Harmony Biosciences: Rare Disease Catalysts and Undervalued Potential Ahead of June 9 Fireside Chat

Harmony Biosciences (NASDAQ: HRMY) stands at a pivotal moment in its trajectory, with a robust pipeline of therapies targeting rare neurological diseases and a series of near-term catalysts poised to redefine its valuation. As the company prepares for its June 9 fireside chat at the Goldman Sachs Global Healthcare Conference, investors have a critical opportunity to assess whether management can deliver on its ambitious growth roadmap—and why the stock may be undervalued relative to its peers.

The Rare Disease Opportunity: A Multibillion-Dollar Frontier

Rare neurological diseases, often overlooked by Big Pharma, represent a high-margin, low-competition market with significant unmet needs. Harmony's focus on narcolepsy, Fragile X syndrome (FXS), and rare epilepsies aligns with this strategy. The narcolepsy market alone, where its lead drug WAKIX® holds a $1 billion+ revenue potential, is just the beginning. For FXS—a condition affecting ~80,000 U.S. patients with no FDA-approved treatments—Harmony's ZYN002 could command a premium if successful.

Upcoming Catalysts: A Pipeline-Rich 2025

The June 9 fireside chat will likely spotlight the following milestones, which could catalyze a revaluation of HRMY's stock:

1. ZYN002 in Fragile X Syndrome (Q3 2025):
   Topline data from the Phase 3 RECONNECT trial is expected in the third quarter. If positive, ZYN002 could become the first approved therapy for FXS, unlocking a near-$1 billion market. Open-label extension data already show clinically meaningful improvements in irritability scores, a key endpoint.

2. Pitolisant HD Formulations (Q4 2025):
   High-dose trials targeting narcolepsy and idiopathic hypersomnia (IH) will begin in late 2025. Success here could extend WAKIX's exclusivity into the 2040s via patents filed to 2044, creating a long-term revenue engine.

3. Pitolisant GR Bioequivalence Study (Q3 2025):
   This formulation, designed to improve gastrointestinal stability, aims to address patient compliance concerns. A positive readout could accelerate approvals and drive adoption.

4. BP1.15205: A Next-Gen Orexin-2 Agonist (H2 2025):
   Preclinical data to be presented at the SLEEP 2025 conference highlight this compound's potential as a “best-in-class” treatment for narcolepsy, with once-daily dosing.

Why HRMY Is Undervalued: A Discounted Leader

At current levels (~$50/share as of June 2025), HRMY trades at a ~3.5x forward P/S multiple, significantly below peers like Ultragenyx (RARE: 12.5x) and BioMarin (BMRN: 9.2x). This discount ignores:
- Strong Financials: $610 million in cash, four consecutive years of profitability, and WAKIX's 20% YoY revenue growth.
- Pipeline Depth: A diversified portfolio spanning sleep disorders, neurobehavioral conditions, and rare epilepsy.
- Patent Protection: Extended exclusivity periods for key programs, shielding revenue from generic competition.

Investment Thesis: Buy the Dip Ahead of Catalysts

The June 9 fireside chat offers a critical inflection point. Positive signals—such as clarity on ZYN002's Phase 3 design, Pitolisant HD's trial timelines, or updates on BP1.15205—could narrow HRMY's valuation gap with peers. Even modest success in 2025 (e.g., ZYN002 approval in 2026) could justify a 50%+ upside to $75/share.

Risks to Consider

• Regulatory Hurdles: The FDA's recent refusal to file pitolisant for IH highlights execution risks.
• Pipeline Delays: Missed milestones or negative trial results could pressure the stock.
• Competition: Emerging therapies in narcolepsy (e.g., Eisai's E2027) pose a threat, though Harmony's IP and market position mitigate this.

Conclusion: A Rare Gem in Rare Diseases

Harmony Biosciences is positioned to capitalize on a multibillion-dollar market with therapies addressing critical unmet needs. With a fortress balance sheet, a 2025 packed with catalysts, and a valuation that ignores its pipeline's potential, HRMY offers asymmetric upside. Investors should monitor the June 9 event closely—positive updates could ignite a rerating, making now an ideal time to establish a position.

Consider initiating a position in HRMY ahead of the June 9 fireside chat, with a target price of $75/share by end-2025 and a stop-loss below $40/share.