Financial Data and Key Metrics Changes - The company reported net revenues of $184.7 million for Q1 2025, representing a 20% increase year-over-year from $154.6 million in Q1 2024 [35][36] - Non-GAAP adjusted net income for Q1 2025 was $60.4 million, or $1.03 per diluted share, compared to $50.7 million, or $0.88 per diluted share in the prior year quarter, reflecting a growth of 19% [37][38] - The company ended Q1 2025 with over $610 million in cash, cash equivalents, and investments on the balance sheet [39] Business Line Data and Key Metrics Changes - Net product revenue for Wakix in Q1 2025 was $184.7 million, a 20% increase year-over-year, indicating strong demand in the narcolepsy market [7][19] - The company is confident in reaching over $1 billion in revenue from narcolepsy alone, with guidance for total net revenue in 2025 set between $820 million and $860 million [21][39] Market Data and Key Metrics Changes - The company has achieved over 50% penetration within approximately 5,000 healthcare providers (HCPs) as of the end of Q1 2025, with continued growth in prescribers beyond those enrolled in the oxybate REMS program [20][21] - The narcolepsy market is estimated to have around 80,000 diagnosed patients, with the company tapping into this potential through its differentiated product profile [21][80] Company Strategy and Development Direction - The company aims to leverage its strong balance sheet to build a robust late-stage pipeline, with plans to have up to six programs in Phase III trials by the end of 2025 [9][12] - The focus is on developing next-generation formulations of pitolisant, targeting unmet patient needs and extending the growth of the pitolisant franchise into the mid-2040s [21][22] - The company is also exploring opportunities in adjacent rare CNS assets to further strengthen its pipeline [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the shifting geopolitical landscape and potential impacts from new tariffs, emphasizing operational independence [12][14] - The company is optimistic about its late-stage pipeline, with expectations of delivering one or more new product or indication launches each year over the next several years, with peak sales potential exceeding $3 billion [15][40] Other Important Information - The company has a unique operational foundation in the U.S., with exclusive licensing rights and intellectual property associated with its products domiciled in the U.S. [14] - The company is actively working on a secondary manufacturing site for Wakix in the U.S. to enhance supply chain resilience [12] Q&A Session Summary Question: What are the powering assumptions for the ZYN-two study and risk mitigation strategies? - The study is powered more than 90% for the primary endpoint, with rigorous criteria and checks in place to ensure the right patients are included [42][45][46] Question: What are the initial impressions of the commercial team and strategies supporting Wakix? - The new Chief Commercial Officer expressed excitement about the team's focus on patient needs and the strong performance of Wakix, with plans to evaluate and implement potential improvements [43][49][51] Question: How does the company view the competitive landscape for orexin receptor agonists? - The company sees the market as still emerging, with a focus on the high potency of its BP1.5205 compound and the potential for polypharmacy in treating narcolepsy [53][57][70] Question: What are the drivers of revenue guidance for 2025? - Continued sequential additions of patients on therapy and strong underlying business fundamentals are expected to drive revenue growth [75][78] Question: What is the timeline for filing the NDA for ZYN-two if positive data is obtained? - The company aims to file the NDA as soon as possible following positive data, with expectations for priority review due to the significant unmet need [87][91]

```markdown [PART I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Harmony Biosciences Holdings, Inc. and its subsidiaries, including the balance sheets, statements of operations and comprehensive income, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining the company's organization, accounting policies, acquisitions, investments, debt, and other financial commitments [Condensed Consolidated Balance Sheets (Unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Condensed Consolidated Balance Sheets (Unaudited) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Assets | $1,055,535 | $999,200 | | Total Liabilities | $335,010 | $340,045 | | Total Stockholders' Equity | $720,525 | $659,155 | | Cash and cash equivalents | $488,998 | $453,001 | | Trade receivables, net | $105,969 | $83,033 | | Inventory, net | $6,384 | $7,198 | - Total assets increased by **$56.3 million** from December 31, 2024, to March 31, 2025, primarily driven by an increase in cash and cash equivalents and trade receivables[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Unaudited)) Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net product revenue | $184,733 | $154,615 | | Gross profit | $152,739 | $127,131 | | Operating expenses | $96,494 | $75,098 | | Operating income | $56,245 | $52,033 | | Net income | $45,560 | $38,334 | | Basic EPS | $0.79 | $0.68 | | Diluted EPS | $0.78 | $0.67 | - Net product revenue increased by **19.5%** year-over-year, and net income grew by **18.8%** for the three months ended March 31, 2025, compared to the same period in 2024[9](index=9&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Unaudited)) Condensed Consolidated Statements of Stockholders' Equity (Unaudited) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Stockholders' Equity | $720,525 | $659,155 | | Retained Earnings | $47,776 | $2,216 | | Additional Paid-in Capital | $672,503 | $656,872 | | Common Stock Shares Outstanding | 57,393,673 | 57,144,887 | - Stockholders' equity increased by **$61.37 million**, primarily due to net income of **$45.56 million**, stock-based compensation of **$12.50 million**, and proceeds from exercised options/RSUs of **$3.13 million**[10](index=10&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net cash provided by operating activities | $33,987 | $31,141 | | Net cash provided by (used in) investing activities | $2,362 | $(6,186) | | Net cash used in financing activities | $(352) | $(3,634) | | Net increase in cash, cash equivalents, and restricted cash | $35,997 | $21,321 | | Cash, cash equivalents, and restricted cash—End of period | $489,268 | $333,251 | - Net cash provided by operating activities increased by **$2.8 million**, while investing activities shifted from a net outflow to a net inflow, primarily due to changes in investment securities purchases and maturities[12](index=12&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) [1. Organization and Description of Business](index=7&type=section&id=1.