Harrow Health, Inc. Aktie

Good morning, and welcome to Harrow Third Quarter 2026 Earnings Conference Call. My name is Michelle, and I will be your operator for today's call. [Operator Instructions]

As a reminder, this conference is being recorded. I would now like to turn the call over to Mike Biega, Vice President of Investor Relations and Communications for Harrow. Please go ahead.

Thank you, operator. Good morning, and welcome to Harrow's Third Quarter 2026 Earnings Conference Call. My name is Mike Biega, Vice President of Investor Relations and Communications.

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 Harrow'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 its FDA-approved products and compounded formulations and technologies 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. Harrow's results may differ materially from those projected. Harrow 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, Harrow will refer to non-GAAP financial metrics, specifically adjusted EBITDA. A reconciliation of any non-GAAP measures with the most directly comparable GAAP measure is included in the company's earnings release and letter to stockholders, both of which are available on the website.

Joining me on today's call are Mark L. Baum, Founder, Chairman and Chief Executive Officer; Andrew Boll, President and Chief Financial Officer; Patrick Sullivan, Chief Commercial Officer; and Amir Shojaei, Chief Scientific Officer.

With that, I would like to turn the call over to Mark. Mark?

Thanks, Mike, and good morning, everyone. Last quarter, I was clear. Our priority was turning the demand we were building into revenue. In the third quarter, that's exactly what happened, and it's the clearest sign yet that the second half is playing out as we expected.

Demand is growing across key products. Our expanded commercial team is getting more productive every month, and we're reaffirming our full year revenue guidance. We're continuing our momentum, and I expect the fourth quarter to be the strongest quarter in Harrow's history. I also believe you will see our momentum continue into 2027.

You see it in VEVYE, which delivered record revenue as our expanded sales force matures and begins to deliver improved prescription economics. You see it in TRIESENCE, which had its strongest quarter under Harrow ownership. And you see it in IHEEZO, which heads into its historically strongest quarter with new clinical evidence from QUELL. An important part of the story is how we're organizing our commercial business to maximize the opportunities ahead.

With the addition of TYRVAYA, we realigned our commercial organization into four focused teams: Ocular Surface Disease, Retina, Surgical and Access+, each built around the same prescribers, care settings and purchasing dynamics.

Our largest team now serves one of the largest opportunities we have, namely Ocular Surface Disease, including dry eye, where we now own two completely differentiated products in the category. Our new commercial structure allows our representatives to promote a broader portfolio of complementary products to the same customers, making every relationship and every sales call more productive.

We've always benefited from commercial leverage, but this organization takes that advantage to another level. And with the launch of HarrowRx, we're making it even easier for those customers to access our entire portfolio through a single destination integrated into their existing workflows, primarily their EMRs.

The G-MELT program, which we launched over 10 years ago, has been a true labor of love and is the first program Harrow took from idea to now, in a matter of weeks an NDA filing. When our NDA is accepted for review and we receive our PDUFA date, which will hopefully be in 2027, it will be a tremendous accomplishment for the entire Harrow family and for our stockholders alike.

I am thrilled that we will soon hopefully have the opportunity to reduce or eliminate the need for IVs and opioids in cataract surgery for millions of Americans each year, and Amir is going to cover our NDA filing a bit more shortly.

In summary, today, Harrow has more products, stronger commercial capabilities and more ways to grow than at any point in our history, but we're not done building. We're not done building, but the emphasis has shifted from building the platform to excellence in commercial execution and delivering financial results.

With that, I'll turn it over to Andrew to walk through the financials and our outlook. Andrew?

Good morning, everyone, and thank you for joining our call today. Third quarter revenue was a record $99.3 million, up 41% sequentially and 39% year-over-year.

Branded revenue was $83.5 million, up about 62% year-over-year and made up roughly 84% of total revenue.

VEVYE generated $39.7 million, IHEEZO $25.3 million and TRIESENCE $10.7 million of revenue. Compounded revenue was $15.8 million.

VEVYE was a clear example of demand converting to revenue. Revenues grew 35% sequentially, outpacing prescription growth as our changes to prescription economics took hold. GAAP gross margin was 75%, consistent with a year ago and an improvement from Q2 gross margins of 71%. Still, our gross margins are lower than we expected and is largely a result of lower gross margins coming from our compounding revenue and product mix.

SG&A was $53.1 million, reflecting our expanded commercial organization and roughly flat quarter-over-quarter. R&D was $10.3 million, which is a little higher than we expected, but the result of programs accelerating and coming in ahead of schedule, primarily reflecting G-MELT NDA-enabling work and clinical studies for IHEEZO and TRIESENCE.

We also recorded a onetime $5 million gain that is reflected in other income in our statement of operations. This is related to the resolution and settlement of our litigation with OSRX dating back several years. GAAP net income was $9.8 million and adjusted EBITDA was $21.2 million versus an adjusted EBITDA loss of $1.2 million in Q2. We ended September with $75.3 million in cash and cash equivalents.

Turning to our outlook. We are reaffirming full year revenue guidance of $350 million to $365 million. That implies Q4 revenue of roughly $136 million to $151 million or approximately 37% to 52% sequential growth. It's a substantial step-up, and here's why we believe it's achievable.

Over the past two years, Q3 to Q4 revenue growth averaged approximately 30%. This year, we believe we're entering the fourth quarter with considerably more momentum across our portfolio.

VEVYE is benefiting from expanded insurance coverage and a large sales force and improving prescription economics. IHEEZO is entering its historically strongest quarter, while TRIESENCE continues to gain traction in ocular inflammation, supported by our expanded surgical team and BYOOVIZ sales are growing. On top of that, we have a new revenue contributor with TYRVAYA, which began contributing revenue in the fourth quarter. Taken together, these drivers give us confidence in our ability to deliver a strong finish to the year.

Turning to profitability. We're updating our full year adjusted EBITDA outlook to more than $40 million, including more than $33 million in the fourth quarter compared with our previous guidance of $80 million to $100 million.

Let me provide some context around that change. Our first half revenue shortfall and lower gross margins than we anticipated put us behind our original EBITDA expectations. At the time, we still saw a path to achieving our guidance, but it required a very strong second half, including a favorable mix of higher-margin products. We made meaningful progress in Q3, delivering $21.2 million in adjusted EBITDA and bringing our year-to-date total to $7.3 million.

But to reach the low end of our previous guidance, we would still need approximately $73 million in Q4 alone, and our third quarter performance is simply not where we needed it to be. As we work through our fourth quarter forecast, several things have also changed. We're moving forward with our G-MELT NDA submission this year, which brings the FDA filing fee and preparation-related expenses into Q4. We've also accelerated spending across several clinical and development programs, including QUELL, the Phase 3 TRIESENCE study and YOCHIL, and we're absorbing transition costs and purchase accounting impacts associated with the TYRVAYA acquisition.

Mark and I believe accelerating these initiatives is the right decision for the business, even though it affects near-term profitability. Rather than depend on unusually favorable fourth quarter product mix to offset those additional costs, we've established a more conservative adjusted EBIT outlook that reflects our current expectations. Importantly, we're providing a floor rather than a range. Our expectation is for more than $33 million in fourth quarter adjusted EBITDA, and there is room to outperform that level depending on how the quarter develops. We're confident in the underlying momentum of the business and believe these investments will position us well heading into 2027.

I'll now turn things over to Pat to discuss some key commercial achievements and metrics.

Thanks, Andrew, and good morning. Starting with VEVYE. Total prescriptions grew 17% sequentially and 83% year-over-year. Two factors stand out. First, we more than doubled the field team behind VEVYE this year and newer representatives are becoming more productive in their territories. The second is economics. We focused on getting more patients on to covered therapy, and it's working. Covered prescriptions are rising with encouraging progress among Medicare patients that continued into October. That's improving the economics of every VEVYE prescription, and we keep adding coverage.

We recently expanded our coverage through a major national plan covering approximately 10 million lives effective January. That's our third coverage win this year and strengthens our position heading into 2027. TYRVAYA's integration is also progressing well. Approximately 40 experienced sales representatives and their managers joined us from Viatris and are already calling on many familiar practices. We're beginning to see prescription demand grow under Harrow.

Now shifting to IHEEZO. Unit demand was 62,210, up 21% year-over-year. It declined about 5% from a record Q2 demand, reflecting both historically slower third quarter procedure activity and elevated practice purchases of the prior single unit presentations late in Q2.

That said, we expect sequential demand growth and believe Q4 can set a new quarterly record. The underlying IHEEZO trends are strong. Our customer base continues to grow and new retina account wins, along with deeper penetration of existing accounts have more than offset the units we lost when pass-through status expired in the ASC setting.

As Amir will discuss next, QUELL gives our retina team something we've never had before, prospective randomized data on IHEEZO and intravitreal injections, including encouraging findings on patient comfort and tolerability for patients who return for injections month after month.

Now focusing on BYOOVIZ. BYOOVIZ went wide before it went deep. More practices placed initial orders than we expected, but many started small while validating reimbursement and purchasing. Early reimbursement experience has been favorable. Several accounts have reordered and demand strengthened through September and into Q4. Our focus is turning initial orders into larger, more consistent purchasing, learnings that will inform the OPUVIZ launch in 2027.

Now let's discuss TRIESENCE. Unit demand reached 20,022, up 37% sequentially and 110% year-over-year, our strongest quarter since we relaunched the product. Ocular inflammation is a key driver, and we're especially encouraged that practices are beginning to build TRIESENCE into their treatment protocols, which tends to make use and unit volumes more consistent and predictable over time.

Our fourth quarter priorities are clear: build on VEVYE's momentum and improving economics, accelerate IHEEZO's growth in its strongest season, deepen BYOOVIZ adoption, deliver TYRVAYA's first quarter under Harrow and continue to grow TRIESENCE the rest of our portfolio. We're entering the quarter with more ways to win than ever, and our team is ready.

With that, I'll turn it over to Amir.

Thanks, Pat. I'll cover QUELL and G-MELT. Today, we're reporting top line results from QUELL, our Phase 4 multisite randomized double-masked study comparing IHEEZO with routine anesthesia in 231 patients undergoing intravitreal injections.

Let me start with the primary endpoint. QUELL did not meet its primary endpoint of non-inferiority. The primary endpoint was successful ocular surface anesthesia, defined as a pain score of zero, meaning no pain or one, meaning pressure only, both immediately before and immediately after the injection. That was achieved in 55.2% of IHEEZO patients compared with 59.7% receiving routine anesthesia and the upper bound of the 95% confidence interval exceeded our prespecified 12-point margin.

The design context matters here. The study was designed assuming 88% of patients in each arm would achieve success. The actual observed rate overall was only about 57%. At that rate, roughly 114 patients per arm could not produce a confidence interval narrow enough to fit within a 12-point margin. In other words, the primary endpoint was inconclusive.

The study did not establish that IHEEZO was non-inferior, but it also did not establish that IHEEZO was inferior. For retina specialists and their patients, patient comfort, pain and safety are critically important. That is where QUELL's exploratory secondary and safety findings are encouraging. Keep in mind that routine anesthesia in this study involved proparacaine drops followed by a potent subconjunctival lidocaine injection, essentially an injection before the injection.

Despite that difference in how anesthesia was administered, cumulative pain scores immediately before and after the intravitreal injection were identical at 2.0 in both groups. Where we began to see differences was after the procedures.

Patients receiving IHEEZO reported lower pain in the hours following the injection with cumulative pain scores through 24 hours of 2.9 compared with 3.7 for routine anesthesia. We also observed encouraging findings related to ocular surface health. Patients receiving IHEEZO had less ocular surface staining following the procedure with a mean increase of 1.7 compared with 3.2 for routine anesthesia.

This suggests less damage to the ocular surface with IHEEZO. Importantly, staining in the untreated eye remained unchanged in both groups. And finally, looking at patient-reported dryness symptoms as measured by SPEED questionnaire, patients receiving IHEEZO experienced less worsening on the day of the injection and by 24 hours, their symptoms have improved from baseline.

To me, this illustrates why the primary endpoint doesn't tell the whole story. It measured whether patients met a prespecified threshold at two time points, but didn't fully capture differences in pain and ocular comfort over the hours that followed. We also observed fewer adverse events with IHEEZO 27% versus 47% with no serious adverse events in either group. I would like to extend our sincere appreciation to all the investigators and all the patients who made this study possible.

Overall, I'm encouraged by these data. Taken together, they provide valuable new clinical evidence about IHEEZO in intravitreal injection procedures, and we look forward to presenting the full results at the Hawaiian Eye & Retina Conference in January 2027.

On G-MELT, we completed our pre-NDA meeting with the FDA and remain on track to submit the NDA later this month or the beginning of next month, which is meaningfully earlier than we originally expected. If approved, G-MELT could become the only on-label product for sedation during cataract surgery, giving patients effective sedation without an IV line or opioids in one of the most common surgical procedures in the U.S.

With that, I'll turn the call back to the operator for questions.

[Operator Instructions]

And our first question will come from Chase Knickerbocker with Craig-Hallum.

Maybe just first on VEVYE. Congrats on the continued progress there. Could you just discuss in further detail some of those business changes that you made in September in light of trying to improve net realized ASP from the product?

Chase, this is Mark. Thanks for the question. I appreciate the question, but we're in an intensely competitive market. And I'm going to elect to not answer the question. Unfortunately, we don't want to reveal the specific algorithm that we use in order to improve VEVYE economics.

Understood. Maybe just if you expect to see that impact kind of notably in Q4 from those business rule changes?

Well, I can tell you without question that we are seeing improvement certainly in Medicare covered prescriptions and really, I think, across the board. The number of offices that are willing to submit prior authorizations for their patients in order to access VEVYE is actually much higher than one would think. And critically, the number of prior authorizations that are getting approved even when there isn't coverage is significant.

So this is, I would say, over the last 60, 75 days, the first real concerted effort that our team has had in order to shift the ratio of covered to cash pay prescriptions. And as we said on the call, the data is extremely encouraging. The VEVYE economics are certainly improving. They did in the third quarter, and I think you'll see that happen in the fourth quarter as well. Andrew, do you want to add to that?

Nothing to add, Mark.

And then just on -- as far as where you think we are from a standpoint of that expanded commercial team as far as productivity for VEVYE. Obviously, the volume growth remains impressive and then kind of the kind of foot on the gas that the new TYRVAYA reps kind of provide to the overall franchise.

And then secondly there, just last for me, Mark. As you think about that coverage win in Q1, should we think about the impact there being similar to the impact we saw to Q1 from the CVS win where we can kind of buck some seasonal trends of volumes in Q1?

Sure. I'm going to take the second question because as you know, I mean, part of the reason why we had a meaningful miss in the first half of this year, and I said this in the letter to stockholders, is because of the challenges that we had from a market access perspective with that big coverage win. I don't believe you're going to see those same issues with this new coverage win beginning next year. In fact, I don't want to guarantee it, but I can almost promise you that we won't see that same level of impact.

So this is a big win. And you're going to see, I think, a greater shift once again from cash pay prescriptions to covered prescriptions. Our economics overall on a covered prescription are meaningfully higher than they are on a cash pay prescription. So we're very excited about not only this recent coverage win, but the other coverage wins we've had with even smaller plans.

So we're making real progress. We promised that we would make progress on covered prescriptions. I think we're meeting that promise. And I think you'll see continued progress on coverage for VEVYE in 2027. That would be a new prediction. I think you'll see more coverage for VEVYE. There seems to be some good momentum there. In terms of the productivity of the sales force, Pat, do you want to jump on that?

Sure. Thanks, Mark, and thanks for the question. We're very excited and bullish on our new ocular surface disease team that's out there representing Harrow's portfolio. I mean I think the products that they're representing really offers a whole suite of solutions to the ophthalmic community and really kind of aligns with our vision of being the preferred partner moving forward.

Our combined team now really is really early days in the process. But I would say is the way we've designed our footprints and our engagement plans, I think early days, but very, very positive on what we're seeing in the trends early, feedback from physicians and ultimately, the integration is going smoothly. So we're very encouraged with Q4 on what we're seeing early days and look forward to really good results as we build upon Q3.

I think I'm excited because if you think about where we were at the beginning of the year in terms of the number of key account managers covering VEVYE versus today, it's more than tripled. When you think about the number of reps that were covering TYRVAYA before Harrow acquired it relative today, it's essentially doubled.

Then on top of all of that, two other really important products that we're seeing momentum with in terms of prescription volumes are VERKAZIA and NATACYN. And now -- as within that Ocular Surface Disease team is -- are those two products. And so we now have all of those reps. And those are not hard push sales.

And when you have fungal infections, and this is the only FDA-approved product for that condition, docs just simply need to know how to get access to NATACYN. When patients have severe allergies, children have severe allergies and doctors want to not prescribe steroids for those patients. This is really the only Steroid-Sparing product, VERKAZIA. And so our reps are now letting them know about its availability. So we have a lot more people providing that access information. And I think you're going to see those big four products, the biggest being VEVYE really leverage this increased sales force.

And our next question is going to come from Lachlan Hanbury-Brown with William Blair.

I guess first, maybe just wanted to follow up on QUELL and sort of elaborate on the implications for IHEEZO in retina. Like are you thinking about another study or sort of where you go from here? Do you need another study? Does this change plans to put it on the label? I guess if we could just start with your thoughts there.

Yes. For us, and I'll ask Amir to comment as well. For us, the key is medical messaging. The reason for investing in the study is not only for an amendment to the label, if possible, if that made sense. But I think critically, it's medical messaging, being able to have a sales force go out and talk about the use of our product specifically in the intravitreal injection procedure. We have not had that to date. All of the studies that were done for IHEEZO were done in cataract surgery.

So now we do have a robust data set for intravitreal injections. And what we learned, I think, is that it's pretty hard to anesthetize the eye and have a 0 or 1 pain outcome with not only IHEEZO, but with an injection of lidocaine. It's not easy. And if you look at the data, I mean, we were within four patients of -- or 4 percentage points of being equivalent to an injection sort of mainlining the anesthesia into the eye.

So I was quite proud of the performance of the drug. But the key for us are those secondary endpoints, being able to go out to an office and to say, look, your patients will have less pain after the injection from hours 4 to 24 hours, better Ocular Surface Staining and far fewer adverse events. We can now confidently legally say that. Amir, do you want to add anything to that?

Then the only thing I'll add is currently, we don't have any plans for a second study or further studies in this line. That said, we do have quite a few ongoing studies with investigator-initiated trials within the IHEEZO franchise.

And maybe as a second question here. I noticed some comments in the 10-Q about how the licensing of TYRVAYA potentially breaches certain parts of the VEVYE licensing contract with Novaliq. Just wondering like what the potential outcomes there could be? Like does this ultimately require divesting TYRVAYA? I realize you probably can't say much, but can you give us any kind of clarity on what this could mean?

Yes. Well, first, let me just say, Novaliq and Harrow has been a marriage made in heaven. We've been a phenomenal partner to them. They have been a phenomenal partner to us. And if you look at the growth in VEVYE units and the progress that our team has made with that product, I think it's very difficult to conclude otherwise. It's just been a phenomenal relationship on both sides.

As far as TYRVAYA goes, we are under confidentiality. We're in active discussions with them. And I think we believe, and I also think they believe that the addition of all of the salespeople, the investments that we've made as a result of the TYRVAYA acquisition really do benefit sales of VEVYE. And so we're going to work through this process. And I would bet that after we're done, we'll probably have a stronger relationship with our partners at Novaliq than we do today.

And our next question will come from Steve Seedhouse with Cantor.

I wanted to dig in on BYOOVIZ a little bit. It sounds like you had a pretty defined internal model just in terms of what your expectations for that launch were going to be, and you mentioned more breadth, but maybe not as much depth early on from an order standpoint. So I was hoping you could just expand on that. Maybe walk us through sort of going forward, what that means? And then I'm also curious to know what you've learned so far, how that sort of affects your expectations for the OPUVIZ launch next year.

Well, I'll ask Pat to comment in a second, but what I would say is when you launch a biosimilar into a fairly competitive category, to be clear, you really don't know what the uptake is going to be. We have very strong relationships in retina. We have an incredible retina team. So the members of the Harrow family that are on the retina side of things are just extraordinary in the productivity, the relationships that they have and the trust that they've built with their customers over many, many years, in most cases, certainly well before they even joined the Harrow family.

But you're right, we were an inch deep and sort of a mile wide on the launch. That can be troubling on the one hand, but the reality is we had a lot of doctors, many more doctors purchasing a product than we had actually initially modeled. So the question is, can you get pull-through after their initial purchases. And they're not going to give you that revenue opportunity, those volumes until they've gone through sort of the same buy-and-bill cycle that we've seen with IHEEZO and that we've seen with TRIESENCE and other products that we sell in the buy-and-bill category.

And so after they had gone through that cycle, we did see and are seeing today that follow-through purchasing. And I think that's the most important factor that I can convey on this conference call with respect to BYOOVIZ. We are getting those follow-through purchases. And I think in the fourth quarter, we're probably well ahead of our model, whereas in the third quarter, we were somewhat behind. But the opportunity to sell more units to more customers can certainly allow you to make up ground quickly. Pat, do you want to add to that?

Sure. Thanks, Mark, and thanks for the question. As Mark mentioned, I think the early stages of the launch in Q3, I think we garnered an awful lot of learnings. I think one of the unique things that Harrow has the ability to show up unlike other organizations in the retina space with the biosimilars, we have the ability to leverage our other products like IHEEZO and TRIESENCE. So this gives us a unique engagement approach. Specifically with BYOOVIZ, I think as Mark mentioned, one of the things that we do know with biosimilars being interchangeable, which is a real positive.

