Harrow's third quarter results show 45% revenue growth, driven by VIVI's new coverage agreements and strong product momentum, positioning for a record fourth quarter.

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

Thank you. Operator Good morning and welcome to HARO's third quarter 2025 earnings conference call. My name is Mike Viega, 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 a link in the Investor section of our website@www.haro.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 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 10K and subsequent quarterly reports on Form 10Q 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, Hara will refer to non GAAP financial metrics, specifically adjusted EBITDA and or adjusted earnings, as well as core results such as core gross margin, core net income and core diluted net income per share. A reconciliation of any non GAAP measures with the most directly comparable GAAP measures is included in the Company's earnings 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 Boal, President and Chief Financial Officer and Patrick Sullivan, Head of Commercial. With that, I would like to turn.

The call over to Mark Mark Thanks.

Mike, and good morning to everyone. Thanks for joining us today. As always, please review our supplemental documents for the third quarter, including our earnings release, corporate presentation and letter to stockholders, all of which are now available on the Investor Relations section of our corporate website. During this call and in future quarterly conference calls, I'm pleased to have Pat Sullivan, haro's Head of Commercial, join us next quarter. I intend to have our Chief Scientific Officer, Amir Shojay 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 US ophthalmic company. Now 12 years into building this patient and physician centric business, I believe we're still just getting started. Our key products are in their early stages of launch with tremendous and durable growth ahead as adoption continues to accelerate over the next two years, we have four new product launches scheduled, each representing a significant opportunity to expand our reach, strengthen our leadership and pave the way for even greater growth in the future. I am particularly proud of the fully scalable commercial infrastructure we've built, which will soon support multiple launches and continued expansion without requiring heavy additional investment. Combine that with a low risk capital, efficient pipeline development and M and A strategy and it's clear HARO's growth and market impact are in their infancy. Now. Our momentum continued during the third quarter with rising revenue and clear evidence of the operating leverage in our business model. As I've mentioned before, some areas of our business will overperform, while others may lag, sometimes due to seasonal factors, and the third quarter was no exception. What matters most though is the overall trajectory of the business and that trajectory remains very strong. Our key growth engines such as Vivi, Iheso and to a certain extent beginning very recently triessence, are rolling and momentum continues to build across the business, especially as we approach the launch of the Samsung Biosimilar portfolio and conclude the acquisition of Melt Pharmaceuticals, which I'm very excited about now. Vivuy and Iheso continue to lead the way and are on track to finish the year very strong. In fact, 2025 is expected to be a record year for both products. They've shown consistent momentum and continue to drive the majority of our growth, driven by strong demand and best in class clinical performance. Vivi delivered 22% quarter over quarter revenue growth Perhaps a key highlight of my remarks though should be the news that we have recently signed agreements with several leading national payers for Vivi. Beginning in January 2026, only a couple of months away, VIVI will be listed on multiple new formularies with a preferred product status, including the largest US Pharmacy benefit manager. This means that certain products are becoming uncovered and that creates an opportunity for prescription transfers and going forward VBI will be covered on those formularies. This particular PBM covers tens of millions of lives and I view this as a major development for VIVI and for haro. With major improvements in coverage and the addition of Apollo Care and Alto joining our specialty pharmacy network this quarter, we expect a higher proportion of patients will receive VIVI as a covered therapy. These advancements strengthen vivi's market access foundation and fuel continued prescription growth, resulting in an improved ratio of covered to cash pay prescriptions. This includes estimates of current cash pay patients who are likely to convert to covered prescriptions and that gives us confidence in vivi's pricing stability and long term growth. IHESO also had an excellent quarter, delivering 20% quarter over quarter revenue growth. That's an impressive performance given the typical seasonal slowdown for that product in the third quarter. Meanwhile, Triescence and our Rare and Specialty portfolio underperformed this year as I talk more about in our stockholder letter and that also included the third quarter. The good news though is that we have the right leadership and strategies in place I believe to get both on track in short order. Triessense in particular is gaining traction in Retina and as of October of this year we launched it in its largest market opportunity yet, Ocular inflammation. Our Rare and Specialty portfolio also has new leadership and they are supporting our HARO Access for All program which is positioned to return this portfolio to growth beginning in the fourth quarter and into 2026. Please review the letter to stockholders for more specific thoughts though, on Triessense and our Rare and Specialty Products portfolio. We also made important strategic moves this quarter as we work to complete the acquisition of Melt Pharmaceuticals and its non opioid procedural sedation candidate melt 300 and we also expanded our Access for All model across our entire ophthalmic portfolio. We're also preparing for four product launches over the next three years, Bioviz, Opiovis, Biclovi and Melt 300, which I'm particularly excited about. In short, our strategy is bearing fruit. We're executing with discipline, scaling with purpose and building a company defined by innovation, access and sustainable growth, creating meaningful long term value for both patients and shareholders. Before I hand it over to Andrew, I want to take a moment to address our Imprimis Rx 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. Imprimis Rx 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 Boal.

