Q3 2024 Harmony Biosciences Holdings Inc Earnings Call
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Todd: Good morning, my name is Todd and I will be your conference operator today. At this time, I would like to welcome everyone to Harmony Biosciences, third quarter, 24 financial results conference call. All participants have been placed on mute to prevent any background noise.
Todd: After the speakers are marks, they 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.
Todd: Please be advised that today's conference may be recorded.
Todd: Lastly, if you should require operator assistance, please press star zero. I will now turn the call over to Bren and Doyle, head of the investor relations, please go ahead.
Speaker Change: Thank you, operator. Good morning, everyone. And thank you for joining us today as we review Harmony Biocides, the third quarter, 2024 financial results in provide a business update.
Bren Doyle: Before we start, I encourage everyone to go to the Investor section of our website to find the materials that accompany our discussion today, including a reconciliation of our gap to non-gap financial measures.
Bren Doyle: At this stage of our life cycle, we believe non-gap financial results better represent the underlying business performance.
Speaker Change: Our speakers on today's call are Dr. Jeffrey Dayno, President and CEO.
Speaker Change: Jeffrey Durks, Chief Commercial Officer, Dr. Kumar Budur, Chief Medical and Scientific Officer, and Sandip Kapadia, Chief Financial Officer and Chief Administrative Officer.
Speaker Change: As a reminder, we will be making forward looking statements today which are based on our current expectations and beliefs.
Speaker Change: These statements are subject to certain risks and uncertainties. Our actual results made different materialy and we undertake no obligation to update these statements, even if circumstances change.
Speaker Change: We encourage you to consult the risk factors referenced in our SEC filings for additional details.
Speaker Change: Now, let's turn the call over to Dr. Jeffrey Dayno. Jeff.
Speaker Change: Thank you, Brandon and thanks everyone for joining our conference call today.
Speaker Change: Q3 was another quarter of strong momentum for the team at Harmony, driving significant revenue growth for WAKICs and advancing our late stage clinical development programs.
Speaker Change: At our successful investor day event earlier this month, we were excited to share new data and outlined a clear path toward becoming the leading CNS company focused on developing and delivering innovative treatments to patients with unmet medical needs.
Speaker Change: As we share during that presentation, our robust late stage pipeline is poised to deliver one or more new product or indication launches each year over the next five years.
Speaker Change: With each catalyst, we are delivering on our promise to patients and generating long-term durable value creation for shareholders.
Speaker Change: In fact, with this team at Harmony that has driven our success thus far, our current pipeline is successful, is poised to deliver over $3 billion in net revenue going forward.
Speaker Change: Also during our investor day, I highlighted what we believe to be one of the strongest and most promising pipelines in the industry for people living with rare neurological diseases.
Speaker Change: Our Pipeline now includes three orphan rare CNS franchises, each with peak sales potential of $1 to $2 billion.
Speaker Change: 8 assets across 13 development programs with three of them in pivotal phase three trials and a fourth to initiate before year end.
Speaker Change: Given the tremendous growth in our pipeline, we will not be able to go into depth on all the development programs on this call, but the key points that I want you to take away from our call today regarding our robust pipeline are these.
Speaker Change: First.
Speaker Change: We continue to strengthen our leadership position in sleep wake.
Speaker Change: We are preparing to submit our S&DA for Patolesan in idiopathic hypersomnia or IH.
Speaker Change: We are advancing the Patolescent NextGen programs and we are on track to submit an I&D for our potential best in class, or Rex and II Agonist, in May 2025. And then enter the clinic the second half of next year.
Speaker Change: Second.
Speaker Change: with EPX-100 or Kremisol Hydrochloride.
Speaker Change: We have the most advanced and promising late-stage development program in the class of 5HG2 receptor agonists to address the serious unmet medical need for the rare childhood onset epilepsy's known as developmental epileptic in cephalopathy's or DE's.
Speaker Change: EPX100 is in an ongoing phase 3 registration trial for patients with your base syndrome and on-track for top-line data in 2026.
Speaker Change: and we will be initiating a pivotal phase three trial for EPX100 in patients with lemx gusto syndrome before year end.
Speaker Change: In addition, we have another asset in our epilepsy pipeline, EPX200, or lower castor in a liquid formulation, which is a selective 5HT2C receptor agonist.
Speaker Change: and both of these have significant upside potential. As the market has recently acknowledged with the acquisition of a 5HG2C Agnes asset that just recently initiated a phase 3 trial survey syndrome.
Speaker Change: Third, there are exciting near-term catalysts coming in the first half of next year, including FDA's decision on file acceptance of our IH S&DA submission going in later this year.
Speaker Change: as well as top line data for ZYN002 from the Pivotal Phase 3 Reconnect trial in patients with fragile
Speaker Change: If these data are positive, it could put us in a path to bring the first approved treatment to the market for patients living with fragile x syndrome.
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Speaker Change: I want to share some highlights with you on our development programs and then Kumar will expand on these key points later in the call.
Speaker Change: First, on the strengthening of our leadership in sleep wake, which is a foundation of our business, we shared new data at our investor day from the long-term extension trial of the Tolason in patients with IH.
Speaker Change: The data demonstrated robust efficacy and sustained response out beyond one year.
Speaker Change: As Kumar will show you, the majority of patients were maintained within the normal range on the effort of sleeping in scale for over one year after coming into the trial at a moderate or severe level of sleepiness.
Speaker Change: This, along with real world evidence, and a strong overall benefit risk composition for Potolicine.
Speaker Change: is the reason for our strong conviction in pursuing an IH indication for Pitalisant, and we are on track to submit an S&DA before year end.
Speaker Change: [inaudible]
Speaker Change: Building off for the innovation of the first-in-class molecule in Titolusin, with its novel mechanism of action.
Speaker Change: and the success of Wakus in the market is our next-gen formulations of Pitalosan.
Speaker Change: Both of these programs, the Tolestant Gastro-resistant or GR.
Speaker Change: and Patolescent High Dose or HD, Reflect Patient Centric Drug Development with the Golden Mate to take a good drug and make it even better.
Speaker Change: by addressing ongoing, unmet medical needs in patients with narcolepsy.
Speaker Change: The Tolstin GR is on track for Buduf at 2026 and Budsolst and HD is on track for Buduf at 2028.
Speaker Change: and Jeff Dorks will provide more color on the strategy behind those programs and how our unique commercial model positions us to optimize the opportunity to both grow and extend the constant franchise into the 2040s.
Speaker Change: The next wave of innovation for the treatment of narcolepsy and other essential disorders of hypersomluence are the erects and two receptor agonists.
