HRMY Stock On Track For Best Intraday Gains In 18 Months — What Did Mizuho Analysts Say?

• Mizuho stated in its note that AET Pharma is the sole remaining generic challenger that has yet to settle with Harmony Biosciences.
• The firm believes Harmony’s Wakix franchise should be viewed as protected and fully intact through 2030.
• Mizuho also noted that Harmony's lawsuit is a "significant development" and a "major positive" for the company.

Shares of Harmony Biosciences Holdings Inc. (HRMY) soared more than 18% in Tuesday’s midday trade after analysts at Mizuho announced that they have learned of a new patent lawsuit filed by the company.

According to TheFly, Mizuho analysts stated that Harmony Biosciences has sued AET Pharma for allegedly infringing a patent covering an amorphous formulation of pitolisant.

Harmony Biosciences shares were up over 14% in Tuesday’s midday trade. Retail sentiment on Stocktwits about the company trended in ‘bullish’ territory, with message volume at ‘high’ levels at the time of writing.

What Is The Lawsuit About?

Mizuho stated in its note that AET Pharma is the sole remaining generic challenger that has yet to settle with Harmony Biosciences. The lawsuit covers pitolisant, which was initially developed by Bioprojet and subsequently licensed exclusively by Harmony for the development, manufacture, and commercialization of pitolisant in the U.S.

The firm now believes the Harmony Wakix franchise should be considered protected and fully intact through 2030. It also noted that Harmony's lawsuit is a "significant development" and a "major positive" for the company.

Mizuho contended that this lawsuit should also remove a major overhang on HRMY stock stemming from concerns that a generic version of pitolisant could be launched before 2030.

The firm reiterated its ‘Outperform’ rating on Harmony, with a $50 price target, implying an upside of about 50% from current levels.

Koyfin data shows that the average 12-month price target for Harmony is $42, implying an upside of about 27% from current levels. Of the 11 analysts covering the stock, six have either a ‘Strong Buy’ or a ‘Buy’ recommendation, four have a ‘Hold’ rating, and one has a ‘Strong Sell’ recommendation.

What Is Pitolisant Used For?

Pitolisant, originally developed to treat excessive daytime sleepiness and cataplexy in narcolepsy patients, is also being evaluated by Harmony Biosciences for use in individuals with Prader-Willi syndrome.

The company also has two pitolisant tablet formulations, namely Pitolisant GR and Pitolisant HD.

Harmony is developing Pitolisant GR to enable treatment initiation within the therapeutic dose range. Pitolisant HD is a reformulated version designed to improve how the drug works in the body and to target additional symptoms, such as fatigue, in patients with narcolepsy.

Harmony announced in February this year that the U.S. Food and Drug Administration (FDA) approved Wakix (pitolisant) for the treatment of cataplexy in pediatric narcolepsy.

“With this approval, clinicians now have the option to prescribe WAKIX to treat excessive daytime sleepiness, cataplexy, or both, in patients 6 years and older with narcolepsy,” said Harmony Biosciences’ Chief Medical and Scientific Officer, Kumar Budur.

HRMY stock is down 10% year-to-date, but up 18% over the past 12 months. The iShares Core S&P Small-Cap ETF (IJR) is up 43% over the past 12 months, while the iShares Russell 2000 ETF (IWM) is up 51%.

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