Good morning. My name is Todd, and I will be your conference operator today. At this time, I would like to welcome everyone to Harmony Biosciences Third Quarter 2024 Financial Results Conference Call. All participants have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session [Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions] I will now turn the call over to Brennan Doyle, Head of Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us today as we review Harmony Biosciences third quarter 2024 financial results and provide a business update. Before we start, I encourage everyone to go to the Investors section of our website to find the materials that accompany our discussion today, including a reconciliation of our GAAP to non-GAAP financial measures. At this stage of our life cycle, we believe non-GAAP financial results better represent the underlying business performance. Our speakers on today's call are Dr. Jeffrey Dayno, President and CEO; Jeffrey Dierks, Chief Commercial Officer; Dr. Kumar Budur, Chief Medical and Scientific Officer; and Sandip Kapadia, Chief Financial Officer and Chief Administrative Officer. As a reminder, we will be making forward-looking statements today, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties. Our actual results may differ materially, and we undertake no obligation to update these statements even if circumstances change. We encourage you to consult the risk factors referenced in our SEC filings for additional details. I would now like to turn the call over to Dr. Jeffrey Dayno. Jeff?

Thank you, Brennan, and thanks, everyone, for joining our conference call today. Q3 was another quarter of strong momentum for the team at Harmony, driving significant revenue growth for WAKIX and advancing our late-stage clinical development programs. At our successful Investor Day event earlier this month, we were excited to share new data and outlined a clear path toward becoming the leading CNS company focused on developing and delivering innovative treatments to patients with unmet medical needs. As we shared during that presentation, our robust late-stage pipeline is poised to deliver one or more new product or indication launches each year over the next 5 years. With each catalyst, we are delivering on our promise to patients and generating long-term durable value creation for shareholders. In fact, with this team at Harmony that has driven our success thus far, our current pipeline, if successful, is poised to deliver over $3 billion in net revenue going forward. Also during our Investor Day, I highlighted what we believe to be one of the strongest and most promising pipelines in the industry for people living with rare neurological diseases. Our pipeline now includes three orphan rare CNS franchises, each with peak sales potential of $1 billion to $2 billion, 8 assets across 13 development programs with 3 of them in pivotal Phase 3 trials and a fourth to initiate before year-end. Given the tremendous growth in our pipeline, we will not be able to go into depth on all the development programs on this call, but the key points that I want you to take away from our call today regarding our robust pipeline are these. First, we continue to strengthen our leadership position in Sleep/Wake. We are preparing to submit our sNDA for pitolisant in idiopathic hypersomnia, or IH. We are advancing…

Thanks, Jeff. We saw another quarter of continued momentum and strength in our underlying business fundamentals for WAKIX in the third quarter. Net sales for the quarter were $186 million. And with these quarterly sales, WAKIX surpassed $2 billion in cumulative net sales since launch. The solid net sales performance in the third quarter reaffirms our confidence in our net sales guidance of $700 million to $720 million for the full year 2024 and WAKIX $1 billion-plus potential in adult narcolepsy alone. We saw continued growth in the average number of patients on WAKIX and in the WAKIX prescriber base, both facilitated by favorable market access as seen on Slide 6 and 7. The average number of patients on WAKIX increased to approximately 6,800 in the third quarter. We're extremely pleased with the approximately 250 sequential increase in average patients on WAKIX from what we reported last quarter. We saw contributions from the pediatric narcolepsy indication launch in our growth in Q3, but the vast majority of our growth in the third quarter was attributed to the continued expansion in our adult narcolepsy patient base given the larger diagnosed patient opportunity. We are extremely pleased with our launch in pediatric narcolepsy. In the first quarter since the FDA approval, we've seen strong interest from the health care professional and patient community and the unique product profile of WAKIX as the only non-scheduled treatment option and strong payer coverage to facilitate pediatric narcolepsy patients getting on product. The growth in average patients in the third quarter was in line with our expectations and reaffirms our confidence in our guidance of approximately 7,000 average patients by the end of the year. We saw growth in the WAKIX prescriber base in the third quarter as well. We saw solid growth in the WAKIX…

