Harmony Biosciences Q1 2025 Earnings Report

Harmony Biosciences EPS Results

• Actual EPS: $0.78
• Consensus EPS: $0.59
• Beat/Miss: Beat by +$0.19
• One Year Ago EPS: $0.67

Harmony Biosciences Revenue Results

• Actual Revenue: $184.73 million
• Expected Revenue: $184.26 million
• Beat/Miss: Beat by +$471.00 thousand
• YoY Revenue Growth: +19.50%

Harmony Biosciences Announcement Details

• Quarter: Q1 2025
• Date: 5/6/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, May 6, 2025
• Conference Call Time: 8:30AM ET

Harmony Biosciences (NASDAQ:HRMY), a commercial-stage pharmaceutical company, focuses on developing and commercializing therapies for patients with rare and other neurological diseases in the United States. The company offers WAKIX (pitolisant), a molecule with a novel mechanism of action for the treatment of excessive daytime sleepiness in adult patients with narcolepsy. It also offers HBS-102, a melanin-concentrating hormone receptor 1 for MCH neurons. The company was formerly known as Harmony Biosciences II, Inc. and changed its name to Harmony Biosciences Holdings, Inc. in February 2020. Harmony Biosciences Holdings, Inc. was incorporated in 2017 and is headquartered in Plymouth Meeting, Pennsylvania.

Harmony Biosciences Q1 2025 Earnings Call Transcript

Key Takeaways

• Financial strength: Harmony reported 20% year-over-year Q1 net revenues of $184.7 million, reaffirmed 2025 guidance of $820 – 860 million, and exited the quarter with over $600 million in cash and investments while remaining profitable.
• Robust late-stage pipeline: The company’s portfolio now spans eight assets in 13 development programs across sleep-wake, neurobehavioral and rare pediatric epilepsy franchises, with up to six Phase III registrational trials expected by year-end.
• ZYN-TWO RECONNECT: Top-line data from the Phase III trial in Fragile X syndrome are on track for Q3 2025, potentially enabling the first FDA-approved treatment for this rare disorder.
• Pitolisant lifecycle management: Next-generation high-dose (HD) and gastro-resistant (GR) formulations are set to enter Phase III in Q4 2025, targeting PDUFA dates in 2026 (GR) and 2028 (HD) with patent protection through 2044.

Presentation

[Operator]

Good morning. My name is Angela and I will be your conference operator today. At this time, I would like to welcome everyone to Harmony Biosciences First Quarter twenty twenty five Financial Results Conference Call. All participant lines 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.

[Brennan Doyle, VP & Head of Investor Relations at Harmony Biosciences]

Thank you, operator. Good morning, everyone, and thank you for joining us today as we review Harmony Biosciences' first quarter twenty twenty five 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 life cycle, we believe non GAAP financial results better represent the underlying business performance. Our speakers today on the call are Doctor.

[Brennan Doyle, VP & Head of Investor Relations at Harmony Biosciences]

Jeffrey Dano, President and CEO Adam Zeski, Chief Commercial Officer Doctor. Kumar Badur, Chief Medical and Scientific Officer and Sandeep Kapadia, Chief Financial 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.

[Brennan Doyle, VP & Head of Investor Relations at Harmony Biosciences]

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

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Thank you, Brennan. Good morning, everyone, and thanks for joining our call today. Before we get started, I am very excited to introduce and welcome Adam Zeski, our new Chief Commercial Officer to the Harmony team. Adam will be sharing a bit about his background in a moment. But let me tell you, in just six weeks at Harmony, he has already made a big impact.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

He has been fully embraced by the team, shown himself to be a quick study and strategic thinker and has brought fresh energy and focus as we continue to grow the pitolisant franchise from the strong foundation we've built over the past five years. Building off of our four years of profitability, Q1 was another strong quarter for Harmony. We continue to leverage our commercial success to drive both top and bottom line growth and are well positioned for significant momentum throughout 2025, fueled by key catalysts from our robust late stage pipeline. Our next major clinical milestone is on track for the third quarter. The top line data readout from the Phase III registrational trial of ZYN-two in patients with Fragile X syndrome, the ReConnect study.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

A positive outcome could position us to deliver the first ever FDA approved treatment for Fragile X syndrome, a significant milestone for patients and their families. I am very proud of the unique profile we have built at Harmony, a profitable, self funding biotech company with a robust pipeline that has the potential to help hundreds of thousands of patients living with rare neurological diseases while creating durable long term value for our shareholders. First, a few comments on our core commercial business. Wicketts and narcolepsy continues to deliver strong, consistent growth. Net product revenue for the quarter was $184,700,000 a 20% increase year over year, now in its sixth year on the market.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

This growth reflects the highly differentiated product profile of WCAGX as the first and only FDA approved nonscheduled treatment for patients living with narcolepsy. Our unique commercial model and strong execution continue to deliver results, and we remain confident that Wakix is on track to reach $1,000,000,000 plus opportunity in narcolepsy alone, well ahead of its loss of exclusivity in 02/1930. Turning to our pipeline, where Harmony's story gets even more exciting. Over the last two years, we have been strategic in leveraging our strong balance sheet to build one of the most robust late stage pipelines in the industry for people living with rare neurological diseases. Today, we have three distinct franchises in sleep wake, neurobehavioral disorders and rare pediatric epilepsies, each with late stage programs, each with plans to pursue multiple indications and each one of these franchises with peak sales potential of 1,000,000,000 to $2,000,000,000 Our pipeline now includes eight assets across 13 development programs, and we expect to have up to six programs in Phase III trials by the end of this year.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Some highlights from our pipeline. First, ZYN-two in patients living with Fragile X syndrome. The Phase III RECONNECT study is on track for top line data in the third quarter. This trial is designed to replicate the positive findings from the prespecified analysis on the primary outcome from the Phase twothree CONNECT study in the subgroup of patients with complete methylation of the FMR1 gene. Next, the Tolucan HD.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

