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DATE

Tuesday, May 12, 2026 at 8 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Mark L. Baum
  • President and Chief Financial Officer — Andrew Boll
  • Chief Commercial Officer — Patrick Sullivan
  • Chief Scientific Officer — Amir Shojaei

TAKEAWAYS

  • Revenue -- $44.2 million consolidated, with management stating this was "expected to be the lowest revenue quarter of the year."
  • Adjusted EBITDA -- Negative $12.7 million, as reported by Andrew Boll.
  • VEVYE Revenue -- $20.9 million, including an $8 million discrete revenue reduction linked to gross-to-net issues from high-deductible patient mix.
  • IHEEZO Revenue -- $1.9 million for the quarter; company expects sequential growth beginning in the second quarter.
  • Specialty and TRIESENCE Portfolio Revenue -- $7.8 million, per CFO breakdown.
  • Access+ Revenue -- $13.5 million, following resolution of prior inventory constraints.
  • VEVYE New Prescriptions (NRx) Growth -- Up approximately 25% sequentially, described as outpacing the branded dry eye prescription market.
  • VEVYE Total Prescriptions (TRx) Growth -- Up about 11% sequentially.
  • VEVYE Prescriber Base Growth -- Expanded by roughly 12% in the quarter.
  • VEVYE Market Share -- Achieved approximately 14% branded share at March-end, with monthly TRx levels surpassing competitor XIIDRA.
  • Dry Eye Prescription Market Growth -- Increased 20% year over year in the last two years; branded market was down 18% in the first quarter.
  • IHEEZO Unit Demand Growth -- Up 18% year over year, with total accounts up nearly 50% and new ordering accounts up 21% for the quarter.
  • TRIESECE Volume Growth -- Unit volume up 136% year over year; March alone up 113%; new account growth approximately 28% sequentially.
  • TRIESECE Six-Quarter Demand Trajectory -- Unit demand has grown about 250% over six consecutive quarters.
  • IOPIDINE 1% J-code Reimbursement -- Permanent J-code effective July 1, 2026; targets a market of over 1.5 million annual procedures.
  • VEVYE Net Pricing Adjustment -- Targeted rule changes implemented in mid-April have "negligible impact on the underlying new prescription VEVYE demand."
  • VEVYE ASP Impact -- CFO Boll stated a "reasonable assumption to assume, roughly 30% increase" in average selling price as a result of business rule changes.
  • Sales Force Expansion -- Over 90 new sales professionals hired; VEVYE and TRIESENCE sales teams doubled or tripled, with additional hires in retina, specialty, and Access+ teams.
  • Full Year 2026 Revenue Guidance -- Reaffirmed at $350 million to $365 million.
  • Q2 Revenue Guidance -- Expected to be $71 million to $81 million, with VEVYE sequential growth and initial BYOOVIZ revenues anticipated.
  • Core Product Demand Trends -- Management cited "refill rates and reorder rates that are at or above our internal estimates."
  • Upcoming Catalysts -- BYOOVIZ launch on July 1, IOPIDINE J-code effectiveness, 20%-25% IHEEZO net pricing improvement, multiunit packaging in Q3, and new clinical milestones highlighted for the second half.
  • G-MELT Clinical Program -- All required pharmacokinetic and nonclinical studies initiated; first study in clinical study report drafting, others to report in Q4.
  • BYQLOVI Sampling -- Samples currently distributed; trade sales to begin in Q3, included in revenue guidance.

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RISKS

  • Management acknowledged, "Q1 was expected to be the lowest revenue quarter of the year," due in part to "a discrete reduction of reported revenue by approximately $8 million" from VEVYE gross-to-net dynamics.
  • CFO Boll reported, "second quarter revenue for IHEEZO, we're expecting to be -- still be somewhat muted, especially compared to the second quarter last year," due to channel inventory normalization and pass-through loss.
  • CEO Baum stated on IHEEZO ASC use, "the ASC is going to go and probably is now at 0," indicating loss of this channel offsets in-office gains short-term.
  • TRIESECE and other product segment growth may face typical seasonal and market-specific volatility not fully offset until later quarters, per management statements.

SUMMARY

Harrow (HROW 23.69%) reported $44.2 million in first-quarter revenue, with an $8 million revenue reduction in VEVYE due to gross-to-net model shifts from high deductible patients. Revenue and demand indicators from VEVYE, IHEEZO, and TRIESENCE were all described as surpassing internal expectations, while a major expansion of commercial talent is now complete and expected to drive acceleration in sales execution. Product-level growth was supported by positive sequential shifts in new prescriptions, total prescription volume, and market share, alongside management's visibility to upcoming catalysts across launches, reimbursement inflections, and clinical data. Investments in commercial infrastructure and strategic portfolio deployment underscore management’s reiteration of a full-year revenue outlook of $350 million to $365 million, with sequential quarterly growth anticipated.

  • BYOOVIZ is expected to begin generating revenue in Q2, with a commercial launch targeted for July 1, introducing a novel growth vector to the portfolio.
  • The implementation of mid-April business rule refinements for VEVYE net pricing is projected by Harrow to result in both higher net revenue and continued robust prescription demand.
  • TRIESECE's six-quarter 250% unit volume growth reflects expanding penetration in ocular surgery, with new account adoption decoupling from previous seasonal headwinds.
  • Preparations for the G-MELT NDA remain on schedule, with completion of pharmacokinetic and toxicology studies targeted, and an FDA pre-NDA meeting update planned for the next quarterly call.

