Harrow Inc is a company which makes medications for eyes. It’s a founder led company and the CEO Mark Baum has impressed me over the material I’ve reviewed. They have 17 products in total with their two main products showing incredible quarter over quarter growth.
VEVYE, a dry eye medication, has sales up 212% qoq
IHEEZO, an ophthalmic anesthetic, has sales up 98% qoq
These numbers line up well with the last four quarters of reported revenue numbers where revenue was more flat but has exploded in the last quarter. The last year of revenue looks like,
34.3M → 36.4 → 34.6 → 48.9
VEVYE was only launched in 2024, and IHEEZO was launched last year. Additionally they have a medication TRIESENCE which they own and bought the rights from Novartis. It is in high demand from doctors but has been off the market for the last few years. The manufacturing process for this medication is challenging, but the company says they have produced quantities which look good and are awaiting approval.
Harrow has an investment in a Melt Pharmaceuticals which they basically started and own 46% of the company with a 5% royalty rate. The product produced is a sublingual tab that serves as anesthetic or sedation medication. It started in the eye market but doctors from dermatology, surgeons and veterinarians are now using the product. It’s a compounded drug which is now seeking FDA approval. In the meantime they will have sold 150k over the course of this year.
Lastly accounting for the rest of Harrow’s 17 total products they have ImprimisRX which has a lot of products that eye doctors need. One standout is they have the only FDA approved anti-fungal in this basket of products.
Having reviewed their Q2, Q1, HC Wainwright conference, and Cantor Fitzgerald conference, there are a number of points which I believe make this company an attractive investment,
First on specific drugs and compounds they make,
IHEEZO
- ocular anesthetic, first new one approved by the FDA in more than a decade and launched last year, treats macular degeneration
- only reimbursable product for this segment and patent lasts through 2039, reorder rate of 87%
- market penetration is “de minimus in the 1% range” with lots of room to grow
- large TAM, 10M annual intravitreal injections
- “beyond actually what our internal projections were”
- Q1 → Q2 saw a large jump in customer unit demand, expect more growth in second half
- on track for 9-figure annual revenue
- have supply agreements in place with vast majority of the major purchasers of these products
- very attractive economics, performing well clinically
- getting 10% of intravitreal injections market will make “a lot of very happy stock holders”
- in Q1 executed supply agreements with seven large multi-practice strategic accounts
VEVYE
- category leading dry eye product that delivers 22x more cyclosporin to the cornea than RESTASIS a popular competitor
- other competitors have worse side effects and lower duration of effect
- value is in the refills for shareholders, seeing “absolutely extraordinary” refill rates, “way beyond our internal projections”
- refill rates are better than even for glaucoma medications, and the “penalty for not taking glaucoma medication is you go blind”
- everything about the drug is up and to the right on all metrics including refills and total prescriptions
- competing products do not have great refill rates, studied the market before releasing
- IQVIA data (some independent data provider) shows breaking records with VEVYE
- product will be sold for a “long, long time and has category leading potential”
- going through the process of attaining Medicare coverage now
- going to have 100% of Medicaid market by time of next report
- there has not been a dry eye product on the market that generates this type of benefit
TRIESENCE
- third leg of the stool
- long admired drug from Novartis has been on shortage list north of five years and completely out of stock last two years
- beloved product in ophthalmology and doctors want it back in stock
- making three commercial batches now with promising results, prior batches had issues
- hope to be able to relaunch and sell units from three latest batches during Q4
- also has product specific J-code meaning it’s reimbursable
- 90,000 gross units from three test batches, can be sold commercially later, not factored in any guide
- so many great reasons doctors like TRIESCENSE, easy to make friends in the industry with this product
ImprimisRx
- compounding business, “throws off a lot of cash”
- record revenues last quarter of 21M, expecting growth to be in the 10%+ range (not sure if that meant qoq or yoy)
MELT 300
- combination of midazolam and ketamine, under tongue for sedation, looking to get product FDA approved so it is easier to sell and become reimbursable, doctors fine to pay cash now
- plan is to stop selling the compounded version once getting FDA approval
- all different types of doctors started calling and asking to purchase the product
- in midst of phase 3 study after phase 2 data showed exceptional data on sedation
- eliminates need for opioid or IV
Some other points gathered throughout my research,
- sequential revenue increase of 42%
- core gross margins floating up into the 80s
- remaining products are “workhorse group” such as anti-inflammatories, anti-bacterial, and anti-fungal
- workhorse group creates a lot of friends in the eye care professional community
- “1B annual revenue run rate is achievable by 2027” (analysts project 2026 revenue at less than 400M)
- attracted a ton of new talented employees, high profile ones such as Greg Depasquale who left Regeneron running a 6B portfolio there
- new employees joining because they believe in the promise of IHEEZO
- sales force really going to kick in on years 2025 and 2026, see many Qs and “actually several years of continued growth through 2027”
- “we are just really jazzed, tough 10-12 years to get to this point, having fun and growing, we see a lot of blue sky”
My biggest concerns for the company are that net income is still negative at -6.5M in the last quarter and they haven’t been showing a profit yet. However, I’m willing to overlook this for now as the last sequential revenue growth was incredible. I would normally like to see more of a pattern of acceleration in revenue growth rather than just a sudden jump up one quarter.
However, I believe the revenue growth is directly attributable to their products absolutely taking off in the marketplace. It would be rare enough to have one product grow 200% qoq, but there’s a second product growing nearly 100% qoq as well, with a lot of other promising opportunities in their third major product which isn’t even accounted for in guidance. The company has a had a big run-up in stock price recently and probably deservedly so, valuation may be on the higher side but I still think this is an attractive opportunity at the moment.