NASDAQ:SUPN Supernus Pharmaceuticals Q1 2023 Earnings Report $32.22 +0.87 (+2.78%) Closing price 04/25/2025 04:00 PM EasternExtended Trading$31.57 -0.65 (-2.00%) As of 04/25/2025 07:57 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Supernus Pharmaceuticals EPS ResultsActual EPS$0.29Consensus EPS $0.12Beat/MissBeat by +$0.17One Year Ago EPS$0.43Supernus Pharmaceuticals Revenue ResultsActual Revenue$153.80 millionExpected Revenue$139.02 millionBeat/MissBeat by +$14.78 millionYoY Revenue Growth+0.90%Supernus Pharmaceuticals Announcement DetailsQuarterQ1 2023Date5/9/2023TimeAfter Market ClosesConference Call DateTuesday, May 9, 2023Conference Call Time4:30PM ETUpcoming EarningsSupernus Pharmaceuticals' Q1 2025 earnings is scheduled for Tuesday, May 6, 2025, with a conference call scheduled at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Supernus Pharmaceuticals Q1 2023 Earnings Call TranscriptProvided by QuartrMay 9, 2023 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00Afternoon, and welcome to Supernus Pharmaceuticals First Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Instructions will follow at that time. As a reminder, this conference call is being recorded. Operator00:00:21I would now like to turn the conference over to Peter Fazza of ICR Westwick, an Investor Relations representative for Supernus Pharmaceuticals. You may begin. Speaker 100:00:32Thank you, Stephen. Good afternoon, everyone, and thank you for joining us today for Supernus Pharmaceuticals' Q1 2023 financial results conference call. Today, after the close of the market, the company issued a press release announcing these results. On the call with me today are Supernus' Chief Executive Officer, Jack Qatar and Chief Financial Officer, Tim Deck. Today's call is being made available via the Investor Relations section of the company's website atir.supernus.com. Speaker 100:01:03During the course of this call, management may make certain forward looking statements regarding future events and the company's future performance. These forward looking statements reflect Supernus' current perspective on existing trends and information. Any such forward looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the Risk Factors section of the company's latest SEC filings. Actual results may differ materially from those projected in these forward looking statements. For the benefit of those of you who may be listening to the replay, this call is being held and recorded on May 9, 2023. Speaker 100:01:38Since then, the company may have made additional announcements related to the topics discussed. Please reference the company's most recent press releases and current filings with the SEC. Supernus declines any obligation to update these forward looking statements, except as required by applicable securities laws. I'll now turn the call over to Jack. Speaker 200:01:58Thank you, Peter. Good afternoon, everyone, and thanks for taking the time to join us as we discuss our 2023 Q1 results. Despite the generic entry on Trokendi XR and the Typical insurance headwinds in our industry in the Q1, Supernus delivered strong Q1 results and set the stage for solid performance for the rest of the year. In the Q1, Supernus achieved total revenues of $154,000,000 Essentially flat compared to $153,000,000 in the same period a year ago. This was achieved despite a In addition, the Q1 2023 adjusted or non GAAP operating earnings were $31,000,000 compared to $28,000,000 in the same period last year. Speaker 200:02:56Excluding Trokendi XR, Q1 2023 net product sales increased 25% year over year, driven by continued adoption of Calvary across both pediatric and adult patients and growth by GOCOVRI. We remain well positioned as we manage through the loss of exclusivity of Calvary continues to perform well with total IQVIA prescriptions in the Q1 of this year, reaching 134,530, representing a sequential increase of 14% compared to the Q4 of 2022. Prescriptions in the most recent month of March reached 49,789, the highest monthly total since the launch. This represents an annual run rate for Calvary of more than 500,000 prescriptions. Calvary also continues to capitalize on several dynamics that we elaborated on last quarter, Including the underlying growth in the overall U. Speaker 200:04:07S. ADHD market, an increase in average wholesale acquisition cost per prescription, Improvement in managed care coverage and the continued growth in Calvary's base of prescribers. In the Q1 of 2023, Calvary expanded its base of prescribers to approximately 19,197, up from 16,822 prescribers in the Q4 of 2022. We initiated the expansion of our sales force by approximately 45 sales representatives to give us broader reach and increased capacity to deliver higher frequency on high decile prescribers. This expansion is Several important growth metrics giving us confidence in its growth potential in 2023 and more importantly in 2024 and beyond. Speaker 200:05:10Switching now to GOCOVRI and Oxtellar XR net product sales increased to $26,000,000 $29,000,000 respectively. This represents an increase of 15% for GOCOVRI and 5% for Oxtellar XR compared to the same period last year. Regarding Trokendi XR, net product sales in the Q1 were $35,000,000 down sequentially from $7,000,000 in the Q4 of 2022 and down year over year from $63,000,000 in the Q1 of 2022. In January 2023, the first generic to 3 out of the 4 product strengths of Trokendi XR was introduced. Total prescriptions for the Q1 of 2023 declined by 48% compared to the same period last year. Speaker 200:06:01Later in the quarter, a generic to the 4th product strength entered the market. At this point, we are maintaining our guidance for net sales between $60,000,000 $80,000,000 for Trokendi XR for the year. Moving on to the pipeline, we had meeting with the FDA in April this year regarding the resubmission of the NDA for SPN-eight thirty, our apomorphine infusion device. Based on the meeting, we expect to resubmit the NDA in the Q4 of 2023. Enrollment is progressing in the open label Phase 2 clinical study for SPN-eight seventeen in adult patients with treatment resistant seizures and we continue to expect top line data in the first half of 2024. Speaker 200:06:49For SPN-eight twenty, our 1st in class orally active mTORC1 activator, the Phase randomized double blind placebo controlled study in adults with treatment resistant depression is ongoing with 33 sites activated. The study will examine the efficacy and safety of SPN-eight twenty over the course of 5 weeks of treatment in approximately 2 70 patients. We're planning on holding an R and D Day in the fall of this year to discuss in further detail our lead pipeline programs and new chemical Clinical candidates