What changed in this filing

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Item 1. Business

2023-02-21 compared with 2022-02-28 · 183 added, 155 removed, 512 unchanged (40% of the section changed)

We are a commercial-stage, rare disease pharmaceutical company focused on developing and commercializing innovative therapies for patients living with rare neurological diseases who have unmet medical needs.

We are a commercial-stage, pharmaceutical company focused on developing and commercializing innovative therapies for patients living with rare neurological diseases as well as patients living with other neurological diseases who have unmet medical needs.

Our product, WAKIX (pitolisant), is a first-in-class molecule with a novel mechanism of action (“MOA”) specifically designed to increase histamine signaling in the brain by binding to H 3 receptors.

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commercial launch was initiated in November 2019.

On October 13, 2020, WAKIX was approved by the FDA for the treatment of cataplexy in adult patients with narcolepsy.

In October 2020, WAKIX was approved by the FDA for the treatment of cataplexy in adult patients with narcolepsy.

WAKIX is the first-and-only approved product for patients with narcolepsy that is not scheduled as a controlled substance by the U.S.

Drug Enforcement Administration (the “DEA”).

We are currently pursuing label expansion for WAKIX in narcolepsy in pediatric patients and have engaged with the FDA in pursuit of pediatric exclusivity.

Our strategic partner, Bioprojet is evaluating pitolisant in pediatric patients with narcolepsy and has completed a Phase 3 trial.

We will be working with Bioprojet to assess the data from the Phase 3 trial to inform how best to advance the pediatric narcolepsy program.

We believe that our strategic decision to assess this data first before advancing the pediatric program is the most prudent and thoughtful path forward from a development and financial perspective.

In the meantime, we are continuing to evaluate regulatory strategies with regard to obtaining pediatric exclusivity.

We anticipate providing an update on the path forward later this year.

We believe that pitolisant’s ability to regulate histamine gives it the potential to provide therapeutic benefit in other rare neurological diseases that are mediated through H 3 receptors and histamine signaling.

Beyond narcolepsy, we are initially focusing on the treatment of EDS associated with Prader-Willi Syndrome (“PWS”) and myotonic dystrophy, otherwise known as dystrophia myotonica (“DM”).

We opened an investigational new drug application (“IND”) for pitolisant for the treatment of PWS in November 2019, completed a Phase 1 PK clinical trial in pediatric patients with PWS in December of 2019, then initiated a long-term, open-label safety trial in those patients who participated in the Phase 1 PK trial.

In December 2020, we initiated a Phase 2 proof of concept (“POC”) clinical trial to evaluate pitolisant for the treatment of EDS and other key symptoms in patients with PWS and anticipate topline results from this POC trial in the second half of 2022.

In June 2021, we initiated a Phase 2 clinical trial to evaluate pitolisant for the treatment of EDS, fatigue and cognitive dysfunction in adult patients with DM1 and anticipate topline results in 2023.

In addition to these potential indications, we opened an IND for pitolisant for the treatment of idiopathic hypersomnia (IH) in November 2021 and plan to initiate a Phase 3 trial in adult patients with IH in the first half of 2022.

We also seek to expand our pipeline through the acquisition of additional assets that focus on addressing the unmet needs of patients with rare neurological diseases and/or neurological diseases that would allow us to leverage our existing infrastructure and expertise.

Consistent with this objective, on August 4, 2021, we acquired HBS-102, a Melanin-concentrating hormone receptor 1 (MCHR1) antagonist previously developed as CSTI-100/ALB-127258(a)/ALB-127258 (the “Compound”), along with intellectual property and other assets related to the development, manufacture, and commercialization of the Compound from ConSynance Therapeutics, Inc.

We are taking a mechanism-

based approach to managing the life cycle of pitolisant and have identified idiopathic hypersomnia (“IH”), another central disorder of hypersomnolence like narcolepsy, as our next potential new indication for pitolisant.

In April 2022, we initiated a Phase 3 registrational trial, the INTUNE Study, to evaluate the efficacy and safety of pitolisant in adult patients with IH and have seen continued strong momentum in patient enrollment, with approximately 85% of the targeted clinical trial sites activated.

We are focusing our development efforts on other rare neurological disorders in which EDS is a prominent symptom, including Prader-Willi Syndrome (“PWS”) and myotonic dystrophy, otherwise known as dystrophia myotonica (“DM”).

We recently received the initial topline data from our Phase 2 proof-of-concept clinical trial to evaluate pitolisant for the treatment of EDS and other key symptoms in patients with PWS, which showed a positive signal on improvement in the primary outcome related to EDS.

We received the full data set at the end of 2022, which our team has been analyzing in preparation for an end-of-phase 2 meeting with the FDA to discuss the data.

We intend to advance our development program in patients with PWS into a Phase 3 trial.

In June 2021, we initiated a Phase 2 proof-of-concept clinical trial to evaluate pitolisant for the treatment of EDS, fatigue and cognitive dysfunction in adult patients with DM1 and anticipate topline results from this trial in the fourth quarter of 2023.

Our partner, Bioprojet completed a Phase 3 trial in pediatric patients with narcolepsy and submitted the trial data to the European Medicines Agency (the “EMA”) seeking approval for a pediatric narcolepsy indication.

On January 26, 2023, Bioprojet received a positive opinion from the EMA’s Committee for Medicinal Products for Human Use (“CHMP”) with an approval for a pediatric narcolepsy indication expected by the EMA within 60 days of the positive CHMP opinion.

We are working with Bioprojet on a path forward towards the submission to the FDA of a supplemental NDA for pediatric narcolepsy and, in addition, we remain committed to obtaining pediatric exclusivity for WAKIX.

We also seek to expand our pipeline through the acquisition of additional assets that focus on addressing the unmet needs of patients living with rare neurological diseases as well as patients living with other neurological diseases who have unmet medical needs.

We are targeting assets that will allow us to further leverage the expertise and infrastructure that we have successfully built at Harmony so we can optimize the benefit of internal synergies.

Consistent with this objective, on July 31, 2022, we entered into a License and Commercialization Agreement (the “2022 LCA”) with Bioprojet whereby we obtained exclusive rights to manufacture, use and commercialize one or more new products based on pitolisant in the United States and Latin America, with the potential to add additional indications and formulations upon the agreement of both parties.

In addition, on August 4, 2021, we acquired HBS-102, a Melanin-concentrating hormone receptor 1 (MCHR1) antagonist previously developed as CSTI-100/ALB-127258(a)/ALB-127258 (the “Compound”), along with intellectual property and other assets related to the development, manufacture, and commercialization of the Compound from ConSynance Therapeutics, Inc.

In connection with the acquisition, we made an upfront payment of $3.5 million and will be required to make certain payments upon the achievement of certain development milestones, regulatory milestones, and sales milestones and pay ongoing royalties upon commercialization.

We acquired full development and commercialization rights globally, but we have provided a grant-back license to ConSynance for the development and commercialization of the Compound in Greater China.

We are currently assessing potential clinical targets for HBS-102 which will inform our development strategy going forward.

Pitolisant was developed by Bioprojet and approved by the European Medicines Agency (“EMA”) in 2016 for the treatment of narcolepsy in adult patients with or without cataplexy.

We acquired an exclusive license to develop, manufacture and commercialize pitolisant in the United States pursuant to our license agreement with Bioprojet (as amended, the “Bioprojet License Agreement”) in July 2017.