We are on track to initiate Phase III registrational trials in narcolepsy and idiopathic hypersomnia in the fourth quarter. Pitolosin HD is our next generation high dose pitolosin formulation with an enhanced PK profile, designed to deliver greater efficacy with no change in the well established safety tolerability profile of pitolacin. With utility patents filed out to 02/1944 and a target PDUFA date in 2028, the HD provides us with a unique opportunity to extend and expand the Tullisin franchise and pursue additional indications for which there are no approved treatments. Kumar will provide more color on our pipeline later in the call. On the business development front, with over $600,000,000 in cash and cash equivalents on the balance sheet, we are actively looking to further strengthen the pipeline.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Our experienced business development team has a track record of disciplined, smart execution, and we are focused on opportunities that can expand our leadership in sleep wake, build out our neurobehavioral and epilepsy franchises and or bring in adjacent rare CNS assets. Our financial strength gives us flexibility, and we are well positioned to deploy our resources to further grow our pipeline and generate significant value for both patients and our shareholders. Against the current market backdrop, Harmony's profile is not only unique because of its profitability and strong cash generation, but Harmony is also well positioned to navigate the shifting geopolitical landscape, including the potential impact from proposed new tariffs. On the supply chain side, while our current manufacturing site for Wakix is in France, we've been working on a secondary manufacturing site for Wakix in The U. S.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

And have made good progress toward bringing this site online. Looking ahead, Pitullisin HD is the future of the Pitullisin franchise, with utility patents for HD extending out to 02/1944. The manufacturing of Petulosin HD has been based in The U. S. From the start of the program.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Importantly, our exclusive licensing rights for WCAGX and the intellectual property associated with WCAGX, along with all the IP related to our pipeline products are domiciled here in The United States. I want to emphasize how unique Harmony's structure is compared to many others in the biotech industry because of its U. S.-based operational foundation. While the outcome of many of these policy proposals is uncertain, we have taken proactive steps to ensure operational independence and minimize exposure to these potential risks. In closing, I want to leave you with this.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Harmony is a profitable, self funding biotech company with a strong and growing commercial business. Next generation formulations of Pitulosin on track for PDUFA dates in 2026 and 2028 with utility patents filed out to 02/1944 and a catalyst rich late stage pipeline that is poised to deliver one or more new product or indication launches each year over the next several years, with peak sales potential over three billion dollars If you look across our industry today, Harmony's profile stands out and offers a unique and compelling investment opportunity. Thank you again for joining us today. I'll now turn the call over to Adam Zewski, our Chief Commercial Officer, to share more about his background and provide an update on our commercial business. Welcome, Adam.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

We are thrilled to have you on the team.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

Thanks, Jeff. I really appreciate the warm welcome from the entire Harmony Biosciences team. I'm thrilled to be joining Harmony at such an exciting time. I've been very impressed with the clear focus on patients and what the team has achieved over the past several years with WCAG. I'm excited to continue that success for many years to come and to expand on that with the next generation Pitolosin formulation as well as the late stage products in the pipeline.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

I hope to leverage my experience having led marketing, sales and market access teams for ten years in The US, as

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

well

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

as leading large and small country organizations in Europe for ten years. My most recent role was leading a region of 25 countries, nearly 900 employees and over 2,000,000,000 in revenue with double digit growth for the past three consecutive years as the largest contributor to revenue and growth for Europe. Prior to that, I led the franchise teams for Europe across rare disease, neuroscience, immunology, hematology, oncology, gastroenterology and plasma derived therapy. I've been a part of building several multi billion dollar brands and I've worked on 10 rare disease launches in the past ten years. Turning to Harmony's performance.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

Q1 twenty twenty five demonstrated the ongoing strength of our core business and our ability to deliver durable growth. Notably, we achieved 184,700,000 in net sales and the fundamentals of the business remain strong and stable. In the first quarter, we saw the familiar seasonal rhythm to our performance consistent with prior years. This includes the traditional Q1 challenges faced across the industry related to payer dynamics, followed by positive momentum and increased prescription demand coming out of Q1. The continued strong 20% year over year first quarter growth in WCAG's net revenue,

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

now

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

in its sixth year post launch, underscores the sustained high demand for WCAG's within the narcolepsy market, driven by the broad clinical utility of WCAGICS and the fact that it's the first and only non scheduled treatment for patients with narcolepsy. This differentiated profile allows us to tap into the full potential of the approximately eighty thousand diagnosed narcolepsy patients. Even with the introduction of new and generic oxybate alternative, we continue to see consistent utilization of WATICS among the approximately 4,000 HCPs enrolled in oxybate REMS. Despite our high penetration within this group, WCAGX prescriptions for additional narcolepsy patients within this segment continues to grow each quarter. We're pleased with the robust growth in Wakix prescribers beyond those enrolled in oxybate REMS, demonstrating Wakix's ongoing success in capturing a broader segment of branded prescribers.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

Additionally, we have now reached over 50% penetration within this approximately 5,000 HCP segment as of the end of Q1. As we look ahead to full year 2025, we're confident in the strength of the underlying business fundamentals and optimistic that they will fuel continued growth of WCAGX. Based on this, we confirm our net revenue guidance in the range of $820,000,000 to $860,000,000 and we remain on track to achieve $1,000,000,000 plus in narcolepsy alone. Leveraging our robust, scalable commercial infrastructure, we are well positioned to unlock significant longer term growth and value with our next generation patolosin programs. Our development of both patolosin gastro resistant, the GR and high dose HD formulations is centered on unmet patient needs, aiming to deliver meaningful improvements in care and extend the growth and revenue of the Pitolesin franchise into the mid-2040s.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

Kumar will elaborate on the specifics of the HD and GR development programs. Initial market research among HCPs and payers regarding the HD target product profile has demonstrated strong interest from both physicians and payers and clear unmet need for patients. In summary, we saw continued strong growth of Wakix in Q1. Our patient centric drug development approach for the pasolosin lifecycle management program combined with our unique commercial model will ensure durable growth through the mid-2040s. In

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

closing,

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

my experiences in both rare disease and neurology were tremendously rewarding parts of my career. I'm excited to return to these therapeutic areas and contribute to Harmony's potential to help many more patients living with unmet medical needs. I would now like to turn the call over to our Chief Medical and Scientific Officer, Kumar Badur, to discuss the advancements in our clinical development programs. Kumar?

