Good morning and welcome to HERO's second quarter 2026 earnings conference call. My name is Michelle and I will be the 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 conference over to Mike Biega, Vice President of Investor Relations and Communications for HARO. Please go ahead.

Thank you, operator. Good morning and welcome to HARO's second quarter 2026 earnings conference call. My name is Mike Biega, Vice President of Investor Relations and Communications, and I'm excited to be introducing today's call. The company's remarks may include forward-looking statements within the meaning of federal securities laws. are subject to numerous risks and uncertainties, many of which are beyond Harold's control, including risks and uncertainties described from time to time in its SEC filings, such as the 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 at risk 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. HARO's results may differ materially from those projected. HARO 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, Harold will refer to non-GAAP financial metrics, specifically adjusted EBITDA. 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. Joining me on today's call are Mark L. Baum, Chief Executive Officer, Andrew Boll, President and Chief Financial Officer, Patrick Sullivan, Chief Commercial Officer, and Amir Shojaei, Chief Scientific Officer. With that, I would like to turn the call over to Mark. Mark?

Thank you, Mike, and good morning, everyone. We spent the first half of 2026 building demand and strengthening the commercial foundation of our business. The second half is about converting that demand into accelerating revenue and growth and profitability and, of course, hitting numbers. Let me be direct. First half revenue of approximately $115 million was lighter than we expected entering the year, primarily because of the V-VI net revenue impact we discussed last quarter. At the same time, we executed on major operating priorities we established for the first half, expanding our commercial organization, improving the economics of key products, strengthening our portfolio, launching BioViz, and building physician demand across our key growth drivers. Those actions have positioned us to deliver meaningfully stronger revenue and growth and profitability during the second half of 2026. And IHESO is a good example. Despite the loss of pass-through on April 1st of this year, IHESO generated the highest quarterly unit demand in its history and delivered record new account growth. Channel Inventory has now normalized, and an approximately 25% improvement in net pricing became effective July 1st. With gross margins exceeding 90%, we expect IHESO to be a major contributor to both revenue growth and profitability during the second half. V-VI is also positioned for stronger growth. During the second quarter, prescriptions increased 21% sequentially. Our prescriber base grew 15% and the product delivered record quarterly revenue. The business rule changes we implemented at the end of April worked as intended. Vivi's economics improved sequentially with meaningfully lower copay card utilization, which drove a higher ASP. Those results validated our ability to improve the economics of the franchise while continuing to grow prescription demand and physician adoption. During the second half, Vivi will benefit from the full period impact of those revised business rules, broader commercial coverage that became effective August 1st, an expanded sampling program, and a sales organization that has doubled in size over the past year. Together, those factors position Vivi for stronger prescription growth and improved net revenue realization. Triessence also reached another quarterly demand record, with more than half of unit demand now coming from ocular surgery. We tripled our surgical commercial organization during the second quarter, and those representatives remain early in their productivity ramp. As they broaden account coverage and deepen utilization, we expect tri-essence revenue growth to build throughout the second half. BioViz represents another incremental growth driver that we launched on July 1st, with encouraging early reception. And our specialty portfolio is similarly positioned to contribute more meaningfully. Vercasia has been relaunched, and interest is growing in the form of rising prescription volumes. and IOPD now benefits from a permanent J-code. We also expanded our Access Plus commercial organization. Each of these initiatives was either absent or only partially reflected in our first half results. Finally, subject to closing, Tervaya will further strengthen our Dry Eye franchise. We are acquiring global rights to the product, which is approved in the United States and China and is under regulatory review in five additional countries. Trevia also offers a distinctive tolerability profile, zero contraindications, zero ocular adverse events, and zero warnings on its label, with sneezing as its most common adverse reaction. From a strategic perspective and given our commitment to relentlessly compete and win in the U.S. dry eye market, this acquisition makes a ton of sense. And I would encourage stockholders to check out slide 15 in our updated corporate deck on that subject. From an acquisition cost perspective also, this deal may be the best deal we've ever struck. From sales and marketing to market access to share a voice in the ophthalmologist and the optometrist's office, we're a much stronger company with Trevaya in our bag. In the past, I always wondered why people would be interested in a nasal spray for their dry eye disease. But after going through our due diligence process and speaking to committed prescribers, I finally get it. There is a very sizable patient base who benefits from this unique product, even down to the side effect profile. I had one fantastic dry eye specialist tell me that his patients just love Turviya and would much rather have someone say God bless you after a sneeze than to endure the stinging and burning or discusia after applying eye drops multiple times a day. Financially, While we expect only a modest revenue contribution this year based on the anticipated timing of the transaction, Turviya and its experienced commercial organization will expand our reach and create additional opportunities to grow the entire Dry Eye franchise. In sum, taken together, our principal growth drivers enter the second half with stronger demand, improved economics, broader access, and greater commercial support. and Brett Matters. Our outlook is not dependent on one product, one launch or one reimbursement event. We have multiple commercial growth drivers positioned to contribute more meaningfully during the second half. That is why we are reiterating our full year guidance. We recognize the magnitude of the second half ramp, and Andrew will walk through the financial bridge in more detail. We expect revenue to grow sequentially in both the third and fourth quarters, with the larger step up occurring in the fourth quarter as these initiatives contribute more fully. The first half was about doing the work required to create the opportunity in front of us. The second half is about execution, converting that opportunity into revenue, earnings, and durable value for our stockholders. Before I turn it over to Andrew, I did want to share something that has only deepened my conviction about Gmail. At this year's American Society of Retina Specialists meeting, I spoke with dozens of retina specialists, and one theme came up again and again. Practices are struggling to secure reliable anesthesia coverage for their procedures, and many are now paying what they call stipends. out of their own facility and global surgical fees just to keep anesthesia services available. We do not believe this is a short-term dislocation. We believe it is a reality that eye surgeons and physicians and other specialties will be managing for many years to come. G-melt, if approved, could be part of the solution to this growing problem. In nearly 15 years of running this company, I've never seen as consistently positive a reaction to a HARO product candidate, and that has got me extremely excited about the future of GMELP. With that, I'll turn the call over to Andrew.

