Supernus Announces Fourth Quarter and Full Year 2023 Financial Results

Fourth quarter 2023 net sales of Qelbree® increased 97% to $46.4 million compared to fourth quarter 2022; Full year 2023 net sales of Qelbree increased 129% to $140.2 million compared to full year 2022.Fourth quarter 2023 net sales of GOCOVRI® increased 10% to $32.0 million compared to fourth quarter 2022; Full year 2023 net sales of GOCOVRI increased 15% to $119.6 million compared to full year 2022.Full year 2023 total revenues (GAAP) were $607.5 million; Full year 2023 total revenues excluding Trokendi XR® net product sales (non-GAAP)(1) increased 26% compared to full year 2022.Full year 2023 operating loss (GAAP) was $(5.3) million; Full year 2023 operating earnings (non-GAAP)(2), were $125.1 million.Full year 2024 total revenue (GAAP) guidance of $580 million to $620 million and operating earnings (non-GAAP)(3) guidance of $80 million to $110 million. ___________________________________________(1) Total revenues excluding Trokendi XR net product sales is a non-GAAP measure and is calculated as total revenues (GAAP) less net product sales of Trokendi XR (GAAP). A reconciliation of this measure to Total revenues (GAAP) is included under the heading “Reconciliation of GAAP Total revenues to Non-GAAP Total revenues excluding Trokendi XR net product sales.”(2) Operating earnings (non-GAAP) is a non-GAAP measure and is calculated as Operating earnings (loss) (GAAP) plus amortization of intangible assets, share-based compensation, contingent consideration expense (gain), intangible asset impairment charges, and depreciation. A reconciliation of this measure to Operating earnings (loss) (GAAP) is included under the heading “Reconciliation of GAAP Operating earnings (loss) to Non-GAAP Operating earnings.”(3) A reconciliation of the operating earnings (non-GAAP) guidance is included under the heading “Full Year 2024 Financial Guidance – GAAP to Non-GAAP Adjustments.” ROCKVILLE, Md., Feb. 27, 2024 (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 fourth quarter and full year of 2023 and associated Company developments. “Our performance in 2023 underscores our strong execution, with combined full year 2023 net sales of $259.8 million for our growth products, Qelbree and GOCOVRI, which far exceeded the decline in net sales of Trokendi XR. Furthermore, that represents 57% growth compared to full year 2022″ said Jack Khattar, President and CEO of Supernus. “Qelbree delivered robust growth of 91% in prescriptions and benefited from a much improved gross-to-net adjustment resulting in 129%, growth in net sales.” Mr. Khattar added, “In 2024, we look forward to continued growth across our key growth products and the launch of SPN-830 in the second half of 2024 as we complete the transition from our legacy products to our growth products. In addition, in 2024 we anticipate several exciting clinical milestones as we progress our pipeline of novel product candidates.” Qelbree Update Total IQVIA prescriptions were 617,192 for full year 2023, an increase of 91% compared to full year 2022.The Company initiated a Phase IV open-label study to assess the efficacy of Qelbree over the course of 14 weeks of treatment in approximately 500 adults with attention deficit hyperactivity disorder (ADHD) and mood symptoms. The primary outcome measure is change from baseline in the Adult ADHD Investigator Symptom Rating Scale (AISRS). Product Pipeline Update SPN-830 (apomorphine infusion device) for treatment of Parkinson’s disease (PD) As previously disclosed, the U.S. Food and Drug Administration (FDA) accepted the resubmission of the New Drug Application for SPN-830 for continuous treatment of motor fluctuations (“off” episodes) in PD and set a user fee goal date (PDUFA date) of April 5, 2024.Assuming FDA approval, the Company expects to launch SPN-830 in the second half of 2024. SPN-820 – Novel first-in-class molecule that increases mTORC1 mediated synaptic function for depression The Phase IIb multi-center randomized double-blind placebo-controlled parallel design study of SPN-820 in adults with treatment-resistant depression is ongoing. The study is examining efficacy and safety of SPN-820 over a course of five weeks of treatment in approximately 268 patients in up to 50 clinical sites. The primary outcome measure is the change from baseline to end of treatment period on the Montgomery-Asberg Depression Rating Scale (MADRS) Total Score. Approximately 118 patients have been enrolled in the trial, to date. Topline data from the Phase IIb trial is expected in the first half of 2025.The Company has initiated a Phase II open-label study in approximately 40 subjects with major depressive disorder (MDD). The primary objective of the study is to assess efficacy in MDD, as well as onset of efficacy. SPN-817 – Novel first-in-class highly selective AChE inhibitor for