Q2 2024 Harrow Inc Earnings Call

August 8, 2024

Good morning and welcome to Harrow's second quarter 2024 earnings conference call. My name is Josh and I will be your operator for today's call. At this time, all participants are in a listen-only mode.

Operator: My name is Josh, and I will be your operator for today's call.

Operator: At this time, all participants are not in listening only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference is being recorded.

Later, we will conduct a question and answer session. As a reminder, this conference is being recorded. I would now like to turn the call over to Jamie Webb, Director of Communications and Investor Relations for Harrow.

Jamie Webb: I would now like to turn the call over to Jamie Webb, Director of Communications and Investor Relations for Harrow.

Jamie Webb: Thank you, operator. Good morning and welcome to Harrow's second quarter 2024 earnings conference call. Before we begin today, let me remind you that 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, an FDA approval of certain drug candidates in a timely manner or at all.

Jamie Webb: Thank you, Operator. Good morning and welcome to Harrow's second quarter 2024 earnings conference call. Before we begin today, let me remind you that the company's remarks may include forward-looking statements within the meaning of federal securities laws.

Jamie Webb: Forward-looking statements are subject to numerous risk and uncertainties, many of which are beyond Harrow's control, including risk and uncertainties described from time to time in its SEC filings.

Jamie Webb: such as the risk 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.

Jamie Webb: For a list and description of those risks and uncertainties, please see the risk sector's section of the company's most recent annual report on Form 10-K, and subsequent quarterly reports on Form 10-K filed with the Securities and Exchange Commission. Harrow's results may differ materially from those projected. Harrow explains any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise.

Jamie Webb: For a list and description of those risk 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.

Unknown Executive: 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. By now, you should have received a copy of the earnings press release. If you have not received a copy, please go to the investor relations page of the company's website, www.harrow.com.

Jamie Webb: 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 refers 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.

Jamie Webb: 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.

Jamie Webb: This conference call contains time-sensitive information and is accurate only as of today.

Jamie Webb: A reconciliation of any non-GAAP measures with the most directly comparable GAAP measures is included in the company's earnings report and letter to stockholders, both of which are available on the website. By now, you should have received a copy of the earnings press release. If you have not received a copy, please go to the investor relations page of the company's website, www.harrow.com. Joining me on today's call are Harrow's Chief Executive Officer, Mark L. Baum, and Harrow's Chief Financial Officer, Andrew Boll. With that, I'd like to turn the call over to Mark to go over some prepared remarks prior to the question and answer session.

Jamie Webb: This conference call contains time-sensitive information and is accurate only as of today.

Jamie Webb: Additionally, Harrow referred 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 and letter to stockholders, both of which are available on the website. By now, you should have received a copy of the earnings press release. If not received a copy, please go to the Investor Relations page of the company's website, www.harrow.com.

Jamie Webb: 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.

Jamie Webb: A reconciliation of any non-GAAP measures with the most directly comparable GAAP measures is included in the company's earnings and letter to stockholders, both of which are available on the website.

Jamie Webb: By now you should have received a copy of the earnings press release. If you have not received a copy, please go to the Investor Relations page of the company's website, www.harrow.com.

Jamie Webb: Joining me on today's call are Harrow's Chief Executive Officer, Mark Elbaum, and Harrow's Chief Financial Officer, Andrew Boe.

Speaker Change: Joining me on today's call are Harrow's Chief Executive Officer, Mark L. Baum, and Harrow's Chief Financial Officer, Andrew Boll. With that, I'd like to turn the call over to Mark to go over some prepared remarks prior to the question and answer session.

Mark Baum: With that, I'd like to turn the call over to Mark to go over some prepared remarks prior to the question-and-answer session.

Mark Baum: Thanks, Jamie, and good morning and welcome to our second quarter 2024 conference call. Hopefully, you've reviewed our earnings release, corporate presentation, and letter to stockholders, all of which are available on the Investor Relations section of our website. As you now know, Harrow achieved record quarterly revenue of $48.9 million. That's a 46% increase over the prior year quarter, and a 42% increase over the previous quarter. Every part of our business contributed to these record results.

Speaker Change: Thanks Jamie and good morning and welcome to our second quarter 2024 conference call. Hopefully, you've reviewed our earnings release, corporate presentation, and letter to stockholders, all of which are available on the investor relations section of our website.

Mark Baum: Hopefully, you've reviewed our earnings release, corporate presentation, and letter to stockholders, all of which are available on the investor relations section of our website. Our interior segment business is performing beautifully, with revenue increasing by over 40% versus the first quarter of this year. I remain confident that 2024 revenue will be greater than $180 million, excluding any triessence contribution. And at this point, I believe the question is just how much greater than $180 million we will print on triessence. I have a good interim update to share. Moving on to dry eye disease.

Speaker Change: As you now know, Harrow achieved record quarterly revenue of $48.9 million. That's a 46% increase over the prior year quarter and a 42% increase over the previous quarter.

Mark Baum: That's a 46% increase over the prior year quarter and a 42% increase over the previous quarter. Every part of our business contributed to these record results. I believe the data, some of which I will share shortly, demonstrate that IHESO is just ripping, and we knocked it out of the park with VIVI.

Mark Baum: I believe the data, some of which I will share shortly, demonstrate that I, he's always just ripping, and we not get out of a park with VVI. Our interior segment business is performing beautifully, with revenue increasing by over 40% versus the first quarter of this year. And our infamous Rx compounding subsidiary achieved the highest quarterly revenue in its history. I'm happy to report that branded revenue is now firmly ahead of compounded revenue. This is now showing up in our margins as they float higher, as promised. We expected branded revenue will continue to dominate overall revenues going forward, and in fact that this should accelerate.

Speaker Change: Every part of our business contributed to these record results.

Speaker Change: I believe the data, some of which I will share shortly, demonstrate that IHESO is just ripping, and we knocked it out of the park with VIVI.

Mark Baum: Our interior segment business is performing beautifully, with revenue increasing by over 40% versus the first quarter of this year, and our IMPROMIS-Rx compounding subsidiary achieved its highest quarterly revenue in its history. I'm happy to report that branded revenue is now firmly ahead of compounded revenue, and this is now showing up in our margins as they float higher as promised. We expect that branded revenue will continue to dominate overall revenues going forward.

Speaker Change: Our interior segment business is performing beautifully, with revenue increasing by over 40% versus the first quarter of this year, and our IMPROMIS-RX compounding subsidiary achieved its highest quarterly revenue in its history.

Speaker Change: I'm happy to report that branded revenue is now firmly ahead of compounded revenue. This is now showing up in our margins as they float higher, as promised.

Speaker Change: We expect that branded revenue will continue to dominate overall revenues going forward, and in fact, that this should accelerate.

Mark Baum: Based on our overall operational momentum, we expect revenue in the back half of 2024 to outpace revenue in the first half of this year, and that's especially true if Triessence has relaunched later this year. I remain confident that 2024 revenue will be greater than $180 million, excluding any Triessence contribution. And at this point, I believe the question is just how much greater than $180 million we will print.

Mark Baum: And in fact, this should accelerate. Based on our overall operational momentum, we expect revenue in the back half of 2024 to outpace revenue in the first half of this year. And that's especially true if triessence is relaunched later this year. I remain confident that 2024 revenue will be greater than $180 million, excluding any triessence contribution, and at this point, I believe the question is just how much greater than $180 million we will print.

Speaker Change: Based on our overall operational momentum, we expect revenue in the back half of 2024 to outpace revenue in the first half of this year. And that's especially true if triessence is relaunched later this year.

Speaker Change: I remain confident that 2024 revenue will be greater than $180 million excluding any triessence contribution, and at this point, I believe the question is just how much greater than $180 million we will print.

Mark Baum: I'll now provide some commentary on the quarter and why we're upbeat about the balance of this year, starting with our Retina market products, which consists of IHizo and Triessence. IHizo quarterly unit volumes yearly doubled up about 98% from last quarter. We've now signed 24 supply agreements with strategic retina practice accounts this year, including 10 in the second quarter and another seven since June 30th. Probably, no, definitely the most exciting statement in my letter to stockholders was the announcement of a recent agreement with the largest and highest volume retina practice group in the United States. This agreement could have a big impact for us.

Mark Baum: I'll now provide some commentary on the quarter and why we're upbeat about the balance of this year, starting with our retina market products, which consist of iHESO and triacetamol. IHESA quarterly unit volumes nearly doubled, up about 98% from last quarter.

Speaker Change: I'll now provide some commentary on the quarter and why we're upbeat about the balance of this year, starting with our retina market products, which consist of iHESO and triessence.

Speaker Change: IHESA quarterly unit volumes nearly doubled, up about 98% from last quarter.

Mark Baum: We've now signed 24 supply agreements with strategic retina practice accounts this year, including 10 in the second quarter and another seven since June 30. Probably, no, definitely the most exciting statement in my letter to stockholders was the announcement of a recent agreement with the largest and highest volume retina practice group in the United States. This agreement could have a big impact on us.

Speaker Change: We've now signed 24 supply agreements with strategic retina practice accounts this year, including 10 in the second quarter and another 7 since June 30th.

Speaker Change: Probably, no, definitely the most exciting statement in my letter to stockholders was the announcement of a recent agreement with the largest and highest volume retina practice group in the United States. This agreement could have a big impact for us.

Mark Baum: And while it will be phased in over the coming quarters, it should fuel and accelerate IHESA growth. And it's a major proof point for the value that IHESA can provide to the most respected practice groups in the country. I have a good interim update to share. We are making progress towards the eventual relaunch of triessence, with all initial analytical testing of the second PPQ batch being in specification. In fact, the third PPQ batch is now scheduled for production in a matter of days. Actually, to be precise, next week.

Mark Baum: And while we've phased in over the coming quarters, it should fuel and accelerate IHizo growth. And it's a major proof point for the value that IHizo can provide to the most respected practice groups in the country.

Speaker Change: And while it will be phased in over the coming quarters, it should fuel and accelerate IHESA growth. And it's a major proof point for the value that IHESA can provide to the most respected practice groups in the country.

Mark Baum: On Triessence, I have a good interim update to share. We are making progress towards the eventual relaunch of Triessence, with all initial analytical testing of the second PPQ batch being in specification. In fact, the third PPQ batch is now scheduled for production in a matter of days; actually, to be precise, next week. More details on our Triessence relaunch work can be found in my letter to stockholders, including my view of our commercial prospects, which follow meetings with numerous key figures in the retina community at the recent ASRS meeting in Stockholm, Sweden.

Speaker Change: On triessence, I have a good interim update to share.

Speaker Change: We are making progress towards the eventual relaunch of triessence.

Speaker Change: With all initial analytical testing of the second PPQ batch being in specification, in fact, the third PPQ batch is now scheduled for production in a matter of days, actually to be precise, next week.

Mark Baum: More details on our tri-essence relaunch work can be found in my letter to stockholders, including my view of our commercial prospects, which follow meetings with numerous key figures in the retina community at the recent ASRS meeting in Stockholm, Sweden. Moving on to dry eye disease, our dry eye disease franchise, which is anchored by VEVI, knocked it out of the park. And here's what I mean.

Speaker Change: More details on our triessence relaunch work can be found in my letter to stockholders, including my view of our commercial prospects, which follow meetings with numerous key figures in the retina community at the recent ASRS meeting in Stockholm, Sweden.

Mark Baum: Moving on to dry eye disease, our dry eye disease franchise, which is anchored by a DVI, knocked it out of the park. And here's what I mean. Our latest corporate presentation, which provides select data from JustFellRx, that's our DVI pharmacy partner, chose total prescriptions in the second quarter of 2024, increasing 212% from the first quarter of this year. New prescriptions continue to roll in, and critically, refills remain a major contributor to DVI growth, with our eighth cycle of monthly refills underway. Keep in mind, this data doesn't include retail pharmacies and other access points for DVI, which would increase these numbers of markets.

Speaker Change: Moving on to dry eye disease. Our dry eye disease franchise, which is anchored by Vevi, knocked it out of the park. And here's what I mean.

Mark Baum: Our latest corporate presentation, which provides select data from just PhilRx, that's our VIVI Pharmacy partner, shows total prescriptions in the second quarter of 2024 increasing 212% from the first quarter of this year; new prescriptions continue to roll in, and critically, refills remain a major contributor to growth with our eighth cycle of monthly refills underway. Keep in mind, this data doesn't include retail pharmacies and other access points for VBuy, which would increase these members' market.

Speaker Change: Our latest corporate presentation, which provides select data from JustPhilRx, that's our Vivi Pharmacy partner, shows total prescriptions in the second quarter of 2024 increasing 212% from the first quarter of this year.

Speaker Change: New prescriptions continue to roll in, and critically, refills remain a major contributor to V.V.I. growth, with our eighth cycle of monthly refills underway.

Unknown Executive: Keep in mind, this data doesn't include retail pharmacies and other access points for VBuy, which would increase these members' market share. Levin prescribers are now about 3,000 strong, and this number grows literally every day. Another key factor driving VBuy's success is our market access strategy. The proof is in the pudding, especially if you're a Harrow stockholder. I'll conclude by adding that while the Harrow team delivered great results for the second quarter, executing beautifully, we are laser focused on the back half of the year, meeting our revenue targets and, in fact, exceeding them, and seizing the opportunity we see to become North America's leading ophthalmic pharmaceutical company.

Speaker Change: Keep in mind, this data doesn't include retail pharmacies and other access points for VBuy, which would increase these numbers markedly.

Mark Baum: VVI prescribers are now about 3,000 strong, and this number grows literally every day. Another key factor driving VVI's success is our market access strategy.

Mark Baum: Levi prescribers are now about 3,000 strong, and this number grows literally every day. Another key factor driving VBuy's success is our market access strategy. You see, even the most clinically impressive drugs can fall short of their potential if they're not accessible to patients.

Speaker Change: VIVI prescribers are now about 3,000 strong and this number grows literally every day. Another key factor driving VIVI's success is our market access strategy.

Mark Baum: You see, even the most clinically impressive drugs can fall short of their potential. If it's not accessible to patients, VVI is currently exceeding our internal market access goals, with covered lives now beyond 166 million, and commercial coverage is at approximately 58%, and Medicaid coverage is currently at 80% and expected to reach 100% by the timely report third quarter results. We're particularly pleased with positive feedback from physicians about their patients' successes with VVI. Their feedback confirms that VVI works quickly, as a longer durability of action is extraordinarily tolerable, resulting in wonderfully positive treatment outcomes.

Speaker Change: You see, even the most clinically impressive drugs can fall short of their potential if it's not accessible to patients.

Mark Baum: VIVI is currently exceeding our internal market access goals with covered lives now exceeding 166 million, and commercial coverage is at approximately 58%, and Medicaid coverage is currently at 80% and expected to reach 100% by the time we report third-quarter results. We're particularly pleased with the positive feedback from physicians about their patients' successes with VIVI. Their feedback confirms that VIVI works quickly, has a longer durability of action, and is extraordinarily tolerable, resulting in wonderful positive treatment outcomes. And here's a shameless plug.

Speaker Change: Devi is currently exceeding our internal market access goals with covered lives now beyond 166 million.

Speaker Change: and commercial coverage is at approximately 58 percent and Medicaid coverage is currently at 80 percent and expected to reach 100 percent by the time we report third quarter results.

Speaker Change: We're particularly pleased with the positive feedback from physicians about their patient successes with VIVI. Their feedback confirms that VIVI works quickly, has a longer durability of action, and is extraordinarily tolerable, resulting in wonderfully positive treatment outcomes.

Mark Baum: And here's a shameless plug. Given the number of people on this call, mathematically, there's a good chance that a fair number of you actually suffered from dry eye disease. I want to encourage you to speak to your eye care professionals to see if VVI can help you. The proof is in the pudding, especially if you're a hero stockholder. Patients who have put other cyclosporins in their eyes, including me, family, and our friends, cannot believe how VVI feels. It just feels different, and it works different in a good way. If you become a VVI user, I want to encourage you to please reach out to us, reach out to me and let me know what you think about VVI.

Mark Baum: Given the number of people on this call, there's a good chance that a fair number of you actually suffer from dry eye disease. I want to encourage you to speak to your eye care professionals to see if EVEye can help you. The proof is in the pudding, especially if you're a Harrow stockholder. Patients who have put other cyclosporins in their eyes, including me, family, and our friends, cannot believe how VIVI feels. It just feels different.

Speaker Change: And here's a shameless plug.

Speaker Change: Given the number of people on this call mathematically, there's a good chance that a fair number of you actually suffer from dry eye disease.

Speaker Change: I want to encourage you to speak to your eye care professionals to see if EVEye can help you. The proof is in the pudding, especially if you're a Harrow stockholder.

Speaker Change: Patients who have put other cyclosporins in their eyes, including me, family, and our friends, cannot believe how Levi feels.

Speaker Change: It just feels different, and it works different, in a good way. If you become a VIVI user, I want to encourage you to please reach out to us. Reach out to me and let me know what you think about VIVI.

Mark Baum: And it works differently, in a good way. If you become a VIVI user, I want to encourage you to please reach out to us. Reach out to me and let me know what you think about VIVI. Because of the VIVI team's launch success, and because we intend to compete for every single opportunity to help a dry eye patient, we are investing by expanding RV by Salesforce and opening new territory. We carve the national geography into 59 territories or markets, and currently, we cover only 36 of these markets with feet on the street.

Mark Baum: Because of the VVI team's launch success and because we intend to compete for every single opportunity to help a dry eye patient, we are investing by expanding our VVI Salesforce and opening new territories. We carve the national geography into 59 territories or markets and currently we cover only 36 of these markets with feet on the street. They don't worry; our inside sales force fills the gaps where we don't have people in these markets, and they do a fantastic job. But a shift is underway given our success, and assuming we can continue at this current pace, the strong demand and geography-specific market access wins, we intend to open up new territories throughout the year.