Speaker Change: As leaders in sleep wake, we have followed this space closely over the past few years.
Speaker Change: Diligent several of the Rec and II Agonist programs.
Speaker Change: and then earlier this year, licensed in BP 1.5 with our partner Bioprase, which we feel could be a potential best in class or a reaction to Agnes Compound.
Speaker Change: This is based on several unique features of this compound, some of which we share during our investor day and Kumar will review them with you later in the call.
Speaker Change: We are on track towards filing an IND mid-2025 and then initiating first-in-human studies in the second half of 2025.
Speaker Change: Next, I would like to take a few moments to discuss and share our excitement with you regarding our rare epilepsy franchise that we recently brought in house through the acquisition of Epigenics Therapeutics.
Speaker Change: This is relevant, particularly in light of some of the recent developments in the competitive landscape, which point to the significant value of new treatments for developmental epileptic and cephalopidies.
Speaker Change: Many of the currently approved therapies, states limitations in terms of efficacy, safety and or tolerability, leaving a treatment gap and serious unmet medical need that must be addressed for patients living with these rare and refractory seizure disorders and their caregivers.
Speaker Change: We view the recent interest in this space as validation of our approach and harmony is in proud to be at the forefront of innovation.
Speaker Change: To put it simply, this space involves compounds that act at the serotonin or 5HT type 2 receptor and enhance serotonergic tone in the brain.
Speaker Change: We have two investigational products for DEEs.
Speaker Change: EPX100, or Climate-Avalide your chloride, and EPX200, a liquid formulation of lyrcastrin.
Speaker Change: Kumar will share with you more details regarding these compounds and their development programs, but what I want to highlight for you is the following.
Speaker Change: The mechanism of action for both EPX 100 and EPX 200, working through 5HT2 receptors and serotonin modulation, has been validated in the zebrafish model developed by Scott Barrowman, who shared his work at our investor day.
Speaker Change: which demonstrated 100% predictability, both 100% positive and 100% negative predictability on efficacy for compounds that were screened in his zebrafish model.
Speaker Change: We have the most advanced clinical development program of the 5-HD-2 Agnes Compounds.
Speaker Change: with EPX 100 and an ongoing registration trial for patients with Dervais Syndrome, which is on track for top line data in 2026. As well as a pivotal phase III trial for patients with Linux is sto syndrome, which is on track to initiate before year end.
Speaker Change: What I want you to take away is that we believe that we have the most robust.
Speaker Change: Most promising and advanced portfolio of assets in the clinic for patients with DEEs. And are confident that if successful, our portfolio can offer new treatment options for patients and drive significant value creation for our shareholders.
Speaker Change: Lastly on our pipeline, as you can see, we have strategically expanded our pipeline and diversified our portfolio across three orphan rare CNS franchises.
Speaker Change: and Bill, what we believe is one of the most exciting and promising pipelines in the industry for patients living with rare neurological diseases.
Speaker Change: Importantly, I want to make sure that our near-term catalyst coming in the first half of next year are top of mind for investors.
Speaker Change: These include FDA's decision on file acceptance for our IHS-NDA submission in the first quarter next year.
Speaker Change: followed by the highly anticipated top-line data readout of the Pivotal Phase 3 Reconnect Study of ZYN002 in patients with fragile x syndrome, which is on track for readout mid-year.
Speaker Change: These are exciting catalysts as we continue to advance our pipeline and build long-term value creation.
Speaker Change: Switching gears, while we advance our late stage development programs, we remain focused on execution across the company and delivered another solid quarter with WAKX net revenue of $186 million.
Speaker Change: This enabled harm need to surpass $2 billion in cumulative net revenue for WAKICs generated in less than five years on the market, which is a significant accomplishment.
Speaker Change: With these strong results, we are once again reiterating our 2024 net revenue guidance of $7,720 million and remain confident in weight-consuming a $1 billion plus market opportunity in North to let the loan be a little bit more.
Speaker Change: We remain active in business development with a dedicated team that has deep experience and the goal is to expand our pipeline even further.
Speaker Change: With approximately $555 million in cash, cash equivalents and investments as of September 30th, we are in a strong financial position to execute on additional business development opportunities.
Speaker Change: And if we do so, we'll apply the same strategic and thoughtful approach that we have demonstrated thus far.
Speaker Change: This is all to say that harmony continues to be a gross story.
Speaker Change: and while I am proud of what we have built at Harmony in just our first seven years, we are just getting started.
Speaker Change: We have this outlook because we know that when we deliver on our promised patients by developing and delivering innovative treatments to patients living with rare neurological diseases, we generate durable long-term value creation for our shareholders.
Speaker Change: With that, I will now turn the call over to Jeffrey Dierks, our Chief Commercial Officer for an update on our commercial performance. Jeff?
Jeffrey Dierks: Thanks Jeff, we saw another quarter of Continuum Momentum and Strength in our underlying business fundamentals for WAKX in the third quarter. Net sales for the quarter were $186 million, and with these quarterly sales, WAKX surpass $2 billion in cumulative net sales since launch.
Speaker Change: The solid net sales performance in the third quarter, rear firms are confidence and are net sales guidance of 720 million. For the full year 2024, and Wakes $1 billion plus potential in the Dalton Arco Lpsi alone.
Speaker Change: We saw continued growth in the average number of patients on WAKICS and in the WAKICS subscriber base, both facilitated by favorable market access as seen on slide 6 and 7.
Speaker Change: The average number of patients on WAKICs increased to approximately 6,800 in the third quarter.
Speaker Change: We're extremely pleased with the approximately 250 sequential increase in average patients on WAKERS from what we reported last quarter.
Speaker Change: We saw contributions from the pediatric narcolepsy indication launch in our growth in Q3, but the vast majority of our growth in the third quarter was attributed to the continued expansion and our adult narcolepsy patient base, given the larger diagnosed patient opportunity.
Speaker Change: We are extremely pleased with our launch and pediatric narcolepsy. In the first quarter since the FDA approval, we've seen strong interest from the healthcare professional and patient community and the unique product profile of WAKIS as the only non-scheduled treatment option.
Speaker Change: and Strong Payer covers the facility, pediatric, and our telephoto-based patients getting on product.
Speaker Change: The growth in average patients in the third quarter within line with their expectations and reaffirms our confidence and our guidance of approximately 7,000 average patients by the end of the year.
Speaker Change: We saw a growth in the Wakies for Scriber Base in the third quarter as well. We saw a solid growth in the Wakies for Scriber Base beyond the Octavate Rends and Rolled Health Care professionals. Demonstrating that Wakies continues to expand the branded writer segment of the market beyond the Octavates.
