Harrow (HROW) Q3 2026 Earnings Call Transcript

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DATE

Nov. 10, 2026

CALL PARTICIPANTS

• Vice President of Investor Relations and Communications - Michael Biega
• Founder, Chairman and Chief Executive Officer - Mark L. Baum
• President and Chief Financial Officer - Andrew Boll
• Chief Commercial Officer - Patrick Sullivan
• Chief Scientific Officer - Amir Shojaei

TAKEAWAYS

• Revenue -- $99.3 million, up 39% year over year and 41% sequentially, driven by record contributions from the branded product portfolio.
• Branded Revenue -- $83.5 million, representing 84% of total revenue and 62% growth versus the prior year.
• VEVYE Revenue -- $39.7 million, up 75% year over year and 35% sequentially as prescription volume and net pricing economics improved.
• IHEEZO Revenue -- $25.3 million, up 15% year over year and 62% sequentially, reflecting recovery from earlier transition challenges.
• TRIESENCE Revenue -- $10.7 million, the highest quarterly revenue recorded under company ownership since the product relaunch.
• Compounded Revenue -- $15.8 million, continuing to provide cash flow despite lower gross margins relative to branded products.
• GAAP Gross Margin -- 75%, consistent with the prior year and up from 71% in the second quarter, primarily impacted by product mix.
• SG&A Expenses -- $53.1 million, roughly flat sequentially while supporting an expanded commercial organization that more than tripled its key account managers.
• R&D Expenses -- $10.3 million, higher than anticipated due to accelerated timelines for the G-MELT program and clinical studies for IHEEZO and TRIESENCE.
• GAAP Net Income -- $9.8 million, which includes a onetime $5 million gain from a litigation settlement.
• Adjusted EBITDA -- $21.2 million, compared with an adjusted EBITDA loss of $1.2 million in the second quarter of 2026.
• Cash and Cash Equivalents -- $75.3 million as of Sept. 30, 2026, to support ongoing commercial launches and pipeline development.
• Full Year Revenue Guidance -- $350 million to $365 million, reaffirmed based on expected momentum in the fourth quarter.
• Full Year Adjusted EBITDA Guidance -- More than $40 million, revised downward from the previous range of $80 million to $100 million due to first-half performance and increased clinical spending.
• Q4 Adjusted EBITDA Floor -- More than $33 million, established as a minimum expectation for the final quarter of the year.
• VEVYE Total Prescriptions -- Up 83% year over year and 17% sequentially, supported by expanded commercial coverage and sales force productivity.
• IHEEZO Unit Demand -- 62,210 units, up 21% year over year but down 5% sequentially due to historical third-quarter seasonality.
• TRIESENCE Unit Demand -- 20,022 units, increasing 110% year over year as medical practices integrated the product into treatment protocols.
• QUELL Study Primary Result -- 55.2% successful ocular surface anesthesia for IHEEZO versus 59.7% for the control group, failing to meet the prespecified non-inferiority margin.
• Insurance Coverage Expansion -- 10 million lives added through a new national plan agreement for VEVYE, effective Jan. 2027.

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RISKS

• Boll stated, "Our first half revenue shortfall and lower gross margins than we anticipated put us behind our original EBITDA expectations," explaining the reduction in full-year profitability guidance.
• Shojaei stated, "QUELL did not meet its primary endpoint of non-inferiority," regarding the Phase 4 study results for IHEEZO in intravitreal injection procedures.

SUMMARY

Harrow, Inc. (NASDAQ:HROW) reported record quarterly revenue and reaffirmed its full-year top-line guidance, citing significant momentum across its core branded ophthalmic products. Management indicated that the commercial organization has been restructured into four focused teams to align with specific care settings and purchasing dynamics. The company completed the acquisition of TYRVAYA and launched HarrowRx to streamline prescription fulfillment through electronic medical record integration. While the company maintained its revenue targets for the year, it established a lower floor for adjusted EBITDA to accommodate accelerated research and development spending and the integration costs of new assets. Management reported that the transition from platform-building to commercial execution is expected to result in the strongest fourth quarter in the history of the company.

• The company realigned its sales force into Ocular Surface Disease, Retina, Surgical, and Access+ teams to maximize commercial leverage.
• CEO Baum stated, "Demand is growing across key products," noting that the expanded sales force is becoming more productive every month.
• The G-MELT program is progressing toward an NDA filing by early Dec. 2026, which is earlier than the company originally expected.
• The QUELL study for IHEEZO demonstrated secondary benefits in patient comfort, with Shojaei noting that patients reported lower pain in the 24 hours following injections compared with routine anesthesia.
• Management noted that VEVYE is benefiting from improved prescription economics as the ratio of covered to cash-pay prescriptions increases.
• The company expects the 2027 launch of OPUVIZ, a biosimilar to EYLEA, to benefit from commercial learnings gained during the BYOOVIZ rollout.

INDUSTRY GLOSSARY

• VEVYE: A prescription eye drop approved for the treatment of the signs and symptoms of dry eye disease.
• IHEEZO: A topical ocular anesthetic gel used for various ophthalmic procedures, including intravitreal injections.
• TRIESENCE: A synthetic corticosteroid indicated for the treatment of ocular inflammatory conditions.
• TYRVAYA: A nasal spray for the treatment of the signs and symptoms of dry eye disease, acquired by Harrow in Oct. 2026.
• G-MELT: A proprietary formulation under development for non-intravenous sedation during cataract surgery.
• QUELL Study: A Phase 4 clinical trial evaluating the efficacy and safety of IHEEZO in patients undergoing intravitreal injections.
• NDA: New Drug Application, the vehicle through which drug sponsors formally propose that the FDA approve a new pharmaceutical for sale and marketing.
• PDUFA: Prescription Drug User Fee Act, referring to the date by which the FDA aims to complete its review of a drug application.
• Adjusted EBITDA: A non-GAAP financial metric that excludes certain non-cash and non-recurring items from earnings.
• Intravitreal Injection: A procedure where a medication is injected directly into the vitreous cavity of the eye.
• Ocular Surface Staining: A clinical test used to assess damage to the surface of the eye.
• Biosimilar: A biological product that is highly similar to and has no clinically meaningful differences from an existing FDA-approved reference product.