%20ORGANIZATION%20AND%20DESCRIPTION%20OF%20BUSINESS) - Harmony Biosciences Holdings, Inc. is a neuroscience company focused on rare neurological diseases, with a portfolio spanning sleep/wake, neurobehavioral, and rare epilepsy[14](index=14&type=chunk) - The company's lead product, WAKIX® (pitolisant), is approved for excessive daytime sleepiness (EDS) and cataplexy in adult narcolepsy patients, and EDS in pediatric patients six years and older[15](index=15&type=chunk) - Recent strategic expansions include the acquisition of Zynerba Pharmaceuticals, Inc. (October 2023) for neurobehavioral disorders, a sublicense for orexin 2 receptor agonist BP1.15205 (April 2024), and the acquisition of Epygenix Therapeutics, Inc. (April 2024) for rare epilepsy treatments[16](index=16&type=chunk)[17](index=17&type=chunk) [2. Liquidity and Capital Resources](index=9&type=section&id=2.%20LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Liquidity and Capital Resources | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Retained Earnings | $47,776 | $2,216 | | Cash, cash equivalents and investments | $610,198 | N/A | - The company believes its existing cash, cash equivalents, and investments, along with future operating and financing cash flows, will meet operational liquidity needs and fund potential investing activities for the next twelve months[20](index=20&type=chunk) [3. Summary of Significant Accounting Policies](index=9&type=section&id=3.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - The financial statements are prepared in conformity with GAAP, with all intercompany accounts and transactions eliminated in consolidation[21](index=21&type=chunk) - The company operates in a single operating segment: rare neurological diseases[26](index=26&type=chunk) - Investments in available-for-sale debt securities are classified as Level 2 fair value instruments, carried at fair value, with unrealized gains and losses recorded in accumulated comprehensive income[31](index=31&type=chunk)[35](index=35&type=chunk) - Three customers (CVS Caremark, Accredo, Pantherx) accounted for **100%** of gross accounts receivable and gross product revenue for the three months ended March 31, 2025[38](index=38&type=chunk)[39](index=39&type=chunk) - The company depends on a single supplier for the active pharmaceutical ingredient (API) of WAKIX and its potential product candidates[40](index=40&type=chunk) - The company adopted ASU 2023-07 (Improvements to Reportable Segment Disclosures) in Q4 2024, which had no impact on consolidated financial statements[43](index=43&type=chunk) [4. Acquisitions](index=17&type=section&id=4.%20ACQUISITIONS) - On April 30, 2024, Harmony Biosciences acquired Epygenix Therapeutics, Inc. for an upfront consideration of **$35.0 million**, with potential milestone payments up to **$130.0 million** for development/regulatory and **$515.0 million** for sales-based achievements[46](index=46&type=chunk) - The Epygenix acquisition was accounted for as an asset acquisition, resulting in a **$17.095 million** charge for acquired in-process research and development expense in 2024[47](index=47&type=chunk) [5. Investments](index=18&type=section&id=5.%20INVESTMENTS) Investments | Investment Type | March 31, 2025 Fair Value (in thousands) | December 31, 2024 Fair Value (in thousands) | | :---------------------- | :------------------------------------- | :------------------------------------- | | Short-term investments | $17,955 | $14,185 | | Long-term investments | $103,245 | $108,874 | | Total Investments | $121,200 | $123,059 | - The company's investments consist of available-for-sale debt securities, with short-term investments increasing and long-term investments decreasing from December 31, 2024, to March 31, 2025[48](index=48&type=chunk) [6. Fair Value Measurements](index=18&type=section&id=6.%20FAIR%20VALUE%20MEASUREMENTS) - Money market funds are classified as Level 1 fair value instruments, while available-for-sale debt securities (commercial paper, corporate debt, U.S. government securities) are classified as Level 2[49](index=49&type=chunk)[50](index=50&type=chunk) Fair Value Measurements | Asset Type | March 31, 2025 Total Fair Value (in thousands) | December 31, 2024 Total Fair Value (in thousands) | | :---------------------- | :------------------------------------- | :------------------------------------- | | Cash equivalents | $302,200 | $303,545 | | Commercial paper | $12,192 | $7,678 | | Corporate debt securities | $91,636 | $93,257 | | U.S. government securities | $17,372 | $22,124 | | Total | $423,400 | $426,604 | [7. Inventory](index=19&type=section&id=7.%20INVENTORY) Inventory | Inventory Component | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------ | :----------------------------- | :----------------------------- | | Raw materials | $912 | $944 | | Work in process | $3,411 | $3,489 | | Finished goods | $2,225 | $2,765 | | Inventory, gross | $6,548 | $7,198 | | Reserve for excess inventory | $(164) | $0 | | Total inventory, net | $6,384 | $7,198 | - Net inventory decreased by **$0.814 million** from December 31, 2024, to March 31, 2025, with a new reserve for excess inventory recorded[51](index=51&type=chunk) [8. Intangible Assets](index=19&type=section&id=8.%20INTANGIBLE%20ASSETS) - Intangible assets primarily relate to milestone payments for WAKIX FDA approvals (EDS in 2019, cataplexy in 2020) and sales milestones (**$500,000** aggregate net sales in 2022), capitalized with useful lives of **10**, **9**, and **7.6 years** respectively, all having a remaining useful life of **4.5 years** as of March 31, 2025[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) Intangible Assets | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------------------- | :----------------------------- | :----------------------------- | | Gross Carrying Amount | $215,000 | $215,000 | | Accumulated Amortization | $(107,698) | $(101,737) | | Net Book Value | $107,302 | $113,263 | | Amortization Expense (Q1) | $5,961 | $5,961 | [9. License Agreements and Asset Purchase Agreements](index=20&type=section&id=9.%20LICENSE%20AGREEMENTS%20AND%20ASSET%20PURCHASE%20AGREEMENTS) - The 2017 LCA with Bioprojet grants exclusive rights to commercialize pitolisant in the US, requiring fixed trademark and tiered sales-based royalties. Royalties incurred were **$29.56 million** (Q1 2025) and **$24.74 million** (Q1 2024)[57](index=57&type=chunk) - The 2022 LCA with Bioprojet provides exclusive rights for new pitolisant-based products in the US and Latin America, with potential payments up to **$155.0 million** for development/sales milestones[58](index=58&type=chunk) - In April 2024, Harmony entered a sublicense with Bioprojet for BP1.15205 (orexin-2 receptor agonist) for narcolepsy, paying an upfront fee of **$25.5 million** and committing to potential milestones up to **$367.5 million** plus mid-teen royalties[59](index=59&type=chunk) - The APA with ConSynance Therapeutics for HBS-102 involves potential milestone payments, with **$0.75 million** paid in March 2023 and **$1.0 million** in September 2024 for preclinical milestones[60](index=60&type=chunk) [10. Accrued Expenses](index=22&type=section&id=10.%20ACCRUED%20EXPENSES) Accrued Expenses | Accrued Expense Type | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Royalties due to Bioprojet | $29,557 | $51,746 | | Rebates and other sales deductions | $58,303 | $50,542 | | Interest | $2,308 | $2,834 | | Sales and marketing | $4,276 | $2,166 | | Research and development | $8,943 | $9,014 | | Professional fees, consulting, and other services | $7,619 | $3,047 | | Other expenses | $1,695 | $1,291 | | Total Accrued Expenses | $112,701 | $120,640 | - Total accrued expenses decreased by **$7.939 million**, primarily due to a reduction in royalties due to Bioprojet, partially offset by increases in rebates, sales and marketing, and professional fees[61](index=61&type=chunk) [11. Debt](index=22&type=section&id=11.%20DEBT) - The company has a five-year senior secured Term Loan (TLA Term Loan) of **$200.0 million**, entered into in July 2023, with quarterly principal payments of **$3.75 million**, increasing to **$5.0 million** from December 31, 2025, and a **$115.0 million** payment due at maturity (July 26, 2028)[63](index=63&type=chunk)[64](index=64&type=chunk) Debt | Debt Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Principal amount | $177,500 | $181,250 | | Unamortized debt discount | $(1,818) | $(1,984) | | Total debt, net | $175,682 | $179,266 | | Current portion of long-term debt | $17,500 | $16,250 | | Long-term debt, net | $158,182 | $163,016 | Interest Expense Component | Interest Expense Component | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Interest on principal balance | $3,670 | $4,355 | | Amortization of deferred financing costs | $166 | $180 | | Total term loan interest expense | $3,836 | $4,535 | [12. Leases](index=24&type=section&id=12.%20LEASES) - The company leases office space in Plymouth Meeting, PA, and a fleet of automobiles, classified as operating leases[68](index=68&type=chunk)[69](index=69&type=chunk) Leases | Lease Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :------------- | | Operating lease right-of-use assets | $1,726 (in thousands) | $2,122 (in thousands) | | Total operating lease liabilities | $1,782 (in thousands) | $2,140 (in thousands) | | Weighted-average remaining lease term | **1.6 years** | N/A | | Weighted-average discount rate | **7.72%** | N/A | [13. Commitments and Contingencies](index=26&type=section&id=13.%20COMMITMENTS%20AND%20CONTINGENCIES) - The company is involved in Abbreviated New Drug Application (ANDA) litigation against multiple generic drug manufacturers (Lupin, Novugen, Novitium, Zenara, AET, Annora, MSN) seeking to market generic versions of WAKIX® before patent expiration (2026, 2029, 2030)[74](index=74&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk)[80](index=80&type=chunk)[82](index=82&type=chunk) - Settlement agreements were reached with Novugen Pharma (October 2024) and Annora (March 2025), granting them licenses to sell generic pitolisant hydrochloride products starting January 2030, or earlier under certain conditions[81](index=81&type=chunk)[83](index=83&type=chunk) - A scheduling order consolidated the ANDA cases, with a claim construction hearing set for March 27, 2025, and a four-day bench trial scheduled to begin on February 17, 2026[79](index=79&type=chunk) [14. Stockholders' Equity](index=30&type=section&id=14.%20STOCKHOLDERS'%20EQUITY) - The Board of Directors approved a share repurchase program in October 2023 for up to **$200.0 million**. As of March 31, 2025, **$150.0 million** remained authorized, with no shares repurchased during the three months ended March 31, 2025, or 2024[87](index=87&type=chunk) [15. Stock Incentive Plan and Stock-Based Compensation](index=30&type=section&id=15.