Harmony Biosciences at Needham Conference: Strategic Growth in CNS Disorders

On Wednesday, 09 April 2025, Harmony Biosciences (NASDAQ: HRMY) presented at the 24th Annual Needham Virtual Healthcare Conference, showcasing its robust financial health and strategic growth plans. The company emphasized its profitability and strong cash reserves, while also addressing potential challenges such as tariffs on pharmaceutical imports. Harmony Biosciences highlighted its focus on expanding its pipeline in orphan rare CNS disorders.

Key Takeaways

• Harmony Biosciences ended last year with over $576 million in cash.
• The company has a catalyst-rich pipeline, expecting multiple product launches in the coming years.
• Top-line data from the Phase 3 RECONNECT trial for ZYN zero zero two in Fragile X syndrome is anticipated in Q3.
• The Wakix franchise is projected to become a billion-dollar opportunity in narcolepsy.
• Harmony is actively seeking business development opportunities to expand its CNS disorder pipeline.

Financial Results

• Strong Cash Position: Harmony Biosciences concluded last year with more than $576 million on the balance sheet.
• Cash Generation: The company generated over $200 million in cash last year, underscoring its profitability.
• Profitability: Harmony Biosciences is a profitable, self-funding biotech company.
• Wakix Revenue: The Wakix franchise is on track to reach a billion-dollar plus opportunity in narcolepsy.

Operational Updates

• Pipeline Expansion: Harmony Biosciences has a diverse pipeline with eight assets across 13 development programs. Up to six programs are expected to reach Phase 3 by year-end.
• ZYN zero zero two (Fragile X Syndrome): Top-line data from the Phase 3 RECONNECT trial is expected in Q3.
• Orexin Agonist: Preclinical data will be presented at the annual sleep meeting in June, with an IND submission planned for mid-year.
• Pitolisant GR and HD: The GR formulation's pivotal bioequivalence study started in Q1, with results expected in Q3. The target PDUFA dates for GR and HD are 2026 and 2028, respectively.

Future Outlook

• Multiple Product Launches: Harmony aims to deliver one or more new product or indication launches annually in the coming years.
• Wakix Franchise Expansion: Programs like pitolisant GR and HD aim to extend market exclusivity and address unmet needs in narcolepsy.
• Business Development: The company is actively seeking opportunities to strengthen its CNS disorder pipeline.

Q&A Highlights

• Fragile X Syndrome (ZYN zero zero two): The Phase 3 RECONNECT trial includes approximately 80 subjects, with key endpoints focused on social avoidance.
• Orexin Agonist: Notable for its low EC50 at orexin two receptors and excellent selectivity.
• Next Generation Wakix (Pitolisant): The GR and HD formulations aim to enhance efficacy and address unique symptoms like fatigue in narcolepsy.
• Tariffs: Most of Wakix's supply chain is based in France, with efforts to qualify local suppliers.

For a detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - 24th Annual Needham Virtual Healthcare Conference:

Ami Fadia, Biotech Analyst, Needham: Good afternoon, everyone. Welcome to the next session with Harmony Biosciences. I'm Ami Fadia, biotech analyst here at Needham. Thank you so much for joining us today. It's my pleasure to be hosting the Harmony team led by Jeff Dano, who's the CEO, Sandeep Kapadia, CFO, and we also have doctor Kumar Badur, who's the chief medical and scientific officer.

Good afternoon, everyone. Thank you so much for joining. Perhaps if I could just ask, Jeff to kick us off with a few opening comments, and we can dive straight into q and a.

Jeff Dano, CEO, Harmony Biosciences: Yeah. Sounds good, Ami. So first of all, yeah. Good afternoon, everyone. Ami, thank you for, you know, the the invitation on behalf of the Harmony team, for this fireside chat to, you you know, kinda share our story and where we are.

And I think at a high level, you you know, we really you know, given Harmony's unique profile, you know, Ami, we we sort of we like our profile, especially, you know, given the the current market, you know, backdrop. And I think namely and importantly, you know, we're a, you know, a profitable self funding biotech, you know, company now, you know, with generating strong cash from our Wakix commercial business. And and we ended last year, you know, with over 576,000,000 on the balance sheet, you know, with regards to, based on the strong cash generation and, and also, you know, advancing our pipeline, you know, off of the balance sheet as well. But in addition, and I think as we'll talk about today, you know, we're really excited about, you know, the late stage catalyst catalyst rich pipeline, you know, that we built, you know, over the past couple years. And, you know, namely, you know, we have three orphan rare, you know, CNS franchises in our pipeline, you know, each with, potential peak sales opportunities of 1 to $2,000,000,000 each.

