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spk01: Good morning. My name is Ashley, and I will be your conference operator today. At this time, I would like to welcome everyone to the Harmony Bioscience First Quarter 2022 Financial Update Conference Call. All participant lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, please press star 1 on your telephone keypad. Please be advised that today's conference may be recorded. Lastly, if you should require operator assistance, please press star zero. I will now turn the call over to Lewis Sine, head of investor relations. Please go ahead.
spk12: Thank you, operator. Good morning, everyone, and thank you for joining us today as we review Harmony Biosciences' first quarter 2022 financial performance and provide a business update. Before we start, I encourage everyone to go to the investor section of our website and to find the press release and slides that accompany our discussion today, including a reconciliation of our GAAP to non-GAAP financial measures. At this stage of our life cycle, we believe non-GAAP financial results better represent the underlying business performance. Our presenters on today's call are John Jacobs, President and CEO, Dr. Jeffrey Dano, Chief Medical Officer, Jeffrey Dirks, Chief Commercial Officer, and Sandeep Kapadia, Chief Financial Officer. Moving on to slide two. As a reminder, we will be making forward-looking statements today, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors referenced in our SEC filings for additional details. I would now like to turn the call over to our CEO, John Jacobs. John?
spk04: Thank you, Louis, and thank you, everyone, for joining our conference call today.
spk03: During the first quarter, we continued to execute on our three-pillar growth strategy, with progress across all three pillars and achieving two key milestones. We're excited about the momentum we see in the business, and as you've heard me say previously, we're looking forward to making 2022 our best year yet. Now I'd like to take a few minutes to highlight our progress on each of the three pillars of our growth strategy in the context of Quarter 1 2022 performance. Starting with Pillar 1, which is to optimize the commercial performance of WCAG's. In Q1-22, we delivered a strong quarter for WCAG with revenues of $85.3 million, a 43% year-over-year increase on the quarter. We also reached an important milestone, surpassing $500 million in cumulative net revenue for WCAG since our launch in November of 2019. The first quarter performance reflects the anticipated seasonal payer dynamics, which our Chief Commercial Officer, Jeff Dirks, will discuss in further detail later in the call. WACIC's underlying business fundamentals remain strong during the quarter, with March representing our strongest month of performance in top-line prescription demand and new patient starts in over a year. For the remainder of the year, we expect quarter-on-quarter growth for WACIC due to strong underlying demand and the large and growing opportunity in narcolepsy. Let's move on to Pillar 2, which is to expand the clinical utility of WAKIX beyond narcolepsy. This quarter, we reached yet another milestone towards delivering innovative therapies that improve the health of people living with rare neurological diseases. Last week, we were pleased to announce the initiation of our Phase 3 Registrational Trial for Pertolicin in Idiopathic Hypersomnia, or IH. We're excited to advance this program, and we are hopeful these efforts, if successful, will lead to the next indication for WAKIX. With the IH program now in the clinic, we have three clinical programs underway for Pertolacin, including Prader-Willi syndrome, myotonic dystrophy, and idiopathic hypersomnia. Furthermore, we're advancing our second asset, HBS-102, into the preclinical proof of concept stage to explore its effect in Prader-Willi syndrome, on the symptoms of hyperphasia, weight gain, and other metabolic parameters. Dr. Jeffrey Dano will share more on HPS 102 later in this call. And finally, pillar three, acquiring new assets through business development to expand our portfolio beyond weight gain. Over time, our intention is to develop a broad portfolio of rare orphan neurology assets and or assets in other neurological conditions where we can leverage our existing expertise and infrastructure To achieve this, we are seeking assets across a range of development stages, including both early and later stage, with the potential to launch both during and after the WCAG lifecycle. Now, it's important that we're beginning this journey early in our company history so we can take the time to be thoughtful and prudent in what we acquire and flexible in the types of deals we are able to consider. And Harmony is in a good position to execute on this strategy. We are intently focused on doing this and are optimistic regarding our potential to make progress here based on our strong financial position and current market conditions. Overall, I'm extremely pleased with the continued execution on our three-pillar growth strategy, which puts us in a very strong position to build for the future. We remain confident in Wakex being a potential $1 billion-plus franchise in the coming years via narcolepsy and additional indications. And with that as a foundation, I am truly excited about what we can achieve next at Harmony. Our vision is to evolve into a leading neurology company with a broad portfolio of innovative assets that have the potential to improve the health of people living with rare and other neurological diseases.