Thank you, Jeff. Good day, everyone, and thank you for joining us today. In R&D, we continue to make great progress in advancing our pipeline program. As Jeff Dayno mentioned, we now have 13 development programs across 8 assets and the 3 franchises focused on rare neurological indications with high unmet medical need. We will have 4 Phase 3 registration studies ongoing in 4 distinct indications by the end of this year with the potential to deliver one or more new product or new indication launches each year for the next 5 years. Our full clinical development pipeline is shown on Slide number 10 and the clinical development highlights are on Slide 11 through Slide 17. Starting with our Sleep/Wake franchise. We are on track to submit an sNDA for idiopathic hypersomnia by the end of this year. Our submission will be based on the robust data from the Phase 3 registrational INTUNE study and several lines of additional evidence that consistently support the efficacy of pitolisant in patients with idiopathic hypersomnia. At our Investor Day on October 1st, we reported new data that showed strong and sustained efficacy of pitolisant in patients with idiopathic hypersomnia more than 1 year out in the long-term extension study. The mean improvement in Epworth Sleepiness Scale was approximately 9 points from baseline out beyond 1 year with the majority of patients in the normal range as measured by ESS score. We saw a similar strong and sustained maintenance of efficacy on Idiopathic Hypersomnia Severity Scale and Sleep Inertia a Questionnaire in the long-term extension study. In addition, we also shared the data from a large sleep clinic in Europe in over 60 patients with IH. Data from this independent study shows that over 60% of patients with IH got better with pitolisant and…

Thank you, Kumar, and good morning, everyone. This morning, we issued our third quarter earnings release and filed our 10-Q, where you'll find the details of our third quarter 2024 financial and operating results. Our financial performance is also shown on Slides 18 through 20. Harmony continues to have a unique profile in the biotech community. We're a profitable, cash-generating company able to fund the growth and advancement of our pipeline fully off our balance sheet. We delivered another quarter of strong double-digit top line growth, maintained profitability and achieved robust cash generation. Our financial performance and strong balance sheet position - positions us well to continue advancing our industry-leading pipeline, along with driving excellence in the commercialization of WAKIX in narcolepsy. We reported net revenues of $186 million for the third quarter of 2024 compared to $160.3 million in the prior year quarter. Performance in the quarter reflects the continued strong underlying demand for WAKIX. We also reported total operating expenses for the third quarter of $81.6 million as compared to $63.5 million for the same quarter in 2023, representing a 29% increase. The growth in expenses was primarily driven by investments in our expanding late-stage pipeline, along with continued investments for the commercialization of WAKIX in narcolepsy. Non-GAAP adjusted net income for the third quarter of 2024 was $59.6 million or $1.03 per diluted share compared to $58.8 million or $0.97 per diluted share in the prior year quarter. We believe non-GAAP adjusted net income better reflects the underlying business performance. Please refer to our press release for a reconciliation of GAAP to non-GAAP results. We ended the third quarter with $504.7 million of cash, cash equivalents and investments. The balance reflects strong cash generation of $70.5 million from operations, which provides us the financial flexibility to execute on our strategy of continuing to grow our pipeline. Looking ahead, we continue to expect quarter-over-quarter growth in net revenues in Q4 of this year. We also expect increases in R&D as we initiate our fourth Phase 3 registrational trial during the fourth quarter. We are once again reiterating our net revenue guidance for 2024 of $700 million to $720 million, highlighting our progress towards the $1 billion-plus opportunity in adult narcolepsy alone. And with that, I'd like to turn the call back to Jeff for his closing remarks. Jeff?

Thank you, Sandip. As we wrap up our call, I want to emphasize that our momentum at Harmony has never been stronger. We continue to lead in Sleep/Wake, fueled by the strength of our foundational business of WAKIX in narcolepsy and driven by a portfolio that represents the next wave of innovation in this space. We believe that our portfolio of assets in rare epilepsies is the most robust and advanced in the industry for DEEs, and we are committed to this area of serious unmet medical need. And finally, our catalyst-rich late-stage pipeline is poised to deliver one or more new product or indication launches each year over the next 5 years, with exciting catalysts in idiopathic hypersomnia and Fragile X syndrome coming in the first half of next year. We have the proven talent, resources and conviction that will continue to fuel Harmony's growth story, and we are just getting started. Thank you. And I will now turn the call back over to the operator.

