Harmony Biosciences Holdings, Inc. (HRMY) 2026 Q2 法說會逐字稿

Good morning, everyone. My name is Bo, and I will be your conference operator today. At this time, I would like to welcome everyone to the Harmony Biosciences second-quarter financial results conference call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions) I would now like to turn the call over to Mr. Brandon Doyle, Head of Investor Relations. Please go ahead, sir.

Good morning, everyone, and thank you for joining us today as we review Harmony Bioscience's second-quarter 2026 financial results and provide a business update. Before we start, I encourage everyone to go to the investor section of our website to find the materials that accompany today's discussion, including a reconciliation of our GAAP to non-GAAP financial measures. At this stage of our life cycle, we believe non-GAAP financial results better represent the underlying business performance.

Our speakers on today's call are Dr. Jeffrey Dano, President and CEO; Adam Zaeske, Chief Commercial Officer; Dr. Kumar Budur, Chief Medical and Scientific Officer; Peter Anastasiou, Chief Operating Officer; and Steve Mollichella, Interim Principal Financial 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. We encourage you to consult the risk factors in reference in our SEC filings for additional details. I would now like to turn the call over to our CEO, Dr. Jeffrey Dano. Jeff.

Thank you, Brennan. Good morning, everyone, and thank you for joining us today. This was a defining quarter for Harmony Biosciences on two fronts. Commercially. WAKIX delivered record quarterly net revenue of $261.3 million, up 30% year over year and up 21% compared to last quarter, signaling a decisive rebound from the seasonal headwinds we discussed on our first-quarter earnings call. And importantly, on the R&D front related to our robust pipeline, today we shared encouraging data. From a Phase 1 single ascending dose, or SAD, study for BP-205 that reinforces its potential as a best-in-class Orexin-2 Receptor Agonist.

Revenue is on track to exceed $1 billion this year, and our opportunity with our Orexin-2 Agonist BP-205 is coming into focus with multiple data catalysts over the next six months. The two key messages that I want you to take away from today's call are: first, continued strong growth for WAKIX on track for over $1 billion in net revenue for the year; and second, encouraging Phase 1 PK data for our potential best-in-class Orexin-2 Agonist BP-205 with multiple data catalysts coming in the next six months.

The foundation upon which we continue to grow the business and advance our pipeline remains strong. We are a profitable self-funding biotech company operating from a position of strength, a proven commercial engine now in its seventh year on the market, a robust pipeline centered around BP-205, our potential best-in-class Orexin-2 Agonist, a balance sheet with the capacity and a management team with the expertise and conviction to execute on meaningful business development opportunities and a multi-layered IP strategy to protect the Bitolicent franchise out to 2030.

We continue to run the business aligned around our four priorities focused on value creation, growing the WAKIX franchise in an evolving market, advancing our robust pipeline, transacting on strategic business development opportunities, and protecting our IP estate around the Pitolisant franchise.

Let me walk you through the highlights for each of these four priorities. First, the commercial performance this quarter was outstanding as we continue to grow the WAKIX franchise in an evolving market.

Our record quarterly revenue of $261.3 million keeps us firmly on track to achieve more than $1 billion in net revenue in 2026, which is why we are confident in reiterating our full-year guidance of $1 billion to $1.04 billion. WAKIX has a compounded annual growth rate of about 40% over the last five years. And there continues to be a large market opportunity for WAKIX with about 80,000 patients diagnosed with narcolepsy and another 90,000 to 100,000 individuals not yet diagnosed.

Turning to our pipeline and the focal point for this call, BP-205, our potential best-in-class Orexin-2 Agonist. Today. We shared encouraging data from a Phase 1 single ascending dose PK study for BP-205. Kumar will take you through the SAD data results later in the call. At a high level, BP-205 is designed to deliver a differentiated profile as the most potent of the Orexin-2 Agonists currently in the clinic with excellent selectivity.

And now with clinical PK data demonstrating a predictable PK profile with the potential for once daily dosing along with a favorable safety tolerability profile. These data strengthen our conviction that BP-205 could be a best-in-class Orexin-2 Agonist and reinforce our commitment to invest in the BP-205 development program.

We will be initiating Phase 2 trials the middle of next year to evaluate multiple CNS indications as we believe BP-205 could have broad clinical utility. Next up for BP-205 is top-line data from the multiple ascending dose study in Q4. An initiation of a Phase 1b study in sleep deprived healthy volunteers in the third quarter, with top-line data readout expected early next year.

Kumar will provide more color on BP-205 during his R&D update. One additional comment on BP-205 and our exciting Orexin opportunity. We have been leaders in the sleep/wake space for almost a decade now and are leveraging our expertise to accelerate our BP-205 development program toward multiple C&S indications and become a leader in the Orexin space.

In addition to organic growth, we have significant firepower to put toward business development for inorganic growth. With approximately $963 million on the balance sheet, we have the capacity and the conviction to execute on meaningful transactions to drive long-term value.

Peter will share more color around our BD strategy later in the call. Additionally, he will provide an update on our multi-layered IP strategy and our efforts to protect the WAKIX franchise. We have settled with six of the seven ANDA filers and are confident in the strength of our IP estate which supports WAKIX' exclusivity to March of 2030, inclusive of six months of pediatric exclusivity, for which we are on track to obtain.

