Earnings Call Transcript - HROW Q1 2025

Operator, Operator

Good morning, and welcome to Harrow's First Quarter 2025 Earnings Conference Call. My name is Shannon, 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 the question-and-answer session. As a reminder, this conference is being recorded. I would now like to turn the call over to Jamie Webb, Director of Communications and Investor Relations for Harrow.

Jamie Webb, Director of Communications and Investor Relations

Thank you, operator. Good morning, and welcome to Harrow's first quarter 2025 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-K and subsequent quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. Harrow's results may differ materially from those projected. Harrow 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, Harrow will refer 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 to 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. By 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.harrow.com. Joining me on today's call are Harrow's Chief Executive Officer, Mark L. Baum; and Harrow's Chief Financial Officer, Andrew Boll. With that, I'd like to turn the call over to Mark to go over some prepared remarks prior to the question-and-answer session.

Mark Baum, CEO

Thanks, Jamie, and good morning, everyone. Thank you for joining us today. I hope you've had an opportunity to review our supplemental documents for the first quarter, including our earnings release, corporate presentation and letter to stockholders, all of which are now available on the Investor Relations section of our corporate website. Let me begin by stating that as Harrow stockholders, the first quarter is always the toughest revenue period for the company. However, it is now in the rearview mirror. And as I will discuss in more detail shortly, we are very well positioned to achieve and hopefully exceed our 2025 directional revenue guidance of more than $280 million. To get there, we'll need to generate approximately $232 million in revenue over the remaining 3 quarters of the year. In the next few minutes, my intention is to discuss the key drivers underpinning my confidence in meeting our guidance for the year. As you know, the Harrow team grew revenues in the first quarter of 2025 by 38% year-over-year, and that's growth that is nothing to sneeze at. We also delivered a record $19.7 million in cash flow from operations. Another bright spot, a very bright spot was VEVYE. VEVYE revenue rose 35% sequentially from $16 million in the fourth quarter of 2024 to $21.5 million in the first quarter of 2025. And that was even before the launch of the VEVYE Access for All program, which happened at the very end of the first quarter. We also completed our critical market access initiatives for TRIESENCE, allowing us to finally begin to realize this product's potential. On the expense side, the first quarter was challenged by a few one-time expenses, including increased costs related to our annual audit and a one-time special project, all totaling $3.7 million in the aggregate. We also continue to invest in building out our commercial infrastructure to support both current operations and future growth, particularly in sales and marketing. The VEVYE team now exceeds 80 sales and marketing professionals. The buy and bill team for IHEEZO and TRIESENCE is just shy of 50 experienced commercial professionals. We're very comfortable with our current cost structure and believe investments in commercial labor, in particular, will be favorably viewed as we deliver quarterly results throughout the year. On the revenue side, first quarter revenues for some segments of our business were softer than we had hoped. And as I explained in my letter to stockholders, there is seasonality to our business and the first quarter, as I mentioned before, is always our weakest, especially this year, which followed such a strong fourth quarter in 2024. Our Specialty branded products stand out because of volatility in gross to net estimates, which caused a reduction in recognizable revenue for the period. Now with the above said, you've heard me describe myself as a glass half empty kind of guy. I'm always striving for performance improvement. I'm never really completely satisfied, especially when I know we could do a little bit better. That said, the first quarter will go down as one of the most important periods in our company's history, and I'm very proud of the work our team did. Importantly, I am truly excited about the remainder of the year. And I want to spend the rest of my prepared remarks discussing specific products and the setup for the balance of the year and how we intend to deliver and hopefully exceed our 2025 revenue guidance. So here we go. VEVYE continues to outperform expectations. As I said in my letter to stockholders, after launching more than 40 ophthalmic prescription products over the past 12 years, including VEVYE, I can say with confidence, one, given the consistent weekly growth in new prescriptions, new prescribers and the stability we see with VEVYE refills, this product is poised to be our largest revenue product. And number two, the VEVYE Access for All program is the most successful market access strategy I've been a part of. And finally, three, without question, VEVYE is presently Harrow's most valuable asset. We launched the VEVYE Access for All program, or VAFA, late in the first quarter. So there was little or no impact in the first quarter results. However, as of today, just 7 weeks post launch of this program, both new prescriptions and weekly VEVYE prescribers at PhilRx have quadrupled. If things continue at the current pace 1 year or 2 from now, I expect VEVYE to be right at or near the top of the leading U.S. prescription dry eye medications. In fact, it should be at the top if we continue at this pace. In the more immediate term, assuming we can maintain our refill rates, even with our ASP expected to moderate a bit and then stabilize over the coming quarters, as we get into the third quarter and see more new prescriptions that we've been filling over the last 7 weeks begin to stack or compound, it is very easy for you as a Harrow stockholder to come up with some very large potential revenue numbers for VEVYE, especially as we get into the third quarter. Those numbers are real, and that is what is possible. And that's without much NRx growth or new prescription growth