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Supernus Announces Third Quarter 2020 Financial Results

Supernus Pharmaceuticals, Inc.
·11 min read
  • Q3 2020 total revenues of $155.1 million, including net product sales of $152.1 million and royalty revenues of $3.0 million

  • Q3 2020 operating earnings of $56.1 million

  • On track to initiate commercial launch of SPN-812 in January 2021, if approved by the FDA

  • Topline data from the SPN-812 Phase III trial in adult ADHD patients expected in Q1 2021

  • Submitted SPN-830 (Apomorphine infusion pump) NDA to the FDA in September 2020

  • Increased full year 2020 net product sales guidance range of $500 million to $525 million, and operating earnings guidance range of $145 million to $160 million

ROCKVILLE, Md., Nov. 03, 2020 (GLOBE NEWSWIRE) -- Supernus Pharmaceuticals, Inc. (Nasdaq: 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 2020 and associated Company developments.

“During the first nine months of 2020, we delivered strong product sales growth, diversified our revenue base and enhanced our long term growth with two corporate transactions” said Jack Khattar, President and CEO of Supernus. “Our employees have been hard at work in anticipation of the launch of SPN-812. Based on the efficacy and safety demonstrated in its clinical program, SPN-812 can potentially offer an important new option in the treatment of ADHD.”

Commercial Update

Third quarter 2020 net product sales were $152.1 million, 52% higher than the same period in 2019, driven by the addition of $40.9 million of net product sales from the acquired commercial products and $11.2 million in net product sales growth from Trokendi XR and Oxtellar XR.

Net Product Sales
($ in millions)

Q3 2020

Q3 2019

Change %

Trokendi XR

$

82.9

$

77.3

7 %

Oxtellar XR

28.3

22.7

25 %

APOKYN

34.5

NM(1)

XADAGO

2.3

NM(1)

MYOBLOC

4.1

NM(1)

Total

$

152.1

$

100.0

52 %

____________
(1) Fluctuation in terms of percentage change is not meaningful.

Product Pipeline Update

SPN-812 - Novel non-stimulant for the treatment of ADHD in children and adults

  • The Company continues to prepare for the commercial launch of SPN-812, which is expected in January 2021, if approved by the FDA. The New Drug Application (NDA) Prescription Drug User Fee Act (PDUFA) target action date is November 8, 2020.

  • The Company completed enrollment in the SPN-812 Phase III trial in adult patients with ADHD. Topline data from the trial is expected in the first quarter of 2021.

SPN-830 (Apomorphine infusion pump) - Continuous treatment of motor fluctuations (“on-off” episodes) in PD

  • NDA was submitted to the U.S. Food and Drug Administration (FDA) in September 2020 for the continuous treatment of "on-off" episodes in adults with Parkinson's disease (PD) whose motor control is unsatisfactory with oral levodopa and at least one other noninvasive PD therapy.

  • The Company expects to launch SPN-830 in the fourth quarter of 2021, if approved by the FDA.

SPN-820 - Novel first-in-class activator of mTORC1

  • Preclinical and development activities are ongoing, with the goal of initiating a Phase II clinical program in treatment-resistant depression by the end of 2021.

Operating Expenses

Research and development (R&D) expenses in the third quarter of 2020 were $16.8 million, essentially unchanged from $16.9 million in the same quarter last year.

Selling, general and administrative (SG&A) expenses in the third quarter of 2020 were $54.7 million, compared to $39.3 million in the same quarter last year. This increase was primarily due to costs associated with the new CNS portfolio of commercial products acquired from US WorldMeds (USWM Acquisition) in the second quarter of 2020 and our ongoing preparations for the potential launch of SPN-812.

Amortization expense of intangible assets in the third quarter of 2020 were $6.1 million, compared to $1.3 million in the same quarter last year. This increase results from the USWM Acquisition.

Operating Earnings and Earnings Per Share

Operating earnings (GAAP) in the third quarter of 2020 were $56.1 million, compared to $39.7 million in the third quarter of 2019. Net earnings (GAAP) in the third quarter of 2020 were $40.0 million, or $0.74 per diluted share, as compared to $28.9 million, or $0.54 per diluted share, in the same period last year.

Balance Sheet Highlights

As of September 30, 2020, the Company had $740.1 million in cash, cash equivalents, marketable securities and long term marketable securities, compared to $938.8 million at December 31, 2019. During the first nine months of 2020, the Company generated $107.5 million of cash from operations, inclusive of net changes in working capital. The Company made cash payments of approximately $300 million for acquisition of the CNS portfolio of US WorldMeds and $25 million paid to Navitor upon executing the development and option agreement for SPN-820.

Financial Guidance

The Company is revising full year 2020 financial guidance, which consists of the following components, inclusive of the impact of acquiring the CNS portfolio of US WorldMeds as of June 9, 2020:

($ in millions)

Current (As of November 3, 2020)

Previous (As of August 18, 2020)

Net product sales

$500 - $525

$460 - $500

Research and development expense

Approximately $75

Approximately $85

Selling, general and administrative expense

$215 - $225

$240 - $250

Amortization of intangible assets

$16

$15

Operating earnings (GAAP)

$145 - $160, including amortization of intangible assets

$90 - $110, including amortization of intangible assets

Conference Call Details

The Company will hold a conference call hosted by Jack Khattar, President and Chief Executive Officer and the executive management team to discuss these results at 9:00 a.m. Eastern Time, on Wednesday, November 4, 2020.