See “—Strategic Agreement—License and Commercialization Agreement with Bioprojet” for further information regarding the Bioprojet License Agreement.

We acquired full development and commercialization rights for HBS-102 globally, but we have provided an indication-limited grant-back license to ConSynance for the development and commercialization of the Compound in Greater China.

We recently initiated a preclinical proof-of-concept study to assess the effect of HBS-102 on hyperphagia, weight gain and other metabolic parameters in a mouse model of PWS.

Pitolisant was developed by Bioprojet and approved by the EMA in 2016 for the treatment of narcolepsy in adult patients with or without cataplexy, and in 2021 for the treatment of EDS in adult patients with obstructive sleep apnea.

We acquired an exclusive license to develop, manufacture and commercialize pitolisant in the United States pursuant to our license agreement with Bioprojet (as amended, the “2017 LCA”) in July 2017.

Pitolisant was granted Orphan Drug Designation for the treatment of narcolepsy by the FDA in 2010.

It received Breakthrough Therapy designation for the treatment of cataplexy in patients with narcolepsy and Fast Track designation for the treatment of EDS and cataplexy in patients with narcolepsy in April 2018.

Our operating subsidiary, Harmony Biosciences, LLC, was formed in May 2017.

We were formed in July 2017 as Harmony Biosciences II, LLC, a Delaware limited liability company, and we converted to a Delaware corporation named Harmony Biosciences II, Inc.

in September 2017.

In February 2020, we changed our name to Harmony Biosciences Holdings, Inc.

Our operations to date have consisted of building and staffing our organization, acquiring the rights to pitolisant, raising capital, opening an IND for pitolisant in narcolepsy, conducting an Expanded Access Program (“EAP”) for pitolisant for appropriate patients with narcolepsy in the United States, preparing and submitting our NDA for pitolisant, gaining NDA approval for WAKIX for the treatment of EDS or cataplexy in adult patients with narcolepsy, and launching and commercializing WAKIX in the United States.

In addition, we have opened INDs for the development of WAKIX/pitolisant in PWS, DM and IH and have initiated clinical trials in PWS and DM in pursuit of potential new indications in those rare disease patient populations.

We also plan to initiate a Phase 3 trial in IH in the first half of 2022.

Initial Public Offering

In August 2020, we completed the initial public offering (“IPO”) of our common stock, in which we sold 6,151,162 shares, including 802,325 shares pursuant to the underwriters’ over-allotment option.

The shares were sold at an IPO price of $24.00 per share for net proceeds of approximately $135.4 million, after deducting underwriting discounts and commissions and offering expenses of approximately $12.2 million.

Upon the closing of the IPO, all outstanding shares of our convertible preferred stock were automatically converted into shares of common stock and the accrued dividend payable to holders of the convertible preferred stock was paid out in shares of common stock, resulting in a total of 42,926,630 shares of common stock being issued to former holders of our convertible preferred stock.

In addition, warrants exercisable for convertible preferred stock were automatically converted into warrants exercisable for a total of 410,239 shares of common stock, which were exercised in September 2021 resulting in a net settlement of 221,511 shares of common stock being issued.

COVID-19 Business Update

During the COVID-19 pandemic, we developed a response strategy that included establishing cross-functional response teams and implementing business continuity plans to manage the impact of the pandemic on our employees, patients, healthcare professionals (“HCPs”), and our business.

Despite our response strategy, the COVID-19 pandemic has had an effect on our business and the pharmaceutical industry in general.

Although the pandemic has impacted the way stakeholders interact with one another, we have leveraged technology and virtual engagement initiatives to offset our reduced in-person access to HCPs.

The COVID-19 pandemic also led to high unemployment and corresponding loss of medical insurance for many patients, caused a change in relationship dynamics between patients and their HCPs, and impacted the way patients took, or did not take, their medication.

As a result, we were not able to adequately gauge our growth rate and believe that our growth may be adversely impacted in the future if there is a reemergence or future outbreak of COVID-19, including any COVID-19 variant.

We intend to maintain meaningful engagement, generate awareness and educate our patients, HCPs and payors to support our commercial launch performance.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—COVID-19 Business Update” in Part II, Item 7 of this Annual Report on Form 10-K.

It received Breakthrough Therapy designation for the treatment of cataplexy in patients with narcolepsy and Fast Track status for the treatment of EDS and cataplexy in patients with narcolepsy in April 2018.

We were founded in July 2017 as Harmony Biosciences II, LLC, a Delaware limited liability company.

We converted to a Delaware corporation named Harmony Biosciences II, Inc.

in September 2017 and, in February 2020, we changed our name to Harmony Biosciences Holdings, Inc.

Our operations are conducted by our wholly owned subsidiary, Harmony Biosciences, LLC, which was formed in May 2017.

Our operations to date have consisted of building and staffing our organization, acquiring the rights to pitolisant, raising capital, opening an investigational new drug application (“IND”) for pitolisant in narcolepsy, conducting an Expanded Access Program (“EAP”) for pitolisant for appropriate patients with narcolepsy in the United States, preparing and submitting our NDA for pitolisant, gaining NDA approval for WAKIX for the treatment of EDS or cataplexy in adult patients with narcolepsy, and launching and commercializing WAKIX in the United

In addition, we have opened INDs for the development of pitolisant in PWS, DM and IH and have initiated clinical trials in pursuit of potential new indications in those rare disease patient populations.

Narcolepsy Market Overview

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These approved drugs are prescribed in accordance with their individual labels for indications covering narcolepsy, cataplexy and/or EDS related to narcolepsy, and have demonstrated the ability to improve the lives of the patients suffering from these symptoms.

In addition, Xyway was approved in August 2021 for the treatment of idiopathic hypersomnia in adults.

In addition, Xywav was approved in August 2021 for the treatment of IH in adults.

Other prescription drugs are used off-label for the treatment of either EDS or cataplexy in patients with narcolepsy, including stimulants for EDS and antidepressants for cataplexy.

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In a retrospective electronic chart review conducted by Rush University Medical Center from June 2011 to December 2018, over 75% (73 out of 97 respondents) of patients with narcolepsy reported at least one residual symptom while on their current treatment.

In a third party survey that we commissioned prior to the commercialization of WAKIX, of the 200 patients with narcolepsy who were surveyed, 86% (173

out of 200 respondents) of patients reported narcolepsy is a life changing disorder and 93% (157 out of 169 respondents) expressed frustration with current treatment options, while 31 patients were not on treatment and, as such, did not provide a response to this question.

In a third-party survey that we commissioned prior to the commercialization of WAKIX, of the 200 patients with narcolepsy who were surveyed, 86% (173 out of 200 respondents) of patients reported narcolepsy is a life changing disorder and 93% (157 out of 169 respondents) expressed frustration with current treatment options, while 31 patients were not on treatment and, as such, did not provide a response to this question.

The main drivers of patients’ dissatisfaction were side effects and tolerability, loss of efficacy over time and concerns about abuse and dependence with current therapies.

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Despite their inherent drawbacks, due to the limited number of treatment options, stimulants have historically been a primary treatment for people with narcolepsy.

In addition to having the potential for abuse, all of the treatments approved for narcolepsy, except WAKIX, require a Risk Evaluation and Mitigation Strategy (“REMS”) program, which is required by the FDA for certain medications with serious safety concerns to help ensure the benefits of the medication outweigh its risks.

