Harmony Biosciences got kicked in the deez by its fumbled patent infringement case against AET Pharma and came to its senses.
A long-time board director who helped start the company got booted out, while the CFO with hands so slippery he couldn't own a single share of the business got kicked to the curb. The neuroscience specialist also acquired exclusive global rights to the one piece of pitolisant intellectual property it didn't own, then turned around and filed a new patent infringement case against AET Pharma. That might be enough to make the whole debacle go away – after making a hefty cash payment to settle the dispute, anyway.
A massive settlement payment would be a fantastic investment considering it would protect over $325 million in annual operating cash flow for 2026, 2027, 2028, and at least half of 2029. Investors have reasons to doubt the company's ability to acquire assets that will change the narrative, but the renamed orexin-2 receptor (OX2R) agonist BP-205 could emerge as the golden ticket for a renewal. That's especially true considering the hype and multi-billion deals for similar assets from Takeda, Alkermes, and Centessa Pharmaceuticals.
If Harmony Biosciences announces a settlement of the patent infringement cases with AET Pharma, then shares would be expected to surge to or above the modeled fair value. The tricky thing is there are only a few months remaining until the district judge issues her ruling, which is expected in August. There's an uncomfortable level of risk involved, but the historical odds favor Harmony.
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NOTE: The model doesn't account for a negative result from the patent litigation case with AET Pharma. A negative outcome would make Harmony Biosciences uninvestable and likely reset the stock price to below $10 per share.
Full-year 2026 operating metrics:
Wakix contributes $52.26 per share and Wakix GR contributes $3.94 per share. All other assets are excluded.
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