SUPERNUS PHARMACEUTICALS, INC.(SUPN)Q1 2025 法說會逐字稿

Good afternoon and welcome to Supernus Pharmaceuticals First Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session; instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Peter Vozzo of ICR Westwicke, Investor Relations representative for Supernus Pharmaceuticals. You may begin.

Thank you, Lauren. Good afternoon everyone and thank you for joining us today for Supernus Pharmaceuticals first quarter 2025 financial results conference call. Today, after the close of the market, the company issued a press release announcing these results. On the call with me today are Supernus' Chief Executive Officer, Jack Khattar; and Chief Financial Officer, Tim Dec. This call is being made available via the Investor Relations section of the company's website at ir.supernus.com. During the course of this call, management may make certain forward-looking statements regarding future events and the company's future performance. These forward-looking statements reflect Supernus' current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the Risk Factors section of the company's latest SEC filings.

Actual results may differ materially from those projected in these forward-looking statements. For the benefit of those of you who may be listening to the replay, this call is being held and recorded on May 5, 2025. Since then, the company may have made additional announcements related to the topics discussed. Please reference the company's most recent press releases and current filings with the SEC. Supernus declines any obligation to update these forward-looking statements, except as required by applicable securities laws. I'll now turn the call over to Jack.

Thank you, Peter. Good afternoon everyone and thanks for taking the time to join us on today's call. Our first quarter results reflect once again double-digit revenue growth from our core products as well as solid growth in adjusted operating earnings. Total revenues, excluding Trokendi XR and Oxtellar XR, increased by 26% in the first quarter compared to the same quarter last year. Driving this growth was the robust performance of both Qelbree and GOCOVRI. These 2 products collectively accounted for 67% of total net sales, while Trokendi XR and Oxtellar XR accounted for only 9% and 7%, respectively. In the first quarter, Qelbree grew by 22% in prescriptions as reported by IQVIA and by 44% in net sales. The product ended the first quarter in a strong position with monthly prescriptions in March reaching an all-time high of 75,277, up 25% compared to the same period last year. In addition, we continue to expand the prescriber base for Qelbree, with the number of prescribers in the first quarter reaching 34,416 which is up by 23% compared to the first quarter last year.

We are also excited about the new data from the open-label study in adults with ADHD and mood disorders. The data from all 161 adult patients will be presented at the American Psychiatric Association Annual Meeting later this month. The data showed significant improvements in clinician and patient-rated measures of ADHD, depression, and anxiety symptoms, and the safety outcomes in the trial were consistent with the double-blind pivotal trial of Qelbree in adult ADHD. Regarding GOCOVRI, for the first quarter of 2025, prescriptions increased by 12% and net sales increased by 16% compared to the same quarter last year. The Medicare Inflation Reduction Act with the reduced patient out-of-pocket costs drove increased prescriptions for GOCOVRI among Medicare patients in the first quarter compared to the same period last year. On average, GOCOVRI's Medicare co-pay declined by 42% compared to the first quarter of 2024, and by March 2025, 84% of GOCOVRI's Medicare prescriptions were costing patients less than $25.

In addition, prior authorizations and medical exception approval rates remained high in the quarter. These new dynamics and the resulting growth in the first quarter suggest that any potential negative impact from increased mandatory Medicare manufacturer payments for the year could end up being offset by increased prescriptions and gross sales in Medicare. Early in the second quarter, we launched ONAPGO, Supernus next growth product. It is the first and only subcutaneous apomorphine infusion device for the treatment of motor fluctuations in adults with advanced Parkinson's disease. It was launched with a support team of experts, including a nurse education program and access support and utilizes our existing Parkinson's disease sales force and infrastructure. The initial response from physicians has been encouraging based on patient enrollment forms submitted early in the launch. And only a few weeks into the launch, more than 75% of the sales territories have generated one or more patient enrollment form, with more than 100 prescribers submitting such forms.

Switching now to our legacy products for the first quarter of 2025, combined net sales of Trokendi XR and Oxtellar XR were down 46%. For the remainder of 2025, we expect further erosion in both product sales and maintain our 2025 guidance of $65 million to $75 million in combined net sales. Moving on to our CNS pipeline of novel product candidates, we plan to initiate a follow-on Phase IIb multicenter randomized, double-blind, placebo-controlled trial with SPN-820 in approximately 200 adults with major depressive disorder. This study will examine the safety and tolerability of SPN-820 at a dose of 2,400 milligrams given intermittently twice per week as an adjunctive treatment to the current baseline antidepressant therapy, as well as assess the rapid onset of improvement in depressive symptoms. As we mentioned on our last call, we completed a pharmacokinetic study of 2 oral formulations of SPN-443 in healthy adults.

