supn-20230630
0001356576false12-312023Q2http://fasb.org/us-gaap/2023#AccountingStandardsUpdate202006Memberhttp://fasb.org/us-gaap/2023#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2023#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2023#AccountsPayableAndAccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#AccountsPayableAndAccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#OperatingLeaseLiabilityNoncurrenthttp://fasb.org/us-gaap/2023#OperatingLeaseLiabilityNoncurrent49500013565762023-01-012023-06-3000013565762023-08-01xbrli:shares00013565762023-06-30iso4217:USD00013565762022-12-31iso4217:USDxbrli:shares0001356576us-gaap:ProductMember2023-04-012023-06-300001356576us-gaap:ProductMember2022-04-012022-06-300001356576us-gaap:ProductMember2023-01-012023-06-300001356576us-gaap:ProductMember2022-01-012022-06-300001356576us-gaap:RoyaltyMember2023-04-012023-06-300001356576us-gaap:RoyaltyMember2022-04-012022-06-300001356576us-gaap:RoyaltyMember2023-01-012023-06-300001356576us-gaap:RoyaltyMember2022-01-012022-06-3000013565762023-04-012023-06-3000013565762022-04-012022-06-3000013565762022-01-012022-06-300001356576us-gaap:CommonStockMember2022-12-310001356576us-gaap:AdditionalPaidInCapitalMember2022-12-310001356576us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001356576us-gaap:RetainedEarningsMember2022-12-310001356576us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-3100013565762023-01-012023-03-310001356576us-gaap:CommonStockMember2023-01-012023-03-310001356576us-gaap:RetainedEarningsMember2023-01-012023-03-310001356576us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001356576us-gaap:CommonStockMember2023-03-310001356576us-gaap:AdditionalPaidInCapitalMember2023-03-310001356576us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001356576us-gaap:RetainedEarningsMember2023-03-3100013565762023-03-310001356576us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001356576us-gaap:CommonStockMember2023-04-012023-06-300001356576us-gaap:RetainedEarningsMember2023-04-012023-06-300001356576us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300001356576us-gaap:CommonStockMember2023-06-300001356576us-gaap:AdditionalPaidInCapitalMember2023-06-300001356576us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001356576us-gaap:RetainedEarningsMember2023-06-300001356576us-gaap:CommonStockMember2021-12-310001356576us-gaap:AdditionalPaidInCapitalMember2021-12-310001356576us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001356576us-gaap:RetainedEarningsMember2021-12-3100013565762021-12-3100013565762021-01-012021-12-310001356576srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AdditionalPaidInCapitalMember2021-12-310001356576srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2021-12-310001356576srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001356576us-gaap:AdditionalPaidInCapitalMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2021-12-310001356576us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2021-12-310001356576srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2021-12-310001356576us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-3100013565762022-01-012022-03-310001356576us-gaap:CommonStockMember2022-01-012022-03-310001356576us-gaap:RetainedEarningsMember2022-01-012022-03-310001356576us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001356576us-gaap:CommonStockMember2022-03-310001356576us-gaap:AdditionalPaidInCapitalMember2022-03-310001356576us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001356576us-gaap:RetainedEarningsMember2022-03-3100013565762022-03-310001356576us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001356576us-gaap:CommonStockMember2022-04-012022-06-300001356576us-gaap:RetainedEarningsMember2022-04-012022-06-300001356576us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001356576us-gaap:CommonStockMember2022-06-300001356576us-gaap:AdditionalPaidInCapitalMember2022-06-300001356576us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001356576us-gaap:RetainedEarningsMember2022-06-3000013565762022-06-30supn:productsupn:segment0001356576us-gaap:ConvertibleDebtMember2023-03-302023-03-300001356576us-gaap:ConvertibleDebtMember2023-04-012023-04-010001356576supn:USBBankUSACreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2023-02-080001356576us-gaap:AccountingStandardsUpdate202006Member2022-01-010001356576us-gaap:AccountingStandardsUpdate202006Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2022-01-010001356576us-gaap:AccountingStandardsUpdate202006Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AdditionalPaidInCapitalMember2022-01-010001356576us-gaap:AccountingStandardsUpdate202006Memberus-gaap:ConvertibleDebtMember2023-01-012023-06-300001356576supn:QelbreeMember2023-04-012023-06-300001356576supn:QelbreeMember2022-04-012022-06-300001356576supn:QelbreeMember2023-01-012023-06-300001356576supn:QelbreeMember2022-01-012022-06-300001356576supn:GOCOVRIMember2023-04-012023-06-300001356576supn:GOCOVRIMember2022-04-012022-06-300001356576supn:GOCOVRIMember2023-01-012023-06-300001356576supn:GOCOVRIMember2022-01-012022-06-300001356576supn:OxtellarXRMember2023-04-012023-06-300001356576supn:OxtellarXRMember2022-04-012022-06-300001356576supn:OxtellarXRMember2023-01-012023-06-300001356576supn:OxtellarXRMember2022-01-012022-06-300001356576supn:TrokendiXrMember2023-04-012023-06-300001356576supn:TrokendiXrMember2022-04-012022-06-300001356576supn:TrokendiXrMember2023-01-012023-06-300001356576supn:TrokendiXrMember2022-01-012022-06-300001356576supn:APOKYNMember2023-04-012023-06-300001356576supn:APOKYNMember2022-04-012022-06-300001356576supn:APOKYNMember2023-01-012023-06-300001356576supn:APOKYNMember2022-01-012022-06-300001356576us-gaap:ManufacturedProductOtherMember2023-04-012023-06-300001356576us-gaap:ManufacturedProductOtherMember2022-04-012022-06-300001356576us-gaap:ManufacturedProductOtherMember2023-01-012023-06-300001356576us-gaap:ManufacturedProductOtherMember2022-01-012022-06-300001356576supn:QelbreeMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-04-012023-06-30xbrli:pure0001356576supn:QelbreeMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2022-04-012022-06-300001356576supn:QelbreeMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-06-300001356576supn:QelbreeMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2022-01-012022-06-300001356576us-gaap:ProductConcentrationRiskMembersupn:GOCOVRIMemberus-gaap:RevenueFromContractWithCustomerMember2023-04-012023-06-300001356576us-gaap:ProductConcentrationRiskMembersupn:GOCOVRIMemberus-gaap:RevenueFromContractWithCustomerMember2022-04-012022-06-300001356576us-gaap:ProductConcentrationRiskMembersupn:GOCOVRIMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-06-300001356576us-gaap:ProductConcentrationRiskMembersupn:GOCOVRIMemberus-gaap:RevenueFromContractWithCustomerMember2022-01-012022-06-300001356576us-gaap:ProductConcentrationRiskMembersupn:OxtellarXRMemberus-gaap:RevenueFromContractWithCustomerMember2023-04-012023-06-300001356576us-gaap:ProductConcentrationRiskMembersupn:OxtellarXRMemberus-gaap:RevenueFromContractWithCustomerMember2022-04-012022-06-300001356576us-gaap:ProductConcentrationRiskMembersupn:OxtellarXRMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-06-300001356576us-gaap:ProductConcentrationRiskMembersupn:OxtellarXRMemberus-gaap:RevenueFromContractWithCustomerMember2022-01-012022-06-300001356576supn:TrokendiXrMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-04-012023-06-300001356576supn:TrokendiXrMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2022-04-012022-06-300001356576supn:TrokendiXrMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-06-300001356576supn:TrokendiXrMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2022-01-012022-06-300001356576supn:APOKYNMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-04-012023-06-300001356576supn:APOKYNMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2022-04-012022-06-300001356576supn:APOKYNMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-06-300001356576supn:APOKYNMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2022-01-012022-06-300001356576us-gaap:ProductConcentrationRiskMemberus-gaap:ManufacturedProductOtherMemberus-gaap:RevenueFromContractWithCustomerMember2023-04-012023-06-300001356576us-gaap:ProductConcentrationRiskMemberus-gaap:ManufacturedProductOtherMemberus-gaap:RevenueFromContractWithCustomerMember2022-04-012022-06-300001356576us-gaap:ProductConcentrationRiskMemberus-gaap:ManufacturedProductOtherMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-06-300001356576us-gaap:ProductConcentrationRiskMemberus-gaap:ManufacturedProductOtherMemberus-gaap:RevenueFromContractWithCustomerMember2022-01-012022-06-300001356576us-gaap:ProductMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-04-012023-06-300001356576us-gaap:ProductMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2022-04-012022-06-300001356576us-gaap:ProductMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-06-300001356576us-gaap:ProductMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2022-01-012022-06-300001356576supn:ThreeMajorCustomersMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-06-300001356576supn:ThreeMajorCustomersMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-04-012023-06-300001356576supn:ThreeMajorCustomersMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2022-04-012022-06-300001356576supn:ThreeMajorCustomersMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2022-01-012022-06-300001356576us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMembersupn:NavitorPharmaceuticalsIncMember2020-04-012020-04-300001356576us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMembersupn:NavitorPharmaceuticalsIncMember2020-04-300001356576us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2021-01-012021-03-3100013565762021-12-012021-12-310001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashMember2023-06-300001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashMemberus-gaap:FairValueInputsLevel1Member2023-06-300001356576us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashMember2023-06-300001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashMemberus-gaap:FairValueInputsLevel3Member2023-06-300001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-06-300001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2023-06-300001356576us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-06-300001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2023-06-300001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-06-300001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2023-06-300001356576us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-06-300001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2023-06-300001356576us-gaap:FairValueMeasurementsRecurringMember2023-06-300001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-06-300001356576us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-06-300001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashMember2022-12-310001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashMemberus-gaap:FairValueInputsLevel1Member2022-12-310001356576us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashMember2022-12-310001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashMemberus-gaap:FairValueInputsLevel3Member2022-12-310001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-12-310001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2022-12-310001356576us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-12-310001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2022-12-310001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-12-310001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2022-12-310001356576us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-12-310001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2022-12-310001356576us-gaap:FairValueMeasurementsRecurringMember2022-12-310001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-12-310001356576us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001356576us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-12-310001356576us-gaap:FairValueInputsLevel2Memberus-gaap:ConvertibleNotesPayableMember2022-12-310001356576supn:MDDUSEnterprisesLLCFormerlyUSWMEnterprisesMember2023-06-300001356576supn:SPN830RegulatoryAndCommercialActivitiesMembersupn:MDDUSEnterprisesLLCFormerlyUSWMEnterprisesMember2023-06-300001356576supn:APOKYNAndSPN830Membersupn:MDDUSEnterprisesLLCFormerlyUSWMEnterprisesMember2023-06-300001356576supn:SPN830NDAApprovalMilestoneMembersupn:MDDUSEnterprisesLLCFormerlyUSWMEnterprisesMember2023-06-300001356576supn:SubsequentCommercialProductLaunchMembersupn:MDDUSEnterprisesLLCFormerlyUSWMEnterprisesMember2023-06-300001356576supn:MDDUSEnterprisesLLCFormerlyUSWMEnterprisesMember2023-04-012023-06-300001356576supn:MDDUSEnterprisesLLCFormerlyUSWMEnterprisesMember2023-01-012023-06-300001356576supn:MDDUSEnterprisesLLCFormerlyUSWMEnterprisesMember2022-04-012022-06-300001356576supn:MDDUSEnterprisesLLCFormerlyUSWMEnterprisesMember2022-01-012022-06-300001356576supn:AdamasMember2021-11-24supn:right0001356576supn:Milestone2024Membersupn:AdamasMember2021-11-242021-11-240001356576supn:Milestone2024AndMilestone2025Membersupn:AdamasMember2021-11-242021-11-240001356576supn:AdamasMember2023-04-012023-06-300001356576supn:AdamasMember2023-01-012023-06-300001356576supn:AdamasMember2022-04-012022-06-300001356576supn:AdamasMember2022-01-012022-06-300001356576supn:MDDUSEnterprisesLLCFormerlyUSWMEnterprisesMember2022-12-310001356576supn:AdamasMember2022-12-310001356576supn:AdamasMember2023-06-300001356576supn:MDDUSEnterprisesLLCFormerlyUSWMEnterprisesMember2021-12-310001356576supn:AdamasMember2021-12-310001356576supn:MDDUSEnterprisesLLCFormerlyUSWMEnterprisesMember2022-06-300001356576supn:AdamasMember2022-06-300001356576us-gaap:InProcessResearchAndDevelopmentMember2023-06-300001356576us-gaap:InProcessResearchAndDevelopmentMember2022-12-310001356576us-gaap:DevelopedTechnologyRightsMember2023-06-300001356576us-gaap:DevelopedTechnologyRightsMember2022-12-310001356576supn:PatentDefenseCostsMember2023-06-300001356576supn:PatentDefenseCostsMember2022-12-310001356576srt:MaximumMember2022-04-012022-06-300001356576us-gaap:ConvertibleDebtMember2023-06-300001356576us-gaap:ConvertibleDebtMember2018-03-012018-03-310001356576us-gaap:ConvertibleDebtMember2023-01-012023-06-300001356576us-gaap:ConvertibleDebtMember2022-12-310001356576us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2023-02-080001356576us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2023-03-302023-03-300001356576us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2023-01-012023-06-300001356576us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2023-06-300001356576us-gaap:ResearchAndDevelopmentExpenseMember2023-04-012023-06-300001356576us-gaap:ResearchAndDevelopmentExpenseMember2022-04-012022-06-300001356576us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-06-300001356576us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-06-300001356576us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-04-012023-06-300001356576us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-04-012022-06-300001356576us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-012023-06-300001356576us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-06-300001356576supn:StockOptionStockAppreciationRightsMember2022-12-310001356576supn:StockOptionStockAppreciationRightsMember2022-01-012022-12-310001356576supn:StockOptionStockAppreciationRightsMember2023-01-012023-06-300001356576supn:StockOptionStockAppreciationRightsMember2023-06-300001356576us-gaap:RestrictedStockUnitsRSUMember2022-12-310001356576us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-06-300001356576us-gaap:RestrictedStockUnitsRSUMember2023-06-300001356576supn:PerformanceBasedUnitsMember2022-12-310001356576supn:MarketBasedUnitsMember2022-12-310001356576us-gaap:PerformanceSharesMember2022-12-310001356576supn:PerformanceBasedUnitsMember2023-01-012023-06-300001356576supn:MarketBasedUnitsMember2023-01-012023-06-300001356576us-gaap:PerformanceSharesMember2023-01-012023-06-300001356576supn:PerformanceBasedUnitsMember2023-06-300001356576supn:MarketBasedUnitsMember2023-06-300001356576us-gaap:PerformanceSharesMember2023-06-300001356576us-gaap:ConvertibleDebtSecuritiesMember2023-04-012023-06-300001356576us-gaap:ConvertibleDebtSecuritiesMember2022-04-012022-06-300001356576us-gaap:ConvertibleDebtSecuritiesMember2023-01-012023-06-300001356576us-gaap:ConvertibleDebtSecuritiesMember2022-01-012022-06-300001356576us-gaap:StockCompensationPlanMember2023-04-012023-06-300001356576us-gaap:StockCompensationPlanMember2022-04-012022-06-300001356576us-gaap:StockCompensationPlanMember2023-01-012023-06-300001356576us-gaap:StockCompensationPlanMember2022-01-012022-06-300001356576supn:LabEquipmentAndFurnitureMember2023-06-300001356576supn:LabEquipmentAndFurnitureMember2022-12-310001356576us-gaap:LeaseholdImprovementsMember2023-06-300001356576us-gaap:LeaseholdImprovementsMember2022-12-310001356576us-gaap:ComputerSoftwareIntangibleAssetMember2023-06-300001356576us-gaap:ComputerSoftwareIntangibleAssetMember2022-12-310001356576us-gaap:ComputerEquipmentMember2023-06-300001356576us-gaap:ComputerEquipmentMember2022-12-310001356576us-gaap:ConstructionInProgressMember2023-06-300001356576us-gaap:ConstructionInProgressMember2022-12-3100013565762014-09-300001356576us-gaap:OtherCurrentLiabilitiesMembersupn:NonrecourseRoyaltyLiabilitiesMember2022-12-31iso4217:EUR0001356576supn:MDDUSEnterprisesLLCFormerlyUSWMEnterprisesMember2019-04-012019-04-010001356576supn:NAMENDAXRNamzaricQuiTamLitigationMember2019-04-012019-04-010001356576supn:JackKhattarMember2023-04-012023-06-300001356576supn:JackKhattarMember2023-06-30
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                 to              
Commission File Number: 001-35518
SUPERNUS PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware20-2590184
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
9715 Key West Avenue
Rockville MD20850
(Address of principal executive offices)(Zip Code)
(301838-2500
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes   No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer 
Non-accelerated filer Smaller reporting company 
Emerging growth company
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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes   No
Securities registered pursuant to Section 12(b) of the Exchange Act
Title of each classOutstanding at August 1, 2023Trading SymbolName of each exchange on which registered
Common Stock, $0.001 par value per share54,594,401SUPNThe Nasdaq Global Market

