In the Third Quarter 2024 Earnings Conference Call, Harrow Health Inc. (NASDAQ:HROW) CEO Mark Baum announced a significant revenue increase to $49.3 million, marking a 44% rise from the previous year. The company experienced a temporary shortage of its dry eye product, VEVYE, but still reported a 55% increase in prescription volume from the second quarter.
VEVYE's refill rate stands at an exceptional 91%, far exceeding the industry standard. Harrow Health has also expanded its sales territories and is securing key Medicare Part D contracts, positioning VEVYE for further market penetration. Additionally, the company is optimistic about its other products, IHEEZO and TRIESENCE, and projects substantial revenue growth for the future.
Key Takeaways
- Harrow Health's revenue rose to $49.3 million, a 44% year-over-year increase.
- VEVYE's prescription volume grew by 55% despite a temporary inventory shortage.
- The company expanded its sales territories from 51 to 61.
- IHEEZO demand increased by 15%, with a strategic sales focus on retina specialists.
- Harrow anticipates recapturing several million dollars of lost revenue due to VEVYE's supply disruption in Q4.
- Medicare Part D contracts for VEVYE are progressing positively, with preferred brand positions established.
- TRIESENCE's relaunch met with positive initial responses, and increased production is scheduled for 2025.
- ImprimisRx is contributing positively to Harrow's cash flow.
Company Outlook
- Harrow Health projects VEVYE's revenue could more than double next year.
- The company aims for IHEEZO to reach $75 million in quarterly revenue by 2027.
- Investments in sales and marketing for IHEEZO and TRIESENCE are expected to correlate with revenue growth.
- Harrow Health anticipates double-digit revenue growth in 2025 for the ImprimisRx segment.
- Phase 3 data for MELT-300 is forthcoming, with potential annual revenue nearing $100 million if approved.
Bearish Highlights
- VEVYE faced inventory shortages, affecting sales and revenue.
- Baum acknowledged initial challenges in the launch of IHEEZO.
Bullish Highlights
- The company has expanded market share against competitors.
- Positive initial response to the relaunch of TRIESENCE.
- Strong refill rate for VEVYE indicates customer loyalty and satisfaction.
Misses
- Supply chain issues impacted VEVYE sales, resulting in lost revenue.
Q&A Highlights
- Baum discussed the sales strategy for IHEEZO and TRIESENCE, emphasizing the importance of GPO relationships.
- The company focuses on strategic growth and managing operating expenses.
- Harrow Health decided against investing in DTC marketing for VEVYE, despite the category's increased awareness.
- The company is finalizing net pricing for TRIESENCE and exploring potential synergies with IHEEZO.
Harrow Health continues to strengthen its position in the ophthalmic pharmaceutical market with two products that show promise and a strategic approach to sales and marketing. With the anticipation of Phase 3 trial data for MELT-300 and the ongoing efforts to improve market presence, Harrow Health remains committed to its long-term growth and value creation for its stakeholders.
InvestingPro Insights
Harrow Health's recent earnings call paints a picture of a company on the rise, and InvestingPro data provides additional context to this growth story. The company's market capitalization stands at $1.52 billion, reflecting investor confidence in its potential. This aligns with the significant revenue growth reported in the earnings call, with InvestingPro data showing a robust 48.15% revenue growth over the last twelve months.
The company's gross profit margin of 72.56% is particularly impressive, indicating strong pricing power for its pharmaceutical products. This high margin supports Harrow's ability to invest in sales and marketing for products like IHEEZO and TRIESENCE, as mentioned in the company outlook.
However, it's important to note that despite the strong top-line growth, Harrow is not yet profitable. An InvestingPro Tip highlights that analysts do not anticipate the company will be profitable this year. This aligns with the reported operating income margin of -5.29%, suggesting that Harrow is still in a growth phase, prioritizing market expansion over immediate profitability.
