Okay. Good morning. Thanks to everyone for listening in to our fourth annual Novel Mechanisms in Neuropsychiatry Summit. My name is Stacy Ku, one of the biotech analysts, and I'm here with my colleague, Vish Shah. We'd like to welcome Jack Khattar, CEO of Supernus, to our fireside chat. Jack, thank you so much for joining today.
Good morning.
So while we believe, the key focus for Supernus is the ongoing launch in ADHD, just given the near-term pipeline updates, we're gonna mix it up a little bit and start with 820 . So Jack, we're getting some updates for 820 within the next few months. Can we take a step back? Let's just talk about what aspects of the data that got you excited about Navitor's mTORC1 mechanism of action and kind of the Navitor initial proof of concept results in treatment-resistant depression.
Yeah, sure. Good morning, and thanks for having me. And just a quick reminder for everybody, I'll be making forward-looking statements, so please check the risk factors in the SEC filings. Yeah, I mean, SPN-820 is a very exciting program for us. It's a very unique mechanism of action in the space, in the depression space. And we got very excited when we were talking to Navitor about it, the innovator behind the molecule, initially back then in around 2020. Because of the early data that they had gotten from a very, very early proof of concept study, phase I study that they did in TRD, which showed a pretty good effect size, an effect size that actually was early within two hours. This is an oral drug, just to be more specific.
And they showed a pretty good level of activity, and that's mainly against the HAMD-6. It was a single dose, 2400 mg, and they measured it all the way through 72 hours, and that effect continued and sustained through that time period. And therefore, the design, for example, that we have currently in one of the phase II studies, which is the open label study, it's a single dose, 2400 mg, mimicking pretty much the initial proof of concept and measuring the differences in the MADRS and the HAMD-6 at different time points, you know, in hours, two hours, four hours, six hours, all the way to 72 hours. So we're trying to mimic that, get a good read on the speed of onset. So speed of onset, to your question, is very important here.
We know in this landscape, in this, yeah, you know, space, it's very important to put patients on something, and they can respond as quickly as possible. You know, a lot of the medications out there, they work within weeks, you know, some within a week, some within three, four, even up to six, seven, eight weeks. So anything that can be oral, that can work really well, will be something that can be very differentiated in this marketplace. So that's the open label that we have now in MDD, and, in parallel, we have another study that is also going on, which is a phase II-b study, placebo-controlled phase II-b study, and that was in TRD. And for that one, we're looking at, getting a read on it, in the first half of, next year.
It's really enrolling well. We're hoping to complete enrollment by year-end. The open label also will get data by year-end of this year, so we're really at the cusp of getting some very exciting data on this molecule. Everything we saw earlier with Navitor, with the SAD/MAD study, as far as tolerability, looks really good, and the safety of the molecule. So we're very hopeful. You know, we have a program here that really can make a difference.
Okay, wonderful. And if we could start with the MDD open label trial, which I believe is gonna enroll around roughly 40 patients, expected by year-end. Sounds like you've made some changes from the initial Navitor proof of concept to kind of your investigational trials. For MDD, you are starting with the same dose. Sounds like the primary endpoint is HAMD-6, with MADRS as a secondary endpoint. So do you wanna just, I guess, talk first about the dosing and rationale there, and then second, why you've decided to kind of choose HAMD as the primary endpoint for faster onset of action versus a MADRS? And then we'll move to kind of the TRD study.
Yeah, sure. When we took the program over, and we continued to, you know, co-develop with Navitor, we completed the SAD studies, we completed the MAD studies, and we were able to see the... And a lot of PK work, obviously. And we measured, you know, plasma concentrations, we measured concentration in the spinal fluid, we measured biomarker activity. So all that work led us to the selection of the doses in these studies. So the first study we initiated was actually the phase II-b study in TRD, which was the initial, you know, indication that Navitor had started with. And then as that study was recruiting, and it took us a little bit longer to recruit that study, we said, "you know what? Maybe in parallel, we can do an open label in MDD.
Eventually, we would like to develop the drug for both indications if we can, as broad as possible. So it would be good also to generate some data in the MDD population." And that's why we initiated the second study, which was the open label in MDD. And for that one, we said, "Let's emphasize on the faster onset of action." So if we can have more time measurement points, you know, on the time point as far as the schedule, two hours, four hours, six hours, and so forth. And we wanted to go with the flexible dosing, which is the single dose, 2,400 mg. Now, why is that?
Because, again, back to the initial proof of concept study that Navitor had done, they were able to show, with the 2,400 mg single dose, sustained a very decent effect size in the point four, point five, point six, you know, level, all the way to 72 hours. And they didn't measure beyond 72 hours, so we don't know whether it could have been even beyond that, but for argument's sake, I mean, they measured up to 72 hours. So we wanted to duplicate that and to see how real that, you know, effect is as far as sustainability. So that's really a lot of the behind-the-scenes kind of planning and thinking and how we ended up where we are today on both studies.
The phase II-b placebo-controlled study and the TRD patient population, that actually studies, you know, 1,600 mg, and you can go down to 800 mg. It's also a flexible dosing type of design. And the reason we didn't go with 2,400, you know, every day, because that's a daily dose, because with the MAD trial, when we looked at the biomarker concentrations, the plasma concentrations, all that, we were seeing actually significant concentrations in the blood, in the CSF, and the biomarker activity at the 800 and 1,600, and we didn't even think we needed to go to 2,400 or 3,000 above that. And that's why we felt very comfortable with these two doses in the phase II-b study in TRD.
Okay, understood. And then, so for the MDD trial, when we look at... Again, with all the caveats, this was a small study. I think the MADRS baseline patients were a little unbalanced. But if we look at, I guess, that Navitor study and try to eyeball some of the differences, in absolute, we actually see, in absolute terms, a two-point difference in the HAMD change, HAMD-6 change from baseline around that 24-48 hours timeframe versus placebo. So for the MDD trial, can you try to set expectations? I know this is an adjunctive agent, so what kind of expectations do you want to see to move forward in MDD for 820 ?
I mean, clearly, given this is open label at this-
Yeah
... at this point, right? So, you know, you're looking for the biggest margin you can get versus, you know, the baseline, to account for the placebo potential, you know, placebo effect within the study. I mean, as far as the numbers, as high as possible, of a difference, I would say, to put it simplistically. Because remember, I mean, this is a completely new mechanism of action. We don't have really a reference, you know, which is a placebo-controlled study that had been done before, you know, with a real reference that is as a big study.
You know, everything we've done so far, to your point, is very small studies, so we didn't have the power on a lot of these studies back then, even the one, you know, that Navitor had done. So the short answer is clearly, I mean, we're looking at a huge, hopefully a huge gap, that would account for some of the placebo effect. So we know definitely there is a real effect here from the drug. But sustainability is also important because, as we all know, I mean, placebo effect could be there on a lot of these studies, but typically, placebo effect doesn't last forever, in a lot of the drugs.
So it's important to measure also over time, you know, what happens, with these doses, and that's where the phase II-b study clearly will give us a better, you know, measure for that, given that the open label is only a short study. So every study is gonna give us, something different, right? And that's why we did both of them, and we designed them a little bit different so we can really be more, you know, educated on how the drug is performing and gives us a much better position and puts us in a much better position, hopefully, to design the phase IIIs moving on later.
Okay, understood. So for MDD, we're just gonna try to investigate if there is a faster onset of efficacy, and the study is for 10 days, so hard to see. Well, hard to know.
Yeah, correct
... especially since we don't have a placebo arm. Okay, understood. So let's go back to the TRD trial then. So that is, as you said, a larger study. I think maybe almost two hundred and seventy patients, placebo-controlled, double-blind, treatment for five weeks. Here, the primary endpoint is MADRS. So do you want to set expectations? Kind of going back to what we pointed out, is the treatment effect that you're looking for, size of around point six, point eight, or do you want to see something, you know, better or worse? Just help us understand your decision-making as you move forward to phase III.
Yeah. I mean, it would be great if we can get in the point six, point, you know, seven, you know, like we had seen initially way back in the Navitor's.
Yeah.
I mean, that would be fantastic. We'll see. I mean, again, that study was small, very early proof of concept, but that would be great if we can get that kind of effect size. But you don't need to have that kind of effect size if you have a product that is so well-differentiated as far as speed of onset. I mean, there is a lot of very good psychiatry drugs that have a point three and point four effect size, and they are very good, effective, you know, medications. So again, we'll see what we get there. It is a much more, of course, robust placebo-controlled design, so bigger study, to your point.
Yes, we were shooting for around, you're right, 268, 270, as far as, you know, randomized. But the key number is really 200 completers. So we had assumed early on when we started recruiting, that we will need somewhere around 268, 270. We may need less because we've had, you know, much less discontinuation during the study than we had initially assumed. So we may hit the 200 completers a little bit earlier. Again, our target is hopefully before year-end, we, we should be able to complete enrollment. I mean, that- that's really what we're shooting for right now, and therefore, data in the first half, so.
... Okay, and willing to provide some type of progress on enrollment? Where, where are you there? I know you said completion by year-end, but-
Right now, if I remember the number, we're at randomization, we're around probably 220 to 118, if I'm not mistaken, somewhere around there. But again, given the lower discontinuation, because this drug has been very tolerable, we really had, you know, no issues with it, we've been running higher as far as the number of completers. So, that's why we're hopeful we should be able to finish everything before year-end. The holidays are always, you know, tricky, right? So if it's not year-end, maybe first couple weeks of January, we'll see. I mean, because holidays always slow things down a little bit.
Okay. Completely understand. Okay, so, so moving to SPN-817, can you just briefly recap the recent proof of concept disclosures for the phase II-a open label trial on treatment-resistant seizures, and specifically, what you think about the efficacy in focal onset epilepsy?
Yeah, I mean, the data that we disclosed back in May, which was interim data, and before year-end, we're hoping to get the full data set on that study. It showed, you know, pretty good efficacy levels. It's open label, not placebo-controlled, obviously, just to make sure everybody understands that. And the issues we had encountered, you know, in the study were more on the tolerability side. The GI side effects, mainly the nausea, which is a very well-known side effects for this class of drugs, which is acetylcholinesterase inhibitor, especially with 817 is a very selective and potent acetylcholinesterase inhibitor. So this was known to us, you know, for a long time. Clearly, nothing surprising there.
We did incorporate in the open label the use of antiemetics, but unfortunately, physicians did not really do stick to it as, you know, we had hoped. So we're designing everything a little bit different in the phase II-b with a very strict regimen as far as the antiemetic is concerned, because we think we can get a good handle on it. You know, you can't use it as needed. That would be too late, and that's really what happened in the open label, and they only used it on seven patients out of the, I forget how many we reported on in May. So it's really, you have to use it ahead, you have to use it from the beginning, during the titration period, which is very important here.
What we found, and what we reported on in May is once you go through the titration, actually discontinuation in the maintenance period was only 2.4%. I mean, so once you get through that period, which is very critical, and if you can give patients the help from an antiemetic perspective, we have a couple other things we're exploring, you know, formulation as well, other strategies from a clinical perspective, that we're doing right now in parallel. We actually could. We believe we can have these patients tolerate the 3 mg to 4 mg , which looks like that's the range, dose range that seems to be pretty effective in treating seizures. So that's where we are.
We continue to be on track as far as starting the phase II-b, you know, around the year-end of this year. And we have started a couple things that... Remember, we talked about extending the open label, so we extended it to test these other couple strategies, antiemetic and something else that we're working on. And as we start collecting data on that extra extension, we will incorporate all these learnings in the phase II-b as things move on. So that's on that program. So that program, I mean, you know, remember in the space, I mean, side effects, unfortunately for the patient, side effects are a very common place in this space. And all these drugs tend to be nasty one way or another.
I mean, we have oxcarbazepine, Trileptal for a long time as, as a brand, very successful brand, I mean, had very high, you know, side effects, nasty side effects, and that's why we created Oxtellar XR and reduced, you know, dizziness and blurred vision. I mean, they all have different issues. So a 40, 45, or 48% nausea, we think we can bring that down. We're not gonna be able to eliminate it, just to be, you know, you know, upfront with that. Clearly, that's unreasonable to eliminate it, but we certainly can bring those levels very much down, so we have more and more patients going through the titration, get to the maintenance, and once they get there, this drug seems to really work well.
Okay, understood. So I believe we're gonna expect to get some updated results from the open label trial by year-end. Is that still on track? I see you nodding.
Yeah, for the. That's right. For the initial open label, so we complete the data set that we started reporting on in May. We'll give you the full set, you know, before year-end. We won't be able to report anything on the new stuff that we started.
Yeah.
That clearly, you know, will be ongoing by then.
Okay. Are you willing to provide guidance on the timing of that extension trial for us to just get a sense of whether tolerability can be improved with these kind of new mitigation strategies?
Yeah, I mean, we could provide updates as time goes on, especially as the phase II-b enrolls and what, you know, we're seeing, because we will be seeing whether people are dropping out or discontinuing clearly in the phase II-b study. So, I'm sure we should have some opportunity to be able to update folks on that.
