XXX our continue hunt this more be is and dispensing next p.m. new as Total will And Tears our of our turn, value with accretive atropine the large we create the

to the deeper dig we XXXX on we momentum have capitalize out and strong started to intend has created. continue and that

a be strategic the lies of are amount Harrow truly plan positioned growing of to there needs we considerable no to of patients. well absolutely both providing not believe uniquely guarantees ahead, that if largest, the States, United While one that and meet customer our the X-year and is of in objectives, pharmaceutical the millions pharmaceutical company their course, pharmaceutical our compounded base meet millions and products ophthalmic pure-play and, largest, branded products of work

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

Operator

Cohen take which we Thalmann. [Operator will Ladenburg this our time, question, from come At first with Instructions] will Jeffrey

Jeffrey Cohen

It strong at a looked presence like you had ASCRS.

that's So nice to see.

branded little looked like as also it to being steer from atropine now. positioned expand products? flow. that, eye Talk and it from far people Is an to and One bit around It So dry I'll can of specific cash upon bit. of for about the being otherwise? away think that your could was just it the a Klarity-C starting a you positioned few some as keep money is pay little Or commentary the X. a with from payor I -- Klarity-C

Mark Baum

No. Yes.

To makes thanks our question. all, for dispenses. be compounded ImprimisRx of is first So formulations business compounded clear, agreement to the that the and related

an not to specific these use indication are products that label or So don't have They approved. a for FDA be clear. are

vehicle prescribed the in and a of X.X% is which a has is States care United the That more the to formulation eye X,XXX product, by believe case or not, it compounded professionals. in proprietary cyclosporin. it patented, is date Klarity-C, than been of contains However, that,

a formulation they were -- FDA-approved So pay all have product, know a many out patients tremendous been it this Many of which has there Klarity-C they and we in who And reason, ultimately prescribed of on several have been them many, product. there, patients, whatever for the those of Klarity-C, a Klarity-C. thousands cash history tens before prescribed products prescribed patients. thousands And helping also and they've of is products a are prescribed been is are. failed that products of and

patients, objective in to patients. Our create to a not only but in that this need formulation space, need order the to they these service these these patient. that eye dry the particular, the sell continuity also patients are relationship with the also of but to only not realize product, in help is service We've the

about lot unique through we've been are a far as preservative only not they're formulations now are talked the the formulations but As make atropine that XXXB. that boric go, we free, available. able available to that free acid a And

to available highest an facility these the standards. outsourcing So are and from made federal

So providing they're interested large relationship partner very members we've have large vision these pay network, an care this and to on they and that a with is basis. formulations this a created entity to extremely in access their cash

these that many have or said have able available pay co-pays at compounded formulations the years, below I been alternatives. we patients oftentimes for other For to that make

will from take this these I And money that will products a to confident And I care be said, deal save realize to compelling perspective, seek as their in quite And to and formulations needs. with their case, they so they they're make as value a they've these us think patients specific these of member that. negotiated potentially base available.

Jeffrey Cohen

Got know now hands that the the size products then in into tie like looks IHEEZO. lot and as maybe at And ILEVRO, coming what maybe commercial I talk away, of out MAXIDEX, about like their through How you does the their arguably us there? it. or and as Mark, geography tied have that in a least products territories and look into walk way coming got and -- enthusiasm three then which well organization NEVANAC more

Mark Baum

Yes.

We've discussions unique all had in say not professionals other first and cataract number commercial and useful it. surgeries, -- above eye originally, has also is that where our IHEEZO. letter without foremost, we I talked stockholder The only that associated this priority would with had care injections. it. opportunities product our a intravitreal organization in J-Code lot be but these the I this unique thought IHEEZO about within So one permanent question with unique

pass-through eye through use had the using label be other would professionals ideas that potentially be But even or that be and on care for this J-Code payment. able would paid its to for

commercial sales globally. our sales external As on our goes, I At PSRs. far incredible eye Harrow, what It It sales call our more our across also view reps view street, pharmacy customer organization service commercial includes not we organization relationships country. these that we It includes professionals includes organization, with commercial the the organization. the have just as reps as feet or reps. care

all around I sell is those throughout if of all populated I XX as they we States. into and in said every total, or the folks, so prior calls, you county aggregate now, Right And group states. in think the United XX cover

