Good morning, everyone, and welcome to the 43rd Annual JP Morgan Healthcare Conference. My name is Sherry Yang, an Associate in the Healthcare Investment Banking Group, and it's my pleasure to be introducing Harmony Biosciences today. We have Jeff Dayno, CEO, who's going to be on stage with me for the presentation, as well as Jeff Dierks, the CCO, Sandip Kapadia, the CFO, as well as Kumar Budur, the Chief Medical and Scientific Officer in the audience, who will join us for the Q&A. Now I'm going to hand it over to Jeff.
Thank you, Sherry. Good morning, everyone, and on behalf of the Harmony team, I want to thank JP Morgan for the invitation to present again at this year's meeting. Really excited to be here this morning to share our story with you. There's a lot going on in Harmony Biosciences, and we feel that this year we're in the best position we've ever been going into 2025. So, issue with the slides?
One moment, Sherry. Here we go.
Okay, so I think going into year eight, okay. Yeah, issue with the slide here. Okay.
That's the sticker.
All right. So going into year eight, Harmony has emerged as an innovative, patient-focused, profitable, self-funding biotech company. But what we're most excited about is our catalyst-rich late-stage pipeline. So this year, we are set up for a key catalyst each and every quarter in 2025. And by the end of this year, we'll have up to six clinical programs in phase III development. So this sets up the opportunity for durable long-term value creation, built off of our foundational franchise of WAKIX and narcolepsy, well on its way to a billion-dollar-plus opportunity. And our pipeline is poised to deliver over $3 billion in revenue going forward. This pipeline, it's a multi-franchise pipeline, and each of the franchises has potential peak sales opportunities of $1 billion-$2 billion each. So this is our pipeline, our innovative late-stage pipeline. So take a look at this pipeline.
We believe we've built one of the strongest pipelines in the industry for patients living with rare neurological diseases. We have eight assets across 13 development programs, and as I mentioned, up to six programs in phase III pivotal trials by the end of this year. In addition, Harmony has demonstrated that we can deliver significant revenue, with WAKIX being one of the most successful orphan-rare drug launches in the industry and now demonstrating really sustained and durable revenue over the first five years in the market. As we announced earlier this week, our preliminary net revenue for 2024 was $714 million. With 80,000 patients diagnosed with narcolepsy in the U.S., there's significant growth opportunity ahead. I'm proud of what the team has delivered thus far.
With this outlook for continued growth, we're guiding this year for 2025 net revenue of $820 million-$860 million. And as you can see with this, WAKIX is well on its way to a billion-dollar-plus opportunity in narcolepsy alone. But that's only part of the story. And what we're most excited about is our late-stage, robust, catalyst-rich pipeline with a value-creating catalyst each and every quarter throughout 2025. And with that, I think the opportunity to create these important milestones, and the time is now. These are coming now in 2025 as the start to durable long-term value creation. So let me walk you through each of these key catalysts. In the first quarter of this year, catalyst for idiopathic hypersomnia and the FDA decision on the IH sNDA final acceptance in Q1.
If we are successful, the potential to launch this indication later this year in 2025. This is based on not just the totality of the clinical data, but the robustness of the data, along with real-world evidence, which is important in a rare disease. We've compiled this data and built this submission to really highlight the overall benefit-risk proposition for pitolisant in IH. In addition, the important unmet medical need based on only one approved product in the market for IH, a Schedule III restricted access REMS product that basically works as a CNS depressant, puts patients to sleep at night in a condition where patients are long sleepers, as opposed to the profile for pitolisant, a wake-promoting agent you take once daily in the morning to generate wakefulness, and also very helpful for the important symptom of sleep inertia in patients living with IH.
The unmet medical need reflected in the voice of the patient report that came out of an externally led patient-focused drug development meeting in which the FDA participated and was part of that discussion in that forum. As for the robustness of the data, we shared this at our investor day last October. You see that in the open-label dose optimization phase from our phase III pivotal INTUNE study, patients had over a nine-point improvement on the Epworth Sleepiness Scale score, bringing them into normal levels of wakefulness that you see on the left of this slide. After the randomized withdrawal phase, patients experienced a sustained and durable response out beyond one year in also maintaining normal levels of wakefulness. There's another way to look at these data, I think, that shows it in a more compelling way.
