UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 9, 2017

 

Supernus Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

(State or other jurisdiction of
Incorporation)

 

 

001-35518

 

20-2590184

(Commission File Number)

 

(IRS Employer Identification No.)

 

 

 

1550 East Gude Drive, Rockville MD

 

20850

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code:  (301) 838-2500

 

Not Applicable

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). o

 

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

 

 

 



 

Item 2.02              Results of Operations and Financial Condition.

 

On May 9, 2017, Supernus Pharmaceuticals, Inc. (“Supernus” or the “Company”) issued a press release regarding its financial results for the first quarter ended March 31, 2017. A copy of this press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

 

As previously announced, Supernus will host a conference call at 9:00 a.m. Eastern Time (6:00 a.m. Pacific Time) on Wednesday, May 10, 2017, to present the financial results.  A live webcast will be available at www.supernus.com.  The webcast will be archived on the Company’s website for 60 days following the live call.  Callers should dial in approximately 10 minutes prior to the start of the call. The phone number to join the conference call is +1 (877) 288-1043 (U.S. and Canada) or +1 (970) 315-0267 (international). The access code for the live call is 9981751.

 

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

 

This Current Report on Form 8-K contains “forward-looking statements” that do not convey historical information, but relate to predicted or potential future events, such as statements of our plans, strategies and intentions. These statements can often be identified by the use of forward-looking terminology such as “believe,” “expect,” “intend,” “may,” “will,” “should,” or “anticipate” or similar terminology. All statements other than statements of historical facts included in this Current Report on Form 8-K are forward-looking statements. All forward-looking statements speak only as of the date of this Current Report on Form 8-K. Except for Supernus’ ongoing obligations to disclose material information under the federal securities laws, Supernus undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition to the risks and uncertainties of ordinary business operations and conditions in the general economy and the markets in which Supernus competes, the forward-looking statements of Supernus contained in this Current Report on Form 8-K are also subject various risks and uncertainties, including those set forth in Item 1A, “Risk Factors,” in Supernus’ Annual Report on Form 10-K for the fiscal year ended December 31, 2016, which the Company filed on March 16, 2017.

 

Item 9.01              Financial Statements and Exhibits.

 

(d)           Exhibit

 

The following document is furnished as an Exhibit pursuant to Item 2.02 hereof:

 

Exhibit 99.1 — Press Release Dated May 9, 2017.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

SUPERNUS PHARMACEUTICALS, INC.

 

 

 

 

 

 

DATED: May 9, 2017

By:

/s/ Gregory S. Patrick

 

 

Gregory S. Patrick

 

 

Vice-President and Chief Financial Officer

 

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EXHIBIT INDEX

 

Number

 

Description

 

 

 

 

 

 

 

99.1

 

Press Release Dated May 9, 2017.

 

Attached

 

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Exhibit 99.1

 

 

Supernus Announces First Quarter 2017 Financial Results

 

·                  Net product sales were $56.4 million, a 31% increase over 2016.

 

·                  Operating income was $16.8 million, a 161% increase over 2016.

 

·                  Diluted earnings per share were $0.19, increasing by 138% over 2016.

 

·                  Early prescription data for Trokendi XR show a strong upward trend following launch in migraine prophylaxis in adults and adolescents.

 

Rockville, Md., May 9, 2017 - Supernus Pharmaceuticals, Inc. (NASDAQ: SUPN), a specialty pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases, today reported financial results for first quarter 2017 and associated company developments.

 

Commercial Update

 

First quarter 2017 product prescriptions for Trokendi XR® and Oxtellar XR®, as reported by IMS, totaled 134,855, a 17.1% increase over the first quarter of 2016.

 

 

 

Prescriptions

 

 

 

 

 

Q1 2017

 

Q1 2016

 

Change %

 

 

 

 

 

 

 

 

 

Trokendi XR

 

101,695

 

86,227

 

17.9

%

Oxtellar XR

 

33,160

 

28,913

 

14.7

%

 

 

 

 

 

 

 

 

Total

 

134,855

 

115,140

 

17.1

%

 

Source:  IMS

 

Net product sales for the first quarter of 2017 were $56.4 million, a 31.2% increase over $43.0 million in the same period the prior year.

 

 

 

 

Net Product Sales ($mil.)

 

 

 

 

 

Q1 2017

 

Q1 2016

 

Change %

 

 

 

 

 

 

 

 

 

Trokendi XR

 

$

42.0

 

$

32.3

 

30.0

%

Oxtellar XR

 

$

14.4

 

$

10.7

 

34.6

%

 

 

 

 

 

 

 

 

Total

 

$

56.4

 

$

43.0

 

31.2

%

 

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Consistent with historical patterns, product prescriptions and net product sales for the first quarter of 2017 for Trokendi XR and Oxtellar XR were impacted by the continued shift of patients to high deductible and high co-pay plans. Lower wholesaler and pharmacy inventory levels during the first quarter of 2017, compared to the fourth quarter of 2016, had the effect of reducing net product sales by approximately $5 million in the first quarter of 2017.

 

Trokendi XR Migraine Launch

 

After receiving final approval from the Food and Drug Administration (FDA) in April 2017, the Company launched Trokendi XR as a new treatment for prophylaxis of migraine headache in adults and adolescents 12 years and older.

 

While it is still early in the launch, for the first three weeks post launch, IMS prescription data for Trokendi XR show a strong upward trend in total and new prescriptions. During the three week period post launch, total prescriptions were 26,472 compared to 24,109 in the three weeks prior to launch, representing a 10% increase. Similarly, for the same three week period post launch, new prescriptions were 12,978 compared to 10,898 in the three weeks prior to launch, representing a 19% increase. Consistent with these early data, feedback from our sales force indicates that physicians are very receptive to the new indication and appreciate the unique benefits that Trokendi XR brings to migraine patients.

 

“We are excited about the launch of Trokendi XR in migraine, and are very encouraged by the early IMS prescription data. We continue to believe that the migraine indication should allow us to realize the full potential of Trokendi XR,” said Jack Khattar, President and CEO of Supernus Pharmaceuticals. “Trokendi XR, with its novel formulation, provides full 24 hour coverage for patients with smooth pharmacokinetics compared to immediate-release topiramate products, making it an important new prophylactic treatment option for adult and adolescent patients suffering from migraine headache.”

 

Progress of Product Pipeline

 

Enrollment continues in both Phase III trials for SPN-810, currently in development for Impulsive Aggression in patients aged 6 to 12 years who have ADHD. Protocol revisions to improve patient retention during the screening period and programs to drive patient enrollment for the Phase III trials are having a positive impact. We expect enrollment to continue through 2017.

 

Regarding SPN-812, currently in development for patients aged 6 to 12 years with ADHD, the Company continues to plan to initiate Phase III clinical testing during the second half of 2017. The Company is on track to meet with the FDA in the second quarter of 2017 for an end-of-Phase II meeting.

 

“We look forward to discussing further with the FDA our Phase IIb clinical trial results and the design of our Phase III program for SPN-812,” said Jack Khattar. “We remain focused on advancing SPN-812 as a novel highly effective and well tolerated non-stimulant for the treatment of ADHD.”

 

Operating Expenses

 

Research and development expenses in the first quarter of 2017 were $9.6 million, as compared to $10.6 million in the same quarter last year. This decrease is primarily due to the completion of enrollment in the Phase IIb trial for SPN-812, which occurred in the third quarter of 2016.

 

Selling, general and administrative expenses in the first quarter of 2017 were $28.2 million, as compared to $25.2 million in the same quarter last year. The increase is due to marketing

 

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program development, sample production, and other activities related to preparing for the launch of the migraine headache indication for Trokendi XR, which occurred in April 2017.

 

Operating Income and Earnings Per Share

 

Operating income in the first quarter of 2017 was $16.8 million, a 160.8% increase over $6.4 million in the same period the prior year. This improvement in operating income is primarily due to increased net product sales.

 

Diluted earnings per share for the first quarter of 2017 were $0.19 compared to $0.08 in the same period last year, an increase of 138% over the prior year. Diluted earnings per share for the first quarter of 2017 includes an effective tax rate of 36.5%, as compared to an effective tax rate of 4.0% during the first quarter of 2016.

 

Weighted-average diluted common shares outstanding were approximately 52.8 million in the first quarter of 2017, as compared to approximately 51.2 million in the same period the prior year.

 

Capital Resources

 

As of March 31, 2017, the Company had $176.3 million in cash, cash equivalents, marketable securities, and long term marketable securities, as compared to $165.5 million at December 31, 2016.  As of May 8, 2017, approximately $1.6 million of the Company’s six year, $90 million notes remain outstanding. During the second quarter of 2017, the Company initiated the process of calling the remaining outstanding principal balance of its six year notes and expects that process to be completed in the quarter.

 

Financial Guidance

 

For full year 2017, the Company reiterates its expectation for net product sales, R&D expenses and operating income as set forth below:

 

·                  Net product sales in the range of $265 million to $275 million.

 

·                  Research and development expense of approximately $55 million.

 

·                  Operating income in the range of $75 million to $80 million. Full year 2017 operating income includes approximately $5 million of non-cash royalty revenue.

 

Conference Call Details

 

The Company will hold a conference call hosted by Jack Khattar, President and Chief Executive Officer, and Greg Patrick, Vice President and Chief Financial Officer, to discuss these results at 9:00 a.m. ET, on Wednesday, May 10, 2017. An accompanying webcast also will be provided.

 

Please refer to the information below for conference call dial-in information and webcast registration. Callers should dial in approximately 10 minutes prior to the start of the call.

 

Conference dial-in:

(877) 288-1043

International dial-in:

(970) 315-0267

Conference ID:

9981751

Conference Call Name:

Supernus Pharmaceuticals First Quarter 2017 Earnings Conference Call

 

Following the live call, a replay will be available on the Company’s website, www.supernus.com, under ‘Investors’.

 

3



 

About Supernus Pharmaceuticals, Inc.

 

Supernus Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system diseases. The Company currently markets Trokendi XR® (extended-release topiramate) for treatment of migraine and epilepsy and Oxtellar XR® (extended-release oxcarbazepine) for treatment of epilepsy. The Company is also developing several product candidates to address large market opportunities in psychiatry, including SPN-810 for the treatment of Impulsive Aggression in ADHD patients and SPN-812 for the treatment of ADHD.

 

Forward-Looking Statements:

 

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not convey historical information, but relate to predicted or potential future events that are based upon management’s current expectations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. In addition to the factors mentioned in this press release, such risks and uncertainties include, but are not limited to, the Company’s ability to sustain and increase its profitability; the Company’s ability to raise sufficient capital to fully implement its corporate strategy; the implementation of the Company’s corporate strategy; the Company’s future financial performance and projected expenditures; the Company’s ability to increase the number of prescriptions written for each of its products; the Company’s ability to increase its net revenue; the Company’s ability to enter into future collaborations with pharmaceutical companies and academic institutions or to obtain funding from government agencies; the Company’s product research and development activities, including the timing and progress of the Company’s clinical trials, and projected expenditures; the Company’s ability to receive, and the timing of any receipt of, regulatory approvals to develop and commercialize the Company’s product candidates; the Company’s ability to protect its intellectual property and operate its business without infringing upon the intellectual property rights of others; the Company’s expectations regarding federal, state and foreign regulatory requirements; the therapeutic benefits, effectiveness and safety of the Company’s product candidates; the accuracy of the Company’s estimates of the size and characteristics of the markets that may be addressed by its product candidates; the Company’s ability to increase its manufacturing capabilities for its products and product candidates; the Company’s projected markets and growth in markets; the Company’s product formulations and patient needs and potential funding sources; the Company’s staffing needs; and other risk factors set forth from time to time in the Company’s SEC filings made pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended. The Company undertakes no obligation to update the information in this press release to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated or unanticipated events.

 

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Supernus Pharmaceuticals, Inc.

Consolidated Balance Sheets

(in thousands)

 

 

 

March 31, 2017

 

December 31, 2016

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and marketable securities

 

$

87,132

 

$

90,121

 

Accounts receivable, net

 

38,885

 

41,527

 

Inventories, net

 

19,167

 

16,801

 

Prepaid expenses and other current assets

 

4,573

 

2,955

 

Total current assets

 

149,757

 

151,404

 

 

 

 

 

 

 

Long term marketable securities

 

89,163

 

75,410

 

Property and equipment, net

 

4,342

 

4,344

 

Deferred legal fees

 

11,331

 

19,860

 

Intangible assets, net

 

29,450

 

16,490

 

Other non-current assets

 

350

 

331

 

Deferred income tax

 

37,863

 

41,729

 

 

 

 

 

 

 

Total assets

 

$

322,256

 

$

309,568

 

 

 

 

 

 

 

Accounts payable

 

$

5,056

 

$

8,055

 

Accrued sales deductions

 

43,450

 

41,943

 

Accrued expenses

 

26,890

 

27,427

 

Accrued income taxes payable

 

1,675

 

7

 

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

 

4,645

 

3,101

 

Deferred licensing revenue

 

287

 

209

 

Total current liabilities

 

82,003

 

80,742

 

 

 

 

 

 

 

Deferred licensing revenue, net of current portion

 

1,365

 

1,501

 

Convertible notes, net

 

3,310

 

4,165

 

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

 

25,555

 

27,289

 

Other non-current liabilities

 

3,936

 

4,002

 

Derivative liabilities

 

23

 

114

 

Total liabilities

 

116,192

 

117,813

 

 

 

 

 

 

 

Total stockholders’ equity

 

206,064

 

191,755

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

322,256

 

$

309,568

 

 

 

 

 

 

 

 

5



 

Supernus Pharmaceuticals, Inc.

Consolidated Statements of Operations

(in thousands, except share and per share data)

 

 

 

Three Months Ended March 31,

 

 

 

2017

 

2016

 

 

 

(unaudited)

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

Net product sales

 

$

56,369

 

$

43,025

 

Royalty revenue

 

1,149

 

1,119

 

Licensing revenue

 

58

 

50

 

 

 

 

 

 

 

Total revenue

 

57,576

 

44,194

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

Cost of product sales

 

2,949

 

2,035

 

Research and development

 

9,601

 

10,562

 

Selling, general and administrative

 

28,238

 

25,160

 

 

 

 

 

 

 

Total costs and expenses

 

40,788

 

37,757

 

 

 

 

 

 

 

Operating income

 

16,788

 

6,437

 

Other income (expense)

 

 

 

 

 

Interest income

 

531

 

327

 

Interest expense

 

(90

)

(179

)

Interest expense-nonrecourse liability related to sale of future royalties

 

(959

)

(1,279

)

Changes in fair value of derivative liabilities

 

54

 

101

 

Loss on extinguishment of debt

 

(101

)

(382

)

 

 

 

 

 

 

Total other expense

 

(565

)

(1,412

)

 

 

 

 

 

 

Earnings before income taxes

 

16,223

 

5,025

 

 

 

 

 

 

 

Income tax expense

 

5,926

 

200

 

 

 

 

 

 

 

Net income

 

$

10,297

 

$

4,825

 

 

 

 

 

 

 

Income per common share:

 

 

 

 

 

Basic

 

$

0.21

 

$

0.10

 

Diluted

 

$

0.19

 

$

0.08

 

 

 

 

 

 

 

Weighted-average number of common shares outstanding:

 

 

 

 

 

Basic

 

50,158,634

 

49,240,099

 

Diluted

 

52,764,442

 

51,152,072

 

 

6



 

CONTACTS:

 

Jack A. Khattar, President and CEO

Gregory S. Patrick, Vice President and CFO

Supernus Pharmaceuticals, Inc.

Tel: (301) 838-2591

 

or

 

INVESTOR CONTACT:

Peter Vozzo

Westwicke Partners

Office: (443) 213-0505

Mobile: (443) 377-4767

Email: peter.vozzo@westwicke.com

 

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