Harmony Biosciences Q3 2024 Earnings Call Transcript

Quartr
Provided by Quartr
October 29, 2024

There are 13 speakers on the call.

Operator

Good morning. My name is Todd, and I will be your conference operator today. At this time, I would like to welcome everyone to Harmony Biosciences Third Quarter 2024 Financial Results Conference Call. All participants have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Operator

Please be advised that today's conference may be recorded. I will now turn the call over to Brennan Doyle, Head of Investor Relations. Please go ahead.

Speaker 1

Thank you, operator. Good morning, everyone, and thank you for joining us today as we review Harmony Biosciences' Q3 2024 financial results and provide a business update. Before we start, I encourage everyone to go to the Investors section of our website to find the materials that accompany our discussion today, including a reconciliation of our GAAP to non GAAP financial measures. At this stage of our lifecycle, we believe non GAAP financial results better represent the underlying business performance. Our speakers on today's call are Doctor.

Speaker 1

Jeffrey Dano, President and CEO Jeffrey Dierks, Chief Commercial Officer Doctor. Kumar Badur, Chief Medical and Scientific Officer and Sandeep Kapadia, Chief Financial Officer and Chief Administrative Officer. As a reminder, we will be making forward looking statements today, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties. Our actual results may differ materially, and we undertake no obligation to update these statements even if circumstances change.

Speaker 1

We encourage you to consult the risk factors referenced in our SEC filings for additional detail. I would now like to turn the call over to Doctor. Jeffrey Dano. Jeff?

Speaker 2

Thank you, Brennan, and thanks everyone for joining our conference call today. Q3 was another quarter of strong momentum for the team at Harmony, driving significant revenue growth for Wakeix and advancing our late stage clinical development programs. At our successful Investor Day event earlier this month, we were excited to share new data and outlined a clear path toward becoming the leading CNS company focused on developing and delivering innovative treatments to patients with unmet medical needs. As we shared during that presentation, our robust late stage pipeline is poised to deliver 1 or more new product or indication launches each year over the next 5 years. With each catalyst, we are delivering on our promise to patients and generating long term durable value creation for shareholders.

Speaker 2

In fact, with this team in Harmony that has driven our success thus far, our current pipeline is successful, is poised to deliver over $3,000,000,000 in net revenue going forward. Also during our Investor Day, I highlighted what we believe to be one of the strongest and most promising pipelines in the industry for people living with rare neurological diseases. Our pipeline now includes 3 orphan rare CNS franchises, each with peak sales potential of $1,000,000,000 to $2,000,000,000 8 assets across 13 development programs with 3 of them in pivotal Phase III trials and a 4th to initiate before year end. Given the tremendous growth in our pipeline, we will

Speaker 3

not be able to go into

Speaker 2

depth on all the we will not be able to go into depth on all the development programs on this call. But the key points that I want you to take away from our call today regarding our robust pipeline are these. 1st, we continue to strengthen our leadership position in sleep wake. We are preparing to submit our sNDA for pettolacent in idiopathic hypersomnia or IH. We are advancing the pettolacent next gen programs and we are on track to submit an IND for our potential best in class Orexin 2 agonist in mid-twenty 25 and then enter the clinic the second half of next year.

Speaker 2

2nd, with EPX-one hundred or Clemisol Hydrochloride, we have the most advanced and promising late stage development program in the class of 5 HT2 receptor agonists to address the serious unmet medical need for the rare childhood onset epilepsies known as developmental epileptic encephalopathies or DEEs. EPX-one hundred is in an ongoing Phase III registrational trial for patients with Dravet syndrome and on track for top line data in 2026. And we will be initiating a pivotal Phase III trial for EPX-one hundred in patients with Lennox Gastaut syndrome before year end. In addition, we have another asset in our epilepsy pipeline, EPX-two hundred or lorcastrin in a liquid formulation, which is a selective 5 HT2C receptor agonist. And both of these have significant upside potential as the market has recently acknowledged with the acquisition of a 5 HT2C agonist asset that just recently initiated a Phase III trial in Dravet syndrome.

Speaker 2

3rd, there are exciting near term catalysts coming in the first half of next year, including FDA's decision on file acceptance of our IH sNDA submission going in later this year as well as top line data for ZYN-two from the pivotal Phase III RECONNECT trial in patients with Fragile X syndrome. If these data are positive, it could put us on a path toward bringing the 1st approved treatment to the market for patients living with Fragile X syndrome. I want to share some highlights with you on our development programs and then Kumar will expand on these key points later in the call. 1st, on the strengthening of our leadership in sleep wake, which is the foundation of our business, we shared new data at our Investor Day from the long term extension trial of patellecint in patients with IH. These data demonstrated robust efficacy and sustained response out beyond 1 year.

Speaker 2

As Kumar will show you, the majority of patients were maintained within the normal range on the Epworth sleepiness scale for over 1 year after coming into the trial at a moderate or severe level of sleepiness. This, along with real world evidence and a strong overall benefit risk proposition for patellesync is the reason for our strong conviction in pursuing an IH indication for patellecinc and we are on track to submit an sNDA before year end. Building off of the innovation of the 1st in class molecule in petuloscent with its novel mechanism of action and the success of WACUS in the market is our next gen formulations of petuloscent. Both of these programs, pettolacent gastro resistant or GR and pettolacent high dose or HD, reflect patient centric drug development with a goal to make to take a good drug and make it even better by addressing ongoing unmet medical needs in patients with narcolepsy. Pituliscent GR is on track for PDUFA in 2026 and Pituliscent HD is on track for PDUFA in 2028.

Speaker 2

And Jeff Dirks will provide more color on the strategy behind those programs and how our unique commercial model positions us to optimize the opportunity to both grow and extend the Pitulisant franchise into the 2040s. The next wave of innovation for the treatment of narcolepsy and other essential disorders of hypersomnolence are the orexin 2 receptor agonists. As leaders in sleep wake, we have followed this space closely over the past few years, diligent several of the orexin 2 agonist programs. And then earlier this year, licensed in BP1.15205 with our partner Biofrige, which we feel could be a potential best in class Orexin II agonist compound. This is based on several unique features of this compound, some of which we shared during our Investor Day and Kumar will review them with you later in the call.