Andrew? Thank you, Mark, and good morning, everyone. We reported a revenue of $70.7 million, up 11% year-over-year and approximately 60% sequentially. That brings first half revenue to approximately $115 million. The year-over-year comparison understates the underlying trajectory. First half results reflected limited IHESO revenue as channel inventory normalized, as well as only a partial quarter benefit from the BVI business rule changes. BVI delivered quarterly revenue of $29.4 million. up nearly 58% year-over-year. The result reflected continued prescription growth and improved net revenue realization following the business rule changes implemented at the end of April. AHISO generated $15.6 million of revenue, primarily related to wholesaler stocking orders of our new five-pack presentation. Unit demand for AHISO reached a quarterly record, but reported revenue continued as distributors sold through previously purchased inventory. We expect IHESO to enter the third quarter with a normalized revenue cycle and improved economics. Our specialty portfolio and tri-essence generated approximately $11 million of revenue, while our compounded portfolio generated $14.6 million of revenue. Gap gross margin was 71%. For the second half, we expect gross margins to trend back towards the high 70s, supported by AHISO's return to a normal revenue cycle, increased overall revenue, continued VBI growth, and more favorable product mix. SG&A was $53.3 million, which increased quarter over quarter, largely reflecting the commercial investments made during the quarter. Excluding the additional headcount expected to be added through the Tervaya transaction at closing, We expect base SG&A dollars to remain approximately flat with second quarter levels for the balance of the year. The core operating cost structure is largely in place, and our objective is to grow revenue against that expense base. Adjusted EBITDA was negative $1.2 million. We ended the quarter with cash and cash equivalents of $83.9 million. For the Tervaya transaction, we expect to fund the upfront consideration of $30 million with cash on hand. And following closing, to the extent any of the contingent net sales milestones are hit, we expect the payment of those milestone amounts will essentially be self-funded. Turning now to our outlook, we are reiterating full-year guidance of $350 million to $365 million in revenue and $80 million to $100 million in adjusted EBITDA. Based on first half revenue of approximately $115 million, our guidance implies second half revenue of approximately $235 to $250 million. We're not providing quarterly guidance, but we expect revenue to grow sequentially in both the third and fourth quarters, with the larger step up occurring in the fourth quarter. That is a substantial step up, so let me be specific about the bridge. The largest incremental contributor should be IHESO. We enter the second half with record demand, normalized channel inventory, and an improvement in net pricing. Those factors should allow reported revenue to more closely reflect the strength of the underlying business beginning in the third quarter. VIVA is another major driver. Its expanded sales organization should begin to contribute in the third quarter. The revised business rules will be in effect for the full second half of the year. Expanded commercial coverage became effective August 1st, and net revenue realization should benefit as more patients satisfy their annual deductibles. Triacins should also continue to grow. Demand reached another quarterly record, and the surgical organization we tripled during the second quarter remains early in its productivity curve. BioViz formally launched July 1 following modest initial stocking activity in the second quarter. Berkesia has been relaunched. And now, IOPTing benefits from a permanent J-code. Each contributes against the first half revenue base that was either minimal or constrained. Subject to closing, Turviya should also contribute modest revenue this year in addition to revenue synergies with Levi that we expect to be realized following the close. Our guidance assumes only a limited 2026 contribution given the anticipated timing of the close and integration. A adjusted EBITDA bridge follows directly from the revenue bridge. Substantially higher revenue, increasing gross margins into the high 70s, and a base operating expense structure that remains approximately flat. Upon closing the Tervaya transaction, we expect to expand our dry ice sales force and territories further by adding experienced professionals from the Beatrice Eye Care Division increasing SG&A expenses by approximately $20 million on an annualized basis once fully integrated. Looking ahead, we expect to provide or contribute more than $30 million in revenue during 2027 and overall to be financially accretive. We recognize the magnitude of the second half ramp. Our confidence is based on factors already visible in the business, prescription growth, record product demand, normalized inventory, improve pricing, broader coverage, and a growing commercial organization that remains early in its productivity curves. On that note, I'll now ask Pat to discuss our commercial progress in more detail.