spk04: I would now like to turn the call over to Jeff Dirks, Harmony's Chief Commercial Officer. Jeff?
spk10: Thanks, John. We made significant strides in advancing our narcolepsy business in the first quarter, both in net revenue and underlying business fundamentals. Net revenue for the first quarter was $85.3 million, representing approximately 43% increase from Q1 2021. In the first quarter of 2022, we surpassed $500 million in cumulative net revenue, a milestone that was achieved in less than two and a half years since our launch. Our strong performance since launch continues to reflect not only the resilience and commitment of our team, but also speaks to how the overall benefit-risk profile of WACIX aligns to the significant unmet medical need in the narcolepsy market. Now, moving on to slide five, I'd like to highlight a few of our underlying business fundamentals that drove our continued growth in the first quarter of 2022. The average number of patients on WACIX increased to approximately 3,900 in the first quarter. which is reflective of the anticipated once-yearly seasonal dynamics of managed care reauthorization and patient assistance program reverification typical for branded specialty products in the first quarter each year. We experienced these same seasonal payer dynamics the previous two years of our launch in the first quarter. As we are now in our third year of commercialization and the majority of our patients are continuing patients versus new patient starts, a larger percentage of our patients are subject to payer reauthorizations and reverifications than in previous years. Due to our strong market access coverage, the vast majority of patients saw immediate approvals, although some patients experienced delays in their prescription approvals. A smaller group of patients, mostly government-insured patients, did not continue on treatment due to not meeting financial need criteria through third-party support. Additionally, some patient assistance program patients did not meet program eligibility requirements, and no longer continued on free goods. Absent these one-time events to government pay and free good patients, we would have experienced similar average patient growth as prior quarters. Moving forward, we are confident in continued growth of WACICS. March represented our strongest month of performance in top-line prescription demand, and new patient starts in over a year, and provides strong momentum in our business as we head into Q2. Turning to our prescriber base, we observed a further broadening and meaningful clinical adoption of WAKIX. We saw further growth in new prescribers for WAKIX in the first quarter of 2022, both in writers of traditional narcolepsy treatment, as well as healthcare professionals who have been reluctant to prescribe other available scheduled narcolepsy treatments. The majority of these prescribers have become repeat writers, meaning they have written a prescription for WAKIX for two or more of their narcolepsy patients since launch. We are pleased with the continued growth in both the depth and breadth of our prescriber base, demonstrating a growing opportunity for WAKIX and adult narcolepsy. We continue to see broad utilization of WAKIX for both type 1 and type 2 narcolepsy patients, and WAKIX being prescribed as monotherapy as well as concomitantly with all other narcolepsy treatments. We saw an increase in in-person field sales engagement with healthcare professionals and their office staff in the first quarter of 22, from the fourth quarter of 2021. More than 70% of all field sales engagements were in person by the end of the first quarter. The increase in access towards the end of the first quarter speaks to an opportunity for further education and engagement in the second quarter and provides an opportunity for our expanded field sales team to drive WCAG's growth in both new and existing prescribers. We completed the expansion of our field sales team with all positions hired, trained, and in their territories by April 1st, in line with what we communicated in our last earnings call. We expect to see the benefit of this expansion in the second half of 2022 at the earliest. The expansion of our field sales team gives us added confidence in our ability to continue to grow WACICS. In summary, the continued strong performance and underlying business fundamentals of WACICS and the narcolepsy market affirm our confidence in WACICS as being a potential billion-dollar-plus franchise opportunity. I'm excited as we head into the second quarter with momentum in all the following areas. Strong top-line prescription demand and continued growth in the average number of patients on WCAGS. The broadening of the depth and breadth of our prescriber base. Strong market access for WCAGS and continual improvement in access for Type 1 patients. Increased access to healthcare professional offices for in-person education by our field sales team. and our expanded field sales team in place to extend our reach to the broad narcolepsy-treating healthcare professional universe. But most importantly, I'm excited about the difference WAKIX is making in the lives of people living with narcolepsy. I'll now turn the presentation over to Dr. Jeff Dano for an update on our clinical development program. Jeff?
