On February 28, 2023 Supernus Pharmaceuticals, Inc. (Nasdaq: SUPN), a biopharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases, reported financial results for the fourth quarter and full year of 2022 and associated Company developments (Press release, Supernus, FEB 28, 2023, View Source [SID1234627878]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"In 2022, we continued to execute on our long-term growth strategy focusing on successfully transitioning from our legacy and mature products to our growth products, and finished the year with record revenues of $667.2 million, up 15% from the prior year," said Jack Khattar, President and CEO of Supernus. "Based on this successful transition and with a solid foundation, we are confident that our growth drivers will allow us to offset the impact coming from loss of exclusivity for Trokendi XR and position us well to drive strong revenue and non-GAAP operating income growth in 2024 and beyond."
Qelbree Update
Total IQVIA prescriptions were 117,635 in the fourth quarter of 2022, an increase of 24% compared to total prescriptions of 94,681 in the third quarter of 2022. In January 2023, the most recent month available, total prescriptions reached 42,881.
Continued healthy growth in the U.S. attention-deficit hyperactivity disorder market with 2022 total number of prescriptions reaching more than 90 million, an increase of 9% compared to 2021, according to IQVIA.
The average wholesale acquisition cost per Qelbree prescription continued to increase in the fourth quarter of 2022, driven by increases in the average daily dose and prescription size.
Executed a second significant pharmacy benefit manager contract effective January 2023, and continued making progress in securing and improving managed care coverage.
Qelbree continues to expand its base of prescribers, with approximately 16,822 prescribers in the fourth quarter of 2022, up from 14,265 prescribers from the third quarter of 2022.
Product Pipeline Update
SPN-830 (apomorphine infusion device) – Continuous treatment of motor fluctuations ("off" episodes) in Parkinson’s disease (PD)
The Company will be meeting with the U.S. Food and Drug Administration (FDA) in April 2023 to discuss the Complete Response Letter received in October 2022. We will announce the timing for our resubmission after our discussion with the FDA.
SPN-820 – Novel first-in-class activator of mTORC1
The Phase II multi-center, randomized double-blind placebo-controlled parallel design study of SPN-820 in adults with treatment-resistant depression is ongoing. The study will examine the efficacy and safety of SPN-820 over a course of five weeks of treatment in approximately 270 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
The Company has commenced an open-label Phase II clinical study of SPN-817 in patients with treatment-resistant seizures. Depending on the rate of enrollment, the Company expects to have data in the first half of 2024.
Financial Highlights
Net Product Sales
For the three months ended December 31, 2022, net product sales were $163.8 million, a 6% increase over net product sales of $155.0 million for the same period in 2021. For the full year ended December 31, 2022, net product sales were $649.4 million, a 14% increase over net product sales of $567.5 million for the same period in 2021. The increases in both periods were primarily due to net product sales of GOCOVRI and growth in net product sales of Qelbree.
The following table provides information regarding net product sales during the three months and full year ended December 31, 2022 and 2021 (dollars in millions):
Three Months Ended
December 31, Full Year Ended
December 31,
2022 2021 Change % 2022 2021 Change %
Net product sales
Trokendi XR $ 57.2 $ 73.3 (22 )% $ 261.2 $ 304.8 (14 )%
Oxtellar XR 27.4 28.6 (4 )% 115.4 110.7 4 %
GOCOVRI(1) 29.2 9.8 ** 104.4 9.8 **
Qelbree 23.6 7.2 228 % 61.3 9.9 519 %
APOKYN 18.1 25.9 (30 )% 75.3 99.2 (24 )%
Other(2) 8.3 10.2 (19 )% 31.8 33.1 (4 )%
Total net product sales $ 163.8 $ 155.0 6 % $ 649.4 $ 567.5 14 %
___________________________________________
(1) Net product sales as of the acquisition of Adamas Pharmaceuticals, Inc. by the Company (the "Adamas Acquisition") in November 2021.
(2) Includes net product sales of MYOBLOC, XADAGO and Osmolex ER.
** Percentage not meaningful for comparative purposes since net product sales for 2021 included revenues from date of Adamas Acquisition.
Operating earnings (GAAP and non-GAAP)
For the three months ended December 31, 2022, operating earnings (GAAP) was $34.3 million, as compared to operating earnings (GAAP) of $6.1 million for the same period in 2021. The increase was primarily due to full quarter net product sales of the commercial products acquired through the Adamas Acquisition and decreased selling, general and administrative expense due to the Adamas Acquisition-related costs incurred in 2021. For the full year ended December 31, 2022 operating earnings (GAAP) were $46.1 million, as compared to $86.0 million for the same period in 2021. The decrease was primarily due to activities to support the launch of Qelbree to the adult population and amortization of acquired intangible assets from the Adamas Acquisition.
For the three months ended December 31, 2022, adjusted operating earnings (non-GAAP) were $57.6 million, compared to $46.2 million in the fourth quarter of 2021. For the full year ended December 31, 2022, adjusted operating earnings (non-GAAP) were $148.8 million, compared to $167.3 million for the same period of 2021.
