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 Biosciences' third quarter, 2024 financial results conference call. All participants 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 Brennan Doyle, head of investor relations. Please go ahead.

Thank you, operator. Good morning, everyone. And thank you for joining us today as we review Harmony Bioscience's third quarter 2024 financial results and provide business updates. 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 Bhadur, Chief Medical and Scientific Officer, and Sandeep Kapadia, Chief Financial Officer and Chief Administrative Officer. 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, Brennan, and thanks, everyone, for joining our conference call today. Q3 was another quarter of strong momentum for the team at Harmony, driving significant revenue growth for WCAG and advancing our late-stage clinical development programs. At our successful Investor Day event earlier this month, we were excited to share new data and outlined a clear path toward becoming the leading CNS company focused on developing and delivering innovative treatments to patients with unmet medical needs. As we shared during that presentation, our robust late-stage pipeline is poised to deliver one or more new product or indication launches each year over the next five years. With each catalyst, we are delivering on our promise to patients and generating long-term durable value creation for shareholders. In fact, with this team at Harmony that has driven our success thus far, our current pipeline is successful. It's poised to deliver over $3 billion in net revenue going forward. Also during our investor day, I highlighted what we believe to be one of the strongest and most promising pipelines in the industry for people living with rare neurological diseases. Our pipeline now includes three orphan rare CNS franchises, each with peak sales potential of $1 to $2 billion, eight assets across 13 development programs, with three of them in pivotal phase three trials, and a fourth to initiate before year end. Given the tremendous growth in our pipeline, we will not be able to go into depth on all the development programs on this call, but the key points that I want you to take away from our call today regarding our robust pipeline are these. First, we continue to strengthen our leadership position in sleep-wake. We are preparing to submit our SNDA for pitocin in idiopathic hypersomnia, or IH. We are advancing the pitocin next-gen programs, and we are on track to submit an IND for our potential best-in-class orexin-2 agonist in mid-2025, and then enter the clinic the second half of next year. Second, with EPX100, or chlamyosal hydrochloride, We have the most advanced and promising late-stage development program in the class of 5-HT2 receptor agonists to address the serious unmet medical need for the rare childhood onset epilepsies known as developmental epileptic encephalopathies, or DEEs. EPX100 is in an ongoing phase three registrational trial for patients with Gervais syndrome and on track for top line data in 2026. And we will be initiating a pivotal phase three trial for EPX100 in patients with Lennox-Gastaut syndrome before year end. In addition, we have another asset in our epilepsy pipeline, EPX200 or lorcaserin in a liquid formulation. which is a selective 5-HT2C receptor agonist. And both of these have significant upside potential, as the market has recently acknowledged with the acquisition of a 5-HT2C agonist asset that just recently initiated a Phase III trial in Dravet syndrome. Third, there are exciting near-term catalysts coming in the first half of next year, including FDA's decision on file acceptance of our IHSNDA submission going in later this year, as well as top-line data for ZYN002 from the Pivotal Phase III ReConnect trial in patients with Fragile X syndrome. If these data are positive, it could put us on a path toward bringing the first approved treatment to the market for patients living with Fragile X syndrome. I want to share some highlights with you on our development programs, and then Kumar will expand on these key points later in the call. First, on the strengthening of our leadership in sleep-wake, which is the foundation of our business, we shared new data at our investor day from the long-term extension trial of Pitocin in patients with IH. These data demonstrated robust efficacy and sustained response out beyond one year. As Kumar will show you, the majority of patients were maintained within the normal range on the F-worth sleepiness scale for over one year after coming into the trial at a moderate or severe level of sleepiness. This, along with real-world evidence and a strong overall benefit-risk proposition for pitolicin, is the reason for our strong conviction in pursuing an IH indication for pitolicin and we are on track to submit an SMDA before year end. Building off of the innovation of the first-in-class molecule in Pitocin with its novel mechanism of action and the success of WAKES in the market is our next-gen formulations of Pitocin. Both of these programs, Pitocin Gastro-Resistant, or GR, and Pitocin High Dose, or HD, reflect patient-centric drug development with the goal to take a good drug and make it even better by addressing ongoing unmet medical needs in patients with narcolepsy. Pitocin-GR is on track for PDUFA in 2026, and Pitocin-HD is on track for PDUFA in 2028. And Jeff Dirks will provide more color on the strategy behind those programs and how our unique commercial model positions us to optimize the opportunity to both grow and extend the Pitocin franchise into the 2040s. The next wave of innovation for the treatment of narcolepsy and other central disorders of hypersomnolence are the orexin-2 receptor agonists. As leaders in sleep-wake, we have followed this space closely over the past few years. diligence several of the erection two agonist programs. And then earlier this year, licensed in BP 1.15205 with our partner Bioprojet, which we feel could be a potential best in class erection two agonist compound. This