Thank you, Andrew. Before turning to Vevi, I'll briefly discuss what the Pending Clear Viya transaction means for our dry franchise. Vevi remains the cornerstone of that franchise. Pure Via is complimentary, offering physicians a differentiated, drop-free option for patients who may struggle with eye drops, prefer another route of administration, or are among the 45 million Americans who wear contact lenses. Subject to closing, we expect to add a large number of experienced dry eye sales representatives from Vietris, whose territories are largely complimentary to our existing coverage. This will expand our geographic reach, increase the frequency of our engagement with eye care professionals, and give our team more touch points through a broader portfolio. We expect to integrate those representatives during the fourth quarter and have them supporting both Vivi and Tear Via. Together, the products give us more treatment options, greater commercial reach, and additional opportunities to grow the entire portfolio. Turning to Vivi. Total prescriptions grew 21% sequentially, compared with 14% growth for the broader branded dry market based on IQVIA data. New prescription growth grew 4% sequentially, while prescriber base expanded 15%, and Vivi exited June with a 14.6% share of the branded market, up from 14% at the end of March and 7.8% a year ago. Those results are particularly encouraging because they were achieved while we implemented significant new business rules designed to improve the economics of the franchise. Co-pay utilization declined meaningfully, yet physician adoption and prescription demand continued to grow. We are also still in the early stages of realizing the full potential of our expanded sales organization. With broader commercial coverage through a top three pharmacy benefit manager effective August 1, an expanded sampling program now underway, the active prioritized initiative encouraging clinicians to use Vevi earlier in the treatment paradigm, we have multiple meaningful growth drivers coming online at the same time. Together, these initiatives position Vevi to accelerate prescription growth, and expanded share of the branded dry eye market during the second half. IHESO delivered one of the strongest commercial performances of the quarter. Despite the loss of pastor reimbursement in the cataract surgery on April 1, unit demand reached a record of 65,477 units, up 44% sequentially and 34% year-over-year. We exited the quarter with 224 total ordering accounts, up 32% year-over-year, and 62 of those accounts placed their first-ever IHESO order during that quarter, the strongest quarter for a new account acquisition since launch. Thank you. Thank you. Before moving to Triessence, I want to briefly touch on BioViz. We formally launched the product on July 1, and while it remains early, initial position engagement has been encouraging. BioViz is a natural fit within our retina organization, expands the options our team can bring to retina specialists, and increases the value of each customer interaction. Triessence also continued its exceptional momentum. Demand reached another quarterly record of 14,529 units, up 162% year-over-year. Total ordering accounts reached 805, a net increase of 69 over the quarter, and 54% of unit demand now comes from ocular surgery. That next shift demonstrates that TriEssence is expanding beyond its historical retina base. We tripled our surgical commercial organization during the second quarter, and those representatives remain early in their productivity ramp. As they expand account coverage and drive broader adoption, we expect their contribution to begin showing up in the third quarter and build from there. Finally, our specialty portfolio continues to build momentum. The permanent J-code for iOpidine became effective on July 1. Berkazia continues to progress following its relaunch, and we expanded our Access Plus commercial organization to support what we believe is the broadest ophthalmic cash pay portfolio in the industry. Across each of these businesses, Our focus remains the same, expanding physician access, improving reimbursement, and increasing commercial execution. While I step back and look across this portfolio, what stands out most is the breadth of our momentum. We're seeing growth across multiple franchises, continued physician adoption, and expanded commercial reach, and the benefits of the investments we made throughout the first half of the year. I believe HARO enters the second half of 2026 in its strongest commercial position to date, and I'm excited about the opportunities ahead. I'll turn it over to Amir to discuss some exciting developments with our R&D pipeline.

Thank you, Pat. I'll start with GMELT, or MELT 300. As I mentioned during our last quarterly webcast, we have now officially secured our pre-MDA meeting with the FDA, which is scheduled for early in the fourth quarter. We are currently preparing the meeting dossier, completing the remaining ancillary activities, and remain on track to submit our MDA during the first half of 2017. This represents another important milestone for the program and keeps us on track for our anticipated regulatory timeline. The program continues to execute according to the development plan we outlined for the investors. From a scientific perspective, I remain very excited about GMELC. We believe it has the potential to fundamentally change procedural sedation by offering a rapid IV-free, opioid-free alternative that addresses a significant unmet need across multiple procedural settings. Assuming a successful regulatory review, we continue to target a potential FDA approval in the first half of 28, followed by a commercial launch later that year. Turning to YoChill or MELT210, the simplest way to think about the program is G-MELT for pediatric patients. YoChill is being developed for children undergoing diagnostic therapeutic endoscopic procedures. Today, oral midazolam is administered primarily as a syrup, which can be difficult for children to tolerate because of its taste and the challenges associated with administration. We believe an orally disintegrating tablet could provide a more convenient and child-friendly option while fitting within the dosing paradigm physicians already use for oral midazolam. Earlier this year, we completed our end of phase two meeting with the FDA. We are currently modifying our pharmacokinetic study protocol to align with the agency's feedback on this program. Our development approach is a 505 path to bridge to oral midazolam syrup through PK, and we expect to develop multiple dose strength, likely four, to accommodate the current weight-based dosing paradigm. NoChill also benefits from the formulation development regulatory experience we have generated through MELT 300, including use of the Zytus orally disintegrating tablet platform, We continue to target an NDA submission in 2027. Together, GMELT and YoChill represent the foundation of a broader procedural sedation platform addressing both adult and pediatric patients. We look forward to providing additional detail on the development plan for both programs at our Investor Day next March. With that, I'll turn the call over to the operator for Q&A.

