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Supernus Pharmaceuticals Reports Third Quarter 2013 Financial Results

ROCKVILLE, Md., Nov. 12, 2013 (GLOBE NEWSWIRE) -- Supernus Pharmaceuticals, Inc. (Nasdaq:SUPN), a specialty pharmaceutical company, today reported financial results for the three and nine months ended September 30, 2013 and provided an update on key accomplishments to date.

"As we expected in the third quarter we received approval by the FDA for Trokendi XR™ and were able to launch it one week later. Our business is now experiencing accelerated growth with product shipments to wholesalers reaching $13.8 million by the end of the third quarter and $17.9 million by the end of last week. Oxtellar XR™ prescriptions have doubled in the third quarter as compared to the second quarter and Trokendi XR™ is off to a great start. Our Company continues to execute very well on our two product launches," said Jack Khattar, President and CEO of Supernus Pharmaceuticals, Inc.

Third Quarter 2013 Financial Results

  • Our net product revenue of $1.1 million for the three months ended September 30, 2013, is comprised of 3,648 Oxtellar XR TM prescriptions filled at the pharmacy level during the second quarter of 2013.
  • Our product gross margin on net product revenue was 97% in the quarter.
  • Research and development (R&D) expense for the third quarter declined from $8.3 million in 2012 to $3.8 million in 2013, primarily because our Phase IIb study for SPN-810 was completed in 2012.
  • Selling, general and administrative (SG&A) expense for the third quarter increased from $4.1 million in 2012 to $14.6 million in 2013, primarily due to increased sales and marketing costs associated with the commercial launches of Oxtellar XR TM and Trokendi XR TM.
  • We recognized a non-cash charge of $4.1 million associated with the interest make-whole provision of our 7.5% Convertible Senior Secured Notes (the "Notes"). This increase is due to the passage of time.
  • Net loss applicable to common shareholders for third quarter of 2013 was $24.1 million or $0.78 per common share (based on 30.9 million weighted average shares outstanding), compared to a net loss of $13.5 million or $0.55 per common share (based on 24.5 million weighted average shares outstanding) in the third quarter of 2012.

Nine Months Ended September 30, 2013 Financial Results

  • Our net product revenue of $1.3 million for the nine months ended September 30, 2013 is comprised of 4,177 Oxtellar XR TM prescriptions filled at the pharmacy level during the first and second quarters.
  • Our product gross margin on net product revenue during this period was 97%.
  • R&D expense for the first nine months of 2013 was $11.8 million, compared with $18.4 million in 2012. The decrease was primarily attributable to the completion of our Phase IIb study for SPN-810 in 2012.
  • SG&A expense for the first nine months of 2013 was $40.4 million compared with $11.4 million in 2012, increasing year over year due to hiring of our sales force as well as costs associated with the commercialization of Oxtellar XR TM and Trokendi XR TM in 2013.
  • Net loss applicable to common shareholders for the first nine months of 2013 was $69.9 million or $2.26 per common share (based on 30.9 million weighted average shares outstanding), compared to $33.9 million or $2.36 per common share (based on 14.4 million weighted average shares outstanding in 2012).

Financial Update

  • For the nine months ended September 30, 2013, product shipments to wholesalers totaled $13.8 million. This total can be apportioned as follows:

-- $6.6 million has been collected in cash from wholesalers through the first nine months. The balance, $7.2 million, is recorded as accounts receivable, at September 30, 2013.

-- $1.8 million of the $13.8 million in shipments to wholesalers has been recognized as revenue, net of $0.5 million in gross to net deductions, resulting in net product revenue of $1.3 million. The balance, $12.0 million, has been recorded on our balance sheet net of $1.6 million in estimated sales deductions; i.e. as net deferred product revenue of $10.4 million.  

