Sell Rating for Harmony Biosciences Holdings Due to Patent Litigation Risks and Speculative Pipeline

In a report released yesterday, Jason Gerberry from Bank of America Securities reiterated a Sell rating on Harmony Biosciences Holdings (HRMY – Research Report), with a price target of $31.00.

Jason Gerberry has given his Sell rating due to a combination of factors related to Harmony Biosciences Holdings’ current market position and future prospects. The company reported a modest revenue increase in the first quarter, primarily driven by its sole marketed product, Wakix, which is expected to meet its full-year growth guidance. However, concerns arise from the impending patent litigation for Wakix, which could impact its long-term growth potential.
Additionally, the company’s pipeline remains speculative, with key developments such as the ZYN-002 Phase 3 data and the pitolisant-HD study still years away. Furthermore, Harmony faces significant competition in the orexin market, with its orexin-2 receptor agonist being behind other competitors in development. The company’s efforts to mitigate geopolitical risks by establishing a US-based manufacturing site for Wakix are noted, yet the lack of a specified timeline adds uncertainty. These factors contribute to the Sell rating, as the risks associated with Wakix’s durability and the speculative nature of the pipeline outweigh the current valuation.

According to TipRanks, Gerberry is a 4-star analyst with an average return of 3.3% and a 50.51% success rate. Gerberry covers the Healthcare sector, focusing on stocks such as Jazz Pharmaceuticals, Axsome Therapeutics, and Alkermes.