SUPERNUS PHARMACEUTICALS INC

Previous wording

We are 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, attention-deficit hyperactivity disorder (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.

Current wording

We are 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, attention-deficit hyperactivity disorder (ADHD), hypomobility in Parkinson’s Disease (PD), cervical dystonia, chronic sialorrhea, and dyskinesia in PD patients receiving levodopa-based therapy. 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.

Previous wording

In October 2023, we resubmitted the New Drug Application (NDA) for SPN-830 to the FDA. In November 2, 2023, the Company announced that the FDA had acknowledged the resubmission of the NDA and assigned a Prescription Drug User Fee Act (PDUFA) date of April 5, 2024. In April 2024, the FDA issued a Complete Response Letter regarding the NDA for SPN-830. For further discussion, see Operational Highlights section below.

Current wording

In October 2023, we resubmitted the New Drug Application (NDA) for SPN-830 to the FDA. In April 2024, the FDA issued a Complete Response Letter regarding the NDA for SPN-830. For further discussion, see Operational Highlights section below.

Previous wording

•Total IQVIA prescriptions were 176,503 for first quarter 2024, an increase of 31% compared to the prior year period.

Current wording

•Total IQVIA prescriptions for Qelbree were 184,342 in the second quarter 2024, an increase of 26% compared to the prior year period.

Previous wording

•More than half the number of planned patients have been enrolled in the ongoing Phase IIb multi-center randomized double-blind placebo-controlled parallel design study of SPN-820 in adults with treatment-resistant depression. 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. Topline data from the Phase IIb trial is expected in the first half of 2025.

Current wording

•Nearly three-quarters of planned patients have been enrolled in the ongoing Phase IIb multi-center randomized double-blind placebo-controlled parallel design study of SPN-820 in adults with treatment-resistant depression. 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. Topline data from the Phase IIb trial is expected in the first half of 2025.

Previous wording

•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.

Current wording

•Enrollment is ongoing in the Phase II open-label study in patients with major depressive disorder (MDD). The primary objective of the study is to assess efficacy in MDD, as well as onset of efficacy. Topline results from the study are expected by the end of 2024.

Previous wording

Comparison of the Three Months Ended March 31, 2024 and 2023

Current wording

Comparison of the Three and Six Months ended June 30, 2024 and 2023

Previous wording

Revenues consist primarily of net product sales of our commercial products in the U.S., supplemented by royalty and licensing revenues from our collaborative licensing arrangements. The following table provides information regarding our revenues during the three months ended March 31, 2024 (dollars in thousands):

Current wording

Revenues consist primarily of net product sales of our commercial products in the U.S., supplemented by royalty and licensing revenues from our collaborative licensing arrangements. The following table provides information regarding our revenues during the three and six months ended June 30, 2024 (dollars in thousands):

Previous wording

The $2.1 million and 2% decrease in net product sales for the three months ended March 31, 2024, as compared to the same period in 2023, was primarily due to the $18.8 million decline in net product sales of Trokendi XR due to generic erosion, and a decline in net product sales of Oxtellar XR, partially offset by the $19.3 million increase in net product sales from Qelbree.

Current wording

Net product sales were $162.5 million and $128.3 million for the three months ended June 30, 2024 and 2023, respectively. The increase was primarily due to increases in net product sales from Qelbree, GOCOVRI and Oxtellar XR partially offset by the decline in net product sales of Trokendi XR due to generic erosion.

Previous wording

The accrued product rebates balance increased from $97.0 million as of December 31, 2023 to $107.7 million as of March 31, 2024 due to timing of Medicaid billing from states.

Current wording

The accrued product rebates balance increased from $97.5 million as of June 30, 2023 to $116.6 million as of June 30, 2024 due to timing of Medicaid billing from states and higher net product sales.

Previous wording

The provision for product returns decreased from $5.8 million for the three months ended March 31, 2023 to $4.2 million for the three months ended March 31, 2024. The decrease was primarily attributable to lower sales of Trokendi XR.