spk13: Thanks, Jeff, and good morning, everyone. I am pleased to provide an update on our clinical development programs and pillar two of our three-pillar growth strategy, to expand the clinical utility of Pitocin. First off, as we announced last week, we are excited about the initiation of our Phase III Registrational Trial in adult patients with idiopathic hypersomnia, or IH, also known as the InTune study. Highlights of this trial can be found on slide six. The primary objective of this trial is to assess the efficacy and safety of the tolicin compared with placebo in treating excessive daytime sleepiness, or EDS, in adult patients with IH, as measured by the Effworth Sleepiness Scale, or ESS. Key secondary endpoints include assessment of the symptom complex of IH utilizing the idiopathic hypersomnia severity scale and patient global impression of change. The trial will also assess the impact of pitocin on what is commonly referred to as brain fog by measuring cognitive function at baseline and after treatment with pitocin in patients with IH. The trial design is a double-blind, placebo-controlled, randomized withdrawal study with a target enrollment of about 200 patients. Approximately 60 to 80 sites in the U.S. will be participating, and over 100 clinical trial sites have been evaluated for this trial. There has been much interest from both the patient and sleep medicine communities in investigating pitocin in patients with IH, and we are pleased with the pace of study startup activities. We appreciate the efforts of our clinical investigators and the participation from the patients and families in the IH community that we are actively working with. We are excited about the in-tune study, and if positive, could lead to the next new potential indication for WCAGS for another rare neurological disease patient population with significant unmet medical need. We look forward to providing updates on the in-tune study on future calls. Turning to our other life cycle management programs for Pitocin, which are shown on our pipeline slide, or slide seven. We have made good progress on our Phase II proof-of-concept trial in patients with Prader-Willi syndrome, or PWS, and are on track for top-line data in the second half of this year. For our Phase II trial in patients with type 1 myotonic dystrophy, or DM1, we continue to activate new sites and enroll patients with top-line data anticipated in 2023. Lastly, a few words on HBS-102. our early-stage asset, which is a melanin-concentrating hormone receptor 1 antagonist, as shown on slide 8. We are working with one of the top labs in the country in MCH biology and are on track to initiate a preclinical proof-of-concept study later this year. The objective of this proof-of-concept study will be to assess the potential utility of HBS-102 for the symptom of hyperphagia as well as its impact on weight gain and other metabolic parameters, utilizing an established mouse model of Prader-Willi syndrome. MCH neurons are located in the hypothalamus and function as a key control center of feeding behavior as well as hormonal and autonomic control of energy metabolism. We will provide an update on the timeline for data readout of this preclinical proof-of-concept study later this year. In closing, we are excited about the initiation of our in-tune study in adult patients with idiopathic hypersomnia, which accelerates our clinical development programs to a Phase III registrational trial. If positive, this would move us closer to a potential new indication for WACIX in another rare neurological disease with unmet medical need. Thank you, and I'll now turn the call over to our CFO, Sandeep Kapadia, for an update on our financial performance. Sandeep?