In addition to having the potential for abuse, all of the treatments approved for narcolepsy, except WAKIX, require a Risk Evaluation and Mitigation Strategy (“REMS”) program,

which is required by the FDA for certain medications with serious safety concerns to help ensure the benefits of the medication outweigh its risks.

WAKIX (pitolisant) represents a novel approach to narcolepsy treatment.

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The key elements of our strategy are outlined in our three pillars of growth:

Optimize the Performance of WAKIX in Adult Patients with Narcolepsy

Optimize the Commercial Performance of WAKIX in Adult Patients with Narcolepsy

Commercialize WAKIX in the United States .

We have assembled a team of approximately 180 professionals that possess comprehensive life sciences experience.

We have assembled a team of approximately 200 professionals who possess comprehensive life sciences experience.

We have also established a robust company infrastructure to execute on our core business and growth strategies.

This team includes over 70 dedicated and experienced sales professionals who call on the approximately 8,000 HCPs who treat approximately 90% of narcolepsy patients in the United States.

This team includes over 80 dedicated and experienced sales professionals who call on the approximately 9,500 HCPs who treat more than 90% of narcolepsy patients in the United States.

In November 2019, we launched commercial sales of WAKIX in the United States.

Expand the Clinical Utility of WAKIX

Expand WAKIX Label in Narcolepsy .

Building upon the EDS and cataplexy indications in adult patients with narcolepsy, we are working with our partner Bioprojet in pursuit of gaining a pediatric indication for both EDS and cataplexy.

We have also engaged with the FDA with regard to pursuing pediatric exclusivity.

Pursue New Indications Beyond Narcolepsy .

Expand the Clinical Utility of Pitolisant

o Pursue New Indications Beyond Narcolepsy.

We believe that pitolisant’s novel MOA offers a portfolio in a product opportunity and has therapeutic potential in several other patient populations living with rare neurological diseases.

We opened an IND for pitolisant for the treatment of PWS in November 2019 and completed a Phase 1 PK clinical trial in pediatric patients with PWS in December 2019, then initiated a long-term, open-label safety trial in those patients who participated in the Phase 1 PK trial.

We opened an IND for pitolisant for the treatment of IH in November 2021 and initiated a Phase 3 registrational trial, the INTUNE Study, in adult patients with IH in April 2022.

We are seeing continued strong momentum in the Phase 3 INTUNE Study with approximately 85% of clinical trial sites activated.

We opened an IND for pitolisant for the treatment of PWS in November 2019 and completed a Phase 1 PK clinical trial in pediatric patients with PWS in December 2019.

We then initiated a long-term, open-label safety trial in those patients who participated in the Phase 1 PK trial.

In December 2020, we initiated a Phase 2 proof-of-concept clinical trial to evaluate pitolisant for the treatment of EDS and other key symptoms in patients with PWS, including behavioral symptoms and cognitive impairment.

Topline results from this clinical POC trial are anticipated in the second half of 2022.

We received topline results from this clinical proof-of-concept trial in November 2022, which showed a positive signal on improvement in the primary outcome related to EDS.

We received the full data set from the trial at the end of 2022, which the team is analyzing in preparation for an end-of-phase 2 meeting with the FDA to discuss the trial results.

We intend to advance our development program in patients with PWS into a Phase 3 trial.

In June 2021, we initiated a Phase 2 clinical trial to evaluate pitolisant for the treatment of EDS, fatigue and cognitive dysfunction in adult patients with DM1 and we anticipate topline results in the fourth quarter of 2023.

Expand WAKIX Label in Narcolepsy .

Building upon the EDS and cataplexy indications in adult patients with narcolepsy, we are working with our partner Bioprojet in consideration of gaining a pediatric indication for both EDS and cataplexy.

Bioprojet has completed a Phase 3 trial in pediatric patients with narcolepsy and submitted the data to the EMA seeking approval for a pediatric narcolepsy indication.

On January 26, 2023, Bioprojet received a positive opinion from the EMA’s CHMP with an approval for a pediatric narcolepsy indication expected by the EMA within 60 days of the positive CHMP opinion.

We are working with Bioprojet on a path forward towards a submission to the FDA of a supplemental NDA for pediatric narcolepsy.

Pursue Pediatric Exclusivity .

We continue to pursue pediatric exclusivity, and we recently received feedback from the FDA regarding our request for a pediatric written request (“PWR”) and we plan to prepare a proposed pediatric study request (“PPSR”) for submission to the FDA in order to align with the agency, in pursuit of pediatric exclusivity for WAKIX.

● Pillar III:

Acquire New Assets to Expand our Product Portfolio

Explore Expansion of our Product Portfolio .

As we continue our commercial growth and advance our clinical development programs with pitolisant, a key component of our strategy is to expand our product portfolio beyond pitolisant by partnering, co-developing or acquiring assets focused on rare neurological diseases and/or other diseases serving patients with unmet medical needs that are complementary to our existing research and development expertise and/or commercial footprint.

Expansion of our Product Portfolio .

As we continue our commercial growth and advancement of our clinical development programs with pitolisant, a key component of our strategy is to expand our pipeline beyond pitolisant by partnering, co-developing or acquiring assets focused on rare neurological diseases and/or other neurological diseases serving patients with unmet medical needs that are complementary to our existing research and development expertise and/or commercial footprint.

Our Commercialization Strategy

We launched WAKIX into the narcolepsy market in November 2019 and are engaging with HCPs, patients and payors through the focused commercialization strategy outlined below to optimize adoption of WAKIX in the marketplace:

We launched WAKIX into the narcolepsy market in November 2019 and we continue to engage with HCPs, patients and payors through the focused commercialization strategy outlined below to optimize adoption of WAKIX in the marketplace:

● HCP Awareness and Adoption :

To facilitate HCP awareness and adoption of WAKIX, we have deployed our dedicated, in-house, over 80-person sales team to educate a defined prescriber base of approximately 9,500 HCPs comprised of neurologists, pulmonologists, sleep specialists, psychiatrists and high-prescribing primary care physicians who specialize in or focus on sleep disorders.

We believe these HCPs diagnose and treat approximately 90% of the narcolepsy patients in the United States.

We believe these HCPs diagnose and treat more than 90% of the narcolepsy patients in the United States.

We began our commercial HCP outreach in August 2019 following FDA approval of WAKIX for the treatment of EDS in adult patients with narcolepsy and our efforts continue following the approval of the cataplexy indication in October 2020.

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Recognizing the importance of payor coverage, our field market access team has been engaging with national and regional payors over the past two plus years to educate them on the clinical data and value proposition of WAKIX.

Through December 31, 2021, we have secured formulary access for approximately 80% of all insured lives (Commercial, Medicare and Medicaid) in the United States.

Through December 31, 2022, we have secured formulary access for more than 80% of all insured lives (Commercial, Medicare and Medicaid) in the United States.

Within these covered lives, we have observed favorable access to WAKIX subsequent to the expanded approval of WAKIX for the treatment of cataplexy in adult patients with narcolepsy in October 2020.

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(i) it is a first-in-class molecule with a novel MOA, (ii) it is the first-and-only non-scheduled treatment approved for EDS or cataplexy in adult patients with narcolepsy, (iii) it is not a stimulant, (iv) it has broad clinical utility because it can be used as monotherapy or administered concomitantly with other narcolepsy treatments, and (v) it is a once-daily oral tablet administered in the morning upon wakening.

