Q4 2023 Harmony Biosciences Holdings Inc Earnings Call

Participants

Luis Sanay; Head, IR; Harmony Biosciences Holdings Inc.

Jeffrey Dayno; President & CEO; Harmony Biosciences Holdings Inc.

Jeffrey Dierks; Chief Commercial Officer; Harmony Biosciences Holdings Inc.

Kumar Budur; Chief Medical Officer; Harmony Biosciences Holdings Inc.

Sandip Kapadia; CFO; Harmony Biosciences Holdings Inc.

Ami Fadia; Analyst; Needham & Company, LLC

Charles Cliff Duncan; Analyst; Cantor Fitzgerald & Co.

François Daniel Brisebois; Analyst; Oppenheimer & Co. Inc.

David Amsellam; Analyst; Piper Sandler & Co.

Jason Matthew Gerberry; Analyst; BofA Securities

Danielle Catherine Brill Bongero; Analyst; Raymond James & Associates, Inc.,

Graig C. Suvannavejh; Analyst; Mizuho Securities USA, LLC

Presentation

Operator

Good morning. My name is Brittany and I will be your conference operator today. At this time, I would like to welcome everyone to the Harmony Biosciences Fourth Quarter and Full Year 2020 2023 financial results conference call participant lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question at that time, please press star one on your telephone keypad. Please be advised that today's conference may be recorded last Friday. If you should require operator assistance, please press star zero. I would now like to turn the call over to Luis Sanay, Head of Investor Relations. Please go ahead.

Luis Sanay

Thank you, operator. Good morning, everyone, and thank you for joining us today as we review Harmony Biosciences' Fourth Quarter and Full Year 2023 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, 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 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, and 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?

Jeffrey Dayno

Thank you, Luis, and thanks, everyone, for joining our conference call today. Harmony continues to be a growth story, as demonstrated by our team's accomplishments throughout 2023, we delivered another strong year of performance across the organization, growing revenue and average number of patients on weekends. We advanced all our clinical development programs for pitolisant, move to the next generation or next gen formulations at the Tolleson into the clinic and expanded our pipeline and diversified our portfolio with the acquisition of Zynerba and the ongoing Phase three clinical trial in patients with Fragile X syndrome. Yesterday, we announced that FDA granted priority review for our supplemental NDA or SNDA for weight kicks in pediatric narcolepsy with a PDUFA date June 21. Earlier this week, we also shared that FDA granted orphan drug designation for pitolisant for the treatment of Prader-Willi syndrome or PWS as we are preparing to initiate our pivotal Phase three TEMPO study in patients with PWS down to age six. All of this reflects momentum across our organization from our commercial business with Wave kicks in narcolepsy to our clinical development programs as well as positive interactions with FDA related to these programs. These outcomes also reflect excellence in execution and the dedication of our team to deliver on the strategy we have laid out and are executing on. In addition, we returned capital to shareholders via our share repurchase program, and we'll continue to take an opportunistic approach to this program throughout this year. I am very excited for the year ahead and believe that Harmony is poised to accelerate our growth in 2024. For the fourth quarter, we reported weighted net revenue of $168.4 million and full year net revenue was $582 million, representing growth of 31% and 33% respectively. This result demonstrates the significant underlying demand for Wajax and the durability of the brand going into year five in the market.
Other factors that drive our confidence in our ability to grow with Qix include it's meaningfully differentiated product profile, which results in its broad clinical utility, coupled that with our ability to reach the broad prescriber universe of approximately 9,000 HCPs who see and treat almost 100% of the diagnosed narcolepsy patient opportunity. We have seen growth in patients on WAKIX and prescribers every quarter since launch, even with the entrance of new branded and generic oxybate treatment options coming into the market over the past few years.
Finally, while there are several investigational agents in the clinic for narcolepsy. We do not see any new or novel mechanisms of action coming to the market that will impact the growth of weight Qix until late during its life cycle in this poly pharmacy market. Based on these reasons, along with the vast market opportunity that remains in narcolepsy, we believe that we can continue to grow the franchise for years to come and remain confident that wake it represents a $1 billion plus opportunity in adult narcolepsy alone. And we are well on our way this is evidenced by our net revenue guidance for 2024, ranging from $700 million to $720 million. In addition to our strong commercial performance, we also advanced and expanded our clinical development enterprise on several fronts. Kumar will provide more details on our clinical development programs later in the call. But first, let me highlight some of our progress starting with pediatric narcolepsy. We are pleased that FDA granted priority review for our SNDA for weeks. This expedites the review process and FDA has set up to do for the date of June 21. We look forward to collaborating with the agency to potentially introduce a new nonscheduled treatment option for pediatric patients living with narcolepsy.
Turning to idiopathic hypersomnia or IH. After completing our review of the full dataset, we continue to believe that based on the totality of the data, along with the Tolleson receiving orphan drug designation for IH and against the backdrop of only one currently approved product that there is a strong case to be made regarding the overall benefit risk proposition of pitolisant for patients with IH. We will be engaging with the agency with this goal in mind, have a meeting scheduled with them next month and look forward to working with the agency on bringing a potential new nonscheduled treatment option patients living with IH. Our current lifecycle management programs for pitolisant, which include IH Prader-Willi syndrome and type one myotonic dystrophy represent about 100,000 diagnosed patients in the US. So If successful, these new indications could contribute up to an additional $1 billion of revenue to the way Qix franchise given its whole since novel mechanism of action and the successive weeks in the market. We've been working on next-gen formulations at the Tolleson with the goal to generate new IP and extend the Tolleson franchise out beyond 2014. These programs entered the clinic last quarter, and we are on track to report PK data in the first half of this year.
Another key component of our growth strategy is business development to expand our pipeline beyond WAKIX and diversify our portfolio beyond sleep wake Zynerba acquisition, which closed last October, represented an important step in that direction and was an excellent strategic fit for Harmony, bringing into two late-stage development programs focused on orphan rare neuro psychiatric disorders with significant unmet medical needs. And we are not stopping with the Zynerba acquisition and remain very active in business development, continually assessing the BD landscape with a focus on rare neurological disease assets and other rare disease assets with unmet medical needs where we can leverage our existing infrastructure and synergies across our organization. We are looking for assets across a range of development stages with a preference for late-stage assets, but open to early-stage assets where there was a strategic fit with approximately $426 million in cash, cash equivalents and investments. At year end, we are in a solid financial position to execute on BD opportunities, which is a strategic priority for us.
In conclusion, I am proud of our team's accomplishments in 2023 and what we were able to do to help patients living with narcolepsy while advancing our development programs in other rare disease patient populations. We experienced solid and durable growth in our core commercial business, strong momentum in our clinical development programs and expansion and diversification of our pipeline assets based on the dedication and commitment across our organization. I am very excited for our opportunities in 2024 as we remain focused on developing and commercializing innovative treatments for patients living with rare neurological diseases who have unmet medical needs.
I will now turn the call over to Jeffrey Dierks, our Chief Commercial Officer, to provide more details on our commercial performance.
Jeff?

