0001564590-21-015274 | 10-K | XBRL Viewer | Harmony Biosciences Holdings INC

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2020	Mar. 15, 2021	Jun. 30, 2020
Cover [Abstract]
Entity Registrant Name	HARMONY BIOSCIENCES HOLDINGS, INC.
Entity Central Index Key	0001802665
Entity Tax Identification Number	82-2279923
Entity File Number	001-39450
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Voluntary Filers	No
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	630 W.
Entity Address, Address Line Two	Germantown Pike
Entity Address, Address Line Three	Suite 215
Entity Address, City or Town	Plymouth Meeting
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19462
City Area Code	484
Local Phone Number	539-9800
Title of 12(b) Security	Common Stock, par value $0.00001 value per share
Trading Symbol	HRMY
Security Exchange Name	NASDAQ
Document Annual Report	true
Document Transition Report	false
Entity Common Stock, Shares Outstanding		56,891,920
Entity Public Float			$ 0
Documents Incorporated by Reference	Portions of the registrant’s definitive proxy statement relating to its 2021 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year ended December 31, 2020 are incorporated herein by reference in Part III where indicated.

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
CURRENT ASSETS:
Cash and cash equivalents	$ 228,631	$ 24,457
Trade receivables, net	22,176	4,255
Inventory, net	3,823	1,088
Prepaid expenses	6,959	1,436
Other current assets	1,302	261
Total current assets	262,891	31,497
NONCURRENT ASSETS:
Property and equipment, net	938	1,330
Restricted cash	750	750
Intangible asset, net	162,343	72,185
Other noncurrent assets	152	941
Total noncurrent assets	164,183	75,206
TOTAL ASSETS	427,074	106,703
CURRENT LIABILITIES:
Trade payables	2,556	6,360
Accrued compensation	8,942	7,917
Accrued expenses	122,727	5,500
Other current liabilities	314	115
Total current liabilities	134,539	19,892
NONCURRENT LIABILITIES:
Deferred rent	212	287
Long term debt, net	194,250	97,946
Other noncurrent liabilities	893	163
Total noncurrent liabilities	195,355	98,396
TOTAL LIABILITIES	329,894	118,288
COMMITMENTS AND CONTINGENCIES (Note 9)
CONVERTIBLE PREFERRED STOCK
Convertible preferred stock, net of placement costs		411,275
STOCKHOLDERS’ EQUITY (DEFICIT):
Preferred stock - $0.00001 par value; 10,000,000 shares and 0 shares authorized at December 31, 2020 and 2019, respectively; 0 shares issued and outstanding at December 31, 2020 and 2019, respectively
Common stock—$0.00001 par value; 500,000,000 shares and 423,630,000 shares authorized at December 31, 2020 and 2019, respectively; 56,890,569 shares and 7,787,470 issued and outstanding at December 31, 2020 and 2019, respectively	1
Additional paid in capital	585,374
Accumulated deficit	(488,195)	(422,862)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)	97,180	(422,862)
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT)	$ 427,074	106,703
Series A Convertible Preferred Stock
CONVERTIBLE PREFERRED STOCK
Convertible preferred stock, net of placement costs		348,203
Series B Convertible Preferred Stock
CONVERTIBLE PREFERRED STOCK
Convertible preferred stock, net of placement costs		12,023
Series C Convertible Preferred Stock
CONVERTIBLE PREFERRED STOCK
Convertible preferred stock, net of placement costs		$ 51,051

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Convertible preferred stock, shares outstanding		318,510,205
Preferred stock, par value	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	10,000,000	0
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	500,000,000	423,630,000
Common stock, shares issued	56,890,569	7,787,470
Common stock, shares outstanding	56,890,569	7,787,470
Series A Convertible Preferred Stock
Convertible preferred stock, par value	$ 1.00	$ 1.00
Convertible preferred stock, shares authorized	0	286,000,000
Convertible preferred stock, shares issued	0	285,000,000
Convertible preferred stock, shares outstanding	0	285,000,000
Series B Convertible Preferred Stock
Convertible preferred stock, par value	$ 1.25	$ 1.25
Convertible preferred stock, shares authorized	0	8,030,000
Convertible preferred stock, shares issued	0	8,000,000
Convertible preferred stock, shares outstanding	0	8,000,000
Series C Convertible Preferred Stock
Convertible preferred stock, par value	$ 1.96	$ 1.96
Convertible preferred stock, shares authorized	0	25,600,000
Convertible preferred stock, shares issued	0	25,510,205
Convertible preferred stock, shares outstanding	0	25,510,205

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
Net product revenues	$ 159,742	$ 5,995
Cost of product sold	27,738	1,577
Gross profit	132,004	4,418
Operating expenses:
Research and development	19,448	69,595
Sales and marketing	55,824	44,318
General and administrative	39,746	36,409
Total operating expenses	115,018	150,322
Operating income (loss)	16,986	(145,904)
Loss on debt extinguishment	(22,639)
Other expense, net	(3,071)
Interest expense, net	(28,220)	(6,073)
Loss before income taxes	(36,944)	(151,977)
Net loss and comprehensive loss	(36,944)	(151,977)
Accumulation of dividends on preferred stock	(26,904)	(35,231)
Net loss available to common stockholders	$ (63,848)	$ (187,208)
NET LOSS PER SHARE:
Basic	$ (2.48)	$ (24.07)
Diluted	$ (2.48)	$ (24.07)
Weighted average number of shares of common stock - basic	25,772,419	7,777,441
Weighted average number of shares of common stock - diluted	25,772,419	7,777,441

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - USD ($)
$ in Thousands

Total

Series C Convertible Preferred Stock

Series A Convertible Preferred Stock

Series B Convertible Preferred Stock

Common Stock

Additional Paid-in Capital

Series C Convertible Preferred Stock

Additional Paid-in Capital

Series A Convertible Preferred Stock

Additional Paid-in Capital

Series B Convertible Preferred Stock

Accumulated Deficit

Series C Convertible Preferred Stock

Accumulated Deficit

Series A Convertible Preferred Stock

Accumulated Deficit

Series B Convertible Preferred Stock

Beginning balance at Dec. 31, 2018

$ (242,673)

Convertible Preferred Stock, beginning balance, Shares at Dec. 31, 2018

293,000,000

Convertible Preferred Stock, beginning balance at Dec. 31, 2018

$ 324,201

Beginning balance, shares at Dec. 31, 2018

^[1]

7,777,100

Net loss

(151,977)

Issuance of convertible preferred stock, net of issuance cost

$ 48,868

Issuance of convertible preferred stock, net of issuance cost, Shares

25,510,205

Preferred stock dividend

$ (1,973)

$ (32,160)

$ (1,098)

$ (9,994)

$ (1,973)

$ (22,166)

$ (1,098)

Preferred stock accretion

(211)

(2,742)

(22)

(211)

(2,742)

(22)

Temporary equity, Preferred stock dividend

1,973

32,160

1,098

Temporary equity, Preferred stock accretion

$ 211

$ 2,742

$ 22

Exercise of stock options

$ 85

Exercise of stock options, Shares

^[1]

10,370

Stock-based compensation

9,909

Ending balance at Dec. 31, 2019

$ (422,862)

(422,862)

Convertible Preferred Stock, Ending balance, Shares at Dec. 31, 2019

318,510,205

25,510,205

285,000,000

8,000,000

Convertible Preferred Stock, ending balance at Dec. 31, 2019

$ 411,275

$ 51,051

$ 348,203

$ 12,023

Ending balance, shares at Dec. 31, 2019

^[1]

7,787,470

Net loss

(36,944)

Preferred stock dividend

(3,347)

(22,780)

(777)

(1,048)

$ 1

(3,347)

(21,732)

(778)

Preferred stock accretion

(922)

(5,562)

(53)

$ (563)

$ (3,572)

$ (37)

$ (359)

$ (1,990)

$ (16)

Temporary equity, Preferred stock dividend

3,347

22,780

777

Temporary equity, Preferred stock accretion

$ 921

$ 5,562

$ 53

Issuance of stock upon initial public offering, net of issuance costs

135,435

Issuance of stock upon initial public offering, net of issuance costs, Shares

^[1]

6,151,162

Temporary equity, Conversion of Series A, B, C convertible stock to common stock

$ (444,715)

Temporary equity, conversion of Series A, B, C convertible stock to common stock, Shares

(318,510,205)

Conversion of Series A, B, C convertible stock to common stock

$ 444,716

$ 1

444,715

Conversion of Series A, B, C convertible stock to common stock, Shares

^[1]

42,926,630

Reclassification of warrant liability to equity

5,468

Exercise of stock options

$ 299

299

Exercise of stock options, Shares

37,947

^[1]

Stock-based compensation

$ 4,693

4,693

Repurchase and cancellation of common units withheld for taxes

(17)

Repurchase and cancellation of common units withheld for taxes, Shares

^[1]

(465)

Repurchase and cancellation of common units

(167)

Repurchase and cancellation of common shares, Shares

^[1]

(12,175)

Ending balance at Dec. 31, 2020

$ 97,180

$ 1

$ 585,374

$ (488,195)

Convertible Preferred Stock, Ending balance, Shares at Dec. 31, 2020

Ending balance, shares at Dec. 31, 2020

^[1]

56,890,569

[1]	Common stock of Harmony Biosciences Holdings, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (36,944)	$ (151,977)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	394	395
Intangible amortization	9,843	2,815
Milestones associated with acquired in-process research & development (IPR&D)	2,000	52,000
Stock-based compensation expense	4,693	9,909
Stock appreciation rights market adjustment	497
Warrant expense	3,109
Noncash paid-in-kind interest expense		2,538
Debt issuance costs amortization	2,412	592
Loss on debt extinguishment	22,639
Change in operating assets and liabilities:
Trade receivables	(17,922)	(4,255)
Inventory	(2,735)	(1,088)
Prepaid expenses and other assets	(6,563)	1,467
Other non-current assets	789	(420)
Trade payables	(3,804)	4,898
Accrued expenses and other current liabilities	18,450	7,763
Other non-current liabilities	157	(73)
Net cash used in operating activities	(2,985)	(75,436)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(2)	(149)
Milestone associated with acquired in-process research & development (IPR&D)	(2,000)	(52,000)
Milestone and acquisition of intangible asset		(75,000)
Net cash used in investing activities	(2,002)	(127,149)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock upon initial public offering	147,628
Initial public offering issuance costs	(12,193)
Proceeds from issuance of preferred stock		50,000
Preferred stock issuance costs		(1,132)
Proceeds from long term debt	200,000	100,000
Debt issuance costs	(5,804)	(5,184)
Extinguishment of debt	(102,538)
Extinguishment of debt exit fees	(18,047)
Proceeds from exercised options	299	85
Repurchase of common stock	(167)
Tax payments for employees shares withheld	(17)
Net cash provided by financing activities	209,161	143,769
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	204,174	(58,816)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period	25,207	84,023
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period	229,381	25,207
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for interest	26,203	4,230
Cash paid during the year for milestones	2,000	127,000
Supplemental Disclosures of Noncash Investing and Financing Activities:
Warrant financing	2,359
Reclassification of warrant liability to equity	5,468
Series A Convertible Preferred Stock
Supplemental Disclosures of Noncash Investing and Financing Activities:
Preferred Stock accrued return	22,780	32,160
Accretion of issuance costs	5,562	2,742
Series B Convertible Preferred Stock
Supplemental Disclosures of Noncash Investing and Financing Activities:
Preferred Stock accrued return	777	1,098
Accretion of issuance costs	53	22
Series C Convertible Preferred Stock
Supplemental Disclosures of Noncash Investing and Financing Activities:
Preferred Stock accrued return	3,347	1,973
Accretion of issuance costs	$ 921	$ 211

Organization and Description of Business

12 Months Ended

Dec. 31, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Description of Business

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

The Company

Our operating subsidiary, Harmony Biosciences, LLC, was formed on May 17, 2017. Harmony Biosciences Holdings, Inc. (the “Company”) was founded on July 25, 2017 as Harmony Biosciences II, LLC, a Delaware limited liability company, and the Company converted to a Delaware corporation named Harmony Biosciences II, Inc. on September 19, 2017. On February 3, 2020, the Company changed its name to Harmony Biosciences Holdings, Inc. The Company is a holding company and has no operations. The Company’s operations are conducted in its wholly owned subsidiary, Harmony Biosciences, LLC (“Harmony”). The Company is a commercial-stage pharmaceutical company focused on developing and commercializing innovative therapies for patients living with rare neurological disorders who have unmet medical needs. The Company is headquartered in Plymouth Meeting, Pennsylvania.

