What changed in this filing

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Item 1. Business

2024-02-22 compared with 2023-02-21 · 301 added, 208 removed, 487 unchanged (51% of the section changed)

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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.

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

We received orphan drug designation by the FDA for IH in September 2023 and Fast Track Designation in November 2023.

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.

We completed enrollment in the INTUNE study in May 2023 and we announced topline data in October 2023.

While the primary endpoint did not meet statistical significance, we believe the totality of the data showed favorable numerical trends for pitolisant in the treatment of adult patients with IH and we have scheduled a meeting with the FDA for March 2024 to discuss the path forward for IH.

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.

Based on the positive signals from the Phase 2 proof-of-concept signal detection clinical trial to evaluate pitolisant for the treatment of EDS and other key symptoms in patients with PWS, an end-of-phase 2 meeting with the FDA was held in June 2023.

We believe we aligned with the FDA on the proposed Phase 3 registrational study design for further investigation of pitolisant as a potential treatment to address the unmet medical need for children, adolescents and adults with PWS experiencing EDS, for which there is currently no approved treatment.

In October 2023, we received FDA alignment regarding the protocol for the Phase 3 TEMPO study in patients with PWS, which we believe will satisfy the requirements for both the registrational trial and one of the two requirements for pediatric exclusivity for pitolisant, with the other requirement being data in pediatric narcolepsy.

In February 2024, the FDA granted Orphan Drug designation to pitolisant for the treatment of PWS.

We expect to initiate the Phase 3 study in the first quarter of 2024.

In June 2021, we initiated a Phase 2 proof-of-concept signal detection clinical trial to evaluate pitolisant for the treatment of EDS, fatigue and cognitive dysfunction in adult patients with DM1 and announced positive topline results from this trial in the fourth quarter of 2023 in which clinically meaningful improvements were demonstrated in EDS and fatigue, and the safety profile was consistent with the established safety profile of pitolisant.

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.

On January 26, 2023, Bioprojet received a positive opinion from the EMA’s Committee for Medicinal Products for Human Use (“CHMP”) and in March 2023, the EMA granted approval for the marketing authorization of WAKIX for the treatment of narcolepsy in children

Based on the data from the positive Phase 3 trial conducted by Bioprojet, we submitted an sNDA for pediatric narcolepsy in December 2023.

On February 21, 2024, we announced that the FDA has granted priority review of our pediatric narcolepsy sNDA and has set a Prescription Drug User Fee Act (“PDUFA”), or target action date, of June 21, 2024.

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.

Consistent with this objective, in July 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.

We have made progress in the development of two formulations, Next Gen 1 (“NG1”) and Next Gen 2 (“NG2”).

Both formulations entered clinical studies in the fourth quarter of 2023, and we anticipate data in the first half of 2024.

In addition, on October 10, 2023, the Company completed a tender offer to acquire all of the outstanding shares of common stock (the “Zynerba Acquisition”) of Zynerba Pharmaceuticals, Inc.

(together with its subsidiary, Zynerba Pharmaceutical Pty, Ltd., “Zynerba”) for $60.0 million, and incurred transaction related costs of approximately $2.6 million.

Zynerba is a clinical-stage pharmaceutical company focused on innovative pharmaceutically produced transdermal cannabidiol therapies for orphan neuropsychiatric disorders, including Fragile X syndrome (“FXS”).

The phase 3 RECONNECT registration study in FXS is ongoing.

In August 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 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.

We are conducting 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 and are also conducting a thirteen-week toxicology study.

We anticipate data from both studies in the first half of 2024.

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.

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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.

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

Narcolepsy Market Overview

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narcolepsy market had an approximate net sales value of $2.5 billion in 2022.

The market is expected to continue to grow based on several factors, including, but not limited to, the introduction of new innovative therapies that offer novel mechanisms of action resulting in improved safety/tolerability profiles while delivering clinically meaningful efficacy, additional investment in education, increased rates of diagnosis, and population growth.

The market is expected to continue to grow based on several factors, including, but

not limited to, the introduction of new innovative therapies that offer novel mechanisms of action resulting in improved safety/tolerability profiles while delivering clinically meaningful efficacy, additional investment in education, increased rates of diagnosis, and population growth.

Prior to the FDA’s approval of WAKIX in 2019, there were six approved medications to treat patients with narcolepsy, all of which are scheduled as controlled substances, and no new therapies had been approved for narcolepsy patients in the United States since 2007.

These medications included Xyrem (sodium oxybate), Provigil (modafinil), Nuvigil (armodafinil), Ritalin (methylphenidate), Adderall (amphetamine salts) and Sunosi (solriamfetol).

Following the approval of WAKIX, in July 2020 the FDA approved a new lower sodium formulation of Xyrem called Xywav.

Following the approval of WAKIX, in July 2020 the FDA approved a new lower sodium formulation of Xyrem called Xywav, followed by generic versions of sodium oxybate in January 2023 and July 2023, as well as a once-nightly version of sodium oxybate (Lumryz) in June 2023.

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.

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Despite the benefits provided by the available medications, according to the American Academy of Sleep Medicine (“AASM”), traditional stimulants, wake-promoting agents and sodium oxybate, at best, provide only moderate improvement in narcolepsy symptoms and side effects may limit their use.

Some of the current therapies have significant side effects (such as increased heart rate and blood pressure) and boxed warnings due to the risk of respiratory depression, abuse and dependence.

Some of the current therapies have significant side effects (such as increased heart rate and blood pressure) and boxed warnings due to the risk of respiratory depression, abuse, dependence and diversion.

These therapies also have the potential for rebound and withdrawal symptoms.

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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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Our goal is to become a leading pharmaceutical company dedicated to developing and commercializing novel treatment options for patients living with rare neurological diseases and/or neurological diseases where we can leverage our existing infrastructure and expertise.

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

Optimize the Commercial Performance of WAKIX in Adult Patients with Narcolepsy

Commercialize WAKIX in the United States .

The key elements of our corporate growth strategy are outlined below:

● Continued Growth of WAKIX in Adult Patients with Narcolepsy.

o Continued Commercialization of WAKIX in the United States .

