Full Press Release Details
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
ROCKVILLE, Md., November 5, 2019 - 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 2019, results from the Phase III P301 trial for SPN-810 and associated Company developments.
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 | % |
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
SPN-810 - Novel treatment of Impulsive Aggression (IA) in patients with ADHD
| 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 |
| 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) |
SPN-604 - Novel treatment of bipolar disorder
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.
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:
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 |
Jack A. Khattar, President and CEO
Gregory S. Patrick, Senior Vice President and CFO
Supernus Pharmaceuticals, Inc.
Westwicke, an ICR Company
Office: (443) 213-0505
Mobile: (443) 377-4767
Email: peter.vozzo@westwicke.com