Harrow Health(US:HROW)2024-08-07 21:15Financial Performance - Total revenues for the three months ended June 30, 2024, were $48,939,000, an increase of $15,469,000 compared to $33,470,000 for the same period in 2023[100] - Product sales, net for the three months ended June 30, 2024, were $48,871,000, up $19,329,000 from $29,542,000 in the prior year[100] - Gross profit for the three months ended June 30, 2024, was $36,400,000, representing a gross margin of 74.38%, compared to $23,470,000 and 70.12% in the same period of 2023[102] - The increase in gross margin from 69.33% to 72.35% for the six months ended June 30, 2024, was primarily due to higher sales of branded ophthalmology products[102] Expenses - Selling, general and administrative expenses for the three months ended June 30, 2024, were $31,817,000, an increase of $11,860,000 from $19,957,000 in the prior year[103] - Research and development expenses increased to $3,053,000 for the three months ended June 30, 2024, compared to $1,161,000 for the same period in 2023, representing a variance of $1,892,000[104] - Interest expense, net decreased to $5,471,000 for the three months ended June 30, 2024, from $5,704,000 in the same period in 2023, primarily due to increased interest income[105] Cash Flow - Net cash used in operating activities was $(7,374,000) for the six months ended June 30, 2024, compared to $(3,648,000) for the same period in 2023, attributed to increased operating expenses[111] - Net cash provided by investing activities was $4,993,000 for the six months ended June 30, 2024, compared to $(132,219,000) in the same period in 2023, primarily due to the sale of the investment position in Eton[114] - Cash and cash equivalents at the end of the period were $70,968,000 as of June 30, 2024, down from $74,085,000 at December 31, 2023[113] Business Developments - The company successfully manufactured a second process performance qualification (PPQ) batch of TRIESENCE in July 2024, with plans for a third batch before the end of Q3 2024[93] - IHEEZO generated net sales of $11,294,000 and $13,616,000 for the three and six months ended June 30, 2024, respectively[100] - The company launched VEVYE in January 2024, the first water-free cyclosporine ophthalmic solution approved for dry eye disease in the U.S.[97] - A $37,000,000 milestone payment will be due to Novartis upon the re-launch of TRIESENCE in the U.S.[93] - The company entered into a license and supply agreement with Apotex in February 2024 for exclusive rights to several ophthalmic products in Canada[94] Income and Taxation - The company recorded other income of $46,000 for the three months ended June 30, 2024, compared to an expense of $178,000 in the same period in 2023[107] - The company anticipates taxable income for the year ending December 31, 2024, due to timing differences related to tax deductibility[108] Strategic Considerations - The company expects to use its current cash position and funds generated from operations to pursue business plans, including potential acquisitions and clinical trials[110] - The company may consider the sale of certain assets to support operations and may pursue acquisitions of revenue-generating products or drug candidates[109] Compliance and Reporting - There has been no change in internal control over financial reporting during the quarter ended June 30, 2024, that has materially affected or is likely to materially affect internal control over financial reporting[122] - The report includes certifications from Mark L. Baum and Andrew R. Boll pursuant to the Sarbanes-Oxley Act of 2002, ensuring compliance with financial reporting standards[124] - The cover page of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, has been formatted in Inline XBRL[125]