We have assembled a team of approximately 250 professionals who possess comprehensive life sciences experience.

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

Expand the Clinical Utility of Pitolisant

● Advance the clinical development programs, extend the pitolisant franchise, expand the pipeline and diversify the product portfolio beyond sleep/wake disorders.

o Pursue New Indications Beyond Narcolepsy.

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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 completed enrollment in the INTUNE study in May 2023 and we announced topline data in October 2023.

While the primary endpoint did not meet statistical significance, we believe the totality of the data showed favorable numerical trends for pitolisant in the treatment of adult patients with IH.

Pitolisant received Orphan Drug designation for IH by the FDA in September 2023 and Fast Track Designation in November 2023.

We submitted a meeting request to the FDA in the fourth quarter of 2023 to discuss the path forward and we have scheduled a meeting with the FDA in March 2024.

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.

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

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.

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 signal detection clinical trial to evaluate pitolisant for the treatment of EDS and other key symptoms in patients with PWS, and based on the positive signals from the data, an end-of-phase 2 meeting with the FDA was held in June 2023.

We believe we aligned with the FDA on the proposed Phase 3 registration study design for further investigation of pitolisant as a potential treatment to address the unmet medical need for children, adolescents and adults with PWS experiencing EDS, for which there is currently no approved treatment.

In October 2023, we received FDA alignment regarding the protocol for the Phase 3 TEMPO study in patients with PWS, which we believe will satisfy the requirements for both the registrational trial and one of the two requirements for pediatric exclusivity, with the other requirement being data in pediatric narcolepsy.

In February 2024, the FDA granted Orphan Drug designation to pitolisant for the treatment of PWS.

We expect to initiate the Phase 3 study in the first quarter of 2024.

In June 2021, we initiated a Phase 2 proof-of-concept signal detection clinical trial to evaluate pitolisant for the treatment of EDS, fatigue and cognitive dysfunction in adult patients with DM1 and announced topline results from this trial in the fourth quarter of 2023 in which clinically meaningful improvements were demonstrated in EDS and fatigue, and the safety profile was consistent with the established safety profile of pitolisant.

o 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 gaining a pediatric indication for both EDS and cataplexy.

Bioprojet 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 and in March 2023, EMA granted approval for the marketing authorization of WAKIX for the treatment of narcolepsy in children 6 and older.

Based on the data from the positive Phase 3 trial conducted by Bioprojet, we submitted an sNDA for pediatric narcolepsy in December 2023.

On February 21, 2024, we announced that the FDA has granted priority review of our pediatric narcolepsy sNDA and has set a PDUFA, or target action date, of June 21, 2024.

o 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”).

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.

We remain committed to obtaining pediatric exclusivity for WAKIX and the submission of a pediatric sNDA in the fourth quarter of 2023 and the planned initiation of a Phase 3 study in PWS in the first quarter of 2024 are consistent with our efforts to obtain pediatric exclusivity.

o Expand Pitolisant Franchise Potentially up to 2040 and Beyond .

Pursuant to the 2022 LCA with Bioprojet, we have made progress in the development of two new formulations of pitolisant, NG1 and NG2.

Both formulations entered into clinical studies in the fourth quarter of 2023 and we anticipate data in the first half of 2024.

o Expand and Diversify 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 and diversify our portfolio beyond sleep/wake disorders 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.

Consistent with this objective, in October 2023, we acquired Zynerba, a clinical-stage pharmaceutical company focused on innovative pharmaceutically produced transdermal cannabidiol therapies for orphan neuropsychiatric disorders, including FXS.

The phase 3 RECONNECT registration study in FXS is ongoing.

● Maintain disciplined capital allocation strategy to maximize shareholder value.

o Execute on Businesses Development Opportunities .

We believe that with our existing cash, cash equivalents and investments on hand as of December 31, 2023, we are well positioned to execute on any business development opportunity to build out a robust pipeline.

o Share Repurchase Program .

We continue to opportunistically execute our share repurchase program to return value to shareholders.

Our Commercialization Strategy

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● 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.

To facilitate HCP awareness and adoption of WAKIX, we have deployed our dedicated, 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 more than 90% of the narcolepsy patients in the United States.

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● Payor Coverage :

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.

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

Through December 31, 2023, we have secured formulary access for more than 80% of all insured lives (Commercial, Medicare and Medicaid) in the United States.

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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.

As of December 31, 2023, we continued 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 2023 was approximately 6,150.

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.

Additionally, as of December 31, 2023, we had secured formulary access for more than 80% of all insured lives (Commercial, Medicare and Medicaid) in the United States.

Within these covered lives, we 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.

Our Development Pipeline

Development Pipeline Chart

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.

Trial conducted by Bioprojet;

received EMA approval on March 15, 2023.

Develop Pitolisant in New Patient Populations in Pursuit of Additional Indications

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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 completed enrollment in the INTUNE study in May 2023 and we announced topline data on October 11, 2023.

While the primary endpoint did not meet statistical significance, we believe the totality of the data showed favorable numerical trends for pitolisant in the treatment of adult patients with IH.

We submitted a meeting request to the FDA in the fourth quarter of 2023 to discuss the path forward and we anticipate a meeting with the FDA towards the end of the first quarter of 2024.

We plan to interact with the FDA to determine next steps.

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.

In December 2020, we initiated a Phase 2 proof-of-concept signal detection 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 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.

An end-of-phase 2 meeting with the FDA was held in June 2023.

We believe we aligned with the FDA on the proposed Phase 3 registration study design to support investigation of pitolisant as a potential treatment to address the unmet medical need for children, adolescents and adults with PWS experiencing EDS, for which there is currently no approved treatment.

In October 2023, we received FDA alignment regarding the protocol for the Phase 3 TEMPO study in patients with PWS, which will satisfy the requirements for both the registrational trial and one of the requirements for pediatric exclusivity, with the other requirement being data in pediatric narcolepsy.

In February 2024, the FDA granted Orphan Drug designation to pitolisant for the treatment of PWS.

We expect to initiate the Phase 3 study in the first quarter of 2024.