  • These results are summarized in the following table, along with the prescriptions which have been filled at the pharmacy level for each quarter:
  Three Months ended    
  March 31  June 30  September 30   TOTAL
           
Prescriptions filled at pharmacy level          
Oxtellar XR TM  529  3,648  7,596    11,773
Trokendi XR TM  -  -  1,434    1,434
           
Revenue Recognized (in thousands)          
Oxtellar XR TM $ - $ 154 $ 1,130   $ 1,283
           
Deferred Revenue (in thousands)          
Oxtellar XR TM $ 3,551 $ 3,967 $ 6,647 (1)  
Trokendi XR TM  -  - $ 3,718 (2)  
       10,365    
           
(1)   Deferred revenue for Oxtellar XR TM represents approximately 19,000 prescriptions. Of this amount, 7,596 prescriptions were filled during the third quarter. The remainder, approximately 11,400 prescriptions, is held at the wholesale level as of September 30, 2013.
           
(2)   Deferred revenue for Trokendi XR TM represents approximately 10,000 prescriptions. Of this amount, 1,434 prescriptions were filled during the first five weeks of launch in the third quarter. The remainder, approximately 8,600 prescriptions, is held at the wholesale level as of September 30, 2013. 
  • We have not yet recognized revenue related to the prescriptions written during the third quarter of 2013 for either Oxtellar XR TM or Trokendi XR TM; however, we anticipate recognizing revenue for these prescriptions in our fourth quarter results. 

Capital Resources and Financial Guidance

  • Cash, cash equivalents and marketable securities increased from $88.5 million at December 31, 2012 to $102.5 million at September 30, 2013, reflecting the proceeds from the sale of the Notes in May 2013. 
  • Cash burn for the nine months ended September 30, 2013 totaled approximately $55 million.
  • We are reducing our forecast for cash burn for 2013 to $70 million - $75 million, as compared to our previous guidance of $85 million - $95 million. 
  • We project full year revenue from Oxtellar XR TM of $8.5 million, assuming that starting in the fourth quarter, revenue will be recognized based on shipments to wholesalers; i.e., rather than prescriptions at the pharmacy level. 
  • We continue to anticipate that cash, cash equivalents, unrestricted marketable securities and long term investments should be sufficient to fund operations through the end of 2014, by which time we project to be cash flow break even.

Oxtellar XR Launch Update

Oxtellar XR TM continued to grow significantly during the third quarter of 2013:

  • Oxtellar XR TM prescriptions, as reported by IMS, more than doubled from 3,648 prescriptions in the second quarter to 7,596 prescriptions in the third quarter.
  • Over 1,600 target physicians have prescribed Oxtellar XR TM since launch, a substantial increase over the 1,100 target physicians prescribing Oxtellar XR TM previously reported.
  • Based on IMS data, for the week ending November 1, 2013, Oxtellar XR TM achieved a conversion share of the addressable oxcarbazepine market of approximately 1.8%, representing a significant increase over the 1.3% conversion share we reported during our second quarter Oxtellar XR TM launch update.
  • Oxtellar XR TM continues to build coverage in managed care with 145.5 million lives covered, 129 million on the commercial side and 16.5 million on Medicaid.

Trokendi XR TM Launch Update

  • As expected, Trokendi XR TM received final FDA approval in the third quarter and was launched in August 2013. This was the second product launch for Supernus this year, following the launch of Oxtellar XR TM in February 2013. The Trokendi XR TM launch is off to a strong start, with 4,711 prescriptions reported by IMS through the week ending November 1, 2013 of which 1,434 were in the first five weeks of launch in the third quarter. Although very early in the launch phase, Trokendi XR TM has already achieved 0.5% market conversion share of the addressable market and feedback from physicians and patients has been very positive.
  • Trokendi XR TM started with strong coverage in managed care with 116.4 million lives covered, 111 million on the commercial side and 5.4 million on Medicaid.
  • In anticipation of the launch of Trokendi XR TM, the Supernus field sales force was increased by 15 sales representatives. We will be adding additional sales representatives in the fourth quarter to continue to support commercialization of Trokendi XR TM and Oxtellar XR TM. Our sales force continues to be successful in increasing the number of calls on target physicians, delivering over 8,900 calls in September 2013, a record number of monthly physician calls for the Company.

Pipeline Update

Regarding our pipeline, a scientific meeting was held with the FDA to discuss our plans for later stage clinical studies for SPN-810. Our current plan is to proceed to a Phase III trial under a Special Protocol Assessment. We continue to progress SPN-812, and have completed the development of several extended release formulations that will be tested in a pharmacokinetic study in the first half of 2014 to select the final formulation for use in the Phase IIb trial.

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