Harmony Biosciences Holdings, Inc.

Good morning. My name is Todd, and I will be your conference operator today. At this time, I would like to welcome everyone to Harmony Bioscience's second 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 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 Louis Finney, head of investor relations. Please go ahead.

Louis Finney Thank you, operator. Good morning, everyone, and thank you for joining us today as we review Harmony Biosciences' second 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, Dr. Kumar Badur, Chief Medical Officer, and Sandy 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 referenced in our SEC filings 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 and for your interest in Harmony. Before I comment on our strong second quarter performance, which is reflective of our focused execution and operational excellence, I want to highlight why Harmony continues to be a growth story and outline the key elements driving our growth. We continue to drive growth in our core business for WACICS and narcolepsy and, based on this, are confident that WACICS represents a $1 billion plus opportunity in adult narcolepsy alone. Our current life cycle management programs for Pitocin, notably our Phase III program in idiopathic hypersomnia, or IH, continue to demonstrate strong momentum, and if we are successful in IH and our other current life cycle management programs, these indications could generate up to an additional $1 billion opportunity. Our work with our partner BioPregé on new formulations of Pitocin is progressing with the goal to potentially extend the Pitocin franchise with new IP out beyond 2040. And with a profitable business and strong balance sheet, we are in a favorable position to bring in new assets through business development to build out a robust pipeline and portfolio of products. In fact, it is the ongoing confidence in our core business and our conviction in the long-term growth potential for Harmony that is the reason behind this morning's announcement that our Board of Directors authorize a $125 million share repurchase program. This program reflects our confidence in the strength of the company and our commitment to deploy capital to maximize shareholder value. Starting with our core business, our strong commercial performance is a result of the unique and meaningfully differentiated product profile of WCAG in the proven excellence of our commercial organization. For the second quarter of 2023, we reported WCAG's net revenue of $134.2 million representing an increase of 25% year over year, driven by the continued underlying demand for WCAG, tapping into a large market opportunity of approximately 80,000 diagnosed patients with narcolepsy in the U.S. The momentum we highlighted last quarter carried into this quarter, during which time we saw the highest top-line prescription demand since our first full quarter of launch in 2020, and the strongest quarter of new patient starts in our history. This is unique as it is not typical to see sustained growth in year four post-launch for an orphan rare product. With another strong quarter of growth behind us, we continue to be confident in Wakex being a $1 billion plus market opportunity in adult narcolepsy alone, and Jeff Dirks will provide further insights into the reasons we remain confident in the future of this opportunity. In addition to our strong commercial performance in Q2, We are also extremely pleased with the progress that we've made across all of our current pitocin life cycle management programs. Our clinical teams have been very busy advancing all three programs with key catalysts coming from each of them later this year. Notably, we are on track for top line data from our phase three registrational in tune study in adult patients with idiopathic hypersomnia in the fourth quarter. As a reminder, last quarter we announced completion of enrollment in this study nine months ahead of our base plan, reflective of the significant interest from patients and healthcare professionals in Pitocin as a potential treatment for IH. We are very excited about this opportunity, which, if successful, could represent the next new indication for WACICS. In follow-up to a positive end of Phase II meeting with the FDA to discuss our Prader-Willi syndrome, or PWS, development program, we plan to initiate a pivotal Phase III trial in patients with PWS six years of age and older in the fourth quarter. And we are on track for top-line data from our Phase II proof-of-concept signal detection study in type 1 myotonic dystrophy, also in Q4. Altogether, IH, PWS, and DM1 represent about 100,000 diagnosed patients in the U.S. So if successful, our current life cycle management programs could contribute up to an additional $1 billion of revenue to the WAKETS franchise. In addition to our current life cycle management programs for Pitocin, we are making progress on new formulations of Pitocin that we are co-developing with our partner, Bioprojet, with the goal to generate new IP and extend the Pitocin franchise out beyond 2040. Lastly, we've advanced our strategy in pediatric narcolepsy and plan on submitting a supplemental new drug application for a pediatric narcolepsy indication in the fourth quarter. And in addition, are actively pursuing pediatric exclusivity for WACICS. As you can see, we have made major progress across all of our development programs, and Dr. Kumar Bidur will provide you with more details on these later in the call. Another key component of our growth strategy is acquiring new assets through business development to expand our portfolio beyond WCAGS. To achieve this, we intend to leverage our strong financial position with approximately $430 million in cash, cash equivalents, and investment securities at the end of the second 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. Since taking on the CEO role at the beginning of the year, the team and I have been actively engaged in business development, evaluating a number of opportunities focused on rare orphan neurology assets, and or assets in other neurological diseases where we can leverage our existing expertise and infrastructure. This is a high priority for us, as it is a key component of our long-term growth strategy. While we are disciplined in our approach, ensuring not only a strategic fit, but also appropriate valuation, we are also working with a sense of urgency and understand the importance of having a robust portfolio in place. Overall, I am extremely proud of the outstanding progress that our team has made across every aspect of our business, which demonstrates that Harmony continues to be a growth story. 