In September 2021, the American Academy of Sleep Medicine (AASM) updated its clinical practice guidelines on central disorders of hypersomnolence, which serve as evidence based treatment guidelines for these disorders.

In it, WAKIX received a strong recommendation for the treatment of both excessive daytime sleepiness and cataplexy in adult patients with narcolepsy.

As of December 31, 2021, we continue to see growth in unique HCPs of WAKIX since it became available in November 2019.

The average number of patients on WAKIX at the end of 2021 was approximately 3,800.

Additionally, as of December 31, 2021, we have secured formulary access for approximately 80% of all insured lives (Commercial, Medicare and Medicaid) in the United States.

In September 2021, the AASM updated its clinical practice guidelines on central disorders of hypersomnolence, which serve as evidence-based treatment guidelines for such disorders, giving WAKIX a strong recommendation for the treatment of both excessive daytime sleepiness and cataplexy in adult patients with narcolepsy.

As of December 31, 2022, we continue to see growth in unique HCPs prescribing WAKIX since it became available in November 2019.

The average number of patients on WAKIX in the fourth quarter of 2022 was approximately 4,900.

Additionally, as of December 31, 2022, we have secured formulary access for more than 80% of all insured lives (Commercial, Medicare and Medicaid) in the United States.

Within these covered lives, we have observed favorable access to WAKIX subsequent to the expanded approval of WAKIX for the treatment of cataplexy in adult patients with narcolepsy in October 2020.

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Development Pipeline Chart

Label Expansion of WAKIX in Narcolepsy

Pediatric Narcolepsy

Approximately 5% of diagnosed narcolepsy patients (approximately 3,600 patients) are 19 years of age or under.

Symptoms often have a more profound effect in children, resulting in reduced function and greater psychological impact.

Until the fourth quarter of 2018, no treatments were approved for pediatric patients with narcolepsy, at which time Xyrem received an expanded indication for the treatment of cataplexy or EDS in patients seven years of age or older with narcolepsy.

Xywav (low sodium formulation of Xyrem) received the same indication in July 2020.

We are working with our partner Bioprojet in pursuit of gaining a pediatric indication for both EDS and cataplexy.

We have also engaged with the FDA in pursuit of pediatric exclusivity.

Includes New Drug Applications and supplemental New Drug Applications.

Trial conducted by Bioprojet and Bioprojet submitted regulatory package to EMA.

Received positive CHMP opinion on January 26, 2023.

Develop Pitolisant in New Patient Populations in Pursuit of Additional Indications

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In addition, H 3 receptors are located mainly in the CNS as opposed to other parts of the body outside the CNS, which contributes to its overall tolerability profile.

This fact, along with pitolisant being highly selective for the H 3 receptor (as opposed to H 1 receptors, H 2 receptors and H 4 receptors), is the reason we believe in pitolisant’s unique MOA and its potential to improve symptoms in patients living with rare neurological diseases, in which impaired histamine signaling is part of the underlying pathophysiology.

This fact, along with pitolisant being highly selective for the H 3 receptor (as opposed to H 1 receptors, H 2 receptors and H 4 receptors), is the reason we

believe in pitolisant’s unique MOA and its potential to improve symptoms in patients living with rare neurological diseases, in which impaired histamine signaling is part of the underlying pathophysiology.

Role of histamine in normal physiologic functioning beyond wake promotion (e.g.

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We have continued to seek new indications in rare neurological disease patient populations that have EDS as a prominent symptom, along with other symptoms mediated by CNS histamine signaling.

We opened an IND for pitolisant for the treatment of PWS in November 2019, completed a Phase 1 PK clinical trial in pediatric patients with PWS in December of 2019, then initiated a long-term, open-label safety trial in those patients who participated in the Phase 1 PK trial.

We opened an IND for pitolisant for the treatment of IH in November 2021 and initiated a Phase 3 registrational trial, the INTUNE Study, in April 2022.

We are seeing continued strong momentum in the Phase 3 INTUNE Study with approximately 85% of clinical trial sites activated.

We opened an IND for pitolisant for the treatment of PWS in November 2019 and completed a Phase 1 PK clinical trial in pediatric patients with PWS in December of 2019.

We then initiated a long-term, open-label safety trial in those patients who participated in the Phase 1 PK trial.

Topline results from this clinical POC trial are anticipated in the second half of 2022.

In addition to these potential indications, we opened an IND for pitolisant for the treatment of idiopathic hypersomnia (“IH”) in November 2021 and plan to initiate a Phase 3 trial in adult patients with IH in the first half of 2022.

Topline results from this clinical proof-of-concept trial were reported in November 2022 and showed a positive signal on improvement in the primary outcome related to EDS.

We received the full data set from the trial at the end of 2022, which the team is analyzing in preparation for an end-of-phase 2 meeting with the FDA to discuss the trial results.

We intend to advance our development program in patients with PWS into a Phase 3 trial.

Idiopathic Hypersomnia

IH, like narcolepsy, is another CNS disorder of hypersomnolence resulting in sleep-wake state instability.

IH, like narcolepsy, is another central disorder of hypersomnolence resulting in sleep-wake state instability.

It is a rare and chronic neurological disease that is characterized by EDS despite sufficient or even long sleep time.

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Based on insurance claims data, the number of patients diagnosed with IH in the US ranges from 30,000 to 40,000.

The FDA accepted an IND application for pitolisant for the treatment of idiopathic hypersomnia in November 2021.

The Company is planning to initiate a Phase 3 clinical trial to evaluate the safety and efficacy of pitolisant in adult patients with IH in the first half of 2022.

The Phase 3 double-blind, placebo controlled randomized withdrawal study will evaluate the safety and efficacy of pitolisant compared with placebo in adult patients with IH (ages ≥18 years) The study will consist of an 8-week Open-Label Phase, which includes a 6-week Dose Optimization Period followed by a 2-week Stable Dose Period.

Patients determined to be responders at the end of the Stable Dose Period will enter the Double-Blind Randomized Withdrawal Phase of the study for 4 weeks of blinded treatment with pitolisant (at the same dose administered in the Stable Dose Period) or matching placebo.

Approximately 200 patients are planned for enrollment in the Open-Label Phase.

The primary efficacy endpoint in the study is the change in ESS score from the end of the Stable Dose Period (Week 8) to the end of the 4-week Double-Blind Randomized Withdrawal Phase (Week 12) for pitolisant compared with placebo.

Secondary efficacy endpoints will evaluate the effect of pitolisant on other symptoms of IH, including overall burden of disease, sleep-related impairment,

sleep inertia, and cognitive function.

Patients who complete the trial will be eligible to participate in an open-label extension phase to assess the long-term safety and effectiveness of pitolisant in adult patients with IH.

Prader-Willi Syndrome

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It is estimated that approximately 15,000 to 20,000 people in the United States suffer from PWS, and over half of those suffering from PWS also have reported or experienced EDS.

We opened an IND for pitolisant for the treatment of PWS in November 2019 and completed a Phase 1 PK clinical trial in pediatric patients with PWS in December of 2019.

We then initiated a long-term, open-label safety trial in those patients who participated in the Phase 1 PK trial.