Speaker 2

We are on track towards filing an IND mid-twenty 25 and then initiating 1st in human studies in the second half of 2025. Next, I would like to take a few moments to discuss and share our excitement with you regarding our rare epilepsy franchise that we recently brought in house through the acquisition of Epigenics Therapeutics. This is relevant, particularly in light of some of the recent developments in the competitive landscape, which point to the significant value of new treatments for developmental epileptic encephalopathies. Many of the currently approved therapies face limitations in terms of efficacy, safety and or tolerability, leaving a treatment gap and serious unmet medical need that must be addressed for patients living with these rare and refractory seizure disorders and their caregivers. We view the recent interest in this space as validation of our approach, and Harmony is again proud to be at the forefront of innovation.

Speaker 2

To put it simply, this space involves compounds that act as the serotonin or 5 HT Type 2 receptor and enhanced serotonergic tone in the brain. We have 2 investigational products for DEEs, EPX-one hundred or climesol hydrochloride and EPX-two hundred, a liquid formulation of larcasterin. Kumar will share with you more details regarding these compounds and their development programs. But what I want to highlight for you is the following. The mechanism of action for both EPX-one hundred and EPX-two hundred working through 5 HT2 receptors and serotonin modulation has been validated in the zebrafish model developed by Scott Barobin, who shared his work at our Investor Day, which demonstrated 100% predictability, both 100% positive and 100% negative predictability on efficacy for compounds that were screened in his zebrafish model.

Speaker 2

We have the most advanced clinical development program of the 5 HT2 agonist compounds with EPX-one hundred in an ongoing registrational trial for patients with Dravet syndrome, which is on track for top line data in 2026 as well as a pivotal Phase 3 trial for patients with Lennox Gastaut syndrome, which is on track to initiate before year end. What I want you to take away is that we believe that we have the most robust, most promising and advanced portfolio of assets in the clinic for patients with DEEs and are confident that if successful, our portfolio can offer new treatment options for patients and drive significant value creation for our shareholders. Lastly, on our pipeline, as you can see, we have strategically expanded our pipeline and diversified our portfolio across 3 orphan rare CNS franchises and built what we believe is one of the most exciting and promising pipelines in the industry for patients living with rare neurological diseases. Importantly, I want to make sure that our near term catalysts coming in the first half of next year are top of mind for investors. These include FDA's decision on file acceptance for our IHSNDA submission in the Q1 next year, followed by the highly anticipated top line data readout of the pivotal Phase III RECONNECT study of ZYN-two in patients with Fragile X syndrome, which is on track for readout mid year.

Speaker 2

These are exciting catalysts as we continue to advance our pipeline and build long term value creation. Switching gears. While we advanced our late stage development programs, we remain focused on execution across the company and delivered another solid quarter with WayKick's net revenue of $186,000,000 This enabled Harmony to surpass $2,000,000,000 in cumulative net revenue for Waco's generated in less than 5 years on the market, which is a significant accomplishment. With these strong results, we are once again reiterating our 2024 net revenue guidance of $700,000,000 to $720,000,000 and remain confident in WACX being a $1,000,000,000 plus market opportunity in narcolepsy alone, and we are well on our way to achieving that. We remain active in business development with a dedicated team that has deep experience and the goal is to expand our pipeline even further With approximately $505,000,000 in cash, cash equivalents and investments as of September 30, we are in a strong financial position to execute on additional business development opportunities.

Speaker 2

And if we do so, we'll apply the same strategic and thoughtful approach that we have demonstrated thus far. This is all to say that Harmony continues to be a growth story. And while I am proud of what we have built at Harmony in just our 1st 7 years, we are just getting started. We have this outlook because we know that when we deliver on our promise to patients by developing and delivering innovative treatments to patients living with rare neurological diseases, we generate durable long term value creation for our shareholders. With that, I will now turn the call over to Jeffrey Dirks, our Chief Commercial Officer, for an update on our commercial performance.

Speaker 2

Jeff?

Speaker 4

Thanks, Jeff. We saw another quarter of continued momentum and strength in our underlying business fundamentals for kicks in the Q3. Net sales for the quarter were $186,000,000 And with these quarterly sales wake kicks surpassed $2,000,000,000 in cumulative net sales since launch. The solid net sales performance in the 3rd quarter reaffirms our confidence in our net sales guidance of $700,000,000 to $720,000,000 for the full year 2024 and Wakeix $1,000,000,000 plus potential in adult narcolepsy alone. We saw continued growth in the average number of patients on Wakeix and in the Wakeix prescriber base, both facilitated by favorable market access as seen on Slide 6 and 7.

Speaker 4

The average number of patients on Wakeix increased to approximately 6,800 in the 3rd quarter. We're extremely pleased with the approximately 250 sequential increase in average patients on WAYGX from what we reported last quarter. We saw contributions from the pediatric narcolepsy indication launch in our growth in Q3, but the vast majority of our growth in the 3rd quarter was attributed to the continued expansion in our adult narcolepsy patient base given the larger diagnosed patient opportunity. We are extremely pleased with our launch in pediatric narcolepsy. In the Q1 since the FDA approval, we've seen strong interest from the healthcare professional and patient community in the unique product profile of Wakeix as the only non scheduled treatment option and strong payer coverage to facilitate pediatric narcolepsy patients getting on product.

Speaker 4

The growth in average patients in the Q3 was in line with our expectations and reaffirms our confidence in our guidance of approximately 7,000 average patients by the end of the year. We saw growth in the Wakeix prescriber base in the Q3 as well. We saw solid growth in the Wakeys prescriber base beyond the oxybate REMS enrolled healthcare professionals, demonstrating that Wakeys continues to expand the branded writer segment of the market beyond the oxybates. We are now more than 40% penetrated in this segment of approximately 5,000 healthcare professionals at the end of the Q3. And this segment of healthcare professionals continues to represent an insulated and durable opportunity for growth from the oxibates that we continue to tap into each quarter to drive performance.

Speaker 4

Coupled with the growth we're seeing beyond the oxybate REMS enrolled healthcare professionals, we continue to see utilization of Wakeix among the approximately 4,000 oxybate REMS enrolled healthcare professionals, even with the availability of new and generic oxybate options. We're highly penetrated within this prescriber audience and see Wakeix being prescribed to additional narcolepsy patients each quarter in this segment. WeightGage provides a meaningfully differentiated product profile and one that offers broad clinical utility across the entire narcolepsy treating healthcare professional universe, allowing us to tap into the full diagnosed narcolepsy patient opportunity of approximately 80,000 patients, giving us confidence in future growth for Wakeix. Now with Wakeix on track to achieve $1,000,000,000 plus in narcolepsy alone, along with a strong commercial team and commercial model that we shared at our Investor Day on October 1, we're making good progress on our lifecycle management plan with the new formulations of the Toluvant. We're developing 2 new formulations of pettolison, pettolison GR and pettolison HD, in a meaningful patient focused way built around unmet needs to drive incremental benefits for patients.

