Q1 2022 Harmony Biosciences Holdings Inc Earnings Call

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Good morning, My name is Ashley and I will be your conference operator today at this time I would like to welcome everyone to the how many bioscience first quarter 2022 financial update conference call. All participant lines have been placed on mute to prevent any background noise. After the speakers' remarks.

Operator: If you should need any audio assistance during your call today, please press star zero. Good morning. My name is Ashley, and I will be your conference operator today. At this time, I would like to welcome everyone to the Harmony Bioscience First Quarter 2022 Financial Update Conference Call. All participant lines have been placed on mute to prevent any background noise.

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Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, please press star 1 on your telephone keypad. Please be advised that today's conference may be recorded. Lastly, if you should require operator assistance, please press star 0. I will now turn the call over to Luis Sanay, Head of Investor Relations. Please go ahead.

I'll now turn the call over to Louis today head of Investor Relations. Please go ahead.

Thank you operator, good morning, everyone and thank you for joining US today as we review Harmony Biosciences first quarter 2022 financial performance and provide a business update.

Luis Sanay: Thank you, operator. Good morning, everyone. And thank you for joining us today as we review Harmony Biosciences first quarter 2022 financial performance and provide a business update. Before we start, I encourage everyone to go to the investor section of our website to find the press release and slides that accompany our discussion today, including a reconciliation of our GAAP to non-GAAP financial measures. At this stage of our life cycle, we believe non-GAAP financial results better represent the underlying business performance. Our presenters on today's call are John Jacobs, President and CEO. Dr. Jeffrey Dayno, Chief Medical Officer. Jeffrey Dierks.

Before we start I encourage everyone to go to the investors section of our website to find the press release and slides that accompany our discussion today.

A reconciliation of our GAAP to non-GAAP financial measures.

At this stage of our lifecycle, we believe non-GAAP financial results better represent the underlying business performance.

Our presenters on today's call are John Jacobs, President and CEO .

Dr. Jeffrey <unk> Chief Medical Officer.

Jeffrey Burks, Chief commercial Officer, and Sandeep Party, Chief Financial Officer.

Luis Sanay: Commercial Officer, and Sandip Kapadia, Chief Financial Officer. Moving on to slide two. As a reminder, we will be making forward-looking statements today, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially.

Moving on to slide two.

As a reminder, we will be making forward looking statements today, which are based on our current expectations and beliefs.

These statements are subject to certain risks and uncertainties and our actual results may differ materially.

I encourage you to consult the risk factors referenced in our SEC filings for additional details.

I would now like to turn the call over to our CEO John Jacobs John .

Luis Sanay: I encourage you to consult the risk factors referenced in our SEC filings for additional details. I would now like to turn the call over to our CEO, John Jacobs. John.

Thank you Louis and thank you everyone for joining our conference call today.

John Jacobs: Thank you, Luis, and thank you, everyone, for joining our conference call today. During the first quarter, we continued to execute on our three-pillar growth strategy, with progress across all three pillars and achieving two key milestones. We're excited about the momentum we see in the business, and as you've heard me say previously, we're looking forward to making 2022 our best year yet. Now I'd like to take a few minutes to highlight our progress on each of the three pillars of our growth strategy in the context of Quarter 1 2022 performance, starting with pillar one, which is to optimize the commercial performance of WCAG. In Q1-22, we delivered a strong quarter for WACIX with revenues of $85.3 million, a 43% year-over-year increase on the quarter.

During the first quarter, we continued to execute on our three pillar growth strategy with progress across all three pillars and achieving two key milestones.

We're excited about the momentum we see in the business and as you've heard me say previously we're looking forward to making 2022, our best year yet.

Now I'd like to take a few minutes to highlight our progress on each of the three pillars of our growth strategy in the context of quarter, one 2022 performance.

Starting with pillar, one which is to optimize the commercial performance of <unk> in Q1, 'twenty. Two we delivered a strong quarter for wake X with revenues of $85 3 million or 43% year over year increase on the quarter we.

We also reached an important milestone surpassing $500 million in cumulative net revenue for <unk> since our launch in November of 2019.

John Jacobs: We also reached an important milestone, surpassing $500 million in cumulative net revenue for WACIX since our launch in November of 2019. The first quarter performance reflects the anticipated seasonal payer dynamics, which our Chief Commercial Officer Jeff Dierks will discuss in further detail later in the call. WCAG's underlying business fundamentals remain strong during the quarter, with March representing our strongest month of performance in top-line prescription demand and new patient starts in over a year.

The first quarter performance reflects the anticipated seasonal payer dynamics, which our chief commercial officer, Jack <unk> will discuss in further detail later in the call.

<unk> underlying business fundamentals remain strong during the quarter with March representing our strongest month of performance in topline prescription demand and new patient starts in over a year.

For the remainder of the year, we expect quarter on quarter growth for wake X due to strong underlying demand and the large and growing opportunity in narcolepsy.

John Jacobs: For the remainder of the year, we expect quarter-on-quarter growth for WACICs due to strong underlying demand and the large and growing opportunity in narcolepsy. Let's move on to Pillar 2, which is to expand the clinical utility of WACACS beyond narcolepsy. This quarter we reached yet another milestone towards delivering innovative therapies that improve the health of people living with rare neurological diseases. Last week, we were pleased to announce the initiation of our Phase 3 Registrational Trial for pitolicin in idiopathic hypersomnia, or IH.

Let's move on to pillar, two which is to expand the clinical utility of wake X beyond narcolepsy.

This quarter, we reached yet another milestone towards delivering innovative therapies that improve the health of people living with rare neurological diseases.

Last week, we were pleased to announce the initiation of our phase III Registrational trial for told US it in idiopathic hypersomnia or I H.

We're excited to advance this program and we are hopeful these efforts if successful will lead to the next indication for <unk>.

John Jacobs: We're excited to advance this program, and we are hopeful these efforts, if successful, will lead to the next indication for WCAG. With the IH program now in the clinic, we have three clinical programs underway for pertolosan, including Prader-Willi syndrome, myotonic dystrophy, and idiopathic hypersomnia.

With the IH program now in the clinic, we have three clinical programs underway for Portola set including product Willi syndrome, My Atonic dystrophy idiopathic hypersomnia.

Furthermore, we are advancing our second asset H B S. One O two into the preclinical proof of concept stage to explore its effect in <unk> Willi syndrome on the symptoms of hyperphagia weight gain and other metabolic parameters Dr. Jeffrey Dana will share more on H B S. One or two later in this call.

John Jacobs: Furthermore, we're advancing our second asset, HBS-102, into the preclinical proof-of-concept stage to explore its effect in Prader-Willi syndrome on the symptoms of hyperphagia, weight gain, and other metabolic parameters. Dr. Jeffrey Dayno will share more on HBS 102 later in this call. And finally, Pillar 3, acquiring new assets through business development to expand our portfolio beyond Wacom. Over time, our intention is to develop a broad portfolio of rare orphan neurology assets, and or assets in other neurological conditions where we can leverage our existing expertise and infrastructure. To achieve this, we are seeking assets across a range of development stages, including both early and later stage, with the potential to launch both during and after the WCAG life cycle.

And finally pillar III acquiring new assets through business development to expand our portfolio beyond <unk>.

Over time, our intention is to develop a broad portfolio of rare orphan neurology assets.

<unk> assets and other neurological conditions, where we can leverage our existing expertise and infrastructure.

To achieve this we are seeking assets across a range of development stages, including both early and later stage with the potential to launch both during and after the <unk> lifecycle.

Now it's important that we're beginning this journey early in our company history. So we can take the time to be thoughtful and prudent in what we acquire and flexible in the types of deals we are able to consider.

John Jacobs: It's important that we're beginning this journey early in our company history so we can take the time to be thoughtful and prudent in what we acquire and flexible in the types of deals we are able to consider, and Harmony is in a good position to execute on this strategy. We are intently focused on doing this and are optimistic regarding our potential to make progress here based on our strong financial position and current market conditions.

And harmony is in a good position to execute on this strategy. We are intently focused on focused on doing this and are optimistic regarding our potential to make progress here based on our strong financial position and current market conditions.

