Harrow (HROW) risk factors, FY2025 10-K

Risks Related to Economic Conditions and Operations of Our Business

1. 01We may not be profitable in the future25% rewritten
2. 02We may not receive sufficient revenue to fund our operations and recover our development costs
3. 03We may fail to realize the anticipated benefits of our recent and any future product acquisitions
4. 04We may not be able to correctly estimate our future operating expenses, which could lead to cash shortfalls
5. 05If we do not successfully identify and acquire rights to new products and drug candidates and successfully integrate them into our operations, our growth opportunities may be limited
6. 06We may be unable to successfully develop and commercialize our drug products, candidates or any other assets we may acquire
7. 07We may need additional capital in order to continue operating our business and to operate as a going concern, and such additional funds may not be available when needed, on acceptable terms, or at all38% rewritten
8. 08We have in the past participated and may in the future participate in strategic transactions that could impact our liquidity, increase our expenses and distract our management
9. 09If we are unable to establish, train and maintain an effective sales and marketing infrastructure, we will not be able to commercialize our drug products and candidates successfully
10. 10We depend upon consultants, outside contractors and other third-party service providers for key aspects of our business58% rewritten
11. 11We carry product and professional liability insurance, which may be inadequate
12. 12Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses
13. 13Our compounding operations and our broader pharmaceutical business are subject to significant regulatory, quality, and commercial risks, and we may not achieve our objectives for these operationsNew
14. 14Our current and future use of artificial intelligence (“AI”), including by third-party vendors we rely on, may create new operational, regulatory, legal, and reputational risks, and may adversely affect our businessNew
15. 15Global macroeconomic conditions could adversely affect our business and results of operationsNew

Risks Related to Government Regulations and Third-Party Policies

1. 16Our business is significantly impacted by state and federal statutes and regulations76% rewritten
2. 17Federal and state compounding frameworks—including evolving FDA policies regarding interstate distribution and information-sharing—may change and could impose additional compliance obligations or restrict aspects of our compounding operations, which could adversely affect our results of operationsNew
3. 18If we (or a partner facility) fail to comply with the Controlled Substances Act, FDCA, or similar state statutes and regulations, the pharmacy facilities could be required to cease operations or become subject to restrictions that could adversely affect our business96% rewritten
4. 19If we market any of our drug candidates in a manner that violates healthcare fraud and abuse laws, or if we violate government price reporting laws, we may be subject to civil or criminal penalties
5. 20Our sales depend on coverage and reimbursement from government and commercial third-party payors, and pricing and reimbursement pressures have affected, and are likely to continue to affect, our profitability97% rewritten
6. 21Changing U.S. federal coverage and reimbursement policies and practices have affected and are likely to continue to affect access to, pricing of and sales of our products
7. 22Changing reimbursement and pricing actions in various states have negatively affected and may continue to negatively affect access to and have affected and may continue to affect sales of our products
8. 23U.S. commercial payor actions have affected and may continue to affect access to and sales of our products
9. 24Guidelines and recommendations published by various organizations can reduce the use of our branded products
10. 25Change in U.S. trade policy, including tariffs or other import restrictions, could increase our costs, disrupt our supply chain, and adversely affect our businessNew

Risks Related to Competition

1. 26There are many competitive risks related to marketing and selling our proprietary formulations and operating our compounding pharmacy business
2. 27Our future success depends in large part on our ability to maintain a competitive position with respect to biotechnology and related pharmaceutical technologies
3. 28Concentration of sales at certain of our wholesaler distributors and consolidation of private payors may negatively affect our business
4. 29If we are unable to protect our proprietary rights, we may not be able to prevent others from using our intellectual property, which may reduce the competitiveness and value of the related assets
5. 30We may face additional competition outside of the U.S. as a result of a lack of patent coverage in some territories and differences in patent prosecution and enforcement laws in foreign counties
6. 31Our products, drug candidates and compounded formulations and technologies could potentially conflict with the rights of others
7. 32If we are unable to attract and retain key personnel and consultants, we may be unable to maintain or expand our business

Risks Related to Product Development, Regulatory Approval, Manufacturing and Commercialization

1. 33If we seek FDA approval to market and sell any of our drug candidates we may be unable to demonstrate the necessary safety and efficacy to obtain such FDA approval
2. 34Even if we receive regulatory approval for any of our drug candidates, we may not be able to successfully commercialize the product and the revenue that we generate from its sales, if any, may be limited
3. 35Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results
4. 36Delays in the completion of, or the termination of, any clinical or non-clinical trials for any drug candidates for which we may seek FDA approval could adversely affect our business
5. 37We may depend on the success of our drug candidates, which have not yet demonstrated efficacy for their target or any other indications. If we are unable to generate revenues from our drug candidates, our ability to create stockholder value may be limited
6. 38If we are not able to obtain required regulatory approvals for a drug candidate, we will not be able to commercialize such drug candidate and our ability to generate revenues will be limited
7. 39Obtaining and maintaining regulatory approval of our products and drug candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our products or drug candidates in other jurisdictions
8. 40Current and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our drug candidates and affect the prices we may obtain
9. 41Our drug candidates may face competition sooner than expected
10. 42Any termination or suspension of, or delays in the commencement or completion of, any necessary studies of any of our drug candidates for any indications could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects
11. 43There is no guarantee that the FDA, EMA or their foreign equivalents will grant any future application for orphan drug designation for any of our drug candidates, which would make us ineligible for the additional exclusivity and other benefits of orphan drug designation
12. 44Although we may pursue expedited regulatory approval pathways for a drug candidate, it may not qualify for expedited development or, if it does qualify for expedited development, it may not actually lead to a faster development or regulatory review or approval process
13. 45Disruptions at the FDA, CMS, the SEC, and other government agencies—due to funding lapses, shutdowns, staffing constraints, reorganizations, or shifting policy priorities—could adversely affect our business and results of operationsNew

Risks Related to Our Indebtedness

1. 46We have incurred significant indebtedness, which will require substantial cash to service and which subjects us to certain financial requirements and business restrictions30% rewritten
2. 47We could enter into various transactions that could increase the amount of our outstanding debt or adversely affect our capital structure or credit rating

Risks Related to Our Common Stock

1. 48If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results, which could cause our stock price to fall
2. 49Our stock price may be volatile23% rewritten
3. 50We have the right to issue shares of preferred stock without obtaining stockholder approval. If we were to issue preferred stock, it may have rights, preferences and privileges superior to those of our common stock
4. 51We have not paid dividends in the past and do not expect to pay dividends in the future. Any return on an investment will be limited to any appreciation in the value of our common stock
5. 52Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline
6. 53Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price