Great. Good afternoon, everyone, and thanks to the team from Harmony. We have Jeffrey Dayno here, CEO recently, as well as Sandip Kapadia, who's the CFO. You know, maybe we'll just start to level set. Could you provide a brief overview of the company, perhaps with a particular focus on what you view as key value drivers over the next 12-24 months?
Yeah, sure, Corinne. First of all, on behalf of the Harmony team, thank you for the invitation...
Uh-huh.
...to participate in the conference this year. I think, you know, you know, Harmony, basically, you know, we are, as a little overview and background, you know, commercial stage pharmaceutical company founded in 2017. We are now, you know, profitable and cash generating. I think, you know, we're focused on developing and delivering innovative therapies for patients living with rare neurologic diseases. You know, our first product, WAKIX, that is a first-in-class molecule with a novel mechanism of action, was approved in 2019 for the treatment of excessive daytime sleepiness and narcolepsy. In 2020 for the treatment of cataplexy in narcolepsy.
We launched in November 2019, sort of, you know, right before the pandemic and, you know, have had a successful launch and last quarter, first quarter with 40%, you know, growth, you know, year-over-year. Actually, you know, last quarter, we hit cumulative $1 billion in net revenue, you know, for the franchise. A strong, I think, you know, foundational business of WAKIX in narcolepsy. From there, with regards to this novel molecule, you know, pitolisant, we view it as a portfolio and a product opportunity. You know, I think the opportunity in narcolepsy alone, as we are sort of well on our way, and, you know, we see that as a billion-dollar-plus, you know, opportunity in narcolepsy alone.
In our lifecycle management programs, we are looking at an opportunity, starting with idiopathic hypersomnia, which is an adjacency to narcolepsy, and that's our most advanced program, and we're in a phase III registrational trial for that indication, along with two other programs, and one in Prader-Willi syndrome and one in myotonic dystrophy.
Mm-hmm.
The opportunity there represents an additional about a 100,000 patient opportunity. If successful, an additional potentially, you know, up to a billion-dollar opportunity for our lifecycle management programs. We're building off of, you know, sort of the opportunity in pitolisant in terms of extending the franchise with working on new formulations with our partner, Bioprojet. The idea there, the goal there is to generate new IP and potentially extend the pitolisant franchise, you know, out beyond 2040, giving us longer runway in terms of further development. With all that, I think, you know, we're looking in terms of deploying capital and investing in the business and focused on, you know, business development and building out a pipeline of assets, you know, that would, you know, have catalysts both during the WAKIX life cycle, you know, and beyond.
Great. Maybe since this is the first opportunity I've had to interview you since you took the reins of CEO, is there anything we should look for that will be different under your leadership or that you expect to focus on in the years ahead?
I mean, I think that, you know, the strategy remains the same. You know, we've talked about at Harmony, sort of our three pillar growth strategy and advancing, you know, sort of the fundamental business of WAKIX and narcolepsy, continuing to drive, you know, that growth in a, you know, well-defined, sizable market that, you know, that we can speak to. Then the life cycle management programs with regards to the unique mechanism and, you know, applying it to those, follow-on indications. I think, you know, now going forward, the focus on business development as a key part of our kind of longer-term growth strategy, you know, with dedicated efforts there, a bit more sense of urgency, you know, in terms of, you know, looking for a deal that fits, is strategic, you know, and makes sense.
You know, obviously with a strong balance sheet, you know, with, you know, close to $400 million on the balance sheet, you know, as of, you know, end of first quarter, we have a lot of, you know, opportunity to transact, you know, for the right deal.
Good. Okay, well, as you mentioned, WAKIX is now in its fourth year post-launch, and it's pretty well exceeded, I would say, expectations during the early launch. As you look forward, what do you expect to be the key drivers of incremental growth from here?
