All right, good afternoon, everyone. Welcome again to the 37th Annual Piper Sandler Healthcare Conference. This is David Amsellem from the Piper Sandler Biopharma team. And our next fireside chat is Harrow. We have Mark Baum, CEO. Lots to talk about. Thanks for coming to the conference this year.
David, thank you for having us. We're grateful for the audience.
I'm going to jump right into questions, if that's OK.
Great.
Actually, I wanted to start with the Melt acquisition, since that's pretty recent, closed in mid-November. Just wanted to get your thoughts on the underlying value proposition of the technology here, how you're thinking about the procedural sedation opportunity. Kind of gets you not just into more anesthesiology, but maybe allows you to cast an even wider net. So how are you thinking about just the overall value proposition and strategic fit there?
I always like to think of things at the consumer level. If I was the patient going in for surgery, what would be best for me? What would I want my mother to experience? And the reality is that if you look at the data, more than 9 out of 10 cataract surgery patients in the United States are administered IV fentanyl. So opioid exposure in cataract surgery is rampant. It's common. And what we're going to try to do is reduce or eliminate opioid exposure for millions of Americans every year. The opportunity, though, with the MELT- 300 extends beyond eye care and ophthalmic surgery. The biggest markets are in dental and plastics and derm. And my wife just underwent an MRI procedure last week. And claustrophobia in MRI is a real problem.
I think one out of four patients press the button because they have claustrophobia and they want to exit the machine, so the use cases outside of ophthalmology are considerable, and we intend to not only take advantage of those use cases in the U.S. market, but we have a patent portfolio and a patent estate that is domestic and international as well, so it's an international play beyond the domestic use case.
Can you go into some details just on the phase III and your SPA with the FDA?
So the company has a Special Protocol Agreement with the FDA. And that extends to study design and statistical analysis, what the primary and secondary endpoints would be. And all of the what I would call high-risk work on the program is completed. So all of the efficacy studies are done. We were able to demonstrate that, for example, the MELT-300, the combination of midazolam and ketamine, is superior to the individual constituents. And so having a superiority capability above midazolam, for example, which is a very good sedation agent, we think is quite powerful. So those agreements are in place. The data has been collected on the efficacy side. Now, there's a few, you know, I don't want to call them perfunctory, but nearly perfunctory, ultra-low-risk data sets that we need to collect in order to complete the dossier and ultimately file an NDA.
OK. So I wanted to ask you about commercialization here. So you obviously have well-established infrastructure in ophthalmology, but you talked about other use cases. So how are you thinking about not just the segments, but the kind of resources that you're going to put on these non-ophthalmology opportunities?
In markets like dental, as an example, there are well-established companies. There's only a few of them that are very strong in that market. And those are the types of companies that we would look to talk to about this opportunity in that specific segment. We just brought on a fellow named Frank Mullery. And Frank Mullery was in charge of Mylan's injectables business in North America. He's got a history of being very successful in accessing the hospital market and other markets in the U.S. outside of ophthalmology. So we have internal talent. I think you'll likely see us hopefully partner with other companies that have commercial capabilities outside of ophthalmology. And that would also extend to potential partnerships with these technologies outside the U.S. market as well. So we're really strong in U.S. ophthalmic.
We have a high conviction that we can be very successful in ophthalmic surgical. Outside of that market, we would look to build relationships in order to exploit the full opportunity with this technology.
And then the last question on all things MELT. Can you talk about 210 and how that differs from the lead asset here?
MELT-210 is what I would call a hidden gem. We didn't really talk a lot about MELT-210 up until this acquisition process. But MELT-210 is essentially.
That's one I want to talk about it.
OK. Well, I was talking to my brother, who's actually a CRNA. We were talking over the Thanksgiving holiday. And he was telling me about how he uses midazolam in his practice. And midazolam, for example, is only available as an IV. And it's available also as a Versed syrup. And so the opportunity to have an oral dissolving tablet that works quickly, where you get blood levels quick and blood levels come down very quick, is a huge opportunity for an anti-anxiety medication, a sedation medication. And so when you think about all those use cases, for example, claustrophobia, if you're going in to have a GI procedure or vasectomy, or I had a Mohs procedure, a derm procedure recently, the anxiety associated with that, when you think about that MELT- 210, instead of taking syrup, instead of being offered an IV medication, there's a huge number of cases.
