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Supernus Announces Third Quarter 2019 Financial Results and Topline Data from Phase III Study of SPN-810 for Treatment of Impulsive Aggression (IA) in ADHD Patients

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  • Total revenue of $102.1 million, compared to $103.0 million in third quarter 2018

  • Net product sales of $100.0 million, compared to $100.2 million in third quarter 2018

  • Operating earnings of $39.7 million, compared to $37.5 million in third quarter 2018

  • NDA submission for SPN-812 expected in November 2019

  • Phase III P301 trial of SPN-810 for the treatment of IA in ADHD patients 6 to 11 years old did not meet its primary endpoint

ROCKVILLE, Md., Nov. 05, 2019 (GLOBE NEWSWIRE) -- Supernus Pharmaceuticals, Inc. (SUPN), a pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases, today reported financial results for the third quarter of 2019, results from the Phase III P301 trial for SPN-810 and associated Company developments.


Commercial Update

Third quarter 2019 product prescriptions for Trokendi XR® and Oxtellar XR®, as reported by IQVIA, totaled 215,033, a 6.4% increase over the third quarter of 2018.

Prescriptions

Q3 2019

Q3 2018

Change %

Trokendi XR

172,981

164,689

5.0%

Oxtellar XR

42,052

37,476

12.2%

Total

215,033

202,165

6.4%

Source: IQVIA

Net product sales for the third quarter of 2019 were $100.0 million, compared to $100.2 million in the third quarter of 2018. Net product sales by product are as follows:

Net Product Sales
($ in thousands)

Q3 2019

Q3 2018

Change %

Trokendi XR

$

77,332

$

79,834

(3.1)%

Oxtellar XR

22,702

20,393

11.3%

Total

$

100,034

$

100,227

(0.2)%

“For the quarter and year to date periods, the beneficial impact of volume growth and price increases has been offset by continued pressure on gross-to-net sales deductions,” said Jack Khattar, President and CEO of Supernus. “Going forward, we believe that competitive dynamics and pressure on gross-to-net deductions are not likely to abate; consequently, we believe that net product sales growth will essentially be flat, even with moderate growth in prescriptions.”


Progress of Product Pipeline

SPN-812 - Novel non-stimulant for the treatment of ADHD

  • The Company expects to submit a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for SPN-812 for the treatment of ADHD in November 2019.

  • A Phase III program in adult patients was initiated during the third quarter of 2019.

SPN-810 - Novel treatment of Impulsive Aggression (IA) in patients with ADHD

  • Phase III P301 trial in patients 6 to 11 years old did not meet its primary endpoint. The study was a randomized, double-blind, placebo controlled, multicenter, parallel group clinical trial in patients diagnosed with ADHD. Patients receiving SPN-810 36mg showed a median percent reduction of 58.6% in the average weekly frequency of impulsive aggression episodes from baseline that was not statistically significant (p= 0.092) compared to placebo. These results are based on the combined analysis of data from stages 1 and 2 in the study. In stage 1 (interim analysis stage), the median percent reduction was 60%, which was statistically significant (p= 0.029) compared to placebo. However, in stage 2 of the study, post the interim analysis, the increase in variability in the 36mg treatment arm seems to have adversely impacted the results in the combined analysis.

Percent Change from Baseline (CFB) in the Frequency of IA Behaviors
Treatment Period - Primary Analysis (ITT Population)

Stage 1 - % CFB

Placebo

SPN-810
18mg

SPN-810
36mg

N

52

49

45

Mean (SD)

-42.9 (35.9)

-45.8 (33.5)

-56.6 (34.1)

Median

-48.6

-47.8

-60.0

P-value

0.651

0.029

Stage 2 - % CFB

N

73

16

90

Mean (SD)

-43.8 (36.3)

-44.5 (34.6)

-44.0 (43.5)

Median

-47.2

-45.6

-58.5

P-value

0.102

Stages 1 & 2 Combined - % CFB

N

125

65

135

Mean (SD)

-43.4 (36.0)

-45.5 (33.5)

-48.2 (40.9)

Median

-48.2

-47.9

-58.6

P-value

0.714

0.092

  • The median percent reduction in frequency of IA behavior in this Phase III study is consistent with the range of percent improvement in the retrospective modified aggression scale (58% - 62%) we saw in the two positive treatment arms in the Phase IIb study. The Company will continue its analysis of the results to better understand the reasons behind the increased variability in the 36mg treatment arm in the P301 study.

  • Overall, the trial exhibited favorable tolerability and safety profiles with low incidence of adverse events (AEs) across all doses. AEs were mild leading to low discontinuation rates of 0%, 7% and 5% for the 18mg, 36mg and combined treatment arms, respectively.

