HARMONY BIOSCIENCES HOLDINGS, INC. (HRMY): what the price assumes
boothcheck covers HARMONY BIOSCIENCES HOLDINGS, INC. (HRMY) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-06-27.
Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/HRMY
Headline
| Field | Value |
|---|---|
| Ticker | HRMY |
| Company | HARMONY BIOSCIENCES HOLDINGS, INC. |
| Current price | $35.80/sh |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 7.2% |
| Operating margin today | 21.1% |
| Margin compression (value-band) | -13.9pp |
| Multiple paid | 9x operating income |
The operating-margin figure is value-band context at year 4: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 9.4% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.81σ |
| cohort percentile (of 116 peers) | 3 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.22x | 5 | expensive |
| Earnings | 0.58x | 5 | justifies |
| Relative | 0.55x | 5 | justifies |
| Growth | 0.46x | 3 | justifies |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.6%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $229.11 | 0.16x | yes | FCF base $0.4B, growth 21% (input: historical growth), terminal g 4.0%, WACC 8.6%, 6yr projection |
| DCF Exit Multiple | Growth | $77.66 | 0.46x | yes | Exit EV/EBITDA: 7.0x / 9.0x / 11.0x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $64.88 | 0.55x | yes | P/E 24x (static sector reference · 2026-04), scenarios: 19.6x / 24.0x / 28.4x (bear / base = reference held flat / bull), EV/EBITDA 16x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $26.78 | 1.34x | yes | BV/sh $15.49, ROE (TTM) 16.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $34.77 | 1.03x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $40.93 | 0.87x | yes | Rev $0.9B, growth 21% (input: historical growth; tapered), Terminal P/S: 1.9x / 2.3x / 2.8x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $86.80 | 0.41x | yes | EPS $2.48, growth 35% (input: historical EPS growth), PEG=0.41 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $33.44 | 1.07x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.16B × (1−18%) / WACC 8.6% → EPV (no growth) |
| Residual Income | Asset | $35.35 | 1.01x | yes | BV $15.49 + 5yr PV of (ROE (TTM) 16.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $29.40 | 1.22x | yes | √(22.5 × EPS $2.48 × BVPS $15.49) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $58.48 | 0.61x | yes | EBITDA $0.19B × sector EV/EBITDA 16.0x |
| FCF Yield | Earnings | $69.75 | 0.51x | yes | FCF $341.8M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $61.83 | 0.58x | yes | SBC-adj FCF $0.30B (FCF $0.34B − SBC $0.04B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $80.02 | 0.45x | yes | EPS $2.48 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $10.85 | 3.30x | yes | BV $15.49 × (ROIC 6.0% / WACC 8.6%) |
| P/Sales Sector | Relative | $61.19 | 0.59x | yes | Revenue $0.90B × sector P/S 4.0x |
| PEG Fair Value | Relative | $93.00 | 0.38x | yes | EPS $2.48 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $26.81 | 1.34x | yes | EPS $2.48 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $482.1m |
| Net debt / NOPAT (after-tax) | -3.11x (net cash) |
| Net debt / operating income (pre-tax) | -2.54x (net cash) |
| Interest coverage | 13.5x |
| Share count CAGR (buyback) | -0.8% |
| Burning cash | no |
Bullet Takeaways
- Harmony is a profitable single-product specialty pharma whose entire franchise rests on WAKIX (pitolisant) for narcolepsy, a drug that crossed $868.5 million in net revenue in 2025 and is guided above $1 billion in 2026.
- The defining risk is concentration: one drug, one indication driving nearly all revenue, with generic entry held off only by patent settlements that let copies launch no earlier than January 2030.
- Watch the late-stage pipeline through 2026, including the pitolisant GR new-drug submission on track for the second quarter and orexin-2 agonist Phase 1 data due mid-year, which is where any value beyond the WAKIX cliff has to come from.
Bull Case
Harmony sits in an unusual spot for a company the market still files under biotech: it is already profitable, already generating cash, and trading at a price the value methods comfortably support. That stage matters for how the numbers should be read. A pre-revenue biotech is a bet on a binary readout; Harmony is a commercial business with a drug that grew net revenue 17% year over year to $215.4 million in the first quarter and is on track for blockbuster status, with full-year 2026 guidance above $1 billion. The company carries net cash of roughly $482 million and runs a trailing operating margin above 20%. This is a cash machine wearing a biotech label.
The franchise is also better protected than the single-product framing first suggests. Harmony resolved its most pressing generic threat through settlement: Lupin received a license to launch a generic WAKIX no earlier than January 2030, extendable to July 2030 with pediatric exclusivity, and the company has continued to defend the patent estate, filing infringement litigation in April against another generic challenger. Roughly four years of protected runway on a drug already throwing off this much cash is enough time to both harvest WAKIX and fund the next act.