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 nine 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 in the next slide, we are updating our full year revenue outlook to a range of 270 to 280 million dollars, 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 for 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 continued 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 haro'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. VIVI 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. VIVI 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 Vivi'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 vivi's commercial infrastructure to fuel the next phase of growth. Turning to IHESO, 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. IHISA 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 IHESO'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 Diheso to deliver a Strong close to 2025. Our TriesSense 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, we with new leadership in place, a dedicated sales force, the launch of Hero Access for all and Triessen'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. ImpermisRx 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 Impermis Rx's fourth quarter revenue. In addition, Impermis RX had an inventory shortage during the month of October, causing a one time decrease of about 4 to 6 million dollars in its revenue. For the fourth quarter. In summary, we are fully focused on achieving our third consecutive year 40% or higher annual revenue growth. With all hands on deck across the organization, VIVA and dihesa 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 to 280 million dollars. 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 it could 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 4th quarter ST activities thanks Andrew.

My responsibility as Haro's commercial leader is crystal clear Unlock the massive commercial potential in our portfolio and position HARO for sustained, profitable growth. As many of you know, I've been in this role for less than six 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 five 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 HARO Access Solutions program to ensure a smooth and positive experience for both eye care 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. VIVI 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 VIVI Access for All initiative remains a key enabler of growth for vivi, simplifying the patient experience and fueling demand. Starting in January, VIVI will appear on several new national formularies with preferred status, including the largest pharmacy benefit manager in the United States. Vivi's improving coverage serves as another catalyst to expand utilization among eye care 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 vivi's improved coverage in their plans. We also expanded our specialty pharmacy network. Vilrx handled all prescriptions in Q3, while Apollo Care went live in Q4 and Alto RX will follow later this quarter, steps that further improve patient access for patients. Combined with the broader payer coverage coming in 2026, these developments favorably position VIVI for continued growth and pricing stability. Let's look at vivi's outlook. Looking at the chart on the top left, the picture is clear. The dry eye disease market is large, active and growing. The branded segment is the key driver for growth in the overall market. By the end of the third quarter, Vivi captured 10.5% of the total dry market, up 2.7 share points from the prior quarter, effectively doubling its market share in just two 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 VIVI the number one prescribed cyclosporine therapy in the US 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 eye care 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 Devi'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 dbuy. The momentum behind VIVI is clear. With growing adoption, strong clinical outcomes, a patient centric access model, and improving coverage, we're just getting started. VIVI has doubled its market share over the past two 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 VIVI the new standard of care for dry disease. Let's look at Iheso. IHESO had another excellent quarter unit demand was up 47% from last year and 3% sequentially. That's strong, sustained growth and continued proof that IHESO'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 the large order already placed in October entering its strongest quarter of the year, when we typically see increased stocking activity, IHESO 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 Iheso for All education initiative is driving awareness, engagement and adoption across Retina practices. Nearly half of the accounts ordering Iheso this year are brand new, a clear sign that we're expanding reach and deepening loyalty. With an 86% reorder rate, IHESO 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 Ihizo'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 IHESA will become an even stronger growth engine for Haro, especially once we introduce our buyer similars starting in mid-2026. Shifting to triessence Triessense 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 Triessense Last October in 2024 there has been a four times growth factor with significant headroom remaining. Triessense unit demand grew 67% sequentially. Importantly, more than half of the accounts ordering triescence in the third quarter, about 53% were new customers. That tells us our reach is expanding and physicians are responding to Triessen's strong clinical performance and favorable reimbursement profile. With its proven safety, excellent efficacy and broad payer coverage, Triessense is well positioned to continue gaining share in the retina market. The big news is our official launch of Triessense 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 Triescence 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 triescence. With proven safety, strong efficacy and broad payer coverage, Triessense 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 Triessence will become a key growth driver and increasingly important contributor to Harrow's leadership in ophthalmicare. Turning to rare and specialty products. This is an area of untapped potential for haro. Earlier this quarter, we're excited to welcome Tom Curtallo 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, re energizing our commercial approach and positioning these brands to return to growth. We're also launching the HARO 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 HARO is headed. We're still very early in the growth stages across all 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, Vivi 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 two major launches, Bioviz 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 and specialty. New leadership, a focused plan of action and the launch of Haro 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 four 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. Haro'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 and A.