INDUSTRY GLOSSARY

  • ASRS: American Society of Retina Specialists — A professional organization; referenced for upcoming IHEEZO clinical data presentation.
  • TRx / NRx: Total prescriptions (TRx) and new prescriptions (NRx) — Standard pharmaceutical industry terms indicating total and first-time prescription fills, respectively.
  • J-code: A reimbursement code under the U.S. Healthcare Common Procedure Coding System, enabling physician billing for certain drugs (referenced for IOPIDINE 1%).
  • Gross-to-Net: The difference between a pharmaceutical product’s gross sales and net revenue after deductions like co-pay assistance, rebates, and discounts.
  • ASP: Average Selling Price; the net price received per unit after adjustments.

Full Conference Call Transcript

Mark L. Baum, Chief Executive Officer; Andrew Boll, President and Chief Financial Officer; Pat Sullivan, Chief Commercial Officer; and Amir Shojaei, Chief Scientific Officer. With that, I would like to turn the call over to Mark. Mark?

Mark Baum: Thank you, and good morning, everyone. To begin, as a growth-oriented business, the fuel for our success is and will always be demand. Without buyers seeing value in Harrow's products, ordering and reordering them, we wouldn't have a business. So demand is the key. And from that standpoint, the underlying fundamentals of Harrow have never been stronger. While the headline revenue number this quarter reflects a specific isolated dynamic, let me be clear to my fellow stockholders, our data demonstrates that demand for our key growth drivers is accelerating. Further, our market share capture is sustainable and will translate into profitable revenue growth. The $8 million revenue reduction in the first quarter was specifically tied to VEVYE.

As detailed in my letter to stockholders, the surge that we saw in demand from patients with high deductibles from this new band of commercial coverage that we were so excited about, it just outpaced our initial financial modeling assumptions. Andrew will discuss this in greater detail shortly. However, we identified this issue. We corrected it. And importantly, our fix to return to our net pricing assumptions has shown negligible impact on the underlying new prescription VEVYE demand. That's the key. With the high deductible season largely behind us and new business rules in place, we expect to realize the full financial benefit of our expanded coverage moving forward, starting in the second quarter.

I want to go back to demand, though, because a lack of demand in the face of a concerted commercial effort is nearly impossible to remedy. Across our portfolio and specifically with our key growth driver products, we do not have that problem. In fact, demand trends are strong, even for what is traditionally a weaker first quarter period due to standard industry seasonality. Moreover, you've probably seen on LinkedIn that we've hired more than 90 new sales professionals. So our promised commercial investments, that is doubling our sales forces in dry eye and surgical and bolstering other teams, are complete.

We are now entering a period where the work we've been doing over the past several years is translating into meaningful sustained growth in demand, and this will in turn convert to revenue. Across VEVYE, IHEEZO, and TRIESENCE, our core growth drivers, we are seeing strong durable demand trends that are at or above our internal expectations. And in our business, once again, operational issues, they can be fixed. A lack of demand cannot. Let me provide some additional color on a few key products. On VEVYE, we are seeing record prescription growth, continued market share gains and increasing prescriber adoption.

The product has now reached a highly meaningful position in the market, having officially surpassed XIIDRA in total prescriptions as of the end of March as we continue to close the gap with other category leaders. Crucially, this happened with half the number of reps we now have deployed. We are positioned to see this momentum accelerate, especially as we continue to successfully gain additional positive coverage changes, which we expect over the next 12 to 18 months. I'm especially pleased that more recently, we are seeing higher daily new prescription highs and higher lows. Breaking demand trend lines for a chronic care product to the upside is a very good thing.

IHEEZO demand continues to build across both retina and in-office accounts. We're seeing record numbers of new accounts, and this trend has continued into the second quarter. We are still early in unlocking the full opportunity here. And as we move into the second half of the year with improved pricing, new packaging and upcoming clinical data specific to IHEEZO in retina procedures, we're positioning IHEEZO for a step change in growth. TRIESENCE is also demonstrating the kind of consistency that we expect. Even in what is typically a more challenging seasonal period for surgery, demand continued to grow sequentially with increasing adoption and strong reorder behavior. These are clear indicators that the product is gaining traction in clinical practice.

Following my recent time in the field with several large new TRIESENCE accounts, it is clear to me that our expansion into the surgical inflammation market is bearing fruit and will be a part of our long-term revenue growth strategy. Our Access+ cash pay business, which includes both our branded and compounded products, having successfully worked through prior inventory constraints, is also on track. We are currently increasing safety stock and expanding the Access+ sales team, positioning this team to enter growth mode so we can deliver essential, affordable cash pay products that our customers rely on.

As Pat will discuss shortly, these are the exact demand trends we look for across our portfolio, growing demand signals expanding account adoption and improving execution, leading to greater breadth and depth within those accounts. As I look at Harrow today, I've never been more confident about where we are or where we're going. Simply put, the business is positioned beautifully for the balance of this year and has never been more valuable. A few more points on the second half setup though. One, as I mentioned, we made targeted high conviction investments to scale our commercial platform and unlock the full potential of our portfolio. We recruited top talent to Harrow. That work is now complete.

We've built the commercial infrastructure, expanded our reach and attracted the exact kind of talent that wins in this industry. What that means is straightforward. We now have the engine in place to convert the demand that we're seeing into sustained revenue and profitability performance. As we move forward, several factors support strong and sustainable growth. First, our core products operate in large, underpenetrated markets with significant runways ahead. These are not short-cycle opportunities. These are durable growth platforms. Second, awareness is building. New account starts are accelerating. Breadth and depth within accounts are expanding, and these factors drive the value of our products within our customers' practices in a highly meaningful way.

