Good afternoon, everyone, and welcome to the Harmony Biosciences company presentation. My name is Ethan Taylor. I'm an associate in JP Morgan's Healthcare Investment Banking group. It is my pleasure to introduce Jeffrey Dayno, Interim CEO and Chief Medical Officer. Upon conclusion of Jeffrey's presentation, we will hold a brief Q&A session to discuss topics that are top of mind among investors. With that, Jeff, please take it away.
Thank you. Thank you, Ethan, for the kind introduction. I also wanna thank JPMorgan for the opportunity to have Harmony share a bit of their story at the conference this year. Good afternoon, everyone, and thank you for attending this session, especially late on a Wednesday afternoon at JPM, to hear a little bit about Harmony Biosciences. As a reminder, I'll be making forward-looking statements today. Please refer to Harmony's SEC filings and our corporate website for more details. Who are we? Who is Harmony Biosciences? We are a pharmaceutical company that specializes in developing and commercializing innovative therapies for patients living with rare neurologic diseases. At Harmony, patients are at the heart of everything we do, and because of that, we believe that where empathy and innovation meet, a better life can begin for these patients.
Let me walk you through our journey now that we're five years in. Harmony was founded in 2017 when Jeff Aronin and the team at Paragon Biosciences secured the U.S. license for WAKIX from Bioprojet. Bioprojet, a French company that's the innovator of the pitolisant molecule. This was a vision that Jeff and the team had at Paragon in terms of an opportunity to find another solution for an area of unmet need in neurologic disorders. The Paragon team had a long history of that, and that's just one example. Then with that, actually, Jeff Aronin, the chairman of the board of Harmony Biosciences, is in the audience with us today. Jeff, thank you for being here on behalf of Harmony. We appreciate all your support.
2018 was what we refer to as the year of the NDA, when we went sort of got busy preparing the NDA, and along the way, received both Fast Track and Breakthrough Therapy designation for pitolisant, and then filed the NDA in December of that year. 2019 was the year of the NDA approval and launch of WAKIX. We received the FDA approval for EDS and narcolepsy in August, and then launched WAKIX to the market in November that year. In addition, we started opening up INDs for our lifecycle management programs, based on pitolisant, based on the mechanism of action in different rare neurologic disorders. The first was with Prader-Willi syndrome and the IND open for PWS in 2019.
2020 was the first full year of commercialization for WAKIX, and that year we achieved $160 million WAKIX net sales in the first year post-launch. In addition, we received the cataplexy indication for narcolepsy in October of that year. We initiated the Prader-Willi syndrome phase II proof of concept trial, opened another IND in our lifecycle management programs in myotonic dystrophy. 2021 was a year of execution and focus, both on the commercial side as well as in clinical development. We initiated a phase II proof of concept trial in patients with type 1 myotonic dystrophy or DM1. Then we were very excited to open our IND for another development program in patients with idiopathic hypersomnia or IH.
That year, in September of 2021, WAKIX was added to the American Academy of Sleep Medicine treatment guidelines and received a strong recommendation for both the treatment of EDS and cataplexy in narcolepsy. The importance of that is the last time those guidelines were issued was in 2007. 2022, last year, that was actually the best year yet for Harmony, and I'll come back to that in a minute and give you some of those highlights. With that journey, where are we today? Harmony is a rapidly growing emergent, emerging leader in the neurology arena. This is based on the strong launch of WAKIX in narcolepsy and the very sort of strong business fundamentals. With that, we see it as a potential $1 billion plus net revenue opportunity via narcolepsy and additional indications.
Harmony is also a fully integrated pharmaceutical company with established infrastructure and really proven capabilities and deep talent across the organization. Clinical development, regulatory affairs, a really strong commercial team. We also, we're very patient-centric approach. We have a very experienced innovative patient advocacy team that sort of complements the work that we do. Our lifecycle management programs for pitolisant, and you'll see multiple phase II programs are underway with the goal of expanding the utility of pitolisant beyond narcolepsy. We're also very proud of our culture and the award-winning team and, you know, across the organization with deep expertise in orphan rare neurology. At Harmony, we like to keep things simple, and we refer to our growth strategy sort of as a Three-Pillar Growth Strategy and very simple and straightforward. Pillar I , to Optimize the WAKIX Commercial Performance.