And if you look at our pipeline, you know, which we believe is one of the strongest pipelines in the industry currently for patients living with orphan rare, you know, neurological disorders. And our current, you know, programs, we have eight assets across 13 development programs and, you know, up to six of them in in phase three, by the end of this year. So with this pipeline, it really sets us up to deliver one or more new product or indication launches, you know, each year over the coming years. So in addition to our strong cash position, our profitability, our Wakix franchise that continues to grow and basically on track to reaching a billion dollar plus opportunity in narcolepsy alone. And then the strength of our late stage pipeline, we feel that we're well positioned to continue to, create long term durable value creation for our shareholders and the potential to help hundreds of thousands of patients living with rare neurological disorders.

Ami Fadia, Biotech Analyst, Needham: Okay. Great. Thank you, Jeff. Perhaps if you could start by I mean, you certainly have built a very nice and deep, pipeline portfolio. What is the next most important catalyst in 2025 and, acknowledging that we have several coming up?

Jeff Dano, CEO, Harmony Biosciences: Yep. So the next, you know, most important catalyst for us that we're very excited about, you know, is our, you know, top line data readout in the the phase three RECONNECT trial, ZYN zero zero two for fragile X syndrome. And I'm gonna turn it over to Kumar. But, you know, just yesterday, you know, we shared some new data, presented new data at the American Academy of Neurology meetings at a podium presentation, hot topics in in in child neurology from some open label extension data from the prior phase two CONNECT study. And and I think, you know, with that data, showing kind of our conviction in the probability of success, you know, with the ongoing phase three RECONNECT trial.

So we're very excited about that upcoming milestone. And and Kumar can share some of the data that that we presented yesterday and, you know, how we're tracking, you know, towards the next, catalyst. Kumar?

Kumar Badur, Chief Medical and Scientific Officer, Harmony Biosciences: Yeah. Thank you, Jeff. Good day, Ami, and good day to everyone on the call. So, yes, Ami, the next major milestone, for Harmony is really the top line data in third quarter of this year on z one zero zero two in Frazolek syndrome. In fact, it's not just a major milestone just for harmony, the field in general, given that there are no approved treatments for any symptoms in patients with Frazolek syndrome.

Jeff mentioned about the podium presentation that happened at American Association of Neurology meeting yesterday. Just to provide some context, Tommy, this podium presentation was under the hot sections, hot topics in child neurology, and it was only one of the 10 presentations that was selected for podium presentation. If you put this in context, American Academy of Neurology typically receives several hundreds of abstracts for presentations. So this really underscores two things. One is the unmet need in patients with frazolix syndrome, and the second thing is the data that was generated on z one zero zero two in frazolix syndrome.

What we presented were two things. The first one is long term efficacy, specifically as it relates to irritability in patients with Frazolek syndrome, which is another core symptom other than social avoidance. We showed that over sixty percent of the patients showed more than nine point change in frazolac syndrome irritability subscale that is considered as clinically meaningful. More seventy percent of the patients showed clinically meaningful changes on caregiver global impression scale. Pretty impressive and also durable data given that we showed this in two hundred forty patients over a period of three years.

And, of course, the long term safety and tolerability where it continues to demonstrate a very favorable safety and tolerability profile. With the only treatment emergent adverse event of note was application site pain that was reported in about six to seven percent of the patients, and this includes, like, irritation, itching, redness, and swelling. Overall, strong data sets. Another supportive evidence, for our top line for our conviction in the ongoing RECONNECT study with the top line data anticipated in third quarter of this year.

Ami Fadia, Biotech Analyst, Needham: Okay. Yeah. No. I think that this data is certainly very compelling, given the long term follow-up, here. Perhaps maybe just, remind us with regards to the RECONNECT study, you know, what is sort of the study size?

What is it powered to demonstrate in terms of the endpoint? And, you know, how does it compare to kind of what we had seen previously in the Connect study?

Kumar Badur, Chief Medical and Scientific Officer, Harmony Biosciences: Yeah. A three CONNECT study, Amit, this is a phase three pivotal registrational study that is ongoing. As mentioned earlier, top line data anticipated in third quarter of this year. And this study design is something that was aligned not just with the FDA, but EMA as well. So if the study is positive, we have an opportunity to get approval not just from the FDA, but also from EMA as well.