Speaker Change: We are now more than 40% penetrated in the segment of approximately 5,000 healthcare professionals at the end of the third quarter. In this segment of healthcare professionals, continue to represent an insulated and durable opportunity for growth from the oxi-bates that we continue to tap into each quarter to drive performance.
Speaker Change: Coupled with the growth we're seeing beyond the Oximate Remzin Rolled healthcare professionals, we continue to utilization Wakix among the approximately 4,000 of the Oximate Remzin Rolled healthcare professionals, even with the availability of new and generic Oximate Options.
Speaker Change: We're highly penetrated within this prescribed or audience and see Wakie's being prescribed to additional North-Lepsie patients each quarter in this segment.
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Speaker Change: Wakus provides a meaningfully differentiated product profile, and one that offers broad clinical utility across the entire North Galaxy trading healthcare professional universe.
Speaker Change: Allowing this to tap into the full diagnosis and our bloodseed patient opportunity of approximately 80,000 patients. Giving us confidence and future growth for WAKX.
Speaker Change: Now with Waking Sun Track to achieve a billion dollar plus in Narkel Obsilone, along with a strong commercial team and commercial model that we shared at our investor day on October 1st, we're making good progress on our lifecycle management plan with the new formulations of the toll fund.
Speaker Change: We're developing two new formulations of the Toulesson, Toulesson GR and Toulesson HD, and a meaningful patient-focused way built around unmet needs to drive incormantive benefits for patients.
Speaker Change: Both products offer new features and attributes to address existing patient unmet needs.
Speaker Change: are on target for PDUFA dates prior to WACACS LOE.
Speaker Change: GR in 2026.
Speaker Change: and HD in 2028, and each has provisional patents filed out to 2044 to grow and extend the Patolason franchise.
Speaker Change: The Tolosan GR is a quick-to-market bioequivalence pathway with the additional benefits of a gas-resistant coating. As we know up to 90% of narcolepsy patients have GI disturbances due to their underlying disease.
Speaker Change: Both allowing patients to start at a therapeutic dose and the potential to achieve clinical benefits sooner.
Speaker Change: The strategy for GR is to expand the patolison patient base through new patient growth and using our unique commercial model, activate previous WCAG patients who have discontinued due to either GI side effects or did not achieve a clinical benefit.
Speaker Change: We see GR representing a potential $300 to $500 million in incremental peak net sales to WACGX.
Speaker Change: Epitolosan HD is an enhanced formulation of epitolosan with even more meaningful features to address untreated fatigue and narcolepsy. Up to 60% of narcolepsy patients suffer from fatigue.
Speaker Change: and address the largest pressing need in the narcolepsy market, which is the need for enhanced efficacy.
Speaker Change: The HD development program is designed to deliver a higher dose, up to two times that of Wacx.
Speaker Change: with an optimized PK profile to drive greater efficacy in EDS and cataplexy, targeting an indication of fatigue in narcolepsy with a gas-resistant coating and no titration, the start of the therapeutic dose.
Speaker Change: The strategy for HD is to grow the Patolison patient base through new patients, current WACACS patients, and previous WACACS patients, due to our unique commercial model, and extend the durable patient revenue growth out to the mid-2040s.
Speaker Change: We see potential peak net sales for HD of more than a billion dollar plus in narcolepsy alone and an even larger peak opportunity with other indications being pursued in idiopathic hypersomnia and myotonic dystrophy.
Speaker Change: Preliminary market research with healthcare professionals and payers on the HD target product profile showed healthcare professionals see HD as a superior product profile given the greater efficacy addressing the most pressing need in the market and the unique fatigue indication broadens its expected use.
Speaker Change: Healthcare professionals saw broad utility for HD and expected to transition the majority of current WACACS patients, re-engage previous WACACS patients, and offer the product to all New Star patients.
Speaker Change: Payers also saw value in the HD profile both pre- and post-wake XLOE and expected favorable access for the vast majority of patients to HD without stepping through a generic patolison post-wake XLOE.
Speaker Change: The Petolson franchise strengthens our leadership position in sleep-wake and is poised to deliver durable patient growth and significant revenues into the mid-2040s.
Speaker Change: So in summary, we're building an exciting sleep-wake franchise. We had another strong quarter of durable growth and performance in net sales, patient ad, and growth in prescribers of Wakex.
Speaker Change: I would now like to turn the call over to our Chief Medical and Scientific Officer Kumar Budur to discuss the advancements of our Clinical Development Program. Kumar?
Kumar Budur: Thank you, Jeff. Good day, everyone, and thank you for joining us today.
Kumar Budur: In R&D, we continue to make great progress in advancing our pipeline program. As Jeff Dayno mentioned, we now have 13 development programs across 8 assets under 3 franchises focused on raised neurological indications with high unmet medical needs.
Kumar Budur: We will have four Phase III registration studies ongoing in four distinct indications by the end of this year, with the potential to deliver one or more new products or new indication launches each year for the next five years.
Kumar Budur: Our full clinical development pipeline is shown on slide number 10 and the clinical development highlights are on slide 11 through slide 17.
Kumar Budur: Starting with our sleep-wake franchise, we are on track to submit an SNDA for idiopathic hypersomnia by the end of this year.
Kumar Budur: Our submission will be based on the robust data from the Phase 3 Registrational In-Tune Study and several lines of additional evidence that consistently support the efficacy of pitolefins in patients with idiopathic hypersomnia.
Kumar Budur: At our investor day on October 1st, we reported new data that showed strong and sustained efficacy of pitolafan in patients with idiopathic hypersomnia more than one year out in the long-term extension study.
Kumar Budur: The mean improvement for sleepiness care was approximately 9 points from baseline or beyond one year, with the majority of patients in the normal range as measured by the ESS score.
Kumar Budur: We saw similar, strong, and sustained maintenance of efficacy on idiopathic hypersomnia severity scale and sleep inertia questionnaires in the long-term extension study.
Kumar Budur: In addition, we also shared the data from a large heat clinic in Europe in over 60 patients with IH.
Kumar Budur: Data from this independent study shows that over 60% of patients with IH got better with Pitolafant and approximately 40% of these patients benefited and remained stable with Pitolafant as monotherapy.
Kumar Budur: Similar efficacy was also observed in Bioproject Compassionate Use program for patients with IH.
Kumar Budur: The totality of data for efficacy, alongside the established safety profile of Pitolosan, a non-scheduled drug with simple dosing regimen, offers a unique benefit-risk proposition for patients with IH, a condition with only one approved treatment that has triple attestation RAMP, with challenging nighttime dosing regimen, and the widespread off-label use of controlled stimulants, which are associated with significant safety issues.
