... Great. Well, thank you all for coming. Welcome to the Supernus Pharmaceuticals Fireside Chat, the Wells Fargo Healthcare Conference. My name is Jason Ellis, and I'm pleased to have with me Jack Khattar, CEO of Supernus.
Thank you, and good morning.
Jack, do you want to get started with just kind of an overview of the business for those who are less familiar? That'd be great.
Yeah, sure. For those of you who may not be, you know, familiar with Supernus, we're a CNS-focused biopharmaceutical company. We've been around since 2005. Actually, launched our first two products in 2013. Gone a full life cycle on these products. Just folded the chapter of losing the exclusivity on these products and now transitioning to a whole new phase of growth behind four key products that we have. Qelbree, which is a leading, a very strong and novel non-stimulant in the ADHD space. Zurzuvae, which is a product we just acquired through the Sage acquisition, which is the first and only oral product approved for postpartum depression. We have Gocovri also, which is the only product in the Parkinson's space that is approved for OFF episodes and dyskinesia.
And then very recently, we also launched APO-go, which is the only and first infusion device, apomorphine infusion device for the treatment of Parkinson's motor fluctuation. So very exciting product portfolio that has emerged, you know, since the legacy products, and we're very excited now to enter a whole new era of re-accelerated growth, on the top line, and we continue to be profitable even through the transition.
Yeah, it's fantastic. Not something a lot of companies can say, so congratulations.
Thank you.
On the continued achievements. Obviously, you've made a very big investment recently with the acquisition of Sage. It'd be great if you could just kind of walk us through the acquisition rationale, what you liked about the product portfolio, and then what your expectations are for Sage as a part of the portfolio going forward.
Yeah, I mean, given that we are a CNS-focused company, you know, clearly postpartum depression falls right into the mix from a strategic perspective. And we also said for several years now that we're not opposed to enter other areas outside CNS. So interestingly, the Sage acquisition gives you the opportunity to get into women's health, however, with the CNS products. It's a really interesting crossover from that perspective. And then, when we look at postpartum depression, it is incredible that for such a long time, there haven't been too many products designed, developed, studied just for that condition. It's a horrible condition that mothers go through.
I mean, these are and should be some of the happiest times for families, for mothers to go through, yet a lot of them suffer through a lot of these issues, having the fatigue, the depression, and in severe cases, even feelings that they might harm themselves or harm the baby. I mean, these are horrible things to go through. We're very excited about Zurzuvae, being the first and only oral treatment for that condition. The clinical data is very convincing, very strong. You get improvement in the symptoms as early as day three, and it's only a fourteen-day course treatment, and you're done. You know, versus the alternatives, if they are treating it, they're using SSRIs that sometimes don't work for weeks. Could you imagine, you know, asking the patient pretty much continue with that condition for weeks and weeks to go?
It's really a great product, and we think the potential is that it could be the standard of care very shortly. Actually, 80% of women who are getting Zurzuvae, it's a first-line treatment. We think we can really set the standard in treating PPD once and for all and really give these patients a lot of help.
Yeah, that's great. So we understand that Biogen is your partner on this now and has been since the co-collaboration they have with Sage. Can you talk about what your expectations are of that relationship and how that collaboration could be beneficial or, you know, will be-
Yeah.
Something that you'll need to grow with?
Yeah, sure. And we've had now about four weeks since we closed the acquisition, so we've had a lot of interactions with Biogen. I mean, great folks, great people. Together with Sage, they did a great job launching the product. It's about a year now, a year and a half into the launch. So we're certainly looking forward to a great collaboration. It's a true fifty-fifty collaboration. I'm sure we have a lot to learn from them, and they have a lot to learn from us, you know, so that's what true partnership is about. And it's very collaborative across every function you could think of, from marketing to sales, supply chain, market access, medical affairs, you name it. It's very much intertwined, and a real, real collaboration.
And similarly, with Shionogi, you know, our partner in Japan and some Asian markets as well. So, we're very pleased with what we've seen so far and look forward to have a very, very successful partnership with both of them.
