Harmony Biosciences Holdings HRMY
Scorpion shorts HRMY: Wakix is a toxic, ineffective H3 antagonist propped up by sham foreign trials, an Insys-style kickback scheme, and off-label sales — collapse is imminent.
Thesis
Scorpion Capital frames Harmony Biosciences (HRMY) as a healthcare fraud built around Wakix (pitolisant), a $175,000-per-year H3 histamine antagonist licensed from small French lab Bioprojet and pushed in the US by serial bad actor Jeff Aronin — the executive Martin Shkreli credits as his inspiration. Drawing on a four-month investigation with ~50 interviews including 16 physicians, 14 ex-employees, FOIA adverse-event reports and pharmacology consultants, the report alleges pitolisant is inherently cardiotoxic (the same QT-prolongation profile that pulled Seldane), was approved via sham foreign trials in which 13 patients died in the drug arm and none in placebo, has no proven mechanism of action, and is commercially propped up by an illegal speaker-program kickback scheme and 40%+ off-label prescribing. Discontinuation rates of 30-100%, the surprise CEO resignation on Jan 6, and a saturated rare-disease market signal imminent collapse; Scorpion is filing an FDA Citizen's Petition seeking withdrawal of approval.
SCQA
Harmony Biosciences sells Wakix (pitolisant), a first-in-class H3 histamine antagonist licensed from French lab Bioprojet, priced at $175,000 per year, as its sole approved product and the entire basis of its market capitalization.
Pitolisant is an old, failed compound that big pharma rejected for cardiotoxicity (same QT-risk class as withdrawn Seldane), approved on sham foreign trials with 13 deaths in the drug arm, has no proven mechanism, and is sold via an alleged kickback scheme.
Scorpion is filing an FDA Citizen's Petition demanding withdrawal of Wakix's approval, soliciting confidential adverse-event reports from physicians and patients, and urging investors to reckon with the looming regulatory and Insys-style legal liability.
No explicit price target; the report argues 'the end is near' as the saturated rare-disease market exhausts, 30-100% discontinuation rates bite, and FDA/legal action remove the drug — implying near-total equity impairment for HRMY.
The three reasons
- 1
Pitolisant is a cardiotoxic H3 antagonist — same QT-risk class as withdrawn Seldane, with 13 trial deaths
- 2
FDA approval rests on sham foreign trials and a non-existent mechanism of action
- 3
Sales depend on an alleged Insys-style speaker-program kickback scheme and 40%+ off-label prescribing
Primary demands
- FDA should withdraw approval of Wakix (pitolisant) — Scorpion is filing a Citizen's Petition
- Investors and regulators should investigate the alleged speaker-program kickback scheme and off-label promotion
- Sell / short HRMY ahead of an imminent commercial and regulatory collapse
KPIs cited
Pattern membership
Precedents cited
- Seldane (terfenadine) FDA withdrawal for cardiotoxicity / QT prolongation
- Insys Therapeutics speaker-program kickback prosecutions (Subsys)
- Aduhelm accelerated-approval controversy
- Enron / Jeff Skilling surprise CEO resignation
- Martin Shkreli / Marathon Pharmaceuticals price-gouging playbook
- Intercept Pharmaceuticals (ICPT) Ocaliva safety / short
- HHS OIG 2020 Special Fraud Alert: Speaker Programs
Composition what's on the 366 slides
Slide gallery ·
Notes
Classic Scorpion Capital long-form investigative short report (366 pages, dense walls of text with embedded screenshots, FOIA snippets, interview Q&A and yellow-highlight pull-quotes). Title page is the entire SCQA in one paragraph — extraordinarily rhetorical for a research note. Filed concurrently with an FDA Citizen's Petition, which functions as the primary 'ask'. Heavy reliance on n=50 expert/employee interviews; extensive name-and-shame of executives (Aronin, Jacobs, Kapadia, Schwartz). No explicit price target or sum-of-parts; thesis is binary regulatory/commercial collapse. Uses Skilling/Enron, Insys, Shkreli/Marathon and Aduhelm as analogues. Visually plain (Arial, single-column, dense), so visual_craft_interest is low; narrative_interest is high as a specimen of short-seller report construction. Stake not disclosed beyond standard 'is short HRMY' boilerplate.