Pillar II , Expand the Clinical Utility of Pitolisant . Pillar III , related to our activity and business development to acquire new assets and build out the pipeline. Those activities are led by our Chief Strategy Officer, Andrew Serafin, who is also in the audience with us today. I wanna thank Andrew for his leadership in that part of the organization. Turning back to 2022 and what we feel is sort of our best year to date and provide some highlights, you know, based on the Three-P illars. On the commercial side, strong commercial performance for WAKIX with net revenue of $310 million as of Q3 last year, which represents a 45% growth year-on-year. Continued growth in the average number of patients on WAKIX as of Q3 last year at 4,600.
In clinical development in Pillar II , we initiated a phase III registrational trial called the INTUNE Study in patients with IH. We're very excited about that program. We also generated positive signals from the phase II proof of concept study in patients with Prader-Willi. We announced those last November based on that program. From Pillar III , we signed a new agreement with our partner, Bioprojet, for up to two new pitolisant-based assets meant to extend our leadership position in narcolepsy beyond WAKIX. Looking ahead to this year, 2023, we're really excited about the prospects, you know, of where Harmony is and what we hope to achieve. We're focused on continued strong commercial execution for WAKIX as we've been doing since the launch. Continue to grow the average number of patients on WAKIX for narcolepsy.
We expect to surpass $1 billion in cumulative net revenue just three years after the launch. Continue patient enrollment in phase III in the registrational INTUNE Study. We're seeing very good momentum there with a lot of interest from both the physician community and the patient community. We'll engage with the FDA in an end of phase II meeting from the Prader-Willi program with plans to advance that development program. We anticipate top-line data from the phase II proof of concept study in DM1 or type 1 myotonic dystrophy. Pillar III , we'll look to acquire new assets to expand the portfolio beyond WAKIX. Our focus is on orphan rare neurological diseases and also possibly considering other neurological disorders as adjacencies in larger patient populations. We'll continue to strengthen our financial position.
With that, let me provide some more color on each of these Three-P illars, starting with Optimizing WAKIX Commercial Performance. For those of you not as familiar with narcolepsy, just sort of a brief primer, if you will, from a medical perspective. This is a rare chronic debilitating neurological disorder, and there's about 165,000 Americans living with narcolepsy. EDS, or excessive daytime sleepiness, is the primary symptom of this disorder, and there are two different types. There's type 1 narcolepsy that has EDS with cataplexy and type 2 EDS without cataplexy. Cataplexy is the sudden loss of muscle tone, usually due to a strong emotional response. More importantly, it's a really difficult disease to live with lifelong chronically. You see at the bottom here, 86% of people living with narcolepsy reported that it is a life-changing disorder.
What about the faces of people living with narcolepsy that you see here? Again, at Harmony, we're very patient-focused. We engage with the patient communities, along with, you know, even in our development programs and actively involved. You see in terms of the impact reflected in some of the quotes from these patients. "Narcolepsy severely impacts not only me, but my family and friends. It's a daily battle fought over a lifetime." "My biggest accomplishment every day is just getting out of bed." "Narcolepsy is an ugly, life-stealing disease. It makes you feel useless and labeled as lazy and unmotivated. I couldn't hold a job, even drive a car for years." You see in the last quote, this theme about loss. "Losing my best friend, my spouse, and daughter.
A number of years, I couldn't even function." As a neurologist by training who practiced for 12 years in clinical academic medicine, taking care of patients with narcolepsy, incredible burden of, you know, on these patients, you know, day to day and difficulty functioning, and that you see that reflected in some of these quotes. Before WAKIX was approved at Harmony, we wanted to understand sort of the status of the market and where things were. There had been no new treatments in over a decade for patients living with narcolepsy. Based on market research that we conducted in 2018, what we saw was over 90% of patients expressed frustration with narcolepsy medications. 94% believed they needed new treatment options.