Initial Public Offering

On August 21, 2020, the Company completed its initial public offering (“IPO”) of common stock, in which it sold 6,151,162 shares, including 802,325 shares pursuant to the underwriters’ over-allotment option. The shares began trading on the Nasdaq Global Market on August 19, 2020. The shares were sold at an IPO price of $24.00 per share for net proceeds of approximately $135,435, after deducting underwriting discounts and commissions and offering expenses of approximately $12,193 payable by the Company. Upon the closing of the IPO, all outstanding shares of the Company’s convertible preferred stock were automatically converted into shares of common stock and the accrued dividend payable to holders of the convertible preferred stock was paid out in shares of common stock, resulting in a total of 42,926,630 shares of common stock being issued to former holders of the Company’s convertible preferred stock. Warrants exercisable for convertible preferred stock were automatically converted into warrants exercisable for a total of 410,239 shares of common stock.

Reverse Stock Split

On August 11, 2020, the Company implemented a 1-for-8.215 reverse stock split of the Company’s common stock. All share and per share data shown in the accompanying financial statements and related notes have been retroactively revised to reflect the reverse stock split. Shares of common stock underlying outstanding stock options and other equity instruments were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities. Shares of common stock reserved for issuance upon the conversion of the Company’s Preferred Stock and preferred dividend were proportionately reduced. All references in the accompanying consolidated financial statements and related notes to the number of shares of common stock, convertible preferred stock, warrants and options to purchase common stock and per share data reflect the effect of the reverse stock split.

Liquidity and Capital Resources

12 Months Ended

Dec. 31, 2020

Liquidity And Capital Resources [Abstract]

Liquidity and Capital Resources

2. LIQUIDITY AND CAPITAL RESOURCES

The consolidated financial statements have been prepared as though the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred operating losses and negative cash flows from operations since inception resulting in an accumulated deficit of $488,195 and $422,862, as of December 31, 2020 and 2019, respectively. As of December 31, 2020, the Company had cash and cash equivalents of $228,631.

On August 21, 2020, the Company received aggregate proceeds from a common stock offering of approximately $135,435, net of underwriting discounts and commissions and other estimated offering expenses (see Note 11). Additionally, on January 9, 2020, the Company received aggregate proceeds of approximately $200,000 through the loan agreement with OrbiMed Royalty & Credit Opportunities, LP. This capital raise and debt issuance has resolved the Company’s significant risks and uncertainties regarding sources of liquidity, which previously raised substantial doubt about the Company’s ability to continue as a going concern.

The Company believes that its anticipated cash from operating and financing activities and existing cash and cash equivalents will enable the Company to meet its operational liquidity needs and fund its planned investing activities for the next twelve months from the date of issuance of these consolidated financial statements.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation.

Significant Risks and Uncertainties

The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to, the results of clinical testing and trial activities of the Company’s product candidates; the Company’s ability to obtain regulatory approval to market its products; competition from products manufactured and sold or being developed by other companies; the price of, and demand for, the Company’s products, if approved; the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its product candidates; and the Company’s ability to raise capital.

The Company currently has one commercially approved product, WAKIX, and there can be no assurance that the Company’s research and development and clinical trials will result in any successfully commercialized products in addition to WAKIX. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the Consolidated Financial Statements, including the notes thereto, and elsewhere in this report. Uncertainties related to the magnitude and duration of COVID-19, the extent to which it will impact our estimated future financial results, worldwide macroeconomic conditions including interest rates, employment rates, consumer spending and health insurance coverage, the speed of the anticipated recovery and governmental and business reactions to the pandemic have increased the complexity of developing these estimates, including the carrying amounts of long-lived assets, and the intangible asset. Actual results may differ significantly from our estimates, including as a result of COVID-19.

Operating Segments

The Company holds all its tangible assets, conducts its operations, and revenues are generated in the U.S. Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Makers in deciding how to allocate resources to an individual segment and in assessing performance. The Company has determined it operates in a single operating segment and has one reportable segment.

Fair Value of Financial Instruments

The Company’s consolidated financial statements include cash, cash equivalents, accounts payable, and accrued liabilities, all of which are short term in nature and, accordingly, approximate fair value. Additionally, prior to the IPO, the Company’s consolidated financial statements included a warrant liability that was carried at fair value and was re-measured at each balance sheet date until it would be exercised or expired. In connection with the IPO, the Warrants were re-evaluated under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480 Distinguishing Liabilities from Equity and reclassified to equity. See Note 13 for a further discussion of the warrants.

It is the Company’s policy, in general, to measure non-financial assets and liabilities at fair value on a nonrecurring basis. The instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (such as evidence of impairment), which, if material, are disclosed in the accompanying footnotes.

The Company measures certain assets and liabilities at fair value in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The guidance in ASC 820 outlines a valuation framework and creates a fair value hierarchy that serves to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company maximizes the use of quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities.

Level 3—Valuations based on unobservable inputs and models that are supported by little or no market activity.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents consist of cash and, if applicable, highly liquid investments with an original maturity of three months or less when purchased, including investments in Money Market Funds. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that equal the amount reflected in the statements of cash flows.

	As of
	December 31, 2020		December 31, 2019
Cash and cash equivalents	$	228,631	$	24,457
Restricted cash		750		750
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	229,381	$	25,207

Amounts included in restricted cash represent those amounts required to be held as a security deposit in the form of letters of credit for the Company’s credit card program and the fleet program.

Concentrations of Risk

Substantially all of the Company’s cash and money market funds are held with a single financial institution. Due to its size, the Company believes this financial institution represents minimal credit risk. Deposits in this institution may exceed the amount of insurance provided on such deposits by the Federal Deposit Insurance Corporation for U.S. institutions. The Company has not experienced any losses on its deposits of cash and cash equivalents. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

The Company is also subject to credit risk from its trade receivables related to its product sales. The Company monitors its exposure within accounts receivable and records a reserve against uncollectible accounts receivable as necessary. The Company extends credit to specialty pharmaceutical distribution companies within the United States. Customer creditworthiness is monitored and collateral is not required. Historically, the Company has not experienced credit losses on its accounts receivable. As of December 31, 2020, three customers accounted for 100% of gross accounts receivable, Caremark LLC (“CVS Caremark”), which accounted for 44% of gross accounts receivable; PANTHERx Specialty Pharmacy LLC (“Pantherx”), which accounted for 23% of gross accounts receivable; and Accredo Health Group, Inc. (“Accredo”), which accounted for 33% of gross accounts receivable.

For the year ended December 31, 2020, three customers accounted for 100% of gross product revenues; CVS Caremark accounted for 40% of gross product revenues; Pantherx accounted for 33% of gross product revenues; and Accredo accounted for 27% of gross product revenues. For the year ended December 31, 2019 two customers accounted for 88% of gross product revenues, CVS Caremark accounted for 59% of gross product revenues and Pantherx accounted for 29% of gross product revenues.

As of December 31, 2019, two customers accounted for 91% of gross accounts receivable; CVS Caremark, which accounted for 72% of gross accounts receivable, and Pantherx, which accounted for 19% of gross accounts receivable.

The Company depends on a single source supplier for its product, product candidates and their active pharmaceutical ingredient.

Inventory

Inventories are valued at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method for all inventories. Our policy is to write down inventory that has become obsolete, inventory that has a cost basis in excess of its expected net realizable value and inventory in excess of expected requirements. The estimate of excess quantities is subjective and primarily dependent on our estimates of future demand for a particular product. If our estimate of future demand changes, we consider the impact on the reserve for excess inventory and adjust the reserve as required. Increases in the reserve are recorded as charges in cost of product sales.

We capitalize inventory costs associated with our products prior to regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. The determination to capitalize inventory costs is based on various factors, including status and expectations of the regulatory approval process, any known safety or efficacy concerns, potential labeling restrictions, and any other impediments to obtaining regulatory approval. We did not capitalize preapproval inventory during 2019.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally between three and ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the term of the lease. The Company’s leasehold improvements primarily relate to its new corporate headquarters in Plymouth Meeting, PA, and are generally being amortized through the end of the lease term in May 2024. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in the statement of operations and comprehensive loss in the period realized.

Intangible Asset

Intangible assets with finite useful lives consist primarily of purchased developed technology and are amortized on a straight-line basis over their estimated useful lives. The estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the associated products and may be modified when circumstances warrant. Such assets are reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount. The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset.

Revenue Recognition

Effective January 1, 2019, the Company adopted ASC 606, Revenue from Contracts with Customers (ASC 606). This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determine those that are performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company has determined that the delivery of its product to its customer constitutes a single performance obligation as there are no other promises to deliver goods or services. Shipping and handling activities are considered to be fulfillment activities and are not considered to be a separate performance obligation. The Company has assessed the existence of a significant financing component in the agreements with its customers. The trade payment terms with its customers do not exceed one year and therefore, no amount of consideration has been allocated as a financing component. Taxes collected related to product sales are remitted to governmental authorities and are excluded from revenue.

Product Sales, Net

The Company began commercial sales of WAKIX in November 2019. The Company sells WAKIX to its customers (a limited number of specialty distributors) that, in turn, distribute WAKIX to patients.

The Company recognizes revenue on sales of WAKIX when the customer obtains control of the product, which occurs at a point in time, typically upon delivery. Product revenues are recorded at the product’s wholesale acquisition costs, net of applicable reserves for variable consideration that are offered within contracts between the Company and its customers, payors, and other indirect customers relating to the sale of WAKIX. Components of variable consideration include government and commercial contracts, product returns, commercial co-payment assistance program transactions, and distribution services fees. These deductions are based on the amounts earned or to be claimed on the related sales and are classified as a current liability or reduction of receivables, based on expected value method and a range of outcomes and are probability weighted in accordance with ASC 606.

The amount of variable consideration which is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognition under contracts will not occur in a future period. The Company’s analyses contemplate the application of the constraint in accordance with ASC 606. Actual amounts of consideration ultimately received may differ from its estimates. If actual results in the future vary from its estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known.