In June 2021, we initiated a Phase 2 proof-of-concept signal detection clinical trial to evaluate pitolisant for the treatment of EDS, fatigue and cognitive dysfunction in adult patients with DM1 and announced topline results from this trial in the fourth quarter of 2023 in which clinically meaningful improvements were demonstrated in EDS and fatigue, and the safety profile was consistent with the established safety profile of pitolisant.

Idiopathic Hypersomnia

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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 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.

The Phase 3 double-blind, placebo controlled randomized withdrawal study evaluated the safety and efficacy of pitolisant compared with placebo in adult patients with IH (ages ≥18 years) The study consisted of an 8-week Open-Label Phase, which included 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 entered 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.

The primary efficacy endpoint in the study was the change in the Epworth Sleepiness Scale (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 evaluated the effect of pitolisant on other symptoms of IH, including overall burden of disease, sleep-related impairment, sleep inertia, and cognitive function.

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

We completed enrollment in the INTUNE study in May 2023 and we announced topline data in October 2023.

Topline study results include:

● Approximately 83% of patients who completed the 8-week open-label treatment period with pitolisant were responders (as defined by a decrease on the ESS of ≥3 points) and experienced a robust clinical response, with an average ESS change from baseline of – 9.4 points.

● A positive trend favoring pitolisant was observed during the 4-week double-blind randomized withdrawal period, however no statistically significant difference was observed between pitolisant and placebo groups on ESS, the primary endpoint.

● Positive trends favoring pitolisant were also observed across additional prespecified endpoints including the IH Severity Scale, which approached statistical significance, as well as on the Sleep Inertia Questionnaire.

Further data analyses are being conducted.

● Approximately 88% of patients in the Double-Blind Randomized Withdrawal Phase continued into a long-term extension study, which is ongoing.

● The safety and tolerability profile of pitolisant in adult patients with idiopathic hypersomnia was consistent with the established safety profile and no new safety signals were observed.

While the primary endpoint did not meet statistical significance, we believe the totality of the data showed favorable numerical trends for pitolisant in the treatment of adult patients with IH.

We are currently analyzing the full data set and we have scheduled a meeting with the FDA for March 2024 to discuss the path forward for IH.

Prader-Willi Syndrome

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Other features include low muscle tone, short stature, behavioral problems and cognitive impairment.

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.

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 experience 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.

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EDS is thought to have a negative effect on behavior and cognitive function and could exacerbate these symptoms in patients with PWS.

In addition, impaired histamine signaling in the brain can contribute to behavioral symptoms and impaired cognition.

In addition, impaired histamine

signaling in the brain can contribute to behavioral symptoms and impaired cognition.

We believe there is a compelling opportunity for the mechanism of action of pitolisant to impact the EDS component of this disorder as well as other symptoms, such as behavioral issues and cognitive impairment.

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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) 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.

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 signal detection 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.

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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.

Based on the positive signals from the data from our Phase 2 proof-of-concept signal detection clinical trial to evaluate pitolisant for the treatment of EDS and other key symptoms in patients with PWS, an end-of-phase 2 meeting with the FDA was held in June 2023.

We believe we aligned with the FDA on the proposed Phase 3 study design to support

further investigation of pitolisant as a potential treatment to address the unmet medical need for children, adolescents and adults with PWS experiencing EDS, for which there is currently no approved treatment.

In October 2023, we received FDA alignment regarding the protocol for the Phase 3 TEMPO study in patients with PWS, which we believe will satisfy the requirements for both the registrational trial and one of the requirements for pediatric exclusivity, with the other being data in pediatric narcolepsy.

In February 2024, the FDA granted Orphan Drug designation to pitolisant for the treatment of PWS.

We expect to initiate the Phase 3 TEMPO study in the first quarter of 2024.

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 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 ESS.

We announced topline results for the Phase 2 proof-of-concept clinical trial in the fourth quarter of 2023.

The Phase 2 proof-of-concept clinical trial was 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 was not powered to demonstrate statistical significance and was designed for signal detection.

Thirty patients were enrolled at 20 sites across the United States and Canada.

Patients were 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 was to assess for improvement in EDS as measured by the Daytime Sleepiness Scale (DSS).

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.

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.

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

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

Patients who completed the trial are eligible to participate in an open-label extension phase to assess the long-term safety and effectiveness of pitolisant in adult patients with DM1.

Topline study results include:

● Clinically meaningful improvements were demonstrated in EDS as measured by DSS, ESS, and Clinical Global Impression of Severity (CGI-S) of EDS.

o On DSS, the mean change from baseline to end of double-blind period was -2.5 and -1.0 for the higher dose and lower dose pitolisant treatment groups, respectively, compared to -0.2 for placebo.

o On ESS, the mean change from baseline to end of double-blind period was -4.88 for the higher dose pitolisant treatment group compared to -0.10 for placebo.

o On CGI-S, the mean change from baseline to end of double-blind period was -0.9 for the higher dose pitolisant treatment group compared to -0.1 for placebo.

● Clinically meaningful improvements were demonstrated for fatigue as measured by the Fatigue Severity Scale (FSS).

o On FSS, the mean change from baseline to end of double-blind period was -0.86 and -0.36 for the higher dose and lower dose pitolisant treatment groups, respectively, compared to -0.13 for placebo.

● A clear and consistent dose-response was demonstrated with the higher dose pitolisant group showing a greater response than the lower dose group across the study endpoints.

● Safety and tolerability profile in adult patients with DM1 was consistent with the established safety profile of pitolisant with no new safety signals detected and no serious adverse events reported.

These results represent the initial topline data.

The full dataset from this trial will include findings from other secondary outcomes, including the Myotonic Dystrophy Health Index (MDHI), cognitive functions, and the safety and effectiveness of pitolisant from the ongoing Open-Label Extension (OLE) Phase.

We are currently evaluating the full data set and determining next steps.

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.

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

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

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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.

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

On January 26, 2023, Bioprojet received a positive opinion from the EMA’s CHMP and in March 2023, the EMA granted approval for the marketing authorization of WAKIX for the treatment of narcolepsy in children 6 and older.