Speaker Change: Because of the Be-Buy team's launch success and because we intend to compete for every single opportunity to help a dry eye patient, we are investing.

Speaker Change: by Expanding RV by Salesforce and Opening New Territories.

Speaker Change: We carve the national geography into 59 territories or markets, and currently we cover only 36 of these markets with feet on the street. But don't worry, our inside sales force fills the gaps where we don't have people in these markets.

Mark Baum: Don't worry; our inside sales force fills the gaps where we don't have people in these markets, and they do a fantastic job. But a shift is underway; given our success and assuming we can continue at this current pace with strong demand and geography-specific market access wins, we intend to open up new territories throughout the year. I love what we've done so far, and I really love VE-BY as a product, as you can tell.

Speaker Change: And they do a fantastic job, but a shift is underway, given our success, and assuming we can continue at this current pace with strong demand and geography-specific market access wins, we intend to open up new territories throughout the year.

Mark Baum: I love what we've done so far, and I really love VVI as a product, as you can tell. But we have barely scratched the surface with what we can do and what we intend to do with VVI. I believe, and certainly the VVI commercial team believes that VVI has best-in-class potential in the dry eye disease category. But VVI, you ain't seen nothing yet. It's a long-term play for us to help millions of people suffering from dry eye disease, and we intend to sell more VVI in 2035 than we do in 2025. As stockholders expect VVI to be a major driver of cash flow and stockholder value for many years to come.

Mark Baum: But we have barely scratched the surface with what we can do and what we intend to do with VE-BY. I believe, and certainly the VE-BY commercial team believes, that VE-BY has best-in-class potential in the dry eye disease category. VIVI, you ain't seen nothing yet. There's a long-term play for us to help millions of people suffering from dry eye disease, and we intend to sell more VIVI in 2035 than we did in 2025.

Speaker Change: I love what we've done so far, and I really love Veevi as a product, as you can tell, but we have barely scratched the surface.

Speaker Change: with what we can do and what we intend to do with V-Bi. I believe, and certainly the V-Bi commercial team believes, that V-Bi has best in-class potential in the dry eye disease category.

Speaker Change: VIVI, you ain't seen nothing yet. It's a long-term play for us to help millions of people suffering from dry eye disease. And we intend to sell more VIVI in 2035 than we do in 2025.

Mark Baum: As stockholders expect VIVI to be a major driver of cash flow and stockholder value for many years, I'll conclude by adding that while the Harrow team delivered great results for the second quarter, executing beautifully, we are laser focused on the back half of the year, meeting our revenue targets and exceeding them, in fact, and seizing the opportunity we see to become North America's leading ophthalmic pharmaceutical company. I believe Harrow's contribution to our customers and their patients is growing.

Speaker Change: As stockholders, expect VBuy to be a major driver of cash flow and stockholder value for many years to come.

Mark Baum: I'll conclude by adding that while the Harrow team delivered great results for the second quarter, executing beautifully, we are laser-focused on the back half of the year, meeting our revenue targets and exceeding them, in fact, and seizing the opportunity we see to become North America's leading ophthalmic pharmaceutical company. I believe Harrow's contribution to our customers and their patients is growing, and that Harrow, which we started from scratch not too long ago, is on the cost of becoming a very special and valuable ophthalmic pharmaceutical company. While we made a lot of progress, we truly are just getting started.

Speaker Change: I'll conclude by adding that while the Harrow team delivered great results for the second quarter, executing beautifully.

Speaker Change: We are laser focused on the back half of the year, meeting our revenue targets and exceeding them, in fact, and seizing the opportunity we see to become North America's leading ophthalmic pharmaceutical company.

Mark Baum: And that Harrow, which we started from scratch not too long ago, is on the cusp of becoming a very special and valuable ophthalmic pharmaceutical. Well, we've made a lot of progress. We truly are just getting started. We're happy now to answer your questions. I'll pause to have our operator poll for questions. Operator.

Speaker Change: I believe Harrow's contribution to our customers and their patients is growing and that Harrow, which we started from scratch not too long ago, is on the cusp of becoming a very special and valuable ophthalmic pharmaceutical company.

Mark Baum: We're happy now to answer your questions. I'll pause to have our operator pull for questions.

Speaker Change: While we've made a lot of progress, we truly are just getting started. We're happy now to answer your questions. I'll pause to have our operator poll for questions. Operator?

Mark Baum: Thank you.

Operator: Thank you. We will now begin the question and answer session. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. One moment for questions. Our first question comes from Jeffrey Cohen with Ledenberg, Dahlman & Company. You may proceed.

Operator: We will now begin the question and answer session. As a reminder to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. One moment for questions.

Speaker Change: Thank you. We will now begin the question and answer session. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. One moment for questions.

Jeffrey Cohen: Our first question comes from Jeffrey Cohen with Layton Bergdauvin and Company. You may proceed.

Speaker Change: Our first question comes from Jeffrey Cohen with Ledenberg Diamond & Company. You may proceed.

Mark Baum: Hey, good morning, Mark. Are you? Good morning, Jeff. I got some great quotes. Much appreciated.

Unknown Executive: Hey, good morning, Mark. How are you?

Jeffrey Cohen: Hey, good morning, Mark. How are you?

Mark Baum: Good morning, Jeff.

Speaker Change: Yes.

Speaker Change: Good morning, Mark. How are you?

Jeffrey Cohen: I got some great quotes, much appreciated. But, a few questions come to mind.

Jeffrey Cohen: Good morning, Jeff.

Mark Baum: So, few questions come to mind. So, specific on VVI. Could you talk about Medicare? I heard you call out the 166 million COVID-19, 58% of Medicaid to 80%. Could you call out Medicare, or is there any commentary there? Yeah, so, you know, we are going through the process of attaining Medicare coverage now. I think, you know, when we launched the product, we said that this was going to be an 18-month to 24-month process to get all of the requisite coverage. And we are absolutely pursuing Medicare coverage. We didn't call Medicare coverage out specifically because, you know, that's not a part of our coverage universe now, but we are certainly in the process and an active negotiation process with those plans.

Speaker Change: I got some great quotes. Much appreciated. So, a few questions come to mind. So,

Jeffrey Cohen: So, What's specific about V-VaI? Could you talk about Medicare? I heard you call out the 166 million covered lives, 58% of Medicaid, and 80%. Did you call out Medicare, or is there any commentary there?

Speaker Change: 's

Speaker Change: specific on v y could you talk about medicare i heard you call out two hundred and sixty-six million covered ized for eight percent of medicaid to eighty percent

Mark Baum: Yeah, so you know, we're going through the process of attaining Medicare coverage now. I think, you know, when we launched the product, we said that this was going to be an 18-month to 24-month process to get all of the requisite coverage. And we are absolutely pursuing Medicare coverage. We didn't call Medicare coverage out specifically because, you know, that's not a part of our coverage universe now, but we are certainly in the process and in an active negotiation process with those plans.

Speaker Change: Did you call out Medicare or is there any commentary there?

Unknown Executive: I am going through the process of attaining Medicare coverage now. I think, you know, when we launched the product, we said that this was going to be an 18-month to 24-month process to get all of the requisite coverage. And we are absolutely pursuing Medicare coverage. We didn't call Medicare coverage out specifically because, you know, that's not a part of our coverage universe now, but we are certainly in the process and in an active negotiation process with those plans.

Speaker Change: that is

Speaker Change: Yeah, so, you know, we're, we are.

Speaker Change: going through the process of attaining Medicare coverage now.

Speaker Change: I think, you know, when we launched the product, we said that this was going to be an 18-month to 24-month process to get all of the requisite coverage.

Speaker Change: And we are absolutely pursuing Medicare coverage. We didn't call Medicare coverage out specifically because

Speaker Change: You know, that's not a part of our coverage universe now, but we are certainly in the process and in an active negotiation process with those plans.

Operator: My name is Josh, and I will be your operator for today's call. At this time, all participants are not listening only mode.

Unknown Executive: Got it.

Jeffrey Cohen: Got it. Okay, perfect. On the commercial side, could you talk about the size or scope of the VIVI Salesforce? And then maybe give us a general flavor of the overall commercial size now, perhaps FTEs, and perhaps what kind of 24 growth and 25 growth in that organization we should anticipate?

Mark Baum: Okay, perfect. On the commercial side, could you talk about the size or scope of the VVI sales force? And then maybe give us a general flavor of the overall commercial size now, perhaps FTEs, and perhaps we'll kind of 24 growth and 25 growth on that organization we should anticipate. Yeah, so the VVI sales force, as I mentioned on the call, we hack up the national geography into specific markets, and we only cover a little over half of those markets with feet on the street. The rest of the markets that we don't have discrete individuals covering is covered by our inside sales force.

Operator: Later, we will conduct a question and answer session. As a reminder, this conference is being recorded.

Speaker Change: Got it. Okay, perfect. On the commercial side, could you talk about the...

Speaker Change: the size or scope of the the VIVI sales force and then maybe give us a general flavor of the overall commercial size now, perhaps FTEs and perhaps what kind of 24 growth and 25 growth on that organization we should anticipate.

Jamie Webb: I would now like to turn the call over to Jamie Webb, Director of Communications and Investor Relations for Harrow. Thank you, operator.

Jamie Webb: Good morning and welcome to Harrow's second quarter, 2024 Earnings Conference call. Before we begin today, let me remind you that the company's remarks may include forward-looking statements within the meaning of federal securities laws. Forward-looking statements are subject to numerous risk and uncertainties, many of which are beyond Harrow's control, including risk and uncertainties described from time to time in its SEC violence, such as the risk and uncertainties related to the company's ability to make commercially available, its FDA-approved products and compounded formulations and technologies, an FDA approval of certain drug candidates in a timely manner are at all.

Mark Baum: Yes, so the Vivi Salesforce, as I mentioned on the call, we hack up the national geography into specific markets, and we only cover a little over half of those markets with feet on the street. The rest of the markets that we don't have discrete individuals covering are covered by our inside sales force, and, as I mentioned on the call, they do a fantastic job.

Jamie Webb: For a list and description of those risks and uncertainties, please see the risk-sector's section of the company's most recent annual report on form 10K, and subsequent quarterly reports on form 10K solve with the Securities and Exchange Commission. Harrow's results may differ materially from those projected. Harrow explains 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.

Speaker Change: Yes, so the VIVI Salesforce, as I mentioned on the call, we hack up the National Geography

Speaker Change: into specific markets. And we only cover

Speaker Change: little over half of those markets with feet on the street

Speaker Change: ah

Speaker Change: and the rest of the markets that we don't have.

Speaker Change: Discreet individuals covering is covered by our inside sales force and as I mentioned on the call they do a fantastic job.

Mark Baum: And, as I mentioned on the call, they do a fantastic job.

Mark Baum: However, because of the market access, wins that we've had, because of the word sort of spreading, I think within the ophthalmic community amongst ophthalmologists and optometrists, and the, I think, growing interest in VVI, we are going to invest in expanding our sales organization. So the goal is to certainly have all of those markets covered with feet on the street. And I think you should expect that to happen, you know, over the coming quarters. It's not going to happen instantaneously. Remember that when we launch products, we launch products to not only serve our customers and their patients, but to also ensure that we don't get over our schemes financially.

Mark Baum: However, because of the market access wins that we've had, because the word is sort of spreading within the ophthalmic community amongst ophthalmologists and optometrists and because of the, I think, growing interest in Levi, we are going to invest in expanding our sales organization. And so the goal is to certainly have all of those markets covered with feet on the street. And I think you should expect that to happen over the coming quarters. It's not going to happen instantaneously, though.

Speaker Change: However, because of the market access wins that we've had, because of the word sort of spreading, I think, within the ophthalmic community amongst ophthalmologists and optometrists,

Speaker Change: and the, I think, growing interest in Levi.

Speaker Change: We are going to invest in expanding our sales organization. And so the goal.

Speaker Change: is to certainly have all of those markets covered with feet on the street and i think you should expect that to happen

Mark Baum: Remember that when we launch products, we launch products to not only serve our customers and their patients but also ensure that we don't get over our skis financially. And so we've been able to launch products over the years in a profitable way, in a very disciplined way. And we're going to continue to do that over the coming quarters as we fill out our Levi sales organization, which has been remarkably productive.

Speaker Change: You know, over the coming quarters. It's not going to happen.

Speaker Change: Instantaneously. Remember that when we launch products, we launch products to not only serve our customers and their patients, but to also ensure that we don't

Jamie Webb: Additionally, Harrow referred to non-gaup financial metrics, specifically adjusted EBITDA and or adjusted earnings, as well as core results, such as core gross margin, core net income, and core deluded net income per share. A reconciliation of any non-gaup measures with the most directly comfortable gap measures is included in the company's earnings and letter to stockholders, both of which are available on the website. By now, you should have received a copy of the earnings press release.

Andrew Boll: And so we've been able to launch products over the years in a profitable way, in a very disciplined way. And we're going to continue to do that over the coming quarters as we fill out our VVI sales organization, which has been remarkably productive. The degree to which this team and their leadership have executed is remarkable, and we're really proud of them and grateful for what they've done. But there's a lot left to be done.

Speaker Change: you know.

Speaker Change: get over our schemes financially and so we've been able to launch products over the years in a profitable way in a very disciplined way and we're going to continue to do that over the coming quarters as we fill out our v i sales organization which has been remarkably

Unknown Executive: The degree to which this team and their leadership have executed is remarkable, and we're really proud of them and grateful for what they've done. But there's a lot left to be done. We've really just scratched the surface, as I said on the call, and we'll continue to grow the organization in 24 and 25. Andrew, do you want to add to that?

Mark Baum: The degree to which this team and their leadership have executed is remarkable, and we're really proud of them and grateful for what they've done, but there's a lot left to be done. We've really just scratched the surface, as I said on the call, and we'll continue to grow the organization in 24 and 25. Andrew, do you want to add to that?

Speaker Change: Thank you.

Speaker Change: Productive.

Speaker Change: The degree to which this team and their leadership have executed is remarkable, and we're really proud of them and grateful for what they've done. But there's a lot

Jamie Webb: If not received a copy, please go to the Investor Relations page of the company's website, www.harrow.com.

Andrew Boll: We've really just scratched the surface as a set on the call, and we'll continue to grow the organization in 24 and 25.

Speaker Change: Left to be done, we've really just scratched the surface, as I said, on the call, and we'll continue to grow the organization in 24 and 25. Andrew, do you want to add to that?

Jamie Webb: Joining me on today's call are Harrow's Chief Executive Officer, Mark Elbaum, and Harrow's Chief Financial Officer, Andrew Boe.

Andrew Boll: Andrew, do you want to add to that? I'll just echo what you said, Mark, about letting sort of the access and revenue drive the sales force and making sure we're not going to get over our fees. That said, I think I said this in the last call. I love VVI. We see so much potential from a revenue standpoint in the long term, value perspectives. The refill rate just continues to perform amazingly well for that product, and is more said, the leadership on the sales team is just doing a fantastic job. And so, as we make investments, I love making investments in that sales force, and we're looking for ways to do that every day.

Andrew Boll: I'll just echo what you said, Mark, about letting sort of access and revenue drive the sales force and making sure we're not going to get over our skis. That said, I think I said this in the last call.

Mark Baum: With that, I'd like to turn the call over to Mark to go over some prepared remarks prior to the question and answer session.

Andrew: I'll just echo what you said, Mark, about letting sort of the access and revenue drive the

Andrew: the sales force and making sure we're not going to get over our skis. That said, I think I said this in the last call, I love VVI. We see so much potential from a revenue standpoint, from a long-term value perspective.

Andrew Boll: I love VVI. We see so much potential from a revenue standpoint and from a long-term value perspective. The refill rate just continues to perform amazingly well for that product. And, as Mark said, the leadership on that sales team is just doing a fantastic job. And so as we make investments, I love making investments in that sales force, and we're looking for ways to do that every day. And so it's going to be an exciting product for us for a long time. And certainly, I know the patients are benefiting. And we're excited to increase access and increase patient availability of the product.

Speaker Change: The refill rate just continues to perform amazingly well for that product. And as Mark said, the leadership on that sales team is just doing a fantastic job. And so as we make investments, I love making investments in that sales force, and we're looking for ways.

Mark Baum: And so it's going to be an exciting product for us for a long time, and certainly I know the patients are benefiting, and we're excited to increase access and increase the patient availability of the product.

Andrew: to do that every day. And so it's going to be an exciting process for us for a long time. And certainly, I know the patients are benefiting. And we're excited to increase access and increase the patient availability of the product.

Mark Baum: I think the number one patient that you know about is your dear old dad, Andrew. I mean, your dad is a VIVI patient who just loves VIVI.

Mark Baum: I think the number one patient that you know about is your dear old dad, Andrew. I mean, your dad is as a VVI patient who just loves to be by. That's right. Got it.

Speaker Change: i think that i think the number one patient that you know about is your dearold dead and i mean your dad is as a vi patient that just love to viv

Mark Baum: I got one more quick one on a heat, so if you don't mind, you talked about these 24 supply agreements.

Speaker Change: That's right.

Unknown Executive: Ahezo, if you don't mind. You talked about these 24 supply agreements. Can you give us a little taste of what a supply agreement looks like, how many users are associated with a typical supply agreement, and any geographical commentary? Thanks.

Jeffrey Cohen: Got it. I have one more quick one on. Ahezo, if you don't mind, you talked about these 24 supply agreements. Can you give us a little taste of what a supply agreement looks like, how many users are associated with the typical supply agreement, and any geographical commentary? Thanks.

Speaker Change: Got it. I've got one more quick one on...

Mark Baum: Can you give us a little taste of what a supply agreement looks like, how many users associated with the typical supply agreement, and any geographical commentary. Thanks. Sure. So the supply agreements, to be clear, are licenses to hunt, if you will. These organizations, many of which are backed by private equity groups, require that you, if you want to sell to the entire organization, that you contract with sort of the head of the organization. So that's what these agreements allow us to do. They allow us to, in a very friction-free way, get into the individual sites that are parts of these organizations, the satellites, if you will, and sell into those organizations.