Cost of Product Sold

Cost of product sold includes manufacturing and distribution costs, the cost of drug substance, FDA program fees, royalties due to third parties on net product sales, freight, shipping, handling, storage costs, and salaries of employees involved with production. The Company began capitalizing inventory upon FDA approval of WAKIX with a portion of the inventory sold during the year ended December 31, 2020 produced prior to FDA approval and, therefore, was previously expensed as research and development expense in 2019 in the amount of $1,323. Excluded from cost of product sold shown and included in general and administrative on the consolidated statements of operations and comprehensive loss is amortization of acquired developed technology of $9,843 and $2,815 for the years ended December 31, 2020 and 2019, respectively.

Research and Development Expenses

Research and development costs are expensed as incurred. Liabilities due to third parties in connection with research and development collaborations prior to regulatory approval are expensed as incurred.

Upfront payments and pre-FDA approval milestone payments made for licensing of technology are expensed as research and development in the period in which they are incurred. Advance payments for goods and services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed.

Advertising Expenses

We expensed the costs of advertising, including promotional expenses, as incurred. Advertising expense was $13,301 and $7,072 a for the years ended December 31, 2020 and 2019, respectively.

Stock-Based Compensation

The Company recognizes compensation expense relating to stock-based payment transactions in operating results using a fair value measurement method, in accordance with FASB ASC 718, Compensation-Stock Compensation. ASC 718 requires all stock-based payments to employees to be recognized in operating results as compensation expense based on fair value over the requisite service period of the awards. The vesting periods have a time-based provision consisting of three to five years and expire no more than 10 years after the date of grant. Upon a change of control, certain unvested awards will immediately vest. The Company determines the fair value of stock-based awards using the Black-Scholes option-pricing model, which uses both historical and current market data to estimate fair value. The method incorporates various assumptions, such as the risk-free interest rate, expected volatility, expected dividend yield, and expected life of the options.

On January 1, 2019, the Company early adopted and accounts for stock-based payments granted to nonemployees in accordance with ASU 2018-07, Compensation – Stock Compensation (ASC 718): Improvements to Nonemployee Share – Based Payment Accounting. The Company determines the fair value of the stock-based payment as the fair value of the equity instruments issued. It is measured on the grant date.

The Company also had nonemployee stock awards subject to a performance condition that are recognized based on probable outcome. On November 15, 2019 the Company modified the award to remove the performance condition resulting in $8,400 of noncash expense that is included in the Company’s consolidated results of operations for the year ended December 31, 2019 (see Note 13 for further details).

Basic and Diluted Net Loss per Share

Basic net loss per share is determined using the weighted average number of shares of common stock outstanding during each period. Diluted net income per share includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock and stock options, which would result in the issuance of incremental shares of common stock. The computation of diluted net loss per shares does not include the conversion of securities that would have an anti-dilutive effect. The basic and diluted computations of net loss per share for the Company are the same because the effects of the Company’s convertible securities would be anti-dilutive (see Note 14 for further detail).

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Deferred tax assets may be reduced by a valuation allowance if, based on all available evidence, it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Management judgment is required in determining the period in which a reversal of a valuation allowance should occur. The Company is required to consider all available evidence, both positive and negative, such as historical levels of income and future forecasts of taxable income among other items, in determining whether a full or partial release of its valuation allowance is required. The Company’s accounting for deferred tax consequences represents the best estimate of those future events. The Company presents deferred income taxes on the Consolidated Balance Sheet on a jurisdictional basis as either a net noncurrent asset or liability.

The Company recognizes the effect of income tax positions only if those positions are more likely than not sustainable, based solely on its technical merits and consideration of the relevant taxing authority’s widely understood administrative practices and precedents. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs. At December 31, 2020 and 2019, the Company did not have any unrecognized uncertain tax positions. The Company’s policy is to include any interest and penalties as a component of income tax expense.

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued amended guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities in the balance sheet and disclosing key information about leasing arrangements. The new guidance clarifies the criteria for distinguishing between a finance lease and operating lease, as well as classification between the two types of leases, which is substantially unchanged from the previous lease guidance. Further, the new guidance requires a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset, initially measured at the present value of the lease payments. For finance leases, a lessee should recognize interest on the lease liability separately from amortization of the right-of-use asset. For operating leases, a lessee should recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. The new standard will become effective for the Company’s fiscal year ending December 31, 2022. The Company is currently assessing the impact of this amended guidance and the timing of adoption.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU No. 2016-13 introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022 for companies deemed to be small reporting companies as of November 15, 2019, with early adoption permitted. The Company is currently evaluating the potential impact of adoption of this standard on its results of operations, financial position and cash flows and related disclosures.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in the existing guidance for income taxes and making other minor improvements. The amendments are effective for annual reporting periods beginning after December 15, 2020 with early adoption permitted. The Company is currently evaluating the impact of adopting this new accounting guidance.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), which provides guidance related to reference rate reform. The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. We are currently evaluating the impact of the transition from LIBOR to alternative reference rates but do not expect a significant impact to our consolidated financial statements.

Inventory

12 Months Ended

Dec. 31, 2020

Inventory Disclosure [Abstract]

Inventory

4. INVENTORY

Inventory, net consisted of the following:

	As of
	December 31, 2020			December 31, 2019
Raw materials	$	396		$	384
Work in process		2,660			417
Finished goods		941			287
Inventory, gross		3,997			1,088
Reserve for obsolescence		(174	)		—
Total inventory, net	$	3,823		$	1,088

Intangible Asset

12 Months Ended

Dec. 31, 2020

Intangible Assets Net Excluding Goodwill [Abstract]

Intangible Asset

5. INTANGIBLE ASSET

On August 15, 2019, the Company received FDA approval of WAKIX^® (pitolisant) for the treatment of excessive daytime sleepiness (“EDS”) in adult patients with narcolepsy. This event triggered a milestone payment of $75,000 associated with the License Agreement which the Company capitalized as an intangible asset and paid in November of 2019. The Company determined a useful life of 10 years for such intangible asset, and, as of December 31, 2020 the remaining useful life was 9 years. Prior to this event, all other milestones associated with the License Agreement were expensed through research and development as they did not meet the criteria to be recognized as an intangible asset.

On October 13, 2020, the Company received notice that the FDA approved the NDA for WAKIX^® for the treatment of cataplexy in adult patients with narcolepsy. This event triggered a milestone payment of $100,000 associated with the License Agreement which the Company capitalized as an intangible asset and paid in January of 2021. The Company determined a useful life of 9 years for such intangible asset, and, as of December 31, 2020 the remaining useful life was 9 years.

The Company expects the future annual amortization expense for the unamortized intangible assets to be as follows:

Years ending December 31,
2021	$	18,569
2022		18,569
2023		18,569
2024		18,569
2025		18,569
Total	$	92,845

The gross carrying amount and net book value of the intangible asset is as follows:

	As of
	December 31, 2020			December 31, 2019
Gross Carrying Amount	$	175,000		$	75,000
Accumulated Amortization		(12,657	)		(2,815	)
Net Book Value	$	162,343		$	72,185

License Agreement

12 Months Ended

Dec. 31, 2020

License Agreement [Abstract]

License Agreement

6. LICENSE AGREEMENT

On July 28, 2017, Harmony entered into the License Agreement whereby Harmony acquired the exclusive right to commercialize the pharmaceutical compound pitolisant for the treatment, and/or prevention, of narcolepsy, obstructive sleep apnea, idiopathic hypersomnia, and Parkinson’s disease as well as any other indications unanimously agreed by the parties in the United States and its territories. A milestone payment of $50,000 was due upon acceptance by the FDA of pitolisant’s New Drug Application (“NDA”), which was achieved on February 12, 2019 and was expensed within research and development for the year ended December 31, 2019. A milestone payment of $77,000, including a $2,000 fee, was due upon FDA approval of WAKIX^® (pitolisant) for treatment of EDS in adult patients with narcolepsy, which was achieved on August 14, 2019. The $2,000 payment and $75,000 milestone payment were paid in August and November 2019, respectively. In addition, a payment of $2,000 is due upon the FDA approval of the NDA for WAKIX^® for the treatment of cataplexy in adult patients with narcolepsy (the “Trigger Date”) which was paid in October 2020 and a $100,000 milestone payment which was paid in January 2021. An additional $40,000 milestone payment is due to Bioprojet upon WAKIX attaining $500,000 in aggregate net sales in the United States. The License Agreement also requires sales-based milestone payments, a fixed trademark royalty and a tiered royalty, all based on net sales, which become due and payable to Bioprojet on a quarterly basis. During the year ended December 31, 2020, the Company incurred $25,580 for sales-based, trademark and tiered royalties recognized as cost of product sold. As of December 31, 2020 and 2019, the Company had accrued $9,006 and $938, respectively, for sales-based, trademark and tiered royalties. At December 31, 2020 the Company had accrued $100,000 for the milestone payment to Bioprojet.

Accrued Expenses

12 Months Ended

Dec. 31, 2020

Payables And Accruals [Abstract]

Accrued Expenses

7. ACCRUED EXPENSES

Accrued expenses consist of the following:

	As of
	December 31, 2020		December 31, 2019
Milestone payment	$	100,000	$	—
Royalties due to third parties		9,006		938
Rebates and other sales deductions		7,803		713
Research and development		2,186		894
Selling and marketing		1,905		1,547
Professional fees, consulting, and other services		1,081		510
Debt issuance costs		—		638
Other expenses		746		260
	$	122,727	$	5,500

Debt

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Debt

8. DEBT

Credit Agreements

On February 28, 2019, the Company entered into a multi-draw loan agreement with CRG Servicing LLC for an aggregate of $200,000 (the “CRG Loan”), which matured in March 2025. The Loan bore a fixed rate of 12%. The Loan agreement required compliance with certain financial covenants. The Company could draw three tranches of the Loan based on achieving specific milestones and dates. The Company could elect to pay the interest on the outstanding principal amount as follows: (i) only 7.5% of the 12% per annum in cash, paid quarterly, starting in March 2019, and (ii) 4.5% of the 12% per annum interest as compounded interest, added to the aggregate outstanding principal balance quarterly; the amount of any such compounded interest being a paid-in-kind loan.

As of December 31, 2019, the Company had borrowed $100,000, resulting in cash proceeds received of $94,816, net of issuance costs. The issuance costs of $5,184 were being amortized over the six-year loan term of the CRG Loan. Unamortized debt issuance costs as of December 31, 2019 are $4,592 and are presented in the consolidated balance sheets as a direct deduction from the carrying value of the debt.

On January 9, 2020 the Company entered into a credit agreement with OrbiMed Royalty & Credit Opportunities, LP for an aggregate amount of $200,000 (the “OrbiMed Loan”), which matures in January 2026. Borrowings under the OrbiMed Loan are collateralized by all of the Company’s assets, excluding the intellectual property licensed through the License Agreement. The OrbiMed Loan bears an interest rate equal to the sum of (i) the greater of (a) 1-month LIBOR or (b) 2.00% per annum, plus (ii) 11.00% per annum, paid in cash monthly in arrears on the last day of each month starting in January 2020. At the time of prepayment or repayment of all or any portion of the principal of the OrbiMed Loan, the Company is required to pay an exit fee of 7.0% of the principal amount of the OrbiMed Loan prepaid, repaid, or required to be prepaid or repaid. The Company recorded as a liability and debt discount the exit fee at the origination of the term loan.

