Supernus Pharmaceuticals, Inc. (SUPN) Q2 2025 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Supernus Pharmaceuticals Second Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your first speaker today, Peter Vozzo of ICR Healthcare, Investor Relations representative for Supernus Pharmaceuticals. You may begin.

Thank you, Gerald. Good afternoon, everyone, and thank you for joining us today for Supernus Pharmaceuticals Second Quarter 2025 Financial Results Conference Call. Today, after the close of market, the company issued a press release announcing these results. On the call with me today are Supernus' Chief Executive Officer, Jack Khattar; and Chief Financial Officer, Tim Dec. Today's call is being made available via the Investor Relations section of the company's website at ir.supernus.com. During the course of this call, management may make certain forward-looking statements regarding future events and the company's future performance. These forward-looking statements reflect Supernus' current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the Risk Factors section of the company's latest SEC filings. Actual results may differ materially from those projected in these forward- looking statements. For the benefit of those of you who may be listening to the replay, this call is being held and recorded on August 5, 2025. But since then, the company may have made additional announcements related to the topics discussed. Please reference the company's most recent press releases and current filings with the SEC. Supernus declines any obligation to update these forward- looking statements, except as required by applicable securities laws. I'll now turn the call over to Jack.

Thank you, Peter. Supernus continues to execute well against its growth plan and had a strong and very active second quarter. In April, we launched ONAPGO, the first and only subcutaneous apomorphine infusion device for the treatment of motor fluctuations in adults with advanced Parkinson's disease. In June, we announced the acquisition of Sage Therapeutics, which closed on July 31. In addition, we generated strong operating results driven by the robust performance of Qelbree and GOCOVRI. The second quarter of 2025 represents a turning point for Supernus and the beginning of a new phase of accelerated growth. We consider the transition from Trokendi XR and Oxtellar XR to be substantially complete as each product represented only 7% of total net sales in the second quarter, while our growth drivers, Qelbree, GOCOVRI and ONAPGO combined represented 73% of our total net sales. Moving forward with the addition of ZURZUVAE, our fourth growth driver, we expect Trokendi XR and Oxtellar XR share of our portfolio to be reduced even further. Starting with our first growth driver, Qelbree, the brand entered its fifth year on the market and had another robust performance with 23% growth in prescriptions as reported by IQVIA and 31% growth in net sales. Qelbree had another quarter expanding its base of prescribers with approximately 36,000 prescribers in the second quarter of 2025, up by 23% compared to the same period last year. After posting 25% growth in IQVIA prescriptions in '24 versus '23, Qelbree continued to show steady strong growth during the first half of 2025 with prescriptions increasing 23% compared to the same period in 2024. Qelbree's 23% growth outpaced both the ADHD market, which grew by 9% and the nonstimulant segment, which grew by 11%. In addition to growth in the pediatric business, Qelbree experienced high growth in the adult business, increasing 29% in the second quarter compared to last year. By the end of June 2025, the adult business had reached 35% of total Qelbree prescriptions compared to approximately 32% for the year 2024. Switching to our second growth driver, GOCOVRI, continued its strong performance on the back of the momentum it had in the first quarter. Prescriptions for the second quarter of 2025 increased by 14% and net sales increased by 16% compared to the same quarter last year. The number of prescribers reached a new high in the quarter to approximately 1,900 prescribers. In the first half of this year, GOCOVRI benefited from the Medicare redesign. And by June 2025, 97% of GOCOVRI Medicare prescriptions had a co-pay that was less than $25 compared to only 77% in 2024. The average GOCOVRI Medicare co-pay declined by 42% and 80% year-over-year for first quarter and second quarter of 2025, respectively. Unlike previous years, patient retention rates held up this year despite the deductible resets. With a more robust patient base this year, we are uniquely positioned to continue growing the brand with new patients rather than having to recapture previous patients that may have discontinued due to the high beginning of the year deductibles. Moving to our third growth driver, ONAPGO. The launch is off to a terrific start, exceeding our expectations. We launched ONAPGO in April, utilizing our existing Parkinson's disease sales force and support network. Through the end of June, we have more than 750 patient enrollment forms submitted by more than 300 prescribers. Finally, regarding ZURZUVAE, our fourth growth driver, we are excited to have completed the acquisition of Sage Therapeutics, which represents a major step for Supernus in accelerating its mid- to long-term revenue growth and cash flow. ZURZUVAE is a unique and well-differentiated product that is early in its launch and that provides further diversification for our revenue base. The product has been successfully launched by Sage and its partner, Biogen, in the U.S. with 2025 second quarter net revenues as reported by Sage reaching $23.2 million, up from $13.8 million as reported by Sage in the first quarter of 2025, representing a 68% increase. We will be focused on integrating the business and working closely with our partners, Biogen and Shionogi to ensure the continued success and growth of ZURZUVAE. Moving on to R&D. We are on track to initiate a follow-on Phase IIb multicenter randomized double-blind placebo-controlled trial with SPN-820 in approximately 200 adults with major depressive disorder by the end of 2025. This study will examine the safety and tolerability of SPN-820 and its efficacy at a dose of 2,400 milligram given intermittently twice per week as an adjunctive treatment to the current baseline antidepressant therapy. Our Phase IIb randomized, double-blind, placebo-controlled study of 817 is ongoing with a targeted enrollment of approximately 258 adult patients with treatment-resistant focal seizures. This trial utilizes 3-milligram and 4- milligram twice daily doses. As we mentioned previously, we completed a pharmacokinetic study of 2 oral formulations of SPN-443 in healthy adults. Both formulations of SPN-443 showed adequate bioavailability and were well tolerated. SPN-443 is our new stimulant-like product candidate for ADHD and other CNS disorders. The company expects to disclose a lead indication for the product candidate by the end of 2025. Finally, despite the completion of the recent acquisition of Sage, corporate development will continue to be a top priority for us as we look for additional strategic opportunities to further strengthen our future growth through additional revenue-generating products or late-stage pipeline product candidates. With that, I will now turn the call over to Tim.

Thank you, Jack. Good afternoon, everyone. As I review our second quarter 2025 results, please refer to today's press release and 10-Q that were filed earlier today. Total revenue for the second quarter of 2025 was $165 million compared to $168 million in the same quarter last year. Total revenue in the second quarter of 2025 was comprised of net product sales of $158 million and royalty, licensing and other revenues of $7 million. Excluding net product sales of Trokendi XR and Oxtellar XR, total revenues for the second quarter of 2025 increased 17% compared to the same quarter last year. This increase was primarily due to the increase in net sales of our core products, Qelbree, GOCOVRI and ONAPGO. For the second quarter of 2025, combined R&D and SG&A expenses were $116 million as compared to $112 million for the same quarter last year. Operating earnings on a GAAP basis for the second quarter of 2025 were $12 million as compared to $23 million for the same quarter last year. The decrease was primarily due to higher sales and marketing expenses related to the ONAPGO launch. GAAP net earnings were $22 million for the second quarter of 2025 or $0.40 per diluted share compared to GAAP net earnings of $20 million or $0.36 per diluted share in the same quarter last year. On a non-GAAP basis, which excludes amortization of intangibles, share-based compensation, contingent consideration and depreciation, adjusted operating earnings for the second quarter of 2025 was $41 million compared to $45 million in the same quarter of the prior year. Total revenues for the 6 months ended June 30, 2025, were $315 million compared to $312 million in the same period last year. Total revenues were comprised of net product sales of $300 million and royalty, licensing and other revenues of $15 million. Net product sales were flat compared to last year. The increase in net product sales of our core products, Qelbree and GOCOVRI were generally offset by decreases in product sales of APOKYN and the generic erosion of Trokendi XR and Oxtellar XR. Excluding net product sales of Trokendi XR and Oxtellar XR, total revenues for the 6 months ended June 30, 2025, increased 21% compared to the same period last year. Again, the increase was primarily due to the increase in net product sales of our core products, Qelbree, GOCOVRI and now APOKYN. Combined R&D and SG&A expenses for the 6 months ended June 30, 2025, were $233 million as compared to $224 million for the same period last year. Operating earnings on a GAAP basis for the 6 months ended June 30, 2025, were $2 million as compared to $19 million for the same period last year. The decrease in operating earnings was primarily due to a change in the fair value of contingent consideration and higher selling and marketing expenses associated with the ONAPGO launch. GAAP net earnings were $11 million for the 6 months ended June 30, 2025, or $0.19 per diluted share compared to $20 million or $0.36 per diluted share in the same period last year. On a non-GAAP basis, which excludes amortization of intangibles, share-based compensation, contingent consideration and depreciation, adjusted operating earnings were $67 million compared to $68 million in the same period last year. As of June 30, 2025, the company had approximately $523 million in cash, cash equivalents and marketable securities compared to $454 million as of December 31, 2024. The increase is primarily due to cash generated from operations. We used a portion of our current cash on hand to fund the acquisition of Sage, which was completed on July 31. Following the acquisition, the company continues to have a strong balance sheet with no debt and significant financial flexibility for potential M&A or other growth opportunities. Now turning to guidance. We are updating our full year 2025 financial guidance primarily to reflect Supernus' strong performance in the first half of the year and the impact of the Sage acquisition starting August 1. We expect total revenues to range from $670 million to $700 million, up from the previous range of $600 million to $630 million, comprised of net product sales and royalty and licensing revenues. Note that total revenue guidance for the full year 2025 assumes approximately $65 million to $70 million of combined net sales of Trokendi XR and Oxtellar XR, which remains unchanged. For the full year 2025, we expect combined R&D and SG&A expenses to range from $505 million to $530 million, up from the previous range of $435 million to $460 million. The increase is primarily due to inclusion of Sage OpEx for the final 5 months of 2025. Overall, we expect full year 2025 operating loss in the range of $70 million to $80 million compared to the previous range of $10 million operating earnings to an operating loss of $15 million. This change is due to the inclusion of 2 items: $55 million to $60 million in Sage acquisition-related costs and an estimate of $10 million to $20 million in increased noncash amortization related to the Sage acquisition for the final 5 months of 2025. And finally, we expect our non-GAAP operating earnings to range from $105 million to $135 million, which is relatively consistent from the previous guidance. Please refer to the earnings press release issued prior to this call that identifies the various ranges of reconciling items between GAAP and non-GAAP. With that, I will now turn the call back over to the operator for Q&A.