Full Conference Call Transcript

Operator: Good morning, and welcome to Harrow Third Quarter 2026 Earnings Conference Call. My name is Michelle, and I will be your operator for today's call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Mike Biega, Vice President of Investor Relations and Communications for Harrow. Please go ahead.

Michael Biega: Thank you, operator. Good morning, and welcome to Harrow's Third Quarter 2026 Earnings Conference Call. My name is Mike Biega, Vice President of Investor Relations and Communications. The company's remarks may include forward-looking statements within the meaning of federal securities laws. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond Harrow's control, including risks and uncertainties described from time to time in its SEC filings, such as the risks and uncertainties related to the company's ability to make commercially available its FDA-approved products and compounded formulations and technologies and FDA approval of certain drug candidates in a timely manner or at all.

For a list and description of those risks and uncertainties, please see the Risk Factors section of the company's most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. Harrow's results may differ materially from those projected. Harrow disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information and is accurate only as of today. Additionally, Harrow will refer to non-GAAP financial metrics, specifically adjusted EBITDA.

A reconciliation of any non-GAAP measures with the most directly comparable GAAP measure is included in the company's earnings release and letter to stockholders, both of which are available on the website. Joining me on today's call are Mark L. Baum, Founder, Chairman and Chief Executive Officer; Andrew Boll, President and Chief Financial Officer; Patrick Sullivan, Chief Commercial Officer; and Amir Shojaei, Chief Scientific Officer. With that, I would like to turn the call over to Mark. Mark?

Mark Baum: Thanks, Mike, and good morning, everyone. Last quarter, I was clear. Our priority was turning the demand we were building into revenue. In the third quarter, that's exactly what happened, and it's the clearest sign yet that the second half is playing out as we expected. Demand is growing across key products. Our expanded commercial team is getting more productive every month, and we're reaffirming our full year revenue guidance. We're continuing our momentum, and I expect the fourth quarter to be the strongest quarter in Harrow's history. I also believe you will see our momentum continue into 2027.

You see it in VEVYE, which delivered record revenue as our expanded sales force matures and begins to deliver improved prescription economics. You see it in TRIESENCE, which had its strongest quarter under Harrow ownership. And you see it in IHEEZO, which heads into its historically strongest quarter with new clinical evidence from QUELL. An important part of the story is how we're organizing our commercial business to maximize the opportunities ahead. With the addition of TYRVAYA, we realigned our commercial organization into four focused teams: Ocular Surface Disease, Retina, Surgical and Access+, each built around the same prescribers, care settings and purchasing dynamics.

Our largest team now serves one of the largest opportunities we have, namely Ocular Surface Disease, including dry eye, where we now own two completely differentiated products in the category. Our new commercial structure allows our representatives to promote a broader portfolio of complementary products to the same customers, making every relationship and every sales call more productive. We've always benefited from commercial leverage, but this organization takes that advantage to another level. And with the launch of HarrowRx, we're making it even easier for those customers to access our entire portfolio through a single destination integrated into their existing workflows, primarily their EMRs.

The G-MELT program, which we launched over 10 years ago, has been a true labor of love and is the first program Harrow took from idea to now, in a matter of weeks an NDA filing. When our NDA is accepted for review and we receive our PDUFA date, which will hopefully be in 2027, it will be a tremendous accomplishment for the entire Harrow family and for our stockholders alike. I am thrilled that we will soon hopefully have the opportunity to reduce or eliminate the need for IVs and opioids in cataract surgery for millions of Americans each year, and Amir is going to cover our NDA filing a bit more shortly.

In summary, today, Harrow has more products, stronger commercial capabilities and more ways to grow than at any point in our history, but we're not done building. We're not done building, but the emphasis has shifted from building the platform to excellence in commercial execution and delivering financial results. With that, I'll turn it over to Andrew to walk through the financials and our outlook. Andrew?

Andrew Boll: Good morning, everyone, and thank you for joining our call today. Third quarter revenue was a record $99.3 million, up 41% sequentially and 39% year-over-year. Branded revenue was $83.5 million, up about 62% year-over-year and made up roughly 84% of total revenue. VEVYE generated $39.7 million, IHEEZO $25.3 million and TRIESENCE $10.7 million of revenue. Compounded revenue was $15.8 million. VEVYE was a clear example of demand converting to revenue. Revenues grew 35% sequentially, outpacing prescription growth as our changes to prescription economics took hold. GAAP gross margin was 75%, consistent with a year ago and an improvement from Q2 gross margins of 71%.

Still, our gross margins are lower than we expected and is largely a result of lower gross margins coming from our compounding revenue and product mix. SG&A was $53.1 million, reflecting our expanded commercial organization and roughly flat quarter-over-quarter. R&D was $10.3 million, which is a little higher than we expected, but the result of programs accelerating and coming in ahead of schedule, primarily reflecting G-MELT NDA-enabling work and clinical studies for IHEEZO and TRIESENCE. We also recorded a onetime $5 million gain that is reflected in other income in our statement of operations. This is related to the resolution and settlement of our litigation with OSRX dating back several years.

GAAP net income was $9.8 million and adjusted EBITDA was $21.2 million versus an adjusted EBITDA loss of $1.2 million in Q2. We ended September with $75.3 million in cash and cash equivalents. Turning to our outlook. We are reaffirming full year revenue guidance of $350 million to $365 million. That implies Q4 revenue of roughly $136 million to $151 million or approximately 37% to 52% sequential growth. It's a substantial step-up, and here's why we believe it's achievable. Over the past two years, Q3 to Q4 revenue growth averaged approximately 30%. This year, we believe we're entering the fourth quarter with considerably more momentum across our portfolio.

VEVYE is benefiting from expanded insurance coverage and a large sales force and improving prescription economics. IHEEZO is entering its historically strongest quarter, while TRIESENCE continues to gain traction in ocular inflammation, supported by our expanded surgical team and BYOOVIZ sales are growing. On top of that, we have a new revenue contributor with TYRVAYA, which began contributing revenue in the fourth quarter. Taken together, these drivers give us confidence in our ability to deliver a strong finish to the year. Turning to profitability. We're updating our full year adjusted EBITDA outlook to more than $40 million, including more than $33 million in the fourth quarter compared with our previous guidance of $80 million to $100 million.

Let me provide some context around that change. Our first half revenue shortfall and lower gross margins than we anticipated put us behind our original EBITDA expectations. At the time, we still saw a path to achieving our guidance, but it required a very strong second half, including a favorable mix of higher-margin products. We made meaningful progress in Q3, delivering $21.2 million in adjusted EBITDA and bringing our year-to-date total to $7.3 million. But to reach the low end of our previous guidance, we would still need approximately $73 million in Q4 alone, and our third quarter performance is simply not where we needed it to be.

As we work through our fourth quarter forecast, several things have also changed. We're moving forward with our G-MELT NDA submission this year, which brings the FDA filing fee and preparation-related expenses into Q4. We've also accelerated spending across several clinical and development programs, including QUELL, the Phase 3 TRIESENCE study and YOCHIL, and we're absorbing transition costs and purchase accounting impacts associated with the TYRVAYA acquisition. Mark and I believe accelerating these initiatives is the right decision for the business, even though it affects near-term profitability. Rather than depend on unusually favorable fourth quarter product mix to offset those additional costs, we've established a more conservative adjusted EBIT outlook that reflects our current expectations.

Importantly, we're providing a floor rather than a range. Our expectation is for more than $33 million in fourth quarter adjusted EBITDA, and there is room to outperform that level depending on how the quarter develops. We're confident in the underlying momentum of the business and believe these investments will position us well heading into 2027. I'll now turn things over to Pat to discuss some key commercial achievements and metrics.

Patrick Sullivan: Thanks, Andrew, and good morning. Starting with VEVYE. Total prescriptions grew 17% sequentially and 83% year-over-year. Two factors stand out. First, we more than doubled the field team behind VEVYE this year and newer representatives are becoming more productive in their territories. The second is economics. We focused on getting more patients on to covered therapy, and it's working. Covered prescriptions are rising with encouraging progress among Medicare patients that continued into October. That's improving the economics of every VEVYE prescription, and we keep adding coverage. We recently expanded our coverage through a major national plan covering approximately 10 million lives effective January. That's our third coverage win this year and strengthens our position heading into 2027.

TYRVAYA's integration is also progressing well. Approximately 40 experienced sales representatives and their managers joined us from Viatris and are already calling on many familiar practices. We're beginning to see prescription demand grow under Harrow. Now shifting to IHEEZO. Unit demand was 62,210, up 21% year-over-year. It declined about 5% from a record Q2 demand, reflecting both historically slower third quarter procedure activity and elevated practice purchases of the prior single unit presentations late in Q2. That said, we expect sequential demand growth and believe Q4 can set a new quarterly record. The underlying IHEEZO trends are strong.

Our customer base continues to grow and new retina account wins, along with deeper penetration of existing accounts have more than offset the units we lost when pass-through status expired in the ASC setting. As Amir will discuss next, QUELL gives our retina team something we've never had before, prospective randomized data on IHEEZO and intravitreal injections, including encouraging findings on patient comfort and tolerability for patients who return for injections month after month. Now focusing on BYOOVIZ. BYOOVIZ went wide before it went deep. More practices placed initial orders than we expected, but many started small while validating reimbursement and purchasing. Early reimbursement experience has been favorable. Several accounts have reordered and demand strengthened through September and into Q4.

Our focus is turning initial orders into larger, more consistent purchasing, learnings that will inform the OPUVIZ launch in 2027. Now let's discuss TRIESENCE. Unit demand reached 20,022, up 37% sequentially and 110% year-over-year, our strongest quarter since we relaunched the product. Ocular inflammation is a key driver, and we're especially encouraged that practices are beginning to build TRIESENCE into their treatment protocols, which tends to make use and unit volumes more consistent and predictable over time. Our fourth quarter priorities are clear: build on VEVYE's momentum and improving economics, accelerate IHEEZO's growth in its strongest season, deepen BYOOVIZ adoption, deliver TYRVAYA's first quarter under Harrow and continue to grow TRIESENCE the rest of our portfolio.

We're entering the quarter with more ways to win than ever, and our team is ready. With that, I'll turn it over to Amir.

Amir Shojaei: Thanks, Pat. I'll cover QUELL and G-MELT. Today, we're reporting top line results from QUELL, our Phase 4 multisite randomized double-masked study comparing IHEEZO with routine anesthesia in 231 patients undergoing intravitreal injections. Let me start with the primary endpoint. QUELL did not meet its primary endpoint of non-inferiority. The primary endpoint was successful ocular surface anesthesia, defined as a pain score of zero, meaning no pain or one, meaning pressure only, both immediately before and immediately after the injection. That was achieved in 55.2% of IHEEZO patients compared with 59.7% receiving routine anesthesia and the upper bound of the 95% confidence interval exceeded our prespecified 12-point margin. The design context matters here.

The study was designed assuming 88% of patients in each arm would achieve success. The actual observed rate overall was only about 57%. At that rate, roughly 114 patients per arm could not produce a confidence interval narrow enough to fit within a 12-point margin. In other words, the primary endpoint was inconclusive. The study did not establish that IHEEZO was non-inferior, but it also did not establish that IHEEZO was inferior. For retina specialists and their patients, patient comfort, pain and safety are critically important. That is where QUELL's exploratory secondary and safety findings are encouraging.