Both formulations of SPN-443 showed adequate bioavailability and were well tolerated. SPN-443 is our new stimulant-like product candidate for ADHD and other CNS disorders. The company expects to disclose a lead indication for the trial for the product by the end of 2025. Regarding corporate development, it continues to be a top priority for us looking for strategic opportunities to further strengthen our future growth with revenue-generating products or late-stage pipeline product candidates. And finally, given the current environment for tariffs, it is difficult to predict what impact, if any, they could potentially have on our business. We don't expect tariffs on finished products to impact Qelbree, Trokendi XR, GOCOVRI, ONAPGO, or APOKYN as they are either manufactured in the U.S. or are under arrangements that shield us from the impact of tariffs. On the other hand, MYOBLOC, XADAGO, and Oxtellar XR finished products are manufactured in Europe or Canada and therefore, could become subject to import tariffs.

All our products, raw materials are imported from various countries outside the U.S. Therefore, any potential impact from tariffs will highly depend on numerous factors, including but not limited to, current inventory levels of various raw materials, timing of any new orders that may be subject to the tariffs, the country of origin for the various materials, and the applicable percentage tariffs. With that, I will now turn the call over to Tim.

Thank you, Jack. Good afternoon everyone. As I review our first quarter 2025 results, please refer to today's press release and 10-Q that was filed earlier today. Total revenue for the first quarter of 2025 was $149.8 million compared to $143.6 million in the first quarter of 2024. Total revenue in the first quarter of 2025 was comprised of net product sales of $142 million and royalty revenues of $7.8 million. This $3.5 million increase in net product sales was primarily due to an increase in net product sales of our core products, Qelbree and GOCOVRI. Excluding net product sales of Trokendi XR and Oxtellar XR in both periods, total revenues for the first quarter of 2025 increased 26% compared to the first quarter of 2024. For the first quarter of 2025, combined R&D and SG&A expenses were $116.9 million as compared to $111.4 million for the prior year quarter. The increase was primarily due to higher R&D spend associated with our ongoing clinical programs as we continue to progress our pipeline.

Operating loss on a GAAP basis for the first quarter of 2025 was $10.3 million as compared to an operating loss of $3.2 million for the prior year period. This increase was primarily due to higher contingent consideration loss related to the achievement of ONAPGO related milestones. GAAP net loss was $11.8 million for the first quarter of 2025, or a loss per diluted share of $0.21 compared to GAAP net earnings of $124,000 or earnings per diluted share of $0.00 in the prior year quarter. On a non-GAAP basis, which excludes amortization of intangibles, share-based compensation, contingent consideration, and depreciation, adjusted operating earnings for the first quarter of 2025 was $25.9 million compared to $22.3 million in the first quarter of 2024. As of March 31, 2025, the company had approximately $463.6 million in cash, cash equivalents, and marketable securities compared to $453.6 million as of December 31, 2024.

This increase was primarily due to cash generated from operations, offset by a $25 million payment of the ONAPGO related milestones in the first quarter of 2025. The company continues to have a strong balance sheet with significant financial flexibility for potential M&A or other value-creating opportunities. Now turning to guidance. For the full year 2025, the company reiterates its financial guidance for total revenue, combined R&D and SG&A expenses, and non-GAAP operating earnings. As such, we expect total revenues to range from $600 million to $630 million, comprised of net product sales and royalty revenue. For the full year 2025, we expect combined R&D and SG&A expenses to range from $435 million to $460 million. Overall, we expect full year 2025 GAAP operating earnings loss in the range of a $15 million GAAP operating loss to a $10 million GAAP operating earnings and non-GAAP operating earnings to range from $105 million to $130 million.

Please refer to the earnings press release issued prior to this call that identifies the various ranges of reconciling items between GAAP and non-GAAP. With that, I will now turn the call back to the operator for Q&A.

Our first question comes from Andrew Tsai with Jefferies.

This is John on behalf of Andrew. Can you remind us of the main growth factors for Qelbree in 2025? Will 2025 focus more on volume rather than price, or could both volume and price contribute to sales? Additionally, could you share more about your choice to proceed with SPN-820 in MDD? What placebo-adjusted efficacy difference do you anticipate? When can we expect to see the data?

Yes. For Qelbree, the growth will come from both volume and a slight increase in price. We implemented a small price increase in January, but the primary growth will stem from an increase in prescriptions. We had a strong first quarter, which is typically a time when we might see some slowdown, but we're pleased with our performance. March was particularly strong, with over 75,000 prescriptions, marking a 25% increase compared to last year. We're optimistic about the brand's position in the first quarter and anticipate continued growth in the following quarters. Regarding SPN-820, our expectation for placebo-adjusted improvement in MADRS is important. In the open-label study, we observed a significant reduction in MADRS, although it’s challenging to compare due to the open-label nature. In the Phase IIb study, we saw a placebo effect resulting in a 10 to 12-point reduction in MADRS. If we can achieve a reduction of 5 to 8 points beyond the placebo effect, which is considered clinically significant, that will be our target. We aim for even better results based on the initial open-label findings. The decision to pursue further studies on SPN-820 is based on its different dosing regimen. We believe that the mTORC1 mechanism is such that it doesn’t require daily administration; intermittent dosing may enhance the drug's impact.