Kumar Budur: Petrol Ascent has the potential to address a high unmet need with a very favourable benefit risk profile.
Kumar Budur: Moving on to Next Gen Pedolecent Formulation, Pedolecent-GR, and Pedolecent-HD.
Speaker Change: Jeffrey Dierks describes the unique value proposition each of these formulations are expected to deliver.
Speaker Change: With Petrolas and GR program, we are on track to initiate the pivotal bioequivalence study and the dosing optimization study in the first quarter of 2025 with PDUFA date in 2026.
Speaker Change: With Petrol Ascent HD, at our investor day earlier this month, we shared preliminary data establishing Petrol Ascent's safety up to five times the current highest-labeled dose of latex, thereby establishing safety margins for Petrol Ascent HD development programs.
Speaker Change: We are currently working on further optimizing the formulation and IND related activities and we are on track to initiate the pivotal phase 3 registry system study in Narcolepsy in second half of 2025 with the target to do so in 2028.
Speaker Change: Provisional patents have been submitted for both pitolacin-GR and pitolacin-HE, with a potential patent protection until 2044.
Speaker Change: Moving on to our Org Sync 2 Receptor Advanced Program, BP1.15205, formerly known as PPM1116.
Speaker Change: The in vitro pharmacology data demonstrated a potency that is much greater compared to all publicly disclosed data on RXL2 agonists.
Speaker Change: As you know, with this class of compounds, potency is the most important parameter that gives us the ability and the dosing flexibility to target all central disorders of hyperhormone and potentially other disorders based on the emerging evidence.
Speaker Change: The potency was consistent across species, and it also demonstrated an excellent selectivity of greater than 600 fold over RXIN1 receptors.
Speaker Change: This translates to over 100-fold margin at RXL1 receptors at the anticipated maximum human dose.
Speaker Change: In addition, it also demonstrated over 1,000 fold selectivity over 150 other targets of interest and has a potential for once-a-day dosing.
Speaker Change: With its novel chemical structure, highest potency, excellent selectivity, potential for 130 dosing, and robust preclinical data, has the potential to be the best-in-class RSN2 receptor agonist.
Speaker Change: We are on track towards filing an IUD in mid 2025 and initiating first in human studies in the second half of 2025.
Speaker Change: Today, we are very excited to highlight our epilepsy franchise, and as just mentioned earlier in the presentation, we have the most advanced development programs in DEGs.
Speaker Change: We have two investigational candidates, EPX-100 and EPX-200, for the treatment of developmental epileptic and stress neuropathies.
Speaker Change: BPX-100 or chlamysul hydrochloride works via modulation of serotonin, that is 5HT2, and enhances the serotonergic tone.
Speaker Change: This erythematic mechanism of action is a validated and well-known mechanism of action in developmental epileptic and subthalamic.
Speaker Change: EPX100 showed efficacy in the Zebrafish model that has 100% positive and 100% negative predictive values.
Speaker Change: In addition, EPICS-100 mechanism of action is also validated in other DEEs such as Intaxin Binding Protein 1 Disorder via preclinical experiments, suggesting a broad utility for EPICS-100 in DEEs.
Speaker Change: When it comes to safety and tolerability, cleanser was on the market for approximately 20 years with no significant safety and or tolerability symptoms from post-marketing exposure.
Speaker Change: In addition, EPX-100 demonstrates favorable preliminary safety and tolerability in the ongoing phase 3 registration study in Tourette syndrome compared to select approved drugs with no need for additional laboratory or special monitoring.
Speaker Change: Thank you. Thank you. Thank you.
Speaker Change: BPX100 is administered in a liquid formulation with BID dosing, a simple dosing regimen that is especially meaningful for patients living with DEs and their caregivers.
Speaker Change: We are actively recruiting globally for our Phase III Registration Study in Traverse Central, the August study, and we are on track to start a global Phase III Registration Study in LGS by the end of this year.
Speaker Change: The strong evidence for efficacy, promising safety and tolerability profile, BID dosing, and on-track for top-line in 2026 makes EPICS 100 the most promising and the most advanced investigational drug for DEVs.
Speaker Change: We have one more investigational product, EPX-200, a liquid formulation of glucosin in the pre-IND phase.
Speaker Change: Locasterine is a selective 5sp2c agonist and the mechanism of action is well-established in DEs.
Speaker Change: We have pre-clinical experiments in the zebrafish model, and also in the clinic, we have a case series published by Tollitt and Divinsky et al. in 2018 in Neurology, following which the FDA expressed interest in exploring leucopterin in developmental and epileptic encephalopathies.
Speaker Change: We are currently in the pre-ING phase and we plan to pursue all VEs with EPX200.
Speaker Change: It is important to note that the safety and tolerability of glucocerin is also well established based on the short-term, long-term, and real-world outcome studies with glucocerin.
Speaker Change: The regulatory agencies recognize the unmet need and the form is EPX-100 and EPX-200 could potentially offer to patients with EEs. Accordingly, EPX-100 has received both orphaned designation and rare pediatric disease designation for both DF and LGS by the FDA.
Speaker Change: ETICS 200 has received orphaned designation for B.S. by the FDA and EMA, and it has received orphaned designation and rare pediatric disease designation for LGS by the FDA.
Speaker Change: Finally, with our neurobehavioral franchise, we remain on track to report top-line data from the Phase III ReConnect Registrational Trial of ZYM002 in Fraser-Lex Syndrome in mid-2025.
Speaker Change: If approved, this will be the first and only approved treatment for any symptoms in patients with Fragile X syndrome.
Speaker Change: We are also on track to initiate the Phase III Registration Study in 22q deletion syndrome in 2025, another rare disorder with prominent neurobehavioral symptoms for which there are no up to date findings.
Speaker Change: In summary, we have made significant progress in advancing our late-stage pipeline across our three franchises, and look forward to sharing more in the coming months and years as we continue to make progress.
Speaker Change: On behalf of Harmony, I would like to thank all the patients and their families who are participating in our clinical trials, as well as the clinical investigators and site personnel for their efforts and commitment in helping us advance our development programs.
Speaker Change: I will now turn the call over to our CFO, Sandip Kapadia, for an update on our financial performance. Sandip?
Sandip Kapadia: Our financial performance is also shown on slides 18 through 20.
Sandip Kapadia: Harmony continues to have a unique profile in the biotech community. We're a profitable, cash-generating company able to fund the growth and advancement of our pipeline fully off our balance sheet.