In addition to entering into the OrbiMed Loan, the Company extinguished the CRG Loan which required a payoff amount of $120,893 consisting of principal repayment, interest, and exit fees. In connection with extinguishment of the CRG Loan, we recognized a loss on extinguishment of $22,639, which included an exit fee of $18,047 and the write-off of the remaining unamortized debt issuance costs of $4,592. The loss on extinguishment of debt was recorded in loss on debt extinguishment within the Company’s consolidated statements of operations. The net cash received as a result of the transaction, less debt issuance costs of $5,804, was $73,313. These debt issuance costs will be amortized as additional interest expense over the six-year loan term of the OrbiMed Loan. The fair value of the OrbiMed loan as of December 31, 2020 was $245,700.

In connection with the OrbiMed Loan, the Company issued warrants (the “Warrants”) to OrbiMed Royalty & Credit Opportunities, LP on January 9, 2020. See Note 13 for further discussion of the Warrants. Pursuant to the Warrants, OrbiMed Royalty & Credit Opportunities, LP, may purchase up to 410,239 shares of the Company’s Common Stock for an initial exercise price of $16.10 at any time from the date of execution of the Warrants through the expiration date, defined within the Warrants as the earlier of (i) January 9, 2027 and (ii) the closing date of a Corporate Reorganization. The fair value of the Warrants using the Black-Scholes option-pricing model was $2,359 at January 9, 2020. The portion of the OrbiMed Loan proceeds allocated to the warrant liability resulted in a debt discount, which is presented in the consolidated balance sheets as a direct deduction from the carrying value of the debt and is being amortized as additional interest expense over the six-year loan term of the OrbiMed Loan. The unamortized debt discount as of December 31, 2020 is $2,097 and is presented in the consolidated balance sheets as a direct deduction from the carrying value of the debt.

The balances of the OrbiMed Loan as of December 31, 2020 and the CRG Loan as of December 31, 2019 were as follows:

	December 31, 2020			December 31, 2019
Liability component - principal	$	200,000		$	102,538
Exit fee		14,000			—
Unamortized debt discount associated with the exit fee, debt financing costs and discount with warrant financing		(19,750	)		(4,592	)
Liability component - net carrying value	$	194,250		$	97,946

Interest expense related to the OrbiMed Loan and CRG Loan were included in interest expense, net in the Consolidated Statements of Operations as follows:

	Year Ended December 31,
		2020		2019
Interest on principal balance	$	26,203	$	4,231
Interest on PIK		—		2,538
Amortization of deferred financing costs		2,412		592
Total term loan interest expense	$	28,615	$	7,361

Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. COMMITMENTS AND CONTINGENCIES

Litigation

From time to time, the Company is subject to claims and suits arising in the ordinary course of business. The Company accrues such liabilities when they are known, if they are deemed probable and can be reasonably estimated.

During 2019 the Company was involved in ongoing litigation with its former chief executive officer related to arbitration and the value of vested common shares. On October 24, 2019, the Company reached a settlement resulting in $3,466 of general and administrative expense reflected in the Company’s consolidated results of operations for the year ended December 31, 2019.

Lease Agreements

In April 2018, the Company entered into an operating lease for approximately nine thousand square feet of office space in Northbrook, IL, which expired in January 2020.

In June 2018, the Company entered into an operating lease for approximately fifteen thousand square feet of office space in Plymouth Meeting, PA, which expires in May 2024.

In December 2020, the Company entered into an operating lease for approximately thirteen thousand square feet of additional office space in Plymouth Meeting, PA, which expires in May 2024. The term will not commence until the Company takes occupancy in mid-2021.

The terms of the lease payments provide for rental payments on a monthly basis and on a graduated scale. The Company recognizes rent expense on a straight-line basis over the lease period and has accrued for rent expense incurred but not paid. In addition, tenant improvement allowances recorded are amortized as a reduction to rent expense on a straight-line basis over the lease term. Rent expense was $686 for the year ended December 31, 2020, compared to $1,051 for the year ended December 31, 2019. The following table sets forth the lease payment obligations as of December 31, 2020, for the periods indicated below:

Years ending December 31,
2021	$	534
2022		875
2023		892
2024		334
2025		—
Thereafter		—
Total	$	2,635

Convertible Preferred Stock

12 Months Ended

Dec. 31, 2020

Stockholders Equity Note [Abstract]

Convertible Preferred Stock

10. CONVERTIBLE PREFERRED STOCK

Upon the closing of the IPO, all outstanding shares of the Company’s convertible preferred stock were automatically converted into shares of common stock and the accrued dividend payable to holders of the convertible preferred stock was paid out in shares of common stock, resulting in a total of 42,926,630 shares of common stock being issued to former holders of the Company’s convertible preferred stock.

Series A Preferred Stock

On September 22, 2017, the Company issued 270,000,000 shares of Series A convertible preferred stock for a purchase price of $1.00 per share, or $270,000 in the aggregate. On January 8, 2018, the Company issued an additional 15,000,000 shares of Series A convertible preferred stock for a purchase price of $1.00 per share, or $15,000 in the aggregate. As of December 31, 2019, there were 286,000,000 Series A convertible preferred stock authorized of which 285,000,000 were issued and outstanding. Each outstanding share of Series A convertible preferred stock accrued dividends at 10% per annum of the Series A original issue price, subject to adjustment for stock splits, combinations, recapitalizations, stock dividends and similar transactions. Preferred dividends on the Series A convertible preferred stock were cumulative and were compounded annually.

Series B Preferred Stock

On January 8, 2018, the Company issued 8,000,000 shares of Series B convertible preferred stock for a purchase price of $1.25 per share, or $10,000 in the aggregate. As of December 31, 2019, there were 8,030,000 shares of Series B convertible preferred stock authorized, of which 8,000,000 were issued and outstanding. Each outstanding share of Series B convertible preferred stock accrued dividends at 10% per annum of the Series B original issue price, subject to adjustment for stock splits, combinations, recapitalizations, stock dividends and similar transactions. Preferred dividends on the Series B convertible preferred stock were cumulative and were compounded annually.

Series C Preferred Stock

On August 9, 2019, the Company issued 25,510,205 shares of Series C convertible preferred stock for a purchase price of $1.96 per share, or $50,000 in the aggregate. As December 31, 2019, there were 25,600,000 shares of Series C convertible preferred stock authorized, of which 25,510,205 were issued and outstanding. Each outstanding share of Series C convertible preferred stock accrued dividends at 10% per annum of the Series C original issue price, subject to adjustment for stock splits, combinations, recapitalizations, stock dividends and similar transactions. Preferred dividends on the Series C convertible preferred stock were cumulative and were compounded annually.

Dividends

The holders of Series A, Series B, and Series C convertible preferred stock were entitled to receive, when and if declared by the board of directors of the Company, cumulative dividends equal to a 10% per annum of Series A, Series B, and Series C convertible preferred stock. In addition, the holders of the outstanding shares of Series A, Series B, and Series C convertible preferred stock were entitled to receive, when and if declared by the board of directors of the Company, a dividend at least equal to any dividend payable on the Company’s common stock as if all convertible preferred stock had been converted to common stock. No dividends were declared as of December 31, 2019. As part of the Company’s IPO, the Company’s accrued cumulative dividend was paid out to holders of Series A, Series B, and Series C convertible preferred stock in shares of the Company’s common stock and reflects the reverse stock split in connection with the mandatory conversion of the Series A, Series B, and Series C convertible preferred stock into shares of the Company’s common stock.

Stockholders' Equity (Deficit)

12 Months Ended

Dec. 31, 2020

Stockholders Equity Note [Abstract]

Stockholders' Equity (Deficit)

11. STOCKHOLDERS’ EQUITY (DEFICIT)

Common Stock

On August 11, 2020, the Company implemented a 1-for-8.215 reverse stock split of the Company’s common stock. All share and per share data shown in the accompanying financial statements and related notes have been retroactively revised to reflect the reverse stock split with the exception of the preferred stock. Shares of common stock underlying outstanding stock options and other equity instruments were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities. Shares of common stock reserved for issuance upon the conversion of the Company’s Preferred Stock were proportionately reduced. As of August 11, 2020, all outstanding shares of preferred stock and preferred stock dividend were convertible into shares of common stock on a 1-for-8.215 basis.

On August 21, 2020, the Company completed its IPO of common stock, in which it sold 6,151,162 shares, including 802,325 shares pursuant to the underwriters’ over-allotment option. The shares began trading on the Nasdaq Global Market on August 19, 2020. The shares were sold at an IPO price of $24.00 per share for net proceeds of approximately $135,435, after deducting underwriting discounts and commissions and offering expenses of approximately $12,193 incurred by the Company.

The holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of the Company’s stockholders. The holders of common stock do not have any cumulative voting rights. Holders of common stock are entitled to receive ratably any dividends declared by the Company’s board of directors out of funds legally available for that purpose, subject to any preferential dividend rights of any outstanding preferred stock. The Company’s common stock has no preemptive rights, conversion rights or other subscription rights or redemption or sinking fund provisions.

1,217,285 common shares held by an investor were subject to certain forfeiture provisions that are dependent upon the outcome of certain future events. On November 15, 2019, the Company removed the provision associated with this forfeiture resulting in $8,400 of noncash stock compensation expense reflected in the Company’s consolidated results of operations for the year ended December 31, 2019.

Stock Incentive Plan and Stock-based Compensation

12 Months Ended

Dec. 31, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Incentive Plan and Stock-based Compensation

12. STOCK INCENTIVE PLAN AND STOCK-BASED COMPENSATION

Stock Incentive Plan

On August 7, 2017, the Company adopted an equity incentive plan (the “2017 Plan”). Under the 2017 Plan, directors, officers, employees, consultants, and advisors of the Company can be paid incentive compensation measured by the value of the Company’s common shares through grants of stock options, stock appreciation rights, or restricted stock.

In connection with the Company’s IPO, the board of directors adopted, and its stockholders approved, the 2020 Incentive Award Plan (the “2020 Plan”), in order to facilitate the grant of cash and equity incentives to directors, employees (including the Company’s named executive officers) and consultants of the Company and its subsidiaries. Upon the effectiveness of the 2020 Plan, no further grants will be made under the 2017 Plan. However, the 2017 Plan will continue to govern the terms and conditions of outstanding awards granted under it. The 2020 Plan provides for the grant of stock options, including ISOs and NSOs, SARs, restricted stock, dividend equivalents, RSUs and other stock or cash based awards.

Stock options under the 2017 Plan and the 2020 Plan have a 10-year contractual term and vest over the vesting period specified in the applicable award agreement, at achievement of a performance requirement, or upon change of control (as defined in the applicable plan).

Changes in awards granted under the Plan as of December 31, 2020 and 2019, are as follows:

	Number of Awards			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term
Awards outstanding—December 31, 2019		2,375,218		$	8.22		8.33
Awards issued		3,035,400		$	24.54
Awards exercised		(37,947	)	$	8.22
Awards forfeited		(112,545	)	$	10.75
Awards outstanding—December 31, 2020		5,260,126		$	17.58		8.63

As of December 31, 2020 and 2019, stock awards issued under the 2017 and 2020 Plans of 987,538 and 573,098 common shares, respectively, were vested. The Company has elected early adoption of ASU No. 2016-09 to recognize forfeitures as they occur. As a result of the adoption, for the year ended December 31, 2020 and 2019, respectively, the Company reversed $3 and $4 out of stock-based compensation previously recorded.

