Harrow, Inc. Common Stock 12th Annual Cantor Fitzgerald Global Healthcare Conference
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Okay, we can get started. Welcome, everyone. I see some people still filing into the room. We'll get started, and welcome to everyone on the webcast also. I'm Steve Seedhouse on the biotech team at Cantor. It's a privilege to welcome Harrow, our next presenting company, and I'm of course, joined by the one and only Mark Baum, Founder and CEO. Looking forward to the conversation, Mark. Thanks for being here. I think this year has been an interesting year for Harrow. We're fairly new to our coverage on the company, but obviously have retraced this historical progress and building of the company that you've had. This year you articulated a change in guidance strategy at least, and almost directly said, "We want to move to a situation where we're under-promising and over-delivering." Maybe a different philosophy, maybe a maturation of the company.
Not to put words in your mouth, but just reflecting on that, how has it helped you focus the company, you think, and maybe take a long-term view of what you're building and where you're going?
Well, thank you, first of all, and thank you to the team at Cantor. We really appreciate the audience. Some people look at week-to-week prescription volumes for VEVYE. The way Andrew and I have built the company over the last, this December will be 15 years, is really based on a five-year strategic cycle. Over these five-year cycles, we've been able to produce a tremendous amount of revenue, profit growth, and stockholder value. You really have to take a little bit longer view than week to week, month to month, quarter to quarter, and even year to year. That said, our stockholders, because we're a publicly traded company, want us to provide some level of financial guidance that we feel comfortable with. We've done that, but I will say that from our perspective, we continue to really manage the business on this five-year cycle.
That said, we've reiterated guidance for the year. The back half of this year is going to be much, I think, stronger than the first half of this year, the fourth quarter stronger than the third quarter. We'll continue to provide financial guidance, but at the same time, manage the business for the longer term.
Yeah. With some of these maturing products that you have, you mentioned VEVYE, obviously there are some others, and a lot of them have been in transition. I am thinking of IHEEZO particularly, and then, of course, you are constantly onboarding new products. You are building this plane in flight, so to speak, with profitability, but adding new products constantly. Are you comfortable with the level of visibility that you have and predictability that you have into these businesses now? Are some of them at different points than others and some of them still a little hard to predict? Or just in terms of your internal visibility on the prospects of your different businesses, where are you at?
Yeah. So visibility and transparency are critical for Andrew and I and the rest of the senior leadership team, and really for even our field reps. We owe it to them to provide visibility. In terms of product by product, it really depends by the product. ASP is always really difficult quarter to quarter. There are seasons within the year for certain products, and it is really hard to be precise on ASP. We have a little bit more predictability, I would say, with our Part B, as in Bravo products, the buy and bill products. But in the aggregate, when we think about financial guidance, I think we do have sufficient visibility and transparency into the business to provide the kind of numbers that we have provided historically and will continue to provide.
Okay. One piece of visibility that you provided to the Street, and this has been a long-standing goal that you have set as a company, is this $250 million revenue quarter, at some point next year, calendar 2027. When you spoke about that goal at your Analyst Day last year, I believe, you even broke that down by segment, in terms of this is the contribution we expect I think from ImprimisRx, and this is from the Retina business, and this is from VEVYE, or from maybe Dry more broadly. Any plans to update that sort of segment contribution, and has anything shifted or is anything going to shift?
I am just curious if that is something that you put out then and maybe will not revisit, or are you really refining that and going to continue to sort of guide us towards what to expect and what to model as we get closer to 2027?
Well, first of all, the 250, as you said, is a goal. It is not guidance. Yep.
I would also say it is not a question of if we are going to hit those numbers, but when. If you look back at prognostications that we made about revenue goals and targets many years ago, I remember we talked about a $100 million revenue run rate, and people thought I was bananas. But we hit that certainly in due course. We actually ran into COVID, and we were about, I think, a quarter late than we had anticipated, but we did it in the face of COVID. So we are going to hit those numbers. In terms of updating the market, we do have an investor day coming in the spring of next year. I do not know that we have addressed the specific details of that agenda.
We have chosen that date, obviously, because we think we are going to have some really interesting things to talk about at that time, and that we do have sufficient visibility and transparency at that level. But we will very likely probably break things down by segment. When I say that, I mean by ocular surgery, retina, and then ocular surface.
Yep. That is really, I think, how we might break the business down, should we do so in the springtime.
Yep, that would be helpful. I have loved hearing you speak one-on-one and in public forums like this about the sort of 5-year strategic plan frameworks that you and Andrew have been implementing as you have been building Harrow. I guess, what does the next one look like? What does the next 5 years, in terms of even if you do not want to get specific now, if that is for the Analyst Day. Just at a high level, how do you think about what the long-term vision is here from Harrow, from where you have come 5 years ago to where you want to go?
Yeah. We are going to talk about the business in terms of those three core segments. Ocular surgery. I mean perioperative. So, in the case of a cataract surgery, for example, ocular surface optimization, sedation, mydriasis, infection, inflammation. When we talk about our retina business, we mean periprocedural. We mean sedation, eye pressure control, anesthesia, the therapeutic, and to the extent that there is inflammation, even an anti-inflammatory. On the ocular surface side of things, we have just a very powerful ocular surface franchise. I do not think anyone has anything quite like what we offer, not only in dry eye disease, but in inflammation, infection, antifungals. We have the only FDA-approved antifungal. So there is a lot of breadth within that portfolio. So that is how we will frame the business on a go-forward basis. Those are the areas that we are interested in and that we will continue to do M&A around.
Last strategic sort of high level question, then we will go through some of the key products, in detail. You have spoken pretty assertively about G-MELT being sort of a big part of the long-term growth vision for the company. Why are you so confident in this product as maybe your biggest one yet? Because that is how you have spoken about it. Is it really just you have hands-on experience with MKO Melt, so you know what it can be out there in the marketplace? Is it an instinct? Is it a combination of all that? Because you have been pretty bullish on the prospects of MELT.
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