Sign in
HB

Harmony Biosciences Holdings, Inc. (HRMY)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered solid top-line growth: net product revenue $184.7M (+20% YoY) and non-GAAP adjusted diluted EPS $1.03; GAAP diluted EPS $0.78 . Versus consensus, HRMY posted a material EPS beat and a modest revenue beat (consensus EPS $0.61*, revenue $182.3M*)*
  • Guidance maintained: FY 2025 net product revenue $820–$860M reiterated; management flagged potential Q2 trade inventory drawdown of “a few days” and increased R&D milestone spending (~$29M) tied to ZYN002 and orexin programs .
  • Commercial KPIs strong: average WAKIX patients rose to ~7,200, exiting Q1 at ~7,300; payer coverage remains broad (>80% of U.S. lives), with no step-through to oxybate required .
  • Pipeline catalysts near term: RECONNECT Phase 3 topline for ZYN002 in Fragile X (Q3 2025; recruitment completed), pitolisant GR bioequivalence topline (Q3 2025), and orexin-2 agonist preclinical data at SLEEP (June) with IND filing mid-2025 .
  • Operational posture: U.S.-based IP/manufacturing strategy to mitigate tariff and supply-chain risk; secondary WAKIX manufacturing site underway in the U.S., HD manufacturing U.S.-based .

What Went Well and What Went Wrong

What Went Well

  • WAKIX demand sustained: net revenue $184.7M (+20% YoY); average patients ~7,200 with exit ~7,300; prescriber penetration >50% outside oxybate REMS; payer coverage stable and broad .
  • EPS beat vs Street: non-GAAP adjusted diluted EPS $1.03 vs consensus $0.61*; GAAP diluted EPS $0.78; non-GAAP adjustments included stock-based comp ($12.45M), amortization ($5.96M), and tax effects *.
  • Pipeline execution: ZYN002 Phase 3 completed recruitment; RECONNECT powered >90% for primary endpoint; pitolisant GR pivotal study initiated (topline Q3 2025); pitolisant HD Phase 3 starts Q4 2025; orexin-2 agonist on track for mid-2025 IND .

What Went Wrong

  • Higher operating expenses: total OpEx $96.5M (+29% YoY), with R&D $34.5M (+56%), reflecting pipeline spend; margin pressure in GAAP terms offset by strong gross profit and non-GAAP profitability .
  • Inventory phasing risk: management highlighted potential Q2 trade inventory drawdown of a few days; typical seasonal gross-to-net headwinds in Q1 persisted .
  • IH regulatory setback lingered: prior RTF for pitolisant IH sNDA acknowledged in Q4 call; HD path requires new Phase 3 trials (Q4 2025 start), delaying IH label expansion .

Financial Results

Revenue, Gross Profit, and Consensus

MetricQ3 2024Q4 2024Q1 2025
Net Product Revenue ($USD Millions)$186.0 $201.3 $184.7
Gross Profit ($USD Millions)$143.3 $146.9 $152.7
Revenue Consensus Mean ($USD Millions)$184.1*$201.2*$182.3*

Values retrieved from S&P Global.*

EPS (GAAP and Non-GAAP) vs Consensus

MetricQ3 2024Q4 2024Q1 2025
GAAP Diluted EPS ($)$0.79 $0.85 $0.78
Non-GAAP Adjusted Diluted EPS ($)$1.03 $1.08 $1.03
Primary EPS Consensus Mean ($)$0.665*$0.734*$0.608*

Values retrieved from S&P Global.*

Margins

MetricQ3 2024Q4 2024Q1 2025
Gross Profit Margin %77.01%*72.97%*82.68%*
EBIT Margin %33.17%*27.69%*30.45%*
Net Income Margin %24.78%*24.58%*24.66%*

Values retrieved from S&P Global.*

Segment/KPIs

MetricQ3 2024Q4 2024Q1 2025
WAKIX Net Revenue ($USD Millions)$186.0 $201.3 $184.7
Avg Patients on WAKIX (#)~6,800 ~7,100 ~7,200
Cash, Cash Equivalents & Investments ($USD Millions)$504.7 $576.1 $610.2
Total Operating Expenses ($USD Millions)$81.6 $91.1 $96.5

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Product RevenueFY 2025$820–$860M $820–$860M Maintained
R&D Milestone PaymentsFY 2025~$29M expected ~$29M expected Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 2025)Trend
WAKIX demand & prescribersPrescriber base expanding; avg patients ~6,800 (Q3), ~7,100 (Q4) Avg ~7,200; exit ~7,300; penetration >50% in non-oxybate prescribers Strengthening
Payer landscapeFavorable, no step-through to oxybate; lowest branded cost context (Q3/Q4) >80% lives covered; policy unchanged; no step-through Stable/Supportive
Pitolisant HD (high-dose)PDUFA target 2028; safety up to 5x labeled dose; planned trials (Q3/Q4) Phase 3 in narcolepsy & IH to start Q4 2025; aim for enhanced efficacy/fatigue label Advancing to Phase 3
Pitolisant GR (gastro-resistant)Pivotal bioequivalence initiation Q1 2025; PDUFA 2026 Pivotal B study initiated; topline Q3 2025 On track
ZYN002 (Fragile X)Topline mid-2025 (Q3/Q4) Recruitment complete; topline Q3 2025; >90% powered primary endpoint De-risking/Imminent readout
Orexin-2 agonistIND mid-2025; best-in-class profile highlighted (Q3/Q4) Comprehensive preclinical data at SLEEP (June); IND mid-2025; FIH H2 2025 Progressing
Tariffs/supply chain & U.S. opsLimited prior commentarySecondary U.S. WAKIX site; HD manufacturing U.S.; IP domiciled in U.S.; tariff mitigation Proactive risk mgmt