Third, refill rates and reorder rates that are at or above our internal estimates support bullish demand metrics for our key products. And fourth, the most challenging part of the year is behind us. Some of you have heard one of my mantras, and that is that at Harrow, we're not interested in mere activity. We celebrate economic accomplishment. We focus on economic accomplishment. And as we move through the balance of 2026, we expect to see accelerating momentum as our commercial investments fully translate into financial results or economic accomplishment. The nonrecurring VEVYE revenue modeling dynamic does not change Harrow's trajectory.

If anything, it reinforces how powerful the underlying business is and what can come from VEVYE, especially as these new patients refill their prescriptions in a profitable way for our stockholders. We are executing, building momentum and it is clearly showing in the demand data. Because of this, underlying demand is tracking in line with or above our expectations. And therefore, we're fully reaffirming our 2026 revenue guidance of between $350 million to $365 million for the full year. Furthermore, this accelerating commercial engine underpins our unified corporate initiative to achieve $250 million in quarterly revenue by the end of 2027. I will now turn the call over to Andrew Boll, our President and Chief Financial Officer. Andrew?

Andrew Boll: Good morning, everyone. For the first quarter of 2026, we reported consolidated revenues of $44.2 million and adjusted EBITDA of negative $12.7 million. As we previously communicated, Q1 was expected to be the lowest revenue quarter of the year. This reflects several factors, as expected, a minimal GAAP contribution from IHEEZO as channel inventories absorbed, and softer revenue from the compounding business as we work through prior inventory constraints. Breaking down Q1 performance by product, VEVYE generated about $20.9 million in revenue. IHEEZO contributed $1.9 million, in line with expectations. Our specialty and TRIESENCE portfolio delivered $7.8 million and Access+ revenue was $13.5 million.

As Mark noted, during the quarter, we experienced a gross to net modeling dynamic related to the VEVYE coverage rollout, which resulted in a discrete reduction of reported revenue by approximately $8 million. To provide additional financial context, ahead of the January 1 coverage launch, we implemented business rules based on specific assumptions regarding patient mix and patient out-of-pocket costs. While January net pricing tracked in line with our forecast, the mix shifted sharply as the quarter progressed. We saw a significantly higher-than-anticipated proportion of high deductible patients filling prescriptions through their pharmacy benefit and our average out-of-pocket buydowns increased rapidly.

This growing utilization drove incremental gross to net pressure beyond our internal assumptions, resulting in lower realized net revenue per unit for the period. Due to the standard industry lag in claims reporting, the full magnitude of this mix shift was confirmed in mid-April. We act immediately, implementing targeted business rule changes, including strict caps and co-pay buydowns and other program refinements to protect our net pricing going forward. These program changes have isolated this to be primarily a first quarter issue, and we are now well positioned to receive the complete economic benefit we expect from our expanded coverage moving forward beginning in Q2.

Based on updated modeling and what we have seen through April, net pricing is much better aligned with our internal expectations and should be notably higher than in the first quarter. Importantly, early indicators prove these changes have not negatively impacted underlying demand or patient access to VEVYE. Given these adjustments and current demand trends, we expect VEVYE to deliver sequential growth and remain fully on track to exceed our $100 million revenue outlook for the year. Looking ahead to the second quarter, we expect total revenues to be in the range of $71 million to $81 million. At the product level, VEVYE is expected to show sequential growth.

We should see IHEEZO revenue start back in Q2, though likely still below prior year levels due to channel dynamics and dependent upon stocking levels associated with our new 5-pack presentation. We will also begin to recognize initial revenues from BYOOVIZ as distributors take on initial stocking orders. As Mark already stated, we are reiterating our full year 2026 revenue guidance of $350 million to $365 million. Based on current demand trends and customer interactions, we expect the second half of the year to be even stronger than initially anticipated.

We have clear visibility into several catalysts that support this robust second half, including continued growth in demand across our core commercial drivers, full deployment of the expanded VEVYE sales force with a modest impact in Q2 and a highly meaningful contribution beginning in the second half of the year. Realization of the full financial benefit from expanded coverage for VEVYE following our mid-April business rule adjustments, the commercial launch of BYOOVIZ on July 1, the permanent J-code for IOPIDINE 1% becoming effective July 1, potentially expanding utilization and in-office procedural setting, an approximate 20% to 25% improvement in IHEEZO net pricing, along with the introduction of multiunit packaging beginning in Q3.

Upcoming clinical milestones for IHEEZO, including initial retina data at the ASRS meeting in July and top line results from the QUELL study in the fourth quarter. And finally, continued growth in TRIESENCE, building on the momentum in ocular inflammation with a dedicated sales force that recently doubled in size. Taken together, these drivers give us high confidence in accelerating growth and improved financial performance as we move through the remainder of 2026. I'll now turn it over to Chief Commercial Officer, Pat Sullivan.

Patrick Sullivan: Thanks, Andrew. Good morning, everyone. I will detail the commercial execution across our portfolio. The thread that runs through every one of these slides is exactly the same. Demand is accelerating, access is improving, and our scaled commercial organization is now actively converting that demand into revenue. Starting with VEVYE. The 4 numbers at the top of this slide tell the demand story. New prescriptions grew approximately 25% sequentially. Total prescriptions grew about 11%. Our prescriber base expanded by another 12% sequentially, and we exited March at roughly 14% branded share, officially surpassing XIIDRA on a monthly TRx basis and steadily gaining ground on MIEBO.

Crucially, all of this was achieved with a smaller sales force of fewer than 50 representatives. Now that we have doubled the VEVYE team, we are aggressively deploying these new reps into both uncovered and underserved territories, which will directly fuel further growth in NRx and TRx. This is happening in a market that has real underlying tailwinds. The dry eye category has grown 20% year-over-year in prescription volume in each of the last 2 years, and VEVYE was effectively the only branded product to grow in Q1. We are actively taking share in an expanding market, and that is the absolute cleanest signal you can get that the brand is winning on its own merit. Moving to IHEEZO.

