Q1 2024 Harmony Biosciences Holdings Inc Earnings Call
Madison: Good morning. My name is Madison, and I will be your conference operator today. At this time, I would like to welcome everyone to Harmony Bioscience's first quarter 2024 financial results conference call. All participant lines have been placed on mute to prevent any background noise.
Good morning, My name is Madison and I will be your conference operator today.
At this time I would like to welcome everyone to Harmony Biosciences first quarter 2024 financial results Conference call.
Madison: All participant lines have been placed on mute to prevent any background noise.
Madison: 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 need operator assistance, please press star zero. I will now turn the call over to Luis Sanay, head of investor relations. Please go ahead.
Madison: After the Speakers' remarks, there will be a question and answer session.
If you would like to ask a question at that time. Please press star one on your telephone keypad.
Madison: Please be advised that today's conference maybe recorded.
Lastly, if you should need it.
Madison: Operator assistance. Please press Star Zero I will now turn the call over to Lewis and I head of Investor Relations. Please go ahead.
Luis Sanay: Thank you, operator. Good morning, everyone, and thank you for joining us today as we review Harmony Biosciences' first quarter 2024 financial results and provide a business update. Before we start, I encourage everyone to go to the investors section of our website to find the materials that accompany our discussion today, including a reconciliation of our gap to non-GAAP financial measures. At this stage of our life cycle, we believe non-GAAP financial results better represent the underlying business performance.
Lewis: Thank you operator, good morning, everyone and thank you for joining US today as we review Armani Biosciences first quarter 2024 financial results and provide a business update.
Lewis: Before we start I encourage everyone to go to the investors section of our website to find the materials that accompany our discussion today, including a reconciliation of our GAAP to non-GAAP financial measures.
Lewis: At this stage of our lifecycle, we believe non-GAAP financial results better represent the underlying business performance.
Luis Sanay: Our speakers on today's call are Dr. Jeffrey Dayno, President and CEO, Jeffrey Dierks, Chief Commercial Officer, Dr. Kumar Budur, Chief Medical Officer, and Sandip Kapadia, Chief Financial Officer and Chief Administrative Officer. 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; our actual results may differ materially, and we undertake no obligation to update these statements, even if circumstances change.
Our speakers on today's call are Dr. Jeffrey NAU, President and CEO, Jeffrey <unk>, Chief Commercial officer, Dr. Kumar of a door, Chief Medical Officer, and Sandy <unk>, <unk>, Chief Financial Officer, and Chief administrative officer.
Lewis: 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. Our actual results may differ materially and we undertake no obligation to update these statements even if circumstances change we.
Luis Sanay: We encourage you to consult the risk factors referenced in our SEC filings for additional details. We have a lot to share this morning, so in order to allow ample time for Q&A, we will keep our prepared remarks brief this morning. I would now like to turn the call over to Dr. Jeffrey Dayno.
Lewis: We encourage you to consult the risk factors referenced in our SEC filings for additional details.
Lewis: We have a lot to share. This morning, so in order to allow ample time for Q&A, we will keep our prepared remarks brief this morning.
Speaker Change: I would now like to turn the call over to Dr. Jeffrey Dana Jeff.
Jeffrey M. Dayno: Lewis, and thanks everyone for joining our conference call today. Earlier this morning, we were excited to announce our third business development deal in the past eight months with the acquisition of Epigenics Therapeutics. As you may have seen in our earnings release, in addition to this news, we have accelerated our growth strategy and transformed our business to position Harmony for long-term value creation. Given all the exciting news and upcoming catalysts that we have to share today, we will not be able to go into depth on everything on this call, but the key points that I want you to take away from our call today regarding the Harmony story are the following. Our commercial business is strong, and Wacas continues to demonstrate durable growth now in its fifth year in the market.
Thank you Louis and thanks, everyone for joining our conference call today.
Jeffrey M. Dayno: Earlier. This morning, we were excited to announce our third business development deal in the past eight months with the acquisition of Epigenetics Therapeutics.
Jeffrey M. Dayno: As you may have seen in our earnings release. In addition to this news we have accelerated our growth strategy and have transformed our business to position harmony for long term value creation.
Speaker Change: Given all of the exciting news and upcoming catalysts that we have to share today, we will not be able to go into depth on everything on this call, but the key points that I want you to take away from our call today regarding the harmony story are the following.
Speaker Change: Our commercial business is strong and wake is continues to demonstrate durable growth now you're five in the market.
Jeffrey M. Dayno: Wakex is a $1 billion plus market opportunity in adult narcolepsy alone, and we are well on our way as we expect to continue to grow the brand through LOE in 2030. We are growing organically by advancing our lifecycle management programs for Pitocin with the next generation formulations, designed to improve the patient experience and patient outcomes, as well as generate new IP to extend the Pitocin franchise out beyond 2040. We are also pursuing new indications for pitolicin, including near-term catalysts in pediatric narcolepsy and idiopathic hypersomnia, to help even more patients living with unmet medical needs and drive incremental revenue.
Speaker Change: Wake acts as a $1 billion plus market opportunity in adult narcolepsy alone and we are well on our way as we expect to continue to grow the brand through low in 2030.
Speaker Change: We are growing organically by advancing our lifecycle management programs for <unk> with the next generation formulations designed to improve the patient experience and patient outcomes as well as generate new IP to extend that the tolson franchise out beyond 2040.
Speaker Change: We are also pursuing new indications for propulsion, including near term catalysts in pediatric narcolepsy and idiopathic hypersomnia to help even more patients living with unmet medical needs and drive incremental revenue.
Jeffrey M. Dayno: We are making good progress toward pediatric exclusivity, which would provide an additional six months of regulatory protection on the back end of our longest patent, a commercial opportunity of upward around $1 billion, and we are growing inorganically through business development. With our previous announcement regarding the licensing of TPM-1116, a highly potent and selective orexin-2 receptor agonist to solidify and grow our sleep-like franchise, and today's announcement regarding the acquisition of Epigenics and their Rare Epilepsy Portfolio.
Speaker Change: We are making good progress towards pediatric exclusivity, which would provide an additional six months of regulatory protection on the backend of our longest patent a commercial.
Opportunity of upward around $1 billion.
Speaker Change: And we are growing inorganically through business development.
Speaker Change: With our previous announcement regarding the licensing of TPM 11, 16, a highly potent and selective orexin two receptor agonist to solidify and grow our sleep wake franchise and.
And today's announcement regarding the acquisition of epigenetics and they are rare epilepsy portfolio.
Jeffrey M. Dayno: We now have three Orphan Rare CNS franchises in late stage development, each with potential peak sales opportunities of one to two billion dollars and patent protection ranging from the late 2030s to the mid-2040s. At Harmony, we believe we are well positioned to become the leading patient-focused CNS biotechnology company delivering innovative treatments to patients with unmet medical needs and, while doing so, driving significant and durable value creation. I want to take a minute to emphasize the value of our pipeline that we have been building. Across these three franchises, we are currently working with eight assets being studied across 13 development programs.
Speaker Change: We now have three orphan rare CNS franchises in late stage development.
Speaker Change: Each with potential peak sales opportunities of $1 billion to $2 billion and patent protection ranging from the late twenties thirties to mid 'twenty forties.
Speaker Change: At Harmony, we believe we are well positioned.
Speaker Change: To become the leading patient focused CNS biotechnology company, delivering innovative treatments to patients with unmet medical needs.
Speaker Change: And while doing so drive significant and durable value creation.
Speaker Change: I want to take a minute to emphasize the value of our pipeline that we have been building.
Across these three franchises. We are currently working with eight assets being studied across 13 development programs.
Jeffrey M. Dayno: More importantly, we expect these programs to result in at least one new product or indication launch each year over the next five years. We have planned ahead, executed smart and strategic business development deals with low upfront costs and risk tied to the achievement of certain clinical, regulatory, and sales milestones that, if successful, are poised to generate significant near-term and long-term value creation. And we are not stopping here.
Speaker Change: More importantly, we expect these programs to result in at least one new product or indication launch each year over the next five years.
Speaker Change: We have planned ahead executed smart and strategic business development deals with low upfront cost and risk tied to the achievement of certain clinical regulatory and sales milestones that is successful are poised to generate significant near term and long term value creation.
Speaker Change: And we are not stopping here.
Jeffrey M. Dayno: While we have made significant progress on our business development goals, we continue to look to build out our pipeline even further. While we do a broad sweep of the BD landscape, our focus is on assets in the orphan rare CNS space, consistent with the three deals we have done over the past eight months. We feel there are other opportunities out there that would fit our growth strategy. And with approximately $454 million in cash, cash equivalents, and investments as of March 31st, we are in a solid financial position to execute on additional BD opportunities and have demonstrated our ability to do so.
Speaker Change: While we have made significant progress on our business development goals, we continue to look to build out our pipeline even further.
Speaker Change: While we do a broad sweep of the BD landscape. Our focus is on assets in the orphan rare CNS space consistent with the three deals we've done over the past eight months we.
Speaker Change: We feel there are other opportunities out there that would fit our growth strategy.
And with approximately $454 million in cash cash equivalents and investments as of March 31st we are in a solid financial position to execute on additional BD opportunities and have demonstrated our ability to do so.
Jeffrey M. Dayno: Let me share a few highlights with you from each of our three franchises that are in late stage development. First, building off our leadership position in SleepWake with WakeX. We began working on extending the Pitolacin franchise several years ago by developing new formulations of Pitolacin that are planned to come to the market both during and towards the end of the wakage lifecycle. Importantly, these products are designed to improve patient experience and patient outcomes and will have new IP that extends our durable growth and leadership in sleep-wake out beyond 2040.
Speaker Change: Let me share a few highlights with you from each of our three franchises that are in late stage development.
First building off our leadership position in sleep wake with Wake X.
Speaker Change: We began working on extending the vitol western franchise several years ago by developing new formulations of <unk> that are planned to come to the market both during and towards the end of the wake its lifecycle.
Speaker Change: Importantly, these products are designed to improve patient experience and patient outcomes and we will have new IP that extends our durable growth and leadership in sleep wake out beyond 2040.
Jeffrey M. Dayno: We remain committed to the idiopathic hypersomnia patient community and gaining an indication for patulsin IH and plan to submit an SNDA to FDA in the second half of this year. After following the Erexin space for the last few years and doing diligence on several of the assets, we licensed TPM1116, a highly potent, selective oral Erexin II receptor agonist with a potential best-in-class profile due to its unique chemical structure and preclinical data.
Speaker Change: We remain committed to the idiopathic hypersomnia patient community and gaining an indication for Pitocin NIH and plan to submit an S. N D. A to F D. A in the second half of this year.
Speaker Change: Yeah.
Speaker Change: After following the Orexin space for the last few years and doing diligence on several of the assets. We licensed T. P. M 11, 16, a highly potent selective oral orexin two receptor agonist with a potential best in class profile due to its unique chemical structure and preclinical data.
Jeffrey M. Dayno: This solidifies our leadership position in sleep medicine and demonstrates our long-term commitment to the field. Our second franchise in rare neurobehavioral disorders continues to make good progress, and the lead program, ZYN002, is in a pivotal phase 3 registrational trial for Fragile X syndrome and on track for top line data readout in mid 2025, with approximately 80,000 patients living with Fragile X in the U.S. This is a sizable market opportunity, and we also have global rights to this asset, which has even bigger market potential.
Speaker Change: This solidifies our leadership position in sleep medicine, and demonstrates our long term commitment to the field.
Speaker Change: Our second franchise in rare neuro behavioral disorders continues to make good progress and the lead program with Z Y N zero-zero too.
Speaker Change: Is in a pivotal phase III Registrational trial for fragile X syndrome, and on track for topline data readout in mid 2025.
Speaker Change: With approximately 80000 patients living with fragile X in the U S. This is a sizable market opportunity and we also have global rights to this asset, but with even bigger market potential.
Jeffrey M. Dayno: And today, with the announcement of our latest BD deal, the acquisition of Epigenics Therapeutics, we established a rare epilepsy franchise and acquired two new assets to serve as the foundation of what could be a larger franchise. The lead program is Clemazole Hydrochloride or EPX-100, which has received both orphan drug designation and rare pediatric disease designation from the FDA for Gervais syndrome and Lennox-Gastaut syndrome It is currently in a pivotal registrational trial for Gervais syndrome, with top-line data expected in 2026. We also plan to start a pivotal phase 3 trial with EPX100 in patients with Lennox-Gastaut syndrome in the second half of this year.