Based on the data from the positive Phase 3 trial conducted by Bioprojet, we submitted an sNDA for pediatric narcolepsy in December 2023.

On February 21, 2024, we announced that the FDA has granted priority review of our pediatric narcolepsy sNDA and has set a PDUFA, or target action date, of June 21, 2024.

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

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).

We remain committed to obtaining pediatric exclusivity for WAKIX.

Our recent efforts regarding pediatric exclusivity include the submission of the pediatric sNDA and the planned initiation of a Phase 3 study in PWS in the first quarter of 2024.

Expand Pitolisant Franchise Potentially up to 2040 and Beyond

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 (see “Strategic Agreements” below).

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

We have made progress in the development of two formulations, NG1 and NG2.

Both formulations entered clinical studies in the fourth quarter of 2023 and we anticipate data in the first half of 2024 .

Expansion and Diversification of our Product Portfolio

On October 10, 2023, we completed a tender offer to acquire all of the outstanding shares of common stock of Zynerba, a clinical-stage pharmaceutical company focused on innovative pharmaceutically produced transdermal cannabidiol therapies for orphan neuropsychiatric disorders, including FXS and 22q.

Zynerba’s lead candidate, ZYN002, is the first-and-only pharmaceutically manufactured synthetic cannabidiol.

It is a non-euphoric cannabidiol formulated as a patent-protected permeation-enhanced gel for transdermal delivery through the skin and into the circulatory system.

The product is manufactured through a synthetic process in a cGMP facility and is not extracted from the cannabis plant.

ZYN002 does not contain THC, the compound that causes the euphoric effect of cannabis, and has the potential to be a nonscheduled product if approved.

Cannabidiol, the active ingredient in ZYN002, has been granted orphan drug designation by the FDA and the EMA for the treatment of FXS and for the treatment of 22q deletion syndrome (“22q”).

Additionally, ZYN002 has received FDA Fast Track designation for the treatment of behavioral symptoms in patients with FXS.

ZYN002 has the potential to serve 80,000 U.S.

patients who are diagnosed with FXS and another 80,000 diagnosed with 22q.

FXS is a rare genetic disorder that is the leading known cause of both inherited intellectual disability and autism spectrum disorder, affecting 1 in 3,600 to 4,000 males and 1 in 4,000 to 6,000 females.

The disorder negatively affects synaptic function, plasticity and neuronal connections, and results in a spectrum of intellectual disabilities and behavioral symptoms, such as social avoidance and irritability.

There are approximately 80,000 people in the United States and approximately 121,000 people in the European Union and UK living with FXS.

There is a significant unmet medical need in patients living with FXS as there are currently no FDA approved treatments for this disorder.

FXS is caused by a mutation in FMR1, a gene which modulates a number of systems, including the endocannabinoid system, and most critically, codes for a protein called FMRP.

The FMR1 mutation manifests as multiple repeats of a DNA segment, known as the CGG triplet repeat, resulting in deficiency or lack of FMRP.

FMRP helps regulate the production of other proteins and plays a role in the development of synapses, which are critical for relaying nerve impulses, and in regulating synaptic plasticity.

In people with full mutation of the FMR1 gene, the CGG segment is repeated more than 200 times, and in most cases causes the gene to not function.

Methylation of the FMR1 gene also plays a role in determining functionality of the gene.

In approximately 60% of patients with FXS, who have complete methylation of the FMR1 gene, no FMRP is produced, resulting in dysregulation of the systems modulated by FMRP.

Based on the data from the Phase 2 CONNECT study, the Phase 3 registration study, RECONNECT, was designed to evaluate the safety and efficacy of ZYN002 in FXS.

This study is currently ongoing and we are evaluating the timelines for the completion of the study.

22q is a disorder caused by a small missing piece of the 22nd chromosome.

The deletion occurs near the middle of the chromosome at a location designated q11.2.

It is considered a mid-line condition, with physical symptoms including characteristic palate abnormalities, heart defects, immune dysfunction, and esophageal / GI issues, as well as debilitating neuropsychiatric and behavioral symptoms, including anxiety, social withdrawal, ADHD, cognitive impairment and autism spectrum disorder.

It is estimated that 22q occurs in one in 4,000 live births, suggesting that there are approximately 80,000 people living with 22q in the United States and 129,000 people living with 22q in the European Union and the UK.

Patients with 22q deletion syndrome are managed by multidisciplinary care providers, and there are currently no FDA approved treatments for this disorder.

An open-label phase 2 proof-of-concept study showed positive signals for ZYN002 in the treatment of behavioral symptoms associated with 22q.

We are currently evaluating the data and are planning further development of ZYN002 in 22q.

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.

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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.

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 and are also conducting a thirteen-week toxicology study.

We anticipate data from both studies in the first half of 2024.

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.

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.

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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.

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.

Additionally, Avadel Pharmaceuticals launched a once nightly formulation version of sodium oxybate in June 2023.

As of January 2023, Xyrem is now available as generic sodium oxybate – one version is marketed by Hikma Pharmaceuticals through their agreement with Jazz Pharmaceuticals (launched in January 2023), and the other version is marketed by Amneal Pharmaceuticals through their agreement with Jazz Pharmaceuticals (launched in July 2023).

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, Xywav, Lumryz and generic sodium oxybate) 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.

Additionally, WAKIX is priced lower than Xyrem and Xywav, which we believe is a competitive advantage for WAKIX and may contribute to third-party payor preferences for WAKIX relative to Xyrem and Xywav.

Additionally, WAKIX is priced lower than Xyrem, Xywav, Lumryz and generic sodium oxybate, which we believe is a competitive advantage for WAKIX and may contribute to third-party payor preferences for WAKIX relative to each version of sodium oxybate.

Conversely, WAKIX is priced higher than other competitors such as Provigil (modafinil), Nuvigil, Sunosi (armodafinil) and certain generic competitors, such as methylphenidate and amphetamine, which may contribute to third-party payor preferences for those lower-priced treatment options relative to WAKIX.

Manufacturing, Supply and Distribution

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

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

We do not currently own or operate facilities for product manufacturing, storage and distribution, or testing, but 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.