In summary, this has been a defining quarter for Harmony Biosciences. We posted record revenue for WAKIX in its seventh year on the market, and shared encouraging data for BP-205, which supports its profile as a potential best-in-class Orexin-2 Agonist.

With multiple data catalysts coming for BP-205 over the next six months and our focus on business development, Harmony is poised to deliver meaningful long-term value creation as we drive toward delivering innovative treatments for patients living with CNS diseases and unmet medical needs.

With that, I will now turn the call over to Adam Zaeske, our Chief Commercial Officer, for a closer look at our Q2 commercial performance. Adam?

Thank you, Jeff, and good morning, everyone. The second quarter continued our strong growth and momentum trend. WAKIX delivered 261.3 million in net sales, up 30% year over year and up 21% over the first quarter. Now, in its seventh year on the market and firmly on pace for our full-year guidance of $1 billion to $1.04 billion in net revenue.

Last quarter, we saw a bit more pronounced seasonal market access headwinds that impact the [act] industry every year. The elevated plan changes, plan switching, and premium increases, which can delay patient starts, especially in January, but the underlying fundamentals remained steady and consistent. This quarter, the demand-driven trajectory and patient additions continued.

WAKIX achieved estimated average patients of 8,950 or an increase of approximately 450 patients from 1Q. This represents the highest 2Q increase in the history of the brand, the second-highest increase all time and with four of the last five quarters achieving 400-plus patient additions. Our growth and performance has never been stronger.

What's driving this continued performance is clear. WAKIX owns a highly differentiated position as the only non-scheduled treatment option for narcolepsy patients. With now seven-plus years of clinical experience, healthcare providers are highly aware of WAKIX and believe in its unique combination of efficacy, safety, and tolerability with low drug-drug interactions as well as with broad payer coverage with more than 80% of lives covered.

This makes WAKIX a familiar go-to option for any patient with narcolepsy and in any combination with other therapies in a highly polypharmacy market. And this will continue to remain true as the market continues to evolve. Q2 was the first quarter after our field-team expansions, which has expanded our presence by roughly 20% across field sales, remote sales, and field reimbursement.

This represents the largest expansion and increase in investment in the history of the brand. All of those positions have been hired, trained, and fully deployed. We also launched a new online portal, easing the process to prescribe WAKIX for healthcare providers and office staff. And we implemented changes to our reimbursement support process, which is already showing results, with patients able to secure WAKIX faster and with higher success.

As a result, we see significant continued growth potential in a total narcolepsy population of approximately 170,000, a diagnosis rate still under 50% and brand penetration of about 20%. Looking ahead. We're excited about our two lifecycle programs to extend and expand the franchise. Pitolisant GR builds on the WAKIX safety and tolerability profile and enables patients to start at a therapeutic dose.

Pitolisant HD offers a new, optimized formulation with up to two times the highest labeled dose of WAKIX, all of the benefits of the GR formulation.

And potential for differentiated labeling regarding fatigue and narcolepsy and sleep inertia in IH.

Finally, our Orexin program gives us the opportunity to deliver on the promise of efficacy with a favorable tolerability profile, once-daily dosing and potential use in a broad range of CNS indications.

To summarize, we continue to operate from a position of strength.

We are on track to achieve more than $1 billion in net sales this year with a pipeline built to extend our leadership in sleep/wake for at least the next decade.

I'll now turn the call over to our Chief Medical and Scientific Officer, Dr. Kumar Bedur. Kumar?

Thank you, Adam. Good morning, everyone, and thank you for joining us today. We continue to make good progress across all our pipeline programs, including five Phase 3 registration studies in five distinct rare neurological disorders. The headline for R&D this quarter is BP-205, a potential best-in-class Orexin-2 Receptor Agonist. So let me start there.

BP-205 is built on novel chemical scaffolds that confers unique potency, selectivity, and potentially avoids some of the molecular structure-related effects, such as hepatic and cardiac toxicity. It is the most potent Orexin-2 Receptor Agonist in chemical development, with excellent selectivity for Orexin-2 or Orexin-1 Receptors and over 150 other receptors of interest.

The high potency gives us the flexibility to use low doses and to pursue a broad range of CNS indications, including those with no obvious Rx and deficiency. Today, we reported data from the single ascending dose portion of our Phase 1 study in healthy volunteers. In this randomized double-blind placebo-controlled study across nine cohorts in men and women, each participant received a single dose of BP-205 or placebo with doses ranging from 0.2 milligram up to 6 milligrams.

In total, 72 healthy volunteers participated in this study. The SAD study in healthy volunteers was designed to characterize pharmacokinetics and safety tolerability profile. Within that scope, the data was very encouraging. Walking through the specific findings. BP-205 showed rapid absorption with a short Tmax in the range of 30 to 75 minutes, pointing to the potential for rapid onset of efficacy. We observed a mean half-life of approximately 25 hours across those groups, which supports once-daily dosing and the potential for durable efficacy throughout the day and into the early year-old.

Exposure was dose proportional across Cmax and AUC across all doses, indicating predictable systemic exposures across the range tested. We saw no age or gender differences in PK parameters, which supports no dose adjustment for elderly or female patients.