Overall I'm extremely pleased with the continued execution on our three pillar growth strategy, which puts us in a very strong position to build for the future.

John Jacobs: Overall, I'm extremely pleased with the continued execution on our three-pillar growth strategy, which puts us in a very strong position to build for the future. We remain confident in Wakex being a potential $1 billion plus franchise in the coming years via narcolepsy and additional indication. And with that as a foundation, I am truly excited about what we can achieve next at Harmony. Our vision is to evolve into a leading neurology company with a broad portfolio of innovative assets that have the potential to improve the health of people living with rare and other neurological diseases. I would now like to turn the call over to Jeff Dierks, Harmony's Chief Commercial Officer. Thanks, John.

We remain confident in wake X being a potential $1 billion plus franchise in the coming years via narcolepsy and additional indications and with that as a foundation I am truly excited about what we can achieve next that harmony.

Our vision is to evolve into a leading neurology company with a broad portfolio of innovative assets that have the potential to improve the health of people living with rare and other neurological diseases.

I would now like to turn the call over to Jeff Berkes harmonies, Chief Commercial officer, Jeff.

Thanks, John .

We made significant strides in advancing our narcolepsy business in the first quarter, both the net revenue and underlying business fundamentals.

Jeff Dierks: We made significant strides in advancing our narcolepsy business in the first quarter, both in net revenue and underlying business fundamentals. Net revenue for the first quarter was $85.3 million, representing approximately 43% increase from Q1 2021. In the first quarter of 2022, we surpassed $500 million in cumulative net revenue, a milestone that was achieved in less than two and a half years since our loss. Our strong performance since launch continues to reflect not only the resilience and commitment of our team, but also speaks to how the overall benefit-risk profile of WACIX aligns to the significant medical need in the narcolepsy market.

Net revenue for the first quarter was $85 $3 million, representing approximately 43% increase from Q1 2021.

In the first quarter of 2022, we surpassed $500 million in cumulative net revenue a milestone that was achieved in less than two and a half years since our launch.

Our strong performance since launch continues to reflect not only the resilience and commitment of our team, but also speaks to how the overall benefit risk profile of wakes aligns with a significant unmet medical need in the narcolepsy market.

Now moving on to slide five I'd like to highlight a few of our underlying business fundamentals that drove our continued growth in the first quarter of 2022.

Jeff Dierks: Now moving on to slide five, I'd like to highlight a few of our underlying business fundamentals that drove our continued growth in the first quarter of 2022. The average number of patients on WACIX increased to approximately 3,900 in the first quarter, which is reflective of the anticipated once yearly seasonal dynamics of managed care reauthorization and patient assistance program re-verification, typical for branded specialty products in the first quarter each year. We experienced the same seasonal payer dynamics the previous two years of our launch in the first quarter.

The average number of patients on <unk> increased to approximately 3900 in the first quarter, which is reflective of the anticipated once yearly seasonal dynamics of managed care reauthorization and patient assistance program re verifications typical for branded specialty products in the first quarter each year.

We experienced the same seasonal payer dynamics the previous two years of our launch in the first quarter as.

As we are now in our third year of commercialization and the majority of our patients are continuing patients versus new patient starts a larger percentage of our patients are subject to payer reauthorization and re verification than in previous years.

Jeff Dierks: As we are now in our third year of commercialization, and the majority of our patients are continuing patients versus new patient starts, a larger percentage of our, are subject to payer reauthorizations and re-verifications than in previous years. Due to our strong market access coverage, the vast majority of patients sought immediate approval. Although some patients experience delays in their prescription approval. A smaller group of patients, mostly government insured patients, did not continue on treatment due to not meeting financial need criteria through third party support. Additionally, some patient assistance program patients did not meet program eligibility requirements and no longer continued on free guidance.

Due to our strong market access coverage the vast majority of patients saw immediate approvals.

Although some patients experienced delays in their prescription approvals.

Smaller group of patients, mostly government insured patients did not continue on treatment due to not meeting financial need criteria through third party support.

Additionally, some patient assistance program patients did not need program eligibility requirements and no longer continued on free goods.

Absent. These one time events the government pay and free good patient, we would've experienced similar average patient growth as prior quarters.

Jeff Dierks: Absent these one-time events, the government pay and free good patients, we would have experienced similar average patient growth as prior quarter. Moving forward, we are confident in continued growth of WIC. March represented our strongest month of performance and top-line prescription demand, a new patient starts in over a year, and provides strong momentum in our business as we head into Q2. Turning to our prescriber base, we observed a further broadening and meaningful clinical adoption of weight.

Moving forward, we're confident in continued growth of wakes March represented our strongest month of performance in topline prescription demand and new patient starts in over a year and provides strong momentum in our business as we head into Q2.

Turning to our prescriber base, we observed a further broadening and meaningful clinical adoption of <unk>.

We saw further growth in new prescribers per week in the first quarter of 2022, both in writers of traditional narcolepsy treatment as well as health care professionals, who have been reluctant to prescribe other available scheduled narcolepsy treatment.

Jeff Dierks: We saw further growth in new prescribers for WCAG in the first quarter of 2022, both in writers of traditional narcolepsy treatment, as well as healthcare professionals who have been reluctant to prescribe other available scheduled narcolepsy treatments. The majority of these prescribers have become repeat writers, meaning they have written a prescription for WACIX for two or more of their narcolepsy patients since launch.

The majority of these prescribers have become repeat writers, meaning they've written a prescription for wafers for two or more of their narcolepsy patients since launch we.

We are pleased with the continued growth in both the depth and breadth of our prescriber base, demonstrating the growing opportunity for wake extent adult narcolepsy with.

Jeff Dierks: We are pleased with the continued growth in both the depth and breadth of our prescriber base, demonstrating a growing opportunity for Wacoxin adult narcolepsy. We continue to see broad utilization of WACIX for both type 1 and type 2 narcolepsy patients, and Wakey's being prescribed as monotherapy as well as concomitantly with all other narcolepsy, We saw an increase in in-person field sales engagement with healthcare professionals and their office staff in the first quarter of 22 from the fourth quarter of 2021. More than 70% of all field sales engagements were in person by the end of the first quarter.

We continue to see broad utilization of wakes for both type one and type two narcolepsy patients and wake is being prescribed as monotherapy as well.

Concomitantly with all other narcolepsy treatments.

We saw an increase in in person field sales engagement with health care professionals and their office staff in the first quarter of 'twenty two from the fourth quarter of 2021.

More than 70% of all field sales engagements where in person by the end of the first quarter.

The increase in access towards the end of the first quarter speaks to an opportunity for further education and engagement in the second quarter and provides an opportunity for our expanded field sales team to drive <unk> growth in both new and existing prescribers.

Jeff Dierks: The increase in access towards the end of the first quarter speaks to an opportunity for further education and engagement in the second quarter and provides an opportunity for our expanded field sales team to drive WCAG's growth in both new and existing prescribers. We completed the expansion of our field sales team with all positions hired, trained and in their territories by April 1st, in line with what we communicated in our last earnings call.

We completed the expansion of our field sales team with all positions hired trained and in their territories by April one in line with what we communicated in our last earnings call.

Jeff Dierks: We expect to see the benefit of this expansion in the second half of 2022 with the early. The expansion of our field sales team gives us added confidence in our ability to continue to grow weight. In summary, the continued strong performance and underlying business fundamentals of Wacox and the narcolepsy market affirm our confidence in Wacox as being a potential billion-dollar-plus franchise operator. I'm excited as we head into the second quarter with momentum in all the following areas.

We expect to see the benefit of this expansion in the second half of 2022 at the earliest.

The expansion of our field sales team gives us added confidence in our ability to continue to grow <unk>.

In summary, the continued strong performance in underlying business fundamentals are weak and the narcolepsy market affirm our confidence in <unk> as being a potential billion dollar plus franchise opportunity I'm excited as we head into the second quarter with momentum in all of the following areas.

Strong top line prescription demand and continued growth in the average number of patients on <unk>.