It's a prospective parallel study design. Approximately 80 subjects. About eighty percent of them are patients with complete methylation, and twenty percent of them are with partial methylation. The primary target population is patients with complete methylation. These are also the patients who have more severe symptoms.

These are the patients where the FMR protein production is virtually absent, which means that their endocannabinoid system is significantly dysfunctional where z one zero zero two acts in a mechanistically synergistic way in the sense it resets the endocannabinoid system and helps these patients with neurobehavioral symptoms. About sixty five percent of the patients with Frazolek syndrome have complete methylation. And we are recruiting about twenty percent of patients with partial methylation with the understanding that if the primary endpoint is positive in complete methylation and if we see supportive data in patients with partial methylation, then we have an opportunity for a much broader indication for patients both with complete and partial methylation. Eighteen week treatment, the primary endpoint is aberrant behavior checklist, Frazolek syndrome, social avoidance subscale. We are also looking at several other endpoints, including irritability that we just about before.

In terms of your question about the previous phase two, three study, connect study, the learnings from that study, The Connect study was one of the largest phase two, three study that was done in patients with Frazolek syndrome. That study showed both clinically significant and clinically meaningful improvement in several core symptoms in patients with Frazolek syndrome, including social avoidant sign irritability, in patients with complete methylation. So, essentially, what we're doing in reconnect study is replicating the clinically meaningful and statistically significant results in patients with complete methylation from the connect study to reconnect study. Just looking at the pathophysiology in patients with Frazolek syndrome, the intervention, which basically helps to correct the dysfunctional endocannabinoid system, and the positive data from the CONNECT study in patients with complete methylation, we have high degree of confidence and conviction in the RECONNECT study.

Jeff Dano, CEO, Harmony Biosciences: Yeah. And and, yeah, and, Ami, I think if if if I if I, you know, sort of pull us back at the, you know, the higher level of the relevance of this, you know, with no FDA approved treatments for patients living with fragile x and, obviously, many programs, you know, that, you know, have have failed in the past. You know, this is, an opportunity if if we're successful of bringing, you know, the first approved treatment for patients living, you know, with fragile X to patients, you know, not only in The US, for which there are about eighty thousand patients in The US living with fragile X. So for an orphan rare disorder, you know, a significant kind of, you know, market opportunity, but also with global rights to ZYN two and a study design, you know, that has been discussed with EMA, as Kumar alluded to, that we could also register, in Europe, you know, an opportunity to partner, you know, this out in in sort of markets outside The US as well. If we are successful with with, positive data, then Kumar and the team has also been working on, you know, a follow on indication in twenty two q deletion syndrome.

So another related neurobehavioral disorder, and has already had interactions with the agency in terms of initiating a pivotal phase three trial in twenty two q deletion syndrome on the heels of positive data in fragile X.

Ami Fadia, Biotech Analyst, Needham: Yeah. No. That's very helpful, Jeff. Maybe just a quick follow-up on the data that we have from the CONNECT study. Now the primary endpoint in the RECONNECT study is sort of the social avoidance subscale.

Can you talk about what has been the experience in the open label portion around the social avoidance subscale and then sort of the interlining of irritability and social avoidance? I guess you got you guys reported on the irritability sort of subscale. So so maybe kind of if you can talk about that. And then also from a clinically meaningful standpoint, how much of a change, whether, you know, it's on an absolute basis or relative to a placebo that would you that you you know, that the physicians would consider clinically meaningful.

Kumar Badur, Chief Medical and Scientific Officer, Harmony Biosciences: Yeah. I mean, social avoidance, social isolation, irritability, these are some of the core symptoms in patients with Frazolex syndrome. Social or in the long term study, we saw a similar trend with social avoidance as well, and these data were presented in the middle of last year at National Cross Alex Foundation. The data are very similar and compelling just like what we saw with irritability. In terms of clinical meaningfulness, a three point change in the social avoidance subscale is considered as clinically meaningful, and that is well established.

The data from the CONNECT study also in patients with complete methylation showed a clinically meaningful change. When I say clinically meaningful change, it's three point change from baseline to the end of treatment on social avoidance. And we also saw a clinically meaningful change, in the irritability component as well, which is a nine point change from baseline to the end of the study.