Another InvestingPro Tip points out that the stock has taken a big hit over the last week, with a 1-week price total return of -18.38%. This recent dip could be related to the temporary inventory shortage of VEVYE mentioned in the earnings call. However, looking at a broader timeframe, the stock shows a remarkable 429.14% return over the past year, indicating strong overall market performance despite short-term fluctuations.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Harrow Health, providing a deeper understanding of the company's financial health and market position.
Full transcript - Harrow Health Inc (HROW) Q3 2024:
Operator: Good morning, and welcome to Harrow's Third Quarter 2024 Earnings Conference Call. My name is Michelle, and I will be your operator for today's call. At this time all participants are in a listen-only mode. 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. Please go ahead.
Jamie Webb: Thank you, operator. Good morning, and welcome to Harrow's Third 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 risks 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. For a list and description of those risks 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. 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. This conference call contains time-sensitive information and is accurate only as of today. Additionally Harrow will refer to non-GAAP financial metrics, specifically adjusted EBITDA and our 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 release 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 Baum; and Harrow's Chief Financial Officer, Andrew Boll. With that, I would 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 to everyone. Thank you for joining us today. Please make sure to review our supplemental documents for the quarter, including our earnings release, corporate presentation and letter to stockholders, all of which are available on the Investor Relations section of our website. In the third quarter, Harrow reported record revenue of $49.3 million and that's a 44% increase over the prior year quarter. It is a slight increase over the previous quarter as well. Gross margins were solid, and we generated cash from operations. And operationally, while we could have done better, as I discussed in my letter to stockholders overall, we are well positioned to meet my commitment to exceed our 2024 financial guidance, especially given what looks like record performance in October and the fourth quarter which is expected to be our strongest quarterly period of the year. Now, let us discuss some of our key products and achievements from the third quarter. VEVYE, our crown jewel dry eye asset, which we launched in January of this year has surpassed our expectations, and we believe it is destined to be a category-leading product due to its rapid onset, efficacy, twice daily dosing and favorable tolerability profile. Total (EPA:TTEF) prescription volume increased 55% in the third quarter compared with the second quarter. As I mentioned in my letter to stockholders, our commercial team did such an excellent job of selling VEVYE that we reached the outer bounds of our internal forecast, leading to a temporary inventory shortage around mid-September. And our VEVYE revenue potential, therefore for the third quarter was unfortunately capped. The good news is that we were able to recover in the fourth quarter, and we have appropriately adjusted our inventory levels by ordering additional batches so that we will not run out again. What drives VEVYE's strong sales growth is its clinical value, which is best demonstrated in the amazing refill rate we have seen. Listen to this statistic. Before VEVYE, 90% of patients did not refill their dry eye prescriptions and were not on therapy at the end of the year. However, VEVYE patients are now into their eighth and ninth refills and we continue to see over 90% refill rates for VEVYE. It's just incredible. Payers are also taking note. And as a result, we are seeing consistent improvement in insurance formulary access for VEVYE. And I talked more about that in our letter to stockholders. Strong VEVYE prescription growth has led us to increase the number of covered territories where we have boots on the ground from 51 in the second quarter to 61 in the third quarter. And in those 61 territories, even though we haven't filled all of those open positions, we are already beating TYRVAYA in about 50% of these markets, CEQUA in about one-third of the markets and MIEBO in nearly 10% of the markets. As demand increases and we continue to increase our market share, we will also add territories as warranted. IHEEZO continues to perform well, too. In the third quarter, IHEEZO saw a 15% sequential increase in unit demand over the second quarter. And in addition IHEEZO's reorder rate also was impressive at 82%. Unit demand has increased up and to the right every quarter, largely because eye care professionals are discovering that IHEEZO is not only an excellent clinical choice for their patients, but we also hear that it enhances their productivity by improving their procedural workflow. That said, in the third quarter with the advice and support of our commercial leadership and after looking at the incredible opportunity before us, I made a strategic decision to implement what I have referred to in the letter to stockholders as the retina pivot, which is to say that our commercial team's call points move nearly