Okay, let's get started. Welcome, everybody. For those who don't know me, I'm Mike DiFiore. I'm one of the senior biotech analysts at Evercore. With me right now, we have the management team of Harmony Biosciences. Gentlemen, welcome. Thank you so much for making the trip down here to sunny Miami to be with us. But before we delve into Q&A, we'd love to get from your purview a view of the business and key things to look out for in the next year.
Sure, sure. Mike, on behalf of the Harmony team, thanks for the invitation to be down here at the Evercore Conference, and I think, you know, in terms of Harmony Biosciences, and you know, eight years into the business now, and you know, if we look at sort of at a high level, you know, building off a strong, you know, foundational commercial business, you know, Wakix and narcolepsy on its way to a $1+ billion opportunity in narcolepsy alone. And then with that, the opportunity in terms of life cycle management with, you know, the next generation, you know, formulations, which we can talk more about. And, you know, one which is a quick-to-market strategy in pitolisant, you know, GR, our gastro-resistant formulation, and then a high dose or pitolisant HD formulation to really expand and extend the pitolisant franchise, you know, out to the mid-2040s.
You know, building off of that, you know, the rest of the pipeline that, you know, we've assembled with regards to additional assets and sleep-wake, you know, orexin-2 agonists, which we've recently gone into the clinic in terms of phase I PK/PD studies, you know, with that compound. And then also our epilepsy franchise and EPX-100, you know, in phase III for both Dravet syndrome and Lennox-Gastaut. And we'll actually be sharing some new efficacy data at the American Epilepsy Society meeting this coming Monday from the open-label portion of that. And, you know, I think all of this activity, you know, we're fortunate with regards to a unique, you know, company profile, you know, given the market backdrop, you know, we're profitable, sort of self-funding all this activity off the balance sheet.
I think, you know, have the opportunity to continue to sort of grow, you know, both the pipeline, you know, as well as the kind of, you know, commercial portfolio with regards to, you know, BD activity. I think, you know, kind of a high level view of, you know, where the company is and, you know, what is coming.
Excellent. Lots to dig in there. Let's just start with the Wakix franchise. Obviously, Harmony has built a strong Wakix business. You're clearly seeing strong underlying patient growth. But at the same time, you mentioned that normal ordering patterns and inventory timing can create some variability quarter to quarter. So as you look ahead, like, what gives you the best read on the true underlying demand trends for Wakix?
Yeah, so I think, you know, Adam Zaeske, our Chief Commercial Officer, can kind of speak to, you know, what's sort of driving the business, you know, continues to have strong underlying demand in a sizable market for an orphan rare condition, and, you know, kind of what is driving our growth.
Yeah. So pitolisant Wakix is a fantastic product, very steady, stable performance for six years now in the market, year over year, quarter over quarter. And the best indicator of demand is going to be continued patient increases. So, you know, for six years, quarter over quarter, you're generally seeing about a 100 - 400 increase in average patients in a quarter. In Q2, we saw an increase of 400. So at the top end of that range, we'd only actually seen that twice before. And the last time we saw that was early in 2022, about three years ago. So really pleased with that Q2 result. And then on the back of that, in Q3, we saw an increase of 500 patients in a quarter. Usually, the patient adds kind of go up and down.
So to see back to back six months, 900 patient adds really gives us confidence in the continued momentum and performance of this brand, which is why we increased guidance for the year from between $820 million- $860 million for the year to $845 million -$865 million.
Got it. Yeah. So Wakix has remained strong even as other narcolepsy drugs have gone generic because it's differentiated. It's not scheduled. It's well tolerated. Just looking ahead, as the landscape evolves and similar core clinical attributes eventually become available more broadly, how do you think about maintaining branded differentiation narcolepsy over time?