Ami Fadia, Biotech Analyst, Needham: Got it. Okay. Maybe if you could shift gears and talk about one of the other kind of data points that you're going to share with us in June of this year, and that's around the orexin agonist asset. Can you talk about how it may be differentiated from the ones that are currently in the clinic. And, you know, you have one of the lowest EC50s compared to some of the others.

So, you know, maybe maybe kind of talk about based on some of the preclinical data, what how do you see that potentially manifesting in the clinic?

Kumar Badur, Chief Medical and Scientific Officer, Harmony Biosciences: Yeah. We we are presenting comprehensive preclinical safety and efficacy data at the annual sleep meeting in the month of June. Really excited about it. And based on the preclinical data, potentially, this could be a best in class paroxysm receptor agonist. Now why do I say that?

Based on several things. First and foremost is the novel chemical structure. This is not a me too chemical structure compared to other orexin receptor agonists. We moved away from the typical pyrrolidone sulfonamide bicyclic moiety. The second thing is the potency.

As you mentioned, Army, it has one of the lowest e c fifty. I mean, we are talking about one one hundred of a nanomolar here, 0.05 e c fifty at orexin two receptors. This high potency gives us the dosing flexibility and therefore the ability to target all the three central disorders of hypersomnia and set a very low dose, which is n t one, n t two, and idiopathic hypersomnia. It has an excellent selectivity of over 600 fold. This, taken in the context of a potency really high potency, offers greater than 140 fold margins for orexin one receptor agonist or one or orexin one receptors at the anticipated maximum human therapeutic dose.

So that's a lot of selectivity for 100 fold margin. And not only that, we also showed over 1,000 fold selectivity over at least another 1,500 targets of interest in humans. And also the preclinical data is supportive of one study dosing. So the combination of all these factors makes us believe that we potentially have the best in class orexin receptor agonist. And we are on track to submit IMPD in the middle of this year and followed immediately by first in human studies.

We should anticipate discussing the clinical data sometime in 2026.

Ami Fadia, Biotech Analyst, Needham: K. Now, you know, there are a couple of payers that are, in the clinic and, you know, swiftly moving towards, generating data that can support pivotal studies. As as you sort of, watch how they're developing their programs, how does that influence how you might develop your own clinical development plan in terms of either, you know, identifying the indications, which, you know, I presume you you're thinking about the three, lead ones or also the endpoints that you intend to study as you develop your asset?

Kumar Badur, Chief Medical and Scientific Officer, Harmony Biosciences: Right, Ami. Look. The we see the other Rx interceptor agonist. Everyone has still in early stages of clinical development in phase phase one b two a with the possible exception of Takeda. We have that in the pure registration studies for n t one only.

Everyone is doing good work in a novel class of drugs, which is good for patients with narcolepsy. And we are also very excited about our own paroxetine receptor agonist as well. So we will certainly leverage some of the learnings from others who are already in the clinic, and we will be pursuing an accelerated clinical development path, but making sure that we have the right datasets as we move from one phase of development to the next.

Ami Fadia, Biotech Analyst, Needham: K. I wanna talk about sort of the WCAGX franchise or the Patrolisan franchise. And obviously, Wakix is rapidly progressing towards becoming a $1,000,000,000 blockbuster asset. Can you talk about your next generation program, the rationale behind it? And, you know, obviously, you sort of have generated some clinical data there.

And and so what is the next step towards, bringing that to fruition and the pivotal data?

Jeff Dano, CEO, Harmony Biosciences: Yeah. Sure. I mean, let me just sort of set up the strategy, then Kumar can kinda give an update on the progress of the programs. And, you know, so, obviously, you know, Wakix as a a novel you know, pitulsin, a novel first in class molecule that's been, you know, very successful product in the market. So what we're looking to do is to take, a very good drug and and make it even better.

