Harrow's second-half bet: IHEEZO demand, VEVYE economics, and a TYRVAYA surprise
After a soft first half, Harrow reiterates full-year guidance by banking on a ~$235–250M H2 — anchored by record IHEEZO demand, durable VEVYE pricing, and a franchise-defining TYRVAYA deal.
HROW · Earnings Call · 2026-08-11
Setting the table
Harrow entered 2026 planning for growth but found first-half revenue of ~$115M "lighter than we expected entering the year," driven primarily by the VEVYE net-revenue impact flagged that prior quarter. Yet management used the period to build commercial machinery rather than defend the topline: SG&A rose to $53.3M, adjusted EBITDA landed at negative $1.2M, and the team tripled its TRIESENCE surgical organization, expanded the AccessPlus cash-pay team, and launched Byooviz on July 1. Mark Baum framed it plainly: the first half was about "doing the work required to create the opportunity in front of us." The second half, he said, "is about execution." The scale of that execution is the real story. Reiterating guidance of $350M–365M revenue and $80M–100M adjusted EBITDA implies second-half revenue of roughly $235M–250M — nearly double the first half's ~$115M. CFO Andrew Boll walked the bridge explicitly, naming IHEEZO as the "largest incremental contributor," followed by VEVYE, TRIESENCE, Byooviz, the relaunched VERKAZIA, and an IOPIDINE now armed with a permanent J-code. That ramp is a radical departure from the recent trend: total revenue in the latest filed quarter (Q1 2026) was just $44M.IHEEZO defies the pass-through loss
The most striking result of the quarter was IHEEZO. Despite the loss of pass-through reimbursement for cataract surgery on April 1, unit demand hit a record 65,477 units — up 44% sequentially and 34% year-over-year — with 62 first-ever accounts, the strongest new-account quarter since launch. Baum said the ASC market is "now effectively shut," but the pivot to the in-office retina and procedure market has more than compensated; he estimated share penetration at "less than 2% of the overall addressable market." “IHEEZO is definitely exceeding all of our expectations. And to be clear, we've really simply just scratched the surface.” — Mark L. Baum, Chief Executive Officer · 2026-08-11 The economics are also improving: an ~25% net-pricing improvement effective July 1 with gross margins exceeding 90%, plus a new 5-pack presentation and a third-quarter return to a "normalized revenue cycle." This is a direct reversal of the destocking that suppressed Q1 and Q2 reported revenue.VEVYE economics flip positive
VEVYE revenue of $29.4M, up nearly 58% year-over-year, confirmed the business rule changes implemented at the end of April are working. Prescriptions rose 21% sequentially, the prescriber base grew 15%, and VEVYE exited June with a 14.6% share of the branded dry eye market, up from 14% in March and 7.8% a year ago. The critical mechanism: co-pay utilization declined meaningfully while ASP rose. This contrasts sharply with the dynamic on the prior call, when CFO Andrew Boll described why the rules were tightened in the first place: “we adjusted those rules to basically take down the amount of out-of-pocket buydowns that we were putting into that patient bucket.” — Andrew Boll, Chief Financial Officer · 2026-05-12 The freshly won top-3 PBM coverage win for commercial lives — effective August 1 — plus the transition from an expensive $0-first-fill program to a cheaper expanded sampling program, should further lift net revenue realization. Andrew Boll noted that "we typically improved pricing throughout the year as patients are hitting the deductible," and the full-period benefit of amended rules starting in Q3 adds momentum. “we typically improved pricing throughout the year as patients are hitting the deductible. And certainly we're expecting to see that with VEVYE.” — Andrew Boll, Chief Financial Officer · 2026-08-11 The shift is visible in the financials: gross margin was 61.2% in the latest filed quarter, but Q2 GAAP gross margin came in at 71%, with management guiding margins "back towards the high 70s" in H2.TYRVAYA: the new growth vector
The most significant corporate development is the pending acquisition of global rights to TYRVAYA — approved in the U.S. and China and under regulatory review in five other countries. The $30M upfront will draw down a cash balance of $83.9M, though on a net basis the company carries a net-debt position near $205M. Baum was unambiguous about its strategic weight:TYRVAYA offers a distinctive tolerability profile — 0 contraindications, 0 ocular adverse events, 0 warnings on its label — and, critically for the contact lens wearers population (45 million Americans), a drop-free route that doesn't require removing lenses. Management expects to integrate Viatris Eye Care Division reps in Q4, adding ~$20M annualized SG&A, with TYRVAYA contributing more than $30M of 2027 revenue and the deal financially accretive. It broadens the dry eye franchise and adds operational synergy with VEVYE that Baum suggested will be visible "as early as the fourth quarter." Also new for the MELT-300 program: a secured pre-NDA meeting with the FDA scheduled for early Q4, an NDA submission targeted for H1 2027, and a potential launch in H2 2028. Baum's conviction is notable — "In nearly 15 years of running this company, I've never seen as consistently positive a reaction to a Harrow product candidate" — citing retina specialists struggling to secure anesthesia coverage.From an acquisition cost perspective also, this deal may be the best deal we've ever struck.