Demand continues to build. Unit demand grew 18% year-over-year. New ordering accounts increased 21% in the quarter and total accounts are up nearly 50% versus last year. Retina remains the core driver, representing over 80% of volume and the momentum we saw in Q1 has continued in the early part of Q2. Interest in IHEEZO continues to build with demand increasing and new accounts continuing to come on board. There is substantial runway ahead within the retina market, and we are starting to see early and encouraging signs of adoption in the in-office setting. That expanding interest across settings reflects growing physician familiarity and confidence in the product and reinforces our view of the broader long-term opportunity for IHEEZO.

Looking ahead, this growth story is driven by 2 engines: continued momentum in retina; and expansion into the broader in-office market. What underpins both is a very strong refill dynamic. Once a practice adopts IHEEZO, they continue to reorder. We also have 4 distinct catalysts that will drive the next step change in growth. First, expanding into the full in-office market adds more than 2.5 million procedures to the addressable opportunity. This expansion is underway and off to a strong start. Second, the first available retina-specific clinical data begins reading out in July, followed by additional data in the fourth quarter, which is designed to accelerate adoption. Third, we are launching multiunit packaging tailored for high-volume practices.

And fourth, we expect a meaningful improvement in net pricing in the second half of the year. These 4 catalysts completely underpin our conviction in IHEEZO's accelerating trajectory from Q3 onwards. On TRIESENCE, the headline number is 136% year-over-year unit volume. March alone was up 113% year-over-year. This is now our sixth consecutive quarter of demand growth and unit demand has grown roughly 250% over those 6 quarters. The composition of this growth matters. 44% of Q1 volume came from the ocular surgery accounts, and we expect that segment to drive the majority of new volume going forward. New account growth was approximately 28% sequentially.

We are seeing increasing integration into the procedural workflows, particularly among cataract surgeons, driven by the product's ability to simplify postoperative care and improve the patient experience. That value proposition is directly translating into reordering. In addition, our label expansion study in cataract surgery and pain is underway, which is positioned to materially expand the long-term opportunity. This slide is a reminder of the sheer breadth of what sits behind our 3 lead products. We have one of, if not the largest, portfolios of ophthalmic prescription medications in the U.S. market, spanning specialty steroids, NSAIDs and anti-inflammatories, antihistamines, antibiotics, plus the most comprehensive ophthalmic compounded portfolio in the U.S. market. Two highlights from Q1.

We secured the IOPIDINE J-code, which I will cover in a moment, and we are unlocking the value of 2 additional historically underappreciated assets. Each of these assets is positioned to enter new on-label markets and contribute meaningful incremental revenue. VERKAZIA is the first and only label product for vernal keratoconjunctivitis, a devastating form of severe ocular allergies that affects children and adults. Our research clearly shows the degree to which the disease is underdiagnosed. We intend to share our plans regarding VERKAZIA opportunity in the near term. The second is NATACYN, a product for fungal blepharitis and other sight-threatening fungal infections. We are conducting a study for that product, and we'll share more information later this year.

Lastly, within our Access+ cash pay business, our supply chain operations successfully cleared the back orders accumulated last year for certain compounded products, rebuilt inventory across the key stockkeeping units and completely restored the operational confidence our customers expect. Let me close on IOPIDINE 1%, the only FDA-approved therapy to prevent intraocular pressure spikes following various in-office procedures, backed by strong, well-established clinical data supporting its use in this setting. Despite that clinical profile, IOPIDINE has historically been underutilized for one specific reason. Physicians have no reimbursement pathway and the product sat as a cost center within capitated fees. That fundamentally changes on July 1 when the permanent J-code takes effect at ASP plus 6%.

Physician incentives are now perfectly aligned with evidence-based practice. The addressable market for laser procedures alone exceeds 1.5 million annual use cases. There is no FDA-approved alternative with an established J-code. Critically, IOPIDINE runs through the exact same in-office call point as IHEEZO, meaning we are directly leveraging existing commercial relationships rather than building new ones. We expect this to be highly incremental, high-margin contributor as we move through the second half of this year. To summarize the commercial picture, VEVYE is taking share in a growing market and now has the access and sales force density to dramatically accelerate.

IHEEZO's demand continues to grow sequentially, armed with 4 independent growth catalysts landing in the second half, alongside continued strength in retina and a highly successful expansion into the in-office setting. TRIESENCE has delivered 6 straight quarters of growth with a major label expansion in motion. And IOPIDINE hits a critical reimbursement inflection on July 1 that unlocks a market that has been waiting for it. Demand across the entire portfolio is robust, and our commercial organization has never been better positioned to convert it. With that, I will now turn the call over to Amir to discuss the assets we recently acquired from Melt Pharmaceuticals.

Amir Shojaei: Thanks, Pat. I wanted to spend a few minutes on G-MELT, our IV and opioid-free procedural sedation candidate. Having spent nearly 30 years in drug development, advancing major global assets, I view G-MELT as a pipeline candidate of the highest caliber. It is uniquely positioned to disrupt standard procedural sedation and positively impact millions of patients. Regarding our clinical and regulatory progress, following the acquisition of Melt, the program's required deliverables included 3 pharmacokinetic studies and a nonclinical toxicology study. We have successfully initiated all of these programs. The nonclinical study is now in the reporting phase and the first pharmacokinetic study has also been completed and is in the CSR drafting stage.

The other 2 PK studies are the renal and hepatic impairment study, both of which are underway, and we anticipate final reports in Q4 2026. On the manufacturing front, our integration and scale-up activities are advancing rapidly. A major manufacturing campaign scheduled for later this quarter will formalize the data package required for our NDA submission. Based on our current trajectory, we remain firmly on track with our targeted time lines. By our next quarterly call, we expect to provide a definitive update regarding our pre-NDA meeting date with the FDA. With that, I would now like to turn it over to our operator for Q&A.

Operator: [Operator Instructions] Our first question will come from Timur Ivannikov with Cantor.

Timur Ivannikov: This is Timur Ivannikov on for Steve Seedhouse. So in terms of VEVYE, could you talk about the gross to net adjustment in more detail? And to what extent this was driven by typical seasonality? And maybe what were the major buckets such as co-pay assistance, high deductible buydowns, cash pay economics? And to what extent this gross to net adjustment is isolated to Q1?

Mark Baum: Thank you, Timur. First of all, the first quarter typically for Part D products with the deductibles resetting is always a challenging period for these types of products. As we noted, I think, in one of our documents, the dry eye category for the first quarter was actually down in total prescriptions. In fact, the branded market was down 18%. That's in the face of the overall category improving better than 20% for the last 2 years. But what we highlighted and what I think is important is that our NRx growth, our new prescription growth was actually up 25% sequentially in the face of a branded market that was down 18%.

Our TRx growth was up 11% once again in the face of a branded market that was down 18%. And with CVS specifically, the new Benefit Manager that we brought on, the new coverage on the commercial side, we were up 170% in sequential growth with that set of plans alone. So we did very well. What I would say is, and I want Andrew to comment on this, is that we had to make a bet with our model in terms of what the likely volume would be for patients with high deductibles. And frankly, the surge in volume that we saw was so large that it really just exceeded the modeling that Andrew and his team had done.

On the one hand, it's a bad thing to see this $8 million revenue reduction as a result of this. But on the other hand, we do know that we retain these commercial patients for a long time. And while we didn't do as well with these patients during the month of January and February and March, we're going to do very well with them on a go-forward basis. Andrew, do you want to specifically add to that regarding gross to net in the first quarter and any co-pay assistance?

Andrew Boll: Yes. Timur, thanks for the question. Just to kind of add on to what Mark was saying, as we kind of looked at the average net pricing for these CVS patients in particular, and our out-of-pocket paydown for patients in general, the CVS patients were coming in about 40% higher out-of-pocket buydown amount than any other covered patient for us. And so as -- obviously, when we modeled things, we didn't model -- we didn't expect that buydown to be significantly higher for these patients.

And so once we accumulated all the data and can make a decision based on the trends in mid-April, we adjusted those rules to basically take down the amount of out-of-pocket buydowns that we were putting into that patient bucket. We also made some tweaks that will affect patients on other plans as well, but should improve net pricing. I think it will have minimal impact on what that patient's actual out-of-pocket is. I think in some cases, actually the patient's out-of-pocket will get better based on just some of these tweaks we did to the business rule.

And so as we kind of talked through the initial trends that we're seeing importantly is that there's minimal to no impact to demand, at least what we're seeing here the -- these first few weeks of implementation of the new business rules. And importantly, we will now go from those CVS patients essentially being on average negative revenue to much more positive and contributing to overall net revenue for -- on a go-forward basis.

Operator: And the next question is going to come from Chase Knickerbocker with Craig-Hallum.

Chase Knickerbocker: Maybe just to kind of ask it directly on VEVYE around ASPs. You had mentioned kind of an $8 million impact if the business rules have been changed for the entirety of the first quarter. So as we look kind of in Q2 and onward, I mean, that's about a, call it, mid-30s percent kind of impact. Is that what we should be assuming sort of from an increase and potential increase of ASP or maybe just making sure that I'm kind of thinking about that the right way?

Mark Baum: Andrew, I don't know that we can give a specific answer regarding ASP, but I know that you've done some calculations on what the likely improvement is, and it's impressive. Do you want to try and tackle that one?

Andrew Boll: Yes. And Chase, obviously, that's assuming status quo. But I think that's a reasonable assumption to assume, roughly 30% increase.

Chase Knickerbocker: Helpful. And maybe just you guys have a couple of weeks of additional visibility relative to us, obviously, on kind of the VEVYE data. So far, since those business rule changes, could you maybe just give us some commentary as far as what you've seen in recent weeks as it relates to volume, just kind of confirming the -- this isn't having an impact? And maybe around those -- around that, Andrew, if you could kind of explain in a little bit greater detail how the out-of-pockets could actually kind of be coming down for these patients with these business changes, respecting the fact that there's a lot of detail here?

Mark Baum: Thanks for that, Chase. In terms of VEVYE volumes more recently in the last, let's say, 20 days even, and I think I mentioned this in my stockholder letter, but I watch the new prescription volumes like a hawk. I mean, literally, multiple times a day, we have a dashboard that gives us real-time data as to what's coming in. And I know, for example, at 4:00 Central what the likely total day volume will be because we've got a lot of data in our system in terms of what the balance of the day would look like as the Mountain Time and Pacific physicians begin to write for VEVYE.

But I think what I'm really pleased with, and I mentioned this in my opening remarks, is that I am seeing higher highs and higher lows in the last 15 days, especially. And I think that's as a result of these new reps actually being out in the field, making the calls and beginning to bear -- their work beginning to bear fruit. That's really exciting. In particular, I'm seeing days in the week that are usually lower in volume than other days in the week. And now all of a sudden, they're popping up, breaking trend lines and becoming much better days in the week.

