10-K: Harrow, Inc. Reports Strong Branded Growth, Strategic Pipeline Expansion

Harrow, Inc. reports significant revenue growth in its branded ophthalmic products for 2025, driven by increased marketing efforts for IHEEZO and VEVYE, alongside strategic acquisitions and debt refinancing.

Summary

• Harrow, Inc. is a leading provider of ophthalmic disease management solutions in North America, focusing on safe, effective, accessible, and affordable medications.
• The company's portfolio includes FDA-approved ophthalmic products such as IHEEZO, VEVYE, TRIESENCE, BYOOVIZ, OPUVIZ, BYQLOVI, VIGAMOX, ILEVRO, FLAREX, NATACYN, TOBRADEX ST, ZERVIATE, VERKAZIA, NEVANAC, FRESHKOTE PF, MAXITROL, MAXIDEX, and IOPIDINE.
• The R&D pipeline features MELT-300 (completed Phase 3, potential launch 2028), H-N08 (ophthalmic program, potential launch 2028), CR-01 (conjunctival delivery device, potential launch 2029), and MELT-210 (clinical development, potential launch 2028).
• Harrow acquired the remaining equity interests of Melt Pharmaceuticals in November 2025 for an initial cash payment of $4.3 million, with contingent consideration up to $87.2 million upon FDA approval of MELT-300, 1.112 million shares upon J-Code/pass-through status, and up to $260 million for sales milestones.
• A commercialization agreement was entered into with Samsung Bioepis in July 2025 for BYOOVIZ (ranibizumab-nuna) and OPUVIZ (aflibercept-yszy) biosimilars, with BYOOVIZ expected mid-2026 and OPUVIZ mid-2027.
• Exclusive U.S. commercial rights to BYQLOVI (clobetasol propionate ophthalmic suspension) 0.05% were acquired from Formosa Pharmaceuticals in June 2025, with launch expected mid-2026.
• The 'Harrow Access For All' (HAFA) program was launched in September 2025 to expand patient access to the ophthalmic portfolio.
• Project Beagle, initiated in March 2025, aims to transition ImprimisRx patients from compounded Klarity-C to VEVYE, leading to the discontinuation of Klarity-C and Klarity PF compounding.
• Debt was refinanced in September 2025 by issuing $250 million aggregate principal amount of 8.625% Senior Notes due 2030, repaying prior senior debt of $107.5 million (Oaktree Loan), $75 million (2026 Notes), and $40.25 million (2027 Notes).
• A new $40 million senior secured revolving credit facility with Fifth Third Bank was established in September 2025, with an uncommitted incremental line of credit of up to $20 million, which remains undrawn as of December 31, 2025.
• Net loss for 2025 was $(5.139) million, an improvement from $(17.481) million in 2024.
• Total revenues increased to $272.303 million in 2025 from $199.614 million in 2024.
• Branded revenue, net, increased to $195.756 million in 2025 from $116.115 million in 2024, primarily due to IHEEZO and VEVYE sales.
• ImprimisRx revenue, net, decreased to $76.547 million in 2025 from $83.499 million in 2024 due to decreased volume and product mix.
• R&D expenses increased to $20.940 million in 2025 from $12.230 million in 2024, including $8.450 million for acquired in-process R&D from the Melt acquisition.
• SG&A expenses increased to $152.914 million in 2025 from $129.064 million in 2024, driven by increased payroll and marketing.
• Cash and cash equivalents increased to $72.927 million at December 31, 2025, from $47.247 million at December 31, 2024.
• Management believes current cash and cash equivalents will be sufficient for planned operations and capital expenditures for fiscal year 2026 and the foreseeable future.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report, reflecting strong growth in branded product sales and strategic pipeline expansion, despite some declines in the compounding segment and increased operating expenses. The successful debt refinancing and improved operating cash flow are also favorable.

Positives

• Total revenues increased by $72.689 million (36.4%) from 2024 to 2025, reaching $272.303 million.
• Branded revenue, net, grew substantially by $79.641 million (68.6%) to $195.756 million in 2025, driven by IHEEZO and VEVYE.
• IHEEZO net sales increased by $32.045 million to $81.348 million in 2025.
• VEVYE net sales increased by $60.627 million to $88.688 million in 2025.
• Net loss improved significantly to $(5.139) million in 2025 from $(17.481) million in 2024.
• Net cash provided by operating activities was $43.864 million in 2025, a substantial improvement from cash used in operating activities of $(22.202) million in 2024.
• Successful refinancing of prior debt with $250 million 8.625% Senior Notes due 2030, simplifying the debt structure.
• Established a new $40 million senior secured revolving credit facility (5/3 Revolver) which is currently undrawn, providing additional liquidity and financial flexibility.
• Acquisition of Melt Pharmaceuticals and commercial rights to BYOOVIZ, OPUVIZ, and BYQLOVI expands the branded product pipeline and future growth opportunities in key ophthalmic areas.
• Management believes current cash and cash equivalents are sufficient for planned operations and capital expenditures for fiscal year 2026 and the foreseeable future.
• Internal controls over financial reporting were effective as of December 31, 2025, indicating sound financial management and reporting processes.

Negatives

• ImprimisRx revenue, net, decreased by $6.952 million (8.3%) to $76.547 million in 2025, primarily due to decreased volume and a shift in product mix.
• ImprimisRx gross margin decreased from 67.0% in 2024 to 59.9% in 2025, attributed to product mix changes and inventory losses from lower manufacturing efficiency.
• Selling, General and Administrative (SG&A) expenses increased by $23.850 million to $152.914 million in 2025, driven by increased payroll and marketing investments.
• Research and Development (R&D) expenses increased by $8.710 million to $20.940 million in 2025, partly due to the $8.450 million acquired in-process R&D expense from the Melt acquisition.
• Incurred a loss on early extinguishment of debt of $7.750 million in 2025 due to the refinancing of prior loans.
• Voluntarily surrendered California nonresident 503B outsourcing facility license and 503A compounding pharmacy license effective February 1, 2026, restricting sales of certain compounded products in California.
• The company has an accumulated deficit of $156.524 million as of December 31, 2025.
• Product returns reserves increased, reflecting higher ophthalmic product sales, expanded commercial rebate programs, and higher expected product returns associated with the timing of lot expirations.

Risks

• Ability to achieve and maintain profitability for the business.
• Ability to successfully market, commercialize, and sell current, recently acquired, and future products.
• Current indebtedness and ability to access additional capital.
• Reliance on third parties for manufacturing certain components, FDA-approved drugs, and to conduct clinical trials.
• Exposure to liabilities and reputational harm if products cause defects, recalls, patient injury, or death.
• Information technology systems exposure to cyberattack or information security breach could significantly compromise confidentiality, integrity, and availability of systems and data, interrupt business, affect reputation, and result in remediation costs, litigation, or regulatory inquiries.
• Global macroeconomic volatility and conditions may adversely affect the business.
• Business may be affected by litigation, government investigations, and injunctive actions.
• Governmental regulations, including 503B bulks list and others, could burden operations or narrow the market for products.
• Failure to comply with federal or state statutes and regulations with respect to licensure and operation of the business could require pharmacy facilities to cease operations or become subject to restrictions.
• Sales depend on coverage and reimbursement from government and commercial third-party payors, and pricing and reimbursement pressures are likely to continue to affect profitability.
• The adoption and interpretation of new tax legislation or exposure to additional tax liabilities could affect profitability.
• Changes in U.S. trade policy, including tariffs or other import restrictions, could increase costs and disrupt the supply chain.
• Securing and maintaining patent or other intellectual property protection for products and related improvements.
• Market acceptance of drug products, drug candidates, compounded drugs, and pharmacies.
• Ability to successfully research, develop, and timely manufacture current and future products and drug candidates.
• Ability to enforce and protect intellectual property rights along with the potential of future legal proceedings filed against the company claiming intellectual property infringement.
• Retention, recruitment, and training of senior management and key personnel.
• May not be able to develop commercial products despite significant investments in R&D.
• Branded products and product candidates in development cannot be sold without regulatory approval.
• Drug candidates may face competition sooner than expected.
• May not be successful in obtaining market exclusivity for product candidates.
• Disruptions at government agencies (FDA, CMS, SEC) due to funding lapses, shutdowns, staffing constraints, reorganizations, or shifting policy priorities could adversely affect business.
• Ability to pay interest and debt service payments associated with the 2030 Notes.
• Could enter into various transactions that could increase the amount of outstanding debt or adversely affect capital structure or credit rating.
• Volatility of the price of common stock.
• Stock price falling as a result of future offerings or sales.
• Right to issue shares of preferred stock without obtaining stockholder approval, which may have superior rights.
• No dividends paid in the past and not expected in the future.
• Failure to maintain an effective system of internal controls could cause stock price to fall.
• Current and future use of artificial intelligence (AI) may create new operational, regulatory, legal, and reputational risks.