You know, the key drivers, I think, you know, what we've tried to do is sort of articulate the opportunity in the narcolepsy market. You know, the key drivers going forward is, you know, WAKIX has a differentiated product profile, you know, the only FDA-approved product that's not scheduled, you know, for narcolepsy. You know, we see that we've built kind of a broader prescriber base. You look at, you know, sort of the oxybate franchise and that history, and there are about 4,000, you know, prescribers in the oxybate REMS. We based on the differentiated product profile, we see broader clinical utility, you know, for WAKIX, and we call on an additional 5,000 HCPs, you know, that do not participate in the oxybate REMS.
I think an opportunity to drive growth, both in the 4,000 HCPs in the oxybate REMS, in the depth of prescribing, and then in the additional 5,000 HCPs, with regards to the breadth of prescribing in that segment.
To that point, you expanded the sales force last year. Maybe can you talk about the drivers that led to that decision, and then where we stand today with respect to those people being at kind of full levels of productivity?
Yep. I think that, you know, it was interesting. Our commercial analytics noticed that there were, additional, like, HCPs that started out, just sort of refilling prescriptions, you know, of WAKIX. After time and based on clinical experience, started writing, you know, new Rxs and new prescriptions. We, you know, we saw an additional, you know, 1,000 HCPs, and then, you know, for to capture that, you know, we added seven reps to the sales force in the first quarter last year. That, you know, that opportunity sort of expands the, you know, the broader clinical utility and, you know, to grow in that segment.
Great. You talked about this a little bit, but you've talked before about the sleep specialist versus the community setting, representing a little less than and a little more than 50% of the population that's prescribing and that you're targeting in narcolepsy. What portion of patients do you now cover with the expanded sales force? What's the average, how do we think about, like, the average number of patients that are addressable per physician, perhaps split by those two groups?
Yeah. I think, it's a great question. The groups, you know, the physicians that participate in the oxybate REMS, they're more the sleep specialists, you know, on the KOLs at the major sleep centers. They have, you know, probably, you know, upwards of, you know.
Up to 100, you know, 100 patients in their practices. A lot more patients there, you know, in terms of more experience and the depth of prescribing. In the other segment, they are, you know, not the sort of specialist neurologists and others, and even some PCPs, probably under 10 patients, you know, in their practices. Collectively, it covers sort of the full market opportunity in terms of, you know, the patients with narcolepsy that are diagnosed and the prescriber universe. I think those 9,000 HCPs cover, you know, the full market opportunity. It, you know, it's consistent with, you know, a non-scheduled product with a differentiated sort of profile.
You know, the treatment decision, sort of the threshold to treat, you know, a little easier, you know, for that broader group of physicians that are prescribing narcolepsy therapies.
Perhaps to put a bow on that, as we think about where we are today and the two populations you just described, how much do you think growth from here will be driven by increasing breadth versus increasing depth to the prescribers you already are getting?
I mean, it's hard to put a specific number on each. I think we, you know, more importantly, we see opportunity in both segments, and it takes a little more time to reach those 5,000 HCPs that are not specialists or experts, to educate them to sort of change behavior. It takes a little longer to kind of penetrate that segment, but, you know, I think it's a matter of time. You know, the broader backdrop in terms of sort of our earnings call, you know, we looked at the broader opportunity in this space, and, you know, the oxybate franchise is a good analog. You know, really good product that's been in the market over 20 years and has served a lot of patients.
I think as has been disclosed, you know, they, at one point, about 60,000 patients, you know, have been on an oxybate product. You know, currently is about 16,000. That speaks to the potential market opportunity. From there, you know, given the prescriber universe, I described an additional 5,000 physicians that don't participate in the oxybate REMS, you know, a non-scheduled product, you know, with broad clinical utility. We see opportunity and growth, you know, in both of those segments.
Understood.
What I would add is, I think, you know, certainly in the ones that are enrolled in the REMS program, we see the opportunity to grow depth, given the large number of patients that are available there. Whereas the 5,000, it's more about getting breadth.
Mm-hmm.
Right? Reaching as many as possible...
Yep
...to get incremental opportunity there.
Sense. There has been some evolution in the market since you were first approved. You've got generic oxybates coming to market. You've got data coming from Axsome later this summer. I guess, what impact, if any, do you see to the WAKIX opportunity set?
In terms of the competitive landscape and what's emerging, you know, starting with, you know, I think, you know, in the oxybate vertical, so obviously in terms of, you know, generic versions and now once nightly with regards to the launch of LUMRYZ. We think that we are pretty well insulated, you know, from kind of the oxybate vertical and that treatment choice. You know, with regards to, you know, different product profile, as I mentioned, as well as the broader prescriber universe and the additional 5,000 HCPs that don't participate in that oxybate REMS in terms of that treatment decision. It's also a polypharmacy market. I think narcolepsy has always been...
You know, I was involved in the modafinil, the Provigil development programs. You know, going back in time, this has always been, you know, a polypharmacy market. With regards to, you mentioned, you know, Axsome and reboxetine. I think we follow, you know, the competitive landscape closely. I, you know, I think the mechanism is a known mechanism, a selective norepinephrine uptake inhibitor. We know that there's a product out there, Strattera or atomoxetine, you know, generic version, that is available. You know, that's not prescribed a lot, you know, in terms of current, you know, narcolepsy prescriptions, you know, more for the cataplexy indication. We'll see how the data read out, you know, in terms of that development program.
We think that, given the, you know, unique profile of WAKIX, the novel mechanism, you know, it was the first new mechanism in over a decade, you know, when we launched it in 2019 in the narcolepsy space. We don't anticipate, you know, a lot of impact from sort of the emerging competitive landscape, but we watch it closely.
Absolutely.
One thing I would add is just, you know, even in the first quarter of this year, you know, we grew right through. There was even a launch of oxybate generic. You know, we don't really anticipate any significant impact from some of the, let's say, competitors, certainly in the short term. Our, you know, it's a very differentiated profile, you know, different physician audience, a broader one, as we spoke about. You know, we see ourselves well positioned in this, you know, in the future competitive landscape.
Understood. I mean, I guess at the beginning of the year, the team elected not to give guidance, you did allude to feeling comfortable with where consensus was. As we sit here today, nearly six months into the year, a full quarter reported, do you still feel comfortable with where consensus numbers are shaking out for the full year?
Yeah. Like you said, we haven't really provided forward-looking guidance, but what I've pointed to is the fact that, you know, we have a very strong analyst community, such as yourself, who pay very close attention to our business. We've been, you know, modeling it for the last 10 quarters, and we've landed, you know, from a short-term perspective, relatively close to consensus, sometimes beating, sometimes right on. We feel good about, you know, the ability for investors to at least model the short term. What we did focus on more is really giving investors more confidence in the mid to long term, and that's why we talked about this past quarter. We see just WAKIX.
In narcolepsy alone, a $1 billion-plus opportunity in terms of growth, as you can see, just given our trajectory and our growth so far, you know, we're well on our way to achieving that. If successful in some of the additional pipeline indications in IH and PWS and DM, we see potential for incremental up to a $1 billion opportunity. I think, you know, we focus more on the mid to long term, continue to focus on execution, 'cause we've demonstrated, I think, good, consistent growth through the launch that's well understood by our investor community. You know, we felt that providing more broader perspective would be more insightful.
Yeah. I mean, we tried to articulate sort of, you know, the broader opportunity in, you know, this orphan rare market that's sizable and well-defined, and, you know, it's a matter of time. obviously, oxybate franchise has been in the market over 20 years and, you know, very successful at $1.6 billion-$1.7 billion franchise. you know, as we get out there, as we reach, you know, this universe of prescribers, seeing that, you know, steady growth, you know, for the franchise and then building upon that.
Great. That's a good segue, I think, to the next, the clinical side of the business. Maybe top of mind, we'll start with the phase III readout in idiopathic hypersomnia, which is expected later this year. First, could you just frame the market opportunity for us as you see it?
Yep. It is a great segue, and I'm, you know, happy to talk about idiopathic hypersomnia. That's an opportunity we're really excited about for lots of reasons. Market size, you know, based on claims data, about 40,000 patients, you know, diagnosed in the U.S. with IH, about another 40,000 thought to be living with IH, but not yet diagnosed. Similar dynamic as to the narcolepsy market. I think that, you know, our phase III registrational trial, the INTUNE study, you know, as we shared, you know, great momentum in that study.
We announced we're fully enrolled about nine months ahead of plan, you know, with regards to our base case scenario, I think that reflects, you know, the interest from both the patient community, physician community, with regards to the potential for pitolisant in this patient population. You know, the reason for that is, you know, that IH, although it's an adjacency to narcolepsy, what's called another central disorder of hypersomnolence, it has a different phenotype, so it's different when we talk about kind of mechanistic fit, you know, in treatment options. Whereas narcolepsy, in addition to excessive daytime sleepiness, you've got disrupted nighttime sleep. A treatment that consolidates nighttime sleep, you know, like the oxybates, you know, makes sense and, you know, has been effective. In IH, you don't have the disrupted nighttime sleep.
Most patients are what's called long sleepers. They sleep many hours, and then they, you know, they wake the next morning, they have what's called sleep inertia, difficulty awaking from sleep. What we're hearing from clinicians and, you know, KOLs, the mechanism of action of pitolisant, you know, as a wake-promoting agent, working through histamine, could be, you know, a nice mechanistic fit, you know, for patients with IH. And that's what, you know, we think was driving the interest and the pace of enrollment in the phase III trial.
Great. as you look today, what's the current treatment landscape for patients with IH? maybe walk us through from diagnosis, given there still remains about half the patients that aren't diagnosed?
Yeah. A diagnosis of exclusion, you know, in terms of starting, you know, with the excessive daytime sleepiness and then going into the sleep lab and kind of ruling out, you know, narcolepsy type 1, a little easier to rule out, you know, with the component of cataplexy and what you see in the sleep lab. Then, you know, the more difficult sort of differential in terms of NT2. Ultimately, a diagnosis of exclusion, along with the different phenotype, you know, clinically. I think once the diagnosis has arrived at, you know, the treatment choices, obviously, you know, XYWAV, in terms of the only FDA-approved treatment, and then the others are the typical treatments, what's available for narcolepsy, wake-promoting agents, modafinil or armodafinil, traditional stimulants, and that's what physicians, you know, turn to and use these days.
Yeah. Do we have a sense for what portion of the diagnosed population is currently receiving some sort of treatment for their disease?
You know, I think that the claims data, probably reflects, you know, those in you know, under sort of medical care, medical attention. I don't have a specific number in terms of those that are actually treated.
Okay. helpful. maybe could you remind us of the phase III trial design, what the primary endpoint is, how many patients will be included, anything specific around inclusion or exclusion criteria that was important?
Yeah. The phase III trial is, you know, there's kind of regulatory precedent here, which, you know, we sort of worked off of that. The thinking is that you're borrowing from the narcolepsy phase III program, the pivotal program, because of the adjacency. A single phase III registrational trial, it's a randomized withdrawal design, which is, you know, basically an enriched design, you know, that involves an open-label dose optimization phase, and patients are titrated to optimal dose. At eight weeks, you look at who are the treatment responders, and those are, you know, randomized into a randomized withdrawal phase. In our trial, you know, that's a four-week randomized withdrawal phase.
Primary outcome is around the Epworth Sleepiness Scale, and looking for a three-point delta improvement, you know, in terms of how it's powered to show statistical significance.
Great. I think you saw a faster-than-expected enrollment in this study. I guess, what do you attribute the pace of enrollment to?
I mean, I think that, obviously, more awareness with regards to IH based on the, you know, the first product approved in XYWAV. There's an FDA-approved product in the market, so awareness is starting to, you know, pick up and improve. In terms of our trial, as I alluded to before, interest in, you know, non-scheduled product, the overall benefit-risk proposition, you know, of WAKIX in general, there's a, you know, a lot of sort of the learnings and understandings from the narcolepsy market kind of transferred over. Overall product profile, you know, non-scheduled status, you know, sort of the ease of prescribing and that what I, you know, refer to as threshold to treat, as well as the mechanistic fit. Just as a note, we were at the sleep meetings last week.
The annual sleep meetings were in Indianapolis, and we were interacting with a lot of HCPs, our clinical investigators, and some of the patient community was there, the Hypersomnia Foundation, and hearing, you know, really positive feedback with regards to experience in the trial and still, you know, significant unmet medical need for new and different treatment options.
Pending positive results, how quickly do you expect to be able to file a supplementary NDA, and when could you get to market with this product?
Yeah. We haven't sort of shared a timeline, but, you know, if we are successful with positive results, we will move swiftly, and in, putting an sNDA together, and filing, you know, with the agency, towards seeking approval.
Great. Given the kind of similarities between the two diseases, do you hear from physicians or any patients that are currently maybe using this off-label, or is that something that is possible at this point?
I mean, you know, we know that there's interest, but I think in terms of off-label use, there's not a lot, you know, because the payers are not approving it, you know, because it's not indicated for IH. You know, obviously, it's something that we don't promote, but we know through our patient hub and our closed pharmacy distribution system that we don't, you know, deal with that, and you know, it's off-label, and really, the payers are not covering it. That is....
Mm-hmm.
...you know, that's the goal, the benefit of the approved indication, is to unlock payer coverage and...
Mm-hmm
... really achieve, you know, we think it's an accretive opportunity.
Mm-hmm.
You know, the other benefit there is, you know, if we're successful and approved, we can sort of plug it right into our existing commercial footprint.
That was my next question. I guess, what's the degree of overlap between the prescribing physician population in narcolepsy and IH, and do you anticipate any changes to the size of your commercial infrastructure?
Yes. I think there is significant overlap, if not, you know, almost a direct overlay. The HCPs that are prescribing and treating patients with narcolepsy are the same ones that are managing patients with idiopathic hypersomnia. Those patients are in the same offices as our, you know, HCPs that we're calling on. You know, in terms of the sales force, we haven't really you know, discussed yet whether we would, you know, add any additional reps. If we do, you know, it won't be a, you know, a sizable increase, we haven't really sort of discussed that yet.
Nice. Makes sense. Given the overlap, do you anticipate, or, like, how could you frame for us the initial launch curve or the shape of the initial launch trajectory?
I think it's hard to predict, given the feedback that we've heard from the patient community and HCPs, around kind of the, you know, the mechanistic fit, the overall product profile, given that there's more awareness of IH, you know, sometimes there's a benefit of being sort of a fast follower, you know, as the awareness improves, and we would add to that in terms of, you know, patient education, you know, and disease awareness. The other opportunity is the HCPs that we're calling on. They know the product. You know, they know WAKIX, they know how to prescribe it, and it would be sort of, you know, the same dosing paradigm. A lot of familiarity, as well as how to go about it, prescription forms, going into the same patient hub.
We think there's an opportunity for a brisk uptake, but I don't want to get out ahead of ourselves and, you know, we'll see how things play out.
Understood. Maybe we'll shift gears here to Prader-Willi syndrome. Provide us a quick refresher on what you've shown to date and what the next steps are for that program.
Sure. Real quick, so Prader-Willi, so a small phase II proof of concept study that we conducted in 67 patients, and we announced in November of last year. Positive, top, you know, signals from the top-line data on the primary endpoint of excessive daytime sleepiness. You know, and we showed, you know, a 5 to 6-point improvement in the low dose and high dose groups from baseline to end of study. Positive signals on the primary outcome, you know, which has taken us to an end of phase II meeting with FDA, you know, that we're actually having later this month to discuss the results of the phase II trial.
We'll be proposing a single phase III registrational trial, around the, you know, improvement in excessive daytime sleepiness in patients with Prader-Willi, and also looking at some of the behavioral manifestations as key secondary outcomes.