Value of Stock Options

The Company has valued awards for each of the plans included herein using the Black-Scholes option-pricing model. The Company historically has been a private company and lacks company-specific historical and implied volatility information. Therefore, the Company estimates its expected stock volatility based on historical volatility of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. For options with service-based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for the time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The assumptions used to value the awards are summarized in the following table.

	As of
	December 31, 2020			December 31, 2019
Dividend yield		0.00	%		0.00	%
Expected volatility	55.00 - 95.80		%	95.30 - 99.30		%
Risk-free interest rate	0.32 - 0.56		%	1.60 - 2.59		%
Lack of marketability discount	0.00 - 20.48		%	26.00 - 31.00		%
Expected term (years)	5.4 - 6.5				6.5

The weighted average per share fair value of awards issued under the Plan was $10.06 and $3.45 in 2020 and 2019, respectively.

Stock-based compensation expense was $5,190 and $9,909 for the years ended December 31, 2020 and 2019, respectively, and was recorded in the consolidated statements of operations and comprehensive loss in the following line items:

	Year Ended December 31,
	2020		2019
Research and development expense	$	586	$	287
Sales and marketing expense		703		351
General and administrative expense		3,901		9,271
	$	5,190	$	9,909

Options issued under the 2017 Plan and 2020 Plan are reflected as a component of equity in these consolidated financial statements. Stock appreciation rights are reflected as other non-current liability. The Company will recognize compensation expense for these awards as summarized in the following table.

Years Ending December 31,	Stock Compensation Expense
2021	$	11,046
2022		10,915
2023		9,928
2024		8,949
2025		5,003

Warrants

12 Months Ended

Dec. 31, 2020

Warrants And Rights Note Disclosure [Abstract]

Warrants

13. WARRANTS

In connection with the OrbiMed Loan, the Company issued Warrants to OrbiMed Royalty & Credit Opportunities, LP on January 9, 2020. Pursuant to the Warrants, OrbiMed Royalty & Credit Opportunities, LP, may purchase up to 410,239 shares of the Company’s Common Stock for an initial exercise price of $16.10 at any time from the date of execution of the Warrants through the expiration date, defined within the Warrants as the earlier of (i) January 9, 2027 and (ii) the closing date of a Corporate Reorganization. The fair value of the Warrants using the Black-Scholes option-pricing model was $2,359 on January 9, 2020 and was initially recorded as a warrant liability which was included in warrant liability in the consolidated balance sheet. The portion of the OrbiMed Loan proceeds allocated to the warrant liability resulted in a debt discount, which is presented in the consolidated balance sheets as a direct deduction from the carrying value of the debt and is being amortized as additional interest expense over the six-year loan term of the OrbiMed Loan. The unamortized debt discount as of December 31, 2020 is $2,102 and is presented in the consolidated balance sheet as a direct deduction from the carrying value of the debt. During the year ended December 31, 2020, a loss of $3,109 was recorded in other expense in the consolidated statements of operations due to the change in the fair value of the warrant liability. See footnote 16 for the fair value of the Warrants.

In connection with the IPO, the financial instrument underlying the warrants was converted from the Company’s Series C Preferred Stock to the Company’s Common Stock. As a result of this conversion the Warrants were re-evaluated under ASC 480 Distinguishing Liabilities from Equity and ASC 815 Derivatives and Hedging and reclassified to equity.

A summary of the changes in the warrant liability for the year ended December 31, 2020 is as follows:

Balance, beginning of period	$	—
Fair Value at Issuance		2,359
Change in fair value included in the statement of operations		3,109
Reclassification to equity		(5,468	)
Balance, end of period	$	—

Earnings per Share

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Earnings per Share

14. EARNINGS PER SHARE

For the years ended December 31, 2020 and 2019, the Company used the two-class method to compute net loss per common share because the Company has issued securities (convertible preferred stock) that entitle the holder to participate in dividends and earnings of the Company. Under this method, net income is reduced by the amount of any dividends earned and the accretion of convertible preferred stock to its redemption value during the period. The remaining earnings (undistributed earnings) are allocated to common stock and each series of convertible preferred stock to the extent that each preferred security may share in the earnings as if all of the earnings for the period had been distributed. The total earnings allocated to common stock is then divided by the number of outstanding shares to which the earnings are allocated to determine the earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the convertible preferred stock have no obligation to fund losses.

Diluted net loss per common share is computed under the treasury stock method by using the weighted average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options and warrants. In addition, the Company analyzes the potential dilutive effects of the outstanding convertible preferred stock under the ‘if-converted’ method when calculating diluted earnings per share, in which it is assumed that the outstanding convertible preferred stock converts into common stock at the beginning of the period or when issued if later. The Company reports the more dilutive of the approaches (treasury stock or ‘if converted’) as their diluted net income per share during the period.

The Company has reported a net loss for the years ended December 31, 2020 and 2019, and the weighted average number of shares utilized for basic and diluted net loss per share attributable to common stockholders are the same for these periods because all convertible preferred stock and stock options have been excluded from the computation of diluted weighted-average shares outstanding because such securities would have an antidilutive impact. Additionally, the fair value adjustment for the warrants was excluded from the computation of diluted net loss for the year ended December 31, 2020 since the additional income would have an antidilutive impact.

The following table sets forth the computation of basic and diluted net loss per share:

	Year Ended December 31,
	2020			2019
Numerator
Net loss	$	(36,944	)	$	(151,977	)
Accumulation of dividends on preferred stock		(26,904	)		(35,231	)
Net loss available to common shareholders	$	(63,848	)	$	(187,208	)
Denominator
Net loss per common share - basic	$	(2.48	)	$	(24.07	)
Net loss per common share - diluted	$	(2.48	)	$	(24.07	)
Weighted average number of shares of common stock - basic		25,772,419			7,777,441
Weighted average number of shares of common stock - diluted		25,772,419			7,777,441

Potential common shares issuable upon conversion of preferred stock, exercise of stock options, and exercise of warrants that are excluded from the computation of diluted weighted-average shares outstanding as well as the warrant fair value adjustments excluded from the numerator are as follows:

	Year Ended December 31,
	2020		2019
Stock options to purchase common stock		5,260,126		2,271,632
Convertible preferred stock		—		36,891,576
Warrants		410,239		—
Total		5,670,365		39,163,208

Adjustment for warrants	$	3,109	$	—

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

15. income taxes

Details of the provision for income taxes consist of the following:

	Year Ended December 31,
	2020			2019
Federal	$	(6,416	)	$	(32,508	)
State		4,198			(9,641	)
Valuation allowance		2,218			42,149
	$	—		$	—
Current	$	—		$	—
Deferred		(2,218	)		(42,149	)
Valuation allowance		2,218			42,149
Total	$	—		$	—

The reasons for the difference between the statutory federal income tax rate and the Company’s effective income tax rate as of December 31, 2020 and 2019 are as follows:

	Year Ended December 31,
	2020			2019
Federal income tax rate		21.0	%		21.0	%
State taxes		(11.4	)		6.3
Other		(3.6	)		0.4
Valuation allowance		(6.0	)		(27.7	)
Total		—	%		—	%

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2020 and 2019, are as follows:

	As of December 31,
	2020					2019
	Assets			Liabilities		Assets			Liabilities
Acquired in-process research and development	$	45,346		$	—	$	50,628		$	—
Net operating loss carryforward		44,983			—		41,427			—
Accrued compensation		4,075			—		5,158			—
Credits		1,604			—		1,682			—
Disallowed interest		7,751			—		1,661			—
Deferred rent		121			—		160			—
Fixed assets		65			—		46			—
Inventory		100			—		—			—
Other		71			1,242		61			167
Total	$	104,116			1,242	$	100,823			167
Net deferred tax asset	$	102,874		$	—	$	100,656		$	—
Valuation allowance	$	(102,874	)	$	—	$	(100,656	)	$	—
Total	$	—		$	—	$	—		$	—

The Company has considered available positive and negative evidence to estimate if sufficient future taxable income will be generated to allow utilization of the existing deferred tax assets. The Company has incurred operating losses and negative cash flows from operations since inception. In light of these considerations, as well as the uncertainty as to when the Company might generate taxable income, the Company has recorded a full valuation allowance of $102,874, which represents an increase of $2,218 in the Company’s valuation allowance from December 31, 2019 to December 31, 2020. The amount of the net deferred tax asset considered realizable could be adjusted in the future if estimates of taxable income change or if objective negative evidence in no longer present and additional weight may be given to subjective evidence.

As of December 31, 2020 and 2019, the Company has approximately $159,395 and $147,823, respectively, of federal net operating loss ("NOL") carryforward available to offset future federal taxable income. The Company also has approximately $157,743 and $139,336 of state NOL carryforwards as of December 31, 2020 and 2019, respectively, available to offset future state taxable income. All of the Company's tax years remain open to examination by federal and state taxing authorities. The Company's pre-2018 federal NOLs expire in 2037 whereas the Company's NOLs arising in 2018, and subsequent years, have an unlimited carryforward period. The Company's state NOLs begin to expire in 2037. Utilization of the net operating loss carryforwards may be subject to a substantial limitation due to ownership change limitations that may occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), as well as similar state provisions. These ownership changes may limit the amount of net operating loss and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups.

As of December 31, 2020 and 2019, the Company has federal tax credits of $1,603 and $837, respectively. These credits begin to expire in 2037.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Financial Instruments

12 Months Ended

Dec. 31, 2020

Financial Instruments [Abstract]

Financial Instruments

16. FINANCIAL INSTRUMENTS

The Company primarily applies the market approach to determine the fair value of financial instruments that are measured at fair value on a recurring basis. There were no changes to its valuation techniques used to determine the fair value of financial instruments during the year ended December 31, 2020. The Company’s financial assets and liabilities which are measured at fair value on a recurring basis were comprised of cash, cash equivalents, and restricted cash of $229,381 and $25,207 as of December 31, 2020 and 2019, respectively, based on Level 1 inputs.

The Company estimates the fair value of the warrant liability using the Black-Scholes option-pricing model at each balance sheet date or when specific events occur. As discussed in Note 13, in connection with the Company’s IPO the warrant fair value was updated on August 19, 2020 with the change in fair value recorded in current period earnings as other expense in the consolidated statement of operations and reclassified to equity. During the year ended December 31, 2020, a loss of $3,109 was recorded in other expense in the consolidated statements of operations due to the change in the fair value of the warrant liability.

The range of assumptions used to determine the fair value of the warrant liability through August 19, 2020 were as follows:

Dividend yield	0.0	%
Expected volatility	54.2% - 68.8	%
Risk-free interest rate	0.17% - 1.56	%
Lack of marketability discount	0.0	%
Expected term (years)	1 - 4.5

Related-party Transactions

12 Months Ended

Dec. 31, 2020

Related-party Transactions

17. RELATED-PARTY TRANSACTIONS

The Company was party to a management agreement for professional services provided by a related party, Paragon. The related party is an entity that shares common ownership with the Company. In addition, the Chairman of the Company’s board of directors was the President and owner of the entity. For the year ended December 31, 2020 and 2019, respectively, the Company incurred $7,384 and $5,378, respectively, in management fee expense and other expenses to this related party, which are included in general and administrative expense in the consolidated statements of operations and comprehensive loss. The Company terminated the Management Services Agreement upon the consummation of its IPO. The Company is also party to a right of use agreement with the related party whereby it has access to and the right to use certain office space leased by the related party in Chicago, Illinois. In addition, the Company had participated in certain transactions with separate related parties that also share common ownership with the Company, primarily related to combined employee health plans. As of December 31, 2020 and 2019, respectively, the amounts due to related parties included in current liabilities were $0 and $1,208, respectively, and the amount included in other assets was $1 and $210, respectively.

