NASDAQ:HROW Harrow Q4 2023 Earnings Report $25.83 +0.83 (+3.32%) Closing price 05/2/2025 04:00 PM EasternExtended Trading$26.46 +0.63 (+2.44%) As of 05/2/2025 05:08 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Harrow EPS ResultsActual EPS-$0.27Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AHarrow Revenue ResultsActual Revenue$36.36 millionExpected Revenue$37.65 millionBeat/MissMissed by -$1.29 millionYoY Revenue GrowthN/AHarrow Announcement DetailsQuarterQ4 2023Date3/19/2024TimeN/AConference Call DateWednesday, March 20, 2024Conference Call Time8:00AM ETUpcoming EarningsHarrow's Q1 2025 earnings is scheduled for Monday, May 12, 2025, with a conference call scheduled on Tuesday, May 13, 2025 at 8:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Harrow Q4 2023 Earnings Call TranscriptProvided by QuartrMarch 20, 2024 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00Good morning, and welcome to Harrow's 4th Quarter Year End 2023 Earnings Conference Call. My name is Drew, 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. Operator00:00:28I would now like to turn the call over to Jamie Webb, Director of Communications and Investor Relations for Harrow. Speaker 100:00:38Thank you, operator. Good morning, and welcome to Harrow's 4th quarter year end 2023 earnings conference call. Before we begin today, let me remind you that the company's remarks may include forward looking statements within the meaning of federal securities laws. Forward looking statements are subject to numerous risks and uncertainties, many of which are beyond Harrow's control, including risks and uncertainties described from time to time in its SEC filings, such as the risks and uncertainties related to the company's ability to make commercially available its FDA approved products and compounded formulations and technologies and FDA approval of certain drug candidates in a timely manner or at all. For a list and description of those risks and uncertainties, please see the Risk Factors section of the company's most recent annual report on Form 10 ks and subsequent quarterly reports on Form 10 Q filed with the Securities and Exchange Commission. Speaker 100:01:34Harrow's results may differ materially from those projected. Herald disclaims any intention or obligation to update or revise any financial projections or forward looking statements, whether because of new information, future events or otherwise. This conference call contains time sensitive information and is accurate only as of today. Additionally, Harold referred to non GAAP financial metrics, specifically adjusted EBITDA and or adjusted earnings, as well as core results such as core gross margin, core net income and core diluted net income per share. A reconciliation of any non GAAP measures with the most directly comparable GAAP measures is included in the company's earnings release and letter to stockholders, both of which are available on the website. Speaker 100:02:21By now, you should have received a copy of the earnings press release. If you have not received a copy, please go to the Investor Relations page of the company's website, www.harro.com. Joining me on today's call are Harrow's Chief Executive Officer, Mark Elbaum and Harrow's Chief Financial Officer, Andrew Bole. With that, I'll turn the call over to Mark to go over some prepared remarks prior to the question and answer session. Speaker 200:02:47Thanks, Jamie, and thanks to everyone for joining us on today's call. I wanted to first address the change in cadence for our earnings release and conference calls. We believed it was in the best interest of our analysts and investors to extend the amount of time between when we issued our earnings release and hosted our calls. We hoped this would allow more time to digest the results and read through our corporate presentation and my letter to stockholders prior to the call. We hope you have found this timing change helpful. Speaker 200:03:19So if you're on this call, I assume you've reviewed these materials and I'll use this time to augment your understanding through some high level commentary. 2023, which is now more than 75 days in the rearview mirror, was a transformative year for Harrow. It was a transformation that was 4 years in the making, all of which I pointed out in my letter to stock holders when I quoted what I said about 4 years ago in 2020 when we were hatching our plan to become a leading North Number 1, we achieved record revenues with 2023 revenues increasing 47% over 2022 revenues. 2, adjusted EBITDA more than doubled in 2023 from 2022. 3, the addition of numerous high utility ophthalmic pharmaceutical products to our portfolio 4, beginning to generate cash flow from our big three products, IHESO, Vivi and Tri Essence, which made up our most significant short term and long term financial drivers. Speaker 200:04:36And finally, delivering $8,700,000 in cash from operating activities in the Q4 of last year and delivering our 2nd consecutive year of positive cash flow from operations. You see, we strengthened our balance sheet last year, especially our cash position ending the year with $83,000,000 in cash and cash equivalents and this includes our position in Eaton Pharmaceuticals. We expect our cash pile to continue to grow over the coming years. Equally important, we fortified our talent base, adding new members to the Harrow family, professionals with the experience, commercial relationships and fresh perspectives to further enhance our transformation. I have highlighted the names of a few of these folks in both the letter to stockholders and the new Harrow corporate deck. Speaker 200:05:31Our stockholders have been asking us for more granularity around our quarterly results. They want to know why we're so bullish on our company and the growth trajectory we see in front of us. This cycle, I've tried to provide more granularity. This detailed information highlights among other things, the amazing success we've had with our vVi launch. Based on our success to date, I am convinced that VIVI has the potential to dominate the large U. Speaker 200:06:00S. Chronic dry disease market as the leading cyclosporin and anti inflammatory product. The V Vi adoption curve driven by our small but mighty sales force speaks volumes as does the positive feedback about VIVI from actual patients on social media. I would encourage you to think about the size of the cyclosporine market alone in the United States. It was about 8,000,000 units last year. Speaker 200:06:29Without question, cyclosporine is the number one most trusted active ingredient for U. S. Dry eye disease patients. Eye care professionals trust cyclosporin. Payers trust cyclosporin. Speaker 200:06:43Patients trust cyclosporin. You see the V Vi train is rolling with all of our key performance metrics moving in the right direction. In fact, the CEO of FilRx, our specialty pharmacy partner, recently told me that vVi has been one of, if not the most millions of U. S. Dry disease patients and generate substantial value for Harrow stockholders over a very long period. Speaker 200:07:19I also discuss our progress in manufacturing Triescence, including a production batch which is set for next month. This is a PPQ batch and to the extent that we're successful meeting all the parameters would become a commercial batch. I talk about the number of units we expect to have available for sale when Tri Essence is eventually reintroduced to the market. I also lay out the expected addressable market in terms of unit volume and our new pricing, which combined make clear why we believe Tri Essence should be a multi 9 figure revenue product and hopefully soon. I hit on the continued uptake of IHIZO since its May 2023 launch and news about the recent publication by CMS of the IHESO ASP or average selling price in the physician's ASP file. Speaker 