Jeffrey Dayno: Strong top-line prescription demand and continued growth in the average number of patients on Wake, The broadening of the depth and breadth of our prescribers. Strong Market Access for Wake and Continual Improvement and Access for Type 1 Patients. Increased access to healthcare professional offices for in-person education by our field sales, and our expanded field sales team in place to extend our reach to the broad narcolepsy treating healthcare professional unit. But most importantly, I'm excited about the difference WakeX is making in the lives of people living with narcolepsy. I'll now turn the presentation over to Dr. Jeff Dayno for an update on our clinical development program. Jeff?

The broadening of the depth and breadth of our prescriber base.

Strong market access for wake and continual improvement and access for type one patients.

Increased access to health care professional offices for in person education by our field sales team.

And our expanded field sales team in place to extend our reach to the broad narcolepsy trading health care professional universe, but most importantly, I am excited about the difference <unk> is making in the lives of people living with narcolepsy.

I'll now turn the presentation over to Dr. Jeff <unk> for an update on our clinical development program Jeff.

Thanks, Jeff and good morning, everyone.

I am pleased to provide an update on our clinical development programs and pillar two of our three pillar growth strategy to expand the clinical utility of the tolleson.

Jeffrey Dayno: Thanks, Jeff. And good morning, everyone. I am pleased to provide an update on our clinical development programs and pillar two of our three-pillar growth strategy to expand the clinical utility of pitolicin. First off, as we announced last week, we are excited about the initiation of our Phase 3 Registrational Trial in Adult Patients with Idiopathic Hypersomnia, or IH, also known as the Intune Study. Highlights of this trial can be found on slide six.

First off as we announced last week, we are excited about the initiation of our phase III Registrational trial in adult patients with idiopathic hypersomnia or IH also known as the <unk> study.

Highlights for this trial can be found on slide six.

The primary objective of this trial is to assess the efficacy and safety of the tolleson compared with placebo in treating excessive daytime sleepiness or eds in adult patients with IH as measured by the FRS sleepiness scale or ESF.

Jeffrey Dayno: The primary objective of this trial is to assess the efficacy and safety of the tolucin compared with placebo in treating excessive daytime sleepiness, or EDS, in adult patients with IH, as measured by the Effort Sleepiness Scale, or ESS.

Key secondary endpoints include assessment of the symptom complex of IH utilizing the idiopathic hypersomnia severity scale.

Jeffrey Dayno: Key secondary endpoints include assessment of the symptom complex of IH, utilizing the idiopathic hypersomnia severity scale, and patient global impression of change. The trial will also assess the impact of pitolicin on what is commonly referred to as brain fog by measuring cognitive function at baseline and after treatment with pitolicin in patients with IH. The trial design is a double-blind, placebo-controlled, randomized withdrawal study with a target enrollment of about 200 patients. Approximately 60 to 80 sites in the U.S. will be participating, and over 100 clinical trial sites have been evaluated for this trial. There has been much interest from both the patient and sleep medicine communities in investigating patolisin in patients with IH, and we are pleased with the pace of study startup activities.

And patient global impression of change.

The trial will also assess the impact of the <unk> on what is commonly referred to as brain fog.

Measuring cognitive function at baseline and after treatment with <unk> in patients with IH.

The trial design is a double blind placebo controlled randomized withdrawal study with a target enrollment of about 200 patients.

Approximately 60 to 80 sites in the U S will be participating in over 100 clinical trial sites have been evaluated for this trial.

There has been much interest from both the patient and sleep medicine communities in investigating <unk> in patients with IH and we are pleased with the pace of study start up activities.

We appreciate the efforts of our clinical investigators and the participation from the patients and families in the IH community that we are actively working with <unk>.

Jeffrey Dayno: We appreciate the efforts of our clinical investigators and the participation from the patients and families in the IH community that we are actively working with. We are excited about the Intune study and, if positive, could lead to the next new potential indication for WCAGS for another rare neurological disease patient population with significant unmet medical need. We look forward to providing updates on the in-tune study on future calls. Turning to our other lifecycle management programs for Petolsen, which are shown on our pipeline slide or slide seven.

We are excited about the <unk> study and if positive could lead to the next new potential indication for wake X for another rare neurological disease patient population with significant unmet medical need.

We look forward to providing updates on the interim study on future calls.

Turning to our other lifecycle management programs for <unk>, which are shown on our pipeline slide slide seven.

We have made good progress on our phase II proof of concept trial in patients with <unk> Willi syndrome, or PWM and are on track for topline data in the second half of this year.

Jeffrey Dayno: We have made good progress on our Phase 2 proof-of-concept trial in patients with Prader-Willi syndrome, or PWS, and are on track for top-line data in the second half of this year. For our Phase 2 trial in patients with type 1 myotonic dystrophy, or DM1, we continue to activate new sites and enroll patients with top-line data anticipated in 2023. Lastly, a few words on HBS-102, our early-stage asset, which is a melanin-concentrating hormone receptor 1 antagonist, as shown on slide 8.

For our phase II trial in patients with type one my atonic dystrophy or <unk>, we continue to activate new sites and enroll patients with top line data anticipated in 2023.

Lastly, a few words on <unk> 102, our early stage asset, which is a melanin concentrating hormone receptor one antagonist as shown on slide eight.

We are working with one of the top labs in the country and mch biology and are on track to initiate a preclinical proof of concept study later this year.

Jeffrey Dayno: We are working with one of the top labs in the country in MCH biology and are on track to initiate a preclinical proof of concept study later this year. The objective of this proof of concept study will be to assess the potential utility of HBS-102 for the symptom of hyperphagia, as well as its impact on weight gain and other metabolic parameters, utilizing an established mouse model of Prader-Willi syndrome. MCH neurons are located in the hypothalamus and function as a key control center of feeding behavior as well as hormonal and autonomic control of energy metabolism.

The objective of this proof of concept study will be to assess the potential utility of <unk> 102 for the symptom of hyperphagia as well as its impact on weight gain and other metabolic parameters utilizing an established mouse model of product Willi syndrome.

Mch neurons are located in the hypothalamus and function as a key control center or feeding behavior, as well as hormonal and autonomic control of energy metabolism.

We will provide an update on the timeline for data readout of this preclinical proof of concept study later this year.

Jeffrey Dayno: We will provide an update on the timeline for data readout of this preclinical proof-of-concept study later this year. In closing, we are excited about the initiation of our Intune study in adult patients with idiopathic hypersomnia, which accelerates our clinical development programs to a phase three registrational trial. If positive, this would move us closer to a potential new indication for WACIX and another rare neurological disease with unmet medical need. Thank you, and I'll now turn the call over to our CFO, Sandip Kapadia, for an update on our financial performance. Sandip.

In closing we are excited about the initiation of our <unk> study in adult patients with idiopathic hypersomnia, which accelerates our clinical development programs to a phase III Registrational trial.

If positive this would move us closer to a potential new indication for <unk> and another rare neurological disease with unmet medical need.

Thank you and I'll now turn the call over to our CFO Sandeep <unk> for an update on our financial performance Sandeep.

Thank you, Jeff and good morning, everyone. This morning, we issued our first quarter of 2022 press release and filed our 10-Q.

Sandip Kapadia: Thank you, Jeff, and good morning, everyone. This morning, we issued our first quarter 2022 press release and filed our 10-Q, where you'll find the details of our financial and operating results. Our first quarter performance is also shown on slides 9, 10, and 11.

The detail of our financial and operating results are.

Our first quarter performance is also shown on slides 910 and 11.

We continued to show strong year over year revenue growth and operating income, while continuing to generate cash flow from operations.

Sandip Kapadia: We continue to show strong year-over-year revenue growth and operating income while continuing to generate cash flow from operations. I'm pleased with how we started 2022 and the momentum we're seeing and the outlook for the balance of the year. For the first quarter of 2022, we reported $85.3 million in net revenues for white, compared to 59.7 million in the prior year quarter. This represents a growth of 43% and reflects the continuous growing demand for weight gain.

I am pleased with how we started 2022 and the momentum we're seeing and the outlook for the balance of the year.

For the first quarter of 2022, we reported $85 3 million and net revenues per wafer.

Compared to $59 7 million in the prior year quarter.