Jeffrey Dierks

Thank you, Jeff. 2023 was a strong year of growth for WageWorks in year four of our commercialization in adult narcolepsy. The fourth quarter represented the strongest revenue quarter in our history with continued growth and momentum in our underlying business fundamentals and top line performance metrics. Net revenue for the fourth quarter was $168.4 million, representing 31% growth from the same quarter prior year and our second consecutive quarter of over $150 million in net revenue. Full year 2023, net revenue was $582 million, a 33% increase from full year 2022. We continue to see strong double digit growth in net revenue for weeks heading into year five of our commercialization, reflecting continued high interest of weeks in the narcolepsy market. The solid performance and continued growth reinforces our long-term belief that week X represents a potential $1 billion plus opportunity in adult narcolepsy alone.
I'd like to share a few key highlights from our performance in the fourth quarter. On Slide 5. The average number of patients on weight Qix in the fourth quarter increased to approximately 6,150, an increase of approximately 350 average patients sequentially from what we reported last quarter. The impressive growth in average patients in the fourth quarter was driven by strong top line demand and new patient starts and speaks to continued product adoption. And more importantly, it highlights the remaining large diagnosed patient opportunity that we continue to tap into each quarter as the market allows.
In addition to the strong growth in average number of patients on week six. We also saw continued product adoption of Wave X by the narcolepsy health care community, both in new and existing prescribers. The number of unique prescribers of Lakes increased again in the fourth quarter. And importantly, we continue to see growth in product adoption of weeks in the prescriber base beyond oxybate REMS enrolled health care professionals of the approximately 5,000 health care professionals not enrolled in the oxybate REMS program. More than 30% of them have prescribed weeks to date, up from 25% reported in our last earnings call. In addition to the continued growth of our prescriber base, we also saw strong growth in the depth of prescribing within the approximately 4,000 oxybate REMS enrolled health care professionals. Our ability to reach and educate the broad narcolepsy treating health care professional universe allows us to access the full diagnosed adult narcolepsy patient opportunity and gives us confidence in continued growth for weeks, the availability of new and generic oxybate hasn't impacted patient or prescriber growth or existing strong payer coverage for WageWorks, given its meaningfully differentiated product profile weak-ish remains the first and only FDA-approved treatment for EDS and cataplexy in narcolepsy that is not scheduled as a controlled substance and attribute that continues to appeal to a broader narcolepsy health care, professional audience and patient population and is a driver of brand growth.
In summary, 2023 was another year of strong commercial performance for Wajax. Full year net revenue of $582 million, 33% growth versus the full year 2022. The fourth quarter represented the strongest revenue quarter for Harmony to date with over $168 million in net revenue. The average number of patients on weeks increased to approximately 6,150, the weakest prescriber base within and beyond the oxybate REMS enrolled health care professional audience continued to grow. And lastly, payer coverage remained strong, even with the availability of new and generic oxybate options, weakest continues to demonstrate durable growth in the narcolepsy market. We've seen growth in patients and prescribers every quarter since launch, even with branded and generic treatment availability and new launches during its first four years on the market.
Looking ahead to 2024, we expect continued growth in the underlying business fundamentals for Qix, with net revenues expected to be between $700 million and $720 million. We anticipate a similar quarterly rhythm to our business in 2024 with what we've experienced in previous years. Traditional seasonal payer dynamic headwinds that impact the entire industry as a whole in Q1 and tailwinds coming out of Q1 and Q2 with stronger prescription demand, typical seasonal headwinds in Q3 with lower patient visits that are common for all products and diseases that are chronically managed and tailwinds in the fourth quarter as we close out the year with no new competition expected in 2024 and limited differentiation in generic and branded products in the near term pipeline, coupled with the large remaining diagnosed patient opportunity, unmet need and the poly pharmacy nature of the narcolepsy market weakness is well positioned for continued growth. Our ability to educate the broad rooms and non-rooms narcolepsy, treating health care professional audience and ability to tap into the full diagnosed patient opportunity gives us confidence in the long-term potential for the brand to represent a $1 billion plus opportunity in adult narcolepsy alone.
Our commercial business has been resilient, and I appreciate the dedication and impact of the entire commercial team and the passion that they have for the narcolepsy patient community.
I would like to now turn the presentation over to Kumar Budur, our Chief Medical Officer, to provide an update on our clinical development pipeline.
Kumar?