200:08:18This is something that we had previously requested from CMS and that was not acted upon until soon after we met with them on January 9 this year. I also talk about the return of ImprimisRx to its previous growth trajectory, fulfilling our performance promise that I made in our last stockholders' letter. I also included quotes from actual users of our products. You see in recent conversations with fellow stockholders, I've noted the reliance on opinions of so called key opinion leaders, KOLs, who, upon my further investigation, had actually not used our products. I thought it was important for you to hear from ophthalmologists and optometrists who, with 100% certainty, have actually used our products. Speaker 200:09:08Also want to mention that it's never been a better time to be a Harrow stockholder. I say this because of the amazing progress we made in 2020 3 and because of what is right in front of us, right in front of our eyes, a clear pathway to achieving our goals, including significant revenue and profitability growth, ultimately making us a leading strategic North American ophthalmic pharmaceutical company. Finally, as both a Harrow stockholder and a senior executive at this company, I continue to be perfectly fine eating my own cooking. I have never sold a share of Harrow stock and I do not plan to do so. In fact, recently, I purchased Harrow shares, in fact, 3 times in the past 12 months precisely because I believe in Harrow's long term value and because the shares have been available at an attractive price. Speaker 200:10:03We're now happy to answer your questions. I will pause to have our operator poll for questions. Operator? Operator00:10:11We will now begin the question and answer The first question comes from Mayank Mamtani with B. Riley Securities. Please go ahead. Speaker 300:10:49Good morning, team. Thanks for taking our questions and appreciate the granularity provided to both 4Q results and the forward looking outlook. Maybe just on the 2024 guide and also the longer term 2027 number that you put out. Are you able to give some breakdown on the incremental contribution you've seen there between your 3 growth drivers, AHEZ or Triacinth and VY? And also lately, notice you didn't give EBITDA guidance forward looking. Speaker 300:11:20It could help to understand how you're thinking of spend in 2024? And then I have a couple of quick follow ups. Speaker 200:11:29Thank you, Mike. Yes, so look, we're standing behind the better than $180,000,000 in revenue guidance that we put out for 2024. We don't guide by product. The one comment that I'll make is what I think is the 800 pound animal in the room, and that is what we put out today in our Form 8 ks filing. And the confirmation from CMS that, in fact, IHESO will be paid for separately in the physician's office setting is without question the most positive consequential event I think that has happened to our company since I founded it with Andrew back in 2011. Speaker 200:12:28So this is a very big event. It certainly supports our confidence in our guidance, which is a number greater than $180,000,000 But once again, we're not going to guide by product. But we're very excited about what we put out today in the Form 8 ks. It's something that happened yesterday afternoon about 2 Central. It kind of hit us with a very, very positive surprise. Speaker 200:13:04But it certainly gives us far greater confidence in our guidance. In terms of our spend in 2024, Andrew, do you want to kind of talk about our approach with some of the spend in the Q4, maybe 2023 and how we're thinking about 2024, especially in light of what we put out in the 8 ks this morning? Speaker 400:13:28Yes. Thanks, Mark. Mayank, thanks for the question. And you can kind of see some of the expense infrastructure changing in the Q4 numbers. In November, we decided to make a shift in our plans for rebuy in this launch. Speaker 400:13:43This resulted in a much heavier spend on the sales and marketing efforts than we initially planned for. In the K, you can kind of read year over year, we added about 100 new employees. A vast majority of those were coming or came in during the Q4 and were really tied to the VBI launch on the commercial side. And so a lot of that expense is going to obviously continue into 2024. One of the reasons we're not giving specific EBITDA guidance is as revenues grow, we'll invest in the operating expense. Speaker 400:14:22We'll invest in the sales and marketing efforts to further revenue growth. That said, we have a leverage ratio number that we want to get to, which is being having a leverage ratio less than 5 times. And so we're focused on that. But at the same time, we're going to be focused on growing revenues and accelerating revenue growth in these product areas where we see an opportunity to invest further on the sales and marketing side. Like Mark said, he's a great example where now we've got this great outcome with CMS. Speaker 400:14:53It's time to invest more heavily on the sales and marketing efforts there and really kind of put the foot to the metal and try to grow revenues. Speaker 200:15:04Yes. I'll add one further comment to that. And we said this in our Form 10 ks, which we filed, you obviously know, and this kind of hits on one of the points Andrew made related to Oaktree, who is our senior lender. And you probably know that they can receive warrants if our leverage ratio exceeds 5 times in 2024. And I think both Andrew and I have a far greater confidence that as a result of the Form 8 ks that was filed this morning, we sincerely doubt that our friends at Oaktree will be receiving any warrants under our agreement with them. Speaker 300:15:47Yes. That's very helpful color. Thank you. And on the cyber attack issue in February, could you just clarify if that is unique to Harrow? And also what visibility you have on utility of Aheza in retina clinics year to date and expectation for that segment to expand, including I think you made some reference for the bilateral IVT procedures. Speaker 300:16:15Is that sort of organic demand you're getting from these retina specialists of as they're using more eye more injections on both eyes that you can have separate billing for 2 units versus 1 unit. So and maybe one final question I won't be buying. Speaker 200:16:40Why. What was the first part, Mayank? I missed it. Speaker 300:16:43The cyber attack issue, whether that is unique to Hatto or that's a broader pharmawide issue of processing claims right now? Speaker 200:16:54Sure. Yes. So the issue with Change Healthcare has affected numerous companies, including us, that sell not only Part D as in David products, but also Part B as in Bravo products. So the system is still sort of being unclogged and the change healthcare issue has affected payments to our customers from the government. And this has affected our sales temporarily in the quarter, but we are seeing evidence of the systems beginning to be unclogged. Speaker 200:17:31We expect recovery and full normalization in the Q2. But this is an issue, the cyber attack that has affected us, but it has affected many, many companies who are selling to the pharma market. In terms of retina, the reason why we went to CMS and I talked about this in our last letter to stockholders is because there was uptake in the retina market. The retina market is in the form of the intravitreal injection market specifically is a very large market exceeding 10,000,000 unit opportunities per year. We saw uptake in that market. Speaker 200:18:20We were seeing reimbursement happen in that market around the country. But the market is unique in that it is highly concentrated. There are very large groups of potential buyers for these products. And so in the face of those sorts of opportunities in front of us, we thought it was prudent to confirm with CMS that in