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On Tuesday, William Blair initiated coverage on Harrow Health (NASDAQ:HROW), a pharmaceutical company with a focus on ophthalmology, assigning an Outperform rating and setting a fair-value estimate of $63 per share. The company, currently valued at $1.11 billion, has seen its stock surge nearly 70% over the past year. According to InvestingPro data, analyst price targets range from $42 to $65, reflecting strong confidence in the company’s potential. Harrow Health, initially a compounding pharmacy business, has in recent years branched out into branded pharmaceuticals through acquisitions, which analysts believe provide a promising growth and margin outlook.
The firm emphasized the potential of three of Harrow’s branded products that are on promising growth trajectories. This product expansion has contributed to impressive financial results, with InvestingPro showing revenue growth of 53.5% and a robust gross margin of 74.5% in the last twelve months. The lead product, Vevye (cyclosporine ophthalmic solution 0.1%), is highlighted as a significant advancement in the treatment of dry eye disease (DED), a large and underserved market. Vevye’s water-free, high-concentration formulation is lauded for its comfort and quick onset compared to other cyclosporine products. Since its launch in January 2024, Vevye has seen strong adoption and refill rates, suggesting a sustained growth trend. The recent introduction of its Vevye Access for All program is also noted for significantly accelerating the product’s market growth.
In addition to Vevye, Harrow Health is expanding its presence in the market for retinal procedures with products such as Iheezo (chloroprocaine HCl ophthalmic gel 3%) and Triesence (triamcinolone acetonide injectable suspension 40 mg/mL). According to the coverage, Iheezo has already made significant inroads, and while it is still early in its adoption phase, the reintroduction of Triesence is expected to serve as an additional driver of growth in this sector.
The analyst’s commentary provides a positive outlook on Harrow Health’s strategic expansion and product portfolio. It underscores the company’s shift from its original compounding pharmacy model to a more diversified branded pharmaceutical company with a specialized focus on eye care. The success of its lead products and the strategic initiatives to enhance market penetration are seen as key factors contributing to Harrow Health’s strong growth prospects. InvestingPro subscribers can access 12 additional investment tips and a comprehensive Pro Research Report, providing deeper insights into the company’s valuation, financial health, and growth potential.
In other recent news, Harrow Health announced its first-quarter 2025 financial results, reporting total revenue of $47.8 million, which represents a 38% year-over-year increase but fell short of the projected $61.13 million. The company also reported a net loss of $17.8 million, or $0.50 per share, significantly missing the expected earnings per share of $0.06. Despite the shortfall, Harrow Health remains optimistic about achieving its 2025 revenue guidance of over $280 million. The company highlighted strong sequential growth in its Vevi product line, with a 35% increase in revenue from the previous quarter.
Harrow Health has also observed an uptick in demand for its product portfolio in the second quarter of 2025, due in part to the depletion of inventories from year-end stocking. The launch of the VEVYE Access for All program has significantly boosted new prescriptions, with the number of prescribers quadrupling. Analyst Yi Chen from H.C. Wainwright maintained a ’Buy’ rating for Harrow Health, raising the price target to $60 per share, reflecting confidence in the company’s future growth prospects. The firm believes that VEVYE could be a key driver of growth in the upcoming quarters, alongside other products such as IHEEZO and TRIESENCE. Harrow Health’s management reiterated their confidence in achieving their revenue target, with projected revenues for the next 12 months supporting the revised price target.
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