Speaker Change: Ahizo, if you don't mind. You talked about these 24 supply agreements. Can you give us a little taste of what a supply agreement looks like, how many users associated with the typical supply agreement, and any geographical commentary. Thanks.

Mark Baum: This is now showing up in our margins as they float higher as promised. We expected branded revenue will continue to dominate overall revenues going forward and in fact that this should accelerate. Based on our overall operational momentum, we expect revenue in the back half of 2024 to outpace revenue in the first half of this year, and that's especially true if Triessence has relaunched later this year. I remain confident that 2024 revenue will be greater than $180 million, excluding any Triessence contribution. And at this point, I believe the question is just how much greater than $180 million we will print.

Mark Baum: Sure. So the supply agreements, to be clear, are licenses to hunt, if you will. These organizations, many of which are backed by private equity groups, require that you, if you want to sell to the entire organization, that you contract with, you know, with sort of the head of the organization. So that's what these agreements allow us to do. They allow us to, in a very friction-free way, get into the individual sites that are part of these organizations, the satellites, if you will, and sell to those organizations.

Ahizo: Sure. So the supply agreements, to be clear, are

Speaker Change: licenses to hunt, if you will.

Andrew: These organizations, many of which are backed by private equity groups,

Andrew: require that you if you want to sell to the entire organization contract

Andrew: with, you know, with sort of the head of the organization. So that's what these agreements allow us to do. They allow us to, in a very friction free way, get into the individual

Mark Baum: I'll now provide some commentary on the quarter and why we're upbeat about the balance of this year, starting with our Retina market products, which consists of IHizo and Triessence. IHizo quarterly unit volumes yearly doubled up about 98% from last quarter. We've now signed 24 supply agreements with strategic Retina practice accounts this year, including 10 in the second quarter and another seven since June 30th. Probably, no, definitely the most exciting statement in my letter to stockholders was the announcement of a recent agreement with the largest and highest volume Retina practice group in the United States.

Andrew: sites that are parts of these organizations, the satellites, if you will, and sell into those organizations. The truth is, though, that you can't get these deals done unless you have

Mark Baum: The truth is, though, that you can't get these deals done unless you have folks within these organizations that want the products. And so the reason why we've been able to get these supply agreements over the line is because of the voices, the physician voices, within these organizations that want the products. And they have been sort of carrying the torch for IHESA within their organizations. And now that we have these deals done, we will phase those programs in.

Mark Baum: The truth is, though, that you can't get these deals done unless you have folks within these organizations that want the products. And so the reason why we've been able to get these supply agreements over the line is because of the voices, the physician voices within these organizations that want the products. And they have been sort of carrying the torch for certainly a hizzo within the organizations. And now that we have these deals done, we will phase those programs in. As I mentioned on the call, we just signed the largest retina practice group in the US, and it's a very big win for us and a very big opportunity.

Andrew: folks within these organizations.

Andrew: that want the products. And so the reason why we've been able to get these supply agreements over the line is because

Andrew: of the voices, the physician voices within these organizations that want the products.

Mark Baum: This agreement could have a big impact for us. And while we've phased in over the coming quarters, it should fuel and accelerate IHizo growth. And it's a major proof point for the value that IHizo can provide to the most respected practice groups in the country.

Andrew: and they have been sort of carrying the torch for certainly IHESA within their organizations and now that we have these deals done we will phase those programs in. As I mentioned on the call we just signed the

Mark Baum: As I mentioned on the call, we just signed the largest retina practice group in the U.S., and it's a very big win for us and a very big opportunity. But it will take several quarters to implement and get these agreements, you know, get the products sold throughout these organizations. But that's part of the reason why we're so bullish on being able to grow revenue over the coming quarters as these agreements get fully implemented in phases.

Andrew: The largest retina practice group in the U.S., and it's a very big win for us and a very big opportunity, but it will take several quarters to implement and get these agreements, you know,

Mark Baum: But it will take several quarters to implement and get these agreements, you know, sold or get the products sold throughout these organizations. But that's part of the reason why we're so bullish on being able to grow revenue over the coming quarters as these agreements get fully implemented and face. Thank you.

Andrew: sold or get the products sold throughout these organizations. But that's part of the reason why we're so bullish on being able to grow revenue over the coming quarters as these agreements get fully implemented and phased in.

Jeffrey Cohen: Supermarket

Unknown Executive: Supermarket

Jeffrey Cohen: Cooper, Mark, and Andrew, thanks for taking our questions.

Speaker Change: Super. Mark, Andrew, thanks for taking our questions.

Chase Knickerbocker: Our next question comes from Chase Knickerbocker with Craig Hallum. We may proceed.

Operator: Our next question comes from Chase Knickerbocker with Craig Hallam. You may proceed.

Speaker Change: thanks jo it's a thank you

Mark Baum: More details on our Triessence relaunch work can be found in my letter to stockholders, including my view of our commercial prospects, which follow meetings with numerous key figures in the Retina community at the recent ASRS meeting in Stockholm, Sweden. Moving on to dry eye disease, our dry eye disease franchise, which is anchored by a DVI knocked it out of the park. And here's what I mean. Our latest corporate presentation, which provides select data from JustFellRx, that's our DVI pharmacy partner, chose total prescriptions in the second quarter of 2024, increasing 212% from the first quarter of this year.

Speaker Change: Our next question comes from Chase Knickerbocker with Craig Hallam. You may proceed.

Chase Knickerbocker: Good morning, Mark and Andrew. You know, obviously, the code speaks for itself, but I want to share my congratulations as well in the execution here. Maybe just first a couple specific market access questions from me. Can you just share kind of what you would expect the average copay to be for Medicaid patients? And then kind of the same question on commercial copays, are we still doing kind of zero dollars on the first prescription speaking on VVI, of course? And then maybe speak some of the barriers that might be up on some of those commercial contracts, kind of speak to, you know, what sort of step edits are in place.

Chase Knickerbocker: Good morning, Mark and Andrew. Obviously, the quarter speaks for itself, but I want to share my congratulations as well on the execution here.

Chase Knickerbocker: Maybe just first, a couple specific market access questions from me. Can you just share kind of what you would expect the average copay to be for Medicaid patients? And then kind of the same question on commercial copays, are we still doing kind of $0 on the first prescription, speaking on VBuy, of course, and then maybe speak to some of the barriers that might be up on some of those commercial contracts, kind of speak to, you know, what sort of step edits are in place. Thanks.

Chase Knickerbocker: Good morning, Mark and Andrew. You know, obviously the quarter speaks for itself, but I want to share my congratulations as well on the execution here.

Chase Knickerbocker: maybe just first a couple of specific market access questions for me can you share kind of what you would expect theaverage copayto be for medicaid patients and then kind of the same question on commercial copes are we still doing kind of zero dollars on the first

Speaker Change: Prescription, speaking on VVI, of course, and then maybe speak to some of the barriers that might be up on some of those commercial contracts, kind of speak to, you know, what sort of step edits are in place. Thanks.

Mark Baum: Thanks. Yeah, I'll just comment, and I think it's referenced in the letter to stockholders that we've had some big wins on Medicaid specifically in some very large markets: Texas and certainly in California. As I said in my letter to stockholders, now Medicaid patients have access to VVI with zero copay. So zero out of pocket, which is fantastic for a market of that size.

Mark Baum: Yeah, I'll just comment. And I think it's referenced in the letter to stockholders that we've had some big wins on Medicaid, specifically, in some very large markets in Texas and certainly in California. As I said in my letter to stockholders, now Medicaid patients have access to Viva with zero. So zero out of pocket, which is fantastic for a market of that size. Andrew, do you want to comment on some additional market access information and specifics? specifically, any barriers and steps in it.

Mark Baum: New prescriptions continue to roll in, and critically, refills remain a major contributor to DVI growth, with our eighth cycle of monthly refills underway. Keep in mind, this data doesn't include retail pharmacies and other access points for DVI, which would increase these numbers of markets. VVI prescribers are now about 3,000 strong and this number grows literally every day. Another key factor driving VVI's success is our market access strategy. You see, even the most clinically impressive drugs can fall short of their potential.

Speaker Change: Yeah I'll just comment and I think it's referenced in the letter to stockholders that we've had some big wins on Medicaid specifically in some very large markets in Texas and certainly in California. As I said in my letter to stockholders now Medicaid patients have access to VIVI with zero copay.

Speaker Change: So zero out of pocket, which is fantastic for a market of that size. Andrew, do you want to comment on some additional market access information and specifically any barriers and step edits?

Andrew Boll: Andrew, do you want to comment on some additional market access information and specifically in barriers and step edits? First the and just coming more a little bit more on the Medicaid side, you know, you know, this is states specific typically on the plans, but as Mark said, the copays are generally really low; in some cases, as low as zero dollars and, in many cases, single digits. So it's a great, great win for the access team on the step edit side. We are seeing some plans requiring that prior authorization. Typically, it's a failed patient on a different dry product.

Andrew Boll: and just coming more a little bit more on the Medicaid side, you know, this is state specific, typically on the plans. But as Mark said, the co-pays are generally really low, in some cases as low as zero dollars, in many cases, you know, single digits. So it's a great, great win for the access team on the step edit side, we are seeing some plans requiring that prior authorization.

Mark Baum: If it's not accessible to patients, VVI is currently exceeding our internal market access goals with covered lives now beyond 166 million and commercial coverage is at approximately 58% and Medicaid coverage is currently at 80% and expected to reach 100% by the timely report third quarter results. We're particularly pleased with positive feedback from physicians about their patients successes with VVI. Their feedback confirms that VVI works quickly as a longer durability of action is extraordinarily tolerable resulting in wonderfully positive treatment outcomes.

Andrew: And just coming a little bit more on the Medicaid side, you know this is state specific, typically on the plans, but as Mark said, the co-pays are generally really low, in some cases as low as zero dollars, in many cases, you know, single digits.

Andrew Boll: Typically, if it's a failed patient on a different dry product, the good news for us is the market is full of patients that have failed on other products. We talked about this in the launch review that the existing dry eye market kind of lacked a really good product. And so, while that step-edit is there, there is a large population of patients that have failed with other dry eye products. And so our ability to get through the steps and get the product paid for isn't a huge barrier, and we're seeing increased wins with even prior authorization approval.

Andrew: So it's a great, great win for the ACCESS team. On the step-edit side, we are seeing some plans requiring that prior authorization.

Andrew Boll: The good news for us is the market is full of patients that have failed other products. We talked about this in launch VVI that the existing dry market kind of lacked a really good product. And so there are a lot of patients that have tried products and failed. And so all that step edit is there. There is a large population patient that have failed other dry products. And so our ability to get through the steps and get the product paid for isn't a huge barrier, and we're seeing increased wins with even prior authorization approvals. Got it.

Mark: Typically it's a failed patient on a different dry product. The good news for us is the market is full of patients that have failed other products.

Speaker Change: We talked about this in the launch review that the existing dry market kind of lacked a really good product.

Mark Baum: And here's a shameless plug. Given the number of people on this call mathematically, there's a good chance that a fair number of you actually suffered from dry eye disease. I want to encourage you to speak to your eye care professionals to see if VVI can help you. The proof is in the pudding, especially if you're a hero stockholder, patients who have put other cyclosporins in their eyes, including me, family, and our friends cannot believe how VVI feels.

Speaker Change: And so there are a lot of patients that have tried products and failed.

Andrew: And so while that step-edit is there, there is a large population of patients.

Speaker Change: and

Speaker Change: that have failed other dry products and so our ability to get through the steps and get

Speaker Change: get the product paid for isn't a huge barrier and we're seeing increased wins with even prior authorization approvals.

Unknown Executive: Got it. That's helpful. And then kind of building off that.

Chase Knickerbocker: Got it. That's helpful. And then kind of building off that. How should investors be thinking about Medicare coverage here? Obviously, it's early days, but do you guys have goals for kind of progress there by the end of the year, by midway next? How are you guys thinking about Medicare coverage, and then maybe speak to what you would expect there as far as how your market access team is trying to make that as affordable as possible for Medicare beneficiaries for VBAC?

Chase Knickerbocker: That's helpful. And then kind of building off that. How should investors be thinking about Medicare coverage here? Obviously, it's early days. But do you guys have goals for kind of progress there by the end of the year, you know, by midway next?

Mark Baum: It just feels different and it works different in a good way. If you become a VVI user, I want to encourage you to please reach out to us, reach out to me and let me know what you think about VVI. Because of the VVI team's launch success and because we intend to compete for every single opportunity to help a dry eye patient, we are investing by expanding our VVI Salesforce and opening new territories.

Speaker Change: Got it, that's helpful. And then kind of building off that...

Speaker Change: How should investors be thinking about Medicare coverage here? Obviously, it's early days, but do you guys have goals for kind of progress there, you know, by the end of the year, you know, by midway next? I mean, how are you guys thinking about Medicare coverage? And then maybe speak to what you would expect there as far as how your market access team is trying to make that as affordable as possible for Medicare beneficiaries for VBA.

Mark Baum: I mean, how are you guys thinking about Medicare coverage and then maybe speak to what you would expect there as far as how your market access team is trying to make that as affordable as possible for Medicare beneficiaries for VVI? Yes, to be clear, as I said in my prepared remarks, we intend to compete for every single dry eye prescription and to be able to help every single dry eye disease patient in need. And that includes Medicare beneficiaries. So we're in active discussions and have been for quite some time to be able to serve that patient population.

Mark Baum: We carve the national geography into 59 territories or markets and currently we cover only 36 of these markets with feet on the street. They don't worry our inside sales force fills the gaps where we don't have people in these markets and they do a fantastic job, but a shift is underway given our success and assuming we can continue at this current pace, the strong demand and geography specific market access wins, we intend to open up new territories throughout the year.

Mark Baum: To be clear, as I said in my prepared remarks, we intend to compete for every single dry eye prescription and to be able to help every single dry eye disease patient in need. And that includes Medicare beneficiaries.

Speaker Change: Yes, to be clear, as I said in my prepared remarks, we intend to compete for every single title. Thank you.

Speaker Change: Dry Eye Prescription

Speaker Change: and to be able to help every single.

Mark Baum: So we're in active discussions and have been for quite some time to be able to serve that patient population. The goal, I think, from the time that we launched the product, was realistic that it was going to take 18 to 24 months or so to get all of the coverage in place that we would need, you know, for the following many, many years as we grew this product. And so I don't think that there's anything that's changed today from where we, you know, had been planning when we launched the product, but we are going after Medicare coverage; we intend to have coverage, hopefully, in the first quarter or so of next year, to have that in place.

Speaker Change: Dry Eye Disease patient in need.

Speaker Change: and that includes medicare beneficiary so we are in active discussions and have been for quite some time to be able to serve that patient population the goal i think from the time that we launched the product

Mark Baum: The goal, I think from the time that we launched the product, you know, we were realistic that it was going to take 18 to 24 months or so to get all of the coverage in place that we would need, you know, for the follow. As we grew this product. And so, I don't think that there's anything that's changed today from where we, you know, had been planning when we launched the product, but we are going after Medicare coverage. We intend to have coverage, hopefully in the first quarter or so of next year to have that in place.

Mark Baum: I love what we've done so far and I really love VVI as a product as you can tell, but we have barely scratched the surface with what we can do and what we intend to do with VVI. I believe and certainly the VVI commercial team believes that VVI has best in-class potential and the dry eye disease category. But VVI, you ain't seen nothing yet. It's a long term play for us to help millions of people suffering from dry eye disease and we intend to sell more VVI in 2035 than we do in 2025. As stockholders expect VVI to be a major driver of cash flow and stockholder value for many years to come.

Speaker Change: We were realistic that it was going to take 18 to 24 months or so to get all of the coverage in place that we would need, you know, for the following.

Speaker Change: many many years as we as we grew this product and so

Speaker Change: I don't think that there's anything that's changed today from where we, you know, had been planning when we launched the product, but we are going after Medicare coverage. We intend to have coverage hopefully in the first quarter or so of next year to have that in place.

Chase Knickerbocker: But I can't really comment specifically on, you know, how those negotiations are going because, you know, it is a, these are, you know, very competitive markets for that patient population. And as I said, our goal is to be able to serve that patient population, and we intend to aggressively compete for every one of those patients. Makes sense.

Mark Baum: But I can't really comment specifically on, you know, how those negotiations are going because, you know, these are, you know, very competitive markets for that patient population. And as I said, our goal is to be able to serve that patient population, and we intend to aggressively compete for it.

Speaker Change: But I can't really comment specifically on, you know, how those negotiations are going because, you know, it is a, these are, you know, very competitive.

Mark Baum: All conclude by adding that while the Harold team delivered great results for the second quarter, executing beautifully, we are laser focused on the back half of the year, meeting our revenue targets and exceeding them, in fact, and seizing the opportunity we see to become North America's leading up the Omicarmaceutical Company. I believe Harold's contribution to our customers and their patients is growing, and that hero, which we started from scratch, not too long ago, is on the cost of becoming a very special and valuable economic-formaceutical company.

Speaker Change: Markets for that patient population. And as I said, our goal is to be able to serve that patient population and we intend to aggressively compete for every one of those patients.

Chase Knickerbocker: makes sense. And then maybe on the supply agreements for at HESO. Now up to 24, that's great to see. Could you help us quantify kind of what the overall opportunity is within those supply agreements? You said, you know, their licenses to hunt, just kind of how big is that ground? You know, whether you can kind of quantify it by maybe like a market share metric or, you know, overall revenue opportunity, just help us kind of think about, you know, what the overall size of those supply agreements is. Thanks.

Chase Knickerbocker: And then just maybe on the supply agreements for a hezo.

Speaker Change: That makes sense. And then just maybe on the supply agreements for...

