Harmony Biosciences Holdings (HRMY) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01We are substantially dependent on the commercial success of our only approved product, WAKIX. If we are unable to maintain or increase sales of WAKIX, our ability to generate revenue and our financial condition will be adversely affected
2. 02The continued commercial success of WAKIX and any other product candidates we develop will depend on the degree of their market acceptance
3. 03The market opportunity for WAKIX or any future product candidate we develop may be smaller than we estimate
4. 04We rely on our license agreements with Bioprojet to provide rights to the core intellectual property relating to pitolisant, and any termination or loss of significant rights under the agreement would adversely affect our development and/or commercialization of pitolisant
5. 05We may not be successful in our efforts to identify other indications for pitolisant beyond EDS and/or cataplexy in adults and pediatric patients six years and older or, in-license, acquire, discover, develop or commercialize additional product candidates or on-market products
6. 06Our business, products or product pricing could be subject to negative publicity, which could have a material adverse effect on our reputation, business, financial position, results of operations, liquidity and cash flows
7. 07Third-party relationships are important to our business. If we are unable to enter into and maintain strategic collaborations or if these relationships are not successful, our business could be adversely affected
8. 08We rely completely on third parties to manufacture and distribute our supply of WAKIX and our product candidates, including certain sole-source suppliers and manufacturers, and intend to rely on third parties to manufacture and distribute any future product candidates
9. 09Because a number of companies compete with us, many of which have greater resources than we do, and because we face rapid changes in science in our industry, we cannot be certain that our products will be accepted in the marketplace or capture market share
10. 10We may need to increase the size and capabilities of our organization based on business need, and we may experience difficulties in managing our growth36% rewritten
11. 11Our future success depends on our ability to retain our key executives and to attract, retain and motivate qualified personnel
12. 12Public health pandemics, such as the COVID-19 pandemic, may result in disruptions to our commercialization, clinical trials, manufacturing and other business operations, which could have a material adverse effect on our business, financial condition, operating results, cash flows and prospects33% rewritten
13. 13prescriptions and impede our clinical trial recruitment, testing, monitoring, data collection and analysis and other related activitiesNew
14. 14We or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster73% rewritten
15. 15A variety of risks associated with operating internationally could materially adversely affect our business
16. 16Failure to keep up with evolving laws, regulations, trends and shareholder expectations relating to environmental, social and governance, or ESG, practices or reporting could adversely impact our reputation, share price and access to and cost of capital or otherwise adversely impact our business

Risks Related to Our Financial Condition and Capital Requirements

1. 17We have made and may be required in the future to make significant payments to Bioprojet under our licensing and collaboration agreements for pitolisant
2. 18Our TLA Credit Agreement contains restrictive and financial covenants that may limit our operating flexibility
3. 19Our failure to comply with the covenants or other terms of the TLA Credit Agreement, including as a result of events beyond our control, could result in a default under the TLA Credit Agreement that could materially and adversely affect the ongoing viability of our business
4. 20We have never paid dividends on our common stock, and we do not intend to pay dividends for the foreseeable future. Consequently, any gains from an investment in our common stock will likely depend on whether the price of our common stock increases
5. 21Our ability to utilize our net operating loss carryforwards may be limited20% rewritten
6. 22Changes in tax laws or regulations could adversely affect our results of operations, business and financial condition37% rewritten

