Harmony Biosciences Exceeds 2025 Revenue Guidance, Reaffirms $1B+ Target for 2026

What happened

Harmony Biosciences reported Q4 2025 revenue of $243.8 million, with 21% year-over-year growth for its flagship drug WAKIX®, culminating in full-year 2025 net product revenue of $868.5 million, which slightly exceeded the high end of prior guidance. This performance marks six consecutive years of revenue growth and profitability, consistent with the DeepValue report's observation of WAKIX's durable cash generation despite recent regulatory setbacks like the FDA refusal for idiopathic hypersomnia. The company has reiterated its 2026 net revenue guidance of over $1 billion, signaling management's confidence in sustaining high-teens growth, aligning with the base scenario in the DeepValue analysis. However, the single-asset reliance on WAKIX remains a critical vulnerability, as highlighted in the report's downside risks, with pipeline diversification still lagging due to past failures. The strong results suggest core commercial execution is robust, but investors must scrutinize future margin trends and pipeline progress to assess if this momentum can offset long-term uncertainties.

Implication

Investors should interpret the revenue beat and reiterated guidance as evidence that WAKIX's commercial strength is resilient, supporting the DeepValue report's base case of 14-18% annual growth and low-$40s fair value. This could drive a re-rating toward the $42 implied value if margins hold in the low-20s, as assumed in the base scenario, reducing the market's discount on recent pipeline setbacks. However, the reaffirmed $1 billion+ target for 2026 reinforces concentration risk, with Harmony still 'substantially dependent' on WAKIX, requiring close monitoring of payor dynamics and net pricing per the report's early warning indicators. The news does not alter the fundamental thesis of undervaluation due to high growth and net cash, but it highlights the need for disciplined capital allocation to fund pipeline extensions without eroding margins. Overall, while this update supports a potential buy rating for near-term gains, investors must remain vigilant on pipeline execution and avoid overconfidence given the history of regulatory and trial disappointments.

Thesis delta

The strong 2025 results and reaffirmed 2026 guidance slightly shift the thesis towards the bull scenario, as actual growth of around 21.5% exceeds the base assumption of 14-18%, indicating better-than-expected execution. However, no structural change is warranted, as the core dependency on WAKIX and pipeline risks outlined in the DeepValue report remain unchanged, keeping the base scenario probability intact but with heightened confidence in near-term performance.