The percentage of patients on pitolisant within normal levels of wakefulness. So what you see on the left here, all patients came into the trial with moderate to severe levels of wakefulness, over 12 on the ESS scale. And at the end of the open-label dose optimization phase, almost 80% of patients achieved normal levels of wakefulness. That is a very robust response. And in a similar fashion, after the brief four-week randomized withdrawal phase, 70%-75% of the patients in the long-term extension maintained normal levels of wakefulness out beyond one year. What this data set shows is one of the most robust clinical data generated in patients living with idiopathic hypersomnia, along with the overall benefit-risk profile.
Again, pitolisant, WAKIX, the first and only non-scheduled product approved for patients living with narcolepsy, and IH as another adjacent central disorder of hypersomnolence provides a compelling product profile in patients living with IH. So again, we submitted the sNDA in the fourth quarter of last year. We look forward to engaging with FDA on this opportunity. Moving to second quarter and working with our partner Bioprojet on a potential best-in-class orexin 2 receptor agonist. We'll be presenting a full preclinical data package on safety and efficacy along with preclinical data at the upcoming annual sleep meeting in June. I think, as you're all aware, the orexin 2 agonist class has generated a lot of excitement as a next novel target in patients living with narcolepsy and other central disorders of hypersomnolence.
Our interest, our excitement in this compound is based on the unique structure and chemical scaffolding that is differentiated from the other known orexin 2 agonists that are in the clinic. And this unique structure can confer potential clinical benefits, the most important being in this class of compounds, potency. And as we shared at our investor day, you see that BP1.15205, that's a mouthful, is the most potent orexin 2 agonist based on publicly available information. And EC50 at the human orexin 2 receptor of 1/100th of a nanomolar, an order of magnitude more potent than the next most potent orexin 2 agonist that's being studied, along with excellent selectivity and potential for once-daily dosing based on the preclinical PK data. So what this means is a lot of discussion about potency, selectivity, but you can't look at selectivity in isolation.
The potency and the potential for very low dosing, it's really the combination of both that for our compound could translate into very low doses in the clinic to achieve efficacy, minimize safety and tolerability issues, and allow for flexibility across the range of central disorders of hypersomnolence, type 1 narcolepsy and T1 and T2, as well as idiopathic hypersomnia. So similar to our commercial product of WAKIX for narcolepsy, which has demonstrated broad clinical utility, this too has the opportunity for broad utility across central disorders of hypersomnolence and the potential to be a best-in-class asset. Moving to our third quarter catalyst, and this is one that we are very excited about, ZYN002 for the treatment of Fragile X syndrome and top-line data readout from the pivotal phase III RECONNECT trial. I want to walk you through this opportunity.
ZYN002, another example of an innovative product in our pipeline, a pharmaceutically manufactured purely synthetic cannabidiol, devoid of THC, with a patent-protected permeation-enhanced gel transdermal delivery that achieves sustained blood levels of cannabidiol in the blood and then to get into the brain to the target site of action to normalize the endocannabinoid system, which is what is disrupted in patients living with Fragile X syndrome. Our lead program is in Fragile X, but with positive data, right behind it is another opportunity for a following indication in a related disorder called 22q deletion syndrome, another neurobehavioral disorder with similar symptom complex neurobehavioral symptoms as Fragile X. These are sizable market opportunities for a rare disease, about 80,000 patients in the U.S. living with Fragile X and also similar for 22q deletion syndrome. In addition, we have worldwide rights to ZYN002, the pivotal phase III trial that we're conducting.