Mark Baum: I mean, now up to 24, that's great to see. Could you help us quantify kind of what the overall opportunity is in those within those supply agreements? You said, you know, their licenses to hunt. Just kind of how big is that ground, you know, whether you can kind of quantify it by maybe like a market share metric or, you know, overall revenue opportunity, just to help us kind of think about, you know, what that is. Overall size of those supply agreements are thanks. Yeah, sure. So, the agreements that we have in place now. You know, what we haven't done is posted sort of what percentage of the tan these agreements reflect.

Speaker Change: at HESO. I'm in and now up to 24, that's great to see.

Speaker Change: Could you help us quantify kind of what the overall opportunity is in those, within those supply agreements, you said, you know, their licenses to hunt, just kind of how, how big is that ground? You know, whether you can kind of quantify it by maybe like a market share?

Mark Baum: Well, we made a lot of progress, we truly are just getting started, we're happy now to answer your questions. I'll pause to have our operator poll for questions. Operator? Thank you. We will now begin the question and answer session. As a reminder, task a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. One moment for questions.

Speaker Change: metric or, you know, overall revenue opportunity just to help us kind of think about, you know, what that overall size of those supply agreements are. Thanks.

Unknown Executive: Yeah, sure. So, what we haven't done is posted sort of what percentage of the TAM these agreements reflect. And I don't think that we're going to do that. I can give you some additional color and just give you a sense of the scale of 2.1 million, so this is a very large market opportunity.

Mark Baum: Yeah, sure. So the agreements that we have in place now, You know, and what we haven't done is posted sort of what percentage of the TAM these agreements reflect. And I don't think that we're going to do that.

Speaker Change: Yeah, sure. So the

Speaker Change: The agreements that we have in place now

Speaker Change: What we haven't done is posted sort of what percentage of the TAM these agreements reflect. And I don't think that we're going to do that. I can give you some additional color and just give you a sense of the scale of

Mark Baum: And I don't think that we're going to do that. I can give you some additional color and just give you a sense of the scale of some of these agreements. And I'll just give you one data point from the most recent agreement that we signed that I was so excited about to serve the largest retina practice group in the US. That group alone has about 2.1 million patient visits per year, 2.1 million. So this is a very large market opportunity. And I would think that many of those patient visits are connected with the administration of individual injections.

Mark Baum: I can give you some additional color and just give you a sense of the scale of some of these agreements. And I'll just give you one data point from the most recent agreement that we signed that I was so excited about to serve the largest retina practice group in the U.S. That group alone has about 2.1 million patient visits per year. 2.1 million, so this is a very large market opportunity, and I would think that many of those patient visits are connected with the administration of intravitreal injections.

Jeffrey Cohen: Our first question comes from Jeffrey Cohen with late-emberg dominant company he may proceed. Hey, good morning, Mark Harrio. Good morning, Jeff.

Speaker Change: some of these agreements. And I'll just give you one data point from the most recent agreement that we signed that I was so excited about to serve the largest retina practice group in the US.

Speaker Change: That group alone has about 2.1 million patient visits per year.

Mark Baum: I got some great quotes, much appreciated, so two questions come to mind. So specific on, Levi, could you talk about Medicare? Do you all call out to 166 million public laws for the 8% of Medicaid to 80%. Did you call out Medicare or is there any commentator? Yeah, so we are going through the process of attaining Medicare coverage now. I think we launched the product, we said that this was going to be an 18 month to 24 month process to get all of the requisite coverage.

Speaker Change: 2.1 million. So this is a very large market opportunity.

Speaker Change: And I would think that many of those patient visits are connected with the administration of intravitreal injections.

Chase Knickerbocker: So it's a very exciting account. But, as I said, we have, you know, more than two dozen of these agreements in place now. And we intend to serve those groups over time. They have to, these agreements have to be phased in, and they will be. And that's, as I said, part of the reason why we're so excited about the coming quarters and the coming years because we really have not yet seen the effects financially from the agreements that we've been able to get in place. But that will happen. Got it.

Mark Baum: So it's a very exciting account, but as I said, we have more than two dozen of these agreements in place now, and we intend to serve those groups over time. They have to These agreements have to be phased in, and they will be, and that's, as I said, part of the reason why we're so excited about the coming quarters and years because we really have not yet seen the financial effects of the agreements that we've been able to get in place, but that will happen.

Mark Baum: And we are absolutely pursuing Medicare coverage. We didn't call Medicare coverage out specifically because, you know, that's not a part of our coverage universe now, but we are certainly in the process in an active negotiation process with those plans.

Speaker Change: So, it's a very exciting account, but as I said, we have more than two dozen of these agreements in place now.

Speaker Change: and we intend to serve those groups over time. These agreements have to be phased in.

Speaker Change: And they will be, and that's, as I said, part of the reason why we're so excited about the coming quarters and the coming years, because we really have not yet seen the effects financially from the agreements that we've been able to get in place, but that will happen.

Chase Knickerbocker: Got it. And then, just last for me, I'll hop back in queue. Sorry for so many here.

Chase Knickerbocker: And then just last for me. I'll hop back in queue. Sorry for so many here.

Chase Knickerbocker: But assuming everything goes right, Mark, when would you expect to relaunch triaths since this year, you know, assuming kind of everything goes smoothly with these one-in-process batch in the next, the third one here. And then, you know, the hundred thousand units is kind of what I have was kind of previously here in the triaths and market before all the supply constraints. How are you thinking about penetrating that kind of original opportunity, you know, in the first couple of quarters after one? Yes, so the timing on price, and as I said, we're going to be making the third batch next week.

Speaker Change: Got it. And then just last for me, I'll hop back in queue. Sorry for so many here.

Mark Baum: Okay, perfect on the commercial side. Could you talk about the size or scope of the device sales force? And then maybe give us a general flavor of the overall commercial size now, perhaps FTEs, and perhaps we will kind of 24 growth and 25 growth on that organization we should anticipate. Yeah, so the Levi sales force, as I mentioned on the call, we hack up the national geography into specific markets and we only cover a little over half of those markets with feed on the street.

Speaker Change: Assuming everything goes right, Mark, when would you expect to relaunch TriEssence this year?

Speaker Change: And everything goes smoothly with these one in process batch and the next, the third one here.

Speaker Change: And then, you know, the 100,000 units is kind of what I have was kind of previously here in the triathlons market before all the supply constraints. How are you thinking about penetrating that kind of original opportunity, you know, in the first couple quarters after launch?

Mark Baum: Yes, so the timing on tri-essence, as I said, we're going to be making the third batch next week. It's scheduled for next week, which is amazing. And boy, do I want to thank the team that has been working so diligently for about a year to get us to this point. They've done an incredible job. And, you know, the reason why we've scheduled the third batch is because all of the indications so far are that we've been successful with the second batch.

Chase Knickerbocker: But assuming everything goes right, Mark, when would you expect to relaunch TriEssence this year? You know, assuming kind of everything goes smoothly with these, one in process batch and the next, the third one here. And then, you know, the 100,000 units is kind of what I was kind of previously here in the TriEssence market before all the supply constraints.

Unknown Executive: Yes, so the

Mark Baum: How are you thinking about penetrating that kind of original opportunity, you know, in the first couple quarters after this? I think it's going to be a lot of fun. I think it's going to be a lot of fun.

Speaker Change: Yes, so

Speaker Change: The timing on tri-essence, as I said, we're going to be making the third batch next week. It's scheduled for next week, which is amazing.

Mark Baum: It's scheduled for next week, which is amazing.

Mark Baum: And boy, do I want to thank the team that has been working so diligently for about a year to get us to this point. So they've done an incredible job, and the reason why we've scheduled the third batch is because all of the indication so far is that we've been successful with the second batch. You know, we don't have all of the data, but we have a lot of the data, and we're pretty positive on the balance of the data that we expect to get here in the coming days. In terms of, you know, when we might be able to relaunch that product, assuming that we're successful with the third batch, it does take somewhere between 30 and it has taken as long as 60 days to get validated analytical test results from a batch.

Mark Baum: Yeah, so the timing on triessence, as I said, we're going to be making the third batch next week. It's scheduled for next week, which is amazing. And boy, do I want to thank the team that has been working so diligently for about a year to get us to this point. They've done an incredible job.

Mark Baum: The rest of the markets that we don't have discrete individuals covering is covered by our inside sales force, and as I mentioned on the call, they do a fantastic job. However, because of the market access wins that we've had, because of the word sort of spreading, I think within the atomic community amongst up the knowledge is an optometrist. And the, I think, growing interest in Levi, we are going to invest in expanding our sales organization.

Speaker Change: And boy, do I want to thank the team.

Speaker Change: that has been working so diligently for about a year to get us to this point. So they've done an incredible job. And, you know, the reason why we've scheduled the third batch is because all of the indications so far is that we've been successful with the second batch.

Mark Baum: And, you know, the reason why we've scheduled the third batch is because all of the indications so far are that we've been successful with the second batch. You know, we don't have all of the data, but we have a lot of data, and we're pretty positive about the balance of the data that we expect to get here in the coming day. In terms of, you know, when we might be able to relaunch that product, assuming that we're successful with the third batch, it does take somewhere between 30 and 60 days to get validated analytical test results from a batch.

Mark Baum: You know, we don't have all of the data, but we have a lot of it, and we're pretty positive about the balance of the data that we expect to get here in the coming days. Retina Specialists at ASRS about Trieste, there was, and I have to, you know, normally you wouldn't want to, TriEssence is a winner. The market wants TriEssence, and we've got some really exciting plans for TriEssence, not only for this year, but for several years to come, to develop TriEssence.

Speaker Change: You know, we don't have all of the data, but we have a lot of the data and we're pretty positive on the balance of the data that we expect to get here in the coming days.

Mark Baum: So the goal is to certainly have all of those markets covered with feed on the street. And I think you should expect that to happen, you know, over the coming quarters. It's not going to happen instantaneously. Remember that when we launch products, we launch products to not only serve our customers and their patients, but also ensure that we don't. You know, get over our schemes financially and so we've been able to launch products over the years in a profitable way in a very disciplined way.

Speaker Change: in terms of, you know,

Speaker Change: When we might be able to relaunch that product, assuming that we're successful with the third batch.

Speaker Change: It does take somewhere between 30 and it has taken as long as 60 days to get validated analytical test results from a batch and so, you know, it's very easy to look at the calendar and say, hey, if they're doing this in the middle of August , and even if it takes two months, and I said in the letter that it takes about 30 days to

Mark Baum: And so, you know, it's very easy to look at the calendar and say, hey, if they're doing this in the middle of August, and even if it takes two months, and I said in the letter that it takes about 30 days to do all the paper, or you can see that sometime in the fourth quarter of all those, well, we'll be able to relaunch this product. But what I'm most excited about, you know, beyond having inventory, finally, of this product, is the feedback that I received from retina specialists at ASRS about Triassins. You know, we had meetings with these folks about programs that we were considering working on.

Mark Baum: You can see that sometime in the fourth quarter, if all goes well, we'll be able to relaunch this product. What I'm most excited about, you know, beyond having inventory, finally, of this product, is the feedback that I received from Retina Specialists at ASRS about Trieste. You know, we had meetings with these folks about programs that we were considering working on, and many of these programs got a big thumbs down.

Speaker Change: to do all the paper you can see that sometime in the fourth quarter of all goes well 'will be able to relaunch this product what i'm most excited about beyond having inventory finally of this product is the feedback that i received from

Mark Baum: And we're going to continue to do that over the coming quarters as we fill out our Levi sales organization, which is being remarkably. Productive. The degree to which this team and their leadership have executed is remarkable and we're really proud of them and grateful for what they've done. But there's a lot left to be done. We've really just scratched the surface as a set on the call and we'll continue to grow the organization in 24 and 25.

Speaker Change: Retina Specialists at ASRS about triessence.

Speaker Change: You know, we had meetings with these folks about programs that we were considering, working on, you know, and

Mark Baum: And many of these programs got a big thumbs down. These retina specialists said, "don't consider that," or "here's why I wouldn't work on that." But when we talked to them about Triassins, there was, and I have to, you know, normally you don't want to say all the word, use the word all, but I would say that all retina specialists that we spoke to, and I spoke to probably 15 high level folks, everyone was really excited to have Triassins back in the market. And so I'm very confident that we're going to be able to sell all that we can produce for quite a long time.

Mark Baum: These, these retina specialists said, don't consider that or here's why I wouldn't work on that. But when we talked to him about triacinamide, there was, and I have to, you know, normally you don't want to say all the word use the word all but I would say that all retina specialists that we spoke to and I spoke to probably 15 high-level folks everyone was really excited to have triacin back in the market and so I'm very confident that we're going to be able to sell all that we can produce for quite a long time right now we're very busy not only preparing for the preparation of this third batch but also working with our contract manufacturer to schedule additional batches this year and into the first half of next year based on our internal forecast for the product so TriEssence is a winner. The market wants TriEssence and we've got some really exciting plans for TriEssence not only hopefully for this year, but for several years to come to develop the TriEssence

Speaker Change: Many of these programs got a big thumbs down. These retina specialists said, don't consider that, or here's why I wouldn't work on that. But when we talked to them about triessence,

Andrew Boll: Andrew, do you want to add to that? I'll just echo what you said, Mark, about letting sort of the access and revenue drive the sales force and making sure we're not going to get over our fees. That said, I think I said this in the last call. I love VVI. We see so much potential from a revenue standpoint in the long term, value perspectives. The refill rate just continues to perform amazingly well for that product and is more said, the leadership on the sales team is just doing a fantastic job.

Speaker Change: there was, and I have to, you know, normally you don't want to

Speaker Change: say all the word use the word all but I would say that all retina specialists that we spoke to and I spoke to

Speaker Change: probably 15 high level folks.

Speaker Change: everyone was really excited to have TriEssence back.

Speaker Change: and the market and so.

Andrew Boll: And so as we make investments, I love making investments in that sales force and we're looking for ways to do that every day. And so it's going to be an exciting product for us for a long time and certainly I know the patients are benefiting and we're excited to increase access and increase the patient availability of the product.

Speaker Change: i'm very confident we're going to be able to sell

Mark Baum: Right now, we're very busy, not only preparing for the preparation of this third batch, but also working with our contract manufacturer to schedule additional batches this year and into the first half of next year based on our internal forecast for the product.

Speaker Change: All that we can produce.

Speaker Change: for quite a long time.

Speaker Change: Right now we're very busy not only preparing for the preparation of this third batch but also working with our contract manufacturer to schedule additional batches this year and into the first half of next year based on our internal forecast for the product.

Mark Baum: So Triassins is a winner; the market wants Triassins, and we've got some really exciting plans for Triassins, not only hopefully for this year, but for several years to come to develop the Triassins brand.

Mark Baum: I think the number one patient that you know about is your dear old dad, Andrew. I mean, your dad is as a VVI patient who just loves to be by. That's right. Got it.

Speaker Change: TriEssence is a winner. The market wants TriEssence and we've got some really exciting plans for TriEssence not only hopefully for this year but for several years to come to develop the TriEssence brand.

Mark Baum: I got one more quick one on a heat so if you don't mind, you talked about these 24 supply agreements. Can you give us a little taste of what a supply agreement looks like, how many users associated with the typical supply agreement and any geographical commentary. Thanks. Sure. So the supply agreements to be clear are licenses to hunt, if you will, these organizations, many of which are backed by private equity groups, require that you, if you want to sell to the entire organization that you contract with sort of the head of the organization.

Chase Knickerbocker: Thanks Mark, congrats again. Thanks, Chase.

Unknown Executive: Thank you.

Mark: Thanks, Mark. Congrats again.

Mayank Mamtani: Our next question comes from my uncle and Tony, with Be Riley Securities. He may proceed.

Operator: Our next question comes from Mayank Mamtani with B. Reilly Securities. Mayank, please proceed. Good luck.

Chase Knickerbocker: thanks chase

Chase Knickerbocker: Thank you.

Speaker Change: Our next question comes from Mayank Mamtani with B. Reilly Securities. You may proceed.

Mayank Mamtani: Good morning, team. Congrats on a strong quarter. And thanks for taking a question.

Unknown Executive: Good morning team, congratulations on a strong quarter and thanks for taking the question. So before we go into the three growth products, could you just maybe help us understand that 40% growth quarter over quarter in the anterior product business?

Mayank Mamtani: Good morning team, congratulations on a strong quarter and thanks for taking the question. So before we go into the three growth products, can you just maybe help us understand that 40% growth quarter over quarter in the anterior product business?

Mark Baum: So before we go into the three growth products, could you just maybe help us understand that 40% growth quarter over quarter in the anterior product business? Well, there's not much to say other than, you know, that portfolio of products which we acquired from Santan and Novartis. So those two transactions that we did make up that portfolio. And, as you recall, I think got a pretty good deal when we acquired those products. And our goal was to stabilize them. They had been falling in terms of their revenues for many years before we got involved. And I think, you know, not only were we trying to stabilize things, but get them back into a growth position.

Mayank Mamtani: Good morning team. Congrats on a strong quarter and thanks for taking the questions. So before we go into the three growth products, could you just maybe help us understand that 40% growth quarter over quarter in the anterior product business?

Mark Baum: Well, there's not much to say other than we have that portfolio of products, which we acquired from San Tan and Novartis. So those two transit transactions that we did make up that portfolio. And as you recall, we got a pretty good deal when we acquired those products, and our goal was to stabilize them. They had been falling in terms of their revenues for many years before we got involved.

Speaker Change: hel

Speaker Change: Well, there's there's not much to say other than, you know, we

Speaker Change: that portfolio of products which we acquired from Santan and Novartis. So those those two transit transactions that we did.

Mark Baum: So that's what these agreements allow us to do. They allow us to in a very friction free way, get into the individual sites that are parts of these organizations, the satellites, if you will, and sell into those those organizations. The truth is, though, that you can't get these deals done unless you have folks within these organizations that want the products. And so the reason why we've been able to get these supply agreements over the line is because of the voices, the physician voices within these organizations that want the products.

