All right. Thank you everybody for joining us. I'm Lachlan Henry-Brown, one of the biotech analysts here at Blair, and I cover Harrow. Before we get started, please visit williamblair.com for relevant disclosures. And with that, pleased to welcome Mark Bohm, the chairman and CEO. Also got Andrew Boll, CFO and president, and Mike Bieger, VP of IRN Communications. Yeah, I'll throw it over to Mark to give the presentation, and then if there's time at the end we'll do Q&A, otherwise come join us in the breakout room. Thank you Lachlan and I want to
thank William Blair for this audience. We're really grateful for the opportunity to share the Harrow story. I think everybody can hear me hopefully. I would imagine that most people listening to this presentation are really interested in AI and at Harrow believe it or not we are an AI company. We're a successful AI company, except we define AI a little bit differently. When I say AI, I mean anterior and interior of the eye. We're interested in the eye in ophthalmology and optometry, and specifically the eye care pharmaceuticals market, where we have the largest portfolio of prescription eye care products for the U.S. market. We're growing rapidly. We have a five-year revenue CAGR of better than 40 percent and a five-year adjusted EBITDA CAGR of better than 60 percent. But the growth isn't stopping. In fact, the growth should continue for many years to come. We have important launches in key markets every year throughout the balance of this decade. So we're publicly traded. This is our safe harbor. And I think what makes us unique is that we are founder-led and we're extremely diversified by delivery type, by the product category, how we receive our revenue, who pays us, the payer type, and the specific etiology of the disease, whether it affects the anterior segment or the posterior segment. And the key revenue drivers that we're going to talk about today are best-in-class products in highly underpenetrated markets. A lot of companies talk about best in class, but what in the world does best in class mean? I define best in class as a product that really drives and leads to obsolescence of your competing products. And so we're going to talk about today how we're driving obsolescence in the markets that we serve. The goal ultimately for Harrow with our portfolio is to surround our customers and be a key vendor for them, to really become an important vendor for them. For the next 18 or so minutes, we're going to not only talk about obsolescence, but we're going to talk about a few disease states and how we serve those markets, like dry eye disease, anesthesia, surgical care and ophthalmology, how we serve the retina market specifically, and other specialty niches like severe allergies and blepharitis and eye pressure control. So this is a visual of what our portfolio looks like. There's a lot of products on there and I'm not going to really get into all of them, but I'm going to selectively discuss some of them and how we use them to solve our customers' unmet needs. So what do I mean by unmet needs, by the way? You can drive obsolescence, you can serve unmet needs, I think really in three ways. You can lower costs, you can increase your customers' revenues, or you could provide unique clinical value. And I think that you'll see with all of the products that we're going to discuss today, we do all three of those and more. So how is the business performed? Remember, we started this business from scratch. We had no revenues, no customers, but as I said, we've got fairly impressive five-year revenue CAGRs and adjusted EBITDA CAGRs. We've actually guided for better than 30% revenue growth from 25 to 26, and a whisker under 50% adjusted EBITDA growth from 25 to 26. So the growth is not yielding. In fact, I would suggest that the growth in 2027 will be accelerating, and the growth won't end there either because we have, we expect a launch coming with a product called Melt that I'm going to talk about today. That should further accelerate our growth in 2028. So let's talk about dry eye disease. First of all, does anybody here have dry eye disease? You do. Do you use anything as a prescription product? No? You do? Okay, great. Those are great. Well, we're very much interested in the dry disease market. It is a very large market in the U.S. There are more than 30 million Americans that suffer from dry disease. It is a highly underserved market because only about 10% or fewer of those patients are actually on therapy. And there is very little therapeutic persistence. So patients who start dry eye prescription medications oftentimes do not continue with them. Have you ever been prescribed a product for dry eye? Or were you just given the punctal plugs? If you don't mind me asking. You did. Great. Thank you for that. The problem with a lot of these dry eye products and the reason why patients will get the first prescription and they don't get the 10th or the 20th or the 30th is because the products burn. They sting. And from our perspective, all forms of dry eye disease have some sort of inflammatory component. And some products don't even contain an anti-inflammatory. So the question is how do you get something to a patient that works fast, that lasts a long time, you get durability of therapeutic effect, and the way you do that we think is with Vivi, where we can actually affect the signs and symptoms of dry eye disease in about 15 days. We have data that shows you can get durability of treatment in effect going out 56 weeks, so it works quick, and it lasts a long time. And the key is to get the anti-inflammatory component to the cornea, the site and source of the inflammation, and to do it really efficiently. And our vehicle that is in Vivi does that. It doesn't contain water. It's a semi-fluorinated alkane vehicle. And it has a very small drop size, about one-fifth of the size of a normal water-based