Speaker 4

Both products offer new features and attributes to address existing patient unmet needs, are on target for PDUFA dates prior to Wake X LOE, GR in 2026 and HD in 2028, and each has provisional patents filed out to 2,044 to grow and extend the betulosun franchise. BetolaSun GR is a quick to market bioequivalence pathway with the additional benefits of a gas resistant coating, as we know up to 90% of narcolepsy patients have GI disturbances due to their underlying disease and eliminates the titration dose as all narcolepsy products have titration schedules and some patients cannot and do not get a therapeutic dose to achieve clinical benefits, both allowing patients to start at a therapeutic dose and the potential to achieve clinical benefits sooner. The strategy for GR is to expand the pottoluson patient base through new patient growth and using our unique commercial model activate previous Wakeix patients who have discontinued due to either GI side effects or did not achieve a clinical benefit. We see GR representing a potential $300,000,000 to $500,000,000 in incremental peak net sales to Wakeix. EpitolaSun HD is an enhanced formulation of EpitolaSun with even more meaningful features to address untreated fatigue and narcolepsy, up to 60% of narcolepsy patients suffer from fatigue and address the largest pressing need in the narcolepsy market, which is the need for enhanced efficacy.

Speaker 4

The HD development program is designed to deliver a higher dose, up to 2 times that of Wakeix with an optimized PK profile to drive greater efficacy in EDS and cataplexy, targeting a unique indication of fatigue in narcolepsy with a gastric resistant coating and no titration to start at a therapeutic dose. The strategy for HD is to grow the pittelfond patient base through new patients, current Wakeix patients and previous Wakeix patients due to our unique commercial model and extend the durable patient revenue growth out to the mid-2040s. We see potential peak net sales for HD of more than $1,000,000,000 plus in narcolepsy alone and an even larger peak opportunity with other indications being pursued in idiopathic hypersomnia and myotonic dystrophy. Preliminary market research with healthcare professionals and payers on the HD target product profile showed healthcare professionals see HD as a superior product profile given the greater efficacy addressing the most pressing need in the market and the unique fatigue indication broadens its expected use. Healthcare professionals saw broad utility for HD and expected to transition the majority of current Wakeix patients, reengage previous Wakeix patients and offer the product to all NuStar patients.

Speaker 4

Payers also saw value in the HD profile both pre and post Wakeix LOE and expected favorable access for the vast majority of patients to HD without stepping through a generic pottolison post Wakeix LOE. The pettolison franchise strengthens our leadership position in sleepwake and is poised to deliver durable patient growth and significant revenues into the mid-2040s. So in summary, we're building an exciting SleepWake franchise. We had another strong quarter of durable growth and performance in net sales, patient add and growth in prescribers of Wakeix. Heading into the Q4, we're confident in our full year guidance, our path towards $1,000,000,000 plus in net sales and our ability to continue to help patients living with narcolepsy.

Speaker 4

I would now like to turn the call over to our Chief Medical and Scientific Officer, Kumar Badur, to discuss the advancements of our clinical development program. Kumar?

Speaker 5

Thank you, Jeff. Good day, everyone, and thank you for joining us today. In R and D, we continue to make great progress in advancing our pipeline program. As Justin mentioned, we now have 13 development programs across 8 assets under 3 franchises focused on rare neurological indication with high unmet medical need. We will have 4 Phase 3 registration studies ongoing in 4 distinct indications by the end of this year with the potential to deliver 1 or more new product or new indication launches each year for the next 5 years.

Speaker 5

Our full clinical development pipeline is shown on Slide number 10, and the clinical development highlights are on Slide 11 through Slide 17. Starting with our seed based franchise, we are on track to submit an sNDA for idiopathic hyperphonemia by the end of this year. Our submission will be based on the robust data from the Phase 3 registration INTUNE study and seven lines of additional evidence that consistently support the efficacy of pitalophene in patients with idiopathic hyposmia. At our Investor Day on October 1, we reported new data that showed strong and sustained efficacy of pitalophene in patients with idiopathic hyposmia more than 1 year out in the long term extension study. The mean improvement in upper sleepiness care was approximately 9 points from baseline out beyond 1 year with the majority of patients in the normal range as measured by ESS score.

Speaker 5

We saw similar, strong and sustained maintenance of efficacy on erythead hyper somis here in care and sleep inertia questionnaires in the long term extension study. In addition, we also shared the data from a large sleep clinic in Europe in over 60 patients with IH. Data from this independent study showed that over 60% of patients with IH got better with pyrtolopent and approximately 40% of these patients benefited and remained stable with pitalosant as monotherapy. Similar efficacy was also observed in biosurface compassionate use program for patients with IH. IH.

Speaker 5

The totality of data for efficacy, alongside the established safety profile of pidolacent, a non scheduled drug with simple dosing regimen, offers a unique benefit to proposition for patients with IH, a condition with only one approved treatment that has triple affective syndrome with a challenging nighttime dosing regimen and the widespread off label use of controlled stimulants, which are associated with significant safety issues. Pitalosant has the potential to address a high unmet need with very favorable benefit risk profile. Moving on to next gen pitalosant formulation, pitalosant GRAS and pitalosant HC. HC. Just described the unique value proposition each of these formulations are expected to deliver.

Speaker 5

With pitalacin GR program, we are on track to initiate the pivotal bioequivalence study and the dosing optimization study in the Q1 of 2025 with PDUFA date in 2026. With Pitulofcent HD, at our Investor Day earlier this month, we shared preliminary data establishing Pitulofcent safety up to 5 times the current highest level dose of leakage, thereby establishing safety margin for pitalifent Fc development program. We are currently working on further optimizing the formulation and IND related activities, and we are on track to initiate the pivotal Phase III resistance study in narcolepsy in second half of twenty twenty five with the target to do for in 2028. Provisional patents have been submitted for both pitulacin GR and pitulacin HE with a potential patent protection until 2,044. Moving on to our OXMT2 receptor agonist program, BP1.15205, formerly known as TPM1116.

Speaker 5

The in vitro pharmacology data demonstrated a potency that is much greater compared to all publicly disclosed data on Orexin2 agonists. As you know, with its class of compounds, potency is the most important parameter that gives us the ability and the dosing flexibility to target all central disorders of hyposomal and potentially other disorders based on the emerging evidence. The potency was consistent across species, and it also demonstrated an excellent selectivity of greater than 600 fold over the OXN-one receptor. This translates to over 100 fold margin at OXN-one receptor at the anticipated maximum human dose. In addition, it also demonstrated over 1,000 source connectivity over 150 other targets of interest and has a potential for once a day dosing.