Finally, and most importantly, BP-205 were generally safe and well-tolerated with no serious or serious treatment-emergent adverse events reported, including no cardiovascular, hepatic, or visual abnormalities. The most common adverse events were headache, fatigue, and diarrhea in approximately 10%, 4%, and 3% of the participants respectively.

To our knowledge, we are the first company to share this level of granularity on Orexin-2 receptor single ascending dose data, and we are doing so because we have strong conviction in BP-205 having the potential for a best-in-class profile.

What comes next? Multiple at-selling dose study data analysis is ongoing, and we plan to disclose those data in Q4. The USIND for BP-205 is now open. And we'll be initiating our Phase 1b study in [sleep-ticard] healthy volunteers in QP with the toppling data expected from this study in early 2027.

That study is the one to watch because it will provide the first signals of efficacy for BP-205 and provide a basis for comparison against other Orexin Agonists. Given the potential for broad utility of this profile, we will be initiating Phase 2 trials in multiple CNS indications in mid-2027.

Turning to our other programs, I'm starting with next-gen Pitolisant programs. We submitted the Pitolisant GR-NDA in the second quarter. The file is accepted for full review with a target to do for date of April 1, 2027. Approximately 80% to 90% of patients with narcolepsy experience GI symptoms as part of their disease, and Pitolisant GR is designed to reduce the potential for GI areas while also allowing patients to initiate treatment at a therapeutic dose of 17.8 milligrams without titration, an important clinical differentiation.

Pitolisant HD, an optimized formulation of Pitolisant with GR coating and high dose continues to advance in two Phase 3 registrational trials, ONSTRIDE 1 in narcolepsy, and ONSTRIDE 2 in idiopathic hypersomnia, with top-line data expected in 2027 and anticipated PDUFA in 2028. These programs are pursuing differentiated labels, fatigue in narcolepsy, and sleep in a shame IH, symptoms for which there are no currently approved treatments. Utility patents are filed for both Pitolisant GR and Pitolisant HD with the potential to extend the Pitolisant franchise into the 2040s.

Moving on, the Phase 3 registration study in Prader-Willi syndrome, the [tempo] study, is actively recruiting patients, and we now expect top-line data in mid-2027. The delay in top-line data is mainly due to limited prevalence of people living with PWS and also experiencing the level of sleepiness that meets the criteria to enroll in this study.

This study is designed with the input from the FDA, not only to meet the registrational requirements, but also social, the second, and last requirement for pediatric exclusivity, which gives us six months of additional regulatory exclusivity for WAKIX on the back end of the longest patent. We remain on track to obtain pediatric exclusivity for WAKIX. We are also advancing the amorphous form of Pitolisant licensed from Norwegian, supported by an issued patent through 2042. The current efforts are directed towards formulation optimization and ongoing Phase 1 PK study.

Finally, our epilepsy franchise. EPX-100, our Clemizole Hydrochloride, continues to advance in two global Phase 3 registration plans. The Prader Studyand [Douay] Syndrome and the Lighthouse Study in Lennox-Gastaut Syndrome, with top-line data expected in mid-2027 and anticipated PDUFA in 2028.

In summary, we are encouraged by the data we shared today for our Orexin-2 Agonist BP-205, supporting its potential best-in-flight profile and excited about the multiple data catalysts coming within the next six months for BP-205.

We also continue to make progress on the five Phase 3 registrational clinical trials that we are conducting across our other pipeline programs, which will contribute to additional data catalysts in 2027 and target PDUFA days in 2028.

On behalf of Harmony, I want to thank the patients and the families for participating in our clinical trials, along with the investigators and site personnel for the dedication in advancing our clinical trials.

I'll now turn the call over to our Chief Operating Officer, Peter Anastasiou, CEO. Peter?

Thank you, Kumar. I want to provide a brief update on the final two objectives in our value-creation strategy, transacting on business development and protecting the Pitolisant franchise. In business development, we are primarily focused on assets with revenue potential in the 2028 to 2032 timeframe. We are prioritizing products in Phase 3, in registration, or on the market.

We plan to leverage our core competencies and are directing our surge and evaluation efforts in sleep/wake, epilepsy, rare orphan CNS, and broader CNS indications. We are considering a variety of deal types, including M&A and licensing. With approximately $963 million on the balance sheet, we have both the capacity and the conviction to transact. You should not expect that we will allocate all of that capital on one transaction. Instead, we will likely engage in multiple transactions and together they can be transformative for harmony.

With regard to protecting Pitolisant, our IP estate is multi-layered across formulations, methods of use, and next-generation applications, and it supports WAKIX exclusivity into March 2030, inclusive of six months of pediatric exclusivity.

There's the potential for Harmony to extend the Pitolisant franchise through other formulations into the 2040s via additional patents and applications. With respect to ongoing litigation, we have settled with six of the seven ANDA filers and we have two active legal proceedings with the loan remaining ANDA filer.

The first is the ANDA litigation with AET where we are defending our Polymorph '197 patent and the Method of Use '947 patent. The bench trial has concluded and the post-trial briefs are public. Harmony requested and the judge has called for closing arguments from both sides on October 22 this year.