eyedrop. The money shot, though, is that it delivers about 22 times more cyclosporine to the cornea versus, for example, the vehicle in Restasis. So it's incredibly efficient at delivering cyclosporine. These are the types of qualities that lead to rapid prescription growth and ultimately the obsolescence of these legacy products in the category. But the power of a chronic care medication financially is, as I said, getting that first prescription, getting the 10th prescription, and getting the 50th prescription if you can. That's how you create this compounding effect. When you get new prescriptions and refills, you get this compounding effect financially. With Vivi, we've been able to show not only in 2025, but also in 2024, that if there's a patient who is covered, we not only get that first prescription, but we get nine refills. And if you add up all of the individual eye drops in those 10 bottles, it's about a year's worth of therapy. That is therapeutic persistence. I don't know that there's any product in the category that delivers financially in that way for patients. And it demonstrates the value of this product to patients and providers. We were really the only product in the first quarter actually that grew. We had 25 percent new prescription growth from Q4 of 25 through the balance of Q1 and 26. We had 11% growth in total prescriptions. We had 12% growth during that period in prescribers, and we achieved 14% market share. And this is a product that only launched a couple of years ago. So we're rapidly taking market share. We're only about 150 basis points or so away from taking over Mybo, which is another important product from Bausch and Loam in the category. And in the March month we surpassed Zydra, which we were really excited about. So we also have expanded coverage. We are now preferred with the largest manager of commercial lives in the United States market. And as a result of the momentum that we have and our belief that we can continue to grow that momentum and take market share, we've doubled the sales force. So between the month of January up until now we've gone from about 50 territories covered to around 100 territories covered. And that should show up in the numbers for the third quarter and once again should accelerate our growth going forward, leading to more and more obsolescence with the competing products in the category. Now let's talk about ocular anesthesia and how we play in that market. If you're going to poke on the eye or you're going to cut on the eye, you want your eye anesthetized. And there hasn't been a lot of innovation in ocular anesthesia in about 14 years. In fact though, ocular anesthesia and the procedures related that require ocular anesthesia, it's one of the largest TAMs in all of eye care. It's about 14 million annual procedures. Huge market opportunity. With IHESO, which is our product in the category, as I said, the first new FDA approved product in the category in about 14 years, our product works quickly. You get predictable duration of anesthesia, which if you're having the procedure is pretty important, obviously. And we've been able to demonstrate that if you receive IHESO, you don't need anything else to continue to complete the procedure. So it's a terrific product, it is innovative, but why is it going to lead to obsolescence? And the answer is not only the performance of the product, but the fact that it is the only currently available reimbursable ocular anesthetic in the U.S. market. And it's used in procedures that are capitated. So the doctor receives a single capitated fee, and if they don't use IHESO, they're paying for the ocular anesthetic out of that capitated fee, if they use IAHESO, they actually can turn a cost center into a small profit center. That is really important. This is a listing of just some of the CPT codes that make up that 14 million annual procedure number. Procedures like intravitreal injections. Many of you have heard of ilea and lucentis and all of the drugs that are used to treat wet age-related macular degeneration. There are more than 10 million of those annual injections. And once again, if you're getting your eye poked on or cut on, you need an ocular anesthetic. How is the product performed? Well, first let me say that it is a very high gross margin product. It is a high 90s gross margin product. We've had strong demand year over year, and we have a very high reorder rate. So when we open an account and an account purchases from us, we have about an 85%, 86% chance that they're going to reorder. A little over 80% of our units for that product are sold into the retina market specifically. So it's a very important market for us. I do want to highlight on this slide that in Q3 and Q4 of last year, we had a little over 112,000 units of demand for IHESO. And what I want to point out is that there are a few events that we expect to begin in the month of July that we believe give us comfort that the total number of second-half units for 2027 will far exceed the number of units for the prior year. and we should see growth further accelerate on the demand side and the revenue side. What do I mean by those events? Well, believe it or not, we've been selling to the retina market with no retina-specific data. And in July, at the American Society of Retina Specialists meeting in Montreal, we're going to have the first presentation of data for IHESO in the retina market. That's a really important data set that should accelerate growth. We also have an ASP that has been reset that will begin in July, and that will create a 20% to 30% improvement in net revenue per unit for IHESO. So we should see increased unit demand, increased revenue per unit, and once again, And the fact that this is the only reimbursable anesthetic in the U.S. market should lead to obsolescence of the other choices in that category. No other choice is reimbursable. Let's talk a little