PLYMOUTH MEETING, Pa. - Harmony Biosciences (NASDAQ:HRMY) has received approval from the U.S. Food and Drug Administration (FDA) for the use of its drug WAKIX® (pitolisant) in pediatric patients aged six and older for the treatment of excessive daytime sleepiness (EDS) associated with narcolepsy. This approval marks an expansion of WAKIX's indication, which was previously authorized for adult narcolepsy patients.
The FDA's decision was based on a Phase 3 study by Bioprojet that demonstrated the safety and efficacy of pitolisant in pediatric patients with narcolepsy. Following this study, the European Medicines Agency also approved the drug for the same pediatric indication last year.
WAKIX, known for its novel mechanism of action as a selective histamine 3 (H₃) receptor antagonist/inverse agonist, is the first and only non-scheduled FDA-approved treatment for narcolepsy in children, providing a new option beyond controlled substances which were the only treatments available until now.
Jeffrey M. Dayno, M.D., President and CEO of Harmony Biosciences, expressed satisfaction with the FDA's swift approval following the priority review. He highlighted the importance of having a non-scheduled treatment option for pediatric patients.
The drug was initially approved by the FDA in August 2019 for adult patients with EDS due to narcolepsy and subsequently for the treatment of cataplexy in adult narcolepsy patients in October 2020. While the FDA has issued a complete response for the treatment of cataplexy in pediatric patients, Harmony Biosciences plans to discuss a path forward based on the Phase 3 trial data.
Monica Gow, Co-Founder and Executive Director of Wake Up Narcolepsy, applauded the FDA's approval, stressing the significance of this development for children with narcolepsy and their unmet medical needs.
Narcolepsy affects approximately 170,000 Americans and is characterized by EDS and potentially cataplexy, among other symptoms. WAKIX's approval for pediatric use provides a new therapeutic option for this rare neurological condition.
This news is based on a press release statement from Harmony Biosciences.
In other recent news, Harmony Biosciences showcased a strong Q1 performance with a 30% increase in net revenues, reaching $154.6 million. This growth was primarily driven by the success WAKIX. The company remains on track to meet its 2024 net revenue guidance of $700 million to $720 million.
Harmony Biosciences also revealed promising findings from a Phase 2 study of pitolisant, indicating potential efficacy in reducing symptoms of excessive daytime sleepiness and fatigue in adults with Myotonic dystrophy Type 1.
In a strategic move, Harmony Biosciences acquired Epygenix Therapeutics, a firm focusing on epilepsy treatments, and TMP1116 for narcolepsy, as part of its expansion strategy. This acquisition was positively received by Needham, a prominent investment firm, which subsequently raised its stock price target for Harmony Biosciences to $52.
Furthermore, Harmony Biosciences received a Buy rating from a Citi analyst, who set the price target for the company at $48.00. The analyst noted that Harmony Biosciences has been predominantly valued by the market for its core business with Wakix, with minimal recognition given to its developmental pipeline. This perspective suggests a potentially favorable risk-reward scenario for the company's stock over the forthcoming 12 to 18 months.
InvestingPro Insights
As Harmony Biosciences (NASDAQ:HRMY) celebrates the FDA's approval for pediatric use of its narcolepsy drug WAKIX, investors and stakeholders are closely watching the company's financial health and market performance. Harmony's strategic moves, including aggressive share buybacks, as indicated by an InvestingPro Tip, suggest a strong confidence from management in the company's value proposition. Moreover, the company's solid balance sheet, with more cash than debt, provides a robust foundation for future growth and operational flexibility.
From a valuation standpoint, Harmony Biosciences' P/E ratio stands at a favorable 12.87, with an adjusted P/E ratio for the last twelve months as of Q1 2024 reflecting an even more attractive figure at 11.71. These metrics, alongside a strong revenue growth of 30.92% over the last twelve months as of Q1 2024, paint a picture of a company on an upward trajectory. Additionally, the company's gross profit margin of 79.28% during the same period underscores an efficient business model with the potential for sustained profitability.
Investors looking for growth opportunities may also take note of the two analyst earnings revisions upwards for the upcoming period, another InvestingPro Tip. With a fair value estimation by analysts at 46 USD and InvestingPro's fair value at 39.38 USD, potential undervaluation could signal a buying opportunity for discerning investors. For those interested in further analysis and additional InvestingPro Tips, there are 6 more listed on InvestingPro, which can be accessed with a subscription. Don't forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Harmony Biosciences' recent FDA approval may just be the tip of the iceberg when it comes to the company's potential, and with the right investment insights, stakeholders can better navigate the opportunities that lie ahead.
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