from our current daily new prescription levels. The reality, though, is that we're seeing consistent weekly NRx growth, and we have been for the past 7 weeks. So we don't expect this growth to abate in the near term. These are still early days, but the VEVYE Access for all program's early momentum is surpassing our expectations, and it's reinforcing my conviction that this groundbreaking initiative is one of the most impactful and potentially financially transformative in Harrow's history. And by the way, when I talked about producing $250 million in revenue in a calendar quarter by the end of 2027, this is the type of product given the success we're seeing in this program, that is going to help us deliver on that promise and that belief that we can hit those numbers. But what about IHEEZO? IHEEZO's first quarter sales were impacted by an elevated stocking activity at the end of 2024. Many of you know that. That dynamic, though, has now normalized with significant destocking occurring during the first quarter. We're now back in growth mode for IHEEZO. For example, in April, unit sales more than doubled compared to the monthly average in the first quarter. This rebound indicates a return to typical ordering behavior and reflects strengthening demand as downstream inventory levels rebalance and new accounts begin to ramp up utilization. We also made solid commercial headway in the first quarter with our sales team engaging with several new and potentially large accounts moving through the various early stages of onboarding, such as sample evaluations, formulary discussions and initial orders. With a quarterly average of 30 new IHEEZO institutional accounts and the top 10 accounts in our pipeline representing an estimated 80,000 incremental annual units of IHEEZO unit demand, we are confident in seeing meaningful unit demand growth through the remainder of the year and a sizable increase in IHEEZO revenue in 2025 versus 2024. So what about TRIESENCE? When is that going to blossom? Well, the first quarter was truly a pivotal period for the long-term plans that we have for this product. We were able to complete market access initiatives, including the publication of TRIESENCE's average selling price, the granting of pass-through status for the product, opening the market for ASC use and hospital and outpatient department use as well as the authorization for bilateral use case reimbursement for TRIESENCE. This all happened in the first quarter. These changes have greatly increased purchasers' confidence in their ability to obtain reimbursement for TRIESENCE. So these market access initiatives took effect April 1st, effectively unlocking about 40% of the overall market for TRIESENCE. And this is being reflected in sales momentum that we're seeing in the second quarter accelerating meaningfully. Already, the number of accounts ordering TRIESENCE has more than doubled since the beginning of the year, a strong signal of growing market confidence and adoption. Ophthalmologists and retina specialists, in particular, are performing procedures in the ASC and hospital and outpatient department settings of care, now have the assurance that TRIESENCE will be reimbursed outside of the bundled fee, a reimbursement feature that we saw directly positively impact the success of IHEEZO. We now have that for TRIESENCE. We believe this momentum will accelerate throughout the year. Now outside of our lead brands, our specialty branded products, which faced gross to net challenges during the first quarter, are picking up in the second quarter. In addition, our ImprimisRx compounding business continues to perform well, showing consistent revenue and operational reliability. In fact, April appears to be a record month for ImprimisRx. So let's bring this back to the original objective for today's call to show you how we expect to achieve our 2025 revenue guidance of more than $280 million. Remember, we have $232 million left to go, and here's how I break things down. On VEVYE, we believe we are on a glide path to generate at least $100 million in VEVYE revenues this year and perhaps much more. We've already reported over $21 million in revenue for the first quarter. Given VEVYE's refill profile averaging 9 refills per year per covered patient and VAFA's strong momentum, we expect revenues from VEVYE to consistently grow quarter-to-quarter with accelerated growth expected in the third and fourth quarters. Based on the number of refills and the growth in the number of new prescriptions and prescribers since launching this program, you should be able to build a model with some very big numbers, large numbers similar to what we are seeing in our internal models. However, we will try to be conservative and leave the opportunity to surprise stockholders meaningfully as the year progresses. On IHEEZO, we're on track. We expect to deliver over $50 million in 2025 revenue for this product with quarter-over-quarter increases expected now that distributor inventory levels have normalized. Our specialty branded products, which include TRIESENCE, in the aggregate, we expect them to deliver at least $50 million in revenue this year. And in terms of our ImprimisRx compounding business, it is a consistent performer on track once again to deliver more than $80 million in revenue in 2025. So if you add all of this up, these expected contributions, you will get to that $280 million or more in 2025 revenue with a clear runway for upside. Again, we're expecting to see overall quarter-over-quarter growth this year. And while the third quarter can be a historically softer period this year, we anticipate stronger numbers driven by the compounding effect from new VEVYE prescriptions under this program. Finally, we expect the fourth quarter to be our strongest revenue quarter, as it was last year. So in sum, I hope after today's discussion, combined with our letter to stockholders and other supporting materials, you have a clear view of where our growth is coming from and why we're confident in its acceleration and durability. With a diverse portfolio of category-leading products, innovative market access initiatives like the VEVYE Access for All program, and accelerating momentum across multiple franchises, Harrow is distinguishing itself as a leading U.S. ophthalmic pharmaceutical company. Now we're happy to answer your questions. I'll pause to have our operator poll for questions.

