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): November 3, 2020
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(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 | ||||||
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):
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. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 3, 2020, Supernus Pharmaceuticals, Inc. (“Supernus” or the “Company”) issued a press release regarding its financial results for the third quarter ended September 30, 2020. A copy of this press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
As previously announced, Supernus is hosting a conference call at 9:00 a.m. Eastern Time on Wednesday, November 4, 2020, to present the business and financial results. A live webcast is available at www.supernus.com. The webcast will be archived on the Company’s website for 60 days following the live call.
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, 2019, which the Company filed on February 28, 2020, Item 8.01 of the Current Report on Form 8-K, which the Company filed on April 3, 2020; Item 1A, “Risk Factors,” of the Quarterly Report on Form 10-Q, which the Company filed on May 15, 2020; and Item 1A, “Risk Factors,” of the Quarterly Report on Form 10-Q, which the Company filed on August 17, 2020.
Item 9.01 Financial Statements and Exhibits*.
(d) Exhibit
Exhibit 99.1 — Press Release Dated November 3, 2020 furnished as an Exhibit pursuant to Item 2.02 hereof.
Exhibit 104 — The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.
______________________________________
* The information furnished under Item 2.02 and Item 9.01 of this Current Report on Form 8-K, including the exhibits, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange act of 1934, as amended, or otherwise subject to liabilities under that section, nor shall it be deemed incorporated by reference in any registration statement or other filings of the Company under the Securities act of 1933, as amended, except as shall be set forth by specific reference in such filing.
2
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: November 3, 2020 | By: | /s/ Gregory S. Patrick | ||||||
| Gregory S. Patrick | ||||||||
| Senior Vice-President and Chief Financial Officer | ||||||||
3
Exhibit 99.1
Supernus Announces Third Quarter 2020 Financial Results
•Q3 2020 total revenues of $155.1 million, including net product sales of $152.1 million and royalty revenues of $3.0 million
•Q3 2020 operating earnings of $56.1 million
•On track to initiate commercial launch of SPN-812 in January 2021, if approved by the FDA
•Topline data from the SPN-812 Phase III trial in adult ADHD patients expected in Q1 2021
•Submitted SPN-830 (Apomorphine infusion pump) NDA to the FDA in September 2020
•Increased full year 2020 net product sales guidance range of $500 million to $525 million, and operating earnings guidance range of $145 million to $160 million
ROCKVILLE, MD., November 3, 2020 - 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 third quarter of 2020 and associated Company developments.
“During the first nine months of 2020, we delivered strong product sales growth, diversified our revenue base and enhanced our long term growth with two corporate transactions” said Jack Khattar, President and CEO of Supernus. “Our employees have been hard at work in anticipation of the launch of SPN-812. Based on the efficacy and safety demonstrated in its clinical program, SPN-812 can potentially offer an important new option in the treatment of ADHD.”
Commercial Update
Third quarter 2020 net product sales were $152.1 million, 52% higher than the same period in 2019, driven by the addition of $40.9 million of net product sales from the acquired commercial products and $11.2 million in net product sales growth from Trokendi XR and Oxtellar XR.
Net Product Sales ($ in millions) | |||||||||||||||||
| Q3 2020 | Q3 2019 | Change % | |||||||||||||||
| Trokendi XR | $ | 82.9 | $ | 77.3 | 7 | % | |||||||||||
| Oxtellar XR | 28.3 | 22.7 | 25 | % | |||||||||||||
| APOKYN | 34.5 | — | NM(1) | ||||||||||||||
| XADAGO | 2.3 | — | NM(1) | ||||||||||||||
| MYOBLOC | 4.1 | — | NM(1) | ||||||||||||||
| Total | $ | 152.1 | $ | 100.0 | 52 | % | |||||||||||
____________
(1)Fluctuation in terms of percentage change is not meaningful.
Product Pipeline Update
SPN-812 - Novel non-stimulant for the treatment of ADHD in children and adults
•The Company continues to prepare for the commercial launch of SPN-812, which is expected in January 2021, if approved by the FDA. The New Drug Application (NDA) Prescription Drug User Fee Act (PDUFA) target action date is November 8, 2020.
•The Company completed enrollment in the SPN-812 Phase III trial in adult patients with ADHD. Topline data from the trial is expected in the first quarter of 2021.
SPN-830 (Apomorphine infusion pump) - Continuous treatment of motor fluctuations (“on-off” episodes) in PD
•NDA was submitted to the U.S. Food and Drug Administration (FDA) in September 2020 for the continuous treatment of "on-off" episodes in adults with Parkinson's disease (PD) whose motor control is unsatisfactory with oral levodopa and at least one other noninvasive PD therapy.
•The Company expects to launch SPN-830 in the fourth quarter of 2021, if approved by the FDA.
