14 Worst 52-Week High Stocks to Buy According to Short Sellers

7. Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY)

52 Week Range: $18.61 – $39.73

Current Share Price: $38.34

Short % of Shares Outstanding: 15.40%

Number of Hedge Funds holding stakes as of Q2 2024: 25

Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY) is a biopharmaceutical company that develops and commercializes therapies for patients with rare and neurological diseases. The company has made significant progress in its intensive pitolisant program, focusing on unmet medical needs within the narcolepsy patient population.

The firm has obtained regulatory clearance from the FDA for WAKIX in treating narcolepsy in children and is set to submit an NDA for idiopathic hypersomnia towards the end of the year. These developments represent recent milestones in Harmony Biosciences’ commercial activities.

Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY) announced a notable 29% rise in its product WAKIX’s net sales, reaching $172.8 million in the second quarter of 2024. The firm also delivered a net income of $60.6 million for the same period, showing a stable financial status with $434.1 million in cash, cash equivalents, and investments. Harmony Biosciences is moving towards achieving its 2024 net revenue target of $700 million to $720 million.

While the high short interest underscores why it is one of the worst 52-week high stocks to buy, according to short sellers, the fact that the company’s revenues are highly dependent on one approved product, Wakix, has always been a big concern.

While Wakix attained FDA approval in 2019, it is poised to face a tough time once it loses its exclusivity. The loss of exclusivity could significantly take a toll on the company’s revenue streams, consequently affecting the company’s revenue base. While the company is profitable, its dependence on one approved drug raises concerns about its ability to generate long-term value.

According to Insider Monkey’s second-quarter database, 25 hedge funds were long Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY), compared to 24 funds in the prior quarter. Vivo Capital is the leading stakeholder of the company, with 2.61 million shares worth over $78.63 million.