Keep in mind that routine anesthesia in this study involved proparacaine drops followed by a potent subconjunctival lidocaine injection, essentially an injection before the injection. Despite that difference in how anesthesia was administered, cumulative pain scores immediately before and after the intravitreal injection were identical at 2.0 in both groups. Where we began to see differences was after the procedures. Patients receiving IHEEZO reported lower pain in the hours following the injection with cumulative pain scores through 24 hours of 2.9 compared with 3.7 for routine anesthesia. We also observed encouraging findings related to ocular surface health. Patients receiving IHEEZO had less ocular surface staining following the procedure with a mean increase of 1.7 compared with 3.2 for routine anesthesia.

This suggests less damage to the ocular surface with IHEEZO. Importantly, staining in the untreated eye remained unchanged in both groups. And finally, looking at patient-reported dryness symptoms as measured by SPEED questionnaire, patients receiving IHEEZO experienced less worsening on the day of the injection and by 24 hours, their symptoms have improved from baseline. To me, this illustrates why the primary endpoint doesn't tell the whole story. It measured whether patients met a prespecified threshold at two time points, but didn't fully capture differences in pain and ocular comfort over the hours that followed. We also observed fewer adverse events with IHEEZO 27% versus 47% with no serious adverse events in either group.

I would like to extend our sincere appreciation to all the investigators and all the patients who made this study possible. Overall, I'm encouraged by these data. Taken together, they provide valuable new clinical evidence about IHEEZO in intravitreal injection procedures, and we look forward to presenting the full results at the Hawaiian Eye & Retina Conference in January 2027. On G-MELT, we completed our pre-NDA meeting with the FDA and remain on track to submit the NDA later this month or the beginning of next month, which is meaningfully earlier than we originally expected.

If approved, G-MELT could become the only on-label product for sedation during cataract surgery, giving patients effective sedation without an IV line or opioids in one of the most common surgical procedures in the U.S. With that, I'll turn the call back to the operator for questions.

Operator: [Operator Instructions] And our first question will come from Chase Knickerbocker with Craig-Hallum.

Chase Knickerbocker: Maybe just first on VEVYE. Congrats on the continued progress there. Could you just discuss in further detail some of those business changes that you made in September in light of trying to improve net realized ASP from the product?

Mark Baum: Chase, this is Mark. Thanks for the question. I appreciate the question, but we're in an intensely competitive market. And I'm going to elect to not answer the question. Unfortunately, we don't want to reveal the specific algorithm that we use in order to improve VEVYE economics.

Chase Knickerbocker: Understood. Maybe just if you expect to see that impact kind of notably in Q4 from those business rule changes?

Mark Baum: Well, I can tell you without question that we are seeing improvement certainly in Medicare covered prescriptions and really, I think, across the board. The number of offices that are willing to submit prior authorizations for their patients in order to access VEVYE is actually much higher than one would think. And critically, the number of prior authorizations that are getting approved even when there isn't coverage is significant. So this is, I would say, over the last 60, 75 days, the first real concerted effort that our team has had in order to shift the ratio of covered to cash pay prescriptions. And as we said on the call, the data is extremely encouraging.

The VEVYE economics are certainly improving. They did in the third quarter, and I think you'll see that happen in the fourth quarter as well. Andrew, do you want to add to that?

Andrew Boll: Nothing to add, Mark.

Chase Knickerbocker: And then just on -- as far as where you think we are from a standpoint of that expanded commercial team as far as productivity for VEVYE. Obviously, the volume growth remains impressive and then kind of the kind of foot on the gas that the new TYRVAYA reps kind of provide to the overall franchise. And then secondly there, just last for me, Mark. As you think about that coverage win in Q1, should we think about the impact there being similar to the impact we saw to Q1 from the CVS win where we can kind of buck some seasonal trends of volumes in Q1?

Mark Baum: Sure. I'm going to take the second question because as you know, I mean, part of the reason why we had a meaningful miss in the first half of this year, and I said this in the letter to stockholders, is because of the challenges that we had from a market access perspective with that big coverage win. I don't believe you're going to see those same issues with this new coverage win beginning next year. In fact, I don't want to guarantee it, but I can almost promise you that we won't see that same level of impact. So this is a big win.

And you're going to see, I think, a greater shift once again from cash pay prescriptions to covered prescriptions. Our economics overall on a covered prescription are meaningfully higher than they are on a cash pay prescription. So we're very excited about not only this recent coverage win, but the other coverage wins we've had with even smaller plans. So we're making real progress. We promised that we would make progress on covered prescriptions. I think we're meeting that promise. And I think you'll see continued progress on coverage for VEVYE in 2027. That would be a new prediction. I think you'll see more coverage for VEVYE. There seems to be some good momentum there.

In terms of the productivity of the sales force, Pat, do you want to jump on that?

Patrick Sullivan: Sure. Thanks, Mark, and thanks for the question. We're very excited and bullish on our new ocular surface disease team that's out there representing Harrow's portfolio. I mean I think the products that they're representing really offers a whole suite of solutions to the ophthalmic community and really kind of aligns with our vision of being the preferred partner moving forward. Our combined team now really is really early days in the process. But I would say is the way we've designed our footprints and our engagement plans, I think early days, but very, very positive on what we're seeing in the trends early, feedback from physicians and ultimately, the integration is going smoothly.

So we're very encouraged with Q4 on what we're seeing early days and look forward to really good results as we build upon Q3.

Mark Baum: I think I'm excited because if you think about where we were at the beginning of the year in terms of the number of key account managers covering VEVYE versus today, it's more than tripled. When you think about the number of reps that were covering TYRVAYA before Harrow acquired it relative today, it's essentially doubled. Then on top of all of that, two other really important products that we're seeing momentum with in terms of prescription volumes are VERKAZIA and NATACYN. And now -- as within that Ocular Surface Disease team is -- are those two products. And so we now have all of those reps. And those are not hard push sales.

