On February 28, 2022 Supernus Pharmaceuticals, Inc. (Nasdaq: SUPN), a biopharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases, reported preliminary financial results for the fourth quarter and full year of 2021, and associated Company developments (Press release, Supernus, FEB 28, 2022, View Source [SID1234609149]).

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Net Product Sales

For full year 2021, preliminary net product sales were $567.5 million, an 11% increase over $509.3 million for the full year 2020. The increase was primarily due to the acquisition of the CNS portfolio of US WorldMeds in June 2020, growth in net product sales of Oxtellar XR, the launch of Qelbree in the second quarter of 2021, and net product sales of GOCOVRI (amantadine) from the acquisition of Adamas Pharmaceuticals, Inc. (Adamas) in November 2021.

Preliminary fourth quarter 2021 net product sales were $155.0 million, a 10% increase over $140.7 million in the same period in 2020. The increase was primarily due to net product sales of GOCOVRI from the acquisition of Adamas in November 2021, the launch of Qelbree in the second quarter of 2021, and growth in net product sales of Oxtellar XR.

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(1) Includes net product sales of MYOBLOC, XADAGO and Osmolex ER.

The fourth quarter and full year 2021 revenue results included herein are preliminary and are therefore subject to change.

Qelbree Launch Update

Total IQVIA prescriptions were 34,328 in the fourth quarter of 2021, an increase of 122% compared to total prescriptions of 15,453 in the third quarter of 2021. In January 2022, the most recent month available, total prescriptions reached 14,177.
Total prescriptions are showing a quarter-to-date (first seven weeks) sequential growth rate of 42% in the first quarter 2022 versus the corresponding same seven-week period in the fourth quarter of 2021.
Qelbree continues to expand its base of prescribers, with over 5,600 prescribers in the fourth quarter of 2021, up from 3,470 prescribers from the third quarter of 2021.
Continued progress in securing and improving managed care coverage.
Preparations for the potential launch in the adult market are well underway, assuming timely approval by the U.S. Food and Drug Administration (FDA) of the supplemental New Drug Application (sNDA) for the adult indication.
Acquisition of Adamas Pharmaceuticals, Inc.

The Company completed the acquisition of Adamas in late November 2021, strengthening its Parkinson’s disease portfolio with two marketed products, including GOCOVRI extended release capsules, the first and only FDA-approved medicine indicated for the treatment of both "off" episodes and dyskinesia in patients with Parkinson’s disease receiving levodopa-based therapy. In addition, the acquisition diversifies and increases the Company’s revenue base and cash flow.
Total prescriptions for GOCOVRI in January 2022 grew by 30% compared to January 2021.
Product Pipeline Update

Qelbree (viloxazine, extended-release capsules) – Novel non-stimulant for the treatment of ADHD in adults

In September 2021, the FDA acknowledged it received the sNDA for Qelbree for the treatment of ADHD in adult patients. The sNDA has a user fee target action date (PDUFA date) in late April 2022.
SPN-830 (apomorphine infusion device) – Continuous treatment of motor fluctuations ("on-off" episodes) in Parkinson’s disease (PD)

The Company received notice from the FDA that its New Drug Application (NDA) resubmission for SPN-830 for the continuous treatment of motor fluctuations ("off" episodes) in Parkinson’s disease is considered a Standard Review, thereby assigning a timeline of 10 months for review by the FDA and establishing a PDUFA target action date in early October 2022.
The Company will work closely with the FDA as it reviews the SPN-830 NDA. The Company is preparing for the commercial launch of SPN-830 in the first quarter of 2023, assuming timely approval by the FDA.
SPN-820 – Novel first-in-class activator of mTORC1

The Company has initiated a Phase II multicenter, randomized double-blind placebo-controlled parallel design study of SPN-820 in adults with treatment resistant depression. The study will examine the efficacy and safety of SPN-820 over a course of five weeks of treatment in approximately 400 patients. The primary outcome measure is the change from baseline to end of treatment period on the Montgomery-Asberg Depression Rating Scale (MADRS) Total Score, a standard depression rating scale.
SPN-817 – A novel product candidate for the treatment of epilepsy

A randomized Phase II clinical study of SPN-817 for the treatment of focal seizures is expected to start in the second half of 2022.
Financial Highlights

Fourth Quarter

For the three months ended December 31, 2021, preliminary combined research and development (R&D) and selling, general and administrative (SG&A) expenses are expected to range between $105.0 million and $110.0 million, as compared to $74.4 million for the same period in 2020. The expected increase is primarily due to activities to support the launch of Qelbree and transactions costs associated with the Adamas acquisition.