Kumar Budur

Thank you, Jeff. Last year was a defining year for Harmony R&D. We made great progress in advancing expanding and diversifying our portfolio working on nine different development programs across five different assets, several of which are in late-stage development. It is not just the numbers, but also the complexity of the program as we target a broad set of indications in rare disease patient population with significant unmet medical need. As we grew our portfolio, we also built a strong, experienced and dedicated R&D organization ready to take on new opportunities as we continue to build our existing portfolio with new assets we have business developed. I'm proud of the work that our team does every day and we look forward to evaluating potential new treatment options for patients with rare diseases with high unmet need on full clinical development pipeline is shown on slide number seven, starting with pediatric narcolepsy We submitted a supplemental NDA to the FDA for an indication in pediatric narcolepsy in the fourth quarter, and we are pleased with the FDA's decision to grant a priority review this deficient highlight the need for new treatment option for the approximately 4,000 pediatric patients living with narcolepsy. FDA have set a producer date of June 21, we look forward to working with the FDA to potentially bring a non-scheduled treatment option administered once a day in the morning for pediatric patients with narcolepsy.
Moving on to our development program in idiopathic hypersomnia. We completed our review of the full dataset and submitted an FDA meeting request in the fourth quarter to discuss the path forward and the meeting is scheduled for March. We are optimistic that we'll be able to find an efficient path forward to become apparent to patients with idiopathic hypersomnia. Our optimism is based on the totality of the data, which strongly supports pitolisant efficacy in patients with idiopathic hypersomnia, especially in the context of high unmet need, with only one pickup crude, which is particular to Class three controlled substance with a REMS program and the off-label use of Class two stimulants with significant safety issue. The data from the open-label part of the study, double-blind randomized withdrawal part of the study and the ongoing long-term extension study in conjunction with the benign safety profile and offer a strong benefit proposition in favor of pitolisant or patients with idiopathic hypersomnia. We look forward to engaging with the FDA in a meeting scheduled next month and making a strong case for a positive benefit-risk profile for pitolisant in GTA, Patrick hypersomnia, we will provide further updates on the IH. program at our next earnings call. Accordingly, the syndrome, we are on track to initiate the Phase three TEMPO study in the first quarter of 50 years. This will be a global double-blind, randomized placebo-controlled study that will randomize approximately 134 patients to either development or placebo in a 1:1 ratio. The duration of the double-blind treatment period is 11 weeks. The age range is six years holders and the primary endpoint is change in seasonality effect for daytime sleepiness as measured by from SRI team score from baseline at the end of the double-blind treatment period compared to placebo. Based on the promising data from the Phase two proof of concept study, we are also evaluating the irritable and disruptive behaviors which are common in PWS did Phase three registration study is designed not just to meet the requirements for an indication in PWS, but also fulfill one of the two requirements again, pediatric exclusivity. We remain confident and committed to gaining pediatric exclusivity for leakage, which will offer us an additional six month regulatory exclusivity on the back end of the market. But at clinical sites. Based on the discussions with the FDA, we have a clear line of sight on the requirements for a period I believe off, which include data in pediatric narcolepsy patient data from the Phase three study in PWS, we are making steady progress to meet this requirement for pediatric narcolepsy SNDA submission in the fourth quarter and the initiation of Phase BPW it turned into quarters are designed to support our efforts to gain pediatric inclusivity for Vacon in myotonic dystrophy type one, RPN1, we were pleased to report positive top line results from the Phase two proof of concept study, Medifast clinically meaningful improvements in not just excessive daytime sleepiness as measured by the daytime sleepiness scale, but also in fatigue which was assessed using fatigue, severity scale. And these data are summarized on slide 9. It's important to note that leads to for excessive daytime sleepiness and fatigue at present in approximately 80% to 90% of patients currently on file, at least in terms of the asset back from a cost in terms of MyFolio and progressive muscle weakness, a clear and consistent dose response was also demonstrated with the higher dose showing the greater spot than the lower dose across the study endpoints. In addition, the safety profile in this patient population is consistent with the established safety profile because of pain, we are currently reviewing the complete dataset to assess the opportunity and inform our next steps. As we have noted in the past, this is an indication which could be awarded to the extent we don't sell based formulation, which will have a much longer patent for holiday.
We continue to make good progress on the next gen pitolisant based on munition NT one and NG two with our partner Biocon today with a goal of generating new IP, extending the pitolisant franchise beyond 2040 and bringing new treatment options for people living with rare diseases. Please note, we have updated the naming conventions for these two formulations. According to this expected market entry timing extent, one or NT is a modified formulation will affect with a potential for chemical. Different patient had a fast-to-market strategy.
Based on the demonstration of bio equivalence. We expect to launch into one integrated lifecycle next into our MT is an enhanced formulation of pecan event designed to deliver an optimized PK profile and a higher dose has turned this formulation will have a new IP of development program and is expected to be launched towards the end of mid to late cycle, both formulation NV and MT entering the clinic in the fourth quarter, and we expect PK data on both of them in the first half of this year. We were also pleased to expand and diversify our pipeline last quarter with the acquisition of Dynepo, this brought in the Z002 of pharmaceutically produced synthetic cannabidiol devoid of PSC for customer delivery reached late breaker. It represents another portfolio of product opportunities. We are currently enrolling patients in pivotal Phase three BEACON trial in Fragile X syndrome and are really excited about this opportunity. There are approximately 80,000 patients diagnosed with fantastic syndrome in the US with no approved treatments and significant unmet medical need. We had an opportunity to assess the time line of the chronic tox and expect to complete patient enrollment in the first quarter of 2025. With topline data in mid-2025, we wait until zero two was also studied in an open-label Phase two proof of concept study in patients with 22q deletion syndrome, known as the INSPIRE trial, which has generated promising data. This represents another market opportunity of approximately 80,000 patients in Europe, and we have been interacting with FDA our Phase three program in 22q. It is worth noting that two three one zero zero two is the global opportunity for Harmony, and we look forward to exploring this opportunity to bring this novel treatment to people living with Travelex syndrome and 22q. around the world.
For Panzem, we have made great progress at Codman in advancing expanding and diversifying our portfolio, resulting in a pipeline with multiple late-stage programs. I look forward to sharing additional updates as we continue to make progress on our clinical development program. On behalf of Codman, I would like to thank all the patients and their families for participating in our clinical trials as one of the clinical investigators and site personnel for their effort and commitment in helping us to advance our development programs.
I'll now turn the call over to our CFO, Sandip Kapadia, for an update on our financial performance. Sandy?