bit about ophthalmic surgery. First of all, we've got a lot of young people. Has anybody had cataract surgery? Anybody know anybody that's had cataract surgery? Okay, you do. Hopefully people know people who've had cataract surgery. Well, the standard of care for cataract surgery, and there's over 4.5 million of those in the U.S. each year, is IV sedation, opioid-based sedation, and multiple eye drops post-surgery to control inflammation and infection. Our vision for ophthalmic surgery is IV-free, opioid-free, and even eye drop-free. If we can deliver on those, we're going to create that obsolescence of these legacy modalities of treating post-surgery inflammation and even sedation. Our entry initially into that market has been with Triessence. Triessence is a high-trust injectable steroid. In fact, it's the only FDA-approved injectable corticosteroid for the U.S. market. This asset was owned, we acquired it, from Novartis. When Novartis owned this asset, there were three factors that really led to, I think, a reduced usage of triessence over the years. Number one, the supply chain was completely screwed up. The drug was not even available in the U.S. market for many years. The second thing is that the sales force was only selling on a very narrow part of the triessence label. And the third item is that there was no defined pass-through status for ophthalmic surgery in, for example, the surgery center environment. And so, once again, surgery centers were paying for it from a capitated fee, which is not good for them. Once again, obsolescence, we're going to try and create that by lowering costs or increasing revenues. And this did the exact opposite. So when we acquired the asset, we fixed all three of those. fixed the supply chain. It's now available. The product's available. Secondly, we are selling on the entirety of the label, including its use case in ophthalmic surgery. And third, we went to CMS and asked them for pass-through status so that the surgery centers could be reimbursed separately outside of the capitated fee for this product. The opportunity for triescence, by the way, is very large. You're talking about about 7 million annual ophthalmic surgeries where this product could be impactful. So very large market. And now that we've begun to sell on the entirety of the label, and that only happened by the way the fourth quarter of last year, 44% of the unit demand for triessence is specifically in the surgical market. We've had 28% quarterly, you know, sequential quarterly account growth, six consecutive quarters of demand growth, and based on what we feel is going to be an acceleration in demand for triessence, now that we've fixed supply chain, we've got pass-through sorted out, and we're selling on the entirety of the label, this year so far we have tripled the sales force for triessence that's selling into that ophthalmic surgical market. So you should expect in the third quarter and certainly in the fourth quarter of this year to see further acceleration of growth. Now, I mentioned that our vision is eye drop free, opioid free, and even IV free, sedation. the largest product opportunity that we have in our portfolio is actually with a product that we expect to launch in 2028 it's called the g melt and as i said in ophthalmic surgery the standard believe it or not is ivs and opioids for sedation in fact there was a duke study that demonstrated study better than 90% of their cataract surgeries, fentanyl, opioids. Mayo study better than 80%. So this is a standard in eye surgery. Our product candidate is a sublingual combination of midazolam and ketamine. We have IP issued both domestically and internationally for our product. And here's the kicker. Clinical studies, phase three clinical studies for the G-Melt were able to demonstrate that the G-Melt as a combination of midazolam and ketamine is superior to midazolam alone. And I can assure you that midazolam as a sedation agent is a very powerful agent. It's like the Michael Jordan of sedation agents. So to be better than that is very difficult to do. We didn't know that we could do it but we actually did show superiority to midazolam alone. We expect to file the NDA maybe later this year if not in the first quarter of next year. We're going to start selling this product if it's approved in eye care in the ophthalmic surgical market but believe it or not the markets outside of eye care are much larger. Colonoscopies. Who here has been an MRI tube. Anybody had an MRI? Do you know that about one out of four patients press the button because they have claustrophobia. They need to get out of the tube. Well, if you give them the gmail, they're probably not going to get out of that tube. From a revenue perspective, if you're the owner of that MRI clinic, it's a very attractive product. But it doesn't end there. It's vasectomies, dermatology, women's health. I could go on and on. There are about 100 million annual procedures in just the U.S. market alone where the G-Melt could be impactful. I just got back yesterday, believe it or not, from Korea. And in Korea, many of you may know, it is the lifestyle procedure capital of the world. Lots and lots of plastic surgeries and dermatology procedures, laser procedures, all sorts of stuff. There's over a million of them in just that country alone. Turkey also is a big market. But G-Melt for us will not only be for eye care, it will also be for non-eye care as well, for sedation, for those types of procedures. So we're excited about that product. As I said, when that product gets approved, I think IVs and opioids will become obsolete. That is our goal. so let me talk a little bit about how we play in the retina market as i said ihezo is a product that we sell into retina for anesthesia if you're going to poke on the eye you're going to cut on the eye you need an anesthetic we sell ihezo into that retina market and now we're excited to