Item 2.01 Completion of Acquisition or Disposition of Assets.
On January 20, 2023, Harrow Health, Inc. along with its wholly-owned
subsidiaries, Harrow IP, LLC and Harrow Eye, LLC (individually and together the
"Company") completed the previously announced acquisition from Novartis
Technology, LLC and Novartis Innovative Therapies AG (together, "Novartis") of
the exclusive commercial rights to assets associated with the following
ophthalmic products (collectively the "Products") in the U.S. (the
"Acquisition"): ILEVRO® (nepafenac ophthalmic suspension) 0.3%; NEVANAC®
(nepafenac ophthalmic suspension) 0.1%; VIGAMOX® (moxifloxacin hydrochloride
ophthalmic solution) 0.5%; MAXIDEX® (dexamethasone ophthalmic suspension) 0.1%;
and TRIESENCE® (triamcinolone acetonide injectable suspension) 40 mg/ml.
Under the terms of the Asset Purchase Agreement between the Company and Novartis
(the "Purchase Agreement"), the Company made a one-time payment of $130,000,000
at closing, with up to another $45,000,000 due in a milestone payment related to
the commercial availability of Triesence. Pursuant to the Purchase Agreement and
various ancillary agreements, immediately following the closing and subject to
certain conditions, for a period that the Company expects to last approximately
six months, and prior to the transfer of the Products' new drug applications
(the "NDAs") to the Company, Novartis will continue to sell the Products on the
Company's behalf and transfer the net profit from the sale of the Products to
the Company. Novartis has agreed to supply certain Products to the Company for a
period of time after the NDAs are transferred to the Company and to assist the
Company with the transfer of the manufacturing of the Products to other
third-party manufacturers, if needed.
The Company funded the initial purchase price payable at closing of the
Acquisition with (i) net proceeds of a $59,750,000 borrowing pursuant to the
previously announced Loan and Security Agreement entered into with B. Riley
Commercial Capital, LLC (the "Senior Secured Loan") drawn at closing of the
Acquisition, (ii) proceeds of recent sales of the Company's common stock and
11.875% senior unsecured notes due 2027 and (iii) available cash on hand.
Item 8.01 Other Events.
On January 23, 2023, the Company issued a press release announcing the closing
of the Acquisition. A copy of the press release is attached as Exhibit 99.1 to
this Current Report on Form 8-K.
Attached as Exhibit 99.2 to this Current Report on Form 8-K and incorporated
herein by reference is the Company's Unaudited Pro Forma Condensed Consolidated
Balance Sheet at September 30, 2022, giving effect to:
(i) the cash received by the Company in connection with the Company's sale and
divestment of its non-ophthalmology related compounding revenue line and
related intangible assets, and the net gain on sale;
(ii) the net proceeds from the sale of shares of the Company's common stock,
after deducting underwriting discounts and commissions, structuring and
commitment fees, and estimated offering expenses payable by the Company;
(iii) the net proceeds from the sale of 11.875% senior unsecured notes due 2027
(the "Notes") (including the exercise of the underwriters' option to
purchase additional Notes), after deducting underwriting discounts and
commissions, structuring and commitment fees, and estimated offering
expenses payable by the Company;
(iv) the net proceeds of the Senior Secured Loan, after deducting underwriting
discounts and commissions, structuring and commitment fees, original issue
discount, and estimated offering expenses payable by the Company; and
(v) cash paid by the Company in connection with closing of the Acquisition,
including estimated expenses related to the Acquisition.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Item Description
99.1 Harrow Health Press Release dated January 23, 2023
99.2 Unaudited Pro Forma Consolidated Balance Sheet
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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