Topline results from this clinical POC trial are anticipated in the second half of 2022

Topline results from this clinical proof-of-concept trial were reported in November 2022 and showed a positive signal on improvement in the primary outcome related to EDS.

PWS poses a heavy burden for both patients and caregivers and there are few therapeutic options available and no FDA-approved treatments for EDS in patients with PWS.

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We are members of the FPWR Clinical Trials Consortium and are working with members of its Scientific Advisory Board to gain their insights for our development program.

Progress to date includes (i) opening an IND for PWS in October 2019, (ii) the completion of a Phase 1 PK trial in patients with PWS in December 2019, with patients actively rolling over into an open-label, long-term safety trial, (iii) the submission of a Phase 2 proof of concept clinical protocol to the FDA for review and comment, and (iv) initiation of a Phase 2 clinical POC trial in December 2020.

The Phase 2 clinical POC trial is a randomized, double-blind, placebo-controlled trial to assess the safety and efficacy of pitolisant in patients with PWS ages 6 to 65.

An estimated 60 to 70 patients will be enrolled at approximately 15 sites across the United States.

Patients will be randomized to low-dose pitolisant, high-dose pitolisant or placebo in a 1:1:1 treatment ratio and titrated over three weeks up to their randomized dose, followed by eight weeks of stable dosing.

The primary trial objective is to assess for improvement in EDS as measured by both subjective and objective scales.

Secondary endpoints include several behavioral symptom scales as well as specific measures of cognitive function using validated computer-based assessments.

Clinician global impression of disease severity, caregiver global impression of EDS severity, and overall caregiver burden will be measured.

Exploratory endpoints include the effect of pitolisant on hyperphagia and measurements of ghrelin levels.

Patients who complete the trial will be eligible to participate in an open-label extension phase to assess the long-term safety and effectiveness of pitolisant in patients with PWS, which will run throughout the duration of the PWS development program.

Progress to date includes (i) opening an IND for PWS in October 2019, (ii) completion of a Phase 1 PK trial in patients with PWS in December 2019, with patients actively rolling over into an open-label, long-term safety trial, and (iii) completion of a Phase 2 proof-of-concept clinical trial with topline data reported in November 2022.

The Phase 2 proof-of-concept clinical trial was a randomized, double-blind, placebo-controlled study designed to assess the safety and efficacy of pitolisant in patients with PWS.

This proof-of-concept study was not powered to demonstrate statistical significance and was designed for signal detection.

The study included patients ages 6 to 65 years and patients were randomized 1:1:1 to low dose pitolisant, high dose pitolisant, or placebo treatment groups.

Pitolisant dosing was based on three age cohorts (children 6 to < 12;

adolescents 12 to < 18;

and adults 18 to 65) and another objective of the study was to evaluate for a dose-response to pitolisant in patients with PWS.

The primary endpoint of this study was the evaluation of EDS as measured by change from baseline to end of treatment (EOT) on the Epworth Sleepiness Scale for Children and Adolescents (ESS-CHAD) Parent/Caregiver Version.

Topline study results include:

● 65 patients were enrolled in the trial, 91% of which completed treatment and all but one patient opted to continue into the open-label extension.

● Mean baseline ESS-CHAD (Parent/Caregiver Version) ranged from 14.7 to 15.7.

● Mean change from baseline to EOT on the ESS-CHAD Parent/Caregiver Version scores ranged from -3.7 to -5.5 across all age groups and treatment groups, representing a clinically meaningful change (which is defined as a ≥ 2-point improvement on this scale).

● In two of the three age groups (children and adults), there was a clinically meaningful difference (minimum of 2 points) between pitolisant and placebo, driven by the high dose pitolisant treatment group.

● In the adolescent age group, there was a high placebo response of a magnitude three times that seen in the other two age groups, which resulted in no clinically meaningful difference between pitolisant and placebo in this age group.

● A responder analysis (defined as an improvement on the ESS-CHAD Parent/Caregiver Version of ≥ 3-points or a score at EOT of ≤10 for this analysis) showed response rates of 70% in the high dose pitolisant group, 55.6% in the low dose pitolisant group, and 52.6% in the placebo group.

● Overall safety/tolerability profile was consistent with the known safety/tolerability profile of pitolisant.

● Adverse events were reported in 57% of patients on pitolisant and 65% of patients on placebo.

● Treatment-related adverse events were reported in 26% of patients on pitolisant and 30% of patients on placebo.

● There was one serious adverse event in a patient in the placebo treatment group.

These results represent the initial topline data.

We received the full data set from the trial at the end of 2022, which the team is analyzing in preparation for an end-of-phase 2 meeting with the FDA to discuss the trial results.

We intend to advance our development program in patients with PWS into a Phase 3 trial and to present the full results of the Phase 2 proof-of-concept trial at a future medical meeting and submit the results for publication in a scientific journal.

Myotonic Dystrophy

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Our clinical program is designed to demonstrate effect on measures of EDS and fatigue, as well as assess performance related to cognitive function, such as attention, vigilance and working memory.

Progress to date includes working with key opinion leaders to develop the scientific rationale for the investigation of pitolisant in patients with DM, development of a Phase 2 clinical protocol, submission of an IND at the end of 2020, the opening of an IND in January 2021, and initiation of a Phase 2 clinical trial in adult patients with DM1 in June of 2021.

The Phase 2 clinical trial is a randomized, double-blind, placebo-controlled trial to assess the safety and efficacy of pitolisant in adult patients with DM1 ages 18 to 65.

Progress to date includes working with key opinion leaders to develop the scientific rationale for the investigation of pitolisant in patients with DM, development of a Phase 2 clinical protocol, submission of an IND at the end of 2020, the opening of an IND in January 2021, and initiation of a Phase 2 proof-of-concept clinical trial in adult patients with DM1 in June of 2021, from which we anticipate topline results in the fourth quarter of 2023.

The Phase 2 proof-of-concept clinical trial is a randomized, double-blind, placebo-controlled trial to assess the safety and efficacy of pitolisant in adult patients with DM1 ages 18 to 65.

It is not powered to demonstrate statistical significance and is designed for signal detection.

An estimated 75 to 80 patients will be enrolled at approximately 20 to 22 sites across the United States and Canada.

Patients will be randomized to low-dose pitolisant, high-dose pitolisant, or placebo in a 1:1:1 treatment ratio and titrated over three weeks up to their randomized dose, followed by eight weeks of stable dosing.

The primary trial objective is to assess for improvement in EDS as measured by the MWT and the ESS.

The primary trial objective is to assess for improvement in EDS as measured by the ESS.

Secondary endpoints include assessments of fatigue as well as specific measures of cognitive function using validated computer-based assessments.

Clinician and patient global impression of disease severity using the CGI-S and PGI-S, respectively, will be measured as well as disease-specific patient assessments of overall disease burden.

Plasma samples will be collected to generate pharmacokinetic data and a PK/PD analysis will be performed.

Plasma samples will be collected to

generate pharmacokinetic data and a PK/PD analysis will be performed.

Patients who complete the trial will be eligible to participate in an open-label extension phase to assess the long-term safety and effectiveness of pitolisant in adult patients with DM1, which will run throughout the duration of the DM development program.

Label Expansion of WAKIX in Narcolepsy

Pediatric Narcolepsy

Approximately 5% of diagnosed narcolepsy patients (approximately 3,600 patients) are under the age of 18 years.