If your question has been answered and you'd like to remove yourself from the queue, press star 11 again, our first question comes from Jeffrey Cohen with Ladenburg. Your line is open.

Good morning. Thanks for taking our questions and congrats on the quarter. A couple from Erin. Firstly, could you talk about prescription data and why we don't see it this quarter? Hey Jeff, this is Mark. Thanks for the question. You know, 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 you know, from our perspective, I think the key metric was revenue generated from these products and not necessarily IQVA 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?

Yeah, and thanks Jeff. The only other part of that to add to what Mark was saying is really, you know, one of the reasons we kind of were pulling out of these third party aggregators were for competitive reasons. And so if we're doing that, it doesn't really, didn't really make sense to us to present the data, to then present the data and make it available to all of our competitors in our earnings release. So there's, 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 VIVI 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 SGMA 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.

Yeah, and this has been a topic for us that we've 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 that investment in the expense should see almost an immediate impact and return on revenue.

Okay, got it. Thanks for taking our questions. Congrats on the quarter. Thank you, Jeff. Thanks, Jeff.

Thank you. Our next question comes from Chase Knickerbocker. We with Craig Hallam. Your line is open.

Good morning. Thanks for taking the questions. Maybe just first to start A couple on DVI, Mark, you had mentioned in 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. And then in near term, can you just walk us through some of your modeling assumptions on VIVI that kind of lead to that ASP stabilization in the near term, is it, you know, improving mix that you're seeing so far in October? And then I've got a follow up. Thanks.

Thanks for the question. Chase, in terms of defining what modestly means, you know, I can't give you the definition with precision. I mean it's, 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 I, you know, to be very clear, you know, we're 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 you know, I think, you know, 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 vivi. 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 on our, in our prepared remarks when we now have landed, you know, this coverage win with the largest pharmacy benefit manager in the US and specifically their commercial lives group. You know, you're talking about tens of millions of new potential lives covered. And when you think about that ratio of covered prescriptions versus cash paid prescriptions beginning January 1st, 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 vivi. You know, we expect to start seeing some of those changes, those prescription flips from other dry eye products to VIVI 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, you know, potentially improving, maybe even more than modestly.

Yeah, that's what I was hoping to follow up on is just any more specifics you'd be willing to share as far as that, that, you know, the largest PBM that win was it, was it their commercial plans? Was it the commercial commercial and Medicare? Just any sort of details there. And then as we think about that asp improvement. To your point, you know, 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?

Yeah, 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. It's a major coverage winner. 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, you know, 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. Those units. And as units are growing, and they will grow regardless, we are going to see significant improvement in total units for vivi. 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. Is going to be a major factor beginning at the beginning of this coming year. And you also know that, you know, 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 VIVI 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 Vivi. The reason why we're making those investments is because, you know, 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 vivi. 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, you know, it's just, it's a. It's a really good time for vivi. 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 does a great job and patients love it. And the refill rates are absolutely extraordinary, I believe. Best in class.

Very helpful color, Mark. Thank you.

Thanks, Jenny.

Thank you. Our next question comes from Steve Seedhouse with Cancer. Your line is open.

Hey, good morning. Thanks for the question. Hoping just to start, you could give us a sense of what proportion of the VIVI cash pay patients currently you'd actually expect to transition to insurance coverage in 2026 and just ballpark the expected impacts that that particular variable would have on net price per unit.

Yeah, I can't. Thanks for the question, Steve. 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 you know, if you just model out how many dry eye patients they have, and you know, we do know how many dry eye prescriptions come from those plans. You know, 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 non preferred brand status, this is a preferred status. So this is the lowest or in some cases no copay type coverage. So it's really favorable coverage for vivi. And then of course, you know, we, as I said, seen 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 know, you start adding up these letters going out to thousands and thousands of physicians and it could be, you know, you know, it could absolutely hit what we are thinking about internally in our modeling. Andrew, do you want to add to that at all?

Yeah, I think the one thing that I'm really excited about, this coverage, when is it kind of shows what. And I think we're gonna really see it next year as we demonstrate the power of vapa, which is really a long. The VAPA program is almost call it a temporary program. It's not meant to be the program forever. The goal of the program is to gain coverage win and 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 EBMs 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. 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, the 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, 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 month window between now and 2026 where it would be critical to keep people on drug.

You.

Know, 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 one time impact to pharmacy 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.