Subsequent Events

12 Months Ended

Dec. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

18. SUBSEQUENT EVENTS

On January 6, 2021, the Company paid the $100,000 milestone payment to Bioprojet for the FDA approval of the NDA for WAKIX for the treatment of cataplexy in adult patients with narcolepsy.

In January and February 2021, the board of directors granted to various employees 882,606 employee stock options to purchase the Company’s common stock. These awards were granted under the 2020 Plan and vest over a four-year period where 50% cliff vest after the second year and monthly thereafter.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation

Significant Risks and Uncertainties

Use of Estimates

Operating Segments

Fair Value of Financial Instruments

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities.

Level 3—Valuations based on unobservable inputs and models that are supported by little or no market activity.

Cash, Cash Equivalents and Restricted Cash

	As of
	December 31, 2020		December 31, 2019
Cash and cash equivalents	$	228,631	$	24,457
Restricted cash		750		750
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	229,381	$	25,207

Amounts included in restricted cash represent those amounts required to be held as a security deposit in the form of letters of credit for the Company’s credit card program and the fleet program.

Concentrations of Risk

The Company depends on a single source supplier for its product, product candidates and their active pharmaceutical ingredient.

Inventory

Property and Equipment

Intangible Assets

Intangible Asset

Revenue Recognition

Product Sales, Net

The Company began commercial sales of WAKIX in November 2019. The Company sells WAKIX to its customers (a limited number of specialty distributors) that, in turn, distribute WAKIX to patients.

Cost of Product Sold

Research and Development Expenses

Advertising Expenses

We expensed the costs of advertising, including promotional expenses, as incurred. Advertising expense was $13,301 and $7,072 a for the years ended December 31, 2020 and 2019, respectively.

Stock-Based Compensation

Basic and Diluted Net Loss per Share

Income Taxes

Emerging Growth Company Status

Recently Issued Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that equal the amount reflected in the statements of cash flows.

	As of
	December 31, 2020		December 31, 2019
Cash and cash equivalents	$	228,631	$	24,457
Restricted cash		750		750
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	229,381	$	25,207

Inventory (Tables)

12 Months Ended

Dec. 31, 2020

Inventory Disclosure [Abstract]

Schedule of Inventory Net

Inventory, net consisted of the following:

	As of
	December 31, 2020			December 31, 2019
Raw materials	$	396		$	384
Work in process		2,660			417
Finished goods		941			287
Inventory, gross		3,997			1,088
Reserve for obsolescence		(174	)		—
Total inventory, net	$	3,823		$	1,088

Intangible Asset (Table)

12 Months Ended

Dec. 31, 2020

Intangible Assets Net Excluding Goodwill [Abstract]

Schedule of Expected Future Annual Amortization Expense for Unamortized Intangible Assets

The Company expects the future annual amortization expense for the unamortized intangible assets to be as follows:

Years ending December 31,
2021	$	18,569
2022		18,569
2023		18,569
2024		18,569
2025		18,569
Total	$	92,845

Schedule of Gross Carrying Amount and Net Book Value of Intangible Asset

The gross carrying amount and net book value of the intangible asset is as follows:

	As of
	December 31, 2020			December 31, 2019
Gross Carrying Amount	$	175,000		$	75,000
Accumulated Amortization		(12,657	)		(2,815	)
Net Book Value	$	162,343		$	72,185

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2020

Payables And Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses consist of the following:

	As of
	December 31, 2020		December 31, 2019
Milestone payment	$	100,000	$	—
Royalties due to third parties		9,006		938
Rebates and other sales deductions		7,803		713
Research and development		2,186		894
Selling and marketing		1,905		1,547
Professional fees, consulting, and other services		1,081		510
Debt issuance costs		—		638
Other expenses		746		260
	$	122,727	$	5,500

Debt (Tables)

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Balances of OrbiMed Loan and CRG Loan

The balances of the OrbiMed Loan as of December 31, 2020 and the CRG Loan as of December 31, 2019 were as follows:

	December 31, 2020			December 31, 2019
Liability component - principal	$	200,000		$	102,538
Exit fee		14,000			—
Unamortized debt discount associated with the exit fee, debt financing costs and discount with warrant financing		(19,750	)		(4,592	)
Liability component - net carrying value	$	194,250		$	97,946

Interest Expense Related to OrbiMed Loan and CRG Loan

Interest expense related to the OrbiMed Loan and CRG Loan were included in interest expense, net in the Consolidated Statements of Operations as follows:

	Year Ended December 31,
		2020		2019
Interest on principal balance	$	26,203	$	4,231
Interest on PIK		—		2,538
Amortization of deferred financing costs		2,412		592
Total term loan interest expense	$	28,615	$	7,361

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2020

Commitments And Contingencies Disclosure [Abstract]

Summary of Lease Payment Obligations

The following table sets forth the lease payment obligations as of December 31, 2020, for the periods indicated below:

Years ending December 31,
2021	$	534
2022		875
2023		892
2024		334
2025		—
Thereafter		—
Total	$	2,635

Stock Incentive Plan and Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Changes in Awards Granted

Changes in awards granted under the Plan as of December 31, 2020 and 2019, are as follows:

	Number of Awards			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term
Awards outstanding—December 31, 2019		2,375,218		$	8.22		8.33
Awards issued		3,035,400		$	24.54
Awards exercised		(37,947	)	$	8.22
Awards forfeited		(112,545	)	$	10.75
Awards outstanding—December 31, 2020		5,260,126		$	17.58		8.63

Summary of Assumptions Used to Value Awards

The assumptions used to value the awards are summarized in the following table.

	As of
	December 31, 2020			December 31, 2019
Dividend yield		0.00	%		0.00	%
Expected volatility	55.00 - 95.80		%	95.30 - 99.30		%
Risk-free interest rate	0.32 - 0.56		%	1.60 - 2.59		%
Lack of marketability discount	0.00 - 20.48		%	26.00 - 31.00		%
Expected term (years)	5.4 - 6.5				6.5

Summary of Stock-based Compensation Expense

	Year Ended December 31,
	2020		2019
Research and development expense	$	586	$	287
Sales and marketing expense		703		351
General and administrative expense		3,901		9,271
	$	5,190	$	9,909

Summary of Future Compensation Expense

The Company will recognize compensation expense for these awards as summarized in the following table.

Years Ending December 31,	Stock Compensation Expense
2021	$	11,046
2022		10,915
2023		9,928
2024		8,949
2025		5,003

Warrants (Tables)

12 Months Ended

Dec. 31, 2020

Warrants And Rights Note Disclosure [Abstract]

Summary of Changes in Warrant Liability

A summary of the changes in the warrant liability for the year ended December 31, 2020 is as follows:

Balance, beginning of period	$	—
Fair Value at Issuance		2,359
Change in fair value included in the statement of operations		3,109
Reclassification to equity		(5,468	)
Balance, end of period	$	—

Earnings per Share (Tables)

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Summary of Computation of Basic and Diluted Net Loss per Share

The following table sets forth the computation of basic and diluted net loss per share:

	Year Ended December 31,
	2020			2019
Numerator
Net loss	$	(36,944	)	$	(151,977	)
Accumulation of dividends on preferred stock		(26,904	)		(35,231	)
Net loss available to common shareholders	$	(63,848	)	$	(187,208	)
Denominator
Net loss per common share - basic	$	(2.48	)	$	(24.07	)
Net loss per common share - diluted	$	(2.48	)	$	(24.07	)
Weighted average number of shares of common stock - basic		25,772,419			7,777,441
Weighted average number of shares of common stock - diluted		25,772,419			7,777,441

Summary of Antidilutive Securities Excluded from Computation of Earnings Per Share

	Year Ended December 31,
	2020		2019
Stock options to purchase common stock		5,260,126		2,271,632
Convertible preferred stock		—		36,891,576
Warrants		410,239		—
Total		5,670,365		39,163,208

Adjustment for warrants	$	3,109	$	—

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Taxes

Details of the provision for income taxes consist of the following:

	Year Ended December 31,
	2020			2019
Federal	$	(6,416	)	$	(32,508	)
State		4,198			(9,641	)
Valuation allowance		2,218			42,149
	$	—		$	—
Current	$	—		$	—
Deferred		(2,218	)		(42,149	)
Valuation allowance		2,218			42,149
Total	$	—		$	—

Schedule of Difference Between Statutory Federal Income Tax Rate

The reasons for the difference between the statutory federal income tax rate and the Company’s effective income tax rate as of December 31, 2020 and 2019 are as follows:

	Year Ended December 31,
	2020			2019
Federal income tax rate		21.0	%		21.0	%
State taxes		(11.4	)		6.3
Other		(3.6	)		0.4
Valuation allowance		(6.0	)		(27.7	)
Total		—	%		—	%

Schedule of Significant Components of Company's Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2020 and 2019, are as follows:

	As of December 31,
	2020					2019
	Assets			Liabilities		Assets			Liabilities
Acquired in-process research and development	$	45,346		$	—	$	50,628		$	—
Net operating loss carryforward		44,983			—		41,427			—
Accrued compensation		4,075			—		5,158			—
Credits		1,604			—		1,682			—
Disallowed interest		7,751			—		1,661			—
Deferred rent		121			—		160			—
Fixed assets		65			—		46			—
Inventory		100			—		—			—
Other		71			1,242		61			167
Total	$	104,116			1,242	$	100,823			167
Net deferred tax asset	$	102,874		$	—	$	100,656		$	—
Valuation allowance	$	(102,874	)	$	—	$	(100,656	)	$	—
Total	$	—		$	—	$	—		$	—

Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2020

Financial Instruments [Abstract]

Financial Instruments -Schedule of Range of Assumptions Used to Determine Fair Value of Warrant Liability

The range of assumptions used to determine the fair value of the warrant liability through August 19, 2020 were as follows:

Dividend yield	0.0	%
Expected volatility	54.2% - 68.8	%
Risk-free interest rate	0.17% - 1.56	%
Lack of marketability discount	0.0	%
Expected term (years)	1 - 4.5

Organization and Description of Business - Additional Information (Details)
$ / shares in Units, $ in Thousands

12 Months Ended

Aug. 21, 2020

USD ($)

$ / shares

Aug. 11, 2020

Dec. 31, 2020

USD ($)

Organization And Description Of Business [Line Items]

Proceeds from issuance of common stock upon initial public offering | $

$ 147,628

Underwriting discounts and commissions and offering expenses | $

$ 12,193

Purchase of common stock upon exercise of warrants

410,239

Reverse stock split ratio, description

1-for-8.215

Reverse stock split ratio

0.1217

Common Stock

Organization And Description Of Business [Line Items]

Issuance of stock upon initial public offering, net of issuance costs, Shares

^[1]

6,151,162

Conversion of Series A, B, C convertible stock to common stock, Shares

42,926,630

^[1]

Common Stock | IPO

Organization And Description Of Business [Line Items]

Issuance of stock upon initial public offering, net of issuance costs, Shares

6,151,162

Shares issued, price per share | $ / shares

$ 24.00

Proceeds from issuance of common stock upon initial public offering | $

$ 135,435

Underwriting discounts and commissions and offering expenses | $

$ 12,193

Common Stock | Over-Allotment Option

Organization And Description Of Business [Line Items]

Issuance of stock upon initial public offering, net of issuance costs, Shares

802,325

[1]	Common stock of Harmony Biosciences Holdings, Inc.

