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 Biosciences' third quarter 2024 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 gap to non-gap financial measures. At this stage of our life cycle, we believe non-gap 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 Boudour, 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 WACCICS 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, is 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 the first 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 SleepWake. 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 agonists in mid 2025 and then enter the clinic the second half of next year. Second, with EPX100 or clemethyl 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 three trial in Gervais 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 three 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 the Tullusin 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 Tullusin, is the reason for our strong conviction in pursuing an IH indication for Tullusin and we are on track to submit an SMDA before year end. Building off of the innovation of the first in class molecule in Tullusin with its novel mechanism of action and the success of WACUS in the market is our next-gen formulations of Tullusin. Both of these programs, Tullusin gastro-resistant or GR and Tullusin high dose or HD reflect patient-centric drug development with the goal to make to take a good drug and make it even better by addressing ongoing unmet medical needs in patients with narcolepsy. Tullusin GR 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 Tullusin franchise into the 2040s. The next wave of innovation for the treatment of narcolepsy and other central disorders of hypersominance are the Erexin 2 receptor agonists. As leaders in SleepWake, we have followed this space closely over the past few years, diligent several of the Erexin 2 agonist programs and then earlier this year licensed in BP1.15205 with our partner BioPregé, which we feel could be a potential best in class Erexin 2 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 epigenetics and 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 needs 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 Clamazole Hydrochloride and EPX200, a liquid formulation of lercasterin. 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 Barrowman, who shared his work at our Investor Day, which demonstrated 100 percent predictability, both 100 percent positive and 100 percent negative predictability on efficacy for compounds that were screened in his zebrafish model. We have the most advanced clinical development program of the 5-HT2 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 three reconnect study of ZYN002 in patients with fragile X syndrome, which is on track for readout midyear. These are exciting catalysts as we continue to advance our pipeline and build long-term value creation. Switching gears, while we advance our late-stage development programs, we remain focused on execution across the company and delivered another solid quarter with WACIX net revenue of $186 million. This enabled Harmony to surpass $2 billion in cumulative net revenue for WACIX, 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 WACIX 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 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 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 WACIX in the third quarter. Net sales for the quarter were $186 million. And with these quarterly sales, WACIX surpassed $2 billion in cumulative net sales since launch. The solid net sales performance in the third quarter reaffirms our confidence and our net sales guidance of $700 to $720 million for the full year 2024 and WACIX $1 billion plus potential in adult narcolepsy alone. We saw continued growth in the average number of patients on WACIX and in the WACIX prescriber base, both facilitated by favorable market access as seen on slides six and seven. The average number of patients on WACIX increased to approximately 6,800 in the third quarter. We're extremely pleased with the approximately 250 sequential increase in average patients on WACIX 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 WACIX 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 Oxford Bay REMS-enrolled healthcare professionals, demonstrating that WACIX continues to expand the branded writer segment of the market beyond the Oxford Bates. 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 Oxford Bates that we continue to tap into each quarter to drive performance. Coupled with the growth we're seeing beyond the Oxford Bay REMS-enrolled healthcare professionals, we continue to see utilization of WACIX among the approximately 4,000 Oxford Bay REMS-enrolled healthcare professionals, even with the availability of new and generic Oxford Bate options. We're highly penetrated within this prescriber audience and see WACIX being prescribed to additional narcolepsy patients each quarter in this segment. WACIX 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 WACIX. Now with WACIX 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 life cycle management plan with the new formulations of the PtoleSUN. We're developing two new formulations of the PtoleSUN, the PtoleSUN GR and the PtoleSUN 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 WACIX LOE, GR in 2026 and HD in 2028, and each has provisional patents filed out to 2044 to grow and extend the PtoleSUN franchise. The PtoleSUN GR is a quick to market bioequivalence pathway with the additional benefits of a gas or resistant coating, as we know that 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 strategy for GR is to expand the PtoleSUN patient base through new patient growth and using our unique commercial model, activate previous WACIX 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 dollars in incremental peak net sales to WACIX. At PtoleSUN HD is an enhanced formulation of PtoleSUN 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 WACIX, with an optimized PK profile to drive greater efficacy in EDS and cataplexy, targeting a unique indication of fatigue and narcolepsy, with a gas-resistant coating and no titration to start at a therapeutic dose. The strategy for HD is to grow the PtoleSUN patient base through new patients, current WACIX patients, and previous WACIX 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 $1 billion 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 WACIX patients, reengage previous WACIX patients, and offer the product to all new star patients. Payers also saw value in the HD profile, both pre- and post-WACIX LOE, and expected favorable access for the vast majority of patients to HD without stepping through a generic patolason post-WACIX LOE. The patolason 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 SleepWake franchise. We had another strong quarter of durable growth and performance in net sales, patient ad, and growth and prescribers of 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 Bidur to discuss the advancements of our clinical development program.