So our focus is really on displacing the originator for us with BYOOVIZ. But one of the things we do see is early in the buy-and-bill cycle that Mark alluded to was accounts and physicians still are going to go through that process of, although a common molecule is they are going to go through the process of, one, validating reimbursement and all of those different details that give them further encouragement. We are on the other side of that at this point in time. And we have very clearly segmented our business in Q4 to focus on growth. And like Mark had said, to reiterate that we are seeing early signs in Q4 with acceleration building on Q3.

And in terms of the market opportunity for OPUVIZ on the EYLEA 2 mg biosimilar is in terms of volume, meaningfully higher. The number of accounts that will use OPUVIZ is significantly higher than those that use BYOOVIZ.

And just a follow-up on the reimbursement and net price sort of side of things for BYOOVIZ, how has that been going relative to your expectations?

Andrew, do you want to comment on that? I don't know that we can give a lot of color on net pricing, but maybe contracted progress.

Yes, Steve, to Mark's point, we're not going to comment on the net pricing of the product just given the competitive dynamics. But in regards to coverage, I think we've been really pleased with the coverage that we've been able to get on the product. I think to your earlier question about learnings going into the OPUVIZ launch, there's a lot of learnings too as part of that going into that launch on the market access side and on the payer side that I think is going to be really advantageous for us. But so far, it's been pretty receptive with the payers. I've been pleased. I think the commercial team has been pleased with the uptake on the payers.

And our next question is going to come from Tom Shrader with U.S. Bank.

Congratulations on all the progress. Very related questions on BYOOVIZ. Do you have a clear sense of what people testing the water want to see? Is it that you help them with reimbursement? Is that your supply chain is easy? Do you know what they're looking for?

Well, I mean, we haven't really surveyed the accounts. But by and large, on a buy-and-bill product, as I said, it's the same sort of purchasing cycle that we've seen with IHEEZO that we've seen with TRIESENCE and really all of our buy-and-bill products. They buy the product, but they need to make sure that if they purchase it, they're going to get paid for it. So it's one thing to be successful on the buy side. But remember, it's buy and bill and the billing piece has got to come through. And that's a key feature that they're investigating when they make these sort of initial purchases. And we're seeing that follow through, and that's really important.

It's showing up in the numbers in the fourth quarter for BYOOVIZ, and we're going to take all of those learnings into 2027 when we launch OPUVIZ. Keep in mind, Tom, we own the largest portfolio of buy-and-bill products in all of ophthalmology. I don't think any company has the number of buy-and-bill products that we have. So we have within our team, extraordinary experience on the buy-and-bill side of things.

And then on the QUELL trial, for a mixed trial like that, is there a rule that if you can get it published, then you can market the data and sort of stress the pieces you wanted? Are there any rules for what you can do for a mixed trial like that? And then a quick follow-up. Just on TRIESENCE, how much of the original market when the other people had it at peak, have you now filled?

Sure. Well, I'm going to take the second question and give the first to Amir. In terms of TRIESENCE, TRIESENCE is being used in an area of inflammation for ocular surgery that we know very well within our company. It's the basis of how we started our company. We started selling compounded triamcinolone acetonide into the cataract surgery market as a compounded medication back in 2014. So we have tremendous history.

That compounded product has been used in over one million cataract surgeries by thousands of ophthalmologists in the U.S. market. So we know the market in this space extremely well and what the size is, what the addressable market is, the opportunity. Even though we reported 20 thousand units in the third quarter, it's really a very small percentage of the overall market opportunity. for that product.

I've been talking about how confident we are in TRIESENCE for now, I guess, a couple of years. And look, the units and the volumes for the quarters following me beginning to talk about how excited I was about relaunching TRIESENCE were not very impressive. But what I think you're starting to see is the overall assessment that I had a couple of years ago was on track.

It was just a little bit late, and you're starting to see that pick up. It's not easy to grow sequentially the way the unit volumes in TRIESENCE are growing now. We have an incredible team. The surgical team has done a wonderful job. Chad and Mike and the rest of the team. And so we're very bullish on TRIESENCE continuing to grow. We have not really I think our penetration is certainly in the low single digits.

So we've got a lot of headroom with TRIESENCE. And the key factor before I turn it over is the clinical outcomes. The clinical outcomes anecdotally on the use of TRIESENCE, all of these new use cases that are causing this increase in volume. The clinical outcomes are extraordinary. They're outstanding, the one-day post-ops that we hear about anecdotally. And what we're really excited about is Amir's got this TRIESENCE study going, and we're going to be able to, once again, just like with IHEEZO and the QUELL study, we're going to go from the anecdote to the actual.

We're going to have a data set to present that I think is going to fuel further adoption of TRIESENCE. That was a long answer, but I do want to turn it over to Amir on QUELL to comment.

Thanks for the question. I think the way I'd position this is we are at the infancy of the data review right now. We have top line results. We anticipate to have the full data. And as you alluded, we will have the study published and presented. At that point, the whole sort of premise behind the study would be medical messaging. We have a very strong medical team, and we would be messaging this across the relevant media and conferences. The study as a whole had the rigor to be a peer-reviewed journal published study. And as such, we anticipate to take it to that route with the investigators involved. So that's our plan.

And our next question is going to come from Daniel Clark, Leerink Partners.

Just first question I wanted to ask on the 2026 revenue guide. Just curious what scenarios you're kind of thinking about to get to the high and low end of the range here for sales?

Andrew, do you want to tackle that one?

Yes. I'll do my best, Daniel, without providing -- typically, we don't provide product level specific guidance. And so we talked a lot kind of talked a lot about the bridge to get there in the letter to shareholders and in the deck. But we expect to see growth quarter-over-quarter from VEVYE. We're going to get continued contribution from TRIESENCE, should see sequential growth for IHEEZO as well.

BYOOVIZ, we've talked a lot about in the Q&A here. We're seeing continued growth there heading into Q4. I think Q4 is going to be a really strong quarter for that product based on the early progress we've seen. And then you've got the contribution from TYRVAYA. And I know we don't provide quarterly guidance on TYRVAYA, but you can read in the MD&A. We expect of the Q, we expect that product to do over $30 million of revenue next year. That product is a pharmacy benefit product is going to have its best quarter in Q4.

So we get the benefit of that product's best quarter being here at the end of 2026 and contributing to revenue where we haven't gotten that benefit earlier in the year. And then we're always working on things. And so we've got some other aspects of the business on the commercial side that we're working on that could help us push beyond the low end of the guided range.

Okay. Got it. Super helpful. Just a follow-up. On HarrowRx, just curious, are there any products or particular use cases where you think this meaningfully improves provider experience? And just how you're thinking about the opportunity from this launch would be great.

Sure. Thank you for that, Daniel. Yes. HarrowRx is actually a really important platform for our company in that when I go out on the road and I talk to our sales reps who are in offices every day, meet with staff, in particular, at these offices who have to deal with the challenges of prescribing pharmacy benefit products. They're using one specialty pharmacy for a product by a competitor. They're using a different specialty pharmacy for VEVYE, for example.

Fortunately, TYRVAYA was available from FLAREX, which is our specialty pharmacy partner. But what we have to offer our offices, and this is something I hear day in and day out when I talk to our customers, they are always surprised at the breadth of our portfolio. They're surprised that we have NATACYN, that we have VERKAZIA, ILEVRO, FLAREX, I can go down the list. And so what they're interested in is a single point of access for the entirety of our portfolio.

In the future, we believe at Harrow that more prescribing is going to take place through these sorts of specialty hubs. If you were to get a prescription for ILEVRO and send it to your local CVS, odds are, they don't have that product in stock for you to pick up in an hour or two. And so they have to order it in. And we believe going forward, if we can provide that single access point for this very large product portfolio, now I think we have over 20 branded products.

We think that's a very attractive platform for doctors and their staff to be able to utilize to be able to access prior authorizations and all sorts of other features that we have planned for the platform. So it's going to be an important part of our business. It will be a single point of access for the entirety of our portfolio. And I don't believe any of our other competitors really have anything like that.

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

I appreciate the level of detail here. If I may ask on the VEVYE new patient start trends, Mark, that seems strong. Are you able to comment on where these are sort of coming from? Are these switches from generic cyclosporine or other branded options? Or these are new to prescription patients? And wonder if the mix in any way is shifting now that you have a fully deployed sales force and payer coverage is also expanding?

Yes. The truth is we don't know what is causing the stability and growth in our new prescription volumes. We put these rules in place, we anticipated volumes may be coming down that we might have to sacrifice volume in order to improve net pricing.

That has simply fortunately not been the case. We've actually been able to grow new prescription starts despite these new rules, this new algorithm that actually improves net pricing and is improving net pricing for us. So I think that's a really positive development for the VEVYE franchise. In terms of where they're coming from, though, as I said, we don't know.

When I put VEVYE in my eye, and I do, and I put the other choices in my eye, I don't know why anyone would start anything other than VEVYE. It feels great. It works fast. It has a durable treatment effect. The data is incredible, and it just feels phenomenal. So like I said, I don't know why anyone would use anything other than VEVYE, but some people do. But as I think you're alluding to in your question, more and more people are starting with VEVYE, and I expect that trend to continue.

Great. And just a couple more quickly. On the IHEEZO step-up in 4Q, to the extent possible, if you're able to quantify year-over-year and also from a restocking and net price per unit reset we got in 2Q. And just broadly, should we think about this in alternate quarter buying cycles that 2Q and 4Q being strong?

As you think about next year, and I know you're not guiding for next year today, it's basically a 2Q to 4Q steady build with a 1Q sort of reset. And then maybe just for Amir, on the G-MELT NDA filing, which elements have been fast tracked, if you could comment and any thoughts from the pre-NDA meeting you may have had on how to think about the combination product scheduling as obviously you prepare for commercial readiness.

Yes. Mayank, thanks for the question. I'll comment on IHEEZO and by not commenting or trying to answer your question. We really do not want to be in the business, and I think I said this in the letter to stockholders of getting or giving quarterly guidance on a product-specific basis. IHEEZO, in particular, can be choppy quarter-to-quarter.

That said, the fourth quarter is always, as we said in the letter, and I think talked about on this call, the strongest period for that product. But look, second quarter is good. The first quarter wasn't bad. This year, in particular, there were some challenges with realizing revenue with IHEEZO. And I think we've talked about that many times on prior calls.

But I think in 2027, you're going to see a normalization of what to expect with IHEEZO. And I can only tell you one thing with IHEEZO, 2027 is going to be a stronger year for volumes and revenue for IHEEZO than 2026, just like 2026, I think, ultimately, in terms of demand certainly was stronger than the prior year. Amir, do you want to comment on the G-MELT filing at all? I don't know that you can say much about our pre-NDA meeting. Certainly, if we're going to actually submit to the FDA, it must have gone fairly well.

Yes. I think I concur with that. The meeting was productive, and we are aligned with -- or more importantly, we are submitting what the FDA anticipates to receive. So from that regard, we are on the right foot. And we will be submitting hopefully by end of this month, if not beginning of next month. That said, our anticipation is we'll have a PDUFA goal date next year, whether it's priority review or not, that will be part of the decision the FDA would make. And beyond that, I think from a scheduling perspective, that would be a review during the submission as well. We are moving forward with our anticipated scheduling between the two fixed-dose combination products.

And our next question will come from Thomas Flaten with Lake Street Capital.

Following up on a couple of questions. First for Amir, and I apologize if I missed this, but do you have a hypothesis on why you came up 30 points or so short of the 88% anesthesia goal that you had set for the study?

Great question. Amir, do you want to tackle that one?

Yes. Thank you for that question. So frankly, this was the first set of sort of adequate and well-controlled study that would generate that answer to your question. So where we believe the hypothesis lies is really the relevant difference between a procedure that requires cutting the eye as opposed to procedure that requires deep penetration into the eyes.

That's where the delta is, and I think Mark alluded to this, how do you anesthesize the eye. And when you compare the various procedures, you realize there are different numbers that you would have to sort of set your bar for. We set the bar. We extrapolated with the existing data because there was no other data available. with this data in hand, we have obviously learned the actual sort of benchmark that we should have set the study at. But that's really the gist of it. It's borrowed from or extrapolated from a different procedure because there were no other data available.

I want to add to that, by the way, because it's very interesting. When we launched IHEEZO, I can't tell you how many doctors said to us, anesthesia is not a problem. we don't have a problem that you're going to be able to help us solve. And I think if you look at the data from QUELL, what it clearly says is patients experience pain from these injections.

It seems axiomatic that if you're going to put a needle into the sclera of someone's eye, that it might be painful. And I think the study certainly demonstrates that. And it also shows that whether you're going to anesthetize the eye with an injection of lidocaine, sort of a needle before a needle or you want to use something topical like IHEEZO, you can pretty much get patients to about the same level. In fact, Amir alluded to the fact that the pain levels between the two cohorts were essentially the same at two.

But what we're excited about and what we're now able to message lawfully through our medical team is the patient experience after the injection. It's so important that these offices not get the calls from their patients who are experiencing pain because they may have gotten an injection of lidocaine post procedure or that they have some ocular surface trauma or that they've experienced some other adverse event associated with the intravitreal injection.

And so to be able to now message that is so important for us. And I think going forward, it's a data set that will inure to the benefit of IHEEZO. It will be helpful to our reps. It will justify certainly the use of IHEEZO in practice for more practices. So we're really quite pleased with the data set that we invested in, could have been better, but it was pretty dog on good.

That's great. And then a follow-up for Pat. You mentioned the new territory design and the ocular surface team. But could you just maybe flesh that out a little bit more? So you've got effectively three teams coming together. You've got seven products. Like how are you overlapping in territories? Did you split territories to create more frequency in smaller groups? Can you talk a little bit more about what that territory design looks like and how your incentive compensation looks with a seven product bag?

Yes. Thanks for the question. On our prior earnings call, and I think through the prior communications, obviously, this has been a very phased and disciplined plan that started earlier this year. If you recall, the organization the organization made a large commitment and I think to further expand our presence in the dry eye space to really get behind VEVYE. And if you recall earlier this year. So right now, what we've done is, to your point, we've taken three teams, the Viatris team with the acquisition of TYRVAYA.

We had a specialty team, as Mark mentioned, that was representing a few of our specialty products, such as like Mark mentioned, these more rare products for VERKAZIA and IOPIDINE and also brought that together in our dry team. So that is our ocular surface team.

So what I would say is one of the things that we're really excited about is we were very methodical in one, looking at a really clear approach that, one, we cover the right physicians to make sure that we have the right prioritization on products to deliver the right promotional intensity to drive the outcome that we're looking for.

So our main focus is heavily on VEVYE. VEVYE, as you see our prescription trends, we've had a pretty significant growth over the prior quarter of 17%, I think 83% year-over-year. I think we're really excited that we're just getting started, and we hear consistent feedback early in our new model about how we're deploying in a very smart, sophisticated way that drives increased productivity. So in a word for us, our prioritization is VEVYE and also our dry eye portfolio.

But I think by leveraging the other products that we have allow us to show up in a really unique way that only Harrow can with the breadth of our products, that really, if you think about it now, we have a really premium cornerstone spot when it comes to VEVYE as the leading dry eye disease product.

With TYRVAYA, FRESHKOTE, and FLAREX, that really makes a real unique combination in our portfolio.

But make no mistake, VEVYE is our lead product that is getting the most emphasis and the most promotional intensity. So to answer your question is we have a very clear plan. This is just now taking shape, but this is really going to help propel us to the next level of growing not only our whole portfolio, but specifically VEVYE moving forward, more prescribers, more productivity and more prescriptions.

And our next question will come from Jeffrey Cohen with Ladenburg Thalmann & Company.

Two for Aaron. I guess first, maybe for Mark or Amir, can you talk about the TRIESENCE Phase 3 and enrollment, how it's going, when we may expect that to complete and what we may see as far as press releases or filing dates?

Sure. Amir, do you want to talk about that study?

Yes. Thanks for the question. Our program for TRIESENCE is going forward well. We are enrolling on track. We still anticipate a readout next year, specifically towards the end of first quarter, beginning of second quarter. That's our sort of current progression.

Perfect. Okay. And then secondly, I guess a question for Andrew. Could you talk about R&D for the quarter and maybe give us a sense of what you'd expect on R&D perhaps for Q4 or just generally speaking, as far as levels go. I know you've been quite active on a number of fronts on the development side.

Yes. Thanks, Jeff. On the R&D side, R&D is kind of, I would say, almost a seasonal spend. It depends on what we have that's active and what we can accelerate. But typically, the expense, I think, as a percent of revenue should be roughly the same as where it is now. That's where we're going to try to pin it to.

But if there's opportunities to accelerate or investments that we think can make a significant return, we'll go after it. as we're kind of looking at Q4, we're accelerating some of these programs. We have accelerated programs. Not all of that ends up in R&D, by the way. And so some of it goes up into the SG&A line. And so for example, with the G-MELT NDA filing, not all of that cost that's going to go into that filing and the PDUFA fee that will go with it is going to end up in R&D. There'll be parts of it for sure, but other parts will also flow up in SG&A.

And I show no further questions at this time. I will now turn the call back over to Mark for closing remarks.

Thank you, operator, and thanks to everyone for joining us. We're seeing real momentum heading into what we expect to be Harrow's strongest quarter. We look forward to reporting our full year results and hopefully seeing many of you at our Investor Day in New York City in March. Have a great day.

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

Good morning, and welcome to Harrow's Second Quarter 2026 Earnings Conference Call. My name is Michelle, and I will be the operator for today's call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Mike Biega, Vice President of Investor Relations and Communications for Harrow. Please go ahead.

Thank you, operator. Good morning, and welcome to Harrow's Second Quarter 2026 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. 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 Harrow'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 its FDA-approved products and compounded formulations and technologies, 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.

Harrow's results may differ materially from those projected. Harrow 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, Harrow will refer to non-GAAP financial metrics, specifically adjusted EBITDA. A reconciliation of any non-GAAP measures with the most directly comparable GAAP measures is included in the company's earnings release and letter to stockholders, both of which are available on the website.

Joining me on today's call are Mark L. Baum, Chief Executive Officer; Andrew Boll, President and Chief Financial Officer; Patrick Sullivan, Chief Commercial Officer; and Amir Shojaei, Chief Scientific Officer. With that, I would like to turn the call over to Mark. Mark?

Thank you, Mike, and good morning, everyone. We spent the first half of 2026 building demand and strengthening the commercial foundation of our business. The second half is about converting that demand into accelerating revenue and growth and profitability and, of course, hitting numbers. Let me be direct. First half revenue of approximately $115 million was lighter than we expected entering the year, primarily because of the VEVYE net revenue impact we discussed last quarter.

At the same time, we executed on major operating priorities we established for the first half, expanding our commercial organization, improving the economics of key products, strengthening our portfolio, launching BYOOVIZ, and building physician demand across our key growth drivers. Those actions have positioned us to deliver meaningfully stronger revenue and growth and profitability during the second half of 2026. And IHEEZO is a good example.

Despite the loss of pass-through on April 1 of this year, IHEEZO generated the highest quarterly unit demand in its history and delivered record new account growth. Channel inventory has now normalized, and an approximately 25% improvement in net pricing became effective July 1 with gross margins exceeding 90%. We expect IHEEZO will be a major contributor to both revenue growth and profitability during the second half. VEVYE is also positioned for stronger growth. During the second quarter, prescriptions increased 21% sequentially. Our prescriber base grew 15%, and the product delivered record quarterly revenue.

The business rule changes we implemented at the end of April worked as intended. VEVYE's economics improved sequentially with meaningfully lower co-pay card utilization, which drove a higher ASP. Those results validated our ability to improve the economics of the franchise while continuing to grow prescription demand and physician adoption. During the second half, VEVYE will benefit from the full period impact of those revised business rules, broader commercial coverage that became effective August 1, an expanded sampling program, and a sales organization that has doubled in size over the past year.

Together, those factors position VEVYE for stronger prescription growth and improved net revenue realization. TRIESENCE also reached another quarterly demand record with more than half of unit demand now coming from ocular surgery. We tripled our surgical commercial organization during the second quarter, and those representatives remain early in their productivity ramp. As they broaden account coverage and deepen utilization, we expect TRIESENCE revenue growth to build throughout the second half.

BYOOVIZ represents another incremental growth driver that we launched on July 1 with encouraging early reception. And our specialty portfolio is similarly positioned to contribute more meaningfully. VERKAZIA has been relaunched, and interest is growing in the form of rising prescription volumes. And IOPIDINE now benefits from a permanent J-code. We also expanded our [ AccessPlus ] commercial organization. Each of these initiatives was either absent or only partially reflected in our first half results.

Finally, subject to closing, TYRVAYA will further strengthen our dry eye franchise. We are acquiring global rights to the product, which is approved in the United States and China and is under regulatory review in five additional countries. TYRVAYA also offers a distinctive tolerability profile, 0 contraindications, 0 ocular adverse events, and 0 warnings on its label, with sneezing as its most common adverse reaction. From a strategic perspective and given our commitment to relentlessly compete and win in the U.S. dry eye market, this acquisition makes a ton of sense.

And I would encourage stockholders to check out slide 15 in our updated corporate deck on that subject. From an acquisition cost perspective also, this deal may be the best deal we've ever struck. From sales and marketing to market access to share of voice in the ophthalmologist and the optometrist's office, we're a much stronger company with TYRVAYA in our bag. In the past, I always wondered why people would be interested in a nasal spray for their dry eye disease. But after going through our due diligence process and speaking to committed prescribers, I finally get it.

There is a very sizable patient base who benefits from this unique product, even down to the side effect profile. I had one fantastic dry eye specialist tell me that his patients just love TYRVAYA and would much rather have someone say, "God bless you," after a sneeze than to endure the stinging and burning or dysgeusia after applying eye drops multiple times a day.