This was actually supported by a chart review study that was conducted at Rush University and presented in 2019, and that showed 75% of patients reported having residual symptoms that disrupted their life even while on the current medications of the day. I think the takeaway from this is that this was a dissatisfied market with continued unmet medical need. Into this market, we launched WAKIX in November of 2019, with its unique and differentiated product profile. It's really based on the attributes of this product and the uniqueness of this molecule. It's a first-in-class molecule with a novel mechanism of action. It's referred to as a histamine H3 receptor antagonist/inverse agonist, and the first one approved by the FDA.
What that means is it increases histamine levels in the brain. Histamine coming out of the hypothalamus of the brain is a major wake-promoting neurotransmitter. Based on its mechanism, there's no evidence of abuse liability. It's the first and only FDA-approved treatment for narcolepsy that's not scheduled as a controlled substance. It's also not a stimulant. You know, traditional stimulants were commonly used for patients with narcolepsy. This is different. There's no evidence of tolerance or withdrawal symptoms that you see with those agents. WAKIX has broad clinical utility. It can be used as monotherapy or administered concomitantly with other narcolepsy treatments. There's actually data in the label showing no significant PK drug-drug interaction with commonly used treatments for narcolepsy, including modafinil and sodium oxybate.
Importantly, it's a once daily oral tablet administered in the morning upon wakening, which means that it's easy for patients to take and easy for physicians to prescribe. With that product profile, we've demonstrated a strong track record of performance with WAKIX in the market. With $780 million of cumulative net revenue just three years since launch. This is based on the underlying strong business fundamentals that you see here. With over 80% of U.S. lives covered with formulary access, we continue to show growth in both the depth and breadth of our prescriber base, which results in the 4,600 average number of patients on WAKIX.
I think this is a reflection of our focus and really strong commercial execution, and that's headed up by our Chief Commercial Officer, Jeffrey Dierks, and his really strong teams in sales and marketing and market access, underpinning all of this. With that, we're confident in WAKIX becoming a potential $1 billion-plus franchise via narcolepsy and additional indications. What about looking forward? Well, we see a significant market opportunity going forward as well, just in narcolepsy. That's because of the patient dynamics. You see on this slide on the right, the current WAKIX patient opportunity. What you see here is there are 44,000-45,000 patients that are currently diagnosed and treated, usually with polypharmacy, multiple agents, and another 28,000-30,000 that are diagnosed but not currently on medications for one reason or another.
The balance are patients living with narcolepsy but not yet diagnosed based on epidemiologic data. Even if the market didn't grow for an orphan rare disorder, there's a sizable patient population, and with WAKIX's broad clinical utility, you know, we see that opportunity, you know, continuing, you know, with this franchise. Turning to Pillar II and Expand the Clinical Utility of Pitolisant . This is our pipeline slide. I'll walk you through it and then hit some highlights of these programs. Our partner, Bioprojet, conducted a pediatric narcolepsy trial and submitted the data to the EMA, and we anticipate an EMA decision this quarter. As I mentioned, we're very excited about our program in IH and our phase III registrational trial, which we initiated last April.
Prader-Willi syndrome, our top line data that read out last year and positive signals on EDS. We're in the clinic with DM1 in a phase II proof of concept study, and we anticipate top-line data from that study later this year. I mentioned the new pitolisant-based assets that we announced last year, third quarter, the agreement with our partner, Bioprojet. Intended to extend the narcolepsy franchise with new formulations of pitolisant. These programs are early in development, and we'll provide an update on those later this year. Turning to our other asset, HBS-102, an early-stage asset, actually preclinical, that is a melanin-concentrating hormone receptor 1 antagonist, and that is a mouthful. Basically what that is MCH neurons are in the hypothalamus, actually right near the histamine neurons, the hypocretin/orexin neurons.
