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Supernus Announces Second Quarter 2019 Financial Results
[August 06, 2019]

Supernus Announces Second Quarter 2019 Financial Results


  • Total revenue of $104.7 million, a 5.2% increase over 2018
  • Net product sales of $102.4 million, a 5.5% increase over 2018
  • Operating earnings of $42.6 million, a 19.3% increase over 2018
  • Submission of New Drug Application for SPN-812 on track for the second half of 2019
  • Revising full year 2019 net product sales guidance range to $400 million - $410 million and full year 2019 operating earnings range to $150 million - $160 million

ROCKVILLE, Md., Aug. 06, 2019 (GLOBE NEWSWIRE) -- Supernus Pharmaceuticals, Inc. (NASDAQ: SUPN), a pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases, today reported financial results for the second quarter of 2019 and associated Company developments.

Commercial Update

Second quarter 2019 product prescriptions for Trokendi XR® and Oxtellar XR®, as reported by IQVIA, totaled 209,066, a 7.4% increase over the second quarter of 2018.

Prescriptions
 Q2 2019  Q2 2018 Change % 
Trokendi XR168,682  158,568 6.4%
Oxtellar XR40,384  36,066 12.0%
Total209,066  194,634 7.4%

Source:  IQVIA

Net product sales for the second quarter of 2019 were $102.4 million, a 5.5% increase over $97.0 million in the second quarter of 2018. Net product sales by product are as follows:

Net Product Sales
($ in millions)
 Q2 2019  Q2 2018Change %
Trokendi XR78,964  76,474 3.3%
Oxtellar XR23,394  20,556 13.8%
Total102,358  97,030 5.5%

“Prescription growth for Trokendi XR improved by 4.8% in the second quarter of 2019 as compared to the first quarter of 2019, but not to the degree we had expected,” said Jack Khattar, President and CEO of Supernus. “Following the abnormally large seasonal decline we experienced in the first quarter of 2019, reflecting the impact of high deductible managed care programs, prescription growth for Trokendi XR has been hindered by a moderate contraction in the overall topiramate market. In addition, sales deductions, particularly rebates, have not improved in the second quarter of 2019 relative to the first quarter of 2019 as we had expected, but have remained relatively flat.” Mr. Khattar added, “As a result, we are revising full year 2019 guidance for net product sales, and, to a lesser extent, operating earnings.”

Progress of Product Pipeline

SPN-812 - Novel non-stimulant for the treatment of ADHD

The Company concluded its pre-New Drug Application (NDA) clinical meeting with the U.S. Food and Drug Administration (FDA) in July 2019, and continues to expect to submit an NDA for SPN-812 in the second half of 2019. Pending FDA approval, the Company continues to expect to launch SPN-812 in the second half of 2020.
– The Company has advanced manufacture of SPN-812 to support the NDA submission and in preparation of commercial launch.
– A Phase III program in adult patients is anticipated to start in the fourth quarter of 2019.

SPN-810 - Novel treatment of Impulsive Aggression in patients with ADHD

– Enrollment in the Phase III P301 trial is complete, with data expected in the fourth quarter of 2019.
– Enrollment in the Phase III P302 trial continues, with data now expected in the first quarter of 2020.
– The Company continues to expect to submit an NDA for SPN-810 in the second half of 2020, and to launch SPN-810, pending FDA approval, in the second half of 2021.
– Enrollment in the open label extension (OLE) study continues at 90% or higher. On average, a patient in the OLE study remains on SPN-810 treatment for approximately 10.7 months, which the Company believes is an encouraging sign of the tolerability and efficacy of SPN-810.
– Patient dosing continues in the Phase III trial (P503) in adolescent patients.

SPN-604 - Novel treatment of bipolar disorder

– The Company remains on track to start a pivotal Phase III program for the treatment of bipolar disorder in the fourth quarter of 2019.

Operating Expenses

Research and development (R&D) expenses in the second quarter of 2019 were $17.0 million, as compared to $20.0 million in the same quarter last year. This decrease is primarily due to the completion of the four Phase III clinical trials for SPN-812, three of which were completed in December 2018 and the fourth in March 2019. Decreased expenses were partially offset by costs to manufacture SPN-812 to support the Company’s upcoming submission of its NDA.

