Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Supernus Pharmaceuticals Inc (SUPN, Financial) reported double-digit growth in total revenues, excluding Trokendi XR and Oxtellar XR, driven by strong performance in Calgary with 31% growth in prescriptions and 75% growth in net sales.
- Calgary prescriptions reached an all-time quarterly high of 176,503, with net sales at $45 million, benefiting from prescription growth and gross-to-net improvement.
- The company expanded its base of prescribers to approximately 27,138, up from 25,938 from the previous quarter, indicating increased market penetration.
- Supernus Pharmaceuticals Inc (SUPN) has an emerging CNS pipeline with exciting catalysts coming up in the next 12 months, including data from Phase IIb study in treatment-resistant depression and interim data from a study on treatment-resistant seizures.
- The company maintains a strong balance sheet with approximately $309.4 million in cash, cash equivalents, and marketable securities, providing significant financial flexibility for potential M&A and other value-creating opportunities.
Negative Points
- Increased pressure on Parkinson's franchise brands due to higher Medicare rebates and patient out-of-pocket costs, contributing to increased gross-to-net deductions.
- Net sales for Oxtellar XR and Trokendi XR declined, with Oxtellar XR net sales at $26.9 million compared to $28.9 million in the same quarter last year, and Trokendi XR net sales down by 54%.
- The FDA issued a complete response letter for SBNA.30, indicating that the application is not ready for approval in its present form, which could delay potential market entry.
- Operating loss on a GAAP basis for the first quarter of 2024 was $3.2 million compared to an operating earnings of $5.2 million for the prior year period, reflecting increased R&D spend associated with clinical programs.
- The company faces uncertainties with the introduction of the first generic of Oxtellar XR expected in September 2024, which may further impact net sales.
Q & A Highlights
Q: Can you provide an update on Calgary's performance in Q2 compared to Q1, and whether you were affected by the Change Healthcare cybersecurity attacks?
A: Jack Khattar, President and CEO of Supernus Pharmaceuticals, noted that Calgary's prescription growth increased by about 11% in Q2 compared to Q1. He expects further acceleration in Q2, particularly with the back-to-school season. Regarding the cybersecurity attacks, he confirmed that Supernus was not impacted as they had other providers to continue service.
Q: With the upcoming interim data for SPN817, what should we expect in terms of follow-up data and seizure freedom rates?
A: Jack Khattar explained that the interim data will cover around 40 patients, with a few more expected by the second half of the year. He discussed the variability in seizure freedom rates across different drugs and patient populations, noting that anything above 10% is generally considered effective, especially for refractory patients.
Q: What is Supernus's capacity for mergers and acquisitions in terms of financial resources?
A: Jack Khattar stated that Supernus could engage in transactions ranging from $500 million to $1 billion, potentially more if equity is used. The scope would depend on the specific acquisition and its characteristics, such as whether it includes assets that generate significant cash flows.
Q: Regarding Calgary, do you anticipate the gross-to-net could dip below 50% as the year progresses?
A: Jack Khattar responded that while quarter-to-quarter fluctuations might occur, the gross-to-net is expected to improve throughout the year. He mentioned the potential for unexpected quarter-to-quarter fluctuations but remained optimistic about achieving the lower end of the target range.
Q: Can you elaborate on the issues raised in the CRL regarding SPNA30, particularly about the master file for the infusion device and product quality?
A: Jack Khattar clarified that the CRL included issues related to quality and the master file. Discussions with the manufacturer are ongoing to address these issues, with a meeting with the FDA scheduled to ensure all concerns are resolved before resubmission.
Q: What are the expectations for the Phase IIa study of SPN817 and the design of the upcoming Phase IIb study?
A: Jack Khattar indicated that the Phase IIa study is exploratory, helping to design the Phase IIb study. He emphasized the importance of a drug that effectively treats epilepsy and potentially delays the progression of the condition. Details of the Phase IIb study will be shared in a future update.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
