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Harmony Biosciences Holdings, Inc. (HRMY)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered record net product revenue of $201.3M (+20% YoY) and non-GAAP adjusted EPS of $1.08; GAAP diluted EPS was $0.85, with continued strength in WAKIX demand and patient adds .
  • 2025 net product revenue guidance was maintained at $820–$860M, reinforcing confidence in a $1B+ narcolepsy opportunity; cash and investments ended 2024 at $576.1M .
  • Strategic/IP overhang eased with first ANDA settlement granting Novugen a license beginning Jan 2030 (or earlier in certain circumstances) and pursuit of pediatric exclusivity, supporting franchise durability .
  • Near-term catalysts: Q3 2025 ZYN002 (Fragile X) Phase 3 topline data; Pitolisant-GR bioequivalence readout in Q3 2025; Pitolisant-HD Phase 3 initiations in narcolepsy/IH in Q4 2025 .

What Went Well and What Went Wrong

What Went Well

  • Record quarterly sales with net product revenue of $201.3M and average WAKIX patients rising ~300 sequentially to ~7,100; management highlighted durable growth and broad prescriber expansion beyond oxybate REMS HCPs (“more than 50% penetrated”) .
  • Guidance reaffirmed: 2025 net product revenue $820–$860M, consistent with a path to $1B+ in narcolepsy, supported by strong underlying demand and favorable market access .
  • IP strength affirmed via first generic settlement and pursuit of pediatric exclusivity; CEO: “We remain committed to vigorously defending our intellectual property estate” .

What Went Wrong

  • FDA issued RTF for pitolisant sNDA in idiopathic hypersomnia based on randomized withdrawal phase data; management plans new Phase 3 in IH with Pitolisant-HD starting Q4 2025 .
  • Operating expenses rose 7% YoY in Q4 to $91.1M as pipeline investment scaled; Q1 seasonality flagged (higher gross-to-net, co-pays, potential trade inventory drawdown) .
  • Litigation continues with other ANDA filers despite the Novugen settlement; Markman hearing scheduled (management cannot comment on ongoing matters), implying ongoing legal spend and timeline risk into 2026 .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Net Product Revenue ($USD Millions)$172.8 $186.0 $201.3
GAAP Diluted EPS ($USD)$0.20 $0.79 $0.85
Non-GAAP Adjusted EPS ($USD)$1.05 $1.03 $1.08
Gross Profit ($USD Millions)$140.7 $143.3 $146.9
Operating Income ($USD Millions)$21.4 $61.7 $55.7
Total Operating Expenses ($USD Millions)$119.3 $81.6 $91.1
GAAP Net Income ($USD Millions)$11.6 $46.1 $49.5

Segment/Product revenue

ProductQ2 2024Q3 2024Q4 2024
WAKIX Net Revenue ($USD Millions)$172.8 $186.0 $201.3

KPIs

KPIQ2 2024Q3 2024Q4 2024
Avg Patients on WAKIX (#)~6,550 ~6,800 ~7,100
Sequential Patient Adds (#)~+250 ~+250 ~+300
Cash, Cash Equivalents & Investments ($USD Millions)$434.1 $504.7 $576.1
Prescriber Penetration (non-oxybate REMS HCPs)——>50% penetrated

Notes:

  • Q4 YoY revenue growth +20%; FY 2024 revenue $714.7M (+23% YoY) .
  • Non-GAAP adjustments detailed (amortization, stock comp, transaction costs, tax effects) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Product Revenue ($USD Millions)FY 2025$820–$860M (provided Jan 13, 2025) $820–$860M (reiterated Feb 25, 2025) Maintained
Net Product Revenue ($USD Millions)FY 2024$700–$720M (reiterated Oct 29, 2024) $714.7M actual Achieved
R&D Milestone Payments ($USD Millions)FY 2025N/APotentially ~$29M in 2025 Introduced
Pitolisant-GR Pivotal BE Timing2025Initiate Q1 2025; PDUFA 2026 Initiate Q1 2025; topline Q3 2025; PDUFA 2026 Maintained with added readout timing
Pitolisant-HD Phase 3 InitiationQ4 2025On track to extend franchise; PDUFA 2028 Narcolepsy & IH Phase 3s initiate Q4 2025; PDUFA 2028 Clarified timing
Share Repurchase AuthorizationAs of period-end$150M remaining (Sep 30, 2024) $150M remaining (Dec 31, 2024) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Sleep/Wake commercial momentumWAKIX revenue $172.8M; +250 patients to ~6,550 WAKIX revenue $186.0M; +250 patients to ~6,800; surpassed $2B cumulative Record $201.3M; +~300 to ~7,100; >50% penetration beyond oxybate REMS HCPs Accelerating growth; expanding prescribers
IH regulatory pathOn track to submit sNDA in Q4 2024 New LTX data supporting strong/sustained efficacy; sNDA submission on track FDA RTF; pivot to Pitolisant-HD Phase 3 in Q4 2025 Near-term setback; redesigned program
Pitolisant-HD (high-dose)PK optimization; PDUFA 2028 targeted On track; safety data up to ~5x dose consistent; PDUFA 2028 Phase 3s to initiate Q4 2025; narcolepsy fatigue and IH sleep inertia endpoints; PDUFA 2028 Advancing; clearer clinical plan
Pitolisant-GR (gastro-resistant)Dose optimization Q4 2024; pivotal BE Q1 2025; PDUFA 2026 Pivotal BE Q1 2025; PDUFA 2026 Pivotal BE initiation Q1 2025; topline Q3 2025; PDUFA 2026 On schedule; added readout timing
Orexin-2 agonist (BP1.15205)IND mid-2025; 2H first-in-human Greater potency/selectivity than peers; once-daily potential Preclinical data at SLEEP 2025; IMPD mid-2025; first-in-human 2H 2025 Progressing toward clinic
ZYN002 (Fragile X)Phase 3 RECONNECT topline mid-2025 Topline mid-2025; potential first approved FXS therapy Topline Q3 2025; complete methylation primary endpoint; dose adjustments >50kg High-conviction catalyst
Rare epilepsy (EPX-100/200)EPX-100 DS Phase 3 ongoing; LGS to initiate; EPX-200 IND-enabling DS Phase 3 ongoing; LGS to initiate; favorable serotonergic MoA DS and LGS Phase 3s ongoing; topline 2026; EPX-200 pre-IND Advancing Phase 3s

Management Commentary

  • CEO: “2025 is set up to be a transformational year for Harmony… our pipeline, if successful, is poised to deliver over $3 billion in net revenue” .
  • CCO: “We surpassed $700 million in net sales and over 7,000 average patients on WAKIX… more than 50% penetrated in the branded writer segment beyond oxybates” .
  • CFO: “We delivered strong top line growth and remain a profitable cash-generating company… guidance for net revenues in 2025 is $820–$860 million” .
  • CM&SO: “We are on track to initiate Phase 3 registrational trials with Pitolisant HD in narcolepsy and IH in Q4 2025… and expect ZYN002 Phase 3 topline data in Q3 2025” .

Q&A Highlights

  • ZYN002 trial design/expectations: Primary endpoint in complete methylation subgroup; ≥3-point change on social avoidance is clinically meaningful; supportive CONNECT data to contribute to NDA if RECONNECT is positive .
  • Pitolisant-HD rationale and timelines: Optimized PK and higher dose expected to enhance EDS efficacy; Phase 3 parallel-arm RCTs planned to start Q4 2025; PDUFA 2028; confidence despite patient competition .
  • IP litigation update: First ANDA settlement reached; Markman hearing scheduled; active engagement with remaining filers; commitment to defend IP .
  • Pitolisant-GR BE study: Aim to show bioequivalence with 90% CI for Cmax/AUC within 80–125%; topline expected Q3 2025; PDUFA 2026 .
  • Orexin agonist safety: No evidence linking OX2R agonism to cognitive decline; issues historically tied to sleep deprivation; preclinical/clinical data to date are reassuring .

Estimates Context

  • Wall Street consensus from S&P Global for Q4 2024 (EPS and revenue) was not available due to data access limits at the time of analysis. As a result, we cannot present beat/miss versus consensus for this quarter [GetEstimates errors].

Key Takeaways for Investors

  • Core WAKIX franchise is compounding with sequential patient additions and record Q4 revenue; guidance suggests continued growth toward $1B+ in narcolepsy .
  • The IH RTF is a tactical setback, but the pivot to Pitolisant-HD Phase 3s with differentiated endpoints (fatigue, sleep inertia) may enhance eventual label and commercial opportunity in narcolepsy and IH .
  • IP durability improved via first ANDA settlement and pursuit of pediatric exclusivity; this supports valuation resilience ahead of the 2030 LOE .
  • 2025 is catalyst-rich: ZYN002 Phase 3 data in Q3, Pitolisant-GR BE readout in Q3, and HD Phase 3 initiations in Q4—each can re-rate the pipeline and narrative .
  • Cash generation and $576.1M liquidity provide flexibility to fund pipeline and absorb milestone spend (~$29M expected in 2025) without external financing pressure .
  • Near-term trading: Expect typical Q1 seasonality (gross-to-net, co-pays, inventory) and potential volatility tied to IH regulatory headlines and FXS data timing; consider positioning around Q3 data events .
  • Medium-term thesis: Sleep/wake leadership with lifecycle management (GR/HD, OX2R agonist) plus neurobehavioral and rare epilepsy franchises could deliver multi-year launches and diversify revenue beyond WAKIX .