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Thank you, Adam.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Good morning, everyone, and thank

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

you for joining us today. In R and D, we continue to make progress in advancing our pipeline across 13 development programs, eight different assets, and three distinct franchises focused on rare neurological diseases with high unmet medical needs. We have four Phase three registrational trials ongoing in four distinct indications, and we will have up to six Phase three registrational trials by the end of this year. This makes our portfolio one of the most robust late stage pipelines in the industry with the potential to deliver one or more new products or indication launches every year in the coming years. Our full clinical development pipeline is shown on slide number five and the clinical development highlights are on slide six through slide 11.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Let's begin with our sleepwake franchise. Our next gen petrolocent programs, with our patient centric development programs are aimed to build upon the product profile of pitotocin. We are on track to initiate the Phase three registration trial of pitotocin HD in narcolepsy in Q4 twenty twenty five with a target PDUFA date in 2028. This optimized, higher dose formulation holds the promise of greater efficacy in addressing excessive daytime sleepiness, the most important unmet need in patients with narcolepsy, and also target fatigue, a symptom experienced by about sixty percent to seventy percent of patients with narcolepsy for which there are no currently approved treatments. We are also on track to initiate our Phase III registration trial in idiopathic hypersomnia in Q4 twenty twenty five.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Petrolocent HD is expected to deliver efficacy in excessive data and sleepiness and also address critical symptoms such as sleep inertia, another core symptom in patients with idiopathic hypersomnia for which there are no approved treatments. This double blind, randomized, placebo controlled, parallel arm study is designed with FDA input and we anticipate a PDUFA date in 2028. Moving on to our pitotlofen GR program. This formulation is designed to adjust the GI co morbidity prevalent in almost eighty percent of patients with narcolepsy and also designed to give patients an ability to start at the therapeutic dose range with no titration. We initiated the pivotal B study in Q1 twenty twenty five and the top line data are anticipated in Q3 twenty twenty five with the projected PDUFA date in 2026.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Utility patents have been submitted for both pitilocent GR and pitilocent HD with the potential for patent protection until 02/1944. Next in our sleep rate franchise is our orexin receptor agonist program, BP1.5205, a potential best in class candidate currently in preclinical development. In vitro pharmacology data demonstrate greater potency compared to all other publicly disclosed Oraxin-two agonist. The combination of high potency, excellent selectivity, potential for once daily dosing, and robust preclinical safety data underscores its best in class potential. We will be presenting a comprehensive preclinical safety and efficacy data at the upcoming annual sleep meeting in June.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

And the data will demonstrate efficacy in sleepiness consistent with its high potency. We remain on track to file an IMPD by mid-twenty twenty five with first in human studies in the second half of this year and anticipate to share clinical data in 2026. Moving on, I'm very excited about our neurobehavioral franchise, which is the next major catalyst in our portfolio. The top end data from the ZVON-two Phase three registrational trial, the RECONNECT study in Frasile X syndrome is in the third quarter of this year. Frasile X syndrome, a rare genetic disorder caused by mutation of the FMR1 gene on the X chromosome results in decreased or no FMR protein production, especially in patients with complete methylation that results in silencing of the gene.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Lack of fmr protein causes endocannabinoid dysregulation, leading to significant neuro behavioral symptoms, intellectual impairment, developmental delays, and other symptoms. In fact, Frasile X syndrome is the most common known inherited cause of intellectual impairment and autism spectrum disorders, with an estimated prevalence of approximately eighty thousand patients each in The US and The EU. VYN-two represents a novel therapeutic approach. It's a 100% synthetic cannabidiol devoid of THC in a patent protected, permeation enhanced transdermal gel, delivering the drug directly into the systemic circulation. ZYN-two is designed to modulate the endocannabinoid system by interacting with CB1 receptors, aiming to restore endocannabinoid homeostasis and thereby alleviating the neuro behavioral symptoms.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Notably, gastrointestinal administration of V1002 offers a significant advantage in tolerability and safety compared to oral cannabidiol, which is associated with substantial gastrointestinal disturbances such as nausea, vomiting, abdominal cramps, and diarrhea. By avoiding the first class hepatic metabolism, ZYN-two is not associated with liver function abnormalities that are often observed with oral cannabidiol. The ongoing Phase three registrational trial, the RECONNECT study, builds upon the data and insights from the large phase two-three connect study. The RECONNECT study essentially seeks to replicate the clinically meaningful and statistically significant efficacy signals observed in patients with complete methylation in the CONNECT study. We have completed recruitment and closed new patient screenings.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

We are on track for top line data in Q3 twenty twenty five. If positive, the RECONNECT study is expected to support regulatory approvals in both US and EU, and Harmony holds global rights for ZYN-two. Based on the etiology and pathophysiology of Fraudan Lake syndrome, ZYN-two's mechanism of action, the robust clinical data in patients with complete methylation from the CONNECT study, as well as the enhancements in the design of the RECONNECT study based on the learnings from the CONNECT study, we have a strong conviction in the program's success. If approved, ZBYN-two will be the first and only treatment approved for any symptoms in patients with Fasaldeck syndrome. Furthermore, we remain on schedule to initiate a phase three registration trial in 22q deletion syndrome in 2025.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

This rare disorder with significant neurobehavioral symptoms and no approved therapies affects approximately eighty thousand individuals each in The US and Europe. Finally, a few words on our epilepsy franchise, where we have the most advanced five HT2 serotonin development programs in developmental and epileptic encephalopathies. EPX100, Clemsul Hydrochloride program, is actively enrolling participants in the global phase three registrational trials, the ARGUS study in Dravet syndrome and the Lighthouse study in Lennox Gastaut syndrome. Our other investigational product in developmental and epileptic encephalopathies, EPX200, a liquid formulation of locipherine, is in the pre IND phase. In conclusion, we are making strong progress across our late stage rare neuro portfolio with the potential to launch one or more new products or indications each year in the coming years.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

More importantly, this progress holds the promise of providing meaningful new treatment options to hundreds of thousands of individuals affected by rare neurological disorders. For many of these patients, there are currently no approved treatments but the existing therapies offer limited efficacy and considerable safety and tolerability issues. As always, on behalf of Harmony, I would like to thank all the patients and their families who are participating in our clinical trials, as well as our clinical investigators and site personnel for their efforts and commitment in helping us to advance our development programs. I'll now turn the call over to our CFO, Sandeep Kapadia for an update on our financial performance. Sandeep?

[Sandip Kapadia, CFO & Chief Administration Officer at Intercept Pharmaceuticals]

Thank you, Kumar, and good morning, everyone. This morning, we issued our first quarter twenty twenty five earnings release and filed our 10 Q, where you'll find the details of our financial and operating results. Our financial performance is also shown on Slides 12 through 14. We're off to a great start to the year in 2025. We reported another quarter for strong growth in revenues of 20% and net income growth of 19% along with closing the quarter with over 600,000,000 investments on the balance sheet.