And when you have fungal infections, and this is the only FDA-approved product for that condition, docs just simply need to know how to get access to NATACYN. When patients have severe allergies, children have severe allergies and doctors want to not prescribe steroids for those patients. This is really the only Steroid-Sparing product, VERKAZIA. And so our reps are now letting them know about its availability. So we have a lot more people providing that access information. And I think you're going to see those big four products, the biggest being VEVYE really leverage this increased sales force.

Operator: And our next question is going to come from Lachlan Hanbury-Brown with William Blair.

Lachlan Hanbury-Brown: I guess first, maybe just wanted to follow up on QUELL and sort of elaborate on the implications for IHEEZO in retina. Like are you thinking about another study or sort of where you go from here? Do you need another study? Does this change plans to put it on the label? I guess if we could just start with your thoughts there.

Mark Baum: Yes. For us, and I'll ask Amir to comment as well. For us, the key is medical messaging. The reason for investing in the study is not only for an amendment to the label, if possible, if that made sense. But I think critically, it's medical messaging, being able to have a sales force go out and talk about the use of our product specifically in the intravitreal injection procedure. We have not had that to date. All of the studies that were done for IHEEZO were done in cataract surgery. So now we do have a robust data set for intravitreal injections.

And what we learned, I think, is that it's pretty hard to anesthetize the eye and have a 0 or 1 pain outcome with not only IHEEZO, but with an injection of lidocaine. It's not easy. And if you look at the data, I mean, we were within four patients of -- or 4 percentage points of being equivalent to an injection sort of mainlining the anesthesia into the eye. So I was quite proud of the performance of the drug.

But the key for us are those secondary endpoints, being able to go out to an office and to say, look, your patients will have less pain after the injection from hours 4 to 24 hours, better Ocular Surface Staining and far fewer adverse events. We can now confidently legally say that. Amir, do you want to add anything to that?

Amir Shojaei: Then the only thing I'll add is currently, we don't have any plans for a second study or further studies in this line. That said, we do have quite a few ongoing studies with investigator-initiated trials within the IHEEZO franchise.

Lachlan Hanbury-Brown: And maybe as a second question here. I noticed some comments in the 10-Q about how the licensing of TYRVAYA potentially breaches certain parts of the VEVYE licensing contract with Novaliq. Just wondering like what the potential outcomes there could be? Like does this ultimately require divesting TYRVAYA? I realize you probably can't say much, but can you give us any kind of clarity on what this could mean?

Mark Baum: Yes. Well, first, let me just say, Novaliq and Harrow has been a marriage made in heaven. We've been a phenomenal partner to them. They have been a phenomenal partner to us. And if you look at the growth in VEVYE units and the progress that our team has made with that product, I think it's very difficult to conclude otherwise. It's just been a phenomenal relationship on both sides. As far as TYRVAYA goes, we are under confidentiality. We're in active discussions with them.

And I think we believe, and I also think they believe that the addition of all of the salespeople, the investments that we've made as a result of the TYRVAYA acquisition really do benefit sales of VEVYE. And so we're going to work through this process. And I would bet that after we're done, we'll probably have a stronger relationship with our partners at Novaliq than we do today.

Operator: And our next question will come from Steve Seedhouse with Cantor.

Steven Seedhouse: I wanted to dig in on BYOOVIZ a little bit. It sounds like you had a pretty defined internal model just in terms of what your expectations for that launch were going to be, and you mentioned more breadth, but maybe not as much depth early on from an order standpoint. So I was hoping you could just expand on that. Maybe walk us through sort of going forward, what that means? And then I'm also curious to know what you've learned so far, how that sort of affects your expectations for the OPUVIZ launch next year.

Mark Baum: Well, I'll ask Pat to comment in a second, but what I would say is when you launch a biosimilar into a fairly competitive category, to be clear, you really don't know what the uptake is going to be. We have very strong relationships in retina. We have an incredible retina team. So the members of the Harrow family that are on the retina side of things are just extraordinary in the productivity, the relationships that they have and the trust that they've built with their customers over many, many years, in most cases, certainly well before they even joined the Harrow family. But you're right, we were an inch deep and sort of a mile wide on the launch.

That can be troubling on the one hand, but the reality is we had a lot of doctors, many more doctors purchasing a product than we had actually initially modeled. So the question is, can you get pull-through after their initial purchases. And they're not going to give you that revenue opportunity, those volumes until they've gone through sort of the same buy-and-bill cycle that we've seen with IHEEZO and that we've seen with TRIESENCE and other products that we sell in the buy-and-bill category. And so after they had gone through that cycle, we did see and are seeing today that follow-through purchasing.

And I think that's the most important factor that I can convey on this conference call with respect to BYOOVIZ. We are getting those follow-through purchases. And I think in the fourth quarter, we're probably well ahead of our model, whereas in the third quarter, we were somewhat behind. But the opportunity to sell more units to more customers can certainly allow you to make up ground quickly. Pat, do you want to add to that?

Patrick Sullivan: Sure. Thanks, Mark, and thanks for the question. As Mark mentioned, I think the early stages of the launch in Q3, I think we garnered an awful lot of learnings. I think one of the unique things that Harrow has the ability to show up unlike other organizations in the retina space with the biosimilars, we have the ability to leverage our other products like IHEEZO and TRIESENCE. So this gives us a unique engagement approach. Specifically with BYOOVIZ, I think as Mark mentioned, one of the things that we do know with biosimilars being interchangeable, which is a real positive. So our focus is really on displacing the originator for us with BYOOVIZ.

But one of the things we do see is early in the buy-and-bill cycle that Mark alluded to was accounts and physicians still are going to go through that process of, although a common molecule is they are going to go through the process of, one, validating reimbursement and all of those different details that give them further encouragement. We are on the other side of that at this point in time. And we have very clearly segmented our business in Q4 to focus on growth. And like Mark had said, to reiterate that we are seeing early signs in Q4 with acceleration building on Q3.

Mark Baum: And in terms of the market opportunity for OPUVIZ on the EYLEA 2 mg biosimilar is in terms of volume, meaningfully higher. The number of accounts that will use OPUVIZ is significantly higher than those that use BYOOVIZ.