In April, Harmony and Novitium filed a new patent infringement lawsuit against AET Pharma US, and its marketing partner, [Sandoz], alleging infringement of the 9/20 patent covering an amorphous form of Pitolisant Hydrochloride.

We are confident that we will prevail in both of these legal proceedings, enabling us to maintain exclusivity for WAKIX into March 2030.

I will now turn the call over to our Interim Principal Financial Officer, Stephen Mollichella. Steve?

Thank you, Peter, and good morning, everyone. This morning, we issued our second-quarter 2026 earnings release and filed our 10-Q where you will find details of our financial and operating results. We delivered strong financial results that reflect continued demand for WAKIX and our disciplined approach to managing expenses across the business.

For the second quarter of 2026, we reported net revenue of $261.3 million, compared to $200.5 million in the prior year quarter, representing 30% growth. Performance in the quarter reflects the continued robust demand for WAKIX. Cost of products sold was 24.2% of net revenue compared to 19% one year ago.

This year-over-year increase was primarily driven by new royalties related to the Novinium license agreement, which we signed in Q1 of this year. We reported total operating expenses of $108.8 million for the second quarter compared to $114.2 million in the prior year quarter. The decline in expenses was primarily driven by the $15 million upfront fee we paid to CiRC in Q2 of 2025, with no corresponding amount in the current year period. This was partially offset by continued investments in R&D and the ongoing commercialization of WAKIX. Net income for the second quarter was $75.4 million or $1.28 per diluted share, compared to $39.8 million or $0.68 per diluted share for the prior year period.

Finally, we ended the second quarter with $962.5 million of cash equivalents and investments and $155 million in debt. We expect cash flow generation to continue to be strong in the coming quarters. That said, our intent is to deploy our cash toward strategic business development opportunities and to continue to invest in the growth of our pipeline and diversification of our commercial portfolio.

And with that, I will turn the call back over to Jeff for his closing remarks, Jeff?

In closing, this was a defining quarter for Harmony Biosciences, centered around two key accomplishments. We delivered record quarterly net revenue for WAKIX and are on track to achieve greater than $1 billion in revenue for the year. And importantly, we took a big step forward in our Orexin-2 Agonist development program, sharing encouraging Phase 1 PK data for BP-205 which supports its potential best-in-class differentiated profile. And coming soon, MAD data in Q4 and data from a sleep-deprived healthy volunteer study for BP-205 early next year.

We have been leaders in the sleep/wake space for almost a decade now and are leveraging our expertise to accelerate our BP-205 development program toward multiple CNS indications and become a leader in the Orexin space.

We continue to drive the business around our four priorities focused on value creation: grow WAKIX in an evolving market advance our robust late-stage pipeline. With our potential best-in-class Orexin-2 Agonist, BP-205, as the centerpiece of our pipeline, with multiple data catalysts coming over the next six months. Transact on strategic BP opportunities. And lastly, protect the Pitolisant franchise based on our multi-layered patent estate and robust IP strategy. That gives us confidence in defending the WAKIX franchise out to March 2030.

We believe that when we execute on these four priorities, Harmony is well positioned to bring innovative treatments to patients living with CNS diseases while driving sustained long-term value for shareholders.

Thank you for your attention. I will now turn the call back over to the operator for Q&A. Operator?

(Operator Instructions) Pete Stavropoulos, Cantor Fitzgerald.

Good morning, and congratulations on progress, and thank you for taking our questions. My question is around the clinical program, BP-205. Congrats on this bad data, good first step. And I'm curious on how the short Tmax, relatively long half-life and high potency could translate into a differentiated clinical profile from both efficacy and safety standpoint? Especially compared to other Orexin-2 Receptor Agonists that are either BID or split those? And how do you think they impact their use in the broader CMS communication?

Yeah, good morning, Pete. Thank you for your question. With regards to BP-205, we are excited about the emerging clinical profile with the Phase 1 SAD data. I'll turn to Kumar to provide perspective on short half-life and the rest of the profile and the potential clinical relevance.

Hey, good morning, Pete. Thank you for the question. So you asked three questions, Tmax, half-life, and potency. Let's start with Tmax. The time to [maximum] concentration was very short. 30 to 75 minutes, and this is a very desirable feature because it results in rapid onset of efficacy, and that's especially important when you look at central disorders of hypersomnolence where patients are sleepy.

And within central disorders of hypersomnolence, if you look at indications such as idiopathic hypersomnia, for example, who have sleep inertia, again, short Tmax is very helpful. And also beyond central disorders of hypersomnolence, if you look at indications such as ADHD, again, a short Tmax would be very helpful.

In terms of half-life, first and foremost, the longer half-life will facilitate [QD] dosing, which is always preferable from a patient perspective. And in terms of efficacy, it does help sustain wakefulness in the later part of the day and in early part of the evening. And if you look beyond NT1, for example, in NT2, idiopathic hypersomnia, the other central disorders, where there is no obvious deficiency of Orexin.

What we are trying to accomplish there is look at the higher casket mechanism of Orexin Receptor Agonists and depend on the downstream impact on histamine, norepinephrine, dopamine, and serotonin. So having a longer half-life dosing to steady state will be helpful in both hypersomnolence disorders and non-hypersomnolence disorders, the broader central nervous system disorders.

