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Net product sales for the third quarter of 2016 were $55.6 million, a 44.1% increase over $38.6 million in the same period last year.
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In August 2016, the Food and Drug Administration (FDA) granted tentative approval to the Company's Supplemental New Drug Application requesting a label expansion for Trokendi XR to include prophylaxis of migraine headache in adults. The Company continues to prepare for and will be ready to launch the migraine indication soon after receiving full FDA approval.Progress of Product Pipeline Enrollment continues in both Phase III trials for SPN-810, which is currently in development for Impulsive Aggression in patients aged 6 to 12 years who have ADHD. As previously discussed, steps were taken this year to improve patient enrollment and retention. Preliminary results indicate that improvement has been made. The Company has partnered with an enrollment and retention agency to facilitate identifying, contacting, and prescreening appropriate patients for the clinical trials, and to assist in scheduling patients for their appointments and follow-up visits. In addition, the patient screening period for the Phase III trials has been lengthened, and increased education has been provided for site coordinators and caregivers about the trial protocol. The Company expects recruitment and retention to continue to improve as these steps become fully implemented. Enrollment is expected to continue into 2017. Regarding SPN-812, currently in development for patients aged 6 to 12 years with ADHD, the Company announced in October positive topline results from its Phase IIb clinical trial in children with ADHD. The trial met its primary endpoint, demonstrating that SPN-812 at daily doses of 400 mg, 300 mg, and 200 mg achieved a statistically significant improvement in the symptoms of ADHD from baseline to end of study as measured by the ADHD Rating Scale-IV. All SPN-812 doses tested in the trial were well tolerated. Supernus plans to have an end-of-Phase II meeting with the FDA after which it will initiate Phase III clinical testing. "Given all the data generated to date, we expect SPN-812 to be a differentiated ADHD product that is a highly effective non-stimulant with a tolerable side effect profile," said Jack Khattar. "Our plan is to meet with the FDA and move forward as quickly as we can into a Phase III program."
Operating ExpensesResearch and development expenses in the third quarter of 2016 were $7.9 million, as compared to $9.1 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. The Company expects research and development expenses to increase for the remainder of 2016. Total research and development expenses in 2017 are expected to range from approximately $50 million to $60 million and will depend on the timing of key research and development projects, including initiation of two Phase III studies for SPN-812 and patient recruitment in the Phase III trials for SPN-810. Selling, general and administrative expenses in the third quarter of 2016 were $25.7 million, as compared to $22.9 million in the same quarter last year. The increase is primarily due to the continued efforts in support of the Company's commercial products. Capital Resources As of September 30, 2016, the Company had $147.4 million in cash, cash equivalents, marketable securities, and long term marketable securities, as compared to $117.2 million at December 31, 2015. As of September 30, 2016, approximately $6.6 million of the Company's six year, $90 million notes, bearing interest at 7.5% per annum, remain outstanding. Recent Form 8-K Filing by Company As discussed in the Form 8-K filed by the Company on November 14, 2016, the Company was unable to timely file its Quarterly Report on Form 10-Q (the "Quarterly Report") for the three months ended September 30, 2016 due to an issue that has arisen concerning the accounting treatment of the $30 million royalty monetization transaction entered into by the Company in July 2014. In addition, the Company will restate financial statements for the years ended December 31, 2014 and December 31, 2015, and the interim quarterly reports in those years beginning with the third quarter of 2014, and the interim quarterly reports for the first and second quarters in 2016. At this time, all the changes necessary to restate the financial statements for these periods are not complete. However, the Company does not expect the restatement to impact the Company's net product sales, operating expenses, or capital resources for the periods ended December 31, 2014 and 2015. As discussed in this update, investors should refer to the Form 8-K for a complete discussion of the potential effects of the restatement.
Financial GuidanceAs set forth in the Company's Form 8-K filed on November 14, 2016, the Company's current guidance for full year 2016 for net product sales, research and development ("R&D") expenses and operating income is as set forth below:
- Net product sales in the range of $205 million to $210 million, compared to the previously expected range of $200 million to $210 million.
- R&D expenses in the range of $40 million to $44 million, compared to the previously expected range of $50 million to $55 million.
- Taking into consideration the anticipated effects of the restatement referred to above (approximately $4 million to $6 million) for the full year 2016, operating income would range from $46 million to $51 million. Excluding the anticipated effect of the restatement, operating income would range from $42 million to $47 million, compared to the previously expected range of $32 million to $37 million.
CONTACTS:Jack A. Khattar, President and CEOGregory S. Patrick, Vice President and CFOSupernus Pharmaceuticals, Inc.Tel: (301) 838-2591orINVESTOR CONTACT:Peter VozzoWestwicke PartnersOffice: (443) 213-0505Mobile: (443) 377-4767Email: firstname.lastname@example.org