is based on several unique features of this compound, some of which we share during our investor day, and Kumar will review them with you later in the call. We are on track toward filing an IND mid-2025 and then initiating first in human studies in the second half of 2025. Next, I would like to take a few moments to discuss and share our excitement with you regarding our rare epilepsy franchise that we recently brought in-house through the acquisition of Epigenics Therapeutics. This is relevant particularly in light of some of the recent developments in the competitive landscape, which point to the significant value of new treatments for developmental epileptic encephalopathies. Many of the currently approved therapies face limitations in terms of efficacy, safety, and or tolerability, leaving a treatment gap and serious unmet medical need that must be addressed for patients living with these rare and refractory seizure disorders and their caregivers. We view the recent interest in this space as validation of our approach, and Harmony is again proud to be at the forefront of innovation. To put it simply, this space involves compounds that act at the serotonin, or 5-HT, type 2 receptor, and enhance serotonergic tone in the brain. We have two investigational products for DEEs, EPX100, or chlamyosal hydrochloride, and EPX200, a liquid formulation of lorcaserin. Kumar will share with you more details regarding these compounds and their development programs, but what I want to highlight for you is the following. The mechanism of action for both EPX100 and EPX200 working through 5-HT2 receptors and serotonin modulation has been validated in the zebrafish model developed by Scott Barragan, who shared his work at our investor day, which demonstrated 100% predictability. both 100% positive and 100% negative predictability on efficacy for compounds that were screened in his zebrafish model. We have the most advanced clinical development program of the 5-HD2 agonist compounds, with EPX100 in an ongoing registrational trial for patients with Gervais syndrome, which is on track for top-line data in 2026. as well as a pivotal phase three trial for patients with Lennox-Gastaut syndrome, which is on track to initiate before year end. What I want you to take away is that we believe that we have the most robust, most promising and advanced portfolio of assets in the clinic for patients with DEEs and are confident that, if successful, our portfolio can offer new treatment options for patients and drive significant value creation for our shareholders. Lastly, on our pipeline, as you can see, we have strategically expanded our pipeline and diversified our portfolio across three orphan rare CNS franchises and built what we believe is one of the most exciting and promising pipelines in the industry for patients living with rare neurological diseases. Importantly, I want to make sure that our near-term catalysts coming in the first half of next year are top of mind for investors. These include FDA's decision on file acceptance for our IHSMDA submission in the first quarter next year, followed by the highly anticipated top-line data readout of the pivotal Phase III ReConnect study of ZYN002 in patients with Fragile X syndrome, which is on track for readout mid-year. These are exciting catalysts as we continue to advance our pipeline and build long-term value creations. Switching gears, while we advanced our late-stage development programs, we remained focused on execution across the company and delivered another solid quarter with WCAG's net revenue of $186 million. This enabled Harmony to surpass $2 billion in cumulative net revenue for WCAG generated in less than five years on the market, which is a significant accomplishment. With these strong results, We are once again reiterating our 2024 net revenue guidance of $700 to $720 million and remain confident in WCAG being a $1 billion plus market opportunity in narcolepsy alone. And we are well on our way to achieving that. We remain active in business development with a dedicated team that has deep experience. And the goal is to expand our pipeline even further With approximately $505 million in cash, cash equivalents and investments as of September 30th, we are in a strong financial position to execute on additional business development opportunities. And if we do so, we'll apply the same strategic and thoughtful approach that we have demonstrated thus far. This is all to say that Harmony continues to be a growth story. And while I am proud of what we have built at Harmony in just our first seven years, we are just getting started. We have this outlook because we know that when we deliver on our promise to patients by developing and delivering innovative treatments to patients living with rare neurological diseases, we generate durable, long-term value creation for our shareholders. With that, I will now turn the call over to Jeffrey Dirks, our Chief Commercial Officer, for an update on our commercial performance. Jeff? Thanks, Jeff. We saw another quarter of continued momentum and strength in our underlying business fundamentals for WCAG in the third quarter. Net sales for the quarter were $186 million. And with these quarterly sales, WCAG surpassed $2 billion in cumulative net sales since launch. The solid net sales performance in the third quarter reaffirms our confidence in our net sales guidance of $700 to $720 million for the full year 2024 and WCAG's $1 billion-plus potential in adult narcolepsy alone. We saw continued growth in the average number of patients on WCAG and in the WCAG's prescriber base, both facilitated by favorable market access, as seen on slides 6 and 7. The average number of patients on WCAG increased to approximately 6,800 in the third quarter. We're extremely pleased with the approximately 250 sequential increase in average patients on WCAGS from what we reported last quarter. We saw contributions from the pediatric narcolepsy indication launch in our growth in Q3, but the vast majority of our growth in the third quarter was attributed to the