Thank you. [Operator Instructions] Our first question will come from Graig Suvannavejh with Mizuho. Please go ahead.

Thanks so much for taking my question. Congrats on the progress. Your pipeline is so deep. I don't know where to start. But maybe if I could ask just one on the Pitolisant GR and HD strategy. As we look out on the horizon, can you just give us a sense of how we should visualize how WAKIX and then GR when it comes in potentially 2026, how you're going to manage kind of the coexistence of those two products? And then how is that going to evolve when HD launches hopefully in 2028? Just trying to visualize what a switch strategy might look like, just the commercial kind of positioning if you are in a position to have three products basically in the market at the same time?

Yes. Good morning, Graig. Thanks for your question. I think that I'm going to turn to Jeff Dierks to expand on that. A lot of it is based on our unique commercial model in terms of enabling us to how to handle that strategy. And Jeff can explain further. Go ahead, Jeff.

Sure. No, thanks for the question, Graig. So pitolisant and WAKIX, obviously, is going to be our foundational business, and we see that as a $1 billion-plus opportunity. From there in advancing these next-generation and life cycle management opportunities, Pitolisant GR, if you're thinking about that asset, target PDUFA in 2026. We see that as an accretive opportunity to expand the pitolisant patient base, not necessarily where physicians are going to be converting established WAKIX patients to GR, but GR is likely going to be a product using our commercial model where we can actually activate patients who are formerly on WAKIX who may have dropped off due to GI side effects or didn't achieve clinical benefit. We're going to look to tap into that audience, as well as any new patient coming into a physician's office, having the benefit of WAKIX with a gastro-resistant coding and the ability with no titration, we see GR growing in new patients, as well as previous WAKIX patients, so not converting existing WAKIX patients. Then when HD looks to come to market with a target PDUFA date in 2028, given the potential to deliver enhanced efficacy, the potential to treat an indication fatigue that doesn't have any products available today, that when we put that product profile in front of health care professionals, they saw that as a superior product profile. That is a product that they embraced likely converting the vast majority of their WAKIX patients over to. They saw this as another opportunity to engage previous WAKIX patients. And they also saw this obviously as an opportunity for new existing patients. So that's kind of how we see these products. They are going to be able to coexist. GR and WAKIX are going to be incremental and accretive opportunities coexisting. HD is likely the asset where we're going to end up seeing most patients end up just given the potential and the meaningful enhancements and benefits that, that product is going to be able to offer to patients with narcolepsy.

Okay. Thank you. If I could just squeeze in one. Just on the orexin program, very interesting. Lots of investors have been asking about it. Just I know that you have talked about the ability or the desire to present additional preclinical data on the asset to perhaps provide a fuller picture of what you see in that opportunity. Any further comments on when we might see that data and what exactly you're hoping to show when you're able to present additional data on the orexin program? Thanks.

Yeah. Hey, Greg. Good morning. Thank you. Yes, at our Investor Day, we presented some data on our orexin receptor agonist where we emphasized the novel chemical structure, the highest potency compared to anything that is publicly available on orexin-2 receptor agonist, great selectivity with over 600 fold, which translates into more than 140-fold margin at orexin-1 receptor and also greater than 1,000-fold selectivity over other 150 targets of interest and also potential for QD dosing. The intent is to disclose additional data at the upcoming scientific meetings. We haven't decided when and where, but we will be providing that information soon.

Yeah. Graig, I think the target for that is we're working with our partner, Bioprojet, and we're looking to next year at a scientific meeting to share sort of the full preclinical profile of that asset.

Okay. Thank you.

Thank you. Our next question will come from Ami Fadia with Needham. Please go ahead.

