Harmony Biosciences(HRMY)2022-11-01 12:00Patient Access and Clinical Trials - As of September 30, 2022, the average number of patients on WAKIX was approximately 4,600, with over 80% of all insured lives in the U.S. having formulary access[103] - The company initiated a Phase 3 registrational trial for idiopathic hypersomnia (IH) and has activated over 70% of the targeted clinical trial sites[97] - The topline data from the Phase 2 proof-of-concept trial for Prader-Willi Syndrome (PWS) showed a positive signal on the primary outcome related to excessive daytime sleepiness (EDS)[97] - The COVID-19 pandemic has impacted the company's ability to gauge growth rates and may adversely affect future growth due to changes in patient access to healthcare[105] - The company has observed a shift of some patients from commercial insurance to free drug and patient assistance programs due to elevated unemployment rates[109] - The company continues to engage and educate healthcare professionals virtually, despite challenges in in-person interactions due to the pandemic[107] - The COVID-19 pandemic has caused disruptions in clinical trials and may continue to affect the company's operations and financial results[116] - The company has implemented remote approaches to clinical trials to maintain patient safety and trial continuity during the pandemic[112] Financial Performance - Net product revenue for Q3 2022 was $117.206 million, an increase from $80.732 million in Q3 2021, representing a growth of 45.2%[141] - Gross profit for the nine months ended September 30, 2022, was $252.951 million, compared to $176.526 million for the same period in 2021, reflecting a year-over-year increase of 43.2%[141] - Operating income for the nine months ended September 30, 2022, was $72.573 million, compared to $58.897 million for the same period in 2021, showing an increase of 23.2%[141] - Net income for Q3 2022 was $87.943 million, a significant recovery from a net loss of $9.620 million in Q3 2021[141] - Net product revenue increased by $36.5 million, or 45.2%, for the three months ended September 30, 2022, and increased by $95.3 million, or 44.5%, for the nine months ended September 30, 2022, compared to the same periods in 2021[142] Expenses and Investments - Research and development expenses for Q3 2022 were $40.548 million, significantly higher than $11.739 million in Q3 2021, indicating an increase of 245.5%[141] - Sales and marketing expenses rose to $20.467 million in Q3 2022 from $16.480 million in Q3 2021, marking a 24.0% increase[141] - General and administrative expenses increased to $21.331 million in Q3 2022, up from $16.856 million in Q3 2021, which is a 26.5% rise[141] - Research and development expenses increased by $28.8 million, or 245.4%, for the three months ended September 30, 2022, and increased by $37.9 million, or 165.3%, for the nine months ended September 30, 2022, primarily due to a $30 million licensing fee[144] - Sales and marketing expenses increased by $4.0 million, or 24.2%, for the three months ended September 30, 2022, and increased by $9.2 million, or 18.8%, for the nine months ended September 30, 2022, driven by patient engagement and marketing activities[145][146] - General and administrative expenses increased by $4.5 million, or 26.5%, for the three months ended September 30, 2022, and increased by $15.7 million, or 34.3%, for the nine months ended September 30, 2022, primarily due to stock compensation and intangible asset amortization[147] Cash Flow and Financial Position - As of September 30, 2022, the company had cash, cash equivalents, restricted cash, and investments totaling $316.8 million, with an accumulated deficit of $320.6 million[151] - Net cash provided by operating activities for the nine months ended September 30, 2022 was $117.8 million, compared to $61.0 million for the same period in 2021[161] - The company made a $40 million milestone payment in March 2022 upon WAKIX attaining $500 million in life-to-date aggregate net sales in the United States[160] - As of September 30, 2022, the company had $235.2 million in investments in money market funds, U.S. treasury notes, corporate bonds, and municipal obligations[172] - The company had $198.0 million in borrowings outstanding as of September 30, 2022, with an Initial Term Loan interest rate of LIBOR plus 6.50%[173] Market and Economic Conditions - The EMA's decision on Bioprojet's pediatric narcolepsy submission is expected in the first quarter of 2023, which could inform the company's strategy for FDA submission[96] - The Blackstone Credit Agreement includes a senior secured term loan facility of $200 million and a delayed draw term loan facility of up to $100 million, with a maturity date of August 9, 2026[155] - An immediate 10% change in market interest rates would not have a material impact on the fair market value of the company's investment portfolio or its financial position[172] - The company is not currently exposed to significant market risk related to foreign currency exchange rates, but may contract with foreign vendors in the future[174] - Inflation has not had a material effect on the company's business, financial condition, or results of operations for the three and nine months ended September 30, 2022, and 2021[175]