[Operator Instructions] Our first question comes from Stacy Ku of TD Cowen.

Congratulations on a great quarter. First question is on Qelbree. Can you just talk about what kind of net pricing dynamics we saw in the quarter and maybe how we should think about the quarterly, let's say, net pricing for Qelbree moving forward? In addition, maybe provide an update on the Qelbree launch progress in the adult segment and maybe that understandable focus on the back-to-school season for Q3. So that's the first question. The second question is on ONAPGO. Just help us understand the 750 enrollment forms and 300 prescribers of ONAPGO and what we're seeing in Q2 in terms of sales, just help me understand reimbursement timelines to getting coverage patients on maybe paid drug or just help us understand that clear demand that we're seeing as it relates for ONAPGO versus maybe even AbbVie's Vyalev when we look at kind of the sales they've reported and the type of demand they're seeing. So that's our second question.

Yes. Starting with Qelbree. If you look at the net pricing, it continues to be north of the $300 per prescription for a 30-day prescription. The gross to net, as we've made previous commentary in previous quarters, we expected it to improve, obviously, versus the first quarter, and it did. Actually, it was pretty much around the same level it was in the second quarter of last year. So it stayed consistent with that. And your question on the adult segment, as I mentioned in my prepared remarks, the adult business, which we've been investing in clearly because of the size of that segment and its importance for the health of the brand and its continued growth is starting to show some traction. Now the business is about 35% of the total prescriptions of Qelbree. Adult prescriptions grew by 29% compared to about 20% for pediatrics. So pediatrics grew very well, of course, by 20%, but the adult performed a little bit more with 29% growth. Having said that, of course, it's also a lower base. So percentage-wise, it's going to show that anyway. But we're very pleased with the continued growth on the adult. And then we're very happy that Qelbree actually performed pretty well during the summertime. And we think some of that is also because of the increased growth in the adult side because adult patient population does not get impacted as much with the seasonality that we see on the pediatric side. So given the high growth on the adult business, it helped us go through summer fairly -- I mean, the business, if you look at the prescriptions of Qelbree, they held up really nicely during the summer months versus typically, they could potentially decline. So we're very happy with the fact that we're now in the back-to-school season with a very good momentum behind the brand and a much stronger position than we've ever been to continue to push through. So we're looking for, hopefully, even a much stronger second half for the brand. So on ONAPGO, the 750 enrollment forms, these are the forms that are submitted by our prescribers. And it takes time for these forms to eventually get adjudicated, everything gets processed for them to translate into actual shipments. And that's where in the end, you'll see. So the key thing is it's like a funnel. You've got to keep filling in the forms because eventually, you're going to lose some of them, and that's typical in the industry in all specialty products, you lose a good portion of these forms and they don't all translate into actual patients. Right now, and this is -- this number is probably around the end of July. So it's not in this end of second quarter. But by the end of July, we estimate we have about slightly more than 200 patients on ONAPGO. So we're very excited about that. So we have a very good number of patients who are getting the product. A good portion also a little bit north of 20%, 25% are already getting refills, starting to get refills. So the momentum is really starting to build up behind the product, given that we just launched it a couple of months ago, late in April. So we're very happy about that and also very happy about the fact that we have more than 300 prescribers. And we estimate about 50% of the prescribers are actually repeat prescribers. So everything is really pointing in the right direction for a very strong launch on ONAPGO.