Hi. Good morning. Thanks for taking my question. Could you talk about EPX-100 and particularly what gets you excited in terms of differentiation on safety, not only versus Epidiolex and Fintepla, but also versus bexicaserin? And as we've seen some of the development plans for bexicaserin, can you talk about your clinical development strategy for this asset beyond LGS and DS and how you plan to approach the other DEE space? Thank you.

Good morning, Ami. Thank you for your question. We will try to unpack that a little bit. Yeah, we are excited with regards to EPX-100, our advanced program. I'll turn to Kumar, just high level in terms of the strategy where we are and some of the profile we're seeing now compared to what's in the market and some of the other investigational products. Kumar?

Yes, sure. Thank you, Jeff. Good morning, Ami. I know you asked several questions there. So let me start by saying that, look, the recent developments have validated our presence in developmental epileptic encephopathy, high unmet need despite several drugs approved in this space, significant limitations in terms of efficacy, safety and tolerability. So that's where EPX-100 comes in and has the ability to fill several gaps in this area. First and foremost, let me talk about safety. Clemizole hydrochloride has been in market for over 20 years and no safety signals were observed. It was constructed with the introduction of second generation of antihistamines. Number two, the FDA asked us to develop this as a new chemical entity. So in support of that, we conducted a full battery of nonclinical tests that include 6-month repeat dose study in [indiscernible] 9-month repeat dose study in beagle dogs and also juvenile toxicity studies. No safety signals were observed. We also had a Phase 1 study in healthy volunteers, which where we saw acceptable safety and tolerability and supported further development of this product. This study is being recruited in U.S. and also outside of U.S. and EU. So the protocol went through FDA and also EMA. And none of these regulatory agencies asked us to do any additional monitoring. And lastly, we disclosed some preliminary safety data from the ongoing Phase 3 study in Dravet syndrome. and also from the long-term extension study where we showed it offers significant benefit when it comes to a couple of approved drugs like Epidiolex in terms of not having to monitor liver function tests routinely and Fintepla, not having to monitor cardiac functions like echocardiography to look at cardiac valvular disease or pulmonary arterial hypertension. In terms of how it differentiates specifically from bexicaserin perspective. EPX-100 safety profile is better established, while bexicaserin [ph] profile is still in early stages and evolving. Second, EPX-100 is administered BID versus bexicaserin PID, which is very clinically meaningful, especially in patients with developmental endtpileptic encephalopathies because of the nature and the severity of the disorder. And the third thing is, this is important. EPX-100 is further along in clinical development. We have been actively recruiting for patients in Dravet syndrome study in U.S. and in Europe, and we are about to start a Phase 3 study in Lennox-Gastaut syndrome. And as we mentioned during the call earlier, the regulatory agencies have recognized the promise of EPX-100 and have given orphan drug designation and rare pediatric disease designation for both DS and LGS.

Thanks, Kumar. Could you also address how you might approach other DEEs? Thank you.

Thank you, Ami. Yes, in the call earlier, I mentioned that we have data, preclinical data to show the utility of EPX-100 in other DEEs, for example, in Syntaxin binding protein 1 disorder, where we saw good evidence for efficacy. And similarly, we saw efficacy in TDD [ph] as well. Right now, our focus is to complete the Phase 3 study in Dravet syndrome and focus on LGS. In terms of approaching the other DEEs, we are in the process of evaluating that opportunity because those are heterogeneous disorders in terms of the nature of the study. We have not determined how exactly to go forward, but we will be pursuing all development epileptic encephalopathies, EPX-100.

Yeah, Ami. And I would just add, I think that these development strategies sort of start more focused and then the opportunity to go broader in the DEEs, which I think is consistent with the program now. But the opportunity for broad DEEs potential basket trial is absolutely there. But we are in line and late stage in the Dravet syndrome study and on track to initiate the Phase 3 pivotal LGS study before year-end.

Thank you.

Thank you. Our next question comes from Charles Duncan with Cantor Fitzgerald. Please go ahead.