spk02: Thank you, Jeff, and good morning, everyone. This morning, we issued our first quarter 2022 press release and filed our 10-Q, where you'll find the details of our financial and operating results. Our first quarter performance is also shown on slides 9, 10, and 11. We continue to show strong year-over-year revenue growth and operating income while continuing to generate cash flow from operations. I'm pleased with how we started 2022 and the momentum we're seeing and the outlook for the balance of the year. For the first quarter of 2022, we reported $85.3 million in net revenues for WCAG, compared to $59.7 million in the prior year quarter. This represents a growth of 43% and reflects the continued growing demand for WCAG. As expected, we did see the impact of seasonal pair dynamics in the early part of the first quarter, resulting in higher growths in net deductions, as well as a typical reduction in trade inventories during the quarter. We expect these dynamics to normalize throughout the balance of the year. During the first quarter of 2022, operating expenses were $43 million compared to $34.7 million in the prior year quarter. The growth in operating expenses continues to be driven by our commercialization of WCAG and the advancement of our pipeline program. As a result, we had operating profitability improvement as we reported first quarter 2022 operating income of $27.6 million compared to $14.5 million in the prior year quarter. Non-GAAP adjusted net income for the first quarter was $31.1 million, or $0.51 per diluted share, compared to 16 million, or 27 cents, per dilute share in the prior year quarter. Starting in 2022, we have updated our GAAP to non-GAAP reconciliation to better align with other commercial stage biotech companies. We believe the updated measure better reflects the underlying business performance when non-cash, non-recurring one-time items are excluded. Thus, non-GAAP adjusted net income excludes non-cash, interest expense, depreciation, amortization, stock-based compensation, and other non-operating items, along with the tax effect of these items. Please see our press release for a reconciliation of this measure. During the first quarter of 2022, we generated approximately $29 million of cash from operations, and ended the quarter with $224.5 million in cash and cash equivalents as of March 31st. During the quarter, we also surpassed $500 million of cumulative WCAG's net revenue since launch, which triggered a final $40 million milestone payment to our partner, BioPregé. Looking ahead, we have strong business momentum and have navigated the earlier payer dynamics, and we expect quarter-over-quarter net revenue growth for the balance of 2022. We also expect to increase in investment in R&D and SG&A as we continue to successfully execute on our three-pillar growth strategy. So, in conclusion, we continue to operate from a position of strength, with growing revenues, prudent expense controls, a solid balance sheet, and access to additional capital. We believe that WCAG has the potential to be a $1 billion-plus franchise based on narcolepsy and other indications in the coming years. We look forward to reinvesting our capital to fund our ongoing development program and acquire additional assets. And with that, I'd like to turn the call back to John for his closing remarks.
spk04: John? Thank you, Sandeep.
spk03: In summary, our business fundamentals continue to be strong, putting us in a good position to execute our three-pillar growth strategy and make 2022 our best year yet in company history. Our intent is to continue growing WCAG sales in narcolepsy via good commercial execution and strong organic demand for this unique and meaningfully differentiated product. To continue to advance our clinical programs with the goal of expanding the utility of WCAG beyond narcolepsy to help bring this innovative therapy to new patient populations, and to acquire new assets beyond WACICS to expand our portfolio with the vision of evolving Harmony into a leading rare neurology company with sustainable long-term growth potential. We look forward to updating you on our progress throughout the year. This concludes our planned remarks today. Thank you for joining our call, and I will now turn things back over to the operator to facilitate the Q&A session. Operator, can we please open the call to questions?
spk01: Thank you. And at this time, if you would like to ask a question, please press star 1 on your telephone keypad. If you wish to remove yourself from the queue, you may do so by pressing the pound key. We remind you to please pick up your handset and please limit yourself to 1 question and 1 follow up question. And we'll take our 1st question from Danielle Brew with Raymond James. Please go ahead. Your line is open.
spk05: Okay, good morning and thanks so much for the question. I just have a couple clarifying questions on the outlook for WCAG and what you said on March being so strong. Was this driven by patients with reauthorization delays coming back online? Or was this an increase in new prescriptions? And then should we be anticipating that patient adds increasing back to the historical 300 to 400 range moving forward? Thank you.
spk03: Yeah, Danielle, it's John. Thank you for your question. Q1 organic demand for our product was actually very strong and stronger than what we experienced in Q4, actually. But as we predicted, you have seasonal dynamics in Q1. So why don't I hand your question over to Jeff Dirks to add a little bit more color to that. Jeff?
spk10: Good morning, Danielle. So with respect to March, March represented the strongest month in terms of top-line prescription demand and new patient starts. So this is new organic demand versus the reauthorization. And your second question about net patient ads moving forward, although we're not providing forward-looking guidance, we do anticipate returning to the prior quarterly growth in average patients moving forward in 22.