Yeah. So I'll start, and you can weigh in. So I think you kind of hit it up front. You know, the product profile for Wakix, so it truly is differentiated. We kind of talk to the broad clinical utility and how we approach, you know, the market opportunity. So the first and still only non-scheduled, you know, product approved for patients with narcolepsy, working through histamine, so a unique mechanism of action, histamine, the main, you know, wake-promoting neurotransmitter. So, you know, either as monotherapy or the majority of patients in a polypharmacy market, you know, kind of added on, because the biggest need in narcolepsy are patients, you know, greater efficacy, because about 75% of patients have residual symptoms.
So, I think that unique, you know, in terms of the overall benefit-risk proposition, you know, very safe and well tolerated with approved for both EDS and cataplexy, and first and only non-scheduled product, you know, gives that broad clinical utility. In terms of, you know, from there, if you want to provide any more.
Yeah. So I mean, the only non-scheduled treatment option that translates into a safety and tolerability profile that has broad clinical utility is applicable and can be added on to combinations of therapies for virtually any narcolepsy patient. That we don't see changing, regardless of what's coming into the market over the next several years. That differentiated profile, we believe, will remain very competitive. And then we're going to continue to build on that profile with life cycle management formulations, two of them specifically, the gastro-resistant coated and the HD, the high dose. So each of these will deliver for patients in terms of unmet need. The gastro-resistant coated version, pitolisant, this is a product that has obviously a gastro-resistant coating, but also allows patients to start at a therapeutic dose. So hopefully, you know, really getting to patient outcome faster. This is a faster market strategy through bioequivalence data.
PDUFA 1Q 2027 strategy is new patients that would have been prescribed Wakix, now prescribed pitolisant GR, and also previous patients that may have discontinued over time over the last six, seven years could also be recontacted because we secure consent. That’s an opportunity for GR as well. On the high dose, now you have the GR, no titration, but you also have up to two times the dose in an optimized formulation with unique indications around fatigue and IH, a new brand launch, differentiated product profile. The strategy there is new and previous patients, but now also transitioning existing patients that may be better, but not well.
Got it. Just want to dig into each of those formulations. One question each. First on the GR, clearly brings clinicians value, like no titration. But as we think about the market evolution and how similar attributes from other products become available at lower cost, how do you expect GR to stand apart, especially from a payer perspective?
Did you want me to take that?
Sure.
Yeah, great. So as I said before, I think the core differentiation of pitolisant will remain highly competitive regardless of new product entrance. When you think about the GR, we've tested this in, you know, speaking with healthcare providers as well as payers. It's an intuitive life cycle expansion, right? A new and improved formulation that offers benefits for patients. And payers see this as an opportunity to basically add onto the existing coverage. It'll be part of the existing label for pitolisant and essentially a line extension. For the HD, this is where you have the improved efficacy potential. And in this case, PDUFA in 2028. And again, healthcare providers here see clearly differentiated, clinically meaningfully differentiated. Payers see a product opportunity where really no step at its prior to LOE and even post LOE.
The only potential step may be through if a patient has never had any experience on Wakix, but that's actually a pretty small portion of the patient population by the time you get to launch.
Yeah. And it's interesting. One other comment. So when you refer to sort of products, you know, sort of lower price, you know, lower price point and the potential, you know, the generic entries for the oxybates. So, you know, to that comment, Wakix still has a unique position, you know, in the marketplace because, you know, it's the only non-scheduled product. So I think that, you know, with that, we call on 9,000 HCP. So in terms of the broad clinical utility, we call on 9,000 HCPs, which is the full market opportunity, only 4,000 of whom participate in an oxybate REMS. So branded or generic sort of in that oxybate vertical. And an additional 5,000 HCPs who don't participate in an oxybate REMS.
From a payer perspective, because it's non-scheduled, you know, and oxybates are schedule three, you know, restricted access triple attestation REMS programs, no payer will make, you know, step Wakix through an oxybate. So even in that setting, I think as Adam alluded to, Wakix holds a unique position in this polypharmacy market.
Got it. Got it. Just out of curiosity, how sticky, just for someone who doesn't really is not that familiar with the market, I mean, how sticky is the patient population? I come from an MS background. Prior to Wall Street, I was at Biogen, was an MS for years. That patient population is sticky. Patients tend to really don't like to switch that much. Is that the same dynamic that goes on here or any comments on that?
A little bit different dynamic here in the narcolepsy market. And as a neurologist, spent 12 years in clinical academic medicine at an MS center. I, you know, I know that background. So narcolepsy, you know, these patients are difficult to treat and manage. You know, as I said, a lot of patients continue to have residual symptoms. So they tend to cycle on and off therapies a bit more than sort of MS patients, you know, number one. In general, statistics about in terms of the discontinuation rate for, you know, all narcolepsy medications ranges about 30%-50% at one year out. And Wakix is sort of somewhere in the middle of that range. But once you get out to sort of a year or so, then they tend to be sticky, you know, with regards to staying on therapy.
Got it. Got it. One last question on HD before we move on. Just again, in a future landscape where pitolisant is more broadly available, like what level of clinical separation do you think HD needs to show in order to earn that premium profile?
Yeah. So I think that, you know, in terms of the opportunity, higher dose driving greater efficacy, what is felt to be a clinically meaningful difference on the main scale that measures excessive daytime sleepiness, the Epworth Sleepiness Scale, about a two-to-three-point improvement. So I think that, and we have data across pitolisant development programs, you know, that demonstrates kind of that dose response and the opportunity to show a clinically meaningful improvement on EDS, improvement in decreasing the weekly rate of cataplexy in terms of that. And then by design, we're also pursuing a unique indication in narcolepsy related fatigue. Fatigue occurs in about 60% of patients with narcolepsy, which is a distinct symptomatology compared to EDS. The importance of that is fatigue is sort of mediated through histaminergic circuits. So Wakix, you know, working through the histamine system.
We actually have positive phase II data from a study we did in patients with myotonic dystrophy that showed positive signals not just on EDS, but fatigue and showed a dose response in that regard. The higher dose, you know, pitolisant formulation, we think will be effective to drive an additional unique indication for pitolisant in HD.
Got it. Got it. Okay. Excellent. Just wanted to pivot to the orexin-2 agonists, 15205. So you've highlighted that 15205 is very potent, very selective. But at the same time, it's still too early to comment on clinical differentiation. So as you move into first-in-human work, what specific signals will matter most in showing that the preclinical potency actually translates into meaningful clinical advantages?
Yeah. So a lot to talk about in the orexin space in a short amount of time.
Right. Right. Not doing it justice.
Yeah. No, that's fair. So really exciting space. You know, obviously the next novel target for patients with narcolepsy with regards to NT1, it's a direct, you know, fit mechanistically orexin deficient state and you give an orexin agonist. So our orexin- 2 program, we acknowledge, you know, that we're a bit behind the other programs. We are learning from those programs and following them closely. Still, I think a lot of questions to be answered. So when we go into, and we are in the clinic in our phase I program, we're doing a single ascending dose in healthy volunteers. But we're also doing sort of the other part of that phase I program is a multiple ascending dose study in sleep deprived healthy volunteers, similar to what some other sponsors have done.
So that'll give us in that model, you know, sleep deprived healthy volunteers will give us a signal in terms of, you know, efficacy and a dose range to inform the program going forward. The preclinical data, you know, in the orexin knockout mouse model has shown efficacy on driving wakefulness at the lowest, you know, preclinical doses across the compounds at 0.03 mg per kg, driving, you know, driving sustained wakefulness. So, you know, now we're going to go into the clinic to, you know, prove that out.
How translatable is mouse to human data? Like, you know, obesity is very translatable.
Yes.
Totally different disease state though, but like just based on kind of bench scientist experience, how translatable is that?