Hey. Good morning, Jeff and team. Congrats on the progress in the quarter. Make the observation. It's tough to know where to start because of all the pipeline products. But I will start with a commercial question, and that is regarding the percentage of patients, the new patients, the over 250 added, what percent come from oxybate versus non-oxybate writers? And then I'm kind of curious why you didn't narrow the guide because it seems like the low end is quite attainable and your perspective on what would have modulated that.

Good morning, Charles. Thanks for your question. Jeff, comments on in terms of where the patients are coming from?

Sure. No, great question, Charles. And so obviously, we're extremely pleased with the growth we saw in the third quarter. We added incrementally approximately 250 average patients from what we reported in the second quarter. And Charles, we're seeing patient growth from both segments of health care professionals. It's probably about maybe 60% of those new patients are being added in from the oxybate REMS enrolled health care professionals. About 40% are coming from the non-oxybate. And that's a lot of function in terms of there's more patients in the oxybate REMS enrolled health care professionals group. They're larger sleep specialists. They tend to have larger patient practices. We continue to see growth in the depth of prescribing, meaning most of these physicians have experience with WAKIX. They're finding a second, fifth, 10th, 20th patient in this area. But we're really excited that we continue to see new patients coming out of the non-oxybate REMS enrolled health care professional audience. We know that we have an insulated group that we continue to tap into even with all the oxybate churn. And so we're extremely pleased. We see tremendous growth opportunities on the horizon, 80,000 diagnosed patients, and we're going to continue to tap into that audience moving forward.

Yeah, Charles. And I would just add, I think the pattern of broad clinical utility for WAKIX in patients with narcolepsy continues to hold true with regards to the HCP universe that we're calling on. Sandip, comment on the position on guidance?

Sure. I mean, look, as I mentioned on the call, I mean, we continue to expect quarter-over-quarter growth going into Q4. What I'd say is our range even right from the start was relatively narrow, right, to $720 million in sales, which is really 2% sort of overall range. So we feel good about the range. We continue to see good momentum, and we'll provide an update, obviously, once the year closed on where we end up on there. We feel very good about the range right now, and we're comfortable.

And if I may add - may I ask a question of Kumar with regard to the ongoing Dravet study Phase 3 with 100. I'm really quite intrigued with the patient population. I mean, 26 data is a little bit remote. So how is enrollment going? Are you able to enroll patients that are on Epidiolex and mTOR inhibitors? And can you characterize the seizure burden and then persistence into the OLE? Could you provide any additional color on how that trial is going? Thanks.

Good morning, Charles. I mean, the trial is recruiting as per projections. We are recruiting patients actively in U.S., Canada and Europe. And in terms of the study design and the patient population, Charles, it's a pretty standard study design, pretty standard inclusion, exclusion criteria compared to any other Dravet syndrome studies in terms of titration, the duration of the study, the inclusion, exclusion criteria, the number of seizure medicines. On an average, these patients, as you know, Charles, are in need of good medicines. And therefore, on average, they tend to be anywhere between 3 to 6 anti-seizure medications. And that's pretty much what we are seeing in our clinical trials. And we disclosed some of the safety data, very promising and very supportive, benign tolerability profile as well. One of the things that we did not mention earlier is actually the impact on appetite as well. As you know, many of the drugs that are out there have appetite suppressant effect, which is pretty challenging given this patient population already have difficulties with feeding and have weight loss. What we saw with EPX-100 is, it did not suppress appetite and there were no other safety or tolerability signals. So overall, we are very pleased with how the recruitment is going. The target is 2026 top line. Obviously, our goal is to recruit the study as soon as possible and try to bring this medication to the patients as soon as possible.

Very good. Thank you.

Thank you. Our next question will come from David Amsellem with Piper Sandler. Please go ahead.

Hey, thanks. So first question is on the payer landscape and how you're thinking about that as we move through 2025 and particularly how you're thinking about net realized price in '25 versus where it is now? Just help us better understand how you're thinking about the landscape, particularly with more generics of sodium oxybate set to enter the market. So that's number - set to enter the market in the not-too-distant future. So that's number one. And then number two, I just wanted to ask a clarification question on Pitolisant HD and regarding dosing. I think at the R&D Day, you said that you could safely dose up to five times higher than the highest dose of WAKIX. I just want to make sure that I have that correct. And as I think earlier in the call, you talked about dosing that's 2x higher. So I just wanted to get a better sense of where you think you could realistically dose Pitolisant HD relative to the legacy formulation. Thanks.