Speaker Change: make up that portfolio. And as you recall, we, I think, got a pretty good deal.

Speaker Change: when we acquired those products. And our goal was to stabilize them. They had been falling in terms of their revenues for many years before we got involved. And I think, you know, not only were we trying to stabilize things, but get them back into a growth position.

Mark Baum: And I think, you know, not only were we trying to stabilize things, but get them back into a growth position. And the thesis was that if we could do that, given the price that we paid, and given the long term need for these products, that we would have a, you know, a financial winner, and that we would be able to serve our customers with a very broad portfolio of an amazing toolkit for ophthalmologists and optometrists for many years to come and make a lot of friends in the ophthalmic community with these products, to make sure they had access to them.

Mark Baum: And the thesis was that if we could do that, given the price that we paid, and given a long-term need for these products, that we would have, you know, a financial winner. And that we would be able to serve our customers with a very broad portfolio of an amazing toolkit for ophthalmologists and optometrists for many years to come and make a lot of friends in the ophthalmic community with these products to make sure they had access to them. And so that's what we've done. I think we've met our promise there. These products have certainly stabilized.

Speaker Change: And the thesis was that if we could do that, given the price that we paid, and given the long-term need for these products.

Mark Baum: And they have been sort of carrying the torch for certainly a hizzo within the organizations. And now that we have these deals done, we will phase those programs in. As I mentioned on the call, we just signed the largest retina practice group in the US, and it's a very big win for us and a very big opportunity. But it will take several quarters to implement and get these agreements, you know, sold or get the products sold throughout these organizations. But that's part of the reason why we're so bullish on being able to grow revenue over the coming quarters as these agreements get fully implemented and face. Thank you.

Speaker Change: that we would have a, you know, a financial winner, and that we would be able to serve our customers with a very broad portfolio of an amazing toolkit for ophthalmologists and optometrists for many years to come and make a lot of friends in the ophthalmic community with these products.

Unknown Executive: to make sure they had access to them. And so that's what we did. I think we've met our promise there. These products have certainly stabilized. And in fact, from the first quarter to the second quarter, as we said, we had over 40% growth. And to be candid with you, as Andrew told me the other day, the third quarter's looking really good too. So this is turning out to be a very positive transaction.

Mark Baum: And so that's what we did. I think we've met our promise there. These products have certainly stabilized, and in fact, from the first quarter of the second quarter, as we said, we have over 40% growth. And to be candid with you, as Andrew told me the other day, the third quarter's looking really good too, so this is turning out to be a very positive transaction. And I think, in keeping with the other transactions that we were able to complete, five transactions over the course of a couple of years, I think all of them have worked out really well for our stock.

Speaker Change: to make sure they had access to them. And so that's what we've done. I think we've met our promise there.

Mayank Mamtani: And in fact, from the first quarter of the second quarter, as we said, we had over 40% growth. And to be candid with you, as Andrew told me the other day, the third quarter is looking really good, too. So this is turning out to be a very positive transaction. And I think, as in keeping with the other transactions that we were able to complete, you know, five transactions over the course of a couple of years, I think all of them have worked out really well for our stockholders. Yes, no, that's great to hear.

Speaker Change: These products have certainly stabilized and in fact

Speaker Change: from the first quarter of the second quarter as we said we have forty over forty percent growth and

Speaker Change: to be candid with you, as Andrew told me the other day.

Andrew: the third quarters looking really good too

Unknown Executive: And I think, in keeping with the other transactions that we were able to complete, five transactions over the course of a couple of years, I think all of them have worked out really well for our stock.

Andrew: So this is turning out to be a very positive transaction.

Speaker Change: and I think is in keeping with the other transactions that we were able to complete. Five transactions over the course of a couple of years, I think all of them have worked out really well for our stockholders.

Chase Knickerbocker: Our next question comes from Chase Knickerbocker with Craig Hallum. We may proceed. Good morning, Mark and Andrew.

Mayank Mamtani: Yeah, no, that's great to hear. And then on AHISO, if you're able to segment how unilateral versus bilateral procedure proportions could look like, as you know, there are certain forms of treatments that are having side effects in the other eye, where you may need a VEGF, and I'm talking about these complement drugs. So I was just curious, you know, what's your expectation unilateral versus bilateral? And then also, some of these procedures could be retroactively billed to January 1. Is that a reasonably interesting number? Or is that relatively small? And then I have a follow-up on VEGF.

Mayank Mamtani: And then on these though, if you're able to segment how unilateral versus bilateral procedure proportions could look like. As you know, there are certain forms of treatments that are having side effects in the other eye, where you may need a better Jeff. And I'm talking about these compliment drugs. So I was just curious. You know, what's your expectation in that versus bilateral? And then also some of these procedures could be retroactively billed to January 1st. Is that a reasonably interesting number, or is that relatively small? And then I will follow up on the by. Yeah, in terms of the retroactivity, I wouldn't, you know, make a big deal out of that.

Speaker Change: No, that's great to hear. And then on AHISO, if you're able to segment how

Mark Baum: You know, obviously the code speaks for itself, but I want to share my congratulations as well in the execution here. Maybe just first a couple specific market access questions from me. Can you just share kind of what you would expect the average copay to be for Medicaid patients? And then kind of the same question on commercial copays, are we still doing kind of zero dollars on the first prescription speaking on VVI, of course?

Speaker Change: Unilateral versus bilateral procedure

Speaker Change: proportions could look like as you know there are certain forms of achtreatments that are having side effects on the other side where you mayneed a ve and i'm talking about these complement drugs so this serious

Mark Baum: And then maybe speak some of the barriers that might be up on some of those commercial contracts, kind of speak to, you know, what sort of step edits are in place. Thanks. Yeah, I'll just comment and I think it's referenced in letter to stockholders that we've had some big wins on Medicaid specifically in some very large markets and Texas and certainly in California. As I said in my letter to stockholders now Medicaid patients have access to VVI with zero copay. So zero out of pocket, which is fantastic for a market of that size.

Speaker Change: you know, what's your expectation unilateral versus bilateral? And then also, some of these procedures could be retroactively billed to January 1. Is that a reasonably interesting number? Or is that is that relatively small? And then I have a follow up on Dubai.

Mark Baum: Yeah, in terms of the retroactivity, I wouldn't, you know, make a big deal out of that. That's mainly a benefit for our customers. You know, to be able to ensure that any issues with billing that were in the past are kind of cleaned up. And that's a good thing from a credibility perspective for us, or for us rather. And in terms of, you know, bilateral versus unilateral, this isn't really a big point to make, because it's simple math that if you are selling an account, you know, 2000 units a year, and they're only using IESO on one eye, and you know, half of the patients are being administered bilateral injections, then you're going to increase your unit volumes with that one account by 50%. And if it' So it's really easy math. It's good, simple math.

Speaker Change: Yeah, in terms of the retroactivity, I wouldn't, you know, make a big deal out of that. That's mainly a benefit for our customers.

Mark Baum: That's mainly a benefit for our customers. You know, to be able to ensure that any, any issues with Billy that were in the past are kind of cleaned up. And that's a good thing from a credibility perspective for us rather. And in terms of, you know, bilateral versus unilateral, this isn't really. The big point to make, because it's simple math that if you are selling an account, you know, 2000 units a year and they're only using a hyzo on one eye and, you know, half of the patients are being administered bilateral injections, then you're going to increase your unit volumes with that one account by 50%.

Speaker Change: you knowto be able to ensure that any any issues with billy that we're in the past are kind of cleaned up

Andrew Boll: Andrew, do you want to comment on some additional market access information and specifically in barriers and step edits? First the and just coming more a little bit more on the Medicaid side, you know, you know, this is states specific typically on the plans, but as Mark said, the copays are generally really low in some cases as low as zero dollars and many cases, you know, single digits. So it's a great, great win for the access team on the step edit side.

Speaker Change: And that's a good thing from a credibility perspective from us.

Speaker Change: for us, rather. And in terms of, you know, bilateral versus unilateral, this is a really...

Speaker Change: Big point to make because it's simple math.

Speaker Change: that if you are selling an account, you know, 2000 units a year and they're only using IESO on one eye,

Speaker Change: and, you know, half of the patients are being administered bilateral injections.

Mark Baum: And if it's being used on 100% of the patients bilaterally, then your revenues are unit volumes, and it's going to double. So it's really easy math. It's good math. But I think the important thing is that the product is really performing well in the clinic. And, you know, not only in surgical cases, but in laser interventions in glaucoma surgeries, certainly in individual injections, we're getting very positive feedback. And, and I think that's where, you know, the greatest opportunity for unit demand will be, you know, well north of 10 million units per year and growing, especially with, you know, these GA products now they're in the market.

Speaker Change: then you're going to increase your unit volumes with that one account by fifty percent

Andrew Boll: We are seeing some plans requiring that prior authorization. Typically it's a failed patient on a different dry product. The good news for us is the market is full of patients that have failed other products. We talked about this in launch VVI that the existing dry market kind of lacked a really good product. And so there are a lot of patients that have tried products and failed. And so all that step edit is there.

Speaker Change: And if it's being used on a hundred percent of the patients bilaterally, then your revenues or your unit volume demand is going to double.

Mark Baum: But I think the important thing is that the product is really performing well in the clinic. And, you know, not only in surgical cases but in laser interventions, glaucoma surgeries, certainly in intravitreal injections, we're getting very positive feedback. And I think that's where, you know, the greatest opportunity for unit demand will be, you know, well north of 10 million units per year and growing, especially with, you know, these GA products now that So we're excited about that market.

Speaker Change: So it's really easy math, it's good math, but I think the important thing is that the product is really performing well.

Speaker Change: in the clinic. And, you know, not only in surgical cases, but in laser interventions, in glaucoma surgeries.

Speaker Change: Certainly, in intravitreal injections, we're getting very positive feedback, and I think that's where the greatest opportunity for unit demand will be, well north of 10 million units per year and growing.

Andrew Boll: There is a large population patient that have failed other dry products. And so our ability to get through the steps and get the product paid for is isn't a huge barrier and we're seeing increased wins with even prior authorization approvals. Got it. That's helpful. And then kind of building off that.

Mark Baum: So we're excited about that market. That's one of the reasons why Gregg Deepas Squall joined our company. He's already making a big impact. The reason why we have so many of these strategic agreements done and not only done, but now that now we're seeing pull through, you know, purchases through these agreements is because of the great work that Gregg and the entire team that's working on iso is doing. I mean, we have a phenomenal team commercially on iso, and they're really producing results, but they're just getting started. This is, if you look at the overall market share, Mike, what we're doing versus what we maybe can do. We have, as I said in the letter, just scratched the surface.

Speaker Change: especially with, you know, these GA products now they're in the market.

Mark Baum: That's one of the reasons why Greg DePasquale joined our company. He's already making a big impact. The reason why we have so many of these strategic agreements done, and not only done, but now we're seeing pull through, you know, purchases, through these agreements is because of the great work that Greg and the entire team that's working on IHESO are doing. I mean, we have a phenomenal commercial team on IHESO, and they're really producing results, but they're just getting started. This is, if you look at the overall market share, Mayank, what we're doing versus what we maybe can do. We have, as I said in the letter, just scratched the surface.

Speaker Change: market so

Speaker Change: We're excited about that market. That's one of the reasons why Greg DePasquale joined our company. He's already making a big impact. The reason why we have so many of these strategic agreements done, and not only done, but now we're seeing pull through.

Mark Baum: How should investors be thinking about Medicare coverage here? Obviously it's early days. But do you guys have goals for kind of progress there by the end of the year, you know, by midway next? I mean, how are you guys thinking about Medicare coverage and then maybe speak to what you would expect there as far as how your market access team is trying to make that as affordable as possible for Medicare beneficiaries for VVI?

Speaker Change: you know, purchases.

Speaker Change: through these agreements is because of the great work that Greg and the entire team that's working on IHESO is doing. I mean, we have a phenomenal

Speaker Change: team commercially on easil and and they're really producing results but they're just getting start this is if you look at the overall market share mank

Mark Baum: Yes, to be clear, as I said in my prepared remarks, we intend to compete for every single dry eye prescription and to be able to help every single dry eye disease patient in need. And that includes Medicare beneficiaries. So we're in active discussions and have been for quite some time to be able to serve that patient population. The goal, I think from the time that we launched the product, you know, we were realistic that it was going to take 18 to 24 months or so to get all of the coverage in place that we would need, you know, for the follow, as we grew this product.

Unknown Executive: Maybe I can do it. We have, as I said in the letter, just scratched the surface.

Speaker Change: what we're doing versus what we maybe can do we have as i said in the letter just scratched the surface

Mayank Mamtani: Yeah, no, absolutely. I'm looking forward to the penetration trends, including, you know, through the course of this year. And I know you're not going to comment on the proportion of contribution to guidance for RAHISO, but sort of my other related question is also around VY, the net price assumption, you know, longer term that we could model here. And also, like, based on the refill rate, what duration of treatment on average you anticipate patients being on the drug would also be helpful.

Mayank Mamtani: Yeah, no, absolutely looking forward to the penetration trend, including, you know, through the course of this year. And I know you're not going to comment on the proportion of contribution to guidance for Rahizo, but sort of my other related question is also around VY, net price assumption, you know, longer term that we could model here. And also, like based on the refill rate, you know, what duration of treatment on average, you anticipate patients being on drug would also be helpful just given, you know, we are seeing one of your peers, you know, materially increased guidance.

Speaker Change: Yeah, no, absolutely. Looking forward to the penetration trends, including, you know, through the course of this year, and I know you're not going to comment on

Speaker Change: the proportion of contribution to guidance for praheal

Speaker Change: but sort of my other related question is also around vy net pric assumption longer term that we could we could model health and also like based on the rel rate you know what duration of treatment on average you ipate patient being on drug

Mark Baum: And so, I don't think that there's anything that's changed today from where we, you know, had been planning when we launched the product, but we are going after Medicare coverage. We intend to have coverage, hopefully in the first quarter or so of next year to have that in place. But I can't really comment specifically on, you know, how those negotiations are going because, you know, it is a, these are, you know, very competitive markets for that patient population. And as I said, our goal is to be able to serve that patient population and we intend to aggressively compete for every one of those patients. Makes sense.

Mayank Mamtani: Just given, you know, we are seeing one of your peers, you know, materially increased guidance. So just kind of trying to understand, you know, what RAHISO and VY's contribution would be on an annual rate basis. And, you know, what are some of those, at least for VY, where we still have to learn more about net price and, you know, number of units per patient over the course of the year. If you're able to give some color, that would be helpful. Sure.

Speaker Change: would also be helpful, just given, you know, we are seeing one of your peers, you know, materially increased guidance. So just kind of trying to understand

Mark Baum: So just kind of trying to understand, you know, what I see ISO and VY on annual rate basis contribution would be. And, you know, what are some of those, at least for VY, where we still have to learn more about net price and, you know, a number of units per patient, or a course of year, if you're able to give some color, that would be helpful. Sure. So, you know, to be clear, whether it's VY or Rahizo, we really will not discuss ASP at all. There's no, no, and a competitive rationale for us publicly discussing ASP.

Speaker Change: What are ICHISO and VY on an annual rate basis contribution would be? And, you know, what are some of those, at least for VY, where we still have to learn more about net price and, you know...

Speaker Change: the number of unit ulpient over course of if you're able to give some color that can be helpful

Mark Baum: Sure. So, you know, to be clear, whether it's VIVI or IHESO, we really will not discuss ASP at all. There's no Competitive Rationale for us publicly discussing ASI, and so we won't do that.

Speaker Change: Sure. So, you know, to be clear, whether it's VIVI or IHESO, we really will not discuss ASP at all. There's no, no...

Mark Baum: And then just maybe on the supply agreements for a hezo. I mean, now up to 24, that's great to see, could you help us quantify kind of what the overall opportunity is in those within those supply agreements, you said, you know, their licenses to hunt just kind of how big is that ground, you know, whether you can kind of quantify it by maybe like a market share metric or, you know, overall revenue opportunity just to help us kind of think about, you know, what that is.

Speaker Change: competitive rationale for us publicly discussing ASP. And so we won't do that. And I think over time, as we report more on a product specific basis,

Mark Baum: And so we won't do that. And, you know, I think over time, as we report more on a product-specific basis, people like you who have your training will be able to sort of get a much better idea of kind of where net pricing is or ASP pricing is for these products. In any case, in terms of refill rates or durations of treatment, if you are diagnosed with chronic dry disease and you start VVI and, you know, you refill the prescription, what we're seeing is that, you know, the refill rates, and we have a history, by the way, of understanding refill rates for chronic dry disease patients through our compounding business.

Mark Baum: And, you know, I think over time, as we report more on a product-specific basis, people like you who have your training will be able to sort of get a much better idea of kind of where net pricing is or ASP pricing is for these products. In terms of refill rates or durations of treatment, If you are diagnosed with chronic dry disease and you start VIVI, and you refill the prescription, what we're seeing is that the refill rates, and we have a history, by the way, of understanding refill rates for chronic dry disease patients through our compounding business.

Speaker Change: people like you who have your training will be able to sort of get a much better idea of kind of where net pricing is or asp pricing this these products in any case in terms of refill rates or durations of treatment

Mark Baum: Overall size of those supply agreements are thanks. Yeah, sure. So the, the agreements that we have in place now. You know, what we haven't done is posted sort of what percentage of the tan these agreements reflect. And I don't think that we're going to do that. I can give you some additional color and just give you a sense of the scale of some of these agreements. And I'll just give you one data point from the most recent agreement that we signed that I was so excited about to serve the largest retina practice group in the US.

Unknown Executive: If you are diagnosed with chronic dry disease and you start VIVI, and you refill the prescription, what we're seeing is that the refill rates, and we have a history, by the way, of understanding refill rates for chronic dry disease patients through our compounding business. So we understand what good looks like. But what we're seeing with VIVI is far exceeding.