spk08: So I hope that answers your question. Yes, thank you.
spk01: And we'll take our next question from Chris Howerton with Jefferies. Please go ahead. Your line is open.
spk06: Great. Hey, thanks so much for taking the questions. I guess a similar vein of questioning for me, I'd be curious to know if you could provide some information of durability of patients on WAKIX, maybe average time on drug or maybe something around the refill rate would be useful. And then in terms of kind of the dynamics moving forward, I guess a clarification from me, Jeff, you said that the headwinds were from government payers and patients not meeting assistance for payment. I guess I was wondering if you could have a little more clarification on that in terms of the relative demand that you guys just articulated.
spk03: Go ahead, Jeff. You want to take that question from Chris?
spk10: Yeah, sure. Thanks for the question, Chris. So with respect to durability in terms of the average time on gerug, what we're seeing, and we've communicated publicly, that the average discontinuation rate for products in this category at 12 months ranges between 30% and 50%. And what we're seeing, although it's still very early and we're only in our third year of commercialization, is WCAG is falling right in the middle of that range, and it's consistent with what the expectations are from patients, from healthcare professionals. So, we're very pleased with, you know, how well the product is being received by the narcolepsy community. With respect to your second question on the dynamics with respect to, you know, the government-paid patient, right? So, one context is government pay is about, you know, 15% of the overall payer mix. So, just to help kind of characterize the size of that opportunity. But I'm sure as you're aware, some government-insured Medicare patients seek third-party assistance programs. to provide financial assistance with insurance premiums, with their copay or coinsurance, diagnostic test assistance. And through independent data on the annual reauthorization process, because this is an annual reauthorization process, some of the patients didn't meet those independent financial need criteria or didn't receive enough eligible funding to continue on treatment, which ultimately resulted in fewer patients on drugs. And this is anticipated every year. Obviously, it's reflective in our average number of patients on WACUS for the first quarter. But absent that and the patient assistance reauthorization, we're very confident we would experience similar patient growth in terms of average number of patients from prior quarters. And as I kind of shared in my response to Danielle, we're extremely pleased and excited about the performance that we've seen. March was the strongest month we've had in over a year in terms of new patient starts and top-line demand. And we are really optimistic about looking to return to prior quarterly growth. And we remain confident that WACIX is that potential billion-dollar-plus franchise. And one thing, Chris, I also wanted to add into you, you know, we talk about average number of patients, and they were about 3,900. But we exited the first quarter with approximately 4,100 active patients on WACICS. And I think exiting patients is likely a better metric for the true demand in Q1, given the anticipated seasonal payer dynamics that we experienced. Right? We have a stronger base of continuing patients. And so some of those reauthorizations on refills and new patient starts get pushed into February and March. So the rate of average patient growth in the first quarter is slightly less due to these anticipated Q1 dynamics. So just to kind of give you a sense that we're really, you know, very, very pleased with our performance. We've got great momentum heading into Q2. These one-time events are behind us, and we've got a great outlook for the rest of it. Right, Jeff.
spk03: And one of the best lead indicators is the organic demand for our drug was higher in Q1 than it was in Q4. So these are anticipated seasonal dynamics, and the strength of our business is really robust as we move forward into 2022.
spk06: That's really helpful, and I don't know if you're able to tell us, Jeff, but what was the exit number at the end of 4Q in terms of patients, active patients?
spk10: Yeah, Chris, we haven't disclosed that information, and honestly, we haven't even looked at that data, but we can circle back with you and Brian and a follow-up call.
spk06: No problem. I really appreciate it. Thanks again, and great practice, everyone. Thanks, Chris.
spk01: And we'll take our next question from Charles Duncan with Cantor Fitzgerald. Please go ahead. Your line is open.
spk11: Yeah. Good morning, John and team. Thanks for taking the question and congrats on the commercial and development progress in the quarter. And, uh, uh, let's see, quick question regarding, um, Yeah, we talked a little bit about the first quarter. I guess I'm wondering if you can provide guideposts for the full year 22, given the learnings from the first quarter. And then secondarily, maybe for Jeff Dirks, Salesforce expansion, you mentioned second half of the year impact at earliest. I guess I'm kind of wondering why you say at earliest and how would you best measure that impact?