Risks Related to Development, Regulatory Approval and Commercialization

1. 23If we fail to obtain and sustain an adequate level of coverage and reimbursement for WAKIX and other product candidates by third-party payors, sales would be adversely affected67% rewritten
2. 24States. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical productsNew
3. 25WAKIX or any of our future product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, reduce the commercial attractiveness of a prescribing label or result in significant negative consequences following regulatory approval, if approved
4. 26Any of these events could prevent us from achieving or maintaining market acceptance of pitolisant and could significantly harm our business, results of operations, financial condition and prospects
5. 27While we have received five years of NCE exclusivity for WAKIX, manufacturers may seek to launch generic products following the expiration of the applicable exclusivity period we obtain, even if we still have patent protection for our product
6. 28We may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates
7. 29failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial
8. 30A Fast Track designation from the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive regulatory approval
9. 31Interim, “topline” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
10. 32Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control
11. 33Even if we receive orphan drug designation for our product candidates, we may not be able to maintain the benefits associated with orphan drug designation, including marketing exclusivity, which may cause our product revenue to be reduced
12. 34Orphan drug exclusivity in the United States may be unavailable where the indication for which the product candidate is approved is broader than the orphan-designated indication or is otherwise different from the orphan-designated disease or condition
13. 35Our business operations and current and future relationships with investigators, healthcare professionals, consultants, third-party payors, patient organizations and customers are subject to applicable healthcare regulatory laws, which could expose us to penalties
14. 36Actual or perceived failure to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition
15. 37and damage to our reputation, any of which could have a material adverse effect on our operations, financial performance and business
16. 38Clinical practice guidelines and recommendations published by various organizations could have significant influence on the use of WAKIX
17. 39Product candidates we develop in the future may be classified as controlled substances, which are subject to state, federal and foreign laws and regulations regarding their manufacture, use, sale, importation, exportation and distribution. Controlled substances are regulated under CSA and regulations of the DEA
18. 40Enacted and future healthcare legislative changes may increase the difficulty and cost for us to obtain marketing approval for and commercialize our product candidates and affect the prices we may obtain61% rewritten
19. 41We have obtained a rare pediatric disease designation for EPX100 for the treatment of Dravet Syndrome and Lennox-Gastaut Syndrome, however, there is no guarantee that FDA approval of will result in issuance of a priority review voucher
20. 42We will need to obtain FDA approval of any proposed product names, and any failure or delay associated with such approval may adversely affect our business

Risks Related to Our Intellectual Property

1. 43If we are unable to obtain and maintain patent protection for our technology and products, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets55% rewritten
2. 44If we fail to comply with our obligations under any license, collaboration or other agreements, we may be required to pay damages and could lose intellectual property rights that are necessary for developing and protecting our current and future product candidates
3. 45If we do not obtain protection under the Hatch-Waxman Amendments by extending the patent term for our current and future product candidates, our business may be harmed
4. 46The validity, scope and enforceability of any patents listed in the Orange Book that cover our current and future product candidates have been challenged by third parties and may be challenged by third parties in the future
5. 47Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirements
6. 48We may need to acquire or license intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms65% rewritten
7. 49needed or on commercially reasonable terms, our ability to commercialize our current and future product candidates, if approved, would likely be delayedNew
8. 50Third-party claims or litigation alleging infringement of patents or other proprietary rights, or seeking to invalidate patents or other proprietary rights, may delay or prevent the development and commercialization of any of our current or future product candidates
9. 51Third parties may assert that we are infringing their patents or employing their proprietary technology without authorization
10. 52could harm our business significantly. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our businessNew
11. 53We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products
12. 54We may become involved in lawsuits to protect or enforce our patents, the patents of our licensors or our other intellectual property rights, which could be expensive, time consuming and unsuccessful27% rewritten
13. 55could be harmed if in litigation the prevailing party does not offer us a license on commercially reasonable terms. Any litigation or other proceedings to enforce our intellectual property rights may fail, and even if successful, may result in substantial costs and distract our management and other employeesNew
14. 56Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties
15. 57Changes in U.S. patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products
16. 58We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of their former employers or other third parties36% rewritten
17. 59or sublicense our rights to collaborators, engage with scientific advisors or hire employees or consultants, each of which would have an adverse effect on our business, results of operations and financial conditionNew
18. 60Any trademarks we have obtained or may obtain may be infringed or be successfully challenged, resulting in harm to our business

Risks Related to Ownership of our Common Stock

1. 61Our directors, officers and principal stockholders beneficially own a significant percentage of our stock and are able to exert significant control over matters subject to stockholder approval
2. 62Future sales of our common stock in the public market, including sales by our directors, officers, or significant shareholders, could cause our share price to fall
3. 63If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline
4. 64Our quarterly operating results may fluctuate significantly
5. 65Future sales and issuances of our common stock or rights to purchase our common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause the stock price of our common stock to decline
6. 66Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our stock
7. 67These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management
8. 68Our Certificate of Incorporation and Bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law