Harmony Biosciences Holdings, Inc. 10-Q

Item 1. Financial Statements HARMONY BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ 2025 2024 ASSETS ​ ​ CURRENT ASSETS: ​ ​ Cash and cash equivalents ​ $ 488,998 ​ $ 453,001 Investments, short-term ​ ​ 17,955 ​ ​ 14,185 Trade receivables, net ​ 105,969 ​ 83,033 Inventory, net ​ 6,384 ​ 7,198 Prepaid expenses ​ 16,470 ​ 13,714 Other current assets ​ 6,916 ​ 8,121 Total current assets ​ 642,692 ​ 579,252 NONCURRENT ASSETS: ​ ​ Property and equipment, net ​ 1,378 ​ 1,257 Restricted cash ​ 270 ​ 270 Investments, long-term ​ ​ 103,245 ​ ​ 108,874 Intangible assets, net ​ 107,302 ​ 113,263 Deferred tax asset ​ ​ 194,709 ​ ​ 190,398 Other noncurrent assets ​ 5,939 ​ 5,886 Total noncurrent assets ​ 412,843 ​ 419,948 TOTAL ASSETS ​ $ 1,055,535 ​ $ 999,200 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ CURRENT LIABILITIES: ​ ​ Trade payables ​ $ 17,459 ​ $ 13,744 Accrued compensation ​ 7,582 ​ 18,776 Accrued expenses ​ 112,701 ​ 120,640 Current portion of long-term debt ​ ​ 17,500 ​ ​ 16,250 Other current liabilities ​ 19,876 ​ 5,672 Total current liabilities ​ 175,118 ​ 175,082 NONCURRENT LIABILITIES: ​ ​ Long-term debt, net ​ 158,182 ​ 163,016 Other noncurrent liabilities ​ 1,710 ​ 1,947 Total noncurrent liabilities ​ 159,892 ​ 164,963 TOTAL LIABILITIES ​ 335,010 ​ 340,045 COMMITMENTS AND CONTINGENCIES (Note 13) ​ ​ STOCKHOLDERS’ EQUITY: ​ ​ Common stock—$ 0.00001 par value; 500,000,000 shares authorized at March 31, 2025 and December 31, 2024, respectively; 57,393,673 and 57,144,887 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively ​ 1 ​ 1 Additional paid in capital ​ 672,503 ​ 656,872 Accumulated other comprehensive income ​ ​ 245 ​ ​ 66 Retained earnings ​ 47,776 ​ 2,216 TOTAL STOCKHOLDERS’ EQUITY ​ 720,525 ​ 659,155 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY ​ $ 1,055,535 ​ $ 999,200 ​ The accompanying notes are an integral part of the unaudited condensed consolidated financial statements ​ 3 Table of Contents ​ HARMONY BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 2024 Net product revenue ​ $ 184,733 ​ $ 154,615 ​ Cost of product sold ​ 31,994 ​ 27,484 ​ Gross profit ​ 152,739 ​ 127,131 ​ Operating expenses: ​ ​ ​ Research and development ​ 34,540 ​ 22,189 ​ Sales and marketing ​ 30,711 ​ 27,233 ​ General and administrative ​ 31,243 ​ 25,676 ​ Total operating expenses ​ 96,494 ​ 75,098 ​ Operating income ​ 56,245 ​ 52,033 ​ Other expense, net ​ ( 276 ) ​ ( 141 ) ​ Interest expense ​ ​ ( 3,836 ) ​ ​ ( 4,535 ) ​ Interest income ​ 5,044 ​ 4,428 ​ Income before income taxes ​ 57,177 ​ 51,785 ​ Income tax expense ​ ( 11,617 ) ​ ( 13,451 ) ​ Net income ​ $ 45,560 ​ $ 38,334 ​ Unrealized income (loss) on investments ​ 179 ​ ( 173 ) ​ Comprehensive income ​ $ 45,739 ​ $ 38,161 ​ EARNINGS PER SHARE: ​ ​ ​ Basic ​ $ 0.79 ​ $ 0.68 ​ Diluted ​ $ 0.78 ​ $ 0.67 ​ Weighted average number of shares of common stock - basic ​ 57,309,938 ​ 56,771,251 ​ Weighted average number of shares of common stock - diluted ​ 58,524,566 ​ 57,597,627 ​ ​ The accompanying notes are an integral part of the unaudited condensed consolidated financial statements ​ 4 Table of Contents ​ HARMONY BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ other ​ ​ ​ ​ Total ​ ​ Common Stock ​ paid-in ​ comprehensive ​ Retained ​ stockholders’ ​ Shares Amount capital income earnings equity Balance as of December 31, 2024 57,144,887 ​ $ 1 ​ $ 656,872 ​ $ 66 ​ $ 2,216 ​ $ 659,155 Net income — ​ — ​ — ​ ​ — ​ 45,560 ​ 45,560 Unrealized gain on investments ​ — ​ ​ — ​ ​ — ​ ​ 179 ​ ​ — ​ ​ 179 Exercise of options and restricted stock units 248,786 ​ — ​ 3,132 ​ ​ — ​ — ​ 3,132 Stock-based compensation — ​ — ​ 12,499 ​ ​ — ​ — ​ 12,499 Balance as of March 31, 2025 57,393,673 ​ $ 1 ​ $ 672,503 ​ $ 245 ​ $ 47,776 ​ $ 720,525 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ other ​ ​ ​ Total ​ ​ Common Stock ​ paid-in ​ comprehensive ​ Accumulated ​ stockholders’ ​ Shares Amount capital ​ (loss) income deficit equity Balance as of December 31, 2023 56,769,081 ​ $ 1 ​ $ 610,266 ​ $ 2 ​ $ ( 143,277 ) ​ $ 466,992 Net income — ​ — ​ — ​ ​ — ​ 38,334 ​ 38,334 Unrealized loss on investments ​ — ​ ​ — ​ ​ — ​ ​ ( 173 ) ​ ​ — ​ ​ ( 173 ) Exercise of stock options and restricted stock units 22,133 ​ — ​ ( 153 ) ​ ​ — ​ — ​ ( 153 ) Stock-based compensation — ​ — ​ 10,394 ​ ​ — ​ — ​ 10,394 Balance as of March 31, 2024 56,791,214 ​ $ 1 ​ $ 620,507 ​ $ ( 171 ) ​ $ ( 104,943 ) ​ $ 515,394 The accompanying notes are an integral part of the unaudited condensed consolidated financial statement s ​ 5 Table of Contents ​ HARMONY BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES ​ ​ Net income ​ $ 45,560 ​ $ 38,334 Adjustments to reconcile net income to net cash used in operating activities: ​ ​ ​ Depreciation ​ 7 ​ 163 Intangible amortization ​ 5,961 ​ 5,961 Stock-based and employee stock purchase compensation expense ​ 12,499 ​ 10,394 Stock appreciation rights market adjustment ​ ( 49 ) ​ 40 Debt issuance costs amortization ​ 166 ​ 180 Deferred taxes ​ ​ ( 4,311 ) ​ ​ ( 3,477 ) Amortization of premiums and accretion of discounts on Investment securities ​ ​ ( 451 ) ​ ​ ( 594 ) Other non-cash expenses ​ ​ 467 ​ ​ 467 Change in operating assets and liabilities: ​ ​ ​ Trade receivables ​ ( 22,936 ) ​ ( 5,579 ) Inventory ​ 814 ​ ( 494 ) Prepaid expenses and other assets ​ ( 1,999 ) ​ ( 3,439 ) Trade payables ​ 3,715 ​ ( 2,586 ) Other liabilities ​ ( 5,456 ) ​ ( 8,229 ) Net cash provided by operating activities ​ 33,987 ​ 31,141 CASH FLOWS FROM INVESTING ACTIVITIES: ​ ​ Purchase of investment securities ​ ​ ( 19,132 ) ​ ​ ( 25,106 ) Proceeds from maturities and sales of investment securities ​ ​ 21,622 ​ ​ 18,925 Purchase of property and equipment ​ ( 128 ) ​ ( 5 ) Net cash provided by (used in) investing activities ​ 2,362 ​ ( 6,186 ) CASH FLOWS FROM FINANCING ACTIVITIES: ​ ​ Principal repayment of long-term debt ​ ​ ( 3,750 ) ​ ​ ( 3,750 ) Payments of employee withholding taxes related to stock-based awards ​ ​ ( 1,308 ) ​ ​ — Proceeds from exercised options ​ 4,706 ​ 116 Net cash used in financing activities ​ ( 352 ) ​ ( 3,634 ) NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ​ 35,997 ​ 21,321 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period ​ 453,271 ​ 311,930 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period ​ $ 489,268 ​ $ 333,251 Supplemental Disclosure of Cash Flow Information: ​ ​ Cash paid during the year for interest ​ $ 4,197 ​ $ 4,585 Cash paid during the year for taxes ​ ​ — ​ ​ — ​ The accompanying notes are an integral part of the unaudited condensed consolidated financial statements ​ 6 Table of Contents HARMONY BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) 1. ORGANIZATION AND DESCRIPTION OF BUSINESS The Company Harmony Biosciences Holdings, Inc., and its consolidated subsidiaries (the “Company”), was founded in July 2017 as Harmony Biosciences II, LLC, a Delaware limited liability company. The Company converted to a Delaware corporation named Harmony Biosciences II, Inc. in September 2017 and, in February 2020, the Company changed its name to Harmony Biosciences Holdings, Inc. The Company’s operations are conducted in its wholly owned subsidiaries, Harmony Biosciences, LLC (“Harmony”), and Harmony Biosciences Management, Inc. The Company is headquartered in Plymouth Meeting, Pennsylvania. The Company is cultivating a differentiated neuroscience company, rooted in innovation and driven by a commitment to addressing the unmet needs of patients living with neurological diseases. To date, we have focused on rare neurological diseases with a growing portfolio now spanning sleep/wake, neurobehavioral, and rare epilepsy, and we are harnessing scientific insights and pioneering approaches to advance meaningful treatments that help patients thrive. ​ In July 2017, Harmony entered into a License Agreement (the “2017 LCA”) with Bioprojet Société Civile de Recherche (“Bioprojet”) whereby Harmony acquired the exclusive right to commercialize the pharmaceutical compound pitolisant. Our lead product, WAKIX® (pitolisant) (“WAKIX”), is a first-in-class therapy