Selling, general and administrative expenses in the second quarter of 2019 were $41.1 million, essentially equivalent to $40.1 million in the same quarter last year.

Operating Earnings and Earnings Per Share

Operating earnings in the second quarter of 2019 were $42.6 million, a 19.3% increase from $35.7 million in the same quarter last year. Operating earnings increased faster than net product sales, which grew by 5.5%, demonstrating the Company’s ability to manage operating expenses and leverage its established infrastructure.

Net earnings (GAAP) in the second quarter of 2019 were $32.7 million, or $0.61 per diluted share, an increase from $30.7 million, or $0.57 per diluted share, in the same period last year. Growth in net earnings was driven primarily from the aforementioned increase in operating earnings, partially offset by the higher effective tax rate in the second quarter of 2019 compared to the year earlier period. The effective tax rate in the second quarter of 2018 benefited from employees exercising stock options.

Weighted-average diluted common shares outstanding were approximately 53.9 million in the second quarter of 2019, as compared to approximately 54.2 million in the prior year period.

Balance Sheet Highlights

As of June 30, 2019, the Company had $852.3 million in cash, cash equivalents, marketable securities and long term marketable securities, compared to $774.8 million at December 31, 2018. This increase primarily reflects cash generated from operations in the first six months of 2019.

Financial Guidance

The Company is revising its full year 2019 guidance for net product sales and operating earnings, and reaffirming expectations for R&D expenses and the effective tax rate as set forth below:

–  Net product sales in the range of $400 million to $410 million, compared to the previously expected range of $435 million to $455 million.
–  R&D expenses in the range of $70 million to $80 million.
–  Operating earnings in the range of $150 million to $160 million, compared to the previously expected range of $160 million to $180 million.
–  Effective tax rate of approximately 23% to 25%.

Conference Call Details

The Company will hold a conference call hosted by Jack Khattar, President and Chief Executive Officer, and Greg Patrick, Senior Vice President and Chief Financial Officer, to discuss these results at 9:00 a.m. Eastern Time, on Wednesday, August 7, 2019. An accompanying webcast also will be provided.

Please refer to the information below for conference call dial-in information and webcast registration. Callers should dial in approximately 10 minutes prior to the start of the call.

Conference dial-in:(877) 288-1043
International dial-in:(970) 315-0267
Conference ID:1527779
Conference Call Name:Supernus Pharmaceuticals Second Quarter 2019 Earnings Conference Call

Following the live call, a replay will be available on the Company's website, www.supernus.com, under “Investor Relations”.

About Supernus Pharmaceuticals, Inc.
Supernus Pharmaceuticals, Inc. is a pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases. The Company currently markets Trokendi XR® (extended-release topiramate) for the prophylaxis of migraine and the treatment of epilepsy, and Oxtellar XR® (extended-release oxcarbazepine) for the treatment of epilepsy. The Company is also developing several product candidates to address large market opportunities in the CNS market, including SPN-810 for the treatment of Impulsive Aggression in ADHD patients, SPN-812 for the treatment of ADHD and SPN-604 for the treatment of bipolar disorder.

Forward-Looking Statements:

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not convey historical information, but relate to predicted or potential future events that are based upon management's current expectations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. In addition to the factors mentioned in this press release, such risks and uncertainties include, but are not limited to, the Company’s ability to sustain and increase its profitability; the Company’s ability to raise sufficient capital to fully implement its corporate strategy; the implementation of the Company’s corporate strategy; the Company’s future financial performance and projected expenditures; the Company’s ability to increase the number of prescriptions written for each of its products; the Company’s ability to increase its net revenue; the Company’s ability to enter into future collaborations with pharmaceutical companies and academic institutions or to obtain funding from government agencies; the Company’s product research and development activities, including the timing and progress of the Company’s clinical trials, and projected expenditures; the Company’s ability to receive, and the timing of any receipt of, regulatory approvals to develop and commercialize the Company’s product candidates; the Company’s ability to protect its intellectual property and operate its business without infringing upon the intellectual property rights of others; the Company’s expectations regarding federal, state and foreign regulatory requirements; the therapeutic benefits, effectiveness and safety of the Company’s product candidates; the accuracy of the Company’s estimates of the size and characteristics of the markets that may be addressed by its product candidates; the Company’s ability to increase its manufacturing capabilities for its products and product candidates; the Company’s projected markets and growth in markets; the Company’s product formulations and patient needs and potential funding sources; the Company’s staffing needs; and other risk factors set forth from time to time in the Company’s filings with the Securities and Exchange Commission made pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended. The Company undertakes no obligation to update the information in this press release to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated or unanticipated events.