Finally, the potency. We have always talked about the importance of potency. In fact, we have been talking about the importance of potency since we first disclosed our in vitro data in October 2004. And we are very impressed with the potency of BP-205. This continues to be the most potent Orexin-2 Receptor Agonists in clinical development. It gives us the flexibility to use low doses across all three central disorders of hypersomnolence and, by extension, other broad CNS indications as well.

All right. Thank you for that. Just a quick follow-up. How do you -- were you able to confirm target engagement? Do you know what 205 is actually activating the Orexin-2 Receptor in CNS?

Yeah, Pete, great question. Yeah, in our single ascending dose study, probably referring specifically to insomnia and polycuria, we did not see those [AEs], but a single ascending dose study, so there is some limitation in extrapolation of the safety and tolerability profile. We are not disclosing our multiple ascending dose data today because the data analysis are still ongoing. But in our multiple ascending dose study, we dosed for 15 days in healthy volunteers. What I can say is we did see some target engagement mechanistic [EAEs] such as insomnia and polycuria. But this was transient, and none of them were either serious or sustained. And we'll disclose full MED data sets in Q4.

Yeah, thanks, Kumar. Pete, I just want to add a few additional comments as regards to the half-life, just frame of reference. I think, as you may be aware, neuropsych drugs in the market that are dosed once daily typically have half-lives in the range of about 15 to 25 hours. So just an important context with regards to the half-life we're reporting today, 25 hours.

One interesting analog is actually WAKIX. WAKIX, half-life of about 20 hours dosed once daily in the morning, convenient dosing for patients. So frame of reference with regards to the half-life of 24 hours and importantly, as Kumar said, maintaining the physiologic tone of the Orexin system when dosed to steady state, another important component of the PK profile. Thanks, Pete.

David Wong, Deutsche Bank.

Hi there. Congrats on the quarter and the data update today, and thanks for taking my questions. So first question, I was wondering if you could just comment a little bit on the selectivity of your Orexin BP-205 for the Orexin-2 Receptor versus Orexin-1? I think you have some preclinical data in the presentation and how that might compare against other Orexin molecules out there. And maybe if you could just elaborate on the importance of potency versus selectivity. So that's my first question.

Thanks, David. Good morning. Let me just have a brief comment. I think that comes down to a threshold effect. So a threshold effect with regards to selectivity, after which there's really no incremental benefit. And then Kumar can provide sort of the data behind that?

Yeah. Good morning, David. In terms of the selectivity, you are probably referring to the in vitro data that is in the slide deck. We have over 600-fold selectivity for Orexin-2 Receptors or Orexin-1 Receptors. Potency and selectivity, they go hand in hand. If you look at the half maximal effective concentration at Orexin-2 Receptor, EC50, is 0.015 nanomolars. And for Orexin-1 Receptors, it's 9.01 nanomolars. So that's over 600-fold selectivity. That's a lot of selectivity. We also looked at selectivity over 100 other receptors of interest.

And we saw greater than 1,000-fold selectivity over there. Now, what it implies from a clinical perspective? Based on the preclinical data, we have a predicted maximum therapeutic dose. If you look at that dose, we will have 140-fold margin, or the maximum predicted efficacy dose in humans. And typically, in central nervous system disorders, you work with a selectivity of around 20-30-fold, and having 140-fold margin over Orexin-1 Receptor is pretty good, a lot more selectivity than we will ever need. And if there is ever a concern about yeast related to Orexin-1 Receptor algorithm, look, we just disclosed the single ascending dose study, granted that it's single ascending dose study.

We actually did not see anything to say that the drug is interacting with Orexin-1 Receptors. And the same was true with the preliminary MAD safety tolerability data as well.

Great. Thank you for that. And then my follow-up question pertains to Pitolus and HD. I understand the top-line data would be next year. Can you just help maybe set some expectations for us? What would you present in the top-line data for Pitolus and HD and what's your level of confidence in getting a differentiated label?

Right. David, in terms of the top-line data for Pitolescent HD, we are on track for top-line data for both narcolepsy and idiopathic psychosomnia in 2027 and PDUFA dates in 2028. Let me start with narcolepsy. Pitolescent HD. Is an optimized formulation of pitolescent. So milligram to milligram, it's just not the same as, for example, WAKIX formulation.

Also has GR coating, and it's higher dose. And we have data to show some linear correlation between exposure and efficacy. So to start with, when it comes to excessive daytime sleepiness, we anticipate to see a larger effect size. And then we will also be pursuing a differentiated label for narcolepsy by targeting symptoms of fatigue. So that's narcolepsy. When it comes to idiopathic hypersomnia, we had disclosed a lot of data from our INTUNE study.

So you will not just be targeting excessive daytime sleepiness in idiopathic hypersomnia. We'll have a high level of confidence, but we'll also be targeting sleep inertia, a very important symptom in patients with idiopathic hypersomnia, for which there are no up to treatments. And again, at last year's sleep meeting, we showed the effectiveness of Pitolisant in treating sleep inertia as measured by sleep inertia questionnaire.

Thanks, Kumar.

Greg Suvannavejh, Mizuho.

Hey, good morning. Congrats on the progress. Thanks for taking my questions. I wanted to get back to the Orexin candidate. And in particular, can you talk more about the novel scaffold you're using for BP-205? And in particular, how different and what is that specific difference versus scaffolds used by other Orexin candidates that directly translate, or at least you believe directly translate, to a potential differentiated profile in both efficacy and safety tolerability? And then I have a follow-up. Thanks.

Good morning, Greg. Thank you for your question. And I'll turn it over to Kumar. But I think that's where the differentiated profile for BP-205 begins. With that differentiated scaffolding chemical structure. Kumar can provide some more detail around that.

Yes. Good morning, Greg. I'm not a medicinal chemist, but I'll try to explain to the best of my ability. When the Orexin-2 Receptor Agonists were being developed, you may remember that there were some EAEs that were caused because of reactive metabolites, for example, liver function test abnormalities.

So [Tazin], from who [BioProzene] licensed and we sublicensed, this drug was designed to stay away some of the molecular structure-related EAEs, especially when it comes to hepatotoxicity and cardiac toxicity. So what they did was instead of going with the typical [pyridone sulfonamide bicyclic moietase], which is a typical structure, they stayed away from it.

And what it really provides is instead of this three-dimensional crystal structure, the structure is much more flat. And that is supposed to give us more potency and also help us with some of the structures-related EAEs. And we saw that. We saw that in our preclinical profile where we showed a very high potency. In fact, BP-205 was effective at a dose of 0.03 mg/kg in the narcolepsy transgenic mice model, the lowest dose that was ever used to test and we saw the same profile in our single ascending dose study in terms of short Tmax, in terms of longer half-life and the safety and tolerability profile to the extent we can extrapolate based on the single ascending dose is very favorable.

So overall, very encouraging data both from a non-clinical perspective and from a limited data that we have on the clinical side.

Thank you very much and then I think there are many of us who are excited about the potential for BP-205 to be differentiated, but I think a question that I get often from investors is really relates to kind of developmental timelines and how far you might be behind, say, Takeda or some of the other players. Can you comment on, maybe broadly speaking, how we should think about the clinical development program and what's next in terms of timelines?

Greg, I think at a high level, as you can hear today, we are -- have the conviction to move quickly and accelerate the development timeline. So while we may not be first to market with regards to NT1 or with regards to NT2 or IH, the other hypersomnias. But importantly, looking at broader CNS indications, as we said, we'll be initiating multiple Phase 2 trials mid-next year.

And we believe with our experience, our know-how in the space, we'll be able to accelerate those development programs. And potentially be first or second to market in some of the broader indications. So we have that commitment. We have that experience to move the program forward across multiple CNS targets, and we're building that momentum and as we shared multiple data catalysts coming over the next six months.

And I would just add, Greg, that as we've seen in many therapeutic categories, the first or second asset isn't necessarily the best asset. And so we believe we've shown today some initial clinical data that supports that this is a differentiated profile that can be well set up to be best in class, not just in hypersomnolence indications, but importantly in broader CNS indications where features like the potential for rapid onset of action, potential for once-daily dosing are going to be very important. And so first isn't necessarily best, and we believe that we are developing what's emerging to be the best profile.

David M. Amsellem, Piper Sandler.

Thanks. A couple from me. So wanted to drill down more on Greg's question on different indications. So we already have a glimpse of potential other indications. There's alchemies with an ADHD program and also fatigue in Ms. And Parkinson's program. Obviously, there are other potential indications across mood and cognition, for example.

So given the business model which is focused historically on [RARE], how are you thinking about these broader indications, particularly in these larger markets that are much more promotion intensive and your willingness to dive into say mood or cognition where you're going to need considerably more commercial infrastructure. So that's number one. And then number two is, sorry if I missed this, but wanted to get a better flavor for your IP estate on 205 when the composition IP expires and talk to additional patents issued or pending. Thanks.

Thanks, David, for your question. So let me start, and I'll turn it over to Peter with some thoughts. So in terms of the opportunity with BP-205 and we're also working with our partner, Bioprojet, on additional Orexin-2 compounds. So there's a backup and then additional compounds based on.

Novel chemical scaffold that we talked about. So I think that now we are looking at optionality. So we're looking at optionality as we advance the program with regards to obviously the hypersomnias and some of those programs are further ahead, but the broader CNS indications that you alluded to. And there is a lot of activity in the space around some of the targets. You mentioned ADHD, MS fatigue, et cetera.

So we actually have worked with our partner, Bioprojet, on some preclinical models and emerging evidence in what potentially could be the best of those targets with regards to preclinical proof of concept. So we are looking broadly with optionality and accelerating the development program opportunity, realizing that in indications in the orphan rare space, there is one opportunity there and then other Orexin-2 compounds to go broader with a different commercial model. And I'll turn it over to Peter, any additional?

The only thing I would add is on your question about appetite, the appetite is strong and I think it is based on the foundation that we just talked about, that this asset has the potential to be effective in both sleep-wake indications and the broader indications. And in particular, that's where the potency, I think, really helps us because many of those broader indications are not indications where there's Orexin deficiency. And so having the most potent asset, I think, sets us up well from an efficacy perspective.