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. The second quarter was another strong quarter for WAKIX. With continued growth and momentum in our underlying business fundamentals, and top-line performance metrics that were the strongest we've seen since launch. Net sales for the second quarter were $134.2 million, which represents 25% growth from the same quarter prior year. The strong double-digit growth in net sales for Wacox in year four of our commercialization demonstrates the continued high interest and adoption of Wacox in the narcolepsy market. and reinforces our long-term belief that WACIX is a billion-dollar-plus opportunity in adult narcolepsy alone. I'd like to share a few key highlights from our performance in the second quarter on slides five and six. The average number of patients on WACIX in the second quarter increased approximately 350 patients sequentially to approximately 5,450 patients. This impressive growth in average patients in the second quarter was driven by a strong performance in top line demand and new patient starts. In the second quarter, we saw the highest top line prescription demand since our first full core of launch at the beginning of 2020. And we also had the highest number of new patient starts in our history. The growth in average patients on WCAG speaks to the continued product adoption and solid business fundamentals. Strong top line prescription demand, growth in new patient starts, along with continued patient refill behavior. We exited the second quarter with approximately 5,600 patients on WACICS, with strong momentum coming out of the second quarter. We believe this metric of exiting patients helps to provide additional context to our strong performance leading into the third quarter. Strong patient interest and continued prescriber adoption continue to be key drivers of the growth in the average number of patients on WACICS. The number of unique prescribers of WACIX increased again in the second quarter. And importantly, we continue to see the WACIX prescriber base expand beyond healthcare professionals enrolled in the OxyBate REMS program. As we've shared in previous earnings calls, the meaningfully differentiated product profile of WACIX and the unique feature of being the only FDA-approved treatment for EDS and cataplexy that is not scheduled as a controlled substance offers broad clinical utility. and appeals to our broader narcolepsy healthcare professional audience and patient base, which drives the continued growth in the depth and breadth of our prescribers. Across the nearly 9,000 narcolepsy-treating healthcare professional prescriber base, we continue to see meaningful penetration and growth. We see growth in the depth of prescribing among the approximately 4,000 healthcare professionals enrolled in the Oxibate REMS program, an expanded breadth of new prescribers, and the approximately 5,000 healthcare professionals not enrolled in the OxyBait REMS program. The availability of a generic OxyBait and the launch of a once-nightly OxyBait at the end of the second quarter has impacted the continued growth of WCAGS. We continue to see meaningful growth in prescribing and patients on WCAGS, along with strong payer coverage. Our ability to reach and educate the broad narcolepsy-treating healthcare professional universe and tap into the full diagnosed adult narcolepsy patient opportunity gives us confidence in continued growth and the long-term growth potential for WACICS. Recent market research conducted by Harmony supports our view of continued growth for WACICS. Research conducted in June of this year with approximately 70 healthcare professionals with and without experience with WACICS prescribing showed the following. 100% of the healthcare professionals surveyed with WACICS clinical experience stated they would prescribe the same or increase their prescribing of WAKIX in the next six months. Nearly 40% of those healthcare professionals surveyed who had not yet prescribed WAKIX to date indicated the intent to prescribe WAKIX in the next six months. And consistent with previous waves of research, one of the highest performing drivers and differentiators for WAKIX was the unique feature as the only non-scheduled treatment option. In summary, I continue to be excited by the strong commercial performance of WAKIX in adult narcolepsy. In the second quarter, we saw the highest top-line prescription demand since our first full quarter of launch in 2020, leading to the all-time high in new patient starts. Strong growth in the average number of patients on WAKIX. Continued expansion and strengthening of the WAKIX prescriber base beyond the Oxibate REMS healthcare professionals. and payer coverage remains strong even with the availability of newer versions of OxyBase. These are tremendous achievements, and I appreciate the dedication and impact of the entire commercial team and the passion they have for our business. This strong performance gives us confidence in the long-term growth potential for Wacus and reinforces our belief that Wacus is a billion-dollar-plus opportunity in adult narcolepsy. I would like to now turn the presentation over to Kumar Badur, our Chief Medical Officer, to provide an update on the clinical development and current lifecycle management programs for Harmony. Kumar?