that were generated through our discovery program and nominated for clinical development. Finally, we continue to be active in corporate development looking for strategic opportunities to further strengthen our future growth and leadership position in CNS. With that, I will now turn the call over to Tim. Speaker 300:07:45Thank you, Jack. Good afternoon, everyone. As I review our Q1 2023 results, please refer to today's press release and 10 Q that were filed earlier today. Total revenue for the Q1 2023 was $153,800,000 compared to $152,500,000 in the same quarter last year. Total revenue in the Q1 of 2023 was comprised of net product sales of 140,600,000 and royalty revenue of $13,200,000 The increase in total revenues was due to higher net product sales of Calvary, GOCOVRI and royalty revenue, partially offset by the decrease in net product sales of Trokendi XR. Speaker 300:08:33For the Q1 of 2023, combined R and D and SG and A expenses were $106,800,000 as compared to $111,300,000 for the same period last year. The decrease was primarily due to Adama's integration costs, which were included in Q1 2022 that resulted in operational efficiencies. Operating earnings On a GAAP basis for the Q1 2023 was $5,200,000 as compared to operating earnings of $2,000,000 for the same period last year. Total other income for the Q1 of 2023 was $3,800,000 as compared to $12,800,000 for the Q1 of 2022. The change is primarily due to a gain recognized in the Q1 of 2022 on the sale of a subsidiary of Navator. Speaker 300:09:26In the Q1 of 2023, we reported an income tax benefit of $7,900,000 as compared to an income tax benefit of $10,900,000 for the same period last year. The income tax benefit in Q1 of 2023 was primarily due to a lower pretax loss forecasted for 2023. The income tax benefit in the year earlier period, as noted on our prior calls, was due to a corporate reorganization of the Adamas entities and the Q1 of 2022. GAAP net earnings were $16,900,000 for the Q1 of 2023 or $0.29 per diluted share compared to $25,600,000 or $0.43 per diluted share in the same period last year. On a non GAAP basis, which excludes amortization of intangible assets, share based compensation, Consingent consideration, expense gain and depreciation adjusted operating earnings was $30,500,000 compared to $28,000,000 in the same period the previous year. Speaker 300:10:36As of March 31, 2023, the company had approximately $686,500,000 in cash, cash equivalents, restricted cash and marketable securities compared to $555,200,000 as of December 31, 2022. The increase was primarily due to cash generated from operations and the net amount drawn on the line of credit to fund the convertible note payoff. In November 2023, the company paid The total principal amount of $402,500,000 due under its convertible senior notes, in addition to payment of the remaining outstanding interest due of $1,300,000 Following the repayment, the 2023 notes are no longer outstanding. The repayment of the 2023 notes at maturity was financed primarily with available cash on hand and to a lesser extent through a borrowing under the company's existing credit line agreement. We expect to fully repay the borrowing from the credit line by the end of the second quarter of this year. Speaker 300:11:43Now turning to guidance. For full year 2023, the company is raising the expected ranges of full year GAAP and non GAAP operating earnings and lowering the expected range of combined R and D and SG and A expenses. For the year ended 2023, the company reiterates its prior financial guidance for total revenue. As such, We expect total revenue to range from $580,000,000 to $620,000,000 comprised of net product sales and royalty revenue. As Jack mentioned, we continue to expect net product sales of Trokendi XR in the range of approximately $60,000,000 to 80,000,000 For the full year 2023, we now expect combined R and D and SG and A expenses to range from $450,000,000 to $480,000,000 compared to the prior guidance of $460,000,000 to 490,000,000 As we mentioned previously, the sales force expansion to support the growth of Calvary was initiated in 2023, with most of the expense related to expansion starting in the Q2 of this year. Speaker 300:12:52We expect to further invest in commercial initiatives for Calgary during the back to school season, along with investments for other growth products. We now expect full year GAAP operating loss in the range of 10,000,000 to $30,000,000 compared to previous guidance of an operating loss of $25,000,000 to 50 And finally, we expect non GAAP operating earnings to range from $75,000,000 to $100,000,000 compared to the previous guidance of $65,000,000 to 95,000,000 Please refer to the earnings press release issued prior to this call that identifies the various ranges of reconciling items between GAAP and non GAAP. With that, I will now turn the call back over to the operator for Q and A. Operator00:13:39Thank you. At this time, we will conduct a question and answer session. And wait for your name to be announced. Our first question comes from the line of Andrew Tsai of Jefferies. Your line is now open. Speaker 400:14:11Okay, great. Thanks everyone and great quarter. I appreciate you taking my questions. So the first one is that Congratulations on locking in that major PBM contract, I think effective January 2023. So maybe remind us the latest and greatest thinking on When we can expect that target of 50% to 50% 55% gross to net to occur, basically, is it fair to assume That range could happen this year or could it take a little bit longer than that? Speaker 400:14:45Thanks. Speaker 200:14:48Yes. Hi, Andrew. Regarding the second contract, it became effective in the Q1 of 2023. Now, we didn't see the full effect of that contract or a lot of the effect of the contract because also you always have opposing factors within the Q1 because of the high deductibles, insurance, higher co pays and so forth. So we certainly expect the full impact of this 2nd PBM contract more in the 2nd quarter and obviously even better in the Q3 and Q4. Speaker 200:15:21So To answer the question, clearly, as we progress through the year, we expect the gross to net to improve And definitely get us closer to the fifty-fifty 5 by year end. So it's going to be, is it linear most likely? I mean that's typically what we see in our Business improvement in the gross to net, with Q1 typically at the worst level and then improvement throughout of the year. So certainly that's what we expect on Calvary moving along from the early 60% gross to net Towards the 55% or even 50% hopefully by year end. Speaker 400:15:59Right. Very clear. And then maybe just one more then is Would you agree based on your guidance, if we backed out