%20STOCK%20INCENTIVE%20PLAN%20AND%20STOCK-BASED%20COMPENSATION) - The 2020 Incentive Award Plan allows for various equity incentives, with **8,777,657** shares available for issuance as of March 31, 2025[88](index=88&type=chunk)[89](index=89&type=chunk) Stock Option Activity | Stock Option Activity | March 31, 2025 | | :-------------------------------- | :------------- | | Awards outstanding | **7,979,619** | | Weighted-average exercise price | **$33.36** | | Weighted-average remaining contractual term | **6.90 years** | | Aggregate intrinsic value | $36,928 (in thousands) | RSU Activity | RSU Activity | March 31, 2025 | | :-------------------------------- | :------------- | | Awards outstanding | **944,252** | | Weighted-average grant date fair value | **$34.24** | | Awards issued (Q1 2025) | **428,650** | | Awards vested (Q1 2025) | (**121,521**) | Stock-Based Compensation Expense | Stock-Based Compensation Expense | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Research and development expense | $2,302 | $1,371 | | Sales and marketing expense | $2,744 | $1,994 | | General and administrative expense | $7,404 | $7,069 | | Total | $12,450 | $10,434 | - Total unrecognized stock-based compensation expense was **$66.06 million** for stock options and **$29.62 million** for RSUs as of March 31, 2025, to be recognized over weighted average periods of **2.69** and **3.17 years**, respectively[98](index=98&type=chunk)[99](index=99&type=chunk) [16. Segment Information](index=35&type=section&id=16.%20SEGMENT%20INFORMATION) - The company operates as a single reportable segment focused on rare neurological diseases, deriving all revenue from WAKIX sales[101](index=101&type=chunk) Segment Information | Segment Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net product revenue | $184,733 | $154,615 | | Cost of product sold (excluding depreciation) | $31,987 | $27,477 | | Research and development (excluding stock compensation) | $32,238 | $20,818 | | Sales and marketing (excluding stock compensation) | $27,967 | $25,239 | | General and administrative (excluding stock compensation and amortization) | $17,878 | $12,490 | | Depreciation and amortization | $5,968 | $6,124 | | Stock-based compensation | $12,450 | $10,434 | | Interest expense | $3,836 | $4,535 | | Interest income | $(5,044) | $(4,428) | | Income tax expense (benefit) | $11,617 | $13,451 | | Consolidated net income | $45,560 | $38,334 | [17. Earnings Per Share](index=37&type=section&id=17.%20EARNINGS%20PER%20SHARE) Earnings Per Share | EPS Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Basic EPS | **$0.79** | **$0.68** | | Diluted EPS | **$0.78** | **$0.67** | | Weighted average shares outstanding - basic | **57,309,938** | **56,771,251** | | Weighted average shares outstanding - diluted | **58,524,566** | **57,597,627** | - Diluted EPS increased by **$0.11** year-over-year, reflecting higher net income and a larger weighted average number of diluted shares[105](index=105&type=chunk) [18. Income Taxes](index=38&type=section&id=18.%20INCOME%20TAXES) Income Taxes | Tax Rate Component | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Federal income tax rate | **21.0%** | **21.0%** | | Stock-based compensation | **0.4%** | — | | State taxes | **1.1%** | **5.1%** | | Credits | (**2.4%**) | (**1.0%**) | | Valuation allowance | — | **0.5%** | | Other | **0.2%** | **0.4%** | | Total Effective Tax Rate | **20.3%** | **26.0%** | - The effective tax rate decreased from **26.0%** in Q1 2024 to **20.3%** in Q1 2025, primarily due to increased benefits from R&D and orphan drug credits and a decrease in state taxes[107](index=107&type=chunk)[164](index=164&type=chunk) [19. Related-Party Transactions](index=38&type=section&id=19.%20RELATED-PARTY%20TRANSACTIONS) - The company incurred **$0.073 million** in expenses to Paragon Biosciences, LLC for office space access for both three months ended March 31, 2025, and 2024[108](index=108&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for the three months ended March 31, 2025, compared to the same period in 2024, covering business overview, commercial performance, detailed analysis of revenue and expenses, liquidity, capital resources, and critical accounting estimates [Cautionary Note Regarding Forward-Looking Statements](index=38&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) - The report contains forward-looking statements regarding future results, business strategy, product approvals, R&D costs, clinical trial timing, and market acceptance, which are subject to known and unknown risks and uncertainties[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) [Company Overview](index=41&type=section&id=Company%20Overview) - Harmony Biosciences is a neuroscience company focused on rare neurological diseases, with a growing portfolio in sleep/wake, neurobehavioral, and rare epilepsy[117](index=117&type=chunk) - WAKIX® (pitolisant) is approved for EDS and cataplexy in adult narcolepsy patients and EDS in pediatric patients six years and older. The company is pursuing pediatric exclusivity for WAKIX[118](index=118&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) - Pipeline expansion includes: Pitolisant GR (pivotal bioequivalence study initiated Q1 2025, PDUFA 2026), Pitolisant HD (Phase 3 trials for narcolepsy/IH planned Q4 2025, PDUFA 2028), BP1.15205 (orexin-2 receptor agonist, first-in-human studies H2 2025), HBS-102 (MCHR1 antagonist, preclinical PoC completed Q3 2024)[124](index=124&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) - Neurobehavioral franchise includes ZYN002 (cannabidiol gel) in Phase 3 for Fragile X Syndrome (topline data Q3 2025) and planned Phase 3 for 22q deletion syndrome in 2025[129](index=129&type=chunk) - Rare epilepsy franchise includes EPX-100 (clemizole) in Phase 3 for Dravet Syndrome and Lennox-Gastaut Syndrome (LGS Phase 3 initiated Q4 2024), and EPX-200 (liquid lorcaserin) in pre-IND phase for DEEs[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) [Commercial Performance Metrics](index=47&type=section&id=Commercial%20Performance%20Metrics) - As of March 31, 2025, the average number of patients on WAKIX was approximately **7,200**, with **7,300** patients on WAKIX at period end[133](index=133&type=chunk) - The company has secured formulary access for over **80%** of all insured lives (Commercial, Medicare, Medicaid) in the United States[133](index=133&type=chunk) [Financial Operations Overview](index=47&type=section&id=Financial%20Operations%20Overview) - Net product revenue is gross product shipments less sales discounts and allowances, which may fluctuate based on patient mix and estimates[134](index=134&type=chunk) - Cost of product sales includes manufacturing, distribution, API costs, FDA fees, royalties, and freight, and is expected to