Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 16, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39450 | ||
Entity Registrant Name | HARMONY BIOSCIENCES HOLDINGS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-2279923 | ||
Entity Address, Postal Zip Code | 19462 | ||
Entity Address, Address Line One | 630 W. | ||
Entity Address, Address Line Two | Germantown Pike | ||
Entity Address, Address Line Three | Suite 215 | ||
Entity Address, City or Town | Plymouth Meeting | ||
Entity Address, State or Province | PA | ||
City Area Code | 484 | ||
Local Phone Number | 539-9800 | ||
Title of 12(b) Security | Common Stock, par value $0.00001 value per share | ||
Trading Symbol | HRMY | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,174.5 | ||
Entity Common Stock, Shares Outstanding | 56,769,081 | ||
Entity Central Index Key | 0001802665 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Amendment Flag | false | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Firm ID | 34 | ||
Auditor Location | Philadelphia, PA |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 311,660 | $ 243,784 |
Investments, short-term | 41,800 | 79,331 |
Trade receivables, net | 74,140 | 54,740 |
Inventory, net | 5,363 | 4,297 |
Prepaid expenses | 12,570 | 9,347 |
Other current assets | 5,537 | 8,786 |
Total current assets | 451,070 | 400,285 |
NONCURRENT ASSETS: | ||
Property and equipment, net | 371 | 573 |
Restricted cash | 270 | 750 |
Investments, long-term | 72,169 | 22,568 |
Intangible assets, net | 137,108 | 160,953 |
Deferred tax asset | 144,162 | 85,943 |
Other noncurrent assets | 6,298 | 2,798 |
Total noncurrent assets | 360,378 | 273,585 |
TOTAL ASSETS | 811,448 | 673,870 |
CURRENT LIABILITIES: | ||
Trade payables | 17,730 | 3,786 |
Accrued compensation | 23,747 | 11,532 |
Accrued expenses | 99,494 | 59,942 |
Current portion of long-term debt | 15,000 | 2,000 |
Other current liabilities | 7,810 | 1,624 |
Total current liabilities | 163,781 | 78,884 |
NONCURRENT LIABILITIES: | ||
Long-term debt, net | 178,566 | 189,647 |
Other noncurrent liabilities | 2,109 | 2,501 |
Total noncurrent liabilities | 180,675 | 192,148 |
TOTAL LIABILITIES | 344,456 | 271,032 |
COMMITMENTS AND CONTINGENCIES (Note 13) | ||
STOCKHOLDERS' EQUITY: | ||
Common stock-$0.00001 par value; 500,000,000 shares authorized at December 31, 2023 and December 31, 2022, respectively; 56,769,081 and 59,615,731 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 1 | 1 |
Additional paid in capital | 610,266 | 675,118 |
Accumulated other comprehensive (loss) income | 2 | (151) |
Accumulated deficit | (143,277) | (272,130) |
TOTAL STOCKHOLDERS' EQUITY | 466,992 | 402,838 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 811,448 | $ 673,870 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 56,769,081 | 59,615,731 |
Common stock, shares outstanding | 56,769,081 | 59,615,731 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||
Net product revenue | $ 582,022 | $ 437,855 | $ 305,440 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Cost of product sold | $ 121,236 | $ 83,481 | $ 55,518 |
Cost, Product and Service [Extensible Enumeration] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Gross profit | $ 460,786 | $ 354,374 | $ 249,922 |
Operating expenses: | |||
Research and development | 76,063 | 70,886 | 30,367 |
Sales and marketing | 97,404 | 79,285 | 68,118 |
General and administrative | 95,289 | 84,017 | 63,909 |
Total operating expenses | 268,756 | 234,188 | 162,394 |
Operating income | 192,030 | 120,186 | 87,528 |
Loss on debt extinguishment | (9,766) | (26,146) | |
Other (expense) income, net | 159 | 169 | 16 |
Interest expense | (23,757) | (18,795) | (24,194) |
Interest income | 14,730 | 3,126 | 224 |
Income before income taxes | 173,396 | 104,686 | 37,428 |
Income tax (expense) benefit | (44,543) | 76,782 | (2,831) |
Net income | 128,853 | 181,468 | 34,597 |
Unrealized income (loss) on investments | 153 | (151) | |
Comprehensive income | $ 129,006 | $ 181,317 | $ 34,597 |
EARNINGS PER SHARE: | |||
Basic | $ 2.17 | $ 3.07 | $ 0.60 |
Diluted | $ 2.13 | $ 2.97 | $ 0.58 |
Weighted average number of shares of common stock - basic | 59,469,648 | 59,173,121 | 57,531,540 |
Weighted average number of shares of common stock - diluted | 60,372,397 | 61,097,045 | 59,205,213 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit | Total | |
Beginning balance at Dec. 31, 2020 | $ 1 | $ 585,374 | $ (488,195) | $ 97,180 | ||
Beginning balance, shares at Dec. 31, 2020 | [1] | 56,890,569 | ||||
Net income | 34,597 | 34,597 | ||||
Issuance of common stock | 29,700 | 29,700 | ||||
Issuance of common stock, Shares | [1] | 1,270,462 | ||||
Exercise of options | 9,371 | 9,371 | ||||
Exercise of options , Shares | [1] | 664,738 | ||||
Stock-based compensation | 15,659 | 15,659 | ||||
Ending balance at Dec. 31, 2021 | $ 1 | 640,104 | (453,598) | 186,507 | ||
Ending balance, shares at Dec. 31, 2021 | [1] | 58,825,769 | ||||
Net income | 181,468 | 181,468 | ||||
Unrealized gain (loss) on investments | $ (151) | (151) | ||||
Issuance of common stock | 408 | 408 | ||||
Issuance of common stock, Shares | [1] | 8,050 | ||||
Exercise of options | 8,433 | 8,433 | ||||
Exercise of options , Shares | [1] | 781,912 | ||||
Stock-based compensation | 26,173 | 26,173 | ||||
Ending balance at Dec. 31, 2022 | $ 1 | 675,118 | (151) | (272,130) | 402,838 | |
Ending balance, shares at Dec. 31, 2022 | [1] | 59,615,731 | ||||
Net income | 128,853 | 128,853 | ||||
Unrealized gain (loss) on investments | 153 | 153 | ||||
Repurchase of common stock | (101,097) | $ (101,097) | ||||
Repurchase of common stock, Shares | [1] | (3,254,445) | ||||
Exercise of options , Shares | 371,896 | |||||
Exercise of options and vesting of restricted stock units | [2] | 4,540 | $ 4,540 | |||
Exercise of options and vesting of restricted stock units, Shares | [1],[2] | 407,795 | ||||
Stock-based compensation | 31,705 | 31,705 | ||||
Ending balance at Dec. 31, 2023 | $ 1 | $ 610,266 | $ 2 | $ (143,277) | $ 466,992 | |
Ending balance, shares at Dec. 31, 2023 | [1] | 56,769,081 | ||||
[1] Common stock of Harmony Biosciences Holdings, Inc. Inclusive of fees and 1% excise tax on shares repurchased. |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) | 12 Months Ended |
Dec. 31, 2023 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) | |
Excise tax rate on shares repurchased | 1% |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 128,853 | $ 181,468 | $ 34,597 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Depreciation | 514 | 419 | 416 |
Intangible amortization | 23,845 | 22,966 | 18,424 |
Acquired in-process research & development (IPR&D) expense | 2,260 | ||
Stock-based and employee stock purchase compensation expense | 31,705 | 26,173 | 15,659 |
Stock appreciation rights market adjustment | (499) | 732 | 446 |
Debt issuance costs amortization | 2,274 | 1,663 | 2,238 |
Deferred taxes | (13,419) | (85,943) | |
Amortization of premiums and accretion of discounts on Investment securities | (2,715) | (432) | |
Loss on debt extinguishment | 9,766 | 26,146 | |
Other non-cash expenses | 1,768 | 1,526 | |
Change in operating assets and liabilities: | |||
Trade receivables | (19,400) | (19,897) | (12,667) |
Inventory | (1,066) | 135 | (609) |
Prepaid expenses and other assets | 74 | (7,548) | (1,655) |
Trade payables | 8,949 | 2,785 | (1,555) |
Accrued expenses and other current liabilities | 46,479 | 20,570 | 17,263 |
Other non-current liabilities | (1) | (151) | (146) |
Net cash provided by operating activities | 219,387 | 144,466 | 98,557 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of investment securities | (127,469) | (110,729) | |
Proceeds from maturities and sales of investment securities | 118,309 | 9,069 | |
Purchase of property and equipment | (312) | (172) | (298) |
Acquisition of Zynerba Pharmaceuticals, Inc., net of cash acquired | (36,967) | ||
Milestone payments | (40,000) | (100,000) | |
Net cash used in investing activities | (46,439) | (141,832) | (100,298) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of common stock | 30,000 | ||
Common stock issuance costs | (300) | ||
Proceeds from issuance of debt | 200,000 | 200,000 | |
Debt issuance costs | (2,997) | (9,152) | |
Extinguishment of debt | (196,500) | (200,000) | |
Extinguishment of debt exit fees | (5,846) | (22,000) | |
Principal repayment of long term debt | (4,750) | (2,000) | (500) |
Repurchase of common stock | (100,000) | ||
Payments of employee withholding taxes related to stock-based awards | (514) | ||
Proceeds from exercised options | 5,055 | 8,841 | 9,371 |
Net cash (used in) provided by financing activities | (105,552) | 6,841 | 7,419 |
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 67,396 | 9,475 | 5,678 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH-Beginning of period | 244,534 | 235,059 | 229,381 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH-End of period | 311,930 | 244,534 | 235,059 |
Supplemental Disclosure of Cash Flow Information: | |||
Cash paid during the year for interest | 20,051 | 16,364 | 19,830 |
Cash paid during the year for taxes | $ 48,233 | $ 12,645 | $ 2,875 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2023 | |
Organization and Description of Business | |
Organization and Description of Business | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS The Company Harmony Biosciences Holdings, Inc., and its consolidated subsidiaries (the “Company”) was founded in July 2017 as Harmony Biosciences II, LLC, a Delaware limited liability company. The Company converted to a Delaware corporation named Harmony Biosciences II, Inc. in September 2017 and, in February 2020, the Company changed its name to Harmony Biosciences Holdings, Inc. The Company’s operations are conducted in its wholly owned subsidiary, Harmony Biosciences, LLC (“Harmony”), which was formed in May 2017. The Company is a commercial-stage pharmaceutical company focused on developing and commercializing innovative therapies for patients living with rare neurological disorders as well as patients living with other neurological diseases who have unmet medical needs. The Company is headquartered in Plymouth Meeting, Pennsylvania. On October 10, 2023, the Company completed a tender offer to acquire all of the outstanding shares of common stock of Zynerba Pharmaceuticals, Inc. (together with its subsidiary, Zynerba Pharmaceutical Pty, Ltd., “Zynerba”). Zynerba is a clinical-stage pharmaceutical company focused on innovative pharmaceutically produced transdermal cannabidiol therapies for orphan neuropsychiatric disorders, including Fragile X syndrome. |
Liquidity and Capital Resources
Liquidity and Capital Resources | 12 Months Ended |
Dec. 31, 2023 | |
Liquidity and Capital Resources | |
Liquidity and Capital Resources | 2. LIQUIDITY AND CAPITAL RESOURCES The consolidated financial statements have been prepared as though the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $143,277 and $272,130, as of December 31, 2023, and 2022, respectively. As of December 31, 2023, the Company had cash, cash equivalents and investments of $425,629. The Company believes that its existing cash, cash equivalents and investments on hand as of December 31, 2023, as well as additional cash generated from operating and financing activities will meet its operational liquidity needs and fund its planned investing activities for the next twelve months from the date of issuance of these consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. All intercompany accounts and transactions have been eliminated. Significant Risks and Uncertainties The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to, the results of clinical testing and trial activities of the Company’s product candidates; the Company’s ability to obtain regulatory approval to market its products; competition from products manufactured and sold or being developed by other companies; the price of, and demand for, the Company’s products, if approved; the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its product candidates; and the Company’s ability to raise capital. The Company currently has one commercially approved product, WAKIX, and there can be no assurance that the Company’s research and development efforts will result in successfully commercialized products in addition to WAKIX. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements, including the notes thereto, and elsewhere in this report. Actual results may differ significantly from estimates, which include rebates due pursuant to commercial and government contracts, accrued research and development expenses, stock-based compensation expense and income taxes. Operating Segments The Company holds all its tangible assets, conducts its operations, and generates its revenue in the U.S. Operating segments which are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Makers in deciding how to allocate resources to an individual segment and in assessing performance. The Company has determined it operates in a single operating segment and has one reportable segment. Fair Value of Financial Instruments The Company’s consolidated financial statements include cash, cash equivalents, accounts payable, and accrued liabilities, all of which are short term in nature and, accordingly, approximate fair value. Additionally, prior to the IPO, the Company’s consolidated financial statements included a warrant liability that was carried at fair value and was re-measured at each balance sheet date until it would be exercised or expired. In connection with the IPO, the Warrants were re-evaluated under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, It is the Company’s policy to measure non-financial assets and liabilities at fair value on a nonrecurring basis. These non-financial assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (such as evidence of impairment), which, if material, are disclosed in the accompanying footnotes. The Company measures certain assets and liabilities at fair value based on the fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels based on the source of inputs as follows: Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities. Level 3—Valuations based on unobservable inputs and models that are supported by little or no market activity. Money market funds are classified as Level 1 fair value instruments. Investments in available-for-sale debt securities are classified as Level 2 and carried at fair value, which we estimate utilizing a third-party pricing service. The pricing service utilizes industry standard valuation models whereby all significant inputs, including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, bids, offers, or other market-related data, are observable. We validate valuations obtained from third-party services by obtaining market values from other pricing sources. The Company did not classify any assets or liabilities as Level 3 as of December 31, 2023, or December 31, 2022. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents and restricted cash consist of cash and, if applicable, highly liquid investments with an original maturity of three months or less when purchased, including investments in money market funds and debt securities that approximate fair value. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet and in the statements of cash flows. As of December 31, December 31, 2023 2022 Cash and cash equivalents $ 311,660 $ 243,784 Restricted cash 270 750 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 311,930 $ 244,534 Restricted cash includes amounts required to be held as a security deposit in the form of letters of credit for the Company’s credit card program and the fleet program. Investments The Company’s investments consist of debt securities that are classified as available-for-sale. Short-term and long-term investments are carried at fair value and unrealized gains and losses are recorded as a component of accumulated comprehensive income in stockholders’ equity. The amortization of premiums and accretion of discounts adjust the carrying value of investments and are recorded in interest expense, net, on the unaudited condensed consolidated statements of operations and comprehensive income. Interest income and realized gains and losses, if any, are also recorded in interest expense, net, on the unaudited condensed consolidated statement of operations and comprehensive income. Realized gains and losses that result from the sale of investments are determined on a specific identification basis. At each reporting period, the Company reviews any unrealized losses position to determine if the decline in the fair value of the underlying investments is a result of credit losses or other factors. If the assessment indicates that a credit loss exists, any impairment is recognized as an allowance for credit losses in our consolidated statement of operations. Concentrations of Risk Substantially all of the Company’s cash and money market funds are held in five financial institutions. Due to their size, the Company believes these financial institutions represent minimal credit risk. Deposits may exceed the amount of insurance provided on such deposits by the Federal Deposit Insurance Corporation for U.S. institutions. The Company has not experienced any losses on its deposits of cash and cash equivalents. The Company believes that it is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company is subject to credit risk from its trade receivables related to its product sales. The Company extends credit to specialty pharmaceutical distribution companies within the United States. Customer creditworthiness is monitored and collateral is not required. Historically, the Company has not experienced credit losses on its accounts receivable. The Company monitors its exposure within accounts receivable and would record a reserve against uncollectible accounts receivable if necessary. As of December 31, 2023, three customers accounted for 100% of gross accounts receivable, Accredo Health Group, Inc. (“Accredo”), which accounted for 39% of gross accounts receivable; Caremark LLC (“CVS Caremark”), which accounted for 32% of gross accounts receivable; and PANTHERX Specialty Pharmacy LLC (“Pantherx), which accounted for 29% of gross accounts receivable. As of December 31, 2022, three customers accounted for 100% of gross accounts receivable; CVS Caremark, which accounted for 41% of gross accounts receivable, Accredo, which accounted for 35% of gross accounts receivable and Pantherx, which accounted for 24% of gross accounts receivable. For the year ended December 31, 2023, three customers accounted for 100% of gross product revenue; CVS Caremark accounted for 37% of gross product revenue; Accredo accounted for 32% of gross product revenue; and Pantherx accounted for 31% of gross product revenue. For the year ended December 31, 2022, three customers accounted for 100% of gross product revenue; CVS Caremark accounted for 42% of gross product revenue; Pantherx accounted for 29% of gross product revenue; and Accredo accounted for 29% of gross product revenue. For the year ended December 31, 2021, three customers accounted for 100% of gross product revenue; CVS Caremark accounted for 36% of gross product revenue; Pantherx accounted for 35% of gross products revenue; and Accredo accounted for 29% of gross product revenue. The Company depends on a single source supplier for each of its product and active pharmaceutical ingredient. Share Repurchases The Company accounts for share repurchases as constructive retirements, whereby it reduces common stock and additional paid-in capital by the amount of the original issuance, with any excess purchase price recorded as a reduction to retained earnings. Under this method, issued and outstanding shares of common stock are reduced by the amount of shares of common stock repurchased, and no treasury stock is recognized on the condensed consolidated financial statements. Inventory Inventory is valued at the lower of cost or net realizable value. Cost is determined using the specific identification method for all inventory. Our policy is to write down inventory that has become obsolete, that has a cost basis in excess of its expected net realizable value and/or that we have quantities in excess of expected future demand. The estimate of excess quantities is subjective and primarily dependent on our estimates of future demand. If our estimate of future demand changes, we consider the impact on the reserve for excess inventory and adjust the reserve as required. Inventory reserves are recorded as a component of cost of product sales in our consolidated statement of operations. We may capitalize inventory costs associated with products prior to regulatory approval when future commercialization is probable. Otherwise, such costs are expensed as research and development. The determination to capitalize inventory costs is based on various factors, including status and expectations of the regulatory approval process, any known safety or efficacy concerns, potential labeling restrictions, and any other impediments to obtaining regulatory approval. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally between three Intangible Assets Intangible assets with finite useful lives consist primarily of purchased developed technology and are amortized on a straight-line basis over their estimated useful lives. The estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the associated products and may be modified when circumstances warrant. Such assets are reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount. The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset. Revenue Recognition We account for contracts with our customers in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606), or ASC 606. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services it transfers to the customer. The amount of variable consideration which is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under contracts will not occur in a future period. Our analyses contemplate the application of the constraint in accordance with ASC 606. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. We have determined that the delivery of our product to our customer constitutes a single performance obligation as there are no other promises to deliver goods or services in contracts with our customers. Shipping and handling activities are considered to be fulfilment activities and are not considered to be a separate performance obligation. The payment terms with our customers do not exceed one year and therefore, no amount of consideration has been allocated as a financing component. Taxes collected related to product sales are remitted to governmental authorities and are excluded from revenue. Net Product Revenue We recognize revenue from sales of WAKIX when the customer obtains control of the product, which occurs at a point in time, typically upon delivery. Product revenue is recorded at the product’s list price, net of applicable reserves for variable consideration that are offered within contracts between us and our customers, payors, and other indirect customers relating to the sale of WAKIX. Components of variable consideration include government (as detailed below) and commercial contracts, commercial co-payment assistance program, and distribution service fees. These deductions are based on the amounts earned, or to be claimed on the related sales, and are classified as a current liability or reduction of receivables in our consolidated balance sheet. Government Contracts We have entered into contracts (i) to participate in the Medicaid Drug Rebate Program and the Medicare Part D program, and (ii) to sell to the U.S. Department of Veterans Affairs, 340b entities and other government agencies, or government payors, so that WAKIX will be eligible for purchase by, in partial or full reimbursement from, such government payors. We record reserves for rebates due pursuant to these contracts as a reduction of revenue in the same period in which the revenue is recognized. The liability for government rebates is included in accrued expenses in our consolidated balance sheet. We estimate rebates due pursuant to government contracts based upon our historical payment trends, information obtained from third parties estimating current payment trends, the government-mandated discounts applicable to government-funded programs, as well as information obtained from our customers. The liability for these government rebates consists of estimates of claims for WAKIX dispensed in the current period, plus an estimate for product which has shipped and has been recognized as revenue but remains in the distribution channel at the end of a reporting period. Cost of Product Sold Cost of product sold includes manufacturing and distribution costs, the cost of drug substance, FDA program fees, royalties due to third parties on net product sales, freight, shipping, handling, storage costs, and salaries of employees involved with production. Research and Development Expenses Research and development costs are expensed as incurred. Liabilities due to third parties in connection with research and development collaborations prior to regulatory approval are expensed as incurred. Upfront payments and pre-FDA approval milestone payments made for licensing of technology are expensed as research and development in the period in which they are incurred. Advance payments for goods and services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed. Advertising Expenses We expense the costs of advertising, including promotional expenses, as incurred. Advertising expenses were $21,544, $22,428 and $19,558 for the years ended December 31, 2023, 2022 and 2021, respectively. Stock-Based Compensation The Company recognizes stock-based compensation expense in operating results using a fair value measurement method, in accordance with FASB ASC 718, Compensation-Stock Compensation. ASC 718 requires all stock-based payments to employees to be recognized in operating results as compensation expense based on fair value over the requisite service period of the awards. The vesting periods have a time-based provision consisting of one Basic and Diluted Net Income per Share Basic net income per share is determined using the weighted average number of shares of common stock outstanding during each period. Diluted net income per share includes the effect, if any, from the potential exercise or conversion of securities, such as stock options, and warrants which would result in the issuance of incremental shares of common stock. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets may be reduced by a valuation allowance if, based on all available evidence, it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Management judgment is required in determining the period in which a reversal of a valuation allowance should occur. The Company is required to consider all available evidence, both positive and negative, such as historical levels of income and future forecasts of taxable income among other items, in determining whether a full or partial release of its valuation allowance is required. Our accounting for deferred tax consequences represents the best estimate of those future events. The Company presents deferred income taxes on the Consolidated Balance Sheet on a jurisdictional basis as either a net noncurrent asset or liability. The Company recognizes the effect of income tax positions only if those positions are more likely than not sustainable, based solely on its technical merits and consideration of the relevant taxing authority’s widely understood administrative practices and precedents. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs. At December 31, 2023 and 2022, the Company did not have any unrecognized uncertain tax positions. The Company’s policy is to include any interest and penalties as a component of income tax expense. Business Combinations Acquisition Recently Issued Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07, Improvements to Reportable Segment Disclosures In December 2023, the FASB issued Accounting Standards Update (“ASU”) No 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2023 | |
Acquisition | |
Acquisition | 4. ACQUISITION On October 10, 2023, the Company completed a tender offer to purchase the outstanding common stock of Zynerba (“Zynerba Common Stock”) for (i) $1.1059 per share of Zynerba Common Stock (the “Common Cash Amount”), plus (ii) one contingent value right (each, a “CVR”) per share of Zynerba Common Stock (the “Common CVR Amount”), which represents the right to receive up to approximately $2.5444 per share of Zynerba Common Stock, subject to the achievement of certain clinical, regulatory and sales-based milestones. Both the Common Cash Amount and Common CVR Amount are to be paid in cash, subject to any applicable withholding of taxes and without interest. The aggregate amount of consideration to acquire Zynerba Common Stock was $60,000, excluding transaction related fees of $2,645 and was paid by the Company using cash on hand. The total purchase consideration for Zynerba was as follows: Cash consideration paid to selling shareholders (i) $ 55,960 Cash consideration paid to settle Zynerba restricted stock awards ("RSAs") as stock options (ii) 4,040 Transaction costs 2,645 Total purchase consideration $ 62,645 (i) The cash consideration paid to selling shareholders was determined based on the total number of Zynerba shares tendered at closing of 50,602,656 at a per share price of $1.1059 . (ii) The cash consideration paid to settle Zynerba restricted stock awards (“RSAs”) and stock options under Zynerba equity incentive plans was determined based on the total number of underlying shares of 4,000,169 at a per share price of $1.1059 , less exercise price for the stock options. All consideration was paid during the year ended December 31, 2023. The Zynerba Acquisition was accounted for as an asset acquisition under ASC Topic 805, Business Combinations, because substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable IPR&D asset, ZYN002, Zynerba’s lead asset. ZYN002 is the first and only pharmaceutically manufactured, synthetic cannabidiol, a non-euphoric cannabidiol, formulated as a patent-protected permeation-enhanced gel for transdermal delivery through the skin and into the circulatory system and is currently in Phase III clinical trial for the potential treatment of Fragile X Syndrome. The Company recognized the acquired assets and assumed liabilities based on the consideration paid, including transaction costs, on a relative fair value basis, and after first allocating the preliminary excess of the fair value of net assets acquired over the purchase price consideration to certain qualifying assets, principally, the IPR&D asset. In accordance with the accounting for asset acquisitions, an entity that acquires IPR&D assets in an asset acquisition follows the guidance in ASC Topic 730 Research and Development, which requires that both tangible and intangible identifiable research and development assets with no alternative future use be allocated a portion of the consideration transferred and recorded as research and development expense at the acquisition date. As a result, the Company recorded a charge of $2,260 related to acquired in-process research and development expense related to the ZYN002 IPR&D asset during the year ended December 31, 2023. The following table shows the allocation of the purchase consideration based on the relative fair value of assets acquired and liabilities assumed by the company, after reducing the excess fair value of the IPR&D asset as described above: Assets acquired Cash and cash equivalents $ 25,658 Prepaid expenses and other current assets 3,540 Deferred tax asset 44,800 Restricted cash 20 Acquired in-process research and development 2,260 Total assets acquired $ 76,278 Liabilities assumed Accounts payable 4,995 Accrued expenses and accrued compensation 8,479 Other current liabilities 159 Total liabilities assumed $ 13,633 Net assets acquired $ 62,645 Subsequent to the acquisition, The Company incurred $7,544 in severance charges related to the acquisition, of which $3,858 was included in general administrative expenses and $3,686 was included in research and development expenses, within the consolidated statements of operations for the year ended December 31, 2023. As of December 31, 2023, the Company had accrued $7,544 related to these severance charges, which is included in accrued compensation in the consolidated balance sheet. The amount of Zynerba’s net loss included in the consolidated statements of operations and comprehensive income for the year ended December 31, 2023, was $14,451. There was no revenue from Zynerba included in the consolidated statements of operations and comprehensive income for the year ended December 31, 2023, as Zynerba has no historical sales. Unaudited Pro Forma Financial Information Unaudited pro forma net income was $108,350 and $135,567 for the year ended December 31, 2023, and 2022, respectively and there was no adjustment to unaudited pro forma net product revenue for the year ended December 31, 2023, and 2022, as Zynerba has no historical sales through December 31, 2023. The unaudited pro forma combined financial information presented above has been prepared from historical financial statements that have been adjusted to give effect to the acquisition of Zynerba as though it had occurred on January 1, 2022. They include adjustments for severance expense and acquired in-process research and development expense. The unaudited pro forma financial information is not intended to reflect the actual results of operations that would have occurred if the acquisition had occurred on January 1, 2022, nor is it indicative of future operating results. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2023 | |
