Mizuho reiterates Outperform rating on Harmony Biosciences stock

Investing.com - Mizuho (NYSE:MFG) has reiterated an Outperform rating and $48.00 price target on Harmony Biosciences Holdings Inc. (NASDAQ:HRMY), currently trading at $32.16, following a positive key opinion leader (KOL) call on the company’s ZYN-002 drug candidate for Fragile X Syndrome (FXS). The company maintains strong financials with $745M in revenue and an impressive 78% gross margin.

The research firm hosted its latest Neurology Spotlight Series call last week, which featured a KOL discussion on ZYN-002’s potential in treating FXS. The call followed Mizuho’s previously published deep dive preview note on the treatment.

According to Mizuho, the KOL expressed strong optimism about ZYN-002, highlighting that with no other approved drugs for FXS, the treatment holds significant potential. The expert also noted that ZYN-002’s topical delivery method makes it particularly suitable for this challenging patient population.

The KOL estimated an 80-90% chance of success for ZYN-002 in its current Phase 3 study, suggesting the drug candidate has promising clinical prospects. Additionally, the expert predicted that if approved, ZYN-002’s market uptake could be both rapid and widespread.

Mizuho cited these positive factors as key reasons for maintaining its Outperform rating on Harmony (JO:HARJ) Biosciences stock, expressing confidence in the potential commercial success of ZYN-002 for treating Fragile X Syndrome.

In other recent news, Harmony Biosciences reported first-quarter revenues of $184.7 million, surpassing both Oppenheimer’s and consensus estimates. The company credits this growth to the momentum of its product, Wakix, which saw an increase in patient numbers to approximately 7,200 by the end of the first quarter. Mizuho Securities raised its price target for Harmony Biosciences to $48.00, maintaining an Outperform rating, following the company’s strong first-quarter performance and robust pipeline. Oppenheimer also assumed coverage with an Outperform rating, setting a price target of $61.00.

Harmony Biosciences plans to begin human trials for its narcolepsy drug, BP1.15205, in 2025, with topline data expected in 2026. This drug demonstrated significant wake-promoting effects in preclinical studies. Additionally, Harmony Biosciences reached a settlement with Lupin (NSE:LUPN) Limited, allowing Lupin to launch a generic version of Wakix no earlier than 2030. The U.S. Patent Office upheld the validity of Harmony’s polymorph patent for pitolisant hydrochloride, reinforcing its intellectual property rights.

Mizuho noted the potential of Harmony’s orexin 2 receptor agonist, BP1.15205, as a best-in-class candidate, despite its earlier development stage compared to competitors. The company is also preparing for significant upcoming events, including the presentation of full preclinical data for BP1.15205 and the announcement of Phase 3 results for ZYN-002 in Fragile X Syndrome by the third quarter of 2025.

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