Liquidity and Capital Resources - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Liquidity And Capital Resources [Line Items]
Accumulated deficit	$ 488,195	$ 422,862
Cash and cash equivalents	228,631	24,457
Proceeds from issuance of common stock, net	$ 135,435
OrbiMed Royalty & Credit Opportunities, LP.
Liquidity And Capital Resources [Line Items]
Aggregate proceeds from loan		$ 200,000

Summary of Significant Accounting Policies - Additional Information (Details)	12 Months Ended
	Dec. 31, 2020 USD ($) Product Segment Customer	Dec. 31, 2019 USD ($) Customer
Summary Of Significant Accounting Policies [Line Items]
Number of approved commercial products \| Product	1
Number of operating segments \| Segment	1
Property and equipment, estimated useful lives of the assets	generally between three and ten years
Capitalized research and development expense		$ 1,323,000
Amortization of acquired developed technology	$ 9,843,000	2,815,000
Advertising expense	$ 13,301,000	7,072,000
Grant date expiration period	10 years
Description of modification award	On November 15, 2019 the Company modified the award to remove the performance condition
Noncash expense		8,400
Unrecognized uncertain tax positions	$ 0	$ 0
Minimum
Summary Of Significant Accounting Policies [Line Items]
Time-based vesting period	3 years
Maximum
Summary Of Significant Accounting Policies [Line Items]
Time-based vesting period	5 years
Recognized income tax positions	$ 50,000
Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Number of customers \| Customer	3	2
Product Revenues
Summary Of Significant Accounting Policies [Line Items]
Number of customers \| Customer	3	2
Three Customers \| Accounts Receivable \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	100.00%
Three Customers \| Product Revenues \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	100.00%
Two Customers \| Accounts Receivable \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage		91.00%
Two Customers \| Product Revenues \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage		88.00%
Caremark LLC \| Accounts Receivable \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	44.00%	72.00%
Caremark LLC \| Product Revenues \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	40.00%	59.00%
PANTHERx Specialty Pharmacy LLC \| Accounts Receivable \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	23.00%	19.00%
PANTHERx Specialty Pharmacy LLC \| Product Revenues \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	33.00%	29.00%
Accredo Health Group, Inc \| Accounts Receivable \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	33.00%
Accredo Health Group, Inc \| Product Revenues \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	27.00%

Summary of Significant Accounting Policies - Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Cash and cash equivalents	$ 228,631	$ 24,457
Restricted cash	750	750
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$ 229,381	$ 25,207	$ 84,023

Inventory - Schedule of Inventory Net (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 396	$ 384
Work in process	2,660	417
Finished goods	941	287
Inventory, gross	3,997	1,088
Reserve for obsolescence	(174)
Total inventory, net	$ 3,823	$ 1,088

Intangible Asset - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended				12 Months Ended
	Jan. 31, 2021	Oct. 31, 2020	Nov. 30, 2019	Aug. 31, 2019	Dec. 31, 2020
Finite Lived Intangible Assets [Line Items]
License agreement milestone payments paid			$ 75,000	$ 2,000
Useful life of intangible asset	9 years				10 years
Remaining useful life					9 years
Upon FDA Approval of WAKIX
Finite Lived Intangible Assets [Line Items]
License agreement milestone payments paid		$ 2,000
Upon FDA Approval of WAKIX \| Subsequent Event
Finite Lived Intangible Assets [Line Items]
License agreement milestone payments paid	$ 100,000

Intangible Asset - Schedule of Expected Future Annual Amortization Expense for Unamortized Intangible Assets (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Finite Lived Intangible Assets Net Amortization Expense Rolling Maturity [Abstract]
2021	$ 18,569
2022	18,569
2023	18,569
2024	18,569
2025	18,569
Total	$ 92,845

Intangible Asset - Schedule of Gross Carrying Amount and Net Book Value of Intangible Asset (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Intangible Assets Net Excluding Goodwill [Abstract]
Gross Carrying Amount	$ 175,000	$ 75,000
Accumulated Amortization	(12,657)	(2,815)
Net Book Value	$ 162,343	$ 72,185

License Agreement - Additional Information (Details) - USD ($) $ in Thousands			1 Months Ended				12 Months Ended
	Jan. 06, 2021	Aug. 14, 2019	Jan. 31, 2021	Oct. 31, 2020	Nov. 30, 2019	Aug. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Feb. 12, 2019
License Agreement [Line Items]
License agreement milestone payments paid					$ 75,000	$ 2,000
Cost of product sold							$ 27,738	$ 1,577
Accrued Sales Based Trademark and Royalties							9,006	$ 938
Accrued milestone payment							100,000
Subsequent Event
License Agreement [Line Items]
License agreement, milestone payment due			$ 100,000
Upon Acceptance by FDA of Pitolisant’s
License Agreement [Line Items]
License agreement, milestone payment due									$ 50,000
Upon FDA Approval of WAKIX
License Agreement [Line Items]
License agreement, milestone payment due		$ 77,000
Licensing agreement milestone fees		$ 2,000
License agreement milestone payments paid				$ 2,000
Upon FDA Approval of WAKIX \| Subsequent Event
License Agreement [Line Items]
License agreement milestone payments paid			$ 100,000
Sales-based, Trademark and Tiered Royalties
License Agreement [Line Items]
Cost of product sold							25,580
Bioprojet
License Agreement [Line Items]
Accrued milestone payment							100,000
Bioprojet \| Upon FDA Approval of WAKIX \| Subsequent Event
License Agreement [Line Items]
License agreement milestone payments paid	$ 100,000
Bioprojet \| United States
License Agreement [Line Items]
Amount of Aggregate Net Sales Attaining							500,000
Bioprojet \| Attaining $500,000 Aggregate Net Sales \| United States \| Upon FDA Approval of WAKIX
License Agreement [Line Items]
License agreement, additional milestone payment due							$ 40,000

Accrued Expenses -Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Payables And Accruals [Abstract]
Milestone payment	$ 100,000
Royalties due to third parties	9,006	$ 938
Rebates and other sales deductions	7,803	713
Research and development	2,186	894
Selling and marketing	1,905	1,547
Professional fees, consulting, and other services	1,081	510
Debt issuance costs		638
Other expenses	746	260
Accrued expenses	$ 122,727	$ 5,500

Debt - Additional Information (Details)			12 Months Ended
Debt - Additional Information (Details)	Jan. 09, 2020 USD ($) $ / shares shares	Feb. 28, 2019 USD ($) Tranche	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Aug. 21, 2020 shares
Debt Instrument [Line Items]
Loss on debt extinguishment			$ (22,639,000)
Purchase of common stock upon exercise of warrants \| shares					410,239
Fair value of warrants			3,109,000
OrbiMed Royalty & Credit Opportunities, LP.
Debt Instrument [Line Items]
Purchase of common stock upon exercise of warrants \| shares	410,239
Warrants initial exercise price \| $ / shares	$ 16.10
Fair value of warrants	$ 2,359,000		3,109,000
OrbiMed Royalty & Credit Opportunities, LP. \| Warrants
Debt Instrument [Line Items]
Unamortized debt issuance costs			2,097,000
Multi-draw Loan Agreement \| CRG Servicing LLC
Debt Instrument [Line Items]
Aggregate principal amount		$ 200,000,000
Maturity date		Mar. 31, 2025
Fixed interest rate		12.00%
Number of tranches \| Tranche		3
Percentage of interest payable in cash		7.50%
Percentage of Compounded interest rate		4.50%
Long-term Debt, Gross				$ 100,000,000
Cash proceeds received				94,816,000
Amortized issuance costs				$ 5,184,000
Term of loan				6 years
Unamortized debt issuance costs				$ 4,592,000
Extinguishment of loan, amount	120,893,000
Loss on debt extinguishment	22,639,000
Exit fee	18,047,000
Write-off of the remaining unamortized debt issuance costs	4,592,000
Credit Agreement \| CRG Servicing LLC
Debt Instrument [Line Items]
Long-term Debt, Gross				$ 102,538,000
Credit Agreement \| OrbiMed Royalty & Credit Opportunities, LP.
Debt Instrument [Line Items]
Aggregate principal amount	$ 200,000,000
Maturity date	Jan. 31, 2026
Long-term Debt, Gross			200,000,000
Cash proceeds received	$ 73,313,000
Amortized issuance costs	$ 5,804,000
Term of loan	6 years
Variable interest rate	2.00%
Basis spread on variable rate	11.00%
Debt instrument exit fee percentage	7.00%
Fair value of loan			$ 245,700,000

Debt - Balances of OrbiMed Loan and CRG Loan (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Liability component - net carrying value	$ 194,250	$ 97,946
Credit Agreement \| OrbiMed
Debt Instrument [Line Items]
Liability component - principal	200,000
Exit fee	14,000
Unamortized debt discount associated with the exit fee, debt financing costs and discount with warrant financing	(19,750)
Liability component - net carrying value	$ 194,250
Credit Agreement \| CRG Servicing LLC
Debt Instrument [Line Items]
Liability component - principal		102,538
Unamortized debt discount associated with the exit fee, debt financing costs and discount with warrant financing		(4,592)
Liability component - net carrying value		$ 97,946

Debt - Interest Expense Related to OrbiMed Loan and CRG Loan (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Noncash paid-in-kind interest expense		$ 2,538
Debt issuance costs amortization	$ 2,412	592
Credit Agreement \| OrbiMed and CRG
Debt Instrument [Line Items]
Interest on principal balance	26,203	4,231
Noncash paid-in-kind interest expense		2,538
Debt issuance costs amortization	2,412	592
Total term loan interest expense	$ 28,615	$ 7,361

Commitments and Contingencies - Additional Information (Details) $ in Thousands		1 Months Ended		12 Months Ended
	Oct. 24, 2019 USD ($)	Jun. 30, 2018 ft²	Apr. 30, 2018 ft²	Dec. 31, 2020 USD ($) ft²	Dec. 31, 2019 USD ($)
Loss Contingencies [Line Items]
Litigation settlement, amount \| $	$ 3,466
Rent expense \| $				$ 686	$ 1,051
Northbrook, IL
Loss Contingencies [Line Items]
Operating lease square feet of office space			9,000
Operating lease expiration month and year			2020-01
Plymouth Meeting, PA
Loss Contingencies [Line Items]
Operating lease square feet of office space		15,000
Operating lease expiration month and year		2024-05
Chicago, IL
Loss Contingencies [Line Items]
Operating lease square feet of office space				13,000
Operating lease expiration month and year				2024-05

Commitments and Contingencies - Summary of Lease Payment Obligations (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Commitments And Contingencies Disclosure [Abstract]
2021	$ 534
2022	875
2023	892
2024	334
Total	$ 2,635

Convertible Preferred Stock - Additional Information (Details) - USD ($)

