On Wednesday, Piper Sandler reaffirmed its Overweight rating on Harmony Biosciences Holdings Inc. (NASDAQ:HRMY) with a steady price target of $44.00. The firm's positive stance follows Harmony's investor day, where the company outlined its growth strategies for Wakix, especially its use in treating idiopathic hypersomnia (IH), and provided details on its high-dose formulation of pitolisant.
During the investor day, Harmony Biosciences presented its pipeline developments, including the orexin 2 receptor agonist BP1.15205, which is anticipated to have an Investigational New Drug (IND) application submitted by mid-2025. Piper Sandler expressed confidence in the company's future, citing the potential of new pitolisant formulations and other pipeline candidates to add value.
The firm underscored the high visibility into Harmony's projected EBITDA growth, driven by Wakix's expected peak sales exceeding $1 billion in narcolepsy alone. Despite the looming loss of exclusivity for Wakix by 2030, Piper Sandler emphasized the significant EBITDA expansion anticipated up to that point. Additionally, the firm noted Harmony's clean capital structure as a positive factor.
Piper Sandler's reiterated Overweight rating reflects a belief in the company's strong growth prospects and the opportunities presented by its pipeline. Harmony Biosciences' current enterprise value to estimated 2025 EBITDA ratio stands at approximately 6 times, which Piper Sandler views as offering optionality at present levels.
In other recent news, Harmony Biosciences reported a robust Q2 financial performance with net sales for its product WAKIX climbing by 29% to $172.8 million and a solid non-GAAP adjusted net income of $60.6 million. The company's financial position remains strong, boasting $434.1 million in cash, cash equivalents, and investments. Harmony Biosciences is on track to meet its 2024 net revenue guidance of $700 million to $720 million.
Despite Harmony Biosciences' advancements in its three core neurology franchises, Goldman Sachs reiterated its Sell rating on the company's shares. Conversely, Mizuho, Needham, and UBS have all maintained positive positions on Harmony Biosciences, citing the company's strong performance and promising pipeline.
The company has also made significant progress in its high-dose pitolisant program, which focuses on unmet medical needs in the narcolepsy community. Harmony Biosciences received FDA approval for WAKIX for pediatric narcolepsy and a planned sNDA for idiopathic hypersomnia is expected later this year.
InvestingPro Insights
Harmony Biosciences Holdings Inc. (NASDAQ:HRMY) has been demonstrating strong financial performance, aligning with Piper Sandler's optimistic outlook. According to InvestingPro data, the company's revenue growth stands at an impressive 31.52% over the last twelve months as of Q2 2024, with a robust gross profit margin of 79.41%. This solid financial foundation supports the company's ability to invest in pipeline developments, such as the orexin 2 receptor agonist BP1.15205 mentioned in the article.
InvestingPro Tips highlight that Harmony's management has been aggressively buying back shares, which often signals confidence in the company's future prospects. Additionally, the company's valuation implies a strong free cash flow yield, potentially providing resources for continued research and development efforts.
The stock is currently trading near its 52-week high, with a strong return of 30.8% over the last three months, reflecting investor optimism that aligns with Piper Sandler's Overweight rating. For investors seeking more comprehensive analysis, InvestingPro offers 10 additional tips for HRMY, providing deeper insights into the company's financial health and market position.
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