Sure. Jeff, do you want to respond to the first question?

Sure. So David, with respect to the payer landscape and how we're thinking about 2025, a lot of the contracts have already started to be negotiated for next year. And we see next year's landscape to be very similar to what we see right now for WAKIX. There's not a lot of incremental contracting that's necessary. Again, we have a very unique position as sort of the lowest branded product relative to the oxybates, so we're less expensive on a WAC [ph] cost than the branded and generic oxybates. And I think that position has afforded us an opportunity to not have to contract. So we see a very favorable landscape moving forward in '25. With respect to generic oxybates coming, we don't anticipate any new generic oxybates in the market in '25. It's likely in 2026 that there may be additional opportunities in there. But I think what we've seen and heard from the payers currently is given the fact that WAKIX is the only non-scheduled treatment option for both EDS and cataplexy, payers are finding a place on their formularies for that product. There are no plans that require WAKIX to be stepped through an oxybate, either branded or generic. And based upon our negotiations and discussions with payers, we believe that, that position is going to maintain moving forward, gives us great opportunity for patients to have access to the product and a lot of confidence for us to continue to grow the brand.

And David, in terms of - just to clarify on Pitolisant HD, what we shared at Investor Day with regards to - we did a small study in terms of - with WAKIX and dosed up to five times the current label dose and establish, excuse me, the safety margins for the development program for Pitolisant HD. The target in the development program is to dose up to two times the maximum label dose of WAKIX in the Pitolisant HD program. But safety margins have been established up to 5x of the current maximum dose.

Yes. And just to add to what Jeff mentioned, up to two times the highest label dose of WAKIX, David, with the optimized formulation, which means that the exposure will be a lot higher milligram to milligram compared to WAKIX. And not only that, we also have - we were able to accomplish some other things with the optimized formulation like decreasing interindividual variability as well, which have meaningful clinical impact in patients.

Okay. All right. That's helpful. Thanks.

Thanks, David.

Thank you. Our next question will come from Danielle Brill with Raymond James. Please go ahead.

Hi. Yes. Good morning. Thanks for the questions. I guess, Sandip, your guidance for 7,000 patients on drug by year-end implies a sequential decline in net patient adds. Is there any particular reason why we might be expecting a slight dip next quarter? And then I just have a clarification on the strategy with DEEs. Is there any reason to leave this as separate indications from LGS? Or do you feel a basket study might be better suited for lorcaserin versus clemizole? I appreciate the clarity there. Thank you.

Hi, Danielle. Thanks for the question. I think our overall thought around there was we said approximately 7,000. We're not exactly guiding to exactly 7,000. So I think what we're seeing is good underlying demand, continued growth quarter-over-quarter. So we don't see any reason why there would be a significant change in terms of momentum going into the fourth quarter. So that's - maybe Jeff Dierks, is there anything else you want to add?

No, I would reiterate exactly what Sandip said. Guidance is an approximation. We've had very strong durable growth, double-digit growth. It's been very consistent. And so we have a lot of confidence. But yes, it's an approximation. And again, the average number of patients we round to the nearest 50. So Danielle, I would anticipate Q4 to look similar to what we've sort of seen in momentum in Q2 and Q3.

And Kumar?

In terms of - Danielle, in terms of your other question regarding the basket study, look, we know that the regulatory agency is open for a basket study approach. We are pursuing two programs, as we mentioned, with EPX-100, one in DS and one in LGS. We are taking a measured approach in that. Look, LGS is already a heterogeneous disorder. So we want to keep the patient population as homogeneous as possible. But we are definitely exploring the opportunity of a basket study for the rest of the DEEs. And based on - depending on the experience that we will have with EPX-100 that will be in the clinical development plans for EPX-200. But we are also excited, very excited about EPX-200 liquid formulation of lorcaserin, given the mechanism of action, the preclinical evidence for efficacy and also the clinical evidence for efficacy that is published widely in literature in an article by Tulett and Devinsky et al in 2018, in neurology.