Current wording

The provision for product returns decreased from $11.7 million for the six months ended June 30, 2023 to $6.7 million for the six months ended June 30, 2024. The decrease was primarily due to the aforementioned $4.1 million adjustment in the estimated provision for product returns related to prior year sales.

Previous wording

The provision for product rebates decreased from $104.6 million for the three months ended March 31, 2023 to $101.0 million for three months ended March 31, 2024. The decrease was primarily attributable to lower Trokendi XR sales partially offset by higher Qelbree sales.

Current wording

The provision for product rebates decreased from $211.4 million for the six months ended June 30, 2023 to $199.0 million for six months ended June 30, 2024. The decrease was primarily attributable to lower Trokendi XR sales partially offset by higher Qelbree sales.

Previous wording

Royalty and licensing revenues were $5.2 million and $13.2 million for the three months ended March 31, 2024 and 2023, respectively. The decrease was primarily due to lower royalties on generic Trokendi XR for the three months ended March 31, 2024 due to the increased number of generic entrants.

Current wording

Royalty, licensing and other revenues were $5.8 million and $7.2 million for the three months ended June 30, 2024 and 2023, respectively. Royalty, licensing and other revenues were $11.0 million and $20.4 million for the six months ended June 30, 2024 and 2023, respectively. The decrease in both periods was primarily due to lower royalties on generic Trokendi XR due to the increased number of generic entrants.

Previous wording

R&D expenses were $24.9 million and $21.2 million for the three months ended March 31, 2024 and 2023, respectively. The increase was primarily due to increased clinical program costs on SPN-820 and increased manufacturing costs of our product candidates.

Current wording

R&D expenses were $26.2 million and $24.4 million for the three months ended June 30, 2024 and 2023, respectively. R&D expenses were $51.1 million and $45.6 million for the six months ended June 30, 2024 and 2023, respectively. The increase in both periods was primarily due to increased clinical program costs on SPN-820 and on the open-label study of Qelbree, and increased manufacturing costs of our product candidates.

Previous wording

Amortization of intangible assets was $20.1 million and $20.0 million for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Amortization of intangible assets was $20.1 million and $20.1 million for the three months ended June 30, 2024 and 2023, respectively. Amortization of intangible assets was $40.2 million and $40.1 million for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

SPN-830 (apomorphine infusion device) for treatment of Parkinson's disease (PD)

Current wording

Contingent consideration was a gain of $4.4 million and an expense of $0.8 million for the three months ended June 30, 2024 and 2023, respectively. Contingent consideration was a gain of $5.5 million and a gain of $0.9 million for the six months ended June 30, 2024 and 2023, respectively. The change for both periods was primarily driven by the passage of time for the sales-based milestones associated with the Adamas Acquisition and change in the estimated timeline of achievement of the regulatory and development milestones associated with the USWM Acquisition. See Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Operational Highlights-Product Pipeline Update-SPN-830 (apomorphine infusion device) for treatment of Parkinson's disease (PD).

Previous wording

Other income (expense) was income of $3.4 million and $3.8 million for the three months ended March 31, 2024 and 2023, respectively. The $0.4 million decrease was due to lower interest income on marketable securities largely driven by an overall lower investment balance, partially offset by the interest expense recognized in three months ended March 31, 2023 related to the 2023 Notes, which were paid off in April 2023.

Current wording

Other income (expense) was an income of $3.7 million and $0.5 million for the three months ended June 30, 2024 and 2023, respectively. Other income (expense) was an income of $7.1 million and $4.3 million for the six months ended June 30, 2024 and 2023, respectively. The increase in both periods was due to higher interest income on marketable securities largely driven by an overall higher investment balance in 2024 and no debt outstanding in the 2024. The interest expense recognized in 2023 was related to the 2023 Notes which were paid off in April 2023.