For the three months ended December 31, 2021, preliminary amortization of intangible assets expense are expected to range between $11.0 million and $12.0 million, as compared to $5.9 million for the same period in 2020. The expected increase is primarily due to amortization for the acquired intangible assets associated with the Adamas acquisition.

For the three months ended December 31, 2021, preliminary operating earnings are expected to range between $20.0 million and $25.0 million, as compared to $43.0 million for the same period in 2020. The expected decrease is primarily attributable to higher expenses to support the launch of Qelbree and transaction and other costs associated with the Adamas acquisition.

Full Year

For the full year ended December 31, 2021, preliminary combined R&D and SG&A expenses are expected to range between $377.0 million and $382.0 million, as compared to $276.6 million for full year 2020. The expected increase is primarily due to activities to support the launch of Qelbree and timing of both the Adamas and US WorldMeds acquisitions.

For the full year ended December 31, 2021, preliminary amortization of intangible assets expense is expected to range between $29.0 million and $30.0 million, compared to $15.7 million, for the same period in 2020. The expected increase is primarily due to amortization for the acquired intangible assets associated with the Adamas acquisition and the timing of the US WorldMeds acquisition.

For the full year ended December 31, 2021, preliminary operating earnings are expected to range between $100.0 million and $105.0 million, as compared to $173.7 million for full year 2020. The expected decrease is primarily due to increased costs and expenses to support the launch of Qelbree and the timing of the US WorldMeds acquisition.

Cash, cash equivalents and marketable securities

At December 31, 2021, the Company’s cash, cash equivalents, current and long-term marketable securities are approximately $458.8 million, compared to $772.9 million as of December 31, 2020. This decrease is primarily due to funding of the acquisition of Adamas, partially offset by cash flow from operations.

The financial information for the fourth quarter and full year 2021 included herein are preliminary and are therefore subject to change.

Full Year 2021 Financial Information

The Company currently anticipates it will require additional time to finalize its financial statements for the year ended December 31, 2021. Accordingly, the Company currently anticipates it will be unable to file timely its Annual Report on Form 10-K for the year ended December 31, 2021 and that it will file a Form 12b-25 on March 1, 2022.

Full Year 2022 Financial Guidance (GAAP)

The Company expects to achieve the following financial objectives in 2022:

Amount ($ in millions)
Total revenues (1) $640 – $680
Combined R&D and SG&A expenses $460 – $490
Operating earnings (2) $20 – $40
Effective tax rate 25% – 28%
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(1) Includes net product sales and royalty revenue.
(2) Includes amortization of intangible assets and contingent consideration expense (gain).

Full Year 2022 Financial Guidance — GAAP to Non-GAAP Adjustments

An itemized reconciliation between projected operating earnings on a GAAP basis and projected operating earnings on a non-GAAP basis is as follows:

Non-GAAP Outlook

In providing an outlook for non-GAAP operating earnings, we exclude certain items which are otherwise included in determining the comparable GAAP financial measures. In order to inform our outlook measures of non-GAAP operating earnings, a description of the 2022 adjustments which have been applicable in determining non-GAAP operating earnings for the period are reflected in the tables above. In providing an outlook for non-GAAP operating earnings, we adjust for non-cash share-based compensation expense, depreciation and amortization, and accretion of contingent consideration. We are providing such outlook on a non-GAAP basis because we believe it is useful supplemental information to investors and others in understanding and evaluating operating results and trends in our business that could otherwise be masked by the effect of the expenses that we exclude.

We use the outlook measure of non-GAAP operating earnings to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes and to evaluate our financial performance and the ability to generate cash from operations. We believe the outlook measure of non-GAAP operating earnings allows for meaningful period-to-period comparisons and analysis of trends in our business, as they exclude expenses that are not reflective of ongoing operating results.

There are limitations associated with the use of the non-GAAP financial measure. The Company’s method for calculating the non-GAAP financial measure may differ from those used by other companies, and therefore comparability may be limited. We mitigate the limitations by reconciling the non-GAAP financial measures to the most comparable GAAP financial measures. The non-GAAP financial measure should be considered in addition to, not as a substitute for or in isolation from, or superior to measures prepared in accordance with GAAP. Investors are encouraged to review the reconciliation.

Conference Call Details

Supernus will host a conference call and webcast today, February 28, 2022, at 4:30 p.m. Eastern Time to discuss these results.

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.