Wonderful. And just to confirm, those 200 patients that you're saying, slightly more than 200 that are on ONAPGO, they're getting -- you guys are getting reimbursement for that? Or is there more of a, let's say, specialty pharmacy bridging program that's ongoing?

No. I mean from a reimbursement coverage point of view, that is going as smooth as you can expect for a launch. We're going to always have bumps on the way, but we're pretty happy with the amount of prescriptions that are going through getting authorized. So you're working the system as time goes on, we work any kinks in it, but we're very happy with that and the amount of patients that are getting the shipments for the product.

Our next question comes from Andrew Tsai from Jefferies.

On the quarter. This is John on for Andrew. So we saw ZURZUVAE Q2 sales accelerate meaningfully quarter-over-quarter. Were there any onetime events driving that sales growth? Or was it all mostly organic? And then do you expect that pace of growth to continue going forward into Q3 and Q4? And then maybe just broadly speaking, what do you think about the peak sales opportunity? And ultimately, what could be your appetite in looking at ZURZUVAE and like MDD or any other CNS indications in the future? Or should we really be thinking that you'll be focused on the launch and kind of keep the pipeline shelf for now?

Yes. The only thing I can really speak about ZURZUVAE, given that we just closed on the transaction, and we'll be coordinating, of course, messages and what we do from a public disclosure perspective with our partner, Biogen, but I can give you a little bit more color given what Sage has reported. So based on what Sage has reported, in the second quarter, they saw 36% growth in the prescriptions, about 4,000 TRxs were shipped to women with PPD. I mean that is a very strong healthy growth. And if you recall, in the first quarter, actually, they grew by 22% versus the fourth quarter of last year. So we're really excited about the momentum that the brand is picking up. Clearly, that is also the benefit of some of the expansion that the 2 partners have done, Biogen and Sage at that time with the expansion of the sales force and the continued investment behind the brand. So we're pretty pleased with the strong growth in the business on a unit basis. And obviously, that is being reflected, of course, in the dollar. On the dollar side, again, as I said, we just closed on the deal. So we need a couple of days to a little bit understand if there is any shift in inventory or anything there else that may have benefited the dollar amount. I don't have a really clear answer for you at this point. But clearly, what's more important is the shipments and the prescriptions, and that's what we're very focused on at this point. As far as peak sales of the brand itself, again, we haven't made any specific public commentary. The only thing I can tell you with some public information, of course, everybody knows the milestones we have with the purchase of Sage. So we would be very happy to pay all these milestones and the CVRs that we have on the deal. And that gives you some idea for what the brand or the level of sales that we're thinking, and we will be working very hard to achieve for this product. I'll just remind folks that these milestones or the sales numbers are actually 50% of what the total brand would be because that would be the net revenues as reported by Supernus for these CVRs. And then finally, regarding any potential future indications or anything specific with that. Again, I'm not at any specific liberty at this point to talk about the future plans of the product until we sit down and talk to our partner, Biogen regarding the potential of the brand. But certainly, we're in it for the long haul, and we're in it to build as big of a product as possible here to serve as many patients.

Our next question comes from Kristen Kluska from Cantor Fitzgerald.

Congrats on a great quarter. Two questions for me. The first is just on Qelbree. Obviously, in 2Q, you introduced a lot of new sales launch initiatives. So I'm curious with all the new prescribers that are coming on board, what are some of the key reasons doctors are wanting to try this option? And how much of the recent launch has been dictated by doctors offering this to patients versus patients asking their doctors about it?

Yes. It's really a combination of all that, Kristen. There is no one specific initiative that is really driving the strong performance of the brand. Clearly, at the beginning of the year, what I believe you're referring to is the new label that we got or changes in the labels that were very, very favorable for the product from the perspective of, first, really clarifying and providing more information about the mechanism of action of Qelbree, which separates the product significantly versus a lot of these options that are out there, specifically with its activity and modulation of the serotonin. And that really differentiates the product and explains also a lot of its activity and how it treats ADHD and the way patients feel when they get the product. So a lot of the time we spent in the first quarter, of course, also in the second quarter, educating physicians about the change in the label, the mechanism of action. We spend a lot of time in pushing the adult business, as I mentioned earlier. So we're doing a lot of things on different fronts. And a lot of these things tie together. The change also in the addition of the lactation data. That is also important for patients, female patients who are in the adulthood and so forth. So a lot of things tie together. And all these initiatives have converged and really produced the results that we've seen behind the brand. And now with the back-to-school season, clearly, we will shift some of the emphasis back on the pediatric side to take the most advantage of the momentum of the back-to-school season. So that will be great for us in the third quarter to continue with the push for the product to hopefully, as I mentioned earlier, that we finish even stronger in the second half even stronger than the first half.

And then with the Sage deal closed now, can you give us a rough sense of what that pro forma cash looks like? I know they did have a good amount of cash left on their balance sheet at all. And just on the sense of the future M&A or in-licensing opportunities, should we expect there to be more focused specifically in the OB/GYN space as you build the sales force and do the work there for PPD?

Yes, sure. I'll take the latter part of the question, and then I'll ask Tim to talk specifically about the cash. From a corporate development perspective, strategy perspective, our top priorities are pretty much still the same. First, starting with revenue-generating products that could continue to build our commercial footprint in CNS. And now, as you mentioned, given that now we are getting into the OB/GYN space, definitely women's health will be an area that we will be looking at very seriously. And it opens up a whole area for us an additional growth opportunity for us. So we will be looking at both areas as always, CNS, neurology, psychiatry, but also now with OB/GYN. And as far as the size of the transaction, all depends on a case-by-case scenario of the type of products we're bringing in. And also regarding the balance sheet, I'll let Tim now comment concerning your question about the cash, the pro forma cash position.

Yes. As I mentioned in my prepared remarks, we still have a strong balance sheet. At the time of close, our cash is between $240 million and $260 million.

So that should clearly give us a continued flexibility given that we still have a very strong and healthy balance sheet overall.

Our next question comes from Annabel Samimy from Stifel.

This is Jack on for Annabel. So on the topic of the OB/GYNs, you've noted that this is the best area for expansion for ZURZUVAE. But your real point of leverage historically has been psychiatry. So how do you plan on balancing these 2? What type of investment do you need to make to kind of reach these prescribers? And does Biogen need to kind of get on board with that decision?

I mean at this point, currently, so far, what we've seen is that 70% to 80% of the prescriptions are generated by OB/GYNs. So clearly, the business is heavily skewed, which makes a lot of sense, of course, given the patient journey, where it starts and where it ends and so forth. And the remainder of the prescription, 20% or so is in the psychiatry space. So that's not too small. Clearly, that is an area where we will be exploring. Again, we will explore that together with our partner, Biogen, to see how we can -- if there is a chance here to potentially take advantage of our strong presence in psychiatry. Does it make sense? Could we expand further in the psychiatry space? So you bet. I mean, that is something we will be talking about with our partner and any decisions will have to be made, of course, jointly as to what kind of expansion, if there is any expansion, investment or whatever it is, where we can explore that avenue and further improve and increase the reach so we can reach patients who go to the psychiatry office. So that is clearly an area we will be exploring as we move forward.

And then one more from us. Just wanted to understand the dosing dynamics for Qelbree in adults a little bit better. Is there still the same level of combination usage with stimulants? And if so, why is that so persistent? I would think that would kind of defeat the purpose and advantage of Qelbree being a nonstimulant in that case.

Yes. It's actually driven by the stimulants themselves and how nasty they can be, of course, Otherwise, why would the physician be considering to switch or add Qelbree, he won't switch to Qelbree, right? That means there is a problem. There is something that the patient is struggling with. And the stimulant on its own is not really doing what it's supposed to do, meaning address the symptoms that the patient is going through. So instead of completely taking the patient off the stimulant, which has a lot of issues with it when you do that, withdrawals, a lot of patients feel withdrawal and suffer from all kind of symptoms when you cut them off completely from the amphetamines or methylphenidates what physicians try to do is taper off the dose of the stimulant over time and then as time goes on, increase the dose of Qelbree. And therefore, the use of Qelbree in combination with the stimulants perhaps will continue to be the case. Physicians like to do that because they don't want to take patients off completely very quickly, very suddenly off the stimulants. And they like to titrate up on Qelbree and add it, and therefore, the reason why we see a very good healthy level of use as a combination. It continues to be around the 40% of adult prescriptions to be combination use. In pediatric, it's less so. It's about 20%, we estimate of the pediatric prescriptions are combination. So that dynamic continues to be the case. And then eventually, what happens with the patient as they're off the stimulant, actually, a lot of them, interestingly, they find out that they don't have to have any more 2 prescriptions or 2 stimulants that they used to take because a lot of them used to take a controlled release, let's say, amphetamine. And then later in the day, they need to supplement with an immediate release because even the extended release doesn't cover and give them the full coverage for the full day. With Qelbree, what they're finding out is that with 1 pill, that's all what they have to do is take Qelbree once a day, and it truly gives them a full 24-hour coverage. So Qelbree has a lot of advantages clearly by giving them the full day coverage without having to take 2 different products. And of course, a very different profile, continues to have good efficacy, and that's why people continue to use it. And actually, in adults, I mean, the satisfaction is pretty high among physicians who have tried Qelbree and continue to add more patients in their offices, adding more patients on Qelbree.

Our last question comes from David Amsellem from Piper Sandler.

This is Alex on for David. Can you please talk to your commercial infrastructure to support ZURZUVAE in postpartum depression, particularly in terms of headcount and how many practitioners it's targeting? And anything you plan to do differently than Sage?

Yes. At this point, unfortunately, I'm not at liberty in getting into the details of the infrastructure, the sales force, the number and so forth, again, until we have some time to discuss with our partner, Biogen. So we will reserve that later. We're happy to provide any color later if that is something that our partner would like to talk about publicly. So for now, we can't make, unfortunately, any comments on that.

This concludes the question-and-answer session. I would now like to turn it back to Jack Khattar for closing remarks.

Thank you for joining us to learn about our second quarter 2025 operating performance and highlights. The company continues to execute well, setting the stage to make 2025 as the year when we complete the transition from our legacy products, Trokendi XR and Oxtellar XR. With the addition of ZURZUVAE, the launch of ONAPGO and the continued robust growth of Qelbree and GOCOVRI, we have just entered a new phase in our history, a phase of renewed and accelerated growth and profitability. Our strengthened portfolio of 4 core growth drivers would position us to further accelerate the growth in revenues and earnings. We are also focused on generating strong cash flows behind the strength of our expanded product portfolio and through the efficiency of our operations. Thanks again for joining us this afternoon. We look forward to updating you on our next call.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.