Steven Seedhouse: And just a follow-up on the reimbursement and net price sort of side of things for BYOOVIZ, how has that been going relative to your expectations?

Mark Baum: Andrew, do you want to comment on that? I don't know that we can give a lot of color on net pricing, but maybe contracted progress.

Andrew Boll: Yes, Steve, to Mark's point, we're not going to comment on the net pricing of the product just given the competitive dynamics. But in regards to coverage, I think we've been really pleased with the coverage that we've been able to get on the product. I think to your earlier question about learnings going into the OPUVIZ launch, there's a lot of learnings too as part of that going into that launch on the market access side and on the payer side that I think is going to be really advantageous for us. But so far, it's been pretty receptive with the payers. I've been pleased. I think the commercial team has been pleased with the uptake on the payers.

Operator: And our next question is going to come from Tom Shrader with U.S. Bank.

Thomas Shrader: Congratulations on all the progress. Very related questions on BYOOVIZ. Do you have a clear sense of what people testing the water want to see? Is it that you help them with reimbursement? Is that your supply chain is easy? Do you know what they're looking for?

Mark Baum: Well, I mean, we haven't really surveyed the accounts. But by and large, on a buy-and-bill product, as I said, it's the same sort of purchasing cycle that we've seen with IHEEZO that we've seen with TRIESENCE and really all of our buy-and-bill products. They buy the product, but they need to make sure that if they purchase it, they're going to get paid for it. So it's one thing to be successful on the buy side. But remember, it's buy and bill and the billing piece has got to come through. And that's a key feature that they're investigating when they make these sort of initial purchases. And we're seeing that follow through, and that's really important.

It's showing up in the numbers in the fourth quarter for BYOOVIZ, and we're going to take all of those learnings into 2027 when we launch OPUVIZ. Keep in mind, Tom, we own the largest portfolio of buy-and-bill products in all of ophthalmology. I don't think any company has the number of buy-and-bill products that we have. So we have within our team, extraordinary experience on the buy-and-bill side of things.

Thomas Shrader: And then on the QUELL trial, for a mixed trial like that, is there a rule that if you can get it published, then you can market the data and sort of stress the pieces you wanted? Are there any rules for what you can do for a mixed trial like that? And then a quick follow-up. Just on TRIESENCE, how much of the original market when the other people had it at peak, have you now filled?

Mark Baum: Sure. Well, I'm going to take the second question and give the first to Amir. In terms of TRIESENCE, TRIESENCE is being used in an area of inflammation for ocular surgery that we know very well within our company. It's the basis of how we started our company. We started selling compounded triamcinolone acetonide into the cataract surgery market as a compounded medication back in 2014. So we have tremendous history. That compounded product has been used in over one million cataract surgeries by thousands of ophthalmologists in the U.S. market. So we know the market in this space extremely well and what the size is, what the addressable market is, the opportunity.

Even though we reported 20 thousand units in the third quarter, it's really a very small percentage of the overall market opportunity. for that product. I've been talking about how confident we are in TRIESENCE for now, I guess, a couple of years. And look, the units and the volumes for the quarters following me beginning to talk about how excited I was about relaunching TRIESENCE were not very impressive. But what I think you're starting to see is the overall assessment that I had a couple of years ago was on track. It was just a little bit late, and you're starting to see that pick up.

It's not easy to grow sequentially the way the unit volumes in TRIESENCE are growing now. We have an incredible team. The surgical team has done a wonderful job. Chad and Mike and the rest of the team. And so we're very bullish on TRIESENCE continuing to grow. We have not really I think our penetration is certainly in the low single digits. So we've got a lot of headroom with TRIESENCE. And the key factor before I turn it over is the clinical outcomes. The clinical outcomes anecdotally on the use of TRIESENCE, all of these new use cases that are causing this increase in volume. The clinical outcomes are extraordinary.

They're outstanding, the one-day post-ops that we hear about anecdotally. And what we're really excited about is Amir's got this TRIESENCE study going, and we're going to be able to, once again, just like with IHEEZO and the QUELL study, we're going to go from the anecdote to the actual. We're going to have a data set to present that I think is going to fuel further adoption of TRIESENCE. That was a long answer, but I do want to turn it over to Amir on QUELL to comment.

Amir Shojaei: Thanks for the question. I think the way I'd position this is we are at the infancy of the data review right now. We have top line results. We anticipate to have the full data. And as you alluded, we will have the study published and presented. At that point, the whole sort of premise behind the study would be medical messaging. We have a very strong medical team, and we would be messaging this across the relevant media and conferences. The study as a whole had the rigor to be a peer-reviewed journal published study. And as such, we anticipate to take it to that route with the investigators involved. So that's our plan.

Operator: And our next question is going to come from Daniel Clark, Leerink Partners.

Daniel Christopher Clark: Just first question I wanted to ask on the 2026 revenue guide. Just curious what scenarios you're kind of thinking about to get to the high and low end of the range here for sales?

Mark Baum: Andrew, do you want to tackle that one?

Andrew Boll: Yes. I'll do my best, Daniel, without providing -- typically, we don't provide product level specific guidance. And so we talked a lot kind of talked a lot about the bridge to get there in the letter to shareholders and in the deck. But we expect to see growth quarter-over-quarter from VEVYE. We're going to get continued contribution from TRIESENCE, should see sequential growth for IHEEZO as well. BYOOVIZ, we've talked a lot about in the Q&A here. We're seeing continued growth there heading into Q4. I think Q4 is going to be a really strong quarter for that product based on the early progress we've seen. And then you've got the contribution from TYRVAYA.

And I know we don't provide quarterly guidance on TYRVAYA, but you can read in the MD&A. We expect of the Q, we expect that product to do over $30 million of revenue next year. That product is a pharmacy benefit product is going to have its best quarter in Q4. So we get the benefit of that product's best quarter being here at the end of 2026 and contributing to revenue where we haven't gotten that benefit earlier in the year. And then we're always working on things. And so we've got some other aspects of the business on the commercial side that we're working on that could help us push beyond the low end of the guided range.