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● Pharma Packaging Solutions, LLC dba Tjoapack, LLC, handles our labeling and secondary packaging.

● Integrated Commercialization Solutions, LLC (ICS), a division of AmerisourceBergen Corporation, is our third-party logistics provider.

● Cardinal Health, Inc.

is our third-party logistics provider.

● Inmar Rx Solutions, Inc., an advanced technology and data analytics company, specializes in reverse distribution of our product and manages our pharmaceutical returns and product recall, if needed.

Customers and Suppliers

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

Caremark LLC accounted for 42% of gross product revenues;

PANTHERx Specialty Pharmacy LLC accounted for 29% of gross product revenues;

For the year ended December 31, 2023, three customers accounted for 100% of gross product revenue;

Caremark LLC accounted for 37% of gross product revenue;

PANTHERx Specialty Pharmacy LLC accounted for 31% of gross product revenue;

and Accredo Health Group, Inc.

accounted for 29% of gross product revenues.

accounted for 32% of gross product revenue.

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

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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.

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

In October 2020, we paid $2.0 million to 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.

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.

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.

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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 $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.

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and 9,650,378), and issued patents in Australia, Brazil, Canada, China, Germany, Spain, France, the United Kingdom, Israel, Italy, Japan, Korea, Mexico, and New Zealand.

The patents have claims directed to certain human MCH-1 receptor-selective antagonists as compositions of matter, and are expected to expire in June 2031 (the ‘308 patent) and January 2029 (the ‘743 and ‘378 patents, as well as the international patents).

The patents have claims directed to certain human MCH-1 receptor-selective antagonists as compositions of matter, and are expected to expire in June 2031 (the ‘308 patent) and January

2029 (the ‘743 and ‘378 patents, as well as the international patents).

The third patent family comprises a pending PCT application (WO2021/142395) and has claims directed to therapeutic combinations or formulations of drugs comprising triple monoamine reuptake inhibitors, MCH receptor 1 (MCHR1) antagonists, and diazoxide, and methods of treating or preventing hyperphagia, moderate to severe binge eating disorder, bulimia nervosa, and management of obesity.

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In particular, our ability to stop third parties from making, using, selling, offering to sell or importing products that infringe our intellectual property will depend in part on our success in enforcing patent claims that cover our technology, inventions and improvements.

We cannot guarantee that patents will be granted with respect to any patent applications we may file in the future, nor can we be sure that any patents that may be granted to us in the future will be commercially useful in protecting our products, the methods of use or

manufacture of those products.

Moreover, issued patents do not guarantee the right to practice our technology in relation to the commercialization of our products.

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The FDA and comparable regulatory authorities in state and local jurisdictions and in other countries impose substantial and burdensome requirements upon companies involved in the clinical development, manufacture, marketing and distribution of drugs, such as those we are developing.

These agencies and other federal, state and local entities regulate, among other things, the research and development, testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion, distribution, post-approval monitoring and reporting, sampling and export and import of our product candidates.

Drug Development Process

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The process required by the FDA before a drug may be marketed in the United States generally involves the following:

● completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice (“GLP”) regulations;

● completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s Good Laboratory Practice (“GLP”) regulations and other applicable regulations;

● submission to the FDA of an IND which must become effective before human clinical trials may begin;

● approval by an independent institutional review board (“IRB”) at each clinical site before each trial may be initiated;

● performance of adequate and well-controlled human clinical trials in accordance with good clinical practice (“GCP”) requirements to establish the safety and efficacy of the proposed drug product for each indication;

● submission to the FDA of an NDA;

● approval by an independent institutional review board (“IRB”) or ethics committee at each clinical site before each trial may be initiated;

● performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practice (“GCP”) regulations to evaluate the safety and efficacy of the proposed drug product for each indication;

● submission to the FDA of an NDA after completion of all pivotal trials;

● satisfactory completion of an FDA advisory committee review, if applicable;

● satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current good manufacturing practice (“cGMP”) requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

● FDA review and approval of the NDA, including consideration of the views of any FDA advisory committee, prior to commercial marketing or sale of the drug in the United States;

● Compliance with any post-approval requirements, including the potential requirement to implement a REMS program or to conduct a post-approval study.

● satisfactory completion of potential inspection of selected clinical investigation sites to assess compliance with GCPs;

● FDA review and approval of the NDA to permit commercial marketing of the product for particular indications for use in the United States.

Preclinical Studies

Preclinical studies include laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies to assess potential safety and efficacy.

An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data and any available clinical data or literature, among other things, to the FDA as part of an IND.

Once a product candidate is identified for development, it enters the preclinical testing stage.

Preclinical tests include laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies.

An IND sponsor must submit the results of the preclinical tests, together with manufacturing information and analytical data, among other things, to the FDA as part of an IND.

An IND is a request for authorization from the FDA to administer an investigational drug product to humans.

An IND will also include a protocol detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated, if the trial includes an efficacy

Some preclinical testing may continue even after the IND is submitted.

An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the clinical trial on a clinical hold.

The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises concerns or questions related to one or more proposed clinical trials and places the clinical trial on a clinical hold.

In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin.

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Clinical Trials

Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial.

Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated.

A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.

In addition, an IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution.

Information about certain clinical trials must be submitted within specific timeframes to the NIH for public dissemination on their www.clinicaltrials.gov website.

Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined:

The drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness.

The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.

The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.

All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCPs, which include, among other things, the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial.

Clinical trials must be conducted under protocols detailing the objectives of the trial, dosing procedures, subject selection and exclusion criteria and the safety and effectiveness criteria to be evaluated.

the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated.

Each protocol must be submitted to the FDA as part of the IND, and a separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent protocol amendments.

While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected serious adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.

Furthermore, an independent IRB at each institution participating in the clinical trial must review and approve each protocol before a clinical trial commences at that institution and must also approve the information regarding the trial and the consent form that must be provided to each trial subject or his or her legal representative, monitor the study until completed and otherwise comply with IRB regulations.

The FDA or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk.