Investments | |
Investments | 5. INVESTMENTS The carrying value and amortized cost of the Company’s available-for-sale debt securities, summarized by type of security, consisted of the following: December 31, 2023 Amortized Unrealized Unrealized Fair Cost Gains Losses Value Short-term: Commercial paper $ 23,832 36 (3) $ 23,865 Corporate debt securities 15,968 28 — 15,996 U.S. government securities 1,940 — (1) 1,939 Total short-term investments $ 41,740 64 (4) $ 41,800 Long-term: Commercial paper $ 744 — — $ 744 Corporate debt securities 42,688 81 (28) 42,741 U.S. government securities 28,795 7 (118) 28,684 Total long-term investments $ 72,227 88 (146) $ 72,169 December 31, 2022 Amortized Unrealized Unrealized Fair Cost Gains Losses Value Short-term: Commercial paper $ 26,553 15 (34) $ 26,534 Corporate debt securities 49,213 9 (73) 49,149 U.S. government securities 3,658 — (10) 3,648 Total short-term investments $ 79,424 24 (117) $ 79,331 Long-term: Commercial paper $ 853 1 — $ 854 Corporate debt securities 21,516 11 (68) 21,459 U.S. government securities 257 — (2) 255 Total long-term investments $ 22,626 12 (70) $ 22,568 The Company classifies investments with an original maturity of less than one year as current and investments with an original maturity date of greater than one year as noncurrent on its consolidated balance sheet. The investments classified as noncurrent have original maturity dates ranging from 1-2 years. The Company did not have any available-for-sale debt security investments in a continuous unrealized loss position of greater than 12 months as of December 31, 2023, and December 31, 2022, respectively. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | 6. FAIR VALUE MEASUREMENTS Money market funds are classified as Level 1 fair value instruments. Investments in available-for-sale debt securities are classified as Level 2 and carried at fair value, which we estimate utilizing a third-party pricing service. The pricing service utilizes industry standard valuation models whereby all significant inputs, including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, bids, offers, or other market-related data, are observable. We validate valuations obtained from third-party services by obtaining market values from other pricing sources. The Company did not classify any assets or liabilities as Level 3 as of December 31, 2023, or December 31, 2022. The Company’s assets measured at fair value consisted of the following: December 31, 2023 December 31, 2022 Total Level 1 Level 2 Total Level 1 Level 2 Assets Cash equivalents $ 244,569 243,685 884 $ 184,977 184,977 — Commercial paper 24,609 — 24,609 27,388 — 27,388 Corporate debt securities 58,737 — 58,737 70,608 — 70,608 U.S. government securities 30,623 — 30,623 3,903 — 3,903 Total $ 358,538 243,685 114,853 $ 286,876 184,977 101,899 |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2023 | |
Inventory | |
Inventory | 7. INVENTORY Inventory, net consisted of the following: As of December 31, December 31, 2023 2022 Raw materials $ 1,060 $ 838 Work in process 2,020 1,513 Finished goods 2,283 2,565 Inventory, gross 5,363 4,916 Reserve for excess inventory — (619) Total inventory, net $ 5,363 $ 4,297 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Intangible Assets | |
Intangible Assets | 8. INTANGIBLE ASSETS In August 2019, the Company received FDA approval of WAKIX ® In October 2020, the Company received FDA approval for the New Drug Application (“NDA”) for WAKIX ® In February 2022, the Company attained $500,000 in life-to-date aggregate net sales of WAKIX in the United States. This event triggered a final $40,000 payment under the provisions of the 2017 LCA which the Company capitalized as an intangible asset and paid in March of 2022. The Company determined a useful life of 7.6 years for such intangible asset, and, as of December 31, 2023, the remaining useful life was 5.8 years. Amortization expense was $23,845, $22,966 and $18,424 for the years ended December 31, 2023, 2022 and 2021, respectively, and is recorded in general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). Future annual amortization expense for the unamortized intangible assets is as follows: Years ending December 31, 2024 $ 23,845 2025 23,845 2026 23,845 2027 23,845 2028 23,845 Thereafter 17,883 Total $ 137,108 The gross carrying amount and net book value of the intangible asset is as follows: As of December 31, December 31, 2023 2022 Gross Carrying Amount $ 215,000 $ 215,000 Accumulated Amortization (77,892) (54,047) Net Book Value $ 137,108 $ 160,953 |
License Agreements and Asset Pu
License Agreements and Asset Purchase Agreements | 12 Months Ended |
Dec. 31, 2023 | |
License Agreements and Asset Purchase Agreements | |
License Agreements and Asset Purchase Agreements | 9. LICENSE AGREEMENTS AND ASSET PURCHASE AGREEMENTS In July 2017, Harmony entered into a License Agreement (the “2017 LCA”) with Bioprojet Société Civile de Recherche (“Bioprojet”) whereby Harmony acquired the exclusive right to commercialize the pharmaceutical compound pitolisant for the treatment, and/or prevention, of narcolepsy, obstructive sleep apnea, idiopathic hypersomnia, and Parkinson’s disease as well as any other indications unanimously agreed by the parties in the United States and its territories. A milestone payment of $50,000 was due upon acceptance by the FDA of pitolisant’s NDA, which was achieved in February 2019 and was expensed within research and development for the year ended December 31, 2019. A milestone payment of $77,000, which included a $2,000 fee that is described below, was due upon FDA approval of WAKIX (pitolisant) for treatment of EDS in adult patients with narcolepsy, which was achieved in August 2019. The $2,000 payment and $75,000 milestone payment were paid in August and November 2019, respectively. In addition, a milestone payment of $102,000, which included a $2,000 fee was due upon the FDA approval of the NDA for WAKIX for the treatment of cataplexy in adult patients with narcolepsy. The $2,000 payment was paid in October 2020 and a $100,000 milestone payment was paid in January 2021. A final $40,000 milestone payment was paid to Bioprojet in March 2022 upon WAKIX attaining $500,000 in aggregate net sales in the United States. The 2017 LCA also requires a fixed trademark royalty and a tiered royalty based on net sales, which is payable to Bioprojet on a quarterly basis. The Company incurred $111,685, $77,107 and $50,957 for the years ended December 31, 2023, 2022 and 2021, respectively, for sales-based, trademark and tiered royalties recognized as cost of product sold. As of December 31, 2023, and 2022, the Company had accrued $40,419 and $25,367, respectively, for sales-based, trademark and tiered royalties. In July 2022, Harmony entered into a License and Commercialization Agreement (the “2022 LCA”) with Bioprojet whereby Harmony obtained exclusive rights to manufacture, use and commercialize one or more new products based on pitolisant in the United States and Latin America, with the potential to add additional indications and formulations upon agreement of both parties. Harmony paid an initial, non-refundable $30,000 licensing fee in October 2022 and additional payments of up to $155,000 are potentially due under the 2022 LCA upon the achievement of certain future development and sales-based milestones. In addition, there are other payments due upon achievement of development milestones for new indications and formulations as agreed upon by both parties. The 2022 LCA also requires a fixed trademark royalty and a tiered royalty based on net sales upon commercialization, which will be payable to Bioprojet on a quarterly basis. The $30,000 licensing fee was recorded in research and development within the consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2022. Agreement Related to Intellectual Property In August 2021, the Company entered into an asset purchase agreement with ConSynance Therapeutics, Inc. (the “APA”) to acquire HBS-102 (formerly referred to as “CSTI-100”), a potential first-in-class molecule with a novel mechanism of action. Under the terms of the APA, the Company acquired full development and commercialization rights globally, with the exception of Greater China, for $3,500. The Company accounted for the transaction as an asset acquisition as substantially all of the fair value of the assets acquired was concentrated in a single identified asset. Additionally, there are payments due under the APA upon the achievement of certain milestones including $1,750 for preclinical milestones, $19,000 for development milestones, $44,000 for regulatory milestones and $110,000 for sales milestones. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Expenses | |
Accrued Expenses | 10. ACCRUED EXPENSES Accrued expenses consist of the following: As of December 31, December 31, 2023 2022 Royalties due to Bioprojet $ 40,419 $ 25,367 Rebates and other sales deductions 38,842 27,860 Interest 3,354 3,286 Selling and marketing 2,354 1,135 Research and development 9,835 358 Professional fees, consulting, and other services 2,195 1,163 Other expenses 2,495 773 $ 99,494 $ 59,942 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt | |
Debt | 11. DEBT Credit Agreements Term Loan A Credit Agreement On July 26, 2023, the Company entered into a Credit Agreement (the “TLA Credit Agreement”) with JPMorgan Chase Bank, N.A., as “Administrative Agent”, and certain lenders. The TLA Credit Agreement provides for a five-year senior secured term loan (the “TLA Term Loan”) in an aggregate principal amount of $185,000. On September 21, 2023, the Company entered into the First Incremental Amendment (the “First Incremental Amendment”) with the Administrative Agent and Bank of America, N.A., as incremental lender. The First Incremental Amendment provides for an incremental senior secured term loan (the “Incremental Term Loan”) in an aggregate principal amount of $15,000. The First Incremental Amendment amends the TLA Credit Agreement and provides that the Incremental Term Loan will have identical terms as the TLA Term Loan. The repayment schedule for both the TLA Term Loan and the Incremental Term Loan (together, the “Term Loans”) consists of quarterly $3,750 principal payments, which commence on December 31, 2023, increasing to quarterly $5,000 principal payments beginning on December 31, 2025, with a $115,000 payment due on the maturity date of July 26, 2028. The Term Loans bear interest at a per annum rate equal to, at the Company’s option, (i) a base rate plus a specified margin ranging from 2.50% to 3.00%, based on the Company’s senior secured net leverage ratio (as defined in the TLA Credit Agreement) or (ii) Term SOFR plus a credit spread adjustment of 0.10% plus a specified margin ranging from 3.50% to 4.00%, based on the Company’s senior secured net leverage ratio. The net cash received related to the Term Loans as a result of the transactions, less debt issuance costs of $2,997, was $197,003. The debt issuance costs related to the Term Loans will be amortized as additional interest expense over the loan term of the TLA Credit Agreement. The fair value of the Term Loans as of December 31, 2023, was $199,859. Blackstone Credit Agreement In August 2021, the Company entered into the Blackstone Credit Agreement that provides for (i) a senior secured term loan facility in an aggregate original principal amount of $200,000 (the “Initial Term Loan”) and (ii) a senior secured delayed draw term loan facility in an aggregate principal amount up to $100,000 (the “DDTL” and, together with the Initial Term Loan, the “Loans”). The DDTL was initially available to draw down through August 9, 2022. In August 2022, the Company entered into an agreement to extend the expiration date of the DDTL to August 9, 2023, for which the Company will pay a ticking fee at a rate of 1% per annum on the undrawn portion of the DDTL, which commenced on August 10, 2022. OrbiMed Credit Agreement In January 2020, the Company entered into a credit agreement with OrbiMed for an aggregate amount of $200,000 (the “OrbiMed Loan”), with a maturity date of January 2026. Borrowings under the OrbiMed Loan were collateralized by all of the Company’s assets, excluding the intellectual property licensed through the License Agreement. The OrbiMed Loan had an interest rate equal to the sum of (i) the greater of (a) 1-month LIBOR or (b) 2.00% per annum, plus (ii) 11.00% per annum, paid in cash monthly in arrears on the last day of each month starting in January 2020. At the time of prepayment or repayment of all or any portion of the principal of the OrbiMed Loan, the Company was required to pay an exit fee of 7.0% of the principal amount of the OrbiMed Loan prepaid, repaid, or required to be prepaid or repaid. The Company recorded the exit fee as a liability and debt discount at the origination of the term loan. In connection with the OrbiMed Loan, the Company extinguished its $200,000 multi-draw loan agreement with CRG Servicing LLC (the “CRG Loan”), which required a payoff amount of $120,893 consisting of principal repayment, interest, and exit fees. In connection with extinguishment of the CRG Loan, the Company recognized a loss on extinguishment of $22,639 within the Company’s consolidated statement of operations for the year ended December 31, 2020. In connection with the Blackstone Credit Agreement, the Company extinguished the OrbiMed Loan, which required a payoff amount of $222,666 consisting of principal repayment, interest, exit fees and a prepayment premium. The Company recognized a loss on extinguishment of $26,146 relating to the OrbiMed Loan within the Company’s consolidated statement of operation for the year ended December 31, 2021. December 31, December 31, 2023 2022 Liability component - principal $ 196,250 $ 197,500 Unamortized debt discount associated with debt financing costs (2,684) (5,853) Liability component - net carrying value 193,566 191,647 Less current portion (15,000) (2,000) Long-term debt, net $ 178,566 $ 189,647 Future minimum payments relating to long term debt, net as of December 31, 2023, for the periods indicated below consists of the following: Years ending December 31, 2024 $ 15,000 2025 16,250 2026 20,000 2027 20,000 2028 125,000 Thereafter — Total $ 196,250 Interest expense related to the Company’s long term debt, net, is included in interest expense, net in the consolidated statements of operations and comprehensive income (loss) and consists of the following: Year Ended December 31, 2023 2022 2021 Interest on principal balance $ 20,511 $ 17,132 $ 21,955 Amortization of deferred financing costs 3,246 1,663 2,238 Total term loan interest expense $ 23,757 $ 18,795 $ 24,193 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Leases | 12. LEASES In June 2018, the Company entered into an operating lease for approximately fifteen thousand square feet of office space in Plymouth Meeting, PA, which expires in May 2024. The Company subsequently entered into two separate operating leases for additional office space in Plymouth Meeting, PA, which include approximately The company recorded operating lease costs of $1,811 and $1,526 for the years ended December 31, 2023, and 2022, respectively. As of December 31, 2023, the weighted-average remaining lease term for operating leases was 2.0 years and the weighted-average discount rate for operating leases was 6.73%. Supplemental balance sheet information related to operating leases was as follows: Leases Classification December 31, 2023 December 31, 2022 Assets Operating lease right-of-use assets Other noncurrent assets $ 2,344 $ 2,312 Liabilities Operating lease liability, current portion Other current liabilities $ 1,437 $ 1,614 Operating lease liability, long-term Other long-term liabilities 1,082 975 Total operating lease liabilities $ 2,519 $ 2,589 Supplemental cash flow information related to operating leases was as follows: December 31, 2023 December 31, 2022 Operating cash flows from operating leases $ 2,016 $ 1,716 Right of use assets obtained in exchange for operating lease obligations $ 2,163 $ 485 Future payments under noncancelable operating leases with initial terms of one year or more as of December 31, 2023, consisted of the following: Years ending December 31, 2024 $ 1,550 2025 732 2026 425 2027 - 2028 - Thereafter - Total lease payments 2,707 Less: imputed interest (188) Total lease liabilities $ 2,519 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 13. COMMITMENTS AND CONTINGENCIES Litigation From time to time, the Company is subject to claims and suits arising in the ordinary course of business. The Company accrues such liabilities when they are known, if they are deemed probable and can be reasonably estimated. As of December 31, 2023, there were no material claims or suits outstanding. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity | |
Stockholders' Equity | 14. STOCKHOLDERS’ EQUITY Common Stock The holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of the Company’s stockholders. The holders of common stock do not have any cumulative voting rights. Holders of common stock are entitled to receive ratably any dividends declared by the Company’s board of directors out of funds legally available for that purpose, subject to any preferential dividend rights of any outstanding preferred stock. The Company’s common stock has no preemptive rights, conversion rights or other subscription rights or redemption or sinking fund provisions. In connection with the Blackstone Credit Agreement, in August 2021, the Company sold an aggregate of 1,048,951 shares of our common stock, par value $0.00001 per share, for an aggregate cash consideration of $30,000, or $28.60 per share. This sale did not involve a public offering and was therefore exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D thereunder as a transaction not involving any public offering. In connection with the OrbiMed Loan, the Company issued warrants to OrbiMed Royalty & Credit Opportunities, LP on January 9, 2020. Pursuant to the warrants, OrbiMed Royalty & Credit Opportunities, LP had the option to purchase up to 410,239 shares of the Company’s common stock for an initial exercise price of $16.10. In September 2021, OrbiMed exercised its option to purchase shares of the Company’s common stock which resulted in the net settlement of 221,511 shares of common stock being issued to OrbiMed. Share Repurchase Program On August 1, 2023, the Company’s Board of Directors approved a program providing for the repurchase of shares of common stock in an aggregate amount of up to $125,000, excluding commissions and transaction fees (the “August 2023 Repurchase Program”). The August 2023 Repurchase Program may be suspended, terminated or modified at any time for any reason. During the year ended December 31, 2023, the Company repurchased and retired 1,439,792 shares of common stock at an aggregate cost of $50,000 under the August 2023 Repurchase Program, excluding commissions and transaction fees. On October 27, 2023, the Company’s Board of Directors terminated the August 2023 Repurchase Program and any remaining amount authorized for the repurchase of shares. Simultaneously, the Company’s Board of Directors approved a share repurchase program (the “October 2023 Repurchase Program”) providing for the repurchase of shares of common stock in an aggregate amount of up to $200,000, excluding commissions and transaction fees. The October 2023 Repurchase Program may be suspended, terminated, or modified at any time for any reason. During the year ended December 31, 2023, the Company repurchases and retired 1,814,653 shares of common stock at an aggregate cost of $50,000 under the October 2023 Repurchase Program, excluding commissions and transaction fees. |
Stock Incentive Plan and Stock-
Stock Incentive Plan and Stock-based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Stock Incentive Plan and Stock-based Compensation | |
Stock Incentive Plan and Stock-based Compensation | 15. STOCK INCENTIVE PLAN AND STOCK-BASED COMPENSATION 2020 Stock Incentive Plan In August 2020, the Company adopted, and its stockholders approved, the 2020 Incentive Award Plan (the “2020 Plan”), in order to facilitate the grant of cash and equity incentives to directors, employees (including the Company’s named executive officers) and consultants of the Company and its subsidiaries. The 2020 Plan provides for the grant of stock options, including incentive stock options (“ISOs”) and non-qualified stock options (“NSOs”), SARs, restricted stock, dividend equivalents, restricted stock units (“RSUs”) and other stock or cash-based awards. Stock options and stock appreciation rights under the 2020 Plan have a 10-year contractual term and vest over the vesting period specified in the applicable award agreement, at achievement of a performance requirement, or upon change of control (as defined in the applicable plan). RSUs vest over the vesting period specified in the applicable award agreement, at achievement of a performance requirement, or upon change of control (as defined in the applicable plan). As of December 31, 2023, there were 6,691,219 shares of common stock available for issuance under the 2020 Plan. The number of shares that may be issued under the 2020 Plan will automatically increase on January 1 of each year in an amount equal to the lesser of (i) 4.0% of the shares of the Company’s common stock outstanding on December 31 of the preceding year or (ii) an amount determined by the Company’s board of directors. 2017 Stock Incentive Plan In August 2017, the Company adopted an equity incentive plan (the “2017 Plan”). Under the 2017 Plan, directors, officers, employees, consultants, and advisors of the Company can be paid incentive compensation measured by the value of the Company’s common shares through grants of stock options, stock appreciation rights (“SARs”), or restricted stock. Following the adoption of the 2020 Plan, no further grants have been, or will be, made under the 2017 Plan. However, the 2017 Plan will continue to govern the terms and conditions of outstanding awards granted under it. Stock Options The following table summarizes stock option activity for the year ended December 31, 2023: Weighted- Weighted- Average Average Remaining Number of Exercise Contractual Awards Price Term Awards outstanding—December 31, 2022 6,460,947 $ 30.90 7.86 Awards issued 440,294 $ 34.80 Awards exercised (371,896) $ 12.00 Awards forfeited (212,923) $ 25.25 Awards outstanding—December 31, 2023 6,316,422 $ 32.47 7.17 Stock Appreciation Rights The following table summarizes SARs activity for the year ended December 31, 2023: Weighted- Weighted- Average Average Remaining Number of Exercise Contractual Awards Price Term Awards outstanding—December 31, 2022 43,208 $ 9.38 6.32 Awards issued — $ — Awards exercised — $ — Awards forfeited — $ — Awards outstanding—December 31, 2023 43,208 $ 9.38 5.32 Restricted Stock Units The following table summarizes RSU activity for the year ended December 31, 2023: Weighted- Average Number of Grant Date Awards Fair Value Awards outstanding—December 31, 2022 60,000 $ 29.03 Awards issued 300,000 $ 31.78 Awards vested (30,000) $ 29.03 Awards forfeited — $ — Awards outstanding—December 31, 2023 330,000 $ 31.53 As of December 31, 2023, and 2022, stock awards issued under the 2017 and 2020 Plans of 3,298,284 and 1,818,045 common shares, respectively, were vested. Value of Stock Options and SARs The Company values options and SARs using the Black-Scholes option-pricing model. The Company lacks sufficient historical company-specific volatility information. Therefore, the Company estimates expected stock volatility based on historical volatility of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. For options with service-based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. For SARs, the expected term is based upon the weighting of certain future events. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for the time periods approximately equal to the expected term of the award. An expected dividend yield of 0% is based on the fact that the Company has never paid cash dividends and does not expect to do so in the foreseeable future. The assumptions used to value the awards are summarized in the following table. As of December 31, December 31, 2023 2022 Dividend yield 0.00 % 0.00 % Expected volatility 74.87 - 80.78 % 72.57 - 77.08 % Risk-free interest rate 3.42 - 4.62 % 1.99 - 4.05 % Lack of marketability discount 0.00 % 0.00 % Expected term (years) 2.26 - 10.77 3.1 - 6.3 Value of RSUs The fair value of RSUs is equal to the value of the Company’s common stock on the grant date. The weighted average per share fair value of awards issued under the 2017 Plan and the 2020 Plan was $20.64, $18.88 and $12.82 in 2023, 2022 and 2021, respectively. Stock-Based Compensation Expense Stock-based compensation expense was $31,206, $26,905 and $16,105 for the years ended December 31, 2023, 2022 and 2021, respectively, and is recorded in the consolidated statements of operations and comprehensive income (loss) in the following line items: Year Ended December 31, 2023 2022 2021 Research and development expense $ 3,962 $ 2,614 $ 2,121 Sales and marketing expense 5,148 3,886 3,103 General and administrative expense 22,096 20,405 10,881 $ 31,206 $ 26,905 $ 16,105 Stock-based compensation expense, net related to options and RSUs issued under the 2017 Plan and 2020 Plan is included in stockholder’s equity, and a liability for S AR Employee Stock Purchase Plan The 2021 Employee Stock Purchase Plan (“ESPP”) was adopted by the Company’s Board of Directors in April 2021. The ESPP permits eligible employees to purchase shares of the Company’s common stock at a 15% discount from the lesser of the fair market value per share of the Company’s common stock on the first day of the offering period or the fair market value of the Company’s common stock on the purchase date. Funds are collected from employees through after-tax payroll deductions. The total number of shares reserved for issuance under the ESPP was initially 629,805, which will automatically increase on January 1 of each year in an amount equal to the lesser of (i) 1.0% of the shares of the Company’s common stock outstanding on December 31 of the preceding year or (ii) an amount determined by the Company’s board of directors. It is intended that the ESPP meet the requirements for an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. For the years ended December 31, 2023, 2022 and 2021, there were 21,313, 21,943 and 11,010 shares issued under the ESPP, respectively. The discount on the ESPP was $393, $363 and $173 for the years ended December 31, 2023, 2022 and 2021, respectively, and is recorded within stock-based compensation expense. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings per Share | |
Earnings per Share | Basic earnings per share is calculated by diving net income by the weighted average number of shares of common stock outstanding. For the years ended December 31, 2023, 2022 and 2021, respectively, the Company calculated Diluted net income per common share is computed under the treasury stock method by using the weighted average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options, stock appreciation rights and restricted stock units. The following table sets forth the computation of basic and diluted net income (loss) per share: Year Ended December 31, 2023 2022 2021 Numerator Net income $ 128,853 $ 181,468 $ 34,597 Net income available to common shareholders $ 128,853 $ 181,468 $ 34,597 Denominator Net income per share of common stock - basic $ 2.17 $ 3.07 $ 0.60 Net income per share of common stock- diluted $ 2.13 $ 2.97 $ 0.58 Weighted average number of shares of common stock - basic 59,469,648 59,173,121 57,531,540 Weighted average number of shares of common stock - diluted 60,372,397 61,097,045 59,205,213 Securities outstanding that were included in the computation above, utilizing the treasury stock method are as follows: Year Ended December 31, 2023 2022 2021 Stock options, SARs, and RSUs to purchase common stock 902,749 1,923,924 1,536,825 Warrants — — 136,848 Total 902,749 1,923,924 1,673,673 Potential common shares issuable upon conversion of preferred stock and exercise of stock options that were excluded from the computation of diluted weighted-average shares outstanding excluded from the numerator are as follows: Year Ended December 31, 2023 2022 2021 Stock options, SARs, and RSUs to purchase common stock 5,786,881 4,640,231 4,289,066 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Income Taxes | 17. INCOME TAXES Details of the provision for income taxes consist of the following: Year Ended December 31, 2023 2022 2021 Federal $ 31,084 $ 10,011 $ 6,487 State 11,884 9,573 2,852 Valuation allowance 1,575 (96,366) (6,508) $ 44,543 $ (76,782) $ 2,831 Current $ 57,962 $ 9,161 $ 2,831 Deferred (14,994) 10,423 6,508 Valuation allowance 1,575 (96,366) (6,508) Total $ 44,543 $ (76,782) $ 2,831 The reasons for the difference between the statutory federal income tax rate and the Company’s effective income tax rate as of December 31, 2023, 2022 and 2021 are as follows: Year Ended December 31, 2023 2022 2021 Federal income tax rate 21.0 % 21.0 % 21.0 % Stock-based compensation (0.4) (4.9) (2.3) State taxes 5.7 (14.1) 6.4 Credits (2.1) (4.8) — Other 0.9 (0.3) (0.2) Valuation allowance 0.6 (70.2) (17.3) Total 25.7 % (73.3) % 7.6 % Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2023, and 2022, are as follows: As of December 31, 2023 2022 Assets Liabilities Assets Liabilities Acquired in-process research and development $ 35,337 $ — $ 45,938 $ — Net operating loss carryforward 45,917 — 6,370 — Accrued compensation 19,915 — 11,551 — Lease obligations, net - 6 71 — Fixed assets 173 — 115 — Inventory 5,344 — 6,781 — Accrued rebates 3,791 — 7,118 — Research and development 38,799 — 8,802 — Other 1,132 790 15 818 Total $ 150,408 796 $ 86,761 818 Net deferred tax asset $ 149,612 $ — $ 85,943 $ — Valuation allowance $ (5,450) $ — $ — $ — Total $ 144,162 $ — $ 85,943 $ — As of December 31, 2023, and December 31, 2022, our deferred tax assets were primarily the result of acquired in-process research and development costs, operating loss carryforwards, capitalized research and development costs, inventory, and accrued rebates. As of December 31, 2023, the Company recorded a valuation allowance on federal net operating losses of Zynerba’s subsidiary, Zynerba Pharmaceuticals Pty Ltd., and the state net operating losses of Zynerba. The Company previously recorded a valuation allowance against Harmony’s historical deferred tax assets. The Company recorded $96,336 as a benefit to the income tax provision upon release of this valuation allowance during year ended December 31, 2022, in part because in the year ended December 31, 2022, we achieved three years of cumulative pretax income, which was a positive indication of the Company’s ability to generate sufficient future taxable income, the Company determined that there was sufficient positive evidence to conclude that it was more likely than not that additional deferred taxes are realizable and, therefore, released the valuation allowance accordingly. Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2023, 2022 and 2021 were as follows: Year Ended December 31, 2023 2022 2021 Valuation allowance at the beginning of the year $ — $ (96,366) $ (102,874) Decreases recorded as a benefit to income tax provision — 96,366 6,508 Increases due to Zynerba Acquisition (3,875) — — Increases recorded to income tax provision (1,575) — — Valuation allowance at the end of the year $ (5,450) $ — $ (96,366) As of December 31, 2023, and 2022, the Company has approximately $179,390 and $0, respectively, of federal net operating loss ("NOL") carryforward available to offset future federal taxable income. The Company also has approximately $137,331 and $95,230 of state NOL carryforwards as of December 31, 2023, and 2022, respectively, available to offset future state taxable income. All of the Company’s tax years remain open to examination by federal and state taxing authorities. The Company’s state NOLs begin to expire in 2037. Utilization of the net operating loss carryforwards may be subject to a substantial limitation due to state provisions. These changes may limit the amount of net operating loss and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year As of December 31, 2023, and 2022, the Company has federal tax credits of $0 and $0, respectively. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Plan | |