Speaker Change: if you are diagnosed with chronic dry disease you start vi

Speaker Change: and you know you you refill the prescription what we're seeing is is that

Speaker Change: the refill rates and we have a history by the way of understanding refill rates for chronic drive he s patients through our compounding business so we understand what good looks like

Mark Baum: So we understand what, you know, good looks like, because our refill rates for our compounded formulations were very strong. And certainly much higher than even refill rates for FDA-approved products historically. But what we're seeing with VVI far exceeds what we've seen with our compounded products, and you know, you don't have any specific information, specific data to give to you, but other than to tell you that we're now in our eighth refill cycle. And if you look at NRX, you know, as a component of TRX over time, the NRX component of the TRX is going to become smaller because more and more patients are refilling.

Mark Baum: That group alone has about 2.1 million patient visits per year, 2.1 million. So this is a very large market opportunity. And I would think that many of those patient visits are connected with the administration of individual injections. So it's a very exciting account. But as I said, we have, you know, more than two dozen of these agreements in place now. And we intend to serve those groups over time. They have to, these agreements have to be phased in and they will be.

Mark Baum: So we understand how good it looks because our refill rates for our compounded formulations were very strong and certainly much higher than even the refill rates for FDA-approved products historically. But what we're seeing with VVI far exceeds what we've seen with our compounded products. And, you know, I don't have any specific information or specific data to give to you, other than to tell you that we're now in our eighth refill cycle.

Speaker Change: because our refill rates for our compounded formulations were very strong and certainly much higher than even refill rates for FDA-approved products historically.

Speaker Change: But what we're seeing with VIVI far exceeds...

Speaker Change: What we've seen with our compounded products.

Speaker Change: I don't have any specific information, specific data to give to you, but other than to tell you that we're now in our eighth refill cycle.

Mark Baum: And if you look at NRX, you know, as a component of TRX, over time, the NRX component of TRX is going to become smaller because more and more patients are refilling it, and so the refills become a larger percentage of TRX. But given the way our TRX is growing, it's not a bad thing. It's a good thing. And as we add more salespeople in these territories, NRX will continue to grow. And then you get this sort of amazingly beautiful compounding of prescriptions. Andrew, do you want to add anything to that?

Speaker Change: and if you look at nrx as a component of tx

Speaker Change: Over time, the NRX component of the TRX is going to become smaller because more and more patients are refilling, and so the refills become a larger percentage of the TRX. But given the way our TRX is growing,

Andrew Boll: And so the refills become a larger percentage of the TRX, but given the way our TRX is growing, that's not a bad thing. It's a good thing. And as we add more salespeople in these territories, the NRX will continue to grow. And then you get this sort of amazingly beautiful compounding of prescriptions. Andrew, do you want to add to that? Yeah, I can a little color. You know, earlier in the call, Mark mentioned my father's on VVI. And I was there when he first looked at it. And to see him, who's, he's suffered most of my diseases, including terrible dry eye.

Mark Baum: And that's, as I said, part of the reason why we're so excited about the coming quarters and the coming years because we really have not yet seen the effects financially from the agreements that we've been able to get in place. But that will happen. Got it.

Speaker Change: It's not a bad thing. It's a good thing. And as we add more salespeople in these territories, the NRX will continue to grow and then you get this sort of amazingly beautiful compounding.

Speaker Change: of prescriptions. Andrew, do you want to add to that?

Chase Knickerbocker: And then just last for me. I'll hop back in queue. Sorry for so many here. But assuming everything goes right, Mark, when would you expect to relaunch triaths since this year, you know, assuming kind of everything goes smoothly with these one-in-process batch in the next, the third one here. And then, you know, the hundred thousand units is kind of what I have was kind of previously here in the triaths and market before all the supply constraints.

Unknown Executive: Yeah, I can add a little color. And, you know, earlier in the call, Mark mentioned my father's on takes VVI. And I was there when he first took it and to see him who suffers from all sorts of eye diseases, including terrible dry eyes, and he's tried all of the products, and it's really helped him as a patient, and it's really, I think, changed his life, his quality of life. And that's one of the reasons we're seeing these refills because there hasn't been a dry eye product on the market that generates this type of benefit.

Andrew Boll: Yeah, I can add a little color. And, you know, earlier in the call, Mark mentioned my father takes VVI. And I was there when he first took it and to see him who'd suffered from all sorts of eye diseases, including terrible dry eyes, and he'd tried all of the products. I still remember putting that drop in his eye, the first drop, and he looked at me, and he said, Wow, and it's really helped him as a patient, and it's really, I think, changed his life, his quality of life.

Andrew: Yeah, I can add a little color. You know, earlier in the call, Mark mentioned my father is on, takes VVI, and I, I was there when he first took it, and to see him, who's, he's suffered from all sorts of eye diseases, including terrible dry eye, and he's tried all of the products.

Andrew Boll: And he's tried all of the products. I remember, still, him putting that drop in his eye, the first drop. He looked at me and he said, wow. And it's really helped him as a patient, and really, I think, changes his life, his quality of life. And that's one of the reasons we're seeing these refills. There isn't; there has not been a dry eye product on the market that generates this type of benefit. And so I think you'll continue to see reflow rates climb. As Mark said, we'll see more and more refilled be a part of the TRX number.

Chase Knickerbocker: How are you thinking about penetrating that kind of original opportunity, you know, in the first couple quarters after one? Yes, so the timing on price and as I said, we're going to be making the third batch next week. It's scheduled for next week, which is amazing. And boy, do I want to thank the team that has been working so diligently for about a year to get us to this point. So they've done an incredible job and the reason why we've scheduled the third batch is because all of the indication so far is that we've been successful with the second batch.

Speaker Change: i remember still and putting dro andit's thefirst drop and you looked said wow

Speaker Change: and it's really helped him as a patient and it's really, I think, changed his life, his quality of life and that's one of the reasons we're seeing these refills is there there isn't been there has not been a dry eye product on the market that that generates this type of benefit.

Andrew Boll: And that's one of the reasons we're seeing these refills is because there hasn't been a dry eye product on the market that generates this type of benefit. And so I think you'll continue to see reflow rates climb. As Mark said, we'll see more and more refilled prescriptions be a part of the TRX number. But we will continue to see NRXs, and we will continue to drive NR

Speaker Change: and so i think you'll continue to see rell rates time as mark said we'll see more and more refill give part of the trexction number but we will continue to see interction and we'll continue to dve rxions

Andrew Boll: But we'll continue to see interaction, and we'll continue to drive NRX's new prescriptions. In regards to pricing too, one of the great things about the market access program is we're focused on making money. And so, as we get these market access wins, we should see ASP improvements. We've got a really generous program right now to make sure we're getting patients on therapy. But overall, the Market Access Program is executing; we're getting wins. And so we should start seeing ASP get a little better on that product as well. And importantly, the refill rates, as those increase, will continue to see ASP go up as well because a lot of us, people have gone through the prioritization process and now they're getting a lot of their claims paid for, a lot of the claims for VVIP paid for.

Andrew Boll: In regards to pricing, too, one of the great things about the market access program is that we're focused on making money. And so as we get these market access wins, we should see ASP improve. We've got a really generous program right now to make sure we're getting patients on therapy.

Mark: and New Prescriptions.

Speaker Change: In regards to pricing, too,

Chase Knickerbocker: You know, we don't have all of the data, but we have a lot of the data and we're pretty positive on the balance of the data that we expect to get here in the coming days. In terms of, you know, when we might be able to relaunch that that product assuming that we're successful with the third batch, it does take somewhere between 30 and it has taken as long as 60 days to get validated analytical test results from a batch.

Speaker Change: One of the great things about the market access program is we're focused on making money.

Speaker Change: As we get these market access wins, we're...

Speaker Change: We should see ASP improved. We've got a really generous program right now to make sure we're getting patients on therapy.

Andrew Boll: But overall, the market access program is executing, we're getting wins, and so we should start seeing ASP get a little better on that product as well. And importantly, as those increase, we'll continue to see ASP go up as well because a lot of those people have gone through the prior authorization process, and now they're getting a lot of their claims paid for, a lot of the claims for V-5 paid.

Speaker Change: but overall the market access program is executing we're getting wins and so we should our teen asp get a little better on that product as well and importantly

Unknown Executive: The refill rates As those increase, we'll continue to see ASP go up as well because a lot of those people have gone through the prior authorization process, and now they're getting a lot of their claims paid for, a lot of the claims for V-5 paid.

Chase Knickerbocker: And so, you know, it's very easy to look at the calendar and say, hey, if they're doing this in the middle of August, and even if it takes two months, and I said in the letter that it takes about 30 days to do all the paper, or you can see that sometime in the fourth quarter of all those well, we'll be able to relaunch this product. But what I'm most excited about, you know, beyond having inventory, finally, of this product is the feedback that I received from Retina Specialists at ASRS about Triassins.

Mark: The refill rates as those increase, we'll continue to see ASP go up as well, because a lot of those people have gone through the prior authorization process, and now they're getting a lot of their claims paid for, a lot of the claims for V-5 paid for.

Mark Baum: So all good things for VVIP; that's probably the product that I'm most excited about. And that tells you how great our product is because IHZ is also an amazing product. As Mark mentioned, we're having tons of wins there, and that's going to be a really big and important product for us for a long time as well.

Unknown Executive: So all good things for VIVA. That's probably the product I'm most excited about. And that tells you how great of a product IESO is because IESO is also an amazing product. As Mark mentioned, we're having tons of wins there. And that's going to be a really big and important product for us for a long time.

Andrew Boll: So all good things for Viva. That's probably the product I'm most excited about. And that tells you how great of a product Viva is because IESO is also an amazing product. As Mark mentioned, we're having tons of wins there. And that's going to be a really big and important product for us for a long time.

Mark: All good things for Reva. That's probably the product I'm most excited about. And that tells you how great of a product it is because Ihezo is also an amazing product.

Speaker Change: As Mark mentioned, we're having tons of wins there and that's going to be a really big and important product for us for a long time as well.

Mayank Mamtani: And my final question about your ASRS meeting in Stockholm: you identified, I believe, some additional strategic opportunities that, you know, you're getting to, you know, be on the table for now that you're a bigger brand in IKEA. You know, could you just talk about how you plan to pursue these and, obviously, balance against the, you know, the laser focus that you have with the current product portfolio? And congrats again. Thanks for taking the time to answer.

Mark Baum: Great, and my final question about your ASL as meeting at Stockholm, you know, you identified, I believe, some additional strategic opportunities that, you know, you're getting to, you know, be on the table for now that you're a bigger brand and I care. You know, could you just talk to how you plan to prosecute these and obviously balance against the, you know, the laser focus that you have with the current product for you and for that again, thanks for taking my questions. Thank you, Mike. Yeah, you know, as I said in the letter, we continue to be on the hunt for wonderful products with great economics that will allow us to serve our customers.

Chase Knickerbocker: You know, we had meetings with these folks about programs that we were considering working on. And many of these programs got a big thumbs down. These Retina Specialists said, don't consider that, or here's why I wouldn't work on that. But when we talked to them about Triassins, there was, and I have to, you know, normally you don't want to say all the word, use the word all, but I would say that all Retina Specialists that we spoke to, and I spoke to probably 15 high level folks, everyone was really excited to have Triassins back in the market.

Speaker Change: Great, and my final question about your ASLS meeting at Stockholm, you know, you identified, I believe, some additional strategic opportunities that, you know, you're getting to, you know, be on the table for now that you're a bigger brand in IK.

Speaker Change: You know, could you just talk to how you plan to prosecute these and obviously balance against the, you know, the laser focus that you have with the current product portfolio. And congrats again. Thanks for taking the questions.

Chase Knickerbocker: And so I'm very confident that we're going to be able to sell all that we can produce for quite a long time. Right now, we're very busy, not only preparing for the preparation of this third batch, but also working with our contract manufacturer to schedule additional batches this year and into the first half of next year based on our internal forecast for the product. So Triassins is a winner, the market wants Triassins, and we've got some really exciting plans for Triassins, not only hopefully for this year, but for several years to come to develop the Triassins brand. Thanks Mark, congrats again. Thanks, Chase.

Mark Baum: Thank you, Mayank. Yeah, you know, as I said in the letter, we continue to be on the hunt for wonderful products with great economics that will allow us to serve our customers. Um, you know, we want to be an important company, not only to the ophthalmic community writ large, but really to these doctors in their offices. We want to be a contributor to the staff in these offices by giving them products that make their job easier that get paid for that don't create prior authorization nightmares for them.

Speaker Change: Thank you, Mayank. Yeah, you know, as I said in the letter, we continue to be on the hunt.

Speaker Change: for

Speaker Change: wonderful products with great economics that will allow us to serve our customers you know we want to be an important company not only to the upthomic community it

Mark Baum: You know, we want to be an important company, not only to the ophthalmic community it writ large, but really to these doctors and their offices. We want to be a contributor to the staff in these offices by giving them products that make their job easier, that get paid for, that don't create prior authorization nightmares for them. So we're looking for products that will allow us to build the persona in ophthalmology as an ophthalmic pharmaceutical company that we can be proud of, that our stockholders can be proud of, that the people who work at Herald can be proud of.

Speaker Change: at large, but really to these doctors in their offices, we want to...

Speaker Change: be a contributor.

Speaker Change: to the staff in these offices by

Speaker Change: giving them products that make their job easier that get paid for that don't create prior authorization nightmares for him so we're looking for products that will allow us to build the persona

Mark Baum: So we're looking for products that will allow us to build a persona in ophthalmology as an ophthalmic pharmaceutical company that we can be proud of, that our stockholders can be proud of, that the people who work at Harrow can be proud of. And so there are great products out there. And there are also a lot of duds. Andrew and I have our fingerprints on all of these deals; we work on them together very actively.

Speaker Change: in ophthalmology.

Speaker Change: as an ophthalmic pharmaceutical company that we can be proud of, that our stockholders can be proud of, that the people who work at Harrow can be proud of. And so there are great products out there. And there are also a lot of duds.

Mark Baum: And so there are great products out there, and there are also a lot of debts. And Andrew and I have our fingerprints on all of these deals. We work on them together very actively. And we're always on the hunt for things that can help us reach our goals. But, as you know, we're not going to overpay; we're not going to get overly excited about something and put ourselves in a financially perilous position. So we have a history of doing deals; I think that is very positive. I think if you look at the five deals that we've done in the last couple of years, we've been able to generate a tremendous amount of value for our stockholders.

Mayank Mamtani: Thank you. Our next question comes from my uncle and Tony, with Be Riley Securities, he may proceed. Good morning, team. Congrats on a strong quarter. And thanks for taking a question.

Mark Baum: And we're always on the hunt for things that can help us reach our goals. But as you know, we're not going to overpay; we're not going to get overly excited about something and put ourselves in a financially perilous position.

Speaker Change: And Andrew and I have our fingerprints on all of these deals. We work on them together very actively, and we're always on the hunt for things that can help us reach our goals.

Mark Baum: So before we go into the three growth products, could you just maybe help us understand that 40% growth quarter will quarter in the anterior product business? Well, there's not much to say other than, you know, that portfolio of products which we acquired from Santan and Novartis. So those two transactions that we did make up that portfolio. And as you recall, I think got a pretty good deal when we acquired those products.

Speaker Change: but as you know we're not going to overpay

Speaker Change: We're not going to get overly excited about something and put

Mark Baum: So we have a history of doing deals, I think, that is very positive. I think if you look at the five deals that we've done in the last couple of years, we've been able to generate a tremendous amount of value for our stockholders. And so we are convinced that there are deals out there to be done, and we're actively looking at, you know, many of them, and we have a lot to offer to partners. I want to close with that.

Speaker Change: ourselves in a

Speaker Change: Financial, financially perilous position.

Speaker Change: We have a history of doing deals, I think.

Speaker Change: that is very positive. I think if you look at the five deals that we've done in the last couple of years, we've been able to generate a tremendous amount of value for our stockholders. And so we are convinced that there are deals out there to be done.

Mark Baum: And so we are convinced that there are deals out there to be done. And we're actively looking at, you know, many of them. And we have a lot to offer to partners. I want to close with that because if you look at our history, whether it's an interior segment product or whether it's a product being sold and reposed to your segment, our commercial organization. is a winner. I mean, these people know how to get the ball over the line. They know how to score points; they know how to get things done. And so to a potential partner, we have a lot of credibility, certainly more credibility than we've ever had, which allows us to speak to potential partners and sort of, you know, with credibility and to, I think, get better terms or more reasonable terms that involve more back ended, less front end.

Mark Baum: Because if you look at our history, whether it's an interior segment product or whether it's a product being sold into the posterior segment, our commercial organization is a winner. I mean, these people know how to get the ball over the line.

Speaker Change: and we're actively looking at, you know, many of them and we have a lot to offer to partners. I want to close with that because if you look at our history, whether it's an interior segment product or whether it's a product being sold in the posterior segment,

Mark Baum: And our goal was to stabilize them. They had been falling in terms of their revenues for many years before we got involved. And I think, you know, not only were we trying to stabilize things, but get them back into a growth position. And the thesis was that if we could do that, given the price that we paid, and given a long term need for these products, that we would have, you know, a financial winner.

Mark Baum: They know how to score points; they know how to get things done. And so, to a potential partner, we have a lot of credibility, certainly more credibility than we've ever had, which allows us to speak to potential partners and sort of, you know, with credibility and to, I think, get better terms or more reasonable terms that involve more back end and less front end. But we're actively looking, and, you know, we'll see. We'll see what we're able to get done.

Unknown Executive: is a winner. I mean, these people know how to get the ball over the line, they know how to score points, and they know how to get things done. And so, to potential partners, we have a lot of credibility, certainly more credibility than we've ever had, which allows us to speak to potential partners and sort of, you know, with credibility and to, I think, get better terms or more reasonable terms that involve more back end and less front end.