fact our J code, which is a product specific permanent J code would in fact be separately reimbursable in the physician's office setting. And so as we promised in the last letter to stockholders, we requested a meeting with CMS. Speaker 200:19:06We had that meeting on January 9, and we have been waiting patiently to hear from them. As we said in the prepared remarks, we were added to the ASP file, the physician's ASP file recently, but we did not know whether or not that confirmed separate payment in the physician's office and that happened just yesterday afternoon, which as I said is a very important event for the company. That can benefit from unique attributes of IHESO and that is going to start here very, very soon and that it will significantly change, I think, the trajectory for IHESO and also I think for our company. But IHESO is a fantastic product for that application. It's also obviously used in numerous other ophthalmic interventions. Speaker 200:20:22And it's a very, very exciting opportunity for us. Speaker 300:20:28And thank you. And lastly, on BY, you put out some good launch metrics. Yet you say it could take up to 18 months for ramp up. So just curious what dynamics in play are here to follow to get visibility and what peak sales could be? And with that, I'll hop back in the queue. Speaker 300:20:46Thanks for taking my questions. Speaker 200:20:48Thank you, Mike. First of all, with respect to VIVI, I want to mention a person because VIVI, the team, the commercial effort is being led by a woman named Maria Lloyd and she is extraordinary. And the effort that she has put into this project is just amazing. So I'm really grateful to everything that she has done. She is very experienced. Speaker 200:21:16She was involved in the launch of RESTASIS. She knows the dry eye market extremely well. And she's brought a lot of wonderful people into our organization that are working on her team. But as you saw in our recent corporate presentation, all of the numbers, all of the metrics with respect to the V Vi launch are up into the right, which is fantastic. Importantly, the product is performing extremely well in the market. Speaker 200:21:51I referenced the social media information that's out there and publicly available. And so we have very high hopes for that product. As I've said for several years, we've studied the dry end market. We know it very well. We've compounded 0.1% cyclosporin with our ImprimisRx business now for over 5 years. Speaker 200:22:16And what VIVI presents to the market is really a complete shift in the cyclosporin market, which is 8,000,000 units strong last year in the U. S. Market. So we think we have a product that can dominate the category. And in terms of what the opportunity is, there's so many patients that have failed other cyclosporin products, whether it's the 0.05% branded version of cyclosporin or its generic version or even the 0.09 percent cyclosporin product that is branded and available. Speaker 200:22:58The tolerability profile of those products is very different from the tolerability profile of VVY. And so, there are a lot of people that have failed those products and those are candidates to benefit from VVY. And in terms of what the size of the market can be, this is a product that gives me far greater confidence that the number that I wrote about a couple of letters to stockholders ago, which was $1,000,000,000 in revenue in the aggregate for our product portfolio, that can actually be met. I mean, that is a real target for us now. The uptake in vVai, certainly this Form 8 ks that was filed this morning, this puts us in the zone of where we wanted to be. Speaker 200:23:52I talked about our revenue getting to $1,000,000,000 or more with our product portfolio if certain things went our way. Well, the things that we announced today that certainly qualifies as something going our way. So we're really excited about that and what Maria and her amazing team are doing with VeeVai. Operator00:24:20The next question comes from Aaron Wolkheimer with Lake Street Capital Markets. Please go ahead. Speaker 500:24:29Hey, good morning guys. This is Aaron on the line for Brooks. I appreciate all the color so far. I guess related to TRIESENCE, have there been any more setbacks? I know you had a few comments Speaker 600:24:42in the prepared remarks, but Speaker 500:24:43I guess if you could just provide a bit more color on sort of inventory timing and how you're thinking about that and maybe just your confidence there to get before year end, that would be helpful. Speaker 200:24:55Sure. Thank you, Aaron. So look, as I said in the letter to stock holders, Tri Essence was not really being made for more than 5 years by our manufacturing partner. And the people and the processes that are involved in making that product were kind of dormant and because they weren't practicing that knowledge wasn't being produced. We knew that it was going to be a challenge reintroducing the product into the market in terms of manufacturing it. Speaker 200:25:33But what I can tell you is, is that the progress that we've made in the last 6 months in particular has given everyone in our organization a very high degree of confidence that we're going to have success meeting all of the required parameters to make Tri Essence here very soon. There were people in our organization, by the way, that were somewhat doubtful. But what I can tell you is at this point, because of the progress that we've made, there is no one in our organization, whether they're an employee or a consultant, who does not have a high degree of confidence that we're going to have Tri Essence made successfully and very soon. We have a batch being produced, a PPQ batch, which is effectively a commercial batch if it meets the production parameters, the performance specification that's going to happen, as I said, in the middle of April. So we'll produce 2 more batches if that first one is successful. Speaker 200:26:41And then within a period of a couple of months, we should be able to be back on track. There's quite a bit more information, as I said in the letter to stockholders and also in our corporate presentation about Tri Essence, but it is a very high utility product. It's an unusual product with an unusual label. And the physician community, I can tell you, is very interested in seeing it back in the market. And we think it's going to happen very soon. Speaker 200:27:12We I can't predict whether it's going to happen by June or by August. What I can tell you is that we're getting very strong help from our manufacturing partner. And our manufacturing partner, as you can see on the box for the product, is a very sophisticated organization. And we, as I said, have a high degree of confidence we'll have Triassic's back here very, very soon. Speaker 500:27:44Great. That's super helpful commentary. Thanks for taking the questions guys. Speaker 200:27:49Thanks, Aaron. Operator00:28:00The next question comes from Jeffrey Cohen with Ladenburg Thalmann. Please go ahead. Speaker 600:28:08Hi, there. Good morning. Thanks for taking our questions. I just had 2 for Mark and Andrew. Firstly, could you talk about perhaps the anticipated cadence on the top line for the year? Speaker 600:28:22Should we expect something somewhat linearly increasing as we did last year? And then secondly, could you touch upon anticipated margins for the year inclusive of Transits? Speaker 200:28:38Andrew, do you want to try and tackle that? I think we're going to keep our numbers where we are, which is in over $180,000,000 And I think with, as I said, the news of this morning, our margins should increase, not decrease. But Andrew, do you want to add anything? Speaker 400:28:59Yes, Jeff. Just to reiterate what Mark said, from a revenue perspective, we're sticking with what we said, which is more than $180,000,000 