As you go into that meeting with the FDA, what do you view as kind of, like, the wish list or a best-case scenario for phase III trial design and requirements coming out of that meeting?
I think it'll, it'll kind of build off of the experience, you know, in terms of gaining concurrence around the primary outcome, you know, and the instruments used to measure that in, you know, in Prader-Willi syndrome. You know, as well as some of, you know, the key secondary outcomes, and then I think given, you know, the orphan rare condition that it is and not a lot of treatment options, you know, understanding that a single phase III trial, along with supportive data, you know, would be enough in terms of a potential, submission for approval.
I think most of us think of Prader-Willi syndrome as characterized primarily by hyperphagia. Where does EDS, or excessive daytime sleepiness, fit within the symptom burden for these patients?
Prader-Willi, it's interesting. Prader-Willi is actually, it's a pediatric neurodevelopmental disorder in about 20,000 patients in the U.S., and it's actually a disorder of hypothalamic dysfunction. A lot of stuff we do at Harmony is sort of focused in the hypothalamus, a small area deep in the core of the brain. You have hypothalamic dysfunction. In addition to in the hypothalamus is the sleep-wake switch. You have dysfunction there, which generates the excessive daytime sleepiness, and then you have the hunger satiety switch kind of right nearby, and the dysfunction there is what generates the hyperphagia. Right? There's also evidence of hypocretin/orexin, you know, deficiency, lower levels, you know, similar to, you know, what you see in narcolepsy type 1.
You know, mechanistically, there are some similarities in terms of hypothalamic dysfunction that you see in narcolepsy, in the Prader-Willi patient population.
As you think about, maybe shifting gears finally to the myotonic dystrophies, could you just walk us through the mechanistic rationale and where we stand with respect to that program?
Yeah. Similar mechanistic rationale, which is, you know, pitolisant has a portfolio and a product opportunity, in terms of looking at its mechanism of action and how it could fit. Myotonic dystrophy also has evidence that those patients have lower levels of hypocretin/orexin, which is what's driving the excessive daytime sleepiness. Myotonic dystrophy, primary symptoms around myotonia, which is an inability for muscles to relax, and it causes muscle weakness and wasting. We know from a lot of good work that's been done, that in addition to those symptoms, the other main symptoms in 80%-90% of patients are excessive daytime sleepiness, fatigue, and cognitive dysfunction. They have as much of an impact on daily functioning as the neuromuscular symptoms, and they're mediated by histamine. Those, you know, those three symptoms.
It's a interesting clinical model in terms of the role, you know, of histamine in potentially improving, you know, EDS, and also what we're looking at is fatigue and cognitive function in the phase II proof of concept study.
Understood. As you think about the opportunity set that you just described and the current price point for WAKIX, do you expect that to evolve at all as you expand into broader populations?
I think the current targets, you know, in terms of that are within the orphan rare disease space, would maintain the price point.
Yeah. No, I think we would. Yeah, we don't expect any major changes in terms of the price. Obviously, the dosing might be different in some of the other indications and thoughts, generally, in terms of our overall pricing dynamic, we feel it's still appropriately priced.
Great. You mentioned this briefly earlier, but given the current patent suite around pitolisant, what efforts are you undertaking to extend the duration of, you know, the patent protection around that, and when can we get more updates?
Patent landscape, you know, for WAKIX, you know, out to March of 2030. We're also pursuing pediatric exclusivity to get an additional six months of protection there. With regards to the ongoing efforts with our partner, Bioprojet, in looking at kind of new, enhanced, you know, formulations to generate new IP, it's still early. We're in the formulation stage, and, you know, we plan to provide an update on some of that work later this year, you know, and what those programs look like, and, you know, what the next steps are.
Right. Could you give us a sense for how those would come into the clinic and what the cadence would look like after deciding upon what you move forward with?
Yeah. I think it's going to depend on, y ou know, the first work there is phase I PK data...
Mm-hmm.
...in terms of what those profiles look like. How they would go into the clinic and what the targets would be. You know, I think we have options for both a sort of fast-to-market strategy, like a 505(b)(2) approach, as well as a full development program if we have the opportunity to look at potentially, you know, new indications and do, you know, full, you know, clinical programs.
