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March 12, 2020
John C. Jacobs
Chief Executive Officer
Harmony Biosciences Holdings, Inc.
630 W. Germantown Pike, Suite 215
Plymouth Meeting, PA 19462
Re: Harmony Biosciences Holdings, Inc.
Draft Registration Statement on Form S-1
Submitted February 14, 2020
CIK No. 0001802665
Dear Mr. Jacobs:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1
Overview, page 1
1. Briefly expand the disclosure regarding the six approved medications for
the treatment of
narcolepsy by including the reasons these medications are prescribed, to
balance the
negative side effects currently discussed.
2. Please expand your discussion of the company's strategy of expanding the
label for
WAKIX to include cataplexy and pediatric applications to explain how
each of these new
goals relate to the current offer. If you will not be able to complete
the related trials and
address the related development costs with the proceeds of the offer,
please disclose that
these goals will not be achievable without additional funding.
John C. Jacobs
FirstNameBiosciences Holdings, Inc.
Harmony LastNameJohn C. Jacobs
Comapany2020
March 12, NameHarmony Biosciences Holdings, Inc.
Page 2
March 12, 2020 Page 2
FirstName LastName
Overview of the Development Pipeline, page 4
3. We note the inclusion of four proposed label expansions in the table
on page 4. Please
expand the table and your disclosure to provide more information about
the company's
progress with respect to pre-clinical trials for these label
expansions. If you have
undertaken IND enabling studies for any of the treatments listed in
the table, please
describe these studies in the disclosure. Alternatively, please state
in the disclosure
surrounding the table where you are in the IND process.
4. Please balance the pipeline table disclosure by stating the
approximate number of patients
worldwide who could benefit from each of the therapies in the table or
otherwise clarify
your estimate of the potential market size for each therapy.
Risk Factors, page 14
5. We note that there are references to foreign regulators and foreign
markets throughout the
Risk Factors and other sections of your prospectus. Please revise to
explain what non-US
markets, if any, you plan to enter, and what steps you have taken to
attain the necessary
regulatory and patent approvals.
6. We note your disclosure on page 168 that your exclusive forum
provision does not apply
to actions arising under the Securities Act or the Exchange Act.
Please ensure that the
exclusive forum provision in the bylaws (as effective on the closing
of the offering) states
this clearly, or tell us how you will inform investors in future
filings that the provision
does not apply to any actions arising under the Securities Act or
Exchange Act.
Use of Proceeds, page 72
7. We note the use of proceeds to fund the clinical development of
additional indications for
pitolisant in PWS, DM1 and pediatric narpcolepsy. Please revise to
specify how far the
proceeds of the offering will take the company into the clinical
development of these
potential additional indications. If any material amounts of other
funds are necessary to
accomplish the specified purposes for which the proceeds are to be
obtained, state the
amounts and sources of such other funds needed for each such specified
purpose and the
sources thereof. Refer to Instruction 3 of Item 504 of Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Cost of Product Sales, page 81
8. Please revise to address the following:
Disclose the amount of estimated historical cost of the inventory
build-up prior to
your regulatory approval that had been expensed as research and
development
expenses for each period presented.
Disclose the effect zero cost inventory had on your historical
results of operations.
Disclose the expected effect on future results of operations and the
assumptions made
John C. Jacobs
FirstNameBiosciences Holdings, Inc.
Harmony LastNameJohn C. Jacobs
Comapany2020
March 12, NameHarmony Biosciences Holdings, Inc.
Page 3
March 12, 2020 Page 3
FirstName LastName
in this regards.
Disclose what the shelf life of your inventory is and your
consideration of whether or
not any additional inventory will be determined to be obsolete in
future periods.
Disclose what you estimate your gross margin percentage will be
after the zero cost
inventories are sold.
Liquidity and Capital Resources, page 86
9. You disclose that the Credit Agreement with OrbiMed requires
compliance with certain
financial covenants, including minimum net revenue thresholds and cash
balance
requirements, and financial reporting requirements. Please amend your
filing to disclose
whether you were in compliance with your covenants for each period
presented. If not,
please discuss any consequences that you may be subject to as a result
of default, absent a
waiver.
Stock-Based Compensation, page 93
10. Please revise to disclose the extent to which any stock-based
compensation has been
awarded during 2019 and through the date of your filing, and provide
the fair valuations
of each award in the Common Stock Valuations section that follows on
page 94. Once you
have an estimated offering price or range, please explain to us how
you determined the
fair value of the common stock underlying your equity issuances and
the reasons for any
differences between the recent valuations of your common stock leading
up to the initial
public offering and the estimated offering price. This information
will help facilitate our
review of your accounting for equity issuances including stock
compensation and
beneficial conversion features.
Competition, page 122
11. Expand your discussion of competition to discuss the principal methods
of competition,
including price. Identify the positive and negative factors affecting
Harmony's
competitive position, to the extent they are known. Refer to
Regulation S-K, Item
101(b)(2)(x).
General
12. Please provide us mockups of any pages that include any additional
pictures or graphics to
be presented, including any accompanying captions. Please keep in
mind, in scheduling
your printing and distribution of the preliminary prospectus, that we
may have comments
after our review of these materials.
13. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
John C. Jacobs
Harmony Biosciences Holdings, Inc.
March 12, 2020
Page 4
You may contact Tracey McKoy at 202-551-3772 or Kevin Vaughn at
202-551-3494 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Julia Griffith at 202-551-3267 or Susan Block at 202-551-3210 with any
other questions.
FirstName LastNameJohn C. Jacobs Sincerely,
Comapany NameHarmony Biosciences Holdings, Inc.
Division of
Corporation Finance
March 12, 2020 Page 4 Office of Life
Sciences
FirstName LastName