Harmony Biosciences Holdings, Inc. Q3 FY2024 earnings call

Key Points

• Strong momentum for WAKIX with net revenue of $186 million in Q3 2024, and cumulative net revenue for WAKIX surpassing $2 billion in less than 5 years.
• Robust late-stage clinical development pipeline:
  • Sleep/Wake: Preparing to submit sNDA for pitolisant in idiopathic hypersomnia, advancing pitolisant next-gen programs (GR and HD), and on track to submit IND for orexin-2 agonist in mid-2025.
  • Rare Epilepsy: EPX-100 in ongoing Phase 3 registrational trial for Dravet syndrome (top line data in 2026) and set to initiate pivotal Phase 3 trial for Lennox-Gastaut syndrome by year-end; EPX-200 in pre-IND phase.
  • Neurobehavioral: On track to report top line data from ZYN-002 Phase 3 RECONNECT trial in Fragile X syndrome in mid-2025, and set to initiate Phase 3 study in 22q deletion syndrome in 2025.
• Commercial performance: WAKIX saw growth in average patients on the drug and prescriber base, with net sales guidance for 2024 reaffirmed at $700 million to $720 million.

In the third quarter, WAKIX contributed significantly with net revenue of $186 million. This enabled Harmony to surpass $2 billion in cumulative net revenue for WAKIX generated in less than 5 years on the market. WAKIX is the primary revenue driver, with its performance forming the foundation of the company's financial results in this segment.

Guidance

• Reiterated 2024 net revenue guidance of $700 million to $720 million.
• Anticipate quarter-over-quarter growth in net revenues in Q4 2024.
• Key near-term catalysts include FDA's decision on file acceptance for IH sNDA submission in Q1 2025 and top-line data for ZYN-002 Phase 3 RECONNECT trial in Fragile X syndrome mid-2025.

Risks

• Uncertainties related to clinical trial outcomes, including potential delays or failures in Phase 3 trials for pipeline programs.
• Regulatory approvals may face challenges, impacting the timeline for product launches.
• Competition from other companies developing treatments for rare neurological diseases could affect market share.
• IP litigation, such as the WAKIX IP litigation, could impact commercialization and revenue.

Q: Please go ahead.

A: Graig Suvannavejh from Mizuho asked about the Pitolisant GR and HD strategy. Jeffrey Dierks responded discussing how GR and HD will coexist, with GR being accretive and HD likely converting most WAKIX patients due to enhanced efficacy.

Q: Please go ahead.

A: Graig Suvannavejh asked about the orexin program. Kumar Budur and Jeffrey Dayno responded stating they plan to disclose additional preclinical data at upcoming scientific meetings, targeting next year.

Q: Please go ahead.

A: Ami Fadia from Needham asked about EPX-100's differentiation and clinical development strategy. Kumar Budur responded discussing EPX-100's safety profile, established use, and ongoing trials in Dravet and Lennox-Gastaut syndromes.

Q: Please go ahead.

A: Charles Duncan from Cantor Fitzgerald asked about patient sources and guidance. Jeffrey Dierks responded stating about 60% of new patients come from oxybate REMS enrolled health care professionals and 40% from non-oxybate, and Sandip Kapadia discussed confidence in the revenue guidance.

Q: Please go ahead.

A: David Amsellem from Piper Sandler asked about payer landscape and Pitolisant HD. Jeffrey Dierks and Kumar Budur responded discussing favorable payer landscape for WAKIX and safety margins for Pitolisant HD.

Q: Please go ahead.

A: Danielle Brill from Raymond James asked about patient adds and DEEs strategy. Sandip Kapadia and Jeffrey Dierks responded stating no significant dip expected in patient adds and Kumar Budur discussed basket study considerations for DEEs.

Q: Please go ahead.

A: Ash Verma from UBS asked about ZYN-002 and trade inventory. Kumar Budur responded discussing primary target population for ZYN-002 and Sandip Kapadia discussed normal trade inventory fluctuations.

Q: Please go ahead.

A: Corinne Johnson from Goldman Sachs asked about fatigue measurement in Pitolisant HD and patents. Sandip Kapadia and Jeffrey Dayno responded discussing fatigue measurement methods and details of Pitolisant HD patents.

Q: Please go ahead.

A: Jason Gerberry from Bank of America asked about EPX-100 in zebrafish model and WAKIX IP litigation. Jeffrey Dierks and Jeffrey Dayno responded discussing EPX-100's zebrafish model efficacy and IP litigation considerations.

Q: Please go ahead.

A: Francois Brisebois from Oppenheimer asked about patients on oxybate and WAKIX and reimbursement. Jeffrey Dierks responded discussing percentage of patients on both and reimbursement landscape for rare orphan categories.