Daniel Christopher Clark: Okay. Got it. Super helpful. Just a follow-up. On HarrowRx, just curious, are there any products or particular use cases where you think this meaningfully improves provider experience? And just how you're thinking about the opportunity from this launch would be great.

Mark Baum: Sure. Thank you for that, Daniel. Yes. HarrowRx is actually a really important platform for our company in that when I go out on the road and I talk to our sales reps who are in offices every day, meet with staff, in particular, at these offices who have to deal with the challenges of prescribing pharmacy benefit products. They're using one specialty pharmacy for a product by a competitor. They're using a different specialty pharmacy for VEVYE, for example. Fortunately, TYRVAYA was available from FLAREX, which is our specialty pharmacy partner.

But what we have to offer our offices, and this is something I hear day in and day out when I talk to our customers, they are always surprised at the breadth of our portfolio. They're surprised that we have NATACYN, that we have VERKAZIA, ILEVRO, FLAREX, I can go down the list. And so what they're interested in is a single point of access for the entirety of our portfolio. In the future, we believe at Harrow that more prescribing is going to take place through these sorts of specialty hubs.

If you were to get a prescription for ILEVRO and send it to your local CVS, odds are, they don't have that product in stock for you to pick up in an hour or two. And so they have to order it in. And we believe going forward, if we can provide that single access point for this very large product portfolio, now I think we have over 20 branded products. We think that's a very attractive platform for doctors and their staff to be able to utilize to be able to access prior authorizations and all sorts of other features that we have planned for the platform. So it's going to be an important part of our business.

It will be a single point of access for the entirety of our portfolio. And I don't believe any of our other competitors really have anything like that.

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

Mayank Mamtani: I appreciate the level of detail here. If I may ask on the VEVYE new patient start trends, Mark, that seems strong. Are you able to comment on where these are sort of coming from? Are these switches from generic cyclosporine or other branded options? Or these are new to prescription patients? And wonder if the mix in any way is shifting now that you have a fully deployed sales force and payer coverage is also expanding?

Mark Baum: Yes. The truth is we don't know what is causing the stability and growth in our new prescription volumes. We put these rules in place, we anticipated volumes may be coming down that we might have to sacrifice volume in order to improve net pricing. That has simply fortunately not been the case. We've actually been able to grow new prescription starts despite these new rules, this new algorithm that actually improves net pricing and is improving net pricing for us. So I think that's a really positive development for the VEVYE franchise. In terms of where they're coming from, though, as I said, we don't know.

When I put VEVYE in my eye, and I do, and I put the other choices in my eye, I don't know why anyone would start anything other than VEVYE. It feels great. It works fast. It has a durable treatment effect. The data is incredible, and it just feels phenomenal. So like I said, I don't know why anyone would use anything other than VEVYE, but some people do. But as I think you're alluding to in your question, more and more people are starting with VEVYE, and I expect that trend to continue.

Mayank Mamtani: Great. And just a couple more quickly. On the IHEEZO step-up in 4Q, to the extent possible, if you're able to quantify year-over-year and also from a restocking and net price per unit reset we got in 2Q. And just broadly, should we think about this in alternate quarter buying cycles that 2Q and 4Q being strong? As you think about next year, and I know you're not guiding for next year today, it's basically a 2Q to 4Q steady build with a 1Q sort of reset.

And then maybe just for Amir, on the G-MELT NDA filing, which elements have been fast tracked, if you could comment and any thoughts from the pre-NDA meeting you may have had on how to think about the combination product scheduling as obviously you prepare for commercial readiness.

Mark Baum: Yes. Mayank, thanks for the question. I'll comment on IHEEZO and by not commenting or trying to answer your question. We really do not want to be in the business, and I think I said this in the letter to stockholders of getting or giving quarterly guidance on a product-specific basis. IHEEZO, in particular, can be choppy quarter-to-quarter. That said, the fourth quarter is always, as we said in the letter, and I think talked about on this call, the strongest period for that product. But look, second quarter is good. The first quarter wasn't bad. This year, in particular, there were some challenges with realizing revenue with IHEEZO.

And I think we've talked about that many times on prior calls. But I think in 2027, you're going to see a normalization of what to expect with IHEEZO. And I can only tell you one thing with IHEEZO, 2027 is going to be a stronger year for volumes and revenue for IHEEZO than 2026, just like 2026, I think, ultimately, in terms of demand certainly was stronger than the prior year. Amir, do you want to comment on the G-MELT filing at all? I don't know that you can say much about our pre-NDA meeting. Certainly, if we're going to actually submit to the FDA, it must have gone fairly well.

Amir Shojaei: Yes. I think I concur with that. The meeting was productive, and we are aligned with -- or more importantly, we are submitting what the FDA anticipates to receive. So from that regard, we are on the right foot. And we will be submitting hopefully by end of this month, if not beginning of next month. That said, our anticipation is we'll have a PDUFA goal date next year, whether it's priority review or not, that will be part of the decision the FDA would make. And beyond that, I think from a scheduling perspective, that would be a review during the submission as well. We are moving forward with our anticipated scheduling between the two fixed-dose combination products.

Operator: And our next question will come from Thomas Flaten with Lake Street Capital.

Thomas Flaten: Following up on a couple of questions. First for Amir, and I apologize if I missed this, but do you have a hypothesis on why you came up 30 points or so short of the 88% anesthesia goal that you had set for the study?

Mark Baum: Great question. Amir, do you want to tackle that one?

Amir Shojaei: Yes. Thank you for that question. So frankly, this was the first set of sort of adequate and well-controlled study that would generate that answer to your question. So where we believe the hypothesis lies is really the relevant difference between a procedure that requires cutting the eye as opposed to procedure that requires deep penetration into the eyes. That's where the delta is, and I think Mark alluded to this, how do you anesthesize the eye. And when you compare the various procedures, you realize there are different numbers that you would have to sort of set your bar for. We set the bar.