So we're having record days, record weeks and as I said, higher highs and higher lows. That's really positive, and we can see those trend lines breaking. So the work that we are doing out in the field with this doubling of the sales force is beginning to have an impact. Andrew, do you want to talk about patient out-of-pocket?

Andrew Boll: Yes. And Chase, I'm going to try to speak to this without giving too much detail because a lot of our competitors listen to this call as well. But what I would say is we are going to leverage our VAFA program and cash pay program with some of those patients as well, which, as you know, the cash pay price there is $59 for the product.

Operator: And the next question comes from Lachlan Hanbury-Brown with William Blair.

Lachlan Hanbury-Brown: I guess, maybe I'll ask one on IHEEZO. Just how should we think about the dynamics in Q2? Is channel inventory sort of largely normalized at this point? And then how do we think about the sort of sunsetting of the current packaging versus the introduction of the new packaging and how that may impact Q2?

Mark Baum: Yes. I'll make a few comments, Lachlan, and then turn it over to Andrew. But I think a couple of important data points. One is 2025, we saw 30% of our unit volume come from the ASC setting. I think you know that. The ASC setting in the Q1 period was down to 18%. And I think as I said in the stockholder letter, we should be able to eclipse the entirety of that ASC volume through the in-office sales that we're beginning to see flow by the end of the year. So that's very promising. Obviously, we've now moved to a 5-pack presentation.

We've made some, I think, very significant improvements to ASP that will begin to kick in, in the third quarter. And I think we even referenced the figure of better than 20% improvement. So that's really, I think, important. And I think what our sales force is particularly excited about is finally having some retina-specific data to be able to present to accounts. So everything that we've done, we've got a few percentage points of market share, but not many. The vast, vast majority of the market opportunity is -- remains underpenetrated -- unpenetrated. And we believe that this data is going to certainly help us -- and that's showing up, by the way, in Q2.

We're seeing record new account starts. And that, I think, bodes well for not only the second quarter, but the third quarter and beyond. That's what I think gives us so much confidence in our -- reiteration of our guidance. Andrew, do you want to talk about the stocking dynamic and what to expect in Q2 versus Q3?

Andrew Boll: Yes, absolutely. Lachlan. So second quarter revenue for IHEEZO, we're expecting to be -- still be somewhat muted, especially compared to the second quarter last year. We're still working through that remainder of channel inventory that was taken in Q4 and the loss of pass-through. But to Mark and Pat's points, we're seeing a big increase in demand, especially on the retina side, a lot of new accounts coming through.

So a lot of the -- any revenue that we're going to be booking will be below last year, but we should start seeing revenue start increasing from IHEEZO and then get to more of a normalized level beginning in Q3 and Q4, especially as we introduce this new multipack option, which we will commercially launch in July of this year.

Lachlan Hanbury-Brown: And maybe if I could just also ask on IOPIDINE 1% with the new J-code. So how should we think about that adoption and the market opportunity? Obviously, a lot of procedures out there where it could be used, but just as we think about how it changes in terms of the contribution it makes starting in Q3, is that going to be a meaningful driver of the back half, or is it more incremental, especially in light of some of the changes with VEVYE and IHEEZO trials?

Mark Baum: Yes. I would definitely say it's going to be an incremental contributor on the launch in the third quarter and the fourth quarter of this year. We're more bullish on the contribution in terms of it showing up relative to our overall size in 2027. But we're really pleased to have a J-code. It is a sizable market. And frankly, the laser procedure market, which is what we kind of quote in terms of the overall TAM at better than 1.5 million annual procedures, is really only a fraction of the potential use cases of the product. There are a lot of procedures that occur in the office that can induce a pressure spike.

And right now, these offices are using a variety of off-label products, once again, that are paid for out of a capitated fee. And I think that the opportunity to use something that is on label, that is reimbursable at ASP plus is very attractive. And we've done a meaningful amount of market research to validate that. So we're pleased to get that launched. It will be incremental this year. It will show up, I think, with bigger numbers in 2027.

Operator: And our next question is going to come from Tom Shrader with BTIG.

Thomas Shrader: Kind of one more on VEVYE. Can you give us a remedial rundown of the information flow, why you learned so late, why it took 4 months for you to get a hint that this problem was going on? Because I feel like you warned on everything this quarter, but then this one hit. And is that solved? And then one quick one on IHEEZO. It's interesting to see you still have 18% ASC use. Do you think that's stable? Do you think that's people who like it enough that are eating the cost? Or is that 18% going to continue to decline?

Mark Baum: Thank you for that, Tom. I'm going to take the last question first, and then I'll ask Andrew to talk about timing because I think it's really important. Our stockholders, I think, hopefully will appreciate after Andrew explains this, Why? This is not a real-time situation. You can't just make a decision, change business rules on a real-time basis and that we actually acted expeditiously once we figure this out, and Andrew will talk on that. But in terms of IHEEZO and the ASC, the IHEEZO business in the ASC is going to go and probably is now at 0. So these ASCs are not going to be purchasing IHEEZO for procedures in that environment.

What we can say is that the unit volumes that we formally had -- and I'm not talking about the 18% that we had in the first quarter, but I'm talking about a more normalized view of what we had in the year 2025 in the ASC environment when those units represented 30% of the overall volume. Those are the unit volumes that we expect to replace with in-office use cases by the end of the year. So it's a larger number overall, and it will contribute meaningfully, I think, to our revenue in 2026 and certainly in 2027. But yes, the ASC business is going to go to 0.

The good news for us is that we have durable sustainable reimbursement in the in-office market. And I would say we have nearly pervasive coverage, nearly pervasive coverage, better than 95% coverage and a prior authorization rate that is sub-5%. So extraordinary coverage in office, and that is durable. Andrew, do you want to describe, I think, in more detail, the timing of the work that you and your team did on the business rules?

