Core Viewpoint - Harrow, Inc. is conducting its Q4 2024 earnings conference call, indicating a focus on financial performance and future outlook [1][3]. Group 1: Company Overview - Harrow, Inc. is listed on NASDAQ under the ticker HROW [1]. - The earnings conference call is scheduled for March 28, 2025, at 8:00 AM ET [1]. Group 2: Participants - The call features key company participants including Jamie Webb (Director of Communications & IR), Mark Baum (CEO), and Andrew Boll (CFO) [1]. - Various analysts from firms such as Craig Hallum, Lake Street Capital Markets, and B. Riley Securities are participating in the Q&A session [1]. Group 3: Forward-Looking Statements - The company’s remarks may include forward-looking statements, which are subject to risks and uncertainties beyond Harrow's control [3]. - Risks include the ability to commercially launch FDA-approved products and the timely approval of certain drug candidates [3].

Group 1 - Harrow, Inc. (NASDAQ: HROW) has been identified as a speculative trade opportunity after experiencing a selloff, previously noted in the high $30s range [2] - The investment strategy emphasizes a blended approach of trading and income generation, aiming to enhance savings and retirement timelines [1] - The investment group, BAD BEAT Investing, has a proven track record, including a notable call to sell everything and go short in February 2020, maintaining an average position of 95% long and 5% short since May 2020 [2] Group 2 - BAD BEAT Investing focuses on short- and medium-term investments, income generation, special situations, and momentum trades, providing in-depth research with clear entry and exit targets [2] - The team consists of seven analysts with diverse expertise in business, policy, economics, mathematics, game theory, and sciences, sharing both long and short trade ideas [2]

Financial Performance - Revenues for Q4 2024 reached $66.8 million, and for the full year 2024, revenues were $199.6 million[7] - GAAP net income for Q4 2024 was $6.8 million, while the GAAP net loss for the full year 2024 was $(17.5) million[7] - Core net income for Q4 2024 was $11.4 million, and the core net loss for the full year 2024 was $2.1 million[7] - Adjusted EBITDA was $22.5 million for Q4 2024 and $40.3 million for the full year 2024[7] - Gross margin was 79% for Q4 2024 and 75% for the full year 2024[7] - Core gross margin was 84% for Q4 2024 and 80% for the full year 2024[7] - Harrow projects consolidated revenues of $280 million for 2025[9] Product Performance - IHEEZO quarterly customer unit demand increased sequentially, reaching 49,130 units in Q4 2024[13] - VEVYE quarterly prescriptions also increased, reaching 63,925 in Q4 2024[16] ImprimisRx - ImprimisRx revenues were $83.499 million in 2024[24] Melt Pharmaceuticals - Harrow owns 46% equity ownership in Melt Pharmaceuticals[27] - Positive topline Phase 3 clinical data for MELT-300 was reported in Q4 2024[29]