Speaker 5

Dp1.15205 with its novel chemical structure, highest potency, excellent selectivity, potential for 1 study dosing and the lowest preclinical data has the potential to be the best in class rxv2 receptor agonist. We are on track towards filing an IND Unit 2025 and initiating 1st in human study in the second half of twenty twenty five. Today, we are very excited to highlight our FESC franchise. And as Beth mentioned earlier in the presentation, we have the most advanced development program in DEG. We have 2 investigational candidates, EPX-one hundred and EPX-two hundred, for the treatment of developmental epileptic and pathologases.

Speaker 5

EPX-one hundred, our clinical hydrochloride, works near modulation of serotonin, that is 5 HT2, and enhances the serotonergic tone. The serotonergic mechanism of action is a validated and well known mechanism of action in developmental epileptic and sublopathy. EPX-one hundred showed efficacy in the Zebra Fish model that has 100% positive and 100 percent negative predictive value. In addition, EPX-one hundred methanpermofraction is also validated in other DDEs such as detoxin binding protein 1 disorders we have preclinical experiments suggesting a broad utility for EKS100 in DDEs. When it comes to safety and tolerability, clinical work on the market for approximately 20 years with no significant safety and or tolerability symptoms from post marketing exposures.

Speaker 5

In addition, EPX-one hundred and twenty demonstrates favorable preliminary safety and tolerability in the ongoing Phase 3 registration study in Dravet syndrome compared to select approved drugs with no need for additional laboratory or special monitoring. PK-one hundred and eighty patently studied in a liquid formulation with BID dosing, a simple dosing regimen that is especially meaningful for patients living with the DEF and their care tumors. We are actively recruiting globally for our Phase III registration study in TRUVESINTRA, the ARGUS study, and we are on track to start a global Phase 3 registration study in LGS by the end of this year. The strong evidence for efficacy, promising safety and tolerability profile, BID dosing and on track for top line in 2026 makes EPX-one hundred the most promising and the most advanced investigational drug for DEVs. We have one more investigational product, EPS-two hundred, our liquid formulation of locastin in the PIND phase.

Speaker 5

Locastin is a selective by the P2P agon and the mechanism of action is well established in DEEs. We have preclinical experiments in the Zebra Fish model and also in the clinic, we have case series published by Toleit and Dubinsky et al in 2018 in neurology, following which the FDA expressed interest in exploring locapherin in developmental and epileptic and sublopropathy. We are currently in the pre IND phase, and we plan to pursue all these with EPX-two hundred. It is important to note that the safety and tolerability of lucaspirin is also well established based on the short term, long term and real world outcome studies with lucaspirin. The regulatory agencies recognize the unmet need and the forming EPX-one hundred and EPX-two hundred could potentially offer to patients with the ease.

Speaker 5

Accordingly, EPX-one hundred has received both orphan drug designation and rare pediatric disease designation for both DF and LGS by the FDA. EPIC 200 has received orphan drug designation for DF by the FDA and MR, and it has received parfumpert designation and array pediatric disease designation for LGS by the FDA. Finally, with our neurobehavioral franchise, we remain on track to report complement data from the Phase III VACONNECT registrational trial of CYN002 in FASZALEX syndrome in mid-twenty 25. If approved, this will be the 1st and only approved treatment for any symptom in patients with FASZALEX syndrome. We are also on track to initiate the Phase 3 registrational study in 22Q Julien syndrome in 2025, another rare disorder with a prominent neurobehavioral symptom for which there are no up to 3 signs.

Speaker 5

In summary, we have made significant progress in advancing our late stage pipeline across our 3 franchises and look forward to sharing more in the coming months years as we continue to make progress. On behalf of Harmony, I would like to thank all the patients and their families who are participating in our clinical trial as well as the clinical investigators and site personnel for their efforts and commitment in helping us advance our development programs. I'll now turn the call over to our CFO, Sandeep Kakadia, for an update on our financial performance. Sandeep?

Speaker 6

Thank you, Kumar, and good morning, everyone. This morning, we issued our Q3 earnings release and filed our 10 Q, where you'll find the details of our Q3 2024 financial and operating results. Our financial performance is also shown on Slides 18 through 20. Harmony continues to have a unique profile in the biotech community. We're a profitable, cash generating company able to fund the growth and advancement of our pipeline fully off our balance sheet.

Speaker 6

We delivered another quarter of strong double digit top line growth, maintained profitability and achieved robust cash generation. Our financial performance and strong balance sheet position positions us well to continue advancing our industry leading pipeline along with driving excellence in the commercialization of Waithex and narcolepsy. We reported net revenues of 180 $6,000,000 for the Q3 of 2024 compared to $160,300,000 in the prior year quarter. Performance in the quarter reflects the continued strong underlying demand for Wakers. We also reported total operating expenses for the Q3 of $81,600,000 as compared to $63,500,000 for the same quarter in 2023, representing a 29% increase.

Speaker 6

The growth in expenses was primarily driven by investments in our expanding late stage pipeline along with continued investments for the commercialization of Waytix and narcolepsy. Non GAAP adjusted net income for the Q3 of 2024 was $59,600,000 or $1.03 per diluted share compared to $58,800,000 or $0.97 per diluted share in the prior year quarter. We believe non GAAP adjusted net income better reflects the underlying business performance. Please refer to our press release for a reconciliation of GAAP to non GAAP results. We ended the 3rd quarter with $504,700,000 of cash, cash equivalents and investments.

Speaker 6

The balance reflects strong cash generation of $70,500,000 from operations, which provides us the financial flexibility to execute on our strategy of continuing to grow our pipeline. Looking ahead, we continue to expect quarter over quarter growth in net revenues in Q4 of this year. We also expect increases in R and D as we initiate our 4th Phase 3 registrational trial during the Q4. We are once again reiterating our net revenue guidance for 2024 of $700,000,000 to $720,000,000 highlighting our progress towards the $1,000,000,000 plus opportunity in adult narcolepsy alone. And with that, I'd like to turn the call back to Jeff for his closing remarks.

Speaker 6

Jeff?