exclusively to the retina specialist community. There are numerous compelling reasons why I made this decision. It's because of the concentration of retina providers, which allows us to have more IHEEZO unit volume impact with fewer call points. The intravitreal injection market is massive and growing, and IHEEZO is an ideal clinical choice for ophthalmic anesthesia in this setting of care. And beginning on July 1, 2024, because we had clarity from CMS on reimbursement, even for same-day bilateral use cases. It just would have been foolish not to make this market our primary interest. I discussed the retina pivot more in the letter to stockholders, but suffice it to say that this pivot may have resulted in a somewhat subdued demand for IHEEZO in the third quarter, as our sales folks focus on sales processes in the retina specialist community. I am more than pleased though to report that we are already seeing the benefits of this retina pivot in the fourth quarter, just as our commercial leadership predicted, and I am 100% convinced that this decision was the right one for not only 2024, but for 2025 and beyond. And as promised, the relaunch of TRIESENCE has happened in the month of October. Following years of market absence, bringing TRIESECE back to the retina specialist community is yet another compelling reason for our retina-pivot. The absence of TRIESENCE in the market created a backlog of demand for which there has been no on-label alternatives, and we are working hard to make sure that everyone in that community knows that TRIESENCE is back. We’re convinced that our investment in TRIESENCE will be richly rewarded, and I can tell you that today, I remain more convinced of this than ever. We also see the combination of IHEEZO and TRIESENCE as a powerful one-two punch, enhancing our commercial team's ability to effectively serve the retina market. Finally, other key parts of our business continue to perform, and I would encourage you to review the letter to stockholders to see my latest commentary on our Anterior Segment business and our ImprimisRx business. We are happy to answer your questions. I will pause to have our operator poll for questions. Operator?
Operator: [Operator Instructions] And our first question comes from Chase Knickerbocker with Craig-Hallum. Your line is now open.
Chase Knickerbocker: Good morning, thanks for taking the questions. Mark, I guess, just first, helpful to see you kind of give that inventory number that you have in Q4 on TRIESENCE. I mean how should investors be thinking about the performance of that drug in Q4 with a little bit more detail around kind of what you think will need to be kind of stocked at distributors? And then ultimately, how much of that kind of inventory do you think you can pull-through before the end of the year given that the product has been off the market for so long? Thanks.
Mark Baum: Thanks for that, Chase. Well, first, I have some I think, very positive news about TRIESENCE and that is that all of the regional MACs have indicated that they are reimbursing for TRIESENCE. So that is very important news. I would also say that the response thus far has been very positive. I laid out as you noted in the stockholder letter, the inventory that we have to sell. And what I can tell you is that the commercial team is just actively working to push that inventory through the system and into the system so we can realize revenue, as much revenue as possible from those units in the fourth quarter. And we have, I think some very positive indications in terms of that inventory so far. But the team is working hard. And we are, as I said, I think, emboldened by the response, at least from Medicare on the product-specific J-code thus far. Andrew, do you want to add to that at all?
Andrew Boll: Yes, Chase, I think from our perspective, too, we are obviously early in the game with the relaunch. So a little early for us to give kind of more precise guidance on what we think exact pull-through will be, but the initial response has been great. The team was a big point for us at AEO in October when we came out. And I think the physicians were happy to see it back. Obviously, it's an important product in the market. We are really focused on also supplying, making sure that supply chain is set for the duration for next year and well beyond. And so that is also another critical focus for us. We've got this initial stock, and we're going to focus really on continuing to make sure supply is there so that there's no shortages for the market going forward.
Mark Baum: And I do want to add, we do have additional batches being made and scheduled to be made in 2025. So I think the issue that Andrew is referring to is just longer term supply chain.
Chase Knickerbocker: Got it. And just a confirmation question there, I guess on those batches, you would expect to have more inventory next year in a material sense than what you had in Q4 here for TRIESENCE. And then just a couple on VEVYE. Mark, I'm sorry if I missed this, but can you quantify kind of what you guys think from a dollar perspective, that disruption caused kind of in late Q3? And then a little bit more kind of color around that initial Part D coverage that you were talking about in the recent press release and in the shareholder letter. Kind of any color there around kind of formulary management? Is there any step edits in there? What does that, what do those kind of contracts look like on the Medicare side?
