Our next session. I'm Andrew Tsai, Senior Biotech Analyst at Jefferies, and it's my pleasure to have Jack Khattar, CEO of Supernus, joining me today. Welcome, Jack.
Thank you. Thanks for having me.
Of course. Thanks, everyone, for listening in. Maybe, Jack, to start, for those who are less familiar with the Supernus story, can you maybe talk about what you're working on, what your key priorities are over the next, say, 6- 12 months?
Yeah, sure. Thank you for joining us, folks. Just a quick reminder that I'll be making forward-looking statements, so please check our SEC filings for all the risk factors associated with the business. For those of you who are not too familiar with us, we're a CNS-focused biopharma. Our latest guidance as far as revenue is $685 million to $705 million for this year. We do have a diversified portfolio of products. The key ones, which are really four growth drivers for the business, starting with Qelbree, which is a novel ADHD non-stimulant product that we launched about four and a half years ago. Gocovri, which is a very unique product in the Parkinson's space. It's the only product approved for dyskinesia and off episodes. And then Onapgo, which is another Parkinson's product. It's an infusion device, apomorphine infusion device that we launched this year.
The fourth product is Zurzuvae, which is the only oral treatment for postpartum depression, which we brought in through the acquisition of Sage Therapeutics.
Great. I typically ask you on peak sales for individual products, so might as well get that out of the way. So for Zurzuvae, which you acquired, Qelbree, there's also Onapgo now. Remind us the latest and greatest, maybe even for Gocovri, what you think the peak sales of these products could become.
I mean, on Qelbree, for example, it's a vast, it's an enormous market. It's about 100 million prescriptions a year in ADHD in the U.S. If you look at our latest IQVIA or IMS monthly prescription, it's about $86,000, which was October of this year. Annualize that, and we were already around a million, a little bit north of a million prescriptions a year for Qelbree. We're just scratching the surface, about 1% market share, basically. We have a long runway on Qelbree, no question about it. Continues to grow very briskly. I mean, in the last, it's been now four and a half years since we launched it, and we continue to put up numbers like around 20% or more growth in prescription. We've been very happy with the performance of the brand, definitely, and its unique position there.
We're annualizing at $320 million or so based on the last quarter, and we continue and will expect to see further growth as time goes on. We have a patent till 2035, the last to expire, so we expect a long runway, hopefully, on the product.
Okay.
On Onapgo, I know that's still a debate out there. We had mentioned something like $200 to $300 million in peak sales. The demand actually has way overexceeded our expectations since the launch of the product, which put us a little bit in a tough spot given the tight supply situation, obviously. That is a product that may prove very well that we were conservative or too conservative in our estimates. It could be beyond that, and we'll update that as time goes on, clearly. On Zurzuvae, we haven't put up any guidance, so to speak, about the potential of the product. What I tell folks is, if you look at the deal that we did when we did the acquisition, we had certain CVRs or milestones to be paid based on certain sales levels. We will be very happy to pay these milestones.
Clearly, those sales levels that we put and structured the deal around were realistic in the sense that, I mean, we think they are potentially could be doable. They are based on a lot of scenario planning, clearly, and modeling. That would be great if we can achieve those levels. Those are levels that are about 50% of the brand, because just to remind everyone, we only book 50% of the sales of Zurzuvae. Biogen books 100% of sales.
Okay. Very good. Very helpful. Speaking of Sage, it was, to me, almost arbitrage of an opportunity for you. I mean, they did have a lot of cash. The net of it is you do still have around $300 million of cash as of Q3. How much more firepower do you have here? Is BD another thing we can expect for 2026, in your view?
I mean, BD, to start with, I mean, will continue to be a priority for us, no question about it. We haven't slowed down, so to speak, because we did the Sage acquisition. Yes, I mean, we will have good firepower because our balance sheet, even post the acquisition, is still clean. As you pointed out, I mean, we will continue to build now the cash position back up as time goes on. As far as the capacity or the size of a transaction we can make, I mean, clearly that depends on where our market cap is at that time, as well as, of course, the assets that you're bringing in. If the assets on their own are commercial assets, they are typically associated with strong cash flow. Clearly, you can leverage, and therefore you can have a decent-sized type of transaction.
Also, for the right transaction, I mean, we're not shy of using some equity if we have to for the right opportunity for a transaction that could be very transformational for the company. Absolutely, we will do something like this. I mean, to put a number on it, I don't know, $1 billion to $1.5 billion. I mean, again, it all depends on the assets. Now, having said all that, I mean, we try to manage the business all the time in a very fundamental, fiscally responsible way, so we're not going to go and over-leverage. We're comfortable with two times, maybe two and a half times EBITDA, and that's about it as far as leverage.