We could submit in terms of with EMA and submission there and then partner this out with global rights. But most importantly, if successful, if positive, we will be on the path to the first approved treatment for patients living with Fragile X syndrome ever. I know this has been a difficult area from a clinical development perspective, but we have high conviction in the data based on what's been generated in this program. Just some quick highlights. In the phase II CONNECT trial, based on a pre-specified ad hoc analysis of a subgroup of patients with what's called complete methylation of the FMR1 gene and then no production of FMR1 protein, which destabilizes the endocannabinoid system, patients with more severe symptoms compared to those with partial methylation. In this analysis, 40% of patients experienced a clinically meaningful improvement in social avoidant behavior.
That was the primary outcome of the study. In addition, you see here the key secondary outcomes also with clinically meaningful and statistically significant results on other behavioral symptomatology. What we also saw, and, actually, ZYN002 has been in the clinic for a number of years now, that patients experienced a sustained improvement in this subgroup with complete methylation, and what you see in the CONNECT study, the 12-week double-blind phase, patients continued to improve, and actually, when they crossed over into the open-label extension, those that were on placebo in sort of the teal tracing and then to the dotted line in purple, then saw significant improvement, and both of those arms, those who started on ZYN002 and those on placebo, continued to improve beyond the 12-week period out to 16 weeks and then experienced sustained improvement out beyond two years.
But the learnings from this with regards to continued improvement out through four months is one of the features, the learnings from the phase II CONNECT trial that was designed into the pivotal phase III RECONNECT trial, and these learnings basically lead to our conviction in high probability of success, so the primary endpoint in the subgroup of patients with complete methylation of the FMR1 gene, more severe symptom burden, and the positive outcome we saw in that subgroup to replicate the phase II CONNECT data. We extended the treatment period out to 16 weeks. We saw the need for higher doses in individuals over 50 kilos and designed that into the phase III trial.
And then once we brought this asset into Harmony after our acquisition of Zynerba Pharmaceuticals, we put all our resources in terms of the conduct and moving the trial forward and introduced additional sites and virtual clinic visits to make it more patient and family friendly. So we're very excited about this opportunity. We see high conviction in the probability of success and, importantly, addressing a major unmet medical need in patients and their families living with Fragile X syndrome. Moving to Q4 and our next gen pitolisant programs and pitolisant high dose or HD for narcolepsy, and we'll be initiating our pivotal phase III trial with pitolisant HD in the fourth quarter. So the next-gen pitolisant programs, why are we doing this? What does it represent?
So simply, we're taking a very good drug that's been successful in the market, and we're making it even better in the context of patient-focused drug development, addressing ongoing unmet medical needs in this patient population living with narcolepsy, the most significant of which is the need for greater efficacy for both excessive daytime sleepiness as well as cataplexy. In the pitolisant development program, when we looked at the data, we saw evidence for dose response and exposure response and the opportunity to drive greater efficacy. In the initial development program almost a decade ago, the full dose range was not interrogated. And now, with provisional patents filed until 2044 and a much longer runway, we had the opportunity to explore that and drive greater efficacy in the pitolisant HD program.
In addition, about 60% of patients living with narcolepsy also experience fatigue, which is a very different type of symptom than sleepiness, and we've been working sort of leading-edge work to develop a fit-for-purpose endpoint, and we'll be assessing narcolepsy-related fatigue and leading to the potential for another symptom indication in the pitolisant HD program, and again, long runway patents down to 2044 to extend the pitolisant franchise out into the 2040s, so this would set up the opportunity for durable long-term revenue generation for the next-gen program, and importantly, we haven't been waiting around out ahead of starting these programs out ahead of LOE for WAKIX that with the pediatric exclusivity and additional six months of exclusivity that we are on track for would take the WAKIX LOE to the third quarter of 2030.