Andrew Boll: Yes, absolutely, Tom. I appreciate the question. So first of all, there's -- it's more than just one data set that we use to assess and calculate a lot of these figures. And so it's co-pay data, it's the claims data from the payer, it's script data from our partners and IQVIA that we're using. And so as we're getting that data, we're making assumptions. But January, which came in -- middle of February, when you have all of the data and you can calculate and analyze it, that came in pretty much in line with what we were anticipating. And so middle of February, we thought we were in pretty good shape.

When the February data came in, that's when sort of our, I would say, our incentives went up. These numbers are coming in much higher than we thought or anticipated. But we didn't want to make a decision based on that single data point. That single data point being in the month of February. So we wanted to see how March came in. And unfortunately, when March came in, which the final accumulation of data came in mid- to late April, we knew we had to make changes.

And so I think we had a final data set that we were able to act on, on a Friday, and we worked over the weekend and had the new business rules out to the partners Sunday night. So we make -- we try to make decisions based on trends and not data points, and that's what we did in this case. We worked as quickly as possible to get those changes in place. And I think going forward, we should see much better improvement on pricing for the product, especially in the case of some of these covered scripts that we've been talking about.

Operator: And our next question will come from Mayank Mamtani with B. Riley Securities.

Mayank Mamtani: Regarding the 100 reps hired in a relatively short period of time, Mark, could you touch on what sort of experience they bring in and how you anticipate demand to inflect further as a result of that in the second half? And I don't know if I heard a commercial mix of the total NRx that you're seeing. If you could maybe give a little bit more color on also how these reps can have an impact on improving commercial mix? And I think in prepared remarks, Mark, you said there are some positive insurance reimbursement developments for VEVYE, if you could maybe lay that out in this 12- to 18-month period?

Mark Baum: Pat, do you want to talk about the tenure of some of these new reps?

Patrick Sullivan: Thanks, Mark. Thanks for the question. As we talked about, this is all about demand and the indicators that we're seeing are very positive. And as Mark mentioned in the letter and previously on the call, we were able to deliver in Q1 the growth with a generally small team of 50 representatives. What we're most excited about in our expansion is the recruitment approach that we use. We have -- many, many reps we recruited have ophthalmic experience in their exact areas. I think we have a range of experience on the anterior side that I think is going to position us well for many of the other competitors in our space right now as we sit today.

So we're super excited about that team that's been out there, arguably a few weeks as it sits right now. And as Mark mentioned, our early indicators in Q2, we're showing positive signs, and we are just getting started. So I would expect ongoing growth acceleration because of the unique profile we have. Our representatives are out there.

I think, as Mark mentioned, in Q1, we wanted to get them out as soon as possible, but I can tell you that we took a very diligent approach to make sure that we've recruited the right reps, at the same time put them through a very rigorous approach to make sure that they were stepping the field to make impact immediately to grow VEVYE and the signs are very positive for us at this point in time. And like I said, I mean, we're super encouraged on the prospect for growth going forward. And the team, as we've said, has been out there for only a few weeks.

So I think more to follow here in Q2 about the progress they make with their customers. But early signs, expect more growth.

Mark Baum: And Mayank, in terms of how do you improve the commercial mix, one of the things I like most about Pat is he really believes in incentives very strongly, and he buys into this whole concept of what you incentivize, you end up getting. And so we value a commercial covered prescription in our company, certainly more than we do, for example, a cash pay consignment prescription in terms of the economic value. And so Pat is a big supporter of that. In terms of new insurance reimbursement, new coverage, the team is actively bidding on that coverage and those processes are in place.

And we have some idea, that we should see improved coverage over the next 12 to 18 months. I think that's why we made the statement. We can't get more specific with which benefit managers or which payers. But we do believe that we're going to have some decent coverage wins over the next 12 to 18 months, and we'll see -- And to the extent that they're meaningful, we'll certainly make our stockholders aware of those.

Mayank Mamtani: Great. And then on the IHEEZO growth catalyst for second half, I appreciate the color on which ones are demand versus net pricing improvement related. But I was just trying to understand the full year revenue target for that brand because second half revenue uplift needed to get to the full year target. If you just look outside of VEVYE and compounding business, there's a lot of growth, including from IHEEZO and other products. If you could maybe just help us understand how do you get to the second half number throughout the different parts of your portfolio? That would be very helpful.

Mark Baum: Yes. I'll ask Andrew to kind of give some additional color on that. But what I can tell you is that even in the second quarter number for IHEEZO in particular, you're not going to see the same level of revenue, we believe, for the second quarter as you did, for example, in the first quarter. So we do expect to see a meaningful step-up in terms of revenue from IHEEZO even in the second quarter and the big improvement to not only unit demand -- the big conversion of unit demand to revenue is going to happen in the third and fourth quarter for that product. Andrew, do you want to comment on second half revenue and the guide?

Andrew Boll: Yes. I will. Mayank, so I think in the second half, number one, you also get a new product, which is BYOOVIZ coming to market, which we expect to have, let's say, a meaningful contribution to revenue. IHEEZO we expect from a revenue perspective to be close to last year's number, hopefully in excess of it from a revenue standpoint, depending on demand. VEVYE revenue will continue to ramp quarter-over-quarter, we expect. Hopefully seeing a meaningful improvement in Q2 over Q1. And then in the second half of the year, we really -- we expect to really see the benefit of that sales force expansion, accelerating unit volumes and importantly, net pricing being stabilized on the product.