increase with WAKIX production ramp-up and supply chain diversification[135](index=135&type=chunk) - Research and development expenses are increasing significantly due to advancing clinical programs and pipeline expansion, including Pitolisant (PWS, DM1), ZYN002, EPX-100, EPX-200, Pitolisant GR/HD, BP1.15205, and HBS-102[137](index=137&type=chunk)[139](index=139&type=chunk)[141](index=141&type=chunk) - Sales and marketing expenses are expected to increase to support WAKIX indications and portfolio growth, covering patient engagement, HCP promotion, and market access[145](index=145&type=chunk)[148](index=148&type=chunk) - General and administrative expenses are anticipated to rise due to continued commercialization, R&D activities, and public company operating costs[150](index=150&type=chunk) [Results of Operations](index=53&type=section&id=Results%20of%20Operations) Results of Operations | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------- | | Net product revenue | $184,733 | $154,615 | $30,118 | **19.5%** | | Cost of product sales | $31,994 | $27,484 | $4,510 | **16.4%** | | Gross profit | $152,739 | $127,131 | $25,608 | **20.1%** | | Research and development | $34,540 | $22,189 | $12,351 | **55.7%** | | Sales and marketing | $30,711 | $27,233 | $3,478 | **12.8%** | | General and administrative | $31,243 | $25,676 | $5,567 | **21.7%** | | Operating income | $56,245 | $52,033 | $4,212 | **8.1%** | | Interest expense | $(3,836) | $(4,535) | $699 | **-15.4%** | | Interest income | $5,044 | $4,428 | $616 | **13.9%** | | Net income | $45,560 | $38,334 | $7,226 | **18.8%** | - Net product revenue increased by **19.5%** due to a **17%** increase in units shipped and a **7%** price increase, partially offset by higher rebates[156](index=156&type=chunk) - Research and development expenses surged by **55.7%**, primarily driven by increased spending on EPX-100 (**$6.5 million**), ZYN002 and Pitolisant GR/HD (**$5.8 million** combined), and personnel costs[159](index=159&type=chunk) - Interest expense decreased by **15.4%** due to lower Term SOFR rates, while interest income increased by **13.9%** due to higher invested balances[162](index=162&type=chunk)[163](index=163&type=chunk) [Liquidity, Sources of Funding and Capital Resources](index=55&type=section&id=Liquidity,%20Sources%20of%20Funding%20and%20Capital%20Resources) - As of March 31, 2025, the company had **$610.2 million** in cash, cash equivalents, and investments, with **$177.5 million** in outstanding debt and **$47.8 million** in retained earnings[165](index=165&type=chunk) - The company expects its current liquidity to meet operational needs and fund potential investing activities for the next **12 months**[166](index=166&type=chunk) - The **$200.0 million** TLA Term Loan has quarterly principal payments, with the company in compliance with all covenants as of March 31, 2025[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) - The October 2023 Share Repurchase Program has **$150.0 million** remaining authorization, with no repurchases in Q1 2025[170](index=170&type=chunk) - Recent milestone payments include **$1.0 million** for HBS-102 preclinical proof-of-concept in September 2024 (paid October 2024)[173](index=173&type=chunk)[176](index=176&type=chunk) [Cash Flows](index=58&type=section&id=Cash%20Flows) Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Operating activities | $33,987 | $31,141 | | Investing activities | $2,362 | $(6,186) | | Financing activities | $(352) | $(3,634) | - Operating cash flow was **$34.0 million**, primarily from net income adjusted for non-cash items like stock-based compensation and intangible amortization, offset by deferred tax assets and an increase in net working capital[178](index=178&type=chunk) - Investing activities generated **$2.4 million**, mainly from maturities of investment securities (**$21.6 million**) offsetting purchases (**$19.1 million**)[179](index=179&type=chunk) - Financing activities used **$0.4 million**, primarily for debt principal repayments (**$3.8 million**) and employee withholding taxes (**$1.3 million**), partially offset by proceeds from exercised stock options (**$4.7 million**)[180](index=180&type=chunk) [Critical Accounting Estimates](index=58&type=section&id=Critical%20Accounting%20Estimates) - Key accounting estimates include revenue recognition for WAKIX sales, R&D costs, stock-based compensation, income tax provision, and business combination accounting[182](index=182&type=chunk) - No material changes to accounting policies or assumptions occurred during the quarter, except as disclosed in Note 3[183](index=183&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, including interest rate fluctuations, foreign currency fluctuations, and inflation - The company is exposed to interest rate risk on its **$423.4 million** investment portfolio and **$177.5 million** in borrowings. An immediate **10%** change in market interest rates or Term SOFR would not materially impact the fair value of investments or debt obligations[185](index=185&type=chunk)[186](index=186&type=chunk) - The company is not currently exposed to significant foreign currency fluctuation risk but may be in the future due to foreign vendors[187](index=187&type=chunk) - Inflation did not have a material effect on the company's business, financial condition, or results of operations for the three months ended March 31, 2025, and 2024[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details management's evaluation of the effectiveness of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[189](index=189&type=chunk) - There were no material changes in internal control over financial reporting during the quarter ended March 31, 2025[190](index=190&type=chunk) [PART II. OTHER INFORMATION](index=61&type=section&id=Part%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the detailed discussion of legal proceedings, specifically the ANDA litigation, provided in Note 13 to the financial statements - The company is subject to claims and suits in the ordinary course of business, with no material claims or lawsuits outstanding other than the ANDA litigation discussed in Note 13[73](index=73&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) [Item 1A. Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the comprehensive discussion of risk factors affecting the company, as detailed in its Annual Report on Form 10-K for the year ended December 31, 2024 - Readers should consider the risk factors outlined in the Annual Report on Form 10-K for the year ended December 31, 2024, as additional risks not currently known or deemed immaterial could adversely affect the business[195](index=195&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities or use of proceeds occurred during the reporting period[196](index=196&type=chunk) [Item 3. Defaults upon Senior Securities](index=63&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities during the reporting period[197](index=197&type=chunk) [Item 4. Mine Safety Disclosures](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the company[198](index=198&type=chunk) [Item 5. Other Information](index=63&type=section&id=Item%205.%20Other%20Information) This section provides information on Rule 10b5-1 trading arrangements adopted by company officers - Andrew Serafin (Chief Strategy Officer) adopted a Rule 10b5-1 plan on February 26, 2025, for the sale of up to **50,000** shares related to option exercises from May 28, 2025, to May 31, 2026[199](index=199&type=chunk) - Jeffrey Dierks (former Chief Commercial Officer) adopted a Rule 10b5-1 plan on February 28, 2025, for option exercises and RSU vesting, which was terminated on March 31, 2025[200](index=200&type=chunk) - Sandip Kapadia (CFO and Chief Administrative Officer) adopted a Rule 10b5-1 plan on March 4, 2025, for the sale of up to **25,000** shares from option exercises and **25,000** shares from RSU vesting, from July 1, 2025, to December 31, 2025[201](index=201&type=chunk) [Item 6. Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including agreements, certifications, and financial statements in XBRL format - The exhibits include the Agreement and Plan of Merger for Zynerba, Amended and Restated Certificate of Incorporation and Bylaws, various License and Commercialization Agreement amendments, Employment Letters, Separation Agreement, CEO/CFO certifications (302 and 906), and financial statements in Inline XBRL format[202](index=202&type=chunk) ```

Financial Performance - WAKIX® (pitolisant) net revenue for Q1 2025 was $184.7 million, representing a 20% growth year-over-year[1] - GAAP net income for Q1 2025 was $45.6 million, or $0.78 earnings per diluted share, compared to $38.3 million, or $0.67 earnings per diluted share for Q1 2024[12] - Non-GAAP adjusted net income for Q1 2025 was $60.4 million, or $1.03 earnings per diluted share, compared to $50.7 million, or $0.88 earnings per diluted share for Q1 2024[12] - Net product revenue for Q1 2025 was $184.733 million, a 19.5% increase from $154.615 million in Q1 2024[44] - Gross profit for Q1 2025 was $152.739 million, compared to $127.131 million in Q1 2024, reflecting a gross margin improvement[44] - Operating income for Q1 2025 was $56.245 million, up from $52.033 million in Q1 2024, showing operational efficiency[44] - Net income for Q1 2025 was $45.560 million, compared to $38.334 million in Q1 2024, representing an increase of 18.5%[44] - GAAP reported net income per diluted share rose to $0.78 in Q1 2025 from $0.67 in Q1 2024, marking a 16% increase[46] - Non-GAAP adjusted net income per diluted share increased to $1.03 in Q1 2025, up from $0.88 in Q1 2024, a growth of 17%[46] Expenses and Investments - Research and Development expenses increased by 56% to $34.5 million in Q1 2025 compared to $22.2 million in Q1 2024[15] - Total operating expenses were $96.5 million in Q1 2025, representing a 29% increase from $75.1 million in Q1 2024[15] - Research and development expenses increased to $34.540 million in Q1 2025 from $22.189 million in Q1 2024, indicating a focus on product development[44] - Stock-based compensation expense increased to $12,450,000 in Q1 2025 from $10,434,000 in Q1 2024, an increase of 19%[46] Patient and Product Development - The average number of patients on WAKIX increased to approximately 7,200 for Q1 2025, with approximately 7,300 patients at the end of the quarter[7] - Recruitment for the Phase 3 registrational trial of ZYN002 in Fragile X syndrome is complete, with topline data expected in Q3 2025[11] - The company is on track to initiate Phase 3 registrational trials in narcolepsy and idiopathic hypersomnia (IH) in Q4 2025[7] - The company plans to submit a supplemental New Drug Application (sNDA) for pitolisant in idiopathic hypersomnia, expanding its product indications[42] - Harmony Biosciences is focused on developing therapies for rare neurological diseases, addressing significant unmet medical needs[41] - The company has received FDA Fast Track designation for ZYN002 for the treatment of behavioral symptoms in patients with Fragile X Syndrome[34] Financial Guidance and Assets - 2025 net revenue guidance is projected between $820 million and $860 million[14] - Total assets as of March 31, 2025, were $1.055 billion, up from $999.200 million at the end of 2024[45] - Cash and cash equivalents increased to $488.998 million from $453.001 million, indicating improved liquidity[45] Other Financial Metrics - Non-cash interest expense for Q1 2025 was $166,000, slightly down from $180,000 in Q1 2024[46] - Depreciation expense decreased significantly to $7,000 in Q1 2025 from $163,000 in Q1 2024[46] - The income tax effect related to non-GAAP adjustments improved to $(3,776,000) in Q1 2025 from $(4,350,000) in Q1 2024[46] - Amortization expenses remained consistent at $5,961,000 for both Q1 2025 and Q1 2024[46] - The weighted average number of shares of common stock used in non-GAAP diluted per share calculations was 58,524,566 in Q1 2025, compared to 57,597,627 in Q1 2024[46]

Q1 2025 Financial Results & Business Update May 6, 2025 Copyright © 2025 Harmony Biosciences. All rights reserved. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding our full year 2024 net product revenue, expectations for the gr ...