And and in the context of patient focused drug development, where we're looking at ongoing unmet medical needs in patients, you know, living with narcolepsy. You know, namely, you know, residual symptoms in over seventy five percent of patients where, you know, the the need for greater efficacy, especially around excessive daytime sleepiness, is really kind of, you know, paramount to drive greater efficacy. And then also through our learnings in the market and in the literature, the, you know, the predisposition to GI symptoms in in patients with narcolepsy, you know, not related to Wakix, you know, related to some other medications like oxybates that fifteen to twenty percent of patients with GI side effects. But and having a, you know, a product that could sort of mitigate against some of that, you know, pre, predisposition to some of the GI side effects in our ptolocin GR program. So, the thinking is, you know, with these two formulations, pitolacin GR as a quick to market strategy that Kumar will comment on, with a target PDUFA in 2026 to sort of expand the base of patients that are on, you know, both WCAG and a Pitolacin GR to set up transitioning the franchise, in the 2028 time frame that target PDUFA for Pitolacin high dose or Pitolacin HD, which is sort of the main value driver, obviously, out ahead of LOE of Wakix in 2030 and with utility patents now filed to 2044 for both pitolacin GR and HD, which gives us a long runway, you know, in in terms of completing the development programs, getting in the market, transitioning the franchise, and then really expanding on further development opportunities for Tulsan HD.

So I'll turn it over to Kumar on on an update of our progress in in both of those programs. Kumar?

Kumar Badur, Chief Medical and Scientific Officer, Harmony Biosciences: Yeah. Thank you, Jeff. So, Amit, Pitola sent GR fast to market strategy showing bioequivalence to VKX and offering two distinct features. One is patients who have upper GI symptoms. It has a gastro resistant coating and also the ability to start at the therapeutic dose range.

The pivotal bioequivalence study was started in the first quarter, and we anticipate top line from the from that study in the third quarter of this year. And the dosing optimization study will also begin soon. And the target PDUFA date is 2026. With the pitolocent HD formulation, as Jeff was mentioning, are the key value driver for the pitolocent program. Here, we are going with an optimized formulation of pitolocent.

The data we discussed in the middle of last year where we showed increasing relative bioavailability and decrease in interinducial variability, both of which have clinical implications. So an optimized pitolisant formulation with a dose that is up to two times the highest level dose of VKX along with the gastroesestrant coating to target larger efficacy on excessive daytime sleepiness, which continues to be the most unmet need in patients with narcolepsy and and also target some unique symptoms like fatigue in narcolepsy that is experienced by about sixty to seventy percent of the patients for which there are no approved treatments. So providing all of these benefits without compromising on the safety or tolerability profile of pitolocent. Again, we have discussed in the past about, the safety and tolerability profile of pitolocent up to one hundred eighty milligram in healthy volunteers in multiple ascending dose study where the safety and tolerability profile was consistent with the established safety and tolerability profile of VEGIX formulation. So two really patient centric development programs, Two very differentiated products, both of them launching one in 2026 and the other one in 2028, well before the loss of exclusivity for Vagex, which is q one twenty thirty.

And with pediatric exclusivity, it will be q three twenty thirty. Okay.

Ami Fadia, Biotech Analyst, Needham: Maybe just a couple of quick follow ups on that. With regards to the bioequivalence study for the GR formulation, Can you sort of share a little bit more detail around how many patients you need to evaluate it? And and what is the risk going into that study just based on the work that you've already done? Or in other words, what gives you you know, talk about the level of confidence you have going into the study because you've already formulated.

Kumar Badur, Chief Medical and Scientific Officer, Harmony Biosciences: Right. I mean, the the level of confidence, Sami, obviously high because we did a pilot PK study, pilot bioequivalence study, and the data were discussed in the early part of 2024, where the pilot b study showed bioequivalence. And based on that, we've been went we are, we designed the pivotal bioequivalence study. In terms of number of patients, just over 50 healthy volunteers participating in the pivotal bioequivalence study. As I mentioned earlier, we initiated the study the study in the first quarter and anticipating top line in the third quarter.

Ami Fadia, Biotech Analyst, Needham: Okay. And with regards to the high dose program, and and, you know, this is sort of a question that also emerges from some of the on target efficacy that we've seen with the orexins where at a higher dose, start to see insomnia and some of the other on target. Of course, this is a completely different mechanism. So I guess the question that I'm trying to get at is at a higher dose, you know, as you have tested up to one eighty milligram dose, were there any on target side effects that are worth noting or thinking about, like insomnia and such. So perhaps maybe, talk a little bit about that.

And then you mentioned fatigue as another endpoint that's being evaluated. What has been the experience with Wakix with regards to helping with fatigue?

Kumar Badur, Chief Medical and Scientific Officer, Harmony Biosciences: Alright. Great question, Sami. Let's, start with the safety and tolerability profile. The common AEs, reported by patients on pitolocent in general, and we have studied pitolocent extensively, not just in narcolepsy, but as you know, idiopathic hypersomnia, pediatric narcolepsy, Prader Willi syndrome, OSA, many other disorders. The profile tend to be consistent, which is the three most common side effects are, nausea, insomnia, and headaches, and anxiety.