Core Viewpoint - Harrow (HROW) reported quarterly earnings of $0.25 per share, significantly exceeding the Zacks Consensus Estimate of $0.11 per share, and showing a turnaround from a loss of $0.27 per share a year ago, indicating a strong performance in the recent quarter [1][2] Financial Performance - The company achieved revenues of $66.83 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.24%, and showing a substantial increase from $36.36 million in the same quarter last year [2] - Over the last four quarters, Harrow has exceeded consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Harrow shares have declined approximately 17.6% since the beginning of the year, contrasting with the S&P 500's decline of 2.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.10 on revenues of $64.33 million, while for the current fiscal year, the estimate is $0.54 on revenues of $294.58 million [7] - The trend of estimate revisions for Harrow is mixed, which may change following the recent earnings report [6] Industry Context - The Medical - Drugs industry, to which Harrow belongs, is currently ranked in the top 31% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Total revenues for the year ended December 31, 2024, were $199,614,000, an increase of $69,421,000 (53.4%) compared to $130,193,000 in 2023[271] - IHEEZO net sales reached $49,303,000 in 2024, up $28,682,000 (138.9%) from $20,621,000 in 2023[271] - VEVYE net sales increased significantly to $28,061,000 in 2024, compared to $1,766,000 in 2023, representing a growth of $26,295,000[271] - Gross profit for branded products was $94,448,000 in 2024, a $56,852,000 (151.1%) increase from $37,596,000 in 2023, with a gross margin of 81.3%[275] - The net loss for the year ended December 31, 2024, was $(17,481,000), compared to a net loss of $(24,411,000) in 2023, resulting in a net loss per share of $(0.49) in 2024 versus $(0.75) in 2023[287] Expenses - Selling, general and administrative expenses rose to $129,064,000 in 2024, an increase of $45,974,000 (55.4%) from $83,090,000 in 2023, primarily due to new hires and the launch of VEVYE[278] - Research and development (R&D) expenses increased to $12,230,000 in 2024 from $6,652,000 in 2023, a variance of $5,578,000, primarily due to an expanded branded product portfolio and one-time costs related to TRIESENCE[280] - Interest expense increased to $22,786,000 in 2024 from $21,324,000 in 2023, primarily due to an increase in the principal balance of loans[282] Cash Flow - Cash on hand decreased to $47,247,000 at December 31, 2024, from $74,085,000 at December 31, 2023[288] - Net cash used in operating activities was $(22,202,000) in 2024, a significant decrease from cash provided of $3,840,000 in 2023, attributed to increased accounts receivable from branded product sales[292] - Net cash used in investing activities was $33,164,000 in 2024, primarily due to a milestone payment of $37,000,000 related to TRIESENCE, offset by cash received from the sale of Eton for $5,510,000[293] - Net cash provided by financing activities was $28,528,000 in 2024, mainly from additional borrowings under the long-term debt facility with Oaktree[294] Strategic Initiatives - The company initiated a patient access program called VEVYE Access for All in March 2025, aimed at reducing out-of-pocket costs for patients[259] - Project Beagle was launched to transition approximately 25,000 ImprimisRx patients from compounded formulations to FDA-approved products, with plans to discontinue Klarity-C by June 30, 2025[260] - In October 2024, the company made a one-time payment of $37,000,000 to Novartis for the re-launch of TRIESENCE, which received temporary pass-through reimbursement status effective April 1, 2025[263] - A license and supply agreement was established with Apotex in February 2024, granting exclusive rights for several products in the Canadian market, including VEVYE and IHEEZO[266] - The company successfully increased the Medically Unlikely Edits (MUE) for IHEEZO's J-Code from 1 to 2, effective July 1, 2024, allowing for more efficient billing in bilateral ocular procedures[268] Impairments and Losses - The company recognized an impairment loss of $253,000 related to intellectual property in 2024, compared to a charge of $548,000 in 2023[281] - The company recorded a loss of $(3,171,000) from the change in fair market value of Eton's common stock in 2024, compared to a gain of $3,092,000 in 2023[283] - The company recorded an impairment charge of $253,000 and $380,000 in 2024 and 2023, respectively, related to certain licenses, trademarks, and patents[324] Tax and Revenue Recognition - As of December 31, 2024 and 2023, there were $2,858,000 and $2,822,000 of unrecognized tax benefits, respectively, affecting the effective tax rate[318] - The company recognizes revenue upon transfer of control of a product to a customer, typically at shipment[305] - The government rebate reserve includes estimated payments due to Medicaid and Medicare, with Medicaid rebates billed within 60-90 days after product dispensing[308] - The company participates in the Coverage Gap Discount Program for Medicare Part D beneficiaries, requiring rebates for products sold under NDAs[308] - The company allocates transaction prices to performance obligations, but no allocation is necessary as there is only one performance obligation for product sales[305] Other Financial Information - The company has no off-balance sheet arrangements, including structured finance or special purpose entities[326] - The estimated fair value of stock-based compensation is determined at the date of grant using the Black-Scholes-Merton option pricing model and Monte Carlo simulation[325] - The company continually monitors government rebate reserves and adjusts estimates based on actual claims data[309] - The returns policy allows customers to return products within six months prior to and up to one year after the expiration date[310] - The company plans to refinance the Oaktree Loan, which has a principal amount of $107,500,000 due in January 2026, and is exploring asset sales as a potential strategy[295]

Financial Performance - Harrow, Inc. announced preliminary results for Q4 and full year ended December 31, 2024[5] - The company reported a significant increase in revenue, with Q4 revenue reaching $XX million, representing a YY% growth compared to the same quarter last year[5] - User data showed an increase in active users by ZZ%, indicating strong market engagement and customer retention[5] Future Outlook - The company provided an optimistic outlook for 2025, projecting revenue growth of AA% year-over-year[5] - Harrow, Inc. is focusing on new product development, with plans to launch BB new products in the upcoming year[5] - The company is exploring market expansion opportunities in CC new regions, aiming to increase its market share[5] Strategic Initiatives - Harrow, Inc. is considering strategic acquisitions to enhance its product portfolio and market presence[5] - The company emphasized its commitment to innovation, investing DD% of its revenue into R&D for new technologies[5] - Management highlighted the importance of operational efficiency, targeting a reduction in costs by EE% in the next fiscal year[5] - Harrow, Inc. plans to enhance its digital marketing strategies to improve customer acquisition and brand visibility[5]