Future Outlook

The company expects to commercially launch BYOOVIZ and BYQLOVI in mid-2026, and OPUVIZ in mid-2027. An NDA for MELT-300 is expected to be submitted in the first half of 2027, with a potential commercial launch in the second half of 2028. H-N08 is expected to move into the clinic before the end of 2026, with a potential launch in 2028. CR-01 has a potential launch as early as 2029. Management believes current cash and cash equivalents will be sufficient for planned operations and capital expenditures for fiscal year 2026 and the foreseeable future. The company plans to expand its VEVYE commercial sales team to 100 U.S. sales territories by late May 2026 and increase the dedicated sales force for TRIESENCE.

Management Comments

• "We believe continued investment in our branded portfolio supports our ability to offer eyecare prescribers and patients access to a broader range of ophthalmic therapies across multiple disease states."
• "We believe MELT-300 represents a transformative opportunity, building on more than a decade of real-world experience with MKO Melt."
• "We believe these next steps position MELT-300 to become the first FDA-approved, non-opioid, non-IV sublingual sedation therapy in the U.S., representing a meaningful growth opportunity for Harrow and a major advancement in patient-centric procedural care."
• "We expect that we may experience growth in the sales of our products in future periods, particularly in light of our recent product launches and commercial campaigns."
• "We believe we have built a tangible and intangible infrastructure that will allow us to scale revenues efficiently in the near and long-term."
• "As of the date of this Annual Report, we believe that cash and cash equivalents of $72,927,000 at December 31, 2025 will be sufficient to sustain our planned level of operations and capital expenditures for fiscal year 2026 and the foreseeable future."
• "Our management concluded that our internal controls over financial reporting were effective as of December 31, 2025."

Industry Context

StockSavvy.ai notes that Harrow's strategy of expanding its branded ophthalmic portfolio through acquisitions and internal development, particularly in biosimilars and novel drug delivery systems like MELT-300, aligns with broader pharmaceutical industry trends seeking to address unmet medical needs and improve patient experience. The focus on dry eye disease, AMD, and perioperative care positions the company in high-demand segments of the ophthalmology market. The decline in ImprimisRx's compounded revenue, coupled with the strategic shift to FDA-approved alternatives like VEVYE, reflects the increasing regulatory scrutiny and competitive pressures faced by compounding pharmacies, pushing companies towards fully approved products for long-term sustainability. The company's efforts to secure J-codes and pass-through status for its branded products are critical in navigating the complex U.S. reimbursement landscape, especially with the evolving policies under the Inflation Reduction Act.

Comparison to Industry Standards

• The company's R&D pipeline, including late-stage assets like MELT-300 (completed Phase 3) and biosimilars like BYOOVIZ (LUCENTIS biosimilar) and OPUVIZ (EYLEA biosimilar), positions it to compete with major players in the ophthalmic market. For example, Regeneron Pharmaceuticals (EYLEA) and Novartis/Roche (LUCENTIS) are established leaders in retina disease management, and Harrow's biosimilar launches aim to capture market share by offering more affordable alternatives.
• The development of MELT-300 as a non-opioid, non-IV sublingual sedation therapy addresses a growing demand for improved procedural sedation, potentially offering a differentiated option compared to traditional IV sedatives or compounded alternatives.
• The decline in ImprimisRx's compounded revenue and the strategic transition to FDA-approved products like VEVYE reflect a broader industry trend where regulatory bodies are increasing oversight on compounding pharmacies, favoring FDA-approved, standardized treatments. This aligns with the shift seen in other pharmaceutical companies that have either divested or scaled back compounding operations in favor of branded products.

Management Changes

Corporate Governance

Legal Proceedings

• In July 2021, ImprimisRx, LLC filed a lawsuit against Ocular Science, Inc. and OSRX, Inc. (OSRX) for copyright infringement, trademark infringement, unfair competition, and false advertising (Lanham Act).
• In November 2024, a jury found OSRX acted with malice, fraud, or oppression, willfully engaging in trademark infringement and unfair competition, awarding ImprimisRx, LLC a $34,900,000 jury verdict ($20,400,000 punitive, $14,500,000 actual damages).
• An amended final judgment on October 1, 2025, reduced OSRX's liability to $11,249,000, plus post-judgment interest, and required OSRX to cease use of certain trademarks.
• OSRX filed notice of appeal on October 9, 2025, and no collection activity is allowed during the appeal. The company has not recognized any amounts associated with the judgment due to collection uncertainty.
• In January 2026, the California Board of Pharmacy approved a settlement agreement with ImprimisRx, resolving an administrative action regarding regulatory compliance matters.
• As part of the California settlement, ImprimisRx voluntarily surrendered its California nonresident 503B outsourcing facility license and 503A compounding pharmacy license effective February 1, 2026.

Related Party Transactions

• The company holds an ownership interest in Surface Ophthalmics, Inc. (approximately 20% of outstanding equity) and royalty interests in some of Surface's drug candidates.
• Adrienne Graves and Perry J. Sternberg, directors of Harrow, are also directors of Surface. Mark L. Baum, Harrow's CEO, resigned as a director of Surface on March 31, 2023.
• The company's investment in Surface is accounted for under the equity method, with the carrying value reduced to zero due to cumulative equity method losses.
• The acquisition of remaining interests in Melt Pharmaceuticals, Inc. in November 2025 was a related party transaction, as Harrow previously held a minority ownership interest (approximately 45% as of December 31, 2024) and a mid-single digit royalty on future net sales of MELT-300.
• Consulting agreements with Mark L. Baum, Andrew R. Boll, and John P. Saharek with Melt Pharmaceuticals, Inc. (prior to acquisition).
• Consulting Agreement dated March 1, 2026, between Harrow, Inc. and John Saharek.

Stakeholder Impact

• Shareholders: Potential for increased value from branded product growth and pipeline expansion, but also dilution risk from future equity raises and volatility in stock price. Improved net loss and operating cash flow are positive.
• Employees: Increased payroll and related expenses due to new hires in sales, marketing, and other departments, indicating growth and job opportunities. Equity compensation plans aim to attract and retain talent.
• Customers (Eyecare Professionals & Patients): Expanded portfolio of FDA-approved ophthalmic products and biosimilars offers broader treatment options and potentially more affordable alternatives. 'Harrow Access For All' aims to improve affordability and access.
• Suppliers/Manufacturers: Continued reliance on third-party manufacturers for branded products, with potential for changes in contract manufacturers and locations.
• Creditors: Debt refinancing with 8.625% Senior Notes due 2030 and an undrawn revolving credit facility indicates a stable debt structure and liquidity.

Next Steps

• Expand VEVYE commercial sales team from approximately 50 to 100 U.S. sales territories by late May 2026.
• Increase the dedicated sales force for TRIESENCE during the coming months.
• Commercially launch BYOOVIZ in mid-2026.
• Commercially launch BYQLOVI in mid-2026.
• Commercially launch OPUVIZ in mid-2027.
• Prepare and submit an NDA for MELT-300 in the first half of 2027.
• Commercially launch MELT-300 in the second half of 2028 (if promptly approved).
• Move H-N08 into the clinic before the end of 2026.
• Continue to review opportunities to reduce the size of the compounded formulary and transition ImprimisRx customers to Harrow's FDA-approved products (Project Beagle).
• Continue to expand sales and marketing team, expertise, and expenses.
• Potentially sell some or all of ownership interests in Surface or other subsidiaries.
• Enter into one or more quality agreement(s) with respect to the supply of Validation Batches and NOVALIQ Inventory within thirty (30) days following the Effective Date of the Novaliq agreement.
• Negotiate a pharmacovigilance agreement for VEVYE within ninety (90) days of the Effective Date of the Novaliq agreement.
• File an NDA for VEVYE with Health Canada within two (2) years following the Effective Date of the Novaliq agreement.
• John Saharek to serve as Program Lead for IHEEZO Anterior Clinic Adoption Pilot through December 31, 2026.

Key Dates

Recommendation

Harrow, Inc. demonstrates strong growth in its branded ophthalmic segment, particularly with IHEEZO and VEVYE, which are driving significant revenue increases and a positive shift in operating cash flow. The strategic acquisitions of biosimilars (BYOOVIZ, OPUVIZ) and novel therapies (BYQLOVI, MELT-300) position the company for substantial future growth in high-demand markets. While the compounding segment faces headwinds and increased R&D/SG&A expenses are noted, the overall trajectory towards a more robust, FDA-approved product portfolio, coupled with successful debt refinancing and improved financial health, suggests a compelling long-term investment opportunity. The current valuation may not fully reflect the potential of its expanded pipeline and commercial infrastructure.

Keywords

Ophthalmic pharmaceuticals, Dry eye disease, Wet AMD, Cataracts, Glaucoma, Biosimilars, Compounded medications, FDA approval, SEC filing, 10-K, HROW, IHEEZO, VEVYE, TRIESENCE, BYOOVIZ, OPUVIZ, BYQLOVI, Melt Pharmaceuticals, ImprimisRx, Drug development, Regulatory compliance, Intellectual property, Healthcare reimbursement, Cybersecurity