HRMY 32.75 (+5.9%) reported this AM. Strong quarter of results, as they beat on top (slight) and bottom line numbers (larger). I use Non-GAAP for eps, even though it appears that analysts are using GAAP. Heavily shorted stock at ~14% of FDS. The primary short thesis has started to crumble; the petition to label Wakix as unsafe (filed by a short seller in the stock) has been denied by the FDA with no chance of appeal. They continue to advance applications for Wakix in younger patients, which is their primary drug and is used to treat Narcolepsy.
Pipeline looks interesting too:
"Beyond WAKIX, we have expanded our pipeline and diversified our portfolio resulting in three promising orphan rare CNS franchises in advanced stages of development, each with the potential to generate $1 billion to $2 billion in peak sales. "
“......we are executing on our late-stage pipeline across three orphan/rare CNS franchises, which we expect to deliver at least one new product or indication launch every year over the next five years, with multi-billion-dollar revenue potential extending beyond 2040. We also delivered another strong quarter of revenue growth for WAKIX, confirming our confidence in WAKIX being a billion dollar plus market opportunity in narcolepsy alone, while gaining the approval and launching WAKIX in pediatric narcolepsy.”
If they can successfully diversify product sales beyond Wakix, it will remove another plank in the short thesis. I expect the shorts to heavily "defend" the 35 price level; if it closes above that......
Guidance for FY24 revenues was reiterated at 700-720MM. I would estimate that non-GAAP eps estimates will be raised based on their pretax margins recorded in Q2 and YTD, even with a higher effective non-GAAP tax rate of 26% (v y/y tax rate of 21%).
AI