Speaker Change: And today with the announcement of our latest BD deal the acquisition of Epigenetics Therapeutics, we established a rare epilepsy franchise and acquired two new assets to serve as the foundation of what could be a larger franchise.
Speaker Change: The lead program is with climates, all hydrochloride or E T X 100.
Speaker Change: Which has received both orphan drug designation.
Speaker Change: And rare pediatric disease designation from the FDA for Dravet syndrome, and Lennox <unk> syndrome.
Speaker Change: It is currently in a pivotal registrational trial for Dravet syndrome, with topline data expected in 2026.
Speaker Change: We also plan to start a pivotal phase III trial with <unk> 100 in patients with Lennox <unk> syndrome in the second half of this year.
Jeffrey M. Dayno: Kumar will be providing more color on the growth of our development enterprise and our robust pipeline programs later in the call. The important takeaway is that we expect these programs to result in at least one new product or indication launch each year over the next five years with multi-billion dollar revenue potential extending out beyond 2040. While I have focused on the significant progress in our catalyst-rich pipeline that has the ability to deliver durable growth out beyond 2040, I don't want you to lose sight of the continued durable growth that Wacox has demonstrated now in its fifth year in the market.
Speaker Change: Kumar will be providing more color on the growth of our development enterprise and a robust pipeline programs later in the call.
The important takeaway is that we expect these programs to result in at least one new product or indication launch each year over the next five years with multibillion dollar revenue potential extending out beyond 2040.
Speaker Change: While I have focused on the significant progress in our catalyst rich pipeline that has the ability to deliver durable growth out beyond 2040.
Speaker Change: I don't want you to lose sight of the continued durable growth that way kicks has demonstrated now year five in the market.
Jeffrey M. Dayno: We delivered another strong quarter with net revenues of $154.6 million, which represents 30% growth year over year. With these strong results, we are reiterating our 2024 net revenue guidance of $700 to $720 million. We believe that we can continue to grow the franchise for years to come and remain confident that WACIS represents a $1 billion plus opportunity in adult narcolepsy alone, and we are well on our way. With that, I will turn the call over to Jeffrey Dierks, our Chief Commercial Officer, for an update on our commercial performance in our SleepWake franchise.
Speaker Change: We delivered another strong quarter with net revenues of $154 6 million, which represents 30% growth year over year.
Speaker Change: With these strong results we are reiterating our 2024 net revenue guidance of $700 million to $720 million.
We believe that we can continue to grow the franchise for years to come and remain confident that <unk> represents a 1 billion dollar plus opportunity in adult narcolepsy alone and we are well on our way.
Speaker Change: With that I will turn the call over to Jeffrey <unk>, Our Chief commercial officer for an update on our commercial performance in our sleep wake franchise Jeff.
Jeffrey Dierks: Thanks, Jeff. The first quarter was another strong quarter for Wacox and adult narcolepsy, highlighted by continued product adoption and growth in our underlying business fundamentals. Net sales for the quarter were $154.6 million, representing 30% growth from the same quarter a year ago. The solid net sales performance in the first quarter reaffirms our confidence and our net sales guidance of $700 to $720 million for the full year 2024.
Okay.
Jeffrey M. Dayno: Thanks, Jeff the first quarter was another strong quarter for wake extended adult narcolepsy highlighted by continued product adoption and growth in our underlying business fundamentals.
Jeffrey M. Dayno: Net sales for the quarter were $154 $6 million.
Representing 30% growth from the same quarter previous year.
Jeffrey M. Dayno: Net sales performance in the first quarter reaffirms our confidence in our net sales guidance of $700 million to $720 million for the full year 2024.
Jeffrey Dierks: Key drivers of our performance in the quarter were continued growth in the average patient on WCAG, growth in the Weakest Prescriber Base, and continued strong favorable market access, as seen on slide five. The average number of patients on wait lists increased to approximately 6,300 in the first quarter.
Jeffrey M. Dayno: Key drivers of our performance in the quarter were continued growth in the average patient on <unk> growth in the weakest prescriber base.
Jeffrey M. Dayno: And continued strong favorable market access as seen on slide five and six.
Jeffrey M. Dayno: The average number of patients on <unk> increased to approximately 6300 in the first quarter.
Jeffrey Dierks: We are extremely pleased with the continued growth in patients on WACACS and the durability we are seeing in that growth in year five of our rare orphan commercialization. We successfully navigated the traditional Q1 seasonal payer dynamics and changed healthcare cybersecurity impact and are seeing good leading indicators in our underlying business fundamentals heading into the second quarter. We saw continued growth of the WACAS prescriber base beyond OxyBate writers in the first quarter as well. Additionally, we saw meaningful growth in new writers of WCAGs in the approximately 5,000 non-Oxobate REMS enrolled healthcare professional audience. And our more than 33% writer penetration rate in the segment at the end of the first quarter.
We are extremely pleased with the continued growth in patients on <unk> and the durability, we're seeing in that growth in year five of our rare orphan commercialization.
Jeffrey M. Dayno: We successfully navigated the traditional Q1 seasonal payer dynamics and change healthcare cyber security impact and are seeing good leading indicators in our underlying business fundamentals heading into the second quarter.
Jeffrey M. Dayno: We saw continued growth of the weakest prescriber base beyond Oxidate writers in the first quarter as well.
Jeffrey M. Dayno: We saw meaningful growth in new writers of wakes and the approximately 5000 non oxidate rems enrolled health care professional audience and our more than 33% writer penetrated in this segment at the end of the first quarter.
Jeffrey Dierks: This audience represents an insulated group of prescribers and patients from the OxyBase. And the continued growth of prescribers in the segment each quarter reaffirms Wacox is growing the Branded Writer segment beyond the Oxford by providing a meaningfully differentiated product profile and one that offers broad clinical utility across the entire narcolepsy-treating healthcare professional universe. In addition to the growth in new prescribers, we continue to see growth in the depth of prescribing among the approximately 4,000 Oxabate REMS-enrolled healthcare professionals, even with the availability of new and generic Oxybate options.
Jeffrey M. Dayno: This audience represents an insulated group of prescribers and patients from the ox abate and the continued growth in prescribers in this segment each quarter reaffirms wakes us growing the branded writer segment beyond the oxo base by providing a meaningfully differentiated product profile and one that offers broad clinical utility and cross the entire narcolepsy.
Jeffrey M. Dayno: Trading healthcare professional universe.
In addition to the growth in new prescribers, we continue to see growth in the depth of prescribing among the approximately 4000 oxalate rems enrolled health care professionals, even with the availability of new engineering oxalate options.
Jeffrey Dierks: Wakex is highly penetrated within this prescriber audience, and we see growth in this segment each quarter as Wakex is being prescribed to additional narcolepsy patients. Our ability to call on the entire narcolepsy-treating healthcare professional audience allows us to tap into the full diagnosed narcolepsy patient opportunity, giving us confidence in the long-term future growth of weight.
Jeffrey M. Dayno: <unk> is highly penetrated within this prescriber audience and see growth in the segment each quarter as <unk> is being prescribed to additional narcolepsy patients.
Jeffrey M. Dayno: Our ability to call on the entire narcolepsy treating health care professional audience allows us to tap into the full diagnosed narcolepsy patient opportunity, giving us confidence in the long term future growth of <unk>.
Jeffrey M. Dayno: The last driver of our performance in the first quarter was the continued strong and favorable market access coverage for <unk>, even with the availability of new and generic oxalate options on the market we've.
Jeffrey Dierks: The last driver of our performance in the first quarter was the continued strong and favorable market access coverage for WACIX, even with the availability of new and generic Oxibate options on the market. We've seen no changes to the overall payer coverage for WACIX over the past year, and we believe we are well-positioned to support future growth. In summary, we had another strong quarter of durable growth and performance in net sales, patient ads, and growth in prescribers awakened.
Jeffrey M. Dayno: We've seen no changes to the overall payer coverage for wake X over the past year, and we believe we are well positioned to support future growth.
In summary, we had another strong quarter of durable growth and performance in net sales patient adds and growth in prescribers of <unk>, we're seeing good leading indicators in our underlying business fundamentals heading into the second quarter.
And the solid performance in Q1 reaffirms our confidence in our full year net sales guidance of $700 million $720 million.
Jeffrey M. Dayno: I am excited about our performance and we are confident in <unk>, representing a potential billion dollar plus opportunity in adult narcolepsy alone and we are well on our way.
Jeffrey Dierks: We're seeing good leading indicators and our underlying business fundamentals heading into the second quarter, and the solid performance in Q1 reaffirms our confidence in our full-year net sales guidance of $700 million to $720 million. I'm excited about our performance, and we are confident in WACIX representing a potential billion-dollar-plus opportunity in adult narcolepsy alone, and we are well on our way. I would like to now turn the call over to our Chief Medical Officer, Kumar Budur, to discuss the advancements in our clinical development programs. Kumar?
Jeffrey M. Dayno: I would like to now turn the call over to our Chief Medical Officer <unk> to discuss the advancements in our clinical development progress Kumar.
Kumar: Thank you Josh.
Kumar: Good morning to everyone and thank you for joining us today.
Kumar: We're making great progress.
Ramzi.
Kumar: Binding and Douglas gout pipeline programs several of you thought in late stage development.
Kumar: Jeff mentioned.
Kumar: Now testing different development programs.
From preclinical to registration studies.
Kumar: Eight different aspects and under three distinct franchise focused.
Kumar: Focus on really awesome, neuro indications with high unmet need.
Kumar Budur: Good morning, everyone, and thank you for joining us today. We are making great progress in advancing, expanding, and diversifying our pipeline programs, several of which are in late-stage development. As Jeff mentioned, we now have 13 different development programs ranging from preclinical to registration studies across eight different assets and under three distinct franchises focused on rare orphan neuroindications with high unmet needs, and we have the ability to launch a number of these indications in the coming years.
Kumar: Right.
Kumar: The ability to launch a number of these indications in the coming years.
Kumar: Oxford clinical development pipeline as shown on slide seven and.
Kumar: And I think you can appreciate how much it has grown over the past year.
Kumar: Let me start by sharing some key update in each of our funds separately.
Kumar: Starting with our growth in sleep franchise, and our broker idiopathic hypersomnia.
Kumar: We make with the USDA in March to discuss the next steps what I would argue it's broke ground.
Kumar: We were encouraged by the discussions we had with the agency on our data.
Kumar: Burden of the disease limitations of current treatment options and we offer yugo.
Kumar Budur: Our full clinical development pipeline is shown on slide 7, and I think you can appreciate how much it has grown over the past year. Let me start by sharing some key updates in each of our franchises, starting with our growth in the sleep-wake franchise and our program in idiopathic hypothermia. We met with the FDA in March to discuss the next steps for our IH program. We were encouraged by the discussions we had with the agency about our data, the burden of the disease, limitations of current treatment options, and the off-label use of scheduled drugs. We feel the agency understands and appreciates the high unmet need in Iowa.
Kumar: Your trucks.
Kumar: The agency understands and appreciates.
Kumar: Maybe my age.
Kumar: While we understand the bar for approval is high.
Kumar: We are moving forward and plan to submit an NDA in the second half of 2024.
Kumar: This submission will be based on the totality of the data generated from the study including data from the ongoing long term extension study, which strongly support efficacy in patients with IH.
Kumar: You have also identified other supportive information that will be included in the San Diego to further strengthen our submission.
Kumar Budur: While we understand the bar for approval is high, we are moving forward and plan to submit an SNDA in the second half of 2024. The submission will be based on the totality of the data generated from the Intune study, including data from the ongoing long-term extension study, which strongly supports pitolicin's efficacy in patients with IIT. You have also identified other supportive information that will be included in the SNDA to further strengthen our submission.
Kumar: We are optimistic and remain committed in bringing a new treatment option to patients living with IH that is not schedule has been established safety profile and a simple dosing regimen.
Kumar: Yeah.
Kumar: Moving to pediatric narcolepsy, we are on track for the <unk> date of June 21st.
Kumar: We are pleased with the Fda's deficient to periodically review this.
Kumar: This decision highlights the need for new treatment options for the approximately 4000 pediatric patients living with not commit fee.
Kumar Budur: We are optimistic and remain committed to bringing a new treatment option to patients living with IH that is not scheduled, has an established safety profile, and a simple dosing regimen. Moving to pediatric narcolepsy, we are on track for the PDUFA date of June 21st. We are pleased with the FDA's decision to grant priority review. This decision highlights the need for new treatment options for the approximately 4000 pediatric patients living with n
Kumar: Brian <unk> Willi syndrome.