1

Table of Contents

SUPERNUS PHARMACEUTICALS, INC.
FORM 10-Q — QUARTERLY REPORT
FOR THE QUARTERLY PERIOD ENDED June 30, 2023
Page No.

2

Table of Contents

PART I — FINANCIAL INFORMATION

Supernus Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
June 30,December 31,
20232022
(unaudited)
Assets
Current assets
Cash and cash equivalents$24,706 $93,120 
Marketable securities126,950 368,214 
Accounts receivable, net136,556 165,497 
Inventories, net90,560 91,541 
Prepaid expenses and other current assets44,766 15,779 
Total current assets423,538 734,151 
Long-term marketable securities37,478 93,896 
Property and equipment, net14,186 15,173 
Intangible assets, net662,389 702,463 
Goodwill117,019 117,019 
Other assets38,489 39,806 
Total assets$1,293,099 $1,702,508 
Liabilities and stockholders’ equity
Current liabilities
Accounts payable and accrued liabilities$83,044 $96,342 
Accrued product returns and rebates148,826 151,665 
Convertible notes, net 401,968 
Contingent consideration, current portion20,720 21,120 
Other current liabilities 16,863 
Total current liabilities252,590 687,958 
Contingent consideration, long-term33,390 33,847 
Operating lease liabilities, long-term34,177 35,998 
Deferred income tax liabilities, net44,300 49,809 
Other liabilities8,734 8,692 
Total liabilities373,191 816,304 
Stockholders’ equity
Common stock, $0.001 par value; 130,000,000 shares authorized; 54,592,901 and 54,253,796 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively
55 54 
Additional paid-in capital424,266 408,115 
Accumulated other comprehensive loss, net of tax(1,775)(3,210)
Retained earnings497,362 481,245 
Total stockholders’ equity919,908 886,204 
Total liabilities and stockholders’ equity$1,293,099 $1,702,508 

See accompanying notes.
3

Table of Contents
Supernus Pharmaceuticals, Inc.
Condensed Consolidated Statements of Earnings (Loss)
(in thousands, except share and per share data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
(unaudited)(unaudited)
Revenues
Net product sales$128,336 $165,459 $268,911 $312,923 
Royalty revenues7,227 4,592 20,416 9,634 
Total revenues135,563 170,051 289,327 322,557 
Costs and expenses
Cost of goods sold21,091 20,457 44,551 38,389 
Research and development24,379 16,385 45,591 37,224 
Selling, general and administrative86,782 100,476 172,379 190,935 
Amortization of intangible assets20,108 20,644 40,074 41,288 
Contingent consideration expense (gain)790 743 (857)1,408 
Total costs and expenses153,150 158,705 301,738 309,244 
Operating earnings (loss)(17,587)11,346 (12,411)13,313 
Other income (expense)
Interest expense(910)(1,810)(2,415)(3,752)
Interest and other income, net1,370 1,788 6,716 16,486 
Total other income (expense)460 (22)4,301 12,734 
Earnings (loss) before income taxes(17,127)11,324 (8,110)26,047 
Income tax expense (benefit) (16,296)3,459 (24,227)(7,434)
Net earnings (loss)$(831)$7,865 $16,117 $33,481 
Earnings (loss) per share
Basic$(0.02)$0.15 $0.30 $0.63 
Diluted$(0.02)$0.14 $0.29 $0.57 
Weighted average shares outstanding
Basic54,502,993 53,426,163 54,442,463 53,378,319 
Diluted54,502,993 61,397,159 59,035,154 61,401,694 