Operator, Operator

Our first question comes from Thomas Flaten with Lake Street Capital Markets.

Thomas Flaten, Analyst

Mark or Andrew, I was curious if you could maybe walk us through some of the price increase initiatives you took at the end of the year going into 2025, particularly as it relates to IHEEZO?

Mark Baum, CEO

Andrew, do you want to take that on?

Andrew Boll, CFO

Yes, Thomas, we did not do much for price increases on the products. IHEEZO, in fact, the list price stayed the same.

Mark Baum, CEO

Earlier in the year, we actually took some price decreases to make some of our products more accessible and affordable.

Thomas Flaten, Analyst

Understood. And then switching over, I was wondering, I know you mentioned Project Eagle, Mark, in your letter, you didn't address it today, but any particular initiatives we should be aware of other than Klarity-C? And then I'm trying to understand the scope and scale of that project. Would it, for example, include divesting the compounding business altogether? Or is that taking it way too far?

Mark Baum, CEO

Yes, I appreciate the question. The initial impetus for Project Eagle was to transition the Klarity-C patients to VEVYE. Financially, it makes a lot of sense for us. But I think even clinically for the patient, they have an incredible opportunity to get access to an FDA-approved 0.1% cyclosporine product. But as I said, financially, it makes a lot of sense for us. Certainly, with Klarity-C, for example, doing about $9 million or so, a little under $10 million in revenue, we're going to very obviously see a reduction in Imprimis revenue by that number. But on a corresponding basis, we'll see a significant increase in Harrow revenue. What's really interesting financially is that even if every single one of the Klarity-C patients came over to VEVYE at the $59 cash pay price, we estimate that our profit would be more than two times what it is on the Klarity-C formulation. And that's with nobody that is a Klarity-C patient having access to insurance coverage. So there's a lot of upside there for us with Project Eagle and implementing this transition from Klarity-C to VEVYE. And as I said, it's great for the consumer, the patient as well. But there are other formulations that we make within the Imprimis portfolio that I think work really well as FDA-approved products. We've talked in the past about Melt to the extent that Melt is ultimately available as an FDA-approved product that would certainly qualify. And there are several others that we're working on. But we're not planning to exit compounding. As I said in the letter to stockholders, we serve thousands and thousands of doctors, ophthalmologists, optometrists in the United States. They rely on our best-in-class compounded formulations. We have the broadest portfolio in the United States. We have the number one national brand. It is a consistent driver of not only revenue but profits, and it's a business that has served us incredibly well. It's been the foundation of our company for many years. So not planning to exit.

