Harmony Biosciences Holdings, Inc.

Good morning. My name is Shelby and I will be your conference operator today. At this time, I would like to welcome everyone to Harmony Biosciences first quarter 2023 financial results 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 one 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 Louis Sine, head of investor relations. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us today as we review Harmony Biosciences' first quarter 2023 financial results 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 life cycle, we believe non-GAAP financial results better represent the underlying business performance. Our speakers on today's call are Dr. Jeffrey Dano, President and CEO, 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. 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 reference in our FEC filing for additional details. I would now like to turn the call over to Dr. Jeffrey Dano. Jeff? Thank you, Louis, and thank you, everyone, for joining our conference call today. I would like to begin this call by expressing my appreciation to the Harmony Board of Directors for their confidence in me and my ability to lead the company forward in this next phase of Harmony's growth story. For this next phase, I will be joined by my colleagues on the management team, a very talented group of experienced pharma executives who share a common goal and whom I have worked alongside to build this company. I also want to acknowledge and thank the incredibly talented group of people who make up Harmony Biosciences. and have generated the strong performance we have demonstrated to date. As they often hear me say, it takes a total team effort, which is how we work at Harmony. After 12 years as a practicing neurologist taking care of patients, followed by 25 years in the industry, touching every aspect of the business, I have seen the impact that developing and delivering innovative treatments can have on patients and their families. I was eager to join Harmony at the very beginning of the company's journey, and I am energized by the progress we have made to date. In fact, we are pleased to report another quarter of strong performance and operational excellence across our business. We saw continued momentum in our commercial business for WACICS, as well as an advancement of our clinical development programs for Pitocin. Our strong commercial performance since launch is a result of the unique and meaningfully differentiated product profile of WCAG and the proven excellence of our commercial organization. This quarter, we achieved another major milestone, surpassing $1 billion in cumulative net revenues for WCAG within the first three and a half years since launch, one of the most successful launches ever for a rare disease company. Many of our investors and analysts are familiar with the remarkable journey Harmony has been on since the company was founded in 2017. For those who may be newer to our story, I would like to share with you some highlights and milestones from this first chapter of Harmony's growth story. Since joining the company at the start in 2017, I've been fortunate to have been closely involved in and leading some of Harmony's many accomplishments. In 2018, we opened the IND for Pitocin and were granted fast track status and breakthrough therapy designation, reflecting the FDA's belief that Pitocin could address an important unmet medical need for adult patients with narcolepsy. Around the same time, we opened an expanded access program to provide treatment with Pitocin to appropriate adult patients with narcolepsy while the NDA was being prepared and then under review. A number of patients who first experienced Pitocin through this compassionate use program are still on commercial WAKIX today. And most significantly, the FDA approved WAKIX in 2019 for the treatment of excessive daytime sleepiness or EDS in adult patients with narcolepsy and in 2020 for the treatment of cataplexy in adult patients with narcolepsy. The FDA approval of WAKIX, along with the other regulatory approvals around the world, was based on a strong body of scientific evidence which demonstrated it to be safe and effective in patients with narcolepsy. In fact, the FDA approval was based on clinical data from all 41 clinical trials that were conducted during the development program in over 1,500 patients, which represents a large safety database for an orphan drug approval. Most recently, our partner, BioPregé, was granted EMA approval for WACICS, for use in pediatric narcolepsy patients down to age six. Patient and healthcare professional interest in WACIS continue to be the fundamental drivers of our business. For the first quarter of 2023, we reported WACIS net revenue of $119.1 million, representing an increase of 40% year over year. Growth continues to be driven by the strong underlying demand for WACIS, which Jeffrey Dirks will expand on later in the call. In fact, March was the highest month of top-line prescription demand for WAKIX in over three years and the strongest month of new patient starts in a year. For the remainder of 2023, we expect continued growth for WAKIX and believe that the vast market opportunity, which remains in narcolepsy, along with the differentiated product profile of WAKIX, provides us with the ability to grow WCAGS for years to come. We are confident in WCAGS being a potential $1 billion plus narcolepsy opportunity with the potential to contribute up to an additional $1 billion if approved in idiopathic hypersomnia and other current life cycle management programs. As you heard me say before, Harmony remains a growth story. with the focus on advancement of our current life cycle management programs for Pitocin and acquisition of new assets to build out our pipeline to drive additional growth. We are extremely pleased with the progress we have made across all of our current life cycle management programs. I will provide more details on these during the clinical update later in the call, but let me share some highlights of our progress. In idiopathic hypersomnia, or IH, We continue to see strong momentum in patient enrollment in our Phase III InTune study, which led to an accelerated timeline, and we now anticipate top-line data in the fourth quarter of this year, about six months ahead of plan. In Prader-Willi syndrome, or PWS, we are preparing for an end-of-Phase II meeting with the FDA scheduled for late second quarter to discuss the results from our Phase II proof-of-concept study and a proposed Phase III trial in patients with PWS. We are committed to advancing our development programs and are hopeful that these efforts could lead to additional new indications for Pitocin and address the unmet medical needs in these patient populations. In addition to our current lifecycle management programs for Pitocin, we continue to make progress on new formulations with our partner Bioprojet. with the goal to extend the Pitocin franchise out beyond 2040. Another key component of our next phase of growth is acquiring new assets through business development to expand our portfolio beyond WACICS. It is our intent to build out a broad pipeline of rare orphan neurology assets and our assets in other neurological diseases where we can leverage our existing expertise and infrastructure. To achieve this, we intend to leverage our strong financial position with approximately $392 million in cash, cash equivalents, and investment securities at the end of the first quarter to acquire additional assets across a range of development stages, including both early and late stage, with the potential to launch both during and after the WCAG lifecycle. To conclude my opening remarks, I am honored to have the confidence of the Board and the support of the entire organization to lead Harmony forward in this next phase of growth. I am extremely proud of the progress that our team has made to date, and I look forward to our continued growth as we help even more people living with rare neurological diseases. I will now turn the call over to Jeffrey Dirks, our Chief Commercial Officer, to provide more details on our commercial performance. Jeff?