See accompanying notes.
4

Table of Contents
Supernus Pharmaceuticals, Inc.
Condensed Consolidated Statements of Comprehensive Earnings (Loss)
(in thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
(unaudited)(unaudited)
Net earnings (loss)$(831)$7,865 $16,117 $33,481 
Other comprehensive gain (loss)
Unrealized gain (loss) on marketable securities, net of tax554 (1,447)1,435 (3,759)
Other comprehensive gain (loss)554 (1,447)1,435 (3,759)
Comprehensive earnings (loss)$(277)$6,418 $17,552 $29,722 







































See accompanying notes.
5

Table of Contents

Supernus Pharmaceuticals, Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
Six Months Ended June 30, 2023 and 2022
(unaudited, in thousands, except share data)
jCommon StockAdditional 
Paid-in Capital
Accumulated Other
Comprehensive
Earnings (Loss)
Retained
Earnings
Total
Stockholders’
Equity
SharesAmount
Balance, December 31, 202254,253,796 $54 $408,115 $(3,210)$481,245 $886,204 
Share-based compensation— — 6,306 — — 6,306 
Issuance of common stock in connection with the Company’s equity award plans216,826 — 1,811 — — 1,811 
Net earnings— — — — 16,948 16,948 
Unrealized gain on marketable securities, net of tax— — — 881 — 881 
Balance, March 31, 202354,470,622 $54 $416,232 $(2,329)$498,193 $912,150 
Share-based compensation— — 6,088 — — 6,088 
Issuance of common stock in connection with the Company’s equity award plans122,279 1 1,946 — — 1,947 
Net loss— — — — (831)(831)
Unrealized gain on marketable securities, net of tax— — — 554 — 554 
Balance, June 30, 202354,592,901 $55 $424,266 $(1,775)$497,362 $919,908 
Common StockAdditional 
Paid-in Capital
Accumulated Other
Comprehensive
Earnings (Loss)
Retained
Earnings
Total
Stockholders’
Equity
SharesAmount
Balance, December 31, 202153,256,094 $53 $434,337 $1,539 $379,922 $815,851 
Cumulative effect of adoption of ASU 2020-06— — (56,212)— 40,612 (15,600)
Balance, January 1, 202253,256,094 53 378,125 1,539 420,534 800,251 
Share-based compensation— — 4,025 — — 4,025 
Issuance of common stock in connection with the Company’s equity award plans130,211 — 866 — — 866 
Net earnings— — — — 25,616 25,616 
Unrealized loss on marketable securities, net of tax— — — (2,312)— (2,312)
Balance, March 31, 202253,386,305 $53 $383,016 $(773)$446,150 $828,446 
Share-based compensation— — 4,297 — — 4,297 
Issuance of common stock in connection with the Company’s equity award plans106,081 — 2,273 — — 2,273 
Net earnings— — — — 7,865 7,865 
Unrealized gain on marketable securities, net of tax— — — (1,447)— (1,447)
Balance, June 30, 202253,492,386 $53 $389,586 $(2,220)$454,015 $841,434 


See accompanying notes.
6

Table of Contents

Supernus Pharmaceuticals, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Six Months Ended June 30,
20232022
(unaudited)
Cash flows from operating activities
Net earnings$16,117 $33,481 
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization41,326 42,919 
Other income from Navitor (see Note 4) (12,888)
Amortization of deferred financing costs and debt discount532 1,053 
Realized gains from sales of marketable securities (13)
Amortization of premium/discount on marketable securities(917)1,068 
Change in fair value of contingent consideration(857)1,408 
Other noncash adjustments, net8,427 (1,187)
Share-based compensation expense12,394 8,322 
Deferred income tax benefit(5,989)(16,057)
Changes in operating assets and liabilities:
Accounts receivable26,364 (9,093)
Inventories(5,830)1,842 
Prepaid expenses and other assets(28,544)1,866 
Accrued product returns and rebates(2,839)13,037 
Accounts payable and other liabilities(29,932)11,763 
Contingent consideration (2,100)
Net cash provided by operating activities30,252 75,421 
Cash flows from investing activities
Purchases of marketable securities (206,503)
Sales and maturities of marketable securities300,513 121,112 
Purchases of property and equipment(437)(275)
Net cash provided by (used in) investing activities300,076 (85,666)
Cash flows from financing activities
Proceeds from Line of Credit93,000  
Payments on Line of Credit(93,000) 
Payment on convertible notes(402,500) 
Payment of contingent consideration (22,900)
Proceeds from issuance of common stock3,758 3,139 
Net cash used in financing activities(398,742)(19,761)
Net change in cash, cash equivalents, and restricted cash(68,414)(30,006)
Cash and cash equivalents at beginning of year93,120 203,434 
Cash and cash equivalents at end of period$24,706 $173,428 
Supplemental cash flow information
Cash paid for interest on debt$1,946 $1,258 
Cash paid for income taxes20,434 8,543 
Cash paid for operating leases8,709 6,238 
Noncash investing and financing activities
Lease assets obtained for new operating leases$3,938 $212 
Property and equipment additions from utilization of tenant improvement allowance 580 
See accompanying notes.
7

Table of Contents

Supernus Pharmaceuticals, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)
1.    Business Organization
Supernus Pharmaceuticals, Inc. (the "Company", see Note 2, Consolidation) is a biopharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases. The Company's 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. The Company is developing a broad range of novel CNS product candidates including new potential treatments for hypomobility in PD, epilepsy, depression, and other CNS disorders.
The Company has eight commercial products that it markets: Qelbree®, GOCOVRI®, Trokendi XR®, Oxtellar XR®, APOKYN®, XADAGO®, Osmolex ER®, and MYOBLOC®. In addition, SPN-830 (apomorphine infusion device) is a late-stage drug/device combination product candidate for the continuous treatment of motor fluctuations ("off" episodes) in PD patients that are not adequately controlled with oral levodopa and one or more adjunct PD medications.
2.    Summary of Significant Accounting Policies
Basis of Presentation
The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (SEC) for interim financial information. As permitted under Generally Accepted Accounting Principles in the United States (U.S. GAAP), certain notes and other information have been omitted from the interim unaudited condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the Company’s most recent Annual Report on Form 10-K, for the year ended December 31, 2022, filed with the SEC.
In management’s opinion, the unaudited condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows. The results of operations for any interim period are not necessarily indicative of the Company’s future quarterly or annual results.
The Company, which is primarily located in the U.S., operates in one operating segment.
Consolidation
The Company's unaudited condensed consolidated financial statements include the accounts of Supernus Pharmaceuticals, Inc. and its wholly owned subsidiaries. These are collectively referred to herein as "Supernus" or "the Company." Supernus Pharmaceuticals, Inc. and each of its subsidiaries are distinct legal entities. All significant intercompany transactions and balances have been eliminated in consolidation.
The unaudited condensed consolidated financial statements reflect the consolidation of entities in which the Company has a controlling financial interest. In determining whether there is a controlling financial interest, the Company considers if it has a majority of the voting interests of the entity, or if the entity is a variable interest entity (VIE) and if the Company is the primary beneficiary. In determining the primary beneficiary of a VIE, the Company evaluates whether it has both: the power to direct the activities of the VIE that most significantly impact the VIE's economic performance; and the obligation to absorb losses of, or the right to receive benefits from the VIE that could potentially be significant to that VIE. The Company's judgment with respect to its level of influence or control of an entity involves the consideration of various factors, including the form of an ownership interest; representation in the entity's governance; the size of the investment; estimates of future cash flows; the ability to participate in policymaking decisions; and the rights of the other investors to participate in the decision making process, including the right to liquidate the entity, if applicable. If the Company is not the primary beneficiary of the VIE, and an ownership interest is maintained in the entity, the interest is accounted for under the equity or cost methods of accounting, as appropriate.
The Company continuously assesses whether it is the primary beneficiary of a VIE as changes to existing relationships or future transactions may affect its conclusions.
8