Thank you. To ask a question, please press star 11 on your telephone and wait for your name to be announced. And to withdraw your question, please press star 11 again. The first question will come from Chase Knickerbocker with Craig Hallam. Your line is now open.

Good morning. Thanks for taking the questions. Mark, maybe just first to start on the national top three PBM win. Can you just maybe talk about exactly what that coverage constitutes? Is it kind of tier one preferred, like that other top three win that you already have?

Yeah, I think the only thing we want to say about that coverage win is, number one, it's obviously a top three PBM. Number two, it's for commercial lives. I think the third element is that these were lives that were formerly blocked that we did not have access to. And then the fourth item Chase is the number of lives that we now have access to is in the many millions. and other than that I think you know that that that is uh that's about all I can say I don't want to go into the specific positioning on the formulary but we're really excited about this coverage win and you know it's something that we promised our stockholders and we were able to deliver actually I think ahead of time we didn't think this would come until the first part of next year but uh you know it's it's the I know the Vivi team's really pumped to have millions and millions of of lives that they now have access to that were formerly blocked.

Got it. And maybe just a two-parter, one on IHESO, one on VBI. So just as we think about kind of the recent volume acceleration for IHESO, can you just discuss what percentage of that business is now in office versus kind of retina as far as kind of characterizing that acceleration? And then just on Vivi, Andrew, if you could just comment on kind of how you see ASP in the second half. Since there is still an impact from those kind of pre-business rule changes in the second quarter, is it fair to assume kind of continued sequential improvement in Vivi ASP? Thanks.

Sure. Thanks for that, Chase. So on IESO, look, The ASC market is now effectively shut because of the loss of pass-through. I think the fact that we hit a record number in terms of unit demand for IHSO in the second quarter, which I don't think anyone expected, was an extraordinary result. And it really goes to the focus that the team has put on the in-office market, and that includes both retina as well as other in-office procedures. The in-office market, which we've talked about, which opens up about two and a half million additional procedures for us is a significant market, but it's one that we've really just barely scratched the surface on. A significant amount of the growth in IHESO for the second quarter came in these retina practices that we've been targeting for the last year and a half or so. were really making progress. We forecasted that in the third quarter we would be set up well with the new five-pack, the new pricing, the data that's starting to come out, and that that would cause this acceleration in the second half of this year. But AIHISO is definitely exceeding all of our expectations and To be clear, we've really simply just scratched the surface. We have probably less than 2% market share in the overall addressable market, less than 2%. And we continue to grow and pick up record numbers of accounts. And we're seeing that acceleration, by the way, in the third quarter. You'll see it in the numbers in the third quarter and then the fourth quarter, as Andrew discussed. but AIHESA is going to be a really important part of us hitting our numbers for the second half. Andrew, do you want to talk about VBI?

Yeah, absolutely. And hey, Chase, thanks for the question. So with VBI ASP and generally anything going through the pharmacy benefit, we typically see improved pricing throughout the year as patients are hitting the deductible and certainly we're expecting to see that with V-VI. But your point about the amended business rules, we didn't get a full quarter benefit of that. And so now moving forward, obviously starting in Q3, we'll get the full benefit of those amended rules, which should add a little bit of additional positive momentum to V-VI ASP going forward.

Thanks, guys. Thanks, Chase.

Thank you. And the next question will come from Steve Seedhouse at Cantor. Your line is open.

Good morning. Thanks so much for taking the question. First, I just wanted to ask on Turvia and if you can give us a sense of what actually were the sales for that product, maybe in 2025, 2026 year to date, and whether it's growing or if it's stable or even declining slightly in recent years before you take over. And then also, what are you modeling for loss of exclusivity of that product?

Andrew, do you want to talk about what we know? I know that, you know, we're trying to keep things quiet as we get to the closing, but is there anything you can discuss on that front?

Yeah, Steve. and there's not a whole lot we can say until we actually own the asset. And so I think you can take a look at some of the VHS's comments. Our focus right now, though, is closing as quickly as possible. We think this is going to be strategically a really important asset for us. And so that's the primary focus is getting it closed. And then once closed, what we're guiding to is, you know, that it will contribute more than $30 million in revenue. We're also adding additional heads on the sales and commercial front with the product. And those people are going to be not only promoting Kervia, but also Vivi. So we should see, regardless of the trajectory of the product currently, we're expecting our ability, we should have the ability to continue to grow it. And then in regards to loss of exclusivity, we're assuming the product will have exclusivity through 2034.

One other comment I would just add is that the operational synergy between these assets is remarkable. And I think you're going to see that probably as early as the fourth quarter. And you'll also see that these assets are clinically complementary. In going out and talking to dry eye professionals, you know, the ability to treat the disease with a chronic, and other care product like Vivi is our primary asset I think is important, but also to supplement the treatment, the interest in supplementing the treatment with a product that nearly immediately produces tears like Turviya is very strong, and it's much stronger than we had anticipated before we did our diligence on this product. So I think, you know, you'll be surprised about the degree to which these are clinically complementary and operationally synergistic.