And this is what, we saw, with the higher doses of Plaquix as well when we studied it in up to one hundred eighty milligrams in a repeat dose study. There might be a slight worsening of some of these symptoms, but up to five times what we studied, It was the a profile was relatively consistent. And with the high dose formulation, we are not talking about going up to five times the dose of the highest level dose of VEGEX, but we are talking only about going up to two times the highest level dose of VEGEX with an optimized formulation, of course. So we anticipate the safety and tolerability profile to be very similar to what we are seeing with our VEGEX formulation. That's that.

Fatigue. Yes. Yes. Fatigue. Thank you for reminding me.

I was thinking about that.

Ami Fadia, Biotech Analyst, Needham: Sorry for putting two questions in one.

Kumar Badur, Chief Medical and Scientific Officer, Harmony Biosciences: No. No. That's fine. You know, fatigue has actually, I'm thinking that, you know, maybe I'm having

Ami Fadia, Biotech Analyst, Needham: So so the question was

Kumar Badur, Chief Medical and Scientific Officer, Harmony Biosciences: No. I So the

Ami Fadia, Biotech Analyst, Needham: question was, have you yeah.

Kumar Badur, Chief Medical and Scientific Officer, Harmony Biosciences: Right. No. I was just saying that maybe I'm having some mental mental fatigue. Fatigue, of course. Right?

We actually have generated data on fatigue in a couple of context. One is myotonic dystrophy. It was an indication that we chose very deliberately because patients with myotonic dystrophy, the primary core symptom is progressive muscle weakness. But about ninety percent of these patients also experience significant fatigue. In these patients, and we disclosed this data in December of twenty twenty three, in these patients, we showed a pretty significant impact, clinically meaningful impact on fatigue on fatigue severity scale.

We also saw positive impact on fatigue in patients with sleep apnea. This was a study that Bayer presented where they were treating residual excessive daytime sleepiness in patients with sleep apnea, and we also saw a positive benefit from pitolisant on fatigue. Pitolisant is uniquely positioned army to impact fatigue compared to anything else. Because if you look at modafinil or stimulants, when they increase the dose, it causes to a certain extent, it causes alertness and wakefulness. But then after that, patients start getting anxious, irritable, but doesn't necessarily impact fatigue because fatigue is somehow uniquely related to the system and the mechanism of action, position positions pitolacine to treat fatigue, and we have shown that in two different indications.

So based on that, we have a high level of confidence that pitolacine will be impactful in fatigue in patients with narcolepsy.

Jeff Dano, CEO, Harmony Biosciences: Yeah. And and, Ami, fatigue has been an area of interest, you know, given sort of the mechanistic fit, as Kumar alluded to, working through the histaminergic system and and how fatigue is sort of mediated, you know, in terms of the CNS. So if we look out sort of longer term with a pitolis and HD product, you know, and with the long runway, you know, we see, you know, the potential for additional opportunity, you know, beyond narcolepsy, beyond IH, beyond myotonic dystrophy. But in chronic neurologic disorders where fatigue is a prominent symptom, such as multiple sclerosis, such as patients, you know, with with Parkinson's disease, where we could, you know, we could take, the development of Pitoulas in HD potentially to broader populations, targeting fatigue as a prominent symptom in these patient populations with, you know, a chronic neurologic disorder. So we're, you know, excited about exploring that component, in the Tolson HD, you know, program for for narcolepsy.

Ami Fadia, Biotech Analyst, Needham: Okay. Thanks. I wanted to switch gears to EPX one hundred. Can you talk about the mechanistic rationale for that drug? And maybe, you know, how transferable is the transferable is the zebrafish model into the clinic?

Kumar Badur, Chief Medical and Scientific Officer, Harmony Biosciences: Right. So, EPX one hundred, clamsol hydrochloride, it's an established serotonergic five HT two mechanism of action. If you look at the pathophysiology in developmental epileptic encephalopathies, it's really because of the interneuronal serotonergic dystrophy that is seen. And that's why serotonergic drugs, the drugs that increase the serotonergic tone in the central nervous system are efficacious. And, you know, we see this with FINTEPLA.

