Harmony Biosciences Reports Second Quarter 2023 Financial Results and Business Updates
WAKIX® (pitolisant) Net Revenue Increased ~25% Year-over-Year to
Average Number of Patients on WAKIX Increased by ~350 Sequentially to ~5,450 for Second Quarter 2023
Exited Second Quarter 2023 With ~5,600 Patients on WAKIX
Completed Enrollment in Phase 3 Idiopathic Hypersomnia (IH) INTUNE Study; On-track for Topline Data in Fourth Quarter 2023
Plans to Initiate Prader-Willi Syndrome (PWS) Phase 3 Study in Fourth Quarter 2023
Board of Directors Authorized
Conference Call and Webcast to be Held Today at
“This quarter represented the highest top line prescription demand since our first full quarter of launch in 2020 and the strongest quarter of new patient starts in our history,” said
“Our share repurchase program reflects our ongoing confidence in the strength of our core business as well as our conviction in the long-term growth potential for Harmony. Looking ahead, we made significant progress in all of our current life cycle management programs setting us up for a catalyst rich remainder of the year.”
Second Quarter 2023 Financial Results
Net product revenues for the quarter ended
GAAP net income for the quarter ended
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
$15.0 millionin the second quarter of 2023, as compared to $12.7 millionfor the same quarter in 2022, representing a 18% increase;
- Sales and Marketing expenses were
$24.5 millionin the second quarter of 2023, as compared to $20.2 millionfor the same quarter in 2022, representing a 22% increase;
- General and Administrative expenses were
$22.8 millionin the second quarter of 2023, as compared to $22.2 millionfor the same quarter in 2022, representing a 3% increase; and
- Total Operating Expenses were
$62.3 millionin the second quarter of 2023, as compared to $55.0 millionfor the same quarter in 2022, representing a 13% increase.
- Completed enrollment of Phase 3 registrational trial (INTUNE Study) in adult patients with IH, nine months ahead of plan, and on-track for topline data in the fourth quarter of 2023.
- Positive End-of-Phase 2 meeting with the
U.S. Food and Drug Administration(“FDA”). We plan to initiate a Phase 3 study in patients with PWS in the fourth quarter of 2023.
- On-track for topline data from the Myotonic Dystrophy (“DM1”) Phase 2 proof-of-concept signal detection trial in the fourth quarter of 2023.
- Regarding a pediatric narcolepsy indication, we are working with
Bioprojeton the submission to FDA of a supplemental new drug application (“sNDA”) for pediatric narcolepsy. We expect to submit the sNDA in the fourth quarter of 2023.
- We are actively pursuing pediatric exclusivity for WAKIX and have made progress with FDA in aligning on the requirements.
- Our Board of Directors authorized a
$125 millionshare repurchase program.
- We entered into a new
$185 millionterm loan facility, further strengthening the balance sheet and reducing annual interest expense by approximately $6 million. Net proceeds from the new term loan facility and cash on hand were used to repay existing debt.
Conference Call Today at
We are hosting our second quarter 2023 financial results conference call and webcast today at
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
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).
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.
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
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.
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.
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
|HARMONY BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY|
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except share and per share data)
|Three Months Ended
||Six Months Ended
|Net product revenues||$||134,216||$||107,028||$||253,342||$||192,341|
|Cost of product sold||25,008||18,921||45,788||33,637|
|Research and development||14,969||12,668||28,258||20,246|
|Sales and marketing||24,528||20,160||47,100||37,743|
|General and administrative||22,809||22,163||44,871||40,043|
|Total operating expenses||62,306||54,991||120,229||98,032|
|Other (expense) income, net||(31||)||42||(29||)||40|
|Interest expense, net||(2,776||)||(3,927||)||(5,421||)||(8,096||)|
|Income before income taxes||44,095||29,231||81,875||52,616|
|Income tax expense||(9,795||)||(5,700||)||(18,090||)||(7,600||)|
|Unrealized loss on investments||(491||)||(29||)||(371||)||(29||)|
|EARNINGS PER SHARE:|
|Weighted average number of shares of common stock - basic||59,974,123||59,063,358||59,853,808||58,986,370|
|Weighted average number of shares of common stock - diluted||60,743,953||60,922,672||60,997,410||60,759,026|
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data)
|Cash and cash equivalents||$||317,415||$||243,784|
|Trade receivables, net||63,812||54,740|
|Other current assets||6,550||8,786|
|Total current assets||455,641||400,285|
|Property and equipment, net||572||573|
|Intangible assets, net||149,031||160,953|
|Deferred tax asset||93,578||85,943|
|Other noncurrent assets||2,460||2,798|
|Total noncurrent assets||304,542||273,585|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Current portion of long-term debt||11,000||2,000|
|Other current liabilities||3,947||1,624|
|Total current liabilities||93,045||78,884|
|Long-term debt, net||180,487||189,647|
|Other noncurrent liabilities||1,479||2,501|
|Total noncurrent liabilities||181,966||192,148|
|COMMITMENTS AND CONTINGENCIES (Note 12)|
|Common stock—$0.00001 par value; 500,000,000 shares authorized at
|Additional paid in capital||694,038||675,118|
|Accumulated other comprehensive (loss) income||(522||)||(151||)|
|TOTAL STOCKHOLDERS’ EQUITY||485,172||402,838|
|TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY||$||760,183||$||673,870|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS
(In thousands except share and per share data)
|Three Months Ended
||Six Months Ended
|GAAP net income||$||34,300||$||23,531||$||63,785||$||45,016|
|Non-cash interest expense (1)||424||411||840||823|
|Stock-based compensation expense||7,793||7,371||14,354||12,267|
|Income tax effect related to non-GAAP adjustments (3)||(2,712||)||(2,662||)||(5,112||)||(3,516||)|
|Non-GAAP adjusted net income||$||45,869||$||34,706||$||85,995||$||65,844|
|GAAP reported net income per diluted share||$||0.56||$||0.39||1.05||$||0.74|
|Non-GAAP adjusted net income per diluted share||$||0.76||$||0.57||1.41||$||1.08|
|Weighted average number of shares of common stock used in non-GAAP diluted per share||60,743,953||60,922,672||60,997,410||60,759,026|
(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
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Source: Harmony Biosciences