[Sandip Kapadia, CFO & Chief Administration Officer at Intercept Pharmaceuticals]

We continue to have a very unique profile in biotech with growing top line profitability and generating positive cash flow. As a result, we are well positioned to advance our growth strategy and look for opportunities to drive incremental value for shareholders. For the first quarter of twenty twenty five, we reported net revenues of 184,700,000.0 compared to $154,600,000 in the prior year quarter, representing a growth of 20%. Performance in the quarter reflects the strong underlying demand for Wagyu's coupled with the typical seasonal dynamics in Q1 that the industry as a whole experiences including higher gross to net deductions while not seeing a significant change in trade inventory. We reported total operating expenses for the first quarter of '90 '6 point '6 million dollars compared to $75,100,000 for the same quarter in 2024.

[Sandip Kapadia, CFO & Chief Administration Officer at Intercept Pharmaceuticals]

Growth in our expenses were driven by our expanding late stage pipeline along with investments for the commercialization of WCAGX and narcolepsy. We also reported solid net income and margin. Non GAAP adjusted net income for the first quarter of twenty twenty five was $60,400,000 or $1.03

[Sandip Kapadia, CFO & Chief Administration Officer at Intercept Pharmaceuticals]

per diluted share compared

[Sandip Kapadia, CFO & Chief Administration Officer at Intercept Pharmaceuticals]

to $50,700,000 or $0.88 per diluted share in the prior year quarter. We believe non GAAP adjusted net income better reflects the underlying business performance. Please see our press release for a reconciliation of GAAP to non GAAP results. We also ended the first quarter with 610,200,000 in cash, cash equivalents and investments on the balance sheet. And looking ahead to the balance of 2025, we are reiterating our net revenue guidance for 2025 of $820,000,000 to $860,000,000 highlighting our progress towards a $1,000,000,000 plus opportunity in narcolepsy alone.

[Sandip Kapadia, CFO & Chief Administration Officer at Intercept Pharmaceuticals]

We expect continued strong quarter over quarter growth, while noting the potential of trade inventory drawdown of a few days in Q2 as we head into the summer months. With respect to expenses, we expect increased R and D investments as we advance our late stage pipeline with multiple programs in Phase three registrational trials. As previously noted, we expect to potentially incur 29,000,000 in R and D related milestone payments in 2025, including milestones for the completion of the Phase three trial for ZYN-two in fragile X syndrome, along with a milestone for positive top line data from this trial. In addition, there is a milestone related to the initiation of the Phase one trial in our OREXAN2 agonist program, which we anticipate in the second half of this year. In summary, I'm pleased with the great start we're off to in 2025.

[Sandip Kapadia, CFO & Chief Administration Officer at Intercept Pharmaceuticals]

We once again delivered a quarter with double digit top line growth and healthy operating margins. This along with our U. S. Operational footprint positions us well as we move through the year with the potential for significant value creation through our catalyst rich pipeline. And with that, I'd like to turn the call back over to Jeff for his closing remarks.

[Sandip Kapadia, CFO & Chief Administration Officer at Intercept Pharmaceuticals]

Jeff?

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Thank you, Sandeep. To wrap up, Harmony Biosciences offers a very compelling profile, a strong commercial foundational business generating significant cash and profitability, a robust late stage pipeline with meaningful near term catalysts poised to deliver one or more new product or indication launches each year over the next several years and peak sales potential over $3,000,000,000 Over $600,000,000 on the balance sheet, funding the entire enterprise, giving us the capacity to build out our pipeline further and create even greater value potential. I am proud of the entire team and what we've accomplished together, transforming Harmony into a high growth biotech company, delivering on our promise to patients and creating durable long term value for our shareholders. So thank you. And I will now turn the call back over to the operator.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Operator?

[Operator]

Thank We'll take our first question from Craig Savonovich with Mizuho Securities.

[Graig Suvannavejh, Managing Director at Mizuho Financial Group]

Hey, thank you very much for taking my question. Congrats on the quarter. Two questions please. First, just on the pipeline and for ZYN-two, could you please remind us what the powering assumptions are for the study and also what perhaps risk mitigation strategies and what strategies for optimizing clinical trial success you put in place? That's my first question.

[Graig Suvannavejh, Managing Director at Mizuho Financial Group]

And then my second question is just for Adam. Congrats on the new role as Chief Commercial Officer. But could you please share with us maybe what you've seen thus far with the commercial team and strategies that are in place supporting Wagex? And are there any changes or tweaks that you think, given your experience, can be put in place? Thanks so much.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Yes. Good morning, Greg. Thank you for your questions. First to Kumar on ZYN-two. Very excited for that opportunity.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

And Kumar can sort of share with you the powering and how that program is designed and our conviction in the top line data that's on track for Q3. Umar?

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Greg,

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

thanks for the question. Regarding the powering of the study, the study is powered more than 90% for the primary endpoint, which is change in the social avoidance severity from baseline to the end of the study as measured by aberrant behavior checklist, community addition specific for frazolous syndrome. And the study powering and the sample size calculation and all the statistical analysis was planned based on the learnings from the CONNECT study, whereas we have disclosed in the past, we not just saw a clinically meaningful, but also a nominally statistically significant difference in patients with complete methylation on the same primary endpoint. Regarding the question on the checks and balances within the clinical trial, Greg, as you know, many of us have done so many neuropsychiatric clinical trials and these clinical trials are very unique. It's very important to make sure that the right patients get into the study.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

And we have ensured that in a way with Frazolek syndrome, it makes it somewhat easier because all of these patients need to have full methylation sorry, full mutation that is confirmed by looking at the CGG repeats and also full complete methylation via PCR test. And after that, we have put up pretty rigorous criteria and checks and balances in place to make sure that the baseline severity meets the criteria that we have set. And also, the caregivers are trained extensively via an independent third party vendor whenever they complete the assessment. So overall, lots of checks and balances in place. Again, as we mentioned in the past, this study is designed based on the learnings from the CONNECT study.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Not only that, we made several enhancements in the RECONNECT study to increase the probability of success. Overall, very excited, high level of conviction and confidence in potentially bringing the first treatment for any symptoms in patients with prozolec syndrome.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Yes. Thank you, Kumar. And over to Adam for his initial impressions. And let me reiterate our welcome to Adam to the Harmony team. Adam?

