One-glance verdict
Undervalued
$228.27 our estimate vs market $33.55
Wall Street consensus: $48.08 (-78.9% lower than our fair-value estimate)
85% below our estimate, below the bear case
Fundamentals snapshot
Harmony Biosciences Holdings, Inc.
HRMY · NGM · Healthcare · Biotechnology
Current price
$33.55
52-week range
$25.90 - $43.49
Market cap
$1.97B
Balance sheet
Healthy
14.23x Strong cushion
Net cash $616.22M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 13.9% last year.
- Reward Returns 18.7% on equity, ahead of 33% of its peers.
- Risk Operating margin compressed from 27.4% to 20.2% over 3 years.
- Risk Insider ownership is only 1.2% (peer median: 1.7%).
What this company does
Harmony Biosciences Holdings, Inc.
Harmony Biosciences sells medicines for rare sleep and neurological disorders, with their main product, WAKIX, treating excessive sleepiness in adults with narcolepsy. The company is also developing new treatments for other conditions, aiming to grow its business by expanding its drug pipeline.
How the company got here
Harmony Biosciences was founded in 2017 by Paragon Biosciences with a focus on developing treatments for rare neurological diseases. A key early step was securing the U.S. rights to pitolisant from Bioprojet, a French company. This molecule, which affects histamine signaling in the brain, became the foundation of Harmony's business. In 2019, the U.S. Food and Drug Administration (FDA) approved pitolisant under the brand name WAKIX for treating excessive daytime sleepiness in adults with narcolepsy. This approval marked a significant turning point, establishing Harmony as a commercial-stage pharmaceutical company.
What it actually does
Harmony Biosciences is a pharmaceutical company that develops and sells medicines for people with rare neurological conditions, particularly those affecting sleep and the central nervous system (CNS). Their main focus is on creating treatments for diseases that currently have limited or no effective options. The company operates primarily in the United States, with its headquarters in Plymouth Meeting, Pennsylvania. Harmony's business model centers on identifying unmet medical needs in specific patient populations and bringing targeted therapies to market.
WAKIX (pitolisant)
WAKIX, whose active ingredient is pitolisant, is Harmony Biosciences' primary product. It's a medication approved to treat excessive daytime sleepiness (EDS) and/or cataplexy (sudden muscle weakness) in adult and pediatric patients (6 years and older) with narcolepsy. Narcolepsy is a chronic neurological disorder characterized by overwhelming daytime drowsiness and sudden attacks of sleep. WAKIX works by increasing the levels of certain chemicals in the brain, like histamine, which helps regulate wakefulness. It's notable for being the only FDA-approved medication for narcolepsy that is not a scheduled substance, meaning it doesn't have the same potential for abuse as some other medications.
Pipeline and Future Development
Harmony Biosciences is actively developing a pipeline of new treatments beyond WAKIX, aiming to expand its offerings for rare neurological diseases. This includes next-generation formulations of pitolisant, such as Pitolisant GR and Pitolisant HD, which are being developed to potentially offer different dosing options or target additional symptoms. The company is also investigating pitolisant for other conditions like Prader-Willi Syndrome and Myotonic Dystrophy. Furthermore, Harmony is exploring entirely new drug candidates, including BP1.15205 (an orexin-2 receptor agonist) and HBS-102 (an MCHR1 antagonist), for various neurological disorders. Acquisitions of companies like Zynerba Pharmaceuticals and Epygenix Therapeutics have also brought additional drug candidates into their pipeline, such as those for Fragile X Syndrome and certain types of epilepsy.
What management is betting on now
Harmony's management is focused on several key strategies to drive future growth and value. A primary goal is to extend the commercial success of WAKIX by deepening its penetration in the narcolepsy market, including its approved use in pediatric patients, and protecting its market exclusivity through intellectual property. Simultaneously, the company is investing heavily in its pipeline, advancing multiple late-stage clinical trials for new drug candidates targeting various CNS disorders. Management is also actively pursuing business development opportunities, looking for new assets that can generate revenue in the medium term (2028-2032) and complement their existing portfolio, all while maintaining a strong financial position to fund these initiatives.
How the company got here
Harmony Biosciences was founded in 2017 by Paragon Biosciences with a focus on developing treatments for rare neurological diseases. A key early step was securing the U.S. rights to pitolisant from Bioprojet, a French company. This molecule, which affects histamine signaling in the brain, became the foundation of Harmony's business. In 2019, the U.S. Food and Drug Administration (FDA) approved pitolisant under the brand name WAKIX for treating excessive daytime sleepiness in adults with narcolepsy. This approval marked a significant turning point, establishing Harmony as a commercial-stage pharmaceutical company.
What it actually does
Harmony Biosciences is a pharmaceutical company that develops and sells medicines for people with rare neurological conditions, particularly those affecting sleep and the central nervous system (CNS). Their main focus is on creating treatments for diseases that currently have limited or no effective options. The company operates primarily in the United States, with its headquarters in Plymouth Meeting, Pennsylvania. Harmony's business model centers on identifying unmet medical needs in specific patient populations and bringing targeted therapies to market.