Kumar? Thank you, Jeff. Good day, everyone, and thank you for joining us today. In R&D, we continue to make great progress in advancing our pipeline program. As Justino mentioned, we now have 13 development programs across eight assets under three franchises focused on rare neurological indications with high-animate medical needs. We will have full phase three registration studies ongoing in four distinct indications by the end of this year, with the potential to deliver one or more new products or new indications launches each year for the next five years. Our full clinical development pipeline is shown on slide number 10, and the clinical development highlights are on slide 11 through slide 17. Starting with our SleepWake franchise, we are on track to submit an SMDA for endocardic hyposomnia by the end of this year. Our submission will be based on the robust data from the phase three registration in-tune study and several lines of additional evidence that consistently support the efficacy of pitot lophin in patients with .F.R. hyposomnia. At our investor day on October 1st, we reported new data that showed strong and sustained efficacy of pitot lophin in patients with .F.R. hyposomnia more than one year out in the long-term extension study. The mean improvement in effort sleepiness scale was approximately nine points from baseline or beyond one year with the majority of patients in the normal range as measured by .F.R. score. We found similar strong and sustained maintenance of efficacy and .F.R. hyposomnia scale and sleep inertia questionnaires in the long-term extension study. In addition, we also shared the data from a large heat clinic in Europe in over 60 patients with IH. Data from this independent study shows that over 60 percent of patients with IH got better with pitot lophin and approximately 40 percent of these patients benefited and remained stable with pitot lophin as monotherapy. Similar efficacy was also observed in bio-sensitive program for patients with IH. The totality of data for efficacy alongside the established safety profile of pitot lophin, a non-stricter drug with simple dosing regimen offers a unique benefit to proposition for patients with IH. A condition with only one approved treatment that has triple affectation ramp with challenging nighttime dosing regimen and the widespread off-label use of pitot lophin has the potential to address a high-animate unique with very favorable benefit risk profile. Moving on to next-gen pitot lophin formulation, pitot lophin GR and pitot lophin HC. Jeff Dirks described the unique value proposition. Each of these formulations are expected to deliver. With pitot lophin GR program, we are on track to initiate the pivotal bio-equal study and the dosing optimization study in the first quarter of 2025 with a date in 2026. With pitot lophin HC, earlier this month, we shared preliminary data establishing pitot lophin safety up to five times the current highest labeled dose of latex, thereby establishing safety margins for pitot lophin HC development program. We are currently working on further optimizing the formulation and I&T related activities and we are on track to initiate the pivotal safety resistance study in narcolepsy in second half of 2025 with a target to do for in 2028. Provision patents have been submitted for both pitot lophin GR and pitot lophin HC with the potential patent protection until 2044. Moving on to our Oryxin 2 receptor advance program BP1.15205, formerly known as PPM1116. The in vitro pharmacology data demonstrated a potency that is much greater compared to all publicly disclosed data on Oryxin 2 agonies. As you know, with this class of compounds, potency is the most important parameter that gives us the ability and the dosing flexibility to target all central disorders of hyposomal and potentially other disorders based on the emerging evidence. The potency was consistent across species and it also demonstrated an excellent selectivity of greater than 600 fold over Oryxin 1 receptors. This translates to over 100 fold margin at Oryxin 1 receptors at the anticipated maximum human dose. In addition, it also demonstrated over 100 fold selectivity for 150 other targets of interest and has the potential for one-third a dosing. BP1.15205 with its novel chemical structure, highest potency, excellent selectivity, potential for one-third a dosing, and robust re-cleanings and data has the potential to be the best in class Oryxin 2 receptor agonist. We are on track to sign an IND in mid-2025 and initiating first in human studies in the second half of 2025. Today, we are very excited to highlight our SPSC franchise and as Jeff mentioned earlier in the presentation, we have the most advanced development program in DEE. We have two investigations candidates, EPX100 and EPX200 for the treatment of developmental epileptic and pernopathy. EPX100, our clinical hydrochloride works near modulation of serotonin, that is 582 and enhances the serotoninic tone. The serotoninic mechanism of action is a validated and well-known mechanism of action in developmental epileptic and pernopathy. EPX100 showed efficacy in the zebrafish model that has 100% positive and 100% negative predictive values. In addition, EPX100 mechanism of action is also validated in other DEEs such as syntax and binding protein one disorders. We have three clinical experiments suggesting a broad utility for EPX100 in DEEs. When it comes to safety and tolerability, clinical was on the market for approximately 20 years with no significant safety and or tolerability symptoms from post-marketing exposure. In addition, EPX100 demonstrates favorable preliminary safety and tolerability in the ongoing phase three registration study in Duwey syndrome compared to select up to drug with no need for additional operating or special monitoring. EPX100 is administered in quick formulation with BID dosing, a simple dosing that is especially meaningful for patients living with DEEs and their caregivers. We are actively recruiting globally for our phase three registration study in Duwey syndrome, the ARGUS study, and we are on track to start a global phase three registration study in LDS by the end of this year. Strong evidence for efficacy, promising safety and tolerability profile, BID dosing, and on track for topping in 2026 makes EPX100 the most promising and the most advanced investigation drug for DEEs. We have one more investigation product, EPX200, our liquid formulation of locafren in the PIND phase. Locafren is a selective 5-HP2C agent and the mechanism of action is well established in DEEs near pre-clinical experiments in the zebrafish model and also in the chain near case series published by Toled and DeWinsky et al. in 2018 in neurology following which the FDA expressed interest in exploring locafren in developmental and epileptic endocrin. We are currently in the PIND phase and we plan to pursue all DEEs with EPX200. It is important to note that the safety and tolerability of locafren is also well established based on the short-term, long-term, and real-world outcomes that is with locafren. The regulatory agencies recognize the unmet needs and upon EPX100 and EPX200 could potentially offer to patients with DEEs. Accordingly, EPX100 has received both orphaned test designation and rare pediatric disease designation for both DEEs and LTAs by the FDA. EPX200 has received orphaned test designation for DEEs by the FDA and EMR and it has received orphaned test designation and rare pediatric disease designation for LTAs by the FDA. Finally, with our new behavioral franchise, we remain on track to report top-line data from the phase III reconnect registration trial of ZY002 in Fasalek syndrome in mid-2025. If approved, this will be the first and only approved treatment for any symptom in patients with Fasalek syndrome. We are also on track to initiate the phase III registration study in 22Q-Vincent syndrome in 2025, another rare disorder with prominent neurobehavioral symptoms for which there are no up to three times. In summary, we have made significant progress in advancing our late-stage pipeline across our three franchises and look forward to sharing more in the coming months and years as we continue to make progress. On behalf of Harmony, I would like to thank all the patients and their families who are participating in our clinical time, as well as the clinical investigators and site personnel for their efforts and commitment in helping us advance our development program. I now turn the call over to our CFO, Sandeep Kapadia, for an update on our financial performance. Sandeep?