Retirement Plan | 18. RETIREMENT PLAN The Company formed a 401(k) defined contribution savings plan (the “401(k) Plan”) in January 2021. The 401(k) Plan is for the benefit of all qualifying employees and permits voluntary contributions by employees limited by the IRS-imposed maximum. Employer contributions were $2,128, $1,705, and $2,479 for the years ended December 31, 2023, 2022 and 2021, respectively. |
Related-party Transactions
Related-party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related-party Transactions | |
Related-party Transactions | 19. RELATED-PARTY TRANSACTIONS The Company was party to a management agreement for professional services provided by a related party, Paragon. The related party is an entity that shares common ownership with the Company. In addition, the Chairman of the Company’s board of directors was the President and owner of the entity. The Company is party to a right of use agreement with the related party whereby it has access to and the right to use certain office space leased by the related party in Chicago, Illinois. For the years ended December 31, 2023, 2022 and 2021, the Company incurred $290, $284 and $284, respectively, in expenses pursuant to the right of use agreement with this related party, which are included in general and administrative expense in the consolidated statements of operations and comprehensive income (loss). In August 2021, the Company paid a $2,300 advisory fee to Paragon in connection with the Blackstone Credit Agreement. $2,000 of this payment was recorded in debt issuance costs as a component of long-term debt, net and $300 was recorded in common stock issuance costs as a component of additional paid-in capital, within the consolidated balance sheet as of December 31, 2022. As of December 31, 2023, and 2022, there were no amounts due to or due from related parties included within the consolidated balance sheet. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts - Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2023 | |
Valuation and Qualifying Accounts - Accounts Receivable, Net | |
Valuation and Qualifying Accounts - Accounts Receivable, Net | 20. Year Ended December 31, 2023 2022 2021 Allowance for distribution fees, discounts and chargebacks at the beginning of the year $ 1,830 $ 1,885 $ 806 Additions due to current period provision 21,821 14,806 12,174 Deductions due to payment of distribution fees, discount and chargebacks (21,007) (14,861) (11,095) Allowance for distribution fees, discounts and chargebacks at the beginning of the year $ 2,644 $ 1,830 $ 1,885 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. All intercompany accounts and transactions have been eliminated. |
Significant Risks and Uncertainties | Significant Risks and Uncertainties The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to, the results of clinical testing and trial activities of the Company’s product candidates; the Company’s ability to obtain regulatory approval to market its products; competition from products manufactured and sold or being developed by other companies; the price of, and demand for, the Company’s products, if approved; the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its product candidates; and the Company’s ability to raise capital. The Company currently has one commercially approved product, WAKIX, and there can be no assurance that the Company’s research and development efforts will result in successfully commercialized products in addition to WAKIX. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements, including the notes thereto, and elsewhere in this report. Actual results may differ significantly from estimates, which include rebates due pursuant to commercial and government contracts, accrued research and development expenses, stock-based compensation expense and income taxes. |
Operating Segments | Operating Segments The Company holds all its tangible assets, conducts its operations, and generates its revenue in the U.S. Operating segments which are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Makers in deciding how to allocate resources to an individual segment and in assessing performance. The Company has determined it operates in a single operating segment and has one reportable segment. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s consolidated financial statements include cash, cash equivalents, accounts payable, and accrued liabilities, all of which are short term in nature and, accordingly, approximate fair value. Additionally, prior to the IPO, the Company’s consolidated financial statements included a warrant liability that was carried at fair value and was re-measured at each balance sheet date until it would be exercised or expired. In connection with the IPO, the Warrants were re-evaluated under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, It is the Company’s policy to measure non-financial assets and liabilities at fair value on a nonrecurring basis. These non-financial assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (such as evidence of impairment), which, if material, are disclosed in the accompanying footnotes. The Company measures certain assets and liabilities at fair value based on the fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels based on the source of inputs as follows: Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities. Level 3—Valuations based on unobservable inputs and models that are supported by little or no market activity. Money market funds are classified as Level 1 fair value instruments. Investments in available-for-sale debt securities are classified as Level 2 and carried at fair value, which we estimate utilizing a third-party pricing service. The pricing service utilizes industry standard valuation models whereby all significant inputs, including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, bids, offers, or other market-related data, are observable. We validate valuations obtained from third-party services by obtaining market values from other pricing sources. The Company did not classify any assets or liabilities as Level 3 as of December 31, 2023, or December 31, 2022. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents and restricted cash consist of cash and, if applicable, highly liquid investments with an original maturity of three months or less when purchased, including investments in money market funds and debt securities that approximate fair value. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet and in the statements of cash flows. As of December 31, December 31, 2023 2022 Cash and cash equivalents $ 311,660 $ 243,784 Restricted cash 270 750 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 311,930 $ 244,534 Restricted cash includes amounts required to be held as a security deposit in the form of letters of credit for the Company’s credit card program and the fleet program. |
Investments | Investments The Company’s investments consist of debt securities that are classified as available-for-sale. Short-term and long-term investments are carried at fair value and unrealized gains and losses are recorded as a component of accumulated comprehensive income in stockholders’ equity. The amortization of premiums and accretion of discounts adjust the carrying value of investments and are recorded in interest expense, net, on the unaudited condensed consolidated statements of operations and comprehensive income. Interest income and realized gains and losses, if any, are also recorded in interest expense, net, on the unaudited condensed consolidated statement of operations and comprehensive income. Realized gains and losses that result from the sale of investments are determined on a specific identification basis. At each reporting period, the Company reviews any unrealized losses position to determine if the decline in the fair value of the underlying investments is a result of credit losses or other factors. If the assessment indicates that a credit loss exists, any impairment is recognized as an allowance for credit losses in our consolidated statement of operations. |
Concentrations of Risk | Concentrations of Risk Substantially all of the Company’s cash and money market funds are held in five financial institutions. Due to their size, the Company believes these financial institutions represent minimal credit risk. Deposits may exceed the amount of insurance provided on such deposits by the Federal Deposit Insurance Corporation for U.S. institutions. The Company has not experienced any losses on its deposits of cash and cash equivalents. The Company believes that it is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company is subject to credit risk from its trade receivables related to its product sales. The Company extends credit to specialty pharmaceutical distribution companies within the United States. Customer creditworthiness is monitored and collateral is not required. Historically, the Company has not experienced credit losses on its accounts receivable. The Company monitors its exposure within accounts receivable and would record a reserve against uncollectible accounts receivable if necessary. As of December 31, 2023, three customers accounted for 100% of gross accounts receivable, Accredo Health Group, Inc. (“Accredo”), which accounted for 39% of gross accounts receivable; Caremark LLC (“CVS Caremark”), which accounted for 32% of gross accounts receivable; and PANTHERX Specialty Pharmacy LLC (“Pantherx), which accounted for 29% of gross accounts receivable. As of December 31, 2022, three customers accounted for 100% of gross accounts receivable; CVS Caremark, which accounted for 41% of gross accounts receivable, Accredo, which accounted for 35% of gross accounts receivable and Pantherx, which accounted for 24% of gross accounts receivable. For the year ended December 31, 2023, three customers accounted for 100% of gross product revenue; CVS Caremark accounted for 37% of gross product revenue; Accredo accounted for 32% of gross product revenue; and Pantherx accounted for 31% of gross product revenue. For the year ended December 31, 2022, three customers accounted for 100% of gross product revenue; CVS Caremark accounted for 42% of gross product revenue; Pantherx accounted for 29% of gross product revenue; and Accredo accounted for 29% of gross product revenue. For the year ended December 31, 2021, three customers accounted for 100% of gross product revenue; CVS Caremark accounted for 36% of gross product revenue; Pantherx accounted for 35% of gross products revenue; and Accredo accounted for 29% of gross product revenue. |
Share Repurchases | Share Repurchases The Company accounts for share repurchases as constructive retirements, whereby it reduces common stock and additional paid-in capital by the amount of the original issuance, with any excess purchase price recorded as a reduction to retained earnings. Under this method, issued and outstanding shares of common stock are reduced by the amount of shares of common stock repurchased, and no treasury stock is recognized on the condensed consolidated financial statements. |
Inventory | Inventory Inventory is valued at the lower of cost or net realizable value. Cost is determined using the specific identification method for all inventory. Our policy is to write down inventory that has become obsolete, that has a cost basis in excess of its expected net realizable value and/or that we have quantities in excess of expected future demand. The estimate of excess quantities is subjective and primarily dependent on our estimates of future demand. If our estimate of future demand changes, we consider the impact on the reserve for excess inventory and adjust the reserve as required. Inventory reserves are recorded as a component of cost of product sales in our consolidated statement of operations. We may capitalize inventory costs associated with products prior to regulatory approval when future commercialization is probable. Otherwise, such costs are expensed as research and development. The determination to capitalize inventory costs is based on various factors, including status and expectations of the regulatory approval process, any known safety or efficacy concerns, potential labeling restrictions, and any other impediments to obtaining regulatory approval. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally between three |
Intangible Asset | Intangible Assets Intangible assets with finite useful lives consist primarily of purchased developed technology and are amortized on a straight-line basis over their estimated useful lives. The estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the associated products and may be modified when circumstances warrant. Such assets are reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount. The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset. |
Revenue Recognition | Revenue Recognition We account for contracts with our customers in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606), or ASC 606. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services it transfers to the customer. The amount of variable consideration which is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under contracts will not occur in a future period. Our analyses contemplate the application of the constraint in accordance with ASC 606. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. We have determined that the delivery of our product to our customer constitutes a single performance obligation as there are no other promises to deliver goods or services in contracts with our customers. Shipping and handling activities are considered to be fulfilment activities and are not considered to be a separate performance obligation. The payment terms with our customers do not exceed one year and therefore, no amount of consideration has been allocated as a financing component. Taxes collected related to product sales are remitted to governmental authorities and are excluded from revenue. |