Sandip Kapadia: We delivered another quarter of strong double-digit top-line growth, maintained profitability, and achieved robust cash generation.
Sandip Kapadia: Our financial performance and strong balance sheet position positions as well to continue advancing our industry-leading pipeline along with driving excellence in the commercialization of weight gains and narcolepsy.
Sandip Kapadia: We've reported net revenues of 186 million for the third quarter of 2024, compared to 160.3 million in the prior year quarter.
Sandip Kapadia: Performance in the quarter reflects the continued strong underlying demand for weight kicks.
Sandip Kapadia: We also reported total operating expenses for the third quarter of $81.6 million, as compared to $63.5 million for the same quarter in 2023, representing a 29% increase.
Sandip Kapadia: The growth in expenses was primarily driven by investments in our expanding late-stage pipeline, along with continued investments for the commercialization of WACICs and narcolepsy.
Sandip Kapadia: Non-GAAP adjusted net income for the third quarter of 2024 was $59.6 million, or $1.03 per diluted share, compared to $58.8 million, or $0.97 per diluted share in the prior year quarter.
Sandip Kapadia: We believe non-gap adjusted net income better reflects the underlying business performance.
Sandip Kapadia: Please refer to our press release for a reconciliation of GAAP to non-GAAP results.
Sandip Kapadia: The balance reflects strong cash generation of $70.5 million from operations, which provides us the financial flexibility to execute on our strategy of continuing to grow our pipeline.
Sandip Kapadia: Looking ahead, we continue to expect quarter-over-quarter growth in net revenues in Q4 of this year.
Sandip Kapadia: We also expect increases in R&D as we initiate our fourth Phase III Registrational Trial during the fourth quarter.
Sandip Kapadia: We are once again reiterating our net revenue guidance for 2024 of 700 to 720 million, highlighting our progress towards a 1 billion plus opportunity in adult narcolepsy alone.
Speaker Change: And with that, I'd like to turn the call back to Jeff for his closing remarks. Jeff?
Jeffrey Dierks: Thank you, Sandip.
Jeffrey Dierks: As we wrap up our call, I want to emphasize that our momentum at Harmony has never been stronger.
Jeff: We continue to lead in SleepWake, fueled by the strength of our foundational business of WakeX and narcolepsy, and driven by a portfolio that represents the next wave of innovation in this space.
Jeff: And finally, our catalyst-rich, late-stage pipeline is poised to deliver one or more new product or indication launches each year over the next five years.
Jeff: With exciting catalysts in idiopathic hypersomnia and Fragile X syndrome coming in the first half of next year
Jeff: We have the proven talent.
Jeff: resources and conviction that will continue to fuel Harmony's growth story and we are just getting started.
Jeff: Thank you, and I will now turn the call back over to the operator.
Speaker Change: Thank you. At this time, if you would like to ask a question, please press the star 1 on your telephone keypad. If you wish to remove yourself from the queue, you may do so by pressing star 2.
Speaker Change: We remind you to please pick up your handset and please limit yourself to one question.
Speaker Change: Again, that's star one to enter the queue. Our first question will come from Greg Savinovich with Mizzouho. Please go ahead.
Greg Savinovich: Thanks so much for taking my question.
Greg Savinovich: Congrats on the progress. Your pipeline is so deep. I don't know where to start, but maybe if I could ask just one on the
Greg Savinovich: when HD launches hopefully in 2028 just trying to visualize what a switch strategy might look like just the commercial kind of positioning if you are in a position to have three products basically in the market at the same time.
Speaker Change: Yes, good morning, Greg. Thanks for your question. I think that I'm going to turn to Jeff Dierks to expand on that. A lot of it is based on our unique commercial model in terms of enabling us to
Jeffrey Dierks: you know, how to handle that strategy and Jeff can explain further. Go ahead, Jeff. Sure. Now, thanks for the question, Greg. So, Patola, Sana, and Wacox obviously is going to be our foundational business, and we see that as a billion-dollar-plus opportunity.
Jeffrey Dierks: from there in advancing these next generation and life cycle management opportunities. Patelus on GR, if you're thinking about that asset, Target PDUF in 2026.
Jeffrey Dierks: We see that as a creative opportunity to expand the Patolus on patient base. Not necessarily where physicians are going to be converting established WACACS patients to GR, but GR is likely going to be a product using our commercial model where we can actually activate patients who were formerly on WACACS who may have dropped off due to GI side effects or didn't achieve clinical benefit. We're going to look to tap into that audience as well as any new patient coming into a physician's office.
Jeffrey Dierks: Having the benefit of Wacx with a gas-resistant coating and the ability with no titration. We see GR growing in new patients as well as previous Wacx patients, so not converting existing Wacx patients.
Jeffrey Dierks: Then when HD looks to come to market with a target PDUFA date in 2028, given the potential to deliver enhanced efficacy, the potential to treat an indication fatigue that doesn't have any products available today.
Speaker Change: That, when we put that product profile in front of healthcare professionals, they saw that as a superior product profile. That is a product that they embraced, likely converting the vast majority of their WACACS patients over to. They saw this as another opportunity to engage previous WACACS patients. And they also saw this, obviously, as an opportunity for new existing patients.
Speaker Change: So that's kind of how we see these products. They are going to be able to coexist.
Speaker Change: G.R. and Wacox are going to be incremental and a creative opportunities coexisting. H.D. is likely the asset where we're going to end up seeing most patients end up just given the potential and the meaningful enhancements and benefits that that product is going to be able to offer to patients with narcolepsy.
Speaker Change: Okay, thank you. If I could just squeeze in one, just on the EREXON program, very interesting. Lots of investors have been asking about it. Just, I know that you have talked about
Speaker Change: the ability or the desire to present additional.
Speaker Change: preclinical data on the assets, perhaps provide a fuller picture of what you see in that opportunity. Any further comments on when we might see that data and what exactly you're hoping to show when you're able to present additional data on the ERECSN program, thanks.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: and also greater than 1,000-fold selectivity over other 150 targets of interest and also potential for QD dosing. The intent is to disclose.
Speaker Change: additional data at the upcoming scientific meetings. We haven't decided when and where but we will be providing information soon.
Speaker Change: Yeah, Greg, and I think the target for that is we're working with our partner, BioProjet, and we're looking to next year at a scientific meeting to share sort of the full preclinical profile of that asset.
Speaker Change: Thank you. Thank you. Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question will come from Ami Fadia with Needham. Please go ahead.
Ami Fadia: Hi, good morning, thanks for taking my question. Could you talk about EPS 100 and particularly what gets you excited in terms of differentiation on safety?