But before then, pitolisant GR or gastro-resistant, a gastro-resistant formulation that addresses an important unmet medical need, about 80%-90% of patients living with narcolepsy have GI symptoms. And based on a kind of mechanistic rationale, orexin controls the vagus nerve. The vagus nerve controls gut motility. The disruption in that system results in patients with narcolepsy having sort of comorbidity with nausea, dyspepsia, GI upset, and predisposed to those symptoms. So a gastro-resistant formulation could be an improved version of delivering pitolisant in these patients. Target PDUFA in 2026, and that is a quick-to-market aspect of the life cycle management program, followed by pitolisant high dose or HD that I just described. And this has the opportunity not only to expand the base of patients on pitolisant before WAKIX LOE, but to then extend the entire pitolisant franchise out beyond 2030 and into the 2040s.
In addition, with this long runway, we have the opportunity to develop and pursue other indications, and the development plan includes pitolisant HD for idiopathic hypersomnia, as well as myotonic dystrophy, type 1 myotonic dystrophy, and for those not as familiar with the story, we did a phase II signal detection study with pitolisant in DM1, and we announced the top-line results in December of 2023, and we saw positive signals on both EDS and fatigue, so coming back to that fatigue endpoint, especially with a higher dose version of pitolisant, we have an opportunity to pursue a pivotal trial in patients also with DM1. This adds up to significant potential for long-term revenue in the next-gen pitolisant programs.
A brief word on one of our other exciting franchises in our pipeline, the rare epilepsy space, and really excited about based on our acquisition of Epygenix Therapeutics, EPX-100, clemizole hydrochloride, and very briefly, the most advanced serotonin agonist development program in the clinic with a proven mechanism of action based on the validated and highly predictable zebrafish model that demonstrated efficacy with clemizole hydrochloride and, importantly, proven safety. It's an interesting story, another sort of innovation. An old drug repurposed and now being developed as an NCE. Clemizole hydrochloride was a first-generation antihistamine on the market in the 1960s and 1970s. So long market experience with post-marketing data that didn't show any significant safety signals while in the market for over 20 years. That's important when you look at the other treatments in the market for the rare epilepsies, the developmental epileptic encephalopathies.
No need for special laboratory monitoring such as LFTs that's required with Epidiolex. No need for cardiac monitoring like echocardiograms, which is required for Fintepla and the Fintepla REMS. The potential for efficacy similar or better than what's currently in the market and long-term safety data showing a favorable safety profile. We're very excited about this program. As I mentioned, we're advanced in phase III enrolling in the U.S. and EU for patients with Dravet syndrome. Then late last year, we initiated a pivotal phase III registrational study in patients with Lennox-Gastaut syndrome. Both of these programs are on track for top-line data readout in 2026. That takes me to 2026. After an exciting catalyst-rich 2025, there's more coming in 2026, including ZYN002 for Fragile X, PDUFA decision, pitolisant GR, PDUFA decision.
I mentioned a phase III top-line data readout for EPX in both Dravet and Lennox-Gastaut. We have an ongoing pivotal phase III trial with pitolisant in patients with Prader-Willi syndrome. That goes back to the beginning of when Harmony was established in 2017 and when the patient community approached us with about 12 children on pitolisant through FDA personal importation after it was approved in Europe in 2016. Our commitment to that patient population and now in a pivotal phase III for the symptom not of hyperphagia, but of excessive daytime sleepiness and the downstream behavioral symptoms in patients with Prader-Willi. And then we'll be reading out some of the initial PK data from the orexin 2 agonist program. And then we look into 2027 and 2028. More value-creating catalysts coming, top-line data readouts, PDUFA decisions.
This pipeline is poised to deliver one or more new product or indication launches each year over the next four years. In closing, I'm really proud of the team at Harmony Biosciences and what we've been building. I think starting with a proven successful commercial franchise in WAKIX and narcolepsy, well on its way to a billion-dollar opportunity and being driven by a unique commercial model. What's important about that is single patient hub, closed specialty pharmacy distribution system. It's something we could leverage when we go to launch new products and new indications in a very cost-effective and efficient manner. We also have a very strategic life cycle management program, as I shared with you, to extend the pitolisant franchise, not just beyond 2030, but into the 2040s.