Speaker 2

Thank you, Sandeep. As we wrap up our call, I want to emphasize that our momentum at Harmony has never been stronger. We continue to lead in sleep wake fueled by the strength of our foundational business of Wake X

Speaker 3

and

Speaker 2

narcolepsy and driven by a portfolio that represents the next wave of innovation in this space. We believe that our portfolio of assets in rare epilepsies is the most robust and advanced in the industry for DEEs, and we are committed to this area of serious unmet medical need. And finally, our catalyst rich late stage pipeline is poised to deliver 1 or more new product or indication launches each year over the next 5 years with exciting catalysts in idiopathic hypersomnia and fragile X syndrome coming in the first half of next year. We have the proven talent, resources and conviction that will continue to fuel Harmony's growth story. And we are just getting started.

Speaker 2

Thank you. And I will now turn the call back over to the operator.

Operator

Thank

Speaker 4

you.

Operator

Our first question will come from Gregg Suvannavejh with Mizuho. Please go ahead.

Speaker 7

Thanks so much for taking my question. Congrats on the progress. Your pipeline is so deep, I don't know where to start. But maybe if I could ask just one on the TolaSoft GR and HD strategy, as we look out on the horizon, can you just give us a sense of how we should visualize how Wakeix and then GR when it comes in potentially 2026, how are you going to manage kind of the coexistence of those two products? And then how is that going to evolve when HD launches hopefully in 2028?

Speaker 7

Just trying to visualize what a switch strategy might look like, just the commercial kind of positioning if you are in a position if you are in a

Speaker 3

position to have 3

Speaker 7

products, basically in the market at the same time? Yes. Good morning, Greg. Thanks for your question. I

Speaker 2

think that I'm going to turn to Jeff Zirks to expand on that that. A lot of it is based on our unique commercial model in terms of enabling us to how to handle that strategy and Jeff can explain further. Go ahead Jeff.

Speaker 4

Sure. Thanks for the question, Greg. So, pottolison and WAKIX obviously is going to be our foundational business and we see that as a $1,000,000,000 plus opportunity. From there in advancing these next generation and lifecycle management opportunities, pettolison GR, if you're thinking about that asset, target PDUFA in 2026, we see that as an accretive opportunity to expand the patelosan patient base, not necessarily where physicians are going to be converting established Wakeix patients to GR. The GR is likely going to be a product using our commercial model where we can actually activate patients who are formally on Wakeix, who may have dropped off due to GI side effects or didn't achieve clinical benefit.

Speaker 4

We're going to look to tap into that audience as well as any new patient coming into a physician's office having the benefit of Wakeix with a gas resistant coating and the ability with no titration, we see GR growing in new patients as well as previous Wakeix patients, so not converting existing Wakeix patients. Then when HD looks to come to market with a target PDUFA date in 2028, given the potential to deliver enhanced efficacy, the potential to treat an indication fatigue that doesn't have any products available today, That when we put that product profile in front of healthcare professionals, they saw that as a superior product profile. That is a product that they embraced likely converting the vast majority of their Wake X patients over to. They saw this as another opportunity to engage previous Wake X patients. And they also saw this obviously as an opportunity for new existing patients.

Speaker 4

So that's kind of how we see these products. They are going to be able to coexist. GR and Wake X are going to be incremental and accretive opportunities coexisting. HD is likely the asset where we're going to end up seeing most patients end up just given the potential and the meaningful enhancements and benefits that that product is going to be able to offer to patients with narcolepsy.

Speaker 3

Okay. Thank you.

Speaker 7

If I could just squeeze in one just on the Orexin program, very interesting, lots of investors have been asking about it. Just I know that you have talked about the ability or the desire to present additional preclinical data on the assets perhaps provide a fuller picture of what you see in that opportunity. Any further comments on when we might see that data and what exactly you're hoping to show when you're able to present additional data on the Oraxin program? Thanks.

Speaker 5

Yes. Hey, Greg, good morning. Thank you. Yes, at our Investor Day, we presented some data on our orexin receptor agonist where we emphasized the novel chemical structure, the highest potency compared to anything that is publicly available on Oryxin2 receptor agonist, great selectivity with over 600 fold, which translates into more than 140 fold margin at orexin 1 receptors and also greater than 1000 fold selectivity over other 150 targets of interest and also potential for QD dosing. The intent is to disclose additional data at the upcoming scientific meetings.

Speaker 5

We haven't decided when and where, but we will be providing that information soon.

Speaker 6

Yes, Greg. And I

Speaker 2

think the target for that is we're working with our partner, Bioprege, and we're looking to next year at a scientific meeting to share sort of the full preclinical profile of that asset.

Speaker 7

Okay. Thank you.

Operator

Thank you. Our next question will come from Ami Fadia with Needham. Please go ahead.

Speaker 8

Hi, good morning. Thanks for taking my question. Could you talk about EPS 100 and particularly what gets you excited in terms of differentiation on safety, not only versus Epidiolex and FINTEPLA, but also versus beficaserin? And as we've seen some of the development plans for beficaserin, can you talk about your clinical development strategy for this asset beyond LVS and DS? And how you plan to approach the other DEE space?

Speaker 8

Thank you.

Speaker 2

Good morning, Ami. Thank you for your question. We will try to unpack that a little bit. Yes, we are excited with regards to EPX-one hundred, our advanced program. I'll turn to Kumar, just high level in terms of the strategy where we are and some of the profile we're seeing now compared to what's in the market and some of the other investigational products.

Speaker 2

Kumar? Yes, sure. Thank you, Jeff. Good morning, Rami.

Speaker 5

I know you asked several questions there. So let me start by saying that, look, the recent developments have validated our presence in developmental epileptic encephalopathy, high unmet need despite several tests approved in this space, significant limitations in terms of efficacy, safety and tolerability. So that's where EPX-one hundred comes in and has the ability to fill several gaps in this area. 1st and foremost, let me talk about safety. Clemesol Hydrochloride has been in market for over 20 years and no safety signals were observed.

Speaker 5

It was sunsetted with the introduction of 2nd generation of antihistamines. Number 2, the FDA asked us to develop this new chemical activity. So in support of that, we conducted a full battery of nonclinical tests that include 6 months repeat dose study in batch, 9 months repeat dose tox study in BeagleDoc and also juvenile toxicity studies. No safety signals were absurd. We also had a Phase I study in healthy volunteers, which was where we saw acceptable safety and tolerability and supported further development of this product.

Speaker 5

This study is being recruited in U. S. And also outside of U. S. EU.