Financially, while we expect only a modest revenue contribution this year based on the anticipated timing of the transaction, TYRVAYA and its experienced commercial organization will expand our reach and create additional opportunities to grow the entire dry eye franchise. In sum taken together, our principal growth drivers enter the second half with stronger demand, improved economics, broader access, and greater commercial support.

And breadth matters. Our outlook is not dependent on one product, one launch, or one reimbursement event. We have multiple commercial growth drivers positioned to contribute more meaningfully during the second half. That is why we are reiterating our full year guidance. We recognize the magnitude of the second half ramp, and Andrew will walk through the financial bridge in more detail.

We expect revenue to grow sequentially in both the third and fourth quarters with the larger step-up occurring in the fourth quarter as these initiatives contribute more fully. The first half was about doing the work required to create the opportunity in front of us. The second half is about execution. Converting that opportunity into revenue, earnings, and durable value for our stockholders. Before I turn it over to Andrew, I did want to share something that has only deepened my conviction about G-MELT.

At this year's American Society of Retina Specialists meeting, I spoke with dozens of retina specialists, and one theme came up again and again. Practices are struggling to secure reliable anesthesia coverage for their procedures. And many are now paying what they call stipends out of their own facility and global surgical fees just to keep anesthesia services available. We do not believe this is a short-term dislocation.

We believe it is a reality that eye surgeons and physicians and other specialties will be managing for many years to come. G-MELT, if approved, could be part of the solution to this growing problem. In nearly 15 years of running this company, I've never seen as consistently positive a reaction to a Harrow product candidate. And that has got me extremely excited about the future of G-MELT. With that, I'll turn the call over to Andrew.

Thank you, Mark, and good morning, everyone. We reported a revenue of $70.7 million, up 11% year-over-year and approximately 60% sequentially. That brings first half revenue to approximately $115 million. The year-over-year comparison understates the underlying trajectory. First half results reflected limited IHEEZO revenue as channel inventory normalized, as well as only a partial quarter benefit from the VEVYE business rule changes.

VEVYE delivered quarterly revenue of $29.4 million, up nearly 58% year-over-year. The result reflected continued prescription growth and improved net revenue realization following the business rule changes implemented at the end of April. IHEEZO generated $15.6 million of revenue, primarily related to wholesaler stocking orders of our new 5-pack presentation. Unit demand for IHEEZO reached a quarterly record, but reported revenue continued to lag underlying demand as distributors sold through previously purchased inventory.

We expect IHEEZO to enter the third quarter with a normalized revenue cycle and improved economics. Our specialty portfolio and TRIESENCE generated approximately $11 million of revenue, while our compounded portfolio generated $14.6 million of revenue. GAAP gross margin was 71%. For the second half, we expect gross margins to trend back towards the high 70s supported by IHEEZO's return to a normal revenue cycle, increased overall revenue, continued VEVYE growth, and more favorable product mix.

SG&A was $53.3 million, which increased quarter-over-quarter, largely reflecting the commercial investments made during the quarter. Excluding the additional headcount expected to be added through the TYRVAYA transaction at closing, we expect base SG&A dollars to remain approximately flat with second quarter levels for the balance of the year.

The core operating cost structure is largely in place, and our objective is to grow revenue against that expense base. Adjusted EBITDA was negative $1.2 million. We ended the quarter with cash and cash equivalents of $83.9 million. With the TYRVAYA transaction, we expect to fund the upfront consideration of $30 million with cash on hand. And following closing, to the extent any of the contingent net sales milestones are hit, we expect the payment of those milestone amounts will essentially be self-funded.

Turning now to our outlook, we are reiterating full year guidance of $350 million to $365 million in revenue and $80 million to $100 million in adjusted EBITDA. Based on first half revenue of approximately $115 million, our guidance implies second half revenue of approximately $235 million to $250 million. We're not providing quarterly guidance, but we expect revenue to grow sequentially in both the third and fourth quarters, with the larger step-up occurring in the fourth quarter.

That is a substantial step-up. So let me be specific about the bridge. The largest incremental contributor should be IHEEZO. We enter the second half with record demand, normalized channel inventory, and an improvement in net pricing. Those factors should allow reported revenue to more closely reflect the strength of the underlying business beginning in the third quarter.

VEVYE is another major driver. Its expanded sales organization should begin to contribute in the third quarter. The revised business rules will be in effect for the full second half of the year. Expanded commercial coverage became effective August 1, and net revenue realization should benefit as more patients satisfy their annual deductibles. TRIESENCE should also continue to grow. Demand reached another quarterly record, and the surgical organization we tripled during the second quarter remains early in its productivity curve.

BYOOVIZ formally launched July 1 following modest initial stocking activity in the second quarter. VERKAZIA has been relaunched, and now IOPIDINE benefits from a permanent J-code. Each contributes against a first half revenue base that was either minimal or constrained. Subject to closing, TYRVAYA should also contribute modest revenue this year in addition to revenue synergies with VEVYE that we expect to be realized following the close.

Our guidance assumes only a limited 2026 contribution given the anticipated timing of the close and integration. The adjusted EBITDA bridge follows directly from the revenue bridge, substantially higher revenue, increasing gross margins into the high 70s, and a base operating expense structure that remains approximately flat. Upon closing the TYRVAYA transaction, we expect to expand our dry eye sales force and territories further by adding experienced professionals from the Viatris Eye Care Division, increasing SG&A expenses by approximately $20 million on an annualized basis once fully integrated.

Looking ahead, we expect TYRVAYA to contribute more than $30 million in revenue during 2027 and overall to be financially accretive. We recognize the magnitude of the second half ramp. Our confidence is based on factors already visible in the business. Prescription growth, record product demand, normalized inventory, improved pricing, broader coverage, and a growing commercial organization that remains early in its productivity curve.

On that note, I'll now ask Pat to discuss our commercial progress in more detail.

Thank you, Andrew. Before turning to VEVYE, I'll briefly discuss what the pending TYRVAYA transaction means for our dry eye franchise. VEVYE remains the cornerstone of that franchise. TYRVAYA is complementary, offering physicians a differentiated, drop-free option for patients who may struggle with eye drops, prefer another route of administration, or are among the 45 million Americans who wear contact lenses.

Subject to closing, we expect to add a large number of experienced dry eye sales representatives from Viatris whose territories are largely complementary to our existing coverage. This will expand our geographic reach, increase the frequency of our engagement with eye care professionals, and give our team more touch points through a broader portfolio. We expect to integrate those representatives during the fourth quarter and have them supporting both VEVYE and TYRVAYA.

Together, the products give us more treatment options, greater commercial reach, and additional opportunities to grow the entire portfolio.

Turning to VEVYE, total prescriptions grew 21% sequentially compared with 14% growth for the broader branded dry eye market based on IQVIA data. New prescription growth grew 4% sequentially while our prescriber base expanded 15%, and VEVYE exited June with a 14.6% share of the branded dry eye market, up from 14% at the end of March and 7.8% a year ago. Those results are particularly encouraging because they were achieved while we implemented significant new business rules designed to improve the economics of the franchise.

Co-pay utilization declined meaningfully, yet physician adoption and prescription demand continued to grow. We are also still in the early stages of realizing the full potential of our expanded sales organization with broader commercial coverage through a top three pharmacy benefit manager effective August 1, an expanded sampling program now underway, and the ACTIVATE initiative encouraging clinicians to use VEVYE earlier in the treatment paradigm. We have multiple meaningful growth drivers coming online at the same time.

Together, these initiatives position VEVYE to accelerate prescription growth and expand its share of the branded dry eye market during the second half.

IHEEZO delivered one of the strongest commercial performances of the quarter. Despite the loss of pass-through reimbursement in the cataract surgery on April 1, unit demand reached a record of 65,477 units, up 44% sequentially and 34% year-over-year. We exited the quarter with 224 total ordering accounts, up 32% year-over-year, and 62 of those accounts placed their first-ever IHEEZO order during that quarter, the strongest quarter for a new account acquisition since launch.

Paired with a trailing 12-month reorder rate of approximately 85.5%, that reinforces that adoption continues to broaden following the reimbursement transition. Our focus now is on increasing utilization within existing accounts while expanding IHEEZO into additional procedures and sites of care, including the broader in-office procedure market, which adds more than 2.5 million annual procedures to our addressable opportunity. We believe those factors position the franchise for a substantially stronger second half.

Before moving to TRIESENCE, I want to briefly touch on BYOOVIZ. We formally launched the product on July 1, and while it remains early, initial physician engagement has been encouraging. BYOOVIZ is a natural fit within our retina organization, expands the options our team can bring to retina specialists, and increases the value of each customer interaction.

TRIESENCE also continued its exceptional momentum. Demand reached another quarterly record of 14,529 units, up 162% year-over-year. Total ordering accounts reached 805, a net increase of 69 over the quarter. And 54% of unit demand now comes from ocular surgery. That mix shift demonstrates that TRIESENCE is expanding beyond its historical retina base. We tripled our surgical commercial organization during the second quarter, and those representatives remain early in their productivity ramp. As they expand account coverage and drive broader adoption, we expect their contribution to begin showing up in the third quarter and build from there.

Finally, our specialty portfolio continues to build momentum. The permanent J-code for IOPIDINE became effective on July 1. VERKAZIA continues to progress following its relaunch, and we expanded our AccessPlus commercial organization to support what we believe is the broadest ophthalmic cash pay portfolio in the industry. Across each of these businesses, our focus remains the same, expanding physician access, improving reimbursement, and increasing commercial execution.

While I step back and look across this portfolio, what stands out most is the breadth of our momentum. We're seeing growth across multiple franchises, continued physician adoption, and expanded commercial reach, and the benefits of the investments we made throughout the first half of the year. I believe Harrow enters the second half of 2026 in its strongest commercial position to date. I'm excited about the opportunities ahead.

I'll turn it over to Amir to discuss some exciting developments with our R&D pipeline.

Thank you, Pat. I'll start with G-MELT or MELT-300. As I mentioned during our last quarterly webcast, we have now officially secured our pre-NDA meeting with the FDA, which is scheduled for early in the fourth quarter. We are currently preparing the meeting dossier, completing the remaining ancillary activities, and remain on track to submit our NDA during the first half of 2027. This represents another important milestone for the program and keeps us on track for our anticipated regulatory timeline.

The program continues to execute according to the development plan we outlined for the investors. From a scientific perspective, I remain very excited about G-MELT. We believe it has the potential to fundamentally change procedural sedation by offering a rapid, IV-free, opioid-free alternative that addresses a significant unmet need across multiple procedural settings. Assuming a successful regulatory review, we continued to target a potential FDA approval in the first half of '28, followed by a commercial launch later that year.

Turning to YOCHIL or MELT-210, the simplest way to think about the program is G-MELT for pediatric patients. YOCHIL is being developed for children undergoing diagnostic and therapeutic endoscopic procedures. Today, oral midazolam is administered primarily as a syrup, which can be difficult for children to tolerate because of its taste and the challenges associated with administration. We believe an orally disintegrating tablet could provide a more convenient and child-friendly option while fitting within the dosing paradigm physicians already use for oral midazolam.

Earlier this year, we completed our End-of-Phase 2 meeting with the FDA. We are currently modifying our pharmacokinetics study protocol to align with the agency's feedback on this program. The development approach is a 505(b)(2) pathway to bridge to oral midazolam syrup through PK, and we expect to develop multiple dose strengths, likely four, to accommodate the current weight-based dosing paradigm. YOCHIL also benefits from the formulation, development, and regulatory experience we have generated through MELT-300, including use of the Zydis orally disintegrating tablet platform.

We continue to target an NDA submission in 2027. Together, G-MELT and YOCHIL represent the foundation of a broader procedural sedation platform addressing both adult and pediatric patients. We look forward to providing additional detail on the development plan for both programs at our Investor Day next March. With that, I'll turn the call over to the operator for Q&A.

Thank you. [Operator Instructions] The first question will come from Chase Knickerbocker with Craig-Hallum.

Mark, maybe just first to start on the national top three PBM win. Can you just maybe talk about exactly what that coverage constitutes. Is it, you know, kind of tier 1 preferred, like that other, you know, top three win that you already have?

Yes, I think the only thing we want to say about that coverage win is number one, it's obviously a top three PBM. Number two, it's for commercial lives. I think the third element is that these were lives that were formerly blocked, that we did not have access to. And then the fourth item, Chase, is the number of lives that we now have access to is in the many millions. And other than that, I think that's about all I can say. I don't want to go into the specific positioning on the formulary, but we're really excited about this coverage win.

And, you know, it's something that we promised our stockholders, and we were able to deliver actually, I think, ahead of time. We didn't think this would come until the first part of next year, but I know the VEVYE team is really pumped to have millions and millions of lives that they now have access to that were formerly blocked.

Got it. And maybe just a two-parter, one on IHEEZO, one on VEVYE. Just as we think about kind of the recent volume acceleration for IHEEZO, can you just discuss what percentage of that business is now in-office versus kind of retina as far as kind of characterizing that acceleration? And then just on VEVYE, Andrew, if you could just comment on kind of how you see ASP in the second half. Since there is still an impact from those kind of pre-business rule changes in the second quarter, is it fair to assume kind of continued sequential improvement in VEVYE ASP? Thanks.

Sure, thanks for that, Chase. So on IHEEZO, look, the ASC market is now effectively shut because of the loss of pass-through. I think the fact that we hit a record number in terms of unit demand for IHEEZO in the second quarter, which I don't think anyone expected, was an extraordinary result. And it really goes to the focus that the team has put on the in-office market, and that includes both retina as well as other in-office procedures. The in-office market, which we've talked about, which opens up about 2.5 million additional procedures for us, is a significant market, but it's one that we've really just barely scratched the surface on.

A significant amount of the growth in IHEEZO for the second quarter came in these retina practices that we've been targeting for the last year and a half or so. We're really making progress. We forecast that in the third quarter we would be set up well with the new 5-pack, the new pricing, the data that's starting to come out, and that would cause this acceleration in the second half of this year. But IHEEZO is definitely exceeding all of our expectations.

And to be clear, we've really simply just scratched the surface. We have probably less than 2% market share in the overall addressable market, less than 2%. And we continue to grow and pick up record numbers of accounts, and we're seeing that acceleration, by the way, in the third quarter. You'll see it in the numbers in the third quarter, and then the fourth quarter as Andrew discussed. But IHEEZO is going to be a really important part of us hitting our numbers for the second half. Andrew, do you want to talk about VEVYE?

Yes, absolutely. Thanks for the question. So with VEVYE ASP and generally anything going through the pharmacy benefit, we typically improved pricing throughout the year as patients are hitting the deductible. And certainly we're expecting to see that with VEVYE. But to your point about the amended business rules, we didn't get a full quarter benefit of that. And so now moving forward, obviously starting in Q3, we'll get the full benefit of those amended rules, which should add a little bit of additional positive momentum to VEVYE ASP going forward.

Thank you. And the next question will come from Steven Seedhouse of Cantor.

First, I just wanted to ask on TYRVAYA, and if you can give us a sense of what actually were the sales for that product, maybe in 2025, 2026 year-to-date, and whether it's growing or if it's stable or even declining slightly in recent years before you take over? And then also, what are you modeling for loss of exclusivity of that product?

Andrew, do you want to talk about what we know? I know that we're trying to keep things quiet as we get to the closing, but is there anything you can discuss on that front?

Yes, Steve, there's not a whole lot we can say until we actually own the asset. And so I think you can take a look at some of the Viatris' comments. Our focus right now though is closing as quickly as possible. We think there's going to be strategically really important assets for us. And so that's the primary focus is getting it closed. And then once closed, what we're guiding to is, you know, that it will contribute more than $30 million of revenue. We're also adding additional heads on the sales and commercial front with the product.

And those people are going to be not only promoting TYRVAYA, but also VEVYE. So we should see, regardless of the trajectory of the product currently, we're expecting our ability, we should have the ability to continue to grow it. And then in regards to loss of exclusivity, we're assuming the product will have exclusivity through 2034.

One other comment I would just add is that the operational synergy between these assets is remarkable, and I think you're going to see that probably as early as the fourth quarter. And you'll also see that these assets are clinically complementary. In going out and talking to dry eye professionals, you know, the ability to treat the disease with a chronic care product like VEVYE is our primary asset, I think is important, but also to supplement the treatment, the interest in supplementing the treatment with a product that nearly immediately produces tears like TYRVAYA is very strong, and it's much stronger than we had anticipated before we did our diligence on this product. And, you know, you'll be surprised about the degree to which these are clinically complementary and operationally synergistic.

All right, thanks. That's helpful color. And I wanted to also ask, on IHEEZO, I guess I'm just curious, like, where this such strong demand has been coming from specifically, because a lot of the tailwinds, the clinical data, obviously, QUELL is still running and that data is in the fourth quarter. And even the launch of your biosimilars that maybe provide some sort of synergy in the marketing effort, like that's sort of on the come still. And yet you still had this record demand amid all of this, you know, resetting of price and inventory and all this. So is there any way you can just articulate what specifically you think has been driving such strong demand and how likely that is to sort of continue into these subsequent quarters as you have these additional tailwinds coming online? Thanks.

Yes. Well, first of all, even though the demand is impressive and you're right, it is across the board, you know, the team has just done a phenomenal job growing that business in terms of new accounts and then pushing through, you know, units used within specific accounts. We're also picking up larger accounts that are using higher volumes within their practices. Once again, even though we've achieved, I think, a phenomenal result in the second quarter, we've really just barely scratched the surface. In terms of why doctors are encouraging us increasingly using IHEEZO, it's because the product is fantastic. It performs amazingly well clinically. It feels good on the patient's eye.

You know, it has predictable onset, predictable duration. And then, you know, the excipient that's in the product actually makes the eye feel better than the alternatives, which includes an injection into the eye of lidocaine to anesthetize the eye. So there are tremendous product attributes that we think give us huge advantages, and the word is spreading certainly among the retina community, but also within these multi-specialty practices that we're increasingly opening up.

So, you know, the in-office market is real. There's a growing market for cataract surgery, for example, in the office. And that's a market that we're picking up. So across the board, you should expect continued growth and acceleration for that product. And once again, we've really just barely scratched the surface, but probably, as I said, less than 2% of the addressable market.

Thank you. And the next question will come from Lachlan Hanbury-Brown with William Blair.

Maybe just a quick follow-up there on TYRVAYA and the sort of contribution to 2026. I appreciate that's obviously somewhat dependent on the exact timing of the close, but should we just be thinking about sort of [ prorating ] what you said about '27 for '26? And maybe would it also be accretive to EBITDA in '26, or are there some sort of initial maybe like the initial cost associated with the sort of closing integration that would affect that?

Yes. Hey, Lachlan. I think that's a fair assessment to kind of pro rata the guide for next year depending on closing, which like I said, we're rapidly trying to get that closed as fast as possible. And then do you think about operating margin and contribution this year? I think it's safe to say it's not going to, we don't expect it to pull down earnings this year. There may be some integration costs this first few months as we're implementing the product, getting it into our system. So expect a little bit higher cost in the first few months, but certainly beginning next year, those integration costs should largely have been cleared out, and we should have positive contributions from the product day one starting next year.

Got it. Thanks. And maybe another on VEVYE. Mark, I know you said you don't want to say too much about that new coverage. Can you at least give some commentary on, like, where the ASP from that coverage may end up relative to, you know, the current coverage or what you've been realizing? You know, is that an improvement? Is it about the same or is it worse than the current coverage and what you've been seeing? And maybe also related to VEVYE, you talked about the sampling program. Can you give us a sense of how impactful that is and maybe like, how much of the current volume has been going through that $0 first fill that this can maybe help to convert more quickly?

Yes, so, you know, in terms of the effect on ASP, simply put, we never sign deals unless there is a net improvement, you know, to ASP. We're not going to, you know, sign a deal unless at the end of the day we're not unable to make up the difference. So for example, if we take a lower net price but we're massively able to increase volume, the amount of revenue that we're able to generate from the franchise ultimately improves. And so we have, I think, a pretty good modeling on the effect now of these coverage opportunities. But in this one in particular, this is something that should improve our unit revenue for VEVYE.

In terms of the $0 first fill, we've built the company on a foundation of access. So, you know, for us, market access, simply put, means any patient in the United States that is in need of any of our medications will have affordable access to the product that they're in need of. And for us, when we were launching VEVYE, without the coverage, and frankly, our coverage has been pretty poor. As I said, the recent coverage win came from a PBM where we were really blocked. But, you know, for us, you know, we implemented a $0 first fill to ensure that everyone who needed VEVYE had access to VEVYE.

The problem with that is it's very expensive for us financially. And what we've, I think, realized is, you know, you'll see significant improvement financially with the sampling program that's now replacing the $0 first fill. Not only do you have the COGS cost with the $0 first fill program, you have all the processing fees, the pharmacy fees, distribution, and so on. And you're really reliant on getting a meaningful number of refills for that patient in order to make up for those investments. And the sampling program is, we believe, going to achieve the same effect in terms of giving patients access to the medication that they need at a far lower cost and ultimately a far more profitable structure for our stockholders.

Okay, thanks. So I guess should we just think about that showing through as maybe slightly lower actual like scripts per se that are written, but just a higher ASP per script that's written? So it effectively a price growth [indiscernible].

I don't know that I would think about it that way. I mean, I think that we're seeing higher volumes of prescriptions, both new prescriptions and total prescriptions as a result of this program. I think what Andrew said in his remarks, and Pat reinforced this, is that the business rule changes that we made most recently, the expectation, I think, among some was that this would constrict, you know, prescribing, it would constrict dispensing.