That next act is the lifecycle and pipeline strategy, and it is concrete rather than aspirational. The pitolisant GR new-drug application is on track for the second quarter of 2026 and is designed to extend the franchise into the 2040s, well past the WAKIX patent window. Behind it sits a late-stage CNS pipeline including ZYN002 in Fragile X syndrome, the EPX-100 and EPX-200 rare-epilepsy programs, and a potential best-in-class orexin-2 agonist with Phase 1 data expected mid-2026. The bull case is that the market is pricing Harmony as a melting ice cube while management is actively building the bridge across the cliff.
Bear Case
The external variable with the most leverage on Harmony is the patent calendar, and the price does not appear to reflect how concentrated that exposure is. Nearly all of the company's revenue comes from one drug in one indication, and the generic-entry date is the single fact that governs the cash flows. The settlement with Lupin licenses a generic WAKIX from no earlier than January 2030, which means that within the horizon a long-term holder cares about, the franchise faces a step-down that the current 7-times-operating-income multiple does not obviously discount. Cheap can be correct when the cash flows are durable; for a single-product pharma facing a known cliff, cheap is also what a wasting asset looks like before the market has decided how fast it wastes.
There is a structural dependency beneath the patent risk. WAKIX is built on licensed technology, and the company's own filing warns that a licensor "may have the right to terminate the license, which could result in us being unable to develop, manufacture and sell products that are covered by the licensed technology". A single-product company that does not own its core molecule outright carries a tail risk that a diversified pharma does not. The market-size and pricing assumptions underpinning the franchise's value, the filing notes, rest on "key assumptions of the current market size and current pricing for commercially available products" drawn from third-party data, the kind of assumptions that hold until a competing mechanism or a payer pushes back on price.
The pipeline that is supposed to bridge the cliff is, by definition, not yet derisked. The pitolisant GR submission, the orexin-2 agonist, ZYN002, and the rare-epilepsy programs are the answer to the concentration problem, but each is a clinical or regulatory event that can slip or fail. The bear case is not that WAKIX collapses tomorrow; it is that the value beyond 2030 depends on programs that have not yet read out, while the price already credits the franchise as a going concern. If the pipeline disappoints, the company reverts to a high-margin but finite cash stream with a fixed expiry, and a low multiple on a shrinking base is not the bargain it looks like today.
Valuation
Today's price works out to roughly 7 times company-wide operating income, low enough that the price sits below what even a modest annual decline in operating profit would warrant. Read as a bound rather than a solved figure, the implication is plain: the market is paying a price that builds in erosion, not growth. For most companies that would be a value signal. For a single-product pharma with a known generic-entry date, it is the market pricing the cliff before it arrives, and the question is whether the discount is too steep or about right.
What is striking about Harmony is that every family of valuation method supports the price rather than fighting it. The asset-value lens, the earnings-power lens, the peer-multiple comparison, and the growth-DCF all land at or above today's level, which is why this reads as a value or asset-supported name rather than a growth bet. A profitable specialty pharma with net cash and a 20-plus-percent operating margin trading below where the conservative methods anchor is not a stock the market is paying up for; it is one the market is discounting for the concentration risk. The methods say the current cash flows alone justify the price; the disagreement, such as it is, is between the methods and the calendar.
Solvency removes any near-term fragility from the picture. The company holds about $482 million of net cash against modest gross debt, interest coverage above thirteen times, and a share count that has edged down rather than up. There is no burn, no dilution overhang, no refinancing risk. The balance sheet is the floor under the bear case: even if the pipeline disappoints, the cash plus the protected WAKIX years through 2030 are worth real money. The valuation hinges not on solvency but on duration, on how much of the post-2030 future the pipeline can secure, and the price today is a wager that the answer is more than the market currently credits.
Catalysts
The pipeline calendar is dense through 2026 and is where the value beyond WAKIX gets decided. The pitolisant GR new-drug application is on track for the second quarter, a filing designed to extend the pitolisant franchise into the 2040s. A potential best-in-class orexin-2 agonist is in Phase 1 with clinical data expected mid-2026, and the late-stage rare-epilepsy and Fragile X programs (EPX-100, EPX-200, ZYN002) provide additional readouts that could reshape the post-cliff story. Each is a discrete event that the concentration-discounted price gives little credit for.
On the commercial side, the read is whether WAKIX growth holds up against the 2026 guidance of over $1 billion in net revenue, after the drug grew 17% year over year to $215.4 million in the first quarter. The patent docket is the other live thread: the company continues to defend the estate, having filed infringement litigation in April against a generic challenger. Any further settlement or court outcome that confirms or extends the generic-entry timeline moves the duration the entire valuation turns on.
Peer Cohorts (Per Segment, With Filing Citations)
Rare neurological diseases (WAKIX) (reported)
- NBIX (NEUROCRINE BIOSCIENCES, INC.)
- FY2025 10-K: …false 2025 FY 0000914475 P3Y http://fasb.org/us-gaap/2025#OtherLiabilitiesCurrent 0.7 - P3Y P3Y one one one one iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure nbix:non-clinicalStageCompound nbix:preclinicalCandidate nbix:undisclosedProgram nbix:geneTherapyProgram nbix:segment 0000914475 2025-01-01…
- FY2025 10-K: …under the 2019 Voyager Agreement. 2023 Voyager Agreement In 2023, we entered into a collaboration and license agreement with Voyager, which we amended in April 2024 (as amended, the 2023 Voyager Agreement), pursuant to which we acquired the global rights to the gene therapy products directed to the gene that encodes…
- SUPN (SUPERNUS PHARMACEUTICALS, INC.)