Sandip Kapadia

Thank you, Kumar, and good morning, everyone. This morning we issued our fourth quarter earnings release and filed our 10-K.
Here.
You'll find the details of our fourth quarter and full year 2023 financial and operating results. Our financial performance is also shown on Slides 10 through 13. We finished the year with strong momentum across the business, helping us deliver solid growth across several key metrics. We reported $582 million in annual waste net revenue achieved our third year of profitability, along with robust cash generation. In addition, we advanced our Tolleson lifecycle management program and executed on business development with the acquisition of Zynerba. We also deployed capital towards our share repurchase program. Overall we remain well positioned to execute on our growth strategy moving forward.
So let me take a moment to review our financial results in more detail for the fourth quarter of 2023, we reported our strongest revenue quarter in Company history with net revenues of $168.4 million compared to $128.3 million in the prior year quarter, representing a growth of 31% performance in the quarter reflects the strong continued underlying demand for Wayfair in the fourth quarter of 2023 operating expenses were $85.1 million compared to $53.8 million in the prior year quarter. The higher operating expenses were primarily driven by our advancement of our clinical development programs, including 0.002 expenses related to the commercialization of weight gain and one-time Zynerba transaction related costs of $9.8 million. Operating income for the fourth quarter of 2023 was $40.2 million compared to $47.6 million in the prior year quarter. Non-gaap adjusted net income for the fourth quarter of 2023 was $42.8 million or $0.73 per diluted share compared to $61.9 million or $1.01 per diluted share in the prior year quarter. We believe non-GAAP adjusted net income or better reflects the underlying business performance. Please refer to our press release for a reconciliation of GAAP to non-GAAP results. We ended the year with $425.6 million of cash, cash equivalents and investment securities on the balance sheet, the balance reflects continued strong cash generation with approximately $77 million in cash from operations in the fourth quarter, offset by the Nova acquisition costs and share repurchase activities in the quarter. For the full year of 2023, we generated $219 million in cash from operations. During the fourth quarter, we returned capital to shareholders and repurchased approximately 1.8 million shares of common stock for $50 million, bringing the full year total of repurchase activities to 3.2 million shares of common stock for $100 million. Moving forward, we expect to continue to opportunistically repurchase shares under the remaining share repurchase program authorization of $150 million. Our strong balance sheet allows us not only to execute on return of capital, but also maintain financial flexibility to execute on business development.
In the fourth quarter, we closed the acquisition of Minerva, which was treated as an asset acquisition for accounting purposes. As previously disclosed, we paid approximately $60 million in cash for the closing of the transaction. We received approximately $26 million of cash and $45 million in deferred tax assets from the acquisition and assumed approximately $14 million in liabilities. Thus, we recorded $2.3 million in ITR. and D charge related to the acquisition, along with $7.5 million in one-time restructuring costs. As a result, we were able to acquire two late-stage programs at very attractive deal terms going forward, we will we will recognize considerable operating synergy and expect ongoing incremental costs from the Zynerba development program of approximately $30 million for 2024.
Turning to 2024 guidance for the full year, we expect net revenues of $700 million to $720 million. This range reflects our thoughtful and balanced approach to providing guidance for the first time in Company history. And it also highlights that we are well on our way towards the $1 billion plus opportunity in adult narcolepsy alone that we have consistently communicated and remain confident in.
And finally, I'll comment on seasonality because you think about the pacing of revenue for the first quarter of 2024, we expect to see the typical seasonal dynamics that the industry as a whole experienced each year in Q1, higher gross-to-net deductions due to insurance plans, reset and higher co-pay obligation along with a drawdown in trade inventories.
In conclusion, we're very pleased with our strong financial performance in 2023 and remain well positioned to continue growth in 2024 and beyond. We look forward to leveraging our financial strength as we continue to expand and diversify the portfolio while also returning capital to shareholders via our share repurchase program.
And with that, I'd like to turn the call back to Jeff for his closing remarks.
Yes.

Jeffrey Dayno

Thank you, Sandip. In summary, Harmony continues to be a growth story as evidenced by the significant progress our team made in 2023. Looking ahead we see durability in our core business, strong momentum in our development programs and remain focused on continuing to grow our way Qix business and helping even more adult patients living with narcolepsy, advancing our pipeline across both our pitolisant and GYN. zero zero two clinical development programs, working with our partner bio per se on next-gen formulations to extend that the Tolleson franchise to help even more patients living with rare neurological diseases, continuing to build out our pipeline through business development to create a robust portfolio of rare disease assets covering all stages of development and deploying capital to maximize shareholder value through our share repurchase program and business development opportunities. I am excited for what is to come this year and believe that we are poised to accelerate Harmony's growth in 2024.
This concludes our planned remarks for today, and thank you for joining our call, and I will now turn the call back over to the operator to facilitate the Q&A session. Operator, can you please open the call to questions?

