Harrow Profile
Harrow, Inc. operates as an ophthalmic-focused pharmaceutical company.
The company’s business specializes in the development, production, sale, and distribution of innovative prescription medications that offer unique competitive advantages and serve unmet needs in the marketplace through the company’s subsidiaries and deconsolidated companies. The company serves ophthalmologists and optometrists by providing FDA-approved branded ophthalmic pharmaceuticals and innovative compounded prescription medicines that are accessible and affordable.
The company owns the U.S. commercial rights to ten branded ophthalmic pharmaceutical products, including IHEEZOTM, IOPIDINE (both approved concentrations), MAXITROL eye drops, MOXEZA, ILEVRO, NEVANAC, VIGAMOX, MAXIDEX, and TRIESENCE. The company owns and operates ImprimisRx, one of the nation’s leading ophthalmology-focused pharmaceutical-compounding businesses, and the company’s branded drugs are marketed under the company’s Harrow name. In addition, the company has non-controlling equity positions in Surface Ophthalmics, Inc. (‘Surface’) and Melt Pharmaceuticals, Inc. (‘Melt’), both companies that began as subsidiaries of Harrow and were subsequently carved-out of the company’s corporate structure and deconsolidated from the company’s financial statements. The company also owns royalty rights in certain drug candidates being developed by Surface and Melt.
ImprimisRx
ImprimisRx is the company’s ophthalmology-focused pharmaceutical compounding businesses. ImprimisRx, whose business consists of integrated research and development, production, dispensing/distribution, sales, marketing, and customer-service capabilities, has offered physician customers and their patients access to critical medicines to meet their clinical needs. Initially, ImprimisRx focused exclusively on compounded medications to serve needs unmet by commercially available drugs. The company’s compounded medications include various combinations of drugs formulated into one bottle and numerous preservative-free formulations. Depending on the formulation, the regulations of a specific state, and ultimately the needs of the patient, ImprimisRx products may be dispensed as patient-specific medications from the company’s 503A pharmacy, or for in-office use, made according to current good manufacturing practices (‘cGMPs’) or other guidance documents from the U.S. Food and Drug Administration (the ‘FDA’), in the company’s FDA-registered New Jersey outsourcing facility. The company’s ophthalmology formulary includes over 30 compounded formulations, many of which are patented or patent-pending, that are customizable for the specific needs of a patient. The company makes its formulations available at prices that are, in most cases, lower than non-customized commercial drugs. ImprimisRx’s customer base has grown to include more than 10,000 U.S. eyecare-dedicated prescribers and institutions.
Branded Pharmaceuticals and Drug Candidates
In order to more fully serve the needs of the company’s growing customer base, the company has invested in broadening its product portfolio to include FDA-approved products. The company’s investments in this regard have led to the pursuit and completion of several announced transactions, and others the company is continuing to pursue, all of which are focused on eyecare pharmaceuticals. The company’s continued investments in these and other products will result in the company’s ability to provide more physician prescribers and their patients with access to a complete portfolio of affordable eyecare pharmaceuticals to address their clinical needs.
ILEVRO, NEVANAC, VIGAMOX, MAXIDEX, and TRIESENCE
In December 2022, the company entered into an Asset Purchase Agreement (the ‘Purchase Agreement’) with Novartis Technology, LLC and Novartis Innovative Therapies AG (together, ‘Novartis’), pursuant to which the company agreed to purchase from Novartis the exclusive commercial rights to assets associated with the following ophthalmic products (collectively the ‘Fab 5 Products’) in the U.S. (the ‘Fab 5 Acquisition’):
ILEVRO (nepafenac ophthalmic suspension) 0.3%, a non-steroidal, anti-inflammatory eye drop indicated for pain and inflammation associated with cataract surgery.
NEVANAC (nepafenac ophthalmic suspension) 0.1%, a non-steroidal, anti-inflammatory eye drop indicated for pain and inflammation associated with cataract surgery.
VIGAMOX (moxifloxacin hydrochloride ophthalmic solution) 0.5%, a fluoroquinolone antibiotic eye drop for the treatment of bacterial conjunctivitis caused by susceptible strains of organisms.
MAXIDEX (dexamethasone ophthalmic suspension) 0.1%, a steroid eye drop for steroid-responsive inflammatory conditions of the palpebral and bulbar conjunctiva, cornea, and anterior segment of the globe.