Core Insights - Harmony Biosciences Holdings, Inc. has a strong track record of exceeding earnings estimates, particularly in the last two quarters with an average surprise of 19.15% [1][5] - The company reported earnings of $0.85 per share in the last quarter, surpassing the Zacks Consensus Estimate of $0.74 per share by 14.86% [2] - The previous quarter also showed a positive surprise, with actual earnings of $0.79 per share against an expected $0.64 per share, resulting in a 23.44% surprise [2] Earnings Estimates and Predictions - Recent changes in earnings estimates for Harmony Biosciences have been favorable, with a positive Earnings ESP of +33.09%, indicating increased analyst optimism about its near-term earnings potential [5][8] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat, with historical data showing that such combinations lead to positive surprises nearly 70% of the time [6][8] - The next earnings report for Harmony Biosciences is anticipated to be released on May 6, 2025 [8]

Core Viewpoint - Jazz Pharmaceuticals and Harmony Biosciences are significant players in the neuroscience sector, particularly in sleep disorders, with Jazz having a more diversified portfolio and stronger financial performance compared to Harmony [1][2][22]. Group 1: Company Overview - Jazz Pharmaceuticals markets several neuroscience drugs, including the oral sleep disorder drug Xywav and the CBD drug Epidiolex, while Harmony Biosciences has one marketed drug, Wakix, for narcolepsy [1][10]. - Jazz derives over two-thirds of its total revenues from its neuroscience franchise, while Harmony generates all its revenue from Wakix sales [3][11]. Group 2: Financial Performance - Jazz's total revenues for 2024 rose 6% year over year to $4.1 billion, with $2.9 billion from neuroscience and $1.1 billion from oncology drugs [9]. - Harmony's 2024 sales increased 23% year over year to $715 million, with expectations for 2025 sales between $820 million and $860 million, indicating an 18% year-over-year growth [11]. Group 3: Product Pipeline and Development - Jazz's Xywav sales rose 16% year over year to $1.5 billion in 2024, and Epidiolex sales increased 15% year over year to $972 million [4][5]. - Harmony is developing next-generation formulations of Wakix and has acquired Zynerba Pharmaceuticals to explore the cannabis space [12][13]. Group 4: Market Position and Valuation - Jazz has a diversified product lineup, including five oncology drugs, which accounted for 29% of its 2024 product revenues [6]. - Harmony's shares trade at a higher price/earnings (P/E) ratio of 8.63 compared to Jazz's 5.07, indicating that Harmony is more expensive [19]. Group 5: Investment Outlook - Jazz is viewed as a better investment option due to its diversified portfolio, rising EPS estimates, and robust cash reserves, while Harmony's reliance on a single product presents a concentration risk [22][23]. - Jazz holds a Zacks Rank 2 (Buy), while Harmony has a Zacks Rank 3 (Hold), reinforcing Jazz's favorable investment standing [24].

Small biotech companies can sometimes offer great benefits, with one or more potentially disruptive drugs in their pipeline. However, most of the times I am not interested because this is more than offset by a multitude"Fundamental Options" would be the title of my investing style, because I combine fundamental analysis with the power of options. I use Fundamental Analysis to quantitatively and qualitatively assess individual stocks and ETFs, and I pursue various strategies: Income oriented, especially BDCs ...

