Why Harmony Biosciences Stock Plunged Today
2024 is not off to a great start. Harmony Bioscience Holdings (HRMY -4.67%) inventory. The neurology-focused biotech stock fell nearly 5% on Tuesday, its first trading day of the year. The culprit was a downgrade recommendation from a renowned researcher. In contrast, the decline S&P 500 The index fell only 0.6%.
Harmony has now been sold, according to Bank of America.
Long before the market opened that day, bank of america Securities analyst Jason Gerberry changed his recommendation on Harmony. He now thinks the stock deserves only an underperform (i.e. sell) tag at a price target of $30 per share, which he previously rated neutral.
In a new research note, Gerberry expressed concern about the lack of “high-impact catalysts” in biotechnology. He also said Harmony would have difficulty coping with the loss of Wakix’s exclusivity.
The drug, the company’s only Food and Drug Administration (FDA) approved product to date, is designed to treat narcolepsy. Approved in April 2019. The end date for the exclusivity is August 14, 2026, and Bank of America forecasters believe it will only extend a few years at best.
Harmony is beneficial, but…
As Gerberry admits, Harmony is a profitable company. This is extremely rare in the world of biotech, which is capital-intensive and highly speculative even in the best of times. Nonetheless, Harmony’s position as the developer of only one approved drug is weak, and this downgrade is unlikely to improve investor sentiment about its prospects.
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has a position at and recommends Bank of America. The Motley Fool has a disclosure policy.