12 Months Ended

Aug. 21, 2020

Dec. 31, 2020

Dec. 31, 2019

Aug. 09, 2019

Dec. 31, 2018

Jan. 08, 2018

Sep. 22, 2017

Class Of Stock [Line Items]

Convertible preferred stock, shares outstanding

318,510,205

293,000,000

Convertible preferred stock aggregate amount

$ 411,275,000

$ 324,201,000

Preferred stock dividend declared

$ 0

Series A Convertible Preferred Stock

Class Of Stock [Line Items]

Convertible preferred stock, shares authorized

286,000,000

Convertible preferred stock, shares issued

285,000,000

15,000,000

270,000,000

Convertible preferred stock, shares outstanding

285,000,000

Convertible preferred stock, purchase price

$ 1.00

Convertible preferred stock aggregate amount

$ 348,203,000

$ 15,000,000

$ 270,000,000

Percentage preferred stock accrued dividends

10.00%

Series B Convertible Preferred Stock

Class Of Stock [Line Items]

Convertible preferred stock, shares authorized

8,030,000

Convertible preferred stock, shares issued

8,000,000

Convertible preferred stock, shares outstanding

8,000,000

Convertible preferred stock, purchase price

$ 1.25

Convertible preferred stock aggregate amount

$ 12,023,000

$ 10,000,000

Percentage preferred stock accrued dividends

10.00%

Series C Convertible Preferred Stock

Class Of Stock [Line Items]

Convertible preferred stock, shares authorized

25,600,000

Convertible preferred stock, shares issued

25,510,205

Convertible preferred stock, shares outstanding

25,510,205

Convertible preferred stock, purchase price

$ 1.96

Convertible preferred stock aggregate amount

$ 51,051,000

$ 50,000,000

Percentage preferred stock accrued dividends

10.00%

Common Stock

Class Of Stock [Line Items]

Conversion of Series A, B, C convertible stock to common stock, Shares

42,926,630

^[1]

[1]	Common stock of Harmony Biosciences Holdings, Inc.

Stockholders' Equity (Deficit) - Additional Information (Details)
$ / shares in Units, $ in Thousands

12 Months Ended

Aug. 21, 2020

USD ($)

$ / shares

Aug. 11, 2020

Nov. 15, 2019

USD ($)

Dec. 31, 2020

USD ($)

Dec. 31, 2019

USD ($)

Class Of Stock [Line Items]

Reverse stock split ratio, description

1-for-8.215

Reverse stock split ratio

0.1217

Preferred stock, conversion basis

1-for-8.215

Preferred stock conversion ratio

0.1217

Net proceeds from initial public offering | $

$ 147,628

Common stock, voting rights

one vote for each share

Common stock number of shares subject to forfeiture provisions | shares

1,217,285

Noncash stock compensation expense | $

$ 8,400

$ 4,693

$ 9,909

Common Stock

Class Of Stock [Line Items]

Issuance of shares upon initial public offering | shares

^[1]

6,151,162

Common Stock | IPO

Class Of Stock [Line Items]

Issuance of shares upon initial public offering | shares

6,151,162

Shares issued, price per share | $ / shares

$ 24.00

Net proceeds from initial public offering | $

$ 135,435

Underwriting discounts and commissions and offering expenses | $

$ 12,193

Common Stock | Over-Allotment Option

Class Of Stock [Line Items]

Issuance of shares upon initial public offering | shares

802,325

[1]	Common stock of Harmony Biosciences Holdings, Inc.

Stock Incentive Plan and Stock-based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options contractual term	10 years
Stock-based compensation expense (income)	$ (3)	$ (4)
Weighted average per share fair value of awards issued	$ 10.06	$ 3.45
Stock-based compensation expense	$ 5,190	$ 9,909
2017 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options contractual term	10 years
2020 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options contractual term	10 years
2017 and 2020 Plans \| Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock vested	987,538	573,098

Stock Incentive Plan and Stock-based Compensation - Summary of Changes in Awards Granted (Details) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of Awards, Awards outstanding, Beginning balance	2,375,218
Number of Awards, Awards issued	3,035,400
Number of Awards, Awards exercised	(37,947)
Number of Awards, Awards forfeited	(112,545)
Number of Awards, Awards outstanding, Ending balance	5,260,126	2,375,218
Weighted-Average Exercise Price, Awards outstanding, Beginning balance	$ 8.22
Weighted-Average Exercise Price, Awards issued	24.54
Weighted-Average Exercise Price, Awards exercised	8.22
Weighted-Average Exercise Price, Awards forfeited	10.75
Weighted-Average Exercise Price, Awards outstanding, Ending balance	$ 17.58	$ 8.22
Weighted-Average Remaining Contractual Term, Balance	8 years 7 months 17 days	8 years 3 months 29 days

Stock Incentive Plan and Stock-based Compensation - Summary of Assumptions Used to Value Awards (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Dividend yield	0.00%	0.00%
Expected volatility, minimum	55.00%	95.30%
Expected volatility, maximum	95.80%	99.30%
Risk-free interest rate, minimum	0.32%	1.60%
Risk-free interest rate, maximum	0.56%	2.59%
Expected term (years)		6 years 6 months
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Lack of marketability discount	0.00%	26.00%
Expected term (years)	5 years 4 months 24 days
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Lack of marketability discount	20.48%	31.00%
Expected term (years)	6 years 6 months

Stock Incentive Plan and Stock-based Compensation - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 5,190	$ 9,909
Research and Development Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	586	287
Sales and Marketing Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	703	351
General and Administrative Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 3,901	$ 9,271

Stock Incentive Plan and Stock-based Compensation - Summary of Future Compensation Expense (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
2021	$ 11,046
2022	10,915
2023	9,928
2024	8,949
2025	$ 5,003

Warrants - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Jan. 09, 2020	Dec. 31, 2020	Aug. 21, 2020
Class Of Warrant Or Right [Line Items]
Purchase of common stock upon exercise of warrants			410,239
Fair value of warrants		$ 3,109
OrbiMed Royalty & Credit Opportunities, LP.
Class Of Warrant Or Right [Line Items]
Purchase of common stock upon exercise of warrants	410,239
Warrants initial exercise price	$ 16.10
Unamortized debt discount		2,102
Fair value of warrants	$ 2,359	$ 3,109
Warrants \| OrbiMed Royalty & Credit Opportunities, LP.
Class Of Warrant Or Right [Line Items]
Fair value of the Warrants	$ 2,359

Warrants - Summary of Changes in Warrant (Details) - Warrants $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value at Issuance	$ 2,359
Change in fair value included in the statement of operations	3,109
Reclassification to equity	$ (5,468)

Earnings per Share - Summary of Computation of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Numerator
Net loss	$ (36,944)	$ (151,977)
Accumulation of dividends on preferred stock	(26,904)	(35,231)
Net loss available to common shareholders	$ (63,848)	$ (187,208)
Denominator
Net loss per common share - basic	$ (2.48)	$ (24.07)
Net loss per common share - diluted	$ (2.48)	$ (24.07)
Weighted average number of shares of common stock - basic	25,772,419	7,777,441
Weighted average number of shares of common stock - diluted	25,772,419	7,777,441

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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Earnings per Share - Summary of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	5,670,365	39,163,208
Fair value of warrants	$ 3,109
Convertible Preferred Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total		36,891,576
Stock Options to Purchase Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	5,260,126	2,271,632
Warrants
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	410,239

Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Federal	$ (6,416)	$ (32,508)
State	4,198	(9,641)
Valuation allowance	2,218	42,149
Deferred	$ (2,218)	$ (42,149)

Income Taxes - Schedule of Difference Between Statutory Federal Income Tax Rate (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Federal income tax rate	21.00%	21.00%
State taxes	(11.40%)	6.30%
Other	(3.60%)	0.40%
Valuation allowance	(6.00%)	(27.70%)

Income Taxes - Schedule of Significant Components of Company's Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred Tax Assets, Gross [Abstract]
Acquired in-process research and development	$ 45,346	$ 50,628
Net operating loss carryforward	44,983	41,427
Accrued compensation	4,075	5,158
Credits	1,604	1,682
Disallowed interest	7,751	1,661
Deferred rent	121	160
Fixed assets	65	46
Inventory	100
Other	71	61
Total	104,116	100,823
Net deferred tax asset	102,874	100,656
Valuation allowance	(102,874)	(100,656)
Deferred Tax Liabilities, Gross [Abstract]
Other	1,242	167
Total	$ 1,242	$ 167

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Operating Loss Carryforwards [Line Items]
Valuation allowance	$ 102,874	$ 100,656
Increase in valuation allowance	$ 2,218
Operating loss carryforwards limitations on use	These ownership changes may limit the amount of net operating loss and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups.
Percentage of change in ownership	50.00%
Period of change in ownership	3 years
Federal
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	$ 159,395	$ 147,823
Operating loss carryforwards expiration period	2037	2037
Tax credit	$ 1,603	$ 837
State
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	$ 157,743	$ 139,336
Operating loss carryforwards expiration period	2037	2037

Financial Instruments - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Financial Instruments [Abstract]
Changes to valuation techniques	false
Cash, cash equivalents, and restricted cash	$ 229,381	$ 25,207	$ 84,023
Fair value of warrants	$ 3,109

Financial Instruments - Schedule of Range of Assumptions Used to Determine Fair Value of Warrant Liability (Details)	Aug. 19, 2020
Dividend Yield
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrant liability, fair value measurement inputs	0.0
Expected Volatility \| Minimum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrant liability, fair value measurement inputs	54.2
Expected Volatility \| Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrant liability, fair value measurement inputs	68.8
Risk-Free Interest Rate \| Minimum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrant liability, fair value measurement inputs	0.17
Risk-Free Interest Rate \| Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrant liability, fair value measurement inputs	1.56
Lack of Marketability Discount
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrant liability, fair value measurement inputs	0.0
Expected Term \| Minimum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Expected term (years)	1 year
Expected Term \| Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Expected term (years)	4 years 6 months

Related-party Transactions - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Current Liabilities
Related Party Transaction [Line Items]
Amounts due to related parties - current	$ 0	$ 1,208
Other Assets
Related Party Transaction [Line Items]
Amounts due from related parties	1	210
Management Services Agreement \| General and Administrative Expense
Related Party Transaction [Line Items]
Management fee expense and other expenses to related party	$ 7,384	$ 5,378

Subsequent Events - Additional Information (Details) - USD ($) $ in Thousands		1 Months Ended				2 Months Ended
	Jan. 06, 2021	Jan. 31, 2021	Oct. 31, 2020	Nov. 30, 2019	Aug. 31, 2019	Feb. 28, 2021
Subsequent Event [Line Items]
License agreement milestone payments paid				$ 75,000	$ 2,000
Subsequent Event \| Employee Stock Option \| 2020 Plan
Subsequent Event [Line Items]
Employee stock options to purchase shares of common stock						882,606
Vesting period (in years)						4 years
Award vesting rights (percentage)						50.00%
Award requisite service period (in years)						2 years
Upon FDA Approval of WAKIX
Subsequent Event [Line Items]
License agreement milestone payments paid			$ 2,000
Upon FDA Approval of WAKIX \| Subsequent Event
Subsequent Event [Line Items]
License agreement milestone payments paid		$ 100,000
Bioprojet \| Upon FDA Approval of WAKIX \| Subsequent Event
Subsequent Event [Line Items]
License agreement milestone payments paid	$ 100,000