Harrow Health(HROW) - 2025 Q2 - Quarterly Results

Letter to Stockholders This section provides an overview of Harrow's strong Q2 2025 financial performance, strategic corporate developments, and detailed product portfolio achievements, including significant growth in VEVYE and IHEEZO Q2 2025 Performance Highlights Harrow reported strong Q2 2025 growth with $63.7 million revenue, $5.0 million net income, and $17.0 million Adjusted EBITDA, supported by strategic acquisitions Q2 2025 Key Financial Metrics | Metric | Q2 2025 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Revenues | $63.7 million | +30% | +33% | | Net Income | $5.0 million | - | - | | Adjusted EBITDA | $17.0 million | - | - | - Harrow solidified its market position through two strategic acquisitions: the Samsung Bioepis ophthalmic biosimilars portfolio (BYOOVIZ® and OPUVIZ™) and U.S. commercial rights to BYQLOVI™ from Formosa Pharmaceuticals[3][5] Corporate and Strategic Developments Harrow is refinancing its $222.75 million debt for financial flexibility, strengthening its leadership, and preparing for its inaugural Investor & Analyst Day - Harrow is in active discussions to refinance its $222.75 million in outstanding debt with the objectives of lowering capital costs, increasing financial flexibility, and improving its ability to pursue growth opportunities[9][13] - The company has made several key leadership appointments, including a Chief Scientific Officer and SVP of Commercial Operations, to bolster its expertise and drive future success[6] - Harrow will host its first annual Investor & Analyst Day on September 26 in New York City to provide deeper insights into its leadership, products, and development pipeline[12] Product Portfolio Performance Harrow's product portfolio showed strong performance, with VEVYE, IHEEZO, and TRIESENCE achieving significant growth, complemented by strategic acquisitions and ImprimisRx's recovery VEVYE VEVYE, Harrow's flagship dry eye product, achieved exceptional Q2 2025 growth with 66% sequential prescription volume increase and 7.8% market share, on track for over $100 million revenue VEVYE Q2 2025 Performance Metrics | Metric | Value | Note | | :--- | :--- | :--- | | Total Prescriptions (TRx) | 119,526 units | +66% sequentially from Q1 2025 | | New Prescriptions (NRx) | ~50,000 units | Part of the total TRx volume | | National DED Market Share | 7.8% | +2.6% gain quarter-over-quarter | - The company reiterates its guidance for VEVYE to surpass $100 million in annual revenue in 2025, expecting to generate over $60 million in the second half of the year[24] - Supply chain is being scaled up to meet surging demand, including adding a second manufacturing site expected to be online next year[22] Buy and Bill Products Harrow's 'Buy and Bill' portfolio, including IHEEZO and TRIESENCE, achieved robust growth, with IHEEZO revenue up 251% sequentially, further strengthened by BYOOVIZ and OPUVIZ acquisitions IHEEZO Q2 2025 Performance | Metric | Value | YoY / QoQ Change | | :--- | :--- | :--- | | Revenue | $18.3 million | +62% YoY / +251% QoQ | | Unit Demand | 48,765 units | +63% YoY / +25% QoQ | - TRIESENCE achieved 32% quarter-over-quarter unit growth in Q2 and added 870 new accounts year-to-date in 2025. The company is preparing to market it more aggressively to the larger ocular inflammation market[31][35] - Harrow acquired exclusive U.S. commercial rights to BYOOVIZ (biosimilar to LUCENTIS) and OPUVIZ (biosimilar to EYLEA) from Samsung Bioepis to compete in the wet AMD market[40] Specialty Branded Products Harrow expanded its Specialty Branded Product portfolio with the acquisition of BYQLOVI, a novel steroid for post-operative ocular inflammation and pain, targeting over 7 million annual U.S. ophthalmic surgeries - The portfolio was expanded with the acquisition of BYQLOVI, an FDA-approved steroid for treating inflammation and pain after ocular surgery[45] - BYQLOVI is positioned to address a significant market, with over 7 million ophthalmic surgeries performed annually in the U.S. The commercial launch is planned within the next few quarters[46] ImprimisRx