This represents a growth of 43% and reflects the continued growing demand for wages.

As expected we did see the impact of seasonal pair dynamics in the early part of the first quarter, resulting in higher gross to net deductions as well as the typical reduction in trade inventories during the quarter.

Sandip Kapadia: As expected, we did see the impact of seasonal pair dynamics in the early part of the first quarter, resulting in higher growth-to-net deductions, as well as a typical reduction in trade inventories during the quarter. We expect these dynamics to normalize throughout the balance of the year. During the first quarter of 2022, operating expenses were $43 million, compared to $34.7 million in the prior year quarter.

We expect these dynamics to normalize throughout the balance of the year.

During the first quarter of 2022 operating expenses were $43 million compared to $34 7 million in the prior year quarter.

Growth in operating expenses continues to be driven by our commercialization of <unk> and the advancement of our pipeline programs.

Sandip Kapadia: The growth in operating expenses continues to be driven by our commercialization of Waytix and the advancement of our pipeline program. As a result, we had operating profitability improvement as we reported first quarter 2022 operating income of $27.6 million compared to $14.5 million in the prior year quarter. Non-GAAP-adjusted net income for the first quarter was $31.1 million, or $0.51 per diluted share, compared to $16 million, or $0.27 per diluted share in the prior year quarter.

As a result, we had operating profitability improvement as we reported first quarter 2020 to operating income of $27 6 million.

<unk> to $14 5 million in the prior year quarter.

non-GAAP adjusted net income for the first quarter was $31 1 million or <unk> 51 per diluted share compared to $16 million or 27 cents per diluted share in the prior year quarter.

Starting in 2022, we have updated our GAAP to non-GAAP reconciliation to better align with other commercial stage biotech companies.

Sandip Kapadia: Starting in 2022, we have updated our gap to non-gap reconciliation to better align with other commercial-stage biotech companies. We believe the updated measure better reflects the underlying business performance when non-cash, non-recurring one-time items are excluded. Thus, non-GAAP-adjusted net income excludes non-cash interest expense, depreciation, amortization, stock-based compensation, and other non-operating items along with the tax effect of these items.

We believe the updated measure better reflects the underlying business performance when noncash nonrecurring onetime items are excluded.

Thus non-GAAP adjusted net income excludes noncash interest expense depreciation amortization stock based compensation and other non operating items along with the tax effect of these items.

Please see our press release for a reconciliation of this measure.

Sandip Kapadia: Please see our press release for a reconciliation of this measure. During the first quarter of 2022, we generated approximately 29 million of cash from operations and end of the quarter with 224.5 million in cash and cash equivalents as of March 31st. During the quarter, we also surpassed $500 million of cumulative WCAG 2.0 revenue since launch, which triggered a final $40 million milestone payment to our partner, Bio4j. Looking ahead, we have strong business momentum and have navigated the earlier payer dynamics, and we expect quarter-over-quarter net revenue growth for the balance of 2022. We also expect to increase in investment in R&D and SG&A as we continue to successfully execute on our three pillar growth strategy.

During the first quarter of 2022, we generated approximately $29 million of cash from operations and ended the quarter with $224 5 million in cash and cash equivalents as of March 31.

During the quarter, we also surpassed $500 million of cumulative <unk> net revenue since launch, which triggered a final $40 million milestone payment to our partner bio <unk>.

Looking ahead, we have strong business momentum.

Obligated the earlier payer dynamic and we expect quarter over quarter net revenue growth for the balance of 2022.

We also expect the increase in investment in R&D and SG&A.

We continue to successfully execute on our three pillar growth strategy.

So in conclusion, we continue to operate from a position of strength.

Sandip Kapadia: So in conclusion, we continue to operate from a position of strength, with growing revenues, prudent expense controls, a solid balance sheet, and access to additional capital. We believe that WCAG has the potential to be a 1 billion press franchise based on narcolepsy and other indications in the coming years. We look forward to reinvesting our capital to fund our ongoing development program and acquire additional assets. And with that, I'd like to turn the call back to John for his closing remarks. Thank you, Sandip.

With growing revenues prudent expense control, a solid balance sheet and access to additional capital.

We believe the wafer test the potential to be a $1 billion plant size based on narcolepsy and other indications in the coming years.

We look forward to reinvesting our capital to fund our ongoing development program and acquire additional assets.

And with that I'd like to turn the call back to John for his closing remarks.

John .

Thank you Sandeep.

In summary, our business fundamentals continue to be strong putting us in a good position to execute our three pillar growth strategy and make 2022, our best year, yet in company history.

John Jacobs: In summary, our business fundamentals continue to be strong, putting us in a good position to execute our three-pillar growth strategy and make 2022 our best year yet in company history. Our intent is to continue growing Wackex sales in narcolepsy via good commercial execution and strong organic demand for this unique and meaningfully differentiated product. To continue to advance our clinical programs with the goal of expanding the utility of WACIX beyond narcolepsy to help bring this innovative therapy to new patient populations, and to acquire new assets beyond Wacox to expand our portfolio with the vision of evolving Harmony into a leading rare neurology company with sustainable long-term growth potential.

Our intent is to continue growing <unk> sales in narcolepsy via a good commercial execution and strong organic demand for this unique and meaningfully differentiated product.

To continue to advance our clinical programs with the goal of expanding the utility of wake X beyond narcolepsy to help bring this innovative therapy to new patient populations.

And to acquire new assets beyond <unk> to expand our portfolio with the vision of evolving harmony into a leading rare neurology company with sustainable long term growth potential.

We look forward to updating you on our progress throughout the year.

Operator: We look forward to updating you on our progress throughout the year. This concludes our planned remarks today. Thank you for joining our call. And I will now turn things back over to the operator to facilitate the Q&A session. Operator, can we please open the call to questions? Thank you, and at this time, if you would like to ask a question, please press star 1 on your telephone keypad. If you wish to remove yourself from the queue, you may do so by pressing the pound key.

This concludes our planned remarks today. Thank you for joining our call and I will now turn things back over to the operator to facilitate the Q&A session.

Operator can we please open the call to questions.

Thank you and at this time, if you would like to ask a question. Please press star one on your telephone keypad, if you wish to remove yourself from the queue. You may do so by pressing the pound key we remind you to please pickup your handset and please limit yourself to one question and one follow up question and we will take our first question from Danielle Brill.

Operator: We remind you to please pick up your handset and please limit yourself to one question and one follow-up question. And we'll take our first question from Danielle Brew with Raymond James. Please go ahead, your line is open.

<unk> with Raymond James. Please go ahead your line is open.

Hey, guys. Good morning, and thanks, so much for that question I guess I just have a couple of clarifying questions on the outlook for latex and <unk>.

John Jacobs: Hi guys, good morning and thanks so much for the question. I just have a couple of clarifying questions on the outlook for WCAGS and what you said on March being so strong. Was this driven by patients with reauthorization delays coming back online? Or was this an increase in new prescriptions? And then should we be anticipating that patient as increasing back to the historical 300 to 400 range moving forward? Thank you. Danielle, it's John.

<unk> being.

Strong was this driven by patient with reauthorization delays coming back online or with an increase in new prescriptions and then.

Should we be anticipating net patient add increasing back to the historical three to 100 300 to 400 range moving flat right. Thank you.

Yes, Danielle it's John Thank you for your question.

Jeff Dierks: Thank you for your question. And, you know, Q1 organic demand for our product was actually very strong and stronger than what we experienced in Q4, actually. But as we predicted, you know, you have seasonal dynamics in Q1. So why don't I hand your question over to Jeff Dierks to add a little bit more color to that. Jeff?

Q1 organic demand for our product was actually very strong and stronger than what we experienced in Q4 actually but as we predicted the seasonal dynamics in Q1. So why don't I answer your question over to Jeff <unk> for them to add a little bit more color to that Jeff.

Good morning, Danielle So with respect to March March represented the strongest month in terms of topline prescription demand and new patient starts. So this is new organic demand versus the reauthorization.