Symptoms often have a more profound effect in children, resulting in reduced function and greater psychological impact.

Xywav (low sodium formulation of Xyrem) received the same indication in July 2020.

We are working with our partner Bioprojet in consideration of gaining a pediatric indication for both EDS and cataplexy.

We are working with Bioprojet on a path forward towards the submission to the FDA of a supplemental NDA for pediatric narcolepsy.

Pediatric Exclusivity

We continue to pursue pediatric exclusivity, and we recently received feedback from the FDA regarding our request for a PWR.

We plan to prepare a PPSR for submission to the FDA in order to align with the agency, in pursuit of pediatric exclusivity for WAKIX.

Expand our pipeline through acquisition of additional assets

On August 4, 2021, we acquired HBS102 along with intellectual property and other assets related to the development, manufacture, and commercialization of the Compound from ConSynance Therapeutics, Inc.

New Pitolisant Assets

On July 31, 2022, we entered into the 2022 LCA with Bioprojet whereby we obtained exclusive rights to manufacture, use and commercialize one or more new products based on pitolisant in the United States and Latin America, with the potential to add additional indications and formulations upon the agreement of both parties (see “Strategic Agreements” below).

The 2022 LCA will expand our opportunity in narcolepsy, and potentially other indications mutually agreed upon by the parties.

In August 2021, we acquired HBS-102 along with intellectual property and other assets related to the development, manufacture, and commercialization of the Compound from ConSynance Therapeutics, Inc.

We acquired full development and commercialization rights globally, but we have provided a grant-back license to ConSynance for the development and commercialization of the Compound in Greater China.

HBS-102 is a Melanin-concentrating hormone receptor 1 (MCHR1) antagonist and a potential first-in-class molecule with a novel mechanism of action.

We are currently assessing potential clinical targets for HBS-102 which will inform our development strategy going forward.

HBS-102 is a Melanin-concentrating hormone (“MCH”) receptor 1 (MCHR1) antagonist and a potential first-in-class molecule with a novel mechanism of action.

MCH neurons are located in the hypothalamus and are involved in the regulation of feeding behavior, energy metabolism and control of REM sleep, among other centrally mediated functions.

We are currently conducting a preclinical proof-of-concept study to assess the impact of HBS-102 on hyperphagia, weight gain, and other metabolic parameters in a knockout mouse model of PWS.

Our industry is highly competitive and subject to rapid and significant change as research provides a deeper understanding of rare neurological disorders, including narcolepsy, and as new therapies are developed.

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WAKIX competes with currently FDA-approved products for the treatment of EDS or cataplexy in adult patients with narcolepsy, all of which are controlled substances.

Jazz Pharmaceuticals’ Xyrem (sodium oxybate) is an FDA-approved product for the treatment of cataplexy or EDS in patients 7 years of age and older with narcolepsy Xyrem is a Schedule III controlled substance available only through a restricted access REMS program.

Jazz Pharmaceuticals’ Xyrem (sodium oxybate) is an FDA-approved

product for the treatment of cataplexy or EDS in patients 7 years of age and older with narcolepsy.

Xyrem is a Schedule III controlled substance available only through a restricted access REMS program.

Xywav, a lower sodium formulation of Xyrem, was approved in July 2020, (became commercially available in November 2020), and is also a Schedule III controlled substance subject to the same restricted access REMS program as Xyrem.

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Anti-depressants and certain other agents are sometimes used off-label for the treatment of cataplexy in narcolepsy.

Jazz Pharmaceuticals’ Sunosi (solriamfetol) was approved by the FDA in March 2019 and launched in July 2019.

Axsome’s Sunosi (solriamfetol) was approved by the FDA in March 2019 and launched in July 2019.

Sunosi (solriamfetol) is a Schedule IV controlled substance and is indicated to improve wakefulness in adult patients with EDS associated with narcolepsy or obstructive sleep apnea.

It is not indicated for cataplexy in patients with narcolepsy.

Additionally, Avadel Pharmaceuticals is working on a once nightly formulation version of sodium oxybate, with approval expected in 2023 or beyond, and Xyrem is expected to go generic in 2023 or earlier depending upon the achievement of certain milestones in their agreement with generic filer Hikma Pharmaceuticals.

Beyond 2023, there are other potential future competitive products in development, including Axsome Therapeutics’ AXS-12 (reboxetine) product candidate and Takeda’s TAK-925/994/861 (orexin 2 receptor agonist) product candidates.

We believe WAKIX offers a differentiated product profile that is competitive with each of the products listed above, some of which are only approved for EDS while others (Xyrem and Xywav) are approved for the treatment of both EDS or cataplexy in patients with narcolepsy.

Additionally, Avadel Pharmaceuticals is working on a once nightly formulation version of sodium oxybate, with approval expected in 2023 or beyond.

As of January 2023, Xyrem is now available as generic sodium oxybate marketed by Hikma Pharmaceuticals through their agreement with Jazz Pharmaceuticals, and other potential future competitive products are currently in development, including Axsome Therapeutics’ AXS-12 (reboxetine) product candidate, Suven Life Sciences’ SUVN-G3031 H3 inverse agonist product candidate, NLS Pharmaceutics mazindol ER product candidate and orexin 2 receptor agonist product candidates from Takeda, Jazz Pharmaceuticals/Sumitomo Pharma and Alkermes among others.

We believe WAKIX offers a meaningfully differentiated product profile that is competitive with each of the products listed above, some of which are only approved for EDS while others (Xyrem and Xywav) are approved for the treatment of both EDS or cataplexy in patients with narcolepsy.

It should be noted that WAKIX has not been compared with these products in head-to-head clinical trials, but its non-scheduled status represents a distinct competitive advantage relative to those same products.

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We sell WAKIX to our customers, a limited number of specialty distributors, that, in turn, distribute WAKIX to patients.

We have secured a commercial drug supply to support the launch of WAKIX in the United States.

Although we do not currently own or operate facilities for product manufacturing, storage and distribution, or testing, we have contracted directly with third parties for each of these functions.

We do not currently own or operate facilities for product manufacturing, storage and distribution, or testing, we have contracted directly with third parties for each of these functions.

Manufacturing is subject to extensive regulation that imposes various procedural and documentation requirements that govern record keeping, manufacturing processes and controls, personnel, quality control and quality assurance, and more.

Our systems and our contractors are required to be in compliance with these regulations, and compliance is assessed regularly through monitoring of performance and a formal audit program.

Our current supply chain for WAKIX involve several manufacturers that specialize in specific operations of the manufacturing process, specifically, intermediate and starting material manufacturing, drug substance manufacturing, and drug product manufacturing, labeling and secondary packaging, and distribution services:

Our current supply chain for WAKIX involves several manufacturers that specialize in specific operations of the manufacturing process, specifically, intermediate and starting material manufacturing, drug substance manufacturing, and drug product manufacturing, labeling and secondary packaging, and distribution services:

● Interor S.A.

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Customers and Suppliers

We depend on a few major customers.

For the year ended December 31, 2022, three customers accounted for 100% of gross product revenues;

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We also depend on a single source supplier for our product, product candidates and active pharmaceutical ingredient.

Strategic Agreement

License and Commercialization Agreement with Bioprojet

In July 2017, we and Bioprojet entered into the Bioprojet License Agreement.