Kumar: We initiated the phase III study in the first quarters.
Kumar: This is a global multi center double blind randomized placebo controlled study randomize approximately 134 patients.
Kumar: We don't think are placebo.
Kumar: One is to one ratio.
Kumar: We are committed to obtaining pediatric exclusivity total effect.
Kumar: We are making good progress on the two requirements and factor in pediatric narcolepsy and Dr thing Gws patient.
Kumar Budur: For Prader-Willi syndrome, we initiated the Phase III Tempo Study in the first quarter. This is a global, multicenter, double-blind, randomized placebo-controlled study that will randomize approximately 134 patients to either pitolescent or placebo in a one-to-one ratio.
Kumar: Feedstock quality F&B and initiating the phase III study gws, respectively.
Kumar: Open pediatric exclusivity will add six months of regulatory exclusivity to the backend of the longest by bank and this represents a significant commercial opportunity for <unk>.
Kumar: An important element of our franchise group strategy is to develop new photography based assets with the goal of generating new IP extending the pit olefin franchise beyond 2040, and bringing new and improved version for Qdoba Saint Gobain market for people living with Mark commit fee.
Kumar Budur: We are committed to obtaining pediatric exclusivity for petroleum. We are making good progress on the two requirements, data in pediatric narcolepsy and data in PWS patients by submitting the PEDS narcolepsy SNDA and initiating the phase three study in PWS, respectively. Obtaining pediatric exclusivity will add six months of regulatory exclusivity to the back end of the longest patent, and this represents a significant commercial opportunity for WayKids. An important element of our franchise growth strategy is to develop new petroleum-based assets with the goal of generating new IP, extending the petroleum franchise beyond 2040, and bringing new and improved versions of petroleum to the market for people living with narcolepsy and other sleep-wake We are making good progress.
Kumar: And obviously make this August.
Kumar: We are making good progress.
Kumar: These formulations.
Kumar: Nextgen one in Q1 and.
Kumar: And Nextgen two <unk> with our partners.
Kumar: We are pleased to report positive PK Darko.
Kumar: In Q1, and three corporate olefin formulation designed to demonstrate equivalence debate geeks abbreviated.
Kumar: Abbreviated development pathway.
Kumar: The <unk> formulation is designed to potentially decrease Gi side effects.
Kumar: We also have an important additional clinical differentiation compared to <unk>.
Kumar: That is the ability to start dosing that $17 eight milligram at the beginning of the therapeutic dose range for Potomac strength, rather than the need to titrate up to the therapeutic range.
Kumar Budur: On these formulations, next-gen 1, NG1, and next-gen 2, NG2, with our partner Bioproject. We are pleased to report positive PK data for NG1, an entry-coded pitolescent formulation designed to demonstrate bioequivalence to vacants through an abbreviated development pathway. The NC1 formulation is designed to potentially decrease GI side effects and also have an important additional clinical differentiation compared to WCAG. That is, the ability to start dosing at 17.8 milligrams at the beginning of the therapeutic dose range for pitonocin rather than the need to titrate up to the therapeutic range.
This clinical differentiation will be supported by your dosing optimization study.
Kumar: As shown on slide nine.
Kumar: The pilot be study showed stimulus debate and extent of absorption that is C. Max and you see.
<unk> and <unk> demonstrating relative bioavailability.
Kumar: The next step towards initiating.
Kumar: Initiating the pivotal bioequivalence and dosing optimization studies in the fourth quarter of fiscal years.
Based on the development timeline.
Picked up <unk> in 2026.
Kumar: Tim.
Kumar: <unk> project for <unk> has been filed and the potential for Bakken predictions are 224 before.
Kumar Budur: This clinical differentiation will be supported by a dosing optimization study. As shown on slide nine, the pilot DE study showed a similar rate and extent of absorption, that is, CMAX and AUC, between NG1 and VACIX, demonstrating relative bioavailability. The next steps for NG1 include initiating the puertal bioequivalence and dosing optimization studies in the fourth quarter of this year. Based on the development timeline, we expect a PDUFA date in 2026. In addition, a provisional patent for NG1 has been filed, and the potential for patent protection up to 2044. Moving on to NextGen2, or NG2.
Kumar: Moving onto Nextgen two <unk>. This is an enhanced formulation of <unk> designed to deliver an optimized PK profile and a higher dosage strength.
Kumar: This population will have a new IP a full development program and is expected to launch towards the end of May kick flight cycle.
Kumar: We are on track to report PK data from this formulation in the first half of this year.
Kumar: We are also very pleased to continue to strengthen our leadership position in sleep wake with licensing of ppm 11 16.
Kumar: Licensing and audits and asset was a natural next step for us as it leverages its already established experience and expertise booking download and commercialization of treatments for sleep wake disorder.
Kumar Budur: This is an enhanced formulation of pitolosan designed to deliver an optimized PK profile and a higher dosage strength. This formulation will have new IP, a full development program, and is expected to launch towards the end of the WCIC Flight Cycle. We are on track to report PK data from this formulation in the first half of this year. We are also very pleased to continue to strengthen our leadership position in sleep-wake with the licensing of TPM 1116. Licensing and audits were a natural next step for us, as it leverages our established experience and expertise, both in the development and commercialization of treatments for sleep-wake disorders. TPM1116, a novel orexin 2-receptor agonist, represents a potential best-in-class product profile amongst the current orexin 2-receptor agonists.
Kumar: DPM 11, 16, a moment Rx in two receptor agonist represents a potential best in class product profile amongst the current audit.
Kumar: Acclamation.
Kumar: It has a new chemical scaffold.
Kumar: The other audit concluded.
Kumar: Potentially contributing to its unique product profile.
Kumar: CPM 11, 16 will be evaluated for the treatment of narcolepsy and other sleep disorders.
Kumar: The preclinical data structures is potential best in class profile.
Kumar: Based on its high potency good selectivity potential for once daily dosing and good safety profile.
Kumar: Look forward to sharing the preclinical data at an upcoming scientific conference.
Kumar: In terms of development milestones.
Kumar Budur: It has a new chemical scaffold compared to the other RXN2 receptor agonists, potentially contributing to its unique product profile. TPM 1116 will be evaluated for the treatment of narcolepsy and other sleep-wake disorders. The preclinical data suggests its potential best-in-class profile based on its high potency, good selectivity, potential for once-daily dosing, and good safety profile. We look forward to sharing the preclinical data at an upcoming scientific conference. In terms of development milestones, we expect to file an IND in mid-2025 and initiate first-in-human studies in the second half of 2025.
Expect to file an IND in.
Kumar: Do you quantify and initiate first in human studies in second half of 2025.
Moving on to our next franchise.
Kumar: Behavioral disorder franchise.
Kumar: Zero zero zero to a pharmaceutical manufactured synthetic kind of redo inkjet devoid of DSV.
Kumar: <unk> predicted, but Nielsen enhanced Joe for transdermal delivery with like <unk> could be a foundational aspect of growing European franchise.
Kumar: We are currently enrolling patients in the pivotal phase III reconnect dry and frozen X syndrome.
Kumar: With approximately 80000 patients diagnosed with funds in extreme drop in the U S alone are no approved treatment there is significant unmet medical need.
Kumar: We expect to complete patient enrollment in the first quarter of <unk>.
Kumar Budur: Moving on to our next franchise, the neurobehavioral disorders franchise. ZYM002, a pharmaceutically manufactured synthetic cannabidiol gel devoid of THC with a patent-protected permeation-enhanced gel for transformal delivery, which, like Wagex, could be a foundational asset in our growing neurobehavioral disorders franchise.
Kumar: <unk> data in mid 2025.
Kumar: 31002 was also studied in an open label Phase II proof of concept study the inspire study in patients with <unk> syndrome and generated positive signals in check.
Kumar: Checklist.
Kumar: This represents another opportunity to help approximately 80000 patients with 20 <unk> deletion syndrome.
Kumar Budur: We are currently enrolling patients in the Pivotal Phase III ReConnect trial for Fragile X syndrome. With approximately 80,000 patients diagnosed with Fragile X syndrome in the U.S. alone and no approved treatment, there is significant unmet medical need. We expect to complete patient enrollment in the first quarter of 2025 and to present top-line data in mid-2025. ZY002 was also studied in an open-label phase 2 proof-of-concept study, the INSPIRE study, in patients with 22q deletion syndrome and generated positive signals in aberrant behavior checklists.
Kumar: Alone and.
Kumar: We have been interacting with the FDA about the phase III program in 'twenty to Q.
Kumar: Expanding this franchise.
Kumar: It is worth noting.
Kumar: 0002 is a global opportunity for harmony, and we look forward to exploring equity with opportunities to bring this novel treatment to patients living with <unk>.
Kumar: Andrew and 'twenty two accumulation syndrome.
Kumar: Ward.
Kumar: Finally, we announced today.
Kumar: <unk> talked about third of neuro franchise in epilepsy with the acquisition of Epigenetics Therapeutics.
Kumar: This acquisition brings us two assets projecting greater epilepsies, both global opportunities.
Kumar: The first asset <unk>.
Kumar: 120, <unk> hydrochloride Portland.
Kumar: And all of them centrally acting serotonin agonist.
Kumar Budur: This represents another opportunity to help approximately 80,000 patients with 22q deletion syndrome in the U.S. alone. And we have been interacting with the FDA about a Phase III program in 22Q and expanding this franchise. It is worth noting
Kumar: It is currently in a pure couple of districts non clinical trial for the treatment of Proteus syndrome in children and adults.
Kumar: <unk> syndrome is that lease and <unk> developmental and epileptic encephalopathy with high unmet medical need.
Kumar: The <unk> mechanism of action of Chemisorb via the federal domestic system could offer good efficacy and importantly, a safer product profile than currently available treatment options and improve the quality of life and functioning in patients with DFS.
Kumar Budur: ZYM002 is a global opportunity for Harmony, and we look forward to exploring opportunities outside the US to bring this novel treatment to patients living with Parzel X syndrome and 22Q deletion syndrome around the world. Finally, we announce today the establishment of our third rare orphan neurofranchise in epilepsy with the acquisition of epigenetics therapeutics. This acquisition brings us two assets targeting rare epilepsies, both global opportunities for us. The first asset, EPX100, is chlamyzole hydrochloride, a potent, quorum-centrally acting serotonin agonist, which is currently in a pivotal registrational clinical trial for the treatment of Brevet syndrome in children and adults.
Kumar: The schematic of the trial design for this registration study known as the AGA study is shown on slide 11.
Kumar: We anticipate top line data from the Orca study in 2026.
Kumar: <unk> 100 is also poised to enter a phase III registration trial for the treatment of <unk> syndrome, and <unk> and see we have developmental and epileptic encephalopathy.
Kumar: Unmet medical need.
Kumar: Anticipate starting this study in the second half of 2024.
Kumar: <unk> 100 has received both orphan drug designation.
Kumar Budur: Dravet syndrome is a rare and severe developmental epileptic encephalopathy with high unmet medical risk. The proven mechanism of action of Clemisorb via the serotonergic system could offer good efficacy and, importantly, a safer product profile than currently available treatment options and improve the quality of life and functioning in patients with DS.
Kumar: And J S pediatric disease designation from the FDA for both <unk> syndrome.
Kumar: We don't control.
Kumar: Our second investigational product <unk> 200.
Kumar: Is a potent oral.
Kumar: Centrally acting selective <unk> agonist that is currently in IND, enabling studies.
Kumar: <unk> 200 also received orphan drug designation squash.
Kumar: Debbie syndrome, Atlanta coastal control I spinoffs treat pediatrics.
Kumar Budur: The schematic of the trial design for this registration study, known as the ARCIS study, is shown on slide 11. We anticipate top-line data from the R2 study in 2026. EPX-100 is also poised to enter a Phase III registration trial for the treatment of Stellar-Gastaut syndrome, another rare and severe developmental epileptic encephalopathy with high unmet medical need. We anticipate starting this study in the second half of 2024. EPX100 has received both orphaned drug designations and rare pediatric disease designations from the FDA for both Dravet syndrome and Lennox-Gistow syndrome.
Kumar: Ignition.
Kumar: We just don't control.
Kumar: To conclude we.
Kumar: <unk> made tremendous progress in advancing our development programs.
Kumar: Turning to our pipeline and diode triangle portfolio, resulting in multiple late stage development programs across three different on Texas.
Kumar: Rick Nadeau behavioral.
