Harmony Biosciences(HRMY) - 2024 Q1 - Quarterly Results

Q1 2024 Business and Financial Highlights Harmony Biosciences reported strong Q1 2024 results, with WAKIX® net revenue up 30% to $154.6 million, and expanded its portfolio Q1 2024 Key Financial Metrics | Metric | Q1 2024 | YoY Growth | Source | | :--- | :--- | :--- | :--- | | WAKIX® Net Revenue | $154.6 million | ~30% | WAKIX® (pitolisant) Net Revenue of $154.6 Million for First Quarter 2024; ~30% Growth Year-over-Year | | GAAP Net Income | $38.3 million | 30% | GAAP net income for the quarter ended March 31, 2024, was $38.3 million... compared to GAAP net income of $29.5 million... for the same period in 2023. | | GAAP Diluted EPS | $0.67 | 39.6% | $0.67 per diluted share, compared to... $0.48 per diluted share, for the same period in 2023. | | Non-GAAP Adj. Net Income | $50.7 million | 26.4% | Non-GAAP adjusted net income was $50.7 million... compared to Non-GAAP adjusted net income of $40.1 million... for the same period in 2023. | | Non-GAAP Adj. Diluted EPS | $0.88 | 33.3% | $0.88 per diluted share... compared to... $0.66 per diluted share, for the same period in 2023. | - The company has accelerated its growth strategy by adding a rare epilepsy franchise, now possessing three late-stage orphan/rare CNS franchises, each with potential peak sales opportunities of $1 billion to $2 billion[3][4] - Harmony expects its pipeline to deliver at least one new product or indication launch every year for the next five years, with revenue potential extending beyond 2040[4] Key Franchise Updates Harmony updated its three CNS franchises, noting WAKIX growth, ZYN002 progress, and a new Rare Epilepsy franchise Sleep/Wake Franchise The Sleep/Wake franchise saw WAKIX® revenue up 30%, advancing its pipeline with an IH sNDA and new assets - WAKIX® net revenue was $154.6 million in Q1 2024, a 30% increase YoY, with the average number of patients growing to approximately 6,300[5] - A supplemental New Drug Application (sNDA) for pitolisant in Idiopathic Hypersomnia (IH) is planned for the second half of 2024[1][5] - Positive pharmacokinetic data was reported for the next-generation pitolisant formulation (NG1), with a PDUFA date expected in 2026 and potential patent protection out to 2044[1][5] - Licensed TPM-1116, a highly potent oral orexin-2 receptor agonist, to strengthen the sleep/wake portfolio. An IND is expected to be filed by mid-2025[6] Neurobehavioral Franchise The Neurobehavioral franchise is advancing ZYN002, with FXS Phase 3 trial enrollment completing Q1 2025 - Patient enrollment in the Phase 3 RECONNECT trial for ZYN002 in Fragile X syndrome (FXS) is expected to be completed in Q1 2025, with topline data expected mid-2025[10] - Intellectual property protection for ZYN002 in FXS is secured out to 2040[10] Rare Epilepsy Franchise Harmony established a new Rare Epilepsy franchise via Epygenix acquisition, advancing EPX-100 for Dravet and LGS - Acquired Epygenix Therapeutics, establishing a new rare epilepsy franchise[1][10] - Lead product EPX-100 (clemizole) is in a pivotal trial for Dravet syndrome (DS) with data expected in 2026. A Phase 3 trial for Lennox-Gastaut syndrome (LGS) is planned for H2 2024[10] - EPX-100 has received Orphan Drug Designation (ODD) and Rare Pediatric Disease Designation (RPDD) for both DS and LGS[10] Q1 2024 Financial Performance Harmony Biosciences reported Q1 2024 net product revenue of $154.6 million, GAAP net income of $38.3 million Key Financial Metrics Q1 2024 net product revenue was $154.6 million, GAAP net income $38.3 million, and cash $453.6 million Q1 2024 vs Q1 2023 Financial Summary | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Product Revenue | $154.6 million | $119.1 million | | GAAP Net Income | $38.3 million | $29.5 million | | GAAP Diluted EPS | $0.67 | $0.48 | | Non-GAAP Adj. Net Income | $50.7 million | $40.1 million | | Non-GAAP Adj. Diluted EPS | $0.88 | $0.66 | Q1 2024 Operating Expenses (YoY) | Expense Category | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Research & Development | $22.2 million | $13.3 million | +67% | | Sales & Marketing | $27.2 million | $22.6 million | +21% | | General & Administrative | $25.7 million | $22.1 million | +16% | | Total Operating Expenses | $75.1 million | $57.9 million | +30% | - As of March 31, 2024, cash, cash equivalents, and