WAKIX (pitolisant)
WAKIX, whose active ingredient is pitolisant, is Harmony Biosciences' primary product. It's a medication approved to treat excessive daytime sleepiness (EDS) and/or cataplexy (sudden muscle weakness) in adult and pediatric patients (6 years and older) with narcolepsy. Narcolepsy is a chronic neurological disorder characterized by overwhelming daytime drowsiness and sudden attacks of sleep. WAKIX works by increasing the levels of certain chemicals in the brain, like histamine, which helps regulate wakefulness. It's notable for being the only FDA-approved medication for narcolepsy that is not a scheduled substance, meaning it doesn't have the same potential for abuse as some other medications.
Pipeline and Future Development
Harmony Biosciences is actively developing a pipeline of new treatments beyond WAKIX, aiming to expand its offerings for rare neurological diseases. This includes next-generation formulations of pitolisant, such as Pitolisant GR and Pitolisant HD, which are being developed to potentially offer different dosing options or target additional symptoms. The company is also investigating pitolisant for other conditions like Prader-Willi Syndrome and Myotonic Dystrophy. Furthermore, Harmony is exploring entirely new drug candidates, including BP1.15205 (an orexin-2 receptor agonist) and HBS-102 (an MCHR1 antagonist), for various neurological disorders. Acquisitions of companies like Zynerba Pharmaceuticals and Epygenix Therapeutics have also brought additional drug candidates into their pipeline, such as those for Fragile X Syndrome and certain types of epilepsy.
What management is betting on now
Harmony's management is focused on several key strategies to drive future growth and value. A primary goal is to extend the commercial success of WAKIX by deepening its penetration in the narcolepsy market, including its approved use in pediatric patients, and protecting its market exclusivity through intellectual property. Simultaneously, the company is investing heavily in its pipeline, advancing multiple late-stage clinical trials for new drug candidates targeting various CNS disorders. Management is also actively pursuing business development opportunities, looking for new assets that can generate revenue in the medium term (2028-2032) and complement their existing portfolio, all while maintaining a strong financial position to fund these initiatives.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$75.05M
FY2025 Q1
$33.86M
FY2025 Q2
$79.32M
FY2025 Q3
$108.66M
FY2025 Q4
$126.04M
Revenue
$268.92M
Net income
$48.20M
Diluted EPS
0.81
Operating cash flow
$76.69M
Free cash flow
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Sources
Revenue
$261.28M
Net income
$75.43M
Diluted EPS
1.28
Operating cash flow
$92.43M
Free cash flow
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Sources
Revenue
$215.39M
Net income
$32.49M
Diluted EPS
0.55
Operating cash flow
$27.76M
Free cash flow
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Sources
Revenue
$243.78M
Net income
$22.49M
Diluted EPS
0.38
Operating cash flow
$126.15M
Free cash flow
$126.04M
Fetching…
Sources
Revenue
$239.46M
Net income
$50.87M
Diluted EPS
0.87
Operating cash flow
$108.73M
Free cash flow
$108.66M
Fetching…
Sources
Revenue
$200.49M
Net income
$39.78M
Diluted EPS
0.68
Operating cash flow
$79.33M
Free cash flow
$79.32M
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Sources
Revenue
$184.73M
Net income
$45.56M
Diluted EPS
0.78
Operating cash flow
$33.99M
Free cash flow
$33.86M
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Sources
Revenue
$201.27M
Net income
$49.48M
Diluted EPS
0.85
Operating cash flow
$75.56M
Free cash flow
$75.05M
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Sources
Is it cheap or expensive?
Fair value $228.27 vs current price $33.55
Wall Street consensus is the average analyst price target: $48.08 (-78.9% lower than our fair-value estimate).
Our most-likely fair value is $228.27 a share — about 580.4% above today's price of $33.55, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $616.2M - more cash than debt. Interest coverage 14.2x.
Net debt
$-616.22M
Interest coverage
14.23x
Harmony Biosciences Holdings, Inc.'s profit covers its interest bill about 14.2 times over. which is stronger than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
HRMY
BASELINE
Harmony Biosciences Holdings, Inc.
Total debt $154.91M Interest coverage 14.23x This is the baseline the peer rows are being compared against.
Total debt $71.85M Interest coverage 3.30x -77% vs HRMY Carries about 4.3x less debt cushion than HRMY.
Total debt $1.57B Interest coverage 20.69x +45% vs HRMY Carries about 1.5x more debt cushion than HRMY.
What you should know
The case for and against HRMY
3 Rewards
2 Risks
Rewards
-
Revenue grew 13.9% last year.
-
Returns 18.7% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 5/10 years.
Risks
-
Operating margin compressed from 27.4% to 20.2% over 3 years.
-
Insider ownership is only 1.2% (peer median: 1.7%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
11.11x
Forward P/E
5.53x
P/B
1.84x
P/S
1.99x
EV/EBITDA
5.59x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
74.0%
Operating margin
20.2%
Net margin
18.1%
ROE
18.7%
ROA
10.2%
Health
Liquidity and balance-sheet strength
Debt / equity
0.14x
Current ratio
3.44x
Quick ratio
3.31x
Total debt
$154.91M
Total cash
$771.14M
Growth
How the business has been compounding
Revenue TTM
$989.36M
Revenue 5Y CAGR
29.9%
EPS TTM
3.02
EPS 5Y CAGR
-3.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$323.04M
Free CF TTM
$347.89M
FCF margin
35.2%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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