Got it. Why don't we move into more of the portfolio and business dynamics? You've cultivated a portfolio with multiple distinct growth assets and, you know, it'd be great to kind of walk through those, starting with Qelbree, which was kind of the lead product, heading into this acquisition. You've seen exceptionally strong growth, you know, even with Qelbree growing faster than the overall ADHD market and certainly the non-stimulant market as well. If you could kind of talk about what you're seeing on the commercial side, that's, you know, particularly around the adults, because that's been a nice growth area for you all that has really led to that growth.
Yeah, sure. Yeah, Qelbree is truly a novel molecule, and we've been in ADHD for now close to thirty years. We've developed four different ADHD products over the years, more than anybody in the industry since the time we used to be at Shire Pharmaceuticals back then, and it lacked innovation for so long, and finally, we introduced Qelbree as a true novel product, and actually, very recently in the label, Qelbree is the only molecule that has in its mechanism of action, you know, serotonin modulation, and it used to be a very successful product in Europe a long time ago as an antidepressant, but here, as a novel use in ADHD, it's been a remarkable product for pediatric and for the adult.
And actually, people have been asking me, you know, "How come in the adult you're doing so well?" And recently, with the recent quarter, we're now up to 35% of our business is adult. The satisfaction level with Qelbree is unheard of in the adult segment as a non-stimulant. It's at 80% satisfaction. And just to give you a benchmark, Strattera, which has been around forever, pretty much, 53% satisfaction. So it's a remarkable difference versus the existing options out there. We always sum it up, Qelbree is a non-stimulant that actually works. It works as early as week one, week two, depending whether you're a kid or you're an adult. It works very well, and we have been generating significant data around the product.
You know, since we launched it, we continue to add more and more data through phase IV type of studies. Because physicians are always asking us question, "Can I use it in combination with a stimulant? Can I use it for comorbidities, you know, ADHD with depression or ADHD with anxiety?" You know, and so forth. So we've been doing studies around these questions and have generated very strong data around the product, you know, and educating physicians. So it's been a very good product, and we're only in the early innings, although we are in year five into the launch. We've been posting, you know, twenty. I mean, last year we grew by 25% in prescriptions versus 2023, and already in the first half, we had 23% growth this year on top of 2024.
So we continue to grow very strongly, and we think, you know, there is a lot of room for us, you know, on this product, certainly.
Great. I know pediatrics is a big part of the market. Can you talk about, you know, it's still early in the back-to-school season, but any kind of momentum that's gonna be giving you confidence for the rest of the year coming out of that?
Yeah, sure. Yeah, it is early, and back to school is always one of the most important, for the obvious reasons, in ADHD. If you look at the last four-week rolling average, we're up 26%, so the growth rate is already picking up into the back-to-school season. Obviously, we're not done with the back-to-school season. Pretty much everybody went back to school after Labor Day, so now everybody, you know, across the different, because different states have different timing of when back to school is. So we're pretty much now everybody is back to school, and therefore, in September, we expect even further pickup and momentum behind the product. We were very happy to enter the back-to-school season this year, probably in a much stronger position than we've ever been as a brand and the momentum behind the brand.
So we're really happy with that. So we expect the second half to be a fairly strong half.
Great. And in terms of, you already mentioned the label updates. How important of a factor do you think, do you expect that to be? Is that mainly around the conversation around marketing, or is there more in there that can really have an influence on physicians?
It's really further differentiation of, you know, Qelbree versus all these other molecules that have existed for so many years on the marketplace. Also, you know, the fact that there is serotonin modulation clearly ties into the history of the molecule, ties into, you know, the potential. Just give you an example, even way back in the phase III studies, we used to have investigators telling us: "You know, we noticed that the patients, we don't know what they're on, obviously, placebo or Qelbree, but we notice they're doing better. I mean, in general, they're just doing better. It's not an issue of just focus or just an issue of attention and ADHD," which everybody always thinks that's what ADHD is about.
They're just doing... overall, they're feeling better. What is it about this drug?" and clearly, serotonin has a lot to do with that.
