Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 09, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | HARMONY BIOSCIENCES HOLDINGS, INC. | |
Entity Central Index Key | 0001802665 | |
Entity Tax Identification Number | 82-2279923 | |
Entity File Number | 1-39450 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 630 W. | |
Entity Address, Address Line Two | Germantown Pike | |
Entity Address, City or Town | Plymouth Meeting | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19462 | |
City Area Code | 484 | |
Local Phone Number | 539-9800 | |
Title of 12(b) Security | Common Stock, par value $0.00001 value per share | |
Trading Symbol | HRMY | |
Security Exchange Name | NASDAQ | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 56,889,111 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 221,740 | $ 24,457 |
Trade receivables, net | 16,326 | 4,255 |
Inventory, net | 2,311 | 1,088 |
Prepaid expenses | 4,240 | 1,436 |
Other current assets | 5,625 | 261 |
Total current assets | 250,242 | 31,497 |
NONCURRENT ASSETS: | ||
Property and equipment, net | 1,038 | 1,330 |
Restricted cash | 750 | 750 |
Intangible asset, net | 66,625 | 72,185 |
Other noncurrent assets | 1,418 | 941 |
Total noncurrent assets | 69,831 | 75,206 |
TOTAL ASSETS | 320,073 | 106,703 |
CURRENT LIABILITIES: | ||
Trade payables | 9,347 | 6,360 |
Accrued compensation | 5,243 | 7,917 |
Accrued expenses | 17,200 | 5,500 |
Other current liabilities | 115 | |
Total current liabilities | 31,790 | 19,892 |
NONCURRENT LIABILITIES: | ||
Deferred rent | 305 | 287 |
Long term debt, net | 192,858 | 97,946 |
Other noncurrent liabilities | 571 | 163 |
Total noncurrent liabilities | 193,734 | 98,396 |
TOTAL LIABILITIES | 225,524 | 118,288 |
COMMITMENTS AND CONTINGENCIES (Note 9) | ||
CONVERTIBLE PREFERRED STOCK | ||
Convertible preferred stock, net of placement costs | 411,275 | |
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Preferred stock - $0.00001 par value; 10,000,000 shares and 0 shares authorized at September 30, 2020 and December 31, 2019, respectively; 0 shares issued and outstanding at September 30 2020 and December 31, 2019 | ||
Common stock—$0.00001 par value; 500,000,000 shares and 423,630,000 shares authorized at September 30, 2020 and December 31, 2019, respectively; 56,888,625 shares and 7,787,470 issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 1 | |
Additional paid in capital | 582,535 | |
Accumulated deficit | (487,987) | (422,862) |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | 94,549 | (422,862) |
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ 320,073 | 106,703 |
Series A Convertible Preferred Stock | ||
CONVERTIBLE PREFERRED STOCK | ||
Convertible preferred stock, net of placement costs | 348,203 | |
Series B Convertible Preferred Stock | ||
CONVERTIBLE PREFERRED STOCK | ||
Convertible preferred stock, net of placement costs | 12,023 | |
Series C Convertible Preferred Stock | ||
CONVERTIBLE PREFERRED STOCK | ||
Convertible preferred stock, net of placement costs | $ 51,051 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Convertible preferred stock, shares outstanding | 318,510,205 | |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 500,000,000 | 423,630,000 |
Common stock, shares issued | 56,888,625 | 7,787,470 |
Common stock, shares outstanding | 56,888,625 | 7,787,470 |
Series A Convertible Preferred Stock | ||
Convertible preferred stock, par value | $ 1 | $ 1 |
Convertible preferred stock, shares authorized | 0 | 286,000,000 |
Convertible preferred stock, shares issued | 0 | 285,000,000 |
Convertible preferred stock, shares outstanding | 0 | 285,000,000 |
Series B Convertible Preferred Stock | ||
Convertible preferred stock, par value | $ 1.25 | $ 1.25 |
Convertible preferred stock, shares authorized | 0 | 8,030,000 |
Convertible preferred stock, shares issued | 0 | 8,000,000 |
Convertible preferred stock, shares outstanding | 0 | 8,000,000 |
Series C Convertible Preferred Stock | ||
Convertible preferred stock, par value | $ 1.96 | $ 1.96 |
Convertible preferred stock, shares authorized | 0 | 25,600,000 |
Convertible preferred stock, shares issued | 0 | 25,510,205 |
Convertible preferred stock, shares outstanding | 0 | 25,510,205 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net product revenues | $ 45,609 | $ 103,454 | ||
Cost of product sold | 7,890 | 17,820 | ||
Gross profit | 37,719 | 85,634 | ||
Operating expenses: | ||||
Research and development | 4,230 | $ 4,336 | 11,829 | $ 62,319 |
Sales and marketing | 12,601 | 12,908 | 38,297 | 27,477 |
General and administrative | 10,508 | 12,560 | 26,280 | 22,415 |
Total operating expenses | 27,339 | 29,804 | 76,406 | 112,211 |
Operating income (loss) | 10,380 | (29,804) | 9,228 | (112,211) |
Loss on debt extinguishment | (22,639) | |||
Other expense, net | (1,525) | (3,071) | ||
Interest expense, net | (6,946) | (2,095) | (20,254) | (3,326) |
Income (loss) before income taxes | 1,909 | (31,899) | (36,736) | (115,537) |
Net income (loss) and comprehensive income (loss) | 1,909 | (31,899) | (36,736) | (115,537) |
Accumulation of dividends on preferred stock | (6,013) | (9,027) | (26,904) | (25,656) |
Net loss available to common stockholders | $ (4,104) | $ (40,926) | $ (63,640) | $ (141,193) |
NET LOSS PER SHARE: | ||||
Basic | $ (0.14) | $ (5.26) | $ (4.15) | $ (18.15) |
Diluted | $ (0.14) | $ (5.26) | $ (4.15) | $ (18.15) |
Weighted average number of shares of common stock - basic | 30,212,959 | 7,777,100 | 15,324,362 | 7,777,100 |
Weighted average number of shares of common stock - diluted | 30,212,959 | 7,777,100 | 15,324,362 | 7,777,100 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT - USD ($) $ in Thousands | Total | Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Series C Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Additional Paid-in CapitalSeries A Convertible Preferred Stock | Additional Paid-in CapitalSeries B Convertible Preferred Stock | Additional Paid-in CapitalSeries C Convertible Preferred Stock | Accumulated Deficit | Accumulated DeficitSeries A Convertible Preferred Stock | Accumulated DeficitSeries B Convertible Preferred Stock | Accumulated DeficitSeries C Convertible Preferred Stock | ||
Beginning balance at Dec. 31, 2018 | $ (242,673) | $ (242,673) | |||||||||||||
Convertible Preferred Stock, beginning balance, Shares at Dec. 31, 2018 | 293,000,000 | ||||||||||||||
Convertible Preferred Stock, beginning balance at Dec. 31, 2018 | $ 324,201 | ||||||||||||||
Beginning balance, shares at Dec. 31, 2018 | [1] | 7,777,100 | |||||||||||||
Net loss | (115,537) | (115,537) | |||||||||||||
Issuance of Series C convertible preferred stock, net of issuance costs | $ 48,868 | ||||||||||||||
Issuance of Series C convertible preferred stock, net of issuance costs, Shares | 25,510,205 | ||||||||||||||
Temporary equity, Preferred stock dividend | $ 24,120 | $ 823 | $ 712 | ||||||||||||
Preferred stock dividend | (24,120) | (823) | (712) | $ (1,104) | $ (23,016) | $ (823) | $ (712) | ||||||||
Temporary equity, Preferred stock accretion | 2,059 | 17 | 76 | ||||||||||||
Preferred stock accretion | (2,059) | (17) | (76) | (2,059) | (17) | (76) | |||||||||
Stock-based compensation | 1,104 | $ 1,104 | |||||||||||||
Ending balance at Sep. 30, 2019 | $ (384,913) | (384,913) | |||||||||||||
Convertible Preferred Stock, Ending balance, Shares at Sep. 30, 2019 | 318,510,205 | ||||||||||||||
Convertible Preferred Stock, ending balance at Sep. 30, 2019 | $ 400,876 | ||||||||||||||
Ending balance, shares at Sep. 30, 2019 | [1] | 7,777,100 | |||||||||||||
Beginning balance at Jun. 30, 2019 | $ (343,626) | (343,626) | |||||||||||||
Convertible Preferred Stock, beginning balance, Shares at Jun. 30, 2019 | 293,000,000 | ||||||||||||||
Convertible Preferred Stock, beginning balance at Jun. 30, 2019 | $ 342,213 | ||||||||||||||
Beginning balance, shares at Jun. 30, 2019 | [1] | 7,777,100 | |||||||||||||
Net loss | (31,899) | (31,899) | |||||||||||||
Issuance of Series C convertible preferred stock, net of issuance costs | 48,868 | ||||||||||||||
Temporary equity, Preferred stock dividend | 8,040 | 274 | 712 | ||||||||||||
Preferred stock dividend | (8,040) | (274) | (712) | (407) | (7,633) | (274) | (712) | ||||||||
Temporary equity, Preferred stock accretion | 687 | 6 | 76 | ||||||||||||
Preferred stock accretion | $ (687) | $ (6) | $ (76) | (687) | (6) | (76) | |||||||||
Stock-based compensation | 407 | 407 | |||||||||||||
Ending balance at Sep. 30, 2019 | $ (384,913) | (384,913) | |||||||||||||
Convertible Preferred Stock, Ending balance, Shares at Sep. 30, 2019 | 318,510,205 | ||||||||||||||
Convertible Preferred Stock, ending balance at Sep. 30, 2019 | $ 400,876 | ||||||||||||||
Ending balance, shares at Sep. 30, 2019 | [1] | 7,777,100 | |||||||||||||
Beginning balance at Dec. 31, 2019 | $ (422,862) | (422,862) | |||||||||||||
Convertible Preferred Stock, beginning balance, Shares at Dec. 31, 2019 | 318,510,205 | 285,000,000 | 8,000,000 | 25,510,205 | |||||||||||
Convertible Preferred Stock, beginning balance at Dec. 31, 2019 | $ 411,275 | $ 348,203 | $ 12,023 | $ 51,051 | |||||||||||
Beginning balance, shares at Dec. 31, 2019 | [1] | 7,787,470 | |||||||||||||
Net loss | (36,736) | (36,736) | |||||||||||||
Temporary equity, Preferred stock dividend | 22,780 | 777 | 3,347 | ||||||||||||
Preferred stock dividend | (22,780) | (777) | (3,347) | (1,048) | $ 1 | (21,732) | (778) | (3,347) | |||||||
Temporary equity, Preferred stock accretion | 5,562 | 53 | 921 | ||||||||||||
Preferred stock accretion | $ (5,562) | $ (53) | $ (922) | (3,572) | (37) | $ (563) | (1,990) | (16) | (359) | ||||||
Issuance of stock upon initial public offering, net of issuance costs | 135,435 | 135,435 | |||||||||||||
Issuance of stock upon initial public offering, net of issuance costs, Shares | [1] | 6,151,162 | |||||||||||||
Temporary equity, Conversion of Series A, B, C convertible stock to common stock | $ (444,715) | ||||||||||||||
Temporary equity, conversion of Series A, B, C convertible stock to common stock | (318,510,205) | ||||||||||||||
Conversion of Series A, B, C convertible stock to common stock | $ 444,716 | $ 1 | 444,715 | ||||||||||||
Conversion of Series A, B, C convertible stock to common stock, Shares | [1] | 42,926,630 | |||||||||||||
Reclassification of warrant liability to equity | 5,468 | 5,468 | |||||||||||||
Exercise of options | $ 283 | 283 | |||||||||||||
Exercise of options, Shares | 36,003 | 36,003 | [1] | ||||||||||||
Stock-based compensation | $ 1,870 | 1,870 | |||||||||||||
Repurchase and cancellation of common units | (167) | (167) | |||||||||||||
Repurchase and cancellation of common units, Shares | [1] | (12,175) | |||||||||||||
Repurchase and cancellation of common units withheld for taxes | (17) | (17) | |||||||||||||
Repurchase and cancellation of common units withheld for taxes, Shares | [1] | (465) | |||||||||||||
Ending balance at Sep. 30, 2020 | 94,549 | $ 1 | 582,535 | (487,987) | |||||||||||
Convertible Preferred Stock, Ending balance, Shares at Sep. 30, 2020 | 0 | 0 | 0 | ||||||||||||
Ending balance, shares at Sep. 30, 2020 | [1] | 56,888,625 | |||||||||||||
Beginning balance at Jun. 30, 2020 | $ (483,362) | (483,362) | |||||||||||||
Convertible Preferred Stock, beginning balance, Shares at Jun. 30, 2020 | 318,510,205 | ||||||||||||||
Convertible Preferred Stock, beginning balance at Jun. 30, 2020 | $ 434,009 | ||||||||||||||
Beginning balance, shares at Jun. 30, 2020 | [1] | 7,805,848 | |||||||||||||
Net loss | 1,909 | 1,909 | |||||||||||||
Temporary equity, Preferred stock dividend | $ 5,091 | $ 174 | $ 748 | ||||||||||||
Preferred stock dividend | (5,091) | (174) | (748) | (5,091) | (174) | (748) | |||||||||
Temporary equity, Preferred stock accretion | 4,010 | 41 | 642 | ||||||||||||
Preferred stock accretion | $ (4,010) | $ (41) | $ (642) | $ (3,572) | $ (37) | $ (563) | $ (438) | $ (4) | $ (79) | ||||||
Issuance of stock upon initial public offering, net of issuance costs | 135,435 | 135,435 | |||||||||||||
Issuance of stock upon initial public offering, net of issuance costs, Shares | [1] | 6,151,162 | |||||||||||||
Temporary equity, Conversion of Series A, B, C convertible stock to common stock | $ (444,715) | ||||||||||||||
Temporary equity, conversion of Series A, B, C convertible stock to common stock | (318,510,205) | ||||||||||||||
Conversion of Series A, B, C convertible stock to common stock | $ 444,716 | $ 1 | 444,715 | ||||||||||||
Conversion of Series A, B, C convertible stock to common stock, Shares | [1] | 42,926,630 | |||||||||||||
Reclassification of warrant liability to equity | 5,468 | 5,468 | |||||||||||||
Exercise of options | 33 | 33 | |||||||||||||
Exercise of options, Shares | [1] | 5,450 | |||||||||||||
Stock-based compensation | 1,073 | 1,073 | |||||||||||||
Repurchase and cancellation of common units withheld for taxes | (17) | (17) | |||||||||||||
Repurchase and cancellation of common units withheld for taxes, Shares | [1] | (465) | |||||||||||||
Ending balance at Sep. 30, 2020 | $ 94,549 | $ 1 | $ 582,535 | $ (487,987) | |||||||||||
Convertible Preferred Stock, Ending balance, Shares at Sep. 30, 2020 | 0 | 0 | 0 | ||||||||||||
Ending balance, shares at Sep. 30, 2020 | [1] | 56,888,625 | |||||||||||||
[1] | Common stock of Harmony Biosciences Holdings, Inc. |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (36,736) | $ (115,537) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 294 | 300 |
Intangible amortization | 5,560 | 965 |
Milestones associated with acquired in-process research & development (IPR&D) | 50,000 | |
Stock-based compensation expense | 1,870 | 1,104 |
Stock appreciation rights market adjustment | 396 | |
Warrant expense | 3,109 | |
Noncash paid-in-kind interest expense | 1,493 | |
Debt issuance costs amortization | 1,020 | 382 |
Loss on debt extinguishment | 22,639 | |
Change in operating assets and liabilities: | ||
Trade receivables | (12,071) | |
Inventory | (1,223) | (916) |
Prepaid expenses and other assets | (8,169) | 179 |
Other non-current assets | (476) | 75 |
Trade payables | 2,987 | 7,491 |
Accrued expenses and other current liabilities | 7,738 | 2,946 |
Other non-current liabilities | 30 | 69 |
Net cash used in operating activities | (13,032) | (51,449) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (2) | (113) |
Milestone associated with acquired in-process research & development (IPR&D) | (50,000) | |
Net cash used in investing activities | (2) | (50,113) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock upon initial public offering | 147,628 | |
Initial public offering issuance costs | (11,021) | |
Proceeds from issuance of preferred stock | 50,000 | |
Preferred stock issuance costs | (1,132) | |
Proceeds from long term debt | 200,000 | 75,000 |
Debt issuance costs | (5,804) | (4,309) |
Extinguishment of debt | (102,538) | |
Extinguishment of debt exit fees | (18,047) | |
Proceeds from exercised options | 283 | |
Repurchase of common stock | (167) | |
Tax payments for employees shares withheld | (17) | |
Net cash provided by financing activities | 210,317 | 119,559 |
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 197,283 | 17,997 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period | 25,207 | 84,023 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period | 222,490 | 102,020 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid during the year for interest | 19,549 | 108 |
Cash paid during the year for milestones | 50,000 | |
Supplemental Disclosures of Noncash Investing and Financing Activities: | ||
Warrant financing | 2,359 | |
Warrant liability reclassified to equity | 5,468 | |
Series A Convertible Preferred Stock | ||
Supplemental Disclosures of Noncash Investing and Financing Activities: | ||
Preferred Stock accrued return | 22,780 | 24,120 |
Accretion of issuance costs | 5,562 | 2,058 |
Series B Convertible Preferred Stock | ||
Supplemental Disclosures of Noncash Investing and Financing Activities: | ||
Preferred Stock accrued return | 777 | 823 |
Accretion of issuance costs | 53 | 17 |
Series C Convertible Preferred Stock | ||
Supplemental Disclosures of Noncash Investing and Financing Activities: | ||
Preferred Stock accrued return | 3,347 | 712 |
Accretion of issuance costs | $ 921 | $ 76 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Description of Business | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS The Company Our operating subsidiary, Harmony Biosciences, LLC, was formed on May 17, 2017. Harmony Biosciences Holdings, Inc. (the “Company”) was founded on July 25, 2017 as Harmony Biosciences II, LLC, a Delaware limited liability company, and the Company converted to a Delaware corporation named Harmony Biosciences II, Inc. on September 19, 2017. On February 3, 2020, the Company changed its name to Harmony Biosciences Holdings, Inc. The Company is a holding company and has no operations. The Company’s operations are conducted in its wholly owned subsidiary, Harmony Biosciences, LLC (“Harmony”). The Company is a commercial-stage pharmaceutical company focused on developing and commercializing innovative therapies for patients living with rare neurological disorders who have unmet medical needs. The Company is headquartered in Plymouth Meeting, Pennsylvania. Initial Public Offering On August 21, 2020, the Company completed its initial public offering (“IPO”) of common stock, in which it sold 6,151,162 shares, including 802,325 shares pursuant to the underwriters’ over-allotment option. The shares began trading on the Nasdaq Global Market on August 19, 2020. The shares were sold at an IPO price of $24.00 per share for net proceeds of approximately $135,435, after deducting underwriting discounts and commissions and offering expenses of approximately $12,193 payable by the Company. Upon the closing of the IPO, all outstanding shares of the Company’s convertible preferred stock were automatically converted into shares of common stock and the accrued dividend payable to holders of the convertible preferred stock was paid out in shares of common stock, resulting in a total of 42,926,630 shares of common stock being issued to former holders of the Company’s convertible preferred stock. Warrants exercisable for convertible preferred stock were automatically converted into warrants exercisable for a total of 410,239 shares of common stock. Reverse Stock Split On August 11, 2020, the Company implemented a 1-for-8.215 reverse stock split of the Company’s common stock. All share and per share data shown in the accompanying financial statements and related notes have been retroactively revised to reflect the reverse stock split. Shares of common stock underlying outstanding stock options and other equity instruments were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities. Shares of common stock reserved for issuance upon the conversion of the Company’s Preferred Stock and preferred dividend were proportionately reduced. All references in the accompanying condensed consolidated financial statements and related notes to the number of shares of common stock, convertible preferred stock, warrants and options to purchase common stock and per share data reflect the effect of the reverse stock split. |
Liquidity and Capital Resources
Liquidity and Capital Resources | 9 Months Ended |
Sep. 30, 2020 | |
Liquidity And Capital Resources [Abstract] | |
Liquidity and Capital Resources | 2. LIQUIDITY AND CAPITAL RESOURCES The unaudited condensed 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 has incurred operating losses and negative cash flows from operations since inception resulting in an accumulated deficit of $487,987 and $422,862, as of September 30, 2020 and December 31, 2019, respectively. As of September 30, 2020, the Company had cash and cash equivalents of $222,490. On August 21, 2020, the Company received aggregate proceeds from a common stock offering of approximately $135,435, net of underwriting discounts and commissions and other estimated offering expenses (see Note 11). Additionally, on January 9, 2020, the Company received aggregate proceeds of approximately $200,000 through the loan agreement with OrbiMed Royalty & Credit Opportunities, LP. This capital raise and debt issuance has resolved the Company’s significant risks and uncertainties regarding sources of liquidity, which previously raised substantial doubt about the Company’s ability to continue as a going concern. The Company believes that its anticipated cash from operating and financing activities and existing cash and cash equivalents will enable the Company to meet its operational liquidity needs and fund its planned investing activities for the next 12 months from the date of issuance of these unaudited condensed consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited condensed 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 in consolidation. The condensed consolidated balance sheet as of September 30, 2020, condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019, and, condensed consolidated statements of operations and comprehensive income (loss) and the condensed consolidated statements of convertible preferred stock and shareholders’ equity (deficit) for the three and nine months ended September 30, 2020 and 2019, are unaudited. The balance sheet as of December 31, 2019 was derived from audited financial statements as of and for the year ended December 31, 2019. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements as of and for the year ended December 31, 2019, and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statements of the Company’s financial position as of September 30, 2020, and the results of its operations and its cash flows for the nine months ended September 30, 2019 and 2020. The condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and note disclosures of the Company normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted under the SEC’s rules and regulations. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto for the year ended December 31, 2019. The balance sheet data as of December 31, 2019 was derived from the Company’s audited financial statements for the year ended December 31, 2019. Use of Estimates The preparation of our Condensed Consolidated Financial Statements in conformity with GAAP requires us to make estimates that affect the amounts and disclosures in the Condensed Consolidated Financial Statements, including the notes thereto, and elsewhere in this report. Uncertainties related to the magnitude and duration of COVID-19, the extent to which it will impact our estimated future financial results, worldwide macroeconomic conditions including interest rates, employment rates, consumer spending and health insurance coverage, the speed of the anticipated recovery and governmental and business reactions to the pandemic have increased the complexity of developing these estimates, including the carrying amounts of long-lived assets, and the intangible asset. Actual results may differ significantly from our estimates, including as a result of COVID-19. Fair Value of Financial Instruments The Company’s unaudited condensed 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 unaudited condensed 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, in general, to measure non-financial assets and liabilities at fair value on a nonrecurring basis. The instruments 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 in accordance with ASC 820, Fair Value Measurements and Disclosures 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. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents 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. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that equal the amount reflected in the statements of cash flows. As of September 30, 2020 December 31, 2019 Cash and cash equivalents $ 221,740 $ 24,457 Restricted cash 750 750 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 222,490 $ 25,207 Amounts included in restricted cash represent those 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. Concentrations of Risk Substantially all of the Company’s cash and money market funds are held with a single financial institution. Due to its size, the Company believes this financial institution represents minimal credit risk. Deposits in this institution 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. Management believes that the Company 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 also subject to credit risk from its trade receivables related to its product sales. The Company monitors its exposure within accounts receivable and records a reserve against uncollectible accounts receivable as necessary. 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. As of September 30, 2020, three customers accounted for 100% of gross accounts receivable, Caremark LLC (“CVS Caremark”), which accounted for 33% of gross accounts receivable; PANTHERx Specialty Pharmacy LLC (“Pantherx”), which accounted for 38% of gross accounts receivable; and Accredo Health Group, Inc. (“Accredo”), which accounted for 29% of gross accounts receivable. As of December 31, 2019, customers accounted for % of gross accounts receivable; CVS Caremark, which accounted for % of gross accounts receivable, and Pantherx, which accounted for of gross accounts receivable. For the nine months ended September 30, 2020, three customers accounted for 100% of gross product revenues; CVS Caremark accounted for 40% of gross product revenues; Pantherx accounted for 34% of gross product revenues; and Accredo accounted for 26% of gross product revenues. For the nine months ended September 30, 2019, revenues were zero. As of December 31, 2019, two customers accounted for 91% of gross accounts receivable; CVS Caremark, which accounted for 72% of gross accounts receivable, and Pantherx, which accounted for 19% of gross accounts receivable. The Company depends on a single source supplier for its product, product candidates and their active pharmaceutical ingredient. 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. The Company began capitalizing inventory upon FDA approval of WAKIX ® Advertising Expenses We expensed the costs of advertising, including promotional expenses, as incurred. Advertising expense was $3,138 and $1,343 for the three months ended September 30, 2020 and 2019, respectively, and was $8,576 and $2,445 for the nine months ended September 30, 2020 and 2019, respectively. Recently Issued Accounting Pronouncements In February 2016, the FASB issued amended guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities in the balance sheet and disclosing key information about leasing arrangements. The new guidance clarifies the criteria for distinguishing between a finance lease and operating lease, as well as classification between the two types of leases, which is substantially unchanged from the previous lease guidance. Further, the new guidance requires a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset, initially measured at the present value of the lease payments. For finance leases, a lessee should recognize interest on the lease liability separately from amortization of the right-of-use asset. For operating leases, a lessee should recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. The new standard will become effective for the Company’s fiscal year ending December 31, 2022. The Company is currently assessing the impact of this amended guidance and the timing of adoption. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | 4. INVENTORY Inventory, net consisted of the following: As of September 30, 2020 December 31, 2019 Raw materials $ 185 $ 384 Work in process 1,105 417 Finished goods 1,076 287 Inventory, gross 2,366 1,088 Reserve for obsolescence (55 ) — Total inventory, net $ 2,311 $ 1,088 |
Intangible Asset
Intangible Asset | 9 Months Ended |
Sep. 30, 2020 | |
Intangible Assets Net Excluding Goodwill [Abstract] | |
INTANGIBLE ASSET | 5. INTANGIBLE ASSET On August 15, 2019, the Company received FDA approval of WAKIX ® The gross carrying amount and net book value of the intangible asset is as follows: As of September 30, 2020 December 31, 2019 Gross Carrying Amount $ 75,000 $ 75,000 Accumulated Amortization (8,375 ) (2,815 ) Net Book Value $ 66,625 $ 72,185 |
License Agreement
License Agreement | 9 Months Ended |
Sep. 30, 2020 | |
License Agreement [Abstract] | |
License Agreement | 6. LICENSE AGREEMENT On July 28, 2017, Harmony entered into the License Agreement 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 New Drug Application (“NDA”), which was achieved on February 12, 2019 and was expensed within research and development for the nine months ended September 30, 2019. A milestone payment of $77,000, including a $2,000 fee, was due upon FDA approval of WAKIX ® ® |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2020 | |
Payables And Accruals [Abstract] | |
Accrued Expenses | 7. ACCRUED EXPENSES Accrued expenses consist of the following: As of September 30, 2020 December 31, 2019 Royalties due to third parties $ 7,297 $ 938 Rebates and other sales deductions 3,983 713 Research and development 2,119 894 Selling and marketing 1,782 1,547 Professional fees, consulting, and other services 1,881 510 Debt issuance costs — 638 Employee travel and other expenses 138 260 $ 17,200 $ 5,500 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 8. DEBT Credit Agreements On February 28, 2019, the Company entered into a multi-draw loan agreement with CRG Servicing LLC for an aggregate of $200,000 (the “CRG Loan”), which matured in March 2025. The Loan bore a fixed rate of 12%. The Loan agreement required compliance with certain financial covenants. The Company could draw three tranches of the Loan based on achieving specific milestones and dates. The Company could elect to pay the interest on the outstanding principal amount as follows: (i) only 7.5% of the 12% per annum in cash, paid quarterly, starting in March 2019, and (ii) 4.5% of the 12% per annum interest as compounded interest, added to the aggregate outstanding principal balance quarterly; the amount of any such compounded interest being a paid-in-kind loan. As of December 31, 2019, the Company had borrowed $100,000, resulting in cash proceeds received of $94,816, net of issuance costs. The issuance costs of $5,184 were being amortized over the six-year loan term of the CRG Loan. Unamortized debt issuance costs as of December 31, 2019 are $4,592 and are presented in the unaudited condensed consolidated balance sheets as a direct deduction from the carrying value of the debt. On January 9, 2020 the Company entered into a credit agreement with OrbiMed Royalty & Credit Opportunities, LP for an aggregate amount of $200,000 (the “OrbiMed Loan”), which matures in January 2026. Borrowings under the OrbiMed Loan are collateralized by all of the Company’s assets, excluding the intellectual property licensed through the License Agreement. The OrbiMed Loan bears 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. In addition to entering into the OrbiMed Loan, the Company extinguished 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, we recognized a loss on extinguishment of $22,639, which included an exit fee of $18,047 and the write-off of the remaining unamortized debt issuance costs of $4,592. The loss on extinguishment of debt was recorded in loss on debt extinguishment within the Company’s unaudited condensed consolidated statements of operations. The net cash received as a result of the transaction, less debt issuance costs of $5,778, was $73,313. These debt issuance costs will be amortized as additional interest expense over the six-year loan term of the OrbiMed Loan. The fair value of the OrbiMed loan as of September 30, 2020 was $210,400. In connection with the OrbiMed Loan, the Company issued warrants (the “Warrants”) to OrbiMed Royalty & Credit Opportunities, LP on January 9, 2020. See Note 13 for further discussion of the Warrants. Pursuant to the Warrants, OrbiMed Royalty & Credit Opportunities, LP, may purchase up to 410,239 shares of the Company’s Common Stock for an initial exercise price of $16.10 at any time from the date of execution of the Warrants through the expiration date, defined within the Warrants as the earlier of (i) January 9, 2027 and (ii) the closing date of a Corporate Reorganization. The fair value of the Warrants using the Black-Scholes option-pricing model was $2,359 at January 9, 2020. The portion of the OrbiMed Loan proceeds allocated to the warrant liability resulted in a debt discount, which is presented in the unaudited condensed consolidated balance sheets as a direct deduction from the carrying value of the debt and is being amortized as additional interest expense over the six-year loan term of the OrbiMed Loan. The unamortized debt discount as of September 30, 2020 is $2,064 and is presented in the unaudited condensed consolidated balance sheets as a direct deduction from the carrying value of the debt. The balances of the OrbiMed Loan as of September 30, 2020 and the CRG Loan as of December 31, 2019 were as follows: September 30, 2020 December 31, 2019 Liability component - principal $ 200,000 $ 102,538 Debt discount associated with warrant financing (2,064 ) — Deferred financing cost (5,078 ) (4,592 ) Liability component - net carrying value $ 192,858 $ 97,946 Interest expense related to the OrbiMed Loan and CRG Loan were included in interest expense, net in the Condensed Consolidated Statements of Operations as follows: For the three months ended For the nine months ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Interest on principal balance $ 6,655 $ 1,449 $ 19,549 $ 2,488 Interest on PIK — 870 — 1,493 Amortization of deferred financing costs 340 185 1,020 382 Total term loan interest expense $ 6,995 $ 2,504 $ 20,569 $ 4,363 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. 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. During 2018 and 2019 the Company was involved in ongoing litigation with its former chief executive officer related to arbitration and the value of vested common shares. On October 24, 2019, the Company reached a settlement resulting in $3,466 of general and administrative expense reflected in the Company’s consolidated results of operations for the year ended December 31, 2019. Lease Agreements In April 2018, the Company entered into an operating lease for approximately nine thousand square feet of office space in Northbrook, IL, which expired in January 2020. 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. In November 2019, the Company entered into an operating lease for approximately four thousand square feet of office space in Chicago, IL, which expires in December 2020. The terms of the lease payments provide for rental payments on a monthly basis and on a graduated scale. The Company recognizes rent expense on a straight-line basis over the lease period and has accrued for rent expense incurred but not paid. In addition, tenant improvement allowances recorded are amortized as a reduction to rent expense on a straight-line basis over the lease term. Rent expense was $516 for the nine months ended September 30, 2020, compared to $442 for the nine months ended September 30, 2019. The following table sets forth the lease payment obligations as of September 30, 2020, for the periods indicated below: Years ending December 31, 2020 $ 363 2021 443 2022 443 2023 443 2024 184 Thereafter — Total $ 1,876 |
Convertible Preferred Stock
Convertible Preferred Stock | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders Equity Note [Abstract] | |
Convertible Preferred Stock | 10. CONVERTIBLE PREFERRED STOCK Upon the closing of the IPO, all outstanding shares of the Company’s convertible preferred stock were automatically converted into shares of common stock and the accrued dividend payable to holders of the convertible preferred stock was paid out in shares of common stock, resulting in a total of 42,926,630 shares of common stock being issued to former holders of the Company’s convertible preferred stock. Series A Preferred Stock On September 22, 2017, the Company issued 270,000,000 shares of Series A convertible preferred stock for a purchase price of $1.00 per share, or $270,000 in the aggregate. On January 8, 2018, the Company issued an additional 15,000,000 shares of Series A convertible preferred stock for a purchase price of $1.00 per share, or $15,000 in the aggregate. As of December 31, 2019, there were 286,000,000 Series A convertible preferred stock authorized of which 285,000,000 were issued and outstanding. Each outstanding share of Series A convertible preferred stock accrued dividends at 10% per annum of the Series A original issue price, subject to adjustment for stock splits, combinations, recapitalizations, stock dividends and similar transactions. Preferred dividends on the Series A convertible preferred stock were cumulative and were compounded annually. As of September 30, 2020, Series A preferred shares and the cumulative unpaid preferred dividends reflect the reverse stock split and conversion to common stock. Series B Preferred Stock On January 8, 2018, the Company issued 8,000,000 shares of Series B convertible preferred stock for a purchase price of $1.25 per share, or $10,000 in the aggregate. As of December 31, 2019, there were 8,030,000 shares of Series B convertible preferred stock authorized, of which 8,000,000 were issued and outstanding. Each outstanding share of Series B convertible preferred stock accrued dividends at 10% per annum of the Series B original issue price, subject to adjustment for stock splits, combinations, recapitalizations, stock dividends and similar transactions. Preferred dividends on the Series B convertible preferred stock were cumulative and were compounded annually. As of September 30, 2020, Series B preferred shares and the cumulative unpaid preferred dividends reflect the reverse stock split and conversion to common stock. Series C Preferred Stock On August 9, 2019, the Company issued 25,510,205 shares of Series C convertible preferred stock for a purchase price of $1.96 per share, or $50,000 in the aggregate. As December 31, 2019, there were 25,600,000 shares of Series C convertible preferred stock authorized, of which 25,510,205 were issued and outstanding. Each outstanding share of Series C convertible preferred stock accrued dividends at 10% per annum of the Series C original issue price, subject to adjustment for stock splits, combinations, recapitalizations, stock dividends and similar transactions. Preferred dividends on the Series C convertible preferred stock were cumulative and were compounded annually. As of September 30, 2020, Series C preferred shares and the cumulative unpaid preferred dividends reflect the reverse stock split and conversion to common stock. Dividends The holders of Series A, Series B, and Series C convertible preferred stock were entitled to receive, when and if declared by the board of directors of the Company, cumulative dividends equal to a 10% per annum of Series A, Series B, and Series C convertible preferred stock. In addition, the holders of the outstanding shares of Series A, Series B, and Series C convertible preferred stock were entitled to receive, when and if declared by the board of directors of the Company, a dividend at least equal to any dividend payable on the Company’s common stock as if all convertible preferred stock had been converted to common stock. No dividends were declared as of December 31, 2019. As part of the Company’s IPO, the Company’s accrued cumulative dividend was paid out to holders of Series A, Series B, and Series C convertible preferred stock in shares of the Company’s common stock and reflects the reverse stock split in connection with the mandatory conversion of the Series A, Series B, and Series C convertible preferred stock into shares of the Company’s common stock. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity (Deficit) | 11. STOCKHOLDERS’ EQUITY (DEFICIT) Common Stock On September 19, 2017, Harmony Biosciences II, LLC, was converted to a C corporation named Harmony Biosciences II, Inc., at which point the 7,709,434 outstanding common units of Harmony Biosciences II, LLC, were converted to 7,709,434 common shares of Harmony Biosciences II, Inc. On September 22, 2017, the Company issued warrants for 1,690,672 common shares, with an exercise price of $0.01 per share, to the holders of the Convertible Notes upon the consummation of an equity financing transaction and these warrants were immediately exercised resulting in the issuance of 1,690,672 common shares and proceeds of $139. On August 31, 2018, the Company repurchased and canceled 1,623,007 common shares from the former chief executive officer for $3,200. On August 11, 2020, the Company implemented a 1-for-8.215 reverse stock split of the Company’s common stock. All share and per share data shown in the accompanying financial statements and related notes have been retroactively revised to reflect the reverse stock split with the exception of the preferred stock. Shares of common stock underlying outstanding stock options and other equity instruments were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities. Shares of common stock reserved for issuance upon the conversion of the Company’s Preferred Stock were proportionately reduced. As of August 11, 2020, all outstanding shares of preferred stock and preferred stock dividend were convertible into shares of common stock on a 1-for-8.215 basis. On August 21, 2020, the Company completed its IPO of common stock, in which it sold 6,151,162 shares, including 802,325 shares pursuant to the underwriters’ over-allotment option. The shares began trading on the Nasdaq Global Market on August 19, 2020. The shares were sold at an IPO price of $24.00 per share for net proceeds of approximately $135,435, after deducting underwriting discounts and commissions and offering expenses of approximately $12,193 incurred by the Company. 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. 1,217,285 common shares held by an investor were subject to certain forfeiture provisions that are dependent upon the outcome of certain future events. On November 15, 2019, the Company removed the provision associated with this forfeiture resulting in $8,400 of noncash stock compensation expense reflected in the Company’s unaudited condensed consolidated results of operations for the year ended December 31, 2019. |
Stock Incentive Plan and Stock-
Stock Incentive Plan and Stock-based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Incentive Plan and Stock-based Compensation | 12. STOCK INCENTIVE PLAN AND STOCK-BASED COMPENSATION Stock Incentive Plan On August 7, 2017, the Company adopted an equity incentive plan (the “Plan”). Under the 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, or restricted stock. In connection with the Company’s IPO, the board of directors 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. Upon the effectiveness of the 2020 Plan, no further grants will be made under the Equity Incentive Plan. However, the Equity Incentive Plan will continue to govern the terms and conditions of outstanding awards granted under it. The 2020 Plan provides for the grant of stock options, including ISOs and NSOs, SARs, restricted stock, dividend equivalents, RSUs and other stock or cash based awards. Stock options under the Plan and the 2020 Plan have a 10-year contractual term and vest over the vesting period specified in the applicable award agreement (generally five years from the date of grant), at achievement of a performance requirement, or upon change of control (as defined in the applicable plan). Changes in awards granted under the Plan as of September 30, 2020 and December 31, 2019, are as follows: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Awards outstanding—December 31, 2019 2,375,218 $ 8.22 8.33 Awards issued 2,812,135 $ 23.01 Awards exercised (36,003 ) $ 8.22 Awards forfeited (99,885 ) $ 11.07 Awards outstanding—September 30, 2020 5,051,465 $ 16.40 8.82 As of September 30, 2020 and December 31, 2019, stock awards issued under the Plan of 751,136 and 573,098 common shares, respectively, were vested. The Company has elected early adoption of ASU No. 2016-09 to recognize forfeitures as they occur. As a result of the adoption, for the nine months ended September 30, 2020, the Company reversed $2 out of stock-based compensation previously recorded, compared to $4 for the nine months ended September 30, 2019. Value of Stock Options The Company has valued awards for each of the plans included herein using the Black-Scholes option-pricing model. The Company historically has been a private company and lacks company-specific historical and implied volatility information. Therefore, the Company estimates its 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. 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. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The assumptions used to value the awards are summarized in the following table. As of September 30, 2020 December 31, 2019 Dividend yield 0.00 % 0.00 % Expected volatility 55.00 - 95.80 % 95.30 - 99.30 % Risk-free interest rate 0.32 - 0.51 % 1.60 - 2.59 % Lack of marketability discount 0.00 - 20.48 % 26.00 - 31.00 % Expected term (years) 5.4 - 6.5 6.5 The weighted average per share fair value of awards issued under the Plan was $9.39 and $3.38 in 2020 and 2019, respectively. Stock-based compensation expense was $1,330 and $2,266 for the three and nine months ended September 30, 2020, compared to $407 and $1,104 for the three and nine months ended September 30, 2019, and was recorded in the unaudited condensed consolidated statements of operations and comprehensive income (loss) in the following line items: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Research and development expense $ 141 $ 75 $ 310 $ 208 Sales and marketing expense 159 112 378 241 General and administrative expense 1,030 220 1,578 655 $ 1,330 $ 407 $ 2,266 $ 1,104 Options issued under the Plan are reflected as a component of equity in these unaudited condensed consolidated financial statements. Stock appreciation rights are reflected as other non-current liability. The Company will recognize compensation expense for these awards as summarized in the following table. Years Ending December 31, Stock Compensation Expense 2020 $ 4,687 2021 9,645 2022 9,514 2023 8,541 2024 7,809 2025 5,001 |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2020 | |
Warrants And Rights Note Disclosure [Abstract] | |
Warrants | 13. WARRANTS 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, may purchase up to 410,239 shares of the Company’s Common Stock for an initial exercise price of $16.10 at any time from the date of execution of the Warrants through the expiration date, defined within the Warrants as the earlier of (i) January 9, 2027 and (ii) the closing date of a Corporate Reorganization. The fair value of the Warrants using the Black-Scholes option-pricing model was $2,359 on January 9, 2020 and was initially recorded as a warrant liability which was included in warrant liability in the unaudited condensed consolidated balance sheet. The portion of the OrbiMed Loan proceeds allocated to the warrant liability resulted in a debt discount, which is presented in the unaudited condensed consolidated balance sheets as a direct deduction from the carrying value of the debt and is being amortized as additional interest expense over the six-year loan term of the OrbiMed Loan. The unamortized debt discount as of September 30, 2020 is $2,064 and is presented in the unaudited condensed consolidated balance sheet as a direct deduction from the carrying value of the debt. During the three and nine months ended September 30, 2020, a loss of $1,525 and $3,109 were recorded in other expense in the unaudited condensed consolidated statements of operations due to the change in the fair value of the warrant liability. See footnote 14 for the fair value of the Warrants. In connection with the IPO, the financial instrument underlying the warrants was converted from the Company’s Series C Preferred Stock to the Company’s Common Stock. As a result of this conversion the Warrants were re-evaluated under ASC 480 Distinguishing Liabilities from Equity and ASC 815 Derivatives and Hedging and reclassified to equity. A summary of the changes in the warrant liability for the nine months ended September 30, 2020 is as follows: Balance, beginning of period $ — Fair Value at Issuance 2,359 Change in fair value included in the statement of operations 3,109 Reclassification to equity (5,468 ) Balance, end of period $ — |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 14. EARNINGS PER SHARE For the three and nine months ended September 30, 2020 and 2019, the Company used the two-class method to compute net loss per common share because the Company has issued securities (convertible preferred stock) that entitle the holder to participate in dividends and earnings of the Company. Under this method, net income is reduced by the amount of any dividends earned and the accretion of convertible preferred stock to its redemption value during the period. The remaining earnings (undistributed earnings) are allocated to common stock and each series of convertible preferred stock to the extent that each preferred security may share in the earnings as if all of the earnings for the period had been distributed. The total earnings allocated to common stock is then divided by the number of outstanding shares to which the earnings are allocated to determine the earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the convertible preferred stock have no obligation to fund losses. Diluted net income (loss) 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 and warrants. In addition, the Company analyzes the potential dilutive effects of the outstanding convertible preferred stock under the ‘if-converted’ method when calculating diluted earnings per share, in which it is assumed that the outstanding convertible preferred stock converts into common stock at the beginning of the period or when issued if later. The Company reports the more dilutive of the approaches (treasury stock or ‘if converted’) as their diluted net income per share during the period. The Company has reported a net loss for the three and nine months ended September 30, 2020 and 2019, and the basic and diluted net loss per share attributable to common stockholders are the same for these periods because all convertible preferred stock and stock options have been excluded from the computation of diluted weighted-average shares outstanding because such securities would have an antidilutive impact. Additionally, the fair value adjustments for the warrants have been excluded from the computation of diluted net loss for the three and nine months ended September 30, 2020 since the additional income would have an antidilutive impact. The following table sets forth the computation of basic and diluted net loss per share: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Numerator Net income (loss) $ 1,909 $ (31,899 ) $ (36,736 ) $ (115,537 ) Accumulation of dividends on preferred stock (6,013 ) (9,027 ) (26,904 ) (25,656 ) Net loss available to common shareholders $ (4,104 ) $ (40,926 ) $ (63,640 ) $ (141,193 ) Denominator Net loss per common share - basic $ (0.14 ) $ (5.26 ) $ (4.15 ) $ (18.15 ) Net loss per common share - diluted $ (0.14 ) $ (5.26 ) $ (4.15 ) $ (18.15 ) Weighted average number of shares of common stock - basic 30,212,959 7,777,100 15,324,362 7,777,100 Weighted average number of shares of common stock - diluted 30,212,959 7,777,100 15,324,362 7,777,100 Potential common shares issuable upon conversion of preferred stock, exercise of stock options, and exercise of warrants that are excluded from the computation of diluted weighted-average shares outstanding as well as the warrant fair value adjustments excluded from the numerator are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Stock options to purchase common stock 5,051,465 2,398,695 5,051,465 2,398,695 Convertible preferred stock — 37,421,645 — 36,257,953 Warrants 410,239 — 410,239 — Total 5,461,704 39,820,340 5,461,704 38,656,648 Adjustment for warrants $ 1,525 $ — $ 3,109 $ — |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Financial Instruments [Abstract] | |
Financial Instruments | 15. FINANCIAL INSTRUMENTS The Company primarily applies the market approach to determine the fair value of financial instruments that are measured at fair value on a recurring basis. There were no changes to its valuation techniques used to determine the fair value of financial instruments during the nine months ended September 30, 2020. The Company’s financial assets and liabilities which are measured at fair value on a recurring basis were comprised of cash, cash equivalents, and restricted cash of $222,490 and $25,207 as of September 30, 2020 and December 31, 2019, respectively, based on Level 1 inputs. The Company estimates the fair value of the warrant liability using the Black-Scholes option-pricing model at each balance sheet date or when specific events occur. As discussed in Note 13, in connection with the Company’s IPO the warrant fair value was updated on August 19, 2020 with the change in fair value recorded in current period earnings as other expense in the unaudited condensed consolidated statement of operations and reclassified to equity. During the nine months ended September 30, 2020, a loss of $3,109 was recorded in other expense in the unaudited condensed consolidated statements of operations due to the change in the fair value of the warrant liability. The range of assumptions used to determine the fair value of the warrant liability through August 19, 2020 were as follows: Dividend yield 0.0 % Expected volatility 54.2% - 68.8 % Risk-free interest rate 0.17% - 1.56 % Lack of marketability discount 0.0 % Expected term (years) 1 - 4.5 |
Related-party Transactions
Related-party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related-party Transactions | 16. 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. For the three and nine months ended September 30, 2020, the Company incurred $3,628 and $7,101, respectively, in management fee expense and other expenses to this related party, which are included in general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss) as compared to $1,102 and $3,120 for the three and nine months ended September 30, 2019, respectively. The Company terminated the Management Services Agreement upon the consummation of its IPO. The Company is also 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. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. SUBSEQUENT EVENTS On October 13, 2020, the Company received notice that the FDA approved the NDA for WAKIX ® |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed 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 in consolidation. The condensed consolidated balance sheet as of September 30, 2020, condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019, and, condensed consolidated statements of operations and comprehensive income (loss) and the condensed consolidated statements of convertible preferred stock and shareholders’ equity (deficit) for the three and nine months ended September 30, 2020 and 2019, are unaudited. The balance sheet as of December 31, 2019 was derived from audited financial statements as of and for the year ended December 31, 2019. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements as of and for the year ended December 31, 2019, and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statements of the Company’s financial position as of September 30, 2020, and the results of its operations and its cash flows for the nine months ended September 30, 2019 and 2020. The condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and note disclosures of the Company normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted under the SEC’s rules and regulations. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto for the year ended December 31, 2019. The balance sheet data as of December 31, 2019 was derived from the Company’s audited financial statements for the year ended December 31, 2019. |
Use of Estimates | Use of Estimates The preparation of our Condensed Consolidated Financial Statements in conformity with GAAP requires us to make estimates that affect the amounts and disclosures in the Condensed Consolidated Financial Statements, including the notes thereto, and elsewhere in this report. Uncertainties related to the magnitude and duration of COVID-19, the extent to which it will impact our estimated future financial results, worldwide macroeconomic conditions including interest rates, employment rates, consumer spending and health insurance coverage, the speed of the anticipated recovery and governmental and business reactions to the pandemic have increased the complexity of developing these estimates, including the carrying amounts of long-lived assets, and the intangible asset. Actual results may differ significantly from our estimates, including as a result of COVID-19. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s unaudited condensed 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 unaudited condensed 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, in general, to measure non-financial assets and liabilities at fair value on a nonrecurring basis. The instruments 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 in accordance with ASC 820, Fair Value Measurements and Disclosures 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. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents 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. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that equal the amount reflected in the statements of cash flows. As of September 30, 2020 December 31, 2019 Cash and cash equivalents $ 221,740 $ 24,457 Restricted cash 750 750 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 222,490 $ 25,207 Amounts included in restricted cash represent those 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. |
Concentrations of Risk | Concentrations of Risk Substantially all of the Company’s cash and money market funds are held with a single financial institution. Due to its size, the Company believes this financial institution represents minimal credit risk. Deposits in this institution 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. Management believes that the Company 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 also subject to credit risk from its trade receivables related to its product sales. The Company monitors its exposure within accounts receivable and records a reserve against uncollectible accounts receivable as necessary. 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. As of September 30, 2020, three customers accounted for 100% of gross accounts receivable, Caremark LLC (“CVS Caremark”), which accounted for 33% of gross accounts receivable; PANTHERx Specialty Pharmacy LLC (“Pantherx”), which accounted for 38% of gross accounts receivable; and Accredo Health Group, Inc. (“Accredo”), which accounted for 29% of gross accounts receivable. As of December 31, 2019, customers accounted for % of gross accounts receivable; CVS Caremark, which accounted for % of gross accounts receivable, and Pantherx, which accounted for of gross accounts receivable. For the nine months ended September 30, 2020, three customers accounted for 100% of gross product revenues; CVS Caremark accounted for 40% of gross product revenues; Pantherx accounted for 34% of gross product revenues; and Accredo accounted for 26% of gross product revenues. For the nine months ended September 30, 2019, revenues were zero. As of December 31, 2019, two customers accounted for 91% of gross accounts receivable; CVS Caremark, which accounted for 72% of gross accounts receivable, and Pantherx, which accounted for 19% of gross accounts receivable. The Company depends on a single source supplier for its product, product candidates and their active pharmaceutical ingredient. |
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. The Company began capitalizing inventory upon FDA approval of WAKIX ® |
Advertising Expenses | Advertising Expenses We expensed the costs of advertising, including promotional expenses, as incurred. Advertising expense was $3,138 and $1,343 for the three months ended September 30, 2020 and 2019, respectively, and was $8,576 and $2,445 for the nine months ended September 30, 2020 and 2019, respectively. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued amended guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities in the balance sheet and disclosing key information about leasing arrangements. The new guidance clarifies the criteria for distinguishing between a finance lease and operating lease, as well as classification between the two types of leases, which is substantially unchanged from the previous lease guidance. Further, the new guidance requires a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset, initially measured at the present value of the lease payments. For finance leases, a lessee should recognize interest on the lease liability separately from amortization of the right-of-use asset. For operating leases, a lessee should recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. The new standard will become effective for the Company’s fiscal year ending December 31, 2022. The Company is currently assessing the impact of this amended guidance and the timing of adoption. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that equal the amount reflected in the statements of cash flows. As of September 30, 2020 December 31, 2019 Cash and cash equivalents $ 221,740 $ 24,457 Restricted cash 750 750 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 222,490 $ 25,207 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory Net | Inventory, net consisted of the following: As of September 30, 2020 December 31, 2019 Raw materials $ 185 $ 384 Work in process 1,105 417 Finished goods 1,076 287 Inventory, gross 2,366 1,088 Reserve for obsolescence (55 ) — Total inventory, net $ 2,311 $ 1,088 |
Intangible Asset (Table)
Intangible Asset (Table) | 9 Months Ended |
Sep. 30, 2020 | |
Intangible Assets Net Excluding Goodwill [Abstract] | |
Schedule of Gross Carrying Amount and Net Book Value of Intangible Asset | The gross carrying amount and net book value of the intangible asset is as follows: As of September 30, 2020 December 31, 2019 Gross Carrying Amount $ 75,000 $ 75,000 Accumulated Amortization (8,375 ) (2,815 ) Net Book Value $ 66,625 $ 72,185 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consist of the following: As of September 30, 2020 December 31, 2019 Royalties due to third parties $ 7,297 $ 938 Rebates and other sales deductions 3,983 713 Research and development 2,119 894 Selling and marketing 1,782 1,547 Professional fees, consulting, and other services 1,881 510 Debt issuance costs — 638 Employee travel and other expenses 138 260 $ 17,200 $ 5,500 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Balances of OrbiMed Loan and CRG Loan | The balances of the OrbiMed Loan as of September 30, 2020 and the CRG Loan as of December 31, 2019 were as follows: September 30, 2020 December 31, 2019 Liability component - principal $ 200,000 $ 102,538 Debt discount associated with warrant financing (2,064 ) — Deferred financing cost (5,078 ) (4,592 ) Liability component - net carrying value $ 192,858 $ 97,946 |
Interest Expense Related to OrbiMed Loan and CRG Loan | Interest expense related to the OrbiMed Loan and CRG Loan were included in interest expense, net in the Condensed Consolidated Statements of Operations as follows: For the three months ended For the nine months ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Interest on principal balance $ 6,655 $ 1,449 $ 19,549 $ 2,488 Interest on PIK — 870 — 1,493 Amortization of deferred financing costs 340 185 1,020 382 Total term loan interest expense $ 6,995 $ 2,504 $ 20,569 $ 4,363 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Lease Payment Obligations | The following table sets forth the lease payment obligations as of September 30, 2020, for the periods indicated below: Years ending December 31, 2020 $ 363 2021 443 2022 443 2023 443 2024 184 Thereafter — Total $ 1,876 |
Stock Incentive Plan and Stoc_2
Stock Incentive Plan and Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Changes in Awards Granted | Changes in awards granted under the Plan as of September 30, 2020 and December 31, 2019, are as follows: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Awards outstanding—December 31, 2019 2,375,218 $ 8.22 8.33 Awards issued 2,812,135 $ 23.01 Awards exercised (36,003 ) $ 8.22 Awards forfeited (99,885 ) $ 11.07 Awards outstanding—September 30, 2020 5,051,465 $ 16.40 8.82 |
Summary of Assumptions Used to Value Awards | The assumptions used to value the awards are summarized in the following table. As of September 30, 2020 December 31, 2019 Dividend yield 0.00 % 0.00 % Expected volatility 55.00 - 95.80 % 95.30 - 99.30 % Risk-free interest rate 0.32 - 0.51 % 1.60 - 2.59 % Lack of marketability discount 0.00 - 20.48 % 26.00 - 31.00 % Expected term (years) 5.4 - 6.5 6.5 |
Summary of Stock-based Compensation Expense | Stock-based compensation expense was $1,330 and $2,266 for the three and nine months ended September 30, 2020, compared to $407 and $1,104 for the three and nine months ended September 30, 2019, and was recorded in the unaudited condensed consolidated statements of operations and comprehensive income (loss) in the following line items: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Research and development expense $ 141 $ 75 $ 310 $ 208 Sales and marketing expense 159 112 378 241 General and administrative expense 1,030 220 1,578 655 $ 1,330 $ 407 $ 2,266 $ 1,104 |
Summary of Future Compensation Expense | The Company will recognize compensation expense for these awards as summarized in the following table. Years Ending December 31, Stock Compensation Expense 2020 $ 4,687 2021 9,645 2022 9,514 2023 8,541 2024 7,809 2025 5,001 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Warrants And Rights Note Disclosure [Abstract] | |
Summary of Changes in Warrant Liability | A summary of the changes in the warrant liability for the nine months ended September 30, 2020 is as follows: Balance, beginning of period $ — Fair Value at Issuance 2,359 Change in fair value included in the statement of operations 3,109 Reclassification to equity (5,468 ) Balance, end of period $ — |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic and Diluted Net Loss per Share | The following table sets forth the computation of basic and diluted net loss per share: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Numerator Net income (loss) $ 1,909 $ (31,899 ) $ (36,736 ) $ (115,537 ) Accumulation of dividends on preferred stock (6,013 ) (9,027 ) (26,904 ) (25,656 ) Net loss available to common shareholders $ (4,104 ) $ (40,926 ) $ (63,640 ) $ (141,193 ) Denominator Net loss per common share - basic $ (0.14 ) $ (5.26 ) $ (4.15 ) $ (18.15 ) Net loss per common share - diluted $ (0.14 ) $ (5.26 ) $ (4.15 ) $ (18.15 ) Weighted average number of shares of common stock - basic 30,212,959 7,777,100 15,324,362 7,777,100 Weighted average number of shares of common stock - diluted 30,212,959 7,777,100 15,324,362 7,777,100 |
Summary of Antidilutive Securities Excluded from Computation of Earnings Per Share | Potential common shares issuable upon conversion of preferred stock, exercise of stock options, and exercise of warrants that are excluded from the computation of diluted weighted-average shares outstanding as well as the warrant fair value adjustments excluded from the numerator are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Stock options to purchase common stock 5,051,465 2,398,695 5,051,465 2,398,695 Convertible preferred stock — 37,421,645 — 36,257,953 Warrants 410,239 — 410,239 — Total 5,461,704 39,820,340 5,461,704 38,656,648 Adjustment for warrants $ 1,525 $ — $ 3,109 $ — |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Financial Instruments [Abstract] | |
Financial Instruments -Schedule of Range of Assumptions Used to Determine Fair Value of Warrant Liability | The range of assumptions used to determine the fair value of the warrant liability through August 19, 2020 were as follows: Dividend yield 0.0 % Expected volatility 54.2% - 68.8 % Risk-free interest rate 0.17% - 1.56 % Lack of marketability discount 0.0 % Expected term (years) 1 - 4.5 |
Organization and Description _2
Organization and Description of Business - Additional Information (Details) $ / shares in Units, $ in Thousands | Aug. 21, 2020USD ($)$ / sharesshares | Aug. 11, 2020 | Sep. 30, 2020shares | Sep. 30, 2020USD ($)shares | |||
Organization And Description Of Business [Line Items] | |||||||
Proceeds from issuance of common stock upon initial public offering | $ | $ 147,628 | ||||||
Underwriting discounts and commissions and offering expenses | $ | $ 11,021 | ||||||
Purchase of common stock upon exercise of warrants | 410,239 | ||||||
Reverse stock split ratio, description | 1-for-8.215 | ||||||
Reverse stock split ratio | 0.1217 | ||||||
Common Stock | |||||||
Organization And Description Of Business [Line Items] | |||||||
Issuance of stock upon initial public offering, net of issuance costs, Shares | [1] | 6,151,162 | 6,151,162 | ||||
Conversion of Series A, B, C convertible stock to common stock, Shares | 42,926,630 | 42,926,630 | [1] | 42,926,630 | [1] | ||
Common Stock | IPO | |||||||
Organization And Description Of Business [Line Items] | |||||||
Issuance of stock upon initial public offering, net of issuance costs, Shares | 6,151,162 | ||||||
Shares issued, price per share | $ / shares | $ 24 | ||||||
Proceeds from issuance of common stock upon initial public offering | $ | $ 135,435 | ||||||
Underwriting discounts and commissions and offering expenses | $ | $ 12,193 | ||||||
Common Stock | Over-Allotment Option | |||||||
Organization And Description Of Business [Line Items] | |||||||
Issuance of stock upon initial public offering, net of issuance costs, Shares | 802,325 | ||||||
[1] | Common stock of Harmony Biosciences Holdings, Inc. |
Liquidity and Capital Resourc_2
Liquidity and Capital Resources - Additional Information (Details) - USD ($) $ in Thousands | Aug. 21, 2020 | Jan. 09, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Liquidity And Capital Resources [Line Items] | ||||||
Accumulated deficit | $ 487,987 | $ 422,862 | ||||
Cash and cash equivalents | $ 222,490 | $ 25,207 | $ 102,020 | $ 84,023 | ||
Proceeds from issuance of common stock, net | $ 135,435 | |||||
OrbiMed Royalty & Credit Opportunities, LP. | ||||||
Liquidity And Capital Resources [Line Items] | ||||||
Aggregate proceeds from loan | $ 200,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 221,740 | $ 24,457 | ||
Restricted cash | 750 | 750 | ||
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | $ 222,490 | $ 25,207 | $ 102,020 | $ 84,023 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Additional Information) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Customer | Sep. 30, 2019USD ($) | Dec. 31, 2019Customer | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Capitalized research and development expense | $ 1,323 | ||||
Amortization of acquired developed technology | $ 1,867 | 5,560 | $ 965 | ||
Advertising expense | $ 3,138 | $ 1,343 | $ 8,576 | $ 2,445 | |
Accounts Receivable | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of customers | Customer | 3 | 2 | |||
Product Revenues | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of customers | Customer | 3 | ||||
Product Revenues | Customer Concentration Risk | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 0.00% | ||||
Three Customers | Accounts Receivable | Customer Concentration Risk | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 100.00% | ||||
Three Customers | Product Revenues | Customer Concentration Risk | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 100.00% | ||||
Two Customers | Accounts Receivable | Customer Concentration Risk | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 91.00% | ||||
Caremark LLC | Accounts Receivable | Customer Concentration Risk | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 33.00% | 72.00% | |||
Caremark LLC | Product Revenues | Customer Concentration Risk | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 40.00% | ||||
PANTHERx Specialty Pharmacy LLC | Accounts Receivable | Customer Concentration Risk | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 38.00% | 19.00% | |||
PANTHERx Specialty Pharmacy LLC | Product Revenues | Customer Concentration Risk | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 34.00% | ||||
Accredo Health Group, Inc | Accounts Receivable | Customer Concentration Risk | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 29.00% | ||||
Accredo Health Group, Inc | Product Revenues | Customer Concentration Risk | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 26.00% |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory Net (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 185 | $ 384 |
Work in process | 1,105 | 417 |
Finished goods | 1,076 | 287 |
Inventory, gross | 2,366 | 1,088 |
Reserve for obsolescence | (55) | |
Total inventory, net | $ 2,311 | $ 1,088 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Nov. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2020 | |
Intangible Assets Net Excluding Goodwill [Abstract] | |||
License agreement milestone payments paid | $ 75,000 | $ 2,000 | |
Useful life of intangible asset | 10 years | ||
Remaining useful life | 9 years | ||
Expected annual amortization year 1 | $ 7,407 | ||
Expected annual amortization year 2 | 7,407 | ||
Expected annual amortization year 3 | 7,407 | ||
Expected annual amortization year 4 | 7,407 | ||
Expected annual amortization year 5 | $ 7,407 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Gross Carrying Amount and Net Book Value of Intangible Asset (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Intangible Assets Net Excluding Goodwill [Abstract] | ||
Gross Carrying Amount | $ 75,000 | $ 75,000 |
Accumulated Amortization | (8,375) | (2,815) |
Net Book Value | $ 66,625 | $ 72,185 |
License Agreement - Additional
License Agreement - Additional Information (Details) - USD ($) $ in Thousands | Aug. 14, 2019 | Oct. 31, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Feb. 12, 2019 |
License Agreement [Line Items] | ||||||||
License agreement milestone payments paid | $ 75,000 | $ 2,000 | ||||||
Cost of product sold | $ 7,890 | $ 17,820 | ||||||
Accrued Sales Based Trademark and Royalties | 7,297 | 7,297 | $ 938 | |||||
Upon Acceptance by FDA of Pitolisant’s | ||||||||
License Agreement [Line Items] | ||||||||
License agreement, milestone payment due | $ 50,000 | |||||||
Upon FDA Approval of WAKIX | ||||||||
License Agreement [Line Items] | ||||||||
License agreement, milestone payment due | $ 77,000 | |||||||
Licensing agreement milestone fees | $ 2,000 | |||||||
Sales-based, Trademark and Tiered Royalties | ||||||||
License Agreement [Line Items] | ||||||||
Cost of product sold | 16,574 | |||||||
Subsequent Event | Upon FDA Approval of WAKIX | ||||||||
License Agreement [Line Items] | ||||||||
License agreement milestone payments paid | $ 2,000 | |||||||
Bioprojet | Subsequent Event | Upon FDA Approval of WAKIX | ||||||||
License Agreement [Line Items] | ||||||||
License agreement milestone payments paid | 2,000 | |||||||
Bioprojet | United States | ||||||||
License Agreement [Line Items] | ||||||||
Amount of Aggregate Net Sales Attaining | 500,000 | |||||||
Bioprojet | Attaining $500,000 Aggregate Net Sales | United States | Upon FDA Approval of WAKIX | ||||||||
License Agreement [Line Items] | ||||||||
License agreement, additional milestone payment due | 40,000 | 40,000 | ||||||
Within 90 Days of Trigger Date | ||||||||
License Agreement [Line Items] | ||||||||
License agreement, milestone payment due | $ 100,000 | $ 100,000 | ||||||
Within 90 Days of Trigger Date | Bioprojet | Subsequent Event | ||||||||
License Agreement [Line Items] | ||||||||
License agreement, milestone payment due | $ 100,000 |
Accrued Expenses -Schedule of A
Accrued Expenses -Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Payables And Accruals [Abstract] | ||
Royalties due to third parties | $ 7,297 | $ 938 |
Rebates and other sales deductions | 3,983 | 713 |
Research and development | 2,119 | 894 |
Selling and marketing | 1,782 | 1,547 |
Professional fees, consulting, and other services | 1,881 | 510 |
Debt issuance costs | 638 | |
Employee travel and other expenses | 138 | 260 |
Accrued expenses | $ 17,200 | $ 5,500 |
Debt - Additional Information (
Debt - Additional Information (Details) | Jan. 09, 2020USD ($)$ / sharesshares | Feb. 28, 2019USD ($)Tranche | Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Aug. 21, 2020shares | Sep. 22, 2017$ / shares |
Debt Instrument [Line Items] | |||||||
Loss on debt extinguishment | $ (22,639,000) | ||||||
Purchase of common stock upon exercise of warrants | shares | 410,239 | ||||||
Warrants initial exercise price | $ / shares | $ 0.01 | ||||||
Fair value of warrants | $ 1,525,000 | 3,109,000 | |||||
OrbiMed Royalty & Credit Opportunities, LP. | |||||||
Debt Instrument [Line Items] | |||||||
Purchase of common stock upon exercise of warrants | shares | 410,239 | ||||||
Warrants initial exercise price | $ / shares | $ 16.10 | ||||||
Fair value of warrants | $ 2,359,000 | 1,525,000 | 3,109,000 | ||||
OrbiMed Royalty & Credit Opportunities, LP. | Warrants | |||||||
Debt Instrument [Line Items] | |||||||
Unamortized debt issuance costs | 2,064,000 | 2,064,000 | |||||
Multi-draw Loan Agreement | CRG Servicing LLC | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 200,000,000 | ||||||
Maturity date | Mar. 31, 2025 | ||||||
Fixed interest rate | 12.00% | ||||||
Number of tranches | Tranche | 3 | ||||||
Percentage of interest payable in cash | 7.50% | ||||||
Percentage of Compounded interest rate | 4.50% | ||||||
Long-term Debt, Gross | $ 100,000,000 | ||||||
Cash proceeds received | 94,816,000 | ||||||
Amortized issuance costs | $ 5,184,000 | ||||||
Term of loan | 6 years | ||||||
Unamortized debt issuance costs | $ 4,592,000 | ||||||
Extinguishment of loan, amount | 120,893,000 | ||||||
Loss on debt extinguishment | 22,639,000 | ||||||
Exit fee | 18,047,000 | ||||||
Write-off of the remaining unamortized debt issuance costs | 4,592,000 | ||||||
Credit Agreement | CRG Servicing LLC | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt, Gross | 102,538,000 | ||||||
Unamortized debt issuance costs | $ 4,592,000 | ||||||
Credit Agreement | OrbiMed Royalty & Credit Opportunities, LP. | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 200,000,000 | ||||||
Maturity date | Jan. 31, 2026 | ||||||
Long-term Debt, Gross | 200,000,000 | 200,000,000 | |||||
Cash proceeds received | $ 73,313,000 | ||||||
Amortized issuance costs | $ 5,778,000 | ||||||
Term of loan | 6 years | ||||||
Unamortized debt issuance costs | 5,078,000 | 5,078,000 | |||||
Variable interest rate | 2.00% | ||||||
Basis spread on variable rate | 11.00% | ||||||
Fair value of loan | $ 210,400,000 | $ 210,400,000 |
Debt - Balances of OrbiMed Loan
Debt - Balances of OrbiMed Loan and CRG Loan (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Liability component - net carrying value | $ 192,858 | $ 97,946 |
OrbiMed | ||
Debt Instrument [Line Items] | ||
Debt discount associated with warrant financing | (2,064) | |
Credit Agreement | OrbiMed | ||
Debt Instrument [Line Items] | ||
Liability component - principal | 200,000 | |
Debt discount associated with warrant financing | (2,064) | |
Deferred financing cost | (5,078) | |
Liability component - net carrying value | $ 192,858 | |
Credit Agreement | CRG | ||
Debt Instrument [Line Items] | ||
Liability component - principal | 102,538 | |
Deferred financing cost | (4,592) | |
Liability component - net carrying value | $ 97,946 |
Debt - Interest Expense Related
Debt - Interest Expense Related to OrbiMed Loan and CRG Loan (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Instrument [Line Items] | ||||
Noncash paid-in-kind interest expense | $ 1,493 | |||
Debt issuance costs amortization | $ 1,020 | 382 | ||
Credit Agreement | OrbiMed and CRG | ||||
Debt Instrument [Line Items] | ||||
Interest on principal balance | $ 6,655 | $ 1,449 | 19,549 | 2,488 |
Noncash paid-in-kind interest expense | 870 | 1,493 | ||
Debt issuance costs amortization | 340 | 185 | 1,020 | 382 |
Total term loan interest expense | $ 6,995 | $ 2,504 | $ 20,569 | $ 4,363 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | Oct. 24, 2019USD ($) | Nov. 30, 2019ft² | Jun. 30, 2018ft² | Apr. 30, 2018ft² | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) |
Loss Contingencies [Line Items] | ||||||
Litigation settlement, amount | $ | $ 3,466 | |||||
Rent expense | $ | $ 516 | $ 442 | ||||
Northbrook, IL | ||||||
Loss Contingencies [Line Items] | ||||||
Operating lease square feet of office space | 9,000 | |||||
Operating lease expiration month and year | 2020-01 | |||||
Plymouth Meeting, PA | ||||||
Loss Contingencies [Line Items] | ||||||
Operating lease square feet of office space | 15,000 | |||||
Operating lease expiration month and year | 2024-05 | |||||
Chicago, IL | ||||||
Loss Contingencies [Line Items] | ||||||
Operating lease square feet of office space | 4,000 | |||||
Operating lease expiration month and year | 2020-12 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Lease Payment Obligations (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2020 | $ 363 |
2021 | 443 |
2022 | 443 |
2023 | 443 |
2024 | 184 |
Total | $ 1,876 |
Convertible Preferred Stock - A
Convertible Preferred Stock - Additional Information (Details) - USD ($) | Aug. 21, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Sep. 30, 2019 | Aug. 09, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Jan. 08, 2018 | Sep. 22, 2017 | ||
Class Of Stock [Line Items] | |||||||||||||
Convertible preferred stock, shares outstanding | 318,510,205 | 318,510,205 | 318,510,205 | 293,000,000 | 293,000,000 | ||||||||
Convertible preferred stock aggregate amount | $ 411,275,000 | $ 434,009,000 | $ 400,876,000 | $ 342,213,000 | $ 324,201,000 | ||||||||
Preferred stock dividend declared | $ 0 | ||||||||||||
Series A Convertible Preferred Stock | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Convertible preferred stock, shares authorized | 0 | 0 | 286,000,000 | ||||||||||
Convertible preferred stock, shares issued | 0 | 0 | 285,000,000 | 15,000,000 | 270,000,000 | ||||||||
Convertible preferred stock, shares outstanding | 0 | 0 | 285,000,000 | ||||||||||
Convertible preferred stock, purchase price | $ 1 | $ 1 | $ 1 | $ 1 | $ 1 | ||||||||
Convertible preferred stock aggregate amount | $ 348,203,000 | $ 15,000,000 | $ 270,000,000 | ||||||||||
Percentage preferred stock accrued dividends | 10.00% | 10.00% | |||||||||||
Series B Convertible Preferred Stock | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Convertible preferred stock, shares authorized | 0 | 0 | 8,030,000 | ||||||||||
Convertible preferred stock, shares issued | 0 | 0 | 8,000,000 | 8,000,000 | |||||||||
Convertible preferred stock, shares outstanding | 0 | 0 | 8,000,000 | ||||||||||
Convertible preferred stock, purchase price | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | |||||||||
Convertible preferred stock aggregate amount | $ 12,023,000 | $ 10,000,000 | |||||||||||
Percentage preferred stock accrued dividends | 10.00% | 10.00% | |||||||||||
Series C Convertible Preferred Stock | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Convertible preferred stock, shares authorized | 0 | 0 | 25,600,000 | ||||||||||
Convertible preferred stock, shares issued | 0 | 0 | 25,510,205 | 25,510,205 | |||||||||
Convertible preferred stock, shares outstanding | 0 | 0 | 25,510,205 | ||||||||||
Convertible preferred stock, purchase price | $ 1.96 | $ 1.96 | $ 1.96 | $ 1.96 | |||||||||
Convertible preferred stock aggregate amount | $ 51,051,000 | $ 50,000,000 | |||||||||||
Percentage preferred stock accrued dividends | 10.00% | 10.00% | |||||||||||
Common Stock | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Conversion of Series A, B, C convertible stock to common stock, Shares | 42,926,630 | 42,926,630 | [1] | 42,926,630 | [1] | ||||||||
[1] | Common stock of Harmony Biosciences Holdings, Inc. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) - Additional Information (Details) $ / shares in Units, $ in Thousands | Aug. 21, 2020USD ($)$ / sharesshares | Aug. 11, 2020 | Nov. 15, 2019USD ($) | Aug. 31, 2018USD ($)shares | Sep. 22, 2017USD ($)$ / sharesshares | Sep. 19, 2017shares | Sep. 30, 2020shares | Sep. 30, 2020USD ($)shares | Sep. 30, 2019USD ($) | |
Class Of Stock [Line Items] | ||||||||||
Number of warrants converted | 1,690,672 | |||||||||
Warrants initial exercise price | $ / shares | $ 0.01 | |||||||||
Stock issued during period shares warrants exercised | 1,690,672 | |||||||||
Proceeds from exercise of warrants | $ | $ 139 | |||||||||
Shares repurchased and cancelled value | $ | $ 167 | |||||||||
Reverse stock split ratio, description | 1-for-8.215 | |||||||||
Reverse stock split ratio | 0.1217 | |||||||||
Preferred stock, conversion basis | 1-for-8.215 | |||||||||
Preferred stock conversion ratio | 0.1217 | |||||||||
Net proceeds from initial public offering | $ | $ 147,628 | |||||||||
Common stock, voting rights | one vote for each share | |||||||||
Common stock number of shares subject to forfeiture provisions | 1,217,285 | 1,217,285 | ||||||||
Noncash stock compensation expense | $ | $ 8,400 | $ 1,870 | $ 1,104 | |||||||
Common Stock | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Shares converted | 7,709,434 | |||||||||
Shares issued upon conversion | 7,709,434 | |||||||||
Number of shares repurchased and cancelled | [1] | 12,175 | ||||||||
Issuance of shares upon initial public offering | [1] | 6,151,162 | 6,151,162 | |||||||
Common Stock | IPO | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Issuance of shares upon initial public offering | 6,151,162 | |||||||||
Shares issued, price per share | $ / shares | $ 24 | |||||||||
Net proceeds from initial public offering | $ | $ 135,435 | |||||||||
Underwriting discounts and commissions and offering expenses | $ | $ 12,193 | |||||||||
Common Stock | Over-Allotment Option | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Issuance of shares upon initial public offering | 802,325 | |||||||||
Common Stock | Chief Executive Officer | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Number of shares repurchased and cancelled | 1,623,007 | |||||||||
Shares repurchased and cancelled value | $ | $ 3,200 | |||||||||
[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 | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options contractual term | 10 years | ||||
Stock options vesting period | 5 years | ||||
Stock-based compensation expense (income) | $ (2) | $ 4 | |||
Weighted average per share fair value of awards issued | $ 9.39 | $ 3.38 | |||
Stock-based compensation expense | $ 1,330 | $ 407 | $ 2,266 | $ 1,104 | |
Common Stock | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock vested | 751,136 | 573,098 |
Stock Incentive Plan and Stoc_4
Stock Incentive Plan and Stock-based Compensation - Summary of Changes in Awards Granted (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Number of Shares, Awards outstanding, Beginning balance | 2,375,218 | |
Number of Shares, Awards issued | 2,812,135 | |
Number of Shares, Awards exercised | (36,003) | |
Number of Shares, Awards forfeited | (99,885) | |
Number of Shares, Awards outstanding, Ending balance | 5,051,465 | 2,375,218 |
Weighted-Average Exercise Price, Awards outstanding, Beginning balance | $ 8.22 | |
Weighted-Average Exercise Price, Awards issued | 23.01 | |
Weighted-Average Exercise Price, Awards exercised | 8.22 | |
Weighted-Average Exercise Price, Awards forfeited | 11.07 | |
Number of Shares, Awards outstanding, Ending balance | $ 16.40 | $ 8.22 |
Weighted-Average Remaining Contractual Term, Balance | 8 years 9 months 25 days | 8 years 3 months 29 days |
Stock Incentive Plan and Stoc_5
Stock Incentive Plan and Stock-based Compensation - Summary of Assumptions Used to Value Awards (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Expected volatility, minimum | 55.00% | 95.30% |
Expected volatility, maximum | 95.80% | 99.30% |
Risk-free interest rate, minimum | 0.32% | 1.60% |
Risk-free interest rate, maximum | 0.51% | 2.59% |
Expected term (years) | 6 years 6 months | |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Lack of marketability discount | 0.00% | 26.00% |
Expected term (years) | 5 years 4 months 24 days | |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Lack of marketability discount | 20.48% | 31.00% |
Expected term (years) | 6 years 6 months |
Stock Incentive Plan and Stoc_6
Stock Incentive Plan and Stock-based Compensation - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 1,330 | $ 407 | $ 2,266 | $ 1,104 |
Research and Development Expense | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 141 | 75 | 310 | 208 |
Sales and Marketing Expense | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 159 | 112 | 378 | 241 |
General and Administrative Expense | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 1,030 | $ 220 | $ 1,578 | $ 655 |
Stock Incentive Plan and Stoc_7
Stock Incentive Plan and Stock-based Compensation - Summary of Future Compensation Expense (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
2020 | $ 4,687 |
2021 | 9,645 |
2022 | 9,514 |
2023 | 8,541 |
2024 | 7,809 |
2025 | $ 5,001 |
Warrants - Additional Informati
Warrants - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 09, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Aug. 21, 2020 | Sep. 22, 2017 |
Class Of Warrant Or Right [Line Items] | |||||
Purchase of common stock upon exercise of warrants | 410,239 | ||||
Warrants initial exercise price | $ 0.01 | ||||
Warrant expense | $ 1,525 | $ 3,109 | |||
OrbiMed Royalty & Credit Opportunities, LP. | |||||
Class Of Warrant Or Right [Line Items] | |||||
Purchase of common stock upon exercise of warrants | 410,239 | ||||
Warrants initial exercise price | $ 16.10 | ||||
Unamortized debt discount | 2,064 | 2,064 | |||
Warrant expense | $ 2,359 | $ 1,525 | $ 3,109 | ||
OrbiMed Royalty & Credit Opportunities, LP. | Warrants | |||||
Class Of Warrant Or Right [Line Items] | |||||
Fair value of the Warrants | $ 2,359 |
Warrants - Summary of Changes i
Warrants - Summary of Changes in Warrant (Details) - Warrants $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Fair Value at Issuance | $ 2,359 |
Change in fair value included in the statement of operations | 3,109 |
Reclassification to equity | $ (5,468) |
Earnings per Share - Summary of
Earnings per Share - Summary of Computation of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator | ||||
Net income (loss) | $ 1,909 | $ (31,899) | $ (36,736) | $ (115,537) |
Accumulation of dividends on preferred stock | (6,013) | (9,027) | (26,904) | (25,656) |
Net loss available to common shareholders | $ (4,104) | $ (40,926) | $ (63,640) | $ (141,193) |
Denominator | ||||
Net loss per common share - basic | $ (0.14) | $ (5.26) | $ (4.15) | $ (18.15) |
Net loss per common share - diluted | $ (0.14) | $ (5.26) | $ (4.15) | $ (18.15) |
Weighted average number of shares of common stock - basic | 30,212,959 | 7,777,100 | 15,324,362 | 7,777,100 |
Weighted average number of shares of common stock - diluted | 30,212,959 | 7,777,100 | 15,324,362 | 7,777,100 |
Earnings per Share - Summary _2
Earnings per Share - Summary of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total | 5,461,704 | 39,820,340 | 5,461,704 | 38,656,648 |
Fair value of warrants | $ 1,525 | $ 3,109 | ||
Convertible Preferred Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total | 37,421,645 | 36,257,953 | ||
Stock Options to Purchase Common Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total | 5,051,465 | 2,398,695 | 5,051,465 | 2,398,695 |
Warrants | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total | 410,239 | 410,239 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
Financial Instruments [Abstract] | |||||
Changes to valuation techniques | false | false | |||
Cash, cash equivalents, and restricted cash | $ 222,490 | $ 222,490 | $ 25,207 | $ 102,020 | $ 84,023 |
Fair value of warrants | $ 1,525 | $ 3,109 |
Financial Instruments -Schedule
Financial Instruments -Schedule of Range of Assumptions Used to Determine Fair Value of Warrant Liability (Details) | Aug. 19, 2020 |
Dividend Yield | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Warrant liability, fair value measurement inputs | 0 |
Expected Volatility | Minimum | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Warrant liability, fair value measurement inputs | 54.2 |
Expected Volatility | Maximum | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Warrant liability, fair value measurement inputs | 68.8 |
Risk-Free Interest Rate | Minimum | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Warrant liability, fair value measurement inputs | 0.17 |
Risk-Free Interest Rate | Maximum | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Warrant liability, fair value measurement inputs | 1.56 |
Lack of Marketability Discount | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Warrant liability, fair value measurement inputs | 0 |
Expected Term | Minimum | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Expected term (years) | 1 year |
Expected Term | Maximum | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Expected term (years) | 4 years 6 months |
Related-party Transactions - Ad
Related-party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Current Liabilities | |||||
Related Party Transaction [Line Items] | |||||
Amount due to related parties - current | $ 193 | $ 193 | $ 1,208 | ||
Other Assets | |||||
Related Party Transaction [Line Items] | |||||
Amount due from related parties | 1 | 1 | $ 210 | ||
Management Services Agreement | General and Administrative Expense | |||||
Related Party Transaction [Line Items] | |||||
Management fee expense and other expenses to related party | $ 3,628 | $ 1,102 | $ 7,101 | $ 3,120 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | ||||
Oct. 31, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2020 | Aug. 14, 2019 | |
Subsequent Event [Line Items] | |||||
License agreement milestone payments paid | $ 75,000 | $ 2,000 | |||
Within 90 Days of Trigger Date | |||||
Subsequent Event [Line Items] | |||||
License agreement, milestone payment due | $ 100,000 | ||||
Upon FDA Approval of WAKIX | |||||
Subsequent Event [Line Items] | |||||
License agreement, milestone payment due | $ 77,000 | ||||
Subsequent Event | Bioprojet | Within 90 Days of Trigger Date | |||||
Subsequent Event [Line Items] | |||||
License agreement, milestone payment due | $ 100,000 | ||||
Subsequent Event | Upon FDA Approval of WAKIX | |||||
Subsequent Event [Line Items] | |||||
License agreement milestone payments paid | 2,000 | ||||
Subsequent Event | Upon FDA Approval of WAKIX | Bioprojet | |||||
Subsequent Event [Line Items] | |||||
License agreement milestone payments paid | $ 2,000 |