And then as Pat kind of mentioned, we should also start seeing contribution from some of these other products that are going to get some attention this year, VERKAZIA, NATACYN and then as well as IOPIDINE with the J-code being issued. And then we've got Imprimis on the compounding side and the Access+ side. That business has been sort of out of that inventory issue that had been occurring in Q4 and Q1 of this year, and that business should return to a growth trajectory this year, although more sequentially quarter-over-quarter versus year-over-year.

Operator: And the next question comes from Thomas Flaten with Lake Street Capital Markets.

Thomas Flaten: Just to confirm on the sales force expansion. So in your letter, you talked about hiring about a 100 folks. If I'm understanding, 50 of them went to the VEVYE sales team to effectively double that team. And the distribution of the balance of those new hires, was it all to the retina team? Or was there -- is there something else we should understand about that?

Mark Baum: No. And thank you for that question, and I'm glad that I have the chance to clarify. So we did hire about 50 new reps for the dry eye team. We also tripled the sales force for TRIESENCE, so that sales organization is now 3 times the size that it once was. We've also made a few incremental hires in retina. And as I said, I think in my prepared remarks, we've also begun to -- we decided to bolster some of the Access+ team. So -- and then finally, VERKAZIA and NATACYN, in particular, historically have not had any inventory. They've had inventory problems with that product, and I'm talking about pre-Harrow ownership.

It had not really had any dedicated sales and promotion. And frankly, with both VERKAZIA and NATACYN, once again, the -- any marketing that was done was really done on only part of the label. So we're going to make a big push with those products. We're going to talk a little bit more about VERKAZIA in the coming weeks. I'm particularly very excited about VERKAZIA. We have great pricing on that product. It's a very powerful product in terms of its clinical efficacy and the results that it provides, particularly for children. It's the only cyclosporine that's actually on label for pediatrics. And we're going to make a big push in that category.

And so we did build out what we call a specialty team around both of those products, and that team makes up the balance of that 100.

Thomas Flaten: That's super helpful. And then, Mark, previously, I think you've mentioned -- I want to say you used the word bounty for pulling the G-MELT submission into 2026. I heard early 2027 today. I'm just curious if there was a chance that, that could get pulled forward if we should really think about an early '27 NDA submission for G-MELT?

Mark Baum: Right now, I think -- let's think about a Q1 2027 submission. We're working really hard. I know the team is to complete the balance of the data gathering and to build the dossier for submission. So I think by our next conference call, we'll have a lot more information, and I'll be able to, I think, specify as to whether or not we'll be able to get a submission made at the end of the year. If we did, it would be at the very, very end of the year.

But I have to tell you, whether we make the submission in late December or early January or even early February, the potential that we see for that product is just extraordinary, absolutely extraordinary. And I do believe in due course that, that product will be perhaps our largest selling product by revenue. So we're really excited to get that NDA filed. All the really difficult risky work is behind us. The work that Amir discussed is, I don't want to say perfunctory, but it is ultra-low-risk data gathering. And we're excited to meet with the FDA in a pre-NDA meeting. We'll have more information about that in August when we have our next call.

Operator: And the next question will come from Yi Chen with H.C. Wainwright.

Yi Chen: Could you comment on whether BYQLOVI has already been launched and whether your current full year revenue guidance including -- includes sales of BYQLOVI and BYOOVIZ?

Mark Baum: Thank you, Yi. The BYQLOVI launch, strictly speaking, when we say launch, we mean trade launch. We mean actual sales of the product. Believe it or not, from a sampling perspective, BYQLOVI is actually launched. We've begun to distribute BYQLOVI samples to select customers. I think there are several thousand of those samples out. We're going to spend the next couple of months continuing that process of sampling and talking to customers about BYQLOVI, which we think is a best-in-class topical steroid. The topical steroid category is a very large category. And we're going to begin the trade portion of the launch, actually selling the product, driving revenue. That will begin in the third quarter.

But strictly speaking, if you were to go into the offices of some of these doctors that are a part of this program, they will have access to BYQLOVI right now. So samples are out, trade is going to begin in the third quarter of this year. And in terms of the numbers that we're quoting, they are inclusive of BYQLOVI for sure.

Yi Chen: Okay. Can you also comment on how much contribution do you expect these 2 drugs to make in -- beyond 2026?

Mark Baum: Yes. So we're not giving revenue-specific guidance on each product. Especially in a new launch, I think that would -- we would have a tough time doing that externally. We certainly have internally a model built, but we're not prepared with either BYQLOVI or even BYOOVIZ at this point to provide what the expected revenue contribution will be for this year or next year.

Operator: I show no further questions at this time. I would now like to turn the call back over to Mark for closing remarks.

Mark Baum: Thank you, operator, and thank you all for joining us today. Let me close with what matters most, and that is Harrow's demand strength is stable. It's a foundation that supports my confidence in our future. With the high deductible season now behind us, we're moving into a period of accelerating growth and execution. The first quarter included a discrete issue that we have resolved, and that does not impact the long-term trajectory of this business. We spent the past several years building this platform, expanding access, scaling our commercial organization, and positioning our portfolio for growth. That work is largely behind us. We're now entering a period where the foundation translates into sustained revenue growth and increasing profitability.

Looking ahead, we have clear visibility into the drivers of our performance from improving access and pricing to new product contributions and clinical milestones. Beyond that, we're actively shaping our next 5-year strategic plan with a clear path to scale our core assets, unlock additional value across the portfolio and hopefully complete some accretive and exciting acquisitions. When I step back, this is a stronger, more scalable and in my view, a more valuable company than at any point in our history. And we truly appreciate your continued trust and support. Thank you, and this will conclude our call.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.