So and try to some us XXX do wake the reps and it's up do hire organization. what products. would go will just a resources. sizable -- see $XX And you few new not It put raise a out on to mighty relatively then is organization. a million street philosophically, to folks lot a it's with say is pitch I These that and out

of way market interest the of for to additional these We're will for sales ILEVRO, Right and sales see profit not the market back TRIESENCE have lot organization. revenue as us our comes That's when grows interest grown the and and opportunities And produce drive let on, the market a going commercial for costs for grow so now, increases and potential IHEEZO, accordingly. our the you we for organization organization. addition within NEVANAC, it us. folks

Jeffrey Cohen

Got And may. then quick couple ones of Andrew, if it. I a for

any you And how on on put is if forth you're for secondly, QX Firstly, of balance the that about the sustainable commentary, margins, could guide, and margins feeling the XXXX? doesn't may unchanged which it's now, that few to leads the first me year, the but believe quarters? subsequent case quarter extra from that the the change -- full which be then in

Andrew Boll

gross can we Mark gross We products, the in there's specifically the always in those let the way. to I gross little where I talk tied at. as core to margin which was grow, I number. bit, room But a more Sure, feels getting think came pleased know core good a with was higher margins definitely margins, in better. starts but from portfolio the about XX% do to on to we them. margins feel I'll guidance particular, have Jeff. Mark regard same like branded going are and gross sales

So a little it's definitely year. to bit about we Mark, the throughout guidance? talk a think is do the that sustainable number you want

Mark Baum

for put have many we many, been Jeffrey, reticent we've Sure. -- to out guidance years.

handful out we achieve. don't degree absolutely closed I looked earlier and have And comfortable I don't said, this We're feel year Fab the when our think fairly and want each going J-Code, the put this guidance. in a Andrew of we Five than comfortable then we for really first I to out time deal. and high put we that on can guidance think we right more other just putting when permanent at out years received We I felt and confidence not a we of to fall guidance face. just

like can would smiles face. have then when a able of of their number put put stockholders we'll that and we have even out And the quarterly put end hopefully, on actually we the we deliver our results. we smile an year, to our by bigger number, ultimately, faces much think so And on to we're the out a

market. the I also a is financial think a be IHEEZO going that to growing within from phenomenon perspective the and reality is

the modest growth markedly I even of certainly This third but calendar and we then calendar into quarter quarter so of the And even second necessarily expect XXXX grow the modest, in third calendar quarter. for second, in terms quarter, out in or beyond. say more and that considerable revenues, the but wouldn't fourth we're expecting, -- should fourth most more the

conservative. for the how have going certainly please us forgive to That's not we think, So We're guidance. but just we of nature being could adjusted that. do

these numbers. additional provide hit things we'll us Let guidance progress. hopefully then And as

Operator

come our question Riley. will And Mamtani next Mayank from B. with

Mayank Mamtani

Congrats on the progress.

So feedback. maybe KOL ASCRS on just the

traction you be. on mentioned for you initial where some the good could exactly IHEEZO got think I uptake understanding

faster what these of like seen in about had decades? your also, patient action, populations, is you lot could having innovative just adopters, data talk for a early two past not that like terms really you So the onset have, them, clinical feel and they of in the

And pass-through bit Could lot then the how questions have get the early follow-up. importance J-Code a you also, we a a about is quick the of on and And of this talk of that understand little status. to grant I trajectory of helpful then drug?

Mark Baum

that only feedback the this administering are Mayank. work. -- work stockholder got to to Sure. letter up and a And I the And administered payment over and being for it's question, thank dealing physician the product inventory folks who got dealing frankly, spoke the that who's the the is with the with my it, to, for has for to thing I work office and The to years surgery or so has the say for it's seven the work launches got first you It's receiving commercial to is and/or They're the issues. paramount not or for who extremely experience setting surgeon. prescribing happen the staff, the we've is the physician got in with that was patient, that to that from last positive. had

drug who who label was positive is user heard the repeatedly, commercial it experiences just referred very So being The using was hate IHEEZO. literally on from who leadership, to is and KOLs, everyone, using really our label. a to spoke and The fantastic. it works what I not from and it's is promised to me had as as but I everyone, everyone but say I

really was anticipated. had more unusual the doctors, broadly patients said, was it not and only I beyond the is that than I the well, thought worked I used the staff, like it what so And for that fact

ours, A is the laser injections, for for intravitreal other -- in various friend of There for IHEEZO injections procedures. a doctors Wisconsin, retina want using now for it to glaucoma state ophthalmologist this procedures ophthalmologist, very of use laser who retina used surgeries. -- retina well-known an procedures. are Doctors and