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Depending on its charter, this group may determine whether a trial may move forward at designated check points based on access to certain data from the trial.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

Information about certain clinical trials must be submitted within specific timeframes to the NIH for public dissemination on their www.clinicaltrials.gov website.clinicaltrials.gov.

Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:

The product candidate is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness.

The product candidate is administered to a limited patient population with a specified disease or condition to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and appropriate dosage.

The product candidate is administered to an expanded patient population to further evaluate dosage, to provide substantial evidence of efficacy and to further test for safety, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.

Post-approval trials, sometimes referred to as Phase 4 studies, may be conducted after initial marketing approval.

These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication.

In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA.

The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug.

In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

There are also requirements governing the reporting of ongoing clinical trials and completed trial results to public registries.

Marketing Approval

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In most cases, the submission of an NDA is subject to a substantial application user fee.

Under the Prescription Drug User Fee Act (“PDUFA”) guidelines that are currently in effect, the FDA has a goal of ten months from the date of “filing” of a standard NDA for a new molecular entity to review and act on the submission.

This review typically takes twelve months from the date the NDA is submitted to FDA because the FDA has approximately two months to make a “filing” decision.

Specifically, the FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review.

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Once the submission is accepted for filing, the FDA begins an in-depth substantive review.

The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety and quality.

The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective for its intended use and whether its manufacturing is cGMP-compliant to assure and preserve the product’s identity, strength, quality and purity.

Under the PDUFA guidelines that are currently in effect, the FDA has a goal of ten months from the date of “filing” of a standard NDA for a new molecular entity to review and act on the submission.

This review typically takes twelve months from the date the NDA is submitted to FDA because the FDA has approximately two months to make a “filing” decision after it the application is submitted.

The FDA also may require submission of a REMS to ensure that the benefits of the drug outweigh its risks.

The REMS could include medication guides, physician communication plans, assessment plans, and/or elements to assure safe use, such as restricted distribution methods, patient registries, or other risk minimization tools.

The FDA will not approve the NDA without an approved REMS, if required.

The FDA may refer an application for a novel drug to an advisory committee.

An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a

recommendation as to whether the application should be approved and under what conditions.

An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

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After evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter.

A complete response letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical or preclinical testing in order for FDA to reconsider the application.

Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter.

An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

A complete response letter usually describes the specific deficiencies in the NDA identified by the FDA and may require additional clinical data, such as an additional clinical trial or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing.

Even with the resubmission of the application with this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product.

The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs.

After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.

The Pediatric Research Equity Act (“PREA”) requires a sponsor to conduct pediatric clinical trials for most drugs, for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration.

Under PREA, original NDAs and supplements must contain a pediatric assessment unless the sponsor has received a deferral or waiver.

The required assessment must evaluate the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

The sponsor or FDA may request a deferral of pediatric clinical trials for some or all of the pediatric subpopulations.

A deferral may be granted for several reasons, including a finding that the drug is ready for approval for use in adults before pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric clinical trials begin.

The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment, keep a deferral current or fails to submit a request for approval of a pediatric formulation.

FDA Expedited Development and Review Programs

The FDA has various programs, including fast track designation, accelerated approval priority review, and breakthrough therapy designation, which are intended to expedite or simplify the process for the development and FDA review of drugs that are intended for the treatment of serious or life-threatening diseases or conditions and demonstrate the potential to address unmet medical needs.

The purpose of these programs is to provide important new drugs to patients earlier than under standard FDA review procedures.

To be eligible for a fast track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need.

The FDA will determine that a product will fill an unmet medical need if it will provide a therapy where none exists or provide a therapy that may be potentially superior to existing therapy based on efficacy or safety factors.

The FDA may review sections of the NDA for a fast track product on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.

The FDA may give a priority review designation to drugs that offer major advances in treatment, or provide a treatment where no adequate therapy exists.

A priority review means that the goal for the FDA to review an application is six months, rather than the standard review of ten months under current PDUFA guidelines.

Under the new PDUFA agreement, these six and ten month review periods are measured from the “filing” date rather than the receipt date for NDAs for new molecular entities, which typically adds approximately two months to the timeline for review and decision from the date of submission.

Products that are eligible for fast track designation may also be considered appropriate to receive a priority review.

In addition, products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may be eligible for accelerated approval and may be approved on the basis of adequate and well-controlled clinical trials establishing that the drug product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.

As a condition of approval, the FDA may require a sponsor of a drug receiving accelerated approval to perform post-marketing studies to verify and describe the predicted effect on irreversible morbidity or mortality or other clinical endpoint, and the drug may be subject to accelerated withdrawal procedures.

Moreover, under the provisions of the Food and Drug Administration Safety and Innovation Act (“FDASIA”) passed in July 2012, a sponsor can request designation of a product candidate as a “breakthrough therapy.” A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

Drugs designated as breakthrough therapies are also eligible for accelerated approval.

The FDA must take certain actions, such as holding timely meetings and providing advice, intended to expedite the development and review of an application for approval of a breakthrough therapy.

The designation includes all of the benefits of a fast track designation.

The breakthrough therapy designation is a distinct status from both accelerated approval and priority review, which can also be granted to the same drug if relevant criteria are met.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

Furthermore, fast track designation, priority review, and breakthrough therapy designation do not change the standards for approval, but may expedite the development or approval process.

The FDA has a number of programs intended to expedite the development or review of a marketing application for an investigational drug.

For example, the fast-track designation program is intended to expedite or facilitate the process for developing and reviewing product candidates that meet certain criteria.

Specifically, investigational drugs are eligible for fast-track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition.

The sponsor of a fast-track product candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once an NDA is submitted, the application may be eligible for priority review.

With regard to a fast track product candidate, the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.

A product candidate intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation to expedite its development and review.

A product candidate can receive breakthrough therapy designation if preliminary clinical evidence indicates that the product candidate, alone or in combination with one or more other drugs or biologics, may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

The designation includes all of the fast-track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product candidate, including involvement of senior managers.

Any product candidate submitted to the FDA for approval, including a product candidate with a fast-track designation or breakthrough designation, may also be eligible for other types of FDA programs intended to expedite development and review, such as priority review.