And the opposite has happened. So, these business rules, and I think this actually has exceeded our expectations, these business rules have not affected at all the demand for the product, and not only the demand, but our ability to ultimately process a prescription and dispense it.

You know, both NRx and TRx moved up meaningfully in the second quarter. And by the way, it's continuing even in the third quarter, which is extraordinary. So we're getting great productivity from the sales force. The business rules that Andrew and the team implemented, I think, were extremely successful so far. And we're in really good shape with our VEVYE franchise.

And the team is fantastic. There's also, by the way, a direct relationship, I think, between the investment in the field force and our ability to get new prescriptions in the door. So we're seeing that correlation, that connection. More reps is going to mean more NRx, and when you have a product as extraordinary as VEVYE, that's going to mean more TRx. And with more coverage, where you're making more money on a unit basis, that should give us increasing overall revenue for the franchise. Andrew, do you want to add to that at all?

I would just kind of reinforce what I said in the previous questions, which is, I think, with the coverage win considered, we do still expect ASP to improve for VEVYE throughout the year.

Thank you. And our next question is going to come from Thomas Shrader with [ U.S. Bank ].

Seems like all 50 balls are back in the air. A question on TYRVAYA and VEVYE. Are they going to be in lockstep, which is the sales force has both? And when you add a TYRVAYA sales force, they'll also have VEVYE, they'll have the same sampling. Is that the way to see it? You'll have two products that are essentially everybody in the sales force has?

Yes, I don't want to go into the specific strategy, Tom, too much, but what I can tell you is VEVYE is our primary product. It is the product, it's the lady that we went to the dance with. And it is the core focus of our team, and it will continue to be. But there is, as I said, tremendous operational synergy between these products, and they are clinically complementary. Pat, do you want to talk at all about what you intend to do on the VEVYE-TYRVAYA front?

Yes, thanks, Mark. You know, to the question, we're really excited about the complementary nature of these products. I mean, when you think about it, VEVYE has performed really, really well. And I think what we're really excited about when you think about this, just some context, we're in a very large and active market. Just to give context, this time last year we have a market that's up about 18%. And the branded RXs are representing over 75%. With VEVYE, the real key point here is we're focused on inflammation as the cornerstone to treating dry eye. We continue to see a positive experience and performs well.

And as we've expanded the team, I think we continue to see a positive experience growing on NRx, TRx, as well as writers. TYRVAYA helps us, one, open up another segment opportunity when it comes to basal tear production, which often is, you know, similar presenting in the inflammation patients. So we see an opportunity for both of these products to, one, grow our Harrow share to further help these patients and doctors that we cover right now and actually bring in more writers and grow our business.

Okay, and then on the biosimilars, obviously growing the brand is important, but protecting your price is a huge part of this game. Any thoughts on, I mean, Amgen seems to have done it, but any thoughts on, your strategy there or maybe one you want to answer even less, but I'm just curious what you can say.

I think right now, Tom, the team has received a tremendous amount of inbound interest in the product, and we're focused on really converting that interest to demand and revenue. Other than that, you know, I think we have a phenomenal market access strategy that's designed to, you know, maximally preserve pricing. And we have, I think, some unique advantages with our product over other choices, including the branded Lucentis as well as the other biosimilar. Andrew, do you want to comment on that at all?

Not really. We're obviously really ASP and maintaining net revenue per unit durability for the product is super important, as you pointed out. And so we, like Mark was saying, we do have a strategy to do that. We have a lot of experience doing this too with some of the other buy-and-bill products. Obviously, this is a little bit different, but you're still kind of in the same sort of, you know, it's going through the medical benefit. It's reimbursed on its own J-code or Q-code. Pardon me. So still a similar dynamic, and so we're using some of that experience to try to extend durability of both BYOOVIZ and when OPUVIZ launches OPUVIZ.

Okay, last one, which may be yes, no. IHEEZO in the surgical setting, is that gone forever or as you are generating clinical data, is there a way you might get some use back? It was a pretty decent market, and people loved the product. Is there any way back or is that just not worth it at this point?

Yes, to be very clear, if we have a minute of time to invest commercially making a sale, given what we're seeing in terms of new account development and reach within these practices, we're going to focus on where we know we are winning and where we have a massive amount of room, headroom, which is in-office in the retina market and in the in-office procedure market. So, you know, we have literally well over 10 million more procedures that we can address with this product on an annual basis.

And so certainly the surgical market is an attractive market. It's how we launched the product, but we have a massive market ahead of us in the interventional injection market, as well as the office procedure market, where we have a permanent product-specific J-code, reimbursement at better than 95%, and a sub-5% prior authorization rate. So we're having tremendous success in the office with retina professionals, as well as other in-office procedures. So that's where we're focusing and we're going to leave the surgical market alone right now.

Thank you. And the next question will come from Mayank Mamtani with B. Riley Securities.

So on the shareholder letter, you mentioned the third-party data undercounts VEVYE. Was just curious, Mark, if you could maybe comment on what you're seeing on the total dispense units that we may not see in IQVIA here. And, obviously trying to understand the volume demand to revenue conversion here. You know, to the extent you can maybe also comment on volume, how you might be tracking, versus another maybe incumbent brand, which is also helping expand the DED market. And then on the new PBM win, did you comment on what percentage, you know, of the new lives that you have was previously filling as cash pay versus completely blocked?

I'll take the cash pay versus covered answer, and so we don't break that out, you know, specifically, and we don't really intend to. Obviously, this is an incredibly competitive market. Andrew, do you want to talk a little bit about the data issue on VEVYE and reporting specifically, anything you want to add there?

Mark, I think that I'll just kind of reiterate some of the things that we said, like Mark was saying in the shareholder letter, that we are seeing an increase in, I would say, disparity between the data that the third-party aggregators are putting out and our internal data. You know, we saw our total brand-to-drive prescriptions reach about 14.6% at the end of June. That's up from last quarter and obviously almost nearly double from a year ago. And so that share that we're drawing, especially when you look at the year-over-year numbers, that's what's basically the old territory setup.

We were able to grow that prescription amount with a much smaller sales force. And we're just barely getting productivity from the new reps. So we're excited about what we're expecting to see in Q3 and Q4, and we're seeing this in the early days, is the reps are producing prescriptions. There's a direct correlation to number of feet on the street and increase in NRx and TRx. And that's only going to be furthered as we add TYRVAYA and some of the commercial organization from Viatris as well, which as Pat was talking about, they're also going to be selling VEVYE as well as TYRVAYA, which should just further accelerate our market position within dry eye between VEVYE and TYRVAYA with the acquisition close pending.

The other thing I would add is that the dashboard that I watch is our [ PhilRx ] dashboard, and as I've said on previous calls, I watch it like a hawk, almost like some investors might watch a stock ticker, I suppose. And what I'm seeing and what gives me confidence in the franchise and the great work that the team is doing is that I'm seeing higher highs and higher lows in daily volume. And so even tracking one Tuesday this week versus the prior Tuesday, just monitoring week-over-week data, once again, higher highs, higher lows, and, you know, one week doesn't necessarily make a trend, but that's happening certainly on the monthly data.

So we're really pleased with the work that the team is doing. There's a lot more work left to do, I would say. The second half is truly about commercial execution, and Pat and Maria and that whole VEVYE team, I have just tremendous confidence in their ability to make it happen and continue the trends that we're seeing on VEVYE.

Understood. And that's certainly what we are seeing on the IQVIA side. Just on pipeline, if I may, just a couple of quick ones. The ASRS interim data for IHEEZO was encouraging, but obviously a small sample size. So how do you see, you know, this QUELL data coming up, build on these learnings, you know, including the comparator arm, I think the same comparator arm you are using of some subconjunctival lidocaine superiority. I think you're trying to demonstrate on post-procedure pain and maybe some of the other more retina clinic workflow relevant endpoints. So just maybe talk about what does win look like to drive utilization against obviously a generic sort of market backdrop. And then lastly, for G-MELT, what are key questions for this pre-NDA meeting coming up in early 4Q? And do you anticipate most of your ancillary studies being wrapped up by the end of the year?

Yes, I'm going to turn both those questions over to Amir, but I do want to say just briefly on the QUELL data and the data that Dr. Dang made available at ASRS, that I always think of things from a patient's perspective. If I was a patient going in to get an intravitreal injection, and I'm going to get another injection of lidocaine in my eye and deal with the consequences of that, I would much rather prefer a single dose of IHEEZO. And so what we're really trying to demonstrate is that in terms of the anesthetic effect, it's the same. So, you know, you can either get a needle or you can get a topical drop. In terms of the anesthetic effect, it's the same.

And, you know, whether there's any difference in pain and, of course, patient preference. And so we always think of things from a consumer perspective, and we think that patients ultimately were going to prefer IHEEZO, and that's got to be borne out in the data, and that's really the focus of the great work that Amir and his team are doing. Amir, do you want to add to the QUELL study that's ongoing and then talk about anything you can about the pre-NDA meeting?

Thanks, Mark. Yes. So, real quickly, on QUELL, this is a double-masked control trial. So, as far as any current data, we obviously don't have any, but the study is well-enrolling, and we anticipate to have the enrollment completion later this year, and then we'll have results later this year. That said, the kind of endpoints we're looking at are substantially twofold. One, we're going to look at the numbing effect where we want to show that the product obviously numbs just as good as the lidocaine subconj. But more importantly, we're looking at patient outcomes, right?

So from a patient outcomes perspective, we have a whole slew of symptoms that we track, as well as the overall satisfaction by the patient, all the way through 24 hours post-injection. So all of those metrics will come out, and we're pretty confident. Now remember, everything that we are doing is based on what we've seen already. This isn't just started necessarily this quarter. We started this journey on evidence generation about 20 months ago. And a lot of this data is trickling out and supporting our continued sort of benefit that we are seeing from the patients using IHEEZO or in procedures especially.

On G-MELT, this is a pre-NDA meeting, and the nature of a pre-NDA meeting is really oriented around the submission package. What is it you're putting in, and what is the format, some of the basic necessities as far as the review division is concerned. That said, we will have CMC-oriented discussion, and most of the other ancillary programs, the PK studies, et cetera, will be discussed during this meeting. So it will be an important meeting, but that said, there isn't one specific thing in focus. It's the whole constellation of data that we're going to put into the NDA.

Thank you. The only thing I would add, by the way, on QUELL is it is a study that's taking place under an IND, which is really important as well, and that could have a significant impact, some advantages pending the outcome of the data.

Thank you. And the next question comes from Jeffrey Cohen with Ladenburg Thalmann.

Just two from our end. Could you talk about the contact lens wearers and TYRVAYA and perhaps some pickup there from VEVYE in dry eye? I know it's a bit early, but do you expect any access program sampling programs, couponing, et cetera, on TYRVAYA as you launch it in the back half?

What was the first question, Jeff? I'm sorry. TYRVAYA?

I wanted to know as far as contact lens wearers in your dry eye franchise.

Yes. So, look, all of the other products that are administered on the eye for contact lens wearers require the patient to remove their contact lenses. And, you know, that takes time, and it is probably true that some patients don't do that. But one of the great advantages to TYRVAYA is that for the 45 million folks in the United States that are contact lens wearers, this is a unique product for them specifically. This is a product, by the way, that, you know, over the last couple of years has had, you know, significant revenue.

What we've been able to demonstrate and what we intend to show once we close on the product is that we can restore that revenue structure and grow the business. And we think that is certainly possible. It hasn't gotten a lot of attention over the last couple of years. And we intend to really focus in on making sure that certainly the contact lens wearers have access to it, but also other patients that we can serve that are suffering from dry eye disease and who could benefit from TYRVAYA. So we have high hopes for TYRVAYA, but that said, VEVYE is going to continue to always be our baby. It's where we focus. It is the lady that we brought to the dance. And we think that VEVYE will continue to be the primary driver of our dry eye franchise for sure.

In terms of the access programs, I don't want to, you know, get into specifics about what we intend to do to ensure access to TYRVAYA. But what I can say is that we will continue to implement access programs that ensure that every patient in need has access to all Harrow products, rich or poor, good insurance, bad insurance, or no insurance. That's how we built the business, that is the foundation of who we are culturally, and that's the way we'll continue to be. Some companies talk a lot about access. We act a lot on access and have programs to make sure patients get what they need. That will certainly be the case with TYRVAYA.

Thanks, Mark, that's helpful. And then just one more quick question on the compounding business. I know we haven't talked about that. Any net changes there for the quarter? And as far as the second half outlook, should we expect a similar run rate to what we saw during Q2?

Do you want to talk at all about the compounded? I mean, what I said in the letter is really, I think, important, and that is, we've had an inventory recovery. So we now have inventory, which is half the battle. We've demonstrated that when we have inventory, we grow. You know, that said, we've talked about on past calls that our interest is in converting compounded units to branded units where that is possible. We feel that that's not only in many cases better for the patient, but it's better financially for Harrow stockholders. But we do expect that business to grow in the third and fourth quarters. Andrew, do you want to add to that at all?

Yes, Jeff, we guided, I think in March, the March conference call we guided that business. We thought we'd do about $60 million to $65 million in revenue. That guide is still in place. So that implies a continued increase in revenues through the second half of the year. And then importantly, we should see improvement in gross margins from that business as well as we progress through the year and start getting more revenue on top of the fixed costs that are built into that operating structure.

Thank you. And the next question will come from Nelson Cox with Lake Street Capital.

I wanted to ask on the $250 million revenue exit rate from 2027, which did not when first issued have some of the more recent adds to the portfolio included in it. The question is why should we not view those incremental to the goal rather than being a part of it, or had the $250 million goal always baked in some kind of business development activities to supplement that portfolio at the time when you initially made that guidance?

Well, thank you for that, Nelson. Yes, we have a history of doing BD for products to generate revenue. And so certainly I think it would be reasonable to believe that we would do BD, but that was really not baked into that goal. The belief is that we can achieve that with the products that we have. We, you know, I must say, have an incredible team, and they're all focused on hitting that number. It is a difficult thing to achieve for sure, but I do believe we can do that. And there is a pathway to achieving that with the products that we had.

[Ex-TYRVAYA]. TYRVAYA certainly helps, though. So we'll see where we land. We've got to get that product closed. But it definitely is additive and should be helpful in getting us to that number. But the idea was that we would hit that number without any business development activities.

Thank you. I am showing no further questions at this time. I will now turn the call back over to Mark for closing remarks.

Thank you, operator. I will close where I began. The first half of 2026 was about setting the table, expanding our commercial organization, improving pricing, normalizing inventory, launching new products, and advancing our pipeline. We did what we said we would do. The second half is about serving the meal. Demand across every one of our growth drivers is strengthening, our commercial organization is larger and more capable than it has ever been, and the investments we made in the first half are already showing up in the business today. That is why we are reiterating our full year guidance and why I remain confident in our ability to deliver it.

I want to end this call by letting our stockholders know that people within this organization matter. After nearly 15 years as the leader of this business, we have simply never had the level of talent we now have throughout the business. We have significantly upgraded our talent level, and this is most pronounced in our commercial group. I am betting on our commercial team to make it happen, and I believe you should too. The table is set. Now we serve. One final note. We announced our Investor Day on March 22, 2027, in New York City. It's going to be a tremendous event. Please mark your calendars. We hope to provide more information about this event later in the year. Thank you, and that will conclude our call.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, and welcome to Harrow's First Quarter 2026 Earnings Conference Call. My name is Michelle, and I will be your operator for today's call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the call over to Mike Biega, Vice President of Investor Relations and Communications for Harrow. Please go ahead.

Thank you, operator. Good morning, and welcome to Harrow's first quarter 2026 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.

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 Harrow'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 its FDA-approved products and compounded formulations and technologies 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. Harrow's results may differ materially from those projected. Harrow 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.

Joining me on today's call are 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?

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?

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.

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.

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

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?

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?

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.

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

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?

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?

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

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?

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?

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.

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

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?

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?

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.

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?

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.

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

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?

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?

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.

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

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?

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

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.

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.

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.

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?

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.

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

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?

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.

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?

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.

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

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?

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.

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

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.

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

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.

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

Good day, and welcome to the Harrow Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note that this call may be recorded.

I would now like to turn the call over to Mike Biega, Vice President, Investor Relations and Communications. Please go ahead.

Good morning, and welcome to Harrow's Fourth Quarter and Full Year 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.

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 and many of which are beyond Harrow's control, including risks and uncertainties described in time to time in its SEC filings, such as the risks and uncertainties related to the company's ability to make commercially available its FDA-approved products and compounded formulations and technologies 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 filed with the Securities and Exchange Commission. Harrow's results may differ materially from those projected. Harrow 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.

Joining me on today's call are Mark Bong, Chief Executive Officer; Andrew Boll, President and Chief Financial Officer; Patrick Sullivan, Chief Commercial Officer; and Amir Shojaei, Chief Scientific Officer.

With that, I would like to turn the call over to Mark. Mark?

Good morning, and thank you for joining us. Over the past 5 years, Harrow has undergone a fundamental transformation. Harrow now owns 1 of the largest portfolios of prescription ophthalmic products in the United States market. And we have been the most prolific acquirer of ophthalmic products in the U.S. market, having completed more than a half a dozen transactions, integrating over 15 branded products into our scalable commercial platform that reaches every populated county within the United States and touches with impact nearly every key ophthalmic disease segment.

As you'll note, in my letter to stockholders, I am proud of the fact that during the last 5 years, hundreds of members of the Harrow family, including my incredible leadership team drove real economic accomplishment and stockholder value creation, which resulted in a more than 70% appreciation in the Hero stock price during this period. As a founder and a large Harrow shareholder, I am proud of our track record and the returns we are providing to stockholders who have had the patience to let this team do its thing. But this team isn't done. And frankly, we've only just begun. I can't guarantee where our stock price will be 5 years from now. However, I can say with nearly absolute certainty that Harrow will be a larger and more powerful enterprise positively impacting the lives of millions of Americans. I resolutely believe that then we will be selling more of every 1 of our key products like Vevye, IHEEZO and Triescence. But I predict we will also sell many more units of other products that many stockholders haven't thought too much about. I also predict that we will complete compelling new acquisitions of products and/or businesses structured to appropriately balance risk and potential reward.

And finally, I can say confidently that 1 or 2 product candidates from our recent Melt Pharmaceuticals acquisition, specifically what we are now calling G-Melt and YOCHIL will be approved for marketing and that if they are coded and reimbursed in the way that we expect, they will make massive improvements to the standard of care in ocular surgery and more generally in the lives of so many Americans in need of an alternative to IV and opioid-based medicaments for sedation and anxiety. It's a very large market. And of course, these assets, as I reflected in my letter to stockholders should, in due course, become our largest revenue products. My bet is that if we do all of that and maybe even a little bit more, patient stockholders should be handsomely rewarded. I invite you to join me for the ride, because our best days are absolutely ahead of us.

Now let me provide a bit of color on our business as things stand today. We are entering the final phase of our current 5-year plan, and we are doing so with momentum. The portfolio we've assembled, the pipeline we've advanced and the commercial infrastructure we've built were designed for scale. This is not a single product company or a single product story. We are meaningfully diversified and our commercial platform is built for durability operating leverage and sustained growth. Today, Harrow operates as 1 Harrow, 1 strategy, 1 commercial engine, 1 unified organization. We have constructed a diversified ophthalmic franchise focused on expanding patient access, improving affordability and delivering strong clinical outcomes.

In the fourth quarter of 2025, we saw a clear validation of that strategy. For the first time, all of our core growth drivers accelerated simultaneously. That alignment reinforces our confidence and supports our goal of exceeding $250 million in quarterly revenue by the end of 2027. And financially, 2025 was a strong year. We delivered great top line growth and demonstrated operating leverage, underscoring the earnings power embedded in our model as revenue scales.

Let me briefly highlight some of the key drivers. Vevye is positioned for revenue acceleration and increasing new prescription velocity, expanded payer coverage is now in effect. So we are doubling the Vevye sales force to ensure that we fully capture the opportunity to build a product with peak sales potential of multiples of last year's numbers. More sales professionals will equal more prescriptions, and this should correlate to increasing profitable revenue growth. Our data backs this up, with covered patients averaging approximately 9 refills annually, effectively a full year of therapy. This reinforces the durability of the demand for Vevye. As access continues to expand and commercial intensity increases, we expect total prescription growth to continue this year and for many years to come as Vevye finally becomes a 9-figure revenue product this year.

IHEEZO delivered a record quarter, driven by real traction and a growing number of retina specialist offices. We have broadened our addressable market by focusing on in-office procedures, effectively increasing our procedure volume TAM by more than 2.5 million units annually. We're also expecting IHEEZO price improvements to begin in the second half of this year as we release a new retina-focused packaging format. At around the same time, we expect retina specific data readouts from studies underway to show from a patient's perspective, the difference between IHEEZO and legacy anesthesia modalities. This is only going to help us, we believe. We've got to see what the data says. These 2026 activities should further enhance financial performance and with multiple growth levers now in place, IHEEZO represents a durable and critical part of our long-term strategy.

Triesence generated its strongest quarter since relaunch, reflecting accelerating adoption in the very large ocular inflammation market. Based on what I'm seeing this quarter with new account trials starting in numerous potentially very large accounts and growing confidence in market access, I have asked our talent team to at least double the dedicated Triesence sales force to deepen penetration in what remains a very large market. Momentum here is early, but it looks meaningful. And because of the origin of the revenue, it is likely highly sustainable. It's not easy to get a product like Triesence added to a surgical treatment protocol. But once you do, and I have seen this happen many times over the years. If the product delivers exceptional outcomes as Triesence appears to be doing, then surgeons are often reticent to change, this is what I mean by the sustainability of the Triesence momentum.