Jeff Dierks: Good morning, Danielle. So with respect to March, March represented the strongest month in terms of top-line prescription demand and new patient starts. So this is new organic demand versus the reauthorization. And when you, your second question about net patient ads moving forward, although we're not providing forward looking guidance, we do anticipate returning to the prior quarterly growth in average patients moving forward in 22. I hope that answers your question. Yep, thank you. And we'll take our next question from Chris Howerton with Jeffreys. Please go ahead, your line is open.

When you your second question about net patient adds moving forward.

Although we're not providing forward looking guidance, we do anticipate returning to the prior quarterly growth and average patients moving forward in 'twenty two.

So I hope that answers your question.

Thank you.

And we'll take our next question from Chris Howerton with Jefferies. Please go ahead. Your line is open.

Great Hey, hey, thanks, so much for taking the questions I guess, a similar vein of questioning for me.

Unknown Executive: Great. Hey, hey, thanks so much for taking the questions. I guess a similar vein of questioning from me, I'd be curious to know if you could provide some information of durability of patients on WACIX, maybe average time on drug or maybe something around the refill rate would be useful. And then in terms of kind of the dynamics moving forward, I just I guess a clarification from me, Jeff, you said that the headwinds were from government payers and patients not meeting, you know, assistance for payment. I guess I was wondering if you could have a little more clarification on that in terms of the relative demand that you guys just articulated. Go ahead, Jeff, you want to take that question from Chris?

I'd be curious to know if you could provide some information durability of patients on <unk>, maybe average time on drug or maybe something around the refill rate.

Would be useful.

And then.

In terms of.

Kind of the the dynamics moving forward I, just I guess a clarification from me.

Jeff you said that the headwinds were from government payers and patients not meeting.

Assistance for payment I guess I was wondering if you could have a little more clarification on that in terms of.

The relative demand that you guys just articulated.

Go ahead, Jeff do you want to take that question from Chris Yes, sure. Thanks for the question, Chris So with respect to durability in terms of the average time on drug what we're seeing and we've communicated publicly that the average discontinuation rate for products. In this category at 12 months range is between 30, and 50% and what we're seeing although it is still.

Jeff Dierks: Yeah, sure. Thanks for the question, Chris. So with respect to durability in terms of the average time on drug, what we're seeing and we've communicated publicly that, you know, the average discontinuation rate for products in this category at 12 months ranges between 30 and 50 percent and, you know, what we're seeing, although it's still very early and we're only in our third year of commercialization, is WCAG is falling right in the middle of that range and it's consistent with what the expectations are from patients, from healthcare professionals.

Very early and we're only earn our third year of commercialization is weak.

Is falling right in the middle of that range and Thats consistent with what the expectations are from from patients from health care professionals. So we're very pleased with how well the product is being received by the narcolepsy community.

Jeff Dierks: So we're very pleased with, you know, how well the product is being received by the narcolepsy community. With respect to your second question on the dynamics with respect to, you know, the government pay patient, right, so one context is government pay is about, you know, 15 percent of the overall payer mix, so just to help kind of characterize the size of that opportunity, but I'm sure as you're aware, some government-insured Medicare patients seek third-party assistance programs to provide financial assistance with insurance premiums, with their co-pay or co-insurance diagnostic test assistance, and through independent data on the annual reauthorization process, because this is an annual reauthorization process, some of the patients didn't meet those independent financial need criteria or didn't receive enough eligible funding to continue on treatment, which ultimately resulted in fewer patients on drug. And this is anticipated every year.

With respect to your second question on the dynamics with respect to the.

The government pay patients right. So one context is government pay is about 15% of the overall payer mix. So just to help kind of characterize the size of that opportunity, but I'm sure as you're aware some government insured Medicare patients seek third party assistance programs to provide financial assistance with insurance premiums with their co pay or co.

Insurance diagnostic test assistance and through independent data on the annual reauthorization process. Because this is an annual reauthorization process. Some of the patients didn't meet those independent financial need criteria or didn't receive enough eligible funding to continue on treatment, which ultimately resulted in fewer patients on drug.

And then this is anticipated every year, obviously, it's reflective in our average number of patients on <unk> for the first quarter, but absent that and the patient assistance reauthorization.

Jeff Dierks: Obviously, it's reflective in our average number of patients on WACIS for the first quarter, but, you know, absent that and the patient assistance reauthorization, we're very confident we would experience similar patient growth in terms of average number of patients from prior quarters. And as I kind of shared in my response to Danielle, we're extremely pleased and excited about the performance that we've seen. March was the strongest month we've had in over a year in terms of new patient starts and top-line demand, and we are really optimistic about looking to return to prior quarterly growth, and we remain confident that WACIS is that potential billion-dollar-plus franchise.

We're very confident we would have experienced similar patient growth.

The average number of patients from prior quarters and as I shared in my response to Daniel we're extremely pleased and excited about the performance that we've seen March was the strongest month, we've had in over a year in terms of new patient starts and topline demand and we're really optimistic about looking to return to prior quarterly growth and we remain confident.

That weakness is that potential billion dollar plus franchise.

And one thing Chris I also wanted to add into we talk about average number of patients and they were about 3900, but we exited the first quarter with approximately 4100 active patients on <unk> and I think exiting patients is likely a better metric for the true demand for in Q1, given the anticipated seasonal payer dynamics that we experienced.

Jeff Dierks: And one thing, Chris, I also wanted to add into, you know, we talk about average number of patients, and they were about 3,900. But we exited the first quarter with approximately 4,100 active patients on WACIX. And I think exiting patients is likely a better metric for the true demand in Q1, given the anticipated seasonal payer dynamics that we experienced. We have a stronger base of continuing patients, and so some of those reauthorizations on refills and new patient starts get pushed into February and March.

Yeah right right, we are a stronger base of continuing patients and so some of those re authorizations on refills and new patient starts get pushed into February and March so the rate of average patient growth in the first quarter of slightly less due to these anticipated Q1 dynamic. So just to kind of give you a sense that we're really very very pleased with our performance.

Jeff Dierks: So the rate of average patient growth in the first quarter is slightly less due to these anticipated Q1 dynamics. So just to kind of give you a sense that we're really, you know, very, very pleased with our performance. We've got great momentum heading into Q2. These one-time events are behind us, and we've got a great outlook for the rest of the year. Right, Jeff.

We've got great momentum heading into Q2. These onetime events are behind us and we've got a great outlook for the rest of it Jeff and one of the best lead indicators is the organic demand for our drug was higher in Q1 than it was in Q4. So these are anticipated seasonal dynamics and the strength of our business is really robust as we move forward into 2000.

Unknown Executive: And one of the best lead indicators is the organic demand for our drug was higher in Q1 than it was in Q4. So these are anticipated seasonal dynamics, and the strength of our business is really robust as we move forward into Q2. That's really helpful.

That said that's really helpful.

If youre able to tell us Jeff, but what was the exit number at the end of <unk> in terms of patients active patients.

Unknown Executive: And I don't know if you're able to tell us, Jeff, but what was the exit number at the end of 4Q in terms of patients, active patients? Yeah, Chris, we haven't disclosed that information. And honestly, we haven't even looked at that data.

Yes.

Yes, Chris we haven't disclosed that information and honestly, we havent, even looked at that data but.

Okay and circle back with you and Brian and a follow up call.

Unknown Executive: But circle back to you and Brian and a follow up call. No problem. I really appreciate it. Thanks again.

No problem I really appreciate it thanks again, great pregnancy, everyone.

Unknown Executive: And great progress, everyone. Thanks, Chris. And we'll take our next question from Charles Duncan with Cantor Fitzgerald. Please go ahead, your line is open.

Thanks, Chris.

Yes.

And we'll take our next question from Charles Duncan with Cantor Fitzgerald. Please go ahead. Your line is open.

Yes, good morning, John and team. Thanks for taking the question and congrats on the commercial and development progress in the quarter.

Unknown Executive: Yeah, good morning, John and team. Thanks for taking the question and congrats on the commercial and development progress in the quarter. And let's see, quick question regarding, yeah, we talked a little bit about the first quarter. I guess I'm wondering if you can provide guideposts for the full year 22, given the learnings from the first quarter. And then secondarily, maybe for Jeff Dierks, Salesforce expansion, you mentioned second half of the year impact at earliest. I guess I'm kind of wondering why you say at earliest, and how would you best measure that impact?