This is when you get into tens of millions of potential use cases. And our competition there is a syrup or IV midazolam. So we think we have a lot of advantages over those two formats.
OK. So let's move on to your core eye care brands. Wanted to spend some time on VEVYE in dry eye disease. So can you just talk about the trajectory of that product and just help us better understand how you frame the value proposition, particularly relative to other forms of cyclosporine?
Once again, going back to thinking like the consumer, having been in physicians' offices when they're seeing dry eye patients and hearing them complain about the burning, the stinging, the fact that something doesn't work quickly, or that they may have used something religiously for month after month and not gotten the treatment effect that they expected from one of these medications that was available to them before VEVYE got to the market. We clearly saw an opportunity to make available something that worked quickly, that had long-lasting effect, that didn't burn or sting, that patients would want to refill, that really tamped down the inflammation that we believe is associated with all forms of dry eye disease. And I think Andrew and I both put this medication in our own eyes. And we were blown away. It felt completely differently.
If you put other forms of cyclosporine in your eye and you do sort of a Coke Pepsi taste test, you will feel the difference. One of the other products that we just recently just dusted has more than 20% of the patients on its label experience pain upon instillation. You don't have that with VEVYE. It feels really great. What we needed to do, though, was make sure that every patient who could benefit from VEVYE had access to it. And so we coupled not only a great product with a phenomenal access program. And that's what I think has enabled VEVYE to nearly double its market share in the last two calendar quarters. And I think things are just really kicking off because we've had a huge coverage win, a major coverage win beginning January 1st. We won't be fighting with both hands tied behind our back.
Patients who need this product will actually be able to get it in a friction-free way.
When you say friction-free way, do you mean not having to step through a generic form of ophthalmic cyclosporine?
We're saying that. And we're saying a preferred status with the largest pharmacy benefit manager in the United States, more than 30 million lives. I have received letters that have gone out to not only ODs, but ophthalmologists' offices, which identify specific patients that were on the product that is no longer on formulary and then letting those physicians know that VEVYE is now preferred on those formularies. So this is tremendous marketing for us, for VEVYE. And that is really why we are doubling our sales force. Beginning about a month ago, we said we would hire 10 more reps for territories in the U.S. And that by Memorial Day, we hope to have about 100 territories covered. So we're investing because it would be malpractice for us not to.
We see not only significantly improving numbers of units in 2026, but also a more buoyant net price per unit.
Have you said publicly what portion of Medicare lives you have access to for the product?
No. And the reason is because it's not about necessarily the coverage, the covered lives. For us, it's about quality of coverage. And it's really hard to segment that out. And the reason why we've talked about this last coverage win is because it is preferred status. It is a friction-free transaction with these plans. And so that is the highest quality coverage. And you're talking about more than 30 million lives.
Just one more question on VEVYE. Just dry eye disease historically, pretty promotion-intensive space. When Allergan had Restasis, a lot of DTC. I know that may not necessarily be your approach. But what is the role, if any, of DTC in your commercial support?
I think when you have something really great to sell, if you have a great spokesperson, you're doing a lot of promotion and direct-to-consumer advertising, that can probably make something really great even better and more successful. When you have something that's not really great, you can certainly be benefited by all of that expense. We've never really had the luxury of being able to offer something that wasn't great and to try and mask it through some direct-to-consumer promotion or anything like that. With VEVYE, we have a product that is absolutely best in class in terms of the data demonstrates that. The refill rates demonstrate that. When patients start VEVYE, they continue, particularly commercial covered patients. So we have something fantastic. We don't do extravaganza launches. You're not going to see us hire these famous people to promote our product.
I would say that in this day and age with social media and the ability for a happy consumer to communicate with other happy consumers who also suffer from dry eye disease, that is a more powerful marketing statement than even having Jennifer Aniston or someone like that. Although we would like to have Jennifer Aniston or one of these other fancy people promoting our product. They probably use our product for their actual dry eye disease and only promote the ones that they're paid for.