Understood. Thank you so much.

Thank you. Our next question will come from Ash Verma with UBS. Please go ahead.

Oh, great. Thanks. Thanks for taking my question. So I have two just for Zygel in the RECONNECT study, so you have 80% of patients which have this complete methylation. I wanted to understand why you're studying the non-complete methylation patients as well. When you looked at the data previously, I think the complete methylation patients are the ones that are likely to show the benefit and your primary endpoint is also on the complete methylation. Do you have any understanding from the FDA that you could get a label irrespective of the methylation status if the study is positive? And just quickly on the quarter, so is there any like inventory build here for WAKIX? So the average patient number added by 4%, you know, increased 4% sequentially, but the net sales is up 8%? Thanks.

Good morning, Ash. Thanks for your question. Kumar, do you address the question on ZYN-002?

Yeah, sure. Hey, good morning, Ash. Yeah, great question, by the way. So you are right, Ash. The primary target population and the primary endpoint is on patients with complete methylation. There's a nominal number of partially methylated patients as well, and this came about during our discussions with the FDA. If we do see supportive data in partially methylated patients that's consistent with the data that we see in complete methylation patients, that does leave us an opportunity to discuss with the regulatory agency in terms of getting a broader label. But for now, the study primary target population and the primary endpoint is complete methylation patients.

Sandip?

Yeah. Just a question in terms of trade inventory. I mean, we see normal fluctuations of trade inventory every quarter. Nothing significant that I would mention, at least for that was had an impact this quarter. Typically, what you do see in the second half of the year, we see some improvement in gross to net. The first quarter, as you know, as you go into the year, gross to net tends to be higher, starts coming down in the second quarter and the second half of the year tends to be. So what you're probably seeing a little bit of improvement in gross to net as well. So hopefully, that provides some context.

Great. Thanks.

Thanks, Ash.

Thank you. Our next question will come from Corinne Johnson with Goldman Sachs. Please go ahead.

Hi. Good morning, guys. Maybe a couple from us. Could you just talk to us about how you're planning to measure fatigue in the clinical study of Pitolisant HD and narcolepsy? And how - like what would be clinically meaningful for - in terms of benefit on this patient population? And if you could just provide some context around how common fatigue is within a narcolepsy population, that would be helpful. Thanks.

Good morning, Corinne. Thanks for your question. Kumar, the plan for fatigue and HD?

Yeah. Thank you, Jeff. Good morning, Corinne. Thanks for the question. Yeah, fatigue is a symptom that is more prevalent than one would think in patients with narcolepsy. The literature has indicated that about 60% to 70% of patients with narcolepsy have fatigue. And we are doing a longitudinal prevalence and impact of fatigue in patients with narcolepsy. That study is underway. And at least the preliminary data shows the prevalence of fatigue is very similar. About two thirds of the patients with narcolepsy have significant fatigue. In terms of how do we measure, this is an indication for which there are no approved treatments. So we had an extensive leading-edge work to look at the - all the instruments that are out there to measure fatigue, and we are devising an instrument that specifically measures fatigue in patients with narcolepsy. A lot of work that is - is already done, and we'll be discussing with the regulatory agencies in terms of the appropriateness of using that instrument specifically to measure fatigue, specifically in patients with narcolepsy because that is what the regulatory agencies expect. Thank you.

Helpful. And then in terms of the patents around the Pitolisant HD, could you just help expand on the kind of nature and number of those patents that you have into those early 40s?

Sure, Corinne. I think the patents around HD are around unique formulation with regards to that along with the gastro-resistant coating and the improvement in the overall PK profile. So the clinical data will sort of support that with regards to what that PK profile will demonstrate. And that is the basis of the HD patents out to the 2044.

Thank you.

Thank you. Our next question will come from Jason Gerberry with Bank of America. Please go ahead.