Net Product Revenue | Net Product Revenue We recognize revenue from sales of WAKIX when the customer obtains control of the product, which occurs at a point in time, typically upon delivery. Product revenue is recorded at the product’s list price, net of applicable reserves for variable consideration that are offered within contracts between us and our customers, payors, and other indirect customers relating to the sale of WAKIX. Components of variable consideration include government (as detailed below) and commercial contracts, commercial co-payment assistance program, and distribution service fees. These deductions are based on the amounts earned, or to be claimed on the related sales, and are classified as a current liability or reduction of receivables in our consolidated balance sheet. Government Contracts We have entered into contracts (i) to participate in the Medicaid Drug Rebate Program and the Medicare Part D program, and (ii) to sell to the U.S. Department of Veterans Affairs, 340b entities and other government agencies, or government payors, so that WAKIX will be eligible for purchase by, in partial or full reimbursement from, such government payors. We record reserves for rebates due pursuant to these contracts as a reduction of revenue in the same period in which the revenue is recognized. The liability for government rebates is included in accrued expenses in our consolidated balance sheet. We estimate rebates due pursuant to government contracts based upon our historical payment trends, information obtained from third parties estimating current payment trends, the government-mandated discounts applicable to government-funded programs, as well as information obtained from our customers. The liability for these government rebates consists of estimates of claims for WAKIX dispensed in the current period, plus an estimate for product which has shipped and has been recognized as revenue but remains in the distribution channel at the end of a reporting period. |
Cost of Product Sold | Cost of Product Sold Cost of product sold includes manufacturing and distribution costs, the cost of drug substance, FDA program fees, royalties due to third parties on net product sales, freight, shipping, handling, storage costs, and salaries of employees involved with production. |
Research and Development Expenses | Research and Development Expenses Research and development costs are expensed as incurred. Liabilities due to third parties in connection with research and development collaborations prior to regulatory approval are expensed as incurred. Upfront payments and pre-FDA approval milestone payments made for licensing of technology are expensed as research and development in the period in which they are incurred. Advance payments for goods and services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed. |
Advertising Expenses | Advertising Expenses We expense the costs of advertising, including promotional expenses, as incurred. Advertising expenses were $21,544, $22,428 and $19,558 for the years ended December 31, 2023, 2022 and 2021, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes stock-based compensation expense in operating results using a fair value measurement method, in accordance with FASB ASC 718, Compensation-Stock Compensation. ASC 718 requires all stock-based payments to employees to be recognized in operating results as compensation expense based on fair value over the requisite service period of the awards. The vesting periods have a time-based provision consisting of one |
Basic and Diluted Net Income per Share | Basic and Diluted Net Income per Share Basic net income per share is determined using the weighted average number of shares of common stock outstanding during each period. Diluted net income per share includes the effect, if any, from the potential exercise or conversion of securities, such as stock options, and warrants which would result in the issuance of incremental shares of common stock. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets may be reduced by a valuation allowance if, based on all available evidence, it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Management judgment is required in determining the period in which a reversal of a valuation allowance should occur. The Company is required to consider all available evidence, both positive and negative, such as historical levels of income and future forecasts of taxable income among other items, in determining whether a full or partial release of its valuation allowance is required. Our accounting for deferred tax consequences represents the best estimate of those future events. The Company presents deferred income taxes on the Consolidated Balance Sheet on a jurisdictional basis as either a net noncurrent asset or liability. The Company recognizes the effect of income tax positions only if those positions are more likely than not sustainable, based solely on its technical merits and consideration of the relevant taxing authority’s widely understood administrative practices and precedents. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs. At December 31, 2023 and 2022, the Company did not have any unrecognized uncertain tax positions. The Company’s policy is to include any interest and penalties as a component of income tax expense. |
Business Combinations | Business Combinations Acquisition |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07, Improvements to Reportable Segment Disclosures In December 2023, the FASB issued Accounting Standards Update (“ASU”) No 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Schedule of reconciliation of cash, cash equivalents, and restricted cash | As of December 31, December 31, 2023 2022 Cash and cash equivalents $ 311,660 $ 243,784 Restricted cash 270 750 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 311,930 $ 244,534 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Acquisition | |
Schedule of purchase consideration and allocation of purchase consideration | Cash consideration paid to selling shareholders (i) $ 55,960 Cash consideration paid to settle Zynerba restricted stock awards ("RSAs") as stock options (ii) 4,040 Transaction costs 2,645 Total purchase consideration $ 62,645 (i) The cash consideration paid to selling shareholders was determined based on the total number of Zynerba shares tendered at closing of 50,602,656 at a per share price of $1.1059 . (ii) The cash consideration paid to settle Zynerba restricted stock awards (“RSAs”) and stock options under Zynerba equity incentive plans was determined based on the total number of underlying shares of 4,000,169 at a per share price of $1.1059 , less exercise price for the stock options. Assets acquired Cash and cash equivalents $ 25,658 Prepaid expenses and other current assets 3,540 Deferred tax asset 44,800 Restricted cash 20 Acquired in-process research and development 2,260 Total assets acquired $ 76,278 Liabilities assumed Accounts payable 4,995 Accrued expenses and accrued compensation 8,479 Other current liabilities 159 Total liabilities assumed $ 13,633 Net assets acquired $ 62,645 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Investments | |
Schedule of carrying value and amortized cost of available-for-sale debt securities | December 31, 2023 Amortized Unrealized Unrealized Fair Cost Gains Losses Value Short-term: Commercial paper $ 23,832 36 (3) $ 23,865 Corporate debt securities 15,968 28 — 15,996 U.S. government securities 1,940 — (1) 1,939 Total short-term investments $ 41,740 64 (4) $ 41,800 Long-term: Commercial paper $ 744 — — $ 744 Corporate debt securities 42,688 81 (28) 42,741 U.S. government securities 28,795 7 (118) 28,684 Total long-term investments $ 72,227 88 (146) $ 72,169 December 31, 2022 Amortized Unrealized Unrealized Fair Cost Gains Losses Value Short-term: Commercial paper $ 26,553 15 (34) $ 26,534 Corporate debt securities 49,213 9 (73) 49,149 U.S. government securities 3,658 — (10) 3,648 Total short-term investments $ 79,424 24 (117) $ 79,331 Long-term: Commercial paper $ 853 1 — $ 854 Corporate debt securities 21,516 11 (68) 21,459 U.S. government securities 257 — (2) 255 Total long-term investments $ 22,626 12 (70) $ 22,568 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements | |
Schedule of assets measured at fair value | December 31, 2023 December 31, 2022 Total Level 1 Level 2 Total Level 1 Level 2 Assets Cash equivalents $ 244,569 243,685 884 $ 184,977 184,977 — Commercial paper 24,609 — 24,609 27,388 — 27,388 Corporate debt securities 58,737 — 58,737 70,608 — 70,608 U.S. government securities 30,623 — 30,623 3,903 — 3,903 Total $ 358,538 243,685 114,853 $ 286,876 184,977 101,899 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory | |
Schedule of inventory net | As of December 31, December 31, 2023 2022 Raw materials $ 1,060 $ 838 Work in process 2,020 1,513 Finished goods 2,283 2,565 Inventory, gross 5,363 4,916 Reserve for excess inventory — (619) Total inventory, net $ 5,363 $ 4,297 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Intangible Assets | |
Schedule of future annual amortization expense for unamortized intangible assets | Years ending December 31, 2024 $ 23,845 2025 23,845 2026 23,845 2027 23,845 2028 23,845 Thereafter 17,883 Total $ 137,108 |
Schedule of gross carrying amount and net book value of intangible assets | As of December 31, December 31, 2023 2022 Gross Carrying Amount $ 215,000 $ 215,000 Accumulated Amortization (77,892) (54,047) Net Book Value $ 137,108 $ 160,953 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Expenses | |
Schedule of accrued expenses | As of December 31, December 31, 2023 2022 Royalties due to Bioprojet $ 40,419 $ 25,367 Rebates and other sales deductions 38,842 27,860 Interest 3,354 3,286 Selling and marketing 2,354 1,135 Research and development 9,835 358 Professional fees, consulting, and other services 2,195 1,163 Other expenses 2,495 773 $ 99,494 $ 59,942 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt | |
Schedule of long-term debt, net | December 31, December 31, 2023 2022 Liability component - principal $ 196,250 $ 197,500 Unamortized debt discount associated with debt financing costs (2,684) (5,853) Liability component - net carrying value 193,566 191,647 Less current portion (15,000) (2,000) Long-term debt, net $ 178,566 $ 189,647 |
Schedule of future minimum payments relating to long term debt | Years ending December 31, 2024 $ 15,000 2025 16,250 2026 20,000 2027 20,000 2028 125,000 Thereafter — Total $ 196,250 |
Schedule of interest expense related to long term debt | Year Ended December 31, 2023 2022 2021 Interest on principal balance $ 20,511 $ 17,132 $ 21,955 Amortization of deferred financing costs 3,246 1,663 2,238 Total term loan interest expense $ 23,757 $ 18,795 $ 24,193 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Schedule of supplemental balance sheet and cash flow information related to operating leases | Leases Classification December 31, 2023 December 31, 2022 Assets Operating lease right-of-use assets Other noncurrent assets $ 2,344 $ 2,312 Liabilities Operating lease liability, current portion Other current liabilities $ 1,437 $ 1,614 Operating lease liability, long-term Other long-term liabilities 1,082 975 Total operating lease liabilities $ 2,519 $ 2,589 December 31, 2023 December 31, 2022 Operating cash flows from operating leases $ 2,016 $ 1,716 Right of use assets obtained in exchange for operating lease obligations $ 2,163 $ 485 |
Schedule of future payments under noncancelable operating leases | Years ending December 31, 2024 $ 1,550 2025 732 2026 425 2027 - 2028 - Thereafter - Total lease payments 2,707 Less: imputed interest (188) Total lease liabilities $ 2,519 |
Stock Incentive Plan and Stoc_2
Stock Incentive Plan and Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stock Incentive Plan and Stock-based Compensation | |
Summary of changes in stock options granted | The following table summarizes stock option activity for the year ended December 31, 2023: Weighted- Weighted- Average Average Remaining Number of Exercise Contractual Awards Price Term Awards outstanding—December 31, 2022 6,460,947 $ 30.90 7.86 Awards issued 440,294 $ 34.80 Awards exercised (371,896) $ 12.00 Awards forfeited (212,923) $ 25.25 Awards outstanding—December 31, 2023 6,316,422 $ 32.47 7.17 |
Summary of changes in SARs granted | The following table summarizes SARs activity for the year ended December 31, 2023: Weighted- Weighted- Average Average Remaining Number of Exercise Contractual Awards Price Term Awards outstanding—December 31, 2022 43,208 $ 9.38 6.32 Awards issued — $ — Awards exercised — $ — Awards forfeited — $ — Awards outstanding—December 31, 2023 43,208 $ 9.38 5.32 |
Summary of changes in RSUs granted | The following table summarizes RSU activity for the year ended December 31, 2023: Weighted- Average Number of Grant Date Awards Fair Value Awards outstanding—December 31, 2022 60,000 $ 29.03 Awards issued 300,000 $ 31.78 Awards vested (30,000) $ 29.03 Awards forfeited — $ — Awards outstanding—December 31, 2023 330,000 $ 31.53 |
Summary of assumptions used to value awards | As of December 31, December 31, 2023 2022 Dividend yield 0.00 % 0.00 % Expected volatility 74.87 - 80.78 % 72.57 - 77.08 % Risk-free interest rate 3.42 - 4.62 % 1.99 - 4.05 % Lack of marketability discount 0.00 % 0.00 % Expected term (years) 2.26 - 10.77 3.1 - 6.3 |
Summary of stock-based compensation expense | Year Ended December 31, 2023 2022 2021 Research and development expense $ 3,962 $ 2,614 $ 2,121 Sales and marketing expense 5,148 3,886 3,103 General and administrative expense 22,096 20,405 10,881 $ 31,206 $ 26,905 $ 16,105 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings per Share | |
Summary of computation of basic and diluted net income (loss) per share | The following table sets forth the computation of basic and diluted net income (loss) per share: Year Ended December 31, 2023 2022 2021 Numerator Net income $ 128,853 $ 181,468 $ 34,597 Net income available to common shareholders $ 128,853 $ 181,468 $ 34,597 Denominator Net income per share of common stock - basic $ 2.17 $ 3.07 $ 0.60 Net income per share of common stock- diluted $ 2.13 $ 2.97 $ 0.58 Weighted average number of shares of common stock - basic 59,469,648 59,173,121 57,531,540 Weighted average number of shares of common stock - diluted 60,372,397 61,097,045 59,205,213 |
Summary of antidilutive securities excluded from computation of earnings per share | Year Ended December 31, 2023 2022 2021 Stock options, SARs, and RSUs to purchase common stock 902,749 1,923,924 1,536,825 Warrants — — 136,848 Total 902,749 1,923,924 1,673,673 Potential common shares issuable upon conversion of preferred stock and exercise of stock options that were excluded from the computation of diluted weighted-average shares outstanding excluded from the numerator are as follows: Year Ended December 31, 2023 2022 2021 Stock options, SARs, and RSUs to purchase common stock 5,786,881 4,640,231 4,289,066 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Schedule of provision for income taxes | Year Ended December 31, 2023 2022 2021 Federal $ 31,084 $ 10,011 $ 6,487 State 11,884 9,573 2,852 Valuation allowance 1,575 (96,366) (6,508) $ 44,543 $ (76,782) $ 2,831 Current $ 57,962 $ 9,161 $ 2,831 Deferred (14,994) 10,423 6,508 Valuation allowance 1,575 (96,366) (6,508) Total $ 44,543 $ (76,782) $ 2,831 |
Schedule of reconciliation between statutory federal income tax rate and the Company's effective income tax rate | Year Ended December 31, 2023 2022 2021 Federal income tax rate 21.0 % 21.0 % 21.0 % Stock-based compensation (0.4) (4.9) (2.3) State taxes 5.7 (14.1) 6.4 Credits (2.1) (4.8) — Other 0.9 (0.3) (0.2) Valuation allowance 0.6 (70.2) (17.3) Total 25.7 % (73.3) % 7.6 % |
Schedule of significant components of company's deferred tax assets and liabilities | As of December 31, 2023 2022 Assets Liabilities Assets Liabilities Acquired in-process research and development $ 35,337 $ — $ 45,938 $ — Net operating loss carryforward 45,917 — 6,370 — Accrued compensation 19,915 — 11,551 — Lease obligations, net - 6 71 — Fixed assets 173 — 115 — Inventory 5,344 — 6,781 — Accrued rebates 3,791 — 7,118 — Research and development 38,799 — 8,802 — Other 1,132 790 15 818 Total $ 150,408 796 $ 86,761 818 Net deferred tax asset $ 149,612 $ — $ 85,943 $ — Valuation allowance $ (5,450) $ — $ — $ — Total $ 144,162 $ — $ 85,943 $ — |
Schedule of change in valuation allowance for deferred tax assets | Year Ended December 31, 2023 2022 2021 Valuation allowance at the beginning of the year $ — $ (96,366) $ (102,874) Decreases recorded as a benefit to income tax provision — 96,366 6,508 Increases due to Zynerba Acquisition (3,875) — — Increases recorded to income tax provision (1,575) — — Valuation allowance at the end of the year $ (5,450) $ — $ (96,366) |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts - Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Valuation and Qualifying Accounts - Accounts Receivable, Net | |