epilepsy An open-label Phase IIa clinical study of SPN-817 for treatment-resistant seizures is ongoing. The study is examining the safety and tolerability of SPN-817 as adjunctive therapy in adult patients with treatment-resistant seizures, as well as assessing efficacy. The Company expects to report interim results from approximately one-half of the targeted randomized patients in May 2024, and topline results for the full study in the second half of 2024.The Company now expects to initiate a Phase IIb randomized, double-blind, placebo-controlled study in approximately 436 patients with treatment-resistant focal seizures in the second half of 2024. The primary endpoint is change from baseline in focal seizure frequency per 28 days. Topline results from the Phase IIb study are expected in 2026. SPN-443 – Novel stimulant for ADHD/CNS The Company plans to initiate a Phase I single dose study in healthy adults in 2024 following submission of an Investigational New Drug application. The primary objective of the study is to assess safety and tolerability. Financial Highlights Total revenues (GAAP and non-GAAP) For the three months ended December 31, 2023, total revenues and total net product sales (GAAP) were $164.3 million and $156.0 million, respectively, compared to total revenues and total net product sales of $167.3 million and $163.8 million for the same periods in 2022. For the full year ended December 31, 2023, total revenues and total net product sales were $607.5 million and $573.9 million, respectively, compared to total revenues and total net product sales of $667.2 million and $649.4 million for the same periods in 2022. The decrease in net product sales in both periods was primarily due to the decline in net product sales of Trokendi XR. This decline in net product sales of Trokendi XR was partially offset by primarily an increase in net product sales of Qelbree and GOCOVRI for the three months ended December 31, 2023, and an increase in net product sales of Qelbree and GOCOVRI for the full year ended December 31, 2023. Total revenues excluding Trokendi XR net product sales (non-GAAP) for the three months and full year ended December 31, 2023, increased 31% and 26%, respectively, compared to the same periods in 2022. The following table provides information regarding total revenues during the three months and full year ended December 31, 2023 and 2022 (dollars in millions):  Three Months Ended December 31,  Full Year Ended December 31,   2023 2022 Change % 2023 2022 Change %Total net product sales$156.0 $163.8 (5)% $573.9 $649.4 (12)%Royalty and licensing revenues (1) 8.3  3.5 134%  33.6  17.8 89%Total revenues (GAAP)$164.3 $167.3 (2)% $607.5 $667.2 (9)%Total revenues excluding Trokendi XR net product sales (non-GAAP)$144.7 $110.1 31% $513.2 $406.0 26% ___________________________________________(1) Royalty and licensing revenues include royalties on generic Trokendi XR, other licensed products and intellectual property. The following table provides information regarding total net product sales during the three months and full year ended December 31, 2023 and 2022 (dollars in millions):  Three Months EndedDecember 31,  Full Year EndedDecember 31,  2023 2022 Change % 2023 2022 Change %Net product sales           Qelbree$46.4 $23.6 97% $140.2 $61.3 129%GOCOVRI 32.0  29.2 10%  119.6  104.4 15%Oxtellar XR® 31.0  27.4 13%  113.4  115.4 (2)%Trokendi XR 19.6  57.2 (66)%  94.3  261.2 (64)%APOKYN® 18.7  18.1 3%  75.1  75.3 —%Other(1) 8.3  8.3 —%  31.3  31.8 (2)%Total net product sales$156.0 $163.8 (5)% $573.9 $649.4 (12)% ___________________________________________(1) Includes net product sales of MYOBLOC®, XADAGO® and Osmolex ER®. Operating earnings (loss) (GAAP and non-GAAP) For the three months ended December 31, 2023, operating loss (GAAP) was $(1.0) million, compared to operating earnings (GAAP) of $34.3 million for the same period in 2022. For the full year ended December 31, 2023, operating loss (GAAP) was $(5.3) million, compared to operating earnings (GAAP) of $46.1 million for the full year 2022. The decrease in operating earnings (GAAP) in the fourth quarter of 2023 compared to the same period in 2022 was primarily due to the $20.2 million intangible asset impairment charges, mainly related to XADAGO, as well as higher research and development expenses and selling and marketing expenses. The decrease in operating earnings (GAAP) for the full year ended December 31, 2023 compared to same period in 2022 was primarily due to a decrease in net product sales of Trokendi XR, the aforementioned impairment charges partially offset by the growth in net product sales of Qelbree and GOCOVRI and a decrease in selling, general and administrative expenses in 2023. For the three months ended December 31, 2023, operating earnings (non-GAAP) were $47.1 million, compared to $57.6 million for the same period in 2022. For