Understood. Maybe a follow-up to that, remind us, late-stage commercial assets versus earlier stage and indication areas would also be helpful.
Yeah, I mean, top priorities are commercial assets, not different than what we just did with Sage or even before that, Gocovri, bringing products that bring in revenue and profits to the company. After that, priority-wise is later-stage pipeline assets, because if you look at our pipeline today, a lot of it is phase two or earlier. Therefore, anything that could be launched in the timeframe like 2027- 2030 will be ideal for us to bring in from the outside. We're very focused on that. As far as therapeutic area, clearly CNS, psychiatry, neurology, movement disorders, anything in the psychiatry space. Of course, now with the Sage acquisition, we opened up a different area, which is women's health.
If we see something in the women's health space, we'll be open to look at that as well, because we have now a sales force that is active in the OB-GYN space.
Understood. Super helpful. Shifting gears to one of your growth products that a lot of investors are really paying attention to, Onapgo for Parkinson's. Q3 sales, in my notes, $6.8 million, but you also then mentioned how there is so much demand that you cannot fulfill that demand. The initial investor reaction on my side was, "Really, Jack? It is really just, quote unquote, $6.8 million. It is not like it is $100 million of order." Maybe walk us through what exactly happened and where do we go next from there.
Yeah, I mean, a little bit of background. This product came to us through the US WorldMeds acquisition when we acquired the Parkinson franchise. At that time, it was a pipeline product. And since then, of course, we took it through the process, got it approved, and just launched it. It is a license that we have. We are the licensee. Our license source is actually in Europe here. It is Stada and Britannia. Britannia is a subsidiary of Stada. They are basically responsible from a supply perspective to provide us with the product. They have the relationship with the CMO, that third party that manufactures this product. This is a production line that is not fully dedicated to Onapgo at the CMO. Therefore, there are competing priorities on that production line.
There are other clients, of course, who have their own products and so forth. It sounds like this production line is full of clients who are all asking for more product, and the demand on all the products has been exceeding. I mean, I do not doubt that. In a sense, from an industry perspective, we are kind of struggling a little bit industry-wise on injectables, fill and finish because of the products in the injectable space. It has been an explosion from that perspective. Nevertheless, I mean, we are working very closely with our partners in Europe, with the supplier, to really get as much capacity, as much production time as possible on that line to get us the number of batches we need to be able to serve our patients.
Now, the moment we realized that we're not going to be able to service or continue to new patients, that's when we made the decision to pause any new patient initiation, which we announced at our earnings recently, because we wanted to prioritize inventories, any deliveries that we're getting to service the patients who are already on therapy. I have to tell you, I mean, this is not ideal, of course. It is disappointing in general for us, for our physicians and patients. I have to say, I mean, the reaction from the field, from physicians, has been amazing. They really respect what we're trying to do here, putting patients first. They're like, "We need this product. We need something other than L evodopa in this space." We've had Levodopa forever. This is Apomorphine, a very different drug.
We will be here for you when you guys come back, and we'll continue to support the product. Actually, some physicians are even still filling in forms and submitting them to us. We are very encouraged by that reaction. Not that we would have done anything different. Our priority is our current patients, to serve them, continue to serve them while we're figuring out and lining up on the production side. We know the product will be there from a long-term perspective. It has done amazingly well in Europe for a couple of decades. It is apomorphine. It's a very different drug than all the drugs that are out there. Mechanistically, it works very different than Levodopa, and there is a lot of clinical need for it. Therefore, I know physicians will support us.
The patients, the demand will be there when we go back.
Understood. To be crystal, crystal clear, the underlying issue is about the fill/finish part, not the API or drug. It is the plastic or component part, or?
Yeah, this is not an issue of API shortage or specific components. It is the fill and finish operation of the cartridge itself. It is not a device. The device is a different supplier, and we are fine on that end.
I see. How do you resolve this exactly? Do you just wait for the supplier to build more supply, or do you branch out and look for other CDMOs?
It's all of these. I mean, we're working every angle possible here to bring supplies as soon as possible for the current patient, of course, but also as important to build adequate inventory levels that gives us the confidence that we can start initiating patients again. I would love to have a timeline, to be honest with you, because that's a fair question, of course, but we don't have 100% clarity yet. Once we figure out all the potential avenues and we can hopefully establish the goalpost, so to speak, it could be as early as this or as late as that. The last thing I want is to communicate something, and then it doesn't happen, and then we disappoint physicians again and patients again. You don't want to do that. Credibility is very important.
As they already told us, they respect what we're trying to do here, so we don't want to create any ill will, clearly. We will communicate when we are ready with more certainty around when the inventory is going to be adequate for them to start new patients.