Schedule of valuation and qualifying accounts - accounts receivable, net | Year Ended December 31, 2023 2022 2021 Allowance for distribution fees, discounts and chargebacks at the beginning of the year $ 1,830 $ 1,885 $ 806 Additions due to current period provision 21,821 14,806 12,174 Deductions due to payment of distribution fees, discount and chargebacks (21,007) (14,861) (11,095) Allowance for distribution fees, discounts and chargebacks at the beginning of the year $ 2,644 $ 1,830 $ 1,885 |
Liquidity and Capital Resourc_2
Liquidity and Capital Resources (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Liquidity and Capital Resources | ||
Accumulated deficit | $ 143,277 | $ 272,130 |
Cash, cash equivalents and investments | $ 425,629 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Summary of Significant Accounting Policies | ||||
Cash and cash equivalents | $ 311,660 | $ 243,784 | ||
Restricted cash | 270 | 750 | ||
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | $ 311,930 | $ 244,534 | $ 235,059 | $ 229,381 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) segment product customer Institution | Dec. 31, 2022 USD ($) customer | Dec. 31, 2021 USD ($) customer | |
Summary Of Significant Accounting Policies [Line Items] | |||
Number of approved commercial products | product | 1 | ||
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 1 | ||
Number Of financial institutions | Institution | 5 | ||
Advertising expenses | $ | $ 21,544 | $ 22,428 | $ 19,558 |
Stock options contractual term | 10 years | ||
Unrecognized uncertain tax positions | $ | $ 0 | $ 0 | |
Minimum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and equipment, estimated useful lives of the assets (in years) | 3 years | ||
Time-based vesting period | 1 year | ||
Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and equipment, estimated useful lives of the assets (in years) | 10 years | ||
Time-based vesting period | 5 years | ||
Three Customers | Accounts Receivable | Customer Concentration Risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of customers | customer | 3 | 3 | |
Concentration risk percentage | 100% | 100% | |
Three Customers | Product Revenues | Customer Concentration Risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of customers | customer | 3 | 3 | 3 |
Concentration risk percentage | 100% | 100% | 100% |
Accredo Health Group, Inc | Accounts Receivable | Customer Concentration Risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 39% | 35% | |
Accredo Health Group, Inc | Product Revenues | Customer Concentration Risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 32% | 29% | 29% |
Caremark LLC | Accounts Receivable | Customer Concentration Risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 32% | 41% | |
Caremark LLC | Product Revenues | Customer Concentration Risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 37% | 42% | 36% |
PANTHERx Specialty Pharmacy LLC | Accounts Receivable | Customer Concentration Risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 29% | 24% | |
PANTHERx Specialty Pharmacy LLC | Product Revenues | Customer Concentration Risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 31% | 29% | 35% |
Acquisition (Details)
Acquisition (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Oct. 10, 2023 USD ($) Right $ / shares shares | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Assets acquired | ||||
Cash and cash equivalents | $ 311,660 | $ 243,784 | ||
Deferred tax asset | 144,162 | 85,943 | ||
Restricted cash | 270 | 750 | ||
TOTAL ASSETS | 811,448 | 673,870 | ||
Liabilities assumed | ||||
Accounts payable | 17,730 | 3,786 | ||
Other current liabilities | 7,810 | 1,624 | ||
TOTAL LIABILITIES | 344,456 | 271,032 | ||
Net loss | 128,853 | 181,468 | $ 34,597 | |
Revenue | 582,022 | 437,855 | $ 305,440 | |
Zynerba Acquisition | ||||
ACQUISITION | ||||
Cash consideration per Common Stock | $ / shares | $ 1.1059 | |||
Number of contingent value right per Common Stock | Right | 1 | |||
Contingent consideration per Common Stock | $ / shares | $ 2.5444 | |||
Aggregate consideration | $ 60,000 | |||
Total purchase consideration | ||||
Cash consideration paid to selling shareholders | 55,960 | |||
Cash consideration paid to settle restricted stock awards ("RSAs") as stock options | 4,040 | |||
Transaction costs | 2,645 | |||
Total purchase consideration | $ 62,645 | |||
Number of shares considered for determination of payments made to selling shareholders | shares | 50,602,656 | |||
Price per share considered for determination of payments made to selling shareholders | $ / shares | $ 1.1059 | |||
Number of shares considered for determination of payments made to settle restricted stock awards ("RSAs") as stock options | shares | 4,000,169 | |||
Price per share considered for determination of payments made to settle restricted stock awards ("RSAs") as stock options | $ / shares | $ 1.1059 | |||
Charge related to acquired in-process research and development | 2,260 | |||
Assets acquired | ||||
Cash and cash equivalents | $ 25,658 | |||
Prepaid expenses and other current assets | 3,540 | |||
Deferred tax asset | 44,800 | |||
Restricted cash | 20 | |||
Acquired in-process research and development | 2,260 | |||
TOTAL ASSETS | 76,278 | |||
Liabilities assumed | ||||
Accounts payable | 4,995 | |||
Accrued expenses and accrued compensation | 8,479 | |||
Other current liabilities | 159 | |||
TOTAL LIABILITIES | 13,633 | |||
Net assets acquired | $ 62,645 | |||
Severance charges | 7,544 | |||
Net loss | (14,451) | |||
Revenue | 0 | |||
Unaudited pro forma net income | 108,350 | 135,567 | ||
Unaudited pro forma net product revenue | 0 | $ 0 | ||
Zynerba Acquisition | Accrued compensation | ||||
Liabilities assumed | ||||
Accrued severance charges | 7,544 | |||
Zynerba Acquisition | General and administrative expense | ||||
Liabilities assumed | ||||
Severance charges | 3,858 | |||
Zynerba Acquisition | Research and development expense | ||||
Liabilities assumed | ||||
Severance charges | $ 3,686 |
Investments - Carrying Value an
Investments - Carrying Value and Amortized Cost of Available-For-Sale Debt Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Minimum | ||
Investment securities | ||
Non current investment maturity term | 1 year | |
Maximum | ||
Investment securities | ||
Non current investment maturity term | 2 years | |
Short-term | ||
Investment securities | ||
Amortized Cost | $ 41,740 | $ 79,424 |
Unrealized Gains | 64 | 24 |
Unrealized Losses | (4) | (117) |
Fair Value | 41,800 | 79,331 |
Short-term commercial paper | ||
Investment securities | ||
Amortized Cost | 23,832 | 26,553 |
Unrealized Gains | 36 | 15 |
Unrealized Losses | (3) | (34) |
Fair Value | 23,865 | 26,534 |
Short-term corporate debt securities | ||
Investment securities | ||
Amortized Cost | 15,968 | 49,213 |
Unrealized Gains | 28 | 9 |
Unrealized Losses | (73) | |
Fair Value | 15,996 | 49,149 |
Short-term U.S. government securities | ||
Investment securities | ||
Amortized Cost | 1,940 | 3,658 |
Unrealized Losses | (1) | (10) |
Fair Value | 1,939 | 3,648 |
Long-term | ||
Investment securities | ||
Amortized Cost | 72,227 | 22,626 |
Unrealized Gains | 88 | 12 |
Unrealized Losses | (146) | (70) |
Fair Value | 72,169 | 22,568 |
Long-term commercial paper | ||
Investment securities | ||
Amortized Cost | 744 | 853 |
Unrealized Gains | 1 | |
Fair Value | 744 | 854 |
Long-term corporate debt securities | ||
Investment securities | ||
Amortized Cost | 42,688 | 21,516 |
Unrealized Gains | 81 | 11 |
Unrealized Losses | (28) | (68) |
Fair Value | 42,741 | 21,459 |
Long-term U.S. government securities | ||
Investment securities | ||
Amortized Cost | 28,795 | 257 |
Unrealized Gains | 7 | |
Unrealized Losses | (118) | (2) |
Fair Value | $ 28,684 | $ 255 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Assets | $ 358,538 | $ 286,876 |
Cash equivalents | ||
Assets | ||
Assets | 244,569 | 184,977 |
Commercial paper | ||
Assets | ||
Assets | 24,609 | 27,388 |
Corporate debt securities | ||
Assets | ||
Assets | 58,737 | 70,608 |
U.S. government securities | ||
Assets | ||
Assets | 30,623 | 3,903 |
Level 1 | ||
Assets | ||
Assets | 243,685 | 184,977 |
Level 1 | Cash equivalents | ||
Assets | ||
Assets | 243,685 | 184,977 |
Level 2 | ||
Assets | ||
Assets | 114,853 | 101,899 |
Level 2 | Cash equivalents | ||
Assets | ||
Assets | 884 | |
Level 2 | Commercial paper | ||
Assets | ||
Assets | 24,609 | 27,388 |
Level 2 | Corporate debt securities | ||
Assets | ||
Assets | 58,737 | 70,608 |
Level 2 | U.S. government securities | ||
Assets | ||
Assets | $ 30,623 | $ 3,903 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory | ||
Raw materials | $ 1,060 | $ 838 |
Work in process | 2,020 | 1,513 |
Finished goods | 2,283 | 2,565 |
Inventory, gross | 5,363 | 4,916 |
Reserve for excess inventory | (619) | |
Total inventory, net | $ 5,363 | $ 4,297 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Mar. 31, 2022 | Feb. 28, 2022 | Jan. 31, 2021 | Aug. 31, 2019 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible Assets | |||||||
Amortization expense | $ 23,845 | $ 22,966 | $ 18,424 | ||||
Net product revenue | $ 582,022 | $ 437,855 | $ 305,440 | ||||
WAKIX | |||||||
Intangible Assets | |||||||
Final payment paid | $ 40,000 | ||||||
Useful life of intangible asset | 7 years 7 months 6 days | ||||||
Remaining useful life | 5 years 9 months 18 days | ||||||
WAKIX | United States | |||||||
Intangible Assets | |||||||
Net product revenue | $ 500,000 | ||||||
WAKIX | Daytime Sleepiness | |||||||
Intangible Assets | |||||||
License agreement milestone payments paid | $ 75,000 | ||||||
Useful life of intangible asset | 10 years | ||||||
Remaining useful life | 5 years 9 months 18 days | ||||||
NDA for WAKIX. | Cataplexy | |||||||
Intangible Assets | |||||||
License agreement milestone payments paid | $ 100,000 | ||||||
Useful life of intangible asset | 9 years | ||||||
Remaining useful life | 5 years 9 months 18 days |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Future Annual Amortization Expense for Unamortized Intangible Assets (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Future annual amortization expense | |
2024 | $ 23,845 |
2025 | 23,845 |
2026 | 23,845 |
2027 | 23,845 |
2028 | 23,845 |
Thereafter | 17,883 |
Total | $ 137,108 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Gross Carrying Amount and Net Book Value of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Intangible Assets | ||
Gross Carrying Amount | $ 215,000 | $ 215,000 |
Accumulated Amortization | (77,892) | (54,047) |
Net Book Value | $ 137,108 | $ 160,953 |
License Agreements and Asset _2
License Agreements and Asset Purchase Agreements (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||
Oct. 31, 2022 | Aug. 31, 2021 | Jan. 31, 2021 | Oct. 31, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 31, 2022 | Feb. 28, 2019 | |
License Agreements and Asset Purchase Agreements | |||||||||||
Cost of product sold | $ 121,236 | $ 83,481 | $ 55,518 | ||||||||
Accrued Sales Based Trademark and Royalties | 40,419 | 25,367 | |||||||||
All Countries Excluding Greater China | HBS-102 | Asset Purchase Agreement with ConSynance Therapeutics | |||||||||||
License Agreements and Asset Purchase Agreements | |||||||||||
Consideration transferred | $ 3,500 | ||||||||||
Payment for intellectual property upon preclinical milestones | 1,750 | ||||||||||
Payment for intellectual property upon developmental milestones | 19,000 | ||||||||||
Payment for intellectual property upon regulatory milestones | 44,000 | ||||||||||
Payment for intellectual property upon sales milestones | $ 110,000 | ||||||||||
Bioprojet | |||||||||||
License Agreements and Asset Purchase Agreements | |||||||||||
Licensing agreement milestone fees | $ 2,000 | ||||||||||
License agreement milestone payments paid | $ 75,000 | 2,000 | |||||||||
License agreement, additional milestone payment due | 102,000 | ||||||||||
Accrued Sales Based Trademark and Royalties | 40,419 | 25,367 | |||||||||
Bioprojet | Upon Acceptance by FDA of Pitolisant's | |||||||||||
License Agreements and Asset Purchase Agreements | |||||||||||
License agreement, milestone payment due | $ 50,000 | ||||||||||
License agreement, upfront non-refundable licensing fees paid | $ 30,000 | ||||||||||
License agreement, maximum additional milestone payment due | $ 155,000 | ||||||||||
Bioprojet | Upon Acceptance by FDA of Pitolisant's | Research and development expense | |||||||||||
License Agreements and Asset Purchase Agreements | |||||||||||
License agreement, upfront non-refundable licensing fees paid | 30,000 | ||||||||||
Bioprojet | Upon FDA Approval of WAKIX | |||||||||||
License Agreements and Asset Purchase Agreements | |||||||||||
License agreement, milestone payment due | 77,000 | ||||||||||
Licensing agreement milestone fees | $ 2,000 | ||||||||||
License agreement milestone payments paid | $ 100,000 | $ 2,000 | |||||||||
Bioprojet | Sales-based, trademark and tiered royalties | |||||||||||
License Agreements and Asset Purchase Agreements | |||||||||||
Cost of product sold | 111,685 | $ 77,107 | $ 50,957 | ||||||||
Bioprojet | United States | |||||||||||
License Agreements and Asset Purchase Agreements | |||||||||||
Amount of Aggregate Net Sales Attaining | 500,000 | ||||||||||
Bioprojet | Attaining $500,000 Aggregate Net Sales | United States | Upon FDA Approval of WAKIX | |||||||||||
License Agreements and Asset Purchase Agreements | |||||||||||
Final payment paid | $ 40,000 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued Expenses | ||
Royalties due to Bioprojet | $ 40,419 | $ 25,367 |
Rebates and other sales deductions | 38,842 | 27,860 |
Interest | 3,354 | 3,286 |
Selling and marketing | 2,354 | 1,135 |
Research and development | 9,835 | 358 |
Professional fees, consulting, and other services | 2,195 | 1,163 |
Other expenses | 2,495 | 773 |
Accrued expenses | $ 99,494 | $ 59,942 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Jul. 26, 2023 | Aug. 10, 2022 | Aug. 31, 2021 | Jan. 31, 2020 | Dec. 31, 2023 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 21, 2023 | |
DEBT | ||||||||
Debt issuance costs paid | $ 2,997 | $ 9,152 | ||||||
Loss on debt extinguishment | 9,766 | 26,146 | ||||||
Blackstone Alternative Credit Advisors ("Blackstone") | ||||||||
DEBT | ||||||||
Extinguishment of loan, amount | 207,308 | |||||||
Loss on debt extinguishment | 9,766 | |||||||
Unamortized debt issuance costs | 1,972 | |||||||
Term Loans | ||||||||
DEBT | ||||||||
Debt issuance costs | 2,997 | |||||||
Net cash received | 197,003 | |||||||
Fair value of loan | 199,859 | |||||||
Term Loans | Repayment Of Debt Commencing On December 31 2023 | ||||||||
DEBT | ||||||||
Periodic payment principal | 3,750 | |||||||
Term Loans | Repayment Of Debt Beginning On December 31 2025 | ||||||||
DEBT | ||||||||
Periodic payment principal | 5,000 | |||||||
Term Loans | Repayment of Debt Due on Maturity Date of July 26, 2028 | ||||||||
DEBT | ||||||||
Periodic payment principal | $ 115,000 | |||||||
Term Loans | Base rate | Minimum | ||||||||
DEBT | ||||||||
Basis spread on variable rate | 2.50% | |||||||
Term Loans | Base rate | Maximum | ||||||||
DEBT | ||||||||
Basis spread on variable rate | 3% | |||||||
Term Loans | SOFR | ||||||||
DEBT | ||||||||
Credit spread adjustment rate | 0.10% | |||||||
Term Loans | SOFR | Minimum | ||||||||
DEBT | ||||||||
Basis spread on variable rate | 3.50% | |||||||
Term Loans | SOFR | Maximum | ||||||||
DEBT | ||||||||
Basis spread on variable rate | 4% | |||||||
TLA Term Loan | ||||||||
DEBT | ||||||||
Term of loan | 5 years | |||||||
Aggregate principal amount | $ 185,000 | |||||||
Incremental Term Loan | ||||||||
DEBT | ||||||||
Aggregate principal amount | $ 15,000 | |||||||
Senior Secured Term Loan | Blackstone Alternative Credit Advisors ("Blackstone") | ||||||||
DEBT | ||||||||
Aggregate principal amount | $ 200,000 | |||||||
Debt issuance costs | 8,151 | |||||||
Net cash received | 191,849 | |||||||
Senior Secured Delayed Draw Term Loan | Blackstone Alternative Credit Advisors ("Blackstone") | ||||||||
DEBT | ||||||||
Aggregate principal amount | 100,000 | |||||||
Percentage of ticking fee | 1% | |||||||