ImprimisRx, Harrow's compounding business, recovered in Q2 2025 with $21.5 million revenue, a 7% sequential increase, and awaits a final ruling on a $34.9 million jury verdict ImprimisRx Q2 2025 Revenue | Metric | Q2 2025 | QoQ Change | | :--- | :--- | :--- | | Revenue | $21.5 million | +7% | - The business demonstrated sequential recovery after Q1 seasonal softness, with April marking a record revenue month[48] - A final legal ruling is expected shortly in the case where ImprimisRx was awarded a $34.9 million jury verdict against OSRX, Inc[50] Closing and Outlook Harrow reaffirms its full-year 2025 revenue guidance of more than $280 million, anticipating stronger second-half performance driven by key products VEVYE, IHEEZO, and TRIESENCE - Harrow is confident in its 2025 revenue guidance of 'more than $280 million,' expecting stronger performance in the second half of the year[52] - Key growth drivers for the second half of 2025 are expected to be VEVYE, IHEEZO, and TRIESENCE[52] Financials This section details Harrow's Q2 2025 financial performance, highlighting significant revenue growth, a shift to net income, and increased Adjusted EBITDA, along with comprehensive non-GAAP reconciliations Commentary on Second Quarter 2025 Financials Harrow's Q2 2025 revenues grew 30% YoY to $63.7 million, achieving $5.0 million net income and $17.0 million Adjusted EBITDA, with IHEEZO and VEVYE as key revenue drivers Q2 2025 Financial Performance vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $63.7 million | $48.9 million | | GAAP Net Income (Loss) | $5.0 million | $(6.5) million | | Adjusted EBITDA | $17.0 million | $8.8 million | | GAAP Gross Margin | 75% | 74% | Revenue Breakdown for the Three Months Ended June 30, 2025 | Product/Segment | Revenue (Millions) | % of Total | | :--- | :--- | :--- | | IHEEZO | $18.3 | 29% | | VEVYE | $18.6 | 29% | | Other branded products | $5.2 | 8% | | ImprimisRx revenue, net | $21.5 | 34% | | Total revenues, net | $63.7 | 100% | - As of June 30, 2025, the company held $53.0 million in cash and cash equivalents and had accounts receivable of $78.8 million[60] Second Quarter 2025 Financial Overview This section details Q2 2025 GAAP results, showing $5.0 million net income and $0.13 diluted EPS, alongside non-GAAP Core net income of $9.2 million and Adjusted EBITDA of $17.0 million GAAP Operating Results (Three Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total revenues | $63,742,000 | $48,939,000 | | Gross profit | $47,512,000 | $36,400,000 | | Income (loss) from operations | $11,409,000 | $1,530,000 | | Net income (loss) | $4,995,000 | $(6,473,000) | | Diluted EPS | $0.13 | $(0.18) | Core Results (Non-GAAP) (Three Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Core gross margin | 80% | 79% | | Core net income (loss) | $9,227,000 | $(2,047,000) | | Adjusted EBITDA | $17,006,000 | $8,803,000 | | Core diluted EPS | $0.24 | $(0.06) | Non-GAAP Financial Measures and Reconciliations This section explains and reconciles non-GAAP financial measures, including Adjusted EBITDA and Core Results, to GAAP figures, providing a clearer view of Harrow's core operating performance - Management utilizes non-GAAP measures like Adjusted EBITDA and Core Results to evaluate financial performance, believing they provide a clearer view of core operations by excluding non-cash or non-recurring items[76] Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA (Three Months Ended June 30) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | GAAP net income (loss) | $4,995,000 | $(6,473,000) | | Stock-based compensation | $875,000 | $4,271,000 | | Interest expense, net | $6,408,000 | $5,471,000 | | Depreciation & Amortization | $4,722,000 | $3,002,000 | | Other adjustments | $6,000 | $1,877,000 | | Adjusted EBITDA | $17,006,000 | $8,803,000 | Reconciliation of GAAP Results to Core Results (Three Months Ended June 30, 2025) | Metric | GAAP Results | Adjustments | Core Results | | :--- | :--- | :--- | :--- | | Gross Profit | $47,512,000 | $3,780,000 | $51,292,000 | | Net Income | $4,995,000 | $4,232,000 | $9,227,000 | | Diluted EPS | $0.13 | - | $0.24 |