all of your products with reasonable assumptions, including Trokendi, which you've Got it too, Oxtellar and so forth. Would you agree that Calvary sales can maybe more than double and if not almost triple This year? And if that's the case, I know it's you're not trying to provide guidance, but directionally speaking, if that's the case, Then is it fair to assume Calvary's sales should accelerate on a quarterly basis going forward? Speaker 400:16:38That's just the root of my question. Thank you. Speaker 200:16:42Yes. The short answer is yes. I mean, we do expect Calvary to accelerate As the year goes on and especially of course as we also get closer to the back to school season on top of all that, Yes, it is more than double than last year. That's an easy answer actually given last year's performance. And We've made several comments this quarter and even the last quarter, obviously about the different dynamics in the marketplace that are helping us And are expected to continue to fuel the growth behind the brand from the market itself being very healthy market, HD market, Then clearly, from a managed care perspective, continued improvement on the coverage, the Continued increase in the WACC average wholesale acquisition cost And of course, the expansion in our sales force and so forth and the improved coverage from an ADHD market perspective. Speaker 200:17:45So all these Our point pointing and aligned in one direction, which is really continue to push Calvary and increase the momentum and the growth behind the product. Speaker 400:17:57Thank you, Jack. Operator00:17:58Okay. One moment for our next question. Next question comes from David Amsellem of Piper Sandler. Your line is now open. Speaker 500:18:15Hey, thanks. So on Calvary, can you talk about, Jack, where you see the mix between Adults and peds evolving over time and I may have missed on your prepared remarks what you said on the current mix between adults in Peds. But just talk about where you think that mix is going to go over time. Secondly, can you provide some more specifics Where you need to improve upon in terms of managed care access? And then 3rd, just real quick on Oxtellar, I believe you have A generic filing a trial on a generic filing pending. Speaker 500:18:57So just wanted to get your thoughts on That and the relative risk of potentially an earlier than expected loss of exclusivity on Xceler? Thank you. Speaker 200:19:10Yes, sure. On the first question for Calgary and the mix of the business, I mean, where we are right now, we are about Somewhere between 28%, 30% adult and the rest being pediatric. The market itself, if you remember, it's basically almost the other way around, where the bulk of it is adult Around 67% and pediatric around 33%. So clearly as time goes on, we continue to expect to grow our business And will it eventually mimic exactly the market? We don't know for sure. Speaker 200:19:50Obviously, we're still early in the adult launch. Certainly, we've done extremely well and we're very happy with the adult launch. And also right now looking at the mix right now versus looking at it in the fall with the back to Full season, the mix may flip a little bit because you have a little bit more momentum behind the pediatric business in the back to school season. So these ratios are going to shift over time and continue to shift. But at some point, we will find ourselves Probably closer to the market, but may not mimic it exactly. Speaker 200:20:23Regarding the next question on the managed care improvement, I mean, that is All is an ongoing process. I mean, we will continue our discussions with other PBMs and continue to add contracts where it makes sense and Where it is reasonable for us to enter these contracts, same thing with the Medicaid and the different states. It's an ongoing process where we always look for improving our position over time. And clearly, as time goes on, as utilization goes up, as we continue to be successful as we've Then in the last couple of years improving and growing the prescriptions in a really solid way that even gives us further to go back and renegotiate contracts or try to improve our position as time goes on. Regarding Oxtellar XR and the generic situation, we basically have 3 generic companies where we are We have sued these 3 generic entrants that wanted to come in on Oxtellar XR. Speaker 200:21:26We are in the middle of litigations. I can't really come One way or the other, but there is certainly a risk on Oxtellar XR that we may be able to maintain exclusivity till the end of the patent expiration, which is 2027 or we may not. So we really don't know. We will certainly update The Street on how things Progress or don't progress or whether any settlements occur, if they do occur. So certainly at this moment, there is nothing really I can But we will definitely report or announce anything if anything comes up. Speaker 200:22:01But certainly there is a risk for us on Oxtellar XR as time goes on. And I don't know if I missed, was there a question on Trokendi, XOLLO? Speaker 500:22:11No, that's it. Just on On Oxtellar, if I may just follow-up real quick. I mean, I believe you had prior litigation that you did win, if I'm not mistaken. Is that just a quick refresher on that? Speaker 200:22:24Yes, sure. The first two generics that filed on Oxtellar X are TWI and Actavis, which is now Teva. We actually Went to court on these two cases and we won in both cases all the way through appeal. So that is correct. That was back in the 2016, 2017 timeframe when those cases were resolved actually in our favor. Speaker 200:22:49So this is a second wave of generics that have filed in the last 2 to 3 years and we are in litigation with the 2nd wave of the generics. Speaker 500:23:00Okay. That's helpful. Thank you, Jack. Yes. Operator00:23:04Okay. Thank you for the question. Our next question comes from Annabel Samimy of Stifel, your line is now open. Speaker 600:23:28Hi, this is Jack on for Annabel. Thanks for taking our questions. Could you talk a little bit about the GOCOVRI launch and how that's going relative to your expectations? You seem to have a pretty refined message that you can treat both the OFF episodes and the dyskinesia. Are Physicians receptive to that or do they only want to talk about how to maximize treatment of the OFF periods? Speaker 600:23:51Is there any friction there? Speaker 200:23:55Yes, sure. Yes, I mean, we've been very pleased with the GOCOVRI and the response we've been getting from the market From physicians regarding the unique positioning of the product, its unique profile, which is it's the only product in Parkinson's that is Proved to treat dyskinesia and off episodes. And obviously, this quarter also was fairly