Supernus Announces Third Quarter 2022 Financial Results
11/08/2022 - 04:05 PM
Third quarter 2022 total revenues of $177.4 million , a 19% increase compared to third quarter 2021 Increasing full year 2022 operating earnings guidance to $35 million to $45 million , from $20 million to $40 million previously Increasing full year 2022 total revenues guidance to $650 million to $680 million , from $640 million to $680 million previously Qelbree® continued its growth trajectory, with 94,328 prescriptions in third quarter 2022, a 50% increase compared to second quarter 2022 Third quarter 2022 Qelbree net product sales of $18.3 million increased 65% compared to second quarter of 2022; First nine months 2022 Qelbree net product sales were $37.7 million Third quarter 2022 GOCOVRI® net product sales of $27.9 million increased 16% compared to net product sales reported by Adamas Pharmaceuticals, Inc. (Adamas) in third quarter of 2021; First nine months 2022 GOCOVRI net product sales of $75.2 million increased 22% compared to net product sales reported by Adamas in the first nine months of 2021 ROCKVILLE, Md., Nov. 08, 2022 (GLOBE NEWSWIRE) -- Supernus Pharmaceuticals, Inc. (Nasdaq: SUPN), a biopharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases, today announced financial results for the third quarter of 2022, and associated Company developments.
Qelbree Launch Update
Total IQVIA prescriptions were 94,328 in the third quarter of 2022, an increase of 50% compared to total prescriptions of 62,938 in the second quarter of 2022. In September 2022, the most recent month available, total prescriptions reached 34,633. Qelbree continues to expand its base of prescribers, with approximately 14,265 prescribers in the third quarter of 2022, up from 9,276 prescribers from the second quarter of 2022. Product Pipeline Update
SPN-830 (apomorphine infusion device) - Continuous treatment of motor fluctuations (“off” episodes) in Parkinson's disease (PD)
In October 2022, the Company announced the U.S. Food and Drug Administration (FDA) issued a Complete Response Letter (CRL) for the SPN-830 New Drug Application (NDA). The CRL does not request additional efficacy and safety clinical studies, but rather requires additional information and analysis related to the infusion device and drug product across several areas of the NDA, including labeling, product quality and manufacturing, device performance and risk analysis. In addition, the FDA mentions that approval of the NDA requires inspections that could not be completed in a timely manner due to COVID-19 travel restrictions. Supernus will continue to work closely with its partners and the FDA to address all questions, and when possible, provide clarity regarding the potential timing of a resubmission of the NDA. The FDA has made an initial determination that the amendment to the Company’s application in response to the CRL will be subject to a Class 2, or six-month, review timeline. 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
An open-label Phase II clinical study of SPN-817 in patients with treatment-resistant seizures is expected to start in the fourth quarter of 2022. Financial Highlights
Net Product Sales
For the three months ended September 30, 2022, net product sales were $172.7 million , a 19% increase over net product sales of $145.5 million for the same period in 2021. For the nine months ended September 30, 2022, net product sales were $485.6 million , an 18% increase over net product sales of $412.5 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 and Oxtellar XR.
The following table provides information regarding net product sales during the three and nine months ended September 30, 2022 and 2021 (dollars in millions):
Three Months Ended September 30 Nine Months Ended September 30 2022 2021 Change % 2022 2021 Change % Net product sales Trokendi XR® $ 69.6 $ 80.9 (14 )% $ 204.0 $ 231.5 (12 )% Oxtellar XR® 30.5 29.7 3 % 88.0 82.1 7 % GOCOVRI(1) 27.9 — ** 75.2 — ** Qelbree 18.3 2.4 ** 37.7 2.7 ** APOKYN® 18.3 24.6 (26 )% 57.2 73.3 (22 )% Other(2) 8.1 7.9 3 % 23.5 22.9 3 % Total net product sales $ 172.7 $ 145.5 19 % $ 485.6 $ 412.5 18 %
___________________________________________(1) The Company acquired Adamas Pharmaceuticals, Inc. in November 2021 (the "Adamas Acquisition").(2) Includes net product sales of MYOBLOC® , XADAGO® and Osmolex ER® .