Understood. So it might not necessarily be a fourth-quarter update later in February. It could be earlier than that, maybe in a press release when you have more clarity.
I mean, normally we announce year-end results February and guidance for 2026, where we clearly will talk about this issue, of course. If there is anything before that, absolutely, we will announce that so that folks will stay updated on it.
Understood. So in the meantime, the existing batch of patients you're servicing them, the newer patients may be on hold a little bit. In terms of the cadence of fourth-quarter sales, again, Q3 was $6.8 million. Is Q4 at a minimum $6.8 or not necessarily for Q4?
Not necessarily, yes and no. I know people say, "Well, Jack, you said, well, it could be the same. It could be lower, it could be higher." All of that is true because you have 400+ patients, right, which we said are on the drug. Now, in the fourth quarter, you're going to have some patients who were on the third quarter maybe just titrating. Therefore, in the fourth quarter, they have refills. They are using more of the product. At the same time, you may have patients who discontinue. I mean, you have different dynamics that could impact what that number might be. Now, as far as 2025, I mean, in total, obviously, we're having an incredible year. As I mentioned earlier, I mean, we upgraded the guidance a couple of times this year.
Even on Onapgo itself, our initial guidance was a high single digit, which, to your point, we already hit it by September. Actually, that's why we're having the issue we're talking about, which is from a supply perspective. To me, I'm not saying I'm not concerned about 2025, but that's not really the important issue here from my perspective. This is a long-term brand. It's really trying to minimize the impact on 2026. That's why we're working pretty hard to make sure that the impact on 2026 is not for a long time, as short as possible. That's why we're working also on different avenues, not just the current supplier, but also a long-term solution as well to line up potentially another supplier. I mean, our partners in Europe here, they have their own production line and so forth. We're exploring that as well.
Potentially, it is the same exact product that is made in Europe, is made for the U.S. market. Clearly, it has different specifications, different aspects. You have to go through the FDA, all that. You have to do all the work to qualify that. Again, we're working on all the different avenues to minimize the impact in 2026.
Understood. I should have asked this, I guess, earlier, but AVI, the competing pump, they are guiding their sales to be $1 billion worldwide. Let's just say 30%-50% of that was U.S. sales. I mean, that kind of exceeds your $200 million to $300 million. You kind of mentioned earlier, maybe it is conservative. Maybe just remind us one more time why you think your product is differentiated and maybe even better than AVI's product.
Yeah, I mean, I chuckle a little bit because I know they spend so much time on their earnings call trying to compare the two products, cherry-picking side effects and all that. I'll try to avoid that. I mean, the two products have never been in a head-to-head trial, and it's unfair to make any comparisons. I think as far as our product, back to why our drug is very different, our drug is not Levodopa. Clearly, it's a very different drug, a fairly potent dopamine agonist, one of the greatest drugs out there because it acts on the D2, D1 family of receptors exactly like dopamine. It mimics exactly the dopamine action, and it doesn't need to be converted.
There is no metabolic conversion that has to occur in the brain like for Levodopa to convert it to dopamine because Apomorphine just goes through, penetrates the CNS system, and acts exactly like dopamine. It is a very different drug. For a lot of patients out there, I do not know, five years into your diagnosis, 10 years into the diagnosis, do you really need the same of the same? Do you really need Levodopa again, although in a different form or different delivery? That is a decision, of course, the clinician will have to make, right, for the right patient, what is right for them, and do they need something else? I think at the end of the day, the data speaks for itself.
I mean, if you look at the aligned launches of both products, meaning align the IMS data or IQVIA data, you can see which product has a better response. I think physicians, in the end, they vote for a product through prescriptions, and so do patients. Comparisons, people can make all kinds of comparisons, but at the end, that's really what speaks for itself.
Right. Understood. And so remind us also then, this is a drug-device combo. What is the exact exclusivity of Onapgo?
Yeah, we do have the orphan drug designation. The seven-year exclusivity has to still be confirmed by the FDA. But these are very complex products. It's a drug-device combination. Most of the companies, including us, it takes more than one try, unfortunately, in getting the regulatory because of the complication of these devices. They're both together the subject of an NDA, not one versus not one component separately. Of course, on the pump, I mean, we have our own supply on the pump, but that doesn't mean people can take a lot of time. As I always say, with time and money, you could always figure out to do something, copy somebody, or outdo somebody. It doesn't mean nobody will ever try, of course. I mean, that's always a risk out there, absolutely.
Okay. Shifting gears to Zurzuvae, maybe talk, I think the unadjusted sales were $55 million in the third quarter, which is a nice uptick, quarter over quarter. Maybe talk about the shape