Harrow (HROW) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of $48.9 million, up 46% year-over-year and 42% sequentially, driven by strong growth in IHEEZO and VEVYE product lines.

• All business segments contributed to growth, with branded revenue now surpassing compounded revenue and driving higher margins.

• Recent product launches and re-launches, including IHEEZO and VEVYE, are fueling profitable and sustainable growth, with aggregate annual revenue potential projected to exceed $500M by 2027.

• Harrow's ophthalmic pharmaceutical portfolio covers a broad range of indications, with several products holding Orange Book-listed patents expiring as late as 2039.

• Recent developments include progress toward the re-launch of TRIESENCE, a Canadian out-license agreement with Apotex, and improved reimbursement for IHEEZO.

Financial highlights

• Q2 2024 revenue reached $48.9 million, a 46% increase over Q2 2023 and 42% over Q1 2024; six-month revenues were $83.5M, up from $59.6M year-over-year.

• Gross margin improved to 74% in Q2 2024 from 70% in Q2 2023; core gross margin at 79%.

• ImprimisRx subsidiary achieved record Q2 2024 revenues of $21.6M.

• Adjusted EBITDA for 1H 2024 reached $13.0M, up from $9.0M in 1H 2023.

• Cash and cash equivalents at June 30, 2024 were $71.0M.

Outlook and guidance

• Full-year 2024 revenue projected to exceed $180 million, excluding any TRIESENCE contribution.

• Aggregate annual revenue potential is projected to surpass $500M by 2027, driven by new and relaunched products.

• Management expects continued revenue and profitability expansion in coming quarters and years, citing strong operational momentum.

• TRIESENCE re-launch planned as early as 2024, with strong customer affinity and pending successful batch validation.

• Cash on hand is expected to be sufficient for at least the next 12 months, with potential asset sales or financings considered for future growth or acquisitions.