Reconciliation of GAAP to Non-GAAP Adjustments
An itemized reconciliation between operating earnings on a GAAP basis and operating earnings on a non-GAAP basis is as follows (dollars in millions):
Three Months Ended
December 31, Full Year Ended
December 31,
2022 2021 2022 2021
Operating earnings – As Reported (GAAP) $ 34.3 $ 6.1 $ 46.1 $ 86.0
Adjustments:
Amortization of intangible assets 20.7 12.0 82.6 30.0
Share-based compensation 4.3 4.0 17.6 17.9
Contingent consideration expense (gain) (2.4 ) 1.1 (0.5 ) (6.5 )
Acquisition-related costs — 22.3 — 22.3
Other R&D — — — 15.0
Depreciation 0.7 0.7 3.0 2.6
Operating earnings – As Adjusted (non-GAAP) $ 57.6 $ 46.2 $ 148.8 $ 167.3
Non-GAAP operating earnings adjusts for non-cash items including amortization of intangible assets, share-based compensation expense, change in fair value of contingent consideration, depreciation, and non-recurring costs. Acquisition-related costs reflect non-recurring acquisition-related costs associated with the Adamas Acquisition. Other R&D reflects a non-cash expense related to the equity investment in Navitor due to the accounting impact of the March 2021 Navitor corporate restructuring. The increase in amortization of intangible assets for the three and twelve month periods ended December 31, 2022 was due to the amortization of acquired intangible assets from the Adamas Acquisition in November 2021.
Net earnings (GAAP)
For the three months ended December 31, 2022, net earnings (GAAP) and diluted earnings per share (GAAP) were $25.5 million and $0.43, respectively, as compared to $2.4 million, or $0.04 per diluted share, in the same period in 2021.
For the full year ended December 31, 2022, net earnings (GAAP) and diluted earnings per share (GAAP) were $60.7 million and $1.04, respectively, as compared to $53.4 million, or $0.98 per diluted share, in the same period in 2021.
Balance sheet
At December 31, 2022, the Company’s cash, cash equivalents, current and long-term marketable securities are approximately $555.2 million, compared to $458.8 million as of December 31, 2021. This increase was primarily due to cash generated from operations.
In February 2023, the Company entered into a credit line agreement with UBS Bank USA providing the Company an uncommitted demand secured line of credit of up to $150.0 million, which can be drawn at any time.
Full Year 2023 Financial Guidance (GAAP)
The Company’s full year 2023 total revenue guidance represents approximately 30% growth at the midpoint compared to full year 2022, excluding revenues of Trokendi XR in both periods. The Company’s full-year 2023 financial guidance is set forth below (dollars in millions):
Amount
Total revenues (1) (Includes $60 million to $80 million of Trokendi XR(2)) $580 – $620
Combined R&D and SG&A expenses $460 – $490
Operating loss (3) $(50) – $(25)
___________________________________________
(1) Includes net product sales and royalty revenue.
(2) Reflects generic entry on Trokendi XR in 2023.
(3) Includes amortization of intangible assets and contingent consideration expense (gain).
Full Year 2023 Financial Guidance – GAAP to Non-GAAP Adjustments
An itemized reconciliation between projected operating loss on a GAAP basis and projected operating earnings on a non-GAAP basis is as follows (dollars in millions):
Amount
Operating loss – GAAP $(50) – $(25)
Adjustments:
Amortization of intangible assets $80 – $80
Share-based compensation $20 – $23
Contingent consideration $10 – $12
Depreciation $5 – $5
Operating earnings – non-GAAP $65 – $95
Non-GAAP Financial Information
This press release contains a financial measure, non-GAAP operating earnings, which does not comply with United States generally accepted accounting principles (GAAP). 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. Non-GAAP operating earnings adjusts for non-cash share-based compensation expense, depreciation and amortization, and accretion of contingent consideration, and for factors that are unusual, non-recurring or unpredictable, and excludes those costs, expenses, and other specified items presented in the reconciliation tables in this press release. We believe the use of non-GAAP operating earnings is useful supplemental information to investors regarding the Company’s results of operations and assist management, analysts, and investors in evaluating the performance of the business. There are limitations associated with the use of non-GAAP financial measures. Including such measures may not be entirely comparable to similarly titled measures used by other companies, may not reflect all items of income and expense, as applicable, that affect our operations, potential differences among calculation methodologies, may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. We mitigate these limitations by reconciling the non-GAAP financial measure to the most comparable GAAP financial measure. Investors are encouraged to review the reconciliation. The Company’s financial guidance is also being provided on both a reported and a non-GAAP basis.
Conference Call Details
Supernus will host a conference call and webcast today, February 28, 2023, at 4:30 p.m. Eastern Time to discuss these results. A live webcast will be available in the Events & Presentations section of the Company’s Investor Relations website www.supernus.com/investors.
Participants may also pre-register any time before the call here. Once registration is completed, participants will be provided a dial-in number with a personalized conference code to access the call. Please dial in 15 minutes prior to the start time.
Following the live call, a replay will be available on the Company’s Investor Relations website www.supernus.com/investors. The webcast will be available on the Company’s website for 60 days following the live call.