Harrow (HROW) Q3 2025: Vivi Market Share Doubles, Unlocking Payer-Driven Upside for 2026
Vivi’s preferred formulary win and surging adoption set up Harrow for a step-change in covered prescription mix and pricing power starting January. IHESO and TriEssence also show momentum, while commercial scaling and targeted investments point to durable operating leverage. Investors should watch Q1 seasonality and execution on four new launches as next catalysts.
Summary
- Formulary Access Inflection: Vivi’s preferred status at the largest PBM will flip prescription mix toward covered scripts in 2026.
- Operating Leverage Emerges: Revenue growth is translating into margin gains as commercial infrastructure scales efficiently.
- Pipeline and M&A Optionality: Four launches and the Melt Pharmaceuticals acquisition expand Harrow’s long-term market reach.
Performance Analysis
Harrow’s Q3 results underscore a business in high-growth mode, with total revenue up 45% year-over-year and 12% sequentially. The company’s branded ophthalmic products, led by Vivi, IHESO, and an emerging TriEssence franchise, delivered strong volume growth and are increasingly driving the company’s revenue mix. Vivi generated $22.6M in the quarter, up 22% QoQ, and IHESO posted $21.9M, up 20% sequentially—both on the back of expanded prescriber adoption and improved access. TriEssence, while still a smaller contributor, saw 33% sequential growth and is now positioned for acceleration following its launch into the ocular inflammation market.
Operating leverage was a standout, as stable expenses allowed adjusted EBITDA to reach $22.7M. The commercial model is showing scalability, with incremental revenue translating efficiently into profit. However, management flagged upcoming investments in sales infrastructure to support Vivi’s next phase, which could modestly lift expenses but are expected to be highly revenue generative. The company’s recurring revenue from ImpromiseRx remains steady, though regulatory risk in California could create minor near-term headwinds. Notably, management trimmed the full-year revenue outlook to $270–$280M (from $280M+), citing inventory disruptions and prudent guidance, but emphasized confidence in hitting a third consecutive year of 40%+ growth.
- Vivi Share Gains: Vivi doubled its dry eye market share to 10.5% in two quarters, driven by prescriber expansion and access wins.
- IHESO New Account Penetration: Nearly half of IHESO accounts in 2025 are new, with an 86% reorder rate supporting durable growth.
- TriEssence Inflection: TriEssence’s launch into ocular inflammation is catalyzing new demand, with 67% sequential unit growth and 53% new customer accounts.
The quarter’s results validate Harrow’s multi-segment approach and set the stage for a significant shift in payer dynamics and product mix heading into 2026.
Executive Commentary
"Perhaps a key highlight of my remarks, though, should be the news that we have recently signed agreements with several leading national payers for Vivi. Beginning in January 2026, only a couple of months away, Vivi will be listed on multiple new formularies with a preferred product status, including the largest US pharmacy benefit manager. This means that certain products are becoming uncovered and that creates an opportunity for prescription transfers. And going forward, Vivi will be covered on those formularies."
Mark L. Baum, Chief Executive Officer
"As we continue to scale, our ability to translate revenue growth into earnings remains a core strength of HARO's model. As we advance into the fourth quarter, we expect to see operating expenses moderately increase as further investments are made in our commercial infrastructure to accelerate sales, and that trend should continue into 2026."
Andrew Boll, President and Chief Financial Officer
Strategic Positioning
1. Payer Access and Prescription Mix Shift
Vivi’s preferred placement with the largest US pharmacy benefit manager (PBM, pharmacy benefit manager, entity that manages prescription drug benefits for insurers) is a transformative win. This will convert a significant portion of cash-pay scripts to covered scripts, improving pricing stability and net revenue per unit. Management expects this shift to begin in January 2026, with “tens of millions” of new covered lives and a step-up in average selling price (ASP) across Vivi’s volume base.
2. Commercial Infrastructure and Operating Leverage
Harrow’s commercial infrastructure, built over the past several years, is now supporting multiple launches and expanding efficiently. The company plans to add 10 new sales territories for Vivi in Q4, scaling to 100 by mid-2026, with a focus on high-opportunity markets aligned with new payer coverage. This scaling is expected to be revenue-accretive, not dilutive, as incremental sales staff are deployed to areas of proven demand and coverage.
3. Portfolio Diversification and Launch Cadence
Four new launches are scheduled over the next two years—BioViz, OpioViz, Biclovi, and Melt 300. The Melt Pharmaceuticals acquisition, with its non-opioid procedural sedation candidate, adds a differentiated asset and positions Harrow for expansion in perioperative and surgical settings. The pipeline is designed for capital efficiency, with a mix of branded, generic, compounded, OTC, and biosimilar products targeting both front- and back-of-eye conditions.
4. Segment-Specific Execution and Turnarounds
TriEssence and the rare/specialty portfolio underperformed earlier in the year, but new leadership and the “Access for All” program are now in place to drive recovery. TriEssence’s launch into ocular inflammation, its largest addressable market, is showing early positive feedback and accelerating adoption, while dedicated sales teams are being built for the rare/specialty segment to unlock its underpenetrated market potential.
5. Regulatory and Geographic Risk Mitigation
The ImpromiseRx California license renewal remains an open regulatory risk, but management is actively negotiating for a resolution and views the risk as manageable. The Melt acquisition also opens the door for Harrow’s first global commercial plays, with Melt 300’s patents covering major international markets.
Key Considerations
Harrow’s Q3 performance reflects a business with multiple high-velocity levers and a disciplined approach to scaling. The upcoming payer access inflection for Vivi is the single most material near-term catalyst, with the potential to change the company’s revenue quality and growth trajectory.
Key Considerations:
- Coverage-Driven Upside: Vivi’s new preferred status will flip the cash/covered mix, driving higher ASP and stickier patient retention.
- Commercial Investment Payoff: Targeted expansion of sales infrastructure is expected to yield immediate returns as new coverage comes online.
- Segment Recovery Potential: TriEssence and the rare/specialty portfolio are positioned for rebound, with new leadership and market launches underway.
- Pipeline Optionality: Four launches and the Melt acquisition provide multi-year growth visibility and market expansion optionality.
- Seasonal and Regulatory Watchpoints: Q1 2026 will show typical seasonal decline, and the ImpromiseRx California license renewal remains a near-term risk.
Risks
Regulatory uncertainty around the ImpromiseRx California license could cause minor revenue disruption if not resolved, though management is actively engaged with regulators. Seasonal demand declines in Q1, inventory timing, and execution risk around commercial expansion and new launches are key watchpoints. Competitive pressure from branded and generic ophthalmic players, as well as payer negotiations, could impact pricing and share gains if not navigated adeptly.
Forward Outlook
For Q4 2025, Harrow guided to:
- Strong sequential revenue growth, driven by Vivi and IHESO seasonality and new coverage wins
- Modest operating expense increases tied to commercial infrastructure expansion
For full-year 2025, management updated guidance to:
- Revenue of $270–$280 million (from $280M+ previously)
Management highlighted several factors that will shape the outlook:
- Vivi’s coverage inflection and sales force ramping will drive 2026 upside
- Q1 2026 expected to show seasonal revenue dip before resuming growth trajectory
Takeaways
Harrow’s payer-driven growth inflection, commercial scaling, and pipeline depth position the company for sustained value creation—if execution on launches and regulatory management holds. Investors should focus on Vivi’s covered prescription mix shift, TriEssence’s adoption curve, and the pace of new territory activation as forward signals.
- Payer Access as Growth Catalyst: Vivi’s preferred formulary status at the largest PBM will drive a material mix shift and pricing uplift in 2026.
- Commercial Scaling Efficiency: Operating leverage is now visible, with incremental revenue converting to profit as commercial investments are targeted and measured.
- Execution on Launches and Recovery: The pace of TriEssence and rare/specialty turnaround, plus Melt 300 integration, will determine if Harrow sustains its multi-year high-growth trajectory.
Conclusion
Harrow’s Q3 results confirm the business is at an inflection point, with payer access and commercial scaling set to drive higher-quality growth in 2026. Execution on new launches and continued discipline in investment will be critical as the company enters a new phase of market expansion and operational leverage.
Industry Read-Through
Harrow’s payer access breakthrough and rapid share gains in ophthalmology signal that formulary wins remain the most potent growth lever for specialty pharma. The company’s ability to translate coverage into adoption and pricing power sets a template for peers aiming to disrupt entrenched brands. The multi-modal portfolio approach—combining branded, biosimilar, and compounded products—also highlights the value of diversification and capital-efficient pipeline development in specialty therapeutics. Watch for increased competitive intensity as PBMs consolidate preferred lists, and for similar commercial infrastructure scaling among high-growth specialty pharma peers.