Harrow Health(HROW) - 2024 Q3 - Earnings Call Transcript

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]