All right, thanks. That's helpful, Culler. And I wanted to also ask, on IHESO, I guess I'm just, I'm curious like where this such strong demand has been coming from specifically because like a lot of the tailwinds you know the clinical data obviously Quell is still running and that data is in the fourth quarter and even like the launch of your biosimilars that maybe provide some sort of synergy in the marketing effort That's sort of on the come still, and yet you still had this record demand amid all this resetting of price and inventory and all this. Is there any way you can just articulate what specifically you think has been driving such strong demand and how likely that is to continue into these subsequent quarters as you have these additional tailwinds coming online? Thanks.

Yeah, well, first of all, even though the demand is impressive and you're right, it is across the board, you know, the team has just done a phenomenal job growing that business in terms of new accounts and then pushing through, you know, units used within specific accounts. We're also picking up larger accounts that are using higher volumes within their practices. But once again, even though We've achieved, I think, a phenomenal result in the second quarter. We've really just barely scratched the surface. In terms of why doctors are increasingly using iHESO, it's because the product is fantastic. It performs amazingly well clinically. It feels good on the patient's eye. You know, it has predictable onset, predictable duration. The excipient that's in the product actually makes the eye feel better than the alternatives, which includes an injection into the eye of lidocaine to anesthetize the eye. So there are tremendous product attributes that we think give us huge advantages, and the word is spreading, certainly among the retina community. but also within these multi-specialty practices that we're increasingly opening up. So, you know, the in-office market is real. There's a growing market for cataract surgery, for example, in the office, and that's a market that we're picking up. So across the board, You should expect continued growth and acceleration for that product. And once again, we've really just barely scratched the surface for probably, as I said, less than 2% of the addressable market.

Makes sense. Thanks, Mark.

Thank you, Steve.

Thank you. And the next question will come from LaKeon Hanbury-Brown with William Blair. Your line's open.

Hey guys, thanks for the question. Maybe just a quick follow up there on TIAVIA and the sort of contribution to 2026. I appreciate that's obviously somewhat dependent on the exact timing of the close, but should we just be thinking about sort of pro-rathering what you said about 27 for 26? So and maybe would it also be a creative EBITDA in 26 or are there some sort of initial maybe like

and a few additional costs associated with the sort of closing integration that would affect that.

Andrew, do you want to take that?

Yeah. Hey, Lachlan. I think that's a fair assessment to kind of pro rata the guide for next year depending on closing, Like I said, we're rapidly trying to get that as close as fast as possible. And then do you think about operating margin and contribution this year? I think it's safe to say it's not going to – we don't expect it to pull down earnings this year. There may be some integration costs this first – The first few months as we're implementing the product, getting it into our system. So expect a little bit higher costs in the first few months. But certainly beginning next year, those integration costs should largely have been cleared out. And we should have positive contributions from the product day one starting next year.

We've got it. Thanks. And maybe another on V-Fi. Mark, I know you said you don't want to say too much about that new coverage. Can you at least give some commentary on where the ASP from that coverage may end up relative to the current coverage or what you've been realizing? Is that an improvement? Is it about the same? Or is it worse than the current coverage and what you've been seeing? And maybe also related to V-Fi, you talked about the sampling program. Can you give us a sense of how impactful that is and maybe like how much of the current volume has been going through that zero dollar first fill that this can maybe help to convert more quickly?

Yes. So, you know, in terms of the effect on ASP, simply put, we never sign deals unless there is a net. and many more. The effect now of these coverage opportunities. But in this one in particular, this is something that should improve our unit revenue for Vivi. In terms of the $0 first fill, we've built the company on a foundation of access. So, you know, for us, market access, simply put, means any patient in the United States that is in need of any of our medications will have affordable access to the product that they're in need of. And for us, when we were launching Vivi, without the coverage, and frankly, our coverage has been pretty poor. As I said, the recent coverage one came from a PBM where we were really blocked. But for us, we implemented a $0 first fill to ensure that everyone who needed Vivi had access to Vivi. The problem with that is it's very expensive for us financially. And what we've, I think, realized is you'll see significant improvement financially with the sampling program that's now replacing the $0 first fill. Not only do you have the COGS cost with the $0 first fill program, you have all the processing fees, the pharmacy fees and distribution and so on, and you're really reliant on getting a meaningful number of refills from that patient in order to make up for those investments. And the sampling program is, we believe, going to achieve the same effect in terms of giving patients access to the medication that they need at a far lower cost and ultimately a far more profitable structure for our stockholders.

Okay, thanks. So I guess should we just think about that showing through as, you know, maybe slightly lower actual, like, scripts per se that are written, but just a higher ASP per script that's written? So it effectively, of course, grows to that?

I don't know that I would think about it that way. I mean, I think that we're seeing higher volumes of prescriptions, both new prescriptions and total prescriptions, as a result of this program. I think what Andrew said in his remarks, and Pat reinforced this, is that the business rule changes that we made most recently, the expectation I think among some was that this would constrict prescribing, it would constrict dispensing and the opposite has happened. So these business rules, and I think this actually has exceeded our expectations, these business rules have not affected at all The demand for the product and not only the demand, but our ability to ultimately process a prescription and dispense it. Both NRXs and TRXs moved up meaningfully in the second quarter. And by the way, it's continuing even in the third quarter, which is extraordinary. So we're getting great productivity from the sales force. The business rules that Andrew and the team implemented, I think, were extremely successful so far. And, you know, we're in really good shape with our Vivi franchise and the team is fantastic. There's also, by the way, a direct relationship, I think, between the investment in the field force and our ability to get new prescriptions in the door. So we're seeing that that and more reps is going to mean more NRXs and when you have a product as extraordinary as Vivi, that's going to mean more TRXs and with more coverage where you're making more money on a unit basis, that should give us increasing overall revenue for the franchise.