On a related topic, for years, I've spoken about tracking the migration of elite sales representatives. This is nearly a surefire leading indicator of future success. You see sales reps go where they can win where they can make money and provide for themselves and their families. Well, the word is getting out, the Trieste is on the move. These elite reps from around the country are hearing about our commitment to this product and they know they will also be selling the G-Melt too if they can make it on to our team. A lot of folks want to get in on the G-Melt, believe me. So we are seeing a mushrooming inbound interest from some of the most prolific ocular surgery pharmaceutical representatives who want to take these coveted surgical physicians at Harrow on the Triesence team. This is really good news.

Now onto our rare specialty and compounded products. Behind the scenes, believe it or not, we've been planning a few positive surprises for our stockholders from the part of our portfolio, they would probably at least expect, yes, are rare specialty and compounded products. This portfolio is now under new sales leadership and it will benefit from new resources we are providing to finally bring out the value we expect from this exciting and unique group of products. As I discuss more in my letter to stockholders, there are 3 products from within this portfolio that our team has been quietly doing great work on. One product is awaiting a coding decision from CMS which we expect in April. There are no guarantees. But if this comes through next month, it will open up a very nice, attractive market for this product.

Regarding another product in this portfolio, we have a key study underway that we expect to read out later this year. Our entire team is super excited about this opportunity. This is a big one. And based on what we know about this product, we expect the study to be able to highlight the opportunity that we have uncovered and once the data is announced, it should fuel opening up, as I said, a very sizable and compelling market for this product. In fact, we are also simultaneously working out supply chain issues to ensure that if things work out the way we expect that we'll be able to supply the market adequately given the historically lower volumes that this product has required.

And there is a third product that we expect to be revived from this portfolio to also fill yet another nice but happens to be a smaller market opportunity, but a good 1 nevertheless. The bottom line is that I believe our stockholders may be positively surprised throughout the year and into next year as our plans for this portfolio are revealed.

A few final points. In 2026, we will also launch 2 important products by close and Bovis further expanding our retina and specialty footprint and leveraging our commercial platform. beyond commercialization, our pipeline continues to advance, and Amir will shortly speak about the great work he and his team are doing.

In summary, Harrow is a diversified ophthalmic platform with multiple accelerating growth drivers and increasing operating leverage we have demonstrated the ability to build, integrate and grow and generate a heck of a great return for our patient stockholders as our 5-year track record demonstrates. But as I said at the outset, I really believe that we are still in the early innings of our growth and stockholder value creation story.

With that said, I will turn it over to Andrew. Andrew?

Good morning, everyone. I'll begin with our fourth quarter and full year 2025 financial results. For the fourth quarter of 2025, consolidated revenues were $89.1 million, representing 33% year-over-year growth. For the full year, revenue was $272 million, up 36% versus 2024. A reflected continued strength across our brand portfolio and expanding commercial execution, particularly in the second half of the year. Adjusted EBITDA was $24.2 million in Q4 and $61.9 million for the full year, reflecting 54% year-over-year growth. This margin expansion demonstrates the operating leverage in our model as revenue scales faster than costs even as we continue investing in commercialization and R&D. In addition, during 2025, we generated just under $44 million of cash from operations, which helped us end the year with $72.9 million in cash and cash equivalents. Overall, 2025 was a year of strong execution, improving profitability and disciplined capital allocation.

Moving on to our core growth drivers. Starting with Vevye, Fourth quarter revenues were $25.9 million, up 14% sequentially, bringing full year revenue to $88.7 million, a 21% increase over 2024. Growth reflects expanding demand. IHEEZO generated $35.9 million in Q4 and $81.3 million for the full year, representing 64% quarter-over-quarter growth and 65% year-over-year growth. Performance was driven by increasing penetration across new and existing accounts, particularly in retina. Based on the momentum we are seeing with Triesence and other modest investments we intend to make in this franchise. We are disclosing this revenue separately for the first time. Brian's fourth quarter revenue was $5.1 million, a 36% increase from the third quarter, totaling $9.9 million for the year, a 193% increase in 2024. The growth was primarily driven by accelerating adoption of Triesence [indiscernible]. Our rare specialty and compounded portfolio generated $22.2 million in Q4 and $92.3 million for the full year. The temporary compounding inventory constraint discussed last quarter is expected to be resolved in the coming weeks, and we expect inventory levels to normalize near the end of the first quarter. We do not anticipate a recurrence [indiscernible].

For 2026, we are approaching guidance with greater transparency and structure and are committed to providing greater insight into the seasonality of our business and how we expect performance to build throughout the year. We expect full year 2026 revenue between $350 million and $365 million. For modeling purposes, we currently expect first half revenue in the range of $133 million to $153 million and the second half revenue in the range of $203 million to $226 million, reflecting the expected phasing of demand channel dynamics and launch timing across the year.

Adjusted EBITDA is expected to be between $80 million to $100 million for the full year with the majority of the EBITDA generated in the second half of 2026. As in prior years, the second half is expected to be stronger with that weighting being more pronounced in 2026.

Historically, quarterly revenue patterns have been consistent, though 2026 will be slightly more second half weighted. Like the past 2 years, the first quarter is expected to be our lowest revenue quarter. primarily due to stocking activity from the fourth quarter and insurance resets and a higher concentration of high deductible plans. We estimated fourth quarter demand for IHEEZO resulted in approximately 1.5 quarters of incremental inventory being built across the channel. That inventory is expected to be drawn down largely during Q1. As a result, although we are seeing demand grow for IHEEZO similar to the first quarter of 2025, because we are drawing down on Q4 2025 inventory that's in the channel, we do not anticipate meaningful IHEEZO revenue in the first quarter.

Vevye entered the year with expanded coverage effective January 1. While we expect improved access will increasingly drive prescription growth throughout the year, the first quarter typically reflects an increased mix of high deductible plans, which creates near-term pressure for Vevye and our branded portfolio. The financial impact of the coverage in will start to be more pronounced as the year progresses and once our expanded sales force is fully deployed. We typically operate with a disciplined methodical approach to spend and we have done that for a reason to protect profitability, drive ROI and preserve strong cash flow. This year, however, we see a clear opportunity to maintain that discipline while increasing the pace and level of investment to expand our revenue base for years to come. As a result, we expect SG&A to increase to approximately $185 million to $205 million in the year as we expand our sales force across our major products and categories, including Vevye and Triesence and prepared to support the launches of BYOOVIZ and BYQLOVI. We plan to add roughly 100 new sales roles in the first half of the year, and we will pair that with increased promotional and marketing investment to drive awareness, adoption and sustained growth in the back half of the year and into 2027. Importantly, even as we invest, we will continue to manage expenses with a careful eye toward profitability and cash flow, holding orals accountable to returns and managing the spend accordingly. We also expect R&D expenses to increase this year to approximately $30 million to $35 million as we complete studies required for the Melt product candidates, NDA submissions and as we invest in post-market studies that Amir will discuss later, efforts we believe can support near- and long-term growth across key products.

Looking to the second quarter, we expect IHEEZO will reuse pass-through status effective April 1, impacting the ASC market. Approximately 30% of 225 units were generated in the ASC setting. We've been preparing for this transition through our retina pivot in 2024 and the recently announced in-office expansion strategy, which, as Mark said, added about 2.5 million annual procedures per TAM. The continued growth in retina and in-office utilization is expected to offset and ultimately exceed the ASC impact. We also plan to launch by clove in Q2, which will support incremental growth in our specialty portfolio.

Now looking at the third quarter. We typically experienced some late summer softness due to both doctors, staff and patient score vacations. The third quarter will include the first full quarter of BYOOVIZ revenue contribution which should provide incremental growth. We are anticipating that IHEEZO will also catch some of the additional tailwinds as a complementing product to BYOOVIZ. In addition, beginning in the third quarter, we expect to start to see the impact of our expanded and fully deployed Viva and tries in sales force, driving growth for both products. Also starting in the third quarter, we're expecting a pricing improvement for IHEEZO to go into effect. When you combine that with the continued revenue growth in the in-office expansion, we expect IHEEZO to have a strong second half of 2026 and position us very well for 2027. The fourth quarter should remain our strongest quarter, driven by demand patterns, stocking activity and patients reaching power pocket maximums.

Finally, as Mark discussed in his letter, as we intentionally transition compounded volume to FDA-approved branded alternatives, 15 revenue into our specialty portfolio, we expect compounded revenues to be approximately $60 million to $65 million for the full year with Q1 the softest quarter as we exit the final stages of the inventory shortage.

In summary, we expect a softer first half as we work through channel inventory absorbs the ASC transition and navigate seasonal deductible dynamics. In the second half, we expect a meaningful acceleration driven by a fully deployed Vevye interactive sales force, contributions from BYOOVIZ and BYQLOVI, improved IHEEZO pricing, expanding retina and in office adoption and incremental contribution from specialty products.

Now I'll turn the call over to Pat Sullivan.

Thank you, Andrew. Starting with Vevye, we exited 2025 with strong fourth quarter momentum at a clear inflection point as expanded coverage went live. Despite limited coverage throughout 2025, we delivered a 115% increase in prescribers writing Vevye, underscoring strong underlying demand for the product, but there is so much more opportunity for Vevye growth in a large and growing U.S. dry eye category.

With broader coverage now in place for our sales force expansion underway, we expect prescriber growth to continue. Consistent with the data shared in 2024, covered patients averaged approximately 9 refills in 2025, effectively a full year of therapy. That level of persistence underscores Vevye's differentiated clinical profile rapid onset, sustained efficacy and comfortable on-eye experience without the stinging and burning commonly associated with other treatments. The bottom line, though, is that we do not believe that any product in the category has this level of refill persistence. Since coverage expansion began, we have seen acceleration in new prescription trends despite navigating a challenging period with insurance benefits resetting and high deductible plans, and we expect continued improvement as the year progresses.

To fully capitalize on this opportunity, we remain on track to double the Vevye sales force by Memorial Day, expanding our Vevye presence among eye care professionals to drive higher prescription volume through 2026.

Turning to IHEEZO. This product materially outperformed our expectations in 2025. And with an impressive 56% growth in unit demand year-over-year. Growth was driven by our expansion in the new retina practices and deeper utilization within existing accounts. Ordering accounts increased 49% year-over-year and retina Specials represented approximately 70% of fourth quarter unit volume, underscoring where adoption and clinical traction are strongest. Importantly, we believe we are still in the early innings of penetration with significant untapped market opportunity ahead as we continue to expand utilization and drive broader adoption.

Looking ahead, in the second half of 2026, we expect a net price improvement, which we expect will further enhance the products revenue and overall financial profile. Importantly, this comes as we prepare to launch BYOOVIZ in mid-2026 further accelerating IHEEZO's expansion into new retina accounts while deepening penetration within our existing customer base. We are also expanding IHEEZO into the office-based setting to broad utilization beyond retina. This initiative targets more than 2.5 million anesthesia relevant procedures that already benefit from established reimbursement pathways, reducing access friction. Earlier engagement has been encouraging, supported by a dedicated commercial effort and our existing relationship in the office space channel.

Turning to Triesence. We delivered a record quarter driven by accelerating momentum in ocular inflammation and continued strength in retina. Despite formally launching in market on October 1, we saw a good portion of the Q4 unit volume come from ocular surgery accounts. and we expect this large market will drive the majority of new volume going forward. Nearly half of the fourth quarter ordering accounts were new and helped drive quarter-over-quarter growth in unit volume. To extend this trajectory, we are in the process of doubling the dedicated Triesence sales force. Based on current trends, we see substantial runway for continued growth in 2026 and beyond.

Finally, our rare specialty and compounded portfolio performance rebounded in the fourth quarter as new commercial leadership took hold and execution improved. While we are encouraged by that momentum, I believe there is substantial room to grow this portfolio of everyday workhorse products from current share levels. We are implementing several revenue-generating initiatives tied to these assets, which we expect to detail later this year. In parallel, as Mark discussed in his letter, we are focused on converting compounded utilization into FDA-approved branded products through the launch of Pharmapack Max and Pharmapack Prime, further strengthening the long-term revenue profile of this segment.

In closing, each of our core growth drivers accelerated in the fourth quarter, and we entered 2026 with clear commercial momentum. We are scaling the organization to support the trajectory doubling the sales forces behind Vevye and Triesence, expanding IHEEZO into the office space setting and preparing for important launches this year with strengthened infrastructure, expanding access and a diversified ophthalmic portfolio, we believe we are well positioned to drive sustained growth and delivering increased value to patients and shareholders.

With that, I'll turn it over to Amir.

Thanks, Pat. I'd like to turn to our pipeline, which we believe represents a compelling long-term value driver for Harrow. The next phase of growth is highly focused and capital efficient. We're advancing clinically relevant programs aligned with clear unmet needs in ophthalmology and tightly integrated with our commercial infrastructure and regulatory expertise. While there are several programs on this slide, and more that you don't know about yet. I'm only going to focus today on G-Melt, formerly known as MELT-300 and the ongoing IHEEZO studies. G-Melt exemplifies our strategy. It is a fully opioid-free and IV sparing procedural sedation candidate that has the potential to redefine that standard of care, and I believe has the potential to become our largest product.

Today, procedural sedation often requires IV access and uses opioid-based regimens, introducing complexity, staffing burden, monitoring requirements and longer recovery times. G-Melt has the potential to simplify that model. From a development perspective, we initiated the remaining pharmacokinetic work earlier this year and are advancing CMC activities with our CDMO partner. We remain on track for an NDA submission in early 2027, while continuing to evaluate opportunities to accelerate time lines. We view G-Melt as platform-level upside, a differentiated sedation solution with the potential to broadly improve procedural efficiency and create meaningful long-term value in the ophthalmic market and eventually beyond. Pipeline value also comes from expanding the evidence base for marketed products, including IHEEZO. I'm amazed that our team has been so successful with IHEEZO and retina given its supporting data was in cataract surgery. And now for my experience developing back-of-the-eye product that retina professionals who are the primary users of IHEEZO want to see specific data based on procedures they need IHEEZO 4, namely intravitreal injections. Therefore, we are investing in clinical data generation to support adoption, strengthen differentiation and reinforce long-term positioning with both clinicians and payers.

While this slide highlights IHEEZO's similar work is underway across the portfolio. High-quality evidence builds clinical confidence drives utilization and supports sustained reinvestment in the franchise. For IHEEZO, we are sponsoring multiple complementary studies an intravitreal injection procedures. The first and most near-term data is an investigator-initiated randomized trial led by Dr. Samin Dang comparing IHEEZO to standard anesthetic approaches, evaluating pain and ocular symptoms with data expected at ASRS this year in July. You could see the quote he provided us with on the bottom left of the slide. As for our own Harrow sponsored IHEEZO study, my team has put together a Phase II multicenter randomized trial assessing patient reported pain and safety across approximately 240 patients. We initiated the study in the first quarter of 2026 under the IND and expect to have data available by the end of 2026.

Together, these studies are designed to generate clinically meaningful practice relevant evidence that supports further and more broad-based adoption reinforcing AES as a durable long-term growth driver.

In summary, Harrow's pipeline is focused, efficient and impactful. It complements our commercial momentum, expands our addressable market and creates multiple pathways for long-term value creation. We are building not just individual products, but a sustainable innovation engine that positions Harrow for continued growth.

With that, I'll turn it over for questions.

[Operator Instructions] Our first question comes from Chase Knickerbocker with Craig-Hallum.

Appreciate the candid thoughts as in the shareholder letter. So Mark, you kind of mentioned in the letter that you expect kind of continued commercial growth and commercial mix improvement for Vevye kind of through the year. What have you seen so far from a commercial mix perspective in Q1? And then can you walk us through what your ASP assumptions or direction of ASP for Vevye is in the 2026 guide kind of versus volume?

Yes. So regarding ASP, I think the only -- I'll answer the second question first. On ASP and net pricing, but the only comment that we've made and that we intend to make is regarding the buoyancy and the slight uptick in ASP, which I had forecasted probably a quarter or 2 late. But nevertheless, as I said in the letter to stockholders, we saw that direction of travel, and we eventually got there. So with a more sustainable and buoyant net pricing for Vevye, that coupled with some of the things that we're seeing on the commercial side with this new coverage, we have initiated this program to more than double the Vevye sales force.

In terms of the build and what we're seeing on the ground today for Vevye. As I said also in the letter to stockholders, even in the fourth quarter, we started to see a little bit of momentum build. I think I've said in the past that CVS had actually sent out letters to thousands and thousands of eye care professionals around the United States, alerting them to the new positioning, the preferred positioning for Buy on their formulary. And that alone, I think, began the positive momentum that we're also seeing a little bit in the first quarter.

What I can say regarding the first quarter is that typically, it's a weaker period. And we're quite surprised with the new prescription volumes that we're seeing today relative to what we thought we would see, which is to say that the new prescription volumes are meaningfully better than what we thought we would be receiving at this point in the year. So we expect that to build throughout the year. As I said in my prepared remarks, we have data that demonstrates very clearly that more reps in the field for this particular product, given the persistence of the product and the market interest in the product yields more prescriptions. And for us, building those new prescriptions ultimately leads to more and more total prescriptions and more revenue. So we're very much bent towards building volume in Vevye, and that's how we're set up for this year, and that's what you should expect.

Helpful, Mark. And just for my second question, another multiparter, sorry, but just on the Triesence Phase III and cataract announced this morning. obviously, a large potential volume opportunity. Just a couple of questions to help us understand the magnitude. So what percentage of the cataract market do you think is kind of the sweet spot for Triesence as it relates to kind of the value prop versus the multi-drop regimens that are pretty pervasive today? How should investors kind of think about the TAM expansion from this label expansion kind of within cataract for trace?

And then second, I think investors often have kind of question on duration of opportunity with pass-through products in ASC. Can you just remind us or discuss the unique aspects of Triesence that may allow for longer-term payment outside the bundle or how you plan to approach pricing there?

Sure. Once again, I'll take the second question, the second part first. In terms of reimbursement for the product, Triesence is a very unique label in that it is both used in the office setting of care, and it's also used in the hospital and outpatient department setting of care. And as a result of that, and I don't want to go into the nuances of of reimbursement policy, but we believe that is will not be limited by a TPT or a temporary pass-through period. And regarding the first part of the question in terms of what the TAM expansion might be for this study that Amir just received clearance on, I believe, yesterday. I go back to, I think, another comment that I made in my prepared remarks and that is that our vision for cataract surgery is that in the future, patients in the United States should have an IV free opioid free and even an eye drop free procedure. That is what I would want my mother to have. That's what I would want anyone that I love to have, not to have to put eyedrops in their eye multiple times per day, multiple different eye drop bottles that's assuming you're using an FDA-approved product, of course. And so that should be the ideal, and that's what we're working towards. That's what the G-Melt is about and that's what this expansion with Triesence is about. It's about putting power in the hands of the surgeon to deliver the anti-inflammatory into the eye so that the patient doesn't need to administer these post-surgical eye drops. What's interesting is, anecdotally, what we see is that for patients who are using this on label which is a subsegment of the cataract surgery population. It's those patients who really can't administer eyedrops who have other comorbidities. What we decided to do because those patients are having such exceptional results is to invest in expanding the label so that all cataract surgery patients have access to this therapy. And what's terrific is, as I said, we've got reimbursement. We have an exceptional clinical outcome. And with this amazing study that Amir and his team are going to execute, we're going to have a very broad-based label that will finally give cataract surgeons access to an easy to administer highly efficacious post-cataract surgery anti-inflammatory that they themselves can inject. And here's the best thing for consumers, for patients. It has the lowest out-of-pocket of any injectable steroid at around $37 per unit. So it's affordable, it's accessible, it's highly efficacious, and we're going to invest for a very small amount of money in a study that will significantly expand the number of patients who will have access to it. And in the United States, by the time this data reads out, that should be about 5 million procedures annually. So it's a very large market opportunity. And as I've said for a couple of years, Triesence is a slow grower. We've got a lot to prove there for sure. But this is a product that in the next couple of years is going to be a meaningful value driver for our stockholders.

Our next question comes from Timur Ivannikov with Cantor Fitzgerald.

Yes. This is Timur Ivannikov on for Steve Seedhouse. So first, on IHEEZO, I think you mentioned price improvements in the second half of 2026. Could you clarify, is that a price improvement from Q2 '26 or from Q4 '25? And do you expect Q2 '26 ASP to be significantly lower?

Andrew, do you want to take that?

Yes. So and just to try to make sure I answer the question correctly. We expect by the time we get to Q3 of 2026, pricing for IHEEZO will be better than what it was in 2025 and in the first part of 2026.

Okay. Got it. And then second question is on the Triesence cataract trial design. Just wanted to understand the trial a little better. I think you mentioned the trial design versus placebo. Could you talk about the use of droplets anti-inflammatory eye droplets in both groups? I mean, are you allowed to dose the droplets in the treatment arm and the control arm?

Amir, can you handle that one?

Yes. I think the protocol design is pretty clear. We're going to have a control arm, which will not get Triesence. And then -- but we do have rescue criteria already built in and those risks it would allow drops again per protocol.

Our next question comes from Mayank Mamtani with B. Riley Securities.

I appreciate the helpful go-forward guidance framework. So by NRx improving and the commercial mix also improving, Mark. Are you able to share with us any end of year or second half loaded kind of market share targets that you may have. So we can understand the growth in the market, obviously, multiple companies investing here on the penetration side, but also I want to understand how you're thinking about share gains in both the cash pay and also, obviously, the commercial mix markets? And then I have a follow-up, with IHEEZO.

