Harrow: The Hidden Gem Challenging Big Pharma in Eye Care

The Setup

Here’s a question: what if I told you there’s a $1.4 billion company that could be worth 3x that in a few years, and it’s not in AI, crypto, or anything trendy?

It’s in eye care. Specifically, a company called Harrow (ticker: HROW).

Now, I know what you’re thinking. Eye drops? Seriously? But stay with me, because this is one of those stories where a scrappy founder took on the pharmaceutical giants - got knocked down, got back up, and is now quietly building something remarkable.

The Founder: From Attorney to Pharma Rebel

Mark Baum is not your typical pharma CEO.

He started as an attorney, moved into finance, and then did something unusual - he decided the U.S. healthcare system was broken and he was going to fix a piece of it. In 2012, he founded a small compounding pharmacy called Imprimis Pharmaceuticals.

His idea was simple: while big pharma was chasing billion-dollar blockbuster drugs, everyday eye doctors were struggling with drug shortages, insane price hikes, and limited access to affordable treatments. Mark wanted to serve those doctors - and their patients - directly.

The company gained attention in 2017 by offering low-cost alternatives to expensive branded eye drops. This was classic David vs. Goliath stuff.

But Goliath noticed. Critics accused Imprimis of skirting FDA rules. The tension peaked when the FDA issued a warning letter saying some of the company’s marketing was misleading.

Here’s where it gets interesting.

Instead of fighting or folding, Mark pivoted. He professionalized the operation, tightened quality controls, and focused exclusively on one thing: ophthalmology. The company rebranded as Harrow Health in 2019, with a single objective:

“To build the next great American ophthalmic pharmaceutical company.”

That’s a bold statement. But the last few years suggest he might actually pull it off.

What Harrow Actually Does (In Plain English)

Harrow’s business model is elegantly simple when you strip away the jargon.

They don’t invent drugs. They buy them and sell them better than anyone else.

Think of it like a real estate flipper, but for pharmaceuticals. They find drugs that are already FDA-approved (or close to it), acquire or license them, and then sell them through their existing network of eye care professionals.

Why does this work? Because they’ve already built the relationships and the infrastructure. Every new drug they add can flow through the same system - same sales team, same reimbursement expertise, same trusted brand.

The company operates in three segments:

1. Branded Drugs - The Growth Engine

This is where the action is. Products like VEVYE (for dry eye), IHEEZO (the first needle-free anesthetic for eye procedures), and TRIESENCE (for eye inflammation). These are high-margin, FDA-approved drugs that doctors actually want to prescribe.

2. ImprimisRx - The Foundation

Remember that compounding pharmacy Mark started? It’s still around, serving over 10,000 eye care professionals across the U.S. It’s not growing fast, but it provides steady cash flow and - critically - deep relationships with the exact doctors Harrow wants to sell its branded products to.

3. Pipeline - The Future

New products coming in 2026, 2027, and beyond. More on this later.

The “Access for All” Program

Here’s something that makes Harrow different from typical pharma companies: they actually want their drugs to be affordable.

Their “Access for All” program handles all the annoying stuff - insurance verification, prior authorizations, copay assistance. For doctors, it means prescribing Harrow products is friction-free. For patients, it means they can actually afford the medication.

This isn’t charity - it’s smart business. Lower barriers = more prescriptions = more revenue = happier shareholders.

The Star Products

VEVYE - The Dry Eye Disruptor

If you’ve ever had dry eyes (and about 16 million Americans do), you know how miserable it is. The existing treatments often burn or sting when you put them in. Not exactly encouraging people to keep using them.

VEVYE is different. It’s a water-free formula that doesn’t burn. In clinical trials, 99.8% of patients reported no or mild discomfort on application. That’s basically unheard of for dry eye drugs.

The results speak for themselves:

Q1 2025: 5.2% market share
Q2 2025: 7.8% market share
Q3 2025: 10.5% market share

They doubled their market share in two quarters. And starting January 2026, one of the largest pharmacy benefit managers in the U.S. granted VEVYE preferred formulary status - meaning tens of millions of patients will now have easy access.

The drug is protected by patents through 2039.

IHEEZO - The Needle-Free Revolution

Before IHEEZO, if you needed an eye procedure like a retinal injection, you’d typically get a needle stuck near your eye for anesthesia. Not pleasant.

IHEEZO is a gel-based anesthetic - no needles required. It’s faster, safer, and more comfortable. And it’s the only reimbursable topical anesthetic in the U.S.

The numbers tell the story: revenue nearly 70% higher than a year ago, with an annual run rate exceeding $50 million. And they’re still early - the goal is to capture about 10% of the intravitreal injection market.

TRIESENCE - The Comeback Story

TRIESENCE had a rough start to 2025. After years of being off the market due to manufacturing issues, it was relaunched - but adoption was slow.

That changed in Q3 2025. Revenue jumped 33% from the previous quarter after the company launched into a new, larger market (ocular inflammation) with proper reimbursement codes. The “green shoots” management mentioned are now clearly visible.

The Future: What’s Coming Down the Pipeline

This is where Harrow gets really interesting.

BYQLOVI - Launching Q1 2026

A new anti-inflammatory for eye surgery. First new molecule in its class in over 15 years. Addresses about 7 million annual eye surgeries in the U.S.

The Biosimilars - 2026 and 2027

Here’s the big opportunity: Harrow is launching biosimilars (basically generic versions) of Lucentis and Eylea, two massive drugs used to treat age-related macular degeneration and diabetic eye disease.