Speaker 5

So the protocol went through FDA and also EMA. And none of these regulatory agents asked us to do any additional monitoring. And lastly, we disclosed some preliminary safety data from the ongoing Phase III study in Tourette syndrome and also from the long term extension study, where we showed it offers significant benefits when it comes to couple of approved drugs like Epidiolex in terms of not having to monitor liver function test routinely and FINTEPLA not having to monitor cardiac functions like echocardiography while epinephrine profile is still in early stages and evolving. 2nd, EPX-one hundred is administered PID versus pexicastric acid in PID, which is very clinically meaningful, especially in patients with developmental end epileptic encephalopathies because of the nature and the severity of the disorder. And the third thing is, this is important, EPX-one hundred is further along in clinical development.

Speaker 5

We have been actively recruiting for patients in Dravet syndrome study in Europe and in Europe, and we are about to start a Phase III study in Lennox Gastaut syndrome. And as we mentioned during the call earlier, the regulatory agencies have recognized the promise of EPX-one hundred and had given orphan drug designation and rare pediatric disease designation for both DS and LGS.

Speaker 8

Thanks, Kumar. Could you also address how you might approach other DEs? Thank you.

Speaker 5

Okay. Thank you, Ami. Yes, in the call earlier, I mentioned that we have data, preclinical data to show the utility of our EPX-one hundred in other DEs, for example, in SYMPAXAN finding protein 1 disorder, where we saw good evidence for efficacy. And similarly, we saw efficacy in CDD as well. Right now, our focus is to complete the Phase III study in Dravet syndrome and focus on LGS.

Speaker 5

In terms of approaching the other DTEs, we are in the process of evaluating that opportunity because those are heterogeneous disorders. In terms of the nature of the study, we have not determined how exactly to go forward, but we will be pursuing all developmental epileptic and saphylopathies in EPS-one hundred.

Speaker 2

Yes. Ami, and I would just add, I think that these development strategies sort of start more focused and then the opportunity to go broader in the DEEs, which I think is consistent with the program now. But the opportunity for broad DEE's potential basket trial is absolutely there. But we are in line and late stage in the Dravet syndrome study and

Speaker 7

on track

Speaker 2

to initiate the Phase 3 pivotal LGS study before year end.

Speaker 8

Thank you.

Speaker 2

Thank you.

Operator

Thank you. Our next question comes from Charles Duncan with Cantor Fitzgerald. Please go ahead.

Speaker 3

Hey, morning, Jeff and team. Congrats on the progress in the quarter. Make the observation, it's tough to know where to start because of all the pipeline products. But I will start with a commercial question. And that is regarding the percentage of patients, the new patients, the over 250 added, what percent come from oxybate versus non oxybate writers?

Speaker 3

And then I'm kind of curious why you didn't narrow the guide because it seems like the low end is quite attainable and your perspective on what would have modulated that?

Speaker 2

Good morning, Charles. Thanks for your question. Jeff, comments on it in terms of where the patients are coming from?

Speaker 4

Sure. No, great question, Charles. So obviously, we're extremely pleased with the growth we saw in the Q3. We added incrementally approximately 250 average patients from what we reported in the Q2. And Charles, we're seeing patient growth from both segments of healthcare professionals.

Speaker 4

It's probably about maybe 60% of those new patients are being added in from the oxybate REMS enrolled healthcare professionals, about 40% are coming from the non oxybate. And that's a lot of function in terms of there's more patients in the oxybate REMS enrolled healthcare professionals group. They're larger sleep specialists. They tend to have larger patient practices. We continue to see growth in the depth of prescribing, meaning most of these physicians have experience with Wakeix.

Speaker 4

They're finding a second, a 5th, a 10th, a 20th patient in this area. But we're really excited that we continue to see new patients coming out of the non oxybate REMS enrolled healthcare professional audience. We know that we have an insulated group that we continue to tap into even with all the oxybate churn. And so we're extremely pleased. We see tremendous growth opportunities on the horizon, 80,000 diagnosed patients, and we're going to continue to tap into that audience moving forward.

Speaker 2

Yes, Charles. And I would just add, I think the pattern of broad clinical utility for Wakeix in patients with narcolepsy continue to hold true with regards to the HCP universe that we're calling on. Sandeep, comments on the position on guidance?

Speaker 6

Sure. I mean, look, as I mentioned on the call, I mean, we continue to expect quarter over quarter growth going into Q4. What I'd say, our range even right from the start was relatively narrow, right, dollars 700,000,000 in sales, which is really 2% sort

Speaker 4

of in

Speaker 6

overall range. So we feel good about the range. We continue to see good momentum and we'll provide an update obviously once the year closes on where we end up on there. We feel very good about the range right now and we're comfortable. Great.

Speaker 3

And then if I may add may I ask a question of Kumar with regard to the ongoing Dravet study, phase 3 with 100. I'm really quite intrigued with the patient population. I mean, 26 data is a little bit remote. So how is enrollment going? Are you able to enroll patients that are on, you know, Epidiolex and mTOR inhibitors?

Speaker 3

And can you characterize a seizure burden and then, persistence into the OLE? Can you provide any additional color on how that trial is going?

Speaker 5

Charles, I mean the trial is recruiting as per projection. We are recruiting patients actively in U. S, Canada and Europe. And in terms of the study design and the patient population, Charles IX are pretty standard study design, pretty standard inclusionexclusion criteria compared to any other Duveis syndrome studies in terms of titration, the duration of the study, the inclusionexclusion criteria, the number of seizure medicines. On an average, these patients are in need of good medicines.

Speaker 5

And therefore, on average, they tend to be anywhere between 3 to 6 anti seizure medications. And that's pretty much what we are seeing in our clinical trial as well. And we disclosed some of the safety data, very promising and very supportive, benign tolerability profile as well. One of the things that we did not mention earlier is actually the impact on appetite as well. As you know, many of the drugs that are out there have appetite suppressant effect.

Speaker 5

This is pretty challenging given this patient population already have difficulties with feeding and have weight loss. What we saw with EPS 1, 100 days, it did not stop the appetite and there were no other safety or tolerability signal. So overall, we are very pleased with how the recruitment is going. The target is 2026 top line. Obviously, our goal is to recruit the study as soon as possible and try to bring this medication to the patients as soon as possible.

Speaker 3

Very good. Thank you.

Operator

Thank you. Our next question will come from David Amsellem with Piper Sandler. Please go ahead.

Speaker 9

Hey, thanks. So, first question is on the payer landscape and how you're thinking about that as we move through 2025 and particularly how you're thinking about net realized price in 2025 versus where it is now? Just help us better understand how you're thinking about the landscape, particularly with more generics of sodium oxybate so dense in the market. So that's number so dense in the market in the not too distant future. So that's number 1.

