UBS has taken a bullish stance on Harmony Biosciences Holdings Inc (HRMY), a commercial-stage biopharmaceutical company specializing in rare neurological disorders. The investment bank initiated coverage with a Buy rating and set a price target of $56, highlighting the company’s strong growth prospects.
Harmony’s flagship drug, Wakix (pitolisant), is approved for treating excessive daytime sleepiness or cataplexy in adults with narcolepsy. Wakix continues to demonstrate strong momentum, generating $172.8 million in net revenue during the second quarter of 2024, a 29% year-over-year increase. The number of patients using Wakix also saw a significant boost, rising by approximately 250 sequentially to reach about 6,550 for the quarter ending June 30, 2024.
UBS believes that Wakix has a solid runway for continued growth. The analyst projects a 19% sales CAGR (compound annual growth rate) between 2024 and 2026, outpacing the consensus forecast of 16%. They envision Wakix reaching $1.2 billion in peak sales, fueled by increased awareness and diagnosis of narcolepsy.
The UBS analyst further emphasizes that Wakix holds a unique position in the polypharmacy market due to its differentiated profile compared to other approved drugs. This, combined with Harmony’s recent business development deals, offers valuable diversification opportunities through the company’s pipeline assets.
In April, Harmony acquired Epygenix Therapeutics, adding a rare epilepsy franchise to its growing late-stage pipeline of central nervous system (CNS) assets. This acquisition cost $35 million in cash with the potential for up to $130 million in milestone payments based on development and regulatory progress.
UBS holds a positive outlook on Zygel, a drug in Harmony’s pipeline, which is currently undergoing a Phase 3 trial for fragile X syndrome. The firm anticipates positive data based on the prior fragile X syndrome trial results and the design of the current study. Data readout is expected in mid-2025.
HRMY stock closed at $37.46 on Tuesday, up 1.55% following the UBS initiation.
This information is for informational purposes only and should not be considered investment advice.
