Building a foundation - Harrow (HROW US)

Harrow reported Q2 result... Quick update post Q2.. Few points:

1. If we just look at the P&L, it was ugly. Sales only grew 3% in 1H. Profitability went from positive to negative (EBITDA loss of $13M in 1H).

2. But the story is in the details.. Look at Pic 1.. It shows the mix... The branded drugs grew nicely. But the compounding division lagged. In my mind, the core business on track.

3. Co sticking to fiscal year target of sales of $350M and $80-100M EBITDA.. As we can see, co is targeting a very sharp surge in 1H (almost doubling 1H sales + profitability inflecting vs. EBITDA loss of $13M in 1H).

4. Certainly aggressive... Key development is co has been investing... SG&A grew 30% yoy despite sales not doing much in 1H as it grew its sales force... So all the initiatives are expected to come together.

5. Market doesn't quite believe its 2026 target.

6. But look at its portfolio. Vevye is recovering (net price will improve in 2H following business rule change). Also gained coverage with a large PBM... So it is building recognition. iHeezo seems to be building in momentum (selling point is avoid needle to the eye with a drop.. 2% market share)... New product like biosimilar.

7. What I don't like is Melt is delayed.. Now only talking about NDA filing in 1H 27.

8. Feels like bottoming.... The cogs are coming together. Would hold the position here...

9. MV is $1.5bn... Remember co goal is to achieve $250M in quarterly sales in Q4 27... Now we are looking at $114M in sales in 1H 26 and $230-240M in sales in 2H 26.... It is aiming for sharp sales growth in 2027 and beyond..... EBITDA of $80-100M in 2026... Co is profitable in 2026...

10. Multi-bagger potential through 2028/2029. Rough number is co will hit $1bn in revenue in 2028/2029... 25% net margin... Then Melt will kick in 2028 and beyond.