Supernus Pharmaceuticals Reports Third Quarter 2013 Financial Results
"As we expected in the third quarter we received approval by the
Third Quarter 2013 Financial Results
Our net product revenue of
$1.1 millionfor the three months ended September 30, 2013, is comprised of 3,648 Oxtellar XRTM prescriptions filled at the pharmacy level during the second quarter of 2013.
- Our product gross margin on net product revenue was 97% in the quarter.
Research and development (R&D) expense for the third quarter declined from
$8.3 millionin 2012 to $3.8 millionin 2013, primarily because our Phase IIb study for SPN-810 was completed in 2012.
Selling, general and administrative (SG&A) expense for the third quarter increased from
$4.1 millionin 2012 to $14.6 millionin 2013, primarily due to increased sales and marketing costs associated with the commercial launches of Oxtellar XRTM and Trokendi XRTM.
We recognized a non-cash charge of
$4.1 millionassociated with the interest make-whole provision of our 7.5% Convertible Senior Secured Notes (the "Notes"). This increase is due to the passage of time.
Net loss applicable to common shareholders for third quarter of 2013 was
$24.1 millionor $0.78per common share (based on 30.9 million weighted average shares outstanding), compared to a net loss of $13.5 millionor $0.55per common share (based on 24.5 million weighted average shares outstanding) in the third quarter of 2012.
Nine Months Ended
Our net product revenue of
$1.3 millionfor the nine months ended September 30, 2013is comprised of 4,177 Oxtellar XRTM prescriptions filled at the pharmacy level during the first and second quarters.
- Our product gross margin on net product revenue during this period was 97%.
R&D expense for the first nine months of 2013 was
$11.8 million, compared with $18.4 millionin 2012. The decrease was primarily attributable to the completion of our Phase IIb study for SPN-810 in 2012.
SG&A expense for the first nine months of 2013 was
$40.4 millioncompared with $11.4 millionin 2012, increasing year over year due to hiring of our sales force as well as costs associated with the commercialization of Oxtellar XRTM and Trokendi XRTM in 2013.
Net loss applicable to common shareholders for the first nine months of 2013 was
$69.9 millionor $2.26per common share (based on 30.9 million weighted average shares outstanding), compared to $33.9 millionor $2.36per common share (based on 14.4 million weighted average shares outstanding in 2012).
For the nine months ended
September 30, 2013, product shipments to wholesalers totaled $13.8 million. This total can be apportioned as follows:
$6.6 millionhas been collected in cash from wholesalers through the first nine months. The balance, $7.2 million, is recorded as accounts receivable, at September 30, 2013.
$1.8 millionof the $13.8 millionin shipments to wholesalers has been recognized as revenue, net of $0.5 millionin gross to net deductions, resulting in net product revenue of $1.3 million. The balance, $12.0 million, has been recorded on our balance sheet net of $1.6 millionin estimated sales deductions; i.e. as net deferred product revenue of $10.4 million.
- These results are summarized in the following table, along with the prescriptions which have been filled at the pharmacy level for each quarter:
|Three Months ended|
||June 30||September 30||TOTAL|
|Prescriptions filled at pharmacy level|
|Revenue Recognized (in thousands)|
|Oxtellar XRTM||$ -||$ 154||$ 1,130||$ 1,283|
|Deferred Revenue (in thousands)|
|Oxtellar XRTM||$ 3,551||$ 3,967||$ 6,647||(1)|
|Trokendi XRTM||-||-||$ 3,718||(2)|
(1) Deferred revenue for Oxtellar XRTM represents approximately 19,000 prescriptions. Of this amount, 7,596 prescriptions were filled during the third quarter. The remainder, approximately 11,400 prescriptions, is held at the wholesale level as of
(2) Deferred revenue for Trokendi XRTM represents approximately 10,000 prescriptions. Of this amount, 1,434 prescriptions were filled during the first five weeks of launch in the third quarter. The remainder, approximately 8,600 prescriptions, is held at the wholesale level as of
- We have not yet recognized revenue related to the prescriptions written during the third quarter of 2013 for either Oxtellar XRTM or Trokendi XRTM; however, we anticipate recognizing revenue for these prescriptions in our fourth quarter results.
Capital Resources and Financial Guidance
Cash, cash equivalents and marketable securities increased from
$88.5 millionat December 31, 2012to $102.5 millionat September 30, 2013, reflecting the proceeds from the sale of the Notes in May 2013.
Cash burn for the nine months ended
September 30, 2013totaled approximately $55 million.
We are reducing our forecast for cash burn for 2013 to
$70 million- $75 million, as compared to our previous guidance of $85 million- $95 million.
We project full year revenue from Oxtellar XRTM of
$8.5 million, assuming that starting in the fourth quarter, revenue will be recognized based on shipments to wholesalers; i.e., rather than prescriptions at the pharmacy level.