Core Viewpoint - Harmony Biosciences (HRMY) has faced challenges, including a 10.8% decline in stock price over the past six months, primarily due to a Refusal to File (RTF) letter from the FDA regarding pitolisant for excessive daytime sleepiness in idiopathic hypersomnia [1][20] Group 1: Company Performance - The stock has underperformed compared to the industry, which declined by 9.7%, and the S&P 500 index during the same period [1] - Despite the setback, the fourth-quarter results reported on February 25 were better than expected, leading to a slight recovery in shares [3] - The lead drug, Wakix, is a first-in-class therapy that has driven growth since its initial FDA approval in 2019, with expected net revenues between $820 million and $860 million for 2025 [7][8] Group 2: Drug Development and Pipeline - The company aimed to expand the label of pitolisant for excessive daytime sleepiness in adult patients with idiopathic hypersomnia, but the submission faced regulatory challenges [4][5] - Two next-generation formulations, pitolisant Gastro-Resistant and pitolisant High-Dose, are in development, with phase III studies planned for late 2025 [9][10] - The acquisition of Zynerba Pharmaceuticals added ZYN-002 to the portfolio, currently in a phase III trial for Fragile X Syndrome, with data expected in Q3 2025 [11][12] Group 3: Financial Position and Valuation - As of December 31, 2024, the company had cash, cash equivalents, and investments totaling $576.1 million, with long-term debt of $163 million, indicating a sound cash position [14] - HRMY's shares trade at a price/sales ratio of 2.27x forward sales, lower than its historical mean of 4.23x but higher than the industry average of 1.70x [15] - The estimate for 2025 earnings per share has decreased to $2.89 from $3.16 over the past 30 days, reflecting a downward trend in earnings expectations [17] Group 4: Market Outlook - The narcolepsy market in the U.S. had an approximate net sales value of $2.9 billion in 2023, with expectations for continued growth [19] - The company believes its pipeline has the potential to deliver more than $3 billion in net revenues in the coming years, driven by successful development of its candidates [19] - The company is advised to maintain investment in HRMY, with potential for value increase from favorable data readouts later in the year [20]

Core Viewpoint - Harmony Biosciences Holdings, Inc. is under investigation for potential securities fraud and unlawful business practices following a negative FDA response regarding its drug pitolisant [1][2]. Group 1: Company Overview - Harmony Biosciences Holdings, Inc. trades on NASDAQ under the ticker HRMY [1]. - The company recently received a Refusal to File (RTF) letter from the FDA concerning pitolisant, which is intended for treating excessive daytime sleepiness in adult patients with idiopathic hypersomnia [2]. Group 2: Financial Impact - Following the FDA's announcement, Harmony's stock price dropped by $3.77 per share, representing a decline of 9.64%, closing at $35.32 per share on February 19, 2025 [2]. Group 3: Legal Context - Pomerantz LLP is leading the investigation into Harmony, focusing on whether the company and its officers engaged in securities fraud or other unlawful practices [1]. - Pomerantz LLP has a long history in corporate and securities class litigation, having recovered significant damages for victims of securities fraud [3].

Financial Data and Key Metrics Changes - The company reported net product revenues of $714.7 million for 2024, representing a 23% year-over-year growth. In Q4 alone, net revenue was $201.3 million, reflecting a 20% increase from $168.4 million in the prior year quarter [11][25][55] - Non-GAAP adjusted net income for Q4 2024 was $63 million, or $1.08 per diluted share, compared to $42.8 million or $0.73 per diluted share in the prior year quarter [56] - The company ended Q4 with approximately $576 million in cash and cash equivalents, reflecting robust cash generation of approximately $219.8 million from operations in 2024 [55][57] Business Line Data and Key Metrics Changes - The average number of patients on WAKIX increased to approximately 7,100 in Q4, with a sequential increase of about 300 patients from the previous quarter [25][26] - The growth in WAKIX prescriptions was primarily driven by adult narcolepsy, which constitutes approximately 95% of the diagnosed narcolepsy opportunity [27] - The company anticipates net revenue guidance for WAKIX in 2025 to be between $820 million and $860 million [30][58] Market Data and Key Metrics Changes - The company continues to see strong double-digit growth in net revenue for WAKIX, demonstrating sustained demand in the narcolepsy market [25][26] - The company is on track to initiate pivotal Phase 3 registration trials for pitolisant HD in both narcolepsy and idiopathic hypersomnia in Q4 2025, with anticipated PDUFA dates in 2028 [40][41] Company Strategy and Development Direction - The company aims to become a leading CNS company focused on developing innovative treatments for patients with unmet medical needs, with a pipeline poised to deliver over $3 billion in net revenue [9][10] - The company is committed to defending its intellectual property and has announced its first generic settlement agreement with Novagen Pharma, reinforcing the strength of its IP portfolio [12][100] - The company is actively engaged in identifying additional opportunities to expand its leadership in Sleep/Wake, neurobehavioral disorders, and rare epilepsies [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory of WAKIX, projecting it to be a $1 billion plus opportunity in narcolepsy alone [11][12] - The company views 2025 as a transformational year, with key clinical milestones expected to reinforce its leadership in Sleep/Wake and rare CNS disorders [17][23] - Management acknowledged challenges with the supplemental new drug application for pitolisant in idiopathic hypersomnia but emphasized their commitment to the patient community [15][16] Other Important Information - The company has a robust late-stage pipeline with four ongoing Phase 3 registrational trials and plans to initiate six by the end of the year [36] - The company is advancing its next-generation pitolisant formulations, including pitolisant HD and pitolisant GR, designed to address unmet needs in narcolepsy and idiopathic hypersomnia [41][42] Q&A Session Summary Question: Can you provide updates on ZYN002 and the Phase 3 study? - Management expressed satisfaction with the ongoing trial and noted that they are on track for top-line data in Q3 2025. They are enrolling patients aged three to 30 years and have seen a good rollover rate into the long-term extension study [66][71] Question: What is the rationale for Pitolisant HD's likelihood of success in IH patients? - Management highlighted the evidence of efficacy from previous studies and the optimized formulation of pitolisant HD, which is expected to deliver enhanced therapeutic benefits [76][79] Question: How confident is the company in the timeline for Pitolisant HD trials given competition? - Management indicated confidence in the recruitment process due to established relationships with clinical trial sites and the robust signal from previous studies [84][88] Question: What is the status of remaining patent challenges? - Management confirmed ongoing litigation processes and mentioned a Markman hearing scheduled for March, with a trial set for 2026 [96][99] Question: What would success look like for the ZYN002 trial? - Success would be defined by demonstrating a statistically significant and clinically meaningful outcome on the primary endpoint, with supportive data from the previous CONNECT study [104][109]