Previous wording

Income tax expense of $0.1 million for the three months ended March 31, 2024, as compared to an income tax (benefit) of $7.9 million for the three months ended March 31, 2023. The change was primarily due to almost break-even pre-tax income for the three months ended March 31, 2024 and greater full year 2024 forecasted losses as compared to the same period in 2023. The effective tax rate was 49.0% for the three months ended March 31, 2024, as compared to (88.0)% for the three months ended March 31, 2023. The effective tax rate for the three months ended March 31, 2024 was higher compared to the same period in 2023 primarily due to near break-even pretax losses forecasted for the full year 2023. The annual forecasted earnings represent the Company's best estimate as of March 31, 2024 and 2023, are subject to change and could have a material impact on the effective tax rate in subsequent periods. ASC 740, Income Taxes(ASC 740), requires an estimate of the annual effective income tax rate for the full year and apply it to pre-tax income (loss) for each interim period, taking into account year-to-date amounts and projected results for the full year.

Current wording

Income tax expense was $6.4 million and $6.5 million for the three and six months ended June 30, 2024, as compared to an income tax benefit of $16.3 million and $24.2 million for the three and six months ended June 30, 2023, respectively. The change in both periods was primarily due to increased pre-tax income for the three and six months ended June 30, 2024 as compared to the same periods in 2023. The effective tax rate was 24.3% and 24.5% for the three and six months ended June 30, 2024, as compared to 95.1% and 298.7% for the three and six months ended June 30, 2023, respectively. The effective tax rate for the three and six months ended June 30, 2024 was lower compared to the same period in 2023 primarily due to an increase in pre-tax income forecasted for the full year 2024 and the near break-even pre-tax losses forecast in 2023 . The annual forecasted earnings represent the Company's best estimate as of June 30, 2024 and 2023, are subject to change and could have a material impact on the effective tax rate in subsequent periods. ASC 740, Income Taxes(ASC 740), requires the Company to estimate the annual effective income tax rate for the full year and apply it to pre-tax income (loss) for each interim period, taking into account year-to-date amounts and projected results for the full year.

Previous wording

The Company believes its balances of cash, cash equivalents, restricted cash, and unrestricted marketable securities, which totaled $309.4 million as of March 31, 2024, along with cash generated from ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements over the next 12 months and beyond.

Current wording

The Company believes its balances of cash, cash equivalents, and unrestricted marketable securities, which totaled $347.2 million as of June 30, 2024, along with cash generated from ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements over the next 12 months and beyond.

Previous wording

Net cash provided by operating activities was $38.4 million and $49.1 million for the three months ended March 31, 2024, and 2023, respectively. The decrease in cash flows provided by operating activities is primarily due to lower net income for the three months ended March 31, 2024 compared to the same period in prior year and changes in working capital which reflects the timing impacts of cash collections on receivables and settlement of payables.

Current wording

Net cash provided by operating activities was $74.0 million and $30.3 million for the six months ended June 30, 2024, and 2023, respectively. The increase in cash flows provided by operating activities is primarily due to changes in working capital which reflects the timing impacts of cash collections on receivables and settlement of payables, and higher net income for the six months ended June 30, 2024 compared to the same period in prior year.

Previous wording

Net cash used in investing activities was $51.6 million for the three months ended March 31, 2024 compared to $239.8 million cash provided by investing activities during the same period in 2023. The change was primarily due to higher cash flows from the sales and maturities of marketable securities in 2023. Proceeds from the sales and maturities of marketable securities in 2023 were used to repay the 2023 Notes at maturity date of April 1, 2023.

Current wording

Net cash used in investing activities was $100.2 million for the six months ended June 30, 2024 compared to $300.1 million cash provided by investing activities during the same period in 2023. The change was primarily due to higher cash flows from the maturities of marketable securities in 2023. Proceeds from the maturities of marketable securities in 2023 were used to repay the 2023 Notes at maturity date of April 1, 2023.

Previous wording

Net cash provided by financing activities were $1.6 million for the three months ended March 31, 2024 compared to $80.2 million used during the same period in 2023. The change was primarily due to the net proceeds from the draw on the line of credit in the first quarter of 2023 which was used to repay the 2023 Notes in April 2023.

Current wording

Net cash provided by financing activities was $3.2 million for the six months ended June 30, 2024 compared to $398.7 million used during the same period in 2023. The change was primarily due to the payment of the total principal amounts and remaining outstanding interest due on the 0.625% Convertible Senior Notes in April 2023.