Supernus Pharmaceuticals Reports Third Quarter 2013 Financial Results

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 asrevenue, 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.

About Supernus Pharmaceuticals, Inc.

Supernus Pharmaceuticals, Inc. is a specialty pharmaceutical company focused
on developing and commercializing products for the treatment of central
nervous system, or CNS, diseases.The Company has two marketed products for
epilepsy, Oxtellar XR^TM (extended release oxcarbazepine), and Trokendi XR^TM
(extended release topiramate). The Company is also developing several product
candidates in psychiatry to address large market opportunities in ADHD
including ADHD patients with impulsive aggression. These product candidates
include SPN-810 for impulsive aggression in ADHD and SPN-812 for ADHD.

Forward-Looking Statements:

This press release includes forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements do not
convey historical information, but relate to predicted or potential future
events that are based upon management's current expectations. These statements
are subject to risks and uncertainties that could cause actual results to
differ materially from those expressed or implied by such statements. In
addition to the factors mentioned in this press release, such risks and
uncertainties include, but are not limited to, the Company's ability to
achieve profitability; the Company's ability to raise sufficient capital to
implement its corporate strategy; the implementation of the Company's
corporate strategy; the Company's future financial performance and projected
expenditures; the Company's ability to enter into future collaborations with
pharmaceutical companies and academic institutions or to obtain funding from
government agencies; the Company's product research and development
activities, including the timing and progress of the Company's clinical
trials, and projected expenditures; the Company's ability to receive, and the
timing of any receipt of, regulatory approvals to develop and commercialize
the Company's product candidates; the Company's ability to protect its
intellectual property and operate its business without infringing upon the
intellectual property rights of others; the Company's expectations regarding
federal, state and foreign regulatory requirements; the therapeutic benefits,
effectiveness and safety of the Company's product candidates; the accuracy of
the Company's estimates of the size and characteristics of the markets that
may be addressed by its product candidates; the Company's ability to increase
its manufacturing capabilities for its product candidates; the Company's
projected markets and growth in markets; the Company's product formulations
and patient needs and potential funding sources; the Company's staffing needs;
and other risk factors set forth from time to time in the Company's SEC
filings made pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended. The Company undertakes no obligation to update the
information in this press release to reflect events or circumstances after the
date hereof or to reflect the occurrence of anticipated or unanticipated
events.



SUPERNUS PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
                                                           
                                         September 30, 2013 December 31, 2012
                                         (unaudited)        
                                                           
Cash, cash equivalents and marketable     $ 87,238           $ 88,508
securities
Accounts receivable                       7,208             -
Inventories                               5,188             1,152
Other current assets                      3,228             1,802
Total Current Assets                      102,862           91,462
                                                           
Property and equipment, net               2,480             1,421
Long term investments                     15,215            -
Deferred financing costs                  2,031             89
Other long-term assets                    1,177             1,017
Total Assets                              $ 123,765          $ 93,989
                                                           
Accounts payable and accrued expenses     $ 14,472           $ 10,666
Deferred product revenue                  10,365            -
Deferred licensing revenue                234               508
Secured notes payable, current            -                 11,809
Total Current Liabilities                 25,071            22,983
                                                           
Deferred licensing revenue, net of        1,452             309
current portion
Convertible notes, net of discount        60,175            -
Secured notes payable, long-term          -                 11,088
Other non-current liabilities             2,401             1,788
Derivative liabilities                    22,213            251
Total Liabilities                         111,312           36,419
                                                           
Total Stockholders' Equity                12,453            57,570
Total Liabilities & Stockholders Equity   $ 123,765          $ 93,989



Supernus Pharmaceuticals, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share data)
                                                             
                     Three Months ended September Nine Months ended September
                      30,                          30,
                     2013           2012          2013          2012
                     (unaudited)                  (unaudited)
                                                             
Revenue                                                      
Net product sales     $1,130        $-           $1,283       $ -
Licensing revenue     127           91           401          391
                                                             
Total revenue         1,257         91           1,684        391
                                                             
Costs and expenses                                            
Cost of product sales 33            -            37           -
Research and          3,779         8,306        11,844       18,367
development
Selling, general and  14,620        4,075        40,366       11,450
administrative
                                                             
Total costs and       18,432        12,381       52,247       29,817
expenses
                                                             
Operating loss       (17,175)      (12,290)     (50,563)     (29,426)
Other income                                                  
(expense)
Interest income and
other income          102           (18)         292          192
(expense), net
Interest expense      (2,870)       (880)        (5,742)      (2,771)
Changes in fair value
of derivative         (4,153)       (294)        (12,692)     (766)
liabilities
Loss on
extinguishment of     -             -            (1,162)      -
debt
                                                             
Total other (expense) (6,921)       (1,192)      (19,304)     (3,345)
income
                                                             
Net loss              (24,096)      (13,482)     (69,867)     (32,771)
                                                             
Cumulative dividends
on Series A           -             -            -            (1,143)
convertible preferred
stock
                                                             
Net loss attributable
to common             $(24,096)     $(13,482)    $(69,867)    $(33,914)
stockholders
                                                             
Loss per common                                               
share:
Basic and diluted     $(0.78)       $(0.55)      $(2.26)      $(2.36)
                                                             
Weighted-average
number of common                                              
shares:
Basic and diluted     30,941,404    24,464,281   30,904,876   14,356,546



Supernus Pharmaceuticals, Inc.
Reconciliation of Non-GAAP Net Loss
(in thousands)
                                                         
                                      Three Months        Nine Months
                                      ended September 30, ended September 30,
                                      2013                2013
                                      (unaudited)
                                                         
Net loss - GAAP                        $(24,096)          $(69,867)
                                                         
Changes in fair value of derivative    (4,153)            (12,692)
liabilities
Loss on extinguishment of debt         -                  (1,162)
                                                         
Adjusted Net Loss - non-GAAP           $(19,943)          $(56,013)

CONTACT: Jack Khattar, President & CEO
         Gregory S. Patrick, Vice President & CFO
         Supernus Pharmaceuticals, Inc.
         Tel: (301) 838-2591
 
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