I those believe, uses, label of It's all are so because novel And anesthetic. a label, on broad. ocular the so is

that we was so what And heard.

the was all that the clinical with way, by consistent And of data.

promote beyond to had we've to The label. over years couple are an patients very what corners have And course, I'm formulations. the wish. of very, learn of is ours. the free not that four whatever FDA-approved tell something say KOLs, not of I But about product doctors, physician can with that of as to from compounded I'm going the who are is in customers you branched they are beyond or out feedback, care last of taking Now only I that regular the ophthalmologists what is talk from but happy

terms cataract like of a fee not capitated importance otherwise The of in pass-through, be means then not fact would side, of the payment the is the surgery happen. a of that for IHEEZO -- innovation And when outside innovation, the and encourages J-Code on everything. would it policy providing product

And an use now can and fee, IHEEZO I its think, works. is benefits, and unique And for the have capitated innovation, outside surgeons critical. encouraging I its experience policy it so it it these of the said, is fact that as paid and benefits,

outside for these environment other ASC in the paid or though, many be mentioned. procedures of product, allows itself, to for the the formulation, outside office the that hospital, of I cataract of J-Code surgery, the The

was think place well. more in it's bodes or that surgery over very now. time, who's whether -- someone met take that going doing even We and to the And are office, ophthalmic retina cataract so with procedures I office in more procedures we think

office. the in surgeries retina So

use that think So thing in certainly office. I IHEEZO more more have are procedures is the great and J-Code that we it. for and going for a And

Mayank Mamtani

talk color, quickly Could II the steps a recently Phase next appreciate retina doing conference. detailed. Surface that study? disease terms the I dry late-stage eye registration-enabling And very a are eye on just about or data what presented then you the of at helpful there in the Ophthalmics, just was meeting

Mark Baum

of Board the Ophthalmics To Directors of on you, you. with Directors. company. the the Surface dropped candid of recently I off of founding be was Thank since the I Board

so chronic data And tell eye some II longer. privy I information able disease extraordinary I also products extraordinary you give with. that not completed Cameron can that studies was the with to dry to has produced produce he Phase they've any is other am data, but What now that

with have developing, than in rather that our Surface. the there's -- they're drug eye more a bit interested company of though, you hoping, but the broader broadly more sooner be I interested what can't think there. They at stockholders. unique rest the necessarily the specifically value next the little but We significant tell are candidates and to frankly, will I'll not that to We're conferences, parties, more of middle communicative, including, me say, later, steps

about So I really time. to that's all have at Surface this say

Operator

Our Street Instructions] come O'Neil here Markets. Brooks will question from Lake Capital [Operator next with

Brooks O'Neil

I got on a few minutes late.

something talked the in we ask us about I you can just could the of and into and the of San written Diego, for a the launch question you in talked hoping you've commercializing little tell what are think balance I that I'm steps me a about if key So maybe IHEEZO you've product But you XXXX? maybe bit details about see quick give answer, already just later. then and the can about about, indeed go

Mark Baum

for you Brooks. Thank Yes. that,

I on all for hands As deck said, our everybody is IHEEZO. on team

for other negative date, is we think detailed strategy. I side, using commercial first. products accounts the we're are exciting. the surgery to and now market, IHEEZO. which recording cataract in certainly IHEEZO, certainly, reports a And got on J-Code pass-through talking those are all for we've had us, are, as very folks Doctors that There to is And are reports have billing revenues at which not for -- well. exciting the We any

of roll there's pecking strategic we And order so a as out. sort this

letter this ophthalmic laser glaucoma now, in terms when call, surgeries into as and think product other procedures. are surgery, including in market, sell of the I've and about procedures, units said when many cataract there look, this to so on But injections. think intravitreal And stockholder opportunities you you about

like, a annually. a look looks that unit overall take it's million number. It's what over number at you bolus opportunities big the big, XX of If

cataract the strategy I so over issue And and think, execute need of more order commercial currently think, this with surgeries, very we've buzz. this from laid that big, given about creating in of we just front doctors a stepwise for try think is that have million for and more out. important us IHEEZO. That I continue that we fact And these out friends need product, clinical one huge their we opportunity is It drug The fashion their in make seeing happening I more telling to the now. a us a It experience. that. is phenomenon product and we is doctors us, which is also to,

a we're years. But a almost going help XX the more great And new look, topical the throughout in market. first having more doctors of It's there's opportunity. them, year. of to huge It's anesthetic and experiences experiences, those are big have