- FY2025 10-K: , lamotrigine, gabapentin, levetiracetam phenobarbital, and zonisamide. In addition, when considering treatment regimens for patients with epilepsy, neurologists and epileptologists take into consideration the MOA of the different AEDs that are available. By combining several different MOAs, it is sometimes possible…
- FY2025 10-K: …improvement was observed early in treatment in clinical studies. Also, it has a proven safety and tolerability profile, with no evidence of abuse potential in clinical studies. Qelbree was the first novel nonstimulant treatment for ADHD approved by the FDA since 2011. Parkinson's Disease Parkinson's Disease is a…
- ACAD (ACADIA PHARMACEUTICALS INC)
- FY2025 10-K: …to low-twenties percent based on net sales of trofinetide and NNZ-2591. The following table provides a summary of milestone payments that Neuren is eligible to receive based on the achievement of certain sales milestones under the terms of the expanded agreement: Territory First Commercial Sales Milestones Total…
- FY2025 10-K: …product candidate ACP-101 (intranasal carbetocin) for the treatment of hyperphagia in PWS, a neuro rare disease. In September 2025, we announced top-line results from our COMPASS PWS study, a Phase 3 study evaluating the efficacy and safety of ACP-101 for the treatment of hyperphagia in PWS. In the study, ACP-101 did…
- CORT (CORCEPT THERAPEUTICS INC)
- FY2025 10-K: …quantities of API. Competition Our Products compete with established treatments, including surgery, radiation and other medications approved by the FDA for the treatment of patients with Cushing's syndrome. Approved products include Signifor® (pasireotide) to treat patients with Cushing's disease - a subset of…
- FY2025 10-K: …cellular apoptosis - the tumor-killing effect many treatments are meant to stimulate. In other cancers, cortisol activity promotes tumor growth. Cortisol also suppresses the body's immune response; activating - not suppressing - the immune system is beneficial in fighting certain cancers. Many types of solid tumors…
- KNSA (Kiniksa Pharmaceuticals International, plc)
- FY2025 10-K: …in the future. Competition poses a number of risks to our company, with a number of competitive factors affecting our ability to market and commercialize our products and product candidates. For more information, see " Risk Factors-Risks Related to Competition, Executing our Strategy and Managing Growth-We face…
- FY2025 10-K: …an indication for which injectable IL-1α and/or IL-1β therapies are already approved. KPL-387 Since we currently expect to develop KPL-387 for the treatment of recurrent pericarditis, we believe that it will compete with the same assets as those described under " Business-Competition-ARCALYST ", which includes a…
- APLS (APELLIS PHARMACEUTICALS, INC.)
- FY2025 10-K: …we may develop, which could render EMPAVELI, SYFOVRE, or our product candidates obsolete and noncompetitive. EMPAVELI targets a market that is already served by a competitor with significantly greater financial resources than us. The principal competitors for EMPAVELI for the treatment of PNH, are eculizumab…
- FY2025 10-K: …Thrombotic Microangiopathy (TA-TMA) (inclusive of HSCT-TMA), following completion of the Phase 2 study and a strategic assessment of the TA-TMA market landscape. Many of the indications for which we are developing product candidates are rare diseases with small patient populations, and many of those patients are…
- ALKS (Alkermes plc.)
- FY2025 10-K: RYZ in the U.S. Pursuant to the settlement and license agreement entered into between Jazz and Avadel in October 2025 (the "Avadel Settlement Agreement"), from October 1, 2025, Jazz receives a royalty of 3.85% (subject to certain adjustments set forth in the agreement) on net sales of LUMRYZ sold for narcolepsy and…
- FY2025 10-K: …agreement with Biogen, Biogen holds the exclusive, worldwide license to develop and commercialize VUMERITY. For more information about the license and collaboration agreement with Biogen, see the "Collaborative Arrangements-Biogen" section in "Part I, Item 1-Business" in this Annual Report. What is multiple…
- BMRN (BioMarin Pharmaceutical Inc)
- FY2025 10-K: …European Union (EU) for the treatment of children with open growth plates aged four months and older, and in other markets, including Australia and Brazil, for patients in various age ranges. We continue to research VOXZOGO's safety and effectiveness in children with achondroplasia while also advancing development…
- FY2025 10-K: …international markets. Research and Development Programs VOXZOGO VOXZOGO, for the treatment of hypochondroplasia, could have competition from clinical stage products under development by Ascendis Pharma A/S and QED Therapeutics, Inc. (a subsidiary of BridgeBio Pharma, Inc.), and a preclinical product candidate from…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
company FY2025 results, January 2026 · company press release, June 2025 · company press release, January 2026 · Q1 FY2026 results, May 2026 · company press release, April 2026