with a novel mechanism of action designed to enhance histamine signaling in the brain by binding to H 3 receptors. Since its initial FDA approval in 2019 for excessive daytime sleepiness (“EDS”) in adult patients with narcolepsy, WAKIX has subsequently been approved for cataplexy in adult patients in 2020 and EDS in pediatric patients six years and older in 2024. Beyond narcolepsy, we are also advancing late-stage clinical programs exploring pitolisant in Prader-Willi syndrome (“PWS”) and continue to grow our impact in other rare neurological diseases. In July 2022, we entered into a License and Commercialization Agreement (the “2022 LCA”) with Bioprojet whereby we obtained exclusive rights to manufacture, develop and commercialize one or more next generation pitolisant based products in the United States and Latin America. Two of the next generations formulations, Pitolisant Gastro-Resistant (“Pitolisant GR”) and Pitolisant High-Dose (“Pitolisant HD”) are currently in clinical development. ​ Along with nurturing the growth of our original pipeline, our innovation strategy includes targeted business development that strengthens our foundation and strategically extends our patient reach as we look to expand our portfolio to new diseases beyond histaminergic science. In October 2023, the Company completed a tender offer to acquire all of the outstanding shares of common stock of Zynerba Pharmaceuticals, Inc. (together with its subsidiary, Zynerba Pharmaceutical Pty, Ltd., “Zynerba”). Zynerba was a clinical-stage pharmaceutical company focused on innovative, pharmaceutically produced transdermal cannabidiol therapies for orphan neurobehavioral disorders, including Fragile X Syndrome and 22q deletion syndrome. As of July 1, 2024, Zynerba Pharmaceuticals, Inc. was renamed and is known as Harmony Biosciences Management, Inc. In April 2024, we expanded into orexin science through a sublicense agreement with Bioprojet for an orexin 2 receptor agonist (“BP1.15205”) in preclinical development for narcolepsy and other potential indications. Under the sublicense agreement we obtained the exclusive right to develop, manufacture and commercialize BP1.15205 in the United States and Latin American territories, which are rights originally licensed from Teijin Pharma, the innovator of BP1.15205. We further broadened our portfolio into rare epilepsy when the Company acquired all of the issued and outstanding capital stock of Epygenix Therapeutics, Inc. (“Epygenix”) in April 2024. As a result, the Company now has an exclusive license relating to the use of clemizole hydrochloride, initially for the treatment of Dravet Syndrome (“DS”) and Lennox-Gastaut Syndrome (“LGS”), and a liquid formulation of lorcaserin for the treatment of developmental and epileptic encephalopathies. 7 Table of Contents ​ 2. LIQUIDITY AND CAPITAL RESOURCES The unaudited condensed consolidated financial statements have been prepared as though the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company had retained earnings of $ 47,776 and $ 2,216 , as of March 31, 2025, and December 31, 2024, respectively. As of March 31, 2025, the Company had cash, cash equivalents and investments of $ 610,198 . The Company believes that its existing cash, cash equivalents and investments on hand as of March 31, 2025, as well as additional cash generated from operating and financing activities will meet its operational liquidity needs and fund potential investing activities for the next twelve months from the date of issuance of these unaudited condensed consolidated financial statements. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated balance sheet as of March 31, 2025, the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2025, and 2024, and the unaudited condensed consolidated statements of operations and comprehensive income and the unaudited condensed consolidated statements of shareholders’ equity for the three months ended March 31, 2025, and 2024, are unaudited. The balance sheet as of December 31, 2024, was derived from audited financial statements as of and for the year ended December 31, 2024. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements as of and for the year ended December 31, 2024, and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of March 31, 2025, and the results of its operations and its cash flows for the three months ended March 31, 2025, and 2024. The unaudited condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted under the SEC’s rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Significant Risks and Uncertainties The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to, clinical trial results of the Company’s product candidates; the Company’s ability to obtain regulatory approval to market its products; competition from products manufactured and sold or being developed by other companies, including generic competition; the price of, and demand for, the Company’s products, if approved; the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its product candidates. The Company currently has one commercially approved product, WAKIX, and there can be no assurance that the Company’s research and development efforts will result in successfully commercialized products in addition to WAKIX. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property. 8 Table of Contents ​ Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts and disclosures in the unaudited condensed consolidated financial statements, including the notes thereto, and elsewhere in this report. Actual results may differ significantly from estimates, which include rebates due pursuant to commercial and government contracts, accrued research and development expenses, stock-based compensation expense and income taxes. Operating Segments Operating segments are defined as comp one nts of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company has determined it operates in a single operating segment, rare neurological diseases and, therefore, has one reportable segment. The Company holds all its tangible assets, conducts its operations, and generates its revenue in the United States. Fair Value of Financial Instruments The Company’s unaudited condensed consolidated financial statements include cash, cash equivalents, restricted cash, accounts payable, and accrued liabilities, all of which are short term in nature and, accordingly, approximate fair value. It is the Company’s policy to measure non-financial assets and liabilities at fair value on a nonrecurring basis. These non-financial assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (such as evidence of impairment), which, if material, are disclosed in the accompanying footnotes. The Company measures certain assets and liabilities at fair value based on the fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels based on the source of inputs as follows: Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities. Level 3—Valuations based on unobservable inputs and models that are supported by little or no market activity. Money market funds are classified as Level 1 fair value instruments. Investments in available-for-sale debt securities are classified as Level 2 and carried at fair value, which we estimate utilizing a third-party pricing service. The pricing service utilizes industry standard valuation models whereby all significant inputs, including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, bids, offers, or other market-related data, are observable. We validate valuations obtained from third-party services by obtaining market values from other pricing sources. The Company did not classify any assets or liabilities as Level 3 as of March 31, 2025, or December 31, 2024. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents and restricted cash consist of cash and, if applicable, highly liquid investments with an original maturity of three months or less when purchased, including investments in money 9 Table of Contents market funds and debt securities that approximate fair value. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet and the statements of cash flows. ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ March 31, December 31, ​ ​ 2025 ​ 2024 Cash and cash equivalents ​ $ 488,998 ​ $ 453,001 Restricted cash ​ 270 ​ 270 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows ​ $ 489,268 ​ $ 453,271 ​ Restricted cash includes amounts required to be held as a security deposit in the form of letters of credit for the Company’s credit card program and the fleet program. Investments The Company’s investments consist of debt securities that are classified as available-for-sale. Short-term and long-term investments are carried at fair value and unrealized gains and losses are recorded as a component of accumulated comprehensive income in stockholders’ equity. Interest income earned on cash and investment balances, accretion of the discount on investments in debt securities, amortization of premiums and realized gains and losses, if any, are recorded in interest income on the unaudited condensed consolidated statement of operations and comprehensive income. Realized gains and losses that result from the sale of investments are determined on a specific identification basis. At each reporting period, the Company reviews any unrealized losses position to determine if the decline in the fair value of the underlying investments is a result of credit losses or other factors. If the assessment indicates that a credit loss exists, any impairment is recognized as an allowance for credit losses in our consolidated statement of operations. Concentrations of Risk Substantially all of the Company’s cash and money market funds are held in five financial institutions. Due to their size, the Company believes these financial institutions represent minimal credit risk. Deposits may exceed the amount of insurance provided on such deposits by the Federal Deposit Insurance Corporation for U.S. institutions. The Company believes that it is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company is subject to credit risk from its trade receivables related to product sales. The Company extends credit to specialty pharmaceutical distribution companies within the United States. Customer creditworthiness is monitored, and collateral is not required. Historically, the Company has not experienced credit losses on its accounts receivable. The Company monitors its exposure within accounts receivable and would record a reserve for uncollectible amounts, if necessary. As of March 31, 2025, three customers accounted for 100 % of gross accounts receivable; Caremark LLC (“CVS Caremark”), which accounted for 40 % of gross accounts receivable; Accredo Health Group, Inc. (“Accredo”), which accounted for 32 % of gross accounts receivable; and PANTHERx Specialty Pharmacy LLC (“Pantherx”), which accounted for 28 % of gross accounts receivable. As of December 31, 2024, three customers accounted for 100 % of gross accounts receivable; CVS Caremark, which accounted for 39 % of gross accounts receivable, Pantherx, which accounted for 31 % of gross accounts receivable; and Accredo, which accounted for 30 % of gross accounts receivable. For the three months ended March 31, 2025, three customers accounted for 100 % of gross product revenue; CVS Caremark accounted for 40 % of gross product revenue; Accredo accounted for 35 % of gross product revenue; and Pantherx accounted for 25 % of gross product revenue. For the three months ended March 31, 2024, three customers accounted for 100 % of gross product revenue; CVS Caremark accounted for 10 Table of Contents 42 % of gross product revenue; Accredo accounted for 33 % of gross product revenue; and Pantherx accounted for 25 % of gross product revenue. The Company depends on a single supplier of the active pharmaceutical ingredient (“API”) for its commercial product, WAKIX, and single API suppliers for each of its potential product candidates. Share Repurchases The Company accounts for share repurchases as constructive retirements, whereby it reduces common stock and additional paid-in capital by the amount of the original issuance, with any excess purchase price recorded as a reduction to retained earnings. Under this method, issued and outstanding shares of common stock are reduced by the amount of shares of common stock repurchased, and no treasury stock is recognized on the condensed consolidated financial statements. ​ Business Combinations Business combinations and asset acquisitions are accounted for in accordance with FASB ASC 805 Business Combinations. Refer to Note 4, Acquisitions , for a more detailed discussion of the Company’s acquisition of Epygenix. ​ Recently Adopted Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 is intended to improve reportable segment disclosures primarily through enhanced disclosure of reportable segment expenses and requires that a public entity that has a single reportable segment provide all the disclosures required by ASU 2023-07 and all existing segment disclosures in Topic 280. This ASU was effective for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption was permitted. ASU 2023-07 was required to be applied retrospectively to all prior periods presented in the financial statements. The Company adopted this guidance in the fourth quarter of 2024. This pronouncement addresses disclosures only and had no impact on the Company’s consolidated financial statements. ​ Recently Issued Accounting Pronouncements ​ In December 2023, the FASB issued Accounting Standards Update (“ASU”) No 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 expands disclosures in the rate reconciliation and requires disclosure of income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that ASU 2023-09 will have on its condensed consolidated financial statements. ​ In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) . ASU 2024-03 requires disclosure, in the notes to the financial statements, of specified information about certain costs and expenses, including amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption, as well as a qualitative description of amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 also requires disclosure of the total amount of selling expenses and, in annual periods, an entity’s definition of selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The guidance may be applied prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact that ASU 2024-03 will have on the Company’s consolidated financial statements. ​ 11 Table of Contents 4. ACQUISITIONS Acquisition of Epygenix On April 30, 2024, the Company acquired all of the issued and outstanding capital stock of Epygenix pursuant to the terms of a stock purchase agreement. The Company paid the former stockholders of Epygenix up front consideration of $ 35,000 less a working capital adjustment. In addition, the Company will be obligated to pay up to $ 130,000 upon the achievement of development and regulatory milestones and up to $ 515,000 upon the achievement of certain sales-based milestones, in each case to Epygenix’s former stockholders. As a result, the Company now has an exclusive license relating to the use of clemizole, initially for the treatment of DS and LGS. The acquisition of Epygenix was accounted for as an asset acquisition under ASC Topic 805, Business Combinations. The Company did not acquire any outputs and there was not an acquired substantive process in place to create outputs. The Company recognized the acquired assets and assumed liabilities based on the consideration paid, including transaction costs, on a relative fair value basis, and after first allocating the preliminary excess of the fair value of net assets acquired over the purchase price consideration to certain qualifying assets, principally, the IPR&D asset. In accordance with the accounting for asset acquisitions, an entity that acquires IPR&D assets in an asset acquisition follows the guidance in ASC Topic 730, Research and Development, which requires that both tangible and intangible identifiable research and development assets with no alternative future use be allocated a portion of the consideration transferred and recorded as research and development expense at the acquisition date. As a