Harmony Biosciences Reports First Quarter 2023 Financial Results and Business Updates

May 02, 2023 at 7:30 AM EDT

WAKIX® (pitolisant) Net Revenue Increased ~40% Year-over-Year to $119.1 Million for First Quarter 2023

Average Number of Patients on WAKIX Increased ~1,200 Year-over-Year to ~5,100 for First Quarter 2023

Exited First Quarter 2023 With ~5,200 Patients on WAKIX

WAKIX Surpassed $1 Billion in Cumulative Net Revenue Since Launch

Anticipate Topline Data in Fourth Quarter 2023 in Phase 3 Idiopathic Hypersomnia (“IH”) INTUNE Study Given Continued Strong Momentum

Conference Call and Webcast to be Held Today at 8:30 a.m. ET 

PLYMOUTH MEETING, Pa., May 02, 2023 (GLOBE NEWSWIRE) -- Harmony Biosciences Holdings, Inc. (“Harmony” or the “Company”) (Nasdaq: HRMY), a pharmaceutical company dedicated to developing and commercializing innovative therapies for patients with rare neurological diseases, today reported financial results and business updates for the quarter ended March 31, 2023.

“We are pleased to report another quarter of strong performance and operational excellence across our business. We saw continued momentum in our commercial business for WAKIX, as well as in the advancement of our clinical development programs for pitolisant,” stated Jeffrey M. Dayno, M.D., President and Chief Executive Officer of Harmony.

“WAKIX commercial performance reflects its unique and meaningfully differentiated product profile, allowing us to reach an important milestone of surpassing $1 billion in cumulative net revenue within the first three and half years since launch, one of the most successful launches ever for a rare disease company. We have demonstrated strong and continued growth since the launch of WAKIX and remain a growth story, given the vast opportunity that remains in the narcolepsy market, the potential of our current life cycle management programs, new formulations of pitolisant that are being developed, and growth through business development.”

First Quarter 2023 Financial Results

Net product revenues for the quarter ended March 31, 2023 were $119.1 million, compared to $85.3 million for the same period in 2022. The 39.6% growth versus the same period in 2022 is primarily attributed to strong commercial sales of WAKIX driven by continued organic demand. The average number of patients on WAKIX increased by approximately 1,200 patients from the quarter ended March 31, 2022 to approximately 5,100 as of the quarter ended March 31, 2023. Exited the quarter ended March 31, 2023, with approximately 5,200 patients on WAKIX.

GAAP net income for the quarter ended March 31, 2023, was $29.5 million, or $0.48 earnings per diluted share, compared to GAAP net income of $21.5 million, or $0.35 earnings per diluted share, for the same period in 2022. Non-GAAP adjusted net income was $40.1 million, or $0.66 earnings per diluted share, for the quarter ended March 31, 2023, compared to Non-GAAP adjusted net income of $31.1 million, or $0.51 per diluted share, for the same period in 2022.

Reconciliations of applicable GAAP financial measures to Non-GAAP financial measures are included at the end of this press release.

Harmony’s operating expenses include the following:

  • Research and Development expenses were $13.3 million in the first quarter of 2023, as compared to $7.6 million for the same quarter in 2022, representing a 75.4% increase;
  • Sales and Marketing expenses were $22.6 million in the first quarter of 2023, as compared to $17.6 million for the same quarter in 2022, representing a 28.4% increase;
  • General and Administrative expenses were $22.1 million in the first quarter of 2023, as compared to $17.9 million for the same quarter in 2022, representing a 23.4% increase; and
  • Total Operating Expenses were $57.9 million in the first quarter of 2023, as compared to $43.0 million for the same quarter in 2022, representing a 34.6% increase.

As of March 31, 2023, Harmony had cash, cash equivalents and investment securities of $392.4 million, compared to $345.7 million as of December 31, 2022.

Company Updates

  • Jeffrey M. Dayno, MD, was appointed President and Chief Executive Officer in April 2023. Dr. Dayno was also elected to join as a member of Harmony’s Board of Directors.
  • Kumar Budur, MD, MS, was appointed Chief Medical Officer in May 2023. Dr. Budur most recently served as Senior Vice President and Head of Clinical Development for Harmony.
  • Continued strong momentum in the Phase 3 registrational trial (INTUNE Study) in adult patients with IH, with topline data anticipated in the fourth quarter of 2023.
  • End-of-Phase 2 meeting with the U.S. Food and Drug Administration (“FDA”) scheduled for late second quarter of 2023 to discuss the Prader-Willi Syndrome (“PWS”) Phase 2 proof-of-concept study results and a proposed Phase 3 trial in patients with PWS.   
  • Enrollment continues in our Myotonic Dystrophy (“DM1”) study. We anticipate topline data from this Phase 2 proof-of-concept trial in the fourth quarter of 2023. 
  • On March 15, 2023, our partner Bioprojet received approval of a pediatric narcolepsy indication from the European Medicines Agency. We are working with Bioprojet on the submission to FDA of a supplemental new drug application for pediatric narcolepsy. 
  • Regarding pediatric exclusivity, we are working with FDA to gain alignment in pursuit of pediatric exclusivity for WAKIX. 