solid, given again, it's a first Which typically we have the headwinds of insurance and everything else that goes on in our business in the Q1, we're very happy with recovery delivering 15% Growth versus last year, and that's on top of the 19% growth that it delivered last year. And as far as the message itself and the positioning, it really depends on the physician, their practice, How they treat Parkinson's? Are they actually movement disorder specialists or are they general neurologists? Speaker 200:24:55So the discussion in the physician's office Sometimes it's a little bit different depending on the specialty. But overall, there is a lot of education that has to occur and that continue to do that from a market education perspective, really helping physicians discuss The real issues bring up the issue of dyskinesia. Patients sometimes on their own, they're not aware That actually dyskinesia is caused by a lot of the medications they're on. They might think actually dyskinesia is part of the disease and therefore they don't raise it, they don't talk about it, they don't ask physicians about it, physicians don't ask the patients about it. So we try to Improve the education in the marketplace to make sure that is brought up in the conversation between the patient and the physician, So that people can be aware of the fact that it is an issue. Speaker 200:25:48It can be dealt with. There is a product that actually treats it And not only treat the Skinesia, but also treat the OFF episode. And there is really no need to have a trade off here between The efficacy of a lot of these Parkinson's agents, specifically levodopacarbidopa, what we're talking about here, there is really no need for the physician To taper off or reduce the dose of levodopa, carbidopa to get rid of dyskinesia, you can always add GOCOVRI, Treat the dyskinesia, but even also get efficacy on the off episodes at the same time. It's a beautiful solution that people if they Really understand the situation. They can have great results with GOCOVRI. Speaker 200:26:31So, it's just a matter of continued education, continue that unique positioning that GOCOVRI holds in the market and I think so far the results speak for themselves As far as the uniqueness of the product and its continued benefit in the marketplace. Speaker 600:26:49Got it. And then if I could just ask one more. On Calabri, do you have a granular breakdown of where those prescriptions are coming from in terms of naive patients versus switches From stimulants or non stimulants? And now with the increasing volumes that you're getting, are payers becoming more permissive with Describing or are they still requiring Step Edit? Speaker 200:27:14Yes. Regarding the source of the business on Calvary, It really cuts in so many different ways, but basically about 29% of the business is from new patients And the remaining 71% is switching patients from existing medications or adding Calvary to the existing medication. And when you look at the switches themselves, 65% of the Switching is coming from the stimulants and 35% of the switching is coming from non stimulants. And that is actually a very, very encouraging fact. And looking at the source of the business, we are actually drawing a lot of patients from the stimulant side. Speaker 200:28:04A lot of it is due to the AEs that People cite AEs mainly as one of the major driver actually behind it. And of course, in kids or pediatric, It's also the parents not willing to put their kids on controlled substances on top of all that. So we're very encouraged by this trend and it continues to be that way even from the time we started launching the product in Peas and in Adults. And then as far as the payers and the Step edit and so forth. I mean, it's a really mixed bag. Speaker 200:28:36The first PBM contract we had, it's actually Tier 2 preferred. There is no step through. The second one has a minor step through. But again, if you think about the market, let's say 90% of it is Stimulant, so if you have to go through a stimulant that's really not much of an issue. If you have to go through a non stimulant, it might just delay your Initiation on Calvary by 3 weeks, 4 weeks or whatever until when you are dissatisfied with the first non stimulant clearly. Speaker 200:29:06So It is a mixed bag. Different plans have different formularies, different step throughs or PAs and so forth. And we can back to my previous answer on the previous question, that is some of the things that we continue to work on and to keep to improve on the coverage and minimize these step throughs or the different medications patients have to go through before getting Calvary. Speaker 600:29:32Very helpful. Thank you. Operator00:29:35Sure. Okay. Seeing no further questions, I would now like to turn it back to Jack Qatar for closing comments. Speaker 200:29:44Yes. In concluding our call this afternoon, I would like to Despite the significant erosion of Trokendi XR due to the entry of generics and the typical insurance headwinds, We are confident that our growth products will allow us to offset the impact coming from the loss of exclusivity of Trokendi XR and to return to Revenue and operating income growth in 2024 and beyond. Thanks so much for joining us this afternoon. We look forward to updating you on our next call.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallSupernus Pharmaceuticals Q1 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Supernus Pharmaceuticals Earnings HeadlinesSupernus Pharmaceuticals (SUPN) Receives a Buy from TD CowenApril 24 at 7:55 PM | markets.businessinsider.comSupernus Pharmaceuticals to Announce First Quarter 2025 Financial Results and Host Conference ...April 23 at 5:42 PM | gurufocus.comURGENT: Someone's Moving Gold Out of London...People who don’t understand the gold market are about to lose a lot of money. Unfortunately, most so-called “gold analysts” have it all wrong… They tell you to invest in gold ETFs - because the popular mining ETFs will someday catch fire and close the price gap with spot gold. April 26, 2025 | Golden Portfolio (Ad)Supernus Pharmaceuticals to Announce First Quarter 2025 Financial Results and Host Conference Call and Webcast on May 6, 2025April 23 at 5:14 PM | globenewswire.comCritical Review: Liquidia (NASDAQ:LQDA) and Supernus Pharmaceuticals (NASDAQ:SUPN)April 23 at 2:41 AM | americanbankingnews.comIs Supernus Pharmaceuticals, Inc. (SUPN) the Best Pharma Stock to Buy for Long Term Growth?April 17, 2025 | insidermonkey.comSee More Supernus Pharmaceuticals Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Supernus Pharmaceuticals? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Supernus Pharmaceuticals and other key companies, straight to your email. Email Address About Supernus PharmaceuticalsSupernus Pharmaceuticals (NASDAQ:SUPN), a biopharmaceutical company, focuses on the development and commercialization of products for the treatment of central nervous system (CNS) diseases in the United States. The company's commercial products are Trokendi XR, an extended release topiramate product indicated for the treatment of epilepsy, as well as for the prophylaxis of migraine headache; and Oxtellar XR, an extended release oxcarbazepine for the monotherapy treatment of partial onset seizures in adults and children between 6 to 17 years of age. It also offers comprise Qelbree, a novel non-stimulant indicated for the treatment of attention-deficit hyperactivity disorder (ADHD) in adults and pediatric patients 6 years and older; APOKYN for the acute intermittent treatment of hypomobility or off episodes in patients with advanced Parkinson's Disease (PD); XADAGO for treating levodopa/carbidopa in patients with PD experiencing off episodes; MYOBLOC, a Type B toxin product indicated for the treatment of cervical dystonia and sialorrhea in adults; GOCOVRI for the treatment of dyskinesia in patients with PD; and Osmolex ER for the treatment of Parkinson's disease and drug-induced extrapyramidal reaction in adult patients. In addition, the company's product candidates include SPN-830, a late-stage drug/device combination product candidate for the treatment of off episodes in PD patients; SPN-817, a novel first-in-class selective acetylcholinesterase inhibitor, which is in Phase II clinical trials for the treatment of epilepsy; SPN-820, a product candidate in Phase II clinical trials for treating resistant depression; SPN-443, a preclinical product for the treatment of ADHD/CNS; and SPN-446 for narcolepsy and SPN-448 for the treatment of CNS which is in discovery stage. It markets and sells its products through pharmaceutical wholesalers, specialty pharmacies, and distributors. Supernus Pharmaceuticals, Inc. was incorporated in 2005 and is headquartered in Rockville, Maryland.View Supernus Pharmaceuticals ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Tesla Earnings Miss, But Musk Refocuses and Bulls ReactQualcomm’s Range Narrows Ahead of Earnings as Bulls Step In Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Starbucks (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 7 speakers on the call. Operator00:00:00Afternoon, and welcome to Supernus Pharmaceuticals First Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Instructions will follow at that time. As a reminder, this conference call is being recorded. Operator00:00:21I would now like to turn the conference over to Peter Fazza of ICR Westwick, an Investor Relations representative for Supernus Pharmaceuticals. You may begin. Speaker 100:00:32Thank you, Stephen. Good afternoon, everyone, and thank you for joining us today for Supernus Pharmaceuticals' Q1 2023 financial results conference call. Today, after the close of the market, the company issued a press release announcing these results. On the call with me today are Supernus' Chief Executive Officer, Jack Qatar and Chief Financial Officer, Tim Deck. Today's call is being made available via the Investor Relations section of the company's website atir.supernus.com. Speaker 100:01:03During the course of this call, management may make certain forward looking statements regarding future events and the company's future performance. These forward looking statements reflect Supernus' current perspective on existing trends and information. Any such forward looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the Risk Factors section of the company's latest SEC filings. Actual results may differ materially from those projected in these forward looking statements. For the benefit of those of you who may be listening to the replay, this call is being held and recorded on May 9, 2023. Speaker 100:01:38Since then, the company may have made additional announcements related to the topics discussed. Please reference the company's most recent press releases and current filings with the SEC. Supernus declines any obligation to update these forward looking statements, except as required by applicable securities laws. I'll now turn the call over to Jack. Speaker 200:01:58Thank you, Peter. Good afternoon, everyone, and thanks for taking the time to join us as we discuss our 2023 Q1 results. Despite the generic entry on Trokendi XR and the Typical insurance headwinds in our industry in the Q1, Supernus delivered strong Q1 results and set the stage for solid performance for the rest of the year. In the Q1, Supernus achieved total revenues of $154,000,000 Essentially flat compared to $153,000,000 in the same period a year ago. This was achieved despite a In addition, the Q1 2023 adjusted or non GAAP operating earnings were $31,000,000 compared to $28,000,000 in the same period last year. Speaker 200:02:56Excluding Trokendi XR, Q1 2023 net product sales increased 25% year over year, driven by continued adoption of Calvary across both pediatric and adult patients and growth by GOCOVRI. We remain well positioned as we manage through the loss of exclusivity of Calvary continues to perform well with total IQVIA prescriptions in the Q1 of this year, reaching 134,530, representing a sequential increase of 14% compared to the Q4 of 2022. Prescriptions in the most recent month of March reached 49,789, the highest monthly total since the launch. This represents an annual run rate for Calvary of more than 500,000 prescriptions. Calvary also continues to capitalize on several dynamics that we elaborated on last quarter, Including the underlying growth in the overall U. Speaker 200:04:07S. ADHD market, an increase in average wholesale acquisition cost per prescription, Improvement in managed care coverage and the continued growth in Calvary's base of prescribers. In the Q1 of 2023, Calvary expanded its base of prescribers to approximately 19,197, up from 16,822 prescribers in the Q4 of 2022. We initiated the expansion of our sales force by approximately 45 sales representatives to give us broader reach and increased capacity to deliver higher frequency on high decile prescribers. This expansion is Several important growth metrics giving us confidence in its growth potential in 2023 and more importantly in 2024 and beyond. Speaker 200:05:10Switching now to GOCOVRI and Oxtellar XR net product sales increased to $26,000,000 $29,000,000 respectively. This represents an increase of 15% for GOCOVRI and 5% for Oxtellar XR compared to the same period last year. Regarding Trokendi XR, net product sales in the Q1 were $35,000,000 down sequentially from $7,000,000 in the Q4 of 2022 and down year over year from $63,000,000 