Adverse Event (AE)
N (%)

Placebo
(N=126)

SPN-810 18mg
(N=65)

SPN-810 36mg
(N=137)

SPN-810 Combined
(N=202)

Fatigue

1 (0.8)

2 (3.1)

10 (7.3)

12 (5.9)

Headache

2 (1.6)

2 (3.1)

7 (5.1)

9 (4.5)

Increased Appetite

6 (4.8)

0

9 (6.6)

9 (4.5)

Blood Prolactin Increased

1 (0.8)

4 (6.2)

2 (1.5)

6 (3.0)

Upper Respiratory Tract Infection

8 (6.3)

2 (3.1)

2 (1.5)

4 (2.0)

Discontinuation Rate due to AE’s

4 (3.1)

0 (0)

10 (7.2)

10 (4.9)

  • Enrollment in the Phase III P302 trial in patients 6 to 11 years old is at 98% of the target. The Company will cease enrollment in the P302 trial and analyze the data, which are expected to be available by the end of 2019. In the meantime, enrollment in the P503 Phase III trial (adolescents) is on hold until data from the P302 study are available and a final decision is reached regarding the SPN-810 program in IA. Mr. Khattar added, “We are obviously disappointed with the efficacy results from our Phase III P301 trial with SPN-810. I thank all our employees for working diligently to complete the studies and believing in what we do for our patients. I also thank all our patients, their families, and our investigators for participating in our studies.”

SPN-604 - Novel treatment of bipolar disorder

  • The Company initiated a pivotal Phase III monotherapy trial for the treatment of bipolar disorder in the fourth quarter of 2019.


Operating Expenses

Research and development (R&D) expenses in the third quarter of 2019 were $16.9 million, lower than the $20.4 million in the same quarter last year. This decrease is due to the completion of the four Phase III clinical trials for SPN-812, three of which were completed in December 2018 and one of which was completed in March 2019. These reductions were partially offset by SPN-812 manufacturing costs in support of the Company’s NDA submission.

Selling, general and administrative (SG&A) expenses in the third quarter of 2019 were $40.6 million, essentially unchanged from $40.9 million in the same quarter last year.


Operating Earnings and Earnings Per Share

Operating earnings in the third quarter of 2019 were $39.7 million, a 5.9% increase from $37.5 million in the same quarter last year. The increase in operating earnings was primarily due to lower R&D expenses in the third quarter of 2019.

Net earnings (GAAP) in the third quarter of 2019 were $28.9 million, or $0.54 per diluted share, compared to $28.0 million, or $0.52 per diluted share, in the same period last year. Growth in operating earnings was offset by a modestly higher effective tax rate in the third quarter of 2019 compared to the year earlier period (27.1% compared to 23.0%), resulting in net earnings in the third quarter of 2019 that were comparable to net earnings in third quarter 2018.

Weighted-average diluted common shares outstanding were approximately 53.8 million in the third quarter of 2019, as compared to approximately 54.2 million in the prior year period.


Balance Sheet Highlights

As of September 30, 2019, the Company had $893.1 million in cash, cash equivalents, marketable securities and long term marketable securities, compared to $774.8 million at December 31, 2018. This increase primarily reflects cash generated from operations in the first nine months of 2019.


Financial Guidance

The Company is revising its full year 2019 guidance for net product sales, R&D expenses and operating earnings, and reaffirming expectations for the effective tax rate as set forth below:

  • Net product sales in the range of $390 million to $395 million, compared to the previously expected range of $400 million to $410 million.

  • R&D expenses of approximately $70 million, compared to the previously expected range of $70 million to $80 million.

  • Operating earnings in the range of $150 million to $155 million, compared to the previously expected range of $150 million to $160 million.

  • Effective tax rate of approximately 23% to 25%.

Looking forward to 2020, the Company expects that the combined impact of product unit volume growth and price increases will be offset by continued pressure on gross-to-net sales deductions. In addition, the Company expects to launch SPN-812 in the second half of 2020. As such, the Company expects SG&A expenses to exceed $200 million for 2020, driven by pre-launch and launch marketing expenses, as well as the impact of fielding the psychiatry sales force in the second half of the year. Finally, R&D expenses are expected to be comparable to 2019.


Conference Call Details

The Company will hold a conference call hosted by Jack Khattar, President and Chief Executive Officer, and Greg Patrick, Senior Vice President and Chief Financial Officer, to discuss these results at 9:00 a.m. Eastern Time, on Wednesday, November 6, 2019.

Please refer to the information below for conference call dial-in information and webcast registration. Callers should dial in approximately 10 minutes prior to the start of the call.

Conference dial-in:

(877) 288-1043

International dial-in:

(970) 315-0267

Conference ID:

8278897

Conference Call Name:

Supernus Pharmaceuticals Third Quarter 2019 Earnings Conference Call

Following the live call, a replay will be available on the Company's website, www.supernus.com, under “Investor Relations”.


About Supernus Pharmaceuticals, Inc.

Supernus Pharmaceuticals, Inc. is a pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases. The Company currently markets Trokendi XR® (extended-release topiramate) for the prophylaxis of migraine and the treatment of epilepsy, and Oxtellar XR® (extended-release oxcarbazepine) for the treatment of epilepsy. The Company is also developing several product candidates to address large market opportunities in the CNS market, including SPN-812 for the treatment of ADHD and SPN-604 for the treatment of bipolar disorder.