This year, we were set up for a key catalyst each and every quarter throughout the year and value creation based on the readouts of those catalysts and a pipeline poised to deliver over $3 billion in revenue going forward. So what I want you to take away from this, where we are in Harmony right now, is the time is now. The time is now in terms of value-creating catalysts coming in 2025, more to follow 2026, 2027, 2028. And the time is now to take a very close look at what we've been building. And at Harmony, every day we live that when we deliver on our promise to patients by bringing innovative treatments to patients living with unmet medical needs, we will generate long-term significant value creation for our shareholders. Thank you very much for your attention. Thank you. Now I'll call up members of the management team.
Thank you for sharing about your pipeline, your near-term catalysts. But let's kick off today's Q&A with your commercial business. You pre-announced on Monday morning that there are strong 2024 WAKIX revenue and bracketed revenue consensus estimates for 2025 WAKIX guidance. So can you describe what are the commercial trends and market dynamics that are driving this continued growth at year six of launch?
Yeah. So as I shared, I think that we're very excited about the ongoing growth opportunity for WAKIX and narcolepsy. I think I'll turn Jeff Dierks, our Chief Commercial Officer, to talk about some of the market dynamics.
Sure. Yeah. So on Monday, we did release guidance for 2025 between $820 million and $860 million. Strong growth heading into year six. And I think one of the things that we've seen in this marketplace, WAKIX is the only non-scheduled treatment option.
And I think that's a very important attribute not only to patients, but also physicians and payers. There's a very concentrated but broad prescriber base that we've been able to tap into. There's about 9,000 healthcare professionals that see and treat and manage these patients. Only about 4,000 of them are enrolled in the oxybate REMS program. So the sodium oxybates as generics come to market as other branded. There's a finite number of doctors that actually look to prescribe those options. With WAKIX being a non-scheduled treatment option, we can access the full prescriber base. We can access the full diagnosed patient base. And we've been able to see growth not only in the REMS-enrolled healthcare professionals, but also those on the outside that are not enrolled in the REMS program.
Thank you. And as for your transition from a very successful commercial company to one with a broad and innovative pipeline developed over the last year and a half, what are some innovative aspects of your pipeline that you're particularly excited about?
So innovation in our pipeline, it's a great topic. I think it begins with the founding of the company. So pitolisant that we licensed from our partner, Bioprojet, which was a first-in-class molecule with a novel mechanism of action, the first new mechanism of action in the narcolepsy market for over a decade. The principal scientist at Bioprojet discovered the histamine 3 receptor that pitolisant works at and optimized the design of the molecule, what became WAKIX. And as we've discussed, a very successful product in the market with a lot of opportunity going forward. If we then look at the other end of our sleep-wake pipeline, the orexin 2 agonist.
And again, with Bioprojet, identifying this from Teijin Pharma, who actually worked with Professor Masashi Yanagisawa, who was the individual who discovered the orexin system in the brain. So kind of interesting kind of parallels there, but very innovative. And again, with the unique chemical structure and scaffolding, another aspect that we're excited about innovation. And then I also just want to come back to the innovation in ZYN002 that I highlighted with my comments with regards to the purely synthetic cannabidiol, devoid of THC, potentially be non-scheduled, and a very unique delivery system that fits for patients living with Fragile X. Kumar, any additional thoughts?
No, I mean, with ZYN002, really the opportunity here is, oh, by the way, good day, everyone. Good to see all of you. And thank you for your interest in Harmony.
It's really a very unique opportunity to bring the very first approved treatment for any symptoms in Fragile X syndrome. I mean, that's the real opportunity here, and we are very confident about the probability of success in this program based on our learnings from the CONNECT study that Jeff just went through, and of course, speaking of innovation, Jeff, you want to talk about EPX-100?
Yeah. I think EPX-100 is another example I highlighted kind of in the context of taking an older drug and then developing it as an NCE with a very sort of dedicated kind of mechanism of action that's been proven and established and having the most advanced program there, so across the pipeline, we look for innovative products that are very strategic.