this year. We feel that's strongly intact. And then on EBITDA margins or operating margins, the approach is going to be kind of dependent upon revenue opportunity. And so we're going to kind of temper revenue growth with EBITDA expectations. Speaker 400:29:30We mentioned the leverage ratio, so we want to be sure we're coming in under 4x levered at the end of the year. But outside of that, we'll continue if we see opportunities to invest in that revenue growth for the out years, especially thinking about VeeVai, thinking about IHIZO and Triestein to an extent, will do it. And so the actual margin percent may be different depending on the revenue number for the year, but certainly we'll keep the leverage ratio in mind as we make investments and plan for the future. Speaker 600:30:06Okay, got it. And then lastly, could you talk about pricing at all? Did you take any pricing in 'twenty three? Or is there any anticipated pricing for 'twenty four? And any comments there would be appreciated. Speaker 200:30:20Andrew, you want to touch on that? I'll just say to start and that to be clear, our philosophy on pricing of any product is focused on access and affordability. That is the cornerstone of our company and there are products that we have raised prices on. There are also other products in our portfolio we've actually lowered prices on and made them even more accessible. But before we do anything, just philosophically, we always make sure that we have a patient assistance program in place that is aggressive, whether it's a branded product or a compounded product to ensure access and affordability to anyone who can benefit from our products. Speaker 200:31:14Andrew, do you want to add anything on pricing? Speaker 400:31:19Yes, Jeff, just more specifically in the corporate deck, we have some wholesale acquisition cost pricing for some of the products, Triacinth probably being the most notable one, where WAC pricing for that product is going to be $9.44 at the time we relaunched the product into the market. But to Mark's point, WACC is list price. There's a gross to net element to that. You see that in the accounting and in the footnotes. We talked a lot about the growth in our accounting, which factors in the patient assistance programs, the co pay assistance programs, making sure we're living up to our mission, which is access and affordability for the patient. Speaker 400:32:04And so ultimately, we're going to price the products to make sure we have steady supply of the products that we can make money selling the products and getting them to the patients, but we're also keeping in mind that patient element, the access element. Speaker 200:32:20A great example of that related to Tri Essence is related to Tri Essence. The price of Tri Essence had not seen any adjustment for 16 years since the product actually hit the market. And so one of the challenges is with a product that's on the FDA's drug shortage list that's not being made, that has not been priced competitively, there's just not a profit incentive to actually make the product available and therefore it ends up on the drug shortage list year after year after year. And so when we thought about pricing for Triescence, which is, as Andrew said, 944 unit, we looked at the other preservative free Transcendolone product that's in the market. It's not competitive with our product, but it is a preservative free transcendolone product and it's priced at more than $1800 per unit. Speaker 200:33:19And so we're almost half of that price. So we're always going to be lower in price and try to be more accessible and more affordable. There are other intravitreal steroid products that are certainly over $1400 $1500 per unit. And so we remain significantly lower than them, but we did adjust the price to create enough profit incentive for us to invest in the product and make sure that we have a steady supply of the product to provide to the market, which is considerable. Speaker 600:34:00Awesome. I think that does it, Russ. Thanks again for the comprehensive commentary and readout. Appreciate it. Speaker 200:34:07Thank you, Jeff. Thanks, Jeff. Operator00:34:11This concludes our question and answer session. I would like to turn the conference back over to Mark L. Baum for any closing remarks. Speaker 200:34:21Thank you, Drew. And I guess I kind of want to apologize to those of you who are waiting for the issuance of our 4th quarter year end earnings and letter to stockholders yesterday, which we intended to publish immediately after the market closed. But as I said earlier, very fortunately, after drafting all of our documents and preparing our press release and getting everything ready to go, the most positively yesterday, which is going to make IHESO, which is our low viscosity patented topical anesthetic gel, which is doing fantastic things in clinics and surgery centers across the country. It's going to make it separately payable, separately reimbursable in the physician's office. And it opens up a very large market for IHESO and it allows Medicare beneficiaries to experience the unique benefits of the product. Speaker 200:35:22So after we calm down from that excitement and we decided to not delay our filings, We made those filings and then ultimately put out a separate Form 8 ks before the market opened, revealing this wonderful new development. So once again, we apologize for being slightly tardy yesterday in publishing everything I heard from some of our stockholders, but we hope you appreciate that this was an example of no news being very good news. Indeed, yesterday was special for every member of the Harrell family, and it was an answer to some of our prayers actually. In past letters to stockholders, as I mentioned earlier, I've opined about aggregate revenue potential. I've said that our product portfolio could achieve $1,000,000,000 in annual revenue if, as I said, some things go our way. Speaker 200:36:16Yesterday's news was an example of a thing that went our way. It's a beautiful thing for many reasons because we're seeing amazing stories, practical stories of how IHEZO is positively changing anesthesia protocols around the country for ophthalmic procedures. It's even reducing patient exposure to dangerous opioids. Our team feels very good about what we believe is going to happen to IHIZO and therefore Harrow. So as I close this communication from what has been a whirlwind couple of days, I want to acknowledge and thank all members of our family, our loyal employees, their families, support our employees and our stockholders for their patience and steadfast support. Speaker 200:37:02Your belief in our mission has been a cornerstone of our progress and together we're going to build a company that we can be proud of. Never been truer than today that the very best is not only yet to come for Harrow, but it is soon to come. Thanks to everyone for attending today's call and for your interest in Harrow. If you have any investor related questions, please email Jamie Webb at jwebRead morePowered by Conference Call Audio Live Call not available Earnings Conference CallHarrow Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(10-K) Harrow Earnings HeadlinesNORDIC GROUP B.V. THROUGH ITS SUBSIDIARY NORDIC PHARMA, INC.April 24, 2025 | prnewswire.comHarrow Inc (HROW) Q4 2024 Earnings Call Highlights: Record Revenue Growth and Strategic ...April 21, 2025 | finance.yahoo.comShocking AI play that’s beats Nvidia by a country mileYou’ve seen the headlines about Nvidia. Now Tim Sykes is sounding the alarm — because what CEO Jensen Huang is about to announce could change the AI market once again. Experts already predict the total addressable market could climb past $20 trillion. But Sykes believes most investors have missed what’s coming next. He’s tracking a new shift — and says the biggest gains are still ahead.May 4, 2025 | Timothy Sykes (Ad)Harrow Expands VEVYE® Access for All Program to ImprimisRx’s Klarity-C PatientsApril 11, 2025 | finance.yahoo.comHarrow expands Vevye Access for All programApril 11, 2025 | markets.businessinsider.comHarrow Health (HROW) Receives a Buy from Craig-HallumApril 11, 2025 | markets.businessinsider.comSee More Harrow Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Harrow? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Harrow and other key companies, straight to your email. Email Address About HarrowHarrow (NASDAQ:HROW) operates as an ophthalmic-focused healthcare company. The company owns ImprimisRx, an ophthalmology outsourcing and pharmaceutical compounding business. The company was formerly known as Imprimis Pharmaceuticals, Inc. and changed its name to Harrow Health, Inc. in December 2018. Harrow Health, Inc. was incorporated in 2006 and is headquartered in Nashville, Tennessee.View Harrow ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Amazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2Palantir Earnings: 1 Bullish Signal and 1 Area of ConcernVisa Q2 Earnings Top Forecasts, Adds $30B Buyback PlanMicrosoft Crushes Earnings, What’s Next for MSFT Stock?Qualcomm's Earnings: 2 Reasons to Buy, 1 to Stay AwayAMD Stock Signals Strong Buy Ahead of Earnings Upcoming Earnings Palantir Technologies (5/5/2025)Vertex Pharmaceuticals (5/5/2025)Realty Income (5/5/2025)Williams Companies (5/5/2025)CRH (5/5/2025)Advanced Micro Devices (5/6/2025)American Electric Power (5/6/2025)Constellation Energy (5/6/2025)Marriott International (5/6/2025)Energy Transfer (5/6/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 7 speakers on the call. Operator00:00:00Good morning, and welcome to Harrow's 4th Quarter Year End 2023 Earnings Conference Call. My name is Drew, 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. Operator00:00:28I would now like to turn the call over to Jamie Webb, Director of Communications and Investor Relations for Harrow. Speaker 100:00:38Thank you, operator. Good morning, and welcome to Harrow's 4th quarter year end 2023 earnings conference call. Before we begin today, let me remind you that the company's remarks may include forward looking statements within the meaning of federal securities laws. Forward looking statements are subject to numerous risks and uncertainties, many of which are beyond Harrow's control, including risks and uncertainties described from time to time in its SEC filings, such as the risks and uncertainties related to the company's ability to make commercially available its FDA approved products and compounded formulations and technologies and FDA approval of certain drug candidates in a timely manner or at all. For a list and description of those risks and uncertainties, please see the Risk Factors section of the company's most recent annual report on Form 10 ks and subsequent quarterly reports on Form 10 Q filed with the Securities and Exchange Commission. Speaker 100:01:34Harrow's results may differ materially from those projected. Herald disclaims any intention or obligation to update or revise any financial projections or forward looking statements, whether because of new information, future events or otherwise. This conference call contains time sensitive information and is accurate only as of today. Additionally, Harold referred to non GAAP financial metrics, specifically adjusted EBITDA and or adjusted earnings, as well as core results such as core gross margin, core net income and core diluted net income per share. A reconciliation of any non GAAP measures with the most directly comparable GAAP measures is included in the company's earnings release and letter to stockholders, both of which are available on the website. Speaker 100:02:21By now, you should have received a copy of the earnings press release. If you have not received a copy, please go to the Investor Relations page of the company's website, www.harro.com. Joining me on today's call are Harrow's Chief Executive Officer, Mark Elbaum and Harrow's Chief Financial Officer, Andrew Bole. With that, I'll turn the call over to Mark to go over some prepared remarks prior to the question and answer session. Speaker 200:02:47Thanks, Jamie, and thanks to everyone for joining us on today's call. I wanted to first address the change in cadence for our earnings release and conference calls. We believed it was in the best interest of our analysts and investors to extend the amount of time between when we issued our earnings release and hosted our calls. We hoped this would allow more time to digest the results and read through our corporate presentation and my letter to stockholders prior to the call. We hope you have found this timing change helpful. Speaker 200:03:19So if you're on this call, I assume you've reviewed these materials and I'll use this time to augment your understanding through some high level commentary. 2023, which is now more than 75 days in the rearview mirror, was a transformative year for Harrow. It was a transformation that was 4 years in the making, all of which I pointed out in my letter to stock holders when I quoted what I said about 4 years ago in 2020 when we were hatching our plan to become a leading North Number 1, we achieved record revenues with 2023 revenues increasing 47% over 2022 revenues. 2, adjusted EBITDA more than doubled in 2023 from 2022. 3, the addition of numerous high utility ophthalmic pharmaceutical products to our portfolio 4, beginning to generate cash flow from our big three products, IHESO, Vivi and Tri Essence, which made up our most significant short term and long term financial drivers. Speaker 200:04:36And finally, delivering $8,700,000 in cash from operating activities in the Q4 of last year and delivering our 2nd consecutive year of positive cash flow from operations. You see, we strengthened our balance sheet last year, especially our cash position ending the year with $83,000,000 in cash and cash equivalents and this includes our position in Eaton Pharmaceuticals. We expect our cash pile to continue to grow over the coming years. Equally important, we fortified our talent base, adding new members to the Harrow family, professionals with the experience, commercial relationships and fresh perspectives to further enhance our transformation. I have highlighted the names of a few of these folks in both the letter to stockholders and the new Harrow corporate deck. Speaker 200:05:31Our stockholders have been asking us for more granularity around our quarterly results. They want to know why we're so bullish on our company and the growth trajectory we see in front of us. This cycle, I've tried to provide more granularity. This detailed information highlights among other things, the amazing success we've had with our vVi launch. Based on our success to date, I am convinced that VIVI has the potential to dominate the large U. Speaker 200:06:00S. Chronic dry disease market as the leading cyclosporin and anti inflammatory product. The V Vi adoption curve driven by our small but mighty sales force speaks volumes as does the positive feedback about VIVI from actual patients on social media. I would encourage you to think about the size of the cyclosporine market alone in the United States. It was about 8,000,000 units last year. Speaker 200:06:29Without question, cyclosporine is the number one most trusted active ingredient for U. S. Dry eye disease patients. Eye care professionals trust cyclosporin. Payers trust cyclosporin. Speaker 200:06:43Patients trust cyclosporin. You see the V Vi train is rolling with all of our key performance metrics moving in the right direction. In fact, the CEO of FilRx, our specialty pharmacy partner, recently told me that vVi has been one of, if not the most millions of U. S. Dry disease patients and generate substantial value for