Ami Fadia: Not only versus Epidiolex and Pentefla, but also versus Bexicacerin. And as we've seen some of the development plans for Bexicacerin, can you talk about your clinical development strategy for this asset beyond LDS and DS?
Ami Fadia: and how you plan to approach the other DEE space. Thank you.
Speaker Change: Good morning, Ami. Thank you for your question. We will try to unpack that a little bit. Yeah, we are excited, you know, with regards to EPX 100, you know, our advanced program. I'll turn to Kumar, just, you know, high level in terms of, you know, the strategy where we are.
Kumar Budur: and some of the profile we're seeing now compared to what's in the market and some of the other investigational products. Kumar? Thank you, Jeff. Good morning, Ami. I know you asked several questions today.
Kumar Budur: So, let me start by saying that, look, the recent developments.
Kumar Budur: have validated our presence in developmental epileptic encephalopathy.
Kumar Budur: Several drugs approved in this space. Significant limitations in terms of efficacy, safety, and tolerability. So that's where EPX100 comes in and has the ability to fill several gaps in this area. First and foremost, let me talk about safety.
Kumar Budur: Clemisol hydrochloride has been in market for over 20 years and no safety signals were observed.
Kumar Budur: It was sunsetted with the introduction of second generation of antihistamines. Number two, the FDA asked us to develop this as new chemical ID. So in support of that, we conducted a full battery of non-clinical tests that include six-month repeat-dose study in bats.
Kumar Budur: 9-Month Pre-Pit Dose Study in BeagleDocs
Kumar Budur: We also had a phase one study in healthy volunteers, which was where we saw acceptable safety and tolerability and supported further development of this product.
Kumar Budur: This study is being recruited in the U.S. and also outside of the U.S. EU, so the protocol went through FDA and also EMA, and none of these regulatory agencies asked us to do any additional monitoring.
Kumar Budur: and Fin Tepla, not having to monitor cardiac functions like echocardiography to look at cardiac valvular disease or pulmonary arterial hypertension.
Kumar Budur: In terms of how it differentiates specifically from Bexicacillin perspective, EPX100 safety profile is better established while Bexicacillin profile is still in early stages and evolving.
Kumar Budur: Second.
Kumar Budur: in Truve Syndrome Study in US and in Europe. And we are about to start a Phase III study in Lennox-Gastaut Syndrome.
Kumar Budur: And as we mentioned during the call earlier, the regulatory agencies have recognized the promise of EPX-100 and have given orphan drug designation and rare pediatric disease designation for both DS and LGS.
Kumar Budur: and others. Thank you. Thank you.
Speaker Change: Thanks Kumar. Could you also address how you might approach other DEs? Thank you.
Kumar Budur: The utility of EPX100 in other DEs, for example, in syntax and finding protein 1 disorder, where we saw evidence for efficacy and similarly we saw efficacy in CDD as well.
Kumar Budur: Right now, our focus is to complete the Phase III study in Reverse Syndrome.
Kumar Budur: and focus on LGF.
Kumar Budur: in terms of approaching the other BGEs.
Kumar Budur: We are in the process of evaluating that opportunity because those are heterogeneous disorders in terms of the nature of the study.
Kumar Budur: We have not determined how exactly to go forward, but we will be pursuing.
Kumar Budur: All developmental epileptic and suphalopathies.
Kumar Budur: Syndrome Study and I'm on track to initiate this phase 3 pivotal LGS study before year end.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question comes from Charles Duncan with Cantor Fitzgerald. Please go ahead.
Charles Duncan: Morning, Jeff and team, congrats on the progress in the quarter. I'll make the observation it's tough to know where to start because of all the all the pipeline products. But I will start with a commercial question, and that is regarding the percentage of patients, the new patients, the over 250 added
Charles Duncan: What percent come from Oxybate versus non-oxybate writers and then I'm kind of curious Why you didn't narrow the guide because it seems like the low end is is quite attainable And and your perspective on what would have modulated that
Jeffrey Dierks: Sure. No, great question, Charles. And so obviously, we're extremely pleased with the growth we saw in the third quarter, we added incrementally approximately 250 average patients from what we reported in the second quarter. And Charles, we're seeing patient growth from both segments of healthcare professionals. You know, it's probably about maybe 60% of those new patients are being added in from the Oxybate REMS enrolled healthcare professionals, about 40% are coming from the non-Oxybate. And that's a lot of function of in terms of there's more patients in the Oxybate REMS enrolled healthcare professionals group, they're larger sleep specialists, they tend to have larger patient practices. We continue to see growth in the depth of prescribing, meaning most of these physicians have experience with WACIX, they're finding a second, a fifth.
Speaker Change: Unknown Executive, Luis Sanay, Sandip Kapadia, Jeffrey Dierks, Unknown Executive, Luis Sanay,
Speaker Change: We know that we have an insulated group that we continue to tap into, even with all the oxibate churn. And so we're extremely pleased. We see tremendous growth opportunities on the horizon, 80,000 diagnosed patients, and we're going to continue to tap into that audience moving forward. Yeah, Charles, and I would just add, I think the pattern of broad clinical utility for WCAG, you know, in patients with narcolepsy.
Speaker Change: You know, continue to hold true, you know, with regards to the HCP universe that we're calling on.
Speaker Change: Sandip, comments on the position on guidance?
Sandip Kapadia: Sure, I mean, look, as I mentioned on the call, I mean, we continue to expect quarter over quarter growth going into Q4. What I'd say, you know, our range, even right from the start was relatively narrow, right 700 to 720 million in sales, which is really 2% sort of
Sandip Kapadia: In overview, in overall range, so we feel good about the range. We continue to see good momentum and we'll provide an update obviously once the year closes where we end up on there. We feel very good about the range right now and we're comfortable.
Speaker Change: that are on, you know, Epidiolex and mTOR inhibitors. And can you characterize the seizure burden and then persistence into the OLE? Can you provide any additional color on how that trial is going? Thanks.
Speaker Change: Good morning, Charles. I mean, the trial is recruiting as per projections.
Speaker Change: We are recruiting patients actively in the U.S., Canada, and Europe. And in terms of the study design and the patient population, Charles, it's a pretty standard
Speaker Change: study design, pretty standard inclusion-exclusion criteria compared to any other Drouet syndromes that is.
Speaker Change: are in need of good medicines, and therefore, on average, they tend to be anywhere between three to six antiseizure medications. And that's pretty much what we are seeing in our clinical trial as well.