be able to expand our offering to the therapeutic as well we partnered with samsung bioepis one of the largest biosimilars companies in the world to relaunch and launch both BioViz and Opiviz respectively. And so the BioViz relaunch is going to occur actually July 1st. We should have a little bit of revenue in the second quarter from stocking orders for BioViz, but we're really excited about it. And how are we going to play in that market? Well, we should have the only ranibizumab, which is the generic name for the active ingredient, that allows for net cost recovery. Once again, what leads to obsolescence, what allows you to compete successfully in a market is improving revenue, lowering costs, or providing something that is superior from an efficacy and safety perspective. And in this instance, we're going to be offering the only ranibizumab that will allow for net cost recovery, which I think gives us a really strong opportunity in that market. I'm not going to get into how we're going to compete with Opiviz because we're going to launch that product in the first quarter of next year, and we'll talk more about that as we get further into the year. But we were excited that Samsung reached a global settlement with Regeneron earlier this year, allowing us to bring Opiviz to the market early next year. This is, by the way, these anti-VEGFs, the largest revenue market in all of U.S. ophthalmology, north of about $8 billion a year. So we're going to be playing not only with the anesthetic, but also with the therapeutic. We have a lot of IHESO customers, bless you, that are very interested in our biosimilar offering. So I have about five minutes, six minutes left, and I'm going to spend that time talking about some specialty conditions, specifically Vercasia, Natasin, and Iopidine. Vercasia, these three products, by the way, were sitting on our shelf. I don't think any of our stockholders knew much about them, cared much about them, or thought that they would ever amount to much. But vercasia specifically is thought of to serve a very rare condition called VKC. And it is true that severe VKC is quite rare, but mild versions of VKC are not. And in fact, patients, particularly children, show up in optometry offices with VKC, pardon me, thank you, Mike, very frequently. There's a saying in optometry that if it's in my chair, it's not rare. And I think that as we've gone to our optometry customers or ophthalmology customers, they've told us that this is, in fact, not a rare condition. How is it used? Well, children who are non-responders to antihistamines when they have allergies, and many of you with children know that your kids get seasonal allergies, you give them antihistamines, and they are not helped. In fact, 61% of patients are not benefited by these antihistamines. What do doctors give these kids? They give them steroids. Steroids are not good when they're chronically used for kids. They cause early onset of glaucoma and all sorts of other eye pressure conditions that can be quite dangerous for patients. Vercasia is the only FDA-approved cyclosporine for kids. So it's first and only. It is a high-margin product. It is a high-impact product for us, and we believe that doctors love the fact that they can prescribe a non-steroid for these kids who are not benefited by antihistamines. Talk a little bit about Natasin. There's a really successful ophthalmic company called Tarsus that makes a product for blepharitis, in fact, demodex blepharitis. there are three causes of blepharitis. It is really only known, I think, by most investors and even some doctors that these mites that the Tarsus product is good at eradicating will cure this condition. And in fact, that's not the case. In fact, 50% of patients when you kill these mites that are causing blepharitis are not benefited. But you need to kill also the bacteria and the fungus. Natasin is the only FDA-approved antifungal in the market, and believe it or not, there are data that show that about 79% of chronic cases of blepharitis involve fungal elements. We're in the process of completing a study that I'll read out in the fourth quarter to demonstrate this yet again, so our own study. The goal is to not only treat patients, but to provide complete treatment for more patients. patients. Once again, this is a high-margin, high-impact product for us. The last one that I'll mention is Iopedi. Yet again, another product sitting on our shelf, highly underutilized. It is used for patients that are undergoing laser procedures in eye care, about a million and a half of them annually, and the standard post-procedure is to treat potential eye pressure spikes with generics, off-label stuff that once again is paid for out of a physician's capitated fee. We saw iopedine 1% as an opportunity to get a J code issued so that it would be separately reimbursable and not paid for out of the physician's global fee. We were successful just a couple of months ago in getting CMS to issue a product specific permanent J code for iopedine 1% that goes into effect July 1st. So once again, we're excited to turn a cost center into a profit center. So in summary, why invest in Harrow? Well, we've got a proven market-leading platform. We're U.S.-centric. We have the largest portfolio of prescription products in the U.S. market. We've got durable patent protection on the key sources of our revenue and growth. We've got an amazing pipeline. We're going to be launching, as I said, new products every year for the balance of the decade. We've demonstrated that we can grow over the last five years, but the growth is going to continue in 2027 and beyond. We have plenty of cash on our balance sheet, and we have a goal of delivering $250 million in quarterly revenue by the end of 2027. So, while everyone else is watching AI, after this presentation, I hope that you'll keep AI on Harrow, or maybe even two eyes on Harrow. Thank you.