Brooks O'Neil

Great.

company the and I'm and wildly when about organization. curious the your things the before kind too exciting going do plate? of not enough overreaching much the on have know additional you and plate think guys on I many you atropine various know there's of about excited think How And Five. get I'm that with to to think perfect. size you'll in your areas, and and formulations these you Fortisite IHEEZO Fab the you on Sounds of some

Mark Baum

the profitability And is I've is but IHEEZO a times one company, call, priority as a opportunity only number IHEEZO. priority. perspective. from Yes, -- our not on said question from everything I biggest a few of a also that's perspective, question. revenue our appreciate the this Look, within is

example. sales and get love to business the continues We not, products it's produce I compounding continue doctors figures. cash value, are their ImprimisRx talk practices. going that to to and business churn see let an a thing day out. to in and those in daily is to of though, And great that to as thing go That who day create a churn and our

presentation. how actually At the listen a link helped letter. Fortisite you Dr. put stockholder to it to Desai's would within Neel I his the in And listen ASCRS has had to opportunity I I the him practice. to And to encourage meeting,

time a practice did care giving number of a this patent-pending others to was really his hundreds formulation Desai say the better to their that he paid trust growing that talk, me, like doctors patients. Now help and of appreciate $X,XXX bring and them for I Dr. and under value their little take that but

because on don't the refrigerator, what and would opportunity you Fortisite it do I the if many Fortisite a about for was that I that said specific, quickly central mentioned And If was have we opportunity. another guarantee let because you there's ever other example, he procedures, besides looks ulcers a like, I product I Fortisite. uses actually your have talking to use then that expired. large in replace it's very about. him to corneal that for it would so that if expire, that patient wouldn't other needs a replacement laid thinking have there's math just And way doctor we you that no who on and he out few a it,

opportunity atropine. American for the like therapy. The who big, big math patients, so think And who market an the talked it's -- when are you five or million you would I've on so from about And number. atropine.com, atropine start about that, doing benefit a

from to the we us base. lot opportunities commercial going. I things perspective don't so with to help that But we're this a these to have. that certainly overwhelmed we market have It is large of a products their patient company, insurance think have going these And helping

If if the of the story. version same we helps with rest And moxifloxacin in of VIGAMOX. to before have FDA-approved the we NSAIDS, NEVANAC, you look we portfolio, Five, at already look only now have the owned you moxifloxacin Fab the already VIGAMOX because VIGAMOX as at sold ILEVRO, of a portfolio, particular, ton us. the an And

I So maximally I all we're customer kind around needs. provide their don't just think wagon for overwhelmed. feel to of the in And aggregate, these our us products the like circle help of

Brooks O'Neil

sounds Well, that great.

and company, years I'm continue four beautifully executed have You five execute confident forward. or beautifully guys pretty going the going you're I've the following to to in been

Operator

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

Mark Baum

really talk Thank of the to question, operator. there space little last in you, about sort the the United is Even bit in States. a ophthalmic more a pharmaceutical vacuum

It really whatever it or major of other a lot and All domination to space. massive focused inflation, in the costs and last COVID ophthalmic seems. insurance for materials in within we've been players medium and therapeutic of had areas, dry other so, sort wet for large pharmaceutical now small be years a the pharmaceutical of derailed pharmaceutical science of not only high related are then seem PBMs The had there's or drug the sort reason, space promotion. and XX on focused companies. and on The development labor AMD markets, to by like we companies,

reasons there there developed threats. ophthalmic to new the the I reduced. And diminished want And we that those bit. one way, not has of a It's Competition, think, sort of The we by there been for to increased. number need. need has said, a number products being the pharmaceutical And in really believe threats be phenomenon. And of space. with this serve a diminishment unique I as competitive are assets that been fewer are of has only are reasons, need has a there

of team. the and today, operational our Harrow of the and that and financial best So would incredible is not be its support stockholders history, entirety of possible our in without shape

attending all your to call for thanks. very offer Harrow. in you Thanks interest very, today's and of I for everyone So sincere

Jamie have Webb jwebb@harrowinc.com. any related investor you This please that's our If will conclude e-mail call. questions,

Operator

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

and You may a great have now lines, day. your disconnect

Harrow Health (HROW) 11 May 232023 Q1 Earnings call transcript