Hey, guys. Good morning. Thanks for taking my questions. Two for me. First, just on EPX-100. Wondering, have you looked at EPX-100 relative to longboard SPEXA [ph] in the zebrafish model? And is that something that's sensitive enough to tease out potential areas of differentiation or more of just a measure of more of a go/no-go viability of the molecule in that disease state? And then as we get into next year, just curious with respect to WAKIX IP litigation, there's a Markman hearing. And I'm just curious if you can kind of help frame what are some of the key kind of outcomes we'd be looking for with respect to the crystal informed patent? How important is it to get a broad claim construction to sort of box out generics and secure an infringement ruling ultimately when the case goes to trial in '26? Thanks.

Take the first question?

Sure. Hey, good morning, Jason. Look, EPX-100 was extensively studied in the zebrafish model, and it showed great efficacy. Similarly, EPX-200 was also studied in this model, which showed great efficacy, which was in turn confirmed by clinical experience. In terms of bexicaserin, obviously, it's not our compound, and we don't have access to that compound. But within zebrafish model, there were some analogs that were studied that had some pure 5-HT2C agonistic properties and that data is published in the literature by Griffin et al [ph] in our brain communication.

Yes. And I think, Jason, in terms of your second question about the IP litigation, I think, first of all, we can't really comment on ongoing litigation. But I think the Markman trial that's scheduled for next March. I mean, basically, what that does is it sets up the claims construction. I think it sets up the overall claims construction in the case and then informs the plan for the trial in 2026. So I think that is the purpose of that in terms of the next stage of that process and the IP litigation. Yeah. And IP, and I think that with regards to, as we've said before, we're confident in the strength of the IP, you know, the validity of the patents. There were two potential challenges to the U.S. PTO that were denied and those decisions were final. So our position is strengthen the overall IP out to 2030.

Got it. Thank you.

Thank you. Our last question will come from Francois Brisebois with Oppenheimer. Please go ahead.

Hi. Thanks for the question. Can you help just elaborate on the percentage of patients that are both on oxybate and WAKIX? And has that changed with time? I'm just trying to gauge also the reimbursement response. Has that been the same? Is it more difficult? You just mentioned there's so much growth that comes from the REMS doctors. So I'm just wondering if reimbursement has changed. And do you foresee any changes once if orexin's come in the market in terms of reimbursing all these products in the polypharmacy market? Thank you.

Yeah. Good morning, Frank. Thanks for your question. Thanks for hanging in there. Jeff Dierks?

Sure. Frank, the percentage of patients that are on both WAKIX and on oxybate has been relatively consistent. It's been like low double digits, like in the teens, probably for about the last couple of years. And the reimbursement landscape has been modestly consistent with where we are. Obviously, with the introduction of more generic oxybate, it's going to be easier to potentially get concomitant use. Certain plans are obviously looking at this category and disease area. But again, remembering that this is a rare orphan space. There's not a lot of patients. It's not very high on a managed care plan. For a lot of them, it's more costly to put in additional administrative steps given the limited number of patients. But obviously, moving forward, there's likely going to be a number of potential branded products that could be introduced later in the decade. Obviously, time will tell how managed care will look at this. But overall, rare orphan categories tend to not be as highly managed as other categories given there's a limited number of patients. It's not a huge budget area. I think our goal is to continue to provide meaningful enhancements. Obviously, the GR and the HD program are really going to be able to hopefully provide some enhanced efficacy. Maybe that can end up helping to potentially reduce the amount of controlled substances patients take, reduce the amount of stimulants potentially oxybate, which obviously would be extremely favorable, not only for the patients, but also the payers.

Thank you. At this time, I would like to turn the call back over to Jeff Dayno for any additional or closing remarks.

Thanks, operator. Thanks, everyone, for joining our call today. We were excited to share with you the progress we are making in our robust late-stage pipeline and look forward to providing future updates. Thanks, and have a great rest of your day.

This does conclude today's Harmony Biosciences third quarter 2024 financial results conference call. You may now disconnect your line. And have a wonderful day.