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

Thank you,

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

Jeff, and thank you, Greg, for the question. Look, it's fantastic to be part of the team here at Harmony now. I'm super excited. I've been thrilled with what I've seen so far. I was originally attracted to Harmony Biosciences for a couple of reasons.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

I saw an organization that had a very clear purpose and a shared purpose around really trying to benefit patients and meet unmet needs of those patients in neurology. I saw an extremely strong team, a lot of talented individuals. And I think as you've seen here today, the outstanding performance, and it just continues quarter over quarter, year over year, in addition to having a really exciting pipeline, pipeline that is developed with very clear patient orientation and is, I think, smartly designed to really meet the remaining unmet needs of patients in each of these areas. So I'm just about one month in. I've had a wonderful opportunity to connect with the team.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

And really, I'm focused on learning and listening at this stage. My platform is pretty simple. I'm focused on how do we continue the strong performance that the organization has delivered for the past five plus years consistently? And how do we prepare for the future? I think the team has a lot of great ideas, and I'm really enjoying the discussion.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

And we're going to be evaluating tweaks, as you say, tweaks and opportunities moving forward and prioritize those. And I'm confident we will continue the strong performance with Wakix, and we will be prepared for the future with the exciting pipeline that exists here. So thank you for your question.

[Operator]

We'll go next to David Amsellem with Piper Sandler.

[David Amsellem, Sr. Research Analyst at Piper Sandler Companies]

Thanks. So wanted to ask a high level question on the orexin. So you have three orexin agonists in mid to late stage development, and it's a space that admittedly getting crowded. So I guess the question is, where do you see your orexin-two receptor agonist fitting in within this emerging armamentarium in sleep wake? Are you looking at the asset in settings beyond SleepWake as other companies are starting to do?

[David Amsellem, Sr. Research Analyst at Piper Sandler Companies]

So that's number one. And then number two,

[David Amsellem, Sr. Research Analyst at Piper Sandler Companies]

can you just talk at

[David Amsellem, Sr. Research Analyst at Piper Sandler Companies]

a high level about the payer landscape for WCAG and what I guess I'm particularly interested in is as we get more and more generic competition with the oxybate starting next year, how should we think about the payer landscape and the gross to net for OPWAKX? Thanks.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Good morning, David. Thanks for your question. So ORRXAN2 agonists, obviously, a lot of attention, a lot of focus, a lot of interest in the next novel target for narcolepsy, other essential disorders and hypersomnolence. The programs are emerging, still early, still a lot to learn. I think I'll turn it over to Kumar in

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

terms of

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

our thoughts where they could fit in. We still see narcolepsy in terms of a polypharmacy market. Chronic neurologic disorder, multiple mechanisms always can be helpful. Kumar, further thoughts on the other programs and where we fit in?

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Sure. Thank you, Jeff. Hey, good morning, David. Thanks for the question. Vikram, we see all of these programs as still early and the data are emerging.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

We just need to see how the data will pan out from an efficacy and safety perspective and also from a tolerability perspective. With the possible exception of Takeda's eight sixty one, which is being pursued only in NT1 and is in Phase three. The other two assets are in Phase 1b 2a studies, and we are monitoring these programs very carefully. What we are excited about is really BP1.15205, as we disclosed in the past, continues to be the highest potent compound compared to any other orexin receptor agonist for which the data has been disclosed publicly. And you'll see this high potency translated into robust efficacy in sleepiness in very low doses in the preclinical models.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

And these data will be presented at the upcoming annual sleep meeting in the month of June. And we'll be providing additional color and context around the preclinical safety and efficacy. In terms of your question, David, beyond central disorders of hypersomber, And that is something we are also carefully monitoring and also doing some of our own experiments as well. There is a potential that orexin receptor agonist could be helpful in certain other symptom domains, for example, like cognition and potentially mood disorders. These are some of the things that we are working on and also following the field very closely, but it's too early to comment on that.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Thanks, Kumar. In terms of the payer landscape, let me turn it over to Adam. But I think, David, in terms of you mentioned the generic oxybate, I think to date, we've not seen any impact with regards to on the payer environment for Wakix with generic oxybate thus far and also the once nightly. In terms of the oxybate vertical, where we feel that we're pretty well insulated, given that it's the first and only non scheduled product with a differentiated profile, payers not wanting to step wake it through an oxybate therapy. But further thoughts on payer landscape going forward, Adam?

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

Thank you, Jeff, and thank you, David, for the question. One of the

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

things I've been really impressed with is the strength and stability of the fundamentals underpinning the business for WCAGX. And I would include payer coverage in that. I think we experienced very broad coverage for WCAGX with over 80% of lives covered U. S. Lives covered for WCAGX.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

And that has really remained consistent, I think, the past several years despite entries of additional brand and generic oxidates. As Jeff mentioned, plans typically don't through an oxybate to secure access for Wakix. And that is, I think, largely because it is a highly differentiated product as the first and only nonscheduled treatment option for these patients. And that performance and coverage has really been stable and consistent, I would say, for the past several years. We saw no changes in no significant changes in payer coverage in 1Q.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

And that is also a reason why I think we remain confident in confirming our full year guidance for net revenue of between $820,000,000 and $860,000,000 for the year. Thank you.

[David Amsellem, Sr. Research Analyst at Piper Sandler Companies]

Thanks.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Thanks, David.

[Operator]

We'll go next to Amy Fadia with Needham.

[Ami Fadia, Senior Analyst at Needham & Company]

Hi, good morning. Thanks for taking my question. And Adam, welcome to the team. Perhaps my first question is just sort of around market dynamics. And how do you see that evolve with the orexins entering the market?

[Ami Fadia, Senior Analyst at Needham & Company]

I understand that some of the assets are still in Phase II. However, in the data that they've generated so far, particularly Takeda as well as Alkermes seems to indicate that patients can achieve something in close to thirty minutes in the NWT. And with that, is there still likely to be polypharmacy in this market? And maybe if you could sort of comment on that and comment on whether you think the dynamics could be different across NT1, NT2 or NIH? And then just separately regarding EPX-one hundred, what are your thoughts around potentially exploring it in a broader DE population as opposed to HES?