They mediate several different functions, including feeding behavior, metabolic function, actually sleep-wake state stability. With that and with the profile, we are now doing a preclinical proof of concept study in a knockout mouse model of Prader-Willi, working with Tom Scammell in his lab at Harvard with HBS-102. Let me share some highlights of our key clinical programs. What I'd like to do is just share some of the scientific rationale, the market opportunities, you know, as well as other aspects of these programs, the unmet medical need. I'll get back to IH, starting with Prader-Willi. It's a rare pediatric neurodevelopmental disorder, it's mainly due to hypothalamic dysfunction. In the hypothalamus you have the sleep-wake switch, and you also have the hunger-satiety switch.
Disorders of those two switches, that's why hunger-satiety results in the hyperphagia, the cardinal symptom of PWS. We've also seen, as we learn more about this disorder, that sleep-wake switch is disturbed, so those patients have excessive daytime sleepiness and are sleepy and have behavioral consequences. There's evidence of decreased hypocretin levels in some of these patients, and that's the overlay with narcolepsy type 1, NT1, is the prototypical disorder of decreased orexin/hypocretin levels. When there's less hypocretin/orexin, histamine comes in as a major player, as an important neurotransmitter. A lot of the circuitry, the sort of parallel circuitry, both of those, both of, you know, hypocretin/orexin and histamine stimulate wakefulness. There's about 15,000-20,000 patients in the U.S. with Prader-Willi, and more than half of them experience EDS with significant impact on daily functioning.
There are no approved treatments for EDS in patients with Prader-Willi. Turning to myotonic dystrophy, another rare neurologic disorder, multisystem disease, and the main symptoms are myotonia, which is difficulty in muscles relaxing and progressive muscle weakness. In addition to those, the two most common non-muscular symptoms are EDS and actually fatigue in up to 90% of patients. Based on some work that was done by Chad Heatwole at University of Rochester and inventories of patients with DM1, the impact of EDS and fatigue is as great, if not greater, than the muscular symptoms in this patient population. There's also evidence of decreased hypocretin levels, some of the scientific rationale and the mechanism-based approach that we're taking in our LCM programs. The epidemiology is interesting. There's about 160,000 people in the U.S. living with a genetic defect for DM1.
Of those, only about 50% are symptomatic, which is sort of based on the genetic load. It's a disorder of a trinucleotide repeat. Of those symptomatic, only about 50% are diagnosed. US claims data suggests about 40,000 patients diagnosed in the US with DM1, and there are no approved treatments for this condition. Turning back to idiopathic hypersomnia, a program that we're very excited about. This is another central disorder of hypersomnolence like narcolepsy, although it's phenotypically different. There's irresistible need for patients to sleep, and they have long sleep times, but the sleep is non-refreshing. They could sleep over 10 hours, 12 hours, 14 hours a night and still not feel rested.
That leads to another symptom that's unique compared to narcolepsy, of what's referred to as sleep inertia, sometimes called sleep drunkenness, difficulty awakening from sleep. All that feeds into another symptom, commonly referred to by patients as sort of the brain fog, the mental cloudiness. This market opportunity is also significant. First of all, the unmet medical need. There's only one FDA-approved treatment for IH. What's used are the traditional agents that are used in narcolepsy, stimulants, methylphenidate, modafinil. The efficacy of these, agents have never been demonstrated, and if patients are on it, most of them still have residual symptoms. We're investigating pitolisant for IH with its unique mechanism of action, again, working through histamine to improve wakefulness. If approved, the opportunity could be significant given the synergy with our existing commercial infrastructure.
The physicians who treat narcolepsy, they're the same physicians who are treating patients with IH. Those patients with IH are in the same offices that our sales force is calling on. Really good sort of commercial synergy if we're successful, you know, with this new indication. Turning to the PWS phase II proof-of-concept study and the top-line data that we shared last November, just a sort of a summary of that. We saw a clinically meaningful reduction in EDS in all age groups. We looked at children, adolescents, and adults in this small trial, proof-of-concept trial. We saw that in both the low-dose and high-dose treatment groups. As you'll see on the left-hand of this slide, there was a high responder rate for pitolisant compared to placebo, and we also saw evidence of a dose response favoring the higher dose.