Speaker Change: Our commercial organization.

Speaker Change: is a winner. I mean, these people know how to get

Speaker Change: the ball over the line they know i had a score points they to get things done and so to a potential partner we have a lot of credibility certainly more credibility than we've ever had which allows us to speak

Mark Baum: And that we would be able to serve our customers with a very broad portfolio of an amazing toolkit for ophthalmologist and optometrist for many years to come and make a lot of friends in the ophthalmic community with these products to make sure they had access to them. And so that's what we've done. I think we've met our promise there. These products have certainly stabilized. And in fact, from the first quarter of the second quarter, as we said, we had over 40% growth.

Speaker Change: to potential partners and sort of, you know, with credibility and to, I think, get better terms or more reasonable terms that involve more back-end and less front-end.

Mark Baum: The main focus, though, to be clear, at Harrow is executing on what we have. We have an amazing portfolio, 17 branded products, and now the number one compounded franchise in the US. So we've got a lot going for us now. We've got a lot to do day in and day out. But if there's a chance to buy something that we believe is worth a dollar and we can pay a dime for it up front, we're going to certainly take a hard look. It makes a lot of sense.

Mark Baum: But we're actively looking, and, you know, we'll see, we'll see what we're able to get done.

Unknown Executive: But we're actively looking, and you know, we'll see, we'll see what we're able to get done. The main focus, though, to be clear, at Harrow, is executing on what we have. We have an amazing portfolio, 17 branded products, and now the number one compounded franchise in the US. So we've got a lot going for us now; we've got a lot to do day in and day out. But if there's a chance to buy something that we believe is worth $1 and we can pay a dime for it up front, we're going to certainly take a hard look.

Speaker Change: But we're actively looking and we'll see what we're able to get done.

Mark Baum: The main focus, though, to be clear at Harrow, is executing on what we have. We have an amazing portfolio, 17 branded products now, the number one compounded franchise in the U.S. So we've got a lot going for us now. We've got a lot to do day in and day out. But if there's a chance to buy something that we believe is worth a dollar, and we can pay a dime for it up front, we're going to certainly take a hard look at that. Thank you. Thank you, Mayank.

Mark Baum: And to be candid with you, as Andrew told me the other day, the third quarter is looking really good, too. So this is turning out to be a very positive transaction. And I think as in keeping with the other transactions that we were able to complete, you know, five transactions over the course of a couple of years, I think all of them have worked out really well for our stockholders. Yes, no, that's great to hear.

Speaker Change: The main focus, though, to be clear,

Speaker Change: at Harrow is executing on what we have. We have an amazing portfolio, 17 branded products now, the number one compounded franchise in the US.

Speaker Change: So we've got a lot going for us now. We've got a lot to do day in and day out. But if if there's a chance to buy something that we believe is worth a dollar and we can pay a dime for it up front, we're going to certainly take a hard look at that.

Mayank Mamtani: Makes a lot of sense. Thank you.

Mark Baum: And then on these though, if you're able to segment how unilateral versus bilateral procedure proportions could look like. As you know, there are certain forms of treatments that are having side effects in the other eye, where you may need a better Jeff. And I'm talking about these compliment drugs. So I was just curious. You know, what's your expectation in that versus bilateral? And then also some of these procedures could be retroactively build to January 1st.

Mark Baum: Thank you.

Speaker Change: Makes a lot of sense. Thank you.

Brooks O'Neill: Our next question comes from Brooks O'Neill with Lake Street Capital Markets.

Operator: Our next question comes from Brooks O'Neill with Lake Street Capital Markets. Please proceed.

Mayank Mamtani: Thank you, Mayank.

Mayank Mamtani: Thank you.

Brooks O'Neill: You may proceed.

Speaker Change: Our next question comes from Brooks O'Neill with Lake Street Capital Markets. You may proceed.

Mark Baum: Morning, all. Thanks for taking my questions. I'm going to focus on two things. One, I noticed in the shareholder letter. I think I did a run at late last night, but I think you said around 11 million of revenue in the quarter from my he's oh, I know it's still very early in the development and commercialization of that product. But can you speak at all to reorder activity so far? Are you seeing any doctors or practices coming back to the plate to a reorder I diesel? Thank you for that, Brooks. Again, in the corporate deck, we actually lay out what the reorder rate is specifically for I Diesel.

Brooks O'Neill: Morning, all. Thanks for taking my questions. I'm going to focus on two things. One, I noticed in the shareholder letter, I think I did, I read it late last night, but I think you said around $11 million in revenue in the quarter from iHESO. I know it's still very early in the development and commercialization of that product, but can you speak at all about reordering activities so far? Are you seeing any doctors or practices coming back? to the place to to reorder a he's Oh, yes.

Brooks O'Neill: morning all thanks for taking my questions i'm going to focus on two things

Brooks O'Neill: one i noticed in the shareholder letter i think i did run it late last night but i think he said around eleven million of revenue in the quarter from my heo i know it's still very early in the development and commercialization of that product but can you speak at all to reorder

Mark Baum: Is that a reasonably interesting number, or is that relatively small? And then I will follow up on the by. Yeah, in terms of the retroactivity, I wouldn't, you know, make a big deal out of that. That's mainly a benefit for our customers. You know, to be able to ensure that any, any issues with Billy that were in the past are kind of cleaned up. And that's a good thing from a credibility perspective from us for us rather.

Speaker Change: activities so far? Are you seeing any doctors or practices coming back?

Mark Baum: Thank you for that, Brooks. Yeah, in the corporate deck, we actually lay out what the reorder rate is specifically for IE.

Unknown Executive: Thank you for that, Brooks. Yeah, in the corporate deck, we actually lay out what the reorder rate is specifically for IE.

Speaker Change: to the place to reorder IHESO.

Speaker Change: thank you for that brook in the corporate deck

Speaker Change: We actually lay out what the reorder rate is specifically for IE, so I think

Mark Baum: I think this quarter, it was 87%. So that's a, that's pretty good. As you know, because you've known me for a while now, I'm a glass half empty kind of guy. And so I say to our people, what about the other 13%? But 87% is not bad. It really isn't bad. But overall, you know, we still have a very, very small percentage of a mark. I think we're just about, you know, I think on a run rate of about 1% of the addressable opportunities. It's a very, very small percentage of the market, but doctors who use it, they like it and they're ordering more.

Speaker Change: This quarter, it was 87%.

Mark Baum: So I think this quarter it was 87%. So that's, that's pretty good. As you know, because you've known me for a while now, I'm a glass half empty kind of guy.

Unknown Executive: So I think this quarter it was 87%. So that's, that's pretty good. As you know, because you've known me for a while now, I'm a glass half empty kind of guy.

Mark Baum: And in terms of, you know, bilateral versus unilateral, this isn't really. The Big Point to Make, because it's simple math that if you are selling an account, you know, 2000 units a year and they're only using a hyzo on one eye and, you know, half of the patients are being administered bilateral injections, then you're going to increase your unit volumes with that one account by 50%. And if it's being used on 100% of the patients bilaterally, then your revenues are unit volumes and it's going to double.

Speaker Change: So, that's a, that's pretty good.

Speaker Change: As you know, because you've known me for a while now, I'm a glass half empty kind of guy. And so I say to our people, what about the other 13%?

Mark Baum: And so I say to our people, what about the other 13%? But 87% is not bad. It really isn't bad.

Unknown Executive: And so I say to our people, what about the other 13%? But 87% is not bad. It really isn't bad.

Speaker Change: But 87% is not bad. It really isn't bad.

Mark Baum: But, you know, overall, we still have a very, very small percentage of the market. I think we're just about, you know, I think on a run rate of about 1%. Unknown Executive, Mayank Mamtani, Jamie Webb, Harrow Health, and I think we can improve that refill rate above 87%.

Unknown Executive: But, you know, overall, we still have a very, very small percentage of the market. I think we're just about, you know, I think on a run rate of about 1% and addressable opportunities. It's a very, very small percentage of the market, but doctors who use it like it, and they're ordering more.

Speaker Change: but know overall you know we still have a very very small percentage of a market i think we're just about you know i think on the run rate of about one percent of the

Speaker Change: addressable opportun soit's a very very small percentage of the market but doctors who use it they like it and they're ordering more

Mark Baum: And I think we can improve that refill rate above 87%. But that's where we are now.

Mark Baum: So it's really easy math. It's good math. But I think the important thing is that the product is really performing well in the clinic. And, you know, not only in surgical cases, but in laser interventions in glaucoma surgeries, certainly in individual injections, we're getting very positive feedback. And, and I think that's where, you know, the greatest opportunity for unit demand will be, you know, well north of 10 million units per year and growing, especially with, you know, these GA products now they're in the market.

Speaker Change: and i think we can't improve that refil rate above eighty-seven percent

Mark Baum: Like you say, 87% is a very impressive number at this stage of the roll out, and with 1% of the market, I can even do the math to figure out what the opportunity is, and it looks quite large. So my second last question is just curious about this. Obviously, many times we see Medicare come through, commercial payers come through before Medicaid. Experience that our friends in state government are not always the most proactive players. Is there any reason you have been so successful in establishing VVI in the Medicaid market? I mean, is there anything unique to Medicaid patients in terms of their proclivity or incidence of dry eye disease, or what do you think is driving that on the Medicaid side?

Mark Baum: Like you say, 87% is a very impressive number at this stage of the rollout. And with 1% of the market, I can even do the math to figure out what the opportunity is, and it looks quite large.

Speaker Change: but that's where we are now

Speaker Change: Like you say, 87% is a very impressive number at this stage of the rollout. And with 1% of the market, I can even do the math to figure out what the opportunity is, and it looks quite large.

Brooks O'Neill: So my second last question is just curious about this. Obviously, many times we see Medicare come through, and commercial payers come through before Medicaid. It's my experience that our friends in state government are not always the most proactive players. Is there any reason you have been so successful in establishing Vivi in the Medicaid market? I mean, is there anything unique to Medicaid patients? terms of their proclivity or incidence of dry eye disease? Or what do you think is driving that on the Medicaid side? And I'm guessing that over time, there will be a big, big, big opportunity in Medicare and commercial as well.

Speaker Change: but my second the last question is just curious about this obviously many times we see medicare come through commercial payers come through before medicaid it's my

Unknown Executive: Experience has shown that our friends in state government are not always the most proactive players. Is there any reason you have been so successful in establishing Vivi in the Medicaid market? I mean, is there anything unique to Medicaid patients?

Mark Baum: So we're excited about that market. That's one of the reasons why Gregg Deepas Squall joined our company. He's already making a big impact. The reason why we have so many of these strategic agreements done and not only done, but now that now we're seeing pull through, you know, purchases through these agreements is because of the great work that Gregg and the entire team that's working on iso is doing. I mean, we have a phenomenal team commercially on iso and they're really producing results, but they're just getting started.

Speaker Change: experience that our friends and state government are not always the most proactive players

Speaker Change: is there any reason you have been so successful in establishing vby in the medicaid market i mean is there anything unique to medicaid patients

Speaker Change: in terms of their proclivity or incidence of dry eye disease? Or what do you think is driving that on the Medicaid side? And I'm guessing that over time, there's a big, big, big opportunity in Medicare and commercial as well.

Mark Baum: And I'm guessing that over time there's a big, big opportunity in Medicare and commercial as well. Yeah, so in terms of what's driving Medicaid, I think, yeah, look, I have to say that our market access team deserves a lot of credit from the leadership on down. And so I want to give them that credit because they're the ones, you know. I walk back to Rob's office and he's got a big smile on his face because he's got a big win. I mean, he just loves this stuff. He's a competitive guy, and he loves getting these wins, and he's getting them.

Unknown Executive: Yeah, so in terms of what's driving Medicaid. And that's the way we do things here. And that's why we built this business over the last, you know, 10 plus years. And that's why we'll continue to do that. Medicaid, though, is a big, big success for us. Medic, we will get Medicare. I do believe, you know, certainly this time next year, you'll, you'll, you'll see that coverage hopefully in place.

Mark Baum: Yeah, so in terms of what's driving Medicaid, I, yeah, look, I have to say that our market access team deserves a lot of credit from the leadership on down. And so I want to give them that credit because they're the ones who, you know, I walk back into Rob's office, and he's got a big smile on his face because he's got a big win. I mean, he just loves this stuff. He's a competitive guy. And he loves getting these wins, and he's getting them. And I think he's going to get a lot more.

Speaker Change: Yeah, so in terms of what's driving Medicaid,

Mark Baum: This is, if you look at the overall market share, Mike, what we're doing versus what we maybe can do, we have, as I said in the letter, just scratch the surface. Yeah, no, absolutely looking forward to the penetration trend, including, you know, through the course of this year.

Speaker Change: I have to say that our market access team deserves a lot of credit from the leadership on down. And so I want to give them that credit because they're the ones.

Speaker Change: When I walk back to Rob's office, he's got a big smile on his face because he's got a big win. I mean, he just loves this stuff. He's a competitive guy, and he loves getting these wins, and he's getting them.

Mark Baum: And I know you're not going to comment on the proportion of contribution to guidance for Rahizo, but sort of my other related question is also around VY, net price assumption, you know, longer term that we could model here. And also, like based on the refill rate, you know, what duration of treatment on average, you anticipate patients being on drug would also be helpful just given, you know, we are seeing one of your peers, you know, materially increased guidance.

Mark Baum: And I think he's going to get a lot more. You know, as I said, we're going to have 100% of Medicaid by the time of our next quarterly report. That's what we expect. But, as Andrew said a few moments ago, we have to be profitable. So when we, when we contract, we have to do that in a way that allows us to earn a profit. But, you know, we, you know, we take our time; we don't do launch extravaganza with hundreds and hundreds of reps just right out of the gate. We are patient, and we are deliberate, and we're disciplined.

Mark Baum: You know, as I said, we're going to have 100% of Medicaid by the time of our next quarterly report. That's what we expect. But as Andrew said a few moments ago, we have to be profitable. So when we when we contract, we have to do that in a way that allows us to earn a profit. You know, we, you know, we take our time; we don't do launch extravaganzas with hundreds and hundreds of reps just right out of the gate.

Speaker Change: and I think he's going to get a lot more. You know, as I said, we're going to have 100% of Medicaid by the time of our next quarterly report. That's what we expect.

Speaker Change: But as Andrew said a few moments ago, we have to be profitable. So when we, when we contract, we have to do that in a way that allows us to earn a profit, you know, we

Mark Baum: So just kind of trying to understand, you know, what I see iso and VY on annual rate basis contribution would be. And, you know, what are some of those, at least for VY, where we still have to learn more about net price and, you know, a number of units per patient, or a course of year, if you're able to give some color, that would be helpful. Sure. So, you know, to be clear, whether it's VY or Rahizo, we really will not discuss ASP at all.

Andrew: You know, we take our time. We don't do launch extravaganzas with hundreds and hundreds of reps just right out of the gate. We are patient, we are deliberate, and we're disciplined.

Mark Baum: We are patient, we are deliberate, and we're disciplined. And that's the way we do things here. And that's why we built this business over the last, you know, 10 plus years. And that's why we'll continue to do that. Medicaid, though, is a big, big success for us. Medic, we will get Medicare. I do believe, you know, certainly this time next year, you'll, you'll, you'll see that coverage hopefully in place. We're patient, and we're going to get the right deals done, and ultimately, I think we're going to be able to serve this patient population that will benefit tremendously from VIVA.

Mark Baum: And that's the way we do things here. And that's why we built this business over the last, you know, 10 plus years. And that's why we'll continue to do that Medicaid, though we is a big, big success for us. We will get Medicare. I do believe, you know, certainly this time next year, you know, you'll, you'll see that coverage hopefully in place. But we're patient, and we're going to get the right deals done, and ultimately, I think we're going to be able to serve this patient population that will benefit tremendously from the buy.

Andrew: And that's the way we do things here, and that's the way we built this business over the last 10 plus years, and that's the way we'll continue to do that. Medicaid, though, is a big, big success for us. We will get Medicare.

Andrew: I do believe, you know, certainly this time next year, you know, you'll see that coverage hopefully in place.

Mark Baum: There's no, no, and a competitive rationale for us publicly discussing ASP. And so we won't do that. And, you know, I think over time, as we report more on a product-specific basis, people like you who have your training will be able to sort of get a much better idea of kind of where net pricing is or ASP pricing is for these products. In any case, in terms of refill rates or durations of treatment, if you are diagnosed with chronic dry disease and you start VVI and, you know, you refill the prescription, what we're seeing is that, you know, the refill rates, and we have a history by the way of understanding refill rates for chronic dry disease patients through our compounding business.

Andrew: But we're patient, and we're going to get the right deals done, and ultimately, I think we're going to be able to serve this patient population that will benefit tremendously from VBuy.

Mark Baum: That's great. I lied. I have one last question, and I appreciate you're taking my questions. It's my sense that in both, in the case of both a hezo and Z, by that many of these patients are essentially in their doctor's office or in need of these medications repeatedly throughout the year. Perhaps even every month. Can you just comment on that so that I understand the market opportunity a little bit better and maybe investors do as well. Well, well, look at our portfolio. You know, on the compounded side, you know, we have medications that are prescribed for patients that suffer.

Unknown Executive: That's great. I lied. I have one last question. And I appreciate your taking my questions. It seems to me that in both the case of both a he's, and the by that many of these patients are

Brooks O'Neill: That's great. I lied to you. I have one last question, and I appreciate your taking the time to answer my questions. It's my sense that in both the case of both a he's, and the by that many of these patients are essentially in their doctor's office or in need of these medications repeatedly throughout the year, perhaps even every month. Can you just comment on that so that I understand the market opportunity a little bit better and maybe investors do as well.

Speaker Change: That's great. I lied, I have one last question and I appreciate you taking my questions.