Table of Contents

Use of Estimates
The Company bases its estimates on: historical experience; forecasts; information received from its service providers; information from other sources, including public and proprietary sources; and other assumptions that the Company believes are reasonable under the circumstances. Actual results could differ materially from the Company’s estimates. The Company periodically evaluates the methodologies employed in making its estimates.
Advertising Expense
Advertising expense includes the cost of promotional materials and activities, such as printed materials and digital marketing, marketing programs and speaker programs. The costs of the Company's advertising efforts are expensed as incurred.
The Company incurred approximately $25.9 million and $51.8 million in advertising expense for the three and six months ended June 30, 2023, respectively, and approximately $36.9 million and $60.8 million for the three and six months ended June 30, 2022. These expenses are recorded as a component of Selling, general and administrative expenses in the unaudited condensed consolidated statements of earnings (loss).
Restricted Cash
On March 30, 2023, the Company transferred funds totaling $403.8 million to the Trustee (Wilmington Trust) related to the repayment of the 2023 Notes which was reported as restricted cash in the first quarter of 2023. On April 1, 2023, the Company paid the total principal amount due of $402.5 million under the 2023 Notes and the remaining outstanding interest due of $1.3 million with the restricted cash. Refer to Note 8, Debt.
Line of Credit
Line of credit includes borrowings under the uncommitted demand secured line of credit. On February 8, 2023, the Company entered into a credit line agreement (the “Credit Line”) with UBS Bank USA (“UBS”). The Credit Line provides for a revolving line of credit of up to $150 million, which can be drawn at any time. Refer to Note 8, Debt.
Recently Issued Accounting Pronouncements
Accounting Pronouncements Adopted
Accounting Standards Update (ASU) 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity - The new standard, issued in August 2020, simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible debt instruments with cash conversion and beneficial conversion features. ASU 2020-06 eliminates requirements to separately account for liability and equity components of such convertible debt instruments and eliminates the ability to use the treasury stock method for calculating diluted earnings per share for convertible instruments whose principal amount may be settled in whole or in part with equity. Instead, ASU 2020-06 requires (i) the entire amount of the security to be presented as a liability on the balance sheet and (ii) application of the “if-converted” method for calculating diluted earnings per share. This new standard also removes certain settlement conditions required for equity contracts to qualify for the derivative scope exception.
The Company adopted the new guidance as of January 1, 2022 using the modified retrospective method of transition which allows for a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result, the cumulative effect of the accounting change increased the carrying amount of the convertible notes, net by $20.6 million, increased retained earnings by $40.6 million, reduced additional paid-in capital by $56.2 million, and decreased deferred tax liabilities by $5.0 million as of January 1, 2022. In addition, the Company had an increase of 6.8 million in dilutive shares included in diluted weighted average shares of common stock outstanding for the purposes of calculating diluted earnings per share under the if-converted method.
9

Table of Contents

3. Disaggregated Revenues

The following table summarizes the disaggregation of revenues by product or source, (dollars in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
(unaudited)(unaudited)
Net product sales
Qelbree$30,977 $11,099 $56,759 $19,382 
GOCOVRI28,751 24,700 54,761 47,301 
Oxtellar XR23,800 29,958 52,715 57,479 
Trokendi XR19,319 71,602 54,109 134,434 
APOKYN17,605 20,447 34,814 38,895 
Other(1)
7,884 7,653 15,753 15,432 
Total net product sales$128,336 $165,459 $268,911 $312,923 
Royalty revenues7,227 4,592 20,416 9,634 
Total revenues$135,563 $170,051 $289,327 $322,557 
___________________________________________
(1) Includes net product sales of MYOBLOC, XADAGO and Osmolex ER.
The decrease in Trokendi XR net product sales for the three and six months ended June 30, 2023, compared to the same period in 2022 was primarily attributable to the loss of exclusivity with generic entrants in January 2023.
The following table shows the percentage of net product sales to total net product sales:
Percentage of Net Product Sales
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
Qelbree24%7%21%6%
GOCOVRI22%15%20%15%
Oxtellar XR19%18%20%18%
Trokendi XR15%43%20%43%
APOKYN14%12%13%12%
Other(1)
6%5%6%6%
Total100%100%100%100%
___________________________________________
(1) Includes net product sales of MYOBLOC, XADAGO and Osmolex ER.
Each of our three major customers, AmerisourceBergen Drug Corporation, Cardinal Health, Inc. and McKesson Corporation, individually accounted for more than 20% of our total net product sales and collectively accounted for more than 75% of our total net product sales for the three and six months ended June 30, 2023 and 2022.
The Company recognized noncash royalty revenue of $1.7 million and $4.0 million for the three and six months ended June 30, 2023, respectively. The Company recognized noncash royalty revenue of $2.5 million and $4.7 million for the three and six months ended June 30, 2022, respectively. Refer to Note 15, Commitments and Contingencies.





10

Table of Contents

4. Investments
Marketable Securities
Unrestricted available-for-sale marketable securities held by the Company are as follows, (dollars in thousands):
June 30, 2023December 31, 2022
(unaudited)
Corporate and U.S. government agency and municipal debt securities
Amortized cost$166,737 $466,333 
Gross unrealized gains 14 
Gross unrealized losses(2,309)(4,237)
Total fair value$164,428 $462,110 
The contractual maturities of the unrestricted available-for-sale marketable securities held by the Company are as follows, (dollars in thousands):
June 30,
2023
(unaudited)
Less than 1 year$126,950 
1 year to 2 years37,478 
Total$164,428 
As of June 30, 2023, there was no impairment due to credit loss on any available-for-sale marketable securities.
Investment in Navitor
Development Agreement
In April 2020, the Company entered into a development agreement (the Development Agreement) with Navitor Pharmaceuticals, Inc. (Navitor Inc.). The Company can terminate the Development Agreement upon 30 days' notice. Under the terms of the Development Agreement, the Company and Navitor Inc. will jointly conduct a Phase II clinical program for NV-5138 (SPN-820) for treatment-resistant depression. The Company will bear all of the Phase I and Phase II development costs incurred by either party, up to a maximum of $50 million. In addition, the Company will incur certain other research and development support costs. There are certain additional payment amounts which could be incurred by the Company. These costs are contingent upon Navitor Inc. achieving defined development milestones. The Company has an option to acquire or license NV-5138 (SPN-820), for which additional payments would be required.
Equity investment
In addition to entering into the Development Agreement in April 2020, the Company acquired Series D Preferred Shares of Navitor Inc. for $15 million, representing an approximately 13% ownership position in Navitor Inc.
In March 2021, Navitor Inc. underwent a legal restructuring. In the restructuring, Navitor Inc. became a wholly owned subsidiary of a newly formed limited liability company, Navitor Pharmaceuticals LLC (Navitor LLC), and the outstanding shares of stock in Navitor Inc. were exchanged for units of membership in Navitor LLC having equivalent rights and preferences (Navitor Restructuring). As part of the Navitor Restructuring, the Series D Preferred Shares previously held by the Company were exchanged for Series D Preferred Shares in Navitor LLC. In addition, certain assets that did not relate to NV-5138 (SPN-820) were transferred from Navitor Inc. to a newly formed entity that became a separate, wholly owned subsidiary of Navitor LLC.
The Company had determined that Navitor LLC is a VIE. The Company does not consolidate this VIE because the Company lacks the power to direct the activities that most significantly impact Navitor’s economic performance.
Prior to the Navitor Restructuring, the investment was accounted for under the practical expedient allowed for equity securities without readily determinable fair value, which is cost minus impairment plus any changes in observable price changes from an orderly transaction of similar investments in Navitor Inc. Following the legal restructuring and exchange of the preferred shares for member equity units of Navitor LLC, the investment was accounted for under the equity method of accounting due to the Company's ability to exert significant influence over but not control the financial and operating decisions of Navitor LLC. As
11

Table of Contents

a result of the change from a cost method investment to an equity method investment, the Company was required to measure its investment initially in accordance with the guidance in ASC 805. The majority of the assets and liabilities recorded in Navitor LLC's financial statements represent working capital items and cash that are being used for research and development purposes and are significantly lower than the Company's investment in Navitor LLC, which created a significant basis difference for the Company's investment in the underlying net assets. The Company determined that substantially all of the fair value of the investment was attributable to a single in-process research and development (IPR&D) asset. As a result, Navitor LLC was not considered a business as defined in ASC 805. In the first quarter of 2021, the $15 million investment, which was previously recorded in Other assets in the unaudited condensed consolidated balance sheets, was expensed and recorded in Research and development expense.
The Company records its share of the results of Navitor LLC, a private company, on a quarter lag as the financial information of Navitor LLC is not available on a sufficiently timely basis for the Company to apply the equity method of accounting. In December 2021, Navitor LLC sold one of its subsidiaries and distributed cash to its members in accordance with each member's share of the proceeds from the sale. The Company received $12.9 million in December 2021 from Navitor LLC in connection with this sale. As the Company's policy is to record its share of the results in its equity method investment on a quarter lag as previously indicated, the Company recorded the cash amount received in Other current liabilities in the consolidated balance sheets as of December 31, 2021. In the first quarter of 2022, the Company determined its estimated share of Navitor LLC's year-end 2021 earnings and recorded a gain of $12.9 million in Interest and other income, net in the unaudited condensed consolidated statement of earnings.
The maximum exposure to losses related to Navitor LLC is a maximum of approximately $50 million in expense for Phase I and Phase II development of NV-5138 (SPN-820), and the cost of other development and formulation activities provided by the Company.
Subsequent to the Development Agreement entered into in 2020, no additional equity investment has been made or financing has been provided to Navitor LLC.
5.    Fair Value of Financial Measurements
The fair value of an asset or liability represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between unrelated market participants.
The Company reports the fair value of assets and liabilities using a three level measurement hierarchy that prioritizes the inputs used to measure fair value. Fair value hierarchy consists of the following three levels:
Level 1—Valuations based on unadjusted quoted prices in active markets that are accessible at measurement date for identical assets.
Level 2—Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and model-based valuations in which all significant inputs are observable in the market, either directly or indirectly (e.g., interest rates; yield curves).
Level 3—Valuations using significant inputs that are unobservable in the market and inputs that reflect the Company’s own assumptions. These are based on the best information available, including the Company’s own data.
The fair value of the restricted marketable securities is recorded in Other assets on the unaudited condensed consolidated balance sheets. There have been no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy.
12

Table of Contents

Financial Assets and Liabilities Recorded at Fair Value
The Company’s financial assets that are required to be measured at fair value on a recurring basis are as follows (dollars in thousands):
Fair Value Measurements as of June 30, 2023 (unaudited)
Total Fair Value as of June 30, 2023 (unaudited)
Level 1

Level 2

Level 3
Assets:
Cash and cash equivalents
Cash$23,598 $23,598 $ $ 
Money market securities and funds1,108 1,108   
Marketable securities
Corporate and municipal debt securities126,950  126,950  
Long-term marketable securities
Corporate and municipal debt securities37,478  37,478  
Other assets
Marketable securities - restricted (SERP)539 13 526  
Total assets at fair value$189,673 $24,719 $164,954 $ 
Liabilities:
Contingent consideration$54,110 $ $ $54,110 
Total liabilities at fair value$54,110 $ $ $54,110 
Fair Value Measurements as of December 31, 2022
Total Fair Value as of December 31, 2022
Level 1