the full year ended December 31, 2023, operating earnings (non-GAAP) were $125.1 million, compared to $148.8 million for the full year 2022. Reconciliation of GAAP Operating earnings (loss) to Non-GAAP Operating earnings An itemized reconciliation between operating earnings on a GAAP basis and operating earnings on a non-GAAP basis is as follows (dollars in millions):  Three Months EndedDecember 31, Full Year EndedDecember 31,  2023   2022   2023   2022 Operating earnings (loss) – As Reported (GAAP)$(1.0) $34.3  $(5.3) $46.1 Adjustments:       Amortization of intangible assets 21.1   20.7   82.4   82.6 Share-based compensation 6.4   4.3   26.8   17.6 Contingent consideration gain (0.2)  (2.4)  (1.5)  (0.5)Intangible asset impairment charges 20.2   —   20.2   — Depreciation 0.6   0.7   2.5   3.0 Operating earnings – As Adjusted (non-GAAP)$47.1  $57.6  $125.1  $148.8  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, impairment charges and depreciation. Net earnings (GAAP) For the three months ended December 31, 2023, net earnings (GAAP) and diluted earnings per share (GAAP) were $1.2 million and $0.02, respectively, as compared to $25.5 million and $0.43, respectively in the same period in 2022. For the full year ended December 31, 2023, net earnings (GAAP) and diluted earnings per share (GAAP) were $1.3 million and $0.02, respectively, as compared to $60.7 million and $1.04, respectively in the same period in 2022. Balance sheet At December 31, 2023, the Company’s cash, cash equivalents, current and long-term marketable securities were approximately $271.5 million, compared to $555.2 million as of December 31, 2022. This decrease was primarily due to repayment of the Company’s $402.5 million 0.625% Convertible Senior Notes due 2023, partially offset by cash generated from operations. Full Year 2024 Financial Guidance (GAAP)  AmountTotal revenues (includes approximately $125 – $135 million of Trokendi XR and Oxtellar XR (1)(2))$580 – $620Combined R&D and SG&A expenses$430 – $460Operating loss (3)$(30) – $(0) ___________________________________________(1) Includes net product sales and royalty and licensing revenue.(2) Reflects generic erosion of Trokendi XR and Oxtellar XR beginning in September 2024.(3) Includes amortization of intangible assets and contingent consideration expense (gain). Full Year 2024 Financial Guidance – GAAP to Non-GAAP Adjustments An itemized reconciliation between projected operating loss on a GAAP basis and projected operating earnings on a non-GAAP basis is as follows (dollars in millions):  AmountOperating earnings (loss) – GAAP$(30) – $0Adjustments: Amortization of intangible assets$80 – $81Share-based compensation$27 – $29Contingent consideration$1 – $2Depreciation$2 – $3Operating earnings – non-GAAP$80 – $110 Non-GAAP Financial Information This press release contains financial measures that present financial information which do not comply with United States generally accepted accounting principles (GAAP). The non-GAAP financial measures 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, intangible asset impairment charges 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. In addition to non-GAAP operating earnings, we also present total revenues excluding net product sales of products without exclusivity due to generic entrants, which is a non-GAAP measure and is calculated as total revenues (GAAP) less net product sales of our products without exclusivity due to generic entrants, which as of the date of this press release, is equal to net product sales of Trokendi XR (GAAP). Beginning in the year a product loses exclusivity due to generic entrants we generally do not expect net product sales of such products to constitute a significant part of our revenue in the future. We believe that the use of non-GAAP financial measures provides useful supplemental information to management, investors, analysts and others regarding the Company’s revenue and results of operations and assist management, investors, analysts, and others in understanding and evaluating our revenue growth and the performance of the business. There are limitations associated with the use of non-GAAP financial measures and therefore comparability may be limited. These limitations include: non-GAAP financial measures that may not be entirely comparable to similarly titled measures used by other companies; these may not reflect all items of income and expense, as applicable, that affect our operations; there may be potential differences among calculation methodologies; these may differ from the non-GAAP information used by other companies, including peer companies. 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 2024 financial guidance is also being provided on both a GAAP and a non-GAAP basis. Reconciliation of GAAP Total revenues to Non-GAAP Total revenues excluding net product sales of Trokendi XR An itemized reconciliation between total revenues on a GAAP basis and Total revenues excluding net product sales of Trokendi XR, a non-GAAP measure, is as follows (unaudited, dollars in millions):  Three Months Ended December 31,   Twelve Months Ended December 31,   2023 2022 Change % 2023 2022 Change %Total revenues (GAAP) (1)$164.3 $167.3 (2)% $607.5 $667.2 (9)%Less: Trokendi XR net product sales 19.6  57.2 (66)%  94.3  261.2 (64)%Total revenues excluding Trokendi XR net product sales (Non-GAAP)$144.7 $110.1 31% $513.2 $406.0 26% ___________________________________________(1) Includes net product sales and royalty and licensing revenues. Conference Call Details Supernus will host a conference call and webcast today, February 27, 2024, 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 Parkinson’s disease (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 and the products of its subsidiaries; the Company’s ability to increase its net revenue; the Company’s ability to commercialize its products and the products of its subsidiaries; 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 the intellectual property of its subsidiaries 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 its subsidiaries; the Company’s ability to increase its net revenue from its products and the products of its subsidiaries; 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.Consolidated Balance Sheets(in thousands, except share data)  December 31, December 31,  2023   2022 Assets   Current assets   Cash and cash equivalents$75,054  $93,120 Marketable securities 179,820   368,214 Accounts receivable, net 144,155   165,497 Inventories, net 77,408   91,541 Prepaid expenses and other current assets 16,676   15,779 Total current assets 493,113   734,151 Long term marketable securities 16,617   93,896 Property and equipment, net 13,530   15,173 Intangible assets, net 599,889   702,463 Goodwill 117,019   117,019 Other assets 37,505   39,806 Total assets$1,277,673  $1,702,508     Liabilities and stockholders’ equity   Current liabilities   Accounts payable and accrued liabilities$79,569  $96,342 Accrued product returns and rebates 154,274   151,665 Contingent consideration, current portion 52,070   21,120 Convertible notes, net —   401,968 Other current liabilities 4,283   16,863 Total current liabilities 290,196   687,958 Contingent consideration, long term 1,380   33,847 Operating lease liabilities, long term 33,196   35,998 Deferred income tax liabilities, net 24,963   49,809 Other liabilities 6,422   8,692 Total liabilities 356,157   816,304     Stockholders’ equity   Common stock, $0.001 par value; 130,000,000 shares authorized; 54,723,356 and 54,253,796 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively 55   54 Additional paid-in capital 439,493   408,115 Accumulated other comprehensive (loss) earnings, net of tax (593)  (3,210)Retained earnings 482,561   481,245 Total stockholders’ equity 921,516   886,204     Total liabilities and stockholders’ equity$1,277,673  $1,702,508  Supernus Pharmaceuticals, Inc.Consolidated Statements of Earnings(in thousands, except share and per share data)  Three Months EndedDecember 31, Twelve Months EndedDecember 31,  2023   2022   2023   2022 Revenues       Net product sales$156,018  $163,785  $573,933  $649,432 Royalty and licensing revenues 8,296   3,543   33,588   17,806 Total revenues 164,314   167,328   607,521   667,238         Costs and expenses       Cost of goods sold (a) 19,627   22,954   83,779   87,221 Research and development 23,347   17,774   91,593   74,552 Selling, general and administrative 81,282   73,972   336,361   377,221 Amortization of intangible assets 21,069   20,698   82,385   82,630 Intangible asset impairment charges 20,189   —   20,189   — Contingent consideration gain (204)  (2,404)  (1,517)  (510)Total costs and expenses 165,310   132,994   612,790   621,114         Operating earnings (loss) (996)  34,334   (5,269)  46,124         Other income (expense)       Interest and other income, net 1,986   2,400   10,453   21,689 Interest expense —   (1,594)  (2,415)  (7,070)Total other income (expense) 1,986   806   8,038   14,619         Earnings before income taxes 990   35,140   2,769   60,743         Income tax (benefit) expense (185)  9,659   1,453   32 Net earnings$1,175  $25,481  $1,316  $60,711         Earnings per share       Basic$0.02  $0.47  $0.02  $1.13 Diluted$0.02  $0.43  $0.02  $1.04         Weighted-average shares outstanding       Basic 54,647,835   54,104,908   54,536,281   53,665,143 Diluted 55,301,319   62,087,687   55,506,828   61,679,800  ___________________________________________(a) Excludes amortization of intangible assets. CONTACTS: Jack A. Khattar, President and CEOTimothy C. Dec, Senior Vice President and CFOSupernus Pharmaceuticals, Inc.(301) 838-2591 or INVESTOR CONTACT:Peter VozzoICR Westwicke(443) [email protected]