An NDA is eligible for priority review if the product candidate is designed to treat a serious condition, and if approved, would provide a significant improvement in safety or efficacy compared to available therapies.

The FDA will attempt to direct additional resources to the evaluation of an NDA designated for priority review in an effort to facilitate the review.

The FDA endeavors to review applications with priority review designations within six months of the filing date as compared to ten months for review of new molecular entity NDAs under its current PDUFA review goals.

In addition, depending on the design of the applicable clinical trials, a product candidate may be eligible for accelerated approval.

Specifically, drugs intended to treat serious or life-threatening diseases or conditions may be eligible for accelerated approval upon a determination that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.

As a condition of approval, the FDA generally requires that a sponsor of a drug receiving accelerated approval perform adequate and well-controlled confirmatory clinical trials and may require that such confirmatory trials be underway prior to granting accelerated approval.

Drugs receiving accelerated approval may be subject to expedited withdrawal procedures if the sponsor fails to conduct the required confirmatory trials in a timely manner or if such trials fail to verify the predicted clinical benefit.

In addition, the FDA currently requires as a condition of accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product.

Fast-track designation, breakthrough therapy designation, priority review, and accelerated approval do not change the standards for approval but may expedite the development or approval process.

Even if a product candidate qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

Post-Approval Requirements

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product.

After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval.

There also are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.

The FDA may impose a number of post-approval requirements as a condition of approval of an NDA.

For example, the FDA may require post-marketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.

In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements.

Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented.

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, and advertising and promotion and reporting of adverse experiences with the product.

After approval, most changes to the approved product, such as adding new indications, certain manufacturing changes and additional labeling claims are subject to further FDA review and approval.

There also are continuing, annual program user fee requirements for any marketed products, as well as new application fees for supplemental applications with clinical data.

Drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and these certain state agencies for compliance with cGMPs and other laws and regulations.

Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented.

FDA regulations also require investigation and correction of any deviations from cGMP requirements and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use.

Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

Once an approval is granted, the FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information;

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● restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

● safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warning or other safety information about the product;

● fines, warning letters or holds on post-approval clinical trials;

● consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs;

● mandated modification of promotional materials and labeling and the issuance of corrective information, safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warning or other safety information about the product;

● fines, warning letters, untitled letters, or holds on post-approval clinical trials;

● refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals;

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Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label.

The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.

Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties.

Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA.

Such off-label uses are common across medical specialties.

Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances.

The FDA does not regulate the behavior of physicians in their choice of treatments.

The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products.

In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act (“PDMA”), which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states.

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Market exclusivity provisions under the FDCA can delay the submission or the approval of certain marketing applications.

The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to obtain approval of an NDA for a new chemical entity.

The FDCA provides a five-year period of non-patent data exclusivity within the United States to the first applicant to obtain approval of an NDA for a new chemical entity.

A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance.

During the exclusivity period, the FDA may not approve or even accept for review an abbreviated new drug application (“ANDA”) or an NDA submitted under Section 505(b)(2) (“505(b)(2) NDA”) submitted by another company for another drug based on the same active moiety, regardless of whether the drug is intended for the same indication as the original innovative drug or for another indication, where the applicant does not own or have a legal right of reference to all the data required for approval.

During the exclusivity period, the FDA may not approve or even accept for review an

abbreviated new drug application (“ANDA”) or an NDA submitted under Section 505(b)(2) (“505(b)(2) NDA”) submitted by another company for another drug based on the same active moiety, regardless of whether the drug is intended for the same indication as the original innovative drug or for another indication, where the applicant does not own or have a legal right of reference to all the data required for approval.

However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement to one of the patents listed with the FDA by the innovator NDA holder.

The FDCA alternatively provides three years of marketing exclusivity for an NDA, or supplement to an existing NDA, if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application.

The FDCA alternatively provides three years of non-patent data exclusivity for an NDA, or supplement to an existing NDA, if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example new indications, dosages or strengths of an existing drug.

This three-year exclusivity covers only the modification for which the drug received approval on the basis of the new clinical investigations and does not prohibit the FDA from approving ANDAs or 505(b)(2) NDAs for drugs containing the active agent for the original indication or condition of use.

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Pediatric exclusivity is another type of marketing exclusivity available in the United States.

Pediatric exclusivity provides for an additional six months of marketing exclusivity attached to another period of exclusivity if a sponsor conducts

clinical trials in children in response to a written request from the FDA.

Pediatric exclusivity provides for an additional six months of marketing exclusivity attached to another period of exclusivity if a sponsor conducts clinical trials in children in response to a written request from the FDA.

The issuance of a written request does not require the sponsor to undertake the described clinical trials.

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After the FDA grants an Orphan Drug Designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.

Orphan designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to a seven-year period of marketing exclusivity during which the FDA may not approve any other applications to market the same therapeutic agent for the same indication, except in limited circumstances, such as a subsequent product’s showing of clinical superiority over the product with orphan exclusivity or where the original applicant cannot produce sufficient quantities of product.

Competitors, however, may receive approval of different therapeutic agents for the indication for which the orphan product has exclusivity or obtain approval for the same therapeutic agent for a different indication than that for which the orphan product has exclusivity.

Among other benefits of an Orphan Drug Designation are tax credits for certain research and a waiver of the user fee for the NDA.

Orphan product exclusivity could block the approval of one of our products for seven years if a competitor obtains approval for the same therapeutic agent for the same indication before we do, unless we are able to demonstrate that our product is clinically superior.

If an orphan designated product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan exclusivity.

Further, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

We received an orphan designation for pitolisant for the treatment of EDS in adult patients with narcolepsy and, upon approval of WAKIX, we received orphan exclusivity until 2026.

We also received an orphan designation for pitolisant for the treatment of cataplexy in adult patients with narcolepsy and we received orphan exclusivity until 2027.

Orphan designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to a seven-year period of marketing exclusivity during which the FDA may not approve any other applications to market the same therapeutic agent for the same disease or condition, except in limited circumstances, such as a subsequent product’s showing of clinical superiority over the product with orphan exclusivity or where the original applicant cannot produce sufficient quantities of product.