spk04: If Charles was asking about full-year guideposts, did you want to answer that question first?
spk02: Yeah, sure. Charles, I mean, as you know, we're not providing more forward-looking, you know, guidance. But what I can say about the business is we've got good, strong fundamentals. You know, Jeff took you through some of the details. We would expect, you know, quarter-over-quarter growth for the balance of the year, both in terms of patients and net sales growth. So we expect, you know, continued momentum that we're seeing certainly coming out of March and going forward. So hopefully that gives you a little bit of context in terms of our expectations for the year.
spk03: I think, Charles, your second question was about Salesforce impact of our expansion. Jeff Dirks, did you want to handle that?
spk10: Yeah, absolutely. Thanks for the question, Charles. It's great to hear from you. So as we've shared, we've expanded our sales team by about 10%, and obviously we completed the expansion with all the positions hired, trained, and in their territories by April 1. We're expecting to see the benefit of this expansion in the second half of the year simply because we know it takes time to build relationships, and obviously in sort of a COVID-depressed environment, It's difficult for us to be able to reach all of our targets. So, you know, what we've shared is about 70% of our interactions are in person. So you would anticipate it likely may take six, seven, eight calls for an individual to change a behavior from a prescriber through education. So we're simply just allowing that opportunity. And we're expecting the second quarter to build those relationships, learn their geographies, really start to get out and educate those healthcare professionals with the impact of likely new prescription uptake and new patient starts in the second half of the year at the earliest, if that helps.
spk11: Got it. One quick commercial follow-up, and that is regarding market dynamics given the change with regard to competitive landscape on Cenosi. The company I cover has acquired that product, and they don't currently have a commercial effort, but do you see anything changing with regard to narcolepsy market dynamics given Synosy marketing and then the positioning of WCAG versus Synosy. Thanks.
spk10: Thanks for the question, Charles. In my perspective, I don't see any changes in the narcolepsy market. Synose has been around since July of 19. It's an active treatment option. We believe WAKES is growing the branded segment of the market by offering a meaningfully differentiated product profile, the only non-scheduled treatment option available, a novel mechanism working for histamine. And so given the large undiagnosed patient population, the significant unmet need, and really a differentiated product profile for WAKIX, we believe there's plenty of room for multiple branded products. You know, we're really excited about the strong demand that we're seeing with WAKIX and Q1, and really supports our belief in the long-term opportunity for the brand.
spk11: Cool. Thanks for taking my questions.
spk03: Then Charles just wanted to welcome you aboard as a covering analyst, and thank you for joining us. It's great to have you here today.
spk11: Yeah, thanks. Excited to be here.
spk01: And we'll take our next question from David M. Sellem with Piper Sandler. Please go ahead. Your line is open.
spk07: Hey, thanks. So just a couple. First, I apologize if I missed this, but can you talk about, generally speaking, the time it takes to get a script filled? What did that look like in the first quarter? And what does that typically look like if you, take away the seasonal dynamics. And I guess where I'm getting at here is that are you getting any sort of dynamics where you've got patients that are just walking away from a prescription because of payer hurdles, whether they're seasonal or just more ongoing? So that's the first question. And then secondly, can you just give us a refresher on the mix between type 1 and type to narcolepsy, and actually with idiopathic hypersomnia in mind, are you even seeing any evidence of a little bit of off-label use in IH? Thanks.
spk03: David, when it comes to time to fill, I mean, obviously, since launch in 2019, we've seen significant improvement in the efficiency of being able to convert a prescription request into an actual patient on product. And that's to be anticipated in a rare orphan launch. And I think, Jeff Dirks, you may want to add some additional color to that. But we've seen, since launch in 2019, a remarkable improvement in that efficiency over time.
