Q3 2025 Earnings Call Contradictions: VEVYE Data Sharing, TRIESENCE Pricing, and ASP Strategies

Date of Call: November 11, 2025

Financials Results

• Revenue: $71.6M in Q3 2025, up 45% YOY and up 12% sequentially; 9M 2025 revenue $183.2M; updated full-year revenue guidance $270M–$280M

Guidance:

• Updated full-year revenue guidance to $270M–$280M.
• Expect a strong Q4 driven by VEVYE and IHEEZO (both on track for record quarters) and continued unit growth.
• Plan moderate increases in operating expenses in Q4 and into 2026 to invest in commercial infrastructure (revenue-generating OpEx).
• Anticipate a typical seasonal decline from Q4 2025 to Q1 2026; Q1 seasonality to be disclosed with full-year results.

Business Commentary:

* Revenue Growth and Key Product Performance: - Harrow reported revenue of $71.6 million for Q3 2025, up 45% over the same period in 2024 and 12% sequentially from the previous quarter. - This growth was driven by strong performance from products like VEVYE and IHEEZO, with VEVYE achieving 22% quarter-over-quarter revenue growth.

• Product Performance and Market Access:
  
• VEVYE generated approximately $22.6 million in revenue during the third quarter, representing a 22% increase from the second quarter of 2025.

• This was attributed to improved market access, including new national payer coverage, which will enhance prescription growth and pricing stability.

• Operational Efficiency and Cost Management:

• Harrow's operating expenses remained stable quarter-to-quarter, and adjusted EBITDA for Q3 was $22.7 million.

• The company achieved operational leverage, translating revenue growth into earnings, supported by investments in commercial infrastructure.

• Rare and Specialty Portfolio and New Leadership:

• The TRIESENCE portfolio, under new leadership, showed a 33% sequential revenue increase to $6.9 million in Q3.
• The addition of new leadership and strategies, such as the Harrow Access for All program, is aimed at returning this portfolio to growth.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted momentum: "Total revenue for the third quarter was $71.6 million, representing a 45% increase over the same period in 2024"; VEVYE "delivered 22% quarter-over-quarter revenue growth"; company updated FY guidance to $270M–$280M while describing multiple product launches and payer wins that improve access and pricing.

Q&A:

• Question from Jeffrey Cohen (Ladenburg Thalmann & Co. Inc., Research Division): Could you talk about VEVYE prescription data and why we don't see it this quarter?
  Response: They stopped using certain third-party data feeds for accuracy and competitive reasons and will focus on reporting revenue and transparent progress without exposing competitive prescription-data feeds.

• Question from Jeffrey Cohen (Ladenburg Thalmann & Co. Inc., Research Division): Could you talk about the leverage that you're achieving on SG&A and how to think about leverage into 2026 as you expand commercial teams?
  Response: Operating leverage is materializing; additional OpEx will be moderate and revenue-generating with near-term returns, not a large proportional increase in SG&A.

• Question from Chase Knickerbocker (Craig-Hallum Capital Group LLC, Research Division): You said ASP was down modestly sequentially in Q3—can you define the magnitude and explain modeling assumptions for near-term ASP stabilization?
  Response: ASP decline was modest (under ~10%); stabilization and eventual improvement depend on payer coverage flips moving cash-pay patients to preferred covered prescriptions starting with new PBM coverage in Jan 2026.

• Question from Chase Knickerbocker (Craig-Hallum Capital Group LLC, Research Division): Was the PBM win for commercial plans or commercial+Medicare, and how much of current volume could benefit?
  Response: The win covers commercial lives only (large and attractive); management expects meaningful portion of current cash-pay volume to convert, improving ASP and justifying expanding territories and commercial investment.

• Question from Steven Seedhouse (Cantor Fitzgerald & Co., Research Division): What proportion of VEVYE cash-pay patients do you expect to transition to insurance in 2026 and impact on net price per unit?
  Response: No precise percentage given; internal models suggest the large commercial PBM preferred status will convert many cash-pay patients, increase ASP and volume materially, and VAFA aids negotiating power.

• Question from Steven Seedhouse (Cantor Fitzgerald & Co., Research Division): Are you providing extra free fills to VAFA patients to bridge coverage timing, and will new specialty pharmacies cause one-time Q4 stocking impacts?
  Response: They won't disclose specific patient-bridge tactics; VAFA has a high-touch fill and conversion program to support patients, and management does not expect meaningful VEVYE inventory/stocking impacts in Q4.

• Question from Mayank Mamtani (B. Riley Securities, Inc., Research Division): Can you comment on Q3-to-Q4 dynamics, the notable Q4 revenue (around $80M), and assumed volume vs price dynamics across product lines?
  Response: Q4 historically represents roughly a third of annual revenue; management expects volume-driven growth across the portfolio (VEVYE/IHEEZO) with ASP at least stabilizing and some price improvement from lower co-pay buydowns.

• Question from Mayank Mamtani (B. Riley Securities, Inc., Research Division): Any learnings on Project Beagle conversion from cash to covered scripts, and what is TRIESENCE's new price point?
  Response: Project Beagle conversions largely completed (25,000+ former cash patients); TRIESENCE pricing cited at $9.44 historically and they repriced to be ~20–25% lower for the ocular inflammation market while confirming reimbursement and early order traction.

• Question from Thomas Shrader (BTIG, LLC, Research Division): Is it easy to re-engage prior TRIESENCE users and will conventional sales reps be added for VEVYE—can reps cover both VEVYE and TRIESENCE?
  Response: Physicians who moved on can be re-engaged but it takes time; TRIESENCE adoption is restarting with orders and reimbursement, and dry-eye reps will carry additional products (FLAREX, FRESHKOTE) while TRIESENCE activation is handled by dedicated field teams.

• Question from Lachlan Hanbury-Brown (William Blair & Company L.L.C., Research Division): How do the new VEVYE coverage economics compare to current net pricing, and what coverage level will the new plans provide?
  Response: Management declined to disclose exact bids but said preferred status will improve ASP versus current cash-net per unit and drive volume; VAFA establishes a base that strengthens payer negotiation leverage.

• Question from Lachlan Hanbury-Brown (William Blair & Company L.L.C., Research Division): Are you adding 10 new reps this quarter and targeting ~100 territories by mid-2026 (roughly doubling current coverage)?
  Response: Yes — adding ~10 reps now to get to just over 60 territories in near term and targeting ~100 territories by Q2 2026.

• Question from Thomas Flaten (Lake Street Capital Markets, LLC, Research Division): What is the duration of therapy for commercially covered VEVYE patients (refill behavior)?
  Response: Commercially covered patients almost refill for the entirety of the year on average, showing very high refill/retention rates.

• Question from Thomas Flaten (Lake Street Capital Markets, LLC, Research Division): On BD activity, should we expect more deals in 2026–2027 or a period focused on integration?
  Response: They are focused on closing and integrating the Melt Pharmaceuticals acquisition first (transformative opportunity) while continually evaluating deals, but near-term emphasis is on closing Melt and executing integration.

• Question from Yi Chen (H.C. Wainwright & Co, LLC, Research Division): Will prescriptions flipping to VEVYE come from other cyclosporine formulations or non-cyclosporine products?
  Response: The flips are coming largely from non-cyclosporine anti-inflammatories; management aims to grow cyclosporine market share from ~10% toward category leadership as coverage improves.

Contradiction Point 1

VEVYE Prescription Data and Market Share

It involves the company's approach to sharing prescription data and the influence on market share and ASP stabilization, which are crucial for revenue projections and strategic positioning.

Can you explain the VEVYE prescription data and why it wasn't reported this quarter? - Jeffrey Cohen(Ladenburg Thalmann & Co. Inc., Research Division)

2025Q3: We withdrew from some data reporting services to ensure absolute confidence in the accuracy of revenue generated from our products. We're not sharing prescription data as it may give competitors an advantage. - Mark Baum(CEO)

Could you clarify the business rule changes within VEVYE and ASP improvement expectations for the year? - Chase Richard Knickerbocker(Craig-Hallum)

2025Q2: Our team is hustling to ensure patients remain on therapy through a robust high-touch program. - Mark Baum(CEO)

Contradiction Point 2

TRIESENCE Market Strategy and Pricing

It highlights changes in the company's strategic approach to pricing and market penetration for its TRIESENCE product, which directly impacts revenue growth and market positioning.

What are the recent changes in TRIESENCE's pricing strategy, and how are they expected to impact future revenue? - Mayank Mamtani(B. Riley Securities, Inc., Research Division)

2025Q3: TRIESENCE's new price is lower due to market conditions and will help drive adoption in the ocular inflammation market. It's a strategic move to bolster adoption and market penetration. - Mark Baum(CEO)

What are the expectations for third-quarter growth in the Specialty Branded and TRIESENCE segment, and what assumptions are being made for the fourth quarter? - Steven James Seedhouse(Cantor Fitzgerald)

2025Q2: We're confident that our new leadership has the ability to drive the market share growth that we need for TRIESENCE to meet our guidance. - Mark Baum(CEO)

Contradiction Point 3

VEVYE Market Share and Growth Expectations

It involves differing expectations for market share and growth of a key product, which could impact investor and stakeholder expectations.

What details can you share about VEVYE's largest PBM contract win? - Chase Knickerbocker(Craig-Hallum Capital Group LLC, Research Division)

2025Q3: The coverage win is with the largest commercial lives group of the PBM. It will drive a higher proportion of patients to receive VEVYE as covered therapy, resulting in ASP improvement and potential for further coverage wins. - Mark Baum(CEO)

Can you update on VEVYE's projections and the potential impact of the Access for All initiative? - Chase Knickerbocker(Craig Hallum)

2024Q4: VEVYE is likely to overperform. The VEVYE Access for All program expands the prescription market and increases market share, with significant growth expected this year. - Mark Baum(CEO)

Contradiction Point 4

Operating Leverage and Cash Flow Conversion

It involves differing expectations for operating leverage and cash flow conversion, which are critical financial metrics for investors.

Could you discuss the leverage achieved, particularly in SG&A during Q3? - Jeffrey Cohen(Ladenburg Thalmann & Co. Inc., Research Division)

2025Q3: We expected operating leverage with revenue growth. We've made commercial and operational investments, and the business is generating significant cash, with $16 million from operations in Q3. - Andrew Boll(CFO)

Can you provide guidance on EBITDA and cash flow conversion for 2025? - Jeffrey Cohen(Ladenburg Thalmann and Company)

2024Q4: Expect operating leverage improvement in 2025. Most EBITDA will convert to cash flow, but tax payments will impact. The VEVYE Access for All program drives recurring revenue. - Andrew Boll(CFO)

Contradiction Point 5

Vevey ASP Stabilization and Improvement Strategies

It involves the company's strategy to stabilize and improve VEVYE's average selling price (ASP), which directly impacts the product's revenue and market competitiveness.

How has ASP stabilization for VEVYE been impacted by the modest Q3 decline? - Chase Knickerbocker(Craig-Hallum Capital Group LLC, Research Division)

2025Q3: ASP stabilization will depend on coverage wins improving the ratio of covered to cash pay prescriptions. Increased coverage will lead to ASP improvement, affecting every unit of VEVYE. - Mark Baum(CEO)

What are the drivers behind the sequential improvement in VEVYE's gross to nets and expectations for 2025? - Chase Knickerbocker(Craig-Hallum)

2025Q1: We made changes to VEVYE's business rules, improving ASP significantly. We expect ASP to stabilize at an attractive level, with expected volume growth and refill rates driving future revenue. - Mark Baum(CEO)