Market Overview

Supernus Announces Fourth Quarter and Full Year 2019 Financial Results

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  • Fourth quarter and full year 2019 total revenue of $100.4 million and $392.8 million, respectively.
  • Fourth quarter and full year 2019 net product sales of $97.9 million and $383.4 million, respectively.
  • Fourth quarter and full year 2019 operating earnings of $40.8 million and $148.6 million, respectively.
  • FDA assigned PDUFA target action date of November 8, 2020 for review of SPN-812 New Drug Application.
  • Phase III P302 trial of SPN-810 for the treatment of IA in ADHD patients 6 to 11 years old did not meet primary endpoint.

ROCKVILLE, Md., Feb. 25, 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 fourth quarter and full year of 2019, and associated Company developments.

Commercial Update

Full year 2019 product prescriptions for Trokendi XR® and Oxtellar XR®, as reported by IQVIA, totaled 836,399, a 6.4% increase over full year 2018. Fourth quarter 2019 product prescriptions for Trokendi XR and Oxtellar XR totaled 212,780, a 1.4% increase over the fourth quarter of 2018.

  Prescriptions    
  FY 2019   FY 2018   Change %  
Trokendi XR 672,485   638,923   5.3%  
Oxtellar XR 163,914   147,488   11.1%  
Total 836,399   786,411   6.4%  
             

Source:  IQVIA

As previously disclosed, wholesalers, distributors and pharmacies increased their inventory levels of the Company's products in the fourth quarter of 2018. The Company estimates that this caused net product sales in both the fourth quarter and full year 2018 to be approximately $10 million higher than would have been otherwise; i.e., had inventory levels remained consistent quarter to quarter. The inventory build in the fourth quarter of 2018 was then effectively reversed in the first quarter of 2019, causing net product sales to be $10 million lower in both the first quarter and full year 2019 than would have been otherwise.

Net product sales for full year 2019 were $383.4 million, compared to $399.9 million for full year 2018. Net product sales for the fourth quarter of 2019 were $97.9 million, compared to $113.5 million in the fourth quarter of 2018. The decrease in both quarter over quarter and year over year comparisons is due to the aforementioned increase in inventory holdings in the fourth quarter of 2018.

In addition, net product sales in both the fourth quarter and full year 2019 were adversely impacted by continued pressure on gross-to-net deductions, as compared to 2018.

Net Product Sales
($ in millions)
  FY 2019
  FY 2018
  Change %  
Trokendi XR $ 295.2   $ 315.3   (6.4)%  
Oxtellar XR 88.2   84.6   4.3%  
Total $ 383.4   $ 399.9   (4.1)%  
                 

Progress of Product Pipeline

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

  • The U.S. Food and Drug Administration (FDA) accepted for review a New Drug Application (NDA) for SPN-812 for the treatment of ADHD, with a Prescription Drug User Fee Act (PDUFA) target action date of November 8, 2020.
  • The Company plans to launch SPN-812 at the end of 2020, if approved by the FDA.
  • The Company expects to complete enrollment in the ongoing Phase III program in adult patients by the end of 2020.

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

  • Phase III P302 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 36 mg showed a median percent reduction of 51.3% in the average weekly frequency of impulsive aggression episodes from baseline that was not statistically significant (p=0.961) compared to placebo. Consistent with the P301 trial, the drug was safe and well tolerated.
  • The Company will halt all development activities on SPN-810 in IA.

SPN-604 - Novel treatment of bipolar disorder

  • The Company expects enrollment in the ongoing pivotal Phase III monotherapy trial for the treatment of bipolar disorder to continue through 2021.

"With our NDA for SPN-812 in ADHD accepted for review by the FDA, we continue to prepare the Company for the commercial launch of SPN-812 and look forward to bringing this important new treatment option to patients and physicians. If approved by the FDA, SPN-812 has the potential of becoming the first novel treatment to be introduced in the ADHD market in more than a decade" said Jack Khattar, President and CEO of Supernus.

"While we are certainly disappointed with the results from the second trial on SPN-810, Supernus continues to invest in R&D programs and is planning to provide an R&D update later in the year." Mr. Khattar added, "We extend our sincere thanks to all our employees for working diligently to complete the SPN-810 studies, and to all our patients, their families, and our investigators for participating in our studies."

Operating Expenses

Full Year

Research and development (R&D) expenses for full year 2019 were $69.1 million, lower than the $89.2 million in 2018. This decrease is primarily due to the one-time upfront expense of approximately $14 million incurred in the fourth quarter of 2018 for the acquisition of Biscayne Neurotherapeutics, Inc. (Biscayne). To a lesser extent, the completion of four Phase III clinical trials for SPN-812 contributed to the year-over-year decline. These reductions were partially offset by SPN-812 manufacturing costs in 2019 to support the Company's NDA submission.

Selling, general and administrative (SG&A) expenses for full year 2019 were $158.4 million, essentially unchanged from $159.9 million in 2018.

Fourth Quarter

R&D expenses in the fourth quarter of 2019 were $19.8 million, lower than the $29.8 million in the same quarter last year. This decrease was primarily due to the one-time upfront expense of approximately $14 million incurred in the fourth quarter of 2018 for the acquisition of Biscayne.

SG&A expenses in the fourth quarter of 2019 were $35.7 million, lower than the $42.1 million in the same quarter last year. This decrease is primarily due to expenses incurred in the fourth quarter of 2018 for the development and production of promotional materials and marketing programs associated with the launch of the monotherapy indication for Oxtellar XR. In addition, employee-related costs were lower.