Andrew, do you want to add to that at all?

I would just kind of reinforce what I said in the previous questions, which is I think with the coverage win considered, we do still expect ASP to improve for VBI throughout the year.

Thanks. Thanks, Lachlan.

Thank you. And our next question is going to come from Tom Schrader with U.S. Bank. Your line is open.

Good morning. Congratulations. Seems like all 50 balls are back in the air, so that's remarkable. A question on Treviah and Vivi. Are they going to be in lockstep, which is the Salesforce has both? And when you add a Treviah Salesforce, they'll also have Vivi, they'll have the same sampling. Is that the way to see it? You'll have two products that are essentially everybody in the Salesforce has?

I don't want to go into the specific strategy, Tom, too much, but what I can tell you is Vivi is our primary product. It is the product. It's the lady that we went to the dance with, and it is the core focus of our team, and it will continue to be. But there is, as I said, tremendous operational synergy between these products, and they are clinically complementary. Pat, do you want to talk at all about what you intend to do on the Vivi Turbaya front?

Yeah, thanks, Mark. You know, to the question, we're really excited about the complementary nature of these products. I mean, when you think about it, Vivi has performed really, really well. And I think what we're really excited about when you think about this, just some context, We're in a very large and active market. Just to give context, this time last year, we have a market that's up about 18%. And the branded RXs are representing over 75%. With Vivi, the real key point here is we're focused on inflammation as the cornerstone to treating dry eye. And we continue to see a positive experience and performs well. And as we've expanded the team, I think we continue to see a positive experience growing on RXs, TRXs, as well as riders. TIRVIA helps us, one, open up another segment opportunity when it comes to basal tear production, which often is, you know, similar presenting in the inflammation patients. So we see an opportunity for both of these products to, one, grow our HARO share to further help these patients and doctors that we cover right now and actually bring in more writers and grow our business.

Okay, and then on the biosimilars, obviously growing the brand is important, but protecting your price is a huge part of this game. Any thoughts on, I mean, Amgen seems to have done it, but any thoughts on your strategy there, or maybe one you want to answer even less, but I'm just curious what you can say.

I think right now, Tom, the team has received a tremendous amount of inbound interest in the product, and we're focused on really converting the interest to demand and revenue. Other than that, I think we have a phenomenal market access strategy that's designed to maximally preserve pricing. And we have, I think, some unique advantages with our product over other choices, including the branded Lucentis as well as the other biosimilar. Andrew, do you want to comment on that at all? Well, not really.

We're obviously really ASB and maintaining net revenue per unit durability. So the product is super important, as you pointed out. And so we, like Mark was saying, we do have a strategy to do that. We have a lot of experience doing this too with some of the other buying bill products. Obviously, this is a little bit different, but you're still kind of in the same sort of, you know, it's going through the medical benefit, it's reimbursed on its own J code, or Q code, pardon me. So still a similar dynamic, and so we're using some of that experience to try to extend durability of both BioViz and when OpiViz launches, OpiViz.

Okay, last one, which may be yes, no. IHESO in the surgical setting, is that gone forever or as you are generating clinical data, is there a way you might get some use back? It was a pretty decent market and people loved the product. Is there any way back or is that just not worth it at this point?

Yeah, to be very clear, if we have a minute of time to invest commercially making a sale, Given what we're seeing in terms of new account development and reach within these practices, we're going to focus on where we know we are winning and where we have a massive amount of room, headroom, which is in office in the retina market and in the in-office procedure market. So, you know, we have literally over, well over 10 million more procedures that we can address with this product on an annual basis. And so certainly the surgical market is an attractive market. It's how we launched the product. But we have a massive market ahead of us in the intravitreal injection market as well as the in-office procedure market where we have a permanent product-specific J-code reimbursement at better than 95%. And a sub-5% prior authorization rate. So we're having tremendous success in the office with retina professionals as well as other in-office procedures. So that's where we're focusing, and we're going to leave the surgical market alone right now. Great. Thanks for all the details. Thank you, Tom.

Thank you. And the next question will come from Mayank Mamtani with B Raleigh Securities. Your line's open.

Mayank Mamtani Yes. Good morning, team. Thanks for taking our questions. I appreciate a lot of detail here. So on the shareholder letter, you know, you mentioned the third-party data undercounts, VY. Was this curious, Mark, if you could maybe comment on what you're seeing on the total dispense units that, you know, we may not see in IQVIA here? and, you know, obviously trying to understand the volume demand to revenue conversion here. You know, to the extent you can maybe also comment on volume, how you might be tracking, you know, versus another maybe incumbent brand, which is also helping expand the DAD market. And then on the, you know, the new PVM win, did you comment on what percentage, you know, of the new lives that you have was previously filling as cash pay versus completely blocked?