The anti-VEGF market - that’s the category these drugs fall into - is worth over $12 billion annually in the U.S. alone.

The CEO put it plainly: each single percentage point of market share in this category is worth over $80 million in annual revenue. Harrow doesn’t need to become the market leader. If they capture just 3-4%, that’s a quarter-billion-dollar business.

And remember - they already have relationships with the retina doctors through IHEEZO and TRIESENCE. They’re not starting from scratch.

MELT-300 - The Wild Card

This one could be huge.

MELT-300 is a sublingual tablet (it dissolves under your tongue) that provides sedation for medical procedures - without needles, without IVs, without opioids.

Right now, over 90% of cataract surgery patients receive IV fentanyl. MELT-300 could change that entirely.

But here’s the really exciting part: this isn’t just for eye procedures. The market for short-duration sedation spans dental work, dermatology, GI procedures, MRIs, and more. The company estimates over 60 million procedures annually in the U.S. could benefit from this.

If MELT-300 works - and the Phase 3 data looks good - it could be Harrow’s entry into a massive market beyond ophthalmology. Launch is targeted for 2028.

The Numbers That Matter

Let’s talk actual results, because this isn’t just a story - there’s financial substance here.

Q3 2025 Results:

Revenue: $71.6 million (+45% year-over-year)
Adjusted EBITDA margin: 31.7%
The company is already GAAP profitable

Guidance:

2025: $270-280 million in revenue
Q4 2027 target: $250+ million in quarterly revenue

Let me put that in perspective. If they hit $250 million per quarter, that’s $1 billion annualized. And they’re currently valued at about $1.4 billion.

Margins:

Gross margins are already around 75%, targeting low-to-mid 80s
Management targets 30-40% EBIT margins by Q4 2027

Historical Growth: The company has compounded revenue at over 40% annually since 2014. This isn’t a one-quarter wonder.

The Valuation Case

This is where it gets interesting for investors.

At a $1.4 billion market cap, Harrow trades at roughly 5x what management expects for 2028 EBIT (operating profit).

Let’s run some scenarios:

If they hit their targets:

$1 billion revenue, 30% EBIT margins = $300 million operating profit
Apply a 15x multiple (reasonable for a growing specialty pharma) = $4.5 billion market cap
That’s over 200% upside from today

If they miss significantly:

Say they only hit $700 million revenue, 25% margins = $175 million EBIT
12x multiple = $2.1 billion market cap
Still 50% upside

What would have to go wrong for this to be a bad investment?

Multiple product launches fail
Reimbursement environment deteriorates dramatically
Competition crushes them

These are real risks, but the margin of safety in the valuation provides cushion.

The Risks (Being Honest Here)

No investment is without risk. Here’s what could go wrong:

Reimbursement Risk: Harrow’s growth depends on favorable insurance coverage and Medicare reimbursement. If that changes, economics suffer.

Execution Risk: They’re launching multiple products in 2026-2027. Simultaneous launches stretch organizational capacity. One stumble could ripple.

Partner Dependencies: Some key products rely on partners like Samsung Bioepis for manufacturing. A dispute or delay could hurt.

Competition: Big pharma has deeper pockets. Regeneron, Novartis, and AbbVie aren’t going to just cede market share without a fight.

Leverage: While Harrow refinanced its debt in 2025 (saving $3 million annually in interest), the company still carries meaningful debt relative to current cash flows.

Management Alignment - Skin in the Game

This is important.

Mark Baum (CEO): Owns about 8% of the company. His compensation structure is tied directly to the stock price:

No payout below $50/share
Major payout (~$90 million) if stock reaches $100

Andrew Boll (CFO): Owns about 2%, similar incentive structure with ~$40 million potential at $100/share.

In other words, management makes money when shareholders make money. That’s exactly what you want to see.

The Bottom Line

Harrow is not a moonshot biotech story. There’s no binary FDA decision that will make or break the company.

It’s an execution story. They already have:

The products (FDA-approved, patent-protected)
The infrastructure (10,000+ prescriber relationships)
The playbook (acquire, integrate, scale)
The track record (40%+ CAGR since 2014)

The question is simply: can they keep executing?

Management has answered that question consistently for years. The founder is aligned, the team is experienced, and the market opportunity is large and growing (aging population = more eye problems = more procedures).

At current prices, the market is still treating Harrow like a small compounding pharmacy. But it’s evolved into something much bigger - an integrated ophthalmic platform with durable assets, growing cash flow, and clear visibility into future growth.

Sometimes the best investments are hiding in plain sight. No AI hype, no crypto volatility. Just a founder who found a problem, built a solution, and is executing his way to building “the next great American ophthalmic pharmaceutical company.”

Time will tell if he pulls it off. But the odds look pretty good from here.

Key Numbers at a Glance

Metric	Value
Market Cap	~$1.4 billion
Q3 2025 Revenue	$71.6 million
Revenue Growth (YoY)	+45%
EBITDA Margin	31.7%
Gross Margin	~75% (targeting 80%+)
2025 Revenue Guidance	$270-280 million
Q4 2027 Revenue Target	$250+ million
Prescriber Network	10,000+ professionals
VEVYE Market Share	10.5% (doubled in 2 quarters)
CEO Ownership	~8%

Sources: Harrow Investment Thesis Deep Dive (Nov 4, 2025), Q3 2025 Earnings Review (Nov 13, 2025), Piper Sandler Conference Takeaways (Dec 5, 2025)

Disclaimer: This is not financial advice. Do your own research before making any investment decisions.