Harrow, Inc.

Good day, and welcome to the HARO Third Quarter 2025 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. Instructions will be given at that time. As a reminder, this call may be recorded. I would like to turn the call over to Mike Biega, Vice President of Investor Relations and Communications. Please go ahead.

Thank you, Operator. Good morning, and welcome to HARO's third quarter 2025 earnings conference call. My name is Mike Biega, Vice President of Investor Relations and Communications, and I'm excited to be introducing today's call. Similar to our last quarterly call, we will be presenting slides during the webcast today. If you have registered and joined through the live conference call link, I would highly recommend that you also join through the webcast. You can find the link in the investor section of our website at www.harrow.com or in our earnings press release that was issued yesterday. 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 HARO'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 FDA-approved products and compounded formulations and technology 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. Harold's results may differ materially from those projected. Harold 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, HARA 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 with the most directly comparable GAAP measures is included in the company's earnings relief and letter to stockholders, both of which are available on the website. Now joining me on today's call are Mark L. Baum, Chief Executive Officer, Andrew Boll, President and Chief Financial Officer, and Patrick Sullivan, Head of Commercial. With that, I would like to turn the call over to Mark. Mark?

Thanks, Mike, and good morning to everyone. Thanks for joining us today. As always, please review our supplemental documents for the third 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. During this call and in future quarterly conference calls, I'm pleased to have Pat Sullivan, HARO's head of commercial, join us. Next quarter, I intend to have our chief scientific officer, Amir Shojai, join us as well. Today, Harrell is one of the leading providers of ophthalmic disease management solutions in North America. Our portfolio helps manage both front and back of the eye conditions, and I believe we are the only ophthalmic company in the world to offer branded, generic, over-the-counter, compounded, and biosimilars, literally every legally available type of ophthalmic medication. At the center of everything we do is our vision to become the next great U.S. Ophthalmic company. Now, 12 years into building this patient and physician-centric business, I believe we're still just getting started. Our key products are in their early stages of launch with tremendous and durable growth ahead as adoption continues to accelerate. Over the next two years, we have four new product launches scheduled, each representing a significant opportunity to expand our reach, strengthen our leadership, and pave the way for even greater growth in the future. I am particularly proud of the fully scalable commercial infrastructure we've built, which will soon support multiple launches and continued expansion without requiring heavy additional investment. Combine that with a low risk, capital efficient pipeline development and M&A strategy, and it's clear. Arrow's growth and market impact are in their infancy. Now, our momentum continued during the third quarter with rising revenue and clear evidence of the operating leverage in our business model. As I've mentioned before, some areas of our business will overperform. while others may lag, sometimes due to seasonal factors. And the third quarter was no exception. What matters most, though, is the overall trajectory of the business, and that trajectory remains very strong. Our key growth engines, such as Vivi, iHESO, and to a certain extent, beginning very recently, TriEssence, are rolling, and momentum continues to build across the business. especially as we approach the launch of the Samsung biosimilar portfolio and conclude the acquisition of Melt Pharmaceuticals, which I'm very excited about. Now, Vivi and IHESA continue to lead the way and are on track to finish the year very strong. In fact, 2025 is expected to be a record year for both products. They've shown consistent momentum and continue to drive the majority of our growth. Driven by strong demand and best-in-class clinical performance, Vivi delivered 22% quarter-over-quarter revenue growth. Perhaps a key highlight of my remarks, though, should be the news. that we have recently signed agreements with several leading national payers for Vivi. Beginning in January 2026, only a couple of months away, Vivi will be listed on multiple new formularies with a preferred product status, including the largest US pharmacy benefit manager. This means that certain products are becoming uncovered And that creates an opportunity for prescription transfers. And going forward, Vivi will be covered on those formularies. This particular PVM covers tens of millions of lives, and I view this as a major development for Vivi and for HARO. With major improvements in coverage and the addition of ApolloCare and Alto joining our specialty pharmacy network this quarter, we expect a higher proportion of patients will receive Vivi as a covered therapy. These advancements strengthen Vivi's market access foundation and fuel continued prescription growth, resulting in an improved ratio of covered to cash pay prescriptions. This includes estimates of current cash pay patients who are likely to convert to covered prescriptions And that gives us confidence in Vivi's pricing stability and long-term growth. IHESO also had an excellent quarter, delivering 20% quarter-over-quarter revenue growth. That's an impressive performance, given the typical seasonal slowdown for that product in the third quarter. Meanwhile, TriEssence and our rare and specialty portfolio underperformed this year, as I talk more about in our stockholder letter. And that also included the third quarter. The good news, though, is that we have the right leadership and strategies in place, I believe, to get both on track in short order. Triessence, in particular, is gaining traction in retina. And as of October of this year, we launched it in its largest market opportunity yet, ocular inflammation. Our rare and specialty portfolio also has new leadership. and they are supporting our HARO Access for All program, which is positioned to return this portfolio to growth beginning in the fourth quarter and into 2026. Please review the letter to stockholders for more specific thoughts, though, on triessence and our rare and specialty products portfolio. We also made important strategic moves this quarter As we work to complete the acquisition of Melt Pharmaceuticals and its non-opioid procedural sedation candidate, Melt 300, and we also expanded our access for all model across our entire Ophthalmic portfolio. We're also preparing for four product launches over the next three years, BioViz, OpioViz, Biclovi, and Melt 300, which I'm particularly excited about. In short, our strategy is bearing fruit. We're executing with discipline, scaling with purpose, and building a company defined by innovation, access, and sustainable growth, creating meaningful long-term value for both patients and shareholders. Before I hand it over to Andrew, I want to take a moment to address our ImpromiseRx business in California, where as many of you know, we have been engaged in a dispute with the California Board of Pharmacy for many years. ImpromiseRx remains licensed to operate in California, but its license is up for renewal on December 1st, 2025. We are actively communicating with the California Board towards a global resolution. which would include a renewal of our license. Because these discussions are ongoing, and frankly, no outcome can be certain, I can't comment on other specific details. But this is top of mind for us, and we believe a solution may be at hand. As more information becomes available, we will communicate with our stockholders. With that, I would like to now turn it over to our President and Chief Financial Officer, Andrew Boll. Andrew?