Competitors, however, may receive approval of different therapeutic agents for the disease or condition for which the orphan product has exclusivity.

Orphan exclusivity also could block the approval of a competing product for seven years if a competitor obtains approval of the “same drug,” as defined by the FDA, or if the active moiety of the product candidate is determined to be contained within the competitor’s product for the same disease or condition.

In addition, if an orphan designated product receives marketing approval for a disease or condition broader than what is designated, it may not be entitled to orphan exclusivity.

DEA Regulation

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Required security measures include background checks on employees and physical control of inventory through measures such as cages, surveillance cameras and inventory reconciliations.

Records must be

maintained for the handling of all controlled substances, and periodic reports made to the DEA, for example distribution reports for Schedule I and II controlled substances, Schedule III substances that are narcotics, and other designated substances.

Records must be maintained for the handling of all controlled substances, and periodic reports made to the DEA, for example distribution reports for Schedule I and II controlled substances, Schedule III substances that are narcotics, and other designated substances.

Reports must also be made for thefts or losses of any controlled substance, and to obtain authorization to destroy any controlled substance.

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federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the healthcare fraud statute implemented under HIPAA or specific intent to violate it in order to have committed a violation.

specific exceptions, to report annually to the Centers for Medicare & Medicaid Services (“CMS”) information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, and applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by physicians and their immediate family members.

Beginning in 2022, these reporting obligations will extend to include payments and transfers of value made during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and anesthesiologist assistants, and certified nurse midwives.

The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services (“CMS”) information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants, and certified nurse midwives) and teaching hospitals, and applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by physicians and their immediate family members.

Similar state and local laws and regulations may also restrict business practices in the pharmaceutical industry, such as state anti-kickback and false claims laws, which may apply to business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or by patients themselves;

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The CCPA, among other things, creates new data privacy obligations for covered companies and provides new privacy rights to California residents, including the right to opt out of certain disclosures of their information.

The CCPA also creates a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data

The CCPA also creates a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach.

Although the law includes limited exceptions, including for “protected health information” maintained by a covered entity or business associate, it may regulate or impact our processing of personal information depending on the context.

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In particular, these obligations and restrictions concern the consent of the individuals to whom the personal data relates, the information provided to the individuals, the transfer of personal data out of the EEA or the United Kingdom, security breach notifications, security and confidentiality of the personal data and imposition of substantial potential fines for breaches of the data protection obligations.

Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.

Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenue of the noncompliant company, whichever is greater.

Further, from January 1, 2021, companies have to comply with the GDPR and also the United Kingdom GDPR (“UK GDPR”) which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law.

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Third-party payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all of the FDA-approved products for a particular indication, or place products at certain formulary levels that result in lower reimbursement levels and higher cost-sharing obligation imposed on patients.

One third-party payor’s decision to cover a particular medical product or service does not ensure that other payors will also provide coverage for the medical product or service and the level of coverage and reimbursement can differ significantly from payor to payor.

As a result, the coverage determination process will often require us to provide scientific and clinical support for the use of our products to each payor separately and can be a time-consuming process, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

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In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies.

For example, the European Union provides options for its member states to restrict the range of medicinal products for which their national health insurance systems

provide reimbursement and to control the prices of medicinal products for human use.

For example, the European Union provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.

A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market.

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In March 2010, the ACA was signed into law, which substantially changed the way healthcare is financed by both governmental and private insurers in the United States and significantly affected the pharmaceutical industry.

The ACA contains a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement adjustments and fraud and abuse changes.

The ACA contained a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement adjustments and fraud and abuse changes.

Additionally, the ACA increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs;

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expanded eligibility criteria for Medicaid programs;

creates a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;

and established a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.

created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;

and established a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.

Since its enactment, there have been judicial, executive and Congressional legislative challenges to certain aspects of the ACA.

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The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

Other legislative changes have also been proposed and adopted since the ACA was enacted, including aggregate reductions of Medicare payments to providers of 2% per fiscal year, which was temporarily suspended from May 1, 2020 through December 31, 2022 under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), and further reduced payments to several types of Medicare providers.

Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted legislation designed, among other things, to bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical products in an attempt to control drug costs.

Other legislative changes have also been proposed and adopted since the ACA was enacted, including aggregate reductions of Medicare payments to providers, which was temporarily suspended from May 1, 2020 through March 31, 2022 under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), and further reduced payments to several types of Medicare providers.

In March 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap for single source and innovator multiple source drugs, beginning January 1, 2024.

The rebate was previously capped at 100% of a drug’s average manufacturer price.

pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical products in an attempt to control drug costs.

Individual states in the United States have also become increasingly active in implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures and, in some cases, mechanisms to encourage importation from other countries and bulk purchasing.

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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.

The Inflation Reduction Act of 2022, or IRA, which was 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.

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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.

The IRA permits the Secretary of the Department of Health and Human Services, or HHS, to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the drug price negotiation program is currently subject to legal challenges.

For that and other reasons, it is currently unclear how the IRA will be effectuated, or the impact of the IRA on our business.

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.

4 unchanged sentences

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 eight of our employees are located.

Wabash Ave, Suite 3500, Chicago, Illinois 60611, where 8 of our employees are located.

Human Capital Management

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.

As of December 31, 2023, we have 246 full-time employees, 127 who are dedicated to commercial functions, which includes sales, marketing, market access, commercial operations, and insights, and 65 who are dedicated to research and development.

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

8 unchanged sentences

We focus on providing our employees safe and healthy working conditions, and actively participate in the communities where we are located.

In addition, we support philanthropic organizations, patient-focused associations, local and national charitable organizations, and areas of need across the country by providing monetary donations or supplying food, medical supplies and other resources.

food, medical supplies and other resources.

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.

8 unchanged sentences

Our internet website is www.harmonybiosciences.com.

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.

We routinely make important information available on our website 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.

Information contained on our website shall not be deemed incorporated into, or to be part of this Annual Report on Form 10-K, and any website references are not intended to be made through active hyperlinks.

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