result, the Company recorded a charge of $ 17,095 related to acquired in-process research and development expense during the year ended December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12 Table of Contents 5. INVESTMENTS ​ The carrying value and amortized cost of the Company’s available-for-sale debt securities, summarized by type of security, consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2025 ​ ​ Amortized ​ Unrealized ​ Unrealized ​ ​ Fair ​ ​ Cost ​ Gains ​ Losses ​ ​ Value Short-term: ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial paper $ 11,401 ​ 11 ​ — ​ $ 11,412 Corporate debt securities ​ 6,535 ​ 8 ​ — ​ ​ 6,543 Total short-term investments $ 17,936 ​ 19 ​ — ​ $ 17,955 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term: ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial paper $ 778 ​ 2 ​ — ​ $ 780 Corporate debt securities ​ 84,911 ​ 232 ​ ( 50 ) ​ ​ 85,093 U.S. government securities ​ 17,330 ​ 43 ​ ( 1 ) ​ ​ 17,372 Total long-term investments $ 103,019 ​ 277 ​ ( 51 ) ​ $ 103,245 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ Amortized ​ Unrealized ​ Unrealized ​ ​ Fair ​ ​ Cost ​ Gains ​ Losses ​ ​ Value Short-term: ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial paper $ 7,670 ​ 9 ​ ( 1 ) ​ $ 7,678 Corporate debt securities ​ 6,495 ​ 12 ​ — ​ ​ 6,507 Total short-term investments $ 14,165 ​ 21 ​ ( 1 ) ​ $ 14,185 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term: ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate debt securities ​ 86,700 ​ 192 ​ ( 142 ) ​ ​ 86,750 U.S. government securities ​ 22,128 ​ 11 ​ ( 15 ) ​ ​ 22,124 Total long-term investments $ 108,828 ​ 203 ​ ( 157 ) ​ $ 108,874 ​ ​ The Company classifies investments with an original maturity of less than one year as current and investments with an original maturity date of greater than one year as noncurrent in its unaudited condensed consolidated balance sheet. The investments classified as noncurrent have original maturity dates ranging from 1 - 2 years . The Company did not have any available-for-sale debt security investments in a continuous unrealized loss position of greater than 12 months as of March 31, 2025, and December 31, 2024, respectively. 6. FAIR VALUE MEASUREMENTS Money market funds are classified as Level 1 fair value instruments. Investments in available-for-sale debt securities are classified as Level 2 and carried at fair value, which we estimate utilizing a third-party pricing service. The pricing service utilizes industry standard valuation models whereby all significant inputs, including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, bids, offers, or other market-related data, are observable. We validate valuations obtained from third-party services by obtaining market values from other pricing sources. The Company did not classify any assets or liabilities as Level 3 as of March 31, 2025, or December 31, 2024. 13 Table of Contents The Company’s assets measured at fair value consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2025 ​ December 31, 2024 ​ ​ Total ​ Level 1 ​ Level 2 ​ ​ Total ​ Level 1 ​ Level 2 Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents $ 302,200 ​ 302,200 ​ — ​ $ 303,545 ​ 303,545 ​ — Commercial paper ​ 12,192 ​ — ​ 12,192 ​ ​ 7,678 ​ — ​ 7,678 Corporate debt securities ​ 91,636 ​ — ​ 91,636 ​ ​ 93,257 ​ — ​ 93,257 U.S. government securities ​ 17,372 ​ — ​ 17,372 ​ ​ 22,124 ​ — ​ 22,124 Total $ 423,400 ​ 302,200 ​ 121,200 ​ $ 426,604 ​ 303,545 ​ 123,059 ​ ​ 7. INVENTORY Inventory, net consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ March 31, December 31, ​ ​ 2025 ​ 2024 Raw materials ​ $ 912 ​ $ 944 Work in process ​ 3,411 ​ 3,489 Finished goods ​ 2,225 ​ 2,765 Inventory, gross ​ 6,548 ​ 7,198 Reserve for excess inventory ​ ( 164 ) ​ — Total inventory, net ​ $ 6,384 ​ $ 7,198 ​ ​ 8. INTANGIBLE ASSETS In August 2019, the Company received FDA approval of WAKIX for the treatment of EDS in adult patients with narcolepsy. This event triggered a milestone payment of $ 75,000 under the provisions of the 2017 LCA which the Company capitalized as an intangible asset. The Company determined a useful life of 10 years for the intangible asset, and, as of March 31, 2025, the remaining useful life was 4.5 years. In October 2020, the Company received FDA approval for the New Drug Application (“NDA”) for WAKIX for the treatment of cataplexy in adult patients with narcolepsy. This event triggered a milestone payment of $ 100,000 under the provisions of the 2017 LCA which the Company capitalized as an intangible asset and paid in January of 2021. The Company determined a useful life of 9 years for the intangible asset, and, as of March 31, 2025, the remaining useful life was 4.5 years. In February 2022, the Company attained $ 500,000 in life-to-date aggregate net sales of WAKIX in the United States. This event triggered a final $ 40,000 payment under the provisions of the 2017 LCA which the Company capitalized as an intangible asset and paid in March of 2022. The Company determined a useful life of 7.6 years for the intangible asset, and, as of March 31, 2025, the remaining useful life was 4.5 years. Amortization expense was $ 5,961 for each of the three months ended March 31, 2025, and 2024, respectively, and is recorded in general and administrative on the unaudited condensed consolidated statements of operations and comprehensive income. 14 Table of Contents The Company expects the future annual amortization expense for the unamortized intangible assets to be as follows: ​ ​ ​ ​ ​ Years ending December 31, ​ ​ 2025 (excluding the three months ended March 31, 2025) ​ $ 17,884 2026 ​ 23,845 2027 ​ 23,845 2028 ​ 23,845 2029 ​ 17,883 Thereafter ​ ​ — Total ​ $ 107,302 ​ ​ The gross carrying amount and net book value of the intangible asset was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ March 31, December 31, ​ ​ 2025 ​ 2024 Gross Carrying Amount ​ $ 215,000 ​ $ 215,000 Accumulated Amortization ​ ( 107,698 ) ​ ( 101,737 ) Net Book Value ​ $ 107,302 ​ $ 113,263 ​ ​ 9. LICENSE AGREEMENTS AND ASSET PURCHASE AGREEMENTS Bioprojet Agreements In July 2017, Harmony entered into the 2017 LCA with Bioprojet whereby Harmony acquired the exclusive right to commercialize the pharmaceutical compound pitolisant for the treatment, and/or prevention, of narcolepsy, obstructive sleep apnea, idiopathic hypersomnia, and Parkinson’s disease, as well as any other indications unanimously agreed by the parties in the United States and its territories. A milestone payment of $ 50,000 was due upon acceptance by the FDA of pitolisant’s NDA, which was achieved in February 2019 and was expensed within research and development for the year ended December 31, 2019. A milestone payment of $ 77,000 , which included a $ 2,000 fee that is described below, was due upon FDA approval of WAKIX (pitolisant) for treatment of EDS in adult patients with narcolepsy, which was achieved in August 2019. The $ 2,000 payment and $ 75,000 milestone payment were paid in August and November 2019, respectively. In addition, a milestone payment of $ 102,000 , which included a $ 2,000 fee was due upon the FDA approval of the NDA for WAKIX for the treatment of cataplexy in adult patients with narcolepsy. The $ 2,000 payment was paid in October 2020 and a $ 100,000 milestone payment was paid in January 2021. A final $ 40,000 milestone payment was paid to Bioprojet in March 2022 upon WAKIX attaining $ 500,000 in aggregate net sales in the United States. The 2017 LCA also requires a fixed trademark royalty and a tiered royalty based on net sales, which is payable to Bioprojet on a quarterly basis. The Company incurred $ 29,557 and $ 24,738 for the three months ended March 31, 2025, and 2024, respectively, for sales-based, trademark and tiered royalties recognized as cost of product sold. As of March 31, 2025, and December 31, 2024, the Company had accrued $ 29,557 and $ 51,746 , respectively, for sales-based, trademark and tiered royalties. In July 2022, Harmony entered into the 2022 LCA with Bioprojet whereby Harmony 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 agreement of both parties. Harmony paid an initial, non-refundable $ 30,000 licensing fee in October 2022 and additional payments of up to $ 155,000 are potentially due under the 2022 LCA upon the achievement of certain future development and sales-based milestones. In addition, there are other payments due upon achievement of development milestones for new indications and formulations as agreed upon by both parties. The 2022 LCA also requires a fixed trademark royalty and a tiered royalty based on net sales upon commercialization, which will be payable to Bioprojet on a quarterly basis. 