{ "docId": "019dd923-622c-750b-8b9a-21918ac10c17", "docSlug": "f3db2294dcf9", "documentTitle": "Harmony Biosciences (HRMY)", "authorId": "58_Scorpion_Capital", "authorName": "Scorpion Capital", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2023-03-28 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 16, "pageCount": 366, "prevPage": 15, "nextPage": 17, "slideType": "villain_critique", "function": "name_villain", "density": "dense", "nDataPoints": 2, "notes": "Uses historical precedent (Enron/Skilling and Insys) to frame current events at Harmony (HRMY) as a potential fraud or legal violation.", "elementsJson": [ "paragraph", "headline_text", "footnote" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9a-21918ac10c17/16", "deckHref": "/decks/019dd923-622c-750b-8b9a-21918ac10c17", "deckJsonHref": "/decks/019dd923-622c-750b-8b9a-21918ac10c17.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9a-21918ac10c17#slide-16", "components": [ { "bbox": null, "kind": "callout", "text": "We encourage them to study the leaderboard of Insys prosecutions, a close analogy to Harmony’s business model vis-a-vis the False Claims Act, Anti-Kickback Statute, and other laws.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-64d0-7099-9cc9-fda38f94c766", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.86, "x": 0.07, "y": 0.75 }, "kind": "paragraph", "text": "In March 2013, a Regional Sales Manager for Insys sent an email to FREEDMAN informing him that he would receive more Speaker Programs in the coming months because Insys wanted prescriptions of Subsys to increase, and urging FREEDMAN to put more patients on Subsys. FREEDMAN responded, in part, “Got it,” and significantly increased his Subsys prescriptions in the following months, during which he received approximately $33,600 in Speaker Program fees.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "32436a26-4e42-43e2-bb46-cf3ee97fab74", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.45, "w": 0.86, "x": 0.07, "y": 0.06 }, "kind": "paragraph", "text": "John Jacobs abruptly fled as Harmony’s CEO on January 6th, throwing the company under a bus on the eve of the JP Morgan healthcare conference. The stock fell as investors wondered what he knew, and why he left for a mediocre comp package at a troubled vaccine maker (NVAX) with a fraction of the market cap. We had already been investigating HRMY for months, and chuckled as it reminded us of Jeff Skilling’s surprise resignation from Enron. Most now forget Skilling’s pathetic attempt to flee, a few months before a baffled market came to know what he did. Skilling, we note, still ended up in prison – an outcome as far from his mind as we presume it is for Harmony executives and the high-volume prescribers in its speaker’s program. We encourage them to study the leaderboard of Insys prosecutions, a close analogy to Harmony’s business model vis-a-vis the False Claims Act, Anti-Kickback Statute, and other laws.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "cebd8eaf-5c5f-4321-9f8b-558c1cc1d016", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "“Got it,” — Dr. Freedman (in response to an email from an Insys Sales Manager regarding speaker program fees).", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-64d0-7099-9cca-01ec696757d3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.65, "x": 0.07, "y": 0.93 }, "kind": "source-note", "text": "Source: https://www.justice.gov/usao-ma/pr/founder-and-former-chairman-board-insys-therapeutics-sentenced-66-months-prison; https://www.justice.gov/usao-sdny/pr/manhattan-doctor-sentenced-more-17-years-prison-bribery-and-kickback-scheme-and", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "20220c28-5123-4bc1-a725-7ffeab6ca061", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.86, "x": 0.07, "y": 0.52 }, "kind": "title", "text": "Founder and Former Chairman of the Board of Insys Therapeutics Sentenced to 66 Months in Prison", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2c349773-d0cc-42d8-8204-be83b50b463e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.86, "x": 0.07, "y": 0.65 }, "kind": "title", "text": "Manhattan Doctor Sentenced To More Than 17 Years In Prison For Bribery And Kickback Scheme", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ce8fd38c-5c8c-429c-8275-97f2db7d9a38", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "argument-from-analogy", "slug": null, "matchId": "b74559e4-1449-4f26-890a-b81c10af2840", "evidence": "Compares Harmony's business model and leadership departure to the criminal case of Insys Therapeutics.", "confidence": 0.9 } ], "arcBeats": [ { "to": 30, "from": 11, "beatId": "d0905c6f-1d0c-46ed-96fd-5548f20fae57", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Monster", "beatSlug": null, "evidence": "The document presents the 'monster' of the company's troubled drug and financial reporting", "position": 1, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }