Good afternoon, and welcome to Supernus Pharmaceuticals' first quarter 2022 financial results conference call. At this time, all participants are on a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will follow at that time. As a reminder, this conference call is being recorded, and I would now like to turn the conference over to Peter Vozzo of Westwicke, investor relations representative for Supernus Pharmaceuticals. Sir, you may begin.
Thank you, Chris. Good afternoon, everyone, and thank you for joining us today for the Supernus Pharmaceuticals first quarter 2022 financial results conference call. Today, after the close of the 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. Following remarks by management, we will open the call to questions. During the course of this call, management may make 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 who may be listening to the replay, this call is being held and recorded on May 9, 2022. 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 will now turn the call over to Jack.
Thank you, Peter. Good afternoon, everyone, and thanks for taking the time to join us as we discuss our 2022 first quarter results. Following a productive year in 2021 in which we worked towards minimizing the impact of the 2023 Trokendi XR transition, we have continued to execute on our long-term growth strategy and focus on our strategic priorities. To quickly recap our overall performance in the first quarter of this year, total revenues were $152.5 million, representing a 16% increase over the first quarter of last year, and adjusted non-GAAP operating earnings were $28 million, an 11% increase over the first quarter of last year. The first quarter of 2022 represents the first full quarter we report on all products combined from the acquisitions in 2020 and 2021.
Note that net sales of Trokendi XR as a percentage of total revenues was 41% in the first quarter of 2022, significantly down from 72% in the first quarter of 2020, which was the last full quarter before both acquisitions. This is the result of great execution and corporate development and commercial operations diversifying our revenue base to minimize the impact of the 2023 Trokendi XR transition on our overall performance. Regarding Qelbree, the product is off to a great start this year with continued momentum and prescription growth and shipments. We are actively preparing for the launch in the adult market after recently receiving approval from the FDA for the treatment of adults. For decades, adult patients had only one non-stimulant treatment option available to them.
We are proud to be bringing innovation to the marketplace with the first novel non-stimulant in 20 years. Adult patients now have a new, safe, and effective treatment option that helps them stay away from controlled substances that have high potential of abuse and dependency. Supernus expects to launch Qelbree for adult patients by the end of this month. This represents a significant expansion opportunity in the largest segment of ADHD market. According to the recent IQVIA Xponent 52-week data, the adult market now represents approximately 68% of the total market's prescriptions. Our launch of Qelbree in the pediatric and adolescent market has been progressing very well. While we launched Qelbree a year ago during a pandemic, facing unprecedented headwinds, Qelbree is on track to become the most successful ADHD launch in the past decade.
Based on IQVIA prescription data aligning all recent ADHD launches on a monthly basis, Qelbree has been consistently outperforming most of the products since its launch in June last year and is well-positioned to take the top ranking spot among all the recent ADHD launches. During the first quarter of 2022, total IQVIA prescriptions for Qelbree reached 47,324 prescriptions, representing an increase of 38% compared to the fourth quarter of 2021. Prescriptions in the most recent month of March reached an all-time high of 18,380 prescriptions. In addition, Qelbree continues to expand its base of prescribers with over 6,900 prescribers in the first quarter of 2022, up from 5,600 prescribers in the fourth quarter of 2021.
We now have approximately 195 sales representatives promoting Qelbree to pediatricians, child psychiatrists, and adult psychiatrists. The company will continue to support the launch of Qelbree in the pediatric and adult segments with heavy investment, which will significantly increase our commercial spend in the second and third quarters of this year. Regarding Gocovri, we are pleased with the performance of Gocovri during its first full quarter under Supernus, with net sales for the product reaching $22.6 million, representing a 28% increase compared with the $17.7 million reported by Adamas in the first quarter of 2021. Also, total prescriptions reached 10,736 in the first quarter of 2022, growing by approximately 23% over the same period last year. After the first full quarter post the closing of the Adamas acquisition, the integration has been substantially complete.
Our Parkinson's sales force is fully trained in the field promoting Gocovri, and we are tracking towards the upper end of our goal of $60-$80 million in synergies in the first 12 months of owning the business. Trokendi XR and Oxtellar XR continue to be promoted by a much smaller neurology sales force that is focusing its efforts on supporting the current prescriber base. For the first quarter of 2022, net product sales of Oxtellar XR were $28 million, essentially unchanged compared to the same period last year, while net product sales of Trokendi XR were $63 million, down from $72 million last year. On Apokyn, the year-over-year decline in net product sales was mainly due to unfavorable changes at the beginning of the year and some Medicare plans and continued competitive dynamics.
The company has been closely monitoring the situation surrounding the recently approved generic cartridge, and to date has not seen a meaningful impact on our business. Moving on to the pipeline, we continue to work closely with the FDA as it reviews the NDA for SPN 830, the infusion device for the continuous treatment of motor fluctuations in Parkinson's disease. The company is preparing for the commercial launch of SPN 830 in the first quarter of 2023, assuming timely approval by the FDA. The PDUFA target action date for SPN 830 is in early October of this year. For SPN 820, our first in class orally active mTOR C1 activator, we continue to enroll patients in a phase 2 multicenter randomized double-blind placebo-controlled design study of SPN 820 in adults with treatment-resistant depression.
The study will examine the efficacy and safety of SPN-820 over the course of five weeks of treatment in approximately 270 patients. The primary outcome measure is the change from baseline to end of treatment period on the Montgomery–Åsberg Depression Rating Scale total score, which is a standard depression rating scale. We are on track to initiate an open-label phase 2 clinical study with SPN-817 in the second half of 2022 in patients with treatment-resistant seizures. SPN-817 represents a novel mechanism of action for an anticonvulsant and utilizes a synthetic form of huperzine A, which is a potent acetylcholinesterase inhibitor with pharmacological activities in CNS conditions such as epilepsy. Finally, we will continue to be active in corporate development, looking for strategic opportunities to further strengthen our future growth and leadership position in CNS.
With that, I will now turn the call over to Tim.
Thank you, Jack. Good afternoon, everyone. As I review our first quarter 2022 results, please refer to today's press release. Total revenue for the first quarter of 2022 was $152.5 million, a 16% increase compared to $130.9 million in the same quarter last year. Total revenue in the first quarter of 2022 was comprised of net product sales of $147.5 million and royalty revenue of $5 million. The increase in net product sales was primarily due to net product sales of Gocovri from the acquisition of Adamas in November 2021 and growth in new product sales of Qelbree, which was launched in the second quarter of 2021.
For the first quarter of 2022, combined R&D and SG&A expenses were $111.3 million as compared to $95.7 million for the same period in 2021. The increase in expenses is primarily due to activities to support the launch of Qelbree and integration costs associated with the Adamas acquisition. Amortization of intangible assets for the first quarter 2022 was $20.6 million compared to $6 million for the same period in 2021. The increase is primarily due to the acquired intangible assets of Adamas. Other income for the first quarter of 2022 was $12.8 million compared to other expense of $2.3 million for the same period in 2021. The increase is primarily due to a gain recognized from the sale of a subsidiary of Navitor.
Operating earnings on a GAAP basis for the first quarter of 2022 was $2 million as compared to $13.2 million for the same period in 2021. The decrease in GAAP operating earnings is primarily attributable to the aforementioned amortization of intangibles associated with Adamas and higher expenses to support the launch of Qelbree. On a non-GAAP basis, which excludes amortization intangibles, share-based compensation, contingent consideration, and depreciation, adjusted operating earnings was $28 million, an increase of 11% compared to $25.2 million for the first quarter of 2021. Due to a corporate reorganization of the Adamas entities during the first quarter of 2022, certain state apportionment factors were favorably impacted. This favorable income tax benefit resulted in a net tax benefit of $10.9 million for the first quarter of 2022.
Reflecting this tax benefit, GAAP net earnings were $25.6 million for the first quarter of 2022 or $0.43 per diluted share, compared to $5.7 million or $0.11 per diluted share in the same period last year. The company adopted a new accounting standard in January of this year using the modified retrospective approach. The company is now required to use the if converted method for the convertible debt. Because of this new standard, there is now approximately $6.8 million additional shares in the diluted EPS calculation. As of March 31, 2022, the company had approximately $437.5 million in cash equivalents and marketable securities, compared to $458.8 million as of December 31, 2021.
The decrease in the quarter is due primarily to a milestone payment associated with the 2020 U.S. WorldMeds's acquisition and transition and integration expenses related to the acquisition of Adamas, which partially offset cash generated from operations. For the year-end of 2022, the company reiterates its prior financial guidance for total revenue, combined R&D and SG&A expenses, and GAAP and non-GAAP operating earnings. As such, we expect total revenues to be in the range from $640 million to $680 million, comprised of net product sales and royalty revenue. For the full year 2022, we expect combined R&D and SG&A expenses to range from $460 million to $490 million.
This range includes the expected significant increase in marketing spend in the second and third quarters that Jack mentioned as they relate to continued support of Qelbree and its launch in the adult market. Overall, we expect full 2022 GAAP operating earnings to range from $20 million-$40 million, and non-GAAP operating earnings to range from $130 million-$165 million. With that, I will now call it back to the operator for Q&A.
Thank you. To ask a question, you will need to press star one on your telephone. To withdraw your question, please press the pound key. Stand by as we compile the Q&A roster. Our first question comes from David Amsellem of Piper Sandler. Your line is open.
Hey, thanks. Just have a couple. First on Qelbree, Jack, you referenced progress in the managed care landscape. I wanted to get a sense for how the payer landscape will evolve with adults now in the label. Is access going to generally be the same? Or, how we should think about contracting as it is now and just the overall trend for gross to net, particularly again with adults in the label. That's number one. Number two is on Gocovri. Another payer-related question, maybe ask just on this one, you know, volumes are growing nicely, but as the footprint of the product grows, do you think any differently about how you interface with payers in terms of contracting?
Do you think you're gonna need to contract? Historically, that hasn't been a contracted product, so how do you think about that? Lastly, on Apokyn, is the decline year-over-year more from the generic or Kynmobi or a bit of both? Thanks.
Yeah, sure. On the first question on Qelbree and managed care, and now with the recent approval for adults, any contracting that we have done basically covers the product, whether it's pediatric or adults. From that perspective, our discussions with managed care, with the payers, the PBMs and so forth, and the Medicaids in the different states is about all the patient population. The recent approval should not restart a lot of these discussions or negotiations that have already occurred. Now, we continue to work closely with some of the PBMs with whom we haven't concluded or executed any specific contracts. We've been very pleased with the first major one that we landed in the fall of last year. That was CVS, where we have a tier two status.
We are very happy with the partnership and appreciate the partnership with CVS. You know, the attitude that everybody who's here is actually trying to do something positive while making something which is a non-controlled substance available to 10 million adults or 16 million patients out there, where most of the therapies are controlled substances. You know, 90% of the market is stimulants.
We're happy to do that, and we're happy to partner with everybody else who's willing to really play a positive role here in trying to give people another alternative that is not a controlled substance, that is not subject to high abuse potential, and so forth. I mean, we also, the crisis that we just went over, obviously in the pain area, and we're hoping to make a positive impact in ADHD with Qelbree, which has an incredibly unique profile and on top of that is an uncontrolled substance. We continue to have these discussions, you know, with all the PBMs and hopefully we'll make some more progress as time goes on. As far as the gross-to-net specifically, you may recall, in the fourth quarter of last year, we were in the high 50s%.
It got a little bit worse actually with the first quarter which is expected as with all products because of the high deductibles and so forth. I would expect moving forward the gross to net will continue to improve as time goes on. You know, our target hasn't really changed as long as we hit somewhere in the 50%-55%, you know, we should be in good shape. We're not too far off, you know, against our target.
Moving on to Gocovri as far as the payer, I mean similarly, I mean we'll continue to have discussions with payers and if there is, an area or a common ground here that could make a lot of sense for us that would be beneficial for our patients as well as would be beneficial for the continued growth of the product, absolutely. You know, we're always willing to have these discussions, on Gocovri as well as all other products. So that really doesn't change much. Then on Apokyn, regarding the decline, a lot of it is because of the, recent changes. There has been some recent changes on some Medicare plans where the product was moved from a preferred to a non-preferred status. That really hurt us a little bit this year versus last year.
Of course the continued, you know, Q1 dynamics with the gross to net worsening, in Q1 versus the rest of the year. I think I covered everything.
Yes you did. Thanks Jack.
Sure.
Thank you. As a reminder to ask a question, please press star one on your telephone. To withdraw your question, please press the pound key. Our next question comes from Annabel Samimy of Stifel. Your line is open.
Hi. Thanks for taking our question. This is Jack calling in for Annabel. For Gocovri, acknowledging that prescription trends are positive, this isn't a new product. In terms of messaging to physicians who should know the benefits here already, what was lacking and what more do you need to do to reach your target audience? Will you need to invest a lot more here or are you just going to leverage the infrastructure and the critical mass that you already have in Parkinson's? For BD, what are you seeing in that landscape? Obviously the market conditions may make some sellers capitulate. Have conversations picked up and can we see anything more this year given the upcoming Trokendi drop?
Yeah. Regarding Gocovri, we view Gocovri as still a new product. To us this is a very important product for our future growth and it is a future growing asset and we will continue to invest in it. Really the short answer here. As far as the messaging or anything that has changed from before, I mean the product was launched, you know, back in the 2017-2018 time frame, but also was relaunched again in 2021, which is a recent, fairly recent launch when the label was expanded.
We continue to see Gocovri as a major product for us with future momentum, future growth, specifically with the expansion of the label which is only recent about, you know, 14 months ago and we continue to invest with the product and message the product appropriately positioning it, especially its very unique clinical profile. It's the only product approved for dyskinesia and the treatment of OFF episodes. There is no other product in the marketplace with that unique label. That message is resonating with physicians and we continue to see obviously the results that we recorded with continued future growth and prescriptions. Now the product certainly does benefit, regarding your other portion of the question, from our existing infrastructure and our existence in Parkinson's overall.
That's part of the rationale that's why we made the acquisition and the unique synergies between the U.S. WorldMeds acquisition and the Adamas acquisition obviously in general. We'll continue to benefit from that over time. Finally, regarding the second question on business development, I mean valuations are getting hit, no question. We all see the tape in the marketplace. Typically our experience in these kind of cycles, it really is dependent on a case-by-case scenario. If you have certain companies and they already have a long cash runway and they don't need to tap into the capital markets, typically their expectations of value don't change that quickly with the market.
Others who may be a little bit in more of a desperate need to raise cash, their expectations might start becoming, you know, more closer, to the reasonable range so to speak. It's really a mixed bag all dependent on case-by-case scenario of whoever, you know, the target is at that time. We continue to look at different things that are available out there. We're very focused on trying to expand also our pipeline. As we mentioned a few times before, as we launch Qelbree in the adult space and hopefully we will launch the pump pending FDA approval in the first quarter of next year. The latest asset in our pipeline is in phase two. If we can find something at a later stage, that will be ideal. We're fairly agnostic whether that is in urology or psychiatry.
Great. Thank you. If I could have one more question. For Apokyn, we've heard the comments about how the dynamics of the circle of care with the product will make it difficult for generics to penetrate, but it seems like most of the comments are geared to new onboarding patients. Are there still barriers for patients currently on Apokyn? In other words, why can't the generic just be used for the refills?
The circle of care and the patient journey on Apokyn is not a very straightforward, simple one, so to speak. There is a lot of hand-holding. There is a lot of important services that, you know, we offer to the patients, not just later after they got the prescription, even at the beginning when the prescription is initiated, with a new patient. With the nurse educators and the network that we have out there, they reach out to the patient, they set up appointments with them, they do training around the product, they follow up with the patient on a routine basis. This is not just initiation of new patients but also continuous maintenance of the patient, making sure they're doing well with the product. Do they have any questions, any feedback? That feedback actually goes back to the prescribing physician.
There is a closed loop of feedback here surrounding the patient and the services we offer. In addition to all that, clearly the cartridge that was recently approved as a generic to our cartridge still has to be used with our device and our pen. That will not be available for the generics, obviously. We view that situation so far has been evolving in the right direction for us. As I mentioned in my prepared remarks, we haven't seen any significant impact of the business as of today.
Great. Thank you so much.
Sure.
Thank you. Again, to ask a question, please press star one on your telephone and stand by one moment as we compile the Q&A roster. Speakers, I do not see any further questions in the queue. I will turn the conference back over to Mr. Jack Khattar for closing remarks.
Thank you. Well, we are executing on our strategic priorities, focusing on our two key growth drivers for our future growth, Qelbree and Gocovri We're very pleased with the first quarter growth from these two products and look forward on building on the momentum for the rest of 2022. We will continue to work with the FDA to progress SPN 830 towards the potential approval by the FDA and to prepare for the potential launch in the first quarter of 2023. I would like to thank all our employees for delivering another solid quarter, which positions us well for the remainder of the year. Thanks again for joining us today. We look forward to updating you on our progress throughout the year.
This concludes today's conference call. Thank you all for participating. You may now disconnect, and have a pleasant day.