[Ami Fadia, Senior Analyst at Needham & Company]

Thank you.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Morning, Ami. Thank you for your questions. Yes, with regards to the orexin-two agonists and sort of the evolving landscape there, obviously, we are following that closely, anticipating what those product profiles may deliver. And as you mentioned, strong efficacy on improving EDS in terms of the data that we've seen. Obviously, as we move forward with our next gen colicin programs and HD, looking for kind of of efficacy going forward in the Fulcin franchise as well.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

I think it really comes down to what the overall product profiles will deliver. Efficacy in cataplexy, it's sort of the totality of the evidence, if you will, what the ultimate product profile will look like. And I'll turn it over to Pumar. Any other thoughts with regards to that piece? And then on EPS, 100,000,000 Sure.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Thank you, Jeff. Good morning, Ami. Thanks for the question. Ami, you did mention about the thirty minutes on MWT. That's true.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

That's the kind of efficacy that we have seen based on the preliminary data from couple of products into subter agonist, which is good. But still, there are many unanswered questions in terms of the response rate, the durability of response and the overall safety and tolerability profile. And these things need to be figured out. The way we see it is, as we progress our own orexin receptor agonist, which we believe have the properties to be potentially the best in class orexin receptor agonist. As we make progress, we continue to believe that narcolepsy will be a polypharmacy market.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Patients with narcolepsy will require more than one medication. As you know, it's not just excessive daytime sleepiness, they also have disrupted nighttime sleepiness, they have cataplexy, they have hypnogotic hypnobotropic hallucinations, fatigue and a host of other symptoms. That's exactly one of the reasons why we are targeting pitolocent HD formulation towards fatigue, which is a symptom that is experienced by about sixty percent to seventy percent of patients with narcolepsy for which there are no approved treatment and histaminergic mechanism of action specifically is suited to treat fatigue symptoms and we demonstrated that in our PM1 study. So that's where we are with our orexin receptor agonist and how we are thinking about the landscape. To your question about APX-one hundred, yes, definitely the option of going or pursuing a broader PEE indication is available.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Right now, we are focused on our two Phase III studies, ARGUS study in Dravet syndrome and Lighthouse study in Lennox Gastaut syndrome. Both of these studies are up and running, actively recruiting patients. And we are evaluating potentially adding other DEE indication, but we just need to look at the benefit risk balance by making some of these studies more heterogeneous by adding other patients. So that's an option that is definitely available and we are evaluating.

[Ami Fadia, Senior Analyst at Needham & Company]

Thank you.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Thanks, Ami.

[Operator]

We'll go next to Patrick Trucchio with H. C. Wainwright.

[Patrick Trucchio, Managing Director at H.C. Wainwright & Co.]

Thanks. Good morning. Just a couple of questions from me. The first is I'm wondering if you can discuss the drivers of your revenue guidance and specifically what we should be looking for to suggest the year's revenue should trend to the higher end of the range rather than the lower end. And then secondly, I'm wondering if you can preview any of the design elements from the upcoming Phase III trial for Pitulosin HD and narcolepsy in IH, including whether fatigue and sleep inertia endpoints may be formally powered in the HD trial for differentiated labeling?

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Good morning, Patrick. Thanks for your questions. So Adam, in terms of drivers of the business, Sandeep, if you want to comment as well.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

Sure. Can jump in. Thank you, Jeff, and thank you for the question. The primary driver of growth for the remainder of the year is going to be continued sequential additions of patients on therapy. And this is something we've seen historically very consistently.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

Again, back to the fundamentals of the business here, a very strong and stable continued progression of average patients on therapy. This quarter, in Q1, we achieved seven thousand two hundred patients on Wakix. We exited the quarter actually at seven thousand three hundred. So we continue to see that strong momentum moving into the rest of the year. And we would expect to see that growth and performance continue.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

As we think about that patient growth, we typically have been discussing how do you grow the top line referrals? How do you make sure that we are converting patients to ensure that referrals are actually dispensed and what is the adherence and compliance with that therapy over time. And I think in each of those buckets, see very strong stable fundamentals and we would continue to expect that through the remainder of this year.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Yes. And I would just add, Patrick. I think it speaks to the I think the underlying opportunity in the narcolepsy market. So again, large market, eighty thousand diagnosed patients. Year six in the market continue to grow, continued sort of momentum.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

And then the differentiated product profile. Again, we tapped into it's the 9,000 HCPs prescribing, five thousand of whom are not don't participate in an oxybate REMS continue to penetrate across that segment, about 50% or so penetrated as well as the depth of the 4,000 HCPs with the larger clinics, more patients. So it is the rhythm of the business, if you will, as we said now going into year six in the market, large market opportunity, differentiated profile, strong underlying business fundamentals that are consistent. And we're confident. We are confident in Wakix being on its way to $1,000,000,000 plus opportunity in narcolepsy alone.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Thank you, Jeff. Hey, good morning, Patrick. Thank you for your questions on pitolis and HD Phase III programs. We have already disclosed the study design for idiopathic hypersomnia, which is aligned with the regulatory agency. It's going to be a double blind, randomized, placebo controlled, parallel arm study.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Phase III narcolepsy study, we haven't disclosed the design yet and we will provide that information as we get ready to initiate the study. And your other question was around fatigue. We have done some leading edge work in fatigue already. We have been working on this for more than two years now. We completed a qualitative research study to look at the instruments to measure specifically fatigue, specifically in patients with narcolepsy.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

And we are about to complete a really large longitudinal study looking at the prevalence and impact and the stability of symptoms of fatigue in patients with narcolepsy. The goal is certainly to get fatigue as an indication in narcolepsy sooner or later, and we will be providing more information on that as we get closer to initiating the narcolepsy study. Thank you.

[Patrick Trucchio, Managing Director at H.C. Wainwright & Co.]

Thanks so much.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Thanks, Patrick.

[Operator]

We'll go next to David Huang with Deutsche Bank.

[David Huang, Vice President Equity Research at Deutsche Bank]

Hi. Thanks so much for taking my questions. Adam, welcome to the team. I wanted to ask a little bit about ZYN-two in fragile X. If you do get positive data in hand, how quickly do you think you could file the NDA for that molecule?

[David Huang, Vice President Equity Research at Deutsche Bank]

And can you just give us a sense of what commercialization of O2 in the fragile X market might look like? How do you think about the value proposition of this product? And are there other analogs in rare neurological diseases that we could look at?