Speaker 9

And then number 2, just wanted to ask a clarification question on pottolus in HD and regarding dosing. I think at the R and D Day, you said that you could safely dose up to 5 times higher than the highest dose of Wake X. I just want to make sure that I have that correct. And as I think earlier in the call, you talked about dosing that's 2x higher. So just wanted to get a better sense of where you think you could realistically dose pitulizin HD relative to the legacy formulation?

Speaker 9

Thanks. Sure.

Speaker 2

Jeff, do you want to respond to the first question?

Speaker 4

Sure. So David, with respect to the payer landscape and how we're thinking about 2025, a lot of the quote contracts have already started to be negotiated for next year. And we see next year's landscape to be very similar to what we see right now for Wakeix. There's not a lot of incremental contracting that's necessary. Again, we have a very unique position as sort of the lowest branded product relative to the oxibates.

Speaker 4

So we're less expensive on a WAC cost than the branded and generic oxibates. And I think that position has afforded us an opportunity to not have to contract. So we see a very favorable landscape moving forward in 2025. With respect to generic oxibates coming, we don't anticipate any new generic oxibates in the market in 2025. It's likely in 2026 that there may be additional opportunities in there.

Speaker 4

But I think what we've seen and heard from the payers currently is, given the fact that Wakeix is the only non scheduled treatment option for both EDS and cataplexy, payers are finding a place on their formularies for that product. There are no plans that require Wakeix to be stepped through and oxybate either branded or generic. And based upon our negotiations and discussions with payers, we believe that that position is going to maintain moving forward, gives us great opportunity for patients to have access to the product and a lot of confidence for us to continue to grow the brand.

Speaker 2

And David, in terms of just to clarify for TOLICON HD, what we shared at Investor Day with regards to we did a small study in terms of with Wakeix and dosed up to 5 times the current label dose and establish the safety margins for the development program for pitulosin HD. The target in the development program is to dose up to 2x the maximum label dose of wickets in the pitulsin HD program. But safety margins have been established up to 5x of the current maximum dose.

Speaker 5

Yes. And just to add to what Jeff mentioned, up to 2x the highest label dose of Wake X, David, with the optimized formulation, which means that the exposure will be a lot higher milligram to milligram compared to Wake X. And not only that, we also have were able to accomplish some other things with the optimized formulation like decrease in interindusial stability as well, which have meaningful clinical impact in patients.

Speaker 9

All right. That's helpful. Thanks.

Speaker 2

Thanks, David.

Operator

Thank you. Our next question will come from Danielle Brill with Raymond James. Please go ahead.

Speaker 10

Hi guys. Good morning. Thanks for the questions. I guess, Sandeep, your guidance for 7,000 patients on drug by year end implies a sequential decline in that patient adds. Is there any particular reason why we might be expecting a slight dip next quarter?

Speaker 10

And then I just have a clarification on the strategy with BEE. Is there any reason to leave this as separate indications from LGS? Or do you feel a basket study might be better suited for Lorcastrin versus Climazole? I appreciate the clarity there. Thank you.

Speaker 6

Yes. Hi, Daniel. Thanks for the question. I think our overall thought around there was we said approximately 7,000. We're not exactly guiding to exactly 7,000.

Speaker 6

So I think what we're seeing is good underlying demand, continued growth quarter over quarter. So we don't see any reason why there would be a significant change in terms of momentum going into the Q4. So that's maybe Jeff Dirks, is there anything else you want to add?

Speaker 4

No, I would reiterate exactly what Sandy said. Guidance is an approximation. We've had very strong durable growth, double digit growth, double digit growth. It's been very consistent. And so we have a lot of confidence.

Speaker 4

But yes, it's an approximation. And again, the average number of patients were round to the nearest 50. So Danielle, I would anticipate Q4 to look similar to what we've sort of seen in momentum in Q2 and Q3.

Speaker 3

Sure.

Speaker 5

Yes. Thanks, Hammad. In terms of Daniel, in terms of your other question regarding the basket study, look, we know that the regulatory agencies open for a basket study approach. We are pursuing 2 programs, as we mentioned, with EPX-one hundred, 1 in DS and 1 in LGS. We are taking a measured approach in that LGS is already a heterogeneous disorder, so we want to keep the patient population as homogeneous as possible, but we are definitely exploring the opportunity of a basket study for the rest of the DTEs.

Speaker 5

And based on depending on the experience that we will have with EPX-one hundred, that will be done in the clinical development plans for EPX-two hundred. But we are also excited very excited about EPX-two hundred liquid formulation of flocasterine given the mechanism of action, the preclinical evidence for efficacy and also the clinical evidence for efficacy that is published widely in literature in an article by Toulit and Dubinsky Etan in 2018 in neurology.

Speaker 8

Understood. Thank you so much.

Operator

Thank you. Our next question will come from Ash Verma with UBS. Please go ahead.

Speaker 11

Great. Thanks for taking my questions. So I have to just for Zaijal in the RECOLLECT study, so you have 80% of patients which have this complete methylation. Want to understand why you're studying the non complete methylation patients as well. When you looked at the data previously, I think the complete methylation patients are the ones that are likely to show the benefit.

Speaker 11

And your primary endpoint is also on the complete methylation. Do you have any understanding from the FDA that you could get a label irrespective of the methylation status if the study is positive? And just quickly on the quarter, so is there any like inventory build here for VK? So the aggregation number added by 4% increased 4% sequentially, but the net sales is up 8%? Thanks.

Speaker 4

Yes. Good morning, Ash. Thanks for

Speaker 2

your question. Kumar, who has addressed the question on CYN-two?

Speaker 5

Yes. Sure. Good morning, Ash. Yes, a great question, by the way. So you're right, Ash.

Speaker 5

The primary target population and the primary endpoint is on patients with complete methylation. There's a nominal number of partially methylated patients as well, and this came about during our discussion with the FDA. If we do see supportive data in partially methylated patients that's consistent with the data that we see in complete methylation patient, that does leave us an opportunity to discuss with the regulatory agency in terms of getting a broader label. But for now, the study primary target population and the primary endpoint is complete methylation patients. And then?

Speaker 5

Yes.

Speaker 6

Just a question in terms of trade inventory. I mean, we see normal fluctuations of trade inventory every quarter. Nothing significant that I would mention at least for that was had an impact this quarter. Typically, what you do see in the second half of the year, do you see some improvement in gross to net? The Q1, as you know, as you go into the year, gross to net tends to be higher, starts coming down in the second quarter and the second half of the year tends to be.