spk10: Yeah, John, thanks. And David, to your point, the time to getting a prescription filled, to your point, we have seen some efficiencies in there. And the rates that we're seeing are relatively better than other industry benchmarks when you look at other rare orphan specialty pharmacy products and the time to fill. So we don't believe that the time to fill has any impact on abandonment. You know, there is some level of abandonment with every single prescription, whether it's an oral oncology product or, you know, a chronic disease. And what we're seeing in our abandonment rates is consistent with that for industry standards. Second question on MIPS for type 1 and type 2. So we're seeing about 50% of our new prescriptions coming in for type 1 narcolepsy, about 50% for type 2, which mirrors what we're seeing in sort of clinical presentation in the physician's office. They're telling us about half of their patients are presenting with type 1 and type 2. So WICUX really is eligible and able to be tapping into that broad narcolepsy opportunity. We continue to hear that from healthcare professionals that WAKIX is an appropriate treatment option for all adult patients living with narcolepsy. And so, you know, the data is vetting out in there. And maybe I can, you know, ask Dr. Dana to kind of assist in terms of interest in IH and maybe what we're seeing from the KOL community.
spk13: Yeah, sure. Hey, David, thanks for the question. Yeah, in terms of, we know that in terms of idiopathic hypersomnia and wake, there's been a lot of interest from, you know, the patient community and the sleep medicine community. We do see, you know, prescription requests in terms of IH, you know, coming into the hub. But obviously, you know, our focus now is on the phase three registrational trial and, you know, doing that study in working towards a potential, you know, new indication for IH. So we've been aware of the growing interest in Ptolemycin for IH, and we are, you know, focused on the Intune study and doing that registrational trial. Okay, great. Thanks, guys.
spk04: Thank you, David.
spk01: And we'll take our next question from Corinne Jenkins with Goldman Sachs. Please go ahead. Your line is open.
spk00: Yeah, good morning, everybody. I was just hoping that you could expand a bit on the drivers that you saw for new patient growth in March as you spoke about the strong organic growth, if you have any visibility on what are some of the dynamics that are driving that.
spk03: Jeff, any commentary on that? We saw really strong organic demand for the product in Q1, and you mentioned March, so we have a question about some of the drivers. A little more color and context on that, if you can.
spk10: Sure. Thanks for the question, Corinne. I mean, what we saw is the increase in the number of in-person engagements with our field sales team increased to more than 70% in March, so it was greater in March than it was in February and January, and we know that We're still kind of early in our launch per se in terms of the education, given that we've been dealing with sort of this COVID headwind and our ability to access healthcare professionals. So I think that in-person engagement, educating the healthcare professional and their staff was likely a driver. We started to see some increases in patient foot traffic in March following lower foot traffic that we saw in January and February. So those are really the drivers. I think this is very much an educational opportunity for us, and we continue to see growth in new prescribers. as well as increasing the depth of our prescriber base, meaning patients starting a second or a third patient on WACIX with a prescription. But I think the engagement process with our representatives getting able to be back in the offices and educating the entire staff, obviously, is a specialty pharmacy product. There's a healthcare professional decision. There's the nurse counseling portion of it. There's the billing coordinator and the reimbursement specialist in the office that all need to be educated on this to make sure they have that optimal experience. So, you know, we're really pleased with the momentum that we saw, Corinne, in March, and I think we're, you know, we're very optimistic in terms of looking forward for the remainder of the year and continuing to make a difference in the narcolepsy community.
spk03: Jeff, we're very strongly and consistently adding additional prescribers as well, new prescribers to the drug each month and each quarter on top of base who continue to prescribe and many of the vast majority of whom become repeat prescribers, correct? Correct.
spk00: And then to that last point around kind of the whole office engagement you need in order to have a smooth process for prescriptions, is there anything you expect to change with respect to the number of visits or the amount of hand-holding you need to do as you expand your sales force to target maybe primary care and psychiatrists who aren't writing as much narcolepsy prescriptions or may not have the same experience as the specialty pharmas?