15 Table of Contents In April 2024, the Company announced that it entered into a sublicense agreement with Bioprojet for an orexin-2 receptor agonist (the “Licensed Compound”) to be evaluated for the treatment of narcolepsy and other potential indications (the “Sublicense”). Under the Sublicense, the Company obtained the exclusive right to develop, manufacture and commercialize the Licensed Compound in the United States and Latin American territories (the “Licensed Territories”), which are rights that Bioprojet originally licensed from Teijin Pharma, the innovator of the Licensed Compound. The Licensed Compound is currently in pre-clinical development with an Investigational Medicinal Product Dossier (“IMPD”) Application currently anticipated in mid-2025. Under the Sublicense, the Company paid Bioprojet an upfront license fee of $ 25,500 , which the Company recognized as an IPR&D charge recorded in research and development within the consolidated statements of operations and comprehensive income for the year ended December 31, 2024, and will also be obligated to pay up to $ 127,500 upon achievement of development and regulatory milestones and up to $ 240,000 upon achievement of sales-based milestones, as well as royalty rates in the mid-teens on any sales of product using the Licensed Compound in the Licensed Territories. ConSynance Agreement In August 2021, the Company entered into an asset purchase agreement with ConSynance Therapeutics, Inc. (the “APA”) to acquire HBS-102 (formerly referred to as “CSTI-100”), a potential first-in-class molecule with a novel mechanism of action. Under the terms of the APA, the Company acquired full development and commercialization rights globally, with the exception of Greater China, for $ 3,500 . The Company accounted for the transaction as an asset acquisition as substantially all of the fair value of the assets acquired was concentrated in a single identified asset. In March 2023, the Company achieved a preclinical milestone, which triggered a $ 750 payment under the provisions of the APA, which the Company recognized as an IPR&D charge recorded in research and development within the consolidated statement of operations and comprehensive income for the year ended December 31, 2023. In September 2024, the Company achieved a milestone for preclinical proof-of-concept, which triggered a $ 1,000 payment under the provisions of the APA, which the Company recognized as an IPR&D charge recorded in research and development within the consolidated statement of operations and comprehensive income for the year ended December 31, 2024. There are additional payments due under the APA upon the achievement of certain milestones including $ 19,000 for development milestones, $ 44,000 for regulatory milestones and $ 110,000 for sales milestones. 10. ACCRUED EXPENSES Accrued expenses consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ March 31, December 31, ​ ​ 2025 ​ 2024 Royalties due to Bioprojet ​ $ 29,557 ​ $ 51,746 Rebates and other sales deductions ​ 58,303 ​ 50,542 Interest ​ ​ 2,308 ​ ​ 2,834 Sales and marketing ​ 4,276 ​ 2,166 Research and development ​ 8,943 ​ 9,014 Professional fees, consulting, and other services ​ 7,619 ​ 3,047 Other expenses ​ 1,695 ​ 1,291 ​ ​ $ 112,701 ​ $ 120,640 ​ ​ ​ 11. DEBT Term Loan A Credit Agreement In July 2023, the Company entered into a Credit Agreement (the “TLA Credit Agreement”) with JPMorgan Chase Bank, N.A., as “Administrative Agent”, and certain lenders, which was subsequently amended 16 Table of Contents in September 2023. The TLA Credit Agreement, as amended, provides for a five-year senior secured term loan (the “TLA Term Loan”) in an aggregate principal amount of $ 200,000 . The repayment schedule for the TLA Term Loan consists of quarterly $ 3,750 principal payments, which commenced on December 31, 2023, increasing to quarterly $ 5,000 principal payments beginning on December 31, 2025, with a $ 115,000 payment due on the maturity date of July 26, 2028. The TLA Term Loan bears interest at a per annum rate equal to, at the Company’s option, (i) a base rate plus a specified margin ranging from 2.50 % to 3.00 %, based on the Company’s senior secured net leverage ratio (as defined in the TLA Credit Agreement) or (ii) Term SOFR plus a credit spread adjustment of 0.10 % plus a specified margin ranging from 3.50 % to 4.00 %, based on the Company’s senior secured net leverage ratio. The net cash received related to the TLA Term Loan as a result of the transactions, less debt issuance costs of $ 2,997 , was $ 197,003 . The debt issuance costs related to the TLA Term Loan will be amortized as additional interest expense over the loan term of the TLA Credit Agreement. The fair value of the TLA Term Loan as of March 31, 2025, was $ 174,593 . Long-term debt, net consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ ​ 2025 ​ 2024 Principal amount ​ $ 177,500 ​ $ 181,250 Unamortized debt discount associated with debt financing costs ​ ( 1,818 ) ​ ( 1,984 ) Total debt, net ​ ​ 175,682 ​ ​ 179,266 Less current portion ​ ​ ( 17,500 ) ​ ​ ( 16,250 ) Long-term debt, net ​ $ 158,182 ​ $ 163,016 ​ Future minimum payments relating to long-term debt, net as of March 31, 2025, for the periods indicated below consisted of the following: ​ ​ ​ ​ ​ Years ending December 31, ​ ​ ​ 2025 (excluding the three months ended March 31, 2025) ​ $ 12,500 2026 ​ 20,000 2027 ​ 20,000 2028 ​ 125,000 2029 ​ — Thereafter ​ — Total ​ $ 177,500 ​ Interest expense related to the Company’s long-term debt, net, is included in interest expense within the unaudited condensed consolidated statements of operations and comprehensive income and consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ ​ ​ 2025 2024 ​ Interest on principal balance ​ $ 3,670 ​ $ 4,355 ​ Amortization of deferred financing costs ​ 166 ​ 180 ​ Total term loan interest expense ​ $ 3,836 ​ $ 4,535 ​ ​ ​ ​ ​ ​ ​ 12. LEASES In June 2018, the Company entered into an operating lease for approximately fifteen thousand square feet of office space in Plymouth Meeting, PA, which was set to expire in May 2024. The Company subsequently entered into two separate operating leases for additional office space in Plymouth Meeting, PA, which include 17 Table of Contents approximately thirteen thousand square feet and seven thousand square feet of additional office space, respectively, and were extended through June 2025. The terms of the lease payments provide for rental payments on a monthly basis and on a graduated scale. The Company also leases a fleet of automobiles that are primarily used by its sales force and are classified as operating leases. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future lease payments using our incremental borrowing rate. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Our leases have remaining lease terms of less than 1 year to 3 years , some of which may include the option to extend or terminate the leases. The Company recorded operating lease costs of $ 467 and $ 509 for the three months ended March 31, 2025, and 2024, respectively. As of March 31, 2025, the weighted-average remaining lease term for operating leases was 1.6 years and the weighted-average discount rate for operating leases was 7.72 %. Supplemental balance sheet information related to operating leases was as follows: ​ ​ ​ ​ ​ ​ ​ Leases Classification ​ March 31, 2025 ​ December 31, 2024 Assets ​ ​ ​ ​ ​ ​ Operating lease right-of-use assets Other noncurrent assets $ 1,726 ​ $ 2,122 Liabilities ​ ​ ​ ​ ​ ​ Operating lease liability, current portion Other current liabilities $ 1,148 ​ $ 1,318 Operating lease liability, long-term Other long-term liabilities ​ 634 ​ ​ 822 Total operating lease liabilities ​ $ 1,782 ​ $ 2,140 ​ Supplemental cash flow information related to operating leases was as follows: ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2025 ​ ​ March 31, 2024 Operating cash flows from operating leases $ 430 ​ $ 561 Right of use assets obtained in exchange for operating lease obligations $ 34 ​ $ 1,198 ​ Future payments under non-cancelable operating leases with initial terms of one year or more as of March 31, 2025, consisted of the following: ​ ​ ​ ​ Years ending December 31, ​ ​ 2025 (excluding the three months ended March 31, 2025) ​ $ 1,003 2026 ​ 701 2027 ​ 183 2028 ​ — 2029 ​ — Thereafter ​ — Total lease payments ​ ​ 1,887 Less: imputed interest ​ ​ ( 105 ) Total lease liabilities ​ $ 1,782 ​ ​ ​ 18 Table of Contents 13. COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company is subject to claims and suits arising in the ordinary course of business. The Company accrues such liabilities when they are known, if they are deemed probable and can be reasonably estimated. Accruals may be adjusted from time to time, as appropriate, in light of new information. The amount of loss incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued. Any expenses, fines, fees, penalties, judgments or settlements that might be incurred by the Company in connection with proceedings could have a material adverse effect on the Company’s results of operations and financial condition. As of March 31, 2025, there were no material claims or lawsuits outstanding other than the ANDA litigation discussed below . Abbreviated New Drug Application (“ANDA”) Litigation ​ On September 27, 2023, the Company and its licensor, Bioprojet, received notice from Lupin Limited (“Lupin”) pursuant to 21 U.S.C. § 355(j) et seq. and 21 C.F.R. § 314.95 et seq. (the “Lupin Notice Letter”) that Lupin has submitted ANDA No. 218846 (the “Lupin ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of U.S. Patent Nos. 8,486,947 (“’947 patent”) and 8,207,197 (“’197 patent”). On September 27, 2023, the Company and Bioprojet received notice from Novugen Pharma Sdn. Bhd. (“Novugen”) pursuant to 21 U.S.C. § 355(j) et seq. and 21 C.F.R. § 314.95 et seq. (the “Novugen Notice Letter”) that Novugen has submitted ANDA No. 218834 (the “Novugen ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ’947 patent and ’197 patent. The ’947 patent and the ‘197 patent are listed with respect to WAKIX ® in the FDA’s Orange Book and will expire in September 2029 and March 2030, respectively. The Lupin Notice Letter and the Novugen Notice Letter assert that their generic product will not infringe the ’947 patent and the ‘197 patent and/or that the ’947 patent and the ‘197 patent are invalid or unenforceable. On November 9, 2023, we, Bioprojet and Bioprojet’s wholly owned subsidiary, Bioprojet Pharma SAS (“Bioprojet Pharma”), filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against Lupin, Novugen and certain of their affiliates and agents in the United States District Court for the District of Delaware in response to the filing of their respective ANDAs with the FDA. ​ On October 12, 2023, the Company and Bioprojet received notice from Novitium Pharma LLC (“Novitium”), pursuant to 21 U.S.C. § 355(j) et seq. and 21 C.F.R. § 314.95 et seq. (the “Novitium Notice Letter”), that Novitium has submitted ANDA No. 218495 (the “Novitium ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of U.S. Patent No. 8,354,430 (the “’430 patent”), which is also listed with respect to WAKIX ® in the FDA’s Orange Book and will expire in February 2026, ’947 patent, and ’197 patent. On October 12, 2023, the Company and Bioprojet received notice from Zenara Pharma Pvt. Ltd. (“Zenara”), pursuant to 21 U.S.C. § 355(j) et seq. and 21 C.F.R. § 314.95 et seq. (the “Zenara Notice Letter”), that Zenara has submitted ANDA No. 218796 (the “Zenara ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ’430 patent, ’947 patent and the ’197 patent. On October 14, 2023, the Company and Bioprojet received notice from AET Pharma US, Inc. (“AET”), pursuant to 21 U.S.C. § 355(j) et seq. and 21 C.F.R. § 314.95 et seq. (the “AET Notice Letter”), that AET has submitted ANDA No. 218892 (the “AET ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ’947 patent and the ’197 patent. On October 16, 2023, the Company and Bioprojet received notice from Annora Pharma Private Limited (“Annora”), pursuant to 21 U.S.C. § 355(j) et seq. and 21 C.F.R. § 314.95 et seq. (the “Annora Notice Letter”), that Annora has submitted ANDA No. 218832 (the “Annora ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ’430 patent, the ’947 patent and the ’197 patent. AET’s Notice Letter asserts that AET’s generic product will not infringe the ’947 patent and the ‘197 patent and/or that ’947 patent and the ‘197 patent are invalid or unenforceable. The Annora Notice Letter asserts that its generic product will not infringe the ‘430 patent, ’947 patent and the ‘197 patent and/or that the ‘430 patent, ’947 patent and the ‘197 patent are invalid or unenforceable. The Novitium Notice Letter asserts that its generic product will not infringe the ‘430 patent, ’947 patent and the ‘197 patent and/or that the ‘430 patent, ’947 patent and the ‘197 patent are invalid or unenforceable. The Zenara Notice Letter asserts that its 19 Table of Contents generic product will not infringe the ‘430 patent, ’947 patent and the ‘197 patent and/or that the ‘430 patent, ’947 patent and the ‘197 patent are invalid or unenforceable. On November 21, 2023, the Company, Bioprojet and Bioprojet Pharma filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against AET, Annora, Novitium and Zenara and certain of their affiliates and agents and for patent infringement of the ’430 patent against Annora, Novitium and Zenara and certain of their affiliates and agents in the United States District Court for the District of Delaware in response to their filing of their respective ANDAs with the FDA. ​ In October 2023, MSN Pharmaceuticals Inc. (“MSN Pharma”) sent correspondence to the Company and Bioprojet stating that MSN Pharma has submitted ANDA No. 218873 (the “MSN ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® . On December 8, 2023, MSN Laboratories Private Limited (“MSN”) filed a declaratory judgment action in the United States District Court for the Eastern District of Virginia against Bioprojet claiming that the ‘430 patent, the ’947 patent and the ‘197 patent will not be infringed by MSN’s generic version of WAKIX ® and that the ‘947 patent is invalid. On December 11, 2023, we, Bioprojet and Bioprojet Pharma filed a complaint in the United States District Court for the District of Delaware for patent infringement of the ‘430 patent, the ’947 patent and the ‘197 patent against MSN and MSN Pharma. On January 12, 2024, the declaratory judgment action was transferred from the United States District Court for the Eastern District of Virginia to the United States District Court for the District of Delaware. On April 15, 2024, the United States District Court for the District of Delaware issued a scheduling order consolidating the cases described above for all purposes up to and including trial (the “Scheduling Order”). The Scheduling Order set March 27, 2025, as the date for the hearing on claim construction and scheduled a four-day bench trial beginning on February 17, 2026. On August 7, 2024, the Company and Bioprojet received further notice from AET pursuant to 21 U.S.C. § 355(j) et seq. and 21 C.F.R. § 314.95 et seq . (the “Second AET Notice Letter”) that AET has submitted the AET ANDA to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ‘947 patent and the ‘197 patent. The Second AET Notice Letter asserts that its generic product will not infringe the ’947 patent and the ‘197 patent and/or that the ’947 patent and the ‘197 patent are invalid or unenforceable. On August 13, 2024, we, Bioprojet and Bioprojet Pharma filed a complaint in the United States District Court for the District