You know, modulating serotonin, and we've been able to show that scientifically. We've done a lot of studies to show the activity of viloxazine, which is the molecule, on the serotonin side. So with further education, we're able to, you know, show that to the physicians. We cannot promote it, so to speak, as obviously an antidepressant or a medication for anxiety, whatever. That's, you know, off-label, so we don't talk about that. But you can at least help physicians understand the mechanism and how truly that molecule works.
Very helpful. Let's transition a bit to SPN-830. Could you share some further perspectives on just kind of the latest trends and dynamics that you're seeing with that product?
Yeah, I mean, with the Medicare redesign, a lot of patients now are getting, you know, hitting their maximum much earlier than normally or typically they used to. You know, it's the $2,000 maximum out-of-pocket. They're hitting that, obviously, before the $3,500 that they used to have to go through. And therefore, we're getting more patients to stay in the franchise, you know, through Q1, which is always the toughest, you know, quarter with the high deductibles, the insurance pressures, and so forth. So the Medicare redesign helped us have more patients, retain them on the franchise, and actually, by June of every year, typically about 70%-75% of patients will have, like, less than 25% co-pay. This year, it's about 97% of our patients-
... have less than $25, you know, co-pay-
Wow
By June. So we're really able to retain these patients and not lose them as we typically, in other years, we would have lost them, and now we have to replenish, right, the patient population that is on the drug. So we're really happy with that. For the patient's sake, of course, but also for, you know, the brand's health and so forth. And we have also samples that sometimes we bridge to help patients stay on the medication, you know, free samples, to allow them until they go through, you know, their deductibles as well. So all in all, the growth has been really great behind the product. Now, you always you also have a counter factor in the Medicare redesign. You're gonna have increased rebates, mandatory rebates on manufacturers.
So we'll see whether the increased demand is gonna offset, right, the increased rebates. We think it will, given the strength in the first half of the business. So we feel pretty good about the brand overall for this year.
You mentioned, you know, there was higher retention in the first half of the year, and that's... Sounds like that's mainly due to the Medicare rebates. Is that something that you expect now will happen kinda going forward?
We sure hope so. Yeah. I mean, because unless there are other structural changes in the Medicare, you know, dynamics that may prevent that, but if the same thing happened as this year, you know, next year, we expect that to be the same, yeah.
In April, you launched Gocovri, which treats motor fluctuations with advanced Parkinson's disease. Sounds like the performance there is so far exceeding expectations, so congratulations on that. Could you give us some perspectives on the performance of Gocovri versus AbbVie's product, Vyalev?
That's a very frequent question these days for me, and rightfully so. Yeah, I mean, AbbVie launched a few months before, or several months before, as they also launched overseas. If you look at the data, from a clinical efficacy point of view, the two products are very close, you know, as far as efficacy. And I would say, you know, the performance has been pretty much in line with what they're seeing, too. You know, we hear a lot of positive remarks from them around their launch, and we're seeing the same with our launch.
So I think the response in the marketplace and the need for an infusion device, whether it's apomorphine, which is our product, or levodopa, which is more the AbbVie-based product, is something that has been built up over the years, and the KOLs and the physicians in the U.S. have been waiting for something like this. It's been available in Europe, especially the apomorphine device, for more than 20 years. Actually, 30 years it's been available, but never developed for the U.S. So there is a huge need for that device, specifically for, you know, more progressed patients that typically end up hitting pretty much a roadblock, taking all these oral medications, continue to get the OFF episodes, getting dyskinesia, and the disease continues to progress, and their only choices that are left with: deep brain stimulation, invasive surgery.
So now the pump, this device, which they can wear, can be a major and significant alternative for them. And that's why we think, you know, we're seeing the demand that, you know, for both products, equally. We're very happy, you know, and very encouraged early on. We're starting to also hear some patient stories, which is remarkable, and not that we're surprised because, again, the product has been available in Europe for many years and does very well. But it's reassuring to see that, you know, from our own market, from our own patient, to get that great feedback as well.
Okay. Can you share any insights? I know there was some concern around, you know, would Kynmobi be, you know, cannibalizing Apokyn, the pen that you have. Are you seeing that happen, play out, or any insights you could share?