Hey.

Let's see quick question regarding <unk>.

Yes, we talked a little bit about the first quarter I guess I'm wondering if you can provide guideposts for the full year 'twenty two given the learnings from the first quarter.

And then secondarily, maybe for Jeff <unk> sales force expansion, you mentioned second half of the year impact at earliest I guess.

Wondering why you say at earliest and how would you best measure of that impact.

Okay.

Charles was asking about full year Guideposts did you want to answer that question first yes sure Charles.

Unknown Executive: Charles was asking about full-year guideposts. Did you want to answer that question first? Yeah, sure, Charles. We're not providing more forward-looking guidance, but what I can say about the business is we've got good, strong fundamentals. Jeff took you through some of the details. We would expect quarter-over-quarter growth for the balance of the year, both in terms of patients and net sales growth. So we expect continued momentum that we're seeing certainly coming out of March and going forward.

As you know, we're not providing more forward looking.

<unk>.

What I can say about the businesses, we've got good strong fundamentals.

To get through some of the details we would expect quarter over quarter growth for the balance of the year. Both in terms of patients and net sales growth. So we expect.

Continued momentum that we're seeing certainly coming out of out of March and going forward.

Hopefully that gives you a little bit of context in terms of our expectations for the year.

Unknown Executive: So hopefully that gives you a little bit of context in terms of our expectations for the year. I think, Charles, your second question was about Salesforce impact of our expansion. Jeff Dierks, did you want to handle that?

And I think Charles your second question was about Salesforce impact of our expansion, Jeff Berkes that you want to handle that yes, absolutely. Thanks for the question Charles It's great to hear from you.

Jeff Dierks: Yeah, absolutely. Thanks for the question, Charles. It's great to hear from you.

So as we've shared we've expanded our sales team by about 10% and obviously, we completed the expansion with all the positions hired trained and in their territories by April one.

Jeff Dierks: So as we've shared, we've expanded our sales team by about 10%. And obviously, we completed the expansion with all the positions hired, trained, and in their territories by April 1. We're expecting to see the benefit of this expansion in the second half of the year, simply because we know it takes time to build relationships. And obviously, in sort of a COVID depressed environment, it's difficult for us to be able to reach all of our targets.

We're expecting to see the benefit is expansion in the second half of the year simply because we know it takes time to build relationships and obviously in sort of a COVID-19 depressed environment, it's difficult for us to be able to reach all of our target. So what we've shared is about 70% of our interactions are in person. So you would anticipate it likely may take 678 calls for an individuals.

Jeff Dierks: So what we've shared is about 70% of our interactions are in person. So you would anticipate it likely may take six, seven, eight calls for an individual to change a behavior from a prescriber through education. So we're simply just allowing that opportunity. And we're expecting the second quarter to build those relationships, learn their geographies, really start to get out and educate those health care professionals with the impact of likely new prescription uptake and new patient starts in the second half of the year at the earliest, if that helps. Got it.

To change of behavior from a prescriber through education. So we're simply just allowing that opportunity and we're expecting the second quarter to build those relationships learner geographies really start to get out and educate those health care professionals with the impact of likely new prescription uptake in new patient starts in the second half of the year at the earliest if that helps.

Got it.

I'm sorry go ahead no go.

Jeff Dierks: One quick commercial follow-up, and that is regarding market dynamics given the change with regard to competitive landscape on Synosy company I cover has acquired that product and they don't currently have a commercial effort, but do you see anything changing with regard to narcolepsy market dynamics given Synosy marketing and then the positioning of Wakex versus Synosy? Thanks. Thanks for the question, Charles. In my perspective, I don't see any changes in the narcolepsy market. Cenosi has been around since July of 19.

Yes, one quick commercial follow up and that is regarding market dynamics, given the change with regard to competitive landscape on Sanofi company I cover has acquired that product and they don't currently have commercial effort, but do you see anything changing with regards to narcolepsy market.

Dynamics, given Sanofi marketing and then the positioning of latex versus Sanofi.

Thanks.

Thanks for the question Charles and my perspective, I don't see any changes in the narcolepsy market Sanofi has been around since July of 19.

It's an active treatment option, we believe <unk> is growing the branded segment of the market by offering a meaningfully differentiated product profile. The only nonscheduled treatment option available and novel mechanism working for histamine and so given the large undiagnosed patient population with significant unmet need and really a differentiated product profile for <unk>. We believe there is plenty of room.

Jeff Dierks: It's an active treatment option. We believe Wacox is growing the branded segment of the market by offering a meaningfully differentiated product profile, the only non-scheduled treatment option available, a novel mechanism working for histamine. And so given the large undiagnosed patient population, the significant unmet need, and really a differentiated product profile for Wacox, we believe there's plenty of room for multiple branded products. We're really excited about the strong demand that we're seeing with Wacox and Q1 and really supports our belief in the long-term opportunity for the brand. Cool.

For multiple branded products, we're really excited about the strong demand that we're seeing with <unk> in Q1, and really supports our belief in the long term opportunity for the brand.

Cool thanks for taking my questions.

Charles just wanted to welcome you aboard as our covering analysts and thank you for joining us it's great to have you here today, yes.

Unknown Executive: Thanks for taking my question. Then Charles just wanted to welcome you aboard as a covering analyst and thank you for joining us. It's great to have you here today. Yeah, thanks. Excited to be here.

Yes, thanks excited to be here.

And we'll take our next question from David <unk> with Piper Sandler. Please go ahead. Your line is open.

Unknown Executive: And we'll take our next question from David Amsellem with Piper Sandler. Please go ahead. Your line is open. Hey, thanks. So just a couple. First, I apologize if I missed this, but can you talk about, generally speaking, the time it takes to get a script filled? What did that look like in the first quarter?

Hey, Thanks, So just a couple first.

I apologize if I missed this but can you talk about generally speaking the time it takes to get a script filled.

What did that look like.

Unknown Executive: And what does that typically look like if you take away the seasonal dynamics? And I guess where I'm getting at here is that, are you getting any sort of dynamics where you've got patients that are just walking away from a prescription because of payer hurdles, whether they're seasonal or just more ongoing? So that's the first question. And then secondly, can you just give us a refresher on the mix between type 1 and type 2 narcolepsy?

In the first quarter and what does that typically look like if you take away the seasonal dynamics and I guess, where I'm getting at here is that are you getting any sort of dynamics, where you've got patients that are just walking away from a prescription because of the.

Because of <unk>.

The payer hurdles.

Whether they're seasonal and largest are just more ongoing.

So that's the first question and then secondly can you just give us a refresher on the mix between.

Unknown Executive: And actually, with idiopathic hypersomnia in mind, Are you even seeing any evidence of a little bit of off-label use in IH? Thanks. David, when it comes to time to fill, I mean, obviously, since launch in 2019, we've seen significant improvement in the efficiency of being able to convert a prescription request into an actual patient on product. And that's to be anticipated in a in a rare orphan launch. And I think Jeff Dirks, you may want to add some additional color to that.

Type one and type two narcolepsy.

And actually with.

With idiopathic hypersomnia in mind.

Are you even seeing any evidence of a little bit of off label use in NIH. Thanks.

David when it when it comes to time to fill I mean, obviously since launch in 2019, we've seen significant improvement in the efficiency of being able to convert the prescription request into an actual patient on product and thats to be anticipated in a rare orphan launch and I think Jeff Berkes, you may want to add some additional color to that but we've seen since launch at <unk> 19.

A remarkable improvement in that efficiency over time.

Yes, John Thanks, and David to your point that the time to getting a prescription filled into your point, we have seen some efficiencies in there and.

John Jacobs: But we've seen since launch in 19, a remarkable improvement in that efficiency over time. Yeah, John, thanks. And David, to your point, the time to getting a prescription filled, to your point, we have seen some efficiencies in there. And, you know, the rates that we're seeing are relatively better than other industry benchmarks when you look at other rare orphan specialty pharmacy products and the time to fill. So we don't believe that the time to fill has any impact on abandonment.