Speaker Change: it's my sense that inboth in the case of both heo and v by

Mark Baum: So we understand what, you know, good looks like, because our refill rates for our compounded formulations were very strong. And certainly much higher than even refill rates for FDA-approved products historically. But what we're seeing with VVI far exceeds what we've seen with our compounded products and, you know, you don't have any specific information specific data to give to you, but other than to tell you that we're now in our eighth refill cycle.

Speaker Change: that many of these patients are essentially in their doctor's office or in need of these medications repeatedly throughout the year, perhaps even every month.

Speaker Change: Can you just comment on that so that I understand the market opportunity a little bit better and maybe investors do as well?

Mark Baum: Well, look at our portfolio. You know, on the compounded side, we have medications that are prescribed for patients that suffer. They're incredibly affordable. They're preservative-free. The value there is tremendous. That's certainly a chronic condition.

Speaker Change: one well look at our portfolio you know on the compounded side you know we have medications that are prescribed for patients that suffer

Mark Baum: They're incredibly affordable; they're preservative free. The value there is tremendous. That's certainly a chronic condition, although these are compounded products that are not FDA approved. If you look throughout our portfolio, you know, we own Vigomox and Vigomox, you know, is an incredible product and the entire T of the portfolio is a tremendous tool kit. for ophthalmologists and optometrists. And as I said, it creates a lot of friends when they need these products. And you know, many of them are not big products. They're small market products. And big companies sometimes, for small market products, ignore them.

Unknown Executive: They're incredibly affordable, and they're preservative-free. The value there is tremendous. That's certainly a chronic condition.

Speaker Change: They're incredibly affordable. They're preservative free. The value there is tremendous. That's certainly a chronic condition.

Unknown Executive: Although these are compounded products, they're not FDA approved. If you look throughout our portfolio, you know, we own Vigamox. Vigamox is an incredible product, and the entirety of the portfolio is a tremendous toolkit for ophthalmologists and optometrists. And we've got some examples of that that we're going to share. You know, since when do you hear about pharmaceutical companies actually lowering prices? We've raised that question.

Mark Baum: Although these are compounded products, they're not FDA approved. If you look throughout our portfolio, we own Vigamox. Vigamox is an incredible product. And the entirety of the portfolio is a tremendous toolkit for ophthalmologists and optometrists.

Speaker Change: Although, these are compounded products. They're not FDA approved. If you look throughout our portfolio, you know, we own Vigamox. Vigamox

Mark Baum: And if you look at NRX, you know, as a component of TRX over time, the NRX component of the TRX is going to become smaller because more and more patients are refilling. And so the refills become a larger percentage of the TRX, but given the way our TRX is growing, that's not a bad thing. It's a good thing. And as we add more salespeople in these territories, the NRX will continue to grow.

Speaker Change: You know, it is an incredible product and the entirety of the portfolio, you know, is a tremendous toolkit.

Mark Baum: And as I said, it creates a lot of friends when they need these products, and, you know, many of them are not big products. They're small market products, and big companies sometimes ignore them, and in many cases, they become unavailable. They go on drug shortages, and so that's not what we're going to do. We're going to continue to make these products available to ophthalmologists and optometrists. We're going to do our darndest to make sure that we control pricing so that they're accessible and affordable.

Speaker Change: for ophthalmologists and optometrists.

Speaker Change: As I said, it creates a lot of friends when they need these products and many of them are not big products.

Speaker Change: they're small market products. And big companies sometimes for small market products, ignore them. And in many cases, they become unavailable, they go on drug shortage. And so that's not what we're going to do, we're going to continue to make these products available.

Mark Baum: And then you get this sort of amazingly beautiful compounding of prescriptions. Andrew, do you want to add to that? Yeah, I can a little color. You know, earlier in the call, Mark mentioned my father's on VVI. And I was there when he first looked at it. And to see him, who's, he's suffered most of my diseases, including terrible dry eye. And he's tried all of the products. I remember, still, him putting that drop in his eye, the first drop, he looked at me and he said, wow.

Mark Baum: And in many cases, they become unavailable. They go on drug shortage. And so that's not what we're going to do. We're going to continue to make these products available to ophthalmologists and optometrists. We're going to do our dandists to make sure that we control pricing so that they're accessible and affordable. Sometimes we have to raise price from time to time. But you know, believe it or not, and I'm probably going to talk about this on our next earnings call. In many cases, we lower prices. And we've got some examples of that that we're going to share.

Mark Baum: And it's really helped him as a patient and really, I think, changes his life, his quality life. And that's one of the reasons we're seeing these refills. There isn't, there has not been a dry eye product on the market that generates this type of benefit. And so I think you'll continue to see reflow rates climb. As Mark said, we'll see more and more refilled be a part of the TRX number. But we'll continue to see interaction and we'll continue to drive NRX's new prescriptions.

Speaker Change: to ophthalmologists and optometrists. We're going to do our darndest to make sure that we control pricing so that they're accessible and affordable. Sometimes we have to raise price from time to time but, you know, believe it or not,

Mark Baum: Sometimes we have to raise prices from time to time, but believe it or not, and I'm probably going to talk about this on our next earnings call, in many cases, we lower prices, and we've got some examples of that that we're going to share. You know, since when do you hear about pharmaceutical companies actually lowering prices?

Speaker Change: andi'm probably going to talk about this in our next earnings call in many cases we lower prices

Unknown Executive: Thank you.

Mark Baum: You know, since Wendy here about pharmaceutical companies actually lowering prices, we've raised a few to be sure. But we're lowering others. And the goal, ultimately, is to have a balanced portfolio for acute care needs, chronic care needs, and to ultimately be an amazing partner, a reliable, trusted partner to the ophthalmic community. And that's what we're doing with this portfolio. In terms of a market opportunity for IHIZO, it's gigantic. There's over 17 million annual use cases, we believe, in the US alone for IHIZO. And the market for chronic dry disease is enormous, with more than 9 million patients alone suffering from moderate to severe dry disease.

Operator: No questions. I would like to turn the call back over to you for any closing remarks.

Speaker Change: and we've got some examples of that that we're going to share you since when do you hear about pharmaceutical companies actually lowering prices we've raised a few

Speaker Change: to be sure, but we're lowering others.

Speaker Change: And the goal, ultimately, is to have a balanced portfolio for acute care needs.

Speaker Change: chronic care needs.

Speaker Change: and to ultimately be.

Speaker Change: an amazing partner, a reliable, trusted partner to the ophthalmic community. And that's

Speaker Change: that's what we're doing and with this portfolio

Speaker Change: in terms of a market opportunity for heo it's gigantic there's over seventeen million annual use cases we believe in the u s alone for io

Mark Baum: In regards to pricing too, one of the great things about the market access program is we're focused on making money. And so as we get these market access wins, we should see ASP improvements. We've got a really generous program right now to make sure we're getting patients on therapy. But overall, the market access program is executing, we're getting wins. And so we should start seeing ASP get a little better on that product as well.

Speaker Change: and the market for chquric dry disease is enormous

Speaker Change: with more than nine million patients alloan suffering from moderate to severe

Mark Baum: I'm not using the 35 million number, the 38 million that a lot of companies use of total dry patients. I'm just saying moderate to severe is more than 9 million. So it's a huge patient population. We think we have best-in-class potential with VVI. And, as I said, it's got a long run way. We're going to sell a lot more VVI in 2035 than we will next year in 2025.

Speaker Change: I'm not using the 35 million number, the 38 million that a lot of companies use of total dry eye patients. I'm just saying moderate to severe is more than 9 million. So it's a huge patient population. We think we have best in class.

Mark Baum: And importantly, and the refill rates as those increase will continue to see ASP go up as well because a lot of us, people have gone through the prioritization process and now they're getting a lot of their claims paid for, a lot of the claims for VVIP paid for. So all good things for VVIP, that's probably the product that I'm most excited about. And that tells you how great our product is because IHZ is also an amazing product. As Mark mentioned, we're having tons of wins there and that's going to be a really big and important product for us for a long time as well.

Speaker Change: potential with fei and as said it's got a long runway we're going to se a lot more v by in two thousand and thirty five then we will next year in two thousand and twenty five

Mark Baum: All right. Thank you very much.

Mark Baum: Thank you.

Speaker Change: Great, thank you very much.

Operator: I would now like to turn the call back over to Mark Baum for any closing remarks. Hello. I'd like to turn the call back over to Mark Baum for any closing remarks. Hello. We can hear you, Mark. Operator, any more questions? No questions.

Speaker Change: Thank you. I would now like to turn the call back over to Mark Baum for any closing remarks.

Speaker Change: Hello.

Mark Baum: Great, and my final question about your ASL as meeting at Stockholm, you know, you identified I believe some additional strategic opportunities that, you know, you're getting to, you know, be on the table for now that you're a bigger brand and I care. You know, could you just talk to how you plan to prosecute these and obviously balance against the, you know, the laser focus that you have with the current product for you and for that again, thanks for taking my questions.

Speaker Change: club

Speaker Change: Hello?

Speaker Change: we can remark

Mark Baum: I would like to turn the call back over to you for any closing remarks. We're epic. So thanks again. We're, as you can tell, I think enthusiastic about the second half of the year, the progress that we discussed is years in the making. And it comes from the efforts of a dedicated team. At Hero, I want to thank all of them, our stockholders, our customers, and the entire Hero family for their contributions and getting us to this place.

Speaker Change: Operator, any more questions?

Speaker Change: No questions. I would like to turn the call back over to you for any closing remarks.

Speaker Change: Terrific. So thanks again. We're, as you can tell, I think enthusiastic about

Mark Baum: Thank you, Mike. Yeah, you know, as I said in the letter, we continue to be on the hunt for wonderful products with great economics that will allow us to serve our customers. You know, we want to be an important company, not only to the ophthalmic community, it writ large, but really to these doctors and their offices, we want to be a contributor to the staff in these offices by giving them products that make their job easier, that get paid for, that don't create prior authorization nightmares for them.

Speaker Change: the second half of the year

Speaker Change: the progress that we discussed as years in the making and it comes from the efforts of a dedicated team at her i want to thank all of them are stockholders

Jamie Webb: As a reminder, if you have any investor-related questions, please email Jamie Webb at jwebweb@heroeak.com.

Jamie Webb: our customers and the entire hero family for their contributions and getting us to this place as a reminder if you have any investor related questions please email jamie web at j web w e b b at hero ink dot com thank you and this will conclude our call

Operator: Thank you, and this will conclude our call. Thank you.

Operator: This concludes the conference. Thank you for your participation.

Operator: You may now disconnect.

Speaker Change: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

Mark Baum: So we're looking for products that will allow us to build the persona in ophthalmology as an ophthalmic pharmaceutical company that we can be proud of, that our stockholders can be proud of, that the people who work at Herald can be proud of. And so there are great products out there and there are also a lot of debts. And Andrew and I have our fingerprints on all of these deals. We work on them together very actively.

Mark Baum: And we're always on the hunt for things that can help us reach our goals. But as you know, we're not going to overpay, we're not going to get overly excited about something and put ourselves in a financial, financially perilous position. So we have a history of doing deals, I think, that is very positive. I think if you look at the five deals that we've done in the last couple of years, we've been able to generate a tremendous amount of value for our stockholders.

Speaker Change: Music Music Music Music Music Music Music Music Music Music

Mark Baum: They know how to score points, they know how to get things done. And so to a potential partner, we have a lot of credibility, certainly more credibility than we've ever had, which allows us to speak to potential partners and sort of, you know, with credibility and to, I think, get better terms or more reasonable terms, that involve more back ended less front end. But we're actively looking and, you know, we'll see, we'll see what we're able to get done.

Mark Baum: The main focus, though, to be clear at Harrow is executing on what we have. We have an amazing portfolio, 17 branded products now, the number one compounded franchise in the U.S. So we've got a lot going for us now. We've got a lot to do day in and day out. But if there's a chance to buy something that we believe is worth a dollar, and we can pay a dime for it up front, we're going to certainly take a hard look at that.

Mark Baum: Thank you.

Mark Baum: Thank you, Mayank. Thank you.

Brooks O'Neill: Our next question comes from Brooks O'Neill with Lake Street Capital Markets. You may proceed. Morning, all thanks for taking my questions. I'm going to focus on two things. One, I noticed in the shareholder letter. I think I did a run at late last night, but I think you said around 11 million of revenue in the quarter from my he's oh, I know it's still very early in the development and commercialization of that product.

Brooks O'Neill: But can you speak at all to reorder activity so far? Are you seeing any doctors or practices coming back to the plate to a reorder I diesel? Thank you for that, Brooks. Again, in the corporate deck, we actually lay out what the reorder rate is specifically for I diesel. I think this quarter, it was 87%. So that's a, that's pretty good. As you know, because you've known me for a while now, I'm a glass half empty kind of guy.

Brooks O'Neill: And so I say to our people, what about the other 13%. But 87% is not bad. It really isn't bad. But overall, you know, we still have a very, very small percentage of a mark. I think we're just about, you know, I think on a run rate of about 1% of the addressable opportunities. It's a very, very small percentage of the market, but doctors who use it, they like it and they're ordering more.

Brooks O'Neill: And I think we can improve that refill rate above 87%. But that's where we are now. Like you say 87% is a very impressive number at this stage of the roll out and with 1% of the market, I can even do the math to figure out what the opportunity is and it looks quite large. So my second last question is just curious about this. Obviously many times we see Medicare come through commercial payers come through before Medicaid.

Brooks O'Neill: Experience that our friends in state government are not always the most proactive players. Is there any reason you have been so successful in establishing VVI in the Medicaid market? I mean, is there anything unique to Medicaid patients in terms of their proclivity or incidence of dry eye disease or what do you think is driving that on the Medicaid side? And I'm guessing that over time there's a big big opportunity in Medicare and commercial as well.

Brooks O'Neill: Yeah, so in terms of what's driving Medicaid, I think, yeah, look, I have to say that our market access team deserves a lot of credit from the leadership on down. And so I want to give them that credit because they're the ones, you know, I walk back to Rob's office and he's got a big smile on his face because he's got a big win. I mean, he just loves this stuff. He's a competitive guy and he loves getting these wins and he's getting them.

Brooks O'Neill: And I think he's going to get a lot more, you know, as I said, we're going to have 100% of Medicaid by the time of our next quarterly report. That's what we expect. But as Andrew said a few moments ago, we have to be profitable. So when we, when we contract, we have to do that in a way that allows us to earn a profit. But, you know, we, you know, we take our time, we don't do launch extravaganza with hundreds and hundreds of reps just right out on a gate.

Brooks O'Neill: We are patient and we are deliberate and we're disciplined. And that's the way we do things here. And that's why we built this business over the last, you know, 10 plus years. And that's why we'll continue to do that Medicaid, though we is a big, big success for us. We will get Medicare. I do believe, you know, certainly this time next year, you know, you'll, you'll see that coverage hopefully in place.

Brooks O'Neill: But we're patient and we're going to get the right deals done and ultimately, I think we're going to be able to serve this patient population that will benefit tremendously from the buy. That's great. I lied. I have one last question and I appreciate you're taking my questions. It's my sense that in both, in the case of both a hezo and Z by that many of these patients are essentially in their doctor's office or in need of these medications repeatedly throughout the year.

Brooks O'Neill: Perhaps even every month. Can you just comment on that so that I understand the market opportunity a little bit better and maybe investors do as well. Well, well, look at our portfolio. You know, on the compounded side, you know, we have medications that are prescribed for patients that suffer. They're incredibly affordable, they're preservative free. The value there is tremendous. That's certainly a chronic condition, although these are compounded products that are not FDA approved.

Brooks O'Neill: If you look throughout our portfolio, you know, we own Vigomox and Vigomox, you know, is an incredible product and the entire T of the portfolio is a tremendous tool kit, for ophthalmologists and optometrists. And as I said, it creates a lot of friends when they need these products. And you know, many of them are not big products. They're small market products. And big companies sometimes for small market products ignore them. And in many cases they become unavailable.

Brooks O'Neill: They go on drug shortage. And so that's not what we're going to do. We're going to continue to make these products available to ophthalmologists and optometrists. We're going to do our dandists to make sure that we control pricing so that they're accessible and affordable. Sometimes we have to raise price from time to time. But you know, believe it or not, and I'm probably going to talk about this on our next earnings call.

Brooks O'Neill: In many cases, we lower prices. And we've got some examples of that that we're going to share. You know, since Wendy here about pharmaceutical companies actually lowering prices, we've raised a few to be sure. But we're lowering others. And the goal, ultimately, is to have a balanced portfolio for acute care needs, chronic care needs, and to ultimately be an amazing partner, a reliable trusted partner to the ophthalmic community. And that's what we're doing with this portfolio.

Brooks O'Neill: In terms of a market opportunity for IHIZO, it's gigantic. There's over 17 million annual use cases, we believe, in the US alone for IHIZO. And the market for chronic dry disease is enormous with more than 9 million patients alone suffering from moderate to severe dry disease. I'm not using the 35 million number, the 38 million that a lot of companies use of total dry patients. I'm just saying moderate to severe is more than 9 million.

Brooks O'Neill: So it's a huge patient population. We think we have best-in-class potential with VVI. And as I said, it's got a long run way. We're going to sell a lot more VVI in 2035 than we will next year in 2025.

Mark Baum: All right. Thank you very much.

Mark Baum: Thank you.

Mark Baum: I would like to turn the call back over to you for any closing remarks. We're epic. So thanks again. We're, as you can tell, I think enthusiastic about the second half of the year, the progress that we discussed is years and the making. And it comes from the efforts of a dedicated team. At Hero, I want to thank all of them, our stock holders, our customers, and the entire Hero family for their contributions and getting us to this place. As a reminder, if you have any investor-related questions, please email Jamie Webb at jwebweb at heroeak.com.

Operator: Thank you, and this will conclude our Call. Thank you. This concludes the conference. Thank you for your participation.

Operator: You may now disconnect.

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