Conference Call Today at 8:30 a.m. ET 
We are hosting our first quarter 2023 financial results conference call and webcast today, beginning at 8:30 a.m. Eastern Time. The live and replayed webcast of the call will be available on the investor relations page of our website at https://ir.harmonybiosciences.com/. To participate in the live call by phone, dial (800) 343-4136 (domestic) or +1 (203) 518-9843 (international), and reference passcode HRMYQ123.

Non-GAAP Financial Measures
In addition to our GAAP results, we present certain Non-GAAP metrics including Non-GAAP adjusted net income and Non-GAAP adjusted net income per share, which we believe provides important supplemental information to management and investors regarding our performance. These measurements are not a substitute for GAAP measurements, and the manner in which we calculate Non-GAAP adjusted net income and Non-GAAP adjusted net income per share may not be identical to the manner in which other companies calculate adjusted net income and adjusted net income per share. We use these Non-GAAP measurements as an aid in monitoring our financial performance from quarter-to-quarter and year-to-year and for benchmarking against comparable companies.

Non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP measures; should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP; have no standardized meaning prescribed by GAAP; and are not prepared under any comprehensive set of accounting rules or principles. In addition, from time to time in the future there may be other items that we may exclude for purposes of our Non-GAAP financial measures; and we may in the future cease to exclude items that we have historically excluded for purposes of our Non-GAAP financial measures.

About WAKIX® (pitolisant) Tablets
WAKIX, a first-in-class medication, is approved by the U.S. Food and Drug Administration for the treatment of excessive daytime sleepiness or cataplexy in adult patients with narcolepsy and has been commercially available in the U.S. since Q4 2019. It was granted orphan drug designation for the treatment of narcolepsy in 2010, and breakthrough therapy designation for the treatment of cataplexy in 2018. WAKIX is a selective histamine 3 (H₃) receptor antagonist/inverse agonist. The mechanism of action of WAKIX is unclear; however, its efficacy could be mediated through its activity at H₃ receptors, thereby increasing the synthesis and release of histamine, a wake promoting neurotransmitter. WAKIX was designed and developed by Bioprojet (France). Harmony has an exclusive license from Bioprojet to develop, manufacture and commercialize pitolisant in the United States.

Indications and Usage
WAKIX is indicated for the treatment of excessive daytime sleepiness or cataplexy in adult patients with narcolepsy.

Important Safety Information

WAKIX is contraindicated in patients with known hypersensitivity to pitolisant or any component of the formulation. Anaphylaxis has been reported. WAKIX is also contraindicated in patients with severe hepatic impairment.

Warnings and Precautions
WAKIX prolongs the QT interval; avoid use of WAKIX in patients with known QT prolongation or in combination with other drugs known to prolong the QT interval. Avoid use in patients with a history of cardiac arrhythmias, as well as other circumstances that may increase the risk of the occurrence of torsade de pointes or sudden death, including symptomatic bradycardia, hypokalemia or hypomagnesemia, and the presence of congenital prolongation of the QT interval. 

The risk of QT prolongation may be greater in patients with hepatic or renal impairment due to higher concentrations of pitolisant; monitor these patients for increased QTc. Dosage modification is recommended in patients with moderate hepatic impairment and moderate or severe renal impairment (see full prescribing information). WAKIX is not recommended in patients with end-stage renal disease (ESRD).

Adverse Reactions
In the placebo-controlled clinical trials conducted in patients with narcolepsy with or without cataplexy, the most common adverse reactions (≥5% and at least twice placebo) for WAKIX were insomnia (6%), nausea (6%), and anxiety (5%). Other adverse reactions that occurred at ≥2% and more frequently than in patients treated with placebo included headache, upper respiratory tract infection, musculoskeletal pain, heart rate increased, hallucinations, irritability, abdominal pain, sleep disturbance, decreased appetite, cataplexy, dry mouth, and rash.

Drug Interactions
Concomitant administration of WAKIX with strong CYP2D6 inhibitors increases pitolisant exposure by 2.2-fold. Reduce the dose of WAKIX by half. 

Concomitant use of WAKIX with strong CYP3A4 inducers decreases exposure of pitolisant by 50%. Dosage adjustments may be required (see full prescribing information). 

