Document
false0001356576 0001356576 2019-07-23 2019-07-23


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): August 6, 2019
 
Supernus Pharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)

Delaware
001-35518
20-2590184
 
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
 
 
 
1550 East Gude Drive
Rockville
MD
20850
 
(Address of Principal Executive Offices)
 
(Zip Code)
 

 
Registrant’s telephone number, including area code: (301) 838-2500
 
Not Applicable
(Former name or former address, if changed since last report.)

  Securities registered pursuant to Section 12(b) of the Exchange Act
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $0.001 par value per share
SUPN
The Nasdaq Global Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 

1



Item 2.02                                           Results of Operations and Financial Condition.

On August 6, 2019, Supernus Pharmaceuticals, Inc. (“Supernus” or the “Company”) issued a press release regarding its financial results for the second quarter ended June 30, 2019. A copy of this press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

As previously announced, Supernus will host a conference call at 9:00 a.m. Eastern Time on Wednesday, August 7, 2019, to present the business and financial results. A live webcast will be available at www.supernus.com. The webcast will be archived on the Company’s website for 60 days following the live call. Callers should dial in approximately 10 minutes prior to the start of the call. The phone number to join the conference call is +1 (877) 288-1043 (U.S. and Canada) or +1 (970) 315-0267 (international). The access code for the live call is 1527779.

The information in this Item 2.02 (including Exhibit 99.1) is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, whether made before or after the date of this report, except as shall be expressly set forth by specific reference in such filing.

This Current Report on Form 8-K contains “forward-looking statements” that do not convey historical information, but relate to predicted or potential future events, such as statements of our plans, strategies and intentions. These statements can often be identified by the use of forward-looking terminology such as “believe,” “expect,” “intend,” “may,” “will,” “should,” or “anticipate” or similar terminology. All statements other than statements of historical facts included in this Current Report on Form 8-K are forward-looking statements. All forward-looking statements speak only as of the date of this Current Report on Form 8-K. Except for Supernus’ ongoing obligations to disclose material information under the federal securities laws, Supernus undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition to the risks and uncertainties of ordinary business operations and conditions in the general economy and the markets in which Supernus competes, the forward-looking statements of Supernus contained in this Current Report on Form 8-K are also subject to various risks and uncertainties, including those set forth in Item 1A, “Risk Factors,” in Supernus’ Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which the Company filed on March 1, 2019.

 
Item 9.01                                           Financial Statements and Exhibits.
 
(d)                                 Exhibit
 
The following document is furnished as an Exhibit pursuant to Item 2.02 hereof:
 
Exhibit 99.1 — Press Release Dated August 6, 2019.

Exhibit 104 — The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.

2



EXHIBIT INDEX
 
Number
 
Description
 
 
 
 
 
 
 
99.1
 
 
Attached

3



SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 
 
SUPERNUS PHARMACEUTICALS, INC.
 
 
DATED: August 6, 2019
By:
/s/ Gregory S. Patrick
 
 
Gregory S. Patrick
 
 
Senior Vice-President and Chief Financial Officer


4
Exhibit


Exhibit 99.1
 http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=13045602&doc=8
 

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., August 6, 2019 - 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 XR
168,682

 
158,568

 
6.4
%
Oxtellar XR
40,384

 
36,066

 
12.0
%
Total
209,066

 
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 2018

 
Change %

Trokendi XR
78,964

 
76,474

 
3.3
%
Oxtellar XR
23,394

 
20,556

 
13.8
%
Total
102,358

 
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 securities
171,222

 
163,770

Accounts receivable, net
84,564

 
102,922

Inventories, net
26,024

 
25,659

Prepaid expenses and other current assets
21,757

 
8,888

Total current assets
390,911

 
493,487

Long term marketable securities
593,754

 
418,798

Property and equipment, net
4,028

 
4,095

Intangible assets, net
28,787

 
31,368

Lease assets
19,639

 

Deferred income taxes
25,975

 
29,683

Other assets
581

 
380

 
 
 
 
Total assets
$
1,063,675

 
$
977,811

 
 
 
 
Liabilities and stockholders’ equity
 
 
 
Current liabilities
 
 
 
Accounts payable
$
4,081

 
$
3,195

Accrued product returns and rebates
95,934

 
107,063

Accrued expenses and other current liabilities
38,614

 
36,535

Income taxes payable
2,674

 
12,377

Non-recourse liability related to sale of future royalties, current portion
2,668

 
2,183

Total current liabilities
143,971

 
161,353

Convertible notes, net
337,210

 
329,462

Non-recourse liability related to sale of future royalties, long term
21,100

 
22,575

Lease liabilities, long term
27,535

 

Other liabilities
10,955

 
11,398

Total liabilities
540,771

 
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 capital
379,369

 
369,637

Accumulated other comprehensive earnings (loss), net of tax
5,924

 
(3,158
)
Retained earnings
137,559

 
86,492

Total stockholders’ equity
522,904

 
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 revenues
2,337

 
1,758

 
4,712

 
3,067

Licensing revenues

 
750

 

 
750

Total revenues
104,695

 
99,538

 
190,169

 
189,967

 
 
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
 
 
Cost of product sales
4,044

 
3,683

 
7,728

 
6,961

Research and development
16,970

 
20,038

 
32,364

 
38,946

Selling, general and administrative
41,083

 
40,097

 
82,051

 
76,946

 
 
 
 
 
 
 
 
Total costs and expenses
62,097

 
63,818

 
122,143

 
122,853

 
 
 
 
 
 
 
 
Operating earnings
42,598

 
35,720

 
68,026

 
67,114

 
 
 
 
 
 
 
 
Other income (expenses), net
148

 
(1,864
)
 
(1,041
)
 
(2,076
)
 
 
 
 
 
 
 
 
Earnings before income taxes
42,746

 
33,856

 
66,985

 
65,038

 
 
 
 
 
 
 
 
Income tax expense
10,019

 
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
 
 
 
 
 
 
 
Basic
52,385,590

 
51,919,894

 
52,361,149

 
51,729,243

Diluted
53,912,977

 
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