Harrow stockholders over a very long period. Speaker 200:07:19I also discuss our progress in manufacturing Triescence, including a production batch which is set for next month. This is a PPQ batch and to the extent that we're successful meeting all the parameters would become a commercial batch. I talk about the number of units we expect to have available for sale when Tri Essence is eventually reintroduced to the market. I also lay out the expected addressable market in terms of unit volume and our new pricing, which combined make clear why we believe Tri Essence should be a multi 9 figure revenue product and hopefully soon. I hit on the continued uptake of IHIZO since its May 2023 launch and news about the recent publication by CMS of the IHESO ASP or average selling price in the physician's ASP file. Speaker 200:08:18This is something that we had previously requested from CMS and that was not acted upon until soon after we met with them on January 9 this year. I also talk about the return of ImprimisRx to its previous growth trajectory, fulfilling our performance promise that I made in our last stockholders' letter. I also included quotes from actual users of our products. You see in recent conversations with fellow stockholders, I've noted the reliance on opinions of so called key opinion leaders, KOLs, who, upon my further investigation, had actually not used our products. I thought it was important for you to hear from ophthalmologists and optometrists who, with 100% certainty, have actually used our products. Speaker 200:09:08Also want to mention that it's never been a better time to be a Harrow stockholder. I say this because of the amazing progress we made in 2020 3 and because of what is right in front of us, right in front of our eyes, a clear pathway to achieving our goals, including significant revenue and profitability growth, ultimately making us a leading strategic North American ophthalmic pharmaceutical company. Finally, as both a Harrow stockholder and a senior executive at this company, I continue to be perfectly fine eating my own cooking. I have never sold a share of Harrow stock and I do not plan to do so. In fact, recently, I purchased Harrow shares, in fact, 3 times in the past 12 months precisely because I believe in Harrow's long term value and because the shares have been available at an attractive price. Speaker 200:10:03We're now happy to answer your questions. I will pause to have our operator poll for questions. Operator? Operator00:10:11We will now begin the question and answer The first question comes from Mayank Mamtani with B. Riley Securities. Please go ahead. Speaker 300:10:49Good morning, team. Thanks for taking our questions and appreciate the granularity provided to both 4Q results and the forward looking outlook. Maybe just on the 2024 guide and also the longer term 2027 number that you put out. Are you able to give some breakdown on the incremental contribution you've seen there between your 3 growth drivers, AHEZ or Triacinth and VY? And also lately, notice you didn't give EBITDA guidance forward looking. Speaker 300:11:20It could help to understand how you're thinking of spend in 2024? And then I have a couple of quick follow ups. Speaker 200:11:29Thank you, Mike. Yes, so look, we're standing behind the better than $180,000,000 in revenue guidance that we put out for 2024. We don't guide by product. The one comment that I'll make is what I think is the 800 pound animal in the room, and that is what we put out today in our Form 8 ks filing. And the confirmation from CMS that, in fact, IHESO will be paid for separately in the physician's office setting is without question the most positive consequential event I think that has happened to our company since I founded it with Andrew back in 2011. Speaker 200:12:28So this is a very big event. It certainly supports our confidence in our guidance, which is a number greater than $180,000,000 But once again, we're not going to guide by product. But we're very excited about what we put out today in the Form 8 ks. It's something that happened yesterday afternoon about 2 Central. It kind of hit us with a very, very positive surprise. Speaker 200:13:04But it certainly gives us far greater confidence in our guidance. In terms of our spend in 2024, Andrew, do you want to kind of talk about our approach with some of the spend in the Q4, maybe 2023 and how we're thinking about 2024, especially in light of what we put out in the 8 ks this morning? Speaker 400:13:28Yes. Thanks, Mark. Mayank, thanks for the question. And you can kind of see some of the expense infrastructure changing in the Q4 numbers. In November, we decided to make a shift in our plans for rebuy in this launch. Speaker 400:13:43This resulted in a much heavier spend on the sales and marketing efforts than we initially planned for. In the K, you can kind of read year over year, we added about 100 new employees. A vast majority of those were coming or came in during the Q4 and were really tied to the VBI launch on the commercial side. And so a lot of that expense is going to obviously continue into 2024. One of the reasons we're not giving specific EBITDA guidance is as revenues grow, we'll invest in the operating expense. Speaker 400:14:22We'll invest in the sales and marketing efforts to further revenue growth. That said, we have a leverage ratio number that we want to get to, which is being having a leverage ratio less than 5 times. And so we're focused on that. But at the same time, we're going to be focused on growing revenues and accelerating revenue growth in these product areas where we see an opportunity to invest further on the sales and marketing side. Like Mark said, he's a great example where now we've got this great outcome with CMS. Speaker 400:14:53It's time to invest more heavily on the sales and marketing efforts there and really kind of put the foot to the metal and try to grow revenues. Speaker 200:15:04Yes. I'll add one further comment to that. And we said this in our Form 10 ks, which we filed, you obviously know, and this kind of hits on one of the points Andrew made related to Oaktree, who is our senior lender. And you probably know that they can receive warrants if our leverage ratio exceeds 5 times in 2024. And I think both Andrew and I have a far greater confidence that as a result of the Form 8 ks that was filed this morning, we sincerely doubt that our friends at Oaktree will be receiving any warrants under our agreement with them. Speaker 300:15:47Yes. That's very helpful color. Thank you. And on the cyber attack issue in February, could you just clarify if that is unique to Harrow? And also what visibility you have on utility of Aheza in retina clinics year to date and expectation for that segment to expand, including I think you made some reference for the bilateral IVT procedures. Speaker 300:16:15Is that sort of organic demand you're getting from these retina specialists of as they're using more eye more injections on both eyes that you can have separate billing for 2 units versus 1 unit. So and maybe one final question I won't be buying. Speaker 200:16:40Why. What was the first part, Mayank? I missed it. Speaker 300:16:43The cyber attack issue, whether that is unique to Hatto or that's a broader pharmawide issue of processing claims right now? Speaker 200:16:54Sure. Yes. So the issue with Change Healthcare has affected numerous companies, including us, that sell not only Part D as in David products, but also Part B as in Bravo products. So the system is still sort of being unclogged and the change healthcare issue has affected payments to our customers from the government. And this has affected our sales temporarily in the quarter, but we are seeing evidence of the systems beginning to be unclogged. Speaker 200:17:31We expect recovery and full normalization in the Q2. But