Sure. Yes. So we have 3 goals for Vevye. First of all, I just want to say that the dry eye market in the U.S. is, Pat said, a very large market. We believe it still continues to be underpenetrated. And we continue to see data that demonstrates that there are large segments of the dry eye patient population that are receiving products on a monthly basis that burn in steam cause pain, sneeze. I mean the list of these effects are too long. And so when we see that patients are getting access to these nonoptimal therapies, for whatever reason, whether it's coverage or they're just not aware of Vevye. We see that as opportunity to convert those patients to a therapy that doesn't burn and sting and that has all of the positive benefits that Vevye offers, including now these enhanced coverage metrics.

But in terms of what our goals are, to be clear, the first goal is we believe Vevye will be the #1 cyclosporine in the U.S. market cyclosporin is the most trusted active ingredient in the dry eye market, and we aim to be the #1 cyclosporin. Second to that, we believe we can capture the anti-inflammatory market. So any product that actually has an active ingredient and that would be an anti-inflammatory, and we believe all forms of dry eye disease we don't care which 1 you choose have an inflammatory component to them. And so we aim to be secondarily the #1 anti-inflammatory. And then eventually -- and it's not going to happen overnight. We think we have the opportunity with this particular product to be the #1 most prescribed dry eye product.

Now for the last couple of years, our competition has had a sales organization, even the most inferior products in the market have had much larger sales organizations than we've had. And we are now as I said, more than doubling our sales force. I think we're more than halfway there. So I'm actually surprised that talent team is doing a great job. And there's just a lot of people that want to join this Maria's team and sell Vevye. But in terms of specific market share percentages, we're not giving those goals. I think to be the #1 cyclosporin in the market we probably need to have just north of 20% market share. So that gives us a sense of what we think is achievable.

And by the way, in many markets, we are already there. The problem is, is that we touched historically, so few markets with a sales organization of just under 50 people that even if you have better than 20% market share in the Greater Cincinnati area, which happens to be the case. You -- there are many other markets where you just simply don't have that level of market share. So with this enhanced sales force now numbering close to about 100. We'll touch more markets. We will increase our market share, I believe, and we'll get closer and closer to that goal of being the #1 cyclosporin.

Pat, do you want to add to that at all?

Thanks, Mark. I think One of the things we're most optimistic about as we stated in our earnings is the increase in writing that we see, we saw 115% growth in our writing. And I think as Mark mentioned, the feedback that we received from our eye care professionals from their patients is extremely positive around the fact that Viva uniquely manages inflammation, how rapid it works and at the same time, is the unique tolerability profile. We are extremely encouraged that our next phase of expansion to cover a much larger portion of the market and increase Vevye presence to really grow this product to be the #1 cyclosporin. So Mark, we're well on our way to building our next phase of growth for Vevye.

And then on IHEEZO, obviously, a lot going on here, ASP past status expiration but also price per unit improvement that you mentioned. And there's also some data generation activity. You noted that ASRs conference middle of the year. I was just curious to contextualize its contribution to the guidance. Are you also thinking like Vevye, this is a 9-digit revenue contributor for this year? Or is it more a reasonable target for next year?

Yes, I don't want to comment on the revenues for that product. I think the only product we've given guidance on it specifically is Vevye, which is clearly on the road to 9 figures. What I will tell you is this, just as a reminder, in 2024, we had absolutely 0 retina presence. We didn't have a retina sales force. We didn't have any products in that market. And only a couple of years ago, did we hire that sales organization. So in really August of 2024, we began what we call the retina pivot where we were able to attract great people from much larger companies that had tremendous backgrounds in retina, and we've built this organization. I remember going to ASRS and Stockholm, nobody knew who Harrow was. They had we had no presence in that market, and it's a very tight community, the retina community. And what I can tell you is over the last 1.5 years, 2 years or so, I think if you go to retina professionals now and ask them if they know who Hero is they really know who Harrow is. I have to say another thing about IHEEZO specifically because it is amazing what Ali and her team have done, taking a product where the clinical studies supporting the NDA were in cataract surgery, and they have been able to adapt to that data to the intravitreal injection market now with more than 70% of the unit volume for IHEEZO in the retina market. What's really exciting is what Amir talked about with the DANG study.

What Ali has wanted for well over a year, we've had numerous conversations is specific data related to the performance of IHEEZO in the intravitreal injection procedure. And we had all this anecdotal information, doctors would tell us how it performed. Some doctors had other benefits that they experienced from the product, including efficiency and their workflow. But what I think you're going to see in the middle of the year, finally, for Ali and her team is a data set that will demonstrate the real difference between IHEEZO and these legacy modes of providing these patients with anesthesia for these intravitreal injections. And I have to tell you, if you're a patient getting these injections, the anesthesia and pain control really matters. And we think we have a product, at least anecdotally, we've received tremendous information from accounts that use this product about its performance. And in the middle of the year at ARS, and he got a late breaker, by the way. I mean it's not easy to get these, but he is going to present this data, and I think that is going to fuel significant demand in the retina market for this product.

So in terms of how we -- how IHEEZO fits into our overall guide this year and certainly in 2027, depending on how this data comes out, this is an opportunity, I think, to significantly improve the unit volume demand for IHEEZO. And then as Andrew said, that coupled with this new packaging format, but specifically for retina, and a meaningfully improved price. I think that by the end of next year, you're going to hopefully be surprised at what we think we can generate from this particular product.

And lastly, very quickly, the OpEx expansion that you have. You're seeing your R&D was higher in fourth quarter. Is it sort of a first half loaded kind of dynamic and is there a steady-state OpEx spend and what you're trying to get at some point this year?

Thank you, Mike. Andrew, do you want to tackle the OpEx?

Yes, absolutely. And I want to be sure to note in Q4, in the P&L, there's an $8.5 million charge for acquired in-process R&D, which was associated with the Melt acquisition, as the upfront costs and some of the transaction costs associated with the deal. But none of that acquisition cost was capitalized all ran through the P&L and then through R&D according to capital and we also didn't back it out or add it back in, I should say, to the EBITDA number for 2024. But kind of looking forward the adjusted EBITDA are looking forward at the OpEx spend and in kind of breaking into 2 parts. You've got the SG&A side, which we're adding that sales -- the sales heads right now. We've been adding them aggressively in Q1. We'll continue to add them in Q2. And then we've also been preparing. So we're preparing from a marketing and promotion standpoint, which is also increasing that spend we're trying to get ahead of a lot of that as well. So that when these people get hired and trained, they're hitting the ground running with Vevye and Triesence for that matter.

From an R&D perspective, a lot of that cost, as you know, are going to be trial dependent. You sort of have a base here of R&D spend year-over-year. But as we put out this announcement this morning regarding the true IND being accepted, and that's been picking up. Those costs will kind of show up in the middle part of the year, so Q2, Q3. So we'll have a little bit of a ramp in the middle part of the year and then it should come down a little bit on the R&D side in Q4 as you sort of wrap up those studies along with some of the Melt studies.

Our next question comes from Lachlan Hanbury-Brown with William Blair.

I guess, first, I would appreciate maybe a little more color on how you're thinking about the IHEEZO dynamics in 2026. So you said you think the in-office procedure expansion beyond retina can offset the ASC loss. Is that sort of specifically talking about Q2? Or is that more of a longer term you think looking a year or so out it will have more than offset that. So I guess, should we expect maybe a drop in Q2 in unit demand?

Yes. I don't want to be specific about demand in any particular quarter other than to say that in Q4, Q1, Q2, Q3, I think I've said this, we expect demand to continue to increase. So demand continues to increase. That's separate from revenue recognition. But demand for the product does continue to increase.

In terms of when we're likely to see the offset from the loss of the ASC units, when I looked at the ASC units specifically, the number of units that we're losing relative to the overall opportunity that we're adding when we add these in-office opportunities of this 2.5 million unit increase to our TAM, it's such a small level of success. And we have a discrete team going into the same customers that are using it in the they don't know that they can use it also in their clinics. Remember, every 1 of the doctors that's using it in the ASC is a surgeon, but they also only spend a day or 2 a week in the surgery operating, the surgical operator. The rest of the week, they spend in their office doing procedures. And so it's a simple idea, we're going to the same customers that are using the product satisfactorily in the ASC and we're saying, "Hey, you're doing more procedures in your office than you're doing in the surgical suite. And it's not for every procedure, but for those procedures where this could be impactful, we're going to the same customers and trying to convert their in-office business. And it's such a small number of units, as I said, that we don't have to really be that successful to fully offset the entirety of what we're losing when we lose the temporary pass-through code. So is that going to happen in the first quarter or the second quarter? No. I doubt it. It should happen throughout the year. And as I said, it's such a small number of units relative to what the overall opportunity is that we can fail and fail and fail again. and still end up eating up all of those lost units from the ASC.

That's good color. I guess second question is, just on Vevye and the new coverage. I'm just wondering what you see in terms of the patients that are sort of getting scripts filled under that coverage. Are they new to brand patients? Or is there a sizable chunk of them who previously paying cash pay or maybe you previously managed to get coverage for them who are now just converting to be sort of covered more easily.

I can't say specifically with numbers, what percentage or what number of patients are converting? What I can sort of echo what we've said in the past and that in 2025, there were a lot of patients who we received prescriptions for but legal prescriptions, but who are denied access to the product for 1 reason or another, who chose not to get their prescription filled. And so we're going out to those patients. Now those patients still have legal prescriptions, and we can contact them and make them aware of the existence of coverage and try to capture as many of those as possible. At the same time, they're or patients who are paying cash, as you said, so these consignment patients who do have coverage now, but formerly did not, and we can go to them. We know exactly who those folks are as well and convert them. This is a sizable number of people and you're talking about well north of $30 million new covered lives where you have the best access for Vevye now. So we have to see how things play out. I think based on what we're seeing in the first quarter, we thought we would not be where we are. We're in a better place than where we thought we would be in terms of new prescriptions. The new-to-brand side of things, I think, is going to come once we get these new bodies out these new sales reps, you'll have more and more of that new to brand. And I can say -- and I don't want to steal Pat's thunder. But Pat, do you want to actually talk about the whole new to brand? Because I know that's really been a focus of yours.

Yes. Thanks, Mark. And I think the core to our next phase of growth for Vevye is really around driving new growth for Vevye. We know better as possible when it comes to managing dry disease, as Mark mentioned. And our main focus going forward is ultimately to win the new-to-brand patients. And I think that's going to be a heavy focus for us and obviously the beginning of this year in our conversion from CBS. We are really in our expansion and leading up to our expansion, heavily focused on the right patient and working with our physicians, our communication approach to make sure that we are targeting these patients. Because what we do know is those that are having either coming in that are having dry disease symptoms or having unresolved or persistent symptoms on other suboptimal treatments. Vevye is the perfect treatment for that. Our goal moving forward is to make sure that we have the right presence with our customers and ultimately target the right patients going forward.

So Mark, to your point, a new to brand for us is a huge focus and will really start to come to life for us as we go to our next phase of expansion.

Our next question comes from Tom Shrader with BTIG.

Thanks for all the updates, fascinating time. On the Vevye sales force, after your increase, where does that put you relative to competitors like myBo, would you be on an equal playing field? And then just a remedial question on the Melt franchise, are you still wedded to 2 products? It seems like the first product is the bigger product. It's the combination. Does your compounding business inform you that there really is a need for 2 products?

Yes. So I'll take the first question. In terms of the Vevye sales force, I actually -- we don't know exactly how many reps these competitors have out in the field that we've heard that 1 of our competitors that has a pretty sizable market share, has upwards of 300 people. So we're going to have around 100 ourselves. But what I can tell you is that our reps are so powerful that 1 Harrow rep with Vevye is equal to 4 of theirs. I'm kidding. But we really do have a terrific sales organization that's well trained and they have an outstanding product to sell. We -- this is the second phase of our expansion. So this -- we had the initial hiring for this product. This is the second phase taking us up to around 100 territories or so. They very likely could be a slight increase in the number of territories as we see this investment pay off. And so -- but we're excited to have the sales force double more than doubling here in the near term. And I'm also pleased with the quality of people we've been able to attract and those that we've continued to retain who are on Maria's team.

In terms of Melt and the need for both products, the MKO Melt, which is a compounded formulation that we've sold for a number of years, is -- has really informed the entirety of the development program. One of the nice things about the melt when it is approved, is that we're going to discontinue the compounded version of the product, and we'll hopefully convert all of that business into an FDA-approved and hopefully, reimbursable product. It is very hard, as I've said, over the years, to sell compounded medications. They're not FDA-approved. They don't have a label, particularly in anesthesia and sedation where an anesthesia professional is going to take place or 3 times about whether or not they're going to use a compounded formulation. So when we have an on-label FDA-approved product that is also hopefully reimbursed, this should significantly expand the market opportunity for the G-Melt in cataract surgery, but also for other procedures where -- and a sublingual nonopioid sedation choice can prevail. In terms of why we need also the 210 program, the 210 program addresses a different market segment. And believe it or not, in terms of the total number of units of opportunity for it, based on the expected label and we still need to discuss that with the FDA and come to a resolution around what ultimately a label might look like for what is now called YOCHIL, that product in terms of unit demand is bigger in unit volume demand, we believe, than even the G-Melt. The G-Melt will be used certainly in cataract surgery, which is what we're studying it for. We also believe it will be used as the compounded product is used in ENT for endoscopy, it's used in dermatology, plastics, dental, widely used in dental, it's used to deal with claustrophobia and MRI tubes. And so that's the experience that we have with the MKO Melt, the compounded version. And our expectation is that the G-Melt when it's approved, eventually will be used in markets outside of ophthalmology, which happened to be even bigger markets than the ophthalmic market. But the answer is yes, we need 2 products. They serve different markets. One is specifically related to anxiety. And it will also, as I said, be available, and I said this, I think, in the letter to stockholders in 3 different ultimately be available in a number of different strengths.

If I can sneak in 1 follow-up. The new Triesence, I mean, it seems like it's a much easier product to make and now. Do you think you might expand that outside the eye where that steroid is used? Or is this entirely a formulation for the eye?

It's purely for the eye. It's -- we started our company in 2014, our first sale was with triamcinolone acetonide for injection. And this is a product category an active ingredient, we know really, really well. Our compounded formulation, once again, the enthusiasm for Triesence for us comes from our experience, having sold Trimax in well over 1 million cataract surgery. So it's a market we know well. It's just -- this product is just going to be for the eye, but we have real high hopes that we can once again create this protocol, which is IV free, opioid-free and even eye drop free eventually for cataract surgery patients, which is really where the market needs to go.

Our next question comes from Thomas Flaten with Lake Street Capital Markets.

Following up on Vevye, with respect to the sales force expansion, can you talk a little bit about -- and I think you alluded to this mark that it's a lot of new territory, but new territory versus territory splitting because of overload. And then how you see the dynamics between the ophthalmology and optometry community playing into that growth expectation?

Well, I'll take the second 1 first, and then I'll flip the first to Pat. But in terms of the sales force -- actually, pardon me. Right, your second sales force expansion and what else comes?

The ophthalmology versus optometry.

Yes. So ophthalmology and optometry, Believe it or not, the optometric market is a critical market. I would say that I would be slightly biased towards the optometric market. I think now optometrists are writing as many are probably more prescriptions for dry eye medications than ophthalmologists. That's what the data that I'm seeing shows. But Pat, do you want to talk about the sales force expansion specifically?

Yes. Thanks, Mark. And I think when we think about the expansion, I mean, this is a real great opportunity for us to look at the great progress that Vevye has done for broad disease patients to date. And I think 1 of the first things we do is look at this, to your point, you were talking about like basically business interruption versus business continuity. It sounded like your question was around I think we're taking a very methodical approach to make sure that we are on relooking at making sure that this approach going forward. It is sales force expansion, but it is about us brand presence and promotional efficiency in front of our customers going forward. This is a very, very active category that is large, growing and active. And for us, like to the prior question by 1 of your colleagues around playing in that dynamic part of the market where that new to brand is, it's going to take not only having our current territories be very efficient, but also our expansions. We are being very, very thoughtful in how we're on putting our footprint together. But I think the key takeaway here is Vevye is poised for significant growth going forward, but it will be about how we want to put a new Vivi presence in front of our customers that 1 is really about differentiation, new to brand and having the right presence that is commensurate with being a #1 goal of being #1 cyclosporin and #1 drive disease treatment. So to your question, very thoughtful on how we'll drive that business to maintain our aims and our growth going forward.

And just as a practical matter, look, we need to get salespeople in these offices. They need to see their Vevye reps more frequently. And that's what this is about. We know where the high-value targets are. We know who's prescribing dry eye disease. We know who is looking for dry eye disease, and this expansion is going to allow more Harrow Vevye reps to get in those offices far more frequently. And our data demonstrates very clearly that when we do that, we end up with more prescriptions for Vevye. And I think you're going to see that throughout the year.

And Mark, to follow up on the last commentary on Melt being used or MKO being used a lot outside of ophthalmology indications, what can we expect with respect to deal making to get melt appropriately exploited in those opportunities that are outside ophthalmology.

Well, right now, we are completely focused on 2 things. One is Amir and his team building this data set. I've put a bounty on him getting that NDA in sooner than he even thinks he's able to get it in. And I'm hopeful that we can hopefully we can beat some of these time lines that we've laid out. So it's all about getting the NDA in and getting the data in front of the FDA so that we can hopefully give this approved and then ultimately get it coded for reimbursement.

The second thing is that the market, even in ophthalmology, you're talking about 5 million use cases minimally per year. And that's just really cataract surgery. If you tack on glaucoma surgeries and other relevant procedures, and you can add another couple of million procedures. So for a reimbursed nonopioid, non-IV sedation medicament the opportunity in ophthalmology is very large. It's billions of dollars per year where our competition is IVs and opioids. I mean the data was a DUKE study. There's a MAYO study. The data is clear. Patients today are getting dosed with SENTINEL for sedation during cataract surgery in particular. And so we aim to change that. We've got to build our commercial strategy for the Gilt and that is underway. So that's the second component.

Other than that, outside of the U.S. market in ophthalmology and getting the studies completed and filing the NDA, if something happens where there's a partnership that is revealed or an opportunity like that, that's revealable certainly pursuing. But we have such a big revenue opportunity with the melt in ophthalmology that we need to really stay focused on that, and that's what we're going to do.

Our next question comes from Jeffrey Cohen with Ladenburg Thalmann & Company.

I guess 2 from our end. Firstly, Mark, Andrew, could you comment any on margins and/or tariffs and ramifications throughout 2026 or any net changes that you're seeing now from '25?

Andrew, you want to tackle tariffs? Margins?

Jeff, from -- yes, on the tariff side, we're not expecting much impact I think the analysis we did last year was kind of almost in a worst-case scenario, when we kind of relooked at things and we're doing that on a continual basis. The analysis we did last year is still holding strong, and actually, we're in better shape than we would have been last year in that worst-case scenario around the version day. So not to answer your question more directly, we're not expecting to see any impact on margins as it relates to tariffs this year.

Got it. And then secondly, any commentary on your mid-year expected launch on B as far as preparations and commercial organization and how that might look like midyear?

Andrew, you want touch on that at all. Anything you want to add there, we're -- I think we're ready to go where I think we start realizing revenue and the team's got a very unique strategy. Andrew, do you want to touch on that or Pat?

Yes, I can touch on a little bit and then hand it over to Pat. The -- Jeff, we're really leveraging the existing retina team with that launch. There's some incremental costs that will go into that. we'll have some variable costs as we get the hub up to help support the product. But we're just -- we're really excited to get that thing going. We've got a great partner in Samsung as well that's helping us help us as we prep. This is a very dynamic market. We're going to be getting in with BYOOVIZ right away in the middle of this year, which is in reference biosimilar. And then you may have recently seen that same thing announced they had entered into a settlement with the innovator drug for EYLEA, and so we'll be able to get into the market a little earlier than we expected with that product as well at the beginning of next year, which will be in January. But spend perspective, like I said, we'll leverage most of the existing sales force. There be some small incremental costs there and maybe some variable costs related to the hub activity for the products, which should be highly, highly accretive to earnings or new revenues.

Pat, do you want to add anything?

Thanks, Andrew. I think 1 thing to add is as Mark mentioned, we're really excited to get this going. Thinking about back to Mark's comments about the team that we have here. a very deep set of heritage in the retina space. So I think to me, we will capitalize on that very quickly. I think in addition, when you think about our current portfolio, we made significant strides in growing our retina business, and this is going to help us significantly with our presence in growing the value of that franchise. And we are actively right now preparing the market and targeting our business to take off here in the middle of this year. So we're super excited about BYOOVIZ forward.

Our next question comes from Yi Chen of H.C. Wainwright.

Could you comment on your marketing strategy for the biosimilar? What they will have a dedicated sales force and how you are going to present your biosimilar as a differentiated product from other casual competitors?

Yes. So thanks for the question. As I think Andrew referenced and as Pat discussed. And I think, as you know, it is a highly dynamic market. It is competitive. And we have a unique place in the market with our Lucentis reference biosimilar. And at this point, I really don't want to reveal specifically how we're going to attain the market share that we expect to drive towards. What I have said in the past is that based on our cost and getting into the deal, the level of success that we need to achieve to make this highly profitable is quite low. We're not planning to get 30% market share with BYOOVIZ. We're planning to get a handful of percentage points of market share in this market, which is the largest market in ophthalmology by revenue. And so our expectations are quite modest, and we believe that the strategy that we're going to employ with the team that we have, which, as Pat said, has a tremendous background in relationships, and this market is going to be successful in helping us get to our goals. But we don't have we're trying to get about a handful of percentage points of market share, which is what we've said historically.