Speaker Change: Let's see.
Speaker Change: These programs could result in at least one new product or indication launches empty years, well over the next five years, along with the potential to have hundreds of thousands of patients across all three of neurological disorders. We are investigating.
Speaker Change: I'm proud of the hard work and dedication of 14th the company and look forward to sharing additional updates as we continue to advance our clinical development program.
Kumar Budur: A second investigational product, EPX 200, is a potent, oral, centrally acting selective 5-HT2C agonist that is currently in IND-enabling studies. EPS 200 also received orphan drug designations for Derbe syndrome and Lennox-Gestalt syndrome, as well as rare pediatric disease designations for Lennox-Gestalt syndrome. To conclude, We have made tremendous progress in advancing our development programs, expanding our pipeline, and diversifying our portfolio, resulting in multiple late-stage development programs across three different franchises: SleepWake, NeuroBehavioral, and Rare Epilepsy.
Speaker Change: On behalf of harmony.
Speaker Change: I would like to thank all the patients and their families for participating in our clinical trials.
Speaker Change: Clinical investigators and site personnel for their effort and commitment in helping us at Greenfield development programs.
Speaker Change: I'll now turn the call over to our CFO Sandeep <unk> for an update on our financial performance Sandy.
Speaker Change: Yeah.
Sandeep: Thank you Kumar and good morning, everyone. This morning, we issued our first quarter earnings release and filed our 10-Q filing.
Sandeep: The details of our first quarter of 2024 financial and operating results.
Sandeep: Our financial performance is also shown on slides 12 through 15.
Sandeep: We're off to a great start to the year in 2024 reported another strong quarter of growth in revenues and net income along with continued cash generation our.
Kumar Budur: If successful, these programs could result in at least one new product or indication launch every year over the next five years, along with the potential to help hundreds of thousands of patients across all the rare neurological disorders we are investigating. I'm proud of the hard work and dedication of our teams at Harmony and look forward to sharing additional updates as we continue to advance our clinical development program. On behalf of Harmony, I would like to thank all the patients and their families for participating in our clinical trials, as well as clinical investigators and site personnel for their efforts and commitment in helping us advance our development program. I now turn the call over to our CFO, Sandip Kapadia, for an update on our financial performance. Sandip.
Sandeep: Our unique financial performance and profile positions us well to continue advancing our growth strategy and look for opportunities to drive value for shareholders.
Sandeep: We reported net revenues of $154 6 million compared to $119 1 million in the prior year quarter, representing a growth of 30%.
Sandeep: Performance in the quarter reflects the continued strong underlying demand for wafer mix, coupled with the typical seasonality dynamics at the industry as a whole experienced as each year in Q1, including higher gross to net deductions along with a couple of days of drawdown in trade inventories.
Sandeep: We also reported strong growth in net income and margin.
Sandeep: non-GAAP adjusted net income for the first quarter of 2024 was $50 7 million or 88 cents per diluted share compared to $40 7 million or <unk> 67 per diluted share in the prior year quarter.
Sandip S. Kapadia: Thank you, Kumar. And good morning, everyone.
Sandip S. Kapadia: This morning, we issued our first quarter earnings release and filed our 10-Q, where you'll find the details of our first quarter 2024 financial and operating results. Our financial performance is also shown on slides 12 through 15. We're off to a great start to the year in 2024.
Sandeep: We believe non-GAAP adjusted net income better reflect the underlying business performance.
Sandeep: Please refer to our press release for a reconciliation of GAAP to non-GAAP results.
Sandip S. Kapadia: We reported another strong quarter of growth in revenues and net income, along with continued cash generation. Our unique financial performance and profile positions us well to continue advancing our growth strategy and look for opportunities to drive value for shareholders. We reported net revenues of $154.6 million compared to $119.1 million in the prior quarter, representing a growth of 30%. Performance in the quarter reflects the continued strong underlying demand for weight kicks coupled with the typical seasonality dynamics that the industry as a whole experiences each year in Q1, including higher gross-to-net deductions, along with a couple of days of drawdown in trade inventory.
Sandeep: We ended the first quarter with $453 6 million of cash cash equivalents and investments on the balance sheet. The balance reflects continued cash generation of our underlying business, which provides us the financial flexibility to continue executing on business development and Opportunistically returning.
Sandeep: Capital shareholders via our share repurchase program.
Sandeep: Looking ahead, we continue to expect strong quarter over quarter growth with a potential for trade inventory drawdown of a few days in Q2 as we head into the summer.
Sandeep: We are reiterating our net revenue guidance of 2024 of $700 million to $720 million highlighting our progress towards the 1 billion plus opportunity in narcolepsy alone.
Sandeep: With respect to expenses, we do expect to take IP R&D charges for the licensing of TPM on <unk>, six and the acquisition of epigenetics and the second quarter.
Sandip S. Kapadia: We also reported strong growth in net income and margin. Non-GAAP-adjusted net income for the first quarter of 2024 was $50.7 million, or $0.88 per diluted share, compared to $40.7 million, or $0.67 per diluted share in the prior year quarter. We believe non-GAAP-adjusted net income better reflects the underlying business performance.
Sandeep: The charges will primarily consist of the upfront cost of $25 5 million and $35 million, respectively offset by the value of net assets, we have acquired in.
Sandeep: In addition, we expect ongoing operating expenses of approximately $35 million for 2024, as we advanced both programs.
Sandip S. Kapadia: Please refer to our press release for a reconciliation of GAAP to non-GAAP results. We ended the first quarter with $453.6 million of cash, cash equivalents, and investments on the balance. The balance reflects continued cash generation from our underlying business, which provides us with the financial flexibility to continue executing on business development and opportunistically returning capital to shareholders via our share repurchase program. Looking ahead, we continue to expect strong quarter-over-quarter growth with a potential for trade inventory drawdown of a few days in Q2 as we head into the summer.
Sandeep: As you saw from the terms of both transaction, we continue to be disciplined with capital deployment, we structured both transactions with low upfront payment with success, driven regulatory and sales milestones.
Sandeep: As a result of our recent efforts in business development. We now have multiple programs in late stage development with the potential to generate revenue in the coming years.
Sandeep: So in conclusion, we're off to a great start to the year, along with strong outlook for the balance of the year and well positioned to continue to drive value for shareholders.
Sandeep: And with that I'd like to turn the call back to Jeff for his closing remarks, Jeff.
Sandip S. Kapadia: We are reiterating our net revenue guidance for 2024 of $700 to $720 million, highlighting our progress towards the $1 billion plus opportunity in narcolepsy alone. With respect to expenses, we do expect to take IT R&D charges for the licensing of PPM 1116 and the acquisition of Epigenics in the second quarter. The charges will primarily consist of the upfront costs of $25.5 million and $35 million, respectively, offset by the value of net assets we have acquired.
Jeff: Thank you Sandeep.
Jeff: As we have just highlighted for you harmony is a growth story and our growth is accelerating.
Jeff: We have strategically been executing on expanding our pipeline and diversifying our portfolio to drive near term revenue out to 2030 and durable long term revenue growth out beyond 2040.
Jeff: The key drivers of our catalyst rich pipeline and future revenue potential include.
Jeff: The next Gen formulations with Vitol sent that can generate new IP and extend that to Tulsa franchise and drive durable revenue out beyond 2040.
Jeff: New indications for <unk>, including near term catalysts in pediatric narcolepsy and idiopathic hypersomnia.
Sandip S. Kapadia: In addition, we expect ongoing operating expenses of approximately $35 million for 2024 as we advance both programs. As you saw from the terms of both transactions, we continue to be disciplined with capital deployment. We structured both transactions with low upfront payments and success-driven regulatory and sales milestones. As a result of our recent efforts in business development, we now have multiple programs in late stage development with the potential to generate revenue in the coming years.
Jeff: Gaining pediatric exclusivity and in an additional six months of patent protection on the backend of our longest patent which represents a significant commercial opportunity.
Jeff: Our three business development deals over the past eight months that has resulted in three orphan rare CNS franchises in late stage development, each with potential peak sales opportunities of $1 billion to $2 billion and patent protection ranging from the late 2030 to mid 2000 <unk>.
Sandip S. Kapadia: So in conclusion, we're off to a great start to the year, along with a strong outlook for the balance of the year, and well positioned to continue to drive value for shareholders. And with that, I'd like to call back to Jeff for his closing remarks.
Jeff: And the growth of our development enterprise, which now includes eight assets advancing across 13 development programs, resulting in the potential for at least one new product or indication launch each year.
Jeff: Over the next five years.
Jeff: At Harmony, we believe we are well positioned to become the leading patient focused CNS biotech company delivering innovative treatments to patients with unmet medical needs and while doing so drive significant and durable value creation.
Jeffrey M. Dayno: As we have just highlighted for you, Harmony is a growth story, and our growth is accelerating. We have strategically been executing on expanding our pipeline and diversifying our portfolio to drive near-term revenue out to 2030 and durable long-term revenue growth out beyond 2040. The key drivers of our catalyst-rich pipeline and future revenue potential include, next-gen formulations of Patulsant that can generate new IP and extend the Patulsant franchise and drive durable revenue out beyond 2040; and new indications for pitolicin, including near-term catalysts in pediatric narcolepsy and idiopathic hypersomnia.
Speaker Change: Thank you for your attention and I will now turn the call over to the operator for Q&A operator.
Speaker Change: Thank you 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 star to.
Operator: We remind you to please pickup your handset and please limit yourself to one question and one follow up question.
Speaker Change: We will take our first question from Charles Duncan with Cantor Fitzgerald.
Speaker Change: Okay.
Charles Cliff Duncan: Hey, good morning, Jeff and team thanks for taking our questions and congratulations on good commercial quarter.
Madison: Gaining pediatric exclusivity and an additional six months of patent protection on the back end of our longest patent, which represents a significant commercial opportunity. Our three business development deals over the past eight months have resulted in three orphan rare CNS franchises in late stage development, each with potential peak sales opportunities of one to two billion dollars and patent protection ranging from the late 2030s to the mid-2040s. And the growth of our development enterprise, which now includes eight assets advancing across 13 development programs, resulting in the potential for at least one new product or indication launch each year over the next five years.
Charles Cliff Duncan: Quarter as well as recent.
Charles Cliff Duncan: Business development deals.
Charles Cliff Duncan: Precip activity.
Jeff: Adequate thank you Charlie.
Charles Cliff Duncan: So.
Speaker Change: Had a quick question for chapter in terms of the commercial business.
Speaker Change: Nice growth year on year appreciating the seasonal issues, but in terms of the number of patient adds.
Speaker Change: Let me let me ask you about how you feel about that as well as one of the things Jay Kumar mentioned.
Madison: At Harmony, we believe we are well-positioned to become the leading patient-focused CNS biotech company, delivering innovative treatments to patients with unmet medical needs and, while doing so, driving significant and durable value creation. Thank you for your attention, and I will now turn the call over to the operator for Q&A. Operator?
Speaker Change: Is the next generation and ability to titrate more rapidly and I guess I'm wondering if you look at the current patient population taking wake effects.
Speaker Change: How do you how do you feel that's impacting the use of a wake X will be improved titration rate.
Madison: Thank you. 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 star 2. We remind you to please pick up your handset and please limit yourself to one question and one follow-up question. We will take our first question from Charles Duncan of Cantor Fitzgerald.
Speaker Change: Make a difference in terms of the.
Speaker Change: Persistence with it with him wake interesting.
Speaker Change: Yes, Charles Thank you for your question Jeff.
Speaker Change: Yes, thanks for the question Charles.
Speaker Change: Answer your question on the average number of patient adds in the first quarter first off I'll tell you. We're extremely pleased with the durable growth that we're seeing in the average number of patients.
Speaker Change: Grew 150 patients sequentially from what we reported in Q4, we continued to see strong topline demand and new patient starts and Charles as you know like the 150 average patient growth is well in line with our past two Q1 average patient growth in the last two years and as you cited we typically have the Q1 seasonal payer dynamics.
Charles Cliff Duncan: Hey, good morning, Jeff and team. Thanks for taking our questions and congratulations on a good commercial quarter as well as the recent business development deals. Impressive activity. Thank you, Charles.
Speaker Change: Reauthorization of the prescriptions and.
Speaker Change: And a reminder, coming into 2024, we had a larger established patient base. We had 60 150 average patients coming into 'twenty four whereas a year ago. We only had about 4900 and all of those established patients are exposed to those re authorizations that occur every January for specialty and branded products and certainly Charles you know theirs.
Charles Cliff Duncan: I had a quick question for Jeff Dierks about the commercial business, nice growth year on year, appreciating the seasonal issues, but in terms of the number of patient ads, let me ask you about that, as well as one of the things that Kumar mentioned in the next generation, an ability to titrate more rapidly. And I guess I'm wondering, if you look at the current patient population taking Wakex, you know, how do you feel that's impacting the use of Wakex? Will the improved titration rate make a difference in terms of persistence within Wakex?
Speaker Change: Authorization, just simply add time, so about 25% more of our patients were exposed to that and then on top of that we did have the additional headwind of change healthcare, but as you know we've got a great commercial model, we have a closed distribution network and the outstanding work of our team we did a tremendous job of navigating those dynamics and we've continued.
Speaker Change: <unk> been able to demonstrate growth every single quarter on average patients were going to continue to tap into that large patient opportunity as the market allows each quarter and we're confident as sandeep shared in his prepared comments to see quarter over quarter growth remainder of 'twenty four and beyond.
Madison: Yeah, Charles, thank you for your question. Jeff, you want to go?
Speaker Change: That's helpful. If I could ask one development.
Jeffrey Dierks: Sure. No. Thanks for the question, Charles. To answer your question on the average number of patient ads in the first quarter, first off, I'll tell you we're extremely pleased with the durable growth that we're seeing in the average number of patients. It grew by 150 patients sequentially from what we reported in Q4. We continue to see strong top-line demand for new patient starts, and Charles, as you know, the 150 average patient growth is well in line with our past two Q1 average patient growths in the last two years.
Speaker Change: And that is regarding the new assets at <unk>. Congratulations on that Kumar you mentioned 26 being data with <unk> 100, I guess I'm wondering what is really.
Speaker Change: Modulating that timing.
Speaker Change: Of of 26 I know these are difficult.
Speaker Change: These to enroll.
Speaker Change: Could that proved to be an overly conservative estimate of time to topline data on <unk> 100.
Jeffrey Dierks: And as you cited, we typically have the Q1 seasonal payer dynamics, you know, the reauthorizations of prescriptions. And as a reminder, coming into 2024, we had a larger established patient base. We had 6,150 average patients coming into 24, whereas a year ago, we only had about 4,900. And all of those established patients are exposed to those reauthorizations that occur every January for specialty and branded products. And certainly, Charles, you know, those reauthorizations just simply add time.
Speaker Change: Yes.
Speaker Change: Hey, good morning, Charles Thanks for the question.
Speaker Change: Look we just acquired this asset right.
Speaker Change: Right now we believe <unk> 26 is the brand we will be able to come up with the topline data obviously as the study progresses as we are able to bring in hot money resources and the expertise in R&D and especially the aggregate. These type of group that we have.
Speaker Change: Very well established here at <unk>, who work hand in glove with patient community. So all of these things will definitely help with the recruitment and youre right recruiting via efficiencies not necessarily easy, but I think we have really a plus team to recruit these patients and as we.
Jeffrey Dierks: So about 25% more of our patients were exposed to that. And then on top of that, we did have the additional headwind of changing healthcare. But as you know, we've got a great commercial model. We have a closed distribution network.
Speaker Change: We make progress with our clinical path, we will provide more granularity for the timeline.
Speaker Change: Okay. Thank you for taking our questions.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Thank you we will take our next question from Francois Brisbois with Oppenheimer.
Jeffrey Dierks: Thanks to the outstanding work of our team, we did a tremendous job navigating those dynamics, and we've continued to be able to demonstrate growth every single quarter in average patients. We're going to continue to tap into that large patient opportunity as the market allows each quarter, and we're confident, as Sandeep shared in his prepared comments, to see quarter-over-quarter growth for the remainder of 24 and beyond.
Franois Daniel Brisebois: Hi, and I apologize if the question was already asked I got dropped off the call for a sector, but I was just wondering in terms of the acquisition. The epigenetics acquisition is there any data that share that you intend to share soon about how their past readouts just given it's a private company and.
Franois Daniel Brisebois: People might not be familiar with the story.
Franois Daniel Brisebois: Okay.
Speaker Change: Good morning, Frank. Thank you for your question I think yes Kumar can talk about data generated and what we'll be sharing going forward.
Jeffrey Dierks: That's helpful. If I could ask one development question, that is regarding the new assets, epigenetics. Congratulations on that. Kumar, you mentioned 26 being data with EPX100. I guess I'm wondering what is really modulating that timing of 26? I know these are difficult studies to enroll, but could that prove to be an overly conservative estimate of time to top-line data on EPX100?
Kumar: Thank you Frank Yes, I mean <unk> hydrochloride.
Franois Daniel Brisebois: Because the first generation antihistamine that was introduced in 19 properties on Sunset in 19 seventies introduction of second and third generation antihistamine.
Kumar: There is some safety data from that period of time, which is very benign and then.
Speaker Change: The fee and one year mutation model of the zebrafish with Clemens Zohydro fluoride.
Kumar Budur: Hey, good morning, Charles. Thanks for the question. Look, we just acquired this asset, and right now, we believe 2026 is when we will be able to come out with the top line data. Obviously, as the study progresses, as we are able to bring in Harmony resources, the expertise in R&D, and especially the advocacy support group that we have very well established here at Harmony, who work hand in glove with patient communities.
Speaker Change: Tidied.
Speaker Change: Is published.
Speaker Change: Extensively.
Speaker Change: By Scott <unk>, who is proposed high style University of California in San Francisco.
Speaker Change: Mechanism of Fox in France is a potent centrally acting et cetera on the drug and this is a proven mechanism of action when it comes to developmental and epileptic encephalopathy.
Kumar Budur: So all of these things will definitely help with recruitment. And you're right, recruiting DS patients is not necessarily easy. But I think we have a really great A+ team to recruit these patients. And as we make progress with the clinical trial, we will provide more granularity for the timeline.
Speaker Change: Alongside with the robust data that we observed in the <unk> mutation zebrafish model and the safety data that we have from Clemens zone.
Speaker Change: Most of it is available in the public domain and within the clinical path. This is a phase III registrational clinical pause and rehab.
Speaker Change: The long term open label data that has not been published yet obviously, we don't know the double blind dietary this double blind, but the open label long term studies that are available and we will be discussing on what will be the appropriate time to put those data in the public domain.
Charles Cliff Duncan: Okay, thank you for taking our questions.
Madison: Thank you. We will take our next question from Francois Brisebois with Oppenheimer.
Francois Brisebois: Hi, and I apologize. The question was already asked. I dropped off the call for a sec there. But I was just wondering, in terms of the acquisition, the epigenetics acquisition, is there any data that's shared that you intend to share soon about other past readouts, just given it's a private company and people might not be familiar with the story?
Speaker Change: Okay Perfect and then just a question in terms of and again, sorry, if you mentioned this but the 150 new patient adds is there any seasonality impact here on the number of patient adds or is it mostly the gross to net.
Speaker Change: And that impact on the inventory also having an impact or does the number of patient adds also get impacted by seasonality in the first quarter, because we had seen it a few years ago. It was only 100 patients I think in Q1 2002. So just wondering about that and then you don't you mentioned the 700 to 720 guidance, but.
Jeffrey M. Dayno: Good morning, Frank. Thank you for your question. I think Kumar can talk about the data generated and what we'll be sharing going forward.
Kumar Budur: Yeah. Thank you, Frank. Yes, I mean, chlamysol hydrochloride, Frank, is a first generation antihistamine that was introduced in the 1950s and sunsetted in the 1970s with the introduction of second and third generation antihistamines. There is some safety data from that period of time, which is very benign. And then the SCN1A mutation model of zebrafish, where chlamysol hydrochloride was studied, was published extensively by Scott Barabun, who is a professor at the University of California in San Francisco. The mechanism of action, Frank, is a potent, centrally acting serotonergic drug, and this is a proven mechanism of action when it comes to developmental epileptic encephalopathies.
Speaker Change: I don't think you mentioned the 7000 patients on drug is that still something that we should expect or are we getting away from that 7000 number here. Thank you.
Speaker Change: Sure Frank Thanks for the question, Yes from a Q1 perspective, we do see a seasonal payer headwinds that do have an influence on the number of patient adds in the first quarter and you cited the 150 patient adds we had this quarter is in line with the last two years. We had 200 last year, we had 102 years ago, So very consistent as we get.
Speaker Change: Reauthorization headwinds on prescriptions and the one thing take into account. This year. Frank is we had a larger established patient base coming into 2024, we had about 6150 average patients that were exposed to that reauthorization this year, whereas coming into 'twenty. Three we only had 4900. So we had about 25.
Speaker Change: 5% more patients exposed to that reauthorization of prescriptions that most specialty and branded products face in January and as you know simply adds time to the process, which does have a little bit of influence on patient adds but it's in line with our expectations. We're extremely pleased with what we saw in the first quarter and then leading into your questions.
Kumar Budur: So, alongside the robust data that we observed in the SCN1A mutation zebrafish model and safety data that we have from chlamysol, most of it is available in the public domain. And within the clinical trial, this is a phase three registrational clinical trial, and we have access to long-term open-label data that has not been published yet. Obviously, we don't know the double-blind data. It is double-blind, but the open-label, long-term study data is available, and we will be discussing what will be the appropriate time to put those data in the public domain.
Speaker Change: About guiding towards approximately 7000 patients at the end of the year. In addition to reiterating our guidance on net sales I am reiterating the guidance that we're expecting to end the year at around 7000 average patients.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: Thanks Frank.
Speaker Change: We will take our next question from Amit <unk> with Needham.
Amit: Hi, good morning, Congrats on the progress.
Amit: The company along with the recent deals.
Amit: My first question is on idiopathic hypersomnia could you share some of the details of the discussions that you have with the FDA.
Francois Brisebois: Okay, perfect. And then just a question in terms of, and again, sorry if you mentioned this, but the, you know, 150 new patient ads, is there any seasonality impact here on the number of patient ads, or is it mostly the growth to net and that impact on, you know, the inventory also having an impact, or does the number of patient ads also get impacted by seasonality in the first quarter? Because we had seen it a few years ago, it was only 100 patients, I think, in Q1-22.
Amit: Now the deal some of the additional analysis that youre going to share with them and you just specifically get met any on whether these data would be added.
Amit: Wait for approval or what's that Characterised issued by the FDA and then I have one more question.
Amit: Good morning, Amit. Thank you for your question it's Jeff.
Jeff: I think as you know we had a good interaction with FDA regarding the IH program.
Jeff: And also as Youre aware it always comes down to a review issue, but based on that discussion and interaction.
Jeff: And the strength of the data that we generated.
Jeff: We feel that there is a path forward and Kumar can share.
Francois Brisebois: So just wondering about that. And then you don't, you mentioned the 700 to 720 guidance, but you, I don't think you mentioned the 7,000 patients on the drug. Is that still something that we should expect, or are we getting away from that 7,000 number? Sure. Frank, thanks for the question. And yeah, from a Q
Kumar: Some more color around the FDA interaction.
Kumar: Yes. Thank you Jeff. Thank you Amit for the question, Yes, we had good discussions with the regulatory agency on the DARPA, the unmet need the lack of treatment options and especially around the off label use.
Kumar: For control stimulants.
Kumar:
Kumar: We did feel that the FDA recognizes and appreciates the lack of treatment options to patients with idiopathic hypersomnia.
Jeffrey Dierks: Sure, Frank, thanks for the question. And yeah, from a Q1 perspective, we do see seasonal payer headwinds that do have an influence on the number of patient ads in the first quarter. And you cited the 150 patient ads we had this quarter are in line with the last two years. We had 200 last year. We had a hundred two years ago.
Kumar: We are optimistic based on the totality of the data not just the open label, but also the trend we saw in the randomized withdrawal period, and especially the long term extension study, which I have mentioned earlier, we still are.
Jeffrey Dierks: So very consistent as we get reauthorization headwinds on prescriptions. And the one thing to take into account this year, Frank, is that we have a larger established patient base coming into 2024. We had about 6,150 average patients that were exposed to that reauthorization this year, whereas coming into 23, we only had 4,900. So we had about 25% more patients exposed to the reauthorization of prescriptions that most specialty and branded products face in January.
Kumar: Approximately 90 patients in the long term extension study all of the patients have completed six months of treatment.
Kumar: And more than half of them have completed 12 months of treatment and about 10 of those patients have completed 18 months of treatment and we continue to see what the stance of effective anvil.