And then when could we possibly expect a data readout from the study?

Yes. At this point, we're considering starting the new study before the end of the year, although we aren't making any promises yet as there's still a lot of work to prepare. In the best-case scenario, it would take about 1.5 years to complete the study and collect data, depending on recruitment and the randomization of 200 patients. The study on Major Depressive Disorder should progress a bit faster than the treatment-resistant depression study, but we'll keep everyone updated as we move forward.

Our next question comes from the line of Stacy Ku with TD Cowen.

So the first is on Qelbree. Just how much of the normal seasonality or Q1 dynamics impacted Qelbree net pricing this quarter? And how should we think about the jump to Q2, the remainder of the year in terms of gross to net? And then maybe could you comment on the level of comfort you might have on Qelbree consensus around $290 million for the year? That's kind of the first question. And then the second question is on ONAPGO. As we think about the infrastructure required, maybe talk about the plumbing to make sure all start forms can be transformed into patient prescriptions, getting patients on drug. What are your thoughts on the timing to go from a start form to getting ONAPGO to the patient?

Yes. Regarding Qelbree, Q1, as we always discuss, typically tends to have pressure on the gross to net, clearly, and the total net price per prescription. So in the first quarter, gross to net went up to somewhere in the early 50s, 51%, 52%, somewhere in that region which is very expected. And then typically, if we do follow the typical trends, it should see some improvement in the second quarter and third quarter unless there is a one-time issue that pops up that is unforeseen and that could cause quarter-to-quarter fluctuations. As far as the consensus of the $290 million annual, I mean, we feel comfortable with that number, although we, again, we don't give official guidance for product. But certainly, the product is doing very well and should do very well for the rest of the year. Regarding ONAPGO and the infrastructure, the infrastructure is very well established clearly because of the few years now we've been in this space in Parkinson's with APOKYN and GOCOVRI.

So the whole infrastructure from sales force to the hub services, nurse educators, reimbursement health, all that has been already established and has been improved actually over the last several years in preparation as well for ONAPGO. So it is a little bit hard right now because we just launched the product and we just started getting all the patient enrollment forms to give you a good idea as to how long the cycle would be from the patient enrollment form until the patient actually gets the product. But from our experience from GOCOVRI and APOKYN and so forth, we are well within the industry average, if not a little bit better. And the same thing goes with the prior authorizations or getting the actual reimbursements. So really how many out of the patient enrollment forms end up actually translating into actual product that gets in the hands of the patients. We typically run at a little bit better than industry average with our rates.

It's north of 40% to 50%. It's in that range. So we feel very optimistic about the process that we have and really making sure we can process these patient enrollment forms and get the product to the patient as soon as possible.

Our next question comes from the line of Annabel Samimy with Stifel.

This is Jack on for Annabel. Could you provide more details about the reimbursement discussions and how we should view the launch trajectory for ONAPGO? Are there specific points of differentiation that physicians are looking for compared to AbbVie's pump?

Yes. Regarding reimbursement, we believe that a significant percentage of enrollment forms will successfully go through the process, ensuring that patients will receive the product. We have robust support throughout this process, starting with the initial completion of the patient enrollment form. Our commitment to service involves guiding that form through our hub services to ensure a smooth reimbursement process with all insurance considerations. Prior to the official product launch, we conducted early tests of this process to ensure everything operates smoothly once we start receiving forms, so we feel quite confident about it. As for product differentiation, our product is based on a unique molecule, differing significantly from others in the market, aside from APOKYN. Apomorphine is a potent molecule that functions effectively as a dopamine agonist and stands out as one of the best available.

Our data from the ONAPGO study and from APOKYN supports this efficacy. Notably, it is the only pump that offers continuous infusion of apomorphine, providing an important option for many patients who may be limited in their choices. For those long-term users of levodopa/carbidopa, the decision to switch to a different product may be influenced by the potential benefits of our offering. This decision will ultimately rest with the movement disorder specialists considering each patient's circumstances. In terms of safety and tolerability, we invite you to compare the label of our product with those of others available, where you will notice clear distinctions. While the efficacy of our product and the competing products may be relatively similar, making direct comparisons without head-to-head trials can be challenging.