Speaker Change: And we disclosed some of the safety data, very promising and very supportive. Benign tolerability profile as well. One of the things that we did not mention earlier is actually the impact on appetite as well. As you know, many of the drugs that are out there
Speaker Change: have appetite subsistence as well, which is pretty challenging given this patient population already have difficulties with feeding.
Speaker Change: and have weight loss.
Speaker Change: What we saw with EPX100 is it did not suppress appetite and there were no other safety or tolerability signals. So overall we are very pleased.
Speaker Change: with how the recruitment is going. The target is 2026 top line. Obviously, our goal is to recruit the study as soon as possible and try to bring this medication to the patients as soon as possible.
Speaker Change: Very good. Thank you.
Speaker Change: Thank you. Our next question will come from David Amsalom with Piper Sandler. Please go ahead.
David Amsalom: Hey, thanks. So, first question is on the payer landscape and how you're thinking about
David Amsalom: that as we move through 2025 and particularly how you're thinking about net realized price in 25 versus where it is now, just help us better understand.
David Amsalom: how you're thinking about
Speaker Change: I just want to make sure that I have that correct. And as I think earlier in the call, you talked about dosing that's 2X higher. So, I just wanted to get a better sense of where you think you could realistically dose patolisin HD relative to the legacy formulation. Thanks.
Speaker Change: Thank you.
Jeffrey Dierks: Jeff, do you want to respond to the first question? Sure. So David, with respect to the payer landscape and how we're thinking about 2025, a lot of the quote contracts have already started to be negotiated for next year. And we see next year's landscape to be very similar to what we see right now for WACIX. There's not a lot of incremental contracting that's necessary. Again, we have a very unique position as sort of the lowest branded product relative to the
Jeffrey Dierks: So, we're less expensive on a WAC cost than the branded and generic Oxybates. And I think that position has afforded us an opportunity to not have to contract. So, we see a very favorable landscape moving forward in 25. With respect to, you know, generic Oxybates coming, we don't anticipate any new generic Oxybates in the market in 25. It's likely in 2026 that there may be additional opportunities in there. But I think what we've seen and heard from the payers currently is, you know, given the fact that WACX is the only non-scheduled treatment option for both EDS and cataplexy, payers are finding a place on their formularies for that product. There are no plans that require WACX to be stepped through an Oxybate, either branded or generic. And based upon our negotiations and discussions with payers, we...
Jeffrey Dierks: We believe that that position is going to maintain moving forward, give this great opportunity for patients to have access to the product and a lot of confidence for us to continue to grow the brand.
Jeffrey Dierks: You know, the current label does.
Jeffrey Dierks: for the development program for Potosin HD. The target
Jeffrey Dierks: In the development program is to dose up to two times, you know, the maximum label dose of wickets.
Jeffrey Dierks: in the Petolson HD program. But safety margins have been established up to 5X.
Speaker Change: of the current maximum dose. Yeah, and just to add to what Jeff mentioned, up to two times the highest labeled dose of WCAG, David, with the optimized formulation, which means that the exposure will be a lot higher milligram to milligram compared to WCAG. And not only that, we also have, were able to accomplish some other things with the optimized formulation like decrease in interindividual variability as well, which have meaningful clinical impact in patients.
Speaker Change: All right, that's helpful. Thanks.
David Amsalom: Thanks, David.
Speaker Change: Thank you. Our next question will come from Danielle Brill with Raymond James. Please go ahead.
Danielle Brill: Good morning. Thanks for the question. I guess.
Danielle Brill: Sandip, your guidance for 7,000 patients on drugs by year end implies a sequential decline in that patient eds.
Danielle Brill: Is there any particular reason why we might be expecting a slight dip next quarter? And then I just have a clarification on the strategy with DEEs.
Danielle Brill: Is there any reason to leave this as separate indications from LGS, or do you feel a basket study might be better suited for locastrin versus clemazole? I appreciate the clarity there. Thank you.
Speaker Change: Thanks for the question. I think our overall thought around there was we said approximately 7,000. We're not exactly guiding to exactly 7,000. So I think, you know, what we're seeing is good underlying demand, you know, continued growth quarter over quarter.
Sandip Kapadia: So that's maybe Jeff Dierks. Is there anything else you want to add? No, I would reiterate exactly what Sandip said, you know, guidance is an approximation. We've had very strong, durable growth, you know, double-digit growth. It's been, you know, been very consistent.
Sandip Kapadia: And so we have a lot of confidence, but yes, it's an approximation. And again, the average number of patients, we round to the nearest 50. So Danielle, I would anticipate Q4 to look, you know, similar to what we've sort of seen in momentum in Q2 and Q3.
Sandip Kapadia: We are taking a measured approach in that.
Speaker Change: Look, LGS is already a heterogeneous disorder, so we want to keep the patient population as homogeneous as possible.
Speaker Change: But we are definitely exploring.
Speaker Change: the opportunity of a basket study for the rest of the DBAs.
Speaker Change: and based on, depending on the experience that we will have with EPX100, that will lead to the clinical development plans for EPX200.
Speaker Change: But we are also excited, very excited, about EPX200, liquid formulation of glucaserin, gives the mechanism of action, the preclinical evidence for efficacy, and also the clinical evidence for efficacy that is published widely in literature, in an article by Tolit and Divinsky, et al., in 2018, in Neurology.
Speaker Change: Thank you so much.
Speaker Change: Thank you. Our next question will come from Ash Verma with UBS. Please go ahead.
Ash Verma: Great, thanks for doing my question. So I have two, just for Zijil, in the ReConnect study, so you have 80% of patients which have this complete mutilation.
Ash Verma: I want to understand why you're studying the non-complete methylation patients as well. When you looked at the data previously, I think the complete methylation patients are the ones that are likely to show the benefit.
Ash Verma: and your primary endpoint is also on the complete methylation.
Ash Verma: Do you have any understanding from the FDA that you could get a label irrespective of the methylation status if the study is positive?
Speaker Change: And just quickly on the quarter, so is there any like inventory build here for the case?
Speaker Change: So the average patient number added by 4% increased 4% sequentially, but the net sales is up 8%. Thanks.
Kumar Budur: Good morning, Ash. Thanks for your question. Kumar, do you want to address the question on the AYM002? Yeah, sure. Hey, good morning, Ash. Yeah, a great question, by the way. So, you are right, Ash. The primary target population and the primary endpoint is on patients with complete methylation.
Kumar Budur: There's a nominal number of partially-methylated patients as well, and this came about during our discussion with the FDA. If we do see supporting data in partially-methylated patients that's consistent with the data that we see in complete methylation patients, that does leave us an opportunity to discuss with the regulatory agency in terms of getting a broader label. But for now, the study...