We're starting to see that, you know, there is a low double-digit kind of percentage of patients, of Vyalev patients, that are actually Apokyn patients. So yes, some of our Apokyn patients, which is, you know, for acute treatment, very different positioning, very different use. It's apomorphine, the same molecule. We're seeing that they are getting Vyalev. What we still don't know, are they using it with Apokyn? You know, because they could preserve and leave Apokyn for on an as-needed basis, as a rescue type of situation. Vyalev, which is the pump, is a continuous delivery that they can wear, you know, throughout the day, and maybe they can leave Apokyn for a specific event or early in the morning. So we don't know yet the dynamics of usage. Is it replacing Apokyn?
Is it in addition to Apokyn, and what type of patient is getting both? Now, we had initially, you know, communicated that we probably expect around 15% cannibalization on Apokyn, and that 15% came from the fact that about 15% of the Apokyn users are heavy users that use it more than three times per day. So if you are injecting Apokyn four times a day, five times a day, more likely than not, you would be interested in putting a pump instead of doing all these injections, right? So we thought maybe that user base or that segment might be moving over to Vyalev. Maybe that's what's happening, but it's really still early right now for us. We're trying to get a good handle on the patient profile-
Yeah
... and who is the patient who's getting the device?
Okay. And just to round out the portfolio, we've already talked about Zurzuvae, but anything from the Q2 highlights that you would kind of observe on that you think are positive for investors to be aware of?
I mean, Sage, you know, reported right before the closing, the second quarter, same thing with Biogen, obviously. I mean, very encouraging. We saw about 36% growth in units, shipments, quarter to quarter, sequential. That's on the back of 20% in the Q1 versus Q4 of last year, and another 20% Q4 versus Q3 last year. So the brand is very healthy, clearly significant growth. They did do sales force expansion on both sides, Biogen sales force and, you know, Sage's sales force. So the expansion is clearly also showing some of the effect, you know, of that expansion is coming through and continued education.
Again, back to my previous comments, I mean, this is a product that we believe we can set the standard of care with Zurzuvae for this condition.
Thank you. Moving on now to the pipeline, you continue to have several attractive assets which seem to be advancing nicely, but you also now have the additional opportunities around Zurzuvae. Sounds like there's more discussion to be had around, you know, whether or not you pursue some of those, but can you talk about kind of, you know, how you view relatively the pipeline that you already have versus some of the opportunities around other indications for Zurzuvae?
I mean, clearly, we will be discussing, you know, closely with our partners, Biogen, on the future of Zurzuvae. How can we maximize the potential of Zurzuvae and really getting it to where we all would love to get it to that level? Whether it's new indications, whether, you know, other life cycle, you know, initiatives. So those are yet to be determined as to where do we go with the product and where else we can see, you know, significant use for the product and benefits for different patient populations and so forth. In addition to that, for the rest of the pipeline that Sage used to have, at this point, we're taking a pause on all the programs. We're gonna reevaluate a lot of the molecules.
I mean, they have a very rich history of discovery and scientific research that they have done over the years. Several platforms, actually, that they have, you know, that are interesting, so we're gonna take a pause, reevaluate all that, and we have already merged that with our own discovery programs that we have and we've been working on behind the scenes, and we will rationalize, you know, the portfolio, the early-stage portfolio, and we'll decide on what are the best programs to move forward, so that's the approach we're taking. We haven't made any specific decisions yet in either case, and then, of course, we have our own pipeline that we've had that is now in phase II, which is SPN-817 , which is in phase IIb study as we speak.
A very promising molecule for the treatment of seizures. We've issued a lot of data last year, open-label study, however, but we're looking at seizure reductions in the 65% or even above that. A remarkable, very potent molecule. It's an acetylcholinesterase inhibitor, which is a class of drug that is very well known, obviously, for Alzheimer's, for cognition. The first time being studied as a novel mechanism for epilepsy, for treatment of seizures, so, very good scientific rationale behind the molecule, the mechanism of action for seizures, but also has the added benefit, potential benefit for procognitive, and that could even further differentiate the molecule from a lot of the other programs in the epilepsy space, because cognitive decline is a big problem in epilepsy, and it is triggered by a couple things.