And the other serotonergic mechanism of action drugs have also established proof of concept. And we saw similar things in our zebrafish model as well. The translatability of what we see in the preclinical to the clinical model, if you look at the zebrafish model, it's actually pretty high. In fact, there is 100% positive predictive value based on that particular model. And in the clinical setting itself, we have phase three study ongoing in Dravet syndrome.

A lot of these patients have rolled into open label extension study. The data that we are seeing, we haven't disclosed this yet in public domain, is very promising and encouraging. And, also, we started the phase three registrational study in Lennox Gastaut syndrome as well, and we are making good progress on both of these pivotal registration studies and anticipate top line in 2026. We also disclosed some emerging safety and tolerability data at the last Investors Day meeting. We saw is, again, very promising and very encouraging.

From a tolerability perspective, we did not see any suppression of appetite, which is a big problem with the drugs that are approved to treat this condition, especially the two drugs that are used extensively, which is FINTEPLA and Epidiolex. We did not see that. We did not see any significant incidence of diarrhea, abdominal cramping, or vomiting that is often seen with some of these drugs. And more importantly, the safety profile, we don't did not see any abnormalities in liver function test that is often seen with Epidiolex, and that there is no need to do regular echocardiogram that is a requirement for FINTEPLA, including the REMS program. So we are looking at a very differentiated target product profile with efficacy similar or better than the established serotonergic mechanism of action drugs and the safety and tolerability profile that is much, much better compared to what we have in the market or in the development currently for patients with the Dravet and LGS.

Ami Fadia, Biotech Analyst, Needham: Thank you. I wanna talk a little bit kind of so I'm gonna kind of take a step back and talk about kind of just your broader strategy around building out this pipeline. You've you've you've certainly, you know, have have a very strong balance sheet with the performance of PayChips over the years, and you have executed on several business development opportunities to build out that pipeline. So maybe if you could sort of talk to how you went about picking the right assets. Right?

It's it's getting more shots on goal, but also picking the shots on goal that makes sense, right, in a in a financially prudent manner. So how did you sort of think about that? And and also going forward, how are you thinking about leveraging your capital to continue to sort of build those shots of goal? So, you know, kind of a two part question there,

Jeff Dano, CEO, Harmony Biosciences: but if could address that. Yeah. Ami, let me start with this strategic framework, and then I'll turn it over to to Sandeep to sort of talk about how how, you know, deployment of capital or thinking there. So in terms of, when we went about, you know, building out kind of our pipeline and, you know, when I stepped into this CEO role, I think I've shared this before, you know, the the mandate from, you know, our board was with the strong commercial business with WCAG, you know, go sort of build the pipeline. And, you know, we approached it very sort of strategically and very thoughtfully, you know, with regards to looking at staying within kind of orphan rare neurological kind of, you know, neuropsych, neurobehavioral, you know, conditions based on the BD opportunities, you know, that we saw out there.

And we really leverage the the internal kind of expertise, you know, with regards to you know, you talk about how did we pick the assets and, you know, the shots on goal and our confidence in what we were bringing in. And and a lot of it, you know, Kumar and his team and our experienced regulatory team in terms of, you know, regulatory pathways to success, you know, I think that it was really data driven. You know, the data that we saw from the phase two three connect study for ZYN two, giving us confidence of pulling it through in the phase three pivotal trial. Kumar just talked about, you know, in terms of EPX 100 and what we saw in some of the preclinical models, you know, that are very trans you know, transferable, you know, to the clinic. So, you know, a data driven approach with regards to assets with a strategic fit, you know, that we could kind of bring in and build out the pipeline that has now resulted in, you know, three orphan rare CNS franchises, you know, with significant, you know, market, you know, opportunity.

We also looked at, you know, deal terms that, you know, were were sort of smart and, you know, the way we went about that, you know, with regards to, you know, being able to, really bring in these assets, you know you know, to drive value, you know, with sort of minimal investment upfront and then derisk, you know, with kind of milestones and, you know, on the back end. So and we continue to say to take a similar approach with regards to either going deeper in in any of, you know, the three franchises that we're in, sleep wake, neurobehavioral, or, you know, in in the epilepsy space, or if we see something that's really compelling in an adjacent orphan rare CNS condition, you know, we would also, contemplate that, you know, for the right deal terms. In in terms of, you know, as we look ahead, I think Sandeep can kinda share some of our thinking about deploying capital, you know, in terms of it in a kind of thoughtful strategic way. Sandeep?