this is an issue, the cyber attack that has affected us, but it has affected many, many companies who are selling to the pharma market. In terms of retina, the reason why we went to CMS and I talked about this in our last letter to stockholders is because there was uptake in the retina market. The retina market is in the form of the intravitreal injection market specifically is a very large market exceeding 10,000,000 unit opportunities per year. We saw uptake in that market. Speaker 200:18:20We were seeing reimbursement happen in that market around the country. But the market is unique in that it is highly concentrated. There are very large groups of potential buyers for these products. And so in the face of those sorts of opportunities in front of us, we thought it was prudent to confirm with CMS that in fact our J code, which is a product specific permanent J code would in fact be separately reimbursable in the physician's office setting. And so as we promised in the last letter to stockholders, we requested a meeting with CMS. Speaker 200:19:06We had that meeting on January 9, and we have been waiting patiently to hear from them. As we said in the prepared remarks, we were added to the ASP file, the physician's ASP file recently, but we did not know whether or not that confirmed separate payment in the physician's office and that happened just yesterday afternoon, which as I said is a very important event for the company. That can benefit from unique attributes of IHESO and that is going to start here very, very soon and that it will significantly change, I think, the trajectory for IHESO and also I think for our company. But IHESO is a fantastic product for that application. It's also obviously used in numerous other ophthalmic interventions. Speaker 200:20:22And it's a very, very exciting opportunity for us. Speaker 300:20:28And thank you. And lastly, on BY, you put out some good launch metrics. Yet you say it could take up to 18 months for ramp up. So just curious what dynamics in play are here to follow to get visibility and what peak sales could be? And with that, I'll hop back in the queue. Speaker 300:20:46Thanks for taking my questions. Speaker 200:20:48Thank you, Mike. First of all, with respect to VIVI, I want to mention a person because VIVI, the team, the commercial effort is being led by a woman named Maria Lloyd and she is extraordinary. And the effort that she has put into this project is just amazing. So I'm really grateful to everything that she has done. She is very experienced. Speaker 200:21:16She was involved in the launch of RESTASIS. She knows the dry eye market extremely well. And she's brought a lot of wonderful people into our organization that are working on her team. But as you saw in our recent corporate presentation, all of the numbers, all of the metrics with respect to the V Vi launch are up into the right, which is fantastic. Importantly, the product is performing extremely well in the market. Speaker 200:21:51I referenced the social media information that's out there and publicly available. And so we have very high hopes for that product. As I've said for several years, we've studied the dry end market. We know it very well. We've compounded 0.1% cyclosporin with our ImprimisRx business now for over 5 years. Speaker 200:22:16And what VIVI presents to the market is really a complete shift in the cyclosporin market, which is 8,000,000 units strong last year in the U. S. Market. So we think we have a product that can dominate the category. And in terms of what the opportunity is, there's so many patients that have failed other cyclosporin products, whether it's the 0.05% branded version of cyclosporin or its generic version or even the 0.09 percent cyclosporin product that is branded and available. Speaker 200:22:58The tolerability profile of those products is very different from the tolerability profile of VVY. And so, there are a lot of people that have failed those products and those are candidates to benefit from VVY. And in terms of what the size of the market can be, this is a product that gives me far greater confidence that the number that I wrote about a couple of letters to stockholders ago, which was $1,000,000,000 in revenue in the aggregate for our product portfolio, that can actually be met. I mean, that is a real target for us now. The uptake in vVai, certainly this Form 8 ks that was filed this morning, this puts us in the zone of where we wanted to be. Speaker 200:23:52I talked about our revenue getting to $1,000,000,000 or more with our product portfolio if certain things went our way. Well, the things that we announced today that certainly qualifies as something going our way. So we're really excited about that and what Maria and her amazing team are doing with VeeVai. Operator00:24:20The next question comes from Aaron Wolkheimer with Lake Street Capital Markets. Please go ahead. Speaker 500:24:29Hey, good morning guys. This is Aaron on the line for Brooks. I appreciate all the color so far. I guess related to TRIESENCE, have there been any more setbacks? I know you had a few comments Speaker 600:24:42in the prepared remarks, but Speaker 500:24:43I guess if you could just provide a bit more color on sort of inventory timing and how you're thinking about that and maybe just your confidence there to get before year end, that would be helpful. Speaker 200:24:55Sure. Thank you, Aaron. So look, as I said in the letter to stock holders, Tri Essence was not really being made for more than 5 years by our manufacturing partner. And the people and the processes that are involved in making that product were kind of dormant and because they weren't practicing that knowledge wasn't being produced. We knew that it was going to be a challenge reintroducing the product into the market in terms of manufacturing it. Speaker 200:25:33But what I can tell you is, is that the progress that we've made in the last 6 months in particular has given everyone in our organization a very high degree of confidence that we're going to have success meeting all of the required parameters to make Tri Essence here very soon. There were people in our organization, by the way, that were somewhat doubtful. But what I can tell you is at this point, because of the progress that we've made, there is no one in our organization, whether they're an employee or a consultant, who does not have a high degree of confidence that we're going to have Tri Essence made successfully and very soon. We have a batch being produced, a PPQ batch, which is effectively a commercial batch if it meets the production parameters, the performance specification that's going to happen, as I said, in the middle of April. So we'll produce 2 more batches if that first one is successful. Speaker 200:26:41And then within a period of a couple of months, we should be able to be back on track. There's quite a bit more information, as I said in the letter to stockholders and also in our corporate presentation about Tri Essence, but it is a very high utility product. It's an unusual product with an unusual label. And the physician community, I can tell you, is very interested in seeing it back in the market. And we think it's going to happen very soon. Speaker 200:27:12We I can't predict whether it's going to happen by June or by August. What I can tell you is that we're getting very strong help from our manufacturing partner. And our manufacturing partner, as you can see on the box for the product, is a very sophisticated organization. And we, as I said, have a high degree of confidence we'll have Triassic's back here very, very soon. Speaker 500:27:44Great. That's super helpful commentary. Thanks for taking the questions guys. Speaker 200:27:49Thanks, Aaron. Operator00:28:00The next question comes from Jeffrey Cohen with Ladenburg Thalmann. Please go ahead. Speaker 