Thank you, Kumar, and good morning, everyone. This morning, we issued our third quarter earnings release and filed our 10Q, while you find the details of our third quarter 2024 financial and operating results. Our financial performance is also shown on slides 18 through 20. Harmony continues to have a unique profile in the biotech community. We're a profitable, cash-generating company able to fund the growth and advancement of our pipeline fully off our balance sheet. We delivered another quarter of strong double-digit top-line growth, maintained profitability, and achieved robust cash generation. Our financial performance and strong balance sheet positions as well to continue advancing our industry-leading pipeline along with driving excellence in the commercialization of wake-ix and narcolepsy. We reported net revenues of $186 million for the third quarter of 2024 compared to $160.3 million in the prior year quarter. Performance in the quarter reflects the continued strong underlying demand for wake-ix. We also reported total operating expenses for the third quarter of $81.6 million as compared to $63.5 million for the same quarter in 2023, representing a 29% increase. The growth in expenses was primarily driven by investments in our expanding late-stage pipeline along with continued investments for the commercialization of wake-ix and narcolepsy. -GAAP-adjusted net income for the third quarter of 2024 was $59.6 million, or $1.03 per diluted share, compared to $58.8 million, or $0.97 per diluted share in the prior year quarter. We believe -GAAP-adjusted net income better reflects the underlying business performance. Please refer to our press release for a reconciliation of GAAP to non-GAAP results. We ended the third quarter with $504.7 million of cash, cash equivalents, and investments. The balance reflects strong cash generation of $70.5 million from operations, which provides us the financial flexibility to execute on our strategy of continuing to grow our pipeline. Looking ahead, we continue to expect -over-quarter growth in net revenues in Q4 of this year. We also expect increases in R&D as we initiate our fourth phase three of the registration trial during the fourth quarter. We are once again reiterating our net revenue guidance for 2024 of $700 to $720 million, highlighting our progress towards the $1 billion plus opportunity in adult narcolepsy alone. And with that, I'd like to turn the call back to Jeff for his closing remarks. Jeff? Jeff Thank you, Sundeep. As we wrap up our call, I want to emphasize that our momentum and harmony has never been stronger. We continue to lead in sleep wake, fueled by the strength of our foundational business of wake-ups and narcolepsy, and driven by a portfolio that represents the next wave of innovation in this space. We believe that our portfolio of assets in rare epilepsies is the most robust and advanced in the industry for DEEs, and we are committed to this area of serious unmet medical need. And finally, our catalyst-rich late-stage pipeline is poised to deliver one or more new product or indication launches each year over the next five years, with exciting catalysts in idiopathic hypersomnia and fragile X syndrome coming in the first half of next year. We have the proven talent, resources, and conviction that will continue to fuel Harmony's growth story. And we are just getting started. Thank you. And I will now turn the call back over to the operator. Jeff Thank you. At this time, if you would like to ask a question, please press the star 1 on your keypad. If you wish to remove yourself from the queue, you may do so by pressing star 2. We remind you to please pick up your handset and please limit yourself to one question. Again, that's star 1 to enter the queue. Our first question will come from Greg Suvenovic with Mizzouho. Please go ahead.

Greg Suvenovic I don't know where to start, but maybe if I could ask just one on the Tollessant GR and HD strategy. As we look out on the horizon, can you just give us a sense of how we should visualize how Wacix and then GR, when it comes in potentially 2026, how are you going to manage the coexistence of those two products? And then how is that going to evolve when

when

HD launches, hopefully in 2028, just trying to visualize what a switch strategy might look like, just the commercial kind of positioning if you are in a position to have three products basically on the market at the same

time. Jeff Yes. Good morning, Greg. Thanks for your question. I think that I'm going to turn to Jeff to expand on that. A lot of it is based on our unique commercial model in terms of enabling us to, how to handle that strategy. And Jeff can explain further. Jeff Sure. Now, thanks for the question, Greg. So Tollessant and Wacix obviously is going to be our foundational business. And we see that as a billion dollar plus opportunity from there in advancing these next generation and life cycle management opportunities. Tollessant GR, if you are thinking about that asset, Target Pidufin 2026, we see that as a creative opportunity to expand the Tollessant patient base, not necessarily where physicians are going to be converting established Wacix patients to GR. But GR is likely going to be a product using our commercial model where we can actually activate patients who are formally on Wacix who may have dropped off due to GI side effects or didn't achieve clinical benefit. We're going to look to tap into that audience as well as any new patient coming into a physician's office, having the benefit of Wacix with a faster resistant coating and the ability with no titration. We see GR growing in new patients as well as previous Wacix patients. So not converting existing Wacix patients. Then when HD looks to come to market with a Target Pidufin in 2028, given the potential to deliver enhanced efficacy, the potential to treat an indication fatigue that doesn't have any products available today, when we put that product profile in front of healthcare professionals, they saw that as a superior product profile, that is a product that they embraced likely converting the vast majority of their Wacix patients over to. They saw this as another opportunity to engage previous Wacix patients. And they also saw this obviously as an opportunity for new existing patients. So that's kind of how we see these products. They are going to be able to coexist. GR and Wacix are going to be incremental into creative opportunities coexisting. HD is likely the asset where we're going to end up seeing most patients end up just given the potential and the meaningful enhancements and benefits that that product is going to be able to offer to patients with narcolepsy.

Okay, thank you. If I could just squeeze in one just on the EREXON program, very interesting. Lots of investors have been asking about it. Just I know that you have talked about the ability or the desire to present additional preclinical data on the assets, perhaps provide a fuller picture of what you see in that opportunity. Any further comments on when we might see that data and what exactly you're hoping to show when you're able to present additional data on the EREXON program?

Thanks. Yeah. Hey, Greg. Good morning. Thank you. Yes, our investor today, he presented some data on our EREXON receptor agonist, where we emphasized the novel chemical structure, the highest potency compared to anything that is publicly available on EREXON receptor agonist, great selectivity with over 600 fold, which translates into more than 140 fold margin at EREXON one receptor, and also greater than 1,000 fold selectivity over other 150 targets of interest and also potential for QD dosing. The intent is to disclose additional data at the upcoming scientific meetings. We haven't decided when and where, but we will be providing that information soon.

Yeah, Greg, and I think the target for that is we're working with our partner, BioProje, and we're looking to next year at a scientific meeting to share sort of the full preclinical profile of that asset. Okay, thank you. Thank you. Our next question will come from Ami Fadia with Needham. Please go ahead.

Hi, good morning. Thanks for taking my question. Could you talk about EPS 100 and particularly what gets you excited in terms of differentiation on safety, not only versus Epidiolex and Cinteflav, but also versus Bexacastorin? As we've seen some of the development plans for Bexacastorin, can you talk about your clinical development strategy for this asset beyond LDS and DS and how you plan to approach the other DEE space? Thank you.

Good morning, Ami. Thank you for your question. We will try to unpack that a little bit. Yeah, we are excited with regards to the EPS 100, our advanced program. I'll turn to Kumar, just high level in terms of the strategy where we are and some of the profile we're seeing now compared to what's in the market and some of the other investigational products. Kumar? Yes,

sir. Thank you, Jeff. Good morning, Ami. I know you asked several questions there. So let me start by saying that the recent developments have validated our presence in developmental epileptic and psychopathy, high on need despite several tests approved in the space, significant limitations in terms of efficacy, safety, and tolerability. So that's EPX 100 comes in and has the ability to fill several gaps in this area. First and foremost, let me talk about safety. Clemson hydrochloride has been in market for over 20 years and no safety signals were observed. It was unset at the introduction of second generation of anti-israelin. Number two, the FDA asked us to develop this as new chemical energy. So in support of that, we conducted a full battery of non-clinical tests that include six months repeat dose study in batch, nine months repeat dose talk study in Beagle Dock, and also juvenile toxicity study. No safety signals were observed. We also had a phase one study in healthy volunteers, which was where we saw acceptable safety and tolerability and supported further development of this product. This study is being recruited in the US and also outside of the US and EU. So the protocol went through FDA and also EMARC. And none of these regulatory agencies asked us to do any additional monitoring. And lastly, we disclosed some preliminary safety data from the ongoing phase three study in Gruyere syndrome and also from the long-term extension study, where we showed it offers significant benefit when it comes to a couple of drugs like Epidiolex in terms of not having to monitor liver function tests routinely and Fintabula not having to monitor cardiac functions like echocardiography to look at cardiac valvular disease or pun arterial hypertension. In terms of how we differentiate specifically from the exocathrine perspective, EPX100 safety profile is better established while the exocathrine profile is still in early stages and evolving. Second, EPX100 is administered with DID versus exocathrine PID, which is very clinically meaningful, especially in patients with developmental encephalopathies because of the nature and the severity of the disorder. And the third thing is, this is important, EPX100 is further along in clinical development. We have been actively recruiting for patients in Gruyere syndrome study in the US and in Europe. And we are about to start a phase three study in Lenox-Gestalt syndrome. And as we mentioned during the call earlier, the regulatory agencies have recognized the promise of EPX100 and have given orphan drug designation and rare pediatric disease designation for both DS and LGS.

Thanks Kumar. Could you also address how you might approach other DEEs? Thank you.

Thank you, Ami. Yes. In the call earlier, I mentioned that we have data, preclinical data, to show the utility of EPX100 in other DEEs. For example, in syntax and finding protein one disorder where we saw good evidence for efficacy and similarly we saw efficacy in CDD as well. Right now, our focus is to complete the phase three study in Gruyere syndrome and focus on LGS. In terms of approaching the other DEEs, we are in the process of evaluating that opportunity because those are heterogeneous disorders in terms of the nature of the study. We have not determined how exactly to go forward, but we will be pursuing all developmental epileptic and cephalopathies EPX100.

Yeah, Ami. And I would just add, I think that these development strategies start more focused and then the opportunity to go broader in the DEEs, which I think is consistent with the program now, but the opportunity for broad DEEs, potential basket trial is absolutely there. But we are in line and late stage in the Dervailles syndrome study and on track to initiate phase three pivotal LGS study before year end.

Thank you.

Thank you. Thank you. Our next question comes from Charles Duncan with Cantor Fitzgerald. Please go ahead.

Hey, morning, Jeff and team. Congrats on the progress in the quarter. Make the observation, it's tough to know where to start because of all the pipeline products. But I will start with a commercial question and that is regarding the percentage of patients, the new patients, the over 250 added, what percent come from OxyBate versus non-OxyBate writers? And then I'm kind of curious why you didn't narrow the guide because it seems like the low end is quite attainable and your perspective on what would have modulated

that. Morning, Charles. Thanks for your question. Jeff, comments on you in terms of where the patients are coming from? Sure. No, great question, Charles. And so obviously we're extremely pleased with the growth we saw in the third quarter. We added incrementally, approximately 250 average patients from what we reported in the second quarter. And Charles, we're seeing patient growth from both segments of healthcare professionals. It's probably about maybe 60% of those new patients are being added in from the OxyBate REMS-enrolled healthcare professionals. About 40% are coming from the non-OxyBate. And that's a lot of function in terms of there's more patients in the OxyBate REMS-enrolled healthcare professionals group. They're larger sleep specialists. They tend to have larger patient practices. We continue to see growth in the depth of prescribing, meaning most of these physicians have experience with wake-ups. They're finding a second, a fifth, a tenth, a twentieth patient in this area. But we're really excited that we continue to see new patients coming out of the non-OxyBate REMS-enrolled healthcare professional audience. We know that we have an insulated group that we continue to tap into even with all the OxyBate churn. And so we're extremely pleased. We see tremendous growth opportunities on the horizon, 80,000 diagnosed patients. We're going to continue to tap into that audience moving forward. Yeah, Charles. And I would just add, I think the pattern of broad clinical utility for wake-ups in patients with narcolepsy continues to hold true with regards to the HCP universe that we're calling on. Sundeep, comments on the position on guidance? Sure. I mean, look, as I mentioned on the call, we continue to expect -over-quarter growth going into Q4. What I'd say, our range even right from the start was relatively narrow, right? 720 million in sales, which is really 2% sort of overall range. So we feel good about the range. We continue to see good momentum, and we'll provide an update, obviously, once the year is close on where we end up on there. We feel very good about the range right now, and we're comfortable. Great.