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:

1882244

Conference Call Name:

Supernus Pharmaceuticals Third Quarter 2020 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 markets Trokendi XR® (extended-release topiramate) for the prophylaxis of migraine and the treatment of epilepsy; Oxtellar XR® (extended-release oxcarbazepine) for the treatment of epilepsy; APOKYN® (apomorphine hydrochloride injection) for the acute treatment of hypomobility in advanced Parkinson’s disease (PD); MYOBLOC® (rimabotulinumtoxinB) for the treatment of cervical dystonia and treatment of chronic sialorrhea in adults; and XADAGO® (safinamide) as an adjunctive treatment to levodopa/carbidopa in PD patients with hypomobility. 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; apomorphine infusion pump for hypomobility in PD; SPN-820 for treatment-resistant depression; and SPN-817 for the treatment of epilepsy.

See full Prescribing Information for our products here: Trokendi XR, Oxtellar XR, APOKYN, MYOBLOC, and XADAGO

All trademarks are the property of their respective owners.

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,

2020

2019

(unaudited)

Assets

Current assets

Cash and cash equivalents

$

204,293

$

181,381

Marketable securities

147,657

165,692

Accounts receivable, net

133,107

87,332

Inventories, net

42,465

26,628

Prepaid expenses and other current assets

24,493

11,611

Total current assets

552,015

472,644

Long term marketable securities

388,185

591,773

Property and equipment, net

17,395

17,068

Operating lease assets

21,019

21,279

Finance lease asset

21,676

Intangible assets, net

402,265

24,840

Goodwill

89,143

Deferred income tax assets

32,063

Other assets

18,324

615

Total assets

$

1,510,022

$

1,160,282

Liabilities and stockholders’ equity

Current liabilities

Accounts payable

$

11,193

$

10,141

Accrued product returns and rebates

136,973

107,629

Accrued expenses and other current liabilities

56,289

34,305

Contingent consideration, current portion

82,900

Income taxes payable

2,443

Operating lease liabilities, current portion

3,741

2,825

Finance lease liability, current portion

3,612

Nonrecourse liability related to sale of future royalties, current portion

4,898

3,244

Total current liabilities

299,606

160,587

Convertible notes, net

357,521

345,170

Contingent consideration, long term

33,000

Nonrecourse liability related to sale of future royalties, long term

14,960

19,248

Operating lease liabilities, long term

29,522

30,440

Finance lease liability, long term

19,289

Deferred income tax liabilities

37,941

Other liabilities

9,304

9,409

Total liabilities

801,143

564,854

Stockholders’ equity

Common stock, $0.001 par value; 130,000,000 shares authorized; 52,670,121 and 52,533,348 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively

53

53

Additional paid-in capital

403,396

388,410

Accumulated other comprehensive earnings, net of tax

9,700

7,417

Retained earnings

295,730

199,548

Total stockholders’ equity

708,879

595,428

Total liabilities and stockholders’ equity

$

1,510,022

$

1,160,282



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,

2020

2019

2020

2019

(unaudited)

(unaudited)

Revenues

Net product sales

$

152,133

$

100,034

$

368,607

$

285,491

Royalty revenues

3,002

2,106

8,233

6,818

Total revenues

155,135

102,140

376,840

292,309

Costs and expenses

Cost of goods sold(a)

21,388

4,819

33,926

12,547

Research and development

16,839

16,943

58,023

49,307

Selling, general and administrative

54,660

39,343

144,377

118,782

Amortization of intangible assets

6,108

1,306

9,814

3,918

Total costs and expenses

98,995

62,411

246,140

184,554

Operating earnings

56,140

39,729

130,700

107,755

Other income (expense)

Interest income

3,262

5,559

12,988

15,696

Interest expense

(6,088

)

(5,662

)

(17,658

)

(16,930

)

Other income (expense), net

(603

)

(36

)

2,925

54

Total other expense

(3,429

)

(139

)

(1,745

)

(1,180

)

Earnings before income taxes

52,711

39,590

128,955

106,575

Income tax expense

12,714

10,730

32,773

26,648

Net earnings

$

39,997

$

28,860

$

96,182

$

79,927

Earnings per share

Basic

$

0.76

$

0.55

$

1.83

$

1.53

Diluted

$

0.74

$

0.54

$

1.79

$

1.48

Weighted-average shares outstanding

Basic

52,658,850

52,453,384

52,583,891

52,392,232

Diluted

53,762,642

53,805,838

53,663,273

53,898,486

___________________________________________

(a) Excludes amortization of acquired intangible assets

CONTACTS:

Jack A. Khattar, President and Chief Executive Officer
Jim Kelly, EVP & Chief Financial Officer
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