TRIESENCE (triamcinolone acetonide injectable suspension) 40 mg/ml, a steroid injection for the treatment of certain ophthalmic diseases and for visualization during vitrectomy.
The company closed the Fab 5 Acquisition on January 20, 2023.
IOPIDINE, MAXITROL EYE DROPS, and MOXEZA
In December 2021, the company acquired the U.S. commercial rights to four FDA-approved ophthalmic medicines: IOPIDINE 1% and 0.5% (apraclonidine hydrochloride); MAXITROL (neomycin/polymyxin B/dexamethasone) ophthalmic suspension; and MOXEZA (moxifloxacin hydrochloride). By expanding the company’s product portfolio to include branded FDA-approved products, the company will be uniquely positioned to leverage the company’s commercial platform to introduce unique lifecycle management strategies that could grow sales and address needs of the company’s customers that the company is unable to meet with the company’s other compounded product offerings.
IHEEZO
In July 2021, the company acquired the exclusive U.S. and Canadian marketing and supply rights to IHEEZO (chloroprocaine hydrochloride ophthalmic gel) 3% from Sintetica S.A. (‘Sintetica’). The FDA approved IHEEZO for ocular surface anesthesia in September 2022. IHEEZO is protected by an Orange Book-listed patent that is valid until 2038. The company expects to commercially launch IHEEZO in the U.S. market during 2023.
The company expects its commercial focus of IHEEZO to be on ophthalmic procedures that traditionally require the eye to be anesthetized, including intravitreal injections and lens replacement procedures, which in aggregate the company estimates to be over 11 million instances annually in the U.S.
IHEEZO is protected by one issued, Orange Book listed patent and another patent-pending. The issued patent includes composition of matter and method of use claims and could provide protection for IHEEZO into 2037.
MAQ-100
In August 2021, the company acquired exclusive marketing rights to MAQ-100 in the U.S. and Canada from Wakamoto Pharmaceutical Co., Ltd. (‘Wakamoto’). MAQ-100 is a preservative-free triamcinolone acetonide ophthalmic injection drug candidate. MAQ-100 is marketed and sold by Wakamoto in Japan as MaQaid. Following Japan’s Ministry of Health Labor and Welfare (‘MHLW’) approval, MaQaid was launched in Japan in 2010, indicated as an intravitreal injection for visualization for vitrectomy. Since its initial MHLW approval, the indication for MaQaid was expanded to include treatments for alleviation of diabetic macular edema, macular edema associated with retinal vein occlusion (or RVO), and non-infectious uveitis. The company is working with Wakamoto to assess a clinical pathway for MaQaid.
The company is evaluating several programs to internally develop product candidates based on technology and know-how the company owns. The company also expects to continue to acquire and/or develop additional FDA-approved/approvable ophthalmic products and product candidates that will allow the company to leverage its commercial infrastructure to promote, sell, and ultimately bring these products to market.
Pharmaceutical Compounding Businesses
Pharmaceutical Compounding
Pharmaceutical compounding is the science of combining different active pharmaceutical ingredients (APIs), all of which are approved by the FDA (either as a finished form product or as a bulk drug ingredient), and excipients to create specialized pharmaceutical preparations. Physicians and healthcare institutions use compounded drugs when commercially available drugs do not optimally treat a patient’s needs. In many cases, compounded drugs, such as the company, have wide market utility and may be clinically appropriate for large patient populations. Examples of compounded formulations include medications with alternative dosage strengths or unique dosage forms, such as topical creams or gels, suspensions, or solutions with more tolerable drug delivery vehicles.
A majority of the company’s sales revenue in 2021 and 2022 was derived from making, selling and dispensing the company’s compounded prescription drug formulations as cash payment transactions between the company and its end-user customer. As such, the majority of the company’s commercial transactions did not involve distributors, wholesalers, insurance companies, pharmacy benefit managers or other middle parties. In regard to the company’s compounded formulations, by not being reliant on insurance company formulary inclusion and pharmacy benefit manager payment clawbacks, the company is able to simplify the prescription transaction process. The outcome of the company’s compounding business model is a simple transaction, involving a patient-in-need, a physician’s diagnosis, a fair price and great service for a quality pharmaceutical product.