in the Q1 of 2022. In January 2023, the first generic to 3 out of the 4 product strengths of Trokendi XR was introduced. Total prescriptions for the Q1 of 2023 declined by 48% compared to the same period last year. Speaker 200:06:01Later in the quarter, a generic to the 4th product strength entered the market. At this point, we are maintaining our guidance for net sales between $60,000,000 $80,000,000 for Trokendi XR for the year. Moving on to the pipeline, we had meeting with the FDA in April this year regarding the resubmission of the NDA for SPN-eight thirty, our apomorphine infusion device. Based on the meeting, we expect to resubmit the NDA in the Q4 of 2023. Enrollment is progressing in the open label Phase 2 clinical study for SPN-eight seventeen in adult patients with treatment resistant seizures and we continue to expect top line data in the first half of 2024. Speaker 200:06:49For SPN-eight twenty, our 1st in class orally active mTORC1 activator, the Phase randomized double blind placebo controlled study in adults with treatment resistant depression is ongoing with 33 sites activated. The study will examine the efficacy and safety of SPN-eight twenty over the course of 5 weeks of treatment in approximately 2 70 patients. We're planning on holding an R and D Day in the fall of this year to discuss in further detail our lead pipeline programs and new chemical Clinical candidates that were generated through our discovery program and nominated for clinical development. Finally, we continue to be active in corporate development looking for strategic opportunities to further strengthen our future growth and leadership position in CNS. With that, I will now turn the call over to Tim. Speaker 300:07:45Thank you, Jack. Good afternoon, everyone. As I review our Q1 2023 results, please refer to today's press release and 10 Q that were filed earlier today. Total revenue for the Q1 2023 was $153,800,000 compared to $152,500,000 in the same quarter last year. Total revenue in the Q1 of 2023 was comprised of net product sales of 140,600,000 and royalty revenue of $13,200,000 The increase in total revenues was due to higher net product sales of Calvary, GOCOVRI and royalty revenue, partially offset by the decrease in net product sales of Trokendi XR. Speaker 300:08:33For the Q1 of 2023, combined R and D and SG and A expenses were $106,800,000 as compared to $111,300,000 for the same period last year. The decrease was primarily due to Adama's integration costs, which were included in Q1 2022 that resulted in operational efficiencies. Operating earnings On a GAAP basis for the Q1 2023 was $5,200,000 as compared to operating earnings of $2,000,000 for the same period last year. Total other income for the Q1 of 2023 was $3,800,000 as compared to $12,800,000 for the Q1 of 2022. The change is primarily due to a gain recognized in the Q1 of 2022 on the sale of a subsidiary of Navator. Speaker 300:09:26In the Q1 of 2023, we reported an income tax benefit of $7,900,000 as compared to an income tax benefit of $10,900,000 for the same period last year. The income tax benefit in Q1 of 2023 was primarily due to a lower pretax loss forecasted for 2023. The income tax benefit in the year earlier period, as noted on our prior calls, was due to a corporate reorganization of the Adamas entities and the Q1 of 2022. GAAP net earnings were $16,900,000 for the Q1 of 2023 or $0.29 per diluted share compared to $25,600,000 or $0.43 per diluted share in the same period last year. On a non GAAP basis, which excludes amortization of intangible assets, share based compensation, Consingent consideration, expense gain and depreciation adjusted operating earnings was $30,500,000 compared to $28,000,000 in the same period the previous year. Speaker 300:10:36As of March 31, 2023, the company had approximately $686,500,000 in cash, cash equivalents, restricted cash and marketable securities compared to $555,200,000 as of December 31, 2022. The increase was primarily due to cash generated from operations and the net amount drawn on the line of credit to fund the convertible note payoff. In November 2023, the company paid The total principal amount of $402,500,000 due under its convertible senior notes, in addition to payment of the remaining outstanding interest due of $1,300,000 Following the repayment, the 2023 notes are no longer outstanding. The repayment of the 2023 notes at maturity was financed primarily with available cash on hand and to a lesser extent through a borrowing under the company's existing credit line agreement. We expect to fully repay the borrowing from the credit line by the end of the second quarter of this year. Speaker 300:11:43Now turning to guidance. For full year 2023, the company is raising the expected ranges of full year GAAP and non GAAP operating earnings and lowering the expected range of combined R and D and SG and A expenses. For the year ended 2023, the company reiterates its prior financial guidance for total revenue. As such, We expect total revenue to range from $580,000,000 to $620,000,000 comprised of net product sales and royalty revenue. As Jack mentioned, we continue to expect net product sales of Trokendi XR in the range of approximately $60,000,000 to 80,000,000 For the full year 2023, we now expect combined R and D and SG and A expenses to range from $450,000,000 to $480,000,000 compared to the prior guidance of $460,000,000 to 490,000,000 As we mentioned previously, the sales force expansion to support the growth of Calvary was initiated in 2023, with most of the expense related to expansion starting in the Q2 of this year. Speaker 300:12:52We expect to further invest in commercial initiatives for Calgary during the back to school season, along with investments for other growth products. We now expect full year GAAP operating loss in the range of 10,000,000 to $30,000,000 compared to previous guidance of an operating loss of $25,000,000 to 50 And finally, we expect non GAAP operating earnings to range from $75,000,000 to $100,000,000 compared to the previous guidance of $65,000,000 to 95,000,000 Please refer to the earnings press release issued prior to this call that identifies the various ranges of reconciling items between GAAP and non GAAP. With that, I will now turn the call back over to the operator for Q and A. Operator00:13:39Thank you. At this time, we will conduct a question and answer session. And wait for your name to be announced. Our first question comes from the line of Andrew Tsai of Jefferies. Your line is now open. Speaker 400:14:11Okay, great. Thanks everyone and great quarter. I appreciate you taking my questions. So the first one is that Congratulations on locking in that major PBM contract, I think effective