Mark Baum: Yes. So I think -- and my phone went on mute, but I think your question was around quantifying what the VEVYE disruption was and then also kind of where we work on a qualitative basis with this Medicare Part D contract. Is that right?
Chase Knickerbocker: That's correct.
Mark Baum: Okay. Yes. So I mean, look, if you add up what we would have had with ZERVIATE and VEVYE, it is several million dollars of additional revenue and probably would have allowed us to meet revenue guidance from the external analysts. The good news is we are going to recapture that. We are recapturing that revenue in the fourth quarter. So it was, as I think, characterized it in my letter to stockholders, we view it as a bump. It's an unfortunate bump, but it's something that we had to deal with nevertheless. Kind of a good problem to have if you are going to have any problem that the demand is so strong that it is outside of the bounds of your forecast. But we do take responsibility. We can do a better job, I think of forecasting. But the answer to your question is that it was several million dollars for the period. In terms of the Part D plans, that's a really great story because we are talking about a preferred brand position with one of the largest Med D providers. So it's not easy to get those sorts of positions. We're still working on additional agreements. But the response so far I think, is better than we had anticipated. And we're getting these contracts in place before So we are doing well there. And I think we should expect additional coverage arrangements in the fairly near term. Andrew, do you want to add to that at all?
Andrew Boll: Nothing.
Chase Knickerbocker: Great. And then just one confirmation, and I'll hop back in queue guys. Sorry for all the questions. But just on VEVYE, the eight months and that 91% refill rate that you mentioned, is that kind of from first fill? And so just, I guess, asked another way, that would be kind of like 2 times or 3 times kind of what we would think of from kind of competitive dry eye kind of discontinuation rates kind of improvement there. Can you just confirm that I'm looking at that number right?
Mark Baum: Andrew can comment on that. And I would just say, by the way, I mean, VEVYE conservatively next year is set to way more than double. That's if we don't do much of anything. So it is a really exciting product. And I think also we're slated to capture more and more of that revenue next year as we get more contracting done, which is very exciting as our ASP hopefully improves. Andrew, do you want to comment on --.
Andrew Boll: Yes, Chase. So the refill rate is based on patients eligible for that refill. And so if they are, in other words, if they're eligible for their 10th refill, we're seeing that large portion of patients refill. And I think for the last two calls, I've said how excited I am about that refill rate because for us, I mean, from a modeling perspective, it is well beyond what we expected and definitely well beyond what we modeled. That's one of the reasons we had that inventory shortage issue in the last couple of weeks of September. But it's something shareholders should be really excited about. It is going to drive a ton of value, I think, in next year and certainly in the long-term because those refills are just continuing to stack. The product is really performing well, performing better than we expected from a clinical perspective and then certainly from a financial perspective. And it continues for me as CFO to be my favorite product. It is something I want to continue to invest in on the sales and marketing side and really just see revenues from that product scale up and drive further value in the medium and long term.
Chase Knickerbocker: Great, thanks guys.
Andrew Boll: Thanks Chase.
Operator: And the next question comes from Brooks O'Neil with Lake Street Capital. Your line is now open.
Brooks O’Neil: Good morning guys. So I have a couple of quick questions. First, just curious if you'd provide any additional color on summer seasonality. I think you called that out as a factor that maybe normally limits results in Q3, but any color would be helpful.
Mark Baum: Sure. Q3 began producing revenue back in 2014 because a lot of our revenue was dependent on surgical scheduling, the summer months are always the weakest months. And that is not only true for our business, but really any drug company or device company that sells into those markets. So in the summertime, patients go on vacation, doctors go on vacation, staff goes on vacation. And so there is always a reduced number of surgical openings.
Brooks O’Neil: Makes sense. Let me just ask you one other one that is I appreciate all the color you gave on VEVYE and IHEEZO and TRIESENCE. As you take a step back and think about the launches of each of those products and the response in the marketplace, is there anything you'd call out that worries you that strikes you as that's not what we hoped for -- that is not what we expected kind of thing beyond the color you've offered so far. Thank you very much for taking my questions.