Bioprojet granted to us an exclusive, sublicensable license to commercialize, in the United States and its territories, commonwealths, and protectorates, including Puerto Rico, a product containing pitolisant currently known as WAKIX for narcolepsy, obstructive sleep apnea, idiopathic hypersomnia, Parkinson’s disease, and any other indication agreed upon by the parties which currently include PWS and DM (“the field”), as well as rights to related patent rights, know-how, trademarks, trade dress, regulatory filings and approvals (the “Bioprojet Assets”).

Bioprojet also granted us a co-exclusive (with Bioprojet), sublicensable license to Bioprojet Assets to clinically develop and register the pitolisant product in the field in the United States.

Strategic Agreements

License and Commercialization Agreements with Bioprojet

In July 2017, we and Bioprojet entered into the Bioprojet License Agreement (the “2017 LCA”).

Bioprojet granted to us an exclusive license to commercialize, in the United States and its territories, commonwealths, and protectorates, including Puerto Rico, a product containing pitolisant currently known as WAKIX for narcolepsy, obstructive sleep apnea, idiopathic hypersomnia, Parkinson’s disease, and any other indication agreed upon by the parties which currently include PWS and DM (“the field”), as well as rights to related patent rights, know-how, trademarks, trade dress, regulatory filings and approvals (the “Bioprojet Assets”).

Bioprojet also granted us a co-exclusive (with Bioprojet) license to Bioprojet Assets to clinically develop and register the pitolisant product in the field in the United States.

Bioprojet retains the right to manufacture the product in the United States, and to develop outside the United States and commercialize other products that contain pitolisant as an active ingredient anywhere in the world.

Bioprojet also granted us an exclusive license to use certain trademarks and trade names in connection with the commercialization of the product under the Bioprojet License Agreement.

Under the Bioprojet License Agreement, we cannot, directly or indirectly, develop, market, sell, promote or file an NDA with respect to any product that would compete with pitolisant in the field.

Under the Bioprojet License Agreement, Bioprojet is responsible for conducting all preclinical studies and clinical trials necessary for achieving and maintaining regulatory approval in the United States for narcolepsy and cataplexy indications, including all costs and expenses.

We are responsible for all other costs associated with other development and regulatory activities, unless Bioprojet otherwise agrees to participate in funding such activities.

Bioprojet was responsible for filing, with our participation, the initial new drug application for the product with the FDA and Bioprojet did transfer such application to us upon approval by the FDA in accordance with the terms of the Bioprojet License Agreement.

Upon approval by the FDA, we were required under the Bioprojet License Agreement to promptly launch the product and use commercially reasonable efforts to commercialize the approved products in the United States in the field for each approved indication.

In addition, we are required to deploy a number of sales representatives and spend an amount of expenditure, each as agreed upon in a commercialization plan.

Under the Bioprojet License Agreement, Bioprojet has the right and authority to prepare, file, prosecute and maintain all Bioprojet patents on a worldwide basis at its own cost.

Bioprojet shall keep us informed of the course of prosecution and other proceedings in the United States.

We have the first right to enforce the licensed patent rights with respect to any infringing products in the United States.

If we do not bring an action to enforce such patents against infringing activities that involve such infringing products, Bioprojet has the right to bring such action.

Under the 2017 LCA, we cannot, directly or indirectly, develop, market, sell, promote or file an NDA with respect to any product that would compete with pitolisant in the field.

We paid Bioprojet an initial license fee of $150.0 million, a milestone payment of $50.0 million upon FDA acceptance of the NDA in February 2019, and a milestone payment of $75.0 million plus an additional $2.0 million fee for approval of the NDA in November 2019.

Upon the Cataplexy Milestone Trigger Date, we became obligated to make the Cataplexy Milestone Payment to Bioprojet pursuant to the terms of the Bioprojet License Agreement.

Subsequently, in October 2020, we made a payment to Bioprojet of $2.0 million to extend the Cataplexy Milestone Payment due date to within 90 days of the Cataplexy Milestone Trigger Date.

In October 2020, we paid $2.0 million Bioprojet to extend the Cataplexy Milestone Payment due date to within 90 days.

In January 2021, we made the $100.0 million Cataplexy Milestone Payment in full to Bioprojet.

In addition, we are subject to a milestone payment of $40.0 million upon the attainment of aggregate net sales of WAKIX in the United States of $500.0 million subsequent to the date of NDA approval by the FDA pursuant to the Bioprojet License Agreement.

We attained this milestone subsequent to December 31, 2021 and expect to make the milestone payment in March 2022.

We agreed to pay royalties on the product at tiered royalty rates of 13% to 24% based on annual total net sales during the period commencing on first commercial sale of the product and ending on the latest of 10 years from first commercial sale of the product, expiration of all regulatory exclusivity, or expiration of the last Bioprojet patent covering the product.

The final milestone payment of $40.0 million was paid to Bioprojet in March 2022 upon the attainment of aggregate net sales of WAKIX in the United States of $500.0 million subsequent to the date of NDA approval by the FDA.

Pursuant to the 2017 LCA, we agreed to pay royalties on the net sales of the product at tiered royalty rates of 13% to 24% based on annual total net sales during the period commencing on first commercial sale of the product and ending on the latest of 10 years from first commercial sale of the product, expiration of all regulatory exclusivity, or expiration of the last Bioprojet patent covering the product.

Such royalty payments are subject to reductions based on royalties paid to any third party in order for us to commercialize the product.

We also agreed to pay royalties in consideration for a trademark license at a rate of 3% of net sales for 20 years after first commercial sale of the product.

We also agreed to pay royalties on net sales of the product at a rate of 3% in consideration for a trademark license based on net sales for 20 years after first commercial sale of the product.

We further agreed to pay minimum royalties during the third through tenth year of the Bioprojet License Agreement if the product is approved for narcolepsy to the extent such minimum royalties exceed the royalties payable as described above, which minimum amounts were calculated based on sales materially below our sales forecast.

The Bioprojet License Agreement will continue until the expiration of the obligation to pay royalties with respect to the product.

We and Bioprojet may each terminate the Bioprojet License Agreement for a material breach by the other party that remains uncured for 90 days.

Bioprojet may terminate the Bioprojet License Agreement in its entirety if we or our

sublicensees challenge the licensed patents.

In addition, we and Bioprojet have the right to terminate the Bioprojet License Agreement upon the other party’s insolvency.

The 2017 LCA will continue until the expiration of the obligation to pay royalties with respect to the product.

We and Bioprojet may each terminate the 2017 LCA for a material breach by the other party that remains uncured for 90 days.

Bioprojet may terminate the 2017 LCA in its entirety if we or our sublicensees challenge the licensed patents.

In addition, we and Bioprojet have the right to terminate the 2017 LCA upon the other party’s insolvency.

In July 2022, we entered into the 2022 LCA with Bioprojet whereby we obtained exclusive rights to manufacture, use and commercialize one or more new products based on pitolisant in the United States and Latin America, with the potential to add additional indications and formulations upon the agreement of both parties.

We paid an initial, non-refundable $30.0 million licensing fee in October 2022 and additional payments of up to $155.0 million are potentially due under the 2022 LCA upon the achievement of certain development and sales-based milestones.

In addition, certain payments will become due upon the achievement of development milestones for new indications and formulations as agreed upon by both parties.