Management Commentary

  • “Net product revenue for the quarter was $184.7 million, a 20% increase year-over-year… we remain confident that WAKIX is on track to reach a $1 billion plus opportunity in narcolepsy alone…” — Jeffrey Dayno, CEO .
  • “We confirm our net revenue guidance in the range of $820 million to $860 million… penetration within non-oxybate prescribers is now over 50%.” — Adam Zaeske, CCO .
  • “The study is powered more than 90% for the primary endpoint… based on learnings from the CONNECT study” — Kumar Budur on ZYN002 RECONNECT .
  • “We ended the first quarter with $610.2 million in cash, cash equivalents and investments… reiterating net revenue guidance for 2025 of $820–$860 million.” — Sandip Kapadia, CFO .

Q&A Highlights

  • ZYN002 trial design/powering: >90% powered for ABC-CFXS Social Avoidance subscale; rigorous inclusion and caregiver training to optimize signal detection .
  • Payer landscape resilient: >80% coverage; no step-through to oxybate; no material changes in Q1; supports revenue guidance .
  • Guidance drivers: sequential patient adds (avg 7,200; exit 7,300) and stable conversion/adherence underpin FY range .
  • Pitolisant HD/GR programs: HD Phase 3 in narcolepsy/IH Q4 2025 with differentiated endpoints (fatigue, sleep inertia); GR bioequivalence topline Q3 2025 .
  • Concomitant therapy: ~10–15% of WAKIX patients also use oxybate; administratively manageable, low budget impact for payers .

Estimates Context

  • Q1 2025: non-GAAP adjusted diluted EPS $1.03 vs consensus $0.608*; revenue $184.7M vs consensus $182.3M* — a significant EPS beat and modest revenue beat *.
  • Prior quarters: Q4 2024 non-GAAP EPS $1.08 vs $0.734*; revenue $201.3M vs $201.2M*; Q3 2024 non-GAAP EPS $1.03 vs $0.665*; revenue $186.0M vs $184.1M* *.
MetricQ3 2024Q4 2024Q1 2025
Revenue Actual ($USD Millions)$186.0 $201.3 $184.7
Revenue Consensus ($USD Millions)$184.1*$201.2*$182.3*
Adjusted Diluted EPS Actual ($)$1.03 $1.08 $1.03
Primary EPS Consensus Mean ($)$0.665*$0.734*$0.608*

Values retrieved from S&P Global.*

Implication: Consensus likely needs to reflect continued patient adds and durable payer access; management’s reiteration suggests confidence despite Q2 inventory timing headwinds .

Key Takeaways for Investors

  • Strong execution: continued revenue growth (+20% YoY) and consistent non-GAAP profitability support the bull case; EPS beat demonstrates operating leverage .
  • Guidance intact with visibility: FY 2025 $820–$860M maintained; watch Q2 for inventory drawdown noise, but underlying prescriptions and payer dynamics remain solid .
  • Near-term catalysts: ZYN002 Phase 3 topline (Q3 2025) and pitolisant GR bioequivalence (Q3 2025) can create upside optionality; orexin-2 IND mid-2025 extends sleep/wake leadership .
  • Strategic moat: U.S.-based IP/manufacturing mitigates tariff/supply chain risks; HD patents to 2044 provide franchise extension beyond WAKIX LOE in 2030 .
  • Commercial durability: >80% coverage, no oxybate step-through, and growing prescriber penetration support continued patient adds; polypharmacy co-use (~10–15%) is acceptable to payers .
  • Watch R&D spend cadence: ~$29M in 2025 milestones tied to ZYN002 success and orexin program initiation; expect OpEx elevation as Phase 3 programs ramp .
  • Trading setup: Potential pre-read run into Q3 ZYN002 topline and SLEEP orexin data in June; consider positioning for binary readouts with risk-balanced exposure.

Sources

  • Q1 2025 Press Release: revenues, EPS, OpEx, cash, guidance, pipeline updates .
  • Q1 2025 Earnings Call: prepared remarks and Q&A on payer coverage, inventory, ZYN002 powering, HD/GR timelines, orexin data plans .
  • Prior quarters: Q4 2024 press release/call ; Q3 2024 press release/call .

Values retrieved from S&P Global.*