Kumar: This deep safety data, but also the effectiveness that the outflow.
Kumar: So combined with all of these things. In addition, we are also planning on obtaining the real world data and other data that will not just Santander submission, but also contextualize that backed out the book generated from the <unk> study. So based on all of this we are optimistic we do recognize the body's high but as Jeff has gone.
Jeffrey Dierks: And as you know, that simply adds time to the process, which does have a little bit of influence on patient ads. But it's in line with our expectations. We're extremely pleased with what we saw in the first quarter. And then leading into your questions about guiding towards approximately 7,000 patients at the end of the year, in addition to reiterating our guidance on net sales, I am reiterating the guidance that we're expecting to end the year at around 7,000 average patients.
Kumar: Distantly mentioned, but we are committed to patients with idiopathic hypersomnia to bring it all the same to them as possible as efficiently as possible and giving them an option for a non scheduled drug with a simple dosing regimen and an established safety profile.
Speaker Change: Got it that's very helpful. Just because it took us to EPS at 100.
Ami Fadia: We will take our next question from Ami Fadia with Needham.
Speaker Change:
Speaker Change: This class of drugs has had to hit some safety issues.
Ami Fadia: Hi, good morning. Congratulations on all the progress at the company along with the recent deals.
Speaker Change: And so could you comment on.
Speaker Change: How you got comfortable with the safety profile.
Jeffrey M. Dayno: My first question is on adipathic hypersomnia. Could you share some of the details of the discussion that you had with the FDA and how they viewed some of the additional analysis that you were going to share with them? And did you specifically get clarity on whether these data would be adequate for approval, or was that characterized as a review issue by the FDA? And then I have one more question.
Speaker Change: 100, and if you could give us some color around.
Speaker Change: The dose is being studied in the fall when the film that has been approved in the market for all these years.
Speaker Change: And also if you could talk about the IP protection.
Speaker Change: Anticipate today.
Speaker Change: Thank you.
Speaker Change: Yeah sure on me.
Speaker Change: I guess.
Speaker Change: You are referring to some of the cardiovascular these shows that <unk> has.
Ami Fadia: Good morning, Ami. Thank you for your question. It's Jeff.
Speaker Change: Also occupancy system and thats it from a kind of somewhat auction.
Jeffrey M. Dayno: Yeah, I think, as you know, we had a good interaction with FDA regarding the IAH program. And also, as you're aware, it always comes down to a review issue, but based on the discussion and interaction and, you know, the strength of the data that we generated, we feel that there is a path forward. And Kumar can share, you know, some more of the color around the FDA interaction. Uh, yeah.
Speaker Change: This is something that took mechanism of faction army with this particular indication set of indications like B E.
Speaker Change: <unk> mechanism of action.
Speaker Change: Particularly with fenfluramine.
Speaker Change: Is the Akamai team bring tableau.
Speaker Change: Does show some cardiovascular effects like pulmonary arterial hypertension, which in turn results in thickening of the heart valves and that's why that particular product has a black.
Speaker Change: Black box Swabbing and is also subject to the.
Speaker Change: Program.
Kumar Budur: Thank you, Jeff. Thank you, Ami, for the question.
Speaker Change: With the climate of hydrochloride, there is use the body.
Kumar Budur: Yes, we had good discussions with the regulatory agency on the data, the unmet need, the lack of treatment options, and especially around the off-label use of controlled stimulants. We did feel that the FDA recognizes, acknowledges, and appreciates the lack of treatment options in patients with idiopathic hypersomnia. We are optimistic based on the totality of the data, Ami, not just the open label, but also the trends we saw in the randomized withdrawal period and especially the long-term extension study, which I have mentioned earlier, where we still have approximately 90 patients in the long-term extension study.
Speaker Change: Safety data one from the time that it was introduced as a first ambition antihistamine and 1950 60, 70 days and on top of <unk>, We conducted a full battery of non clinical safety studies.
Speaker Change: Including six months study repeat dose studies in blocks nine month repeat dose studies being dogs and as you know docs are extremely sensitive when it comes to be findings of cardiovascular.
Speaker Change: Issue.
Speaker Change: Did not see anything to suggest that the clinical hydrochloride has any cardiovascular impact including.
Speaker Change: <unk> and then this data was reviewed by the FDA.
Kumar Budur: All of those patients have completed six months of treatment, and more than half of them have completed 12 months of treatment, and about 10 of those patients have completed 18 months of treatment, and we continue to see persistence of effectiveness, and we are getting safety data, but also effectiveness data as well. So combined with all of these things, in addition, we are also planning on obtaining real-world data and other data that will not just strengthen the submission, but also contextualize the data that was generated from the in-tune study.
Speaker Change: They did not ask us to conduct any additional cardiovascular monitoring apart from routine easy on the monitoring of pulse and blood pressure and on top of it Amit.
Speaker Change: Earlier I mentioned that.
Speaker Change: The patients who complete.
Speaker Change: Apple Blind randomized study.
Speaker Change: All into open label extension study.
Speaker Change: Thats a three year open label extension study and some of these patients how exposure past one year on the safety profile looks pretty good in the sense. None of them have had any cardiovascular issue and also we haven't seen any laboratory abnormality.
Speaker Change: Yes.
Speaker Change: There are two paths that are often used in this indication one of them has significant TISCO send request U S function monitoring on a regular basis.
Kumar Budur: So based on all of this, we are optimistic. We do recognize the bar is high, but as Jeff has consistently mentioned, we are committed to patients with idiopathic hypersomnia to bring Pitolazine to them as soon as possible, as efficiently as possible, and giving them an option for a non-scheduled drug with a simple dosing regimen and an established safety profile.
Speaker Change: One as you mentioned how does schuh.
Speaker Change: How do you see it with the cardiovascular system.
Speaker Change: Haven't seen either of them the safety profile pretty benign and the efficacy data that we have seen in the open label part is.
Speaker Change: Pretty compelling potential to offer a very unique benefit risk profile in this patient population.
Speaker Change: Okay.
Speaker Change: That's come out of that I'm, saying.
Ami Fadia: I got it. That's very helpful. Just with regard to EPS 100, this class of drugs has had a history of some safety issues, and so could you comment on how you got comfortable with the safety profile of EPX100 and if you could give us some color around the dose that's being studied in the trial relative to the dose that has been approved in the market for all these years, and also if you could talk about the IP protection that you anticipate for the effort. Thank you. Yeah,
Speaker Change: And then I would just add that IP question as well if that's okay.
Speaker Change: Yes.
Speaker Change: This is an oral compound. So we don't have a composition of matter project, but we do have a method of use patent and of course, because both of these orphan diseases rare diseases, we will get to seven ESL.
Speaker Change: Exclusivity orphan drug exclusivity in the U S. But each of these indications, but this is a global opportunity for us to be very good 10 years of exclusivity in Europe for each of these indications.
Kumar Budur: Yeah, sure Ami. I mean I guess you are referring to some of the cardiovascular issues that FinTEPA has, which also act via histaminergic mechanism of action. The histaminergic mechanism of action, Ami, with this particular indication, set of indications like DEE, is a proven mechanism of action, particularly with fenfluramine, which is the active moiety in FinTEPA, does show some cardiovascular effects like pulmonary arterial hypertension, which in turn results in thickening of the heart valves, and that's why that particular product has a black box warning and is also subject to the REMS program.
Speaker Change: And just to clarify Kumar method of use out to 2030 for 2034 and any other extensive regulatory exclusivity.
Speaker Change: Okay.
Speaker Change: Thanks very much.
Speaker Change: Thank you Amy.
Speaker Change: Okay.
Speaker Change: And we will take our next question from David and solemn with Piper Sandler.
David: Hey, Thanks to have two questions one on <unk> and then one on the Orexin so on Columbus.
David: So can you talk about how.
David: The product compares.
Kumar Budur: With the chlamysol hydrochloride, there is a huge body of safety data, one from the time that it was introduced as a first-generation antihistamine in 1950s, 60s, and 70s, and on top of it, we conducted a full battery of non-clinical safety studies, including six-month studies, repeat-dose studies in rats, nine-month repeat-dose studies in dogs, and as you know, dogs are extremely sensitive when it comes to the findings of cardiovascular issues. We did not see anything to suggest that the chlamysol hydrochloride has any cardiovascular impact, including QDC, and then these data were reviewed by the FDA, and they did not ask us to conduct any additional cardiovascular monitoring apart from routine EEC and the monitoring of pulse and blood pressure, and on top of it, I mean, earlier I mentioned that the patients who complete the double-blind randomized study roll into open-label extension study, and that's a three-year open-label extension study, and some of these patients have exposure past one year, and the safety profile looks pretty good in the sense none of them have had any cardiovascular issues, and also we haven't seen any laboratory abnormalities as well.
David: Versus next generation options with search and heidrick activity I'm thinking specifically of longboard spec for Katherine.
David: Given its recent body of data how do you think about how <unk> stacks up and I understand it's a polypharmacy based market, but do you think that there is room.
David: For these agents with with some overlap mechanistically. So that's number one.
David: And then number two on on the erection.
David: I know, it's early but can you talk to that.
David: The development path here, you've got alkermes, and you've got Takeda advancing their erections in.
David: N T one and Alkermes also 92.
David: Do you think more about yours, potentially NIH or in other settings, where hypersomnia lens is a hallmark symptom.
David: Or are you also looking at.
David: Your garden variety path forward in terms of narcolepsy wanted to just help us better understand how you're thinking about it. Thank you.
David: Thanks, David for your question Kumar you want to address on EPS 100, and then I'll respond to the Euro question sure. Thank you, Jeff Hey, Good morning, Dave David Thanks for the question.
Kumar Budur: There are two drugs that are often used in this indication. One of them has significant GI issues and requires liver function monitoring on a regular basis, and the other one, as we mentioned, has issues with the cardiovascular system, and we haven't seen either of them. The safety profile is pretty benign, and the efficacy data that we have seen in the open-label part is pretty compelling, potential to offer a very unique benefit-risk profile in this patient population.
Kumar: Regarding fixed to Kathryn I guess, you are referring to the data from the Pacific study right. We took recently.
David: Disclosed.
Kumar: It's a small study 52 patient.
Speaker Change: The efficacy data looked good.
Kumar: But it felt a short study due and we havent seen the long term safety data yet as we have continued to Pemex, though I see that as well.
Kumar: Early stage still.
Kumar Budur: Thanks, Kumar. That was really helpful. And I just have that IP question as well, if that's okay.
Kumar: And I'll just need to how it will pan out.
Kumar: The next stage of development plan and in this particular space, David Obviously no.
Ami Fadia: Yeah, this is an old compound, Ami, so we don't have a composition of matter patent, but we do have a method of use patent, and of course, because both of these are orphan diseases, rare diseases, we will get seven years of exclusivity, orphan drug exclusivity in U.S. for each of these indications, and this is a global opportunity for us, so we will get ten years of exclusivity in Europe for each of these indications.
Speaker Change: As we mentioned just now it's a polypharmacy market that significant unmet need.
Speaker Change: There is.
Speaker Change: There is a place for a different mechanism of action deploy this even incremental differentiation in efficacy or safety is embraced by the providers and patients alike.
Kumar Budur: And just to clarify, Kumar, method of use out to 2034? 2034 and any other extensions. And regulatory exclusivities. Right.
Speaker Change: Okay.
Speaker Change: And David with regards to your question about the TPM 11, 16, and our Orexin two agonist, while we recognize that it's an early stage and the other development programs ahead.
Kumar Budur: 2034, and any other extensive regulatory exclusivities.
Speaker Change: I think that we're still learning from so I think that.
David A. Amsellem: And we will take our next question from David Amsellem with Piper Sandler.
David: We are still learning from those data and those programs and as they are generated so with regards to our development plan and approach.
David A. Amsellem: Hey, thanks. So, I have two questions, one on clemozole and then one on orexin. So, on clemozole, can you talk about how the product compares versus next-generation options with serotonergic activity? I'm thinking specifically of long-term use spexacacerin, given its recent body of data. How do you think about how clemozole stacks up? And I understand it's a polypharmacy-based market, but do you think that there's room for these agents with some overlap mechanistically?
Speaker Change: I think we have optionality.
Speaker Change: I think that will be optionality based on what we learn from some of these other development Orexin development programs ahead.
Speaker Change: Most logical approach I think as you are aware going in through <unk>, one, which is the prototypical disorder with orexin deficiency as opposed to and T. Two NIH, but.