Operating Earnings and Earnings Per Share

Operating earnings for full year 2019 were $148.6 million, compared to $144.4 million in 2018. The increase in operating earnings is primarily due to lower R&D and SG&A expenses in 2019. Operating earnings for the full year 2019 were negatively impacted by the aforementioned inventory drawdown in the first quarter of 2019. This resulted in full year 2018 operating earnings being $10 million higher, and the full year 2019 operating earnings being $10 million lower than would have been otherwise.

Operating earnings in the fourth quarter of 2019 were $40.8 million, compared to $39.9 million in the fourth quarter of 2018. The quarterly comparison was negatively impacted by the aforementioned increase in channel inventory holdings in the fourth quarter of 2018. The increase in channel inventory holdings in 2018 caused the fourth quarter 2018 operating earnings to be higher by approximately $10 million than would have been otherwise.

Net earnings (GAAP) were $113.1 million for full year 2019, or $2.10 per diluted share, compared to $111.0 million, or $2.05 per diluted share, for full year 2018.

Net earnings (GAAP) in the fourth quarter of 2019 were $33.1 million, or $0.62 per diluted share, an increase of 29% on a diluted share basis, as compared to $25.9 million, or $0.48 per diluted share, in the same period last year.

Weighted-average diluted common shares outstanding were approximately 53.8 million for the full year 2019 and 53.6 million for the fourth quarter of 2019, as compared to approximately 54.1 million for each of the respective prior year periods.

Balance Sheet Highlights

As of December 31, 2019, the Company had $938.8 million in cash, cash equivalents, marketable securities and long term marketable securities, as compared to $774.8 million at December 31, 2018. This increase primarily reflects cash generated from operations in 2019.

Financial Guidance

For full year 2020, the Company estimates net product sales and operating earnings as set forth below:

  • Net product sales to range from $360 million to $390 million.
  • Operating earnings to range from $70 million to $100 million.

Other than the impact from the addition of salesforce personnel at the end of 2020 in anticipation of the launch of SPN-812, SG&A expenses are expected to be consistent quarter to quarter in 2020.

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, February 26, 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: 7796907
Conference Call Name: Supernus Pharmaceuticals Fourth Quarter and Full Year 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.
Consolidated Balance Sheets
(in thousands, except share data)

  December 31,
2019
  December 31,
2018
  (unaudited)    
Assets      
Current assets      
Cash and cash equivalents $ 181,381     $ 192,248  
Marketable securities 165,692     163,770  
Accounts receivable, net 87,332     102,922  
Inventories, net 26,628     25,659  
Prepaid expenses and other current assets 11,611     8,888  
Total current assets 472,644     493,487  
Long term marketable securities 591,773     418,798  
Property and equipment, net 17,068     4,095  
Intangible assets, net 24,840     31,368  
Lease assets 21,279      
Deferred income taxes 32,063     29,683  
Other assets 615     380  
Total assets $ 1,160,282     $ 977,811  
       
Liabilities and stockholders' equity      
Current liabilities      
Accounts payable $ 10,141     $ 3,195  
Accrued product returns and rebates 107,629     107,063  
Accrued expenses and other current liabilities 37,130     36,535  
Income taxes payable 2,443     12,377  
Nonrecourse liability related to sale of future royalties; current portion 3,244     2,183  
Total current liabilities 160,587     161,353  
Convertible notes, net 345,170     329,462  
Nonrecourse liability related to sale of future royalties; long term 19,248     22,575  
Lease liabilities, long term 30,440      
Other liabilities 9,409     11,398  
Total liabilities 564,854     524,788  
       
Stockholders' equity      
Common stock, $0.001 par value; 130,000,000 shares authorized; 52,533,348 and 52,316,583 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively 53     52  
Additional paid-in capital 388,410     369,637  
Accumulated other comprehensive earnings (loss), net of tax 7,417     (3,158 )
Retained earnings 199,548     86,492  
Total stockholders' equity 595,428     453,023  
       
Total liabilities and stockholders' equity $ 1,160,282     $ 977,811  
               

Supernus Pharmaceuticals, Inc.
Consolidated Statements of Earnings
(in thousands, except share and per share data)

  Three Months ended
December 31,
  Years ended December 31,
  2019   2018   2019   2018
           
  (unaudited)   (unaudited)    
Revenues              
Net product sales $ 97,909     $ 113,494     $ 383,400     $ 399,871  
Royalty revenue 2,537     2,440     9,355     8,276  
Licensing revenue             750  
Total revenues 100,446     115,934     392,755     408,897  
               
Costs and expenses              
Cost of goods sold 4,113     4,188     16,660     15,356  
Research and development 19,792     29,841     69,099     89,209  
Selling, general and administrative 35,725     42,050     158,425     159,888  
Total costs and expenses 59,630     76,079     244,184     264,453  
               
Operating earnings 40,816     39,855     148,571     144,444  
               
Other (expense) income              
Interest expense (5,870 )   (5,600 )   (22,707 )   (18,111 )
Interest income, net 5,966     4,512     21,623     13,843  
Total other (expense) income 96     (1,088 )   (1,084 )   (4,268 )
               
Earnings before income taxes 40,912     38,767     147,487     140,176  
               
Income tax expense 7,783     12,874     34,431     29,183  
Net earnings $ 33,129     $ 25,893     $ 113,056     $ 110,993  
               
Earnings per share              
Basic $ 0.63     $ 0.50     $ 2.16     $ 2.13  
Diluted $ 0.62     $ 0.48     $ 2.10     $ 2.05  
               
Weighted-average shares outstanding              
Basic 52,471,389     52,264,504     52,412,181     51,989,824  
Diluted 53,649,083     54,104,036     53,816,754     54,098,872  
               

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 

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