investments totaled $453.6 million, an increase from $425.6 million at the end of 2023[12] Consolidated Statements of Operations Q1 2024 consolidated operations show net product revenue of $154.6 million, gross profit of $127.1 million Q1 2024 Statement of Operations (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net product revenue | $154,615 | $119,126 | | Gross profit | $127,131 | $98,346 | | Total operating expenses | $75,098 | $57,923 | | Operating income | $52,033 | $40,423 | | Net income | $38,334 | $29,485 | | Diluted EPS | $0.67 | $0.48 | Consolidated Balance Sheets As of March 31, 2024, total assets were $847.0 million, liabilities $331.6 million, and equity $515.4 million Balance Sheet Summary (in thousands) | Account | March 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $332,981 | $311,660 | | Total current assets | $479,503 | $451,070 | | Total Assets | $846,985 | $811,448 | | Total current liabilities | $154,253 | $163,781 | | Total Liabilities | $331,591 | $344,456 | | Total Stockholders' Equity | $515,394 | $466,992 | Reconciliation of GAAP to Non-GAAP Financial Results Q1 2024 GAAP net income was $38.3 million, adjusted to non-GAAP net income of $50.7 million Q1 2024 GAAP to Non-GAAP Reconciliation (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | GAAP net income | $38,334 | $29,485 | | Amortization | $5,961 | $5,961 | | Stock-based compensation | $10,434 | $6,561 | | Other adjustments (net of tax) | ($4,027) | ($1,270) | | Non-GAAP adjusted net income | $50,722 | $40,738 | | GAAP diluted EPS | $0.67 | $0.48 | | Non-GAAP adjusted diluted EPS | $0.88 | $0.67 | 2024 Outlook and Corporate Updates Harmony reiterated 2024 net product revenue guidance of $700-720 million and $150 million for share repurchase - The company reiterates its full-year 2024 net product revenue guidance of $700 million to $720 million[2][13] - As of March 31, 2024, $150 million remains authorized for the company's share repurchase program[14] Product and Pipeline Overview Harmony's key products and pipeline include WAKIX® for narcolepsy, ZYN002 for FXS/22q, and EPX-100 for epilepsy WAKIX® (pitolisant) and Target Indications WAKIX® (pitolisant) is a first-in-class H₃ receptor antagonist for narcolepsy, also studied for IH and PWS - WAKIX is a first-in-class selective histamine 3 (H₃) receptor antagonist/inverse agonist approved for excessive daytime sleepiness or cataplexy in adult narcolepsy patients[19] - Narcolepsy is a rare neurological disease affecting approximately 170,000 Americans, primarily characterized by excessive daytime sleepiness (EDS) and cataplexy[32] - The pipeline includes expanding WAKIX's use to Idiopathic Hypersomnia (IH) and Prader-Willi Syndrome (PWS), both rare disorders involving EDS[33][34] ZYN002 and Target Indications ZYN002 is a synthetic, THC-free cannabidiol gel developed for Fragile X and 22q syndromes - ZYN002 is a synthetic, THC-free cannabidiol in a transdermal gel formulation[35] - It is being developed for Fragile X syndrome (FXS), which affects up to 80,000 patients in the U.S., and 22q11.2 deletion syndrome (22q), affecting a similar number[36][39] EPX-100 (clemizole) and Target Indications EPX-100 (clemizole) is an oral drug targeting serotonin receptors for Dravet and LGS - EPX-100 (clemizole hydrochloride) is an oral drug candidate that targets central 5-hydroxytryptamine (serotonin) receptors[40] - It is under development for Dravet syndrome (DS), which has an incidence of ~1:15,700, and Lennox-Gastaut syndrome (LGS), which affects approximately 48,000 patients in the U.S[41][42] WAKIX® Important Safety Information WAKIX® safety notes contraindications for hypersensitivity or hepatic impairment, QT prolongation, and common adverse reactions - WAKIX is contraindicated in patients with severe hepatic impairment or known hypersensitivity to pitolisant[21] - A primary warning is that WAKIX prolongs the QT interval; it should be avoided in patients with known QT prolongation or with other risk factors for torsade de pointes[22][23] - The most common adverse reactions (≥5% and twice placebo) in clinical trials were insomnia (6%), nausea (6%), and anxiety (5%)[25] - WAKIX may reduce the effectiveness of hormonal contraceptives; an alternative non-hormonal method is recommended during and for 21 days after treatment[27][28]