Compounding Facilities
Pharmaceutical compounding businesses are governed by Sections 503A and 503B of the Federal Food Drug and Cosmetic Act (the ‘FDCA’). Section 503A of the FDCA provides that a pharmacy is only permitted to compound a drug for an individually identified patient based on a prescription for the patient and is only permitted to distribute the drug interstate if the pharmacy is licensed to do so in the states where it is compounded and where the medication is received.
Section 503B of the FDCA provides that a pharmacy engaged in preparing sterile compounded drug formulations may voluntarily elect to register as an ‘outsourcing facility.’ Outsourcing facilities are permitted to compound large quantities of drugs without a prescription and distribute them out of state with certain limitations, such as the formulation appearing on the FDA’s drug shortage list or the bulk drug substances contained in the formulations appearing on the FDA’s ‘clinical need’ list. Entities voluntarily registering with FDA as outsourcing facilities are subject to additional requirements that do not apply to compounding pharmacies (operating under Section 503A of the FDCA), including adhering to standards such cGMPs or other FDA guidance documents and being subject to regular FDA inspection.
The company operates two compounding facilities located in Ledgewood, New Jersey. The company’s New Jersey operations are consisted of two separate entities and facilities, one of which is registered with the FDA as an outsourcing facility (‘NJOF’) under Section 503B of the FDCA. The other New Jersey facility (‘RxNJ’) is a licensed pharmacy operating under Section 503A of the FDCA. All of the company’s compounded products that the company sells, produces and dispenses are made in the United States.
With the company’s compounding pharmacy facilities and licenses and FDA registration of NJOF, the company has the infrastructure to scale its business appropriately under the current regulatory landscape and meet the potential growth in demand the company is targeting. The company plans to invest in one or both of the company’s facilities to further their capacity and efficiencies. Also, the company may seek to access greater pharmacy and production related redundancy and markets through acquisitions, partnerships or other strategic transactions.
Carved-Out Subsidiaries (De-Consolidated Businesses)
The company has ownership interests in Surface, Melt, and Eton Pharmaceuticals, Inc. (‘Eton’) and holds royalty interests in some of Surface’s and Melt’s drug candidates. These companies are pursuing market approval for their drug candidates under the FDCA, including in some instances under the abbreviated pathway described in Section 505(b)(2), which permits the submission of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference.
Noncontrolling Equity Interests
Melt Pharmaceuticals, Inc. (Melt)
Melt is a clinical-stage pharmaceutical company focused on the development and commercialization of proprietary non-intravenous, sedation and anesthesia therapeutics for human medical procedures in hospital, outpatient, and in-office settings. Melt is seeking regulatory approval for its proprietary technologies, where possible. In December 2018, the company entered into an Asset Purchase Agreement with Melt (the ‘Melt Asset Purchase Agreement’), pursuant to which Harrow assigned to Melt the underlying intellectual property for Melt’s pipeline, including its lead drug candidate MELT-300. The core intellectual property Melt owns is a patented series of combination non-opioid sedation drug formulations that the company estimates to have multitudinous applications.
MELT-300 is a novel, sublingually delivered, non-IV, opioid-free drug candidate being developed for procedural sedation. In February 2021, Melt announced data from, and the successful completion of, its Phase 1 study. In December 2022, Melt announced topline data from its Phase 2 study for MELT-300:
In a study of more than 300 patients, at 9 study sites, all undergoing cataract surgery, MELT-300 achieved its primary procedural sedation endpoint, demonstrating statistical superiority for procedural sedation compared to all comparator treatment arms, including midazolam 3mg (P=0.0129) and ketamine 50mg (P=0.0096).
Using the validated Ramsey Sedation Scale (RSS), MELT-300 treatment arm patients were 50% less likely to require rescue sedation compared to midazolam 3mg (P=0.0198).
Using the RSS, MELT-300 treatment arm patients were 66% less likely to require rescue sedation pre-operatively compared to the midazolam 3mg treatment arm.
MELT-300’s safety profile was generally comparable to the placebo arm.
In January 2019, Melt closed an offering of its Series A Preferred Stock. At that time, the company gave up its controlling interest and deconsolidated Melt from the company’s consolidated financial statements. The company owns 3,500,000 shares of Melt common stock, which was approximately 46% of Melt’s equity and voting interests issued and outstanding as of December 31, 2022. In September 2021, the company provided Melt with a senior secured loan with a principal amount of $13,500,000, which was used to fund the Phase 2 program of MELT-300.
Melt is required to make mid-single digit royalty payments to the company on net sales of MELT-300, while any patent rights remain outstanding, subject to other conditions. Melt can require the company to cease compounding like products at the time of FDA approval of MELT-300. If approved, the company does not expect a cessation of compounding like products to have a material impact on the company’s operations and financial performance.
Surface Ophthalmics, Inc. (Surface)
Surface is a clinical-stage pharmaceutical company focused on development and commercialization of innovative therapeutics for ocular surface diseases.
SURF-100 for Chronic Dry Eye Disease: Surface completed its 350-patient Phase 2 clinical trial, comparing five active arms of SURF-100 study drugs with the market-leading prescription chronic dry eye treatments. According to Surface, the SURF-100 Phase 2 clinical trial achieved superiority for both signs and symptoms of chronic dry eye disease compared to market leading incumbents, as well as generating positive data on onset and duration of action.
SURF-200 for Acute Dry Eye: Surface has completed enrollment of its Phase 2 clinical trial for SURF-200 and expects to announce top-line results in 2023.
SURF-201 for Pain and Inflammation Following Ocular Surgery: According to the Surface results, SURF-201 was dosed twice daily, met its primary endpoints of absence of inflammation at both Day 8 and Day 15 and was found to be safe and well-tolerated by the patient group. In addition, a secondary endpoint showed almost 90% of patients given SURF-201 were pain free at Day 15.
In 2018, Surface closed an offering of its Series A Preferred Stock. At that time, the company lost its controlling interest and deconsolidated Surface from the company’s consolidated financial statements. The company owns mid-single-digit royalty rights on net sales of SURF-100, SURF-200 and SURF-201.
Eton Pharmaceuticals, Inc.
Eton is a pharmaceutical company focused on developing, acquiring, and commercializing treatments for rare diseases. Eton commercializes ALKINDI SPRINKLE and Carglumic Acid tablets and has additional rare disease products under development, including dehydrated alcohol injection and the ZENEO hydrocortisone autoinjector. In May 2017, the company gave up its controlling interest in Eton.
Sales and Marketing
The focus of the company’s sales and marketing is in the U.S. The company’s sales and marketing activities consist primarily of efforts to educate doctors, ambulatory surgery centers, healthcare systems, hospitals and other users throughout the U.S. about the company’s branded drug products and compounded formulations.
The company entered into various sales and marketing agreements with certain organizations to provide exclusive sales and marketing representation services in select geographies in the U.S., in connection with the company’s pharmaceutical products and compounded formulations.
Intellectual Property
As of March 15, 2023, the company owned and/or licensed more than 50 total issued and pending patent applications, which include the U.S.-issued patents, international-issued patents, and the U.S. and foreign/international patent pending applications.
As of March 15, 2023, the company had, on a worldwide basis, more than 100 issued trademarks, pending trademark and copyright applications, or registered copyright and/or trademarks, including but not limited to IHEEZO, Imprimis, ImprimisRx, Harrow Health, Dropless, LessDrops, Dropless Cataract Surgery, Dropless Cataract Therapy, Dropless Therapy, MKO Melt, and Simple Drops.
Governmental Regulation
The company’s business is subject to federal, state and local laws, regulations, and administrative practices, including among others: federal, state and local licensure and registration requirements concerning the operation of pharmacies and the practice of pharmacy; the Health Insurance Portability and Accountability Act of 1996 (‘HIPAA’); the Health Care Reform Law; statutes and regulations of the FDA, the U.S. Federal Trade Commission (the ‘FTC’), the U.S. Drug Enforcement Administration, and the U.S. Consumer Product Safety Commission, as well as regulations promulgated by comparable state agencies concerning the sale, advertisement and promotion of the products the company sells.
The company’s pharmacy operations in NJ are governed by Section 503A of the FDCA, and the company’s New Jersey based outsourcing facility is governed by Section 503B of the FDCA.
Research and Development (R&D) Expenses
During the year ended December 31, 2022, the company incurred $3,050,000 in R&D expenses.
History
The company was founded in 1998. The company was incorporated in Delaware in 2006. It was formerly known as Transdel Pharmaceuticals, Inc. and changed its name to Imprimis Pharmaceuticals, Inc. in 2012. Further, the company changed its name to Harrow Health, Inc. in 2018 and to Harrow, Inc. in September 2023.