Level 2

Level 3
Assets:
Cash and cash equivalents
Cash$52,181 $52,181 $ $ 
Money market securities and funds40,939 40,939   
Marketable securities
Corporate and municipal debt securities368,214  368,214  
Long-term marketable securities
Corporate and municipal debt securities93,896  93,896  
Other assets
Marketable securities - restricted (SERP)496 11 485  
Total assets at fair value$555,726 $93,131 $462,595 $ 
Liabilities:
Contingent consideration$54,967 $ $ $54,967 
Total liabilities at fair value$54,967 $ $ $54,967 
Other Financial Instruments
The carrying amounts of other financial instruments, including accounts receivable, accounts payable, and accrued expenses approximate fair value due to their short-term maturities.
13

Table of Contents

Financial Liabilities Recorded at Carrying Value
On April 1, 2023, the Company paid the total principal amount due of $402.5 million under the 2023 Notes and the outstanding interest due of $1.3 million.
As of December 31, 2022, the carrying value and fair value of the 2023 Notes which were not carried at fair value was as follows (dollars in thousands):
December 31, 2022
Carrying ValueFair Value (Level 2)
Convertible notes, net$401,968 $395,959 
The fair value has been estimated based on actual trading information, and quoted prices, both provided by bond traders.
6. Contingent Consideration
The Company's contingent consideration liabilities are related to the USWM Acquisition in 2020 and the Adamas Acquisition in 2021 (each acquisition as defined below). The contingent consideration liabilities are measured at fair value using either a Monte Carlo simulation or the income approach. The Company classifies its contingent consideration liabilities as Level 3 fair value measurements based on the significant unobservable inputs used to estimate fair value. These reflect the inputs and assumptions the Company believes would be made by market participants. Changes in any of those inputs together or in isolation may result in significantly lower or higher fair value measurement. The change in fair value is reported on the condensed consolidated statement of earnings (loss) in Contingent consideration (gain) expense.
USWM Contingent Consideration
On June 9, 2020 (the USWM Closing Date), the Company completed its acquisition of all the outstanding equity of USWM Enterprises, LLC (USWM Enterprises) (USWM Acquisition). The USWM Acquisition included potential additional contingent consideration payments for regulatory and development milestones and sales-based milestones. As of June 30, 2023, the potential contingent consideration payments are up to $85 million, which is comprised of the potential $55 million in regulatory and development milestones and $30 million in sales-based milestones.
Regulatory and development milestones:
The potential $55 million in regulatory and development milestones is comprised of (1) $25 million related to the FDA's approval of the SPN-830 NDA and (2) $30 million related to the subsequent commercial product launch.
Sales-based milestones:
The potential $30 million sales-based milestone relates to the achievement of certain net product sales of the acquired USWM products in 2023. As of June 30, 2023, the Company assessed that this remaining $30 million sales-based milestone will not be achieved based on net sales projections.
The key assumptions considered in estimating the fair value include the estimated probability and timing of milestone achievement, such as the probability and timing of obtaining regulatory approval, discount rate, and the estimated amount and timing of projected revenues from the acquired USWM products.
The Company recorded a $0.7 million expense and a $1.1 million gain due to the change in the fair value of the contingent consideration liabilities for the USWM milestones for the three and six months ended June 30, 2023. The change in the fair value of contingent consideration for USWM milestones was primarily driven by the change in estimated fair value of regulatory and developmental milestones due to passage of time in both periods, as well as the change in timing of milestone achievement and estimated discount rate in the first quarter of 2023.
The Company recorded a $0.3 million expense and a $2.1 million expense due to the change in the fair value of the contingent consideration liabilities for the USWM milestones for the three and six months ended June 30, 2022. The change in the fair value was primarily driven by the increase in estimated fair value of regulatory and developmental milestones due to passage of time and the accretion to the payout amount related to the milestone achieved in the first quarter of 2022.
14

Table of Contents

Adamas Contingent Consideration
On November 24, 2021 (the Adamas Closing Date), the Company completed its acquisition of all the outstanding equity of Adamas (Adamas Acquisition). The Adamas Acquisition included payment of two non-tradable contingent value rights (CVRs) each of which represents the contractual right to receive a contingent payment upon the achievement of the applicable aggregate worldwide net product sales of GOCOVRI.
Each CVR represents the contractual right to receive a contingent payment of $0.50 per share in cash, less any applicable withholding taxes and without interest, upon the achievement of the applicable milestone (each such amount, a Milestone Payment) in accordance with the terms of a Contingent Value Rights Agreement entered into between the Company and American Stock Transfer & Trust Company, LLC, as rights agent, as further defined in the CVR agreement. One Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $150 million during any consecutive 12-month period ending on or before December 31, 2024 (Milestone 2024). Another Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $225 million during any consecutive 12-month period ending on or before December 31, 2025 (Milestone 2025 and, together with Milestone 2024, the Milestones). Each Milestone may only be achieved once. The possible outcomes for the contingent consideration range from $0 to $50.9 million on an undiscounted basis.
The key assumptions considered in estimating the fair value of the Adamas sales-based milestones include the estimated revenue projections, volatility, estimated discount rates and risk-free interest rate.
The Company recorded a $0.1 million expense and a $0.2 million expense due to the change in fair value of the contingent consideration liabilities for the CVRs for the three and six months ended June 30, 2023. The change in fair value of contingent consideration for the sales-based Adamas milestones was primarily due to passage of time and estimated discount rate.
The Company recorded a $0.4 million expense and a $0.7 million gain due to the change in fair value of the contingent consideration liabilities for the CVRs for the three and six months ended June 30, 2022. The change in fair value was primarily due to changes in market data and the passage of time.
The following tables provide a reconciliation of the beginning and ending balances related to the contingent consideration for the USWM Acquisition and Adamas Acquisition (dollars in thousands):
USWM AcquisitionAdamas AcquisitionTotal
Balance at December 31, 2022$46,270 $8,697 $54,967 
Change in fair value recognized in earnings(1,050)193 (857)
Balance at June 30, 2023 (unaudited)$45,220 $8,890 $54,110 
USWM AcquisitionAdamas AcquisitionTotal
Balance at December 31, 2021$70,170 $10,307 $80,477 
Milestone payments(25,000) (25,000)
Change in fair value recognized in earnings2,070 (662)1,408 
Balance at June 30, 2022 (unaudited)$47,240 $9,645 $56,885 
The Company paid $25 million in the first quarter of 2022 of which $22.9 million represents the acquisition date fair value of the contingent consideration liability and was reported under cash flows from financing activities. The remaining $2.1 million represents the excess of the acquisition date fair value and was reported under cash flows from operating activities. The amount paid was for the milestone that was due upon the FDA acceptance of the SPN-830 NDA for review, which was achieved in the first quarter of 2022.




15

Table of Contents

The following table provides the current and long-term portions related to the contingent consideration for the USWM Acquisition and Adamas Acquisition (dollars in thousands):
June 30,
2023
December 31,
2022
Reported under the following captions in the condensed consolidated balance sheets:(unaudited)
Contingent consideration, current portion$20,720 $21,120 
Contingent consideration, long-term33,390 33,847 
Total$54,110 $54,967 
7.    Intangibles Assets, Net
The following table sets forth the gross carrying amounts and related accumulated amortization of intangibles assets (dollars in thousands):
June 30,
2023
December 31,
2022
(unaudited)
Remaining Weighted
Average Life (Years)
Carrying Amount, GrossAccumulated AmortizationCarrying Amount, NetCarrying Amount, GrossAccumulated AmortizationCarrying Amount, Net
Acquired in-process research and development$124,000 $— $124,000 $124,000 $— $124,000 
Intangible assets subject to amortization:
Acquired developed technology and product rights7.32681,500 (151,814)529,686 681,500 (113,061)568,439 
Capitalized patent defense costs1.1743,820 (35,117)8,703 43,820 (33,796)10,024 
Total intangible assets7.22$849,320 $(186,931)$662,389 $849,320 $(146,857)$702,463 
Amortization expense for intangible assets was approximately $20.1 million and $40.1 million, for the three and six months ended June 30, 2023 and approximately $20.7 million and $41.3 million for the three and six months ended June 30, 2022, respectively.
U.S. patents covering Trokendi XR and Oxtellar XR will expire no earlier than 2027. In regard to Trokendi XR, the Company entered into settlement agreements that allowed third parties to enter the market on January 1, 2023. In regard to Oxtellar XR, the Company entered into settlement and license agreements that allows a third party to enter the market on or after September 1, 2024.
8.    Debt
Convertible Senior Notes Due 2023
The 0.625% Convertible Senior Notes Due 2023 (2023 Notes), which were issued in March 2018, bore interest at an annual rate of 0.625%, payable semi-annually in arrears on April 1 and October 1 of each year. The 2023 Notes matured on April 1, 2023. On March 30, 2023, the Company transferred funds totaling $403.8 million to the Trustee (Wilmington Trust) related to the repayment of the 2023 Notes which was reported as restricted cash in the first quarter of 2023. On April 1, 2023, the Company paid the total principal amount due of $402.5 million under the 2023 Notes and the remaining outstanding interest due of $1.3 million with the restricted cash.
Contemporaneous with the issuance of the 2023 Notes, the Company also entered into separate privately negotiated convertible note hedge transactions (collectively, the Convertible Note Hedge Transactions) with each of the call spread counterparties. The Company issued 402,500 convertible note hedge options. As of March 31, 2023, the Convertible Note Hedges have expired.
Concurrently with entering into the Convertible Note Hedge Transactions, the Company also entered into separate privately negotiated warrant transactions (collectively, the Warrant Transactions) with each of the call spread counterparties. The
16