I can add a little bit to the 1 big advantage we have compared to everyone else in this market. is we have other products that we're selling these doctors and so it allows us to provide a really comprehensive offering. You can talk about the patient experience with our anesthetic nonop has that anesthetic and so it's more than just the biosimilar products that we're going to be selling. It's this comprehensive package of products where we totally support the practice and focusing on the patient experience.

I'm showing no further questions. I'd like to turn the call back over to Mark Baum, CEO, for closing remarks.

Well, first, and this is not in my script, I have to say that this call is the longest call I think we've ever had. It was -- reminds me of our recent state of the union, it set a record. And so we're going to definitely work next time to try and make this call a little bit more efficient. So we apologize for the time that this call took. But I think it was worthwhile, and hopefully, anyone who is listening feels a lot more knowledgeable about where this company is and where we're going over the coming quarters and years. Across the portfolio, we're seeing tangible momentum, improved access, expanding adoption and growing commercial execution. We've got a great new commercial leadership team. Multiple products are scaling meaningfully. Key franchises are gaining depth, and we're seeing early signs of inflection where we've been patient and disciplined. And the result is that you own a business with increasing revenue concentration that is in durable high-value assets and that we have multiple pathways with other products for continued growth. I want to thank you for your continued confidence in here. We're building something durable and lasting and valuable, and we believe the most exciting part of our story is still ahead. This will conclude our call. Thank you.

Thank you for your participation. You may now disconnect. Everyone, have a great day.

Good day, and welcome to the Harrow Third Quarter 2025 Earnings Conference Call. [Operator Instructions] 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 Harrow'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 Investors 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 Harrow'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 its 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.

Harrow's results may differ materially from those projected. Harrow 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, Harrow 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 release 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, Harrow's Head of Commercial, join us. Next quarter, I intend to have our Chief Scientific Officer, Amir Shojaei, join us as well.

Today, Harrow 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 2 years, we have 4 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, Harrow'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 VEVYE, IHEEZO and to a certain extent, beginning very recently, TRIESENCE 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 VEVYE and IHEEZO 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, VEVYE 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 VEVYE.

Beginning in January 2026, only a couple of months away, VEVYE will be listed on multiple new formularies with a preferred product status, including the largest U.S. pharmacy benefit manager.

This means that certain products are becoming uncovered and that creates an opportunity for prescription transfers. And going forward, VEVYE will be covered on those formularies. This particular PBM covers tens of millions of lives and I view this as a major development for VEVYE and for Harrow.

With major improvements in coverage and the addition of Apollo Care and Alto joining our specialty pharmacy network this quarter, we expect a higher proportion of patients will receive VEVYE as a covered therapy.

These advancements strengthen VEVYE'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 VEVYE's pricing stability and long-term growth.

IHEEZO 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, TRIESENCE in 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.

TRIESENCE, 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 Harrow 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 TRIESENCE 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 4 product launches over the next 3 years, BYOOVIZ, OPUVIZ, BYQLOVI 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 ImprimisRx 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.

ImprimisRx remains licensed to operate in California, but its license is up for renewal on December 1, 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?

Thanks, Mark. And thank you to everyone joining the call today.

Turning now to our financial performance. Total revenue for the third quarter was $71.6 million, representing a 45% increase over the same period in 2024 and a 12% sequential increase from the second quarter of this year.

For the first 9 months of 2025, total revenue reached $183.2 million. We remain firmly on track for another strong year of revenue growth, advancing toward our long-term financial targets with disciplined execution.

Based on what we're seeing across the business today and which I'll walk through in greater detail on the next slide, we are updating our full year revenue outlook to a range of $270 million to $280 million. While hitting our original target of over $280 million is still within reach, we want to take a slightly more conservative approach and update guidance to a range we believe we can deliver on.

Adjusted EBITDA for the third quarter was $22.7 million with GAAP-based net income of $1 million.

Operating expenses continue to be relatively stable quarter-to-quarter and we are seeing more operating leverage manifest itself within the new revenue gains. As we continue to scale, our ability to translate revenue growth into earnings remains a core strength of Harrow's model.

As we advance into the fourth quarter, we expect to see operating expenses moderately increase as further investments are made in our commercial infrastructure to accelerate sales and that trend should continue into 2026.

Let's turn to our product performance. VEVYE continues to outperform, generating approximately $22.6 million in revenue during the third quarter. This is a 22% increase from the second quarter of 2025.

This revenue increase was driven on continued increase in unit volumes year-over-year and quarter-over-quarter. VEVYE is set up for a record fourth quarter. October hit an all-time high in prescriptions and that momentum has carried right through the first week of November.

Q4 was VEVYE's strongest period last year. And with the trends we're seeing, I'm confident we're on track to finish near our $100 million annual revenue target for 2025, with additional, meaningful growth expected in 2026 as improved coverage kicks in and we further invest into VEVYE's commercial infrastructure to fuel the next phase of growth.

Turning to IHEEZO. Revenue for the third quarter came in at $21.9 million. This is up 20% from the second quarter. As we've seen in prior years, the third quarter tends to be seasonally softer due to the July and August slowdown as both patients and physicians take time off.

That said, demand rebounded sharply in September and remained strong through October. IHEEZO has significantly outperformed our expectations this year and is also on track for a very strong fourth quarter and a record year.

The fourth quarter has historically been IHEEZO's highest volume quarter, supported by end-of-year ordering patterns and stocking activity and we've already seen large orders placed early in the period. Based on those dynamics, we expect IHEEZO to deliver a strong close to 2025.

Our TRIESENCE and broader specialty branded portfolio generated $6.9 million in revenue. This is a 33% sequential increase.

As Mark discussed and highlighted in our Letter to Stockholders, with new leadership in place, a dedicated sales force, the launch of Harrow Access for All and TRIESENCE's launch into ocular inflammation, we now have the focus and strategies in place to reignite growth starting as early as the fourth quarter of this year.

ImprimisRx products continue to provide stable recurring revenue, generating approximately $20.1 million of revenue in the third quarter. As Mark mentioned earlier, if we are unable to resolve the dispute with the California Board of Pharmacy, we may see a minor impact on ImprimisRx's fourth quarter revenue.

In addition, ImprimisRx had an inventory shortage during the month of October, causing a onetime decrease of about $4 million to $6 million in its revenue for the fourth quarter.

In summary, we are fully focused on achieving our third consecutive year of 40% or higher annual revenue growth with all hands on deck across the organization.

VEVYE and IHEEZO are both positioned for a strong finish to the year and a record quarter. However, given the certain near-term factors, we're updating our full year outlook to a range of $270 million to $280 million. While our original target is still within reach, this new range is one I believe we can deliver on based on where we are today.

That said, the fundamentals of our business remain strong and I couldn't be more confident in the long-term growth trajectory.

Looking ahead, following what we expect to be a strong fourth quarter, we anticipate a typical seasonal decline from Q4 2025 to Q1 2026, likely consistent with the pattern we saw earlier this year. This doesn't mean that we won't achieve record results next year, which is what we expect to happen.

However, we want to establish that Q1 presents a seasonality that we need to consider. I'll provide more color on the magnitude of that dynamic when we report full year results, including the expected impact from the fourth quarter stocking activities.

Thanks, Andrew. My responsibility as Harrow's commercial leader is crystal clear, unlock the massive commercial potential in our portfolio and position Harrow for sustained, profitable growth.

As many of you know, I've been in this role for less than 6 months, but I am not new to commercial leadership, building successful teams to execute thoughtful strategies and ultimately delivering extraordinary results.

I would like to highlight the 5 commercial priorities that will drive my team's efforts. First, we're activating our advanced, key account management initiative. This is about deepening relationships with high-value accounts, fueling trial, accelerating adoption and building long-term loyalty across the brands.

Second, we're elevating our focus on driving depth and breadth, expanding our reach to more prescribers and new accounts while going deeper within existing users. This is key to unlocking the full potential of our portfolio.

Third, we have a scalable investment model across the commercial organization, one that allows us to grow efficiently, invest intelligently and maximize return on every dollar spent.

Fourth, we're expanding awareness of our Harrow Access solutions program to ensure a smooth and positive experience for both eyecare professionals and their patients. Removing barriers to access remains a cornerstone of our strategy.

And finally, we're sustaining operational discipline and stability, maintaining an efficient cost-base, while continuing to execute at a high level. These commercial acceleration priorities position us to drive stronger adoption, profitable growth and continue our journey as an emerging leader in the ophthalmic market.

VEVYE continued to strengthen and expand its position in the dry eye market during the third quarter, delivering strong and sustained growth. Our commercial strategy is working. We're seeing increasing physician confidence, excellent patient outcomes and faster, more affordable access to therapy.

By the end of September, we saw a 36% increase in prescribing physicians, a strong indicator of continued growth and expanding physician adoption.

Our VEVYE Access For All initiative remains a key enabler of growth for VEVYE, simplifying the patient experience and fueling demand.

Starting in January, VEVYE will appear on several new national formularies with preferred status, including the largest pharmacy benefit manager, the United States. VEVYE's improving coverage serves as another catalyst to expand utilization among eyecare physicians and among more patients with dry eye disease.

We anticipate that these increased coverage wins, many current cash pay patients will take advantage of VEVYE's improved coverage in their plans.

We also expanded our specialty pharmacy network. PhilRx handled all prescriptions in Q3, while Apollo Care went live in Q4 and [ AltoRx ] will follow later this quarter, steps to further improve patient access for patients. Combined with the broader payer coverage coming in 2026, these developments favorably position VEVYE for continued growth and pricing stability.

Let's look at VEVYE's outlook. Looking at the chart on the top left, the picture is clear. The dry eye disease market is large, active and growing. Branded segment is the key driver for growth in the overall market.

By the end of the third quarter, VEVYE captured 10.5% of the total dry eye market, up 2.7 share points from the prior quarter, effectively doubling its market share in just 2 quarters. It's a clear sign of strong, sustained growth and proof that our strategy is delivering results.

Our goal remains the same, to make VEVYE the number one prescribed cyclosporine therapy in the U.S. and we're making steady progress toward that. We're building momentum every quarter, increasing adoption, improving access and expanding coverage and we remain confident in our path to becoming the leading cyclosporine therapy in the dry eye space.

Looking ahead, we're focused on accelerating growth through both depth and breadth, deepening utilization with existing eyecare physicians, while expanding use among new physicians and their patients. Now that we are comfortable with our supply, we are also preparing for the next phase of expansion with plans to invest in VEVYE's commercial infrastructure and open 10 additional sales territories to fuel the next phase of growth.

We anticipate that more territories will open during the first half of 2026 and we are going to focus on markets served by the new plans that will cover VEVYE.

The momentum behind VEVYE is clear. With growing adoption, strong clinical outcomes, a patient-centric access model and improving coverage, we're just getting started. VEVYE has doubled its market share over the past 2 quarters and with new investments in our commercial infrastructure to support the next phase of expansion, the opportunity ahead is tremendous. I'm confident our team is fully aligned and focused on making VEVYE the new standard of care for dry eye disease.

Let's look at IHEEZO. IHEEZO had another excellent quarter. Unit demand was up 47% from last year and 3% sequentially. That's strong, sustained growth and continued proof that IHEEZO's value proposition is resonating in the market.

As expected, the third quarter followed normal seasonality, a brief slowdown in July and August, but demand rebounded quickly in September and continued through October. With a large order already placed in October, entering its strongest quarter of the year when we typically see increased stocking activity, IHEEZO is well positioned for a strong finish to 2025 and real momentum heading into 2026.

Our strategy is working exactly as planned. The retina pivot we executed last year, along with our new IHEEZO For All education initiative is driving awareness, engagement and adoption across retina practices.

Nearly half of the accounts ordering IHEEZO this year are brand new, a clear sign that we're expanding reach and deepening loyalty. With an 86% reorder rate, IHEEZO is not only winning new users, but also keeping them, a strong foundation for sustained growth ahead.

Looking ahead, we're still just scratching the surface of IHEEZO's potential. We're in the very early stages of this growth story and the opportunity ahead is tremendous.

Our retina team is focused on both driving both breadth and depth, reaching new accounts and deepening relationships with existing customers and expanding awareness among retina specialists.

As adoption continues to grow, we're confident that IHEEZO will become an even stronger growth engine for Harrow, especially once we introduce our biosimilars starting in mid-2026.

Shifting to TRIESENCE. TRIESENCE is showing real progress in the retina market. The trends we're seeing now indicate an acceleration in adoption and growing traction across the retinal community.

Since relaunching TRIESENCE last October in 2024, there has been a 4x growth factor with significant headroom remaining. TRIESENCE unit demand grew 67% sequentially.

Importantly, more than half of the accounts ordering TRIESENCE in the third quarter, about 53% were new customers. That tells us our reach is expanding and physicians are responding to TRIESENCE strong clinical performance and favorable reimbursement profile.

With its proven safety, excellent efficacy and broad payer coverage, TRIESENCE is well positioned to continue gaining share in the retina market.

The big news is our official launch of TRIESENCE into the ocular inflammation market, the largest and most promising opportunity for the brand to date. We're still early in the launch, but the response from the field has been encouraging.

Physicians are giving strong, positive feedback and early utilization trends are moving in the right direction. The early traction reinforced exactly what we believe from the start that TRIESENCE delivers real clinical value and fits seamlessly into physician workflows. We see this launch as a true catalyst, opening a major new growth channel for TRIESENCE.

With proven safety, strong efficacy and broad payer coverage, TRIESENCE is gaining traction in the retina market and has just entered its largest opportunity yet, ocular inflammation with positive early feedback. As awareness builds and adoption expands, I'm confident TRIESENCE will become a key growth driver and increasingly important contributor to Harrow's leadership in ophthalmic care.

Turning to Rare & Specialty products. This is an area of untapped potential for Harrow. Earlier this quarter, we're excited to welcome Tom Pertallo as the Vice President of this segment.

Tom brings deep commercial experience and a proven track record of driving growth and his leadership comes at exactly the right time as we work to unlock the full value of this portfolio. Right now these products represent less than 1% of the total market volume, which means the upside is significant.

With Tom leading the charge and a dedicated sales force being built to focus exclusively on this business, we're tightening execution, reenergizing our commercial approach and positioning these brands to return to growth.

We're also launching the Harrow Access for All program this quarter, which will improve affordability and expand patient access, key levers to drive sustainable growth across the portfolio. This portfolio once generated nearly $10 million quarterly revenue and we see a clear path to reignite that growth and ultimately exceed those levels.

With strong leadership now in place, renewed focus and clear strategies in place, I'm confident this business is positioned to return for growth and deliver stronger, more consistent performance moving forward.

To close, I couldn't be more excited about where Harrow is headed. We're still very early in the growth stage across all of our key growth drivers with significant catalysts and ample room for further growth.

We are well positioned for our next stage of growth. Our commercial momentum is strong. The plan is clear and the opportunities in front of us are huge.

In dry eye, VEVYE continues to lead the charge, expanding its share, broadening access, improving coverage and deepening adoption among prescribers. In retina, we're strengthening relationships, expanding awareness and gearing up for 2 major launches, BYOOVIZ in mid-2026 and OPUVIZ in mid-2027.

In the Surgical segment, we're building a differentiated portfolio that supports the perioperative space, delivering efficiency and value for practices. In Rare & Specialty, new leadership, a focused plan of action and the launch of Harrow Access for All, are unlocking the potential of a diverse portfolio that represents less than 1% of its addressable market today.

The opportunity across these 4 segments is tremendous. With best-in-class products, a scalable commercial platform and a disciplined strategy for execution, we're building a company with durable, long-term growth potential.

Harrow's path forward is clear, stronger execution, expanding leadership and sustained momentum across every part of the business.

With that, we can turn it over to the operator for Q&A.

[Operator Instructions] Our first question comes from Jeffrey Cohen with Ladenburg.

Congrats on the quarter. A couple from our end. Firstly, could you talk about VEVYE prescription data and why we don't see it this quarter?

Jeff, this is Mark. What we decided to do is to make sure that we have the most accurate information available. As you know, we withdrew from some of the reporting services, some of the data reporting services a few quarters ago.

And it's really important that we have confidence, absolute confidence that what we're putting out is accurate as possible. And from our perspective, I think, the key metric was revenue generated from these products and not necessarily IQVIA data or data from a data feed that may or may not be completely accurate. So because of that, we decided to change the way that we're reporting.

Andrew, do you want to add to that at all?

Yes. The only other part of that to add to what Mark was saying is really one of the reasons we're pulling out of these third-party aggregators were for competitive reasons. And so if we're doing that, it didn't really make sense to us to present the data and make it available to all of our competitors in our earnings release. That's driven a lot of the decision-making with presentation of the [ TRx ] data.

But to Mark's point, we're going to do our best to be transparent about the progress of VEVYE without giving up competitive positioning.

Okay. That's perfect. And then secondly, maybe for you, Andrew, could you talk about the leverage that you're achieving? You had some pretty nice leverage on the SG&A in the third quarter. But as you continue to expand your commercial teams, how should we think about leverage overall into 2026, mainly as a percent of revenues?

Yes. And this has been a topic for us that we brought up for a long time now where we expected to see operating leverage, especially this year in the model on the new revenue growth we expected.

We spent a lot of money on the operational and commercial infrastructure to support the branded group. That is mostly in place and we're seeing that leverage show up in the numbers.

Obviously, Q3, we had great adjusted EBITDA just under $23 million. The business is producing a lot of cash, I think about $16 million of cash in the third quarter from operations. And as we look out, Pat talked a little bit about adding to that commercial infrastructure to drive revenue.

The additional OpEx that we're looking at is revenue-generating OpEx, so we should start seeing immediate return on that expense.

So again, even though we're going to be making investments in the commercial infrastructure, it's not like it's going to be a 50% increase in OpEx, it's going to be a moderate increase. And importantly and this is probably the most important thing, that investment in the expense should see almost an immediate impact and return on revenue.

Our next question comes from Chase Knickerbocker with Craig-Hallum.

Maybe just first to start, a couple on VEVYE. Mark, you had mentioned in the stockholder letter that ASP was down modestly sequentially in Q3. Could you just define the magnitude of that modest decline for us just so we can kind of understand that?

And then just as we think about, you kind of spoke to stabilization in the near term. Can you just walk us through some of your modeling assumptions on VEVYE that kind of lead to that ASP stabilization in the near term? Is it improving mix that you're seeing so far in October? And then I've got a follow-up.

In terms of defining what modestly means, I can't give you a definition with precision. I mean, it's -- I think it's less than 10%. But I think the more important issue is how is ASP or net revenue per unit, how is that going to stabilize in the near term and then as I said on prior calls, begin to float up?

What is the justification for that? And to be very clear, we are really counting on coverage coming through. We're counting on the ratio of covered prescriptions versus cash pay prescriptions to flip or begin to change so that there's more of a bias towards covered prescriptions versus cash pay prescriptions.

If that happens, that's when you see the stabilization happen, that's when you see the ASP begin to float up. And the beautiful thing, I think, the exciting thing for us and I think you've actually noted this in your notes that I've seen is that that increase will affect the entire corpus, every single unit of VEVYE.

And so the question is how and when is that going to happen? And I tried to address that in the Letter to Stockholders. We discussed that in our prepared remarks.

And we now have landed this coverage win with the largest pharmacy benefit manager in the U.S. and specifically their commercial lives group, you're talking about tens of millions of new potential lives covered. And when you think about that ratio of covered prescriptions versus cash pay prescriptions, beginning January 1, we anticipate that ratio is going to begin to flip.

Actually, to be candid with you, I've had doctors send me letters that I know that have already gone out from this benefit manager to the physicians, letting them know about the plan changes that will take effect, drugs that will not be covered and the specific patients' names who will no longer be covered for that product and letting them know what the new formulary looks like.

So this is really exciting for VEVYE. We expect to start seeing some of those changes, those prescription flips from other dry eye products to VEVYE in the fourth quarter. We expect that will start to happen, but it will really kick in, in the first quarter.

And as I said, once that takes place, that ratio of covered versus cash pay will begin to change, you'll see that stabilization happen and I think, as I said in the last call, we'll start to see, I think, a bias towards ASP improving and potentially improving maybe even more than modestly.

Yes, that's what I was hoping to follow-up on is just any more specifics you'd be willing to share as far as the largest PBM, that win? Was it the commercial plans? Was it commercial and Medicare?

Just any sort of details there. And then as we think about that ASP improvement, to your point, any way you can help us kind of define how you see your current volume and kind of the amount of your current volume that could benefit from that win and how that affects ASP? And any thoughts you'd be willing to give there as we enter next year?

Yes. I would say that these are commercial lives, number one. So they're, I would say, the most attractive of those lives that you can get. So it's a major coverage one.

I was talking to our team earlier and I said, I hope that our investors, the main takeaway from the stockholder letter, I think, it's the most important part of the stockholder letter is this coverage win, because it dramatically changes things. I mean, if you get a $20 or $30 or $40 improvement and I'm not suggesting that we'll see a $40 improvement on ASP, but if it's a $20 improvement as an example, it affects every single one of those units.

And as units are growing and they will grow regardless, we are going to see significant improvement in total units for VEVYE. But the question is how much money are we going to make from all of those units. And I think that this improvement in coverage is going to be a major factor at the beginning of this coming year.

And you also know that we are very conservative in terms of how we invest commercially. We don't do extravaganza launches because we dip our toes into the water, we kind of get in, we see what works. It's just our style and it's the way that we've been able to invest in new product launches.

And for us to now make investments in VEVYE and specifically open up 10 new territories in the very near term and then I think by the middle part of next year, we're going to have upwards of about 100 total territories for VEVYE.

The reason why we're making those investments is because candidly, it would be malpractice for us not to make those investments now that we have such strong coverage in these specific markets.