We extrapolated with the existing data because there was no other data available. with this data in hand, we have obviously learned the actual sort of benchmark that we should have set the study at. But that's really the gist of it. It's borrowed from or extrapolated from a different procedure because there were no other data available.

Mark Baum: I want to add to that, by the way, because it's very interesting. When we launched IHEEZO, I can't tell you how many doctors said to us, anesthesia is not a problem. we don't have a problem that you're going to be able to help us solve. And I think if you look at the data from QUELL, what it clearly says is patients experience pain from these injections. It seems axiomatic that if you're going to put a needle into the sclera of someone's eye, that it might be painful. And I think the study certainly demonstrates that.

And it also shows that whether you're going to anesthetize the eye with an injection of lidocaine, sort of a needle before a needle or you want to use something topical like IHEEZO, you can pretty much get patients to about the same level. In fact, Amir alluded to the fact that the pain levels between the two cohorts were essentially the same at two. But what we're excited about and what we're now able to message lawfully through our medical team is the patient experience after the injection.

It's so important that these offices not get the calls from their patients who are experiencing pain because they may have gotten an injection of lidocaine post procedure or that they have some ocular surface trauma or that they've experienced some other adverse event associated with the intravitreal injection. And so to be able to now message that is so important for us. And I think going forward, it's a data set that will inure to the benefit of IHEEZO. It will be helpful to our reps. It will justify certainly the use of IHEEZO in practice for more practices.

So we're really quite pleased with the data set that we invested in, could have been better, but it was pretty dog on good.

Thomas Flaten: That's great. And then a follow-up for Pat. You mentioned the new territory design and the ocular surface team. But could you just maybe flesh that out a little bit more? So you've got effectively three teams coming together. You've got seven products. Like how are you overlapping in territories? Did you split territories to create more frequency in smaller groups? Can you talk a little bit more about what that territory design looks like and how your incentive compensation looks with a seven product bag?

Patrick Sullivan: Yes. Thanks for the question. On our priorearnings call and I think through the prior communications, obviously, this has been a very phased and disciplined plan that started earlier this year. If you recall, the organization the organization made a large commitment and I think to further expand our presence in the dry eye space to really get behind VEVYE. And if you recall earlier this year. So right now, what we've done is, to your point, we've taken three teams, the Viatris team with the acquisition of TYRVAYA.

We had a specialty team, as Mark mentioned, that was representing a few of our specialty products, such as like Mark mentioned, these more rare products for VERKAZIA and IOPIDINE and also brought that together in our dry team. So that is our ocular surface team. So what I would say is one of the things that we're really excited about is we were very methodical in one, looking at a really clear approach that, one, we cover the right physicians to make sure that we have the right prioritization on products to deliver the right promotional intensity to drive the outcome that we're looking for. So our main focus is heavily on VEVYE.

VEVYE, as you see our prescription trends, we've had a pretty significant growth over the prior quarter of 17%, I think 83% year-over-year. I think we're really excited that we're just getting started, and we hear consistent feedback early in our new model about how we're deploying in a very smart, sophisticated way that drives increased productivity. So in a word for us, our prioritization is VEVYE and also our dry eye portfolio.

But I think by leveraging the other products that we have allow us to show up in a really unique way that only Harrow can with the breadth of our products, that really, if you think about it now, we have a really premium cornerstone spot when it comes to VEVYE as the leading dry eye disease product. With TYRVAYA, FRESHKOTE, and FLAREX, that really makes a real unique combination in our portfolio. But make no mistake, VEVYE is our lead product that is getting the most emphasis and the most promotional intensity. So to answer your question is we have a very clear plan.

This is just now taking shape, but this is really going to help propel us to the next level of growing not only our whole portfolio, but specifically VEVYE moving forward, more prescribers, more productivity and more prescriptions.

Operator: And our next question will come from Jeffrey Cohen with Ladenburg Thalmann & Company.

Jeffrey Cohen: Two for Aaron. I guess first, maybe for Mark or Amir, can you talk about the TRIESENCE Phase 3 and enrollment, how it's going, when we may expect that to complete and what we may see as far as press releases or filing dates?

Mark Baum: Sure. Amir, do you want to talk about that study?

Amir Shojaei: Yes. Thanks for the question. Our program for TRIESENCE is going forward well. We are enrolling on track. We still anticipate a readout next year, specifically towards the end of first quarter, beginning of second quarter. That's our sort of current progression.

Jeffrey Cohen: Perfect. Okay. And then secondly, I guess a question for Andrew. Could you talk about R&D for the quarter and maybe give us a sense of what you'd expect on R&D perhaps for Q4 or just generally speaking, as far as levels go. I know you've been quite active on a number of fronts on the development side.

Andrew Boll: Yes. Thanks, Jeff. On the R&D side, R&D is kind of, I would say, almost a seasonal spend. It depends on what we have that's active and what we can accelerate. But typically, the expense, I think, as a percent of revenue should be roughly the same as where it is now. That's where we're going to try to pin it to. But if there's opportunities to accelerate or investments that we think can make a significant return, we'll go after it. as we're kind of looking at Q4, we're accelerating some of these programs. We have accelerated programs. Not all of that ends up in R&D, by the way.

And so some of it goes up into the SG&A line. And so for example, with the G-MELT NDA filing, not all of that cost that's going to go into that filing and the PDUFA fee that will go with it is going to end up in R&D. There'll be parts of it for sure, but other parts will also flow up in SG&A.

Operator: And I show no further questions at this time. I will now turn the call back over to Mark for closing remarks.

Mark Baum: Thank you, operator, and thanks to everyone for joining us. We're seeing real momentum heading into what we expect to be Harrow's strongest quarter. We look forward to reporting our full year results and hopefully seeing many of you at our Investor Day in New York City in March. Have a great day.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.

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