Well, I'll take the cash pay versus covered answer. And so we don't break that out, you know, specifically. And we don't really intend to. Obviously, this is an incredibly competitive market. Andrew, do you want to talk a little bit about the data issue on VBI and reporting specifically. Anything you want to add there?

Mike, I think that I'll just kind of reiterate some of the things that we said, like Mark was saying in the shareholder letter, that we are seeing An increase in, I would say, disparity between the data that the third-party aggregators are putting out and our internal data. You know, we saw our total brand-to-drive restrictions reach about 14.6% at the end of June. That's up from last quarter and obviously almost nearly double from a year ago, and so that that share that we're drawing, especially when you look at the year-over-year numbers. That's what's basically the old territory setup. We were able to grow that prescription amount with a much smaller sales force, and we're just barely getting productivity from the new reps. And so we're excited about What we're expecting to see in Q3 and Q4, and we're seeing this in the early days, is the reps are producing prescriptions. There's a direct correlation to number of feet on the street and increase in NRXs and TRXs. And that's only going to be furthered as we add Turviya and some of the commercial organizations from Beatrice as well. which as Pat was talking about they're also going to be selling Levi as well as Turbaya which should just further accelerate our market position within dry between Levi and Turbaya with the acquisition close pending.

The other thing I would add is that the dashboard that I watch is our PhilRx dashboard. And as I've said on previous calls, I watch it like a hawk, almost like some investors might watch a stock ticker, I suppose. And what I'm seeing and what gives me confidence in the franchise and the great work that the team is doing is that I'm seeing higher highs and higher lows in daily volume. And so even tracking one, Tuesday, this week versus the prior Tuesday, just monitoring week over week data. Once again, higher highs, higher lows. And, you know, one week doesn't necessarily make a trend, but that's happening certainly on the monthly data. So we're really pleased with the work that the team is doing. There's a lot more work left to do, I would say. And the second half is truly about Commercial Execution and Pat and Maria and that whole Vivi team, I have just tremendous confidence in their ability to make it happen and continue the trends that we're seeing on Vivi.

Understood. And that's certainly what we are seeing on the IQVIA side. Just on pipeline, if I may, just a couple of quick ones. The ASRS interim data from what Ihego was encouraging, but obviously a small sample size. So how do you see You know, the SQL data coming up to build on this learning, you know, including the comparator arm. I think the same comparator arm you are using of some subconjunctivital lidocaine superiority, I think you're trying to demonstrate on post-procedural pain and maybe some of the other more retina clinic workflow relevant endpoints. So just maybe talk about what is going to look like to drive utilization against, obviously, a generic sort of market backdrop. And then lastly, for Gmail, what are key questions, you know, for this pre-NDA meeting coming up in early 4Q? And do you anticipate most of your ancillary studies, you know, being wrapped up by the end of the year?

I'm going to turn both those questions over to Amir, but I do want to say just briefly on the the Quell data and the data that Dr. Dang made available at ASRS that I always think of things from a patient's perspective. If I was a patient going in to get an intravitreal injection and I'm gonna get another injection of lidocaine in my eye and deal with the consequences of that, I would much rather prefer a single dose of IHESO and so what we're really trying to demonstrate is that in terms of the anesthetic effect it's the same so you know you can either get a needle or you can get a topical drop in terms of the anesthetic effect it's the same and you know whether there's any difference in pain and of course patient preference and so we always think of things from a consumer perspective and we think that patients. Ultimately, we're going to prefer IHESA. That's got to be borne out in the data. And that's really the focus of the great work that Amir and his team are doing. Amir, do you want to add to the QWEL study that's ongoing and then talk about anything you can about the pre-MDA meeting?

Thanks, Mark. So real quickly on QWEL, this is a double mask control trial. So as far as any Current data, we obviously don't have any, but there's studies well enrolling, and we anticipated to have the enrollment completion later this year, and then we'll have results later this year. That said, the kind of endpoints we're looking at are substantially twofold. One, we're going to look at the numbing effect, where we want to show that the product obviously numbs just as good as the lidocaine subconj Well, more importantly, we're looking at patient outcomes, right? So from a patient outcomes perspective, we have a whole slew of symptoms that we track as well as the overall satisfaction by the patient all the way through 24 hours post-injection. So all of those metrics will come out and we're pretty confident. Now, remember, everything that we are doing is based on what we've seen already. This isn't just started necessarily this quarter. We started this journey on evidence generation about 20 months ago. And a lot of this data is trickling out and supporting our continued sort of benefit that we are seeing from the patients using iHESO or in procedures especially. On gmelt, this is a pre-NDA meeting and the nature of a pre-NDA meeting is really oriented around The submission package, what is it you're putting in and what is the format, some of the basic necessities as far as the review division is concerned. That said, we will have CMC-oriented discussion and most of the other ancillary programs, the PK studies, et cetera, will be discussed during this meeting. So it will be an important meeting. But that said, there isn't one specific thing in focus. It's the whole constellation of data that we're going to put into the NDA.

Thank you. The only thing I would add, by the way, on QWEL is it is a study that's taking place under an IND, which is really important as well. And that could give us some advantages, you know, pending the outcome of the data.

Understood. Thank you.

Thank you. And the next question comes from Jeffrey Cohen with Lattenburg. Your line is open.