January 2023. So maybe remind us the latest and greatest thinking on When we can expect that target of 50% to 50% 55% gross to net to occur, basically, is it fair to assume That range could happen this year or could it take a little bit longer than that? Speaker 400:14:45Thanks. Speaker 200:14:48Yes. Hi, Andrew. Regarding the second contract, it became effective in the Q1 of 2023. Now, we didn't see the full effect of that contract or a lot of the effect of the contract because also you always have opposing factors within the Q1 because of the high deductibles, insurance, higher co pays and so forth. So we certainly expect the full impact of this 2nd PBM contract more in the 2nd quarter and obviously even better in the Q3 and Q4. Speaker 200:15:21So To answer the question, clearly, as we progress through the year, we expect the gross to net to improve And definitely get us closer to the fifty-fifty 5 by year end. So it's going to be, is it linear most likely? I mean that's typically what we see in our Business improvement in the gross to net, with Q1 typically at the worst level and then improvement throughout of the year. So certainly that's what we expect on Calvary moving along from the early 60% gross to net Towards the 55% or even 50% hopefully by year end. Speaker 400:15:59Right. Very clear. And then maybe just one more then is Would you agree based on your guidance, if we backed out all of your products with reasonable assumptions, including Trokendi, which you've Got it too, Oxtellar and so forth. Would you agree that Calvary sales can maybe more than double and if not almost triple This year? And if that's the case, I know it's you're not trying to provide guidance, but directionally speaking, if that's the case, Then is it fair to assume Calvary's sales should accelerate on a quarterly basis going forward? Speaker 400:16:38That's just the root of my question. Thank you. Speaker 200:16:42Yes. The short answer is yes. I mean, we do expect Calvary to accelerate As the year goes on and especially of course as we also get closer to the back to school season on top of all that, Yes, it is more than double than last year. That's an easy answer actually given last year's performance. And We've made several comments this quarter and even the last quarter, obviously about the different dynamics in the marketplace that are helping us And are expected to continue to fuel the growth behind the brand from the market itself being very healthy market, HD market, Then clearly, from a managed care perspective, continued improvement on the coverage, the Continued increase in the WACC average wholesale acquisition cost And of course, the expansion in our sales force and so forth and the improved coverage from an ADHD market perspective. Speaker 200:17:45So all these Our point pointing and aligned in one direction, which is really continue to push Calvary and increase the momentum and the growth behind the product. Speaker 400:17:57Thank you, Jack. Operator00:17:58Okay. One moment for our next question. Next question comes from David Amsellem of Piper Sandler. Your line is now open. Speaker 500:18:15Hey, thanks. So on Calvary, can you talk about, Jack, where you see the mix between Adults and peds evolving over time and I may have missed on your prepared remarks what you said on the current mix between adults in Peds. But just talk about where you think that mix is going to go over time. Secondly, can you provide some more specifics Where you need to improve upon in terms of managed care access? And then 3rd, just real quick on Oxtellar, I believe you have A generic filing a trial on a generic filing pending. Speaker 500:18:57So just wanted to get your thoughts on That and the relative risk of potentially an earlier than expected loss of exclusivity on Xceler? Thank you. Speaker 200:19:10Yes, sure. On the first question for Calgary and the mix of the business, I mean, where we are right now, we are about Somewhere between 28%, 30% adult and the rest being pediatric. The market itself, if you remember, it's basically almost the other way around, where the bulk of it is adult Around 67% and pediatric around 33%. So clearly as time goes on, we continue to expect to grow our business And will it eventually mimic exactly the market? We don't know for sure. Speaker 200:19:50Obviously, we're still early in the adult launch. Certainly, we've done extremely well and we're very happy with the adult launch. And also right now looking at the mix right now versus looking at it in the fall with the back to Full season, the mix may flip a little bit because you have a little bit more momentum behind the pediatric business in the back to school season. So these ratios are going to shift over time and continue to shift. But at some point, we will find ourselves Probably closer to the market, but may not mimic it exactly. Speaker 200:20:23Regarding the next question on the managed care improvement, I mean, that is All is an ongoing process. I mean, we will continue our discussions with other PBMs and continue to add contracts where it makes sense and Where it is reasonable for us to enter these contracts, same thing with the Medicaid and the different states. It's an ongoing process where we always look for improving our position over time. And clearly, as time goes on, as utilization goes up, as we continue to be successful as we've Then in the last couple of years improving and growing the prescriptions in a really solid way that even gives us further to go back and renegotiate contracts or try to improve our position as time goes on. Regarding Oxtellar XR and the generic situation, we basically have 3 generic companies where we are We have sued these 3 generic entrants that wanted to come in on Oxtellar XR. Speaker 200:21:26We are in the middle of litigations. I can't really come One way or the other, but there is certainly a risk on Oxtellar XR that we may be able to maintain exclusivity till the end of the patent expiration, which is 2027 or we may not. So we really don't know. We will certainly update The Street on how things Progress or don't progress or whether any settlements occur, if they do occur. So certainly at this moment, there is nothing really I can But we will definitely report or announce anything if anything comes up. Speaker 200:22:01But certainly there is a risk for us on Oxtellar XR as time goes on. And I don't know if I missed, was there a question on Trokendi, XOLLO? Speaker 500:22:11No, that's it. Just on On Oxtellar, if I may just follow-up real quick. I mean, I believe you had prior litigation that you did win, if I'm not mistaken. Is that just a quick refresher on that? Speaker 200:22:24Yes, sure. The first two generics that filed on Oxtellar X