HROW Q3 2026 earnings call transcript, November 10, 2026

And welcome to HARO third quarter 2026 earnings conference call. My name is Michelle and I will be your operator.

For today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. As a reminder, this conference is being recorded. I would now like to turn the call over to Mike Biega, Vice President of Invest Relations and Communications for HARO. Please go ahead.

Thank you, operator.

Thanks, Mike, and good morning, everyone. Last quarter, I was clear. Our priority was turning We'll be right back. 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 Vivi, which delivered record revenue as our expanded sales force matures and begins to deliver improved prescription economics. You see it in Twiescence, which had its strongest quarter under Harrow ownership, and you see it in Ihezo, 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 Terviya, we realigned our commercial organization into four focus teams, ocular surface disease, retina, surgical, and Access Plus, 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 complimentary products to the same customers, making every relationship

Good morning, everyone, and thank you for joining our call today. Third quarter revenue was a record $99.3 million, up 41% sequentially, and third quarter revenue was a record $99.3 million, up 41% sequentially, and third quarter revenue was a record $99.3 million. 39% year-over-year. Branded revenue was $83.5 million, up about 62% year-over-year, and made up roughly 84% of total revenue. Vivi generated $39.7 million, IHISO $25.3 million, and TriEssence $10.7 million of revenue. Compounded revenue was $15.8 million. Vivi was a clear example of demand converting to revenue. Right. Revenues grew 35% sequentially, outpacing prescription growth as our changes to prescription economics took hold. Gap 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 quarters. 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 GMELT, NDA, enabling work, and clinical studies for Ihezone Triassins. We also recorded a one-time $5 million gain that is reflected as other income in our statement of operations. This is related to...

Thanks, Andrew, and good morning.

Thanks, Pat.

the same.

Thank you. And our next question is going to come from Lachlan Hanbury-Brown with William Blair. Your line's open.

Hey, guys.

Thanks for the question.

I guess first maybe just wanted to follow up on Quell and sort of elaborate on the implications for IHESO in Retina. Like are you thinking about another study or sort of where do you go from here? Do you need another study? Does this change plans to put it on the label? I guess we could just start with your thoughts there. 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, you know, 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 IHESO were done in cataract surgery. And 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 zero or one pain outcome with not only IHESO, but with an injection of lidocaine. It's not easy. And if you look at the data, I mean, you know, we were within four patients of, or four percentage points of, of, of being equivalent to an injection sort of mainline. the, the anesthesia into the eyes. So I, 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 four to 24 hours, better ocular surface staining and far fewer adverse events. We can now confidently.

We legally say that. Amir, do you want to add anything to that? 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 IHESO franchise.

Second question here. I noticed some comments in the 10Q about how the licensing of TierVIA potentially breaches certain parts of the VVIA licensing contract with NovaLeak. Just wondering what the potential outcomes there could be. Could this ultimately require divesting TierVIA? I realize you probably can't say much, but can you give us any kind of clarity on what this could be? Yeah. Well, first, let me just... say, Novolique 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 V-Buy 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 Tervaya 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 Tervaya acquisition really do benefit sales of V-Buy. 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 NovaLeague than we do today.

Thank you. And our next question will come from Steve Seathouse with Canter. Your line's open.

Thank you. And our next question is going to come from Tom Schrader with U.S. Bank. Your line is open.

Good morning.

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

Well, I mean, we haven't really surveyed the accounts, but by and large, on a buy and build product, as I said, it's the same sort of purchasing cycle that we've seen with IHESO, that we've seen with Triessence, and really all of our buy and build 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, you know, initial purchases, and we're seeing that follow through, and that's really important, and it's showing up in the numbers in the fourth quarter for BioViz, and we're going to take all of the those learnings into 2027 when we launch Opiviz. 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. And then on the QUELL trial, for a mixed trial line, like that. Is the 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 TriEssence, how much of the original market, when the other people had it at peak, have you now filled? Thanks. Sure.

Well, I'm going to take the second question and give the first to Amir. In terms of TriEssence, TriEssence is being used in an area, 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 cataracts. Surgery market as a compounded medication back in 2014. So we have tremendous history. That compounded product has been used in over a 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, you know, we were. We reported 20,000 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 Triessence 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 Triessence were not very impressive. But what I think you're starting to see is, you know, 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 pickup. It's not easy to grow sequentially the way the unit volumes in Triessence are growing now. We have an incredible...

The surgical team has done a wonderful job. Chad and Mike and the rest of the team. And so we're very bullish on Triessence 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 Triessence. And the key factor before I turn it over is in the middle of the game. The clinical outcomes. The clinical outcomes anecdotally on the use of Triessence. 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 Triessence study going and we're going to be able... Once again, just like with IHESO 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 Triessence. That was a long answer, but I do want to turn it over to Amir on QUELL to comment.

Thanks for the question.

Thanks for all the details. Thank you. And our next question is going to come from Daniel Clark with Leering.

Partners, your line's open. Great. Thank you.

Good morning.

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 ends of the range here for sales. Thank you. Andrew, do you want to tackle that one? Yep. I'll do my best, Daniel, without providing, you know, typically we don't provide. Product level specific guidance. And so we've talked a lot, kind of, talked a lot about the bridge to get there in the, in the letter to shareholders and in the deck. But, you know, we expect to see growth quarter over quarter from Vivi. We're going to get continued contributions from triessence. Should see sequential growth from IHESO as well. Bio visits, we've talked a lot about in the Q&A here. We're seeing continued growth there heading into Q4. And 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 Turvaya. And I know we didn't provide quarterly guidance on Turvaya, 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 in the subject-guided range. Okay. Got it. Super helpful. Just a follow-up. On HARO-RX, just curious, you know, 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. Thank you. Sure.

Thank you for that, Daniel.

Yeah. HARO-RX is actually a really important platform for a 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. You know, they're using one specialty pharmacy for a product by a competitor. They're using a different specialty pharmacy for that they're using one specialty pharmacy. And they're using one specialty pharmacy. And they're using one specialty pharmacy.

Thanks for that.

Vivi, for example. Fortunately, Terviya is actually was available from PhilRx, 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're always surprised at the breadth of our portfolio. They're surprised that we have Mattis. That we have Vercasia, Alevro, 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 Alevro 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 to access prior authorizations and, 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'll 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. Thank you. And our next question will come from Mayank.

Thank you. And our next question will come from Thomas Flatton with Lake Street Capital. Your line's open.

Thanks everyone. Thank you. And our next question will come from Jeffrey Cohen with Leidenberg, Tommen and Company. Your line is open.

Thank you, Operator, and thanks to everyone for joining us. We're seeing real momentum heading into what we expect to be HARO'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.