The way that we build out the pipeline, very thoughtful and strategic, again, with three orphan rare CNS franchises and each with potential peak sales opportunities of $1 billion-$2 billion and the potential to help thousands of additional patients living with rare neurological diseases and unmet medical needs.
Thank you. You have highlighted four significant catalysts for the year 2025. C an you walk us through each of those and remind investors why they need to look at the story now so they don't miss them?
As I highlighted, as I went through the presentation, I mean, each one, the opportunity so in Q1, so the opportunity of pitolisant in idiopathic hypersomnia, significant opportunity, again, unmet medical need that I highlighted, and purely accretive to the WAKIX opportunity in narcolepsy. Jeff, maybe a few words on that.
Sure. So idiopathic hypersomnia, it's about 40,000 diagnosed patients. So it's about half the size of narcolepsy. But it's thought that as many as 80,000 individuals are living with IH. So from a population perspective, it could be as large as the opportunity in narcolepsy. Only one FDA-approved treatment option right now, which is [triple attestation], restricted REMS product derivative of GHB. And we believe that right now, there's a lot of interest in the community, but due to the cost of WAKIX, payers are not covering pitolisant for IH. So if successful with the regulatory approval, it unlocks payer coverage and really drives incremental value and is purely an accretive opportunity for the organization.
Yeah. And I think moving to the second quarter and presenting the preclinical safety and efficacy data on our orexin 2 agonist at the sleep meeting in June, I think that it's sort of the proof points.
I think we're excited about what we saw during our diligence and what we saw in the preclinical data and the potential best-in-class profile, safety, efficacy, unique chemical structure, the PK data. So I think that will really provide the proof points for the market to kind of better understand what we're working with there. In the third quarter, I highlighted the very exciting value-creating catalyst of ZYN002 and Fragile X syndrome. And in the fourth quarter, it's really advancing the next-gen program and really getting that started in the pivotal phase III trial for patients living with narcolepsy. And then after that, the long runway and the opportunity to pursue pitolisant HD in IH, as well as myotonic dystrophy.
Thank you. And as you build up your neuro rare disease pipeline over the next year and a half, what is your capital allocation plans for 2025? And are you still deciding to move forward over with BD?
So let me just a few words, and I'll turn it over to Sandip. I think the short answer is we often say we're just getting started. We've built an organization with capacity to continue to grow. And the pipeline came together quickly. And I think we're excited about that. But with a very strong balance sheet that Sandip can sort of expand on, we have the opportunity to go further, go deeper in each of the three franchises that we currently have in our pipeline. Or if we see an interesting opportunity in an adjacent orphan rare neuro indication with good deal terms, that's something else that we would contemplate. And Sandip?
Yeah. Look, I mean, overall, we have over $500 million on the balance sheet based on the last third quarter and continue to be profitable, continue to generate positive cash flow. So really sufficient capital to continue to develop not everything that we've heard today, but also look for opportunities. As Jeff mentioned, over the last 18 months, we've developed a very late-stage pipeline, which we're very proud of, and they were done with very smart deals, very low upfronts with more success-driven milestones. So that's a model that we'll continue to pursue in terms of looking for opportunities that are out there. We have a dedicated business development team led by Andrew Serafin and his team over here. We're very active here. JP Morgan, as well as follow-up.
We see lots of opportunities in the space to continue to look for ways to continue to develop, grow the company. And again, we have plenty of with a nice growing top line. That's the guidance that we gave of $820 million-$860 million. As we go into this year with continued profitability, really gives us more and more capacity to continue to layer on assets and really build a truly unique biotech that's profitable, positive cash flow generating, as well as a deep late-stage pipeline.
Yeah. Let me just add too, yeah, so not to sort of Andrew Serafin, who's in the room with us today and his BD team, that many years of experience really adept at doing this and every day out there looking for these opportunities resulting in the pipeline that we've built. So another all funded off the balance sheet, self-funded, another important point.
Harmony is a unique profile with regards to the profitability and the successful commercial franchise, and then self-funding the build-out of the pipeline that we believe is one of the strongest in the industry is for patients living with rare neurological diseases.