Operator, Operator

Our next question comes from the line of Chase Knickerbocker with Craig-Hallum.

Chase Knickerbocker, Analyst

Mark, I just want to start on IHEEZO to make sure I kind of understand the sequential changes. So if I kind of normalize ASP to account for what the potential stocking was, it looks like the impact was about $9 million. And then is that all from that unwinding of some potential stocking in Q4? Or was there any other kind of movers there?

Mark Baum, CEO

Yes, I don't have your numbers in front of me. Andrew, do you want to kind of talk through the impact of stocking and destocking from Q4 to Q1?

Andrew Boll, CFO

Yes, I think it's best to look at it on a forward-looking basis regarding unit volume and demand. We've observed a similar trend between Q4 and Q1 in the past, specifically with IHEEZO showing some softness in unit demand. However, as we moved into Q2, we started to see an uptick and a return to growth mode, as Mark mentioned in his prepared remarks. We expect unit demand for IHEEZO to rebound, resulting in incremental growth each quarter, provided that customer reorder rates maintain their current pace and new accounts come online. I can't provide the exact impact from the stocking events, but I'm open to discussing this in more detail later, Chase.

Chase Knickerbocker, Analyst

Yes.

Mark Baum, CEO

Yes. I would add too that if you look at the difference between Q4 of '23 and Q1 of '24, there was about an 80% decline. And we actually saw a better decline, if that's worth mentioning, but we actually had a lower decline. So it was probably 5 to 6 percentage points lower this year in Q1 of '25 versus Q4 of '24. So we did a little bit better. But look, it's wobbly. There is stocking at the end of the year for this product. And I think the focus here is the continued unit demand growth throughout the year, 2025 for the product, which is what we expect, and ultimately delivering more revenue for that product and more growth for that product this year relative to last year.

Chase Knickerbocker, Analyst

Got it. And it sounds like in April, shipments to distributors are now kind of winding up with end-user demand. And then I guess, just kind of confirmation there. And then on TRIESENCE, you spoke to kind of better fundamentals in April. Are you seeing a meaningful inflection in volumes? And then kind of can you split that between kind of the ASC and the retina opportunity and kind of where you're seeing some early signs of inflection and progress?

Mark Baum, CEO

Yes. I would say that what I'm seeing is that we're opening a lot of accounts. There are a lot of accounts dabbling and picking off small numbers of units to begin using the product and seeking reimbursement for it. And that's a typical pattern that you see with these buy and bill products. The account gets opened, they buy a few units, they use them. They know what TRIESENCE does. They're very familiar with the product. But the back office, which drives a lot of the purchasing of buy and bill products, wants to make sure that they're going to get reimbursed. And the reimbursement work that we did in the first quarter was critical for the long-term success. We are seeing the product being used in the ASC. We're seeing it used in the hospital. We're seeing it being used by cataract surgeons. We're seeing it being used by retina specialists. So there's a lot of upside. We think this is going to be the #1 intraocular injectable steroid in the market in fairly short order. But the team has just been given the tools from a reimbursement perspective that they need in order to be successful. They're really only about 40 days into that. So we are seeing the right signs with lots of new account openings, but dabblers at this point. And then as the year progresses, we expect to see greater density within those accounts.

Chase Knickerbocker, Analyst

Got it. And then on VEVYE, obviously, continued impressive progress there. If I think about the improvement sequentially in gross to nets, again, it's pretty impressive kind of sequential improvement there. Can you kind of speak to the drivers? And then in '25, you kind of spoke to it a little bit, but basically, gross to nets moderate a little bit in Q2 and then improve sequentially from there? Is that the right way to think about it, Mark?