Operating earnings (GAAP and non-GAAP)
For the three months ended September 30, 2022, operating loss (GAAP) was $1.5 million , as compared to operating earnings (GAAP) of $32.6 million for the same period in 2021. For the nine months ended September 30, 2022 operating earnings (GAAP) were $11.8 million , as compared to $79.9 million for the same period in 2021. The decreases in both periods were primarily due to activities to support the launch of Qelbree to the adult population, the Qelbree direct-to-consumer campaign, which substantially occurred in the third quarter of 2022, and amortization of acquired intangible assets from the Adamas Acquisition.
For the three months ended September 30, 2022, adjusted operating earnings (non-GAAP) were $25.4 million , compared to $43.3 million in the third quarter of 2021. For the nine months ended September 30, 2022, adjusted operating earnings (non-GAAP) were $91.1 million , compared to $106.0 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 September 30 Nine Months Ended September 30 2022 2021 2022 2021 Operating earnings (loss) - As Reported (GAAP) $ (1.5 ) $ 32.6 $ 11.8 $ 79.9 Adjustments: Amortization of intangible assets 20.6 6.0 61.9 18.0 Share-based compensation 5.0 4.0 13.3 13.9 Contingent consideration expense (gain) 0.5 0.1 1.9 (7.7 ) Depreciation 0.8 0.6 2.2 1.9 Operating earnings - As Adjusted (non-GAAP) $ 25.4 $ 43.3 $ 91.1 $ 106.0
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, and depreciation. The increase in amortization of intangible assets for the three and nine months period ended September 30, 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 September 30, 2022, net earnings (GAAP) and diluted earnings per share (GAAP) were $1.7 million and $0.03 , respectively, as compared to $21.6 million , or $0.40 per diluted share, in the same period in 2021.
For the nine months ended September 30, 2022, net earnings (GAAP) and diluted earnings per share (GAAP) were $35.2 million and $0.62 , respectively, as compared to $51.0 million , or $0.94 per diluted share, in the same period in 2021.
Cash, cash equivalents and marketable securities
At September 30, 2022, the Company’s cash, cash equivalents, current and long-term marketable securities are approximately $523.7 million , compared to $458.8 million as of December 31, 2021. This increase was primarily due to cash generated from operations.
Full Year 2022 Financial Guidance (GAAP)
For full year 2022, the Company is raising the midpoint and narrowing the expected ranges of full year 2022 financial guidance for total revenues and operating earnings (GAAP). The Company’s revised full-year 2022 financial guidance is set forth below (dollars in millions):
Amount Total revenues (1) $650 - $680 Combined R&D and SG&A expenses $460 - $475 Operating earnings (2) $35 - $45
___________________________________________(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 (dollars in millions):
Amount Operating earnings - GAAP $35 - $45 Adjustments: Amortization of intangible assets $80 - $84 Share-based compensation $16 - $20 Contingent consideration $2 - $3 Depreciation $2 - $3 Operating earnings - non-GAAP $135 - $155
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 2022 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, November 8, 2022, 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.
About Supernus Pharmaceuticals, Inc.
Supernus Pharmaceuticals is a biopharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases.
Our diverse neuroscience portfolio includes approved treatments for epilepsy, migraine, ADHD, hypomobility in PD, cervical dystonia, chronic sialorrhea, dyskinesia in PD patients receiving levodopa-based therapy, and drug-induced extrapyramidal reactions in adult patients. We are developing a broad range of novel CNS product candidates including new potential treatments for hypomobility in PD, epilepsy, depression, and other CNS disorders.
For more information, please visit www.supernus.com .