Got it. And then if I could just ask one more. For SPN-820, was there anything you were able to gather from the Phase II in treatment-resistant depression that could either maybe revive that program and/or give you some extra comfort on the Phase IIb in major depressive disorder? Do you see that indication as likely dropped at this point? Or have you not finished going through that data?

Yes. We didn't see from all the data and everything that we've been doing since we announced the results, we didn't see anything that points to the fact that it's an indication-driven difference that we saw between the 2 studies. The key difference is the dosing regimen. So what I'm saying is, initially, we're going to go after MDD with a follow-on study. That doesn't mean we're giving up on TRD. So we think the product will work in both but MDD could be quicker as far as enrollment or what have you and that's why we chose to go with MDD at this point as a follow-on study. So we're not giving up on TRD because we think that the product mechanistically, if it works in MDD, it should work in TRD. And the only reason it didn't work in the Phase IIb most likely is because of the dosing regimen.

Our next question comes from the line of David Amsellem with Piper Sandler.

So just a couple for me. First on ONAPGO, I know these are early days but what are you hearing in the field regarding competitive dynamics versus Vyalev, the AbbVie product? And specifically, are you getting any pushback regarding the use of apomorphine in general when there is another subcutaneous pump available that delivers levodopa and carbidopa? So that's number one. Just talk to the competitive dynamics and what you are seeing and expect to see. And then just turning to the pipeline on SPN-443, I know you're going to disclose a lead indication by the end of this year. But since it is a stimulant, is it fair to say that sleep-wake could be on the table here either narcolepsy or idiopathic hypersomnia or both? And how are you just thinking about that in terms of its fit for what you plan to do with that asset?

Regarding ONAPGO, I can say that it's very early in the process. As I mentioned earlier, we're encouraged by the positive response to the product from both physicians and the overall activity surrounding it. We've started receiving initial feedback on our Circle of Care program, which provides our patients with support and positive reinforcement. We have refined this program over the years, applying our experience with GOCOVRI and APOKYN to ONAPGO. We focus on delivering high-quality service to our patients and their physicians, viewing this as a competitive advantage. So far, the feedback has been very positive and encouraging. However, I want to remind everyone that it is still early in the launch, only a few weeks in, and it's performing better than we initially expected, which we hope will continue. Regarding the choice between apomorphine and levodopa/carbidopa, that's a decision for physicians to make.

When considering patients with advanced conditions who have been using levodopa/carbidopa for several years, we ask whether it makes sense to return them to that medication. The other infusion device requires patients to completely replace their oral levodopa/carbidopa, whereas our pump allows patients to maintain their oral medication while using the ONAPGO infusion device for apomorphine. This capability is a significant differentiation between the two products, and being an add-on may provide potential advantages in the market. Regarding our pipeline and SPN-443, we view it as a potential stimulant for ADHD, likely to receive a Schedule 4 rather than C2 classification, which would be a considerable market advantage. We are also exploring additional indications, which is why we haven't finalized the lead indication yet. We plan to finalize our work, including some animal models, and make a decision by the end of the year. It's an exciting asset, and we are considering where to initially focus our efforts as well as where we might go next with additional indications.

Our next question comes from the line of Kristen Kluska with Cantor Fitzgerald.

This is Ian on the line for Kristen. Regarding Qelbree, do you know what percentage of naive patients are using ADHD medication for the first time and choosing Qelbree? Also, you mentioned earlier that the combination use in the adult population is approximately 35% to 40% of prescriptions. Has that changed?

Yes. For Qelbree, approximately 32% to 33% of patients are completely new to first-line treatment, while the remaining 67% to 68% are primarily switching from existing medications. Most of these switches come from stimulant medications like Vyvanse and Adderall, with around 35% coming from other non-stimulants like Strattera and Intuniv. In terms of combination use, it's still between 35% and 40% in adults. It will be interesting to see if this changes as more data becomes available and people learn more about the product and its labeling, particularly among adults with various comorbidities. However, for now, it remains in that range.

I'm showing no further questions at this time. I would now like to turn it back to Jack Khattar for closing remarks.

Thank you for joining us to learn about our operating performance in the first quarter of 2025. The company has executed well through the loss of exclusivity on 2 of its legacy products. Excluding these legacy products, we continue to deliver robust double-digit growth in revenues. Also, we continue to generate strong cash flows behind the strength of our portfolio, particularly our core products and through the efficiency of our operations. We believe we are well positioned for continued growth beyond the current transition and are focused on several key areas. First, driving growth and generating strong cash flow from our core products, allowing us to continue our investments in our pipeline; second, the launch of ONAPGO and strengthening our leadership position in Parkinson's; third, advancing our innovative R&D portfolio of differentiated first-in-class molecules; and finally, continuing our emphasis on corporate development as a top priority to augment our growth through external opportunities. Thanks again for joining us this afternoon. We look forward to updating you on our next call.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.