Mark Baum, CEO

Yes. I wouldn't say gross to nets will moderately decrease and then start to improve. Firstly, we mentioned in previous calls that we were making changes to our business rules, which we expected would significantly enhance our average selling price for VEVYE. I believe we have completely fulfilled that expectation. However, as noted in my letter to stockholders, we do anticipate some reduction in the average selling price over the next quarter or so at the levels we are currently seeing. After that, we expect it to stabilize at a very appealing level. This is a level that, even when Andrew and I were developing our initial models before the launch, we considered to be aspirational. So we’re truly pleased with where we believe the average selling price will eventually settle. Furthermore, what is particularly impressive, beyond even our prelaunch aspirational data, is the growth in new prescriptions and the refill rate. It has been an incredible journey over the last seven weeks. This product has the potential to truly define our company and could lead the category in dry eye treatment, fulfilling the promise of addressing the needs of more than 30 million Americans suffering from this condition. Andrew, do you want to add to that?

Andrew Boll, CFO

Nothing to add, Mark.

Operator, Operator

Our next question comes from Jeffrey Cohen with Ladenburg.

Jeffrey Cohen, Analyst

I wanted to poke you a little bit further on the compounding business and some of the transition of the compounding products to prescription. Could you talk about the base that's existing as far as Imprimis and the base opportunity, both internal and perhaps external?

Mark Baum, CEO

I believe I have previously highlighted the potential of our compounding business, which I've discussed for several years as containing significant hidden value. The commercial partnerships we established with over 10,000 eye care professionals across the United States have greatly enhanced our commercial credibility. This credibility enabled us to work with EyePoint, leading to a remarkable 400% increase in sales of DEXYCU. It also facilitated our access to IHEEZO from Sintetica, which has been highly valuable for our company. This success inspired Novaliq to offer us VEVYE at an attractive price, with the majority of the financial benefits on the back end, and we are seeing positive developments with VEVYE. All of this growth and opportunity stemmed from the compounding business. Currently, we are transitioning over 25,000 Klarity-C patients to VEVYE. If I were to contact a marketing firm for the cost to reach over 25,000 targeted consumers with a near 100% likelihood of purchasing a chronic product at our current price levels, it would be incredibly costly. ImprimisRx already has access to these potential VEVYE patients, thanks to the success of our business over the last 12 years. We also have other products in the ImprimisRx portfolio that are closely linked to the branded products we sell, such as NSAIDs, antibiotics, topical steroids, and injectables; there is significant overlap. Our goal is to always provide customers with an FDA-approved product at a cost comparable to that of a compounded product if they are interested. This approach will guide our progress with Project Beagle.

Jeffrey Cohen, Analyst

Got it. That's helpful. And then secondly, could you talk about the Interior segment a bit as far as Q4 to Q1, looked a little bit weak. Is that seasonality? Or could you maybe expand upon that a bit?

Mark Baum, CEO

I appreciate your question. To be clear, I'm not satisfied with the current strategy, and if you were in my position, you likely wouldn't be either. The results speak for themselves; we should be performing much better, and we plan to improve. One of the strengths of our partnership is that we take decisive action when we recognize clear issues, and it's evident that these products should be doing significantly better. We are committed to reviewing our current strategy, which is certainly necessary. Stockholders should expect to see considerable improvement from the first quarter results. There are some technical revenue recognition and accounting issues specific to that quarter, but that's as bad as it will get financially. You can anticipate significant improvements from this point forward. Overall, I am not satisfied with the current strategy, and we are determined to implement changes for better results.

Operator, Operator

Our next question comes from the line of Yi Chen with H.C. Wainwright.

Yi Chen, Analyst

You mentioned that VEVYE revenue grew sequentially, but I noticed that the quarterly prescription was lower in the first quarter. So could you comment on the current average collection cycle for VEVYE sales?

Mark Baum, CEO

Yes. Andrew, would you like to address that? Revenues have increased, and we saw notable improvements in our net average selling price. Andrew, could you discuss the volumes?