Question and Answer Session

Operator

Thank you. At this time, if you would like to ask a question please press the star one on your telephone keypad. If you wish to remove yourself from the queue, you may do so by pressing star two. We remind you to please pick up your handset to please limit yourself to one question and one follow-up. We'll take our first question from any cigar data with Ami Fadia, Needham & Company. Your line is now open.

Ami Fadia

Good morning.
Thanks for taking my question, and thank you for giving all the updates from the pipeline. Firstly, I have two questions. First, can you talk about the two new per dose and formulation on which you're going to be sharing data in the first half. What should we expect to see from the data? And just to set up expectations for investors will we be able to get visibility into how the formulations make it differentiated from Vectibix based on that data?
And then the second question is regarding idiopathic hypersomnia. If you could shed any additional color on that analysis that you have put together for your meeting with the FDA? And if you could comment on whether there's any possibility of January or any additional data from the open-label portion of the study to support an approval.
Thank you.

Jeffrey Dayno

On the Army's, Al.
Good morning. Thank you for your questions, and I'll ask Kumar to yes to comment on the next-gen formulations and on some visibility there and as well as our preparation for the FDA meeting on IH., correct?

Kumar Budur

Yes, good morning mean thanks for the question. In terms of NexTone formulations. As we mentioned, we made progress on next-gen formulations last year, and we were really pleased to bring both of those two formulations into the clinic in the fourth quarter. And as we've previously said, Steve Riffee will provide data from the next in 14 patients in the first half of this year.
In terms of next gen one or NT. one. It's a modified Fatala thing formulation. We see a potential for clinical differentiation fast-to-market strategy by demonstrating bioequivalence alongside a clinical study that will offer a meaningful clinical differentiation for patients. The nature of the clinical study and the potential differentiation that will be offered will be discussed at the next earnings call, along with the PK data with the next gen two RNG. two formulation. It's an enhanced formulation of pitolisant designed to deliver optimized PK and also and ability to go to a higher dose strength. This is the formulation that will have a full development program, a new IP, and it will extend the pitolisant franchise well beyond 2014. And we plan to provide the PK data from this formulation at our next earnings call.
And regarding your question about the idiopathic hypersomnia AMI, the totality of the data from the open-label study from the randomized withdrawal period of the study and the long-term extension study course, pitolisant efficacy in patients with idiopathic hypersomnia. And in terms of file the argument of the discussions that we will be having with the FDA is the totality of the data, the nonscheduled status of the dollars and the ease of administration, a relatively benign safety profile, especially in the context of one one plus that it happens scheduled three controlled substance and the off-label use of plus 2.4 subsequent to us. That has a little bit of time. So all these factors offered a strong benefit risk proposition to bring Fatala plan for patients with idiopathic hypersomnia. And we hope to have good discussions with the FDA and find an efficient path forward to bring pitolisant patients with diabetes from.
Yes, as soon as possible.
Keith here.

Operator

And our next question from Charles Cliff Duncan with Cantor Fitzgerald. Your line is open.

Charles Cliff Duncan

Yes, hey, good morning, Jeff and team. Congratulations on a good year in 2023.
Thanks for taking our questions. I have one commercial question and then and then a pipeline question to follow. So regarding the commercial question, absolutely appreciate the 25 rev guide looks looks good to me. I note that you've added about 350 patients on weight Qix per quarter for the last three quarters. And that seems to be just a really consistent number. And I guess I'm wondering if you could speak to anything in the market dynamics or prescriber access that results in that 350 or is that just serendipity?
Thanks.

Jeffrey Dayno

Good morning, Charles. Thank you for your question. Yes, I think you know, Jeff, or can provide some color on the patient adds and the continued market opportunity for wafer.

Jeffrey Dierks

Sure.
Good morning, Charles, and thanks for the question. Yes, we've been extremely pleased with the durable growth that we've seen in the average number of patients on weekends. And I think some of the things that we're seeing, Charles, is given the unique and meaningfully differentiated product profile where it has the ability and our sales team has the ability to engage with the broad 9,000 approximate health care professionals at sea and treat narcolepsy patients. And what that does is that affords us the opportunity to tap into the full diagnosed patient opportunity, both those individuals and healthcare professionals outside the oxybate REMS program, which we continue to see meaningful growth in the number of unique writers every quarter. But even within the oxybate REMS enrolled health care professionals, even with the availability of generic and once-nightly oxybate launches this year, we're seeing meaningful growth. And excuse me, in terms of depth of prescribing in that audience. So I think really what we're seeing is the unique nature of the meaningfully differentiated product profile, the nonscheduled status, the broad clinical utility that Jeff Dayno spoke about that really affords us the ability to continue to tap into that broad diagnosed patient opportunity as the market allows around the or the traditional quarterly dynamics that we speak about each earnings call, Charles. We're extremely pleased with what we're seeing as I'm hearing from you as well. And we're confident in continued growth in the average number of patients as we move into 2024.

Charles Cliff Duncan

Okay. That's helpful.
Added color, Jeff, thanks. A quick question on the pipeline and actually a multi part question, sorry about that. And that is appreciate the Phase 3 TEMPO study data or not data excuse me details. I'm wondering when you would anticipate data. How rapidly do you think that study can enroll given some competing programs? And then is the NDA, SNDA timing? I assume that would be gated by the open label extension or would you file perhaps before that's completed? And then the second part of the question is regarding the pediatric narcolepsy and priority review. It seems to say something about the agency's perspective on the safety of the product. So I'm wondering if you could provide any of any thoughts on that and recent priority review being granted?