spk10: Yeah, Corinna, and I think with a new product, obviously it's a novel mechanism. There's education within every office, and you're right. If you've got someone that's familiar with a specialty pharmacy distribution model, there's likely less education necessary for that and more education on the product. But we have a great educated field sales team that's been expanded. We have a field reimbursement manager team that is out there and able to help support offices going through the reimbursement. We have a fully staffed and dedicated patient hub. So we really have a very sophisticated white glove service that can really sort of surround that office and make sure that we have all the appropriate touch points. We know that likely there may be some additional investment in time in some of these offices, but we have the right resources to be able to do it. We've seen great success in educating existing psychiatrists and primary care doctors, and we're anticipating a very similar journey with some of these new writers that we continue to bring on board in future quarters.
spk00: Great. Thank you.
spk01: And once again, as a reminder, to ask a question today, that is star 1 on your touchtone phone. And we'll take our next question from Principal Chris Boyce with Oppenheimer. Please go ahead.
spk09: All right. Thanks for taking the questions. So I was just wondering, just trying to get a better feel for the prevalence of IAH. It seems like the true IAH patients, the 18 to 20 hours of sleep, or a little more rare, but there seems to be co-mingling of indications. So, it seems hard to, there's just a lot of patients with IH without the long sleep time, and then there's the narcolepsy type 2 patients that seem hard to distinguish. So, I'm just trying to get a feel for how, you know, you segment this 30 to 40,000 diagnosed patients in IH that you discussed.
spk03: Jeff, I want you to take that question from Brian. Yeah.
spk13: Yeah, good morning, Frank. Thanks for the question. Yeah, so in terms of IH, I think in terms of epidemiology, you know, it starts with, so the claims data and the number of diagnosed patients, you know, based on, you know, ICSD criteria in the range of 30,000 to 40,000 patients. Going to the literature in terms of the broader epidemiology, you know, it's potentially up to 70,000 to 80,000 patients in the U.S. And you raise a good point. Obviously, in the sleep medicine community, it's, you know, an active discussion. You know, idiopathic hypersomnia, you know, exists along a continuum or a spectrum, you know, in terms of patients with type 1 narcolepsy, you know, type 2, and then IH. And I think IH, as another central disorder of hypersomnolence, you know, there is some of that overlap you're alluding to, especially with NT2. However, you know, you lean on, you know, the clinical diagnosis and the clinicians making the diagnosis supported, you know, by the sleep studies. And, you know, ICSD2 differentiated between, you know, IH patients with long sleep time and those without sleep. Actually, the ICSD3 criteria sort of took that away. So there is some of that difference in terms of the clinical phenotype. But ultimately, it's how the clinicians make the diagnosis. Obviously, in our clinical trials, we lean on the formal diagnosis of IH for patients to be eligible. And then they're managed in terms of by the sleep medicine community. What's also interesting is when speaking to the KOLs, you know, they say that a lot of them have as many patients, you know, with IH, you know, per ICSD criteria in their clinics as they do with narcolepsy. So, you know, we think it's obviously a significant opportunity for Pitocin going forward. As I mentioned before, you know, we're focused on the execution of the Intune trial in pursuit of the indications.
spk09: Okay, thank you. That's extremely helpful. And then maybe lastly, in terms of the time for the script to be in the patient's hand, has Harmony ever thought or has ever given out free samples for maybe the first 30 days, the first 60 days of use, or is that not something that's necessary based on it not seeming to really be a problem at this point?
spk10: Go ahead, Jeff. Yeah, Frank, thanks for the question. So most rare orphan products do not sample the product. And, again, we haven't seen any challenges with abandonment or, you know, patients that are walking away for not having a sample. I mean, this is obviously a chronic lifelong neurologic disorder where there is no cure. Patients have been waiting for over a decade for Wakex. And so the time that they're waiting for their prescription is, you know, well within industry norms. And as I was saying earlier to another question that I believe David asked, Versus benchmarks, we're actually more expeditious in getting patients on product than a lot of other companies. So we're really pleased about the results and the enhancements that we're making within our patient hub and our SP network. And we're really excited about our ability to continue to help patients get on WAKIX.
spk09: Okay, great.
spk08: That's it for me. Thanks, and congrats on the progress. Thank you, Frank.
spk01: All right, thank you. And I am showing there are no further questions. This does conclude today's Harmony Bioscience first quarter 2022 financial update conference call. You may now disconnect your line and have a wonderful day.
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