H1 receptor antagonists that cross the blood-brain barrier may reduce the effectiveness of WAKIX. Patients should avoid centrally acting H1 receptor antagonists. 

WAKIX is a borderline/weak inducer of CYP3A4. Therefore, reduced effectiveness of sensitive CYP3A4 substrates may occur when used concomitantly with WAKIX. The effectiveness of hormonal contraceptives may be reduced when used with WAKIX and effectiveness may be reduced for 21 days after discontinuation of therapy.

Use in Specific Populations
WAKIX may reduce the effectiveness of hormonal contraceptives. Patients using hormonal contraception should be advised to use an alternative non-hormonal contraceptive method during treatment with WAKIX and for at least 21 days after discontinuing treatment. 

There is a pregnancy exposure registry that monitors pregnancy outcomes in women who are exposed to WAKIX during pregnancy. Patients should be encouraged to enroll in the WAKIX pregnancy registry if they become pregnant. To enroll or obtain information from the registry, patients can call 1-800-833-7460. The safety and effectiveness of WAKIX have not been established in patients less than 18 years of age. 

WAKIX is extensively metabolized by the liver. WAKIX is contraindicated in patients with severe hepatic impairment. Dosage adjustment is required in patients with moderate hepatic impairment.

WAKIX is not recommended in patients with end-stage renal disease. Dosage adjustment of WAKIX is recommended in patients with moderate or severe renal impairment. 

Dosage reduction is recommended in patients known to be poor CYP2D6 metabolizers; these patients have higher concentrations of WAKIX than normal CYP2D6 metabolizers.

Please see the Full Prescribing Information for WAKIX for more information.

To report suspected adverse reactions, contact Harmony Biosciences at 1-800-833-7460 or the FDA at 1-800-FDA-1088 or www.fda.gov/medwatch.

About Narcolepsy
Narcolepsy is a rare, chronic, debilitating neurological disease of sleep-wake state instability that impacts approximately 165,000 Americans and is primarily characterized by excessive daytime sleepiness (EDS) and cataplexy – its two cardinal symptoms – along with other manifestations of REM sleep dysregulation (hallucinations and sleep paralysis), which intrude into wakefulness. EDS is the inability to stay awake and alert during the day and is the symptom that is present in all people living with narcolepsy. In most patients, narcolepsy is caused by the loss of hypocretin/orexin, a neuropeptide in the brain that supports sleep-wake state stability. This disease affects men and women equally, with typical symptom onset in adolescence or young adulthood; however, it can take up to a decade to be properly diagnosed.

About Idiopathic Hypersomnia
Idiopathic Hypersomnia (IH) is a rare and chronic neurological disease that is characterized by excessive daytime sleepiness (EDS) despite sufficient or even long sleep time. EDS in IH cannot be alleviated by naps, longer sleep or more efficient sleep. People living with IH experience significant EDS along with the symptoms of sleep inertia (prolonged difficulty waking up from sleep) and 'brain fog' (impaired cognition, attention, and alertness). The cause of IH is unknown, but it is likely due to alterations in areas of the brain that stabilize states of sleep and wakefulness. IH is one of the central disorders of hypersomnolence and, like narcolepsy, is a debilitating sleep disorder that can result in significant disruption in daily functioning.

About HBS-102
HBS-102, an investigational compound, is a melanin-concentrating hormone (MCH) receptor 1 (MCHR1) antagonist that targets MCH neurons in the brain. It has the potential to be a first-in-class molecule with a novel mechanism of action that could offer a new approach to the treatment of a variety of rare neurological diseases.

About Harmony Biosciences
At Harmony Biosciences, we specialize in developing and delivering treatments for rare neurological diseases that others often overlook. We believe that where empathy and innovation meet, a better life can begin for people living with neurological diseases. Established by Paragon Biosciences, LLC, in 2017 and headquartered in Plymouth Meeting, PA, our team of experts from a wide variety of disciplines and experiences is driven by our shared conviction that innovative science translates into therapeutic possibilities for our patients, who are at the heart of everything we do. For more information, please visit www.harmonybiosciences.com.

Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding our product WAKIX. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: our commercialization efforts and strategy for WAKIX; the rate and degree of market acceptance and clinical utility of WAKIX, pitolisant in additional indications, if approved, and any other product candidates we may develop or acquire, if approved; our research and development plans, including our development activities with Bioprojet, and plans to explore the therapeutic potential of pitolisant in additional indications; our ongoing and planned clinical trials; the availability of favorable insurance coverage and reimbursement for WAKIX; the impact of the COVID-19 pandemic, including any current and future variants; the timing of and our ability to obtain regulatory approvals for pitolisant for other indications as well as any of our product candidates, including those we are developing with Bioprojet; our failure to achieve the potential benefits of the 2022 LCA with Bioprojet; our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; our ability to identify additional products or product candidates with significant commercial potential that are consistent with our commercial objectives; our commercialization, marketing and manufacturing capabilities and strategy; significant competition in our industry; our intellectual property position; loss or retirement of key members of management; failure to successfully execute our growth strategy, including any delays in our planned future growth; our failure to maintain effective internal controls; the impact of government laws and regulations; volatility and fluctuations in the price of our common stock; the significant costs and required management time as a result of operating as a public company; the fact that the price of Harmony’s common stock may be volatile and fluctuate substantially; and the significant costs and required management time as a result of operating as a public company. These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 21, 2023, and our other filings with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

(In thousands, except share and per share data)
    Three Months Ended March 31,
Net product revenues   $ 119,126     $ 85,313  
Cost of product sold     20,780       14,716  
Gross profit     98,346       70,597  
Operating expenses:            
Research and development     13,289       7,578  
Sales and marketing     22,572       17,583  
General and administrative     22,062       17,880  
Total operating expenses     57,923       43,041  
Operating income     40,423       27,556  
Other income (expense), net     2       (2 )
Interest expense, net     (2,645 )     (4,169 )
Income before income taxes     37,780       23,385  
Income tax expense     (8,295 )     (1,900 )
Net income   $ 29,485     $ 21,485  
Unrealized gain on investments     120        
Comprehensive income   $ 29,605     $ 21,485  
Basic   $ 0.49     $ 0.36  
Diluted   $ 0.48     $ 0.35  
Weighted average number of shares of common stock - basic     59,732,157       58,908,526  
Weighted average number of shares of common stock - diluted     61,221,511       60,586,875  

(In thousands except share and per share data)
    March 31,   December 31,
    2023   2022
CURRENT ASSETS:            
Cash and cash equivalents   $ 287,962     $ 243,784  
Investments, short-term     55,916       79,331  
Trade receivables, net     52,575       54,740  
Inventory, net     4,090       4,297  
Prepaid expenses     11,399       9,347  
Other current assets     6,145       8,786  
Total current assets     418,087       400,285  
Property and equipment, net     470       573  
Restricted cash     750       750  
Investments, long-term     48,538       22,568  
Intangible assets, net     154,992       160,953  
Deferred tax asset     89,385       85,943  
Other noncurrent assets     2,870       2,798  
Total noncurrent assets     297,005       273,585  
TOTAL ASSETS   $ 715,092     $ 673,870  
Trade payables   $ 6,414     $ 3,786  
Accrued compensation     5,691       11,532  
Accrued expenses     56,810       59,942  
Current portion of long-term debt     6,500       2,000  
Other current liabilities     9,948       1,624  
Total current liabilities     85,363       78,884  
Long-term debt, net     185,063       189,647  
Other noncurrent liabilities     1,625       2,501  
Total noncurrent liabilities     186,688       192,148  
TOTAL LIABILITIES     272,051       271,032  
Common stock—$0.00001 par value; 500,000,000 shares authorized at March 31, 2023 and December 31, 2022, respectively; 59,954,618 shares and 59,615,731 issued and outstanding at March 31, 2023 and December 31, 2022, respectively     1       1  
Additional paid in capital     685,716       675,118  
Accumulated other comprehensive income (loss)     (31 )     (151 )
Accumulated deficit     (242,645 )     (272,130 )
TOTAL STOCKHOLDERS’ EQUITY     443,041       402,838  

(In thousands except share and per share data)
    Three Months Ended
    March 31,   March 31,
GAAP net income   $ 29,485     $ 21,485  
Non-GAAP Adjustments:            
Non-cash interest expense (1)     416       412  
Depreciation     103       117  
Amortization (2)     5,961       5,082  
Stock-based compensation expense     6,561       4,896  
Income tax effect related to non-GAAP adjustments (3)     (2,400 )     (854 )
Non-GAAP adjusted net income   $ 40,126     $ 31,138  
GAAP reported net income per diluted share   $ 0.48     $ 0.35  
Non-GAAP adjusted net income per diluted share   $ 0.66     $ 0.51  
Weighted average number of shares of common stock used in non-GAAP diluted per share     61,221,511       60,586,875  

(1) Includes amortization of deferred finance charges
(2) Includes amortization of intangible asset related to WAKIX
(3) Calculated using the reported effective tax rate for the periods presented less impact of discrete items

Harmony Biosciences Investor Contact:
Luis Sanay, CFA

Harmony Biosciences Media Contact:
Cate McCanless

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Source: Harmony Biosciences