Jeffrey Dierks

Yes, Charles, first, let me say, I think that we're excited to be initiating the Phase three on TEMPO study in patients with Prader-Willi. I'll have two more comment on that and then I'll circle back on some thoughts about the priority review for the pediatric narcolepsy SMDNR. Kumar.

Kumar Budur

Good morning, Charles. Thanks for the question. Regarding the PDM PWS study. First of all, we are very pleased to have the orphan drug designation from the FDA for TWS program in pools of recruitment, we anticipate to complete enrollment in about two years. It is true, Charles, that there are multiple programs in this space for them. We are the only ones who are looking at excessive daytime sleepiness and behavioral and something PWS. The other programs are targeting more towards the hyperphagia in PWS. And as I mentioned previously, more than half of the patients with PWS target 50 daytime sleepiness. And almost all of these patients have behavioral disturbances. And from a proof of concept study, we showed strong data supporting pitolisant efficacy, important excessive daytime sleepiness through September?

Jeffrey Dierks

Yes. And Charles, can you repeat that?

Charles Cliff Duncan

Second question about the on the Peach narcolepsy NDA?
Yes.
I mean, the pediatric narcolepsy, as will produce and rapid it down time to respond. It just seems to say something about the safety of the product or the agency's perspective on that. And not speaking for the agency of course, but that combined with the priority review, I guess, do you have any thoughts about the perspectives?

Jeffrey Dierks

Yes, Charles, I mean, what I would say, you know, I think that come as we shared this week. And we're very pleased with the interactions we've had with FDA with regards to the orphan drug designation for the Tolleson for Prader-Willi and then followed by the decision priority review for the pediatric narcolepsy S. and BII., I think that it reflects the Woodford cards to the overall benefit risk profile to tell us and what we have said all along, Sean advance the development programs. We don't have any concerns with regards to the safety profile has been consistent from the original pivotal development program in narcolepsy and on through the lifecycle management programs that we've been conducting with no real change in the overall safety profile and the favorable benefit risk profile, I think that reflects and the positive interactions we've had with the agency, the decision that we've received and we remain focused on the execution and advancement of those development programs to bring potential new treatment options to those patient populations.

Charles Cliff Duncan

Very good.
Thanks for the added info.
Congrats on a good year.

Jeffrey Dayno

Thanks, Charles.

Operator

We'll take our next question from François Daniel Brisebois with Oppenheimer. Your line is now open.

François Daniel Brisebois

Hi. Can you hear me okay?

Jeffrey Dayno

Yes, yes, right.

François Daniel Brisebois

Okay.
The second question, just so I was just wondering, in terms of the guidance, can you help us understand what the thought process was behind giving guidance for the first time here? And how should we be thinking about the revenues for patients in 2024? Thank you.

Jeffrey Dayno

Thanks, Frank. Sandip.

Sandip Kapadia

Sure.
Look, as I said, Frank, thanks for the question. I mean, our guidance represents what I'd say it's a thoughtful and balanced approach, especially that for the first year, we're giving guidance. I think we certainly have opportunities on to providing updates as we go throughout the year of that.

François Daniel Brisebois

Yes, with respect to the guidance, based on the timing how we should think about pricing or maybe revenues per se on smartphones get?

Sandip Kapadia

Yes.
I think look, we did take a price increase earlier this year of about 7% and a portion of that actually falls through to the bottom line. So I think generally you'll see an impact from that as we go throughout the year. Obviously, in the first quarter there's usually headwinds regarding our gross-to-net pressure and normal.
Yes, things that happen. Typically in the seasonality that happens, you generally don't see as much of that in the first quarter, but generally as we go throughout the year, you'll see the you'll see the benefit is very similar to the pattern that we've had over the last three, four years.

François Daniel Brisebois

Great. Thank you very much.

Sandip Kapadia

Thank you.

Operator

And I think he will take our next question from David Amsellem with Piper Sandler. Your line is now open.

David Amsellam

Yes, hello.
Thanks.
So just a couple.
First regarding business development. I wanted to get more detailed thoughts on on the extent to which you do a larger scale transaction versus something smaller scale along the lines of Zynerba. Just philosophically, how are you thinking about and acquisitions in general and tied to that question is also would you lever up and lever up significantly to do something? So that's number one. And then number two, I wanted to pick your brain on the directions. We've seen some some data from Takeda from Alkermes. There are others, of course, I'm wondering to get your view on the potential long-term impact on the orexin two receptor agonist to the extent one or more reach the market? Thank you.

Jeffrey Dayno

Yes.
Thanks, Dave, and good morning. I think with regards to business development. We are we're assessing the landscape very actively, and we're open to sort of all opportunities with regards to a deal similar to Zynerba on that. That's a good strategic fit as well as something more transformational. We're in a strong sort of, you know, financial position to transact. So we first look for good strategic fit and prefer sort of late late stage assets, but open to earlier stage and of those that can launch both during the waking life cycle and after.
In terms of capacity, I'll ask Sandip to comment on that I think have.

Sandip Kapadia

Yes.
Look, we have good financial strength and flexibility to execute on business development. We also have access to debt, if appropriate, as well as the capital markets as also we mentioned we had over $425 million of cash and cash equivalents available. We're generating significant positive cash flow. Last quarter was about $77 million in cash flow generation as well as almost over $219 million last year in cash generation. So I think we have a good flexibility, as Jeff mentioned, to look at both down, yes, small add-on transactions as well as potentially something that some are larger and transformative. But I think the important thing is the filter that Jeff mentioned upfront in terms of making sure it's a good strategic fit for the Company. And I think from a capital perspective, we have broad flexibility.
Yes.

Jeffrey Dayno

Thanks, Sandip. And David, turning to one question about the Orexin agonist. I mean, you know this space well on as do we and we're following it closely. So obviously, a lot of attention lately, given some of the data that has come out, I think at a high level of the programs are still are still early and are obviously advancing. I think questions are being generated, both from a safety side and the efficacy side, you know, based on the data that has been coming out, obviously the target is interesting. You know, in terms of the next potential novel mechanism of action tomorrow for narcolepsy and other essential disorders of hyper somnolence. So I think we are following the space closely as the data come out as more questions have been generated and done, I think that they will likely come to market as successful towards the end of the decade towards the end of the waking life cycle. But importantly, it's our belief that narcolepsy will continue to be a poly pharmacy market calm through new entrant. Pino can only help on the sales and more share of voice more education. So interesting novel target I think waits to be seen as these development programs advance and on it will continue to be a poly pharmacy market and we'll follow them as things go forward.
Right.

David Amsellam

Thanks.
Yes.

Jeffrey Dayno

Thank you.

Operator

Thank you. We'll take our next question from Jason Gerberry with Bank of America. Your line is open.

Jason Matthew Gerberry

You, guys. Thanks for taking your questions. With Sparlon on for Jason. Our first question is your garden with regards to Zygel asset, where are you at with enrollment for the Phase three Fragile X syndrome and study? And any added clarity as to our assumptions, shape your view on mid-2025 readout timing?
And then a second commercial question on what are your assumptions for average revenue per req expansion? Is that a meaningful tailwind for revenue growth in 2024 in your guidance? Or is growth mainly driven by volume?

Jeffrey Dayno

Thank you for your questions on which I'll ask Mike to comment on the ZYN. here here are two Phase three RECONNECT trial. Very exciting opportunity for us and can provide no. And then some more color on where we are there. The.

Kumar Budur

Thank you, Jeff. So you relooked at the time line as to previous to that, we will and based on the historical recruitment plans and the anticipated growth in this particular patient population. We are out that we will complete enrollment in the first quarter of 2025, and the top line will be in with 2025. Now that the asset is well within home. Obviously, we will bring all the additional resources and the expertise, not just from a clinical development perspective, but also have the advocacy group active as well to plan to accelerate recruitment.

Jeffrey Dayno

Thanks, Kumar. In terms of revenue per patient or Jeff or you want to comment on that?

Jeffrey Dierks

Sure.
So in looking ahead in 2024 question in terms of just price volume or average revenue per patient. As C&D shared, we took a 7% price increase in the beginning of the year. And as with previous years, we would expect to capture most of that price increase on. And as you're looking at our guidance rate from $700 million to $720 million, you could see that we're expecting 20% plus growth. So you could see the vast majority of the growth we're expecting in 2024 is driven by volume. Our we've talked a lot about the large remaining diagnosed patient opportunity, the meaningfully differentiated product profile for week. So we see significant opportunity and room for growth, but hopefully that provides a little bit of context and helps you think about price versus volume assumptions in the average revenue per patient at 2024.
Thank you. And if I could have one follow-up question. What is the appetite for share buybacks in 2024 look like relative to the $100 million and share buybacks that you guys did in 2023. I think as you said, you are looking to take an opportunistic approach on.

Kumar Budur

And Sandip, if you want to comment further.

Sandip Kapadia

Yes, look, we were very pleased last year that we were able to do approximately 100 million share repurchase activities over the last couple of quarters. And I think it's really not a question of either or we have the flexibility to do both and you know and love and respective business development. We obviously talked about our strategy there. And then in terms of share buyback, again, we'd look at it more opportunistically and at the appropriate levels, we would certainly in a great cash position to be a flex.
Yes, and we have approximately $150 million of capacity still remaining.
Yes.

Jason Matthew Gerberry

Thank you.

Sandip Kapadia

Thank you.

Operator

Thank you. And we'll take our next question from Danielle Brill with Raymond James. Your line is open.

Danielle Catherine Brill Bongero

Hey, guys, good morning. Thanks for the questions. I was also hoping you could provide more color on the assumptions that went into your 2024 guidance, specifically around expectations for patient adds, it looks like you're expecting a slowdown in net patient adds each quarter, or are you just being conservative here or is growth starting to moderate? And then as a follow-up, can you remind us what impact the label expansion into the pediatric narcolepsy population will have on the overall TAM for Wayfair. Thank you.

Jeffrey Dayno

Yes.
Thanks, Danielle, and good morning.
Yes, with regards to on, you know, I think, Betsy, in terms of revenue and your revenue guidance and Sandip, do you want to know?

Sandip Kapadia

Yes.
Look, I I think as we mentioned, we've taken a thoughtful and balanced approach in terms of providing guidance for us for the 1st year in element. Certainly look to provide an update as we go throughout the year. We're not in any way indicating we see great momentum coming out of the fourth quarter and expect that momentum to sort of carry through for the year?
I mean, Jeff comment at all in terms of just overall well, but you're saying.