Supernus Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share amounts)

 June 30, December 31,
 2019 2018
 (unaudited)  
Assets   
Current assets   
Cash and cash equivalents$87,344  $192,248 
Marketable securities171,222  163,770 
Accounts receivable, net84,564  102,922 
Inventories, net26,024  25,659 
Prepaid expenses and other current assets21,757  8,888 
Total current assets390,911  493,487 
Long term marketable securities593,754  418,798 
Property and equipment, net4,028  4,095 
Intangible assets, net28,787  31,368 
Lease assets19,639   
Deferred income taxes25,975  29,683 
Other assets581  380 
    
Total assets$1,063,675  $977,811 
    
Liabilities and stockholders’ equity   
Current liabilities   
Accounts payable$4,081  $3,195 
Accrued product returns and rebates95,934  107,063 
Accrued expenses and other current liabilities38,614  36,535 
Income taxes payable2,674  12,377 
Non-recourse liability related to sale of future royalties, current portion2,668  2,183 
Total current liabilities143,971  161,353 
Convertible notes, net337,210  329,462 
Non-recourse liability related to sale of future royalties, long term21,100  22,575 
Lease liabilities, long term27,535   
Other liabilities10,955  11,398 
Total liabilities540,771  524,788 
    
Stockholders’ equity   
Common stock, $0.001 par value, 130,000,000 shares authorized 52,449,036 and 52,316,583 shares


 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively
52  52 
Additional paid-in capital379,369  369,637 
Accumulated other comprehensive earnings (loss), net of tax5,924  (3,158)
Retained earnings137,559  86,492 
Total stockholders’ equity522,904  453,023 
    
Total liabilities and stockholders’ equity$1,063,675  $977,811 

Supernus Pharmaceuticals, Inc.
Condensed Consolidated Statements of Earnings
(in thousands, except share and per share data)

 Three Months ended June 30, Six Months ended June 30,
 2019 2018 2019 2018
 (unaudited) (unaudited)
Revenues       
Net product sales$102,358  $97,030  $185,457  $186,150 
Royalty revenues2,337  1,758  4,712  3,067 
Licensing revenues  750    750 
Total revenues104,695  99,538  190,169  189,967 
        
Costs and expenses       
Cost of product sales4,044  3,683  7,728  6,961 
Research and development16,970  20,038  32,364  38,946 
Selling, general and administrative41,083  40,097  82,051  76,946 
        
Total costs and expenses62,097  63,818  122,143  122,853 
        
Operating earnings42,598  35,720  68,026  67,114 
        
Other income (expenses), net148  (1,864) (1,041) (2,076)
        
Earnings before income taxes42,746  33,856  66,985  65,038 
        
Income tax expense10,019  3,119  15,918  7,949 
Net earnings$32,727  $30,737  $51,067  $57,089 
        
Earnings per share       
Basic$0.62  $0.59  $0.98  $1.10 
Diluted$0.61  $0.57  $0.95  $1.06 
        
Weighted-average shares outstanding       
Basic52,385,590  51,919,894  52,361,149  51,729,243 
Diluted53,912,977  54,203,308  53,947,834  54,021,941 
        

CONTACTS:


Jack A. Khattar, President and CEO
Gregory S. Patrick, Senior Vice President and CFO
Supernus Pharmaceuticals, Inc.
Tel: (301) 838-2591

or

INVESTOR CONTACT:
Peter Vozzo
Westwicke, an ICR Company
Office: (443) 213-0505
Mobile: (443) 377-4767
Email: peter.vozzo@westwicke.com

 

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