Forward-Looking Statements:

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not convey historical information, but relate to predicted or potential future events that are based upon management's current expectations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. In addition to the factors mentioned in this press release, such risks and uncertainties include, but are not limited to, the Company’s ability to sustain and increase its profitability; the Company’s ability to raise sufficient capital to fully implement its corporate strategy; the implementation of the Company’s corporate strategy; the Company’s future financial performance and projected expenditures; the Company’s ability to increase the number of prescriptions written for each of its products; the Company’s ability to increase its net revenue; the Company’s ability to enter into future collaborations with pharmaceutical companies and academic institutions or to obtain funding from government agencies; the Company’s product research and development activities, including the timing and progress of the Company’s clinical trials, and projected expenditures; the Company’s ability to receive, and the timing of any receipt of, regulatory approvals to develop and commercialize the Company’s product candidates; the Company’s ability to protect its intellectual property and operate its business without infringing upon the intellectual property rights of others; the Company’s expectations regarding federal, state and foreign regulatory requirements; the therapeutic benefits, effectiveness and safety of the Company’s product candidates; the accuracy of the Company’s estimates of the size and characteristics of the markets that may be addressed by its product candidates; the Company’s ability to increase its manufacturing capabilities for its products and product candidates; the Company’s projected markets and growth in markets; the Company’s product formulations and patient needs and potential funding sources; the Company’s staffing needs; and other risk factors set forth from time to time in the Company’s filings with the Securities and Exchange Commission made pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended. The Company undertakes no obligation to update the information in this press release to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated or unanticipated events.


Supernus Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets
(in thousands, except share data)

September 30,

December 31,

2019

2018

(unaudited)

Assets

Current assets

Cash and cash equivalents

$

116,889

$

192,248

Marketable securities

179,808

163,770

Accounts receivable, net

86,699

102,922

Inventories, net

25,504

25,659

Prepaid expenses and other current assets

18,182

8,888

Total current assets

427,082

493,487

Long term marketable securities

596,442

418,798

Property and equipment, net

9,977

4,095

Intangible assets, net

26,101

31,368

Lease assets

18,780

Deferred income taxes

27,953

29,683

Other assets

574

380

Total assets

$

1,106,909

$

977,811

Liabilities and stockholders’ equity

Current liabilities

Accounts payable

$

3,090

$

3,195

Accrued product returns and rebates

98,050

107,063

Accrued expenses and other current liabilities

40,800

36,535

Income taxes payable

4,818

12,377

Nonrecourse liability related to sale of future royalties, current portion

2,959

2,183

Total current liabilities

149,717

161,353

Convertible notes, net

341,163

329,462

Nonrecourse liability related to sale of future royalties, long term

20,305

22,575

Lease liabilities, long term

27,256

Other liabilities

11,211

11,398

Total liabilities

549,652

524,788

Stockholders’ equity

Common stock, $0.001 par value; 130,000,000 shares authorized; 52,462,936 and 52,316,583 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively

52

52

Additional paid-in capital

383,525

369,637

Accumulated other comprehensive earnings (loss), net of tax

7,261

(3,158

)

Retained earnings

166,419

86,492

Total stockholders’ equity

557,257

453,023

Total liabilities and stockholders’ equity

$

1,106,909

$

977,811


Supernus Pharmaceuticals, Inc.

Condensed Consolidated Statements of Earnings
(in thousands, except share and per share data)

Three Months ended
September 30,

Nine Months ended
September 30,

2019

2018

2019

2018

(unaudited)

(unaudited)

Revenues

Net product sales

$

100,034

$

100,227

$

285,491

$

286,377

Royalty revenues

2,106

2,769

6,818

5,836

Licensing revenues

750

Total revenues

102,140

102,996

292,309

292,963

Costs and expenses

Cost of goods sold

4,819

4,207

12,547

11,168

Research and development

16,943

20,422

49,307

59,368

Selling, general and administrative

40,649

40,892

122,700

117,838

Total costs and expenses

62,411

65,521

184,554

188,374

Operating earnings

39,729

37,475

107,755

104,589

Other income (expenses), net

(139

)

(1,104

)

(1,180

)

(3,180

)

Earnings before income taxes

39,590

36,371

106,575

101,409

Income tax expense

10,730

8,360

26,648

16,309

Net earnings

$

28,860

$

28,011

$

79,927

$

85,100

Earnings per share

Basic

$

0.55

$

0.54

$

1.53

$

1.64

Diluted

$

0.54

$

0.52

$

1.48

$

1.57

Weighted-average shares outstanding

Basic

52,453,384

52,227,630

52,392,232

51,897,240

Diluted

53,805,838

54,239,847

53,898,486

54,098,330


CONTACTS:

Jack A. Khattar, President and CEO
Gregory S. Patrick, Senior Vice President and CFO
Supernus Pharmaceuticals, Inc.
Tel: (301) 838-2591

or

INVESTOR CONTACT:
Peter Vozzo
Westwicke, an ICR Company
Office: (443) 213-0505
Mobile: (443) 377-4767
Email: peter.vozzo@westwicke.com