UBS initiated coverage on Harmony Biosciences Holdings Inc (NASDAQ:HRMY), a commercial-stage biopharmaceutical company focused on rare neurological disorders.
The company's marketed medicine, Wakix (pitolisant), is approved for excessive daytime sleepiness or cataplexy in adult patients with narcolepsy.
Wakix generated net revenues of $172.8 million in the second quarter of 2024, up 29% year-over-year.
The average number of patients on Wakix increased by approximately 250 patients sequentially to approximately 6,550 for the quarter ended June 30, 2024.
UBS initiates with a Buy rating and price target of $56 on Harmony. "We like Harmony because, in our view, continued growth is feasible for Wakix," the analyst writes.
The UBS analyst models a 19% '24-'26E sales CAGR compared to a consensus of 16% and $1.2 billion peak sales from Wakix in narcolepsy.
"We believe the narcolepsy market can present more opportunities as awareness of narcolepsy increases the diagnosis rate from the current ~50%," the analyst adds.
UBS also writes that Wakix is well-positioned in the polypharmacy market with its differentiated profile vs. other approved drugs.
UBS notes that recent business development deals could offer valuable diversification opportunities through pipeline assets.
In April, Harmony acquired Epygenix Therapeutics, adding a rare epilepsy franchise to its expanding late-stage pipeline of central nervous system (CNS) assets for $35 million in cash with the potential for payments of up to $130 million based on development and regulatory milestones.
"We believe Zygel can generate positive data from the ongoing Phase 3 trial in fragile X syndrome based on its prior FXS trial results and the design of the current study," UBS writes. Data read-out is expected in mid-2025.
Price Action: HRMY stock is up 1.55% at $37.46 at the last check on Tuesday.
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