are TWI and Actavis, which is now Teva. We actually Went to court on these two cases and we won in both cases all the way through appeal. So that is correct. That was back in the 2016, 2017 timeframe when those cases were resolved actually in our favor. Speaker 200:22:49So this is a second wave of generics that have filed in the last 2 to 3 years and we are in litigation with the 2nd wave of the generics. Speaker 500:23:00Okay. That's helpful. Thank you, Jack. Yes. Operator00:23:04Okay. Thank you for the question. Our next question comes from Annabel Samimy of Stifel, your line is now open. Speaker 600:23:28Hi, this is Jack on for Annabel. Thanks for taking our questions. Could you talk a little bit about the GOCOVRI launch and how that's going relative to your expectations? You seem to have a pretty refined message that you can treat both the OFF episodes and the dyskinesia. Are Physicians receptive to that or do they only want to talk about how to maximize treatment of the OFF periods? Speaker 600:23:51Is there any friction there? Speaker 200:23:55Yes, sure. Yes, I mean, we've been very pleased with the GOCOVRI and the response we've been getting from the market From physicians regarding the unique positioning of the product, its unique profile, which is it's the only product in Parkinson's that is Proved to treat dyskinesia and off episodes. And obviously, this quarter also was fairly solid, given again, it's a first Which typically we have the headwinds of insurance and everything else that goes on in our business in the Q1, we're very happy with recovery delivering 15% Growth versus last year, and that's on top of the 19% growth that it delivered last year. And as far as the message itself and the positioning, it really depends on the physician, their practice, How they treat Parkinson's? Are they actually movement disorder specialists or are they general neurologists? Speaker 200:24:55So the discussion in the physician's office Sometimes it's a little bit different depending on the specialty. But overall, there is a lot of education that has to occur and that continue to do that from a market education perspective, really helping physicians discuss The real issues bring up the issue of dyskinesia. Patients sometimes on their own, they're not aware That actually dyskinesia is caused by a lot of the medications they're on. They might think actually dyskinesia is part of the disease and therefore they don't raise it, they don't talk about it, they don't ask physicians about it, physicians don't ask the patients about it. So we try to Improve the education in the marketplace to make sure that is brought up in the conversation between the patient and the physician, So that people can be aware of the fact that it is an issue. Speaker 200:25:48It can be dealt with. There is a product that actually treats it And not only treat the Skinesia, but also treat the OFF episode. And there is really no need to have a trade off here between The efficacy of a lot of these Parkinson's agents, specifically levodopacarbidopa, what we're talking about here, there is really no need for the physician To taper off or reduce the dose of levodopa, carbidopa to get rid of dyskinesia, you can always add GOCOVRI, Treat the dyskinesia, but even also get efficacy on the off episodes at the same time. It's a beautiful solution that people if they Really understand the situation. They can have great results with GOCOVRI. Speaker 200:26:31So, it's just a matter of continued education, continue that unique positioning that GOCOVRI holds in the market and I think so far the results speak for themselves As far as the uniqueness of the product and its continued benefit in the marketplace. Speaker 600:26:49Got it. And then if I could just ask one more. On Calabri, do you have a granular breakdown of where those prescriptions are coming from in terms of naive patients versus switches From stimulants or non stimulants? And now with the increasing volumes that you're getting, are payers becoming more permissive with Describing or are they still requiring Step Edit? Speaker 200:27:14Yes. Regarding the source of the business on Calvary, It really cuts in so many different ways, but basically about 29% of the business is from new patients And the remaining 71% is switching patients from existing medications or adding Calvary to the existing medication. And when you look at the switches themselves, 65% of the Switching is coming from the stimulants and 35% of the switching is coming from non stimulants. And that is actually a very, very encouraging fact. And looking at the source of the business, we are actually drawing a lot of patients from the stimulant side. Speaker 200:28:04A lot of it is due to the AEs that People cite AEs mainly as one of the major driver actually behind it. And of course, in kids or pediatric, It's also the parents not willing to put their kids on controlled substances on top of all that. So we're very encouraged by this trend and it continues to be that way even from the time we started launching the product in Peas and in Adults. And then as far as the payers and the Step edit and so forth. I mean, it's a really mixed bag. Speaker 200:28:36The first PBM contract we had, it's actually Tier 2 preferred. There is no step through. The second one has a minor step through. But again, if you think about the market, let's say 90% of it is Stimulant, so if you have to go through a stimulant that's really not much of an issue. If you have to go through a non stimulant, it might just delay your Initiation on Calvary by 3 weeks, 4 weeks or whatever until when you are dissatisfied with the first non stimulant clearly. Speaker 200:29:06So It is a mixed bag. Different plans have different formularies, different step throughs or PAs and so forth. And we can back to my previous answer on the previous question, that is some of the things that we continue to work on and to keep to improve on the coverage and minimize these step throughs or the different medications patients have to go through before getting Calvary. Speaker 600:29:32Very helpful. Thank you. Operator00:29:35Sure. Okay. Seeing no further questions, I would now like to turn it back to Jack Qatar for closing comments. Speaker 200:29:44Yes. In concluding our call this afternoon, I would like to Despite the significant erosion of Trokendi XR due to the entry of generics and the typical insurance headwinds, We are confident that our growth products will allow us to offset the impact coming from the loss of exclusivity of Trokendi XR and to return to Revenue and operating income growth in 2024 and beyond. Thanks so much for joining us this afternoon. We look forward to updating you on our next call.Read morePowered by