Okay, understood. Okay, so, wanna make sure we have enough time to really go back to ours and, and investors' key focus, which is the ongoing launch of Qelbree for ADHD. How is the back-to-school season progressing for Qelbree in Q3? Obviously, we're towards the end of September, now, so just help us understand how Qelbree's progressing versus internal expectations, and how the overall market for ADHD looks versus the past few years, not just last year, but the past few years.
Mm-hmm. Yeah, the ADHD market, well, maybe I'll start there, you know, went through an interesting cycle with the COVID, you know, the pandemic, the aftermath of the pandemic, and then once the pandemic is pretty much over or under control, so to speak, and people are back to school, or people are back to work, you know, things have changed. So what I'm really referring to is we saw a very strong acceleration in demand and growth in the ADHD market because of the pandemic. That also was compounded by the fact that there were shortages and they are very related, of course. They're, they both relate to each other. Shortages, especially with the stimulants, which, you know, make up 90% of the market.
All that fueled a very, very healthy, strong market that was growing in the 9%-10%, you know, around that timeframe. Then in 2023, the market took more or less like a little breather, but also the shortages probably, you know, caused an issue because they couldn't meet the demand, so the growth kind of went down to around 3%. And 3%-4% is typically what historically. You know, historically, if you look before the pandemic, is typically what this market is around. Most of the growth always used to be coming mainly from the adult segment. The pediatric segment is fairly well-diagnosed, well-treated, has been like that for a long time. So what we're seeing this year, in 2024, so far, year to date, and this is the data I have so far, which is really through August.
We don't have, of course, the September, you know, IMS or IQVIA data. Year to date through August, the total ADHD market is, has grown by 9%, so continues to be, you know, strong growth this year, nine percent. So we're hoping that the back-to-school season would be a little bit stronger than last year, where, you know, between June and September, that's how we measure back to school, so to speak. It's not a calendar quarter.
Yep.
September to June, the market was down by about 3% last year. We don't have yet the September numbers, so we're looking at the growth so far. I mean, I'll give you an example on Qelbree. In July, we went up 7% in our monthly prescriptions in July versus June. August, another 6% versus July, so it's really picking up. Versus, for example, in June and May, you know, when you're really in the summer, you know, low season kind of cycle, we were more, like, flat or a little bit down. So clearly things are picking up, have picked up. July, where although July is still summer, things are starting to pick up, and we'll see where we land in September. We'll get that data around mid-October as far as it...
We're hopeful that this season is a little bit stronger, you know, than last year. At least that's the initial signals we have so far, I mean, as far as the data is concerned.
Okay. Okay, understood. So our understanding around kind of, Q2 was that there was maybe a company focus on pursuing the adult launch for ADHD, and for Q3, obviously now a focus on the pediatric ADHD patients. So is there any implication to gross to nets as we think about, one, maybe the weight-based prescriptions in adults versus pediatric patients? Two, maybe a little bit more co-pay assistance or support in Q3 to really capture that pediatric back-to-school season. And then three, I know you had talked about, this is not kind of related to the adult and pediatric dynamic, but you had talked about kind of these lower return rates than originally assumed in Q2.
So can you talk about the tailwind and all of that we're kind of asking, because, one, how should we think about kind of gross to nets in Q3 specifically, but throughout the course of the year? And maybe, if, I'll remind you, but how should we think about how things progress-
Mm-hmm
... into next year for gross to nets? Because I do think that's a really important variable as we think about kind of the Qelbree launch moving forward.
Yeah, sure. To your early portion of the question, as far as adult and pediatric, we make these switches, if you wanna call it, or prioritization, so to speak, within the sales force, within the marketing programs, and the efforts, based on the seasonality that we typically go through within the ADHD market. So yes, in a very low season for pediatrics, for example, we might emphasize a little bit more the adults. So we take advantage of the fact, let's push more adult promotion, prioritize maybe the sales calls or more of the adult psychiatrists versus child psychiatrists. So we make these adjustments as time goes on, quarter over quarter. Of course, in the third quarter, we go heavy on the pediatric side to pick up the momentum behind the back-to-school season and so forth.
As far as the co-pay card, I mean, most of the adjustments and fine tuning that we do on the co-pay card is more driven around and focused around Q1, typically, so we don't make a lot of adjustments, you know, with seasonality, back to school, or anything like this. A lot of the adjustments typically tend to be around Q1, where we maybe increase some of the benefit levels just to help folks with the deductibles early in the year and so forth, so that's typically summer, and that's why Q1 gross to net tends to be, you know, the worst in any typical normal year.
Now, of course, in our case, we're still going through the launch dynamics, and therefore, we're not yet at equilibrium, so to speak, and therefore, we have other things going on in the business that impact the gross to net. Like one of the things that you referred to, for example, last quarter, we saw much lower return rates than we had assumed on the business, and now that we are, you know, almost three and a half, four years into the launch, you know, we make these adjustments. We can't keep carrying on the books, you know, accruals at a very high rate of return when the actuals are coming much lower. You have to, you know, adjust for that.
And that's what we saw in the second quarter, and that's why we also made comments back then in August when we did the earnings, that we anticipate some of that leftover will continue, you know, potentially a couple quarters into the year. And therefore, for the gross to net for the rest of the year, you know, we lowered the range that we're targeting, that we could be in, from the 50%-55%, we lowered it down to the 45%-50%, you know, on Qelbree because of these dynamics. And clearly, you know, we are also still getting the full benefit of the changes we made to the co-pay last year in the fourth quarter. So we haven't even gotten a full cycle yet on those changes, right?
So we continue to get some of those benefits, as we wind down through the year, you know, the 2024 year. So these are really the typical dynamics. So at some point, the returns, we get to a point where it is more an ongoing rate. We know what it is. It's all established based on all the historicals, and therefore, we get to a place which is like we did with Trokendi XR, Oxtellar XR, and so forth.
Okay, understood. So I guess, first, do you expect gross nets to continue to improve throughout the course of this year, and then-
Yes, I mean-
We'll see next year?
... aside from the return issue, that's normally an expectation on any brand, you know, on an ongoing, you know, stable brand, not in a launch mode or any specific circumstance. I mean, that's typically the trend you see, right? Q1, the worst, Q2, improves slightly, Q3 gets better, and Q4 gets better. And then you go through the same cycle again. I mean, unless you have one-time situations that could occur within a specific quarter that causes, you know, certain fluctuations, which we did in the second quarter, and we expect some of that to continue a little bit, which is the return, the issue on the returns.
Okay, understood. So I guess in the last few moments we have, can you talk about long term, how big you think Qelbree could become? What is kind of your views on the trajectory into next year, into kind of the peak opportunity? Just help us understand your conviction around maybe Qelbree peak sales and the opportunity there.
Yeah, I mean, we continue to believe, you know, Qelbree can be a multi-hundred million dollar product. I mean, we're not even scratching the surface as far as penetration of the market. At this point, the product continues to perform really well from a clinical, medical perspective, so all that continues to be very positive for the product. It's a matter of just keep promoting. It's a promotion-sensitive category. Keep promoting it. We're changing some really serious old habits here, where a lot of doctors just go to stimulants first, and they don't even give it a chance, you know, to try a non-stimulant because of the history. The history, meaning these old non-stimulants don't work and don't work that well for everybody.
Finally, we have a non-stimulant that actually works, and that takes time, you know, to keep, you know, that message out with physicians, encourage them to really put these kids, adults, on the product, because really, you don't have much to lose here. You can know whether this product work for you within a week or two. You really don't have to wait, like you used to wait on Strattera or any of the other products, for weeks to see whether the product will work for you. So, and you can have a sample for free for two weeks on top of that. So, so really, the downside of trying Qelbree is pretty minimum, is pretty low, and therefore, we just have to keep, you know, the effort, the investment behind the brand, and we're very committed to it.
And again, you know, people have heard me say, you know, if it's a $100 million, a $100 million prescription market of ADHD at peak, which probably will surpass that very easily, and you need to get 4%-5% market share and a net price of $200, and we're way above the $200 net price at this point, you know, we're in the $300 actually, you know, the number is pretty quickly could reach $1 billion. I mean, it's really, the math is pretty straightforward. So, all our emphasis is on Qelbree continue, you know, the push to get the stronger penetration on both populations, adult, they're both very important, and continue to increase penetration in the adult segment.
Okay. Well, wonderful. We're out of time to discuss 830 today, but obviously nearing a PDUFA date in February. So, with 817, 820, 830, lots of upcoming catalysts and updates, so we are very much looking forward to seeing all this progress. Thanks so much for the time, everyone. Have a great rest of the day, and thanks again, Jack, for your time today.
Thank you. Thank you.
Take care.