On May 03, 2016 Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN), a specialty pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases, reported financial results for first quarter 2016 and associated company developments (Press release, Supernus, MAY 3, 2016, View Source [SID:1234511895]).
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Commercial Update
First quarter 2016 product prescriptions for Trokendi XR and Oxtellar XR, as reported by IMS, totaled 114,773, a 49.7% increase over the first quarter of 2015.
Prescriptions
Q1 2016 Q1 2015 Change %
Trokendi XR 85,987 55,227 55.7 %
Oxtellar XR 28,786 21,463 34.1 %
Total 114,773 76,690 49.7 %
Source Data: Product prescriptions as reported by IMS
Total revenue for the first quarter of 2016 was $43.1 million, a 53.1% increase over $28.1 million in the same period last year. Total revenue for both periods consisted almost exclusively of net product sales.
Net Product Sales ($mil.)
Q1 2016 Q1 2015 Change %
Trokendi XR $ 32.3 $ 20.9 54.5 %
Oxtellar XR $ 10.7 $ 7.2 49.3 %
Total $ 43.0 $ 28.1 53.1 %
Consistent with industry trends and the Company’s experience in the first quarter last year, product prescriptions and net product sales for Trokendi XR and Oxtellar XR were unfavorably impacted by the reset of insurance coverage at the beginning of the year, with high deductible and high co-pay programs. Additionally, changes in wholesaler inventory levels and ordering patterns during the first quarter of 2016 had the effect of reducing net product sales by approximately $3 million in the first quarter of 2016.
"Our business continues to post strong growth compared to last year. Total first quarter IMS prescriptions, and net product sales grew by 50% or more compared to the same period last year. We continue to build on the momentum we finished with last year promoting the benefits of our products to patients with epilepsy," said Jack Khattar, President and CEO of Supernus Pharmaceuticals.
Regarding our supplemental new drug application requesting approval to expand the Trokendi XR label to include treatment of migraine in adults, we are ready to launch the new migraine indication once we receive full approval from the FDA.
Progress of Product Pipeline
Enrollment continues for both Phase III trials for SPN-810, which is currently in development for Impulsive Aggression in patients who have ADHD, and for the Phase IIb trial for SPN-812, currently in development for ADHD. The Company continues to expect Phase III data for SPN-810 to be available by mid 2017, and data from the SPN-812 Phase IIb trial to be available by early 2017.
"In addition to our recent findings on the favorable emerging clinical profile of SPN-812 as it relates to adverse events, we completed the evaluation of the cardiac effects portion of the single ascending and multiple ascending dose study. We are pleased to report that there was no clinically significant change in QT interval and other ECG parameters. We believe these additional safety data in adult healthy volunteers, which show a lack of cardiac effects, are very encouraging and further strengthen the differentiation of SPN-812," said Jack Khattar.
Collaboration Update
Shire recently announced positive results of SHP465 in a safety and efficacy study in children and adolescents with ADHD. The study addresses a key U.S. Food and Drug Administration (FDA) requirement, keeping SHP465 on track for resubmission in the fourth quarter of 2016 and a potential launch in the second half of 2017, if it is approved by the FDA. SHP465 was originally developed by Shire Laboratories, the former division of Shire that subsequently became Supernus Pharmaceuticals. Based on the agreement between Supernus and Shire, Shire will pay to Supernus a single-digit percentage royalty on net sales of the product.
Operating Expenses
Research and development expenses in the first quarter of 2016 were $10.6 million, as compared to $3.7 million in the same quarter the prior year. This increase is primarily due to the ongoing Phase III testing of SPN-810 and Phase IIb testing of SPN-812.
Selling, general and administrative expenses in the first quarter of 2016 were $25.2 million, as compared to $19.4 million in the same quarter the prior year. The increase is primarily due to the continued increase in our sales and marketing efforts for both Trokendi XR and Oxtellar XR and the efforts in preparing for the launch of the migraine indication for Trokendi XR.
Operating Income and Earnings Per Share
Operating income in the first quarter of 2016 was $5.3 million, an increase of 55.0% over operating income of $3.4 million in the same period last year. This improvement in operating income is primarily due to the increase in net product sales.
Diluted earnings per share were $0.08 in the first quarter ended March 31, 2016, compared to $0.02 in the same period last year.
Weighted-average diluted common shares outstanding were approximately 51.2 million in the first quarter of 2016, as compared to approximately 44.9 million in the same period the prior year.
Capital Resources
As of March 31, 2016, the Company had $114.0 million in cash, cash equivalents, marketable securities, and long term marketable securities, as compared to $117.2 million at December 31, 2015. As of March 31, 2016, approximately $6.6 million of the Company’s six year, $90 million notes, bearing interest at 7.5% per annum, remain outstanding.
Financial Guidance
For full year 2016, the Company reiterates its expectation that net product sales will range from $200 million to $210 million, R&D expenses to range from $55 million to $65 million, and operating income to range from $28 million to $35 million.