Andrew Boll, CFO

Thank you for the question, Yi. I want to ensure I understood it correctly. Our revenue recognition is related to prescription volume, but it's not a perfect correlation. On the prescription front, Mark mentioned some business rules that were introduced at the beginning of the year, which helped improve the average selling price and also affected patient access. These business rules, along with our market access and patient access program, changed at the end of March with the launch of VEVYE Access for All. Looking ahead, we are seeing rapid increases in volume, particularly with new prescriptions. However, this may lead us to sacrifice some of the gross to net improvements we experienced in the first quarter. Importantly, we expect the average selling price to be higher with VEVYE Access for All compared to last year. The volume increases we are witnessing are remarkable. One of the reasons I favor VEVYE is the compounding effect we see with refills, which creates an annuity-like benefit. The new prescriptions we are acquiring in April, and continuing in May, will really show their value in the third and fourth quarters as the prescriptions begin to compound. We are excited about this program, as it benefits everyone involved—providing better access and lower prices for patients, while also allowing us to net more per prescription compared to last year.

Yi Chen, Analyst

Okay. Got it. And could you also let us know whether any of Harrow's products are affected by current tariff policy?

Mark Baum, CEO

We actually addressed that. Andrew had conducted some analysis on the impact of tariffs, which is detailed on Page 6 of the letter to stockholders. We estimated that our gross margins for 2024, based on current knowledge of the tariff programs, would be affected by about 50 basis points. This impact is relatively minor for us. I've received similar questions from others. For instance, people are aware of the cost of IHEEZO, which is manufactured outside the United States. Even if we were to add 25%, 10%, or even 125% to that cost, it wouldn't significantly affect our gross margins. Therefore, we do not anticipate much impact from the current tariff structure on our portfolio. We're also making efforts to source more of our excipients and APIs domestically for some of our compounding formulations, which should reduce the impact even further. Overall, our estimate for the impact remains around 50 basis points, which is not substantial.

Operator, Operator

Our next question comes from the line of Mayank Mamtani with B. Riley Securities.

Mayank Mamtani, Analyst

I appreciate the comprehensive update on business. Sorry, one more question on IHEEZO. So it looks like your unit volume demand was comparable to 3Q, but revenues came in a little lighter than that, actually a lot lighter than that, which makes you wonder if anything we need to account for existing and new accounts sort of going forward? I know there's a 1Q patient co-pay assistant support dynamic that other eye care retina players kind of faced. But I was also curious on an account-by-account basis, including the new GPOs that you have, anything we need to factor in? And if you can confirm there was no major customer we lost in 1Q? And I have a follow-up on VEVYE.

Mark Baum, CEO

Yes. I would say that the key focus with buy and bill products, where discounts and rebates are involved, is to manage the average selling price. Besides getting the products out, opening accounts, and servicing them, we emphasize managing the average selling price, which is crucial for us. Clearly, if there’s a change in the average selling price affecting revenues from one quarter to the next, it usually relates to the aspects of buy and bill products. That said, we are indeed focusing on average selling price diligently. Andrew and I discuss average selling price management almost daily and are exploring compliant ways to achieve that. However, what's perhaps more significant is what has transpired in the retina market over the past six months, particularly with the complete loss of foundation support, for example, from good days. We believe this is positively impacting us as we move into the second quarter and will likely have an even greater effect later this year. Anecdotally, we see more retina accounts evaluating the clinical advantages of IHEEZO and considering the elimination of anesthetic costs. Some retina practices are rethinking whether to pay out of pocket for an anesthetic with clinical benefits that may not be as compelling as VEVYE. With VEVYE, they can actually seek reimbursement. Thus, we are observing encouraging trends in the marketplace with increased interest in IHEEZO amidst the loss of major accounts. While we don’t discuss specific accounts, I will mention that we expect revenue growth and unit demand growth from 2024 to 2025 with IHEEZO, and I feel very confident about that.

Mayank Mamtani, Analyst

Very helpful color. And regarding VEVYE, we are also hearing a similar momentum from some KOL calls we did post-VAFA. Could you touch on what proportion of the 25,000 patients have already moved over from Klarity sort of quarter-to-date? And trying to understand how sequentially you could get to, in terms of NRx volume growth? And anything you could comment on the dynamic share you have right now in the broader cyclosporine market?

Mark Baum, CEO

I can't comment on the specific share, and I'm glad you're seeing, when you do your independent calls, the kind of feedback that we're also receiving with respect to VEVYE, not only clinically, but with respect to this program. It is making a huge impact. I've always looked at the dry eye market, and we've talked about this offline many times. If I was a patient, what would I want or if my mother was a patient, what would I want my mother to have access to? And I wouldn't want one of these old cyclosporines that took 9 clinical studies to get approved, that doesn't have a label for signs and symptoms. I wouldn't want something that causes pain upon installation to a significant number of patients that put it in their eye. That's not the cyclosporine that I would want my mother to have. And it wouldn't matter whether it was a branded version of that or a generic version of that, because it wouldn't matter at all. Bad is bad, or not great is not great, if you will, to be more politically correct. So we think that we can win the cyclosporine market. There's a lot of units available. I wouldn't want to compete against VEVYE. But the most interesting thing I think I learned over the last quarter is that Mark Cuban has a pharmacy business. I think it's called Cost Plus. And if you go to Mark Cuban Cost Plus and you look at what the out-of-pocket cost is at the consumer level for generic cyclosporine, which if you put in your eye, doesn't feel very good. And you look at what the cost is of VEVYE, which I assure you feels probably a lot better and has much better data, it's actually less expensive these days to get access to VEVYE without a prior authorization being required and without the need for step therapy. And we're quite happy that so many patients are now moving in that direction. And we don't think that's going to abate, as I said in my prepared remarks. So I wouldn't want to compete with us on VEVYE in the cyclosporine market. And frankly, I think we're going to win the anti-inflammatory market within the category as well because I think we've got the best anti-inflammatory. I think cyclosporine is highly trusted, and it's more trusted, I think, than anything else. And so anyway, look, we're real proud of VEVYE as a product. We think it delivers clinically. We're proud of the team that is executing our commercial strategy. And I wouldn't want to compete against us. And I think we're going to win the market.

Mayank Mamtani, Analyst

Understood. And then maybe for Andrew, a bit more color on debt refinancing since that is viewed as a little bit of an overhang on stock. If you could comment on what precisely are you looking to get to by summer to fall, kind of timeframe you've said in the stockholder letter. And is it something you want to get fundamentally with your business internally or something externally you're watching out for, including maybe a milestone with a potential strategic acquisition, if you could comment on that?

Andrew Boll, CFO

I appreciate the question, Mayank. Regarding the debt refinancing, I need to be a bit cautious since we are currently in discussions with lenders, including Oaktree. I don't want to share too much information while we are working to secure the best terms possible. However, I can say that we have had very positive conversations and I believe we have strong momentum as we head into spring and summer to finalize this and deliver good results for our shareholders through restructuring our facilities. We will have sufficient capital to manage the debt and operationally, our business is positioned to effectively delever. It's important for all shareholders to know that we are confident in our ability to refinance the debt. We are engaging with some excellent institutions and financing partners, and we are optimistic about reaching an agreement by late summer or early fall.

Operator, Operator

That's all the time we have for questions. I will now turn the call back to Mark L. Baum for closing remarks.

Mark Baum, CEO

Thank you for joining us today and for your questions. Long-term success in building a business we can be proud of requires a clear strategic vision, relentless execution, and a dedicated team. Unfortunately, it also requires some time. We have been developing the Imprimis business for over 12 years, which has led to many opportunities for creating a strong company that we believe will be a leading ophthalmic pharmaceutical company in the United States. We do expect some products to perform better than others, and fluctuations are natural in any dynamic business. However, we are confident in our foundation and the fundamentals of our business model. The momentum we see today reinforces our belief that the best is yet to come. We plan to deliver record numbers this year. I want to thank the Harrow family for their hard work. We aim to meet our 2025 guidance while also creating long-term value for our shareholders. If you have questions, please reach out to Jamie Webb at [email protected]. This concludes our call.

Operator, Operator

This concludes today's conference. Thank you for your participation. You may now disconnect.