Kumar Budur: Primary Target Population and the Primary Endpoint is Complete Methylation Patients.
Speaker Change: Unknown Executive, Luis Sanay, Sandip Kapadia, Jeffrey Dierks, Unknown Executive, Luis Sanay,
Speaker Change: Thanks.
Speaker Change: Thank you. Thank you.
Speaker Change: Thank you. Our next question will come from Corinne Johnson with Goldman Sachs. Please go ahead.
Corinne Johnson: Now, good morning, guys. Maybe a couple from us. Can you just talk to us about how you're planning to measure fatigue in the clinical study of Pitullison HD and narcolepsy and how, like, what would be clinically meaningful for, in terms of benefit on this patient population? And if you could just provide some context around how common fatigue is within a narcolepsy population, that would be helpful. Thanks.
Speaker Change: Good morning, Kareem. Thanks for your question. Kumar, the plan for fatigue and H.D.? Yeah, thank you, Jeff. Hey, good morning, Kareem. Thanks for the question. Yeah, fatigue is a symptom that is
Speaker Change: More prevalent than one would think in patients with narcolepsy.
Speaker Change: The literature has indicated that about 60-70% of patients with narcolepsy have fatigue.
Speaker Change: and we are doing a longitudinal prevalence and impact of fatigue in patients with narcolepsy.
Speaker Change: Their study is underway, and at least the preliminary data shows that prevalence of fatigue is very similar. About two-thirds of the patients with narcolepsy have significant fatigue.
Speaker Change: In terms of how do we measure, this is an indication for which there are no approved treatments. So, we had an extensive leading-edge work.
Speaker Change: to look at all the instruments that are out there to measure fatigue and we are devising an instrument that specifically measures fatigue in patients with narcolepsy.
Speaker Change: A lot of work that is already done, and we'll be discussing with the regulatory agencies in terms of the appropriateness of using that instrument specifically to measure fatigue, specifically in patients with narcolepsy because that is what the regulatory agencies expect.
Speaker Change: www.unc.org.au www.unc.org.au
Speaker Change: Thank you. Okay. Awesome. And then in terms of the patents around the Potosin HD, could you just help expand on the kind of nature and number of those patents that you have into the early 40s?
Speaker Change: Thank you.
Speaker Change: I think the patents on HP are around the unique formulation with regards to that along with the guess or resistant coding.
Speaker Change: the improvement in the overall PK profile. So the clinical data will sort of support that with regards to what that PK profile will demonstrate. And that is the basis of the HD patents out to the 2044.
Speaker Change: Thank you.
Speaker Change: Thank you. Thank you.
Speaker Change: Thank you. Our next question will come from Jason Gerberry with Bank of America. Please go ahead.
Jason Gerberry: I'm wondering, have you looked at EPEX-100 relative to Longboard's BEXA in the Zebrafish model?
Jason Gerberry: Is that something that's sensitive enough to tease out potential areas of differentiation or more of just a measure of more of a go-no-go viability of the molecule in that disease state?
Jason Gerberry: As we get into next year, just curious, with respect to WACIC's IP litigation, there's a Markman hearing, and I'm just curious if you can...
Jason Gerberry: Kind of help frame. What what are some of the key kind of outcomes? You know, we'd be looking for with respect to the crystal and form patent
Jason Gerberry: How important is it to get a broad claim construction to sort of box out generics and secure an infringement ruling ultimately when the case goes to trial in 26. Thanks.
Speaker Change: Sure. Hey, good morning, Jason. Look, EPX100 was extensively studied in the zebrafish model, and it showed great efficacy.
Speaker Change: In terms of plexicacerin, obviously it's not our compound, and we don't have access to the compound, but within zebrafish model, there were some analogs that were studied.
Speaker Change: that had
Speaker Change: Yeah, and I think, Jason, in terms of your second question, you know, about the the IP litigation, I think, you know, first of all, we can't, we can't really comment on ongoing litigation, but I think, you know, the Markman trial that's scheduled for next March. I mean, basically what that does is it sets up the claims construction.
Speaker Change: and then informs the plan for the trial in 2026. So I think that is the purpose of that in terms of the next stage of that process in the IP litigation.
Speaker Change: Yeah, and I think that, you know, with regards to, as we said before, you know, we're confident in the strength of the IP, you know, the validity of the patents, you know, there were, you know, two potential challenges to the USPTO, you know, that were denied and, you know, those decisions were final.
Speaker Change: So our position is strengthened the overall IP out to 2030.
Speaker Change: Thank you.
Speaker Change: Thank you. Our last question will come from Francois Brisbois with Oppenheimer. Please go ahead.
Francois Brisbois: Hi, thanks for the question. Can you help just elaborate on the percentage of patients that are both on Oxibate and Wacax and has that changed with time? I'm just trying to gauge also the reimbursement response. Has that, you know, been the same? Is it more difficult? You just mentioned there's so much growth that comes from the REMS doctors. So I'm just wondering if reimbursement has changed and do you foresee any changes once, you know, if Erexans come in the market in terms of reimbursing all these products and probably pharmacy market? Thank you.
Speaker Change: Yep. Good morning, Frank. Thanks for your question. Thanks for hanging in there. Jeff Dierks.
Jeffrey Dierks: Sure. Frank, the percentage of patients that are on both WACIX and on Oxibate has been relatively consistent. It's been like low double digits, like in the teens, probably for about the last couple of years. And, you know, the reimbursement landscape has been, you know, modestly consistent with where we are. Obviously, with the introduction of more generic Oxibates, it's going to be, quote, easier to potentially get concomitant use. You know, certain plans are obviously looking at this.
Jeffrey Dierks: category and disease area. But again, remembering this is a rare orphan space, there's not a lot of patients, it's not very high on a managed cares plan. For a lot of them, it's more costly to put in additional administrative steps given the limited number of patients.
Jeffrey Dierks: But obviously moving forward, there's likely going to be a number of potential branded products that could be introduced later in the decade.
Jeffrey Dierks: You know, obviously, time will tell how managed care will look at this, but overall, rare orphan categories tend to not be as highly managed as other categories, given there's a limited number of patients. It's not a huge budget area.
Jeffrey Dierks: I think our goal is to continue to provide meaningful enhancements.
Speaker Change: Thank you. At this time, I would like to turn the call back over to Jeff Dayno for any additional or closing remarks.
Jeff Dayno: Thanks, Operator. Thanks, everyone, for joining our call today. We were excited to share with you the progress we are making in our robust, late-stage pipeline, and look forward to providing future updates. Thanks, and have a great rest of your day.
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