But I guess the point is you don't need a celebrity spokesperson to necessarily drive a pretty robust sales ramp.
100%. 100%. You need a great product.
Let's switch gears to IHEEZO. So you've had a nice sales ramp here. Just remind us, for those who are not as familiar with the product, just about the value proposition of IHEEZO. And what is driving the brisk growth here?
So what we noticed for anesthesia, in particular for intravitreal injections in the U.S. market, is that physicians had myriad protocols that they were using to anesthetize an eye. And many of those protocols involved using various caines, whether it was lidocaine or tetracaine or some other. And it was a very inefficient process. Often it would take 15-20 minutes or longer to actually anesthetize the eye. So from a time and motion perspective, not very efficient. Also, a lot of these medications dry the patient's eye out and can cause pain. So we saw that there was an opportunity to do something better for the patient, once again. And with IHEEZO, it is a gel that is based in hydroxyethyl cellulose. It actually hydrates the cornea as opposed to drying it out. And with one dose of IHEEZO, you can anesthetize the eye.
It works fast, reliably, reliable duration. And then importantly, because of the data that we were able to produce and demonstrate to the folks at CMS, it's the only reimbursable topical anesthetic in the U.S. market. And so growth in that market for that product has been steady. We said, I think, at our last investor day that we expected that product to do around $50 million or so for this year. Well, through the first three quarters, I think we're up to about $45 million. And the fourth quarter will, without question, be the biggest quarter for that product. And we expect even better things for IHEEZO next year. We're just, I think, at the infancy of that growth. Our expectation is that for the intravitreal injection market, the in-office market, we should by the end of 2027 hopefully have around 10% market share, which is fairly modest.
If we do, we'll be able to hit our 2027 goals for that product. A lot of runway to go, a lot of benefits for IHEEZO versus this legacy way of anesthetizing the eye.
Another product that I wanted to touch on was Triesence. So can you talk about the trajectory of that product since the relaunch? And I think you've talked about exclusivity runway. You've also talked about a next-generation product. So help us better understand where you're looking to take that franchise?
I will say this, just to fall on the sword. The first three quarters of this year for Triesence were a disappointment. And I would have less confidence in our 2027 figure if I didn't see the turnaround with Triesence taking place. That's very important for that franchise. I continue to be a Triesence bull. And what we noticed with Triesence is that, number one, there were certainly manufacturing issues. The product was essentially extinct for a number of years. It was not being made. But importantly, it was not being promoted on its full label, both the surgical and non-surgical indications. And then from a coding and billing perspective, the prior owner never applied for pass-through. They never, I think, learned that the product, even after pass-through, would be paid for in an ASC setting, so in a surgical setting.
And so we saw all of these unique features with the product in terms of being able to promote on the full label, coding and reimbursement. And we had to get all of that right. I will say that I think our initial launch wasn't great. But around the summertime, we brought in new commercial leadership. We brought in new leadership on the strategic account side. And we have seen a turnaround. We decided to launch Triesence in the largest market opportunity for the product. We did do that October 1st. And I'm really pleased with what I'm seeing. We are seeing the green shoots that we thought we would see with that product. And we're going to get to where we need to be and hopefully even better with Triesence. It's a very big disappointment for the first three quarters of the year.
But it's a very good thing that's going on now with Triesence, the things that we're seeing with that product.
Can you comment at all on the next-gen product?
We're going to do a prefilled syringe of Triesence. And it's hopefully coming. We'll hopefully file on it next year.
Got it. All right. So you're entering the biosimilar space. So wanted to talk about that. So you had the eventual launches of a ranibizumab biosimilar, I think 2026, and then aflibercept biosimilar in 2027. So I wanted to take a step back here. What was your rationale for entering these product markets? Is it mainly driven by the fact that you're gaining traction with these retinal practices regarding IHEEZO? And is that sort of a logical way to leverage your presence there?