And in terms of your question on appetite for investment commercially, et cetera. Certainly Adam can chime in. But we have that appetite as well. Many of us have significant experience in many of those categories. Even though the organization doesn't have experience in those categories, many of us within the organization do. And we, I think, have clearly established with the fact that we're on track to achieve $1 billion dollars in revenue that we have the commercial wherewithal.

So to be able to scale up from that very strong commercial footprint we already have to take advantage of opportunities in these broader markets is something we're prepared to do and quite confident we can do. And then you asked about IP. The IP goes to 2043 with the potential for additional patent term extensions on top of that.

And the composition patent expiry, is that 2043 or earlier?

No, that's the company that's 2043.

Thank you, David.

Amy Fadia, Needham & Company.

Hi, good morning. Thanks for taking my question. Maybe a follow-up to the last couple of questions. As you think about navigating the competitive landscape with this first Orexin Acid 205 and some of the backup compounds that you talked about. How would you think about prioritizing either rare indications versus the larger markets with your first initial program because I would assume that you want to think about the pricing dynamics in each of the different markets and appropriately develop each asset catered to a different market.

So maybe you could sort of talk about how -- maybe your current thoughts around how you're prioritizing around those. And then maybe if I could squeeze in a question on WAKIX. With the strong patient ads that we saw this quarter, if you could comment on how you anticipate the cadence of patient ads in the remainder of the year?

Good morning, Ami. Thanks for your questions. With regards to the first one and prioritizing, I think it's a combination of multiple factors. I think as Peter alluded to, we have the ability and the conviction to pursue multiple. CNS indications, both the hypersomnias and these broader CNS indications.

Understanding in terms of price point of orphan rare indications such as narcolepsy and IH. So I think it's a combination of timing, but again, we feel first to market may not be best. So there's still opportunity in the hypersomnias off of the strong foundation and the strong base and business that we built in that space with WAKIX, but also excited about the broader CNS indications, accelerating those efforts, multiple Phase 2 trials beginning mid next year, and then investing in those Phase 2 studies, letting the data inform our opportunities going forward.

And as Peter alluded to, with the commercial experience to broaden that footprint, broaden that effort towards those opportunities. So I think we've got optionality, multiple opportunities in both hypersomnias, broader CNS indications, and are moving the program forward.

To generate data covering both of those areas to inform our decisions on Phase 3 development and eventual commercialization.

And I can speak to patient ads. Good morning, Ami. Good to hear from you. So we are very pleased with the performance we saw in 2Q. Achieved 8,950 average patient set up 450 in the quarter. That is the second highest quarterly increase in the seven-year history of the brand. So very strong. And we've now seen four of the last five quarters actually achieving 400-plus patient adds. So the momentum is there. We're carrying that into Q3, and we'd expect that growth to continue through the end of the year, similar to what we've seen in prior years for wake. It's very steady growth, very steady momentum, and we expect that growth to continue. Hence confirming full-year guidance at $1 billion plus in net sales, $1 billion to $1.04 billion for the year. Thanks for the question.

Patrick Trucchio, HC Wainwright.

Hello, good morning, everyone, and congrats on the progress. This is Luis in for Patrick. I'm curious about the next steps for the 205 program. So. What efficacy data would give you confidence to advance to Phase 2? What are the key gating items? Is there a minimum threshold that the FDA requires? What would be a go/no-go decision for you?

Good morning, Luis. Thanks for the question. So I think the next steps and then I'll. Hand it over to Kumar. So as we said, multiple data catalysts coming over the next six months, the MAD data that we'll read out in the fourth quarter, importantly, initiation of the Sleep Surprise Healthy Volunteer Study this quarter, data early '27. Obviously, the mechanism of action is proven.

So with regards to -- we anticipate a strong outcome in the sleep-deprived healthy volunteer study, the opportunity is also demonstrating at lower clinical doses, which could provide a very good risk-benefit profile, similar to what Kumar alluded to in the preclinical model, at the lowest doses, demonstrating sustained wakefulness. So that is the opportunity with regard to the sleep-deprived healthy volunteer data.

And then from there, Kumar, additional thoughts.

Yeah, sure. Good morning, Louis. Thanks for this question. Just building on what Jeff mentioned, the sleep-deprived healthy volunteer study, that's when we will see the first signal for efficacy. We anticipate strong. And sustained response from the sleep-deprived healthy volunteer study. And that is based on the profile that we saw in our non-clinical studies and also the early profile, the PK profile that we are seeing in our single ascending dose study.

In terms of your question regarding go, no-go, gating decisions, those kind of things, as Jeff was alluding to. In NT1, the mechanism of action is established. There is Orexin deficiency, you get Orexin-2 Receptor agonist, and you see efficacy. But beyond that, that's where the profile of BP-205 becomes extremely important in terms of potency, in terms of selectivity, in terms of half-life, and also the safety and tolerability profile, the initial safety and tolerability profile that we shared today.

We believe all of these features continue to support our belief that BP-205 is a best-in-class Rxin2 receptor agonist that will be helpful not just for central disorders of hypothrombolas, but beyond that, including many other broader central nervous system disorders.

Jason Gerberry, Bank of America.