It's the medications that our patients take cause a lot of cognitive decline. I mean, topiramate is one good example, for example. And also the disease itself, over time, with repetitive seizures, you continue to have different cells that are dying in the brain, and therefore, cognitive capacity declines over time. So if you have an agent that is a powerful, you know, seizure reduction agent, but also could be procognitive, and we already... That would be amazing. And we already saw a signal in the open label because we use EpiTrack, which is a very good, you know, test for cognition, actually developed specifically for epilepsy drugs. We saw 75% of our patients either held the line on cognition, it didn't deteriorate or improved. And trust me, for epileptic patients, if you don't have a decline, that's a good thing.
That's a win on its own, that your cognition is not declining. So to keep it at the same level or even improving, that is promising, and we will continue to monitor that through the rest of the clinical program.
So is it fair to say, I mean, SPN-817 , so far, the results that we've seen have been really good. You also have a legacy around epileptic disorders. Would you say that the fit of that one is an obvious, you know, kind of addition to the business overall, whereas the others are less so, or would you say you're still excited around pretty much the whole pipeline?
No, I mean, the whole pipeline is in CNS. I mean, the other molecule, which we're equally excited about, is SPN-820, which is depression. Obviously, that we are in psychiatry with ADHD, we are in psychiatry now with PPD. So, I mean, that's... They're all a fit to what we are doing and what we're focused on, whether it's a psychiatry or neurology asset. And then even some of the early, you know, SPN-443, which we now have moved up, advanced. We did the first-in-human study last year, very promising from an oral bioavailability and so forth. We will decide on the lead indication before year-end. We see a promise in ADHD and potentially other CNS disorders, so we will make a decision before year-end on that lead indication for that molecule.
That's an internally discovered molecule, and as I mentioned, also the Sage pipeline as well. But everything is pretty much in the CNS space.
Yep. With SPN-820 , you saw some clinical results that, you know, weren't kind of in line with what you were expecting. You know, can you talk about your interest in kind of moving that forward and how you think about that?
Yeah, sure. Absolutely. Yeah, we had a pretty busy year last year with a lot of clinical data on SPN-820 and SPN-817 . SPN-820 , we had two studies going on, an open label in MDD, and that data was remarkable. However, it's open label. As we all know, in depression, open label is open label. You know, it's not placebo-controlled. But the data was so consistent across so many measures and very strong signals. At the same time, we had a phase IIb study in TRD, but the dosing regimen was very different. In the open label, we had 2,400 milligrams single dose every three days, intermittent dosing, and the reason for that was because of the mechanism, which is an mTORC1 activation.
There was a study that was done by the innovator, a phase 1b study, placebo-controlled, very small study, where they were able to separate from placebo with only one single dose. They only gave one single dose and measured it after seventy-two hours, still saw an incredible impact on MADRS. That's what gave us the idea to study that even further in the open-label study. In the phase 2b, we gave sixteen hundred milligrams every single day, and that's the study that failed and did not separate from placebo. We looked at everything, demographics, patient population, MDD, TRD. Nothing really pointed to why this study failed versus the open label, other than the key difference is the dosing regimen.
There is a very strong scientific data that is emerging that pretty much says that not every CNS target needs to be hit every single day with a daily dose. There are plenty of examples out there of molecules that actually didn't work on a daily dose but did work in an intermittent dosing. We believe the mTORC1 activation, that, you know, that whole biology, that whole mechanism, is one of those. Because typically, when you activate the mTORC1, you're increasing the protein synthesis, and you need to allow the system to pretty much digest that change that improves the health of the synapse, and that's what really increases the neuronal networking and the connections and improve depression, you know, the depressive symptoms.