Jeffrey Dierks

Sure, Danielle, in terms of looking at it average patient growth and sort of the assumptions in the 2024 guidance. I mean, as you've seen, we've seen demonstrated durable growth in the narcolepsy market, and we've grown average patients every quarter since launch, even with availability. But within that durable growth, that growth has evolved every year and entering our year five of our rare orphan launch, we're going to expect that growth to continue to evolve that follow the previous year's cadence of the quarterly growth as we tap into that large diagnosed patient opportunity. So you'll see the traditional payer headwinds in the first quarter that impact all brands and specialty products, you'll see the traditional fewer patient visits associated with chronically manage conditions and diseases in Q3 and then typically in previous years, we expect to have the traditional tailwinds in the second and the fourth quarter with stronger prescription demand on again. But I think the takeaway is we're extremely pleased with what we're seeing, I'm confident in continued growth, and we really believe that way Qix is well positioned for future growth in 2024 and the next day, things on to pin down.
Then your next question on (multiple speakers)

Danielle Catherine Brill Bongero

it was on pediatric TAM and how that expense going to make its offer to them. And I think Jeff can speak to that is done, I think, obviously, you know, positive signals from the agency on the importance of that indication in pediatric narcolepsy patients who Jeff on what does the opportunity look like for sure.

Jeffrey Dierks

So I mean, Danielle, we estimate there's about 4,000 pediatric narcolepsy patients in the US. And although it's not a large opportunity, it's an important one. And it's a very underserved patient population. It was only one FDA-approved treatment option being sodium oxybate being a Schedule three REMS product right now. And I think we're very excited about the potential if successful to bring a non-scheduled treatment option and given what we're seeing the impact of narcolepsy on these individuals' lives.
Yes.

Jeffrey Dayno

Thanks, Jeff. And Danielle. Let me let me just also add with regards to on the pediatric narcolepsy, that S. and PA., it's also important that those data are we're also pursuing a pediatric exclusivity, which is obviously an important in our commercial opportunity with regard to an additional six months of regulatory exclusivity. So those data are one component of that, along with the data that we'll be generating in the Phase three Prader-Willi TEMPO study. So both of these components are important and we are advancing both of these and making progress in terms of pediatric narcolepsy data through that submission and then the initiation of the Phase three trial in Prader-Willi syndrome. And both of those components are what would be required as we pursue pediatric exclusivity an additional six months of protection.

Danielle Catherine Brill Bongero

Okay. Thank you.

Jeffrey Dierks

So much. Thanks for coming.

Operator

Thank you.
We'll take our next question from Graig Suvannavejh with Lubrizol. Your line is open pilot launch from now on for Greg.

Graig C. Suvannavejh

I just had a question about the one about the bottleneck opportunities. Any of that or timelines have been pushed a little bit due to enrollment, but were there any changes in the trial design as there originally were which also constantly.
And then also on the pediatric opportunity, I know you said it's a pretty small opportunity, but do you anticipate growing the weak sales force it all and it's accrued.

Jeffrey Dayno

Thank you for your question. With regards to on the Fragile X study tomorrow, Kumar?

Kumar Budur

Yes, thank you for the question. Once the COVID pandemic syndrome at the time line would not pushed out this that we had mentioned that we will go evaluate the time by once the asset is being called, and we had an opportunity to evaluate the time line. And based on the historical recruitment plan and the anticipated recruitment in this patient population, we are out of time completing enrollment in the first quarter of 2025 with top line anticipated in mid 2025. And there is not no change in the study design.

Sandip Kapadia

And I would just add, I think that the opportunity is for enough for Harmony for us, if you have to put our resources towards driving the Phase three RECONNECT trial forward with regards to the experience of the clinical development team, about more capacity from an operational perspective and really engaging with the patient community through our patient advocacy efforts as well to drive that forward toward significant market opportunity of 80,000 diagnosed patients in the US.
Turning to pediatric narcolepsy zone, we see current sort of small market opportunity, but quite an important one. And I think you have just sort of alluded to this being an important one in terms of potential new non-scheduled treatment option for pediatric patients with narcolepsy rather than Schedule two stimulants. So we are looking forward to working with the agency towards that and then with regards to, you know, the impact on the market opportunity, just short and so in looking at the sales force coverage for pediatric narcolepsy?

Jeffrey Dierks

Yes, we believe that we're optimized for the narcolepsy opportunity with our existing sales force footprint. There will be some new prescribers that we'll be adding to our target list of successful, but we believe that our current team that is still very excited about the potential to bring this forward is optimized to be able to take on this new opportunity with these additional patients. And with the addition of a handful of health care professionals, there's a high overlap between adult narcolepsy prescribing and pediatric narcolepsy prescribing. So we believe we've got relationships established with a good portion of those prescribers. But we are absolutely optimized with our team and if successful, very excited to bring this new indication forward.
Great (multiple speakers)

Graig C. Suvannavejh

Thanks.
I think I'm a new squeeze in one more sorry on for our gross-to-net. I know you talked about the headwinds in Q1, but can you just quantify what you think it will be for the full year?

Jeffrey Dayno

Sandip?

Sandip Kapadia

Yes, hi, thanks for the question. As I mentioned, typically in the first quarter across the industry, there, general headwinds from just higher co-pay obligation and insurance funds resets in the first quarter. So we'll see a couple of percentage points impact from that. Typically what we've seen in the past in the first quarter and that sort of outcome, again improved as we go throughout the year generally.

Graig C. Suvannavejh

Okay. Thank you.

Operator

And I'm showing no further questions. I would now like to turn the call back to management for closing remarks.

Jeffrey Dayno

Thank you, Brittany, and thanks, everyone, for joining our call today and for your interest in harmony. As you've heard from us this morning, our strong execution in 2023 and solid momentum going into this year. Positioned Harmony well for continued growth in 2024. We look forward to providing updates as we execute on our growth strategy. Thank you and have a great day.

Operator

This does conclude today's Harmony Biosciences' Fourth Quarter and Full Year 2023 financial results conference call. You may now disconnect your lines and have a wonderful day. But I will yes.