Harrow, Inc. achieved record quarterly revenue of $48.9 million, marking a 46% increase year-over-year and a 42% increase quarter-over-quarter, with strong performance across all business segments.
Summary
Harrow’s Q2 2024 performance was driven by significant growth in branded revenue, which now surpasses compounded revenue. The company’s key products, IHEEZO and VEVYE, showed strong market traction, while the Anterior Segment business grew by over 40% compared to Q1. CEO Mark Baum expressed confidence in exceeding the $180 million revenue target for 2024, stating:
“Based on our overall operational momentum, we expect revenue in the back half of 2024 to outpace revenue in the first half of this year, and that’s especially true with TRIESENCE relaunched later this year.”
Main Themes
- Guidance: 2024 revenue expected to exceed $180 million, excluding TRIESENCE contribution
- New Product Performance: IHEEZO and VEVYE showing strong market adoption and growth
- Market Expansion: Increasing market access and coverage for VEVYE
- Product Relaunch: TRIESENCE on track for relaunch in Q4 2024
- Sales Force Expansion: Plans to increase VEVYE salesforce coverage
Insights
- IHEEZO quarterly unit volumes nearly doubled, up 98% from the previous quarter
- 24 supply agreements signed with strategic retina practice accounts in 2024, including the largest retina practice group in the US
- VEVYE prescriptions increased 212% in Q2 2024 compared to Q1, with strong refill rates
- Anterior Segment business grew over 40% quarter-over-quarter
Market Opportunity
Harrow is targeting multiple segments within the ophthalmic market:
- Retina market: IHEEZO addressable opportunity estimated at over 10 million units per year
- Dry eye disease: More than 9 million patients suffering from moderate to severe dry eye disease
- Anterior segment: Stabilized and growing portfolio of acquired products
The company is expanding its salesforce to capture a larger share of these markets, particularly for VEVYE.
Market Commentary
The ophthalmic pharmaceutical market is showing strong demand for innovative products. IHEEZO is gaining traction in surgical cases, laser interventions, glaucoma surgeries, and intravitreal injections. The dry eye disease market lacks effective treatments, creating a significant opportunity for VEVYE. The relaunch of TRIESENCE is highly anticipated by retina specialists, indicating pent-up demand in the market.
Customer Behaviors
Customers are responding positively to Harrow’s products:
- IHEEZO: 87% reorder rate among current users
- VEVYE: Strong refill rates, indicating high patient satisfaction and treatment adherence
- TRIESENCE: High anticipation from retina specialists for the product’s return to market
Physicians are providing positive feedback on VEVYE’s quick action, longer durability, and high tolerability.
Regulatory Policy
Harrow is actively working on market access and coverage for its products:
- VEVYE: 166 million covered lives, 58% commercial coverage, 80% Medicaid coverage (expected to reach 100% by Q3)
- Medicare coverage for VEVYE expected in the first quarter of 2025
Industry Insights
- The ophthalmic market is receptive to innovative products that address unmet needs
- Strategic agreements with large practice groups are crucial for market penetration
- Market access and coverage play a significant role in product adoption and success
- There is a growing demand for preservative-free, affordable ophthalmic medications
Key Metrics
Financial Metrics:
- Q2 2024 Revenue: $48.9 million (46% YoY increase, 42% QoQ increase)
- Branded revenue now exceeds compounded revenue
KPIs:
- IHEEZO: 98% QoQ increase in unit volumes
- VEVYE: 212% QoQ increase in total prescriptions
- VEVYE: ~3,000 prescribers and growing daily
- Anterior Segment business: 40%+ QoQ growth
Competitive Differentiators
- Diverse product portfolio addressing multiple ophthalmic segments
- Strong market access and coverage strategy for key products
- Ability to acquire and revitalize underperforming products
- Focus on preservative-free, affordable medications
- Strong relationships with key opinion leaders in ophthalmology
Key Risks
- Execution risk in expanding salesforce and market coverage
- Potential delays in TRIESENCE relaunch
- Competitive pressure in the dry eye disease market
- Dependence on successful integration of acquired products
- Regulatory risks associated with market access and pricing strategies
Analyst Q&A Focus Areas
- VEVYE market access and pricing strategy
- IHEEZO supply agreements and market penetration
- TRIESENCE relaunch timeline and market expectations
- Expansion plans for the sales organization
- Potential for future acquisitions and product additions
Harrow, Inc. Summary:
Harrow is positioned for strong growth in the ophthalmic pharmaceutical market, driven by the success of IHEEZO and VEVYE, the anticipated relaunch of TRIESENCE, and the stabilization of its Anterior Segment business. The company’s focus on strategic agreements, market access, and salesforce expansion should support continued revenue growth. Investors should watch for the successful relaunch of TRIESENCE, expansion of Medicare coverage for VEVYE, and the company’s ability to maintain its growth trajectory while integrating new products and expanding its market presence.