Good morning. Thanks for taking our questions. Just two from our end. Could you talk about the contact lens wearers and Trevi and perhaps some pickup there from Viva and Dry Island? And could you, I know it's a bit early, but do you expect any Access Program, Sampling Programs, Couponing, etc. on Treviya as you launch it in the back half.

What was the first question, Jeff? I'm sorry.

Treviya. I wanted to know as far as contact lens wearers currently in your dry franchise.

Yeah. So, look, all of the other products that are administered on the eye for contact lens wearers require the patient to remove their contact lenses. And, you know, that takes time and it is probably true that some patients don't do that. But one of the great advantages to Turviya is that for the 45 million folks in the United States that our contact lens wears, this is a unique product for them specifically. This is a product, by the way, that over the last couple of years has had significant revenue. What we've been able to demonstrate and what we intend to show once we close on the product is that we can restore that revenue structure and grow the business. And we think that that is certainly possible. It hasn't gotten a lot of attention over the last a couple of years, and we intend to really focus in on making sure that certainly the contact lens wearers have access to it, but also other patients that we can serve that are suffering from dry disease and who could benefit from Turviya. So we have high hopes for Turviya, but that said, Vivi is going to continue to always be our baby. It's where we focus. It is the lady that we brought to the dance. and we think that VIVA will continue to be the primary driver of our Dry Eye franchise for sure. In terms of the access programs, I don't want to, you know, get into specifics about what we intend to do to ensure access to Turbaya, but, you know, I can say is that We will continue to implement access programs that ensure that every patient in need has access to all HARO products. Rich or poor, good insurance, bad insurance, or no insurance. That's how we built the business. That is the foundation of who we are culturally, and that's the way we'll continue to be. Some companies talk. a lot about access. We act a lot on access and have programs to make sure patients get what they need. And that will certainly be the case with Turbaya.

Thanks, Mark. That's helpful. And then just one more quick question on the compounding business. I know we haven't talked about that. Any net changes there for the quarter? And as far as the second half outlook, should we expect a similar run rate to what we saw during Q2.

Do you want to talk at all about the compounded? I mean, what I said in the letter is really, I think, important, and that is, you know, we've had an inventory recovery. So we now have inventory, which is half the battle. We've demonstrated that when we have inventory, we grow. You know, that said, we've talked about on past calls that our interest is in converting compounded units to branded units where that is possible. We feel that that's not only in many cases better for the patient, but it's better financially for HARO stockholders. But we do expect that business to grow in the third and fourth quarters. Andrew, do you wanna add to that at all?

Yeah, Jeff, we guided, I think in March, on the March conference call, we guided that that business We thought we'd do about 60 to 65 million in revenue. That guide is still in place, so that implies a continued increase in revenues through the second half of the year. And then importantly, we should see improvement in gross margins from that business as well as we progress through the year and start getting more revenue on top of the fixed costs that are built into that operating structure.

Thank you. Thanks for taking the questions. Thank you, Jeff.

Thank you. And the next question will come from Nelson Cox with Lake Street Capital. Your line's open.

Hey, thanks for taking the questions. I'll just leave it to one here in the interest of time.

But I wanted to ask on the $250 million revenue exit rate from 2027, which did not, when first issued, have some of the more recent adds to the portfolio included in it. I guess the question is, why should we not view those incremental to the goal rather than being a part of it?

Or had the $250 million goal always baked in some kind of business development activities to supplement that portfolio at the time when you initially made that guidance?

Well, thank you for that, Nelson. Yeah, we have a history of doing BD for products to generate revenue. And so Certainly, I think it would be reasonable to believe that we would do BD, but that was really not baked into that goal. The belief is that we can achieve that with the products that we have. We, I must say, have an incredible team, and they're all focused on hitting that number. It is a difficult thing to achieve, for sure. But I do believe we can do that. And there is a pathway to achieving that with the products that we had ex-Trovia. Trovia certainly helps, though. So we'll see where we land. We've got to get that product closed, but it definitely is additive and should be helpful ultimately in getting us to that number. But the idea was that that we would hit that number without any business development activities.

Thank you, guys.

Thank you. I am showing no further questions at this time. I will now turn the call back over to Mark for closing remarks.

Thank you, operator. I will close where I began. The first half of 2026 was about setting the table, expanding our commercial organization, improving pricing, normalizing inventory, launching new products, and advancing our pipeline. We did what we said we would do. The second half is about serving the meal. Demand across every one of our growth drivers is strengthening. Our commercial organization is larger and more capable than it has ever been. And the investments we made in the first half are already showing up in the business today. That is why we are reiterating our full year guidance and why I remain confident in our ability to deliver it. I want to end this call by letting our stockholders know that people within this organization matter. After nearly 15 years as the leader of this business, we have simply never had the level of talent we now have. Throughout the business, we have significantly upgraded our talent level, and this is most pronounced in our commercial group. I am betting on our commercial team to make it happen, and I believe you should too. The table is set. Now we serve. One final note. We announced our investor day on March 22nd, 2027 in New York City. It's going to be a tremendous event. Please mark your calendars. We hope to provide more information about this event later in the year. Thank you, and that will conclude our call.

This concludes today's conference call. Thank you for participating, and you may now disconnect.