The 2022 LCA also requires a fixed trademark royalty and a tiered royalty based on net sales upon commercialization, payable to Bioprojet on a quarterly basis for 10 years from the first commercial sale of each new product, the expiration of all regulatory exclusivity, or the expiration of the last Bioprojet patent covering the products.

closing of the 2022 LCA on September 28, 2022, the $30.0 million licensing fee was recorded in research and development expenses within the consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2022.

The 2022 LCA will continue until the expiration of the obligation to pay royalties with respect to each new product.

Either party may terminate the 2022 LCA for a material breach by the other party that remains uncured for 90 days.

Bioprojet may terminate the 2022 LCA in its entirety if we or our sublicensees challenge the licensed patents.

In addition, we and Bioprojet have the right to terminate the 2022 LCA upon the other party’s insolvency.

Intellectual Property

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Our WAKIX patent portfolio is comprised of three U.S.

patents exclusively licensed to us from Bioprojet.

8,207,197, has claims directed to a polymorph, i.e.

a specific crystalline form, of pitolisant and, methods for preparing that polymorph of pitolisant, which is expected to expire in February 2029 without taking into consideration any possible patent term extension.

patents exclusively licensed to us from Bioprojet under the 2017 LCA.

8,207,197, which has claims directed to a polymorph, i.e., a specific crystalline form, of pitolisant and, methods for preparing that polymorph of pitolisant, is expected to expire in March 2030 based on a granted request for patent term extension, but without taking into consideration any possible pediatric exclusivity.

A second U.S.

8,486,947, has claims directed to methods of treating excessive daytime sleepiness by administering pitolisant, which is expected to expire in September 2029 without taking into consideration any possible patent term extension.

With applicable patent term extension granted to us, we believe the term of the last-to-expire pitolisant-related patent in our portfolio will extend to February 2030 or September 2030, depending on which patent we elect for patent term extension as described below.

Our HBS-102 patent portfolio comprises three patent families.

The first patent family includes a U.S.

8,637,501, which has claims certain melanin-concentrating hormone (MCH-1) receptor antagonists as compositions of matter, as well as methods of making the antagonists, and methods of use for treating obesity, anxiety, and depression, and processes for preparing the compounds, which is expected to expire in April 2031 without taking into consideration any possible patent term extension.

The first patent family includes U.S.

8,637,501, which has claims to certain melanin-concentrating hormone (MCH-1) receptor antagonists as compositions of matter, as well as methods of making the antagonists, and methods of use for treating obesity, anxiety, and depression, and processes for preparing the compounds, which is expected to expire in April 2031 without taking into consideration any possible patent term extension.

A second patent family comprises three issued U.S.

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While the length of the patent term extension is related to the length of time the drug is under regulatory review, patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, and only one patent per approved drug may be extended under the Hatch-Waxman Act.

We have applied for patent term extension on two patents covering pitolisant (the ‘197 and ‘947 patents referenced above), only one of which will receive patent term extension, if at all.

FDA has advised the USPTO that the relevant regulatory review period for WAKIX was 505 days and, based on that information, we estimate the length of such patent term extension to be 374 days.

There is no guarantee that the USPTO determination will align with our estimate.

The patent positions of companies like ours are generally uncertain and involve complex legal and factual questions.

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Further, we have in-licensed from Bioprojet the registered trademark product name “WAKIX” in the United States.

We also have registered trademark protection in the United States for “KNOW NARCOLEPSY” as well as our brand and logo “HB,” “HB HARMONY BIOSCIENCES” and “HARMONY BIOSCIENCES.” We also have trademark applications pending with the U.S.

Patent and Trademark Office for “REM AT THE WRONG TIME” and “NON-REM AT THE WRONG TIME.”

We also have registered trademark protection in the United States for “KNOW NARCOLEPSY,” “REM AT THE WRONG TIME” and “NON-REM AT THE WRONG TIME,” as well as our brand and logo “HB,” “HB HARMONY BIOSCIENCES” and “HARMONY BIOSCIENCES.”

Government Regulation

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Furthermore, there has been increased interest by third-party payors and governmental authorities in reference pricing systems and publication of discounts and list prices.

The “Inflation Reduction Act of 2022”, signed into law on August 16, 2022, included several provisions to reduce drug spending by the federal government and reduce out-of-pocket costs for patients on Medicare.

This legislation requires that the federal government negotiate prices for some drugs covered under Medicare Part B and Part D with the highest total spending, beginning in 2026.

It also requires manufacturers to pay rebates back to the federal government if the price of their medications for Medicare beneficiaries rises faster than inflation.

The legislation also placed a cap on out-of-pocket costs for Medicare Part D enrollees and shifted the cost of supplying these medications to manufacturers and plans.

Eligibility for the Medicare Part D Low-Income Subsidy Program was also expanded under the legislation, and it further delayed the implementation of the Trump Administration’s drug rebate rule to 2027.

We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our products or additional pricing pressures.

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In December 2020, we leased additional office space at this same location, which increased our footprint to approximately 28,638 square feet of office space.

As of December 31, 2021, approximately 60 of our employees are located at our corporate headquarters.

As of December 31, 2022, 68 of our employees are located at our corporate headquarters.

Pursuant to our Right of Use Agreement with Paragon, we also utilize office space at 330 N.

Wabash Ave, Suite 3500, Chicago, Illinois 60611, where approximately 10 of our employees are located.

Wabash Ave, Suite 3500, Chicago, Illinois 60611, where approximately eight of our employees are located.

Human Capital Management

As of December 31, 2021, we have approximately 180 full-time employees, 105 of whom are dedicated to commercial functions, which includes sales, marketing, market access, commercial operations and insights, and 25 of whom are dedicated to research and development.

As of December 31, 2022, we have 200 full-time employees, 107 of whom are dedicated to commercial functions, which includes sales, marketing, market access, commercial operations, and insights, and 44 of whom are dedicated to research and development.

None of our employees are represented by labor unions or covered by collective bargaining agreements.

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We collaborate with patient advocacy organizations to understand the needs of patients living with rare, neurological disorders including narcolepsy, and are committed to addressing those needs.

Our environmental, social and governance (”ESG”) and social impact strategy is directed by our Board and overseen by management and a cross-functional executive team comprised of Legal, Compliance, Human Resources, Corporate Affairs and Investor Relations.

Our Board of Directors, through our Nominations and Governance Committee, has oversight over our strategic process.

We conducted a materiality assessment, including engaging internal stakeholders and reviewing external standards, to inform the creation of an ESG framework, and set our goals and targets to address industry trends, laws and regulations, and stakeholder expectations.

We will regularly evaluate our performance in meeting those goals.

We may also engage with external organizations and experts to benchmark performance and identify best practices.

Corporate Information

Our operating subsidiary, Harmony Biosciences, LLC, was formed in May 2017.

We were formed in July 2017 as Harmony Biosciences II, LLC, a Delaware limited liability company, and we converted to a Delaware corporation named Harmony Biosciences II, Inc.

in September 2017.

In February 2020, we changed our name to Harmony Biosciences Holdings, Inc.

Our principal executive offices are located at 630 W.

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Our internet website is www.harmonybiosciences.com.

We routinely make available important information free of charge, including copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC.

We routinely make important information available on our website, including copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC.

We recognize our website as a key channel of distribution to reach public investors and as a means of disclosing material non-public information to comply with our disclosure obligations under SEC Regulation FD.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business