Thanks, Jeff. Q1 represented another strong quarter of performance, with demonstrated growth and momentum in our underlying business fundamentals. Net sales for the first quarter of 2023 were $119.1 million, which represents a 40% growth from the same quarter prior year. We also surpassed $1 billion in cumulative net sales in the first quarter, a significant milestone achieved in less than three and a half years from our launch, demonstrating value creation for the organization, and a reflection of the impact that we've had on adult patients living with narcolepsy. I'd like to highlight a few of our underlying business fundamentals on slide five that drove our performance in the first quarter. The average number of patients on WAKIX in the first quarter increased to approximately 5,100. The average number of patients on WAKIX grew approximately 1,200 patients in the last four quarters, demonstrating strong, consistent growth in our patient base over the last year. The growth speaks to the strong interest in WACICs we're seeing in the narcolepsy community. Growth in new patient starts, growth in new prescribers, along with solid patient refill behavior following the seasonal payer dynamics of prescription reauthorizations early in the first quarter. We exited Q1 with approximately 5,200 patients on WACICs with strong momentum coming out of the first quarter. In March, we saw the highest month of top line prescription demand for WACICs in over three years, and the strongest month of new patients starts in a year. The performance coming out of Q1 reinforces our confidence in WAKIX and the long-term growth opportunity in adult narcolepsy. The growth in patients on WAKIX continues to be driven by a broadening and strengthening of our prescriber base. We continue to see growth in new prescribers of WAKIX in the first quarter and now have more prescribers of WAKIX than healthcare professionals enrolled in the sodium-oxidate REMS program. We also continue to see growth in established prescribers of WAKIX. As we've shared in previous earnings calls and demonstrated by the broadening and strengthening of the prescriber base of WAKIX, we anticipate continued future growth of WAKIX given the meaningfully differentiated product profile and the unique feature of being the only FDA-approved treatment for both EDS and cataplexy that is not a scheduled substance or a controlled substance. Our award-winning field sales team called on approximately 9,000 narcolepsy-treating healthcare professionals who see and treat almost 100% of the diagnosed adult narcolepsy patient opportunity. Both the 4,000 approximate ATPs enrolled in the OxyBate REMS program and the approximately 5,000 healthcare professionals not enrolled in the OxyBate REMS program. Our ability to reach and educate this approximately 9,000 narcolepsy-treating healthcare professionals and tap into the broad diagnosed narcolepsy patient opportunity gives us confidence in the long-term growth potential for WACICs. Recent market research conducted by Harmony supports our view of continued growth for WACICs. Research conducted in February of 2023 with approximately 70 healthcare professionals with and without experience with WACICs demonstrated that more than 95% of the healthcare professionals with WACIC experience stated they would write the same or increase prescribing of WAKIX in the next six months. And greater than 50% of those physicians surveyed who had not prescribed WAKIX to date indicated their intent to prescribe WAKIX in the next six months. And one of the highest performing drivers and differentiators for WAKIX was the unique feature as a non-scheduled treatment and less potential for abuse. To support the continued growth and maximize the long-term opportunity in adult narcolepsy, we continue to evolve our commercial model to ensure we're being both responsive and meeting the needs of our customers. Our field sales team has had a year in their territory since the expansion in the first quarter of 2022, building relationships and educating the broad narcolepsy treating healthcare professional audience on the overall risk-benefit profile of WAKISH for adult narcolepsy. and our commercial performance is a direct reflection of their effort and dedication. To complement our field sales team in-person engagement, we expanded our virtual engagement with healthcare professionals through our remote territory manager team. This six-person team are conducting effective outreach to white space narcolepsy treating healthcare professionals who are not covered by our field team, supporting any vacant territories with engagement, as well as serving on-demand requests for a rep contact by healthcare professionals through our branded website, WAKIX.com. Our market access field team, through education with payers, has secured broad favorable formulary access for WAKIX and has demonstrated continued growth in coverage and improvement in coverage, helping to ensure and accelerate appropriate adult narcolepsy patients' access to WAKIX. Our field reimbursement manager team has been effective in providing subject matter expertise on the reimbursement and access for WCAG to healthcare professional offices after an unlabeled adult narcolepsy prescription has been submitted to the patient hub. And lastly, our outstanding home office team of tenured and experienced commercial leaders continues to utilize data and insights to drive informed decision-making to support our business across the adult narcolepsy patient journey. I appreciate the dedication and impact of the entire commercial team, the passion that they have for our business, and how they operate in the highly regulated environment of the pharmaceutical industry. In summary, I'm excited about the continued strong commercial performance of Wakex and adult narcolepsy. To put our performance into context, we've surpassed sodium-oxibate REMS-enrolled healthcare professionals in the number of unique prescribers of Wakex. We've generated over a billion dollars in net revenue and have over 5,000 patients on WAKIX in less than three and a half years since our launch, which compares favorably to the OxyBait launch over two decades ago. This strong performance, along with our evolved commercial model and strong culture of patient centricity and compliance, gives us confidence in the long-term growth potential for WAKIX and our belief of WAKIX being a billion-dollar-plus opportunity in adult narcolepsy. with the potential to contribute up to an additional billion dollars, if approved, in IH and other current lifecycle management programs. I would now like to turn the presentation back over to Jeff to provide an update on the clinical development and current lifecycle management programs for Harmony. Jeff?