Yeah. It's felt that it translates quite well into the clinic, you know, these knockout mouse models, that there's, you know, good sort of predictive value of those models into the clinic. And the other aspect is, you know, highest potency of at least what's publicly available information of all the orexin compounds that are being investigated. So that gives the opportunity for, you know, lower dosages in terms of the overall risk benefit profile. And it has a unique chemical scaffold in BP1.15205 compared to the other orexin agonists that are in the clinic.
Got it. Got it. Very helpful. And you said you're kind of seeing what happens, you're learning from others as the field develops. Hang on, I lost my spot here. So again, as more and more human data emerge from the competition, like in narcolepsy and IH, like what have you learned so far and care to comment on that in terms of how that shapes your strategy for the product?
Yeah. So I think obviously the learnings and it's a pretty dynamic space, proven mechanism of action, you know, especially in NT1, again, which is sort of the direct fit mechanistically. I think there's still questions remain, you know, about how high do you have to dose on NT2 and IH. More recently, the programs have gone from a profile looking for once a day dosing, and now they're talking about, you know, split dosing in the morning and later in the day. How that plays out with regards to the risk of insomnia at night still kind of waits to be seen. From our preclinical data, you know, we are still looking at the potential for once daily dosing, which I think, you know, could be a benefit.
And, you know, I think it's also some of the AEs and some of those questions, whether they're on target or not, you know, remain to be sort of seen.
Certainly. Okay. Just want to touch upon ZYN002, your cannabidiol g el for a second. In light of the RECONNECT outcome and the pause in 22q, like how are you thinking about those investments and the future role of neurobehavioral, the whole space in terms of your strategy?
Yeah. So I think for now we're sort of, the programs are on hold. So, you know, we were disappointed. The Zynerba acquisition, I think was a, it was a very opportunistic in terms of the deal terms were very favorable. We saw good strong signals in the phase II CONNECT study, and we're obviously disappointed in the phase III RECONNECT readout. The reason we're looking at all the data, remember there are no approved treatments for patients living with Fragile X. It's a major unmet medical need. So we're trying to see, and we are, you know, Kumar Budur and the R&D team going through the full data set. Is there anything in the data that's worthy of maybe going to the FDA and having a discussion, you know, if there is a path forward in terms of Fragile X?
So that's where we are. As we've said, we plan to finish that assessment by the end of the year and early next year, give an update to the market of where we are on that, and, you know, in the meantime, the 22q follow-on has been, you know, placed on hold pending the assessment of the full data analysis.
Final big picture question. You know, you've got, you know, Wakix, healthy franchise ahead, you got the GR, HD formulations, EPX-100, and now orexin all moving forward on top of Wakix. So like, what does that take organizationally to make sure each of those gets the due attention they need as you shift essentially from one product company to a multi-franchise business?
Yeah. Yeah. Mike, it's a great question. So I often say at Harmony, you know, we're small, but we're mighty. But, you know, we've continued to, I think, grow thoughtfully to meet those demands. And it's sort of been an evolution because we've already, you know, taken those programs on. And again, all of them funded off the balance sheet with regards to by the end of the year, we'll have five programs in phase III, you know, registrational trials. Next year, we'll have six programs. So, you know, we have grown the team accordingly to sort of meet those needs, but staying, you know, lean and efficient in terms of how we do that. And then I think lastly, you know, with that strong commercial business, balance sheet continues to grow.
You know, what we look forward to is really putting our cash to work in terms of business development and really try to, you know, drive more value, you know, both growing the pipeline and building out the pipeline. And more so now looking at commercial stage assets, we have a really strong commercial engine and we think we have, you know, we have the capacity and we have the desire to also, in terms of the commercial portfolio, to build that out further and drive greater value going forward.
Excellent. Well, unfortunately, Jeff, that's all we have time for. We're going to end it there. But gentlemen, thank you so much for spending time with us here at our conference and I wish you the best of luck in the next 12 months.
Yeah. Thank you. Thanks for the opportunity. Thanks, Mike.