SPN-820 - Novel first-in-class activator of mTORC1
•Preclinical and development activities are ongoing, with the goal of initiating a Phase II clinical program in treatment-resistant depression by the end of 2021.
Operating Expenses
Research and development (R&D) expenses in the third quarter of 2020 were $16.8 million, essentially unchanged from $16.9 million in the same quarter last year.
Selling, general and administrative (SG&A) expenses in the third quarter of 2020 were $54.7 million, compared to $39.3 million in the same quarter last year. This increase was primarily due to costs associated with the new CNS portfolio of commercial products acquired from US WorldMeds (USWM Acquisition) in the second quarter of 2020 and our ongoing preparations for the potential launch of SPN-812.
Amortization expense of intangible assets in the third quarter of 2020 were $6.1 million, compared to $1.3 million in the same quarter last year. This increase results from the USWM Acquisition.
Operating Earnings and Earnings Per Share
Operating earnings (GAAP) in the third quarter of 2020 were $56.1 million, compared to $39.7 million in the third quarter of 2019. Net earnings (GAAP) in the third quarter of 2020 were $40.0 million, or $0.74 per diluted share, as compared to $28.9 million, or $0.54 per diluted share, in the same period last year.
Balance Sheet Highlights
As of September 30, 2020, the Company had $740.1 million in cash, cash equivalents, marketable securities and long term marketable securities, compared to $938.8 million at December 31, 2019. During the first nine months of 2020, the Company generated $107.5 million of cash from operations, inclusive of net changes in working capital. The Company made cash payments of approximately $300 million for acquisition of the CNS portfolio of US WorldMeds and $25 million paid to Navitor upon executing the development and option agreement for SPN-820.
Financial Guidance
The Company is revising full year 2020 financial guidance, which consists of the following components, inclusive of the impact of acquiring the CNS portfolio of US WorldMeds as of June 9, 2020:
| ($ in millions) | Current (As of November 3, 2020) | Previous (As of August 18, 2020) | |||||||||
| Net product sales | $500 - $525 | $460 - $500 | |||||||||
| Research and development expense | Approximately $75 | Approximately $85 | |||||||||
| Selling, general and administrative expense | $215 - $225 | $240 - $250 | |||||||||
| Amortization of intangible assets | $16 | $15 | |||||||||
| Operating earnings (GAAP) | $145 - $160, including amortization of intangible assets | $90 - $110, including amortization of intangible assets | |||||||||
Conference Call Details
The Company will hold a conference call hosted by Jack Khattar, President and Chief Executive Officer and the executive management team to discuss these results at 9:00 a.m. Eastern Time, on Wednesday, November 4, 2020.
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: | 1882244 | ||||
| Conference Call Name: | Supernus Pharmaceuticals Third Quarter 2020 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 markets Trokendi XR® (extended-release topiramate) for the prophylaxis of migraine and the treatment of epilepsy; Oxtellar XR® (extended-release oxcarbazepine) for the treatment of epilepsy; APOKYN® (apomorphine hydrochloride injection) for the acute treatment of hypomobility in advanced Parkinson’s disease (PD); MYOBLOC® (rimabotulinumtoxinB) for the treatment of cervical dystonia and treatment of chronic sialorrhea in adults; and XADAGO® (safinamide) as an adjunctive treatment to levodopa/carbidopa in PD patients with hypomobility. The Company is also developing several product candidates to address large market opportunities in the CNS market, including SPN-812 for the treatment of ADHD; apomorphine infusion pump for hypomobility in PD; SPN-820 for treatment-resistant depression; and SPN-817 for the treatment of epilepsy.
See full Prescribing Information for our products here: Trokendi XR, Oxtellar XR, APOKYN, MYOBLOC, and XADAGO.
All trademarks are the property of their respective owners.
