Harmony Biosciences(HRMY) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Harmony Biosciences reported net revenues of $107 million for Q2 2022, representing a 45% year-over-year increase from $73.8 million in the prior year quarter [29] - Operating income for Q2 2022 was $33.1 million, a 42% increase compared to $23.3 million in the prior year quarter [30] - Non-GAAP adjusted net income for Q2 was $34.7 million or $0.57 per diluted share, compared to $21.9 million or $0.37 per diluted share in the prior year quarter [30] Business Line Data and Key Metrics Changes - The WAKIX product line achieved net sales of $107 million in Q2 2022, marking the first time quarterly revenue surpassed $100 million [8] - The average number of patients on WAKIX increased to approximately 4,300 in Q2 2022, reflecting strong organic demand [14] - The company observed strong refill behavior and new patient starts, with Q2 representing the strongest quarter of prescription demand in over two years [15][20] Market Data and Key Metrics Changes - The company noted a significant increase in in-person field sales engagement, with approximately 75% of all engagements being in-person during Q2 2022 [16] - There was a broadening of clinical adoption of WAKIX among healthcare professionals, with new prescribers increasing in Q2 2022 [17] - Market access for WAKIX improved, facilitating patient access to the medication [18] Company Strategy and Development Direction - Harmony's growth strategy is based on three pillars: optimizing WAKIX's commercial performance, expanding its clinical utility, and acquiring new assets [6][10] - The company announced a new agreement with Bioprojet to develop innovative therapeutics based on pitolisant, aiming to expand its portfolio beyond WAKIX [10][11] - Harmony intends to leverage its financial position to acquire additional assets in neurology, focusing on rare orphan diseases [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in making 2022 the best year yet for Harmony, driven by strong demand for WAKIX and ongoing clinical programs [6][12] - The company anticipates typical seasonal headwinds in Q3 but expects a strong Q4 performance [31] - Management remains optimistic about WAKIX becoming a potential $1 billion franchise in the coming years [12] Other Important Information - Harmony ended Q2 2022 with approximately $258.9 million in cash, cash equivalents, and investments [31] - The company plans to incur a $30 million upfront fee related to the Bioprojet agreement in Q3 2022 [31] Q&A Session Summary Question: Impact of different physician practices on prescribing - The initial target audience consisted of about 8,000 healthcare professionals, covering 90% of the patient opportunity, while an additional 1,000 physicians managed about 10% [38] Question: Details on the Bioprojet relationship - The agreement focuses on developing new therapies based on pitolisant, potentially expanding the franchise in narcolepsy and other mutually agreed indications [39] Question: Momentum in prescription demand - The momentum exiting Q2 was as strong as entering it, with Q2 being the strongest quarter for prescription demand in two years [45] Question: Seasonal impact in Q3 - Typical summer seasonality is expected, with fewer patient visits and more vacation time affecting performance [50] Question: Increase in new patients over the year - The company anticipates continued growth due to strong underlying demand but is not providing forward-looking guidance [55] Question: Mechanistic rationale for pitolisant in Prader-Willi syndrome - Prader-Willi syndrome involves hypothalamic dysfunction, which may lead to excessive daytime sleepiness, making pitolisant a suitable treatment option [58] Question: Off-label usage of WAKIX for idiopathic hypersomnia - There is excitement in the community, but off-label usage is limited due to WAKIX being a higher-priced specialty product without FDA approval for that indication [99]