Debt issuance costs paid | $ 1,000 | |||||||
Credit Agreement | OrbiMed Royalty & Credit Opportunities, LP. | ||||||||
DEBT | ||||||||
Aggregate principal amount | $ 200,000 | |||||||
Basis spread on variable rate | 11% | |||||||
Extinguishment of loan, amount | $ 222,666 | |||||||
Loss on debt extinguishment | $ 26,146 | |||||||
Fixed interest rate | 2% | |||||||
Debt instrument exit fee percentage | 7% | |||||||
Multi-draw Loan Agreement | CRG Servicing LLC | ||||||||
DEBT | ||||||||
Aggregate principal amount | $ 200,000 | |||||||
Extinguishment of loan, amount | $ 120,893 | |||||||
Loss on debt extinguishment | $ 22,639 |
Debt - Balances of Long-term De
Debt - Balances of Long-term Debt, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt | ||
Liability component - principal | $ 196,250 | $ 197,500 |
Unamortized debt discount associated with debt financing costs | (2,684) | (5,853) |
Liability component - net carrying value | 193,566 | 191,647 |
Less current portion | (15,000) | (2,000) |
Long-term debt, net | $ 178,566 | $ 189,647 |
Debt - Future Minimum Payments
Debt - Future Minimum Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Future minimum payments | ||
2024 | $ 15,000 | |
2025 | 16,250 | |
2026 | 20,000 | |
2027 | 20,000 | |
2028 | 125,000 | |
Total | $ 196,250 | $ 197,500 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt | |||
Interest on principal balance | $ 20,511 | $ 17,132 | $ 21,955 |
Amortization of deferred financing costs | 3,246 | 1,663 | 2,238 |
Total term loan interest expense | $ 23,757 | $ 18,795 | $ 24,193 |
Leases (Details)
Leases (Details) ft² in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2018 ft² | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
LEASES | |||
Operating lease square feet of office space | 15 | ||
Additional office space leased one | 13 | ||
Additional office space leased two | 7 | ||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | ||
Lessee, Operating Lease, Existence of Option to Terminate [true false] | true | ||
Operating lease costs | $ | $ 1,811 | $ 1,526 | |
Weighted average remaining lease term | 2 years | ||
Weighted-average discount rate for operating leases | 6.73% | ||
Minimum | |||
LEASES | |||
Lease terms | 1 year | ||
Maximum | |||
LEASES | |||
Lease terms | 3 years |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Operating lease right-of-use assets | $ 2,344 | $ 2,312 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets Noncurrent | Other Assets Noncurrent |
Liabilities | ||
Operating lease liability, current portion | $ 1,437 | $ 1,614 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other Liabilities Current | Other Liabilities Current |
Operating lease liability, long-term | $ 1,082 | $ 975 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities Noncurrent | Other Liabilities Noncurrent |
Total operating lease liabilities | $ 2,519 | $ 2,589 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases | ||
Operating cash flows from operating leases | $ 2,016 | $ 1,716 |
Right of use assets obtained in exchange for operating lease obligations | $ 2,163 | $ 485 |
Leases - Future Payments (Detai
Leases - Future Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Years ending December 31, | ||
2024 | $ 1,550 | |
2025 | 732 | |
2026 | 425 | |
Total lease payments | 2,707 | |
Less: imputed interest | (188) | |
Total operating lease liabilities | $ 2,519 | $ 2,589 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2021 shares | Aug. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) Vote $ / shares shares | Dec. 31, 2022 $ / shares shares | Dec. 31, 2021 shares | Oct. 27, 2023 USD ($) | Aug. 01, 2023 USD ($) | Jan. 09, 2020 $ / shares shares | ||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Number of votes for each common stock | Vote | 1 | ||||||||
Common Stock Par or Stated Value Per Share | $ / shares | $ 0.00001 | $ 0.00001 | |||||||
August 2023 Repurchase Program | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Repurchase of shares of common stock approved | $ | $ 125,000 | ||||||||
Shares of common stock repurchased and retired | 1,439,792 | ||||||||
Aggregate cost of common stock repurchased and cancelled, exclusive of commissions and transaction fees | $ | $ 50,000 | ||||||||
October 2023 Repurchase Program | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Repurchase of shares of common stock approved | $ | $ 200,000 | ||||||||
Shares of common stock repurchased and retired | 1,814,653 | ||||||||
Aggregate cost of common stock repurchased and cancelled, exclusive of commissions and transaction fees | $ | $ 50,000 | ||||||||
OrbiMed Royalty & Credit Opportunities, LP. | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Purchase of common stock upon exercise of warrants | 410,239 | ||||||||
Warrants initial exercise price | $ / shares | $ 16.10 | ||||||||
Issuance of common stock (in shares) | 221,511 | ||||||||
Common Stock | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Issuance of common stock (in shares) | [1] | 8,050 | 1,270,462 | ||||||
Shares of common stock repurchased and retired | [1] | 3,254,445 | |||||||
Common Stock | Blackstone Alternative Credit Advisors ("Blackstone") | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Number of shares sold | 1,048,951 | ||||||||
Common Stock Par or Stated Value Per Share | $ / shares | $ 0.00001 | ||||||||
Aggregate cash consideration | $ | $ 30,000 | ||||||||
Price per share (in USD per share) | $ / shares | $ 28.60 | ||||||||
[1] Common stock of Harmony Biosciences Holdings, Inc. |
Stock Incentive Plan and Stoc_3
Stock Incentive Plan and Stock-based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock Incentive Plan and Stock-based Compensation | ||||
Stock options contractual term | 10 years | |||
Unrecognized stock-based compensation expense | $ 69,594 | |||
Weighted average period | 2 years 3 months 18 days | |||
Restricted Stock Units | ||||
Stock Incentive Plan and Stock-based Compensation | ||||
Weighted average per share fair value of awards issued (in USD per share) | $ 31.78 | |||
2020 Plan | ||||
Stock Incentive Plan and Stock-based Compensation | ||||
Stock options contractual term | 10 years | |||
Percentage of increment of common stock outstanding | 4% | |||
Total number of shares available for issuance | 6,691,219 | |||
2017 and 2020 Plans | Restricted Stock Units | ||||
Stock Incentive Plan and Stock-based Compensation | ||||
Weighted average per share fair value of awards issued (in USD per share) | $ 20.64 | $ 18.88 | $ 12.82 | |
2017 and 2020 Plans | Common Stock | ||||
Stock Incentive Plan and Stock-based Compensation | ||||
Stock vested | 3,298,284 | 1,818,045 | ||
Employee Stock Purchase Plan | ||||
Stock Incentive Plan and Stock-based Compensation | ||||
Percentage of increment of common stock outstanding | 1% | |||
ESPP permits eligible employees to purchase shares of common stock at discount | 15% | |||
Total number of shares available for issuance | 629,805 | |||
Shares issued under the ESPP | 21,313 | 21,943 | 11,010 | |
Amount of discount on ESSP | $ 393 | $ 363 | $ 173 |
Stock Incentive Plan and Stoc_4
Stock Incentive Plan and Stock-based Compensation - Summary of Changes in Stock Options Granted (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Stock Incentive Plan and Stock-based Compensation | ||
Number of Awards, Awards outstanding, Beginning balance | 6,460,947 | |
Number of Awards, Awards issued | 440,294 | |
Number of Awards, Awards exercised | (371,896) | |
Number of Awards, Awards forfeited | (212,923) | |
Number of Awards, Awards outstanding, Ending balance | 6,316,422 | 6,460,947 |
Weighted-Average Exercise Price, Awards outstanding, Beginning balance | $ 30.90 | |
Weighted-Average Exercise Price, Awards issued | 34.80 | |
Weighted-Average Exercise Price, Awards exercised | 12 | |
Weighted-Average Exercise Price, Awards forfeited | 25.25 | |
Weighted-Average Exercise Price, Awards outstanding, Ending balance | $ 32.47 | $ 30.90 |
Weighted-Average Remaining Contractual Term | 7 years 2 months 1 day | 7 years 10 months 9 days |
Stock Incentive Plan and Stoc_5
Stock Incentive Plan and Stock-based Compensation - Summary of Changes in SARs Granted (Details) - Stock Appreciation Rights (SARs) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Awards, Awards outstanding, Beginning balance | 43,208 | |
Number of Awards, Awards outstanding, Ending balance | 43,208 | 43,208 |
Weighted-Average Exercise Price, Awards outstanding, Beginning balance | $ 9.38 | |
Weighted-Average Exercise Price, Awards outstanding, Ending balance | $ 9.38 | $ 9.38 |
Weighted-Average Remaining Contractual Term | 5 years 3 months 25 days | 6 years 3 months 25 days |
Stock Incentive Plan and Stoc_6
Stock Incentive Plan and Stock-based Compensation - Summary of Changes in RSUs Granted (Details) - Restricted Stock Units | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Awards, Awards outstanding, Beginning balance | shares | 60,000 |
Number of Awards, Awards issued | shares | 300,000 |
Number of Awards, Awards vested | shares | (30,000) |
Number of Awards, Awards outstanding, Ending balance | shares | 330,000 |
Weighted-Average Grant Date Fair Value, Awards outstanding, Beginning balance | $ / shares | $ 29.03 |
Weighted-Average Grant Date Fair Value, Awards issued | $ / shares | 31.78 |
Weighted-Average Grant Date Fair Value, Awards vested | $ / shares | 29.03 |
Weighted-Average Grant Date Fair Value, Awards outstanding, Ending balance | $ / shares | $ 31.53 |
Stock Incentive Plan and Stoc_7
Stock Incentive Plan and Stock-based Compensation - Summary of Assumptions Used to Value Awards (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Dividend yield | 0% | 0% |
Expected volatility, minimum | 74.87% | 72.57% |
Expected volatility, maximum | 80.78% | 77.08% |
Risk-free interest rate, minimum | 3.42% | 1.99% |
Risk-free interest rate, maximum | 4.62% | 4.05% |
Lack of marketability discount | 0% | 0% |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (years) | 2 years 3 months 3 days | 3 years 1 month 6 days |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (years) | 10 years 9 months 7 days | 6 years 3 months 18 days |
Stock Incentive Plan and Stoc_8
Stock Incentive Plan and Stock-based Compensation - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 31,206 | $ 26,905 | $ 16,105 |
Research and development expense | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 3,962 | 2,614 | 2,121 |
Sales and marketing expense | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 5,148 | 3,886 | 3,103 |
General and administrative expense | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 22,096 | $ 20,405 | $ 10,881 |
Earnings per Share - Summary of
Earnings per Share - Summary of Computation of Basic and Diluted Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator | |||
Net Income (Loss) | $ 128,853 | $ 181,468 | $ 34,597 |
Net income available to common shareholders | $ 128,853 | $ 181,468 | $ 34,597 |
Denominator | |||
Net income per share of common stock - basic | $ 2.17 | $ 3.07 | $ 0.60 |
Net income per share of common stock - diluted | $ 2.13 | $ 2.97 | $ 0.58 |
Weighted average number of shares of common stock - basic | 59,469,648 | 59,173,121 | 57,531,540 |
Weighted average number of shares of common stock - diluted | 60,372,397 | 61,097,045 | 59,205,213 |
Earnings per Share - Summary _2
Earnings per Share - Summary of Securities Outstanding Included in Computation above, Utilizing Treasury Stock Method (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings per Share | |||
Securities outstanding included in the computation - Stock options, SARs, and RSUs to purchase common stock | 902,749 | 1,923,924 | 1,536,825 |
Securities outstanding included in the computation - Warrants | 136,848 | ||
Securities outstanding included in the computation - Total | 902,749 | 1,923,924 | 1,673,673 |
Earnings per Share - Summary _3
Earnings per Share - Summary of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock options, SARs, and RSUs to purchase common stock | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Total | 5,786,881 | 4,640,231 | 4,289,066 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | |||
Federal | $ 31,084 | $ 10,011 | $ 6,487 |
State | 11,884 | 9,573 | 2,852 |
Valuation allowance | 1,575 | (96,366) | (6,508) |
Income Tax Expense (Benefit), Total | 44,543 | (76,782) | 2,831 |
Current | 57,962 | 9,161 | 2,831 |
Deferred | $ (14,994) | $ 10,423 | $ 6,508 |
Income Taxes - Schedule of Diff
Income Taxes - Schedule of Difference Between Statutory Federal Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | |||
Federal income tax rate | 21% | 21% | 21% |
Stock-based compensation | (0.40%) | (4.90%) | (2.30%) |
State taxes | 5.70% | (14.10%) | 6.40% |
Credits | (2.10%) | (4.80%) | |
Other | 0.90% | (0.30%) | (0.20%) |
Valuation allowance | 0.60% | (70.20%) | (17.30%) |
Total | 25.70% | (73.30%) | 7.60% |
Income Taxes - Schedule of Sign
Income Taxes - Schedule of Significant Components of Company's Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||||
Acquired in-process research and development | $ 35,337 | $ 45,938 | ||
Net operating loss carryforward | 45,917 | 6,370 | ||
Accrued compensation | 19,915 | 11,551 | ||
Lease obligations, net | 71 | |||
Fixed assets | 173 | 115 | ||
Inventory | 5,344 | 6,781 | ||
Accrued rebates | 3,791 | 7,118 | ||
Research and development | 38,799 | 8,802 | ||
Other | 1,132 | 15 | ||
Total | 150,408 | 86,761 | ||
Net deferred tax asset | 149,612 | 85,943 | ||
Valuation allowance | (5,450) | $ (96,366) | $ (102,874) | |
Total | 144,162 | 85,943 | ||
Liabilities | ||||
Lease obligations, net | 6 | |||
Other | 790 | 818 | ||
Total | $ 796 | $ 818 |
Income Taxes - Changes in the v
Income Taxes - Changes in the valuation allowance for deferred tax assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | |||
Valuation allowance at the beginning of the year | $ (96,366) | $ (102,874) | |
Decreases recorded as a benefit to income tax provision | $ 96,366 | 6,508 | |
Increases due to Zynerba Acquisition | $ (3,875) | ||
Increases recorded to income tax provision | (1,575) | ||
Valuation allowance at the end of the year | $ (5,450) | $ (96,366) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Tax benefit upon release of valuation allowance | $ 96,336 | |
Percentage of change in ownership | 50% | |
Period of change in ownership | 3 years | |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 179,390 | 0 |
Tax credit | 0 | 0 |
State | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 137,331 | $ 95,230 |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Plan | |||
Employer contributions | $ 2,128 | $ 1,705 | $ 2,479 |
Related-party Transactions (Det
Related-party Transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related-party Transactions | ||||
General and administrative | $ 95,289 | $ 84,017 | $ 63,909 | |
Amounts due to related parties | $ 0 | $ 0 | ||
Other Liability, Related Party, Type [Extensible Enumeration] | Related party | Related party | ||
Amounts due from related parties | $ 0 | $ 0 | ||
Other Receivable, after Allowance for Credit Loss, Related Party, Type [Extensible Enumeration] | Related party | Related party | ||
Advisory fee paid | $ 2,300 | |||
Debt issuance costs as a component of long-term debt | ||||
Related-party Transactions | ||||
Advisory fee paid | $ 2,000 | |||
Additional paid-in capital | ||||
Related-party Transactions | ||||
Advisory fee paid | 300 | |||
Related party | ||||
Related-party Transactions | ||||
General and administrative | $ 290 | $ 284 | $ 284 |
Valuation and Qualifying Acco_3
Valuation and Qualifying Accounts - Accounts Receivable, Net (Details) - Distribution Fees, discounts and chargebacks - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes in the valuation allowance for accounts receivable, net | |||
Allowance at the beginning of the year | $ 1,830 | $ 1,885 | $ 806 |
Additions due to current period provision | 21,821 | 14,806 | 12,174 |
Deductions due to payment | (21,007) | (14,861) | (11,095) |
Allowance at the end of the year | $ 2,644 | $ 1,830 | $ 1,885 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 128,853 | $ 181,468 | $ 34,597 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |