PLYMOUTH MEETING, PA — Harmony Biosciences Holdings Inc. (Nasdaq: HRMY) reported a decline in third-quarter profit despite a 12% increase in sales of its narcolepsy treatment WAKIX, as higher licensing costs and research spending offset revenue growth at the Plymouth Meeting-based pharmaceutical company.
Net income fell to $48.2 million, or 81 cents per diluted share, for the quarter ended Sept. 30, 2026, compared with $50.9 million, or 87 cents per share, a year earlier.
WAKIX, the company’s principal commercial product, generated $268.9 million in quarterly net revenue, up from $239.5 million in the comparable 2025 period.
Harmony reaffirmed its full-year WAKIX revenue forecast of $1 billion to $1.04 billion, supported by continued patient enrollment and expanded commercial operations.
The company also reported preliminary safety and pharmacokinetic results from BP-205, an experimental treatment targeting the orexin-2 receptor, as it prepares for additional clinical studies in 2027.
The financial results illustrate Harmony’s efforts to maintain growth in its established narcolepsy franchise while investing in experimental treatments and defending the intellectual property supporting its existing business.
WAKIX patient demand continued to increase during the quarter, with the estimated average number of patients receiving treatment rising by 400 to approximately 9,350.
Harmony has added more than 400 patients in five of the past six quarters, reflecting continued prescribing activity in the U.S. narcolepsy market.
The company estimates that approximately 170,000 Americans live with narcolepsy, although fewer than half have received a diagnosis.
Among diagnosed patients, Harmony estimates WAKIX penetration at approximately 20%, indicating additional commercial opportunities within the existing treatment population.
WAKIX, also known as pitolisant, is a nonscheduled treatment for excessive daytime sleepiness and cataplexy associated with narcolepsy in adult and pediatric patients.
The drug has more than seven years of clinical experience and insurance coverage extending to more than 80% of covered lives, according to the company.
Harmony completed an expansion of its field sales, remote sales, reimbursement and patient outreach teams during the second quarter, increasing its commercial capacity ahead of the latest reporting period.
Higher revenue did not translate into increased earnings because of additional royalty obligations and clinical development costs.
Cost of products sold rose 35% to $80.7 million from $59.7 million a year earlier, increasing to 30% of WAKIX revenue from 25%.
Harmony attributed the higher cost ratio primarily to new royalties associated with its licensing agreement with Novitium.
Research and development expenses increased 30% to $71.7 million from $55 million, largely reflecting a $25 million milestone charge under an agreement with MSN Laboratories.
That increase was partially offset by the absence of a $15 million clinical milestone expense associated with ZYN002 in the prior-year quarter.
Sales and marketing expenses climbed 18% to $34.7 million, reflecting the expansion of Harmony’s commercial field teams.
General and administrative expenses declined 7% to $27.7 million, primarily because of lower stock-based compensation.
Total operating expenses increased 17% to $134 million from $114.3 million.
Harmony ended September with $1.052 billion in cash, cash equivalents and investments, up from $882.5 million at the end of 2025.
The company plans to direct capital toward clinical development, milestone payments and acquisitions or licensing arrangements that could diversify its commercial portfolio.
Its development strategy includes treatments for sleep disorders, epilepsy and other central nervous system conditions, with potential business development opportunities spanning near-term revenue generation from 2028 through 2032 and longer-term experimental programs.
A central component of that strategy is BP-205, an investigational orexin-2 receptor agonist being developed with Bioprojet following its discovery by Teijin Pharma.
Harmony reported preliminary results from a randomized, double-blind, placebo-controlled multiple-ascending-dose study involving 94 healthy volunteers.
Participants received once-daily BP-205 doses of 0.1, 0.6, 1 or 3 milligrams across six cohorts over 14 days.
The treatment was rapidly absorbed, reaching maximum concentrations in approximately 60 minutes on average, with a range of 30 to 90 minutes.
Its mean effective half-life after repeated dosing was approximately 29 hours, consistent with earlier single-dose findings and supportive of a once-daily dosing schedule.
BP-205 was generally well tolerated across the evaluated doses, according to Harmony.
Headache was the most common adverse event, occurring in approximately 25% of participants.
Insomnia was reported in fewer than 20% of participants at each dose level, while urinary frequency and urgency occurred in fewer than 20% of participants receiving the 1-milligram and 3-milligram doses.
Those adverse events were mild and did not lead to treatment discontinuation.
The company reported no serious or severe adverse events, liver or visual adverse events, clinically significant cardiovascular events or electrocardiogram abnormalities.
The preliminary findings are consistent with the safety and pharmacokinetic profile observed in the earlier single-ascending-dose study, although further trials will be needed to evaluate clinical efficacy.
Harmony plans to present the complete multiple-ascending-dose findings at an upcoming medical meeting.
A Phase 1b study evaluating BP-205 in sleep-deprived healthy volunteers began in the United States during the third quarter, with results expected in the first quarter of 2027.
The company expects to begin Phase 2 studies across multiple central nervous system indications by mid-2027.
Separately, Bioprojet presented preclinical research at the SLEEP EU 2026 meeting showing a combined effect of orexin and histamine on wakefulness in a mouse model of narcolepsy.
The findings suggest a potential therapeutic approach combining an orexin-2 receptor agonist with pitolisant, although the research remains preclinical.
Harmony is also pursuing additional formulations of pitolisant intended to expand the drug’s clinical applications and extend the commercial life of the franchise.
The U.S. Food and Drug Administration is reviewing a New Drug Application for gastro-resistant pitolisant tablets, known as Pitolisant GR, with a regulatory decision target date of April 1, 2027.
The formulation is designed to allow patients to begin treatment at a therapeutic dose without the gradual dose increases required under existing treatment protocols.
Harmony anticipates a potential commercial launch during the first half of 2027, subject to regulatory approval.
The company is also conducting Phase 3 trials of a higher-dose pitolisant formulation, known as Pitolisant HD, in narcolepsy and idiopathic hypersomnia.
The ONSTRIDE 1 and ONSTRIDE 2 studies are expected to produce topline results in 2027, with potential FDA decisions targeted for 2028.
The higher-dose formulation incorporates an optimized pharmacokinetic profile and enteric coating, with the company seeking additional labeling for fatigue associated with narcolepsy and sleep inertia associated with idiopathic hypersomnia.
Another Phase 3 study, TEMPO, is evaluating WAKIX in patients with Prader-Willi syndrome, a rare genetic disorder.
Topline results are expected in mid-2027, with a potential regulatory decision in 2028.
Completion of the study would fulfill the second and final requirement agreed upon with the FDA for pediatric exclusivity, potentially extending WAKIX regulatory protection by six months.
Harmony is separately evaluating an amorphous form of pitolisant for broader central nervous system applications.
The development program draws on an exclusive license to Novitium’s issued patent covering amorphous pitolisant, which provides protection through 2042.
The company has also licensed a patent from MSN Laboratories covering methods of manufacturing amorphous pitolisant hydrochloride. That patent was issued during the third quarter.
These intellectual property arrangements are part of Harmony’s strategy to protect and extend its pitolisant business as it faces challenges from prospective generic competitors.
Harmony is pursuing several patent infringement proceedings involving different aspects of the drug’s formulations and uses.
In litigation involving AET Pharma’s abbreviated new drug application, closing arguments concerning polymorph and method-of-use patents were held Oct. 22.
A ruling is expected around February 2027, when the applicable 30-month regulatory stay expires.
In a separate case, Harmony and Novitium filed a patent infringement lawsuit in April against AET Pharma US and its marketing partner, Sandoz, involving the amorphous pitolisant patent.
A scheduling conference took place Oct. 21, and a trial concerning that patent is expected to be scheduled for 2029.
On Nov. 3, the judge scheduled a preliminary injunction hearing for Jan. 26, 2027, with a decision expected by Feb. 14, when the 30-month stay expires.
The schedule matches the proposal Harmony submitted to the court on Oct. 26.
Harmony has reached settlements with six of the seven companies that filed abbreviated new drug applications for generic versions of pitolisant.
The company maintains that its combination of patents, licensing arrangements and litigation supports WAKIX market exclusivity through March 2030, including the anticipated six-month pediatric exclusivity extension.
Beyond its sleep disorder portfolio, Harmony is developing EPX-100, or clemizole hydrochloride, for rare forms of epilepsy.
The treatment is being evaluated in two global Phase 3 registration studies: LIGHTHOUSE for Lennox-Gastaut syndrome and ARGUS for Dravet syndrome.
Both trials are enrolling patients, with topline results expected in mid-2027 and potential regulatory decisions targeted for 2028.
Updated 18-month data from the open-label extension portion of ARGUS are scheduled for presentation at the American Epilepsy Society’s annual meeting in December 2026.
Harmony is also preparing for a leadership transition.
Peter Anastasiou, currently senior executive vice president and chief operating officer, will become president and chief executive officer on Jan. 1, 2027.
He will succeed Jeffrey Dayno, M.D., who plans to retire Dec. 31, 2026.
The transition was announced Oct. 12, and the company expects its existing commercial and clinical development schedules to remain unchanged.
Dayno identified the established WAKIX business and the company’s financial resources as central to its next phase of development.
“As I prepare to transition the President and CEO role to Peter on January 1, I believe Harmony is operating from a position of strength, with a durable and growing WAKIX franchise, the financial flexibility to invest in innovation, conviction to pursue strategic business development opportunities, and a pipeline led by BP-205 that has the potential to generate significant long-term value,” Dayno stated.
The leadership change comes ahead of a series of clinical and regulatory milestones that could influence Harmony’s product portfolio through 2028.
The company’s immediate financial performance remains closely tied to WAKIX, while its longer-term growth strategy depends on advancing new treatments, obtaining additional regulatory approvals and maintaining the intellectual property protections supporting its existing franchise.
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