But if you don't allow that, and you don't give the system at least a couple of days for it to digest what happened with the first dose, you're doing more harm than help. And therefore, if you give the first dose, you wait for two days, then the system resets, then you hit it again, and that's the intermittent dosing that showed the results that we did. So if that theory holds, we have an incredible product because this is an oral medication, works like ketamine, not an injection, not an infusion. You don't have to sit in the clinic to be observed for three or four hours because of hallucinations or any other, you know, psychotic symptoms. And it's an oral, and it works within hours. Hours. There aren't too many oral medications in the depression space that work even in one week, you know?
Yeah.
If you have a product, an oral that works within hours, that would be phenomenal. It's a product that, whose profile is definitely well worth redoing the phase IIb, and that's why we took the gamble, you know, of course, based on the science, and we said, "This is something is worth redoing." We're looking very much forward to restart another phase IIb before year-end. Probably we'll get data in the 2027 timeframe, you know, depending on recruitment, we'll get back to folks with a much better timeline on that.
Got it. Thank you. Maybe we'll just kind of round out here on business development. You mentioned on the earnings call that M&A continues to be a top priority, despite the Sage deal. Can you give us a sense of kind of how far that appetite for M&A extends? Is it mainly trying to fill in, you know, different holes in the portfolio, or are you looking at the longevity of the revenue profile and saying, "We'd like to have, you know, something that's, you know, comes on here because we're concerned about LOE-
Yeah
Or other things here?" Just how do you think about that?
Yeah. M&A is always a, you know, one of our key growth drivers. We believe in both M&A and R&D, and historically, we have a very strong R&D capability, and we always augment that with M&A activity. And that will continue. And even though we just did an acquisition, we still have a clean balance sheet. We're gonna have very strong and continued generation of cash, so certainly, we will have the capacity to do another deal. And as far as priorities are concerned, I mean, our priorities haven't really changed much. You know, we'll continue to look for commercial assets if we can. But aside from that, our focus on the pipeline side is programs that are post-phase II.
Because our programs are phase II or earlier, it doesn't really make a lot of sense to bring in other projects that are phase I or pre-phase I, and so forth. So we're focused on looking for assets that are post-phase II, whether they're in phase III, or beyond, because we're looking at the window of like 2026 to 2030. Right now, we don't have anything that could be launched during that period. Not that we won't have any growth, we'll have plenty of growth with our existing portfolio, but we would like to launch more products during that window, and that's really what we're very focused on. And again, we're agnostic, whether it's psychiatry, neurology, and now we're actually in women's health. So we have a sales force in women's health, so that opens up another whole new, different area for us.
So we're very excited and we'll continue to, you know, look. It's a priority, will always be a priority for us.
Got it. We have a couple of minutes left. Any questions from the audience? Maybe just another point on that, that M&A topic. You talked about psychiatry, CNS more broadly, also now women's health. Would you say the bar is higher to be looking outside of that, whether it's kind of rare disease or some other kind of indication, or is it still kind of the best asset?
Yeah, I mean, rare disease could be a rare disease, CNS rare disease, right? I mean, rare disease could be across therapeutic areas, and we are very well equipped to deal with a rare disease. I mean, Parkinson's, in a way, is almost like a rare disease. So we have the infrastructure, we have the hub services, the field reimbursement services. We have a whole nurse network that support all our patients in Parkinson's. So we have a very strong infrastructure that can absorb and take on, you know, specific rare disease assets. But we're not looking to expand for another whole different vertical right now. It would be nice if we can further maximize what we have from an infrastructure perspective, whether it's in psychiatry.
I mean, we have a strong presence in psychiatry with two hundred and forty reps in the ADHD space, and of course, now we have a sales force in OB/GYN, so it would be nice to add more assets in that space if we can, before we add another third leg or fourth leg, you know, so to speak. But in M&A, as we all know, you always have a wish list, but it never works that way, right? So it's what's available, and when you have a willing seller, you have to be opportunistic sometime. As long as it makes sense financially, it's still prudent to do it. We don't do a deal just for the heck of it.
We've been very disciplined in how we pay for deals and how much we pay, and make sure we, you know, in the end, we're bringing value to our shareholders. Yeah.
You've definitely been successful in the last few deals, and we wish you much more success.
Thank you very much.
Thanks, Jack.
Thank you.
Thanks very much for being here.