Speaker Change: We will we will learn from some of the other programs and have the Optionality with regard to what the best path forward will be as we advanced TPM $11 16.
Speaker Change: Additionally, okay, yeah. Thank you Jeff.
David A. Amsellem: So, that's number one. And then, number two, on orexin, and I know it's early, but can you talk about the development path here? You've got Alkermes and you've got Takeda advancing their orexins in NT1 and Alkermes also in NT2. Do you think more about yours potentially in IH or in other settings where hypersomnolence is a hallmark symptom, or are you also looking at your garden variety path forward in terms of narcolepsy 1 and 2?
Jeff: Yes, just to add on.
Speaker Change: Coming to the question regarding is.
Speaker Change: Is it garden, whether it'd be <unk> 82 or something else.
Jeff: David This particular compound ppm 11, 16 has a real high potency and that actually provides both options.
Jeff: Optionality in terms of looking at the other central disorders of Hypersound Melinda.
Jeff: As you know Takeda had to limit the dose to 10 milligram in vitro studies to only pursue NP one.
Jeffrey M. Dayno: Just help us better understand how you work
Madison: Thanks, David, for your questions. Kumar, you want to address on EPX 100, and then I'll respond to the Iraq question. Sure. Thank you, Jeff.
Jeff: Not anti dwarf idiopathic hypersomnia disappear.
Jeff: The preclinical profile that we see with the ppm 11, 16 look pretty good and based on that we do see optionality here.
Kumar Budur: Sure. Thank you, Jeff. Hey, good morning, Dave. Dave, thanks for the question. Regarding dexecathrin, I guess you're referring to the data from the Pacific study, right, which was recently disclosed. Look, it's a small study, 52 patients. The efficacy data looks good, but it's also a short study too, and we haven't seen the long-term safety data yet as they continue to collect it. So I see that as an early stage still, and you just need to see how it will pan out as it goes to the next stage of development.
Jeff: European Central default of Hypersound.
Speaker Change: Thanks, Good morning.
Speaker Change: Alright, thanks, guys.
Speaker Change: Thanks, David.
Speaker Change: We will take our next question from Greg savanna, VAG with Mizuho.
Graig C. Suvannavejh: Great. Thank you can you hear me okay.
Graig C. Suvannavejh: Yes, we can great good morning.
Graig C. Suvannavejh: Okay. Thanks, Jeff Congrats on.
Graig C. Suvannavejh: Great progress that we're seeing from the company I've actually got a question for Sandeep.
Kumar Budur: And in this particular space, David, as you know, or as we mentioned just now, it's a polypharmacy market, a significant unmet need. There is a place for different mechanisms of action to coexist. Even incremental differentiation in efficacy or safety is embraced by providers and patients alike.
Sandeep: Sandeep just.
Sandeep: In light of the new <unk>.
Sandeep: The deals that you've done and your plans to potentially continue adding.
Sandeep: On to the pipeline.
Sandeep: It is a two part question.
Sandeep: First.
Sandeep: Maybe Jeff you can answer this first part of the question is the current plan on any next deal that you do to first prioritize adding yet another or fourth CNS franchise or is the current plan or your thoughts currently to build on the existing three CNS franchises you have now and then the second part of my question.
Kumar Budur: And David, with regard to your question about TPM 1116 and our Erexon II agonist, you know, while we recognize that it's an early stage and the other development programs ahead, you know, that I think that we're still learning from, so I think that... You know, we are still learning from the data and those programs as they are generated. So with regard to our development plan and approach, you know, I think we have options.
Sandeep: And maybe this is really more for Sandeep is in light of kind of added.
Sandeep: Pipeline programs, which as you know I think we all things in a positive.
Kumar Budur: You know, I think that there'll be optionality based on what we learn from some of these other development programs ahead. The most logical approach, I think, as you're aware, going in through NT1, which is the prototypical disorder with erection deficiency as opposed to NT2 and IH. But we will, you know, we will learn from some of the other programs and have the optionality with regard to, you know, what the best path forward will be as we advance TPM1116. Okay, yeah. Thank you, Jeff.
Sandeep: Just wondering if you've got any initial thoughts on what the P&L might look like for the company both in terms of SG&A and R&D.
Sandeep: For Hanmi over the next one or two or three years. Thanks.
Speaker Change: Yeah sure Greg Let me, let me address your first question in terms of the sort of the BD our growth strategy going forward again, I think it's also optionality again.
Speaker Change: Im very pleased with how we've been able to expand and grow the pipeline diversify our portfolio and these three CNS franchise franchises, where we are now.
Speaker Change: Each with potential peak sales opportunities of $1 billion to $2 billion.
Speaker Change: We could either based on we continue to be active in BD.
Jeffrey M. Dayno: Is it the garden variety, NT1, NT2, or something else? David, this particular compound, TPM-1116, has a real high potency, and that actually provides us with optionality in terms of looking at other central disorders of hypersomnolence as well. I mean, as you know, Takeda had to limit the dose to 10 milligrams, and they decided to only pursue NT1, not NT2 or i The preclinical profile that we see with the TPM-1116 looks pretty good, and based on that, we do see optionality here other than the routine central disorders of hypersomnolence. Thanks, Kumar. All right.
Speaker Change: Looking at the landscape so we could.
Speaker Change: Go further in either of these franchises with additional assets or if we see another opportunity in another CNS area.
Speaker Change: That we could diversify the pipeline further.
Speaker Change: We are that would be another path forward. The other thing I want to.
Speaker Change: Comment on it in two.
Speaker Change: Zinc just bring light too.
Speaker Change: This approach also it is important that it leverages, our internal expertise in the CNS area as well as the commercial model our internal synergies so as we expand and diversify this portfolio.
Kumar Budur: We will take our next question from Graig Suvannavejh with Mizuhu.
Speaker Change: And these CNS areas then.
Speaker Change: Jeff <unk>, our commercial model, where we can thoughtfully.
Graig C. Suvannavejh: Thank you. Can you hear me okay?
Speaker Change: Apply that model to any new indications any new products that would go to market.
Madison: Yes, we can. Great. Good morning.
Graig C. Suvannavejh: Thanks, Jeff. Congratulations on the great progress that we're seeing from the company.
Speaker Change: So I think that that's how we're seeing the strategy going forward pleased with the progress to date, but we're not stopping there.
Jeffrey M. Dayno: I've actually got a question for Sandip. Sandip, in light of the new BD deals that you've done and your plans to potentially continue adding to the pipeline, this is a two-part question. And first – or maybe, Jeff, you can answer this first part of the question. Is the current plan on any next deal that you do to first prioritize adding yet another or a fourth CNS franchise, or is the current plan or your thoughts currently to build on the existing three CNS franchises you have now?
Speaker Change: Dave do you want to yes sure.
Speaker Change: Sure.
Dave: With respect to your question in terms of financial impact overall as you saw from both of the deals, but we continue to be very disciplined in capital deployment restructured them with low upfront relative to the age of the assets the more success driven milestone.
Dave: These are all fairly late stage programs.
Dave: In terms of actual capital resources.
Dave: We're really for the next couple of years. If you just think about it and also we've got growing revenues.
Dave: Got internal synergies overall that we can also bring.
Dave: And growing profitability.
Jeffrey M. Dayno: And then the second part of my question, maybe this is really more for Sandip, is in light of kind of the added pipeline programs, which is, you know, I think we all think is in that positive direction, just wondering if you've got any initial thoughts on what the P&L might look like for the company, both in terms of SG&A and R&D for Harmony over the next, you know, one or two, three years.
Dave: That gives us the UK capacity to continue.
Dave: Additional business development opportunities, while still maintaining a relatively profitable.
Dave: Our business.
Dave: Self sustaining and can continue to grow so I think.
Dave: I feel good about what we've been able to acquire these are again very late stage assets.
Dave: Like I mentioned for this year, it's about $35 million more in terms of incremental Boston, probably similarly, as we go into next year.
Jeffrey M. Dayno: Sure, Greg. Let me address your first question. In terms of BD, our growth strategy going forward, again, I think it's also optionality again. I'm very pleased with how we've been able to expand and grow the pipeline, diversify our portfolio, and these three CNS franchises where we are now, each with potential peak sales opportunities of $1 billion to $2 billion. We could either, based on how we continue to be active in BD and looking at the landscape, so we could go further in either of these franchises with additional assets.
Dave: We've got close to top line, so really a good smart investments upfront.
Dave: To hopefully unlock incremental value.
Dave: Yeah.
Speaker Change: Operator next question.
Dave: We will take our next question from Karen Johnson with Goldman Sachs.
Dave: Okay.
Karen Johnson: Please go ahead. Your line is open Craig Johnson Alright.
Karen Johnson: Sorry, I was on mute good morning, guys.
Karen Johnson: Can you just help us understand how you thought about the market opportunity and potential value for these assets <unk> 100, 200 and in particular like how do you think about the past of differentiation.
Craig Johnson: There and with that differentiation, what kind of the peak sales opportunity could be for such an asset.
Jeffrey M. Dayno: Or if we see another opportunity in another CNS area that, you know, we could diversify the pipeline further, you know, we are, you know; that would be another path forward. The other thing I want to comment on and to, I think, just bring light to is that this approach also leverages our internal expertise in the CNS area as well as the commercial model, our internal synergies. So as we expand and diversify this portfolio in these CNS areas, then Jeff Dierks, our commercial model, where we could thoughtfully apply that model to any new indications, any new products that would go to market.
Speaker Change: Good morning, Karen.
Karen Johnson: So in terms of the at the market opportunity, referring to Epogen X and the rare epilepsy franchise.
Speaker Change: So I think obviously.
Karen Johnson: The epilepsy space is significant market opportunity.
Karen Johnson: Beginning in this area of orphan rare and the developmental and epileptic encephalopathy or <unk>.
Speaker Change: We are in a registrational trial for <unk> is kind of a smaller patient population, but planning to initiate a phase III study in Lennox <unk> syndrome second half of this year, a larger market opportunity, but we also see this acquisition as sort of the foundation of a broader.
Jeffrey M. Dayno: So I think that's how we're seeing the strategy going forward, pleased with the progress to date, but we're not stopping there. Sandip, do you want to? Yeah, sure. With respect to your question in terms of the overall financial impact.
Speaker Change: Our epilepsy franchise, so with regards to.
Speaker Change: Current market opportunity with regards to what's currently available I think Thats Kumar has been alluding to.
Sandip S. Kapadia: Yeah, sure. With respect to your question in terms of the financial impact overall, you know, as you saw from both of the deals, we continue to be very disciplined in capital deployment. We structured them with low up-runs relative to the stage of the assets with more success-driven milestones. You know, these are all fairly late-stage programs, so, you know, in terms of actual capital resources, we're really for the next couple of years, if you just think about it.
Speaker Change: We see the potential product profile of <unk> 100 in terms of overall benefit risk compare to the current treatment options.
Speaker Change: It is a significant.
Speaker Change: Product offering and in terms of therapeutic option in the near term.
Speaker Change: And then we look to we.
Speaker Change: Draw on our internal sort of expertise in this area look for potentially additional assets to build out a broader epilepsy franchise.
Sandip S. Kapadia: And also, we've got growing revenues. We've got internal synergies overall that we can also bring. And growing profitability that, you know, gives us the capacity to continue to do additional business development opportunities while still maintaining a relatively profitable, you know, business that's self-sustaining and can continue to grow. So, I think, you know, I feel good about what we've been able to acquire. These are, again, very late-stage assets, as I mentioned.
Speaker Change: And I think thats it.
Speaker Change: The current view on where we are there kumar any any other thoughts.
Kumar: You may now as I mentioned earlier based on what we have seen we believe that it will offer a compelling value proposition with a uni could benefit risk profile for patients, especially from a safety profile do you run some of the significant limitations, we see with some of the drugs that are currently approved.
Speaker Change: In this space.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: And we will take our next question.
Sandip S. Kapadia: For this year, it's about $35 million more in terms of incremental cost and probably, similarly, as we go into next year, and we'll get close to the top line. So, really a good, smart investment up front to hopefully unlock incremental value.
Speaker Change: From Jason <unk> with Bank of America.
Jason: Hey, guys. Good morning, Thanks for taking my questions.
Speaker Change: Sure.
Jason: I guess one question on <unk> hundred is the base case here that you have the same class safety labeling around CV.
Jason: Talks as from Tesla.
Jason: And I am seeing in the preclinical theres some affinity for five <unk>. So just wondering that coupled with its only a 100 patient pivotal study if you can.
