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 first quarter of 2019 and associated
Company developments.
Commercial Update
First quarter 2019 product prescriptions for Trokendi XR® and
Oxtellar XR®, as reported by IQVIA, totaled 199,520, an 11.0%
increase over the first quarter of 2018.
Prescriptions |
|
Q1 2019 |
Q1 2018 |
Change % |
Trokendi XR |
160,940 |
144,995 |
11.0% |
Oxtellar XR |
38,580 |
34,716 |
11.1% |
Total |
199,520 |
179,711 |
11.0% |
|
|
|
|
Source: IQVIA
In the fourth quarter of 2018, wholesalers, distributors, and
pharmacies increased their inventory holdings as compared to the
prevailing inventory levels in the third quarter of 2018. As
previously disclosed, the Company estimated that this caused net
product sales to be approximately $10 million higher in the fourth
quarter of 2018 than it would have been otherwise, had inventory
levels remained consistent quarter to quarter.
This process was effectively reversed in the first quarter of
2019, with net product sales decreasing in the first quarter of
2019 by an estimated $10 million, as compared both to the prior
year as well as the prior quarter.
In addition, net product sales were impacted by the growing
prevalence of high deductible patient plans, their seasonal effect
on first quarter prescription trends, and the seasonal increase in
our use of copay assistance. Consequently, gross to net deductions
were higher by approximately $4 million, as compared to the first
quarter of 2018.
Net product sales decreased by $6 million in the first quarter
of 2019, compared to the same period last year. Net product sales
by product are as follows:
Net Product
Sales($ in millions) |
|
Q1
2019 |
Q1
2018 |
Change
% |
Trokendi XR |
$ |
63.7 |
$ |
70.5 |
-9.6 |
% |
Oxtellar XR |
$ |
19.4 |
$ |
18.6 |
4.3 |
% |
Total |
$ |
83.1 |
$ |
89.1 |
-6.7 |
% |
Progress of Product Pipeline
During its Investor Day held on April 16, 2019, the Company
provided a product pipeline update as set forth below.
SPN-812 – Novel non-stimulant for the treatment of ADHD
- During March 2019, the Company announced data from the fourth
and final Phase III study for SPN-812 (P304) that confirm positive
results from the previous three Phase III studies on SPN-812,
announced in December 2018.
- The Company continues to expect to submit a New Drug
Application (NDA) for SPN-812 in the second half of 2019, and to
launch it, pending U.S. Food and Drug
Administration (FDA) approval, in the second half of
2020.
- A Phase III program in adult patients is anticipated to start
in the second half of 2019.
SPN-810 – Novel treatment of Impulsive Aggression in patients
with ADHD
- Enrollment in the Phase III trials (P301 and P302) continues
with data from both trials expected in the second half of
2019.
- The Company continues to expect to submit an NDA for SPN-810 in
the second half of 2020, and to launch it, pending FDA approval, in
the second half of 2021.
- Enrollment in the open label extension (OLE) study continues at
90% or higher. On average, a patient in the OLE study remains on
SPN-810 treatment for approximately 10.5 months, which the Company
believes is an encouraging sign of the tolerability and efficacy of
SPN-810.
- Patient dosing continues in the Phase III trial (P503) in
adolescent patients.
SPN-604 – Novel treatment of bipolar disorder
- The Company expects to start a pivotal Phase III program for
the treatment of bipolar disorder in the fourth quarter of
2019.
Operating Expenses
Research and development expenses in the first quarter of 2019
were $15.4 million, as compared to $18.9 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 completed in March 2019. The
decrease was partially offset by the manufacture of validation and
registration lots for SPN-812 to support the Company’s upcoming
submission of its New Drug Application (NDA).
Selling, general and administrative expenses in the first
quarter of 2019 were $41.0 million, as compared to $36.8 million in
the same quarter last year. This increase was primarily due to the
development and production of promotional materials and marketing
programs associated with the launch of the monotherapy indication
for Oxtellar XR.
Operating Earnings and Earnings Per Share
Operating earnings in the first quarter of 2019 were $25.4
million, compared to $31.4 million in the same quarter last year.
The decrease in operating earnings was primarily due to decreased
net product sales. Excluding the negative impact to net product
sales from the aforementioned inventory drawdown in the first
quarter, operating earnings would have been approximately $9.5
million higher than in 2018.
Net earnings (GAAP) in the first quarter of 2019 were $18.3
million, or $0.34 per diluted share, compared to $26.4 million, or
$0.49 per diluted share, in the same period last year. In addition
to the impact of lower operating earnings for the first quarter of
2019, net earnings (GAAP) were subject to a higher effective tax
rate in the first quarter of 2019 relative to the first quarter of
2018. The tax rate in the first quarter of 2018 benefited from
stock option exercises.
Weighted-average diluted common shares outstanding were
approximately 54.0 million in the first quarter of 2019, as
compared to approximately 53.8 million in the prior year
period.
“Our financial results for the first quarter were adversely
impacted by several factors, converging all at once: the fourth
quarter 2018 inventory buildup impacting shipments in first quarter
2019: first quarter seasonal insurance plan dynamics putting
pressure on prescription growth coupled with increased gross-to-net
deductions through our copay assistance; and the increase in the
effective tax rate compared to same period in 2018,” said Jack
Khattar, President and CEO of Supernus. “Aside from the effective
tax rate, these one-time events are not expected to have a
continuing effect in the subsequent quarters. We have already seen
in the second quarter of 2019 a normalization of shipments and
prescription trends”
Balance Sheet Highlights
As of March 31, 2019, the Company had $815.5 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 quarter of 2019.