I think if you take a step even further back, we're in the business of providing solutions to our customers. So a lot of companies that are in our space have individual products. We're really interested in knitting together products to create solutions that create durability with our customer relationships. If you think about our surgical products, we have a perioperative surgical solution, everything from preparing the cornea before a cataract surgery to sedation to infection, inflammation, and post-surgical pain, the entire suite of products. When you think about the retina office, you think about AMD as an example and intravitreal injections. We wanted to be a company that not only sold the anesthetic, a best-in-class anesthetic that was reimbursable, but also the therapeutic and also Triesence on the anti-inflammation side.
So we have now, I think, the largest portfolio of buy-and-bill products that are sold into the retina market. They're complementary with one another. And when you think about what we will have with the Lucentis and Eylea biosimilar, and you really take that, let's say, $10 billion AMD, and if you look at the entire market, it's like, I think, $15 billion of total spend. But we take that $10 billion and we carve it up. And we get to about a billion or so that is specifically focused on the sort of Lucentis, Lucentis biosimilar market. Lucentis has phenomenal data. It's a great product. And about 20% of these patients are refractory to Eylea. And so there's a large opportunity within that $10 billion. And it's about a billion. And within that billion, there's less competition than you might think, less crowded.
If we can get a good chunk of that billion, I think we're going to surprise people.
So that touched on my next question, which is on competition. So you do have ranibizumab entrants already. Of course, anytime you have a multi-source product market, there's always the potential for more entrants. I mean, that's just the nature of biosims and generics. So point taken. But how do you think about the competitive dynamics going forward, pricing erosion of ranibizumab, and frankly, also aflibercept as well over time?
Yeah. I think it's a question of what your expectations are. Our expectations within that market are to get a handful or so percentage points of market share. So we're not trying to do what Pavblu was able to do this year, which was extraordinary. So if we can get three, four percentage points of a market that is north of $80 million in revenue per percentage point, our stockholders are going to be very, very happy. If you look at our team, our team comes from they're all ex-Regeneron veterans and have a tremendous amount of experience. And we're going to really focus on not only the quality of our product, quality of service, the quality of relationships that we have, the ability to also provide the anesthetic, which is two opportunities for net cost recovery instead of one, and stability in supply.
So we have a unique strategy, I think, that should be able to meet our internal expectations. And our internal expectations are so low that there's a good opportunity to not maybe do what Pavblu has done, but to beat our own internal expectations. And if we do, our stockholders are going to be very, very happy.
Can you give us just a refresher on what your economics are with Samsung on the biosims?
It's not a royalty deal. It's more of a partnership opportunity. As you've seen, we get into these deals at what I would call very affordable prices. That was one that we got at an affordable price. And these are products that cost hundreds of millions of dollars to develop. We didn't spend that. But the share is there for both Samsung and us. And we're happy with the deal.
Okay. So we've got a couple of minutes left. So I wanted to touch on a couple of additional topics. You've talked about your Harrow Access for All program. Just wanted to get some color on that program.
We have a number of access programs. The Harrow Access for All program in general, or any of our access programs, are really designed to ensure that anyone who needs one of our medications will get access to it, whether it's a VEVYE patient or an IHEEZO patient. For example, IHEEZO, which is what I would want my mother's eye to be anesthetized if she was having an injection, should be used for every patient. We have more than 90% coverage with IHEEZO, over 90% coverage with Triesence, less than 5% prior authorizations for both products.
Even if it's access to TobraDex ST or Flarex or any of our products, what we're trying to ensure for the physician right at the moment that they're making a prescribing decision, we want them to know that as partners of theirs, if they send that patient to us, we're going to make sure that that patient gets access to the medication that they need at an affordable price with a max out-of-pocket of $59. That's what the program does. It could be $0, by the way, but max of $59, which is accessible and affordable for most patients.
Okay. And then last question, just appetite for further biz dev M&A?
You know, when I think about what we have on our plate with Melt, I'm blown away, and I think Andrew and I are, we look at deals all the time. If we can buy a dollar for a dime, we will, but we have what we need to build a very large market cap company.
Okay. I'll leave it there. Thanks so much, Mark. Thanks everyone in the audience.
Thank you, David.