- We continue to anticipate that cash, cash equivalents, unrestricted marketable securities and long term investments should be sufficient to fund operations through the end of 2014, by which time we project to be cash flow break even.
Oxtellar XR™ Launch Update
Oxtellar XRTM continued to grow significantly during the third quarter of 2013:
- Oxtellar XRTM prescriptions, as reported by IMS, more than doubled from 3,648 prescriptions in the second quarter to 7,596 prescriptions in the third quarter.
- Over 1,600 target physicians have prescribed Oxtellar XRTM since launch, a substantial increase over the 1,100 target physicians prescribing Oxtellar XRTM previously reported.
Based on IMS data, for the week ending
November 1, 2013, Oxtellar XRTM achieved a conversion share of the addressable oxcarbazepine market of approximately 1.8%, representing a significant increase over the 1.3% conversion share we reported during our second quarter Oxtellar XRTM launch update.
Oxtellar XRTM continues to build coverage in managed care with 145.5 million lives covered, 129 million on the commercial side and 16.5 million on
Trokendi XRTM Launch Update
As expected, Trokendi XRTM received final
FDAapproval in the third quarter and was launched in August 2013. This was the second product launch for Supernus this year, following the launch of Oxtellar XRTM in February 2013. The Trokendi XRTM launch is off to a strong start, with 4,711 prescriptions reported by IMS through the week ending November 1, 2013of which 1,434 were in the first five weeks of launch in the third quarter. Although very early in the launch phase, Trokendi XRTM has already achieved 0.5% market conversion share of the addressable market and feedback from physicians and patients has been very positive.
Trokendi XRTM started with strong coverage in managed care with 116.4 million lives covered, 111 million on the commercial side and 5.4 million on
In anticipation of the launch of Trokendi XRTM, the Supernus field sales force was increased by 15 sales representatives. We will be adding additional sales representatives in the fourth quarter to continue to support commercialization of Trokendi XRTM and Oxtellar XRTM. Our sales force continues to be successful in increasing the number of calls on target physicians, delivering over 8,900 calls in
September 2013, a record number of monthly physician calls for the Company.
Regarding our pipeline, a scientific meeting was held with the
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 achieve profitability; the Company's ability to raise sufficient capital to 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 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 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
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|Cash, cash equivalents and marketable securities||
|Other current assets||3,228||1,802|
|Total Current Assets||102,862||91,462|
|Property and equipment, net||2,480||1,421|
|Long term investments||15,215||-|
|Deferred financing costs||2,031||89|
|Other long-term assets||1,177||1,017|
|Accounts payable and accrued expenses||
|Deferred product revenue||10,365||-|
|Deferred licensing revenue||234||508|
|Secured notes payable, current||-||11,809|
|Total Current Liabilities||25,071||22,983|
|Deferred licensing revenue, net of current portion||1,452||309|
|Convertible notes, net of discount||60,175||-|
|Secured notes payable, long-term||-||11,088|
|Other non-current liabilities||2,401||1,788|
|Total Stockholders' Equity||12,453||57,570|
|Total Liabilities & Stockholders Equity||
|Consolidated Statements of Operations|
|(in thousands, except share and per share data)|
Three Months ended
Nine Months ended
|Net product sales||$ 1,130||$ -||$ 1,283||$ -|
|Costs and expenses|
|Cost of product sales||33||-||37||-|
|Research and development||3,779||8,306||11,844||18,367|
|Selling, general and administrative||14,620||4,075||40,366||11,450|
|Total costs and expenses||18,432||12,381||52,247||29,817|
|Other income (expense)|
|Interest income and other income (expense), net||102||(18)||292||192|
|Changes in fair value of derivative liabilities||(4,153)||(294)||(12,692)||(766)|
|Loss on extinguishment of debt||-||-||(1,162)||-|
|Total other (expense) income||(6,921)||(1,192)||(19,304)||(3,345)|
|Cumulative dividends on Series A convertible preferred stock||-||-||-||(1,143)|
|Net loss attributable to common stockholders||$ (24,096)||$ (13,482)||$ (69,867)||$ (33,914)|
|Loss per common share:|
|Basic and diluted||$ (0.78)||$ (0.55)||$ (2.26)||$ (2.36)|
|Weighted-average number of common shares:|
|Basic and diluted||30,941,404||24,464,281||30,904,876||14,356,546|
|Reconciliation of Non-GAAP Net Loss|
|Three Months||Nine Months|
|Net loss - GAAP||$ (24,096)||$ (69,867)|
|Changes in fair value of derivative liabilities||(4,153)||(12,692)|
|Loss on extinguishment of debt||-||(1,162)|
|Adjusted Net Loss - non-GAAP||$ (19,943)||$ (56,013)|
Jack Khattar, President & CEO Gregory S. Patrick, Vice President & CFO Supernus Pharmaceuticals, Inc.Tel: (301) 838-2591
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