Harmony Biosciences(US:HRMY)2024-04-30 12:00Product Development and Approvals - As of March 31, 2024, the average number of patients on WAKIX was approximately 6,300, with over 80% of all insured lives in the U.S. having secured formulary access[120] - WAKIX was approved by the FDA for the treatment of cataplexy in adult patients with narcolepsy in October 2020, contributing to favorable access for patients[120] - The FDA granted orphan drug designation for pitolisant in the treatment of idiopathic hypersomnia in September 2023 and fast track designation in November 2023[107] - The Phase 3 registrational trial, TEMPO study, for Prader-Willi Syndrome was initiated in March 2024, with FDA alignment on the protocol received in October 2023[112] - The company is developing two new formulations of pitolisant, NG1 and NG2, with clinical studies initiated in Q4 2023 and data from NG1 expected to support further development[112] - The FDA granted priority review for the pediatric narcolepsy supplemental NDA, with a target action date set for June 21, 2024[110] - The primary endpoint of the INTUNE study for idiopathic hypersomnia did not meet statistical significance, but favorable numerical trends were observed, leading to a planned supplemental NDA submission in H2 2024[107] Financial Performance - Net product revenue increased by $35.5 million, or 29.8%, for the three months ended March 31, 2024, compared to the same period in 2023, primarily due to a 28.3% increase in units shipped and a 7% price increase[143] - Cost of product sales increased by $6.7 million, or 32.3%, for the three months ended March 31, 2024, with cost of product sales as a percentage of net product revenue at 17.8%[144] - Research and development expenses increased by $8.9 million, or 67.0%, for the three months ended March 31, 2024, driven by increased costs for clinical development and regulatory work associated with pitolisant and ZYN002[146] - Sales and marketing expenses increased by $4.7 million, or 20.6%, for the three months ended March 31, 2024, primarily due to increased patient engagement and marketing activities[147] - General and administrative expenses increased by $3.6 million, or 16.4%, for the three months ended March 31, 2024, mainly due to higher stock compensation and legal fees[148] - Net income for the three months ended March 31, 2024, was $38.3 million, compared to $29.5 million for the same period in 2023[142] Cash and Debt Management - As of March 31, 2024, the company had cash, cash equivalents, and investments of $453.6 million, with outstanding debt of $192.5 million[152] - The effective tax rate for the three months ended March 31, 2024, was 26.0%, compared to 22.0% for the same period in 2023, influenced by prior year tax benefits[151] - The company entered into a five-year senior secured term loan agreement totaling $185.0 million in July 2023[154] - An incremental term loan of $15.0 million was added in September 2023, with identical terms to the original loan[155] - The repayment schedule includes quarterly principal payments starting at $3.8 million, increasing to $5.0 million by December 2025, with a final payment of $115.0 million due in July 2028[156] - As of March 31, 2024, the company had $192.5 million in borrowings outstanding, with interest rates based on a senior secured net leverage ratio[177] Strategic Acquisitions and Agreements - The company completed the acquisition of Zynerba Pharmaceuticals in October 2023, focusing on innovative transdermal cannabidiol therapies for orphan neuropsychiatric disorders[113] - Topline data from the pivotal Phase 3 RECONNECT study for Zynerba's ZYN002 is anticipated in mid-2025, with patent protection until 2038[113] - A share repurchase program was approved in October 2023, allowing for up to $200.0 million in repurchases, with $150.0 million remaining as of March 31, 2024[158] - The company completed a tender offer to acquire Zynerba for $60.0 million, plus contingent value rights potentially worth up to $2.5444 per share[160] - An asset purchase agreement for HBS-102 was made for $3.5 million, with additional milestone payments totaling up to $174.0 million[161] - A sublicense agreement for an orexin-2 receptor agonist was established, involving an upfront fee of $25.5 million and potential milestone payments of up to $367.5 million[162] Cash Flow Activities - Net cash provided by operating activities for Q1 2024 was $31.1 million, down from $42.6 million in Q1 2023[165][166] - Net cash used in investing activities increased to $6.2 million in Q1 2024 from $1.8 million in Q1 2023[168][169]