Harmony Biosciences joins IBD 50 Stocks To Watch as the biotech stock nears the buy point of a new base.
The Plymouth Meeting, Penn.-based biotech makes treatments for neurological sleep disorders like narcolepsy. The company says narcolepsy affects an estimated 165,000 Americans. But fewer than 50% are diagnosed. That suggests the company has plenty of room to grow.
Holds Exclusive License
Harmony Biosciences was founded in 2017 and the biotech stock to watch went public in 2020. It holds the exclusive license from France-based Bioprojet to develop, manufacture and commercialize pitolisant in the U.S. Pitolisant is the main ingredient of the company's product Wakix, a once-a-day pill that treats the effects of narcolepsy.
It's an improvement on rival products that require multiple doses a day. Harmony Biosciences has FDA approval for two treatments of specific aspects of sleep disorders. But it's working on gaining the OK to use Wakix for more related treatments.
Stocks To Watch: Harmony Biosciences' Stock Action
On Feb. 28 the company reported a 152% gain in fourth-quarter earnings and a 298% gain in full-year earnings, according to MarketSmith. On the same day, Harmony Biosciences' stock leapt back above its 50-day moving average. From there it proceeded to run up the right side of a new cup base.
HRMY stock traded near the 45.99 buy point late Wednesday, which was set when the cup pattern started at its prior peak on Jan. 4.
A bullish sign can be seen in the new highs Harmony's relative strength line has been hitting this past week. Volume was well above average Wednesday, another good sign for the breakout attempt.
The latest cup base follows quickly on the heels of another cup base. An attempted breakout from that base failed. The stock then carved out the new cup base. The low of the current base undercut the previous cup's low, which resets the base count.
Keep Watchlists Up To Date
In market corrections, investors should avoid buying stocks. But keeping an up-to-date stocks to watch list makes sense. After all, a follow-through day that confirms a new stock market rally is potentially never more than three days away.
Harmony ranks No. 3 in the biotech industry group, according to Stock Checkup. Its earnings per share have grown an average 178% the past three quarters. That's the kind of big increase you want to see in stocks to watch.
Other highly rated stocks in the biomed/biotech group that are also members of the IBD 50 list of top growth stocks include Pacira, Vertex Pharmaceuticals and Corcept Therapeutics.
Harmony Biosciences is also a member of IBD's IPO Leaders list, a feature that uses special screening criteria to find new issues with strong fundamental and technical traits.
Harmony will participate in the Oppenheimer 32nd annual Healthcare Conference on Tuesday and the first Needham Virtual Neuroscience Forum March 16.