Yeah. On the, on any inventory stocking, Steve, I don't think we'll see anything really that impactful with VIVI 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, you know, Maria and her entire team are hustling. Pat, you want to add to that at all? Yeah, 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 VFA 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 VFA 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, you know, our.

Program right now, our fill program in VAF is a very high touch program. So we have 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. Thanks for. I'll just add that I was excited as soon as we got the coverage win. We got that information, I'll tell you. And 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 vivi. So kudos to the work that Pat and Maria are doing.

Thank you. Our next question comes from Mayank Mamtomni with B Rally Securities. Your line is open.

Yes. Good morning team.

Thanks for taking our questions and appreciate the detail on business momentum. So maybe just a high level question on sort of this 3Q to 4Q dynamics, you know, some you observed last year versus others you know you're talking to are unique to you have this year. Was just curious if you could, you know, comment a little bit on the notably high sort of 80 million revenue threshold in 4Q. It's sort of sequentially double versus, you know, what you had in 3Q. And it seems a lot to be still driven by VY, I think 60% over sequentially. You know, 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. Then I will follow up on Q4. You know what I would say is I think last year, Andrew, Q4 was probably upwards of a third, maybe a smidge higher than a third of our overall revenue for the annual period. That'll probably, you know, I wouldn't expect that to change this year. I think that, that, you know, we can do around, you know, that range this year. I think the exciting thing about Q4 for what it's worth, is the emergence of triescence finally. You know, 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 Triessense, you know, in every period this year, the first three periods. And the same is true with our rare and specialty portfolio. But the key is, is that we've taken action. Triessense, I think, you know, we're seeing really exciting things, not just in, in words but in deeds. You know, 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 Triessens. 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, you know, I've been involved in the sales process myself. I've been communicating with high volume surgeons and talking to them about tries and specifically. And I'm actually seeing surgeries start with it and that's exciting. And I've been through, 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, you know, 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?

Yeah, Mike, I think, you know, we've kind of talked about VIVI on the ASP side and expecting at least stabilization there. Typically at the end of the year your patients are out of that copay deductible in a month like that. So our copay buy downs 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, 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 by 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 Triessense, are you able to comment on what the new price point is? Looks like you're really focused on access to enable, you know, significant volume growth as you enter the ocular information market. And obviously, you know, very curious to hear your goal here to how close you are trying to get to when the product was not on the shortage list a few years ago. Thanks for taking your questions. In terms of Project Bingo and specifically the transition from Clarity C to vivi, 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 Clarity C. We stopped making Clarity C in the summertime. And you know, I think largely those conversions have taken place. There's probably some, some units out in the field in various offices around the country. But you know, 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 VIVI will have made that, that transition. In terms of Triessen's pricing, you know, the, the, the pricing was at 944. You know, you're moving into the ocular inflammation market. The products in that category are probably 20, 25% lower in price. And I believed, and I think our team believed that price was, would have affected adoption. And you know, 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, you know, 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, you know, 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 you know, there are a number of other reasons why, clinical reasons as well as economic reasons why triessence is so exciting to these physicians that really didn't know that, that this level of reimbursement was available for this product. So we are seeing really positive things. I have been through this before. You know, our first product was a product called Trimoxy. It was a compounded combination of Triamcinolone acetonide, amoxyfloxacin 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 we, once those physicians adopt this and it starts working so well for their patients and they see their patients coming in with clean wide eyes on their post op day one, 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, you know, we were doing in excess of probably 300,000 units of, of Trimoxy and Trimoxy bank, you know, years ago and some of these other sterile injectables. And so when I think about what Quiescent had done many years ago versus what we were doing with a non FDA approved product, which was significantly more than Triessense 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, you know, more why any surgeon would not use Triessense. And so we think that, you know, this is going to become, you know, 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 Triessense. So we think more and more physicians will. It's an exciting time for that product. And you know, we're just scratching the surface. I don't even know that you could even call it a scratch at this point.

Helpful. Kalimal.

Thank you.

Thank you. Our next question comes from Tom Schrader with btig. Your line is open.

