HRMY Shorts Build as Options Hit Yearly High

Harmony Biosciences heads into its November 4 Q3 earnings print with shorts at their most aggressive in months and options traders paying heavily for downside protection.

The short interest story is genuinely meaningful here. Bears have added to positions steadily since early October, with SI rising nearly 20% over the past month to reach almost 10% of the free float. That is a deliberate build, not noise. The short score has climbed in tandem, from 57.1 on October 19 to 59.7 on October 30, its highest in the recent record. Options positioning reinforces the caution: the put/call ratio reached 2.876 on November 2, nearly at its 52-week high of 2.934 and well above the 20-day average of 2.41. That puts heavy demand for downside protection relative to recent norms. Partially offsetting this, the borrow market remains loose. Availability is 435%, meaning shares to borrow dwarf the current short position several times over, and the cost to borrow is just 0.51%, low by any measure. The short build is a conviction trade, not a forced or squeezed one.

The debate around the stock centres on one concentrated risk: WAKIX. Bulls point to the durability of the franchise, with 2026 net revenue guidance reaffirmed at $1.00 billion to $1.04 billion, roughly in line with the $1.03 billion FactSet consensus, and a cash balance of $962.5 million that funds a pipeline including pitolisant, BP-205, Zygel, and EPX-100. The analyst consensus tilts bullish, with Needham and HC Wainwright holding Buy ratings at targets of $50 and $55 respectively, and Wolfe Research initiating at Outperform with a $60 target in August. The mean target across the desk is $48.08, implying roughly 27% upside to the current price of $37.91. Bears counter that the entire thesis rests on WAKIX's exclusivity runway: sodium oxybate competition, slower patient adds, and the threat of generic pitolisant entry are hard to diversify away. Deutsche Bank and Truist both hold Hold ratings, reflecting the view that the pipeline does not fully insulate the company from WAKIX event risk.

One alternative data point adds context without predicting the outcome. Medicaid reimbursements for Harmony's drugs, as reported by the Centers for Medicare and Medicaid Services, have risen for four consecutive quarters. The most recent quarterly reading shows Medicaid dollars reimbursed up 20% on the same quarter a year earlier, at $38.7 million. The Medicaid drugs dataset has not been measured to lead the company's reported revenue figures, so this is colour rather than a directional signal on the print.

Institutional ownership presents one striking subplot. BlackRock raised its stake to 12.6% as recently as October 27, per its latest 13G/A filing. The Chief Medical Officer, Budur Kumar, meanwhile filed open-market sales in September totalling roughly $1.6 million in net proceeds, transaction codes that flag discretionary selling rather than compensation mechanics. Neither the institutional buying nor the insider selling under the 5% threshold warrants over-reading, but they point in opposite directions.

The print will test whether WAKIX patient growth has held its pace against competitive headwinds, and whether management's full-year revenue range can survive scrutiny after a month in which short sellers have made their most sustained commitment to the downside in recent history.