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Supernus Up on Non-Dilutive Royalty Deal

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Supernus Pharmaceuticals, Inc.’s (SUPN) shares gained 3.1% following the company’s announcement regarding the execution of a non-dilutive royalty deal with HealthCare Royalty Partners. Shares increased an additional 0.7% in the subsequent trading session. According to the agreement, Supernus will receive a cash payment of $30 million from the company.

As per the deal, HealthCare Royalty will acquire certain royalty and milestone rights related to the commercialization of United Therapeutics’ (UTHR) Orenitram (oral treprostinil), which is approved for the improvement of exercise capacity in pulmonary arterial hypertension (PAH) patients. Once a certain threshold is achieved, Supernus will retain full ownership of the royalty rights on the sales of Orenitram.

United Therapeutics and Supernus have a partnership agreement under which EnSoTrol, Supernus’ osmotic delivery system has been used in the development of Orenitram.

The agreement between Supernus and HealthCare Royalty will strengthen Supernus' cash position while enhancing its operational and financial flexibility. It will position Supernus in such a manner that it can benefit from the upside potential of Orenitram going forward and partially monetize its royalty stream from the product.

We remind investors that Orenitram was launched in the U.S. market in Apr 2014. We note that subcutaneous and intravenous formulations of Orenitram are also available under the trade name Remodulin for the treatment of PAH. An application for orphan drug designation for Orenitram is under FDA review.

Supernus holds a Zacks Rank #2 (Buy). Some better-ranked stocks in the healthcare sector include Mallinckrodt plc (MNK) and Akorn, Inc. (AKRX). Both carry a Zacks Rank #1 (Strong Buy). United Therapeutics carries a Zacks Rank #2.

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