Mark Baum: Sure. I think with any launch, things go your way many times, and then there are always things that don't go your way. That just happens. I think with IHEEZO, there have been a number of challenges over the last 1.5 years or so. I'm really excited about where we stand right now. I mean the product is on track next year. I mean it is heading towards being a nine-figure revenue product in short order. That's what we promised, and that's what looks like is happening. And that's a good thing. We have absolute clarity on the reimbursement side now. That's very positive. We didn't have that when we launched. So in many ways, I would say things didn't go perfectly out of the gate, but the team has done such an extraordinary job of positioning the product now for many years into the future that our stockholders, I think, should be really excited about IHEEZO. VEVYE, as Andrew said, he is incredibly enthusiastic about it, and he should be because once patients start using this product, it looks like they continue to use it. They continue to refill it. And as I've said many times over the years, the value of products like VEVYE is really on the refill. It's the chronic use of the product without having to invest further in sales and marketing. That's how you get the economic compounding effect taking place for chronic pharmaceutical products like VEVYE. And then finally, I would say with TRIESENCE right now. And I can tell you once again, some things have gone absolutely as we expected, and some things have not. But it is really important to note that our team, when we launch something or take a particular action, we not only have a primary action, but we have secondary and tertiary strategies behind them because you have to anticipate that not everything is going to go your way. We've seen that happen with TRIESENCE. We actually have a really exciting life cycle management strategy for that product. As I've said on these calls, I think in the past, our expectation is that we want to be able to sell more TRIESENCE in 2035 than we do in 2025. So our stockholders should count on the fact that we have a life cycle management strategy that will be implemented to affect what I'm saying. And I think, that means that we should be able to, over the longer-term, realize the value from these products that we had expected and that we have promised to our stockholders over the last 1.5 years or so.
Brooks O’Neil: Makes total sense. Let me just slip in one more. I thought of it as you were talking. You've commented on the pivot the IHEEZO pivot, I think it was. Do you have plans to go back and try to capture the opportunity in the ophthalmic and cataract surgery areas? Or how are you thinking about that now?
Mark Baum: Yes. First of all, we are not abandoning that market. We have quite a few IHEEZO customers in those markets, and we'll continue to service those customers without question. But when you take a look at what I've said regarding, how do you get to $1 billion of revenue by the end of 2027, on a revenue run rate basis during one of those quarterly periods. One of the things we need is significant revenue from IHEEZO. And I discussed that in the letter to stockholders. We've penciled in about $75 million of quarterly revenue from that product. And what does that mean? That means that we need to capture about 6% or 7% of the intravitreal injection market for IHEEZO. And so it just makes sense, given what we are trying to accomplish by 2027 to really laser focus on that specific market. Does that mean we are not going to have any units sold into the cataract surgery market? No. You can expect that we'll probably sell into that market even by that date, even if it's not reimbursed in the ASC environment. But because we have such clarity on in-office reimbursement, that is really where we need to focus. We have a permanent J-code and we have clarity of reimbursement in the office setting. And there are just more than 10 million annual procedures that take place there, and we have an ideal product that is gaining traction and that is producing a lot of value, not only clinically, but also I think, for our stockholders.
Brooks O'Neil: Great. Thank you very much.
Operator: And the next question comes from Jeffrey Cohen with Ladenburg Thalmann & Company. Your line is now open.
Jeffrey Cohen: Hi Mark and Andrew, good morning. I guess you did talk about the size of the organization in commercial for VEVYE. I wanted to kind of jump that over to IHEEZO and TRESENCE. Could you give us at least some relative metrics on size if those folks out there are selling both IHEEZO and TRESENCE and maybe talk about we're driving into OpEx going forward and how you're thinking about ramping that up?