Table of Contents

Company issued a total of 6,783,939 warrants. The warrants entitle the holder to one share per warrant. The strike price of the Warrant Transactions will initially be $80.91 per share of the Company’s common stock, and is subject to adjustment.
The Warrant Transactions were intended to partially offset the cost to the Company of the purchased Convertible Note Hedge Transactions; however, the Warrant Transactions could have a dilutive effect with respect to the Company’s common stock, to the extent that the market price per share of the Company’s common stock, as measured under the terms of the Warrant Transactions, exceeds the strike price of the warrants. The warrants expire in tranches, if unexercised, on or before November 22, 2023.
As of December 31, 2022, the liability component of the 2023 Notes consisted of the following, (dollars in thousands):
December 31,
2022
 
2023 Notes$402,500 
Unamortized debt discount and deferred financing costs(532)
Total carrying value$401,968 
Uncommitted Demand Secured Line of Credit
On February 8, 2023, the Company entered into a credit line agreement with UBS. The Credit Line provides for a revolving line of credit of up to $150 million, which can be drawn at any time. Any fixed rate borrowing will bear interest at a fixed interest rate, equal to the sum of (i) the UBS Fixed Funding Rate (as defined in the Credit Line) plus (ii) the applicable Percentage Spread established in the Credit Line. Any variable rate borrowing will bear interest at a variable interest rate, equal to the sum of (i) the UBS Variable Rate (as defined in the Credit Line) plus (ii) the applicable Percentage Spread established in the Credit Line.
The Credit Line is secured by a first priority lien and security interest in certain of the Company’s assets, including each account of the Company at UBS Financial Services Inc. (the “Collateral Account”), and other such collateral (collectively, the Collateral), as further defined in the Credit Line. The Company may be required to post additional collateral if the value of the Collateral declines below the required collateral maintenance requirements.
Upon certain customary events of default, all amounts due under the Credit Line will become immediately due and payable without demand, and UBS has the right, in its discretion, to liquidate, transfer, withdraw or sell all or any part of the Collateral and apply the proceeds to repay any borrowings pursuant to the Credit Line.
The Company has the right to repay any variable rate advance under the Credit Line at any time, in whole or in part, without penalty. The Company may repay any fixed rate advance in whole, but may not repay any fixed rate advance in part. In its discretion and without cause, UBS has the right at any time to demand full or partial payment of amounts borrowed pursuant to the Credit Line and terminate the Credit Line.
On March 30, 2023, the Company borrowed $93.0 million under the Credit Line, which bore a variable interest rate. The funds from this borrowing were used to repay outstanding indebtedness under the 2023 Notes as discussed above under the Convertible Senior Notes Due 2023. During the six months ended June 30, 2023, the Company repaid the total principal balance of $93.0 million under the Credit Line and the interest incurred on the Credit Line of $0.7 million. As of June 30. 2023, there was no outstanding debt under the Credit Line.
9.    Share-Based Payments
Share-based compensation expense is as follows (dollars in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
(unaudited)(unaudited)
Research and development$1,246 $808 $2,204 $1,459 
Selling, general and administrative4,842 3,489 10,190 6,863 
Total$6,088 $4,297 $12,394 $8,322 
17

Table of Contents

Stock Option and Stock Appreciation Rights
The following table summarizes stock option and stock appreciation rights (SAR) activities:
Number of
Options
Weighted
Average
Exercise Price
Weighted
Average
Remaining
Contractual
Term (in years)
Outstanding, December 31, 20225,797,569 $26.99 6.11
Granted 1,112,140 $38.52 
Exercised (210,528)$17.33 
Forfeited (50,262)$32.46 
Outstanding, June 30, 2023 (unaudited)6,648,919 $29.17 6.38
As of June 30, 2023 (unaudited):
Vested and expected to vest6,648,919 $29.17 6.38
Exercisable 4,079,988 $26.42 4.87
As of December 31, 2022:
Vested and expected to vest5,797,569 $26.99 6.11
Exercisable3,541,395 $25.08 4.68
Restricted Stock Units
The following table summarizes restricted stock unit (RSU) activities:
Number of
RSUs
Weighted Average
Grant Date Fair Value per Share
Nonvested, December 31, 2022131,960 $32.17 
Granted227,980 $38.60 
Vested(46,674)$32.18 
Forfeited(6,875)$33.53 
Nonvested, June 30, 2023 (unaudited)306,391 $36.92 
Performance Share Units
The following table summarizes performance share unit (PSU) activities:
Performance-Based UnitsMarket-Based UnitsTotal PSUs
Number of PSUsWeighted
Average
Grant Date Fair Value per Share
Number of PSUsWeighted
Average
Grant Date Fair Value per Share
Number of PSUsWeighted
Average
Grant Date Fair Value per Share
Nonvested, December 31, 2022181,750 $29.07 20,000 $28.63 201,750 $29.03 
Granted205,000 $34.00  $ 205,000 $34.00 
Vested(65,020)$29.33  $ (65,020)$29.33 
Forfeited(3,000)$28.93  $ (3,000)$28.93 
Nonvested, June 30, 2023 (unaudited)318,730$32.19 20,000$28.63 338,730$31.98 
18

Table of Contents

10.    Earnings (Loss) per Share
Basic earnings (loss) per share is calculated using the weighted average number of common shares outstanding. Diluted earnings (loss) per share is calculated using the weighted average number of common shares outstanding, including the dilutive effect of the Company’s stock option grants, SARs, RSUs, employee stock purchase plan (ESPP) awards, and the 2023 Notes, as determined per the if-converted method.
Effect of Convertible Notes and Related Convertible Note Hedges and Warrants
In connection with the issuance of the 2023 Notes, the Company entered into Convertible Note Hedge and Warrant Transactions as described further in Note 8, Debt. The expected collective impact of the Convertible Note Hedge and Warrant Transactions is to reduce the potential dilution that would occur if the price of the Company's common stock was between the conversion price of $59.33 per share and the strike price of the warrants of $80.91 per share.
Diluted earnings (loss) per share related to the 2023 Notes is calculated using the if-converted method. The number of dilutive shares is based on the initial conversion rate associated with the 2023 Notes. The Convertible Note Hedge and Warrant Transactions are excluded in the calculation of diluted earnings (loss) per share because inclusion would be anti-dilutive. Specifically, the denominator of the diluted earnings (loss) per share calculation excludes the additional shares related to the warrants because the average price of the Company's common stock was less than the strike price of the warrants of $80.91 per share. Prior to actual conversion, the Convertible Note Hedge Transactions are not considered in calculating diluted earnings per share, as their impact would be anti-dilutive.
In addition to the above described effect of the 2023 Notes and the related Convertible Note Hedge and Warrant Transactions, the Company also excluded the common stock equivalents of the following outstanding stock-based awards and shares associated with the conversion of the 2023 Notes in the calculation of diluted earnings (loss) per share, because their inclusion would be anti-dilutive:
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
(unaudited)(unaudited)
2023 Notes74,549    
Stock options, RSUs, PSUs537,762 283,299 482,447 556,565 
The following table sets forth the computation of basic and diluted net earnings (loss) per share for the three and six months ended June 30, 2023 and 2022 under the if-converted method (dollars in thousands, except share and per share amounts):

Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
(unaudited)(unaudited)
Numerator:
Net earnings (loss)$(831)$7,865 $16,117 $33,481 
After-tax interest expense for 2023 Notes 888 892 1,775 
Numerator for dilutive earnings per share$(831)$8,753 $17,009 $35,256 
Denominator:
Weighted average shares outstanding, basic54,502,993 53,426,163 54,442,463 53,378,319 
Effect of dilutive securities:
Stock options, RSUs and SARs 1,187,060 1,181,983 1,239,439 
Convertible notes 6,783,936 3,410,708 6,783,936 
Weighted average shares outstanding, diluted54,502,993 61,397,159 59,035,154 61,401,694 
Earnings (loss) per share, basic$(0.02)$0.15 $0.30 $0.63 
Earnings (loss) per share, diluted$(0.02)$0.14 $0.29 $0.57 
19

Table of Contents

11.    Income Tax Expense (Benefit)
The following table provides information regarding the Company’s income tax expense (benefit) for the three and six months ended June 30, 2023 and 2022 (dollars in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
(unaudited)(unaudited)
Income tax expense (benefit)$(16,296)$3,459 $(24,227)$(7,434)
Effective tax rate95.1 %30.5 %298.7 %(28.5)%
Income tax benefit was $16.3 million and $24.2 million for the three and six months ended June 30, 2023, as compared to $3.5 million expense and $7.4 million benefit for the three and six months ended June 30, 2022. The change was mainly due to an increased pre-tax loss in both periods in 2023. 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. The effective tax rate decrease was mainly due to lower pre-tax earnings forecasted for 2023. The annual forecasted earnings represent the Company's best estimate as of June 30, 2023 and is subject to changes, which could have a material impact on the effective tax rate in subsequent periods.
12.    Leases
Operating lease assets and lease liabilities as reported on the unaudited condensed consolidated balance sheets are as follows (dollars in thousands):

Balance Sheet ClassificationJune 30, 2023December 31, 2022
(unaudited)
Assets
Operating lease assetsOther assets$29,145 $28,904 
Total lease assets$29,145 $28,904 
Liabilities
Operating lease liabilities, current portionAccounts payable and accrued liabilities$8,019 $6,791 
Operating lease liabilities, long-termOperating lease liabilities, long-term34,177 35,998 
Total lease liabilities$42,196 $42,789 

13.    Composition of Other Balance Sheet Items
The following details the composition of other balance sheet items (dollars in thousands for amounts in tables):
Accounts Receivables, Net
As of June 30, 2023 and December 31, 2022, the Company has reduced accounts receivable by approximately $10.2 million and $13.0 million, respectively. Prompt pay discount and contractual service fees, which were originally recorded as a reduction to revenues, represents estimated amounts not expected to be paid by our customers. The Company's customers are primarily pharmaceutical wholesalers and distributors and specialty pharmacies.
20

Table of Contents

Inventories
June 30,
2023
December 31,
2022
(unaudited)
Raw materials$28,161 $24,820 
Work in process23,592 31,710 
Finished goods38,807 35,011 
Total$90,560 $91,541 
Property and Equipment
June 30,
2023
December 31,
2022
(unaudited)
Lab equipment and furniture$12,565 $12,127 
Leasehold improvements14,023 14,023 
Software883 883 
Computer equipment983 983 
Construction-in-progress33 206 
28,487 28,222 
Less accumulated depreciation and amortization(14,301)(13,049)
Property and equipment, net$14,186 $15,173 
Depreciation and amortization expense on property and equipment was approximately $0.6 million and $1.3 million for the three and six months ended June 30, 2023, and approximately $0.7 million and $1.4 million for the three and six months ended June 30, 2022, respectively.
Accounts Payable and Accrued Liabilities
June 30,
2023
December 31,
2022
(unaudited)
Accounts payable$4,400 $10,543 
Accrued sales & marketing16,035 16,783 
Accrued compensation, benefits, & related accruals15,682 16,963 
Accrued manufacturing expenses12,580 15,216 
Accrued R&D expenses9,362 7,490 
Operating lease liabilities, current portion (2)
8,019 6,791 
Accrued royalties (1)
7,342 12,022 
Other accrued expenses9,624 10,534 
Total$83,044 $96,342 
_______________________________
(1) Refer to Note 15, Commitments and Contingencies.
(2) Refer to Note 12, Leases.
Accrued Product Returns and Rebates
June 30,
2023
December 31,
2022
(unaudited)
Accrued product rebates$97,538 $106,657 
Accrued product returns51,288 45,008 
Total$148,826 $151,665 
21

Table of Contents

14.    Interest Expense
The following details the composition of interest expense (dollars in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
(unaudited)(unaudited)
Interest expense$(665)$(1,175)$(1,853)$(2,330)
Interest expense on nonrecourse liability related to sale of future royalties(245)(635)(562)(1,422)
Total$(910)$(1,810)$(2,415)$(3,752)
Interest expense includes noncash interest expense related to amortization of deferred financing costs on the 2023 Notes. The Company has fully amortized the deferred financing costs on the 2023 Notes in the first quarter of 2023. Noncash interest for the six months ended June 30, 2023 was $0.5 million. Noncash interest expense was $0.5 million and $1.1 million for the three and six months ended June 30, 2022, respectively.
15.    Commitments and Contingencies
Product Licenses
The Company has obtained exclusive licenses from third parties for proprietary rights to support the product candidates in the Company's CNS portfolio. Under these license agreements, the Company may be required to pay certain amounts upon the achievement of defined milestones. If these products are ultimately commercialized, the Company is also obligated to pay royalties to third parties, computed as a percentage of net product sales, for each respective product under a license agreement.
Through the USWM Acquisition, the Company acquired licensing agreements with other pharmaceutical companies for APOKYN, XADAGO, and MYOBLOC. The Company is obligated to pay royalties to third parties, computed as a percentage of net product sales, for each of the products under the respective license agreements. The royalty expense incurred for these acquired products is recognized as Cost of goods sold in the unaudited condensed consolidated statements of earnings (loss).
Royalty Agreement
In the third quarter of 2014, the Company received $30 million pursuant to a Royalty Interest Acquisition Agreement related to the purchase by HC Royalty of certain of the Company's rights under the Company's agreement with United Therapeutics related to the commercialization of Orenitram (treprostinil) Extended-Release Tablets. Full ownership of the royalty rights have reverted back to the Company as the cumulative payment threshold has been reached as of June 30, 2023 (see Note 3, Disaggregated Revenues).
As of December 31, 2022, the nonrecourse liability related to the sale of future royalties was $6.0 million and was included in Other current liabilities as reported on the consolidated balance sheet.
USWM Enterprise Commitments Assumed
As part of the USWM Acquisition, the Company assumed the remaining commitments of USWM Enterprises and its subsidiaries, which are discussed below.
The Company assumed the annual minimum purchase requirement of MYOBLOC, amounting to an estimated €3.9 million annually, under the contract manufacturing agreement with Merz for manufacture and supply.
MDD US Operations, LLC (formerly US WorldMeds, LLC) and its subsidiary, Solstice Neurosciences, LLC (US) (collectively, the MDD Subsidiaries) entered into a Corporate Integrity Agreement (CIA) with the Office of Inspector General of the U.S. Department of Health and Human Services which was effective in April 2019. Under the CIA, the MDD Subsidiaries agreed to and paid $17.5 million to resolve U.S. Department of Justice allegations that it violated the False Claims Act and committed to the establishment and ongoing maintenance of an effective compliance program. The fine was paid by the MDD Subsidiaries prior to closing of the USWM Acquisition. As part of the USWM Acquisition, the Company assumed the obligations of the CIA and could become liable for payment of certain stipulated monetary penalties in the event of any CIA violations. In addition, the Company will continue to maintain a broad array of processes, policies and procedures necessary to comply with the
22

Table of Contents

CIA through March 2024.
Data Breach-related Contingency
On November 24, 2021, the Company announced that we were the target of a ransomware attack. The attack had no significant impact on our business and did not cause any long-term disruption to our operations. Based on its internal investigation, the Company believes the criminal ransomware groups ("criminal groups") copied certain data from our systems, encrypted certain data on the Company's systems, and then deployed malware designed to impede access to our systems. Thereafter the criminal groups contacted the Company and threatened to publish certain data copied from the Company's systems. Upon detection of the ransomware attack, the Company notified government authorities, engaged third-party cybersecurity experts through our outside counsel, and commenced its recovery process. The Company maintains redundant off-site data backups, which were verified to have not been compromised by the ransomware attack and were utilized to restore the data encrypted by the criminal groups. In the fourth quarter of 2021, the Company had successfully recovered the impacted files and took additional steps designed to further protect its networks and files.
Furthermore, while the Company has not been the subject of any legal proceedings involving the attack, the likelihood that the Company could be the subject of claims from persons alleging they suffered damages from the incident, or actions by governmental authorities is possible, but the amount of such fines, penalties or costs, if any, cannot be estimated at this time. The Company continues to monitor the situation.
Claims and Litigation
From time to time, the Company may be involved in various claims, litigation and legal proceedings. These matters may involve patent litigation, product liability and other product-related litigation, commercial and other matters, and government investigations, among others. On a quarterly basis, the Company reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated, the Company will accrue a liability for the estimated loss. Because of uncertainties related to claims, legal proceedings and litigation, accruals will be based on the Company's best estimates based on available information. The Company does not believe that any of these matters will have a material adverse effect on our financial position. The Company may reassess the potential liability related to these matters and may revise these estimates. The process of resolving matters through litigation or other means is inherently uncertain and it is possible that an unfavorable resolution of these matters will adversely affect the Company, its results of operations, financial condition and cash flows.
NAMENDA XR/Namzaric Qui Tam Litigation
On April 1, 2019, Adamas was served with a complaint filed in the United States District Court for the Northern District of California (the District Court) (Case No. 3:18-cv-03018-JCS) against it and several Allergan entities alleging violations of federal and state false claims acts (FCA) in connection with the commercialization of NAMENDA XR and Namzaric by Allergan. The lawsuit is a qui tam complaint brought by an individual, asserting rights of the federal government and various state governments. The lawsuit was originally filed in May 2018 under seal, and Adamas became aware of the lawsuit when it was served. The complaint alleges that patents held by Allergan and Adamas covering NAMENDA XR and Namzaric were procured through fraud on the United States Patent and Trademark Office and that these patents were asserted against potential generic manufacturers of NAMENDA XR and Namzaric to prevent the generic manufacturers from entering the market, thereby wrongfully excluding generic competition resulting in artificially high price being charged to government payors. Adamas' patents in question were licensed exclusively to Forest Laboratories Holdings Limited. The complaint includes a claim for damages of "potentially more than $2.5 billion dollars," treble damages and statutory penalties. To date the federal and state governments have declined to intervene in this action. This case is currently stayed pending Adamas's and Allergan's interlocutory appeal of the District Court's December 11, 2020 order denying Adamas's and Allergan's motion to dismiss the complaint. The appeal is pending in the United States Court of Appeals for the Ninth Circuit (Case No. 21-80005). Argument was held on January 10, 2022. On August 25, 2022, the Ninth Circuit sided with the defendants by reversing the District Court’s public disclosure bar rulings and remanding the case back to the District Court to decide certain issues in the first instance. On October 11, 2022, the plaintiff filed a petition for rehearing with the Ninth Circuit which was denied on November 3, 2022. On December 23, 2022, the defendants filed renewed motions to dismiss directed to the remaining unresolved issue. On March 20, 2023, the District Court entered an order and final judgment dismissing with prejudice Silbersher’s Federal False Claims Act claim while declining to exercise supplemental jurisdiction over the state false claims act claims which were dismissed without prejudice. On April 19, 2023, the plaintiff appealed the District Court's dismissal of the Federal False Claims Act claim.


23

Table of Contents

APOKYN Litigation
On October 3, 2022, Sage Chemical, Inc. and TruPharma, LLC filed a lawsuit in the United States District Court for the District of Delaware (Case No.22-cv-1302) alleging that Supernus Pharmaceuticals, Inc., Britannia Pharmaceuticals Limited, and US WorldMeds Partners, LLC violated state and federal antitrust law in connection with APOKYN. On January 10, 2023, the Company filed motions to dismiss all claims. On January 25, 2023, Defendants filed a motion to stay discovery and stay the deadline to submit a proposed scheduling order pending resolutions of Defendants’ motions to dismiss. On March 7, 2023, the Court denied the Company's motion to stay and ordered that the parties commence discovery. On April 10, 2023, the Court issued a scheduling order that provides for a Pretrial Conference on March 7, 2025 and a jury trial beginning on March 24, 2025. Pretrial discovery is ongoing as the date of this letter. The Company intends to defend itself vigorously. However, the Company can offer no assurances that it will be successful in a litigation.
Apotex Settlement and License Agreements
The Company entered into a settlement and license agreements dated June 21, 2023 with Apotex Inc. to settle ongoing patent litigation regarding Apotex ANDA filings seeking approval to market a generic version of the Company's 150mg, 300mg, and 600mg strength Oxtellar XR (extended-release oxcarbazepine) tablets on or after September 1, 2024.
24

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and the financial condition of Supernus Pharmaceuticals, Inc. The interim condensed consolidated financial statements included in this report and this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2022 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 9, 2023.
In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. These forward-looking statements may include declarations regarding the Company’s belief or current expectations of management, such as statements including the words “budgeted,” “anticipate,” “project,” “forecast,” “estimate,” “expect,” “may,” “believe,” “potential,” and similar statements or expressions, which are intended to be among the statements that are forward-looking statements, as such statements reflect the reality of risk and uncertainty that is inherent in our business. Actual results may differ materially from those expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which are made as of the date this report was filed with the Securities and Exchange Commission. Our actual results and the timing of events could differ materially from those discussed in our forward-looking statements because of many factors, including those set forth under the “Risk Factors” section of our Annual Report on Form 10-K and elsewhere in this report as well as in other reports and documents we file with the Securities and Exchange Commission from time to time. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.
Unless the content requires otherwise, the words "Supernus," "we," "our" and "the Company" refer to Supernus Pharmaceuticals, Inc. and/or one or more of its subsidiaries, as the case may be. These terms are used solely for the convenience of the reader. Supernus Pharmaceuticals, Inc. and each of its subsidiaries are distinct legal entities. For example, MDD US Operations, LLC, a wholly-owned indirect subsidiary of Supernus Pharmaceuticals, Inc., is the exclusive licensee and distributor of APOKYN in the United States and its territories. Adamas Operations, LLC, a wholly-owned indirect subsidiary of Supernus Pharmaceuticals, Inc., wholly owns the patents and patent applications related to GOCOVRI and Osmolex ER and has a license agreement with Supernus Pharmaceuticals, Inc., granting Supernus Pharmaceuticals, Inc. rights to market and sell GOCOVRI and Osmolex ER.
Solely for convenience, in this Quarterly Report on Form 10-Q, the trade names are referred to without the TM symbols and the trademark registrations are referred to without the circled R, but such references should not be construed as any indicator that the Company will not assert, to the fullest extent under applicable law, our rights thereto.

25

Table of Contents

Overview
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.
We have a portfolio of commercial products and product candidates.
Commercial Products
Qelbree® (viloxazine extended-release capsules) is a novel non-stimulant product indicated for the treatment of ADHD in adults and pediatric patients 6 years and older. The United States Food and Drug Administration (FDA) approved Qelbree for the treatment of ADHD in pediatric patients 6 to 17 years of age in April 2021, and in adult patients in April 2022. The Company launched Qelbree for pediatric patients in May 2021 and for adult patients in May 2022 in the United States (U.S.).
GOCOVRI® (amantadine) extended-release capsules is the first and only FDA approved medicine indicated for the treatment of dyskinesia in patients with PD receiving levodopa-based therapy, with or without concomitant dopaminergic medications, and as an adjunctive treatment to levodopa/carbidopa with PD experiencing "off" episodes.
Trokendi XR® (topiramate) is the first once-daily extended-release topiramate product indicated for the treatment of epilepsy in patients 6 years of age and older in the U.S. market. It is also indicated for the prophylaxis of migraine headache in adults and adolescents 12 years and older.
Oxtellar XR® (oxcarbazepine) is indicated as therapy for the treatment of partial onset seizures in patients 6 years of age and older. It is also the first once-daily extended-release oxcarbazepine product indicated for the treatment of epilepsy in the U.S. market.
APOKYN® (apomorphine hydrochloride injection) is a product indicated for the acute, intermittent treatment of hypomobility, "off" episodes ("end-of-dose wearing off" and unpredictable "on/off" episodes) in patients with advanced PD.
XADAGO® (safinamide) is a once-daily product indicated as adjunctive treatment to levodopa/carbidopa in patients with PD experiencing "off" episodes.
Osmolex ER® (amantadine) extended-release tablets is for the treatment of PD and drug-induced extrapyramidal reactions in adult patients.
MYOBLOC® (rimabotulinumtoxinB injection) is a product indicated for the treatment of cervical dystonia and chronic sialorrhea in adults. It is the only botulinum toxin type B available on the market.
26

Table of Contents

Research and Development
We are committed to the development of innovative product candidates in neurology and psychiatry, including the following:
Product CandidateIndicationDevelopmentNDA
SPN-830Continuous treatment of motor fluctuations ("off" episodes) in PD patientsPlan to resubmit the NDA in the fourth quarter of 2023Complete Response Letter (CRL) received from FDA in October 2022
SPN-820/821Treatment-resistant depressionPhase II
SPN-817Treatment-resistant seizuresPhase II
SPN-443ADHDPreclinical
SPN-446/448CNSDiscovery
SPN-830 (apomorphine infusion device)
SPN-830 is a late-stage drug/device combination product candidate for the continuous treatment of motor fluctuations ("off" episodes) in PD patients that are not adequately controlled with oral levodopa and one or more adjunct PD medications. If approved, it would be the only continuous infusion of apomorphine available in the U.S. and an important step for PD patients that would have otherwise been candidates for potentially invasive surgical procedures, such as deep brain stimulation. Continuous slow infusion may also limit some of the side effects of a bolus injection of apomorphine.
In December 2021, we resubmitted the NDA to the FDA. In February 2022, we received a notice from the FDA that the resubmission of the NDA for SPN-830 was considered as a Standard Review and was assigned a PDUFA target action date in early October 2022. In October 2022, the FDA issued a Complete Response Letter (CRL) regarding the NDA for SPN-830. The CRL requires additional information and analysis related to the infusion device and drug product across several areas of the NDA including, but not limited to, labeling, product quality and manufacturing, device performance and risk analysis. In addition, the FDA mentions that approval of the NDA requires inspections that could not be completed in a timely manner due to COVID-19 travel restrictions. The CRL does not request additional efficacy and safety clinical studies. The FDA has made an initial determination that the amendment to the Company’s application in response to the CRL will be subject to a Class 2, or six-month, review timeline. In April 2023, the Company met with the FDA to discuss the CRL. Refer to discussion under the Operational Highlights section below for a further regulatory update.
SPN-820/821 (mTORC1 activator)
SPN-820/821 is a first-in-class, orally active small molecule that activates the brain mechanistic target of rapamycin complex 1 (mTORC1), a gatekeeper of cellular metabolism and renewal. SPN-820/821 binds to and modulates sestrin, which senses amino acid availability in the brain, a potent natural activator of mTORC1.
SPN-817 (huperzine A)
SPN-817 represents a novel mechanism of action (MOA) for an anticonvulsant. SPN-817 is a novel synthetic form of
huperzine A, whose MOA includes potent acetylcholinesterase inhibition, with pharmacological activities in CNS conditions such as epilepsy. The development will initially focus on the drug's anticonvulsant activity, which has been shown in preclinical models to be effective for the treatment of partial seizures and Dravet Syndrome. SPN-817 is in clinical development and has received Orphan Drug designation for several epilepsy indications from the FDA.
Operational Highlights
Qelbree Update
Total IQVIA prescriptions were 146,344 in the second quarter of 2023, an increase of 133% compared to the same period last year and 9% compared to the first quarter of 2023.
Increase in prescription size and improvement in gross to net resulting in 10% increase in average net price per prescription to $212 in the second quarter of 2023 compared to the first quarter.
27

Table of Contents

Qelbree continues to expand its base of prescribers, with approximately 21,291 prescribers in the second quarter of 2023, up from 19,197 prescribers in the first quarter of 2023.
The salesforce expansion has been completed and the field sales team is fully trained, allowing the Company broader reach and increased capacity as it prepares for the “back-to-school” season for Qelbree.
Product Pipeline Update
SPN-830 (apomorphine infusion device) - Continuous treatment of motor fluctuations (“off” episodes) in Parkinson's Disease (PD)
In April 2023, the Company had a constructive meeting with the FDA to discuss the Complete Response Letter received in October 2022. Based on this meeting, the Company expects to resubmit the New Drug Application for SPN-830 in the fourth quarter of 2023.
SPN-820/821 - Novel first-in-class activator of mTORC1
The Phase II multi-center randomized double-blind placebo-controlled parallel design study of SPN-820 in adults with treatment-resistant depression is ongoing. The study will examine the efficacy and safety of SPN-820 over a course of five weeks of treatment in approximately 270 patients. The primary outcome measure is the change from baseline to end of treatment period on the Montgomery-Asberg Depression Rating Scale (MADRS) Total Score, a standard depression rating scale.
SPN-817 – A novel product candidate for the treatment of epilepsy
The open-label Phase II clinical study of SPN-817 in patients with treatment-resistant seizures is ongoing. Depending on the rate of enrollment, the Company expects to have data in the first half of 2024.
Critical Accounting Policies and the Use of Estimates
A summary of our significant accounting policies is included in Note 2, Summary of Significant Accounting Policies of our audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2022. There were no significant changes to the disclosures with respect to our critical accounting policies in our Annual Report on Form 10-K for the year ended December 31, 2022.

28

Table of Contents

Results of Operations
Comparison of the Three and Six Months ended June 30, 2023 and 2022
Revenues
Revenues consist primarily of net product sales of our commercial products in the U.S., supplemented by royalty revenues from our collaborative licensing arrangements. The following table provides information regarding our revenues during the three and six months ended months ended June 30, 2023 and 2022 (dollars in thousands):
Three Months Ended
June 30,
ChangeSix Months Ended
June 30,
Change
20232022AmountPercent20232022AmountPercent
Net product sales
Qelbree$30,977 $11,099 $19,878 **$56,759 $19,382 $37,377 **
GOCOVRI28,751 24,700 4,051 16 %54,761 47,301 7,460 16