Harmony Biosciences(HRMY)2021-08-10 12:31Financial Performance - For the six months ended June 30, 2021, the company generated $133.5 million in net product revenues[106]. - Net product revenue increased by $35.8 million, or 94.2%, for the three months ended June 30, 2021, and $75.7 million, or 130.8%, for the six months ended June 30, 2021 compared to the same periods in 2020, driven by growing commercial sales of WAKIX and a price increase following cataplexy indication approval[152]. - Net cash provided by operating activities was $30.6 million for the six months ended June 30, 2021, compared to net cash used of $21.9 million for the same period in 2020, reflecting revenue growth and net income from WAKIX commercialization[171]. - As of June 30, 2021, the company reported a net income of $14.1 million, compared to a net loss of $27 thousand in the same quarter of the previous year[188]. - Non-GAAP adjusted net income for the three months ended June 30, 2021, was $31.9 million, significantly up from $9.9 million in the prior year[188]. - EBITDA for the three months ended June 30, 2021, was $28.0 million, compared to $8.9 million in the same quarter of the previous year[188]. - The GAAP reported net income per diluted share for the quarter was $0.24, a recovery from a loss of $1.34 per share in the same quarter last year[188]. Product Development and Clinical Trials - The company plans to pursue label expansion for WAKIX in pediatric patients with narcolepsy, with ongoing Phase 3 trials by its strategic partner Bioprojet[100]. - The company initiated a Phase 2 clinical trial for pitolisant in patients with Prader-Willi Syndrome and anticipates topline results in the first half of 2022[101]. - Research and development expenses are expected to be significant over the next several years as the company advances clinical development programs and prepares for regulatory approval of additional indications for pitolisant[132]. - The COVID-19 pandemic has negatively impacted the ability to conduct clinical trials, potentially leading to significant delays in clinical development timelines[119]. - The company has implemented remote and virtual approaches to clinical trials to maintain patient safety and trial continuity during the pandemic[119]. Sales and Marketing - The company intends to maintain engagement and generate awareness to support commercial launch performance[112]. - Sales and marketing expenses are increasing to support the commercialization of WAKIX and anticipated growth from potential additional indications[138]. - Sales and marketing expenses grew by $4.6 million, or 36.8%, for the three months ended June 30, 2021, and $6.8 million, or 26.6%, for the six months ended June 30, 2021, attributed to patient engagement and marketing activities[155]. - The company continues to engage and educate healthcare professionals virtually, with plans to re-initiate in-person interactions as conditions allow[115]. Financial Position and Debt - As of June 30, 2021, the company had cash, cash equivalents, and restricted cash of $160.4 million, with an accumulated deficit of $466.7 million[106]. - The company has outstanding debt of $195.6 million as of June 30, 2021[106]. - The company entered into a new Credit Agreement on August 9, 2021, providing for a senior secured term loan facility of $200.0 million and a delayed draw term loan facility of up to $100.0 million[163]. - The company had $200.0 million in borrowings outstanding as of June 30, 2021, with a term loan interest rate of LIBOR or 2.00% per annum plus 11.00% per annum[190]. Cost and Expenses - The cost of product sales includes manufacturing and distribution costs, with a noted increase as production ramps up to meet expected demand for WAKIX[126]. - Cost of product sales rose by $6.2 million, or 96.5%, for the three months ended June 30, 2021, and $13.2 million, or 132.6%, for the six months ended June 30, 2021, primarily due to increased commercial sales of WAKIX[153]. - Research and development expenses increased by $2.3 million, or 55.9%, for the three months ended June 30, 2021, and $3.6 million, or 47.1%, for the six months ended June 30, 2021, mainly due to clinical development work associated with PWS and DM[154]. - General and administrative expenses are anticipated to increase to support ongoing commercialization efforts and compliance with public company requirements[141]. - General and administrative expenses increased by $6.7 million, or 87.5%, for the three months ended June 30, 2021, and $13.1 million, or 82.9%, for the six months ended June 30, 2021, primarily due to intangible asset amortization and increased headcount[156]. Market and Economic Conditions - The COVID-19 pandemic has impacted the company's business, affecting stakeholder interactions and patient medication adherence[111]. - The company has faced challenges in converting demand into revenue due to shifts in patient insurance coverage during the pandemic[116]. - Inflation has not materially affected the company's financial condition or results of operations for the three and six months ended June 30, 2021[192]. - An immediate 10% change in market interest rates would not have a material impact on the company's financial position or results of operations[189]. - The company does not currently face significant market risk related to foreign currency exchange rates, although it may contract with foreign vendors in the future[191].