So we're very bullish on VEVYE next year. I think you can expect to see some improvements in ASP as this ratio begins to flip and bias more covered versus cash pay prescriptions. And it's a really good time for VEVYE and the drug, by the way, is phenomenal.

If you've ever put the drug in your eye, it's phenomenal. I think it's the best product in the class. So it does a great job and patients love it and the refill rates are absolutely extraordinary, I believe, best-in-class.

Our next question comes from Steve Seedhouse with Cantor.

Hoping just to start you could give us a sense of what proportion of the VEVYE cash pay patients currently you'd actually expect to transition to insurance coverage in 2026 and just ballpark the expected impact that that particular variable would have on net price per unit.

Yes, I can't -- I don't know that we can give you the answer with precision. We actually have built internal models to try and estimate what that would look like.

This is the largest commercial PBM. And if you just model out how many dry eye patients they have and we do know how many dry eye prescriptions come from those plans, we can see a couple of things happening.

One, as I said, there are patients that have been denied coverage from those plans who are paying cash, who we will be able to reach out to and hopefully transition them from cash pay to covered because this is not just a nonpreferred brand status. This is a preferred status. So this is the lowest or in some cases, no co-pay type coverage. So it's really favorable coverage for VEVYE.

And then, of course, we, as I said, seeing the letters that have already gone out to physicians, letting them know that legacy products that patients were being prescribed are no longer covered. I know what those specific products are.

And I mean, I was looking at the number of patients, of course, not looking at the specific patients' names or any of that. But just one physician in one small community on one street, the number of patients and you start adding up these letters going out to thousands and thousands of physicians and it could be -- it could absolutely hit what we are thinking about internally in our modeling.

Andrew, do you want to add to that at all?

Yes. I think the one thing that I'm really excited about this coverage win is it kind of shows what -- and then I think we're going to really see it next year as we demonstrate the power of VAFA, which is really a long -- it's -- the VAFA program is, I almost call it a temporary program. It's not meant to be the program forever.

The goal of the program is to gain coverage wins and to increase patient access through insurance reimbursement. And through that, we think ASP will improve. What's great about the program, though, is it also sets us up where we kind of have a base to work off of when we're negotiating with PBMs and payers. There's no reason for us to take less money from a payer.

So when we're bidding, we're not going to bid ourselves into a hole. The VAFA program is working really well. I mean, it's exceeding our expectations on the cash pay side. And what that's doing is setting us up for a lot of long-term growth for the product, especially as the insurance wins come in and we think they will.

And we think that the program itself, just with the volume and demand we're seeing, brings us more negotiating power when we go to the payers and go through these bid cycles. And I think this -- like I said, this first coverage win is a good demonstration of that and we should see more of that in '26 and '27.

I just want to ask, just focusing on, I guess, fourth quarter specifically and on that point, you were just noting like you're in this moment, right, where the volume growth is tremendous and you have this sort of couple of month window between now and 2026, where it would be critical to keep people on drug until their insurance coverage kicks in.

So are you doing anything like providing free prescriptions beyond the first month to VAFA patients? Or just anything new to bridge that gap given the new coverage decisions that would impact fourth quarter revenue?

And then on the flip side, just with the addition of the new specialty pharmacies, is there any expected like inventory or stocking or sort of onetime impact to fourth quarter that we should be considering for our models?

Andrew, why don't you take the last question and I'll touch on the first question and ask Pat for some guidance as well.

Yes. On the -- on any inventory stocking, Steve, I don't think we'll see anything really that impactful with VEVYE in particular for the fourth quarter. These guys are ordering pretty almost just-in-time type ordering, not quite that regularly, but it's -- I would say they're taking less inventory than wholesalers typically would. So no real end of year impact related to that.

And specifically on keeping patients on therapy, I don't know that we want to go into any specific tactics, but I know that the dry eye team, Maria and her entire team are hustling. Pat, do you want to add to that at all?

Yes. Thanks, Mark. I think this is a super exciting opportunity and this is part of the plan. So I think to me, we have a very, very clear activation plan to really take advantage of evolving from VAFA to support these patients to really capitalizing on our managed care wins.

And I think to me, it's very much focused on the communications that are happening from the plans at this point in time to their patients, making sure that doctors know about our VAFA program and these wins that are going to be taking place to ultimately support the patient end of the year.

So we have a very robust high-touch program that is taking place and activating as we speak now that will continue to wrap up the year to support these patients and really accelerate growth at the end of the year.

I think in addition, our program right now, our fill program in VAFA is a very high-touch program. So we have a very, very clear view into who the patients are that are coming on our product and that are eligible for conversion to this commercial win. So super exciting time. But to answer your question, we have a very clear plan to really drive conversion and help these patients.

And I'll just add that I was excited. As soon as we got the coverage win, we got that information, I'll tell you, it gave me a lot of confidence in Pat and Maria and the team.

I mean they had -- I think they even had a name for the plan internally that they were going to begin to execute. And it was just a text message. It was just like, okay, let's fire it up. And it just gave me a lot of confidence that we have the right people, we have the right strategy to take advantage of this great opportunity and continue the growth in VEVYE. So kudos to the work that Pat and Maria are doing.

Our next question comes from Mayank Mamtani with B. Riley Securities.

Appreciate the detail on business momentum. So maybe just a high-level question on sort of this 3Q to 4Q dynamics. Some you observed last year versus others you were talking to are unique to -- you have this year.

Was just curious if you could comment a little bit on the notably high sort of $80 million revenue threshold in 4Q. It's sort of sequentially double versus what you had in 3Q. And it seems a lot to be still driven by VEVYE, I think, 60% over sequentially.

Any color, Mark, you can give on volume versus price kind of dynamic here that you're assuming across the different lines -- different product lines? And then I have a follow-up.

On Q4, what I would say is I think last year, Andrew, Q4 was probably upwards of 1/3, maybe a smidge higher than 1/3 of our overall revenue for the annual period. That will -- I wouldn't expect that to change this year.

I think that we can do around that range this year. I think the exciting thing about Q4 for what it's worth is the emergence of TRIESENCE finally. I think we -- I was quite candid in the letter. We could have done a lot better. We should have done a lot better with TRIESENCE in every period this year, the first 3 periods and the same is true with our Rare & Specialty portfolio.

But the key is, is that we've taken action. TRIESENCE, I think we're seeing really exciting things, not just in words, but in deeds. As I was telling the team, we're not at a point where Mark can get on a conference call and say, "Hey, I'm really excited about TRIESENCE. I think this is going to be fantastic."

It's time for orders. It's time for revenue. It's time for reorders. It's time for new accounts starting and adopting. And because I'm seeing that, I'm actually -- I've been involved in the sales process myself. I've been communicating with high-volume surgeons and talking to them about TRIESENCE specifically and I'm actually seeing surgeries start with it. And that's exciting.

I've been through that cycle. I've seen that cycle. And so that gives me a lot of confidence in where we're going with that product, not only beginning to feather in, in the fourth quarter, but really for next year. It's going to get to where we thought it would be and that's super important. In terms of other dynamics between Q3 and Q4, Andrew, do you want to comment on any of that?

Yes, Mayank, I think we've kind of talked about VEVYE on the ASP side and expecting at least stabilization there. Typically, at the end of the year, your patients are out of that co-pay deductible and amounts like that.

So our co-pay buydowns are a little bit lower on a per unit basis. So hopefully, that helps to see a little bit of price improvement. But in general, the expectation is we're going to see volume improve across the portfolio that will drive most of the revenue growth for the quarter.

Great. And then one -- actually a couple of specific product level questions. So Project Beagle enabled patients who crossed over to branded VEVYE. You may have some information there on the conversion rate from cash pay maybe to commercial insurance covered scripts. I don't know if that was something you can share or has given you some learnings moving forward?

And then on TRIESENCE, are you able to comment on what the new price point is? Looks like you're really focused on access to enable significant volume growth as you enter the ocular inflammation market. And obviously, very curious to hear your goal here to -- how close you're trying to get to when the product was not on the shortage list a few years ago?

In terms of Project Beagle and specifically the transition from Klarity-C to VEVYE, we really don't have much more to add to that. I think we had more than 25,000 patients that were using cash pay Klarity-C.

We stopped making Klarity-C in the summertime. And I think largely, those conversions have taken place. There's probably some units out in the field in various offices around the country.

But I expect for that to be kind of mopped up by the end of the year for sure. And those patients who will have transitioned to VEVYE will have made that transition.

In terms of TRIESENCE pricing, the pricing was at $9.44. You're moving into the ocular inflammation market. The products in that category are probably 20%, 25% lower in price. And I believe and I think our team believes that price was -- would have affected adoption and in particular, as we focused on that ocular inflammation market.

It was a good move, by the way. New orders are coming. As I said, it's not Mark talking about what might happen, what could happen. It's Mark talking about orders coming in, revenue reorders.

And as I said in the stockholder letter, we have now confirmed reimbursement. So you're talking about a product that is -- has tremendous coverage, an extraordinarily low prior authorization rate, a multi-decade track record of performance. It's a product that is, I would say, beloved by ocular surgeons.

And there are a number of other reasons why -- clinical reasons as well as economic reasons why TRIESENCE is so exciting to these physicians that really didn't know that this level of reimbursement was available for this product.

So we are seeing really positive things. I have been through this before. Our first product was a product called Tri-Moxi. It was a compounded combination of triamcinolone acetonide and moxifloxacin hydrochloride and I remember the adoption cycle there.

What happens in the surgical environment, in particular, is you get a few cases and I tried to describe it in the letter of stockholders and then they see that it performs terrific clinically. Now we've gone through the reimbursement cycle.

There's really no reason why these physicians can't use this pervasively throughout their practice. And so there is this cycle to adoption and we're going through those cycles right now.

What's really neat is once those physicians adopt this and it starts working so well for their patients and they see their patients coming in with clean white eyes on their post-op day 1, they don't want to change. And then when they talk to their administrators at their surgery centers and they hear that they were reimbursed and they didn't have to deal with prior authorizations, they just don't want to change.

And then it grows and grows and grows. At our peak with a non-FDA-approved compounded product, we were doing in excess of probably 300,000 units of Tri-Moxi and Tri-Moxi-Vanc years ago and some of these other sterile injectables.

And so when I think about what TRIESENCE had done many years ago versus what we were doing with a non-FDA-approved product, which was significantly more than TRIESENCE in terms of annual unit volumes, I say that the units that we were doing with a non-FDA-approved product were miniscule relative to what the overall market opportunity is.

And I just wonder why more -- why any surgeon would not use TRIESENCE. And so we think that this is going to become, hopefully, the new standard of care for these patients.

And if it was my mother, if it was someone that I love that was having a procedure and they could have the physician inject the medication to ensure that they had the medication on board and that they would not have to as a 75, 78, 80-year-old patient with comorbidities, have to administer eye drops post-surgery, I think I would want my mother's physician to choose TRIESENCE.

So we think more and more physicians will. It's an exciting time for that product and we're just scratching the surface. I don't even know that you could even call it a scratch at this point.

Our next question comes from Tom Shrader with BTIG.

Congratulations on the quarter. The TRIESENCE, that had a pretty good user base before and we agree people loved the drug. Is it easy to move back into those people? Or have they moved on?

Could you just give us a sense of is that low-hanging fruit? Are those people waiting for the drug? And then you commented on fueling commercial operations for VEVYE. Does that mean adding conventional salespeople? And if so what other products do you think they could most easily help? Is TRIESENCE too far away for someone to market both VEVYE and TRIESENCE?

Yes. I don't want to keep talking, but if you don't mind, I'm going to take both, if that's all right. In terms of how easy it is to reengage and whether these physicians have moved on, when TRIESENCE was not available, without question they moved on.

They started using [indiscernible] which has preservatives. It's got benzyl alcohol in it. If you're the patient, if the patient is someone you love, you don't want the doctor putting a chemical in their eye that could potentially blind them.

And so that is why Alcon many years ago sought FDA approval for TRIESENCE because there was a clear unmet need in the marketplace for a preservative-free triamcinolone acetonide and that is TRIESENCE. That's what makes the product very special.

And if you knew that an iPhone 17 was not available, maybe you go back to the BlackBerry. But boy, as soon as you found out that the iPhone 17 was available, you're going to switch back.

It does take time to reengage with these physicians. Many of them, even to this day, don't know that TRIESENCE is available, that it's in stock. They don't know about the low prior authorization rate, the reimbursement and coverage.

But that's our job. That's Chad's job. That's the job of this team that is going out, [ Aly ] and her folks and Adam and really making it happen for this product. And it takes time.

I mean, you're talking about thousands and thousands of call points, but they're doing a great job. They're making progress. I think Pat talked about that.

And for Harrow and our stockholders, the juice will be worth a squeeze. I mean, this is a tremendous product. I've always said that I saw TRIESENCE as a 9-figure revenue product. I think we're going to get there in due course. You wouldn't think that from the first quarter to the second quarter and the third quarter.

But I think if we speak this time next year, you will see that I was not delusional. And then finally, in terms of commercial ops for VEVYE, we're making those investments because we have coverage.

When you have coverage, when you have the ability to have a prescription written and to get it filled in sort of a friction-free way and what we do know, by the way, and we've talked about this in prior stockholder letters is that when we get a commercially covered VEVYE patient through our process, we retain them. Our refill rate is amazing for a commercially covered patient.

So once we get that patient now that we can get them covered, we can retain them because the product is so spectacular. It provides us with a sort of a compounding effect as we get more new patients and retain them, you'll see that continued growth.

In terms of other products that we're going to put in their bag, if you go through the corporate deck, one of the things I'm really excited about is we actually did add 2 products to the bag of our dry eye team. We have an amazing dry eye team.

It will be growing. As I said, by the middle of next year, we'll have 100 territories. So Maria is going to have a much larger group of folks to manage. And they will also be helping patients and giving them access to FLAREX and they'll be getting -- they'll have FRESHKOTE in their bag as well.

And so the combination of a chronic care dry eye medication with other related products that cover ocular inflammation and FRESHKOTE in particular, which I think if you Google FRESHKOTE, you start looking at some of the marketing materials and its ability through polyvinyl alcohol base to actually help patients retain their tears and prevent evaporation, I think that's a really terrific product that the team is excited about.

And by the way, it's over the counter. I think you can get it for under $30 a unit. It's over the counter. So you don't need a prescription for it. So we're going to do some exciting things with FRESHKOTE. Maria has got FLAREX now. And of course, the cornerstone product in her portfolio was VEVYE.

Our next question comes from Lachlan Hanbury-Brown with William Blair.

I guess I'd be curious on the new coverage for VEVYE. Can you just talk about how the economics there shake up or stack up compared to the current net pricing you're seeing? Because I know you've been sort of vocal, Mark, in the past about the economics that PBMs try to extract.

So would be interested to know just sort of where that shakes out. And also once those new plans come online in '26, what kind of coverage level are you looking at? Like what proportion of commercial lives nationally are covered for VEVYE?

Yes. What I can tell you, and Andrew mentioned this, is that when you have a VAFA program and you establish a base, it takes you out of what we would call desperation mode to do bad deals with PBMs. Andrew, do you want to kind of add to that? You talked about it a little while earlier.

Yes, without giving away the kind of bid, like Mark is saying, like I was saying that we kind of start with a base and we say, okay, if we're going to get a coverage win, what we want -- what does the economics need to be?

And it obviously has to be an improvement on the cash number that we have. And so what that means and what I think -- and without getting -- being specific about what that impact is going to be, the expectation is it's going to be an improvement for those patients over what they -- over the cash price that we would net on a per unit basis.

And we've talked a lot about just the ASP impact of the coverage win and that will help stabilize and certainly increase that number in 2026. But there's another aspect to this, which is VEVYE was not preferred in this plan and Mark kind of talked about this.

The fact that now it is preferred and another product got pulled out of that preferred status, the payer is letting the physicians know, hey, your patient was on this product and it's not going to be preferred next year, but VEVYE is.

So not only are we going to get the increase in ASP, but just getting that preferred status, the PBM is helping us drive volume. And so you're going to -- it kind of one begets the other, but it's going to be an increase in ASP. It should also be an increase in volume as well for the product.

Great. And maybe a quick one on the VEVYE expansion, the new territory. So just to make sure I heard correctly, is that you're adding 10 new reps this quarter and then we'll keep adding more until you get to about 100 next year, which if I have my numbers right, is sort of roughly double where you're at now?

Yes. So we're going to increase by 10. We'll get to a little bit more than 60 here in the very near term. And then by the second quarter, we'll hopefully have -- we'll reach the century mark, we'll have about 100 territories.

Our next question comes from Thomas Flaten with Lake Street Capital Markets.

Mark, just a follow-up. You mentioned the refill rates are great. Could you give us a sense of duration of therapy that some of these long-duration patients are on products for?

I think last time that we looked at the data for a commercially covered patient, if you look at their initial prescription plus the refills and you add -- you just think about the number of drops per bottle and the number of dosages per day. I mean, I think we were almost -- we were right at these commercially covered patients getting therapy for the entirety of the year.

I mean, I think it was only a few weeks away from, on average, refilling for the entirety of the year. I mean, we would have never ever thought that we would get that sort of affinity of refill rate for that patient. I mean, that was not anywhere even in the highest, the boldest of bold cases in our models. So that's what we've seen.

And Andrew, do you want to add to that at all?

No, nothing to add.

And then maybe if I could, bigger picture. You guys have been pretty busy on the BD front and have kind of created a really impressive to-do list for yourselves over the next couple of years.

What should we anticipate in '26, '27? Is this more of an absorb, digest and act? Or is it more deals, more deals? Where do you land on that?

Well, I think at our office today and over the next week or so, we are over the moon excited about Melt. And I don't think we've talked about Melt really at all, but we're hoping to get this closed here in the very near term.

And I don't think people really understand the value of Melt and what the potential is there. It's really transformative for us. And so yes, we can -- we look at deals constantly. We're always evaluating things.

But if you look at our portfolio and you think about some of the strategic goals that we've discussed and I've laid out even in the letter, in particular, around cataract surgery, the vision for ophthalmic surgery that we have, which is to have opioid IV and drop-free cataract surgery, that's exciting for patients. That's transformative.

The idea that you can probably go into an office, have office space, maybe even bilateral same-day cataract surgery and on the pharma side, have no IVs, no opioids and not need eye drops post-surgery, that's extraordinary. And that's what Melt and some of the other products that we have will enable.

That's transformative for the nearly 5 million surgeries that occur annually in the U.S. So we are looking at other deals. We're very interested in other deals. But right now we're super pumped about Melt.

We want to get that closed. We want to get the balance of the data collected and put into a dossier so that we can submit an NDA and get that product approved and help realize this vision that we have to really transform ophthalmic surgery.

And then eventually, hopefully see the MELT-300 drug candidate used outside of ophthalmology, which is really a much bigger market opportunity in dental and GI and claustrophobia for MRIs and the tens of millions of annual uses in the U.S. where we think the MELT-300 will be impactful.

And then, of course, what's also interesting is this will be the first global play that we have. Historically, we've been a U.S.-focused business. And as you, I think, know, MELT-300 is not only patented, multiple patents issued domestically, but in all of the -- many of the major markets around the world.

So it's a global opportunity as well that we hope to discuss with partners in other markets around the world. So lots to look at, but I'll tell you, when we look at what we have with Melt and the products that we've acquired over the years recently, we have just something very, very special that we need to execute on. And I'm really pleased to have Pat as my partner, our partner to help us do that.

Our next question comes from Yi Chen with H.C. Wainwright.

Mark, you mentioned that with the coverage win, some prescription flipped to VEVYE. Could you give some additional color on market dynamics, whether those prescriptions flip to VEVYE, they originally came from prescription for other cyclosporine formulations or they could be -- they came from non-cyclosporine prescriptions as well?

Yes. So the -- in terms of who is who -- which product was the -- incurred the loss to our potential win, it was really -- and I don't want to go into the specific products, but they were not cyclosporine-based products, but they were anti-inflammatories.

And you might be able to figure out which ones they were. But in any case, for us, we are really focused on being the #1 cyclosporine in the market. And I think this really adds to that momentum.

I think to be the #1 cyclosporine in the market, you're talking about, I think, with generics, probably 22%, 23% market share. We're a little over 10%. We do expect to see NTP improvement as we get more and more coverage and that ratio flips.

But this is going to really help us I think drive not only new prescriptions from patients naturally, but I think from these flips. As I said, I've seen the letters that have gone out to the eyecare professionals. It lists the product that is no longer covered and it lists the patients.

And I know from the few physicians that I've spoken to that their intention is to move them to VEVYE. However, I have to say, if you go around the country, there are many physicians in many markets all over the country that have no idea what VEVYE is.

And it's our job to make sure that they not only know about the clinical value that VEVYE brings, but also now the new coverage, which will, I think, create a more friction-free process for prescribing.

I'm showing no further questions. I'd like to turn the call back over to Mark Baum, CEO, for closing remarks.

Thank you, operator, and thanks, everyone, for their questions. And we really appreciate you joining us today. As we look into the future, I remain confident in where we're heading.

We've built a solid foundation. We've brought together an outstanding leadership team and defined a clear strategy that touches every part of our business. And we have a portfolio of best-in-class products and expanding access for patients and physicians and driving a culture that thrives on focus and execution. It positions Harrow for sustained growth and long-term value creation.

The opportunities that we have ahead of us with TRIESENCE and VEVYE and IHEEZO are tremendous and we are ready to capture them. If you have any further questions or you need additional information, please don't hesitate to reach out to Mike Biega. His e-mail address is m as in Mary, b as in bravo, [email protected]. This will conclude our call.

Thank you for your participation. You may now disconnect. Good day.