Madison: Operator, next question. We will take our next question from Corinne Johnson with Goldman Sachs.
Corinne Jenkins: Please go ahead; your line is open, Corinne Johnson.
Jason: Or think you may be able to decouple that safety issue from a safety labeling perspective, and then from a development perspective are you planning to run a second pivotal trial would that be done in parallel once you.
Jeffrey M. Dayno: Good morning, Corinne. So in terms of the market opportunity, referring to epigenetics and the rare epilepsy franchise, you know, so I think obviously, the epilepsy space is a significant market opportunity, beginning in, you know, this area of, you know, orphan rare and developmental epileptic encephalopathies. We are in a registrational trial for Gervais, you know, kind of a smaller patient population, but planning to initiate a phase three study in Lennox-Gastaut syndrome in the second half of this year, a larger market opportunity.
Jason: Get the asset in house or would that be after you get data in 2026, just wondering sort of the timeline to market for <unk> hundred. Thanks.
Speaker Change: Good morning, Jason Yes. Thank you for your question.
Jason: Yes, I think kumar can sort of.
Jason: Unpack that with regards to the opportunity that we're seeing near term with regards to <unk>.
Speaker Change: And then in terms of differentiated from a safety perspective with regard to Boston Tesla, Yes.
Jeffrey M. Dayno: But we also see, you know, this acquisition as sort of the foundation of a broader epilepsy franchise. So with regard to the current market opportunity with regard to what's currently available. I think, as Kumar has been alluding to, we see the potential product profile of EPX 100 in terms of overall benefit-risk compared to the current treatment options as a significant product offering in terms of therapeutic options in the near term. And then we look to draw on our internal sort of expertise in this area, look for potentially additional assets, you know, to build out a broader epilepsy franchise. And I think that's the current view on where we are on there. Kumar, any other thoughts? Yeah, I mean, as I mentioned earlier, based on what we have seen,
Speaker Change: And good morning, and thanks for the question.
Speaker Change: The answer to your first question is no.
Speaker Change: We do not anticipate any cardiovascular liability.
Speaker Change: Clinical hydrochloride that is based on the large body of data.
Speaker Change: From the first generation antihistamine and done all the pre clinical data that we have generated for this particular compound.
Speaker Change: <unk> repeat dose chronic tox studies, and the peak renal clinical space and also.
Speaker Change: Looking at the data the FDA.
Speaker Change: I did not ask us to do echocardiogram or monitor for pulmonary arterial hypertension or cardiac roundabout abnormalities. So we do not believe that this will have any of the safety issue.
Kumar Budur: As I mentioned earlier, based on what we have seen, we believe that it will offer a compelling value proposition with a unique benefit-risk profile for patients, especially from a safety perspective given some of the significant limitations we see with some of the drugs that are currently approved in this space.
Speaker Change: We do see with Printup law.
Speaker Change: Rich has a black box warning is subjected to.
Speaker Change: <unk> program and also based on the long term extension study open label data that we have seen so far.
Speaker Change: Actually really pleased with the safety profile both in terms of lack of any lab abnormalities and also from the cardiovascular safety perspective.
Madison: And we will take our next question. From Jason Gerberry with Bank of America.
Jason Gerberry: Hey guys, good morning. Thanks for taking my questions. I guess I have one question on EPX-100. Is the base case here that you have the same class safety labeling around CV? I'm seeing in the preclinical studies that there's some affinity for 5-HT2B, so just wondering, you know, that coupled with it's only a 100-patient pivotal study, if you can, or think you may be able to decouple that safety issue from a safety labeling perspective.
Speaker Change: Safety and Tolerability in general.
Speaker Change: And to your second question about <unk>.
Speaker Change: The second study the cutting strategist and I know that on clinical trials start recall, which still stands at a phase two study, but it's actually registrational phase three study.
Speaker Change: It started out as a phase two study and then the sample size will be increased to 100 subjects equally randomized one to one between <unk> and placebo and now this is a pure distribution study and the top line data will be available in 2026, and typically define as you know in rare disorders.
Jason Gerberry: And then from a development perspective, are you planning to run a second pivotal trial? Would that be done in parallel once you get the asset in-house, or would that be after you get data in 2026? Just wondering sort of the timeline to market for EPX-100. Thanks.
Jason Gerberry: Good morning, Jason. Yeah, thank you for your question. Yeah, I think Kumar can sort of, you know, unpack that with regard to the opportunity that we're seeing, you know, near-term with regard to dravets and then in terms of differentiated from a safety perspective with regard to SINTEPLA. Hey, Jason. Good morning, and thanks for the question.
Speaker Change: I think great and well controlled study.
Speaker Change: Generally accepted.
Speaker Change: Substantial evidence of effectiveness by the regulatory agencies, but we do plan to file.
Speaker Change: Based off of this study should the data look good.
Speaker Change: Got it okay. Thank you.
Speaker Change: Thanks, Jason.
Speaker Change: And we will take our last question from Danielle Brill with with Raymond James.
Jeffrey M. Dayno: Yeah, Jason, good morning, and thanks for the question. I mean, the answer to your first question is no. We do not anticipate any cardiovascular liability with chlamyzole hydrochloride. That is based on the large body of data from the first-generation antihistamines and then all the preclinical data that we have generated for this particular compound, including repeat dose, chronic toxic studies in the preclinical space and also looking at the data. The FDA did not ask us to echocardiogram or monitor for pulmonary arterial hypertension or cardiac valve abnormalities. So we do not believe that this will have any of the safety issues that we do see with Fintepla, which has a black box warning and is subjected to the REMS program.
Danielle Catherine Brill Bongero: Hey, guys. Good morning, Thanks for the question.
Danielle Catherine Brill Bongero: I'm curious, how you're gauging, Rhode Island, Sixteen's profile versus the other orexin agonist and.
Danielle Catherine Brill Bongero: What type of data should we expect to be presented at the upcoming scientific meeting and which conference that you're targeting thank you.
Speaker Change: Thank you Daniele for your question Kumar.
Speaker Change: Hey, good morning, Daniel Thanks for the question, Yeah, just some background information Daniela.
Kumar: 11 16.
Danielle Catherine Brill Bongero: This originated out of paving.
Danielle Catherine Brill Bongero: <unk> this is a conglomerate.
Danielle Catherine Brill Bongero: <unk> deep expertise in drug discovery.
Danielle Catherine Brill Bongero: We work very closely with profit and give patois, who many of you know is the one who actually discovered.
Kumar Budur: And also, based on the long-term extension study open-label data, Jason, that we have seen so far, we are actually very pleased with the safety profile, both in terms of lack of any lab abnormalities, and also from the cardiovascular safety perspective, and just safety and tolerability in general. And to your second question about the second study, the current study, Jason, I know that on clinicaltrials.gov, it still says it's a phase two study, but it's actually a registrational phase three study.
Danielle Catherine Brill Bongero: And the impact on <unk>.
Danielle Catherine Brill Bongero: They have been working on this.
Danielle Catherine Brill Bongero: Theories of compound for awhile, and we advance CPM 11 16.
Danielle Catherine Brill Bongero: Because there could be passed in the fees that the comp ppm 11, 16 has a very novel chemical scaffold compared to other <unk> receptor agonists that are out there and we believe this novel chemical scaffold offers.
Danielle Catherine Brill Bongero: Unique features that we have seen in our preclinical studies first and foremost high potency.
Kumar Budur: It started out as a phase two study, and then the sample size was increased to 100 subjects, equally randomized one to one between clonazole and placebo. Now this is a pivotal registration study, and the top line data will be available in 2026. And typically, Jason, as we know, in rare disorders, one adequate and well-controlled study is generally accepted as substantial evidence for effectiveness by the regulatory agencies. So we do plan to file based on this study should the data look good. Got it, okay, thank you. Thanks, Jason. And we will take our last question from Danielle Brody.
Danielle Catherine Brill Bongero: Good selectivity potential for once a day dosing.
Danielle Catherine Brill Bongero: Good preclinical safety data we.
Danielle Catherine Brill Bongero: We are completing the rest of the IMD, enabling experiments and we plan to submit the heightened in 2025 and start first in human studies in the second half of 2025.
Speaker Change: Thank you I'm showing no further questions I would now like to turn the call back for any closing remarks.
Speaker Change: Thank you Madison and thanks, everyone for joining our call today and for your interest in harmony.
Speaker Change: As you heard from US. This morning, the future is bright at harmony based on the strength of our commercial business of wakes in narcolepsy and the value of our expanding pipeline, which will serve as the foundation for durable revenue generation out beyond 2040.
Jason Gerberry: And we will take our last question from Danielle Brill with Raymond James.
Speaker Change: We look forward to providing updates as we continue to accelerate our strategy for long term growth.
Danielle Catherine Brill Bongero: Thanks Danielle for your question. Kumar?
Kumar Budur: Sure. Hey, good morning, Daniel.
Speaker Change: Thank you and have a great day.
Danielle Catherine Brill Bongero: Thanks for the question. Yeah, just some background information, Daniel, on TPM-1116. This originated out of Tazin Pharma. This is a conglomerate with deep expertise in drug discovery. They actually worked very closely with Professor Yanagisawa, who many of you know is the one who actually discovered orexins and their impact on sleep-wake. They had been working on this series of compounds for a while, and they advanced TPM-1116 because that was the best in the series that they found.
Speaker Change: Yeah.
Speaker Change: This does conclude today's harmony Biosciences first quarter 2024 financial results Conference call. You May now disconnect your line and have a wonderful day.
Speaker Change:
Speaker Change: Hum.
Danielle Catherine Brill Bongero: Yeah.
Danielle Catherine Brill Bongero: Okay.
Danielle Catherine Brill Bongero: [music].
Danielle Catherine Brill Bongero: Okay.
Danielle Catherine Brill Bongero: Uh-huh.
Danielle Catherine Brill Bongero: Okay.
Danielle Catherine Brill Bongero: Hum.
Danielle Catherine Brill Bongero: TPM-1116 has a very novel chemical scaffold compared to the other orexin receptor agonists that are out there, and we believe that this novel chemical scaffold offers certain unique features that we have seen in our preclinical studies. First and foremost, high potency, good selectivity, potential for once-a-day dosing, and good preclinical safety data. We are completing the rest of the IND-enabling experiments, and we plan to submit an IND in mid-2025 and start first human studies in the second half of 2025.
Danielle Catherine Brill Bongero: Hum.
Danielle Catherine Brill Bongero: [music].
Danielle Catherine Brill Bongero: Hum.
Danielle Catherine Brill Bongero: Hum.
Danielle Catherine Brill Bongero: Yes.
Danielle Catherine Brill Bongero: Yeah.
Danielle Catherine Brill Bongero: Okay.
Danielle Catherine Brill Bongero: [music].
Danielle Catherine Brill Bongero: Okay.
Danielle Catherine Brill Bongero: Okay.
Danielle Catherine Brill Bongero: [music].
Kumar Budur: Thank you. I am showing no further questions. I would now like to turn the call back for any closing remarks.
Danielle Catherine Brill Bongero: Yes.
Danielle Catherine Brill Bongero: [music].
Madison: Thank you, Madison, and thanks, everyone, for joining our call today and for your interest in Harmony. As you heard from us this morning, the future is bright at Harmony, based on the strength of our commercial businesses, Wacox and Narcolepsy, and the value of our expanding pipeline, which will serve as the foundation for durable revenue generation out beyond 2040. We look forward to providing updates as we continue to accelerate our strategy for long-term growth. Thank you, and have a great day!
Danielle Catherine Brill Bongero: Okay.
Danielle Catherine Brill Bongero: Okay.
Danielle Catherine Brill Bongero: Okay.
Danielle Catherine Brill Bongero: Hum.
Danielle Catherine Brill Bongero: [music].
Danielle Catherine Brill Bongero: Mhm.
Danielle Catherine Brill Bongero: [music].
Danielle Catherine Brill Bongero: Sure.
Danielle Catherine Brill Bongero: [music].
Madison: This does conclude today's Harmony Biosciences first quarter 2024 financial results conference call. You may now disconnect your line and have a wonderful day.
Danielle Catherine Brill Bongero: Okay.
Danielle Catherine Brill Bongero: Hum.
Danielle Catherine Brill Bongero: Okay.
Danielle Catherine Brill Bongero: Oh.
Danielle Catherine Brill Bongero: [music].
Madison: [inaudible]. ?? ?? ?? ?? ?? ?? ?? ?? ?? [inaudible]