Financial Guidance
For full year 2019, the Company reiterates its prior guidance
for net product sales, research and development expenses, operating
earnings, and effective tax rate as set forth below:
- Net product sales in the range of $435 million to $455
million
- Research and development expenses in the range of $70 million
to $80 million
- Operating earnings in the range of $160 million to $180
million
- Effective tax rate of approximately 23% to 25%
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, May 8, 2019. An
accompanying webcast also will be provided.
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: |
|
8139879 |
Conference Call Name: |
|
Supernus Pharmaceuticals First 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-810 for the treatment of Impulsive Aggression in ADHD patients,
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 amounts) |
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
2019 |
|
2018 |
Assets |
(unaudited) |
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
122,778 |
|
$ |
192,248 |
|
Marketable securities |
|
170,165 |
|
|
163,770 |
|
Accounts receivable, net |
|
79,950 |
|
|
102,922 |
|
Inventories, net |
|
26,518 |
|
|
25,659 |
|
Prepaid expenses and other current assets |
|
20,556 |
|
|
8,888 |
|
Total current
assets |
|
419,967 |
|
|
493,487 |
|
Long term marketable securities |
|
522,551 |
|
|
418,798 |
|
Property and equipment, net |
|
4,226 |
|
|
4,095 |
|
Intangible assets, net |
|
30,063 |
|
|
31,368 |
|
Lease assets |
|
20,049 |
|
|
— |
|
Deferred income taxes |
|
27,967 |
|
|
29,683 |
|
Other assets |
|
625 |
|
|
380 |
|
|
|
|
|
|
|
Total
assets |
$ |
1,025,448 |
|
$ |
977,811 |
|
|
|
|
|
|
|
Liabilities and
stockholders' equity |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable |
$ |
7,240 |
|
$ |
3,195 |
|
Accrued product returns and rebates |
|
88,200 |
|
|
107,063 |
|
Accrued expenses and other current liabilities |
|
36,607 |
|
|
36,535 |
|
Income taxes payable |
|
17,233 |
|
|
12,377 |
|
Non-recourse liability related to sale of future royalties, current
portion |
|
2,426 |
|
|
2,183 |
|
Total current
liabilities |
|
151,706 |
|
|
161,353 |
|
Convertible notes, net |
|
333,310 |
|
|
329,462 |
|
Non-recourse liability related to sale of future royalties, long
term |
|
21,957 |
|
|
22,575 |
|
Lease liabilities, long term |
|
27,824 |
|
|
— |
|
Other non-current liabilities |
|
10,633 |
|
|
11,398 |
|
Total
liabilities |
|
545,430 |
|
|
524,788 |
|
|
|
|
|
|
|
Stockholders'
equity |
|
|
|
|
|
Common stock, $0.001 par value, 130,000,000 shares authorized |
|
|
|
|
|
52,374,248 and 52,316,583 shares issued and outstanding as of March
31, 2019 and December 31, 2018, respectively |
|
52 |
|
|
52 |
|
Additional paid-in capital |
|
373,707 |
|
|
369,637 |
|
Accumulated other comprehensive earnings (loss), net of tax |
|
1,427 |
|
|
(3,158 |
) |
Retained earnings |
|
104,832 |
|
|
86,492 |
|
Total stockholders'
equity |
|
480,018 |
|
|
453,023 |
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity |
$ |
1,025,448 |
|
$ |
977,811 |
|
|
|
|
|
|
|
|
Supernus Pharmaceuticals, Inc. |
Condensed Consolidated Statements of Earnings |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
Three Months ended March 31, |
|
2019 |
|
2018 |
|
(unaudited) |
|
|
Revenues |
|
|
|
|
|
Net product sales |
$ |
83,099 |
|
|
$ |
89,120 |
|
Royalty revenue |
|
2,375 |
|
|
|
1,309 |
|
Total revenues |
|
85,474 |
|
|
|
90,429 |
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
Cost of product sales |
|
3,684 |
|
|
|
3,278 |
|
Research and development |
|
15,394 |
|
|
|
18,908 |
|
Selling, general and administrative |
|
40,968 |
|
|
|
36,849 |
|
|
|
|
|
|
|
Total costs and expenses |
|
60,046 |
|
|
|
59,035 |
|
|
|
|
|
|
|
Operating earnings |
|
25,428 |
|
|
|
31,394 |
|
|
|
|
|
|
|
Other expenses, net |
|
(1,189 |
) |
|
|
(212 |
) |
|
|
|
|
|
|
Earnings before income
taxes |
|
24,239 |
|
|
|
31,182 |
|
|
|
|
|
|
|
Income tax expense |
|
5,899 |
|
|
|
4,830 |
|
Net earnings |
$ |
18,340 |
|
|
$ |
26,352 |
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
Basic |
$ |
0.35 |
|
|
$ |
0.51 |
|
Diluted |
$ |
0.34 |
|
|
$ |
0.49 |
|
|
|
|
|
|
|
Weighted-average shares
outstanding |
|
|
|
|
|
Basic |
|
52,336,443 |
|
|
|
51,536,474 |
|
Diluted |
|
53,985,385 |
|
|
|
53,788,346 |
|
|
|
|
|
|
|
|
|
CONTACTS:
Jack A. Khattar, President and CEOGregory S. Patrick, Senior
Vice President and CFOSupernus Pharmaceuticals, Inc.Tel: (301)
838-2591
or
INVESTOR CONTACT:Peter VozzoWestwicke, an ICR CompanyOffice:
(443) 213-0505Mobile: (443) 377-4767Email:
peter.vozzo@westwicke.com
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