Importantly, in this patient population, pitolisant was well tolerated, with the overall safety profile consistent with the known safety profile of pitolisant. Lastly, turning to Pillar III and our BD activity to acquire new assets. As I mentioned, we have a dedicated business development team headed up by Andrew Serafin and deep internal capabilities to conduct diligence across clinical development, regulatory, our commercial analytics group, as well as launch experience and execution. It's our intent to acquire a portfolio of orphan rare neurology assets or potentially adjacencies in other neurologic conditions. This is meant by design to leverage our existing expertise and infrastructure and the synergies with the current, you know, WAKIX position and our footprint in the market.
We're looking across all stages of development, early stage and late stage, in our assessment of, you know, what's out there, in terms of BD opportunities. We have the ability to do this based on our strong financial position. With $316 million in cash equivalents, and investments as of Q3 last year, we have access to an additional $100 million with Blackstone, our Blackstone debt facility. We're profitable, we're cash generating, and we have access to the capital markets. With that, it's our goal at Harmony to evolve into a leading pharmaceutical company focused on developing and commercializing innovative therapies for patients living with rare neurological diseases who have unmet medical needs.
To sum up, to sort of conclude, as we look ahead to this year, we're focused on continued strong commercial execution for WAKIX, increasing average number of patients, and we expect to surpass $1 billion in cumulative net revenue since launch. Focus on our phase III registrational trial in IH, the phase III INTUNE Study, with really good momentum there. Engaging with FDA to advance our Prader-Willi development program, and we anticipate top-line data readout from our phase II proof of concept study in DM1. We'll look to acquire new assets, so we can expand the portfolio beyond WAKIX, focused on orphan rare neurological disorders, and obviously we'll continue to strengthen our financial position. With that, thank you for your attention, and I'll turn things back over to Ethan.
I wanna thank JP Morgan again for the opportunity to present at the conference this year, and we'll be happy to take questions.
First of all, Jeff, congrats on appointment to your new role as CEO. How has the first week been?
It's, it's been great. It's been great. I'm out here at JPM. No, it's been, you know, really great, a chance to sort of see people face-to-face, you know, have the opportunity to share the Harmony story, you know, with everyone. You know, I've been at Harmony since the beginning. It's a really unique opportunity. I'm looking, you know, at our chairman, Jeff Aronin. I'm a neurologist by training. The science, you know, got my attention from the start. From there, we build a company with deep expertise and experience. I think what's important is the success of Harmony to date really reflects the talent and the strength across the organization. You know, it's not a reflection of any one individual. It's a team effort.
That's the way we built the company. You know, that's where we are. Our focus is on execution and, you know, I'll go back and make the rounds around the organization and, you know, our underlying business fundamentals are strong, execute on our Three-P illar Growth Strategy and look forward to that opportunity. I'm excited.
Great. Speaking of growth, you know, you've had such tremendous success with WAKIX, you know, over the past several years. How should we think about growth in 2023?
I think that I highlighted some of that potential, you know, in terms of WAKIX for narcolepsy. You know, based on the patient dynamic, and the size of the market, even though it's an orphan rare disorder, you know, with about 75,000 patients diagnosed, some treated, some not currently on therapy. Even if the market doesn't grow, we have that opportunity in front of us.
I guess with that, I'll turn it over to Sandip, you know, reflected in some of the, you know, financials.
Yeah, sure. I mean, look, we're not at this point providing guidance, forward-looking guidance at this stage. You know, something that obviously we'll seriously consider. What I'd say is, you know, we had a very strong quarter in quarter three, which was the last quarter that we reported our sales. We had $117 million of sales there. We have about 4,600 patients average on therapy. As Jeff mentioned, we have 75,000 patient market opportunity here. Really still see the potential to grow the business for many more years to come, to a point where, you know, we certainly believe at this stage that WAKIX is a billion-plus opportunity in narcolepsy and other indication.
Great. Thank you. It seems like IH is the, you know, the next near-term opportunity for the company. Can you expand a bit more about that opportunity and the ongoing INTUNE Study?
