Harmony Biosciences Holdings, Inc.

Good morning. My name is Katie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Harmony Biosciences second 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, should you require any operator assistance, please press star zero. I would now like to turn the call over to Louis Sine, Head of Investor Relations. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and thank you for joining us today as we review Harmony Biosciences' second quarter 2022 financial performance and provide a business update. Before we start, I encourage everyone to go to the investor section of our website to find the materials that accompany our discussion today, including a reconciliation of our GAAP to non-GAAP financial measures. At this stage of our lifecycle, 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 Sandy Papadia, 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. Our actual results may differ materially, and we undertake no obligation to update these statements, even if circumstances change. We 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?

Thank you, Louis, and thank you, everyone, for joining our conference call today. We are excited about the momentum we saw in our business as we continue to execute on our three-pillar growth strategy during the second quarter. We've made good progress in the first half of this year and are looking forward to making 2022 our best year yet for Harmony. I would now like to take a few minutes to highlight our progress on each of the three pillars of our growth strategy in the context of Q2 2022 performance, which you can see on slide three. Starting with pillar one, which is to optimize the commercial performance of WCAG's. In Q2-22, we delivered a strong quarter for WCAG as we surpassed the $100 million mark for the first time in quarterly revenue, achieving net sales of $107 million, a 45% year-over-year increase for the quarter. WCAG's business fundamentals remain strong, with the second quarter representing our best quarter of performance in top-line prescription demand in over two years. For the remainder of the year, we continue to expect quarter-on-quarter growth for WAKIX due to strong underlying demand and the significant unmet need that persists in the narcolepsy market. Let's move on to Pillar 2, which is to expand the clinical utility of WAKIX beyond narcolepsy. During the quarter, we made good initial progress on our Phase 3 in-tune study for WAKIX in idiopathic hypersomnia. where we were able to initiate multiple sites and have been actively enrolling patients. In Prader-Willi, we have completed enrollment in our Phase II proof-of-concept study and are on track for top-line results in the fourth quarter of this year. We are excited with the continued advancement of our pipeline programs and are hopeful that these efforts, if successful, will lead to additional indications for WCAGS. Dr. Jeff Dana will provide more details on our clinical programs later in the call. And finally, Pillar 3, acquiring new assets through business development to expand our portfolio beyond WACICS. This morning, we announced a new agreement with BioPregé, which is designed to leverage its drug discovery capabilities in combination with our proven commercial expertise in the U.S. market to develop innovative therapeutics based on patolicent. Bioprojet has significant scientific expertise, as demonstrated by their discovery of Pitolisant or Wakeix. The agreement will enable us to pursue new therapeutics for narcolepsy based on Pitolisant. If successful, these efforts could expand Harmony's franchise in narcolepsy by yielding one or more new products with the potential to launch during the Wakeix lifecycle. Closing of the agreement is contingent on clearance under the Hart-Scott-Rodino, or HSR, Antitrust Improvements Act of 1976 and other customary closing conditions, which we expect to complete in the fall. We look forward to providing additional updates as we advance these efforts. As we have said before, we began our business development efforts early in our company history so we could take the time to be thoughtful and prudent in what we acquire and flexible in the types of deals we are able to consider. Over time, our intention is to develop a broad portfolio of rare orphan neurology assets and or assets in other neurological diseases where we can leverage our existing expertise and infrastructure. To achieve this, we intend to leverage our strong and growing financial position to acquire additional assets across a range of development stages, including both early and later stage, with the potential to launch both during and after WCAG's lifecycle. The addition of HBS-102 last year and the new agreement with Bioprojet are important steps in our journey to building a diversified portfolio in neurology. And it is our intention to continue adding additional assets to further strengthen our ability to help patients and to grow our business for long-term sustainability. Harmony is in a good position to execute on Pillar 3 as our business fundamentals with WCAG remain strong. We have approximately $260 million in cash, cash equivalents, and investments as of Q2, and we anticipate that we will continue to generate more cash each quarter from WCAG sales. Overall, I'm extremely pleased with the progress on our three-pillar growth strategy during Q2, and we are well-positioned for the remainder of the year to continue delivering on our plans for growth. We remain confident in WCAG 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.