Oh, hey, guys. This is [Qi] on for Jason. Thanks for taking our question. I have a question of BP-205 and a follow-up as well. I'm curious, can you talk about the shape of the PK curve? Should investor interpret the rapid Pmax as a high Cmax as well or peak concentration or does the PK curve have a flat peak-to-trough profile? And then I have a follow-up after this.

Thank you for the question. We haven't disclosed all the data because typically we disclose the full data set at a scientific meeting. But your point in terms of Tmax and Cmax is Tmax, that's when we saw the maximum concentration of BP-205 and the Tmax varied in the range of 30 to 75 minutes.

Okay. And my follow-up question is on the extended half-life relative to other clinical programs or other clinical or rex and clinical programs. And I think those programs seem to have roughly around 10 hours of half-life or less. So I'm curious, do you think you've thread the needle between having a long enough half-life for a one stadium dosing and also having exposure level low enough at nighttime?

Can you talk about dosing strategy to mitigate insomnia? And really insight from the Phase 1 MET portion, given you have talked about insomnia and polyculia as signal target engagement early on the call.

Yes, good question. In terms of half-life, look, we don't know the half-life or the exact half-life of the other programs because no one has shared the data in a comprehensive way like what we are doing in our SAD study. So I can only comment on BP-205. The terminal half-life that we saw in the single ascending dose study was approximately 25 hours. If you look at the drugs that are administered once a day, for example, the half-life ranges anywhere between 14 to 20 plus hours.

Jeff mentioned earlier, the half-life of pitolafine is 20 hours, and it's dosed once a day. So based on what we know. About the TK profiles of the drugs that are dosed once a day, we are confident that this profile fits QD dosing, which is preferable from a patient perspective. And it will also help to sustain wakefulness in the afternoon and in the early part of the evening.

In your question about the long half-life and potential for EAEs. I mentioned earlier in our single ascending dose study, we did not see insomnia or polycuria that are some of the mechanistic target engagement related AEs.

But in our MAD study, where we did dose for 15 days in healthy volunteers, we did see some insomnia and polycuria, but neither of them were neither serious nor sustained. So the emerging profile that we are seeing is very much supportive of QD tosing, helping the patients through the day and without necessarily carrying the effects into night, resulting in undesirable EAEs.

Okay, great. Thanks for taking our questions.

Thank you.

Danielle Brill, Truist.

Hi, guys. Good morning. Thanks for the question. Maybe a bit of a follow-up to the prior one. So you've confirmed insomnia on polykeria in your MAD study and understanding you're not giving numbers today, but just wondering if you could maybe provide some directional color ahead of the data, specifically wondering if investors should expect incidence rates to track similarly to.

Peers in the 50% to 60% range, whether we should expect a dose response, and understanding there were transient events. Did these resolve despite continued dosing, or did they fade over time as tolerance improved, and should we -- what should we expect in terms of discontinue?

Thank you.

Good morning, Danielle. Thanks for the question. All great questions. But at this point in time, those data are still being analyzed, and we plan to provide a comprehensive MAD data in the fourth quarter of this year.

I can't comment anything beyond than what I've already said, which is, yeah, we did see insomnia. We did see some polykuria, dysphotansient, not sustained or severe.

Maybe as a follow-up, could you frame you talked a lot about how metrics that would support the best-in-class profile of BP-205. Could you frame on the safety front how you would define a best-in-class profile?

All right. So from a safety perspective, there are things that are class-related that we expect based on the mechanism of action. And there are things that are off-target, depending on the chemical structure of the car. From a class-related EAS, I already mentioned what I can mention on this call, which is from a single ascending dose study perspective, we did not see cardiovascular, hepatic, or visual disturbances.

Specifically mentioning this because based on the development program. From other sponsors, we have seen in the past some hexatotoxicity and some visual disturbances.

In terms of off-target effects, we already talked about the selectivity, 600-fold selectivity for Orexin-1 Receptor agonist. And we already talked about the protency and the efficacy. Ultimately, what it comes down to is the product profile based on efficacy, safety, and tolerability, and ease of use.

Based on the data that we have as of today, the non-clinical and early clinical, high potency, longer half-life, short pmax, seeing some on-target target engagement AEs, transient, not sustained, not severe, no off-target effects, and once-a-day dosing, we are actually very confident with the emerging product profile for BP-205.

Thanks, Kumar. Yeah, so I think, Danielle, just to add, overall benefit-risk based on efficacy, safety, tolerability, as Kumar said, and also the opportunity with BP-205 are lower clinical doses given its potency, both in NT1 and other disorders that don't have a Rexin deficiency opportunity in terms of threading the needle, if you will, of a favorable benefit-risk profile is what we are working towards and what BP-205 is designed to deliver. So more data to come, but excited about the emerging profile and our opportunity in the broader REXMA space.

Thank you. And ladies and gentlemen, that's all the time we have for questions this morning. Dr. Dano, I'd like to turn things back to you, sir, for any closing comments.

Thanks, operator. My thanks to all of you for being on the call today, for your interest in Harmony Biosciences and our opportunities ahead. Again, strong commercial performance this quarter and excited about our opportunity, BP-205 and in the erection space. Thank you and have a great day.

Thank you, Dr. Dano. This does conclude today's Harmony Biosciences second-quarter 2026 financial results conference call. You may now disconnect your line and have a wonderful day, everyone.