600:28:08Hi, there. Good morning. Thanks for taking our questions. I just had 2 for Mark and Andrew. Firstly, could you talk about perhaps the anticipated cadence on the top line for the year? Speaker 600:28:22Should we expect something somewhat linearly increasing as we did last year? And then secondly, could you touch upon anticipated margins for the year inclusive of Transits? Speaker 200:28:38Andrew, do you want to try and tackle that? I think we're going to keep our numbers where we are, which is in over $180,000,000 And I think with, as I said, the news of this morning, our margins should increase, not decrease. But Andrew, do you want to add anything? Speaker 400:28:59Yes, Jeff. Just to reiterate what Mark said, from a revenue perspective, we're sticking with what we said, which is more than $180,000,000 this year. We feel that's strongly intact. And then on EBITDA margins or operating margins, the approach is going to be kind of dependent upon revenue opportunity. And so we're going to kind of temper revenue growth with EBITDA expectations. Speaker 400:29:30We mentioned the leverage ratio, so we want to be sure we're coming in under 4x levered at the end of the year. But outside of that, we'll continue if we see opportunities to invest in that revenue growth for the out years, especially thinking about VeeVai, thinking about IHIZO and Triestein to an extent, will do it. And so the actual margin percent may be different depending on the revenue number for the year, but certainly we'll keep the leverage ratio in mind as we make investments and plan for the future. Speaker 600:30:06Okay, got it. And then lastly, could you talk about pricing at all? Did you take any pricing in 'twenty three? Or is there any anticipated pricing for 'twenty four? And any comments there would be appreciated. Speaker 200:30:20Andrew, you want to touch on that? I'll just say to start and that to be clear, our philosophy on pricing of any product is focused on access and affordability. That is the cornerstone of our company and there are products that we have raised prices on. There are also other products in our portfolio we've actually lowered prices on and made them even more accessible. But before we do anything, just philosophically, we always make sure that we have a patient assistance program in place that is aggressive, whether it's a branded product or a compounded product to ensure access and affordability to anyone who can benefit from our products. Speaker 200:31:14Andrew, do you want to add anything on pricing? Speaker 400:31:19Yes, Jeff, just more specifically in the corporate deck, we have some wholesale acquisition cost pricing for some of the products, Triacinth probably being the most notable one, where WAC pricing for that product is going to be $9.44 at the time we relaunched the product into the market. But to Mark's point, WACC is list price. There's a gross to net element to that. You see that in the accounting and in the footnotes. We talked a lot about the growth in our accounting, which factors in the patient assistance programs, the co pay assistance programs, making sure we're living up to our mission, which is access and affordability for the patient. Speaker 400:32:04And so ultimately, we're going to price the products to make sure we have steady supply of the products that we can make money selling the products and getting them to the patients, but we're also keeping in mind that patient element, the access element. Speaker 200:32:20A great example of that related to Tri Essence is related to Tri Essence. The price of Tri Essence had not seen any adjustment for 16 years since the product actually hit the market. And so one of the challenges is with a product that's on the FDA's drug shortage list that's not being made, that has not been priced competitively, there's just not a profit incentive to actually make the product available and therefore it ends up on the drug shortage list year after year after year. And so when we thought about pricing for Triescence, which is, as Andrew said, 944 unit, we looked at the other preservative free Transcendolone product that's in the market. It's not competitive with our product, but it is a preservative free transcendolone product and it's priced at more than $1800 per unit. Speaker 200:33:19And so we're almost half of that price. So we're always going to be lower in price and try to be more accessible and more affordable. There are other intravitreal steroid products that are certainly over $1400 $1500 per unit. And so we remain significantly lower than them, but we did adjust the price to create enough profit incentive for us to invest in the product and make sure that we have a steady supply of the product to provide to the market, which is considerable. Speaker 600:34:00Awesome. I think that does it, Russ. Thanks again for the comprehensive commentary and readout. Appreciate it. Speaker 200:34:07Thank you, Jeff. Thanks, Jeff. Operator00:34:11This concludes our question and answer session. I would like to turn the conference back over to Mark L. Baum for any closing remarks. Speaker 200:34:21Thank you, Drew. And I guess I kind of want to apologize to those of you who are waiting for the issuance of our 4th quarter year end earnings and letter to stockholders yesterday, which we intended to publish immediately after the market closed. But as I said earlier, very fortunately, after drafting all of our documents and preparing our press release and getting everything ready to go, the most positively yesterday, which is going to make IHESO, which is our low viscosity patented topical anesthetic gel, which is doing fantastic things in clinics and surgery centers across the country. It's going to make it separately payable, separately reimbursable in the physician's office. And it opens up a very large market for IHESO and it allows Medicare beneficiaries to experience the unique benefits of the product. Speaker 200:35:22So after we calm down from that excitement and we decided to not delay our filings, We made those filings and then ultimately put out a separate Form 8 ks before the market opened, revealing this wonderful new development. So once again, we apologize for being slightly tardy yesterday in publishing everything I heard from some of our stockholders, but we hope you appreciate that this was an example of no news being very good news. Indeed, yesterday was special for every member of the Harrell family, and it was an answer to some of our prayers actually. In past letters to stockholders, as I mentioned earlier, I've opined about aggregate revenue potential. I've said that our product portfolio could achieve $1,000,000,000 in annual revenue if, as I said, some things go our way. Speaker 200:36:16Yesterday's news was an example of a thing that went our way. It's a beautiful thing for many reasons because we're seeing amazing stories, practical stories of how IHEZO is positively changing anesthesia protocols around the country for ophthalmic procedures. It's even reducing patient exposure to dangerous opioids. Our team feels very good about what we believe is going to happen to IHIZO and therefore Harrow. So as I close this communication from what has been a whirlwind couple of days, I want to acknowledge and thank all members of our family, our loyal employees, their families, support our employees and our stockholders for their patience and steadfast support. Speaker 200:37:02Your belief in our mission has been a cornerstone of our progress and together we're going to build a company that we can be proud of. Never been truer than today that the very best is not only yet to come for Harrow, but it is soon to come. Thanks to everyone for attending today's call and for your interest in Harrow. If you have any investor related questions, please email Jamie Webb at jwebRead morePowered by