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 commercialize its products including Qelbree; 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; the Company’s ability to increase the number of prescriptions written for each of its products and the products of Adamas; the Company’s ability to increase its net revenue from its products and the products of Adamas; 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 data)
September 30, December 31, 2022 2021 (unaudited) Assets Current assets Cash and cash equivalents $ 111,492 $ 203,434 Marketable securities 280,297 136,246 Accounts receivable, net 164,086 148,932 Inventories, net 83,165 85,959 Prepaid expenses and other current assets 24,846 27,019 Total current assets 663,886 601,590 Long-term marketable securities 131,937 119,166 Property and equipment, net 15,872 16,955 Intangible assets, net 722,761 784,693 Goodwill 117,383 117,516 Other assets 41,290 49,232 Total assets $ 1,693,129 $ 1,689,152 Liabilities and stockholders’ equity Current liabilities Accounts payable and accrued liabilities $ 110,302 $ 117,683 Accrued product returns and rebates 158,470 132,724 Contingent consideration, current portion 47,590 44,840 Convertible notes, net(a) 401,438 — Other current liabilities 8,187 20,132 Total current liabilities 725,987 315,379 Convertible notes, net(a) — 379,252 Contingent consideration, long-term 9,781 35,637 Operating lease liabilities, long-term 36,028 41,298 Deferred income tax liabilities(a) 58,164 85,355 Other liabilities 10,371 16,380 Total liabilities 840,331 873,301 Stockholders’ equity Common stock, $0.00 1 par value; 130,000,000 shares authorized; 54,053,513 and 53,256,094 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively 54 53 Additional paid-in capital(a) 401,026 434,337 Accumulated other comprehensive earnings (loss), net of tax (4,046 ) 1,539 Retained earnings(a) 455,764 379,922 Total stockholders’ equity 852,798 815,851 Total liabilities and stockholders’ equity $ 1,693,129 $ 1,689,152
______________________________(a) Effective January 1, 2022, the Company adopted the simplified convertible instruments accounting guidance (ASU 2020-06), which impacted the treatment of our Convertible Senior Notes Due 2023. The adoption of ASU 2020-06 increased the carrying amount of the convertible notes, net by $20.6 million , increased retained earnings by $40.6 million , reduced additional paid-in capital by $56.2 million , and decreased deferred tax liabilities by $5.0 million as of January 1, 2022.
Supernus Pharmaceuticals, Inc. Condensed Consolidated Statements of Earnings (in thousands, except share and per share data)
Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (unaudited) (unaudited) Revenues Net product sales $ 172,724 $ 145,532 $ 485,647 $ 412,541 Royalty revenues 4,629 2,932 14,263 8,184 Total revenues 177,353 148,464 499,910 420,725 Costs and expenses Cost of goods sold(a) 25,878 18,085 64,267 58,067 Research and development 19,554 19,654 56,778 69,389 Selling, general and administrative 112,314 72,032 303,249 203,024 Amortization of intangible assets 20,644 6,009 61,932 17,964 Contingent consideration expense (gain) 486 80 1,894 (7,650 ) Total costs and expenses 178,876 115,860 488,120 340,794 Operating earnings (loss) (1,523 ) 32,604 11,790 79,931 Other income (expense) Interest expense (1,724 ) (5,925 ) (5,476 ) (17,489 ) Interest and other income, net 2,803 2,281 19,289 8,682 Total other income (expense) 1,079 (3,644 ) 13,813 (8,807 ) Earnings (Loss) before income taxes (444 ) 28,960 25,603 71,124 Income tax (benefit) expense (2,193 ) 7,398 (9,627 ) 20,142 Net earnings $ 1,749 $ 21,562 $ 35,230 $ 50,982 Earnings per share Basic $ 0.03 $ 0.41 $ 0.66 $ 0.96 Diluted(b) $ 0.03 $ 0.40 $ 0.62 $ 0.94 Weighted average shares outstanding Basic 53,789,674 53,187,764 53,517,838 53,053,441 Diluted(b) 55,034,838 54,334,794 61,543,121 54,301,461
______________________________(a) Excludes amortization of acquired intangible assets(b) As a result of the adoption of ASU 2020-06 in January 1, 2022, for the 2022 periods presented, the Company used the if-converted method in calculating diluted earnings per share. The potential dilutive effect of the convertible notes, an increase of 6.8 million in dilutive shares, is included in the computation of diluted earnings (loss) per share if these are determined to be dilutive for the respective period.
CONTACTS:
Jack A. Khattar, President and CEO
or
INVESTOR CONTACT:
