Supernus Announces Fourth Quarter and Full Year 2022 Financial Results
28 Feb 2023
Phase 2Financial StatementAcquisition
Supernus Announces Fourth Quarter and Full Year 2022 Financial Results
Full Year 2022 total revenues of $667.2 million, a 15% increase compared to full year 2021
Executed a second significant pharmacy benefit manager contract for Qelbree
Anticipates approximately 30% growth at the midpoint of full year 2023 total revenues guidance compared to full year 2022, excluding revenues of Trokendi XR®
1Includes net product sales reported by Adamas Pharmaceuticals prior to the acquisition of Adamas by Supernus Pharmaceuticals in November 2021.
ROCKVILLE, Md., Feb. 28, 2023 (GLOBE NEWSWIRE) -- Supernus Pharmaceuticals, Inc. (Nasdaq: SUPN), a biopharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases, today announced financial results for the fourth quarter and full year of 2022 and associated Company developments.
“In 2022, we continued to execute on our long-term growth strategy focusing on successfully transitioning from our legacy and mature products to our growth products, and finished the year with record revenues of $667.2 million, up 15% from the prior year,” said Jack Khattar, President and CEO of Supernus. “Based on this successful transition and with a solid foundation, we are confident that our growth drivers will allow us to offset the impact coming from loss of exclusivity for Trokendi XR and position us well to drive strong revenue and non-GAAP operating income growth in 2024 and beyond.”
Qelbree Update
Total IQVIA prescriptions were 117,635 in the fourth quarter of 2022, an increase of 24% compared to total prescriptions of 94,681 in the third quarter of 2022. In January 2023, the most recent month available, total prescriptions reached 42,881.
Continued healthy growth in the U.S. attention-deficit hyperactivity disorder market with 2022 total number of prescriptions reaching more than 90 million, an increase of 9% compared to 2021, according to IQVIA.
The average wholesale acquisition cost per Qelbree prescription continued to increase in the fourth quarter of 2022, driven by increases in the average daily dose and prescription size.
Executed a second significant pharmacy benefit manager contract effective January 2023, and continued making progress in securing and improving managed care coverage.
Qelbree continues to expand its base of prescribers, with approximately 16,822 prescribers in the fourth quarter of 2022, up from 14,265 prescribers from the third quarter of 2022.
Product Pipeline Update
SPN-830 (apomorphine infusion device) - Continuous treatment of motor fluctuations (“off” episodes) in Parkinson's disease (PD)
The Company will be meeting with the U.S. Food and Drug Administration (FDA) in April 2023 to discuss the Complete Response Letter received in October 2022. We will announce the timing for our resubmission after our discussion with the FDA.
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.
The Company has commenced an open-label Phase II clinical study of SPN-817 in patients with treatment-resistant seizures. Depending on the rate of enrollment, the Company expects to have data in the first half of 2024.
Financial Highlights
Net Product Sales
For the three months ended December 31, 2022, net product sales were $163.8 million, a 6% increase over net product sales of $155.0 million for the same period in 2021. For the full year ended December 31, 2022, net product sales were $649.4 million, a 14% increase over net product sales of $567.5 million for the same period in 2021. The increases in both periods were primarily due to net product sales of GOCOVRI and growth in net product sales of Qelbree.
The following table provides information regarding net product sales during the three months and full year ended December 31, 2022 and 2021 (dollars in millions):
Three Months Ended
December 31, Full Year Ended
December 31, 2022 2021 Change % 2022 2021 Change %Net product sales Trokendi XR®$57.2 $73.3 (22)% $261.2 $304.8 (14)%Oxtellar XR® 27.4 28.6 (4)% 115.4 110.7 4%GOCOVRI(1) 29.2 9.8 ** 104.4 9.8 ** Qelbree 23.6 7.2 228% 61.3 9.9 519%APOKYN® 18.1 25.9 (30)% 75.3 99.2 (24)%Other(2) 8.3 10.2 (19)% 31.8 33.1 (4)%Total net product sales$163.8 $155.0 6% $649.4 $567.5 14%
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(1) Net product sales as of the acquisition of Adamas Pharmaceuticals, Inc. by the Company (the "Adamas Acquisition") in November 2021.
(2) Includes net product sales of MYOBLOC®, XADAGO® and Osmolex ER®.
** Percentage not meaningful for comparative purposes since net product sales for 2021 included revenues from date of Adamas Acquisition.
Operating earnings (GAAP and non-GAAP)
For the three months ended December 31, 2022, operating earnings (GAAP) was $34.3 million, as compared to operating earnings (GAAP) of $6.1 million for the same period in 2021. The increase was primarily due to full quarter net product sales of the commercial products acquired through the Adamas Acquisition and decreased selling, general and administrative expense due to the Adamas Acquisition-related costs incurred in 2021. For the full year ended December 31, 2022 operating earnings (GAAP) were $46.1 million, as compared to $86.0 million for the same period in 2021. The decrease was primarily due to activities to support the launch of Qelbree to the adult population and amortization of acquired intangible assets from the Adamas Acquisition.
For the three months ended December 31, 2022, adjusted operating earnings (non-GAAP) were $57.6 million, compared to $46.2 million in the fourth quarter of 2021. For the full year ended December 31, 2022, adjusted operating earnings (non-GAAP) were $148.8 million, compared to $167.3 million for the same period of 2021.
Reconciliation of GAAP to Non-GAAP Adjustments
An itemized reconciliation between operating earnings on a GAAP basis and operating earnings on a non-GAAP basis is as follows (dollars in millions):
Three Months Ended
December 31, Full Year Ended
December 31, 2022 2021 2022 2021 Operating earnings - As Reported (GAAP)$34.3 $6.1 $46.1 $86.0 Adjustments: Amortization of intangible assets 20.7 12.0 82.6 30.0 Share-based compensation 4.3 4.0 17.6 17.9 Contingent consideration expense (gain) (2.4) 1.1 (0.5) (6.5)Acquisition-related costs — 22.3 — 22.3 Other R&D — — — 15.0 Depreciation 0.7 0.7 3.0 2.6 Operating earnings - As Adjusted (non-GAAP)$57.6 $46.2 $148.8 $167.3
Non-GAAP operating earnings adjusts for non-cash items including amortization of intangible assets, share-based compensation expense, change in fair value of contingent consideration, depreciation, and non-recurring costs. Acquisition-related costs reflect non-recurring acquisition-related costs associated with the Adamas Acquisition. Other R&D reflects a non-cash expense related to the equity investment in Navitor due to the accounting impact of the March 2021 Navitor corporate restructuring. The increase in amortization of intangible assets for the three and twelve month periods ended December 31, 2022 was due to the amortization of acquired intangible assets from the Adamas Acquisition in November 2021.
Net earnings (GAAP)
For the three months ended December 31, 2022, net earnings (GAAP) and diluted earnings per share (GAAP) were $25.5 million and $0.43, respectively, as compared to $2.4 million, or $0.04 per diluted share, in the same period in 2021.
For the full year ended December 31, 2022, net earnings (GAAP) and diluted earnings per share (GAAP) were $60.7 million and $1.04, respectively, as compared to $53.4 million, or $0.98 per diluted share, in the same period in 2021.
Balance sheet
At December 31, 2022, the Company’s cash, cash equivalents, current and long-term marketable securities are approximately $555.2 million, compared to $458.8 million as of December 31, 2021. This increase was primarily due to cash generated from operations.
In February 2023, the Company entered into a credit line agreement with UBS Bank USA providing the Company an uncommitted demand secured line of credit of up to $150.0 million, which can be drawn at any time.
Full Year 2023 Financial Guidance (GAAP)
The Company’s full year 2023 total revenue guidance represents approximately 30% growth at the midpoint compared to full year 2022, excluding revenues of Trokendi XR in both periods. The Company’s full-year 2023 financial guidance is set forth below (dollars in millions):
AmountTotal revenues (1) (Includes $60 million to $80 million of Trokendi XR(2))$580 - $620Combined R&D and SG&A expenses$460 - $490Operating loss (3)$(50) - $(25)
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(1) Includes net product sales and royalty revenue.
(2) Reflects generic entry on Trokendi XR in 2023.
(3) Includes amortization of intangible assets and contingent consideration expense (gain).
Full Year 2023 Financial Guidance - GAAP to Non-GAAP Adjustments
An itemized reconciliation between projected operating loss on a GAAP basis and projected operating earnings on a non-GAAP basis is as follows (dollars in millions):
AmountOperating loss - GAAP$(50) - $(25)Adjustments: Amortization of intangible assets$80 - $80Share-based compensation$20 - $23Contingent consideration$10 - $12Depreciation$5 - $5Operating earnings - non-GAAP$65 - $95
Non-GAAP Financial Information
This press release contains a financial measure, non-GAAP operating earnings, which does not comply with United States generally accepted accounting principles (GAAP). The non-GAAP financial measure should be considered in addition to, not as a substitute for or in isolation from, or superior to measures prepared in accordance with GAAP. Non-GAAP operating earnings adjusts for non-cash share-based compensation expense, depreciation and amortization, and accretion of contingent consideration, and for factors that are unusual, non-recurring or unpredictable, and excludes those costs, expenses, and other specified items presented in the reconciliation tables in this press release. We believe the use of non-GAAP operating earnings is useful supplemental information to investors regarding the Company’s results of operations and assist management, analysts, and investors in evaluating the performance of the business. There are limitations associated with the use of non-GAAP financial measures. Including such measures may not be entirely comparable to similarly titled measures used by other companies, may not reflect all items of income and expense, as applicable, that affect our operations, potential differences among calculation methodologies, may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. We mitigate these limitations by reconciling the non-GAAP financial measure to the most comparable GAAP financial measure. Investors are encouraged to review the reconciliation. The Company’s financial guidance is also being provided on both a reported and a non-GAAP basis.
Conference Call Details
Supernus will host a conference call and webcast today, February 28, 2023, at 4:30 p.m. Eastern Time to discuss these results. A live webcast will be available in the Events & Presentations section of the Company’s Investor Relations website www.supernus.com/investors.
Participants may also pre-register any time before the call here. Once registration is completed, participants will be provided a dial-in number with a personalized conference code to access the call. Please dial in 15 minutes prior to the start time.
Following the live call, a replay will be available on the Company's Investor Relations website www.supernus.com/investors. The webcast will be available on the Company’s website for 60 days following the live call.
Supernus Pharmaceuticals is 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, ADHD, hypomobility in 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.
For more information, please visit www.supernus.com.
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 and the products of its subsidiaries; the Company’s ability to increase its net revenue; the Company’s ability to commercialize its products and the products of its subsidiaries; 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 the intellectual property of its subsidiaries 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; the Company’s ability to increase the number of prescriptions written for each of its products and the products of its subsidiaries; the Company’s ability to increase its net revenue from its products and the products of its subsidiaries; and other risk factors set forth from time to time in the Company’s filings with the Securities and Exchange Commission made pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended. The Company undertakes no obligation to update the information in this press release to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated or unanticipated events.
Consolidated Balance Sheets
(in thousands, except share data)
December 31, December 31, 2022 2021 (Unaudited) Assets Current assets Cash and cash equivalents$93,120 $203,434 Marketable securities 368,214 136,246 Accounts receivable, net 165,497 148,932 Inventories, net 91,541 85,959 Prepaid expenses and other current assets 15,779 27,019 Total current assets 734,151 601,590 Long-term marketable securities 93,896 119,166 Property and equipment, net 15,173 16,955 Intangible assets, net 702,463 784,693 Goodwill 117,019 117,516 Other assets 39,806 49,232 Total assets$1,702,508 $1,689,152 Liabilities and stockholders’ equity Current liabilities Accounts payable and accrued liabilities$96,342 $117,683 Accrued product returns and rebates 151,665 132,724 Contingent consideration, current portion 21,120 44,840 Convertible notes, net(a) 401,968 — Other current liabilities 16,863 20,132 Total current liabilities 687,958 315,379 Convertible notes, net(a) — 379,252 Contingent consideration, long-term 33,847 35,637 Operating lease liabilities, long-term 35,998 41,298 Deferred income tax liabilities(a) 49,809 85,355 Other liabilities 8,692 16,380 Total liabilities 816,304 873,301 Stockholders’ equity Common stock, $0.001 par value; 130,000,000 shares authorized; 54,253,796 and 53,256,094 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively 54 53 Additional paid-in capital(a) 408,115 434,337 Accumulated other comprehensive (loss) earnings, net of tax (3,210) 1,539 Retained earnings(a) 481,245 379,922 Total stockholders’ equity 886,204 815,851 Total liabilities and stockholders’ equity$1,702,508 $1,689,152 ______________________________
(a) Effective January 1, 2022, the Company adopted the simplified convertible instruments accounting guidance (ASU 2020-06), which impacted the treatment of our Convertible Senior Notes Due 2023. The adoption of ASU 2020-06 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.
Consolidated Statements of Earnings
(in thousands, except share and per share data)
(Unaudited)
Three Months Ended
December 31, Twelve Months Ended
December 31, 2022 2021 2022 2021 Revenues Net product sales$163,785 $154,963 $649,432 $567,504 Royalty revenues 3,543 4,087 17,806 12,271 Total revenues 167,328 159,050 667,238 579,775 Costs and expenses Cost of goods sold(a) 22,954 16,994 87,221 75,061 Research and development 17,774 21,078 74,552 90,467 Selling, general and administrative 73,972 101,735 377,221 304,759 Amortization of intangible assets 20,698 12,025 82,630 29,989 Contingent consideration (gain) expense (2,404) 1,120 (510) (6,530)Total costs and expenses 132,994 152,952 621,114 493,746 Operating earnings 34,334 6,098 46,124 86,029 Other income (expense) Interest and other income, net 2,400 1,887 21,689 10,569 Interest expense(b) (1,594) (5,934) (7,070) (23,423)Total other income (expense) 806 (4,047) 14,619 (12,854) Earnings before income taxes 35,140 2,051 60,743 73,175 Income tax (benefit) expense 9,659 (391) 32 19,751 Net earnings$25,481 $2,442 $60,711 $53,424 Earnings per share Basic$0.47 $0.05 $1.13 $1.01 Diluted(b)$0.43 $0.04 $1.04 $0.98 Weighted average shares outstanding Basic 54,104,908 53,235,082 53,665,143 53,099,330 Diluted(b) 62,087,687 54,528,826 61,679,800 54,356,744 ______________________________
(a) Excludes amortization of acquired intangible assets
(b) As a result of the adoption of ASU 2020-06 in January 1, 2022, for the 2022 periods presented, the Company used the if-converted method in calculating diluted earnings per share. The potential dilutive effect of the convertible notes, an increase of 6.8 million in dilutive shares, is included in the computation of diluted earnings (loss) per share if these are determined to be dilutive for the respective period. In addition, beginning January 1, 2022, the Company no longer records interest expense on the previously recorded discount for the embedded conversion feature on the Convertible Senior Notes Due 2023.
CONTACTS:
Jack A. Khattar, President and CEO
Timothy C. Dec, Senior Vice President and CFO
Tel: (301) 838-2591
or
INVESTOR CONTACT:
Peter Vozzo
ICR Westwicke
Office: (443) 213-0505
Mobile: (443) 377-4767
Email: peter.vozzo@westwicke.com
For more details,please visit the original website
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