Sandeep Kapadia, CFO, Harmony Biosciences: Yeah. Sure, Jeff. I mean, look, as as I mentioned earlier, I mean, we have a very unique business model in in the biotech space. Right? We have a growing top line.

We're profitable, cash flow generating. You know, just in last year, I think we generated over 200,000,000 in in cash, you know, closing the year at about 576,000,000 of cash. You know, I think this is a real important distinction, especially in the current market environment where investors are looking at companies with strong fundamentals. And and I think, you know, we've and that's been our model right from the start, you know, achieving profitability, leveraging, you know, good, you know, margin expansion and and using that capital to actually do three you know, we've done three transactions in the last two years, you know, as as Jeff mentioned, you know, relatively low upfront, you know, success driven milestones, you know, focusing the capital on advancing these programs, you know, in in the clinic as we're doing with the Fragile X program, which hopefully will have top line later this year. So again, we're gonna continue with that recipe, continue to keep strong fundamentals in the company and deploy capital where it can really help drive value for shareholders through additional opportunities.

And what I'd say is we obviously continue to have a dedicated business development team. They're very active in this space. And, you know, I I think the current equity environment actually makes it even more attractive for for our team. So, you know, we continue to be focused out there and really looking for opportunities to drive value for shareholders.

Kumar Badur, Chief Medical and Scientific Officer, Harmony Biosciences: Yep.

Ami Fadia, Biotech Analyst, Needham: Thank you, Sandeep. I'm I'm being told that we're almost out of time, but I would be remiss if I didn't ask you about the tariff question, which I think everybody's interested in. You know, with what's going on in the last couple of days, there's a very real possibility that there will be tariffs levied on imports relating to the pharmaceutical industry as well. And and so I think investors are curious to just understand, you know, as you think about your supply chain, where are you where, you know, sort of where are kind of the pieces of supply chain based and, you know, anything kind of related to that that you can comment on?

Jeff Dano, CEO, Harmony Biosciences: Yeah. Yeah. Go ahead, Sandeep.

Sandeep Kapadia, CFO, Harmony Biosciences: Yeah. No. I think, you know, with respect to tariffs, I mean, we, like like everyone else, are following the situation closely. We have a dedicated team of, in government affairs as well that actually follows, what's happening legislatively as well and and following the landscape. I think, you know, at at this point, as you know, there there's not been any tariffs announced on pharmaceutical products, but that's really currently, you know, it's hard hard to say, you know, what predict the future on that.

However, what I what I would say is from a WCAG supply chain perspective, most of our supply is from from France. So we bring in materials made there, and and we import it into The US. But we're also have been looking for the over the last couple of years and looking at local providers as well to qualify secondary suppliers as well. So that's been a project that, you know, we initiated, you know, several years ago that we're currently, you know, in in the process of going there. So, you know, again, we follow the space.

We'll we'll continue to monitor the situation and, you know, as as well. But, you know, we are, I think, in a strong fundamental financial position as a company as as we discussed, and, you know, and and we'll we'll we'll react accordingly.

Ami Fadia, Biotech Analyst, Needham: And and maybe just quickly, where is the IP based for Wagex?

Sandeep Kapadia, CFO, Harmony Biosciences: The IP is based here in The US. We're a US company. We're primarily focused in The US. We're not we don't have any we don't have our IP offshore like many other companies. We're a US company registered here and and and and and housing the I IP here as well.

Ami Fadia, Biotech Analyst, Needham: Okay. Alright. Looks like we are a little bit, out of time here. So I, would like to close our conversation and thank all of you for taking the time to do this chat with me. And, thanks to all our listeners as well for joining.

Jeff Dano, CEO, Harmony Biosciences: Yeah. Ami, thanks thanks again for the opportunity. Always enjoyable to speak with you. And, you know, it was a great opportunity to provide an update on, you know, on the Harmony business going forward and excitement we have in, you know, in our pipeline programs. Thank you.

Ami Fadia, Biotech Analyst, Needham: Yes. Indeed. We have a lot of things to look forward to on on the Harmony story, so, we will stay tuned. Thank you.

Jeff Dano, CEO, Harmony Biosciences: Alright. Bye now.

Sandeep Kapadia, CFO, Harmony Biosciences: Thank you.

Kumar Badur, Chief Medical and Scientific Officer, Harmony Biosciences: Thank you, Omie. Bye bye.

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