The rates that we're seeing are relatively better than other industry benchmarks. When you look at other railroad from specialty pharmacy products and the time to fill so we don't believe that the time to fill has any impact on abandonment.

There is some level of abandonment with every single prescription whether it's an oral oncology product or a chronic disease and what we're seeing in our abandonment rates is consistent with that for industry standards.

Jeff Dierks: You know, there is some level of abandonment with every single prescription, whether it's an oral oncology product or, you know, a chronic disease. And what we're seeing in our abandonment rates is consistent with that for industry standards. Second question on mix for type 1 and type 2.

Second question on mix for type one and type two so we're seeing about 50% of our new prescriptions coming in for type one narcolepsy about 50% for type two which mirrors, what we're seeing in sort of clinical presentation in the physician's office. They are telling us about half of their patients are presenting with type one and type two so we can really is earlier.

Jeff Dierks: So we're seeing about 50% of our new prescriptions coming in for type 1 narcolepsy, about 50% for type 2, which mirrors what we're seeing in sort of clinical presentation in the physician's office. They're telling us about half of their patients are presenting with type 1 and type 2. So, you know, WCAGS really is eligible and able to be tapping into that broad narcolepsy opportunity. We continue to hear that from healthcare professionals that WCAGS is an appropriate treatment option for all adult patients living with narcolepsy.

<unk> enable to be tapping into that broad narcolepsy opportunity.

We continue to hear that from health care professionals that <unk> is an appropriate treatment option for all adult patients living with narcolepsy and so the data is is vetting out in there and maybe I can ask Dr. Dana the kind of assist in terms of interest and IH and maybe what we're seeing from the Kols community, Yes sure.

Jeff Dierks: And so, you know, the data is vetting out in there. And maybe I can, you know, ask Dr. Dana to kind of assist in terms of interest in IH and maybe what we're seeing from the KOL community. Yeah, sure.

Jeffrey Dayno: Hey, David, thanks for the question. Yeah, in terms of we know that in terms of idiopathic hypersomnia and WCAGS or Pitocin, there's been a lot of interest from, you know, the patient community and the sleep medicine community. We do see, you know, prescription requests in terms of IH, you know, coming into the hub. But obviously, you know, our focus now is on the phase 3 registrational trial and, you know, doing that study and working towards a potential, you know, new indication for IH. So, we've been aware of the growing interest in Pitocin for IH and we are, you know, focused on the Intune study and doing that registrational trial. Okay, great. Thanks, guys.

Hey, David Thanks for the question in terms of we know that in terms of idiopathic hypersomnia and wake surf with Tulsa and Theres been a lot of interest from the patient community and the sleep medicine community.

We do see.

Prescription more class in terms of IH coming into the hub.

But obviously our focus now is on the phase III Registrational trial, and doing doing that study and working towards a potential new indication for IH. So we've been aware of the growing interest.

In propulsion for IH and.

We are.

Focused on the <unk> study and doing that Registrational trial.

Okay, great. Thanks, guys.

Thank you David.

And we will take our next question from Corinne Jenkins with Goldman Sachs. Please go ahead. Your line is open.

Unknown Executive: Thank you, David. And we'll take our next question from Corinne Jenkins with Goldman Sachs. Please go ahead, your line is open.

Yeah, good morning, everybody.

Just hoping that you could expand a bit.

Unknown Executive: Yeah, good morning, everybody. I was just hoping that you could expand a bit on the drivers that you saw for new patient growth in March, as you spoke about the strong organic growth, if you have any visibility on what are some of the dynamics that are driving that. Jeff, any commentary?

And the drivers that you saw for new patient growth in March as you spoke about the strong organic growth if you have any visibility on.

What are some of the dynamics that are driving that.

Jeff any commentary on that because we saw really strong organic demand for the product in Q1, and you mentioned March. So we have a question about some of the drivers a little more color and context on Matthew can sure. Thanks for the question I mean, what we saw is the increase in the number of in person engagements with our field sales team.

Jeff Dierks: We saw really strong organic demand for the product in Q1, and you mentioned March, so we have a question about some of the drivers. A little more color and context on that if you can. Sure, thanks for the question, Corinne. I mean, what we saw is the increase in the number of in-person engagements with our field sales team increased to more than 70% in March, so it was greater in March than it was in February and January, and we know we're still kind of early in our launch, per se, in terms of the education, given that we've been dealing with sort of this COVID headwind and our ability to access healthcare professionals, so I think that in-person engagement, educating the healthcare professional and their staff was likely a driver. We started to see some increases in patient foot traffic in March following lower foot traffic that we saw in January and February, so those are really the drivers.

Increased to more than 70% in March. So it was it was greater in <unk> than it was in February and January and we know we're still kind of early in our launch per se in terms of the education given that we've been dealing with sort of this COVID-19 headwind in our ability to access health care professionals. So I think that in person engagement educating the healthcare professional in their staff was likely a driver.

Are we starting to see some increases in patient foot traffic in March following lower foot traffic that we saw in January and February .

So those are really the drivers I think this is very much an educational opportunity for us and we continue to see growth in new prescribers.

Jeff Dierks: I think this is very much an educational opportunity for us, and we continue to see growth in new prescribers, as well as increasing the depth of our prescriber base, meaning patients starting a second or a third patient on WACIX with a prescription, but I think the engagement process with our representatives getting able to be back in the offices and educating the entire staff. Obviously, as a specialty pharmacy product, there's a healthcare professional decision, there's the nurse counseling portion of it, there's the billing coordinator and the reimbursement specialist in the office that all need to be educated on this to make sure they have that optimal experience.

As well as increasing the depth of our prescriber base, meaning patients starting a second or a third patient on <unk> with a prescription.

But I think the engagement process with our representatives getting able to be back in the offices and educating the entire staff, obviously as a specialty pharmacy product. There's a health care professional decision. There is the nurse counseling portion of it there is the billing coordinator and the reimbursement specialist in the office that all need to be educated on this to make sure they have that optimal experience.

So we're really pleased with the momentum that we saw current in March and I think we're you know.

Jeff Dierks: So, you know, we're really pleased with the momentum that we saw current in March, and I think we're, you know, we're very optimistic in terms of looking forward for the remainder of the year and continuing to make a difference in the narcolepsy community. Jeff, we're very strongly and consistently adding additional prescribers, as well, new prescribers, to the drug each month and each quarter on top of base who can continue to prescribe in many of the vast majority of whom become repeat prescribers, correct? Correct.

We're very optimistic in terms of looking forward for the remainder of the year and continuing to make a difference in the narcolepsy community, Jeff, we're very strongly and consistently adding additional prescribers as well new prescribers to.

So the drug each month and each quarter on top of base, who continue to prescribe in many of the vast majority of them become repeat prescribers correct correct. Okay, and then to that last plane around kind of the whole office engagement you need in order to have a smooth process for prescriptions.

Jeff Dierks: And then to that last point around kind of the whole office engagement you need in order to have a smooth process for prescriptions, is there anything you expect to change with respect to the number of visits or the amount of handholding you need to do as you expand your sales force to target maybe primary care and psychiatrists who aren't writing as much narcolepsy prescriptions or may not have the same experience with the specialty pharmas? Yeah, Corinne, and I think with a new product, obviously, it's a novel mechanism. There's education within every office, and you're right. If you've got someone that's familiar with a specialty pharmacy distribution model, there's likely less education necessary for that and more education on the product.

Is there anything you expect to change with respect to the number of visits or the amount of <unk>.

Handholding you need to do as you expand your sales force to target, maybe primary Karen psychiatrist who aren't writing as much narcolepsy.

Dark lipsey prescriptions, you may not have the same experience so that the specialty pharmacy.

Yes, Chris I think with the new product obviously, it's a novel mechanism. There's education within every office and you are right. If you've got someone that's familiar with our specialty pharmacy distribution model, there is likely less education necessary for that and more education on the product, but we have a great educated field sales team. That's been expanded we have a field reimbursement manager team.

Jeff Dierks: But we have a great educated field sales team that's been expanded. We have a field reimbursement manager team that is out there and able to help support offices going through the reimbursement. We have a fully staffed and dedicated patient hub. So we really have a very sophisticated white glove service that can really sort of surround that office and make sure that we have all the appropriate touch points. We know that likely there may be some additional investment in time in some of these offices, but we have the right resources to be able to do it.