Mark Baum: Sure. Thanks for that, Jeff. To be clear the team that is selling IHEEZO is also the same team that is selling TRIESENCE. So they now have two products in their bag. Our strategic accounts team is also selling both products obviously. And what we are working on I think, to make our efforts even more potent are new GPO relationships outside of even our sales organization where we can efficiently reach very large segments of the market and particularly, that's true with strategic accounts. So we have a small but very mighty sales organization moving IHEEZO and TRIESENCE. And as I said that team, which is extraordinarily experienced, coupled with these new relationships that we are bringing on, which I also talked about or mentioned in the letter to stockholders, are really going to set us up well, not only for the fourth quarter, but also for 2025 and beyond. Andrew do you want to comment on the balance of the question?
Andrew Boll: Yes, Jeff on the operating expense side, so you know the approach, we take kind of a moderated approach where we are trying to make sure the business is profitable while we're still in that growth mode. The operating infrastructure, the G&A part of SG&A is really there. It's in place for the most part. So any investment further in operating expenses is going to be tied primarily to the commercial side. And we will continue to do that as revenues ramp as market access improves on VEVYE, you should see us continue to invest in the sales and marketing and market access type activities to further drive revenue and further drive growth. So all the important part about that really is that those expenses should be tied to correlating revenue increase as well. So the overall profitability of the company as we grow OpEx, we will continue to expand in 2025 and out years.
Jeffrey Cohen: Okay. Got it. That's helpful. And then one more, if I may. We haven't heard about it in a while. Any commentary or thoughts on how everything is going at ImprimisRx, please?
Mark Baum: Andrew, do you want to add a comment about ImprimisRx? I think business is doing really well. It is producing a lot of cash. That's for sure.
Andrew Boll: Yes. And Jeffrey, we added a new disclosure in the Q where we broke out segments, so you can kind of get an idea of profitability of the ImprimisRx business, as well as our branded business and how those two things are performing at an individual level. But we've been really pleased with how the ImprimisRx business has been operating this year. Summer months are traditionally slow, as Mark mentioned. But despite that, it's continuing to see improvement. We really see a pathway especially in 2025 to see that double-digit revenue growth that we've talked about in the past hitting. Definitely seeing new accounts get added there and continue to see a real market need for the products and seeing market and seeing even new products come to market. We launched a new product called Povacaine AEL, and we're seeing initial uptake there and customer reception has been really positive.
Jeffrey Cohen: Thank you taking my questions.
Operator: [Operator Instructions] The next question comes from Mayank Mamtani with B. Riley Securities. Your line is now open.
Mayank Mamtani: Hi, team. Thank you for taking my questions and I appreciate the 4Q trend update. That's helpful. Just quickly on the VEVYE script volume and market share trends that look impressive. Could you talk a bit more on what you are doing to improve gross to net? Based on our math, you are trending one-third lower than a peer dry eye launch. Anything there to comment on relative to your commercial payer coverage goals or how you might be investing in access payer efforts? And also, should we see some DTC activity from you as we've seen from your peers? And then I have a couple of quick follow-ups.
Mark Baum: Sure. Thanks for the question. Let me start by commenting on the DTC effort. And the answer is absolutely not. You will not see us investing in DTC. That said we really appreciate the investments that we are seeing in DTC because they are definitely increasing awareness of dry eye-disease. And when you have a product like VEVYE that is so effective and that patients appreciate so much that they refill at the rates that we are seeing, you just really want as much awareness, consumer awareness in particular about the condition. So we are not going to invest there, but I think we are going to benefit there, which is terrific. I also want to add that the market access team that's working on VEVYE is doing an extraordinary job. We took a look at the gross this last quarter, and we just are seeing a massive number, especially for a new launch and a very small on a relative basis, sales organization. So very, I think efficient team building a lot of revenue. The question is, how do we get more and more of that revenue. We are going to do that through, obviously, contracting. There is a lot of interest on the payer side with the product because of the refill rate, because of what is being seen clinically. But what I can tell you is that on a net basis, and that's really what our stockholders care a lot about is not only the refill rate, but what are we capturing on a per prescription basis. There is a significant amount of revenue per unit that we can capture by tweaking a few little things. And those efforts are underway right now. And I think over the next couple of quarters, we have the ability to very meaningfully improve our ASP. And that's what we are going to do. I think our stockholders can count on us to do that. That's not only going to improve revenue, but it's going to improve margins as well for the product. Andrew, do you want to add to that?
