Short Seller Report On Harmony Biosciences: Here's Why The Stock Is Tanking

Harmony Biosciences Holdings Inc HRMY shares are trading lower after Scorpion Capital filed a Citizen's Petition with the FDA requesting the withdrawal of approval of Wakix (pitolisant).

The FDA approved Wakix for excessive daytime sleepiness or cataplexy in adult patients with narcolepsy, and it has been commercially available in the U.S. since Q4 2019.

The report added that "Harmony's drug Wakix (pitolisant) is a repeat of the Seldane (terfenadine) saga, another histamine antagonist that the FDA pulled from the market and which is the poster child for cardiac toxicity via fatal QT prolongation/arrhythmia. Wakix is worse."

The filing noted several serious adverse events reports from the FDA via Freedom of Information Act requests filed over several months, including a recent sudden cardiac death weeks after starting Wakix on the day it was titrated to the highest dose.

A physician alerted Scorpion Capital to a recent, unreported adverse event where a healthy 42-year-old was rushed to an emergency room and hospitalized shortly after initiating Wakix due to what the physician indicated was drug-induced arrhythmia.

"We detail 12 deaths in the foreign clinical trials, all in the drug arm, none in placebo, despite exclusion criteria for cardiac risk", the report added.

Scorpion Capital accuses that explosive information was concealed from the FDA that would have prevented approval in 2019 as an individual involved with the trial stated it was prematurely, quietly halted due to liver toxicity.

In its Q4 earnings release, the company said Wakix is selective histamine 3 (H₃) receptor antagonist/inverse agonist. 

The mechanism of action of WAKIX is unclear; however, its efficacy could be mediated through its activity at H₃ receptors, thereby increasing the synthesis and release of histamine, a wake promoting neurotransmitter. 

Price Action: HRMY shares are down 22.30% at $32.26 during the premarket session on the last check Tuesday.