Harmony Biosciences Holdings, Inc. (HRMY Quick QuoteHRMY - Free Report) reported third-quarter 2026 earnings of 81 cents per share, down from 87 cents in the year-ago quarter. The figure missed the Zacks Consensus Estimate of $1.00 per share.

An increase in research and development expenses affected the bottom line.

Quarterly revenues increased 12% year over year to $269 million but marginally missed the Zacks Consensus Estimate of $271 million. Growth was driven by sustained demand for lead drug, Wakix (pitolisant), with the estimated average patient count increasing 400 sequentially to approximately 9,350.

Year to date, shares of HRMY have lost 8.1% against the industry’s 11.9% gain.

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HRMY Q3 Cost Analysis

Total operating expenses increased 17.5% year over year to $134 million. The increase was primarily driven by a $25-million milestone charge related to MSN Labs, continued research and development investments, and the expansion of field-based commercial teams.

Net income declined to $48 million from $51 million in the year-ago quarter, primarily due to higher milestone charges and new MSN royalty expenses incurred in the third quarter of 2026.

As of Sept. 30, 2026, Harmony had cash, cash equivalents and investments of $1,051.6 million.

Harmony Advances BP-205 Development

Harmony reported encouraging preliminary multiple-ascending-dose (MAD) results from the phase I study of BP-205, its investigational orexin-2 receptor agonist being developed for narcolepsy and other central nervous system (CNS) disorders.

The 14-day study evaluated once-daily doses ranging from 0.1 mg to 3 mg in 94 healthy volunteers. BP-205 demonstrated a mean time to maximum plasma concentration of approximately 60 minutes and an effective half-life of approximately 29 hours, supporting the potential for rapid onset and once-daily dosing.

The candidate was generally well tolerated, with no serious or severe treatment-emergent adverse events. Headaches occurred in approximately 25% of participants, while insomnia and urinary-related adverse events were reported in fewer than 20%.

Harmony initiated a study in sleep-deprived healthy volunteers during the third quarter, with top-line results expected in the first quarter of 2027. Phase II studies across multiple CNS indications are planned for mid-2027.

HRMY Progresses Pitolisant and Epilepsy Programs

The FDA is reviewing the new drug application for pitolisant gastro-resistant (GR), with a target action date of April 1, 2027. Harmony anticipates launching the GR formulation during the first half of 2027, subject to regulatory approval.

The company continues to advance pitolisant HD through the phase III ONSTRIDE 1 and ONSTRIDE 2 studies in narcolepsy and idiopathic hypersomnia, respectively. Top-line results are expected in 2027, with potential regulatory action anticipated in 2028.

Harmony's phase III TEMPO study of Wakix in Prader-Willi syndrome remains actively recruiting, with top-line data expected in mid-2027.

Meanwhile, EPX-100 is progressing through the phase III LIGHTHOUSE and ARGUS studies targeting Lennox-Gastaut syndrome and Dravet syndrome, respectively. Results from both studies are expected in mid-2027, with potential regulatory action targeted for 2028.

Harmony Reaffirms 2026 Revenue Outlook

Harmony reiterated its full-year 2026 Wakix net revenue guidance of $1 billion to $1.04 billion, keeping the company on track to cross the $1-billion annual revenue milestone for the first time.

Management highlighted sustained patient demand, supported by expanded commercial infrastructure, improved reimbursement support and payer coverage exceeding 80% of covered lives.

Wakix recorded at least 400 net patient additions in five of the past six quarters.

Despite the anticipated introduction of Takeda's (TAK Quick QuoteTAK - Free Report) competing narcolepsy treatment, Orzeyful, management remains confident in Wakix's differentiated positioning as the only nonscheduled treatment option for narcolepsy.

Harmony Focuses on Patent Protection and Expansion

Harmony continues defending Wakix's intellectual property, having settled with six of the seven abbreviated new drug application filers. Management maintains confidence in exclusivity through March 2030, including anticipated pediatric exclusivity.

A preliminary injunction hearing involving AET Pharma and Sandoz is scheduled for Jan. 26, 2027, ahead of the February 2027 expiration of the regulatory stay.

Separately, Peter Anastasiou will succeed Jeffrey Dayno as president and CEO effective Jan. 1, 2027.

Our Take on HRMY's Q3 Performance

HRMY delivered double-digit revenue growth during the third quarter, supported by continued Wakix demand. However, higher royalty expenses and milestone-related charges weighed on profitability, contributing to the earnings miss.

Wakix remains the company's primary commercial growth driver, while BP-205 and the expanding late-stage pipeline provide opportunities for future diversification.

HRMY’s Zacks Rank and Stocks to Consider

HRMY currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the biotech sector are TG Therapeutics (TGTX Quick QuoteTGTX - Free Report) and Tarsus Pharmaceuticals (TARS Quick QuoteTARS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past 60 days, estimates for TG Therapeutics’ 2026 earnings per share have risen from 92 cents to 94 cents, while that for 2027 EPS has increased from $2.65 to $2.66 during the same time frame. TGTX shares have surged 106.8% year to date.

TG Therapeutics’ earnings beat estimates in one of the trailing four quarters and missed in the other three, with the average surprise being 184.65%.

Over the past 60 days, estimates for Tarsus Pharmaceuticals' 2026 loss per share have narrowed from $2.41 to $2.23. TARS shares have lost 15.7% year to date.