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Supernus Pharmaceuticals Inc (SUPN) Q2 2024 Earnings Call Highlights: Strong Revenue Growth and ...

GuruFocus News
·4 min read

  • Total Revenue: $168.3 million for Q2 2024, up from $135.5 million in Q2 2023.

  • Net Product Sales: $162.5 million for Q2 2024.

  • Qelbree Net Sales: $59 million for Q2 2024, 92% growth.

  • Gocovri Net Sales: $32 million for Q2 2024, 10% increase from Q2 2023.

  • Oxtellar XR Net Sales: $30 million for Q2 2024, up from $24 million in Q2 2023.

  • Trokendi XR Net Sales: $17 million for Q2 2024, down 12% from Q2 2023.

  • Operating Earnings (GAAP): $22.6 million for Q2 2024, compared to a loss of $17.6 million in Q2 2023.

  • GAAP Net Earnings: $19.9 million for Q2 2024, or $0.36 per diluted share.

  • Adjusted Operating Earnings (Non-GAAP): $45.5 million for Q2 2024, up from $10 million in Q2 2023.

  • Cash and Equivalents: $347.2 million as of June 30, 2024.

  • Full Year 2024 Revenue Guidance: $600 million to $625 million.

Release Date: August 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Supernus Pharmaceuticals Inc (NASDAQ:SUPN) reported a 32% increase in total revenues, excluding Trokendi XR and Oxtellar XR, driven by strong performance from Qelbree and Gocovri.

  • Qelbree prescriptions grew by 28% in the first six months of 2024, with net sales increasing by 84% compared to the same period last year.

  • The company has a strong balance sheet with approximately $347.2 million in cash and no debt, providing significant financial flexibility for potential M&A and growth opportunities.

  • Supernus Pharmaceuticals Inc (NASDAQ:SUPN) raised its financial guidance for total revenue and operating earnings for the full year 2024.

  • The company is advancing its product pipeline with promising developments in SPN-817 for treatment-resistant seizures and SPN-820 for depression, with significant data expected in the next 6 to 12 months.

Negative Points

  • Net sales of Trokendi XR decreased by 12% in the second quarter and are expected to continue eroding with the entry of Oxtellar XR generics later this year.

  • The company faces uncertainties regarding the FDA's classification of the SPN-830 NDA resubmission, which could impact the review timeline.

  • Combined R&D and SG&A expenses increased slightly, primarily due to R&D spend associated with clinical programs, which could pressure margins.

  • The ADHD market experienced a softer back-to-school season last year, and there is uncertainty about whether this year's season will see a stronger recovery.

  • Despite growth in adult prescriptions, Qelbree's market share in the adult ADHD segment remains low, indicating a need for further market penetration efforts.

Q & A Highlights

Q: Can you discuss your confidence in the approval of SPN-830 following its resubmission, especially considering a competitor also received a CRL recently? A: Jack Khattar, CEO, explained that the issues addressed in the recent CRL were fewer than before, indicating progress. They had a meeting with the FDA prior to resubmission to ensure confidence. The classification of the resubmission as Class I or II is pending, which will determine the review timeline.

Q: Regarding SPN-817, how many more patients are expected to complete the maintenance period, and what are the expectations for the high doses? A: Jack Khattar noted that, in addition to the 19 patients who completed the maintenance period, there were about 7 or 8 more in various stages. They expect a handful more to complete the study. The extension study, which includes testing strategies to address nausea, has started but results will not be available this year.

Q: With the back-to-school season approaching, what are your expectations for Qelbree's volume growth, and how does this relate to gross-to-net improvements? A: Jack Khattar expects robust prescription growth for Qelbree, noting that the ADHD market is recovering this year. The back-to-school season is expected to be stronger than last year, contributing to growth. The growth is not solely due to gross-to-net improvements; there is significant volume growth potential as well.

Q: Can you clarify if the gross-to-net improvements for Qelbree are sustainable long-term, and is there room for further improvement? A: Jack Khattar explained that the gross-to-net improvements are partly due to lower-than-expected product returns. While they hope the 45% to 50% range becomes the long-term target, they will confirm this based on future data.

Q: How is the adult population impacting Qelbree's pricing and growth, and what feedback are you receiving from this segment? A: Jack Khattar stated that adult prescriptions have a higher price point due to larger prescription sizes. Feedback from adults is consistent with pediatrics, showing satisfaction with the product. The adult market share is low, indicating significant growth potential.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.