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 data)
| September 30, | December 31, | ||||||||||
| 2020 | 2019 | ||||||||||
| (unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 204,293 | $ | 181,381 | |||||||
| Marketable securities | 147,657 | 165,692 | |||||||||
| Accounts receivable, net | 133,107 | 87,332 | |||||||||
| Inventories, net | 42,465 | 26,628 | |||||||||
| Prepaid expenses and other current assets | 24,493 | 11,611 | |||||||||
| Total current assets | 552,015 | 472,644 | |||||||||
| Long term marketable securities | 388,185 | 591,773 | |||||||||
| Property and equipment, net | 17,395 | 17,068 | |||||||||
| Operating lease assets | 21,019 | 21,279 | |||||||||
| Finance lease asset | 21,676 | — | |||||||||
| Intangible assets, net | 402,265 | 24,840 | |||||||||
| Goodwill | 89,143 | — | |||||||||
| Deferred income tax assets | — | 32,063 | |||||||||
| Other assets | 18,324 | 615 | |||||||||
| Total assets | $ | 1,510,022 | $ | 1,160,282 | |||||||
| Liabilities and stockholders’ equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 11,193 | $ | 10,141 | |||||||
| Accrued product returns and rebates | 136,973 | 107,629 | |||||||||
| Accrued expenses and other current liabilities | 56,289 | 34,305 | |||||||||
| Contingent consideration, current portion | 82,900 | — | |||||||||
| Income taxes payable | — | 2,443 | |||||||||
| Operating lease liabilities, current portion | 3,741 | 2,825 | |||||||||
| Finance lease liability, current portion | 3,612 | — | |||||||||
| Nonrecourse liability related to sale of future royalties, current portion | 4,898 | 3,244 | |||||||||
| Total current liabilities | 299,606 | 160,587 | |||||||||
| Convertible notes, net | 357,521 | 345,170 | |||||||||
| Contingent consideration, long term | 33,000 | — | |||||||||
| Nonrecourse liability related to sale of future royalties, long term | 14,960 | 19,248 | |||||||||
| Operating lease liabilities, long term | 29,522 | 30,440 | |||||||||
| Finance lease liability, long term | 19,289 | — | |||||||||
| Deferred income tax liabilities | 37,941 | — | |||||||||
| Other liabilities | 9,304 | 9,409 | |||||||||
| Total liabilities | 801,143 | 564,854 | |||||||||
| Stockholders’ equity | |||||||||||
Common stock, $0.001 par value; 130,000,000 shares authorized; 52,670,121 and 52,533,348 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | 53 | 53 | |||||||||
| Additional paid-in capital | 403,396 | 388,410 | |||||||||
| Accumulated other comprehensive earnings, net of tax | 9,700 | 7,417 | |||||||||
| Retained earnings | 295,730 | 199,548 | |||||||||
| Total stockholders’ equity | 708,879 | 595,428 | |||||||||
| Total liabilities and stockholders’ equity | $ | 1,510,022 | $ | 1,160,282 | |||||||
Supernus Pharmaceuticals, Inc.
Condensed Consolidated Statements of Earnings
(in thousands, except share and per share data)
| Three Months ended September 30, | Nine Months ended September 30, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Net product sales | $ | 152,133 | $ | 100,034 | $ | 368,607 | $ | 285,491 | |||||||||||||||
| Royalty revenues | 3,002 | 2,106 | 8,233 | 6,818 | |||||||||||||||||||
| Total revenues | 155,135 | 102,140 | 376,840 | 292,309 | |||||||||||||||||||
| Costs and expenses | |||||||||||||||||||||||
Cost of goods sold(a) | 21,388 | 4,819 | 33,926 | 12,547 | |||||||||||||||||||
| Research and development | 16,839 | 16,943 | 58,023 | 49,307 | |||||||||||||||||||
| Selling, general and administrative | 54,660 | 39,343 | 144,377 | 118,782 | |||||||||||||||||||
| Amortization of intangible assets | 6,108 | 1,306 | 9,814 | 3,918 | |||||||||||||||||||
| Total costs and expenses | 98,995 | 62,411 | 246,140 | 184,554 | |||||||||||||||||||
| Operating earnings | 56,140 | 39,729 | 130,700 | 107,755 | |||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Interest income | 3,262 | 5,559 | 12,988 | 15,696 | |||||||||||||||||||
| Interest expense | (6,088) | (5,662) | (17,658) | (16,930) | |||||||||||||||||||
| Other income (expense), net | (603) | (36) | 2,925 | 54 | |||||||||||||||||||
| Total other expense | (3,429) | (139) | (1,745) | (1,180) | |||||||||||||||||||
| Earnings before income taxes | 52,711 | 39,590 | 128,955 | 106,575 | |||||||||||||||||||
| Income tax expense | 12,714 | 10,730 | 32,773 | 26,648 | |||||||||||||||||||
| Net earnings | $ | 39,997 | $ | 28,860 | $ | 96,182 | $ | 79,927 | |||||||||||||||
| Earnings per share | |||||||||||||||||||||||
| Basic | $ | 0.76 | $ | 0.55 | $ | 1.83 | $ | 1.53 | |||||||||||||||
| Diluted | $ | 0.74 | $ | 0.54 | $ | 1.79 | $ | 1.48 | |||||||||||||||
| Weighted-average shares outstanding | |||||||||||||||||||||||
| Basic | 52,658,850 | 52,453,384 | 52,583,891 | 52,392,232 | |||||||||||||||||||
| Diluted | 53,762,642 | 53,805,838 | 53,663,273 | 53,898,486 | |||||||||||||||||||
___________________________________________
(a) Excludes amortization of acquired intangible assets
CONTACTS:
Jack A. Khattar, President and Chief Executive Officer
Jim Kelly, EVP & Chief Financial Officer
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