Yeah. As I mentioned, yeah, IH, you know, we're really excited about that. That's our most advanced clinical development program, and we're seeing really good momentum. You know, As I said, adjacency to narcolepsy, sort of the natural follow on, the overlay of our commercial footprint, and the sizable market opportunity with about 40,000 patients, you know, patients diagnosed. We continue to be focused and execute in the phase III registrational trial, and we'll provide updates on that as, you know, the year goes along.
Got it.
I mean, the only thing I would probably add, you know, we do see this as a very distinct opportunity, right. You know, patients that have IH are usually excluded from being narcolepsy patients. There's a separate, you know, code for IH patients. We believe this is an actually an incremental opportunity for us as a business. If successful, you know, we'd be able to, you know, capitalize on that.
Great. Yeah. Along those lines, you know, you highlighted in your presentation the possibility of synergies between the IH launch. How should we think about the uptake of that?
Yeah. I think, yeah, the synergy speaks to, you know, the commercial footprint, how the patients with IH are, as I mentioned, you know, they're in the offices of the HCPs that the sales force is currently, you know, calling on because the adjacency to narcolepsy. Sort of that, you know, target universe of physicians and where we are. Also those HCPs, they know WAKIX. They know WAKIX from, you know, treating patients with narcolepsy.
There's an opportunity, if successful, and we gain the new indication, to go in, educate on a new indication, in terms of label expansion and potentially, you know, have, sort of a good ramp and a good uptake of that, you know, because familiarity, which I think also is being reflected by the interest in our phase III clinical trial and the good momentum that we're seeing.
Thank you. Then, you know, shifting now to the PWS program. Could you kind of remind us of the next steps on that? Then, you know, have you received a full dataset yet, and has the FDA, EOP2 meeting been requested or scheduled yet?
Yeah. What we announced last November, the initial sort of top line data, you know, signals from the top line data. Right around year-end, we received the full dataset. The team is, you know, currently reviewing the full dataset, which will inform our strategy, how we will engage with FDA in an end of phase II meeting. That's kind of the next step. And then it's our intent to propose a single phase III registrational trial after discussions, you know, with FDA. This is an orphan rare disease with a high unmet medical need. I think if a single phase III trial is robust enough, we may have the opportunity, you know, to do that in that approach towards registration.
Great. Thank you. You know, as you think about Pillar III , that you mentioned in your presentation of the growth strategy, how would you describe the M&A market currently?
You wanna-
Sure. I mean, look, I think it's certainly a target-rich environment. You know, certainly evaluations have reset over time. As you know, we have a very dedicated business development team led by Andrew Serafin, our Chief Strategy Officer. You know, the team's been active, you know, over the last couple of years. You know, they're active here at, you know, JP Morgan, looking for potential assets over time. We're gonna continue to focus on rare neurological assets that potentially could launch, you know, during and later in the WAKIX lifecycle. You know, we did announce 2 transactions more recently. More recently, we did the Bioprojet deal that Jeff talked about, where we licensed two...
up to two pitolisant-based assets that could, you know, currently extend our lifecycle, you know, beyond our leadership in, beyond WAKIX.
Yeah. Any additional color you can provide on that new pitolisant asset?
I think that, you know, they're early in development and, you know, looking to. You know, WAKIX is a good product that has broad clinical utility, but opportunity to. With new, you know, formulation work and lifecycle management. That, you know, that's what we're working on. That's the design, you know, of that program. Opportunity for new IP, regulatory exclusivities. We're working with our partner, Bioprojet now, on those things, and we'll provide an update later in the year.
Excellent. I wanna thank you again for your time. If you have any final concluding remarks, please feel free. If not, then, we can conclude the session.
Yeah.
I'll let you say anything else.
Okay. No, I would just I wanna thank, you know, JP Morgan. Obviously, we're a young organization, five years in, and it's sort of been, you know, quite a ride all based on this very unique product. You know, we remain focused to extend, you know, where we are now and that opportunity and kind of build the company from there. Thank everyone for your attention, your interest in Harmony, you know, sort of late on Wednesday at JPM. Thanks, everyone. Thank you.
Great. Thank you, Jeff. Thank you.