Good morning. Congratulations. On the quarter, the Triessense 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 Vivi. Does that mean adding conventional salespeople? And if so, what other products do you think they could most easily help? Is Triescence too far away for someone to market? Both EVI and Triessense. Thanks. Yeah, 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 triescence was not available, without question, they moved on. They started using analog, which has preservatives. It's got benzyl alcohol in it. You know, 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 triescence because there was a clear unmet need in the marketplace for a preservative free triamcinolone, acetonide, and that is Triessense. That's what makes the product very special. And you know, if you knew that an iPhone 17 was not available, maybe you'd 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 Triescence 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, Allie 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 you know, 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 Triessense as a nine figure revenue product. I think we're going to get there in due course. You wouldn't think that from the first quarter, 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 Revi, we're making those investments because we have coverage when you have coverage, when you have the ability to. 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 V. VI 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 get them covered, we can retain them because the product is so spectacular. It provides us with, you know. Sort. Of a compounding effect as we would get more new patients and retain them. You know, 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 two 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 a hundred territories. So Maria's going to have a much larger group of folks to manage and they will also be helping patients and giving them access to flare X and they'll be getting, they'll have Fresh Coat in their bag as well. And so the combination of chronic care dry eye medication with other related products that cover ocular inflammation and Fresh Coat in particular, which I think, you know, if you Google Fresh coat, 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 Fresh Coat. Maria's got Flarex now and of course the cornerstone product in her portfolio is Vivi.

Thanks for the detail.

Thank you, Tom.

Thank you. Our next question comes from Lachlan Hanbury Brown with William Blair. Your line is open.

Hey guys, thanks for the questions. I guess I'd be curious on the new coverage for Vivi. 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 it'd be interesting 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 vivi? What I can tell you and Andrew mentioned this is that when you have a VAFA program and you establish a base, it. 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 know, you talked about it a little while earlier. Yeah.

Without giving away the, the. The kind of bid with, like Mark is saying, like I was saying that we kind of start with base and we say, okay, if we're going to get a coverage when what do 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 you know, we've talked a lot about just the ASP impact of the coverage win, and that'll help stabilize and certainly increase that number in 2026. But there's another aspect to this, which is VWAP 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 VIVA 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, thanks. And maybe a quick one on the VIVI 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 it sort of roughly double where you're at now?

Yeah. So we're going to increase by 10, we'll get to, you know, 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.

Awesome. Thanks.

Thank you, Lachlan.

Thank you. Our next question comes from Thomas Flatten with Lake Street Capital Markets. Your line is open.

Hey, good morning. I appreciate you taking the questions. Hey, Mark, just to 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 product for? I think last time that we looked at the data for a commercially covered patient, you know, if you look at their initial prescription plus the refills and you add, you know, you just think about the number of drops per bottle and the number of dosages per day. I mean, I think we were almost 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 bullish of bull cases in our models. So, you know, that's what we've seen. And, and Andrew, you want to add. To that at all? No, nothing. And then maybe if I could, bigger picture. You guys have been pretty busy on the BD front and 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 a absorb, digest and act or is it, you know, more, more deals. More deals. Where do you land on that? Well, I think in our office today and over the next week or so we are over the moon excited about melt. And you know, I don't think we've talked about melt really at all. But you know, we're hoping to get this closed here in the very near term. And you know, I don't think people really understand the value of meltdown and what the potential is there. It's really transformative for us. And so yeah, 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, an office based, 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, you know, 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 you know, 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 US 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 US focused business. And as you I think know, Melt 300 is not only patented, multiple patents issued domestically, but in all of the, you know, 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.

Appreciate that.

Thanks, Mark. Thank you, Thomas.

Thank you. Our next question comes from yi Chen with H.C. wainwright. Your line is open. Morning. Thank you for taking my question.

Mark, you mentioned that with the coverage wings some prescription flip to vivi. Could you give some additional color on market dynamics whether those prescriptions flip to vivi, they originally came from prescription for other cyclosporine formulations or they could be, they could come from non cyclosporine prescriptions as well. Thank you. Yeah, so the in terms of who is who, you know, which product was the incurred the loss to our potential win. You know, 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, you know, for us we are really focused on being the number one cyclosporine in the market. And I think this really get, you know, adds to that momentum, I think to be the number one cyclosporine in the market. You know, you're talking about, I think with generics probably 20 to 23% market share, we're at a little over 10. We do expect to see, you know, NPP improvement as we get more and more coverage and that ratio flips. But this is going to really help us, I think drive, you know, 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 eye care professionals. It lists the product that is no longer covered and it lists patients. And I know from, you know, the few physicians that I've spoken to that their intention is to to move them to vivi. 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 VIVI is. And it's our job to make sure that they not only know about the clinical value that that VIVI brings, but also now the new coverage which will I think create a more friction free process for prescribing. Thank you.

Thank you.

Yee. Thank you. 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 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 hero for sustained growth and long term value creation. The opportunities that we have ahead of us with Triessense and VIVI and IHESO 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 Viega. His email address is M as in Mary, B as in Bravo I e g aeroink.com this will conclude our call.

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