Thanks, Charles. And if I may add, may I ask a question of Kumar with regard to the ongoing Tervay study? Phase 3 with 100. I'm really quite intrigued with the patient population. I mean, 26 data is a little bit remote. So how is enrollment going? Are you able to enroll patients that are on, you know, Epidiolex and mTOR inhibitors? And can you characterize a seizure burden and then persistence into the OLE? Can you provide any additional color on how that trial is going? Thanks.

Hey, good morning, Charles. I mean, the trial is recruiting as per projection. We are recruiting patients actively in the U.S., Canada, and Europe. And in terms of the study design and the patient population, Charles, it's pretty standard study design, pretty standard inclusion-exclusion criteria compared to any other Tervay syndrome studies in terms of titration, the duration of the study, the inclusion-exclusion criteria, the number of seizure medicines on an average. These patients, as you know, Charles, are in need of good medicines, and therefore, on average, they tend to be anywhere between three to six antiseizure medications. And that's pretty much what we are seeing in our clinical trial. And we disclose some of the safety data, very promising and very supportive, and I'm tolerating the profile as well. One of the things that we did not mention earlier is actually the impact on appetite as well. As you know, many of the drugs that are out there have appetite, suppressant effects. These are pretty challenging, given this patient population already have difficulties with feeding and have weight loss. What we saw with EPS-100 is it did not suppress appetite, and there were no other safety or tolerability signals. So overall, we are very pleased with how the recruitment is going. The target is 2026 top line. Obviously, our goal is to recruit the study as soon as possible and try to bring this medication to the patients as soon as possible.

Very good. Thank you.

Thank you. Our next question will come from David Ancelam with Piper Sandler. Please go ahead.

Hey, thanks. So first question is on the payer landscape and how you're thinking about that as we move through 2025, and particularly how you're thinking about net realized price in 2025 versus where it is now. Just help us better understand how you're thinking about the landscape, particularly with more generics of sodium oxyvate set to enter the market. Set to enter the market in the not too distant future. So that's number one. And then number two, just wanted to ask a clarification question on the Ptolecin HD and regarding dosing. I think at the R&D day, you said that you could safely dose up to five times higher than the highest dose of Wacix. I just want to make sure that I have that correct, and I think earlier in the call, you talked about dosing that's 2x higher. So just wanted to get a better sense of where you think you could realistically dose Ptolecin HD relative to the legacy formulation.

Thanks. Sure. Jeff, do you want to respond to the first question? Sure. So David, with respect to the payer landscape and how we're thinking about 2025, a lot of the quote contracts have already started to be negotiated for next year. And we see next year's landscape to be very similar to what we see right now for Wacix. There's not a lot of incremental contracting that's necessary. Again, we have a very unique position as sort of the lowest branded product relative to the oxybates. So we're less expensive on a WACC cost than the branded and generic oxybates. And I think that position has afforded us an opportunity to not have to contract. So we see a very favorable landscape moving forward in 2025. With respect to generic oxybates coming, we don't anticipate any new generic oxybates in the market in 2025. It's likely in 2026 that there may be additional opportunities in there. But I think what we've seen and heard from the payers currently is, given the fact that Wacix is the only non-scheduled treatment option for both EDS and cataplexy, payers are finding a place on their formularies for that product. There are no plans that require Wacix to be stepped through an oxybate, either branded or generic. And based upon our negotiations and discussions with payers, we believe that that position is going to maintain moving forward, give us great opportunity for patients to have access to the product and a lot of confidence for us to continue to grow the brand. And David, in terms of just to clarify, in the Ptolecin HD, what we shared at Investor Day with regards to, we did a small study in terms of with Wacix and dosed up to five times, you know, the current label dose and established, excuse me, the safety margins for the development program for Ptolecin HD. The target in the development program is to dose up two times, you know, the maximum labeled dose of Wacix in the Ptolecin HD program. But safety margins have been established up to 5x of the current maximum

dose. Yeah, and just to add to what Jeff mentioned, up to two times the highest labeled dose of Wacix, David, with the optimized formulation, which means that the exposure will be a lot higher, milligram to milligram compared to Wacix. And not only that, we also have, were able to accomplish some other things with the optimized formulation, like decreasing inter-individual disability as well, which have meaningful clinical impact in patients.

All right, that's all for today.

Thank you. Thank you. Our next question will come from Danielle Brill with Raymond James. Please go ahead.

Thank you. Good morning. Thanks for the question. I guess, Sandeep, your guidance for 7,000 patients on drugs by year-end implies a sequential decline in that patient ed. Is there any particular reason why we might be expecting a flight dip next quarter? And then I just have a clarification on the strategy with VEEs. Is there any reason to leave this as separate indications from LGS, or do you feel a basket study might be better suited for LaCaster and versus Climidol? I appreciate the clarity there. Thank you.

Yeah. Hi, Danielle. Thanks for the question. I think our overall thought around there was, we said approximately 7,000. We're not exactly, got into exactly 7,000. So I think, you know, what we're seeing is good underlying demand, you know, continued growth quarter over quarter. So we don't see any reason why there would be a significant change in terms of momentum going into the fourth quarter. So that's maybe Jeff Dirks. Is there anything else you want to add? No, I would reiterate exactly what Sandeep said. You know, guidance is an approximation. We've had very strong, durable growth, you know, double-digit growth. It's been, you know, been very consistent. And so we have a lot of confidence. But yes, it's an approximation. And again, the average number of patients were around to the nearest 50. So Danielle, I would anticipate Q4 to look, you know, similar to what we've sort of seen in momentum in Q2 and Q3. Sure.

Yes. In terms of, Danielle, in terms of your other question regarding the basket study, look, we know that the regulatory agencies open for a basket study approach. We are pursuing two programs, as we mentioned, with EPX100, one in DS and one in LGS. We are taking a measured approach in that, look, LGS is already a heterogeneous disorder. So we want to look at that. But we are definitely exploring the opportunity of a basket study for the rest of the BDE. And based on, depending on the experience that we will have with EPX100, that will be done in the clinical development plans for EPX200. But we are also excited, very excited about EPX200 liquid formulation of locaserin. It gives the mechanism of action, the preclinical evidence for efficacy, and also the clinical evidence for efficacy that is published widely in literature in an article by Khalid and Divinski et al. in 2018 in Neurology.

Thank you. Thank you so much.

Thank you. Our next question will come from Ash Verma with UBS. Please go ahead.

Great. Thanks for doing my question. So I have to, just for Zyzo in the Recollect study, so you have 80% of patients which have this complete methylation. I want to understand why you're studying the non-complete methylation patients as well. When you looked at the data previously, I think the complete methylation patients are the ones that are likely to show benefit. And your primary endpoint is also on the complete methylation. Do you have any understanding from the FDA that you could get a label irrespective of the methylation status if the study is positive? And just quickly on the corner, so is there any inventory build here for the case? So the average patient number added by 4% increase, 4% sequentially, but the net sales up 8%.

Thanks. Yeah, good morning, Ash. Thanks for your question. Kumar, do you want to ask a question on CY002?

Yeah, sure. Hey, good morning, Ash. Yeah, a great question, by the way. So you are right, Ash. The primary target population and the primary endpoint is on patients with complete methylation. There's an on the number of partially methylated patients as well, and this came about during our discussion with the FDA. If we do see support data in partially methylated patients that's consistent with the data that we see in complete methylation patients, that does leave us an opportunity to discuss with the regulatory agency in terms of getting a broader label. But for now, the study primary target population and the primary endpoint is complete methylation patients. Sandhya? Yeah, just a

question in terms of trade inventory. I mean, we see normal fluctuations of trade inventory every quarter. Nothing significant that I would mention, at least for that was had an impact this quarter. Typically what you do see in the second half of the year, you see some improvement in growths in that. You know, the first quarter, as you know, as you go into the year, growths in that tends to be higher, starts coming down in the second quarter, and the second half of the year tends to be. So what you're probably seeing a little bit of improvement in growths in that as well. So hopefully that provides some context.

Great, thanks. Thank you,

our next question will come from Corinne Johnson with Goldman Sachs. Please go ahead.

Good morning, guys. Maybe a couple from us. Could you just talk to us about how you're planning to measure fatigue in the clinical study of patellus and HDN narcolepsy and what would be clinically meaningful in terms of benefit on the patient population? And maybe just provide some context around how common fatigue is within a narcolepsy population. That would be helpful.

Thanks. Good morning, Corinne. Thanks for your question. Kumar, the plan for fatigue and

switch to me.

Yeah,

thank you, Jeff. Hey, good morning, Corinne. Thanks for the question. Yeah, fatigue is a symptom that is more prevalent than one thing in patients with narcolepsy. The literature has indicated that about 60 to 70 percent of patients with narcolepsy have fatigue, and we are doing a longitudinal prevalence and impact of fatigue in patients with narcolepsy. That study is underway, and at least the preliminary data shows that prevalence of fatigue is very similar. About two-thirds of the patients with narcolepsy have significant fatigue. In terms of how do we measure, this is an indication for which there are no approved treatments. So we had an extensive leading-edge work to look at all the instruments that are out there to measure fatigue, and we are devising an instrument that specifically measures fatigue in patients with narcolepsy. A lot of work that is already done, and we will be discussing with the regulatory agencies in terms of the appropriateness of using that instrument specifically to measure fatigue, specifically in patients with narcolepsy, because that is what the regulatory agencies expect. Thank you.

Okay, awesome. And then in terms of the patents around the Patelus and HD, could you just help expand on the kind of nature and number of those patents you have into the early 40s?

Sure, Corinne. I think the patents around HD are around unique formulation with regards to that, along with the -to-resistant coding and the improvement in the overall PK profile. So the clinical data will sort of support that with regards to what that PK profile will demonstrate, and that is the basis of the HD patents out to the 2044.

Thank you.

Thank you. Our next question will come from Jason Gerberry with Bank of America. Please go ahead. Hey, guys. Good morning. Thanks for taking my questions. Two for me. First is on EPX100. Wondering, have you looked at EPX100 relative to longboard spexa in the zebrafish model, and is that something that's sensitive enough to tease out potential areas of differentiation or more of just a measure of more of a -no-go viability of the molecule in that disease state? And then as we get into next year, just curious with respect to WACAC's IP litigation, there's a Markman hearing, and I'm just curious if you can kind of help frame what are some of the key kind of outcomes we'd be looking for with respect to the crystal-informed patent, how important is it to get a broad paint construction to sort of box out generics and secure an infringement ruling ultimately when the case goes to trial in 26? Thanks.

I think the first question. Sure. Hey, good morning, Jason. Look, EPX100 was extensively studied in the zebrafish model, and it showed great efficacy. Similarly, EPX200 was also studied in this model, which showed great efficacy, which was in turn confirmed by a clinical experience. In terms of pexacarcin, obviously it's not our compound, and we don't have access to the compound, but within the zebrafish model, there were some analogs that were studied that had some pure 5-ST, 2-C agonistic properties, and that data is published in the literature by Griffin et al. in brain communication.

Yeah, and I think, Jason, in terms of your second question about the IP litigation, I think first of all, we can't really comment on ongoing litigation, but I think the Markman trial that's scheduled for next March, basically what that does is it sets up the claims construction. I think it sets up the overall claims construction in the case and then informs the on the plan for the trial in 2026. So I think that is the purpose of that in terms of the next stage of that process in the IP litigation. Yeah, and I think that with regards to, as we said before, we're confident in the strength of the IP, the litigate of the patents. There were two potential challenges to the USPTO that were denied and those decisions were final. So our position is strength in the overall IP and out to 2030. Thank you. Thank you. Our last question will come from Francois Brisbois with Oppenheimer. Please go ahead.

Hi, thanks for the question. Can you help just elaborate on the percentage of patients that are both on OxyBate and wake-hates and has that changed with time? I'm just trying to gauge also the reimbursement response. Has that been the same? Is it more difficult? You just mentioned there's so much growth that comes from the REMS doctors. So I'm just wondering if reimbursement has changed and do you foresee any changes once, if erections come in the market in terms of reimbursing all these products in the pharmacy market? Thank you.

Yeah, good morning, Frank. Thanks for your question. Thanks for hanging in there. Jeff? Sure. Frank, the percentage of patients that are on both wake-hates and on OxyBate has been relatively consistent. It's been like low double digits like in the teens, probably for about the last couple of years. And the reimbursement landscape has been modestly consistent with where we are. Obviously with the introduction of more generic OxyBates, it's going to be, quote, easier to potentially get concomitant use. Certain plans are obviously looking at this category and disease area. But again, remembering this is a rare orphan space, there's not a lot of patients. It's not very high on a managed care plan. For a lot of them, it's more costly to put in additional administrative steps given the limited number of patients. But obviously moving forward, there's likely going to be a number of potential branded products that could be introduced later in the decade. Obviously time will tell how managed care will look at this. But overall, rare orphan categories tend to not be as highly managed as other categories given there's a limited number of patients. It's not a huge budget area. I think our goal is to continue to provide meaningful enhancements. Obviously the GR and the HD program are really going to be able to hopefully provide some enhanced efficacy. Maybe that can end up helping to potentially reduce the amount of controlled substances patients take, reduce the amount of stimulants, potentially oxidate, which obviously would be extremely favorable not only for the patients but also the payers. Thank you. At this time, I would like to turn the call back over to Jeff Dano for any additional or closing remarks. Thanks, operator. Thanks, everyone, for joining our call today. We were excited to hear from you. We hope to share with you the progress we are making in our robust late-stage pipeline and look forward to providing future updates. Thanks and have a great rest of your day. This does conclude today's Harmony Biosciences Third Quarter 2024 Financial Results Conference call. You may now disconnect your line and have...