Harrow Q1 Earnings Call Highlights

Key Points

• Harrow said first-quarter results were hurt by a VEVYE gross-to-net accounting issue tied to a higher mix of high-deductible patients, but management stressed that underlying demand remains strong and the issue has been addressed with pricing and buydown changes.
• The company reaffirmed full-year 2026 guidance of $350 million to $365 million and expects second-quarter revenue of $71 million to $81 million, with VEVYE still projected to exceed $100 million in annual revenue.
• Management highlighted several second-half catalysts, including expanded VEVYE sales coverage, improved net pricing, the July launches of BYOOVIZ and IOPIDINE’s permanent J-code, and ongoing momentum in TRIESENCE and IHEEZO.

Harrow NASDAQ: HROW executives said the company’s first-quarter results were weighed down by a discrete revenue issue tied to VEVYE coverage and high-deductible patients, but management repeatedly emphasized that underlying demand for its core ophthalmic products is accelerating.

On the company’s first-quarter 2026 earnings call, CEO Mark L. Baum said the quarter’s headline revenue figure reflected “a specific isolated dynamic” rather than a deterioration in demand. Harrow reported consolidated revenue of $44.2 million and adjusted EBITDA of negative $12.7 million for the quarter, according to President and Chief Financial Officer Andrew Boll.

“The underlying fundamentals of Harrow have never been stronger,” Baum said, adding that demand for the company’s key growth drivers is “at or above” internal expectations.

VEVYE Revenue Hit by Gross-to-Net Issue

Management said VEVYE generated approximately $20.9 million in first-quarter revenue, but that reported revenue was reduced by about $8 million due to a gross-to-net modeling issue related to expanded commercial coverage that began Jan. 1.

Boll said Harrow’s initial business rules assumed a certain patient mix and level of out-of-pocket support. While January results tracked with expectations, the company later saw a significantly higher proportion of high-deductible patients filling prescriptions through pharmacy benefits, increasing average out-of-pocket buydowns and pressuring net revenue per unit.

“Due to the standard industry lag in claims reporting, the full magnitude of this mix shift was confirmed in mid-April,” Boll said. He said Harrow then implemented targeted changes, including strict caps on co-pay buydowns and other refinements intended to protect net pricing.

In response to an analyst question, Boll said CVS-covered patients were coming in about 40% higher on out-of-pocket buydown amounts than other covered patients. He said the business rule changes should move those patients from being, on average, “negative revenue” to “much more positive” contributors going forward.

Baum said the changes have shown “negligible impact” on new prescription demand. He said recent VEVYE prescription data showed “higher highs and higher lows,” which he attributed in part to the company’s expanded sales force beginning to affect field activity.

Company Reaffirms 2026 Guidance

Despite the first-quarter adjustment, Harrow reaffirmed full-year 2026 revenue guidance of $350 million to $365 million. Boll said the company expects second-quarter revenue of $71 million to $81 million, with VEVYE showing sequential growth.

Management also reiterated its expectation that VEVYE will exceed $100 million in revenue for the year. Boll said April trends suggested net pricing is “much better aligned” with internal expectations and should be notably higher than in the first quarter. In response to a question on average selling prices, Boll said assuming the current setup, a roughly 30% increase was a reasonable assumption.

Baum said Harrow’s commercial investments, including the hiring of more than 90 new sales professionals, are now complete. The company doubled its VEVYE dry eye sales force, expanded its surgical and retina-related teams, and added resources for Access+ and specialty products.

Pat Sullivan, Harrow’s chief commercial officer, said VEVYE new prescriptions grew approximately 25% sequentially in the quarter, while total prescriptions grew about 11%. He said the prescriber base expanded another 12% sequentially, and the product exited March with roughly 14% branded share, surpassing Xiidra on a monthly total prescription basis.

IHEEZO, TRIESENCE and Other Products

IHEEZO contributed $1.9 million in first-quarter revenue, which Boll said was in line with expectations as channel inventory was absorbed. Sullivan said IHEEZO unit demand grew 18% year over year, new ordering accounts increased by 21 during the quarter, and total accounts were up nearly 50% from last year. Retina procedures represented more than 80% of volume.

Harrow expects IHEEZO revenue to begin rebounding in the second quarter but remain below prior-year levels due to channel dynamics, Boll said. He said results should move toward a more normalized level in the third and fourth quarters, helped by a new multi-unit package launching in July and an expected 20% to 25% improvement in net pricing beginning in the second half.

Baum said the ambulatory surgery center business for IHEEZO is expected to “go to zero” following the loss of pass-through reimbursement, but he said the company expects to replace prior ASC unit volumes with in-office use cases by the end of the year. He described in-office coverage as “nearly pervasive,” with better than 95% coverage and a prior authorization rate below 5%.

TRIESENCE delivered $7.8 million in first-quarter revenue. Sullivan said the product posted 136% year-over-year unit volume growth, with March up 113% from a year earlier. He said TRIESENCE has now recorded six consecutive quarters of demand growth, with unit demand up roughly 250% over that period. Harrow also said its label expansion study in cataract surgery and pain is underway.

Access+ revenue was $13.5 million. Baum and Sullivan said Harrow had worked through prior inventory constraints in the cash-pay business and rebuilt inventory for key products.

Second-Half Catalysts and New Launches

Boll said the company expects a stronger second half supported by several catalysts, including full deployment of the expanded VEVYE sales force, better VEVYE net pricing, the July 1 commercial launch of BYOOVIZ, and the July 1 effective date of a permanent J-code for IOPIDINE 1%.

Sullivan said IOPIDINE is the only FDA-approved therapy to prevent intraocular pressure spikes following various in-office procedures. He said the permanent J-code, reimbursed at ASP plus 6%, changes the economics for physicians and could unlock an addressable market of more than 1.5 million annual laser procedure use cases. Baum said IOPIDINE is expected to be an incremental contributor in the second half of 2026, with a larger impact expected in 2027.

Baum also said BYQLOVI samples are already being distributed to select customers, while the trade launch, meaning revenue-generating sales, is expected to begin in the third quarter. He said Harrow’s full-year guidance includes BYQLOVI, though the company is not providing product-specific revenue expectations for BYQLOVI or BYOOVIZ.

MELT-300 Development Remains on Track

Chief Scientific Officer Amir Shojaei discussed MELT-300, Harrow’s IV- and opioid-free procedural sedation candidate acquired from Melt Pharmaceuticals. He said the company has initiated required pharmacokinetic and non-clinical toxicology studies. The non-clinical study is in the reporting phase, and the first pharmacokinetic study has been completed and is in clinical study report drafting.

Shojaei said renal and hepatic impairment studies are underway, with final reports anticipated in the fourth quarter of 2026. He also said a major manufacturing campaign scheduled for later in the quarter is expected to support the data package required for an NDA submission. Baum later said investors should think about a first-quarter 2027 submission, though he said Harrow would provide more information on the next quarterly call.

In closing, Baum said the first-quarter issue was resolved and did not change the company’s long-term trajectory. “We’re now entering a period where the foundation translates into sustained revenue growth and increasing profitability,” he said.

About Harrow NASDAQ: HROW

Harrow Health, Inc NASDAQ: HROW is a U.S.-based commercial-stage biopharmaceutical company specializing in ophthalmic therapeutics and diagnostics. The company focuses on the development, manufacturing and distribution of proprietary, generic and branded eye care products designed to treat a range of ocular conditions, including glaucoma, ocular hypertension, dry eye disease and other anterior segment disorders.

Through its wholly owned affiliate ImprimisRx, Harrow Health offers a direct-to-physician model for customized formulations as well as low-cost generic alternatives.

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