You've stated publicly that you are interested in pursuing business development, and perhaps you said a bit more urgency over the near term. What do you think of as the ideal target profile for a Harmony acquisition?
Yeah. I think, you know, in terms of, you know, business development, I know, you know, we've been talking about that for a little while. We, you know, we do have more, you know, sense of urgency and we, you know, we have a dedicated business development team. You know, we have four members on that team that are looking across the BD landscape and kind of scouring what's out there. You know, we've gone deep on a couple assets. You know, I think that our sweet spot, we've always said, is orphan rare neurologic, you know, disorders in terms of to leverage our, you know, internal expertise and, you know, as well as our infrastructure. I think, you know, that would be kind of the, you know, the best fit.
We're also casting a broader net in terms of, you know, adjacencies and broader kind of neurology or psychiatry targets and looking at some of those things as well, or another orphan rare condition, maybe outside, you know, kind of neuropsych. You know, very active there. I think that opportunity to transact, you know, We, we want to be thoughtful. We want to be strategic. You know, we can't control those timelines, but we have looked at multiple opportunities. As I said, we've gone deep on a few, and when, you know, when the time comes, we have capacity to transact.
Yeah, no, we have solid growing capacity, right? As you know, we're a profitable, cash-generating business. You know, as at the end of last quarter, we had $392 million and continue to generate positive cash flows. As every quarter goes by, we continue to build our capacity to do more to additional business development.
Can you quantify any further on the capacity front? How do you think about target leverage, et cetera?
Yeah, I think, you know, the best way to sort of think about that is really the type of asset. If it's an asset that's more closer to commercial or potentially on market, we would look at, you know, potentially leveraging additional debt capital to potentially finance that. If it's an earlier phased asset, those things typically, you can certainly do it off of the current balance sheet, and certainly we have access to the public markets if needed. I think we have broad capacity. I think the key thing is really trying to find the right asset for a company our size, where it still continues to leverage where we can offer some synergies or capabilities that can either accelerate programs or accelerate commercial launch and really drive incremental value for shareholders.
Great. I mean, beyond the business development, are there any other thoughts you could share about capital allocation and the priorities you have there?
Yeah, I think, look, as a company, with our stage right now, we have multiple things that we could certainly be doing, everything from, you know, business development, as we talked. Some investors have asked about, you know, return of capital. Those are things that, of course, you know. We certainly continue to look and see whatever can help enhance shareholder value. You know, and it's really not even a, sometimes a question of one or the other, right? Given our increasing cash balance and our capability as a company, we're in a position to do multiple things at the same time. Yeah, we'll see what the overall environment overall.
Great. That's all the questions that I have. Anything else you'd like to share before we close out for the day?
I think, you know, again, thank you for the invitation to participate. You know, I think the takeaway is that Harmony remains a growth story. I think, you know, we're profitable, cash generate, you know, generating. We've been fortunate in terms of the success of our launch of WAKIX in narcolepsy. On that base business, you know, the plan to grow our lifecycle management program. A billion-dollar-plus opportunity of WAKIX in narcolepsy alone, up to an incremental $1 billion in our LCM programs if we're successful. We're looking at new formulations to extend, you know, take a novel molecule and extend that franchise out beyond 2040.
Capital allocation, you know, in a sort of an intelligent manner in terms of business development and other ways to, you know, return value. I think, you know, final is that we look forward to the second half of this year, you know, in terms of catalyst rich, second half of 2023, with the readout for IH in 4th quarter. The top, you know, readout of our myotonic dystrophy phase II proof of concept study anticipated in Q4. We'll have an update on the end of phase II meeting with FDA on our Prader-Willi program and plans to, you know, continue that and go into a phase III trial.
Great. Well, thanks so much for joining us, to everyone in the audience, as well as the team from Harmony.
Yeah. Thank you very much.
Thanks. Thanks.
Appreciate it.