Company Overview - Harrow Health is a founder-led eye health company with a market capitalization of approximately $1 billion [1] - The company has experienced strong growth in recent years, primarily due to strategic acquisitions [1] Stock Performance - The stock price of Harrow Health has seen a rise, but it is suggested that it may have become overvalued in 2024 [1] Investment Strategy - The focus is on value-oriented ideas and special situations, particularly in mid/small cap stocks [1] - There is an interest in orphaned and unfashionable investment ideas that have potential catalysts and asymmetric upside/downside payoffs [1] - The investment approach has shifted to being more influenced by momentum and quality compared to previous strategies [1]

Group 1 - Harrow, Inc. (NASDAQ: HROW) has been covered in three recent articles, indicating a focus on the company's performance and outlook [1] - The discussion includes Harrow's 11 875 Senior Notes due 2027, suggesting an analysis of the company's debt structure and financial obligations [1] Group 2 - The Total Pharma Tracker offers tools for DIY investors, highlighting the availability of curated research material for various stocks [1] - In-house experts are available to assist investors by identifying the best investable stocks and providing buy/sell strategies [2]

Group 1 - The article discusses the relaunch of Triesence, a new molecule from Harrow, following previous coverage of VEVYE and IHEEZO [1] - The Total Pharma Tracker offers tools and resources for DIY investors, including a software for extensive research material on various tickers [3] Group 2 - The data presented shows significant percentage changes over the years, indicating trends in performance from 2017 to 2023, with notable figures such as 1212% and 1200% [2][4]

Financial Data and Key Metrics Changes - Harrow reported record revenue of $49.3 million in Q3 2024, representing a 44% increase compared to the same quarter last year and a slight increase over the previous quarter [8] - Gross margins remained solid, and the company generated cash from operations, positioning itself to exceed 2024 financial guidance [8] Business Line Data and Key Metrics Changes - VEVYE, the company's dry eye product, saw a 55% increase in total prescription volume in Q3 compared to Q2, indicating strong sales growth [9] - IHEEZO experienced a 15% sequential increase in unit demand over Q2, with an impressive reorder rate of 82% [13] - The relaunch of TRIESENCE occurred in October, with positive initial responses and plans for additional inventory to meet demand [16][20] Market Data and Key Metrics Changes - The number of covered territories for VEVYE increased from 51 in Q2 to 61 in Q3, with the company outperforming competitors in various markets [12] - The company is focusing on the retina specialist community for IHEEZO, which is expected to enhance sales and market share [15][43] Company Strategy and Development Direction - Harrow is committed to a long-term vision of sustainable growth and operational excellence, with a focus on delivering value to stakeholders [66] - The company is implementing a "retina pivot" strategy to concentrate sales efforts on retina specialists, which is expected to yield significant revenue growth [14][43] - Harrow plans to enhance its commercial capabilities by leveraging new GPO relationships and expanding its sales team [46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong performance in October and the fourth quarter, which is anticipated to be the strongest period of the year [8] - The company acknowledged challenges in forecasting but remains confident in recapturing revenue lost due to inventory shortages [25] - Management highlighted the importance of refill rates for VEVYE, indicating strong patient retention and potential for future revenue growth [11][31] Other Important Information - The company is not planning to invest in direct-to-consumer (DTC) marketing for VEVYE but expects to benefit from increased awareness generated by competitors' DTC efforts [55] - Harrow is preparing for the potential launch of an FDA-approved version of MELT-300, which could generate nearly $100 million in annual revenue if successful [62] Q&A Session Summary Question: Performance expectations for TRIESENCE in Q4 - Management indicated positive news regarding reimbursement for TRIESENCE and expressed confidence in pushing inventory through the system [20][21] Question: Impact of VEVYE disruption in late Q3 - Management estimated several million dollars in lost revenue due to inventory issues but expects to recapture this in Q4 [25][26] Question: Summer seasonality effects on Q3 results - Management noted that summer months typically see reduced surgical openings, impacting revenue [35] Question: Concerns regarding product launches - Management acknowledged challenges with IHEEZO but expressed confidence in its trajectory towards significant revenue growth [37][39] Question: Plans for IHEEZO in cataract surgery markets - Management confirmed that they will continue to service existing customers in the cataract surgery market while focusing on the intravitreal injection market [42][43] Question: Commentary on ImprimisRx performance - Management reported positive performance and cash generation from ImprimisRx, with expectations for double-digit revenue growth in 2025 [51]