continued expansion in our adult narcolepsy patient base, given the larger diagnosed patient opportunity. We are extremely pleased with our launch in pediatric narcolepsy. In the first quarter since the FDA approval, we've seen strong interest from the healthcare professional and patient community in the unique product profile of WCAG as the only non-scheduled treatment option and strong payer coverage to facilitate pediatric narcolepsy patients getting on product. The growth in average patients in the third quarter was in line with our expectations and reaffirms our confidence and our guidance of approximately 7,000 average patients by the end of the year. We saw growth in the WACIX prescriber base in the third quarter as well. We saw solid growth in the WACIX prescriber base beyond the Oxibate REMS-enrolled healthcare professionals, demonstrating that WACIX continues to expand the branded writer segment of the market beyond the Oxibates. We are now more than 40% penetrated in this segment of approximately 5,000 healthcare professionals at the end of the third quarter. And this segment of healthcare professionals continues to represent an insulated and durable opportunity for growth from the OxyBates that we continue to tap into each quarter to drive performance. Coupled with the growth we're seeing beyond the OxyBate REMS-enrolled healthcare professionals, we continue to see utilization of WCAGS among the approximately 4,000 OxyBate REMS-enrolled healthcare professionals, even with the availability of new and generic OxyBate options. We're highly penetrated within this prescriber audience and see WAKIX being prescribed to additional narcolepsy patients each quarter in this segment. WAKIX provides a meaningfully differentiated product profile and one that offers broad clinical utility across the entire narcolepsy treating healthcare professional universe, allowing us to tap into the full diagnosed narcolepsy patient opportunity of approximately 80,000 patients, giving us confidence in future growth for WAKIX. And with WCAGST on track to achieve a billion-dollar-plus in narcolepsy alone, along with a strong commercial team and commercial model that we shared at our investor day on October 1st, we're making good progress on our lifecycle management plan with the new formulations of Pitolisant. We're developing two new formulations of Pitolisant, Pitolisant-GR and Pitolisant-HD, in a meaningful patient-focused way built around unmet needs to drive incremental benefits for patients. Both products offer new features and attributes to address existing patient unmet needs, are on target for PDUFA dates prior to Wake XLOE, GR in 2026, and HD in 2028, and each has provisional patents filed out to 2044 to grow and extend the Pitolisun franchise. Pitolisun GR is a quick-to-market bioequivalence pathway with the additional benefits of a gas-resistant coating, as we know up to 90% of narcolepsy patients have GI disturbances due to their underlying disease, and eliminates the titration dose, as all narcolepsy products have titration schedules, and some patients cannot and do not get a therapeutic dose to achieve clinical benefits, both allowing patients to start at a therapeutic dose and the potential to achieve clinical benefits sooner. The strategy for GR is to expand the Ptolemaicin patient base through new patient growth and using our unique commercial model, activate previous WAKIX patients who have discontinued due to either GI side effects or did not achieve a clinical benefit. We see GR representing a potential $300 to $500 million in incremental peak net sales to WAKIX. At Ptolema Sun, HD is an enhanced formulation of Ptolema Sun with even more meaningful features to address untreated fatigue and narcolepsy. Up to 60% of narcolepsy patients suffer from fatigue and address the largest pressing need in the narcolepsy market, which is the need for enhanced efficacy. The HD development program is designed to deliver a higher dose, up to two times that of WAKIX, with an optimized PK profile to drive greater efficacy in EDS and cataplexy, targeting a unique indication of fatigue in narcolepsy, with a gas-resistant coating and no titration, the start of the therapeutic dose. The strategy for HD is to grow the Ptolemaicin patient base through new patients, current WAKIX patients, and previous WAKIX patients, due to our unique commercial model, and extend the durable patient revenue growth out to the mid-2040s. We see potential peak net sales for HD of more than a billion-dollar-plus in narcolepsy alone, and an even larger peak opportunity with other indications being pursued in idiopathic hypersomnia and myotonic dystrophy. Preliminary market research with healthcare professionals and payers on the HD target product profile showed healthcare professionals see HD as a superior product profile given the greater efficacy addressing the most pressing need in the market, and the unique fatigue indication broadens its expected use. Healthcare professionals saw broad utility for HD, and expected to transition the majority of current WAKIX patients, re-engage previous WAKIX patients, and offer the product to all new start patients. Payers also saw value in the HD profile, both pre- and post-WAKIX LOE, and expected favorable access for the vast majority of patients to HD without stepping through a generic Pitolisan post-WAKIX LOE. The Pitolisan franchise strengthens our leadership position in SleepWake and is poised to deliver durable patient growth and significant revenues into the mid-2040s. So in summary, we're building an exciting sleep-wake franchise. We had another strong quarter of durable growth and performance in net sales, patient ad, and growth in prescribers of WAKIX. Heading into the fourth quarter, we're confident in our full-year guidance, our path towards a billion-dollar-plus in net sales, and our ability to continue to help patients living with narcolepsy. I would now like to turn the call over to our Chief Medical and Scientific Officer, Kumar Badur, to discuss the advances of our clinical development program.