That is out there and able to help support offices going through the reimbursement we have a fully staffed and dedicated patient hub. So we really have a very sophisticated white glove service that it can really sort of surround that office and make sure that we have all the appropriate touch points.

That likely there may be some additional investment in time and some of these offices, but we have the right resources to be able to do it we've seen great success in educating existing psychiatrist in primary care doctors and worked anticipating a very similar journey with some of these new writers that we continue to bring on board in future quarters.

Jeff Dierks: We've seen great success in educating existing psychiatrists and primary care doctors, and we're anticipating a very similar journey with some of these new writers that we continue to bring on board in future quarters. Great, thank you. And once again, as a reminder, to ask a question today, that is star 1 on your touchtone phone. And we'll take our next question from Franois Brisebois with Oppenheimer. Please go ahead.

Great. Thank you.

So once again as a reminder to ask a question today that is star one on your Touchtone phone.

And we will take our next question from Frank Joyce Principal is with Oppenheimer. Please go ahead.

Alright, thanks for taking the questions.

So I was just wondering just trying to get a better feel for the prevalence of IH and it seems like the the true IH patients.

Unknown Executive: Hi, thanks for taking the questions. So, I was just wondering, just trying to get a better feel for the prevalence of IH. And it seems like the, you know, the true IH patients, the, you know, 18 to 20 hours of sleep are a little more rare, but there seems to be commingling of indications. So, it seems hard to, there's just a lot of patients with IH without the long sleep time, and then there's the narcolepsy type 2 patients that seem hard to distinguish. So, I'm just trying to get a feel for how, you know, you segment this 30 to 40,000 diagnosed patients in IH that you describe. Jeff Dayno, why don't you take that question from Frank?

18 to 20 hours of sleep, a little more rare, but there seems to be co mingling of indication. So it seems hard to there's just a lot of patients with age with that.

The long sleep time, and then Theres the narcolepsy type two patients that seem hard to distinguish so I'm just trying to get a feel for how you segment that 30 to 40000 diagnosed patients NIH that you discussed.

Justin why don't you take that question from Brian Yes, Yes. Good morning, Frank Thanks for the question, yes. So in terms of IH I think in terms of epidemiology. It starts with so the claims data and the number of diagnosed patients based on.

Jeffrey Dayno: Yeah. Yeah, good morning, Frank. Thanks for the question. Yeah. So in terms of IH, I think in terms of epidemiology, you know, it starts with, so the claims data and the number of diagnosed patients, you know, based on, you know, ICSD criteria in the range of 30 to 40,000 patients. Going to the literature in terms of the broader epidemiology, you know, it's potentially up to 70,000 to 80,000 patients in the U.S. And you raise a good point, obviously, and in the sleep medicine community, it's, you know, an active discussion, you know, idiopathic hypersomnia, you know, exists along a continuum or a spectrum, you know, in terms of patients with type 1 narcolepsy, you know, type 2, and then IH.

Ics the criteria in the range of 30 to 40000 patients.

Going to the literature in terms of the broader epidemiology.

<unk> up to 70% to 80000 patients in the U S and you raise a good point, obviously any of the sleep medicine community, it's an active discussion.

APAC hypersomnia exists along a continuum or a spectrum in terms of patients with <unk>.

Type one narcolepsy type two and then IH and I think IH as another central disorder of hypersomnia lengths. There is some of that overlap youre alluding to the.

Jeffrey Dayno: And I think IH as another central disorder of hypersomnolence, you know, there is some of that overlap you're alluding to, especially with NT2. However, you know, you lean on, you know, the clinical diagnosis and the clinicians making the diagnosis supported, you know, by sleep studies, and, you know, they're, you know, ICSD2 differentiated between, you know, IH patients with long sleep time and those without. Actually, the ICSD3 criteria sort of took that away. So, there is, you know, some of that difference in terms of the, you know, the clinical phenotype.

Especially within T. Two however, you lean on the clinical diagnosis and the clinicians, making the diagnosis supported by sleep studies.

And they are.

ICSC to differentiate it between.

Patients with long sleep time than those without.

Actually the ICSC three criteria sort of took that away.

Jeffrey Dayno: But ultimately, you know, it's how the clinicians make the diagnosis. Obviously, in our clinical trials, you know, we lean on the formal diagnosis of IH for patients to be eligible. And, you know, then they're managed in terms of by, you know, the sleep medicine community. What's also interesting is when speaking to the KOLs, you know, they say that a lot of them have as many patients, you know, with IH, you know, per ICSD criteria in their clinics as they do with narcolepsy. So, we, you know, we think it's obviously a significant opportunity for Pitulsan going forward.

So there is some of that difference in terms of the clinical phenotype, but ultimately.

It's how the clinicians make the diagnosis.

Obviously in our clinical trials, we lean on the formal diagnosis of IH for patients to be eligible.

And then they are managed in terms of by the sleep Medicine community.

What's also interesting is when speaking to the Kols.

They say that a lot of them have as many patients with IH.

Her ICSC criteria in their clinics as they do with narcolepsy.

So.

Thank.

It's obviously a significant opportunity for <unk> going forward as I mentioned before we're focused on the execution of the <unk> trial in pursuit of the indication.

Jeff Dierks: As I mentioned before, you know, we're focused on the execution of the Intune trial in pursuit of the indication. Okay, thank you. That's extremely helpful. And then maybe lastly, in terms of the time for the script to be in the patient's hand, has Harmony ever thought or has ever given out free samples for the maybe the first 30 days, the first 60 days of use?

Okay. Thank you that's extremely helpful. And then maybe lastly in terms of the time for the script to be in the patient's hands has harmony ever.

Or have you ever given out free samples.

30 days or 60 days of abuse or is that not something that's necessary based on it not seeming to really be a problem at this point.

Go ahead, Jeff Yes, Frank Thanks for the question so most of our or from products do not sample the product and again, we haven't seen any challenges with abandonment or patients that are <unk>.

Jeff Dierks: Or is that not something that's necessary based on it not seeming to really be a problem at, Go ahead, Jeff. Yeah, Frank, thanks for the question. So most ROR from products do not sample the product.

Jeff Dierks: And again, we haven't seen any challenges with abandonment or patients that are walking away for not having a sample. I mean, this is obviously a chronic lifelong neurologic disorder where there is no cure. Patients have been waiting for over a decade for WCAGs. And so the time that they're waiting for their prescription is well within industry norms. And as I was saying earlier to another question that I believe David asked, versus benchmarks, we're actually more expeditious in getting patients on product than a lot of other companies.

Walking away for not having a sample I mean this is obviously a chronic lifelong neurologic disorder, where there is no cure patients have been waiting for in over a decade for wake X and so the time that they are waiting for their prescription is well within industry norms and as I was saying earlier to another question that I believe David asked versus benchmarks were actually more expeditious and getting patients on.

Product and a lot of other companies. So we're really pleased about the results and the enhancements that we're making within our patient hub and our SP network.

Jeff Dierks: So we're really pleased about the results and the enhancements that we're making within our patient hub and our SP network. And we're really excited about our ability to continue to help patients get on WCAG. Okay, great. That's it for me.

Really excited about our ability to continue to help patients get on <unk>.

Okay, Great. That's it for me, thanks, and congrats on the progress.

Thank you Brian .

Alright, Thank you and I am showing there are no further questions. This does conclude today's how many bioscience first quarter 2022 financial update conference call. You May now disconnect your line and have a wonderful day.

Unknown Executive: Thanks and congrats on the progress. Thank you, Craig. All right, thank you. And I am showing there are no further questions. This does conclude today's Harmony Bioscience first quarter 2022 financial update conference call.

Thank you everyone.

Okay.

Operator: You may now disconnect your line and have a wonderful day. Thank you, everyone. Time to change the subtitles. 분이람, Jessica Kirschgrober, Advisor of Trinity University Safety from Harvard. And we all appreciate it. We should be grateful. Thank you, stardust, technical difficulties, all trouble,

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