of Delaware for patent infringement of the ’947 patent and the ‘197 patent against AET. ​ On October 31, 2024, the Company reached an agreement with Novugen Pharma to resolve the dispute over Novugen’s ANDA for a generic pitolisant hydrochloride product. Under the terms of the settlement agreement, the litigation between the parties in the United States District Court for the District of Delaware was ended on November 4, 2024, and Novugen will have a license to sell its generic product beginning January 2030, or earlier under certain circumstances. ​ On December 12, 2024, the Company and Bioprojet received further notice from Lupin pursuant to 21 U.S.C. § 355(j) et seq. and 21 C.F.R. § 314.95 et seq . (the “Second Lupin Notice Letter”) that Lupin has submitted the Lupin ANDA to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ‘947 patent and the ‘197 patent. The Second Lupin Notice Letter asserts that its generic product will not infringe the ’947 patent and the ‘197 patent and/or that the ’947 patent and the ‘197 patent are invalid or unenforceable. On January 24, 2025, we, Bioprojet and Bioprojet Pharma filed a complaint in the United States District Court for the District of Delaware for patent infringement of the ’947 patent and the ‘197 patent against Lupin. On March 24, 2025, the Company reached an agreement with Annora to resolve the dispute over Annora’s ANDA for a generic pitolisant hydrochloride product. Under the terms of the settlement agreement, the litigation between the parties in the United States District Court for the District of Delaware was ended on March 31, 2025, and Annora will have a license to sell its generic product beginning January 2030, or earlier under certain circumstances. ​ 20 Table of Contents The resolution of one or more of these matters against the Company could have a significant negative effect on the Company’s results of operations. ​ 14. STOCKHOLDERS’ EQUITY Common Stock The holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of the Company’s stockholders. The holders of common stock do not have any cumulative voting rights. Holders of common stock are entitled to receive any dividends declared by the Company’s board of directors out of funds legally available for that purpose, subject to any preferential dividend rights of any outstanding preferred stock. The Company’s common stock has no preemptive rights, conversion rights or other subscription rights or redemption or sinking fund provisions. Share Repurchase Program In October 2023, the Company’s Board of Directors approved a share repurchase program (the “October 2023 Repurchase Program”) providing for the repurchase of shares of common stock in an aggregate amount of up to $ 200,000 , excluding commissions and transaction fees. The October 2023 Repurchase Program may be suspended, terminated, or modified at any time for any reason. During the three months ended March 31, 2025, and 2024, no shares of common stock were repurchased and cancelled by the Company under the October 2023 Repurchase Program. As of March 31, 2025, the remaining amount of common stock authorized for repurchases was $ 150,000 . 15. STOCK INCENTIVE PLAN AND STOCK-BASED COMPENSATION 2020 Stock Incentive Plan In August 2020, the Company adopted, and its stockholders approved, the 2020 Incentive Award Plan (the “2020 Plan”), in order to facilitate the grant of cash and equity incentives to directors, employees (including the Company’s named executive officers) and consultants of the Company and its subsidiaries. The 2020 Plan provides for the grant of stock options, including incentive stock options (“ISOs”) and non-qualified stock options (“NSOs”), SARs, restricted stock, dividend equivalents, restricted stock units (“RSUs”) and other stock or cash-based awards. Stock options and stock appreciation rights under the 2020 Plan have a 10 -year contractual term and vest over the vesting period specified in the applicable award agreement, at achievement of a performance requirement, or upon change of control (as defined in the applicable plan). RSUs vest over the vesting period specified in the applicable award agreement, at achievement of a performance requirement, or upon change of control (as defined in the applicable plan). As of March 31, 2025, there were 8,777,657 shares of common stock available for issuance under the 2020 Plan. The number of shares that may be issued under the 2020 Plan automatically increases on January 1 of each year in an amount equal to the lesser of (i) 4.0 % of the shares of the Company’s common stock outstanding on December 31 of the preceding year or (ii) an amount determined by the Company’s board of directors. 2017 Stock Incentive Plan In August 2017, the Company adopted an equity incentive plan (the “2017 Plan”). Under the 2017 Plan, directors, officers, employees, consultants, and advisors of the Company can be paid incentive compensation measured by the value of the Company’s shares of common stock through grants of stock options, stock appreciation rights (“SARs”), or restricted stock. Following the adoption of the 2020 Plan, no further grants have been, or will be, made under the 2017 Plan. However, the 2017 Plan will continue to govern the terms and conditions of outstanding awards granted under it. 21 Table of Contents Stock Options The following table summarizes stock option activity for the three months ended March 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ Weighted- ​ ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ ​ Remaining ​ ​ Aggregate ​ ​ Number of ​ Exercise ​ ​ Contractual ​ ​ Intrinsic ​ Awards Price ​ Term ​ Value ($000's) Awards outstanding—December 31, 2024 7,157,235 ​ $ 32.48 ​ ​ 6.72 ​ ​ ​ Awards issued 1,037,900 ​ $ 37.96 ​ ​ ​ ​ ​ Awards exercised ( 184,681 ) ​ $ 25.48 ​ ​ ​ ​ ​ Awards forfeited ( 30,835 ) ​ $ 31.75 ​ ​ ​ ​ ​ Awards outstanding—March 31, 2025 7,979,619 ​ $ 33.36 ​ ​ 6.90 ​ $ 36,928 Awards exercisable—March 31, 2025 ​ 4,670,534 ​ $ 32.15 ​ ​ 5.84 ​ $ 29,531 Awards unvested—March 31, 2025 ​ 3,309,085 ​ $ 35.06 ​ ​ 8.39 ​ $ 7,397 ​ The weighted-average grant-date fair value of stock options granted during the three months ended March 31, 2025, was $ 25.50 . The total intrinsic value of stock options exercised for the three months ended March 31, 2025, was $ 2,157 . Stock Appreciation Rights The following table summarizes SARs activity for the three months ended March 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ Weighted- ​ ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ ​ Remaining ​ ​ Aggregate ​ ​ Number of ​ Exercise ​ ​ Contractual ​ ​ Intrinsic ​ Awards Price ​ Term ​ Value ($000's) Awards outstanding—December 31, 2024 43,208 ​ $ 9.38 ​ ​ 4.32 ​ ​ ​ Awards issued — ​ $ — ​ ​ ​ ​ ​ Awards exercised — ​ $ — ​ ​ ​ ​ ​ Awards forfeited — ​ $ — ​ ​ ​ ​ Awards outstanding—March 31, 2025 43,208 ​ $ 9.38 ​ ​ 4.08 ​ $ 681 Awards exercisable—March 31, 2025 ​ 41,382 ​ $ 9.19 ​ ​ 4.02 ​ $ 665 ​ Restricted Stock Units The following table summarizes RSU activity for the three months ended March 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ ​ Number of ​ Grant Date ​ Awards Fair Value Awards outstanding—December 31, 2024 638,900 ​ $ 30.90 Awards issued 428,650 ​ $ 38.25 Awards vested ( 121,521 ) ​ $ 30.46 Awards forfeited ( 1,777 ) ​ $ 30.69 Awards outstanding—March 31, 2025 944,252 ​ $ 34.24 ​ ​ 22 Table of Contents Value of RSUs The fair value of RSUs is equal to the value of the Company’s common stock on the grant date. The weighted-average per share fair value of awards issued under the 2020 Plan during the three months ended March 31, 2025, and 2024 was $ 38.25 and $ 30.69 , respectively. Value of Stock Options and SARs The Company values options and SARs using the Black-Scholes option-pricing model. The Company lacks sufficient historical company-specific volatility information. Therefore, the Company estimates expected stock volatility based on historical volatility of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. For options with service-based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. For SARs, the expected term is based upon the weighting of certain future events. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for the time periods approximately equal to the expected term of the award. An expected dividend yield of 0 % is based on the fact that the Company has never paid cash dividends and does not expect to do so in the foreseeable future. The assumptions used to value the awards are summarized in the following table. ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ March 31, 2025 December 31, 2024 ​ Dividend yield 0.00 % 0.00 % Expected volatility 70.01 - 71.43 % 69.84 - 72.98 % Risk-free interest rate 3.96 - 4.44 % 3.51 - 4.65 % Lack of marketability discount 0.00 % 0.00 % Expected term (years) 1.70 - 6.11 1.81 - 6.11 ​ ​ Stock-Based Compensation Expense Stock-based compensation expense for the three months ended March 31, 2025, and 2024, was recorded in the unaudited condensed consolidated statements of operations and comprehensive income in the following line items: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 2024 Research and development expense ​ $ 2,302 ​ $ 1,371 ​ Sales and marketing expense ​ 2,744 ​ 1,994 ​ General and administrative expense ​ 7,404 ​ 7,069 ​ ​ ​ $ 12,450 ​ $ 10,434 ​ ​ ​ Stock-based compensation expense related to options and RSUs issued under the 2017 Plan and 2020 Plan is included in stockholder’s equity, and a liability for SARs is included in other non-current liabilities, in the Company’s unaudited condensed consolidated balance sheet. As of March 31, 2025, the total unrecognized stock-based compensation expense was $ 66,056 and $ 29,617 for stock options and RSUs, 23 Table of Contents respectively. These amounts will be recognized in the Company’s consolidated statement of operations over a weighted average period of 2.69 years and 3.17 years for stock options and RSUs, respectively. ​ Employee Stock Purchase Plan The 2020 Employee Stock Purchase Plan (“ESPP”) was adopted by the Company’s Board of Directors on April 30, 2021. The ESPP permits eligible employees to purchase shares of the Company’s common stock at a 15 % discount from the lesser of the fair market value per share of the Company’s common stock on the first day of the offering period or the fair market value of the Company’s common stock on the purchase date. Funds are collected from employees through after-tax payroll deductions. The total number of shares reserved for issuance under the ESPP was initially 629,805 , which automatically increases on January 1 of each year in an amount equal to the lesser of (i) 1.0 % of the shares of the Company’s common stock outstanding on December 31 of the preceding year or (ii) an amount determined by the Company’s board of directors. It is intended that the ESPP meet the requirements for an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. There were no shares issued under the ESPP for the three months ended March 31, 2025, and 2024, respectively. The discount on the ESPP was $ 60 and $ 80 for the three months ended March 31, 2025, and 2024, respectively, and is recorded within stock-based compensation expense. ​ 16. SEGMENT INFORMATION The Company has one reportable segment: rare neurological diseases. The rare neurological diseases segment consists of the Company’s commercial product, WAKIX, and its potential product candidates, that focus on patients living with rare neurological diseases who have unmet needs. The Company currently derives all of its revenue from sales of WAKIX, which is used in the treatment of EDS and cataplexy in adult patients with narcolepsy and the treatment of EDS in pediatric patients six years and older with narcolepsy and manages its business activities on a consolidated basis. The accounting policies of the rare neurological diseases segment are consistent with those described in Note 3, Summary of Significant Accounting Policies , and the measure of segment assets is reported on the consolidated balance sheets as total assets. The Company’s CODM is the chief executive officer. The CODM assesses performance of the rare neurological diseases segment using net income as reported in the consolidated statements of operations and comprehensive income. Net income is assessed by the CODM to make decisions on how to allocate resources, such as reinvesting profits into the rare neurological diseases segment or pursuing potential investing activities. ​ ​ ​ ​ ​ ​ ​ ​ ​ 24 Table of Contents The following table summarizes segment revenue and significant segment expenses for the three months ended March 31, 2025, and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rare Neurological Diseases Segment ​ ​ Three Months Ended March 31, ​ 2025 ​ 2024 Net product revenue $ 184,733 ​ $ 154,615 Less: ​ ​ ​ ​ ​ ​ Cost of product sold (excluding depreciation) ​ ​ 31,987 ​ ​ 27,477 Research and development (excluding stock compensation) ​ ​ 32,238 ​ ​ 20,818 Sales and marketing (excluding stock compensation) ​ ​ 27,967 ​ ​ 25,239 General and administrative (excluding stock compensation and amortization) ​ ​ 17,878 ​ ​ 12,490 Depreciation and amortization ​ ​ 5,968 ​ ​ 6,124 Stock-based compensation ​ ​ 12,450 ​ ​ 10,434 Interest expense ​ ​ 3,836 ​ ​ 4,535 Interest income ​ ​ ( 5,044 ) ​ ​ ( 4,428 ) Income tax expense (benefit) ​ ​ 11,617 ​ ​ 13,451 Other segment items (a) 276 ​ 141 Consolidated net income $ 45,560 ​ $ 38,334 ​ ​ (a) Other segment items includes other expense, net. ​ ​ 17. EARNINGS PER SHARE Basic earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted net income per share of common is computed under the treasury stock method by using the weighted average number of shares of common stock outstanding, plus, for periods with net income, the potential dilutive effects of stock options, stock appreciation rights and restricted stock units. The following table sets forth the computation of basic and diluted net income per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ 2025 2024 Numerator ​ ​ ​ Net income ​ $ 45,560 ​ $ 38,334 ​ Denominator ​ ​ ​ Net income per share of common stock - basic ​ $ 0.79 ​ $ 0.68 ​ Net income per share of common stock- diluted ​ $ 0.78 ​ $ 0.67 ​ Weighted average number of shares of common stock - basic ​ 57,309,938 ​ 56,771,251 ​ Weighted average number of shares of common stock - diluted ​ 58,524,566 ​ 57,597,627 ​ ​ Securities outstanding and included in the computation above, utilizing the treasury stock method are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 2024 Stock options, SARs, and RSUs to purchase common stock ​ ​ 1,214,628 ​ ​ 826,376 ​ 25 Table of Contents ​ ​ Potential shares of common stock that were excluded from the computation of diluted weighted-average shares outstanding excluded from the numerator, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ 2025 2024 Stock options, SARs, and RSUs to purchase common stock ​ 7,752,451 ​ 7,281,505 ​ ​ ​ 18. INCOME TAXES A reconciliation between the statutory federal income tax rate and the Company’s effective income tax rate for the three months ended March 31, 2025, and 2024 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 2024 ​ Federal income tax rate ​ 21.0 % 21.0 % Stock-based compensation ​ 0.4 ​ — ​ State taxes ​ 1.1 ​ 5.1 ​ Credits ​ ( 2.4 ) ​ ( 1.0 ) ​ Valuation allowance ​ — ​ 0.5 ​ Other ​ 0.2 ​ 0.4 ​ Total ​ 20.3 % 26.0 % ​ ​ 19. RELATED-PARTY TRANSACTIONS The Company is a party to a right of use agreement with Paragon Biosciences, LLC (“Paragon”) whereby it has access to and the right to use certain office space leased by Paragon in Chicago, IL. Paragon is an entity that shares common ownership with the Company. In addition, the Chairman of the Company’s board of directors is the Founder, Chairman and CEO of Paragon. The Company incurred $ 73 for each of the three months ended March 31, 2025, and 2024, in expenses to Paragon, which are included in general and administrative in the unaudited condensed consolidated statements of operations and comprehensive loss. As of March 31, 2025, and December 31, 2024, there were no amounts due to or due from related parties included in the unaudited condensed consolidated balance sheets. ​