Speaker 6

So what you're probably seeing a little bit of improvement in gross to net as well. So hopefully that provides some context.

Speaker 2

Great. Thanks. Thanks, Ash.

Operator

Thank you. Our next question will come from Corinne Johnson with Goldman Sachs. Please go ahead.

Speaker 10

Good morning, guys. Maybe a couple from us. Could you just talk to us about how you're planning to measure fatigue in the clinical study of patellefsen HD in narcolepsy and how like what would be clinically meaningful for in terms of benefit on those patient population? And if you could just provide some context around how common fatigue is within a narcolepsy population, that would be helpful. Thanks.

Speaker 2

Good morning, Karim. Thanks for your question. Kumar, the plan for fatigue in HSD?

Speaker 5

Yes. Thank you, Jeff. Hey, good morning, Karim. Thanks for the question. Yes, fatigue is a symptom that is more prevalent than one would think in patients with narcolepsy.

Speaker 5

The literature has indicated that about 60% to 70% of patients with narcolepsy have fatigue, And we are doing a longitudinal prevalence and impact of fatigue in patients with narcolepsy. The study is underway, and at least the preliminary data shows the prevalence of fatigue is very similar. About twothree of the patients with narcolepsy have significant fatigue. In terms of how do we measure, this is an indication for which there are no approved treatments. So we had an extensive leading edge work to look at the all the instruments that are out there to measure fatigue, and we are devising an instrument that specifically measures fatigue in patients with narcolepsy.

Speaker 5

A lot of work that is already done, and we'll be discussing with the regulatory agencies in terms of the appropriateness of using that instrument, specifically to measure fatigue, specifically in patients with narcolepsy, because that is what the regulatory agencies expect. Thank you. Okay.

Speaker 10

And then in terms of the patents around the patellecin HD, could you just help expand on the kind of nature and number of those patents that you have into those early 40s?

Speaker 2

Sure, Karen. I think the patents around HD are around the unique formulation with regards to that along with the Gasser resistant coating and the improvement in the overall PK profile. So the clinical data will sort of support that with regards to what that PK profile will demonstrate. And that is the basis of the HD patents out to the 2,044.

Speaker 10

Thank you.

Operator

Thank you. Our next question will come from Jason Gerberry with Bank of America. Please go ahead.

Speaker 12

Hey, guys. Good morning. Thanks for taking my questions. 2 for me. First is on EPX-one hundred.

Speaker 12

Wondering, have you looked at EPX-one hundred relative to longboard specs in the zebrafish model? And is that something that's sensitive enough to tease out potential areas of differentiation or more of just a measure of more of

Speaker 2

a go, no go viability

Speaker 12

of the molecule in that disease state? And then as we get into next year, just curious with respect to Wakeix IP litigation, there's a Markman hearing. And I'm just curious if you can kind of help frame what are some of the key kind of outcomes we'd be looking for with respect to the Crystal Informed patent? How important is it to get a broad construction to sort of box out generics and secure an infringement ruling ultimately when the case goes to trial in 26? Thanks.

Speaker 2

Thanks for the question.

Speaker 5

Hey, good morning, Jason. Look, EPX-one hundred was extensively studied in the zebrafish model, and it showed great efficacy. Similarly, EPX-two hundred was also studied in this model, which showed great efficacy, which was in turn confirmed by the clinical experience. In terms of bexicasterin, obviously, it's not our compound, and we don't have access to that compound. But within the BRAFISH model, there were some analogs that were studied that had some pure 5 ST2C agonistic properties, and that data is published in the literature by Griffin et al.

Speaker 5

In brain communication.

Speaker 2

Yes. And I think, Jason, in terms of your second question about the IP litigation, I think, first of all, we really comment on ongoing litigation, but I think the Markman trial that's scheduled for next March, I mean, basically what that does is it sets up the claims construction.

Speaker 3

I think it sets up the overall claims construction in

Speaker 2

the case and then informs the

Speaker 5

Yes

Speaker 2

Yes. And I think that with regards to, as we said before, we're confident in the strength of the IP, the liquidity, the patents, there were 2 potential challenges to the U. S. PPO that were denied and those decisions were final. So our position is strength in the overall IP and out to 2,030.

Speaker 5

Got it. Thank you.

Operator

Thank you. Our last question will come from Francois Brisebois with Oppenheimer. Please go ahead.

Speaker 3

Hi. Thanks for the question. Can you help just elaborate on the percentage of patients that are both on oxybate and Wakeates? And has that changed with time? I'm just trying to gauge also the reimbursement response.

Speaker 3

Has that been the same? Is it more difficult? You just mentioned there's so much growth that comes from the REMS doctors. So I'm just wondering if reimbursement has changed. And do you foresee any changes once, if Orexin's come into market in terms of reimbursing all these products, in probably pharmacy market?

Speaker 3

Thank you.

Speaker 2

Yes. Good morning, Frank. Thanks for your question. Thanks for hanging in there. Jeff?

Speaker 4

Sure. Frank, the percentage of patients are on both Wakeixent and OXIVATE has been relatively consistent. It's been like low double digits like in the teens, probably for about the last couple of years. And the reimbursement landscape has been modestly consistent with where we are obviously with the introduction of more generic oxibates it's going to be easier to potentially get concomitant use. Certain plans are obviously looking at this category and disease area.

Speaker 4

But again, remembering this is a rare orphan space. There's not a lot of patients. It's not very high on a managed care plan. For a lot of them, it's more costly to put in additional administrative steps given the limited number of patients. But obviously moving forward, there's likely going to be a number of potential branded products that could be introduced later in the decade.

Speaker 4

Obviously, time will tell how managed care will look at this. But overall, rare orphan categories tend to not be as highly managed as other categories given there's a limited number of patients. It's not a huge budget area. I think our goal is to continue to provide meaningful enhancements. Obviously, the GR and EHD program are really going to be able to hopefully provide some enhanced efficacy.

Speaker 4

Maybe that can end up helping to potentially reduce the amount of controlled substances patients take, reduce the amount of stimulants, potentially oxybate, which obviously would be extremely favorable not only for the patients, but also the payers.

Operator

Thank you. At this time, I would like to turn the call back over to Jeff Dano for any additional or closing remarks.

Speaker 2

Thanks, operator. Thanks, everyone, for joining our call today. We were excited to share with you the progress we are making in our robust late stage pipeline and look forward to providing future updates. Thanks, and have a great rest of your day.

Operator

This does conclude today's Harmony Biosciences Third Quarter 2024 Financial Results Conference Call. You may now disconnect your line and have a wonderful day.

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