Andrew Boll: Yes. From a gross to net perspective, Mayank, I mean this year, especially on the launch side, we really have been focused on volume and getting volume and getting patients on therapy and getting doctors introduced to the product. That said next year and beyond as we gain more access, as Mark was saying that gross to net should continue to improve. And then importantly, I think as access improves obviously, it should also help drive volume. So we should get a double benefit as those things start coming online.
Mayank Mamtani: Very helpful. And then on the TRIESENCE relaunch at AAO, I know it is early, but is there any overlap in patients and procedures where you see use of both IHEEZO and TRIESENCE? And similar question, is there a net price you expect for TRIESENCE that based on your early discussions, I know the gross to net for IHEEZO for example, is trending at 70%. So is the expectation TRIESENCE would also be in that same range?
Mark Baum: Yes. So first thing, we are not going to really comment on sort of net pricing for TRIESENCE right now. We are actually still completing that work. But with respect to the first part of the question, what I can tell you is at least like on a GPO basis, we are moving both products together. And so you can create a sort of retina specialist formulary. And that's one of the real big positives about having both IHEEZO and TRIESENCE. I think we are one of the only companies in the ophthalmic pharma market. We may even be the only company that actually has two products to sell into that market, which is exciting.
Mayank Mamtani: Okay. And lastly, I noticed a bit more color on MELT-300 in your shareholder letter, including the SPA reached with FDA recently and the Phase 3 readout is obviously expected shortly. How should we think about value creation from that? And thanks for taking my questions.
Mark Baum: Thank you, Mayank. I believe that by this time next week, we are going to know where we stand with MELT in terms of the Phase 3 data. So my expectations are that the Phase 3 data will read out early next week and that there'll be some sort of external communication regarding that by this time next week. In terms of value creation for MELT, we’re very interested in that product, obviously. As I've said in prior communications we sell a compounded version of the MELT formulation. And if we were able to sell an FDA-approved version of that product, it would result in nearly $100 million of annual revenue. So we know who those customers are that use the compounded formulation and I have a high degree of confidence they would prefer to use an FDA-approved version of the product. And so as I said, it creates sort of as much of a no-brainer commercial launch as you could possibly have. That's something we're really attracted to. But all of that is premature, unless we have a positive readout. And so we'll hopefully know more about that this time next week. If the data is strong, the data comes through, especially given the SPA that the company was able to reach with FDA, we'll be well positioned to do great things with that patented formulation. It's patented not only domestically, it is patented internationally. It has uses certainly in ophthalmology, where we are focused, but the greater number of use cases is outside of ophthalmology. And it is going to be a big product. But we need to see what the data looks like. And, if we were to fast forward a week from now, we will know.
Operator: That's all the time that we do have for questions. And I would like now to turn it back to Mark for closing remarks.
Mark Baum: Sure. Thank you, operator and thanks for joining us today. I just want to reiterate how grateful we are for your continued support and trust in the company as we execute on this vision. It is not a short-term vision. It's a long-term vision. I think we have a pretty good record of creating value over the longer term. It is a really exciting time to be a part of our journey, though, whether you're an investor a customer, a partner or a member of the Harrow family. The progress and achievements that we've made this year are a testament to the team's hard work and dedication, the partnerships that we've built along the way. And as we move towards the very end of this year which I believe is going to certainly be a record year, our focus is going to be delivering sustainable growth, operational excellence and importantly value for all of our stockholders and stakeholders. So if you have any other questions or you need additional information, don't hesitate to reach out to Jamie Webb. Her e-mail address is jwebb@harrowinc.com. This will conclude our call.
Operator: Thank you so much for participating. This does conclude the call. You may now disconnect.
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