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Yes. thanks for your question. Really excited about the ZYN-two Fragile X opportunity. Kumar, you want to sort of talk about the development part, and then we can talk about market opportunity.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Sure.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Thank you, Jeff. Hey, good morning, David. Yes, Frasile X syndrome, look, very excited for the top line data. As we disclosed this morning, we completed recruitment and closed for new screening. We are on track for top line data in 3Q of this year.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

And if the results are positive, we have the ability, the opportunity to bring the very first approved treatment to patients with Frazolek syndrome. Once we get the top line data, David, the goal is to file NDA as soon as possible. And given the unmet need, significant unmet need in this patient population, I think it's reasonable to expect a priority review in an indication like this. So there will be an expedited timeline to submission of NDA, and I'm sure the FDA will also show the urgency to quickly review the data package and give the decision on PDUFA. And of course, the other thing is in the background, we are working expeditiously on 22q.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

We have aligned with the regulatory agencies on the primary endpoint and the Phase study as we speak, we are getting ready to initiate Phase III study in 22q as well. Another RACE indication of approximately eighty thousand patients each in U. S. And Europe. And as we have mentioned in the past, we have global rights for ZYN-one thousand and two and not have to go back on Frozalex syndrome.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

One thing is the study design meets the requirement of not just the FDA, but also eMark for an indication for Fragile X syndrome.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Yes. So David, suffice it to say, with positive data, we will move swiftly in terms of preparing an NDA and submitting that. In terms of the market opportunity and go to market, so about eighty thousand patients living with Fragile X as well as 22q in The U. S. And similar in The EU as well with global rights.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

We see this, I think, about sixty thousand by claims data. So significant opportunity for rare disease. We see this as a sort of a centers of excellence model, if you will, with regards to neurobehavioral syndromes and those types of disorders. We have a lot of institutional knowledge in the space that came over from our acquisition of Zynerva, know it well. And then our sort of world class patient advocacy team is fully engaged with the Fragile X patient community, listening to them, kind of understanding sort of the unmet needs.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

You'll hear more from Adam going forward in terms of launch preparation as we plan for success with high conviction in the top line data.

[Operator]

We'll go next to Ash Ferma with UBS.

[Ashwani Verma, Executive Director - SMID Biotech & Biopharma at UBS Group]

Thanks for taking my question. Congrats on the quarter. So maybe just on Fabrylex, I wanted to understand that there is this competitor Shinobi that is a program Zetol Milast, which is reading out in the second quarter. And they've shown prior Phase II data with cognitive assessment. Just what are your thoughts on PD-four d, allosteric inhibitor approach?

[Ashwani Verma, Executive Director - SMID Biotech & Biopharma at UBS Group]

And then I saw like their endpoint is different versus what you're studying. Just wanted to make sure that these are both FDA approval or not. And then secondly, on VAPIC, so wanted to understand like these new patients that you're getting in, can you provide us a split of how much of that is coming from oxybate experienced versus naive patients? Thanks.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Morning, Ash. Thanks for your question. In terms of the ShiNOGI program, just very briefly, obviously, following that closely, very different program. As you mentioned, the primary outcome around cognition and cognitive function only in male patients. So if Kumar, you want to comment further, but our program is very different as well as the importance of any new treatments for patient populations with unmet medical need.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

No, I

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

mean, just I think you covered everything. Yes, ASH, it does utilize getelmilast, PDE4D inhibitor, specifically looking at symptoms of cognition in male patients only who have a relatively higher level of baseline cognitive function, whereas in RECONNECT, we are looking at neurobehavioral symptoms, which are extremely prevalent, in fact, in every patient with Fragile syndrome and also the most bothersome symptoms when it comes to patients and their caregivers.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Thanks, Kumar. Adam, do

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

want to Sure.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

Thank you, Jeff. Thanks for

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

the question. Yes. So I guess in terms of sourcing of patients, I think Jeff mentioned before the polypharmacy nature of the therapeutic approach here. So the reality is the majority of patients that we're seeing referred for Wakix have been on one or multiple other therapies prior to that referral. That's common.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

And that's going to be true for any product for sleep wake. And then even when patients are on Wakyx therapy, we continue to see that polypharmacy approach. And so the majority of patients on Wakix therapy are also on one or additional other therapeutic options. And certainly, oxybate is being a prominent option that HCPs have access to. That's going to be a proportional portion of those patients that would also have concomitant oxybate use.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Yes. And I think the experience with concomitant use, about ten percent to fifteen percent of patients on WCAG also on an oxybate, it's been fairly consistent since launch.

[Ashwani Verma, Executive Director - SMID Biotech & Biopharma at UBS Group]

Thank you.

[Brennan Doyle, VP & Head of Investor Relations at Harmony Biosciences]

Thanks, Ash.

[Operator]

We'll go next to Jason Gerberry with Bank of America.

[Jason Gerberry, MD & Equity Research Analyst - Biotech & Pharma at Bank of America Merrill Lynch]

Hey, guys. Thanks for taking my questions. Just on the Orexin data at sleep, I'm wondering if can preview a little bit like what we'll get. I think when I looked at some of the other players who were in the clinic when they were evaluating their drugs preclinically, looking at the DTA mouse models and what endpoints will you give? And I look at like some testes versus Takeda's data, some of the endpoint measures are a little bit different, making comparisons a little bit difficult, but we give latency to sleep or latency to cataplexy so we can benchmark and get a sense that the potency selectivity argument is starting to translate on the efficacy side.

[Jason Gerberry, MD & Equity Research Analyst - Biotech & Pharma at Bank of America Merrill Lynch]

And then just asking the polypharmacy question a little bit differently, like what proportion of payers are amenable to two proprietary brand medicines in the narcolepsy setting? Just trying to get a sense because as new proprietary, presumably expensive medicines come on board, just wondering how payers will be amenable to covering multiple brands? Thanks.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Good morning, Jason. Thanks for the question. Kumar, on upcoming data at Sleep?

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Sure. Hey, good morning, Jason. Thanks for the question. Yes, we will be presenting a comprehensive preclinical safety and efficacy data JSON at the upcoming Sleep Meeting in June in Seattle. And as I mentioned earlier during the call, I mean, you'll see high potency translated into robust efficacy in sleepiness at very low doses in the preclinical animal models.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

In terms of specifically the model and the parameters that we will be discussing, you can expect to see the standard parameters like sleep latency, wakefulness time in a mice model that is considered as standard for preclinical studies. You're right, Jason. Sometimes it's hard to compare the data in preclinical models because of use of different animal models, different experimental conditions, different point in time. But we will be showing data that will show that the efficacy is consistent with very high potency that we have been talking about and also the preclinical safety data in GMP studies that will look very good. Yes.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Wait for the sleep meeting.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

And Jason, I think your next question was about concomitant use of Wakix and oxybates in the payer landscape. And I think that the experience has been, and we've said this before, given all the plans and each plan with not a lot of patients in the plans, that it's almost more in terms of administratively with regards to managing both of those therapies. So there's not been any pushback, I think, with regards to it's not a big part of their budget. So patients on both Wakix and a branded Octavate has not been a challenge in the market for us because each of the plans don't have a lot of patients given that it's a rare disease.

[Jason Gerberry, MD & Equity Research Analyst - Biotech & Pharma at Bank of America Merrill Lynch]

Got it. Thank you.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Thanks, Jason.

[Operator]

We'll go next to Charles Duncan with Cantor Fitzgerald.

[Charles Duncan, Managing Director at Cantor Fitzgerald]

Hi, good morning, Jeff and team. Congrats on a nice quarter. Thanks for taking our question. I had a commercial question and then a pipeline question. May I also have a strategy question at the end, but with regard to the commercial question, I guess, Anna mentioned exiting the quarter with about 7,300 patients on.

[Charles Duncan, Managing Director at Cantor Fitzgerald]

I guess I'm wondering five weeks into the quarter, how do you feel about the trends for WATICS now? And would the guidance depend more on, call it, factors such as demand or more on internal efforts such as tweaks to the marketing program that you plan for that you're contemplating for WCAG?

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

Thanks for the question. So what I can speak to is really the strong continued performance in Q1. And in Q1, we typically do see the traditional seasonality. We've seen that every year for the five years now moving on to six years since launch. And that has to do with the traditional payer resets that happen at the beginning of the year.

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

So as patients move coverage, they have to reestablish prior authorizations and steps. And that takes a little bit of time. So that does have an impact on Q1 patient numbers, but that's something that's seen actually not just for Wapix, it's seen across sleep wake, it's also seen actually across the industry. So that's the typical seasonality that we would expect to see, and we weathered that successfully this quarter. As I mentioned, the momentum continues very strong as we're exiting the quarter, and we continue to have confidence for that full year revenue guidance between $820,000,000 and $860,000,000 for the full year.

[Charles Duncan, Managing Director at Cantor Fitzgerald]

That sounds like it's demand driven, correct?

[Adam Zaeske, EVP & CCO at Harmony Biosciences]

So I mean, yes, so certainly the growth is, as Jeff said before, it's going to be primarily driven by demand as a result of the highly differentiated profile of Wakix. But I will mention as well, one of the things I've been really impressed with is the commercial model that has been put in place to support patients, to support HCPs as well as caregivers. I think, is a key driver of performance. It's not just the model itself, but also how it's used with all referrals going into a single central hub, very tight distribution through three specialty pharmacies and the broad set of data that we're able to capture on patients individually and longitudinally that allows us to deploy intelligent investment decisions, resource planning and make real time decisions as we're seeing that data updated on a daily basis. So I think that's also an element.

[Charles Duncan, Managing Director at Cantor Fitzgerald]

Okay. That's helpful. Sounds like no major changes in terms of sales strategy.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

No, major changes. I think it's really what I said before. You're right, underlying demand remains strong. Market opportunity remains large, strong underlying fundamentals. And I think no major changes to the strategy.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

We will see opportunities, obviously, as the brand matures to make tweaks along the way. I think Adam is bringing sort of fresh perspective and thinking with regards to that. And we see continued opportunity ahead in our core franchise towards the $1,000,000,000 plus in narcolepsy as we prepare to initiate the Phase III trials for Pitulosin HD in both narcolepsy and IH in the fourth quarter. So we are poised with a target PDUFA in 2028 to transition the pitotilsen franchise with utility patents to 02/1944 well into the future to extend that franchise and generate significant value.

[Charles Duncan, Managing Director at Cantor Fitzgerald]

That's a great segue, Jeff, to my last question, which is pitolisin HD. In terms of the timing of that Phase III start, I'm kind of wondering what the rate limiting step is. Know that you run a lean and mean operation, so lots going on in the pipeline generally, but are there any experimental results you're waiting for to be able to operationalize that Phase three with Pitolacin HD in narcolepsy as well as perhaps IH by the end of the year?

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Yes, Charles, I think it's mainly just finalizing the formulation work. I'll turn it over to Kumar. But all of the preparation is in motion for those. And Kumar, do you want to provide more color?

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

Yes, sure. Thanks, Jeff. Hey, good morning, Charles. Yes, we always said we will initiate the Phase three studies both in narcolepsy and in IH in the fourth quarter of this year and we are on track to initiate both the studies in narcolepsy and in the IH large global Phase three studies. In terms of what happens, Charles, is these are large studies, registration studies.

[Kumar Budur, Executive VP and Chief Medical & Scientific Officer at Harmony Biosciences]

So a lot of work that needs to happen in terms of the protocol finalization, the regulatory alignment, IND submission and the formation development. These are Phase three studies, so we need commercial ready formulation work that needs to be completed before you start Phase three study. So we are just checking all the boxes and making steady progress to initiate both the studies in fourth quarter of this year. And we are committed to the potential target PDUFA date in 2028, as Jeff mentioned, well before the loss of patent on vacates, which is Q1 two thousand and thirty.

[Operator]

Thank you. I'm showing no further questions. I would now like to turn the call back over for any closing remarks.

[Jeffrey Dayno, President & CEO at Harmony Biosciences]

Thanks, Angela. I want to thank everyone for joining our call today. Harmony is well positioned to continue to grow our enterprise and generate durable value going forward. Thank you for your interest in Harmony, and have a great day.

[Operator]

This does conclude today's Harmony Biosciences first quarter twenty twenty five financial results conference call. You may now disconnect your line and have a wonderful day.

Participants

Executives

• Brennan Doyle, VP & Head of Investor Relations
• Jeffrey Dayno, President & CEO
• Adam Zaeske, EVP & CCO
• Kumar Budur, Executive VP and Chief Medical & Scientific Officer
• Sandip Kapadia, CFO & Chief Administration Officer

Analysts

• Graig Suvannavejh, Managing Director at Mizuho Financial Group
• David Amsellem, Sr. Research Analyst at Piper Sandler Companies
• Ami Fadia, Senior Analyst at Needham & Company
• Patrick Trucchio, Managing Director at H.C. Wainwright & Co.
• David Huang, Vice President Equity Research at Deutsche Bank
• Ashwani Verma, Executive Director - SMID Biotech & Biopharma at UBS Group
• Jason Gerberry, MD & Equity Research Analyst - Biotech & Pharma at Bank of America Merrill Lynch
• Charles Duncan, Managing Director at Cantor Fitzgerald