Business Context and Reporting Period
This Form 8-K was filed by Harrow Health, Inc. (HROW) on December 6, 2021. The filing reports the entry into a material agreement between ImprimisRx, LLC (a wholly owned subsidiary of Harrow) and EyePoint Pharmaceuticals, Inc. to expand their existing commercial alliance regarding the product DEXYCU.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures. The document focuses exclusively on the terms of a new commercial agreement rather than reporting period financial results.
Material Changes and Agreement Terms
- Agreement Expansion: A Letter Agreement was signed to expand the commercial alliance effective January 1, 2022, through December 31, 2023.
- Operational Shift: Harrow will assume full responsibility for the sales and marketing of DEXYCU (dexamethasone intraocular suspension 9%) in the U.S. in exchange for a commission based on net sales paid by EyePoint.
- Personnel: Harrow agreed to make offers of employment to eight EyePoint employees.
- Regulatory Compliance: Harrow will handle sales and marketing regulatory compliance, while EyePoint retains control over regulatory approvals and commercial rights.
- Minimum Sales Levels: The agreement amends required minimum sales levels based on Q3 2021 unit demand. Failure to meet these levels could result in penalties, capped at the amount of commissions payable to Harrow.
Guidance, Risks, and Contingencies
- Medicare Part B Status Risk: The agreement includes termination rights if DEXYCU loses Medicare Part B "pass-through" payment status for at least six months.
- HOPPS Rule Contingency: Harrow has the right to terminate the Letter Agreement with 30 days' notice if a 2022 CMS Hospital Outpatient Prospective Payment System (HOPPS) rule does not extend the pass-through payment period beyond December 31, 2022, and EyePoint has not waived minimum sales requirements.
- Reversion Clause: Upon expiration or termination, the parties will revert to the original Commercial Alliance Agreement terms.
Investor Verification Checklist
- Verify the full text of the Letter Agreement expected to be filed as an exhibit to the 2021 Form 10-K.
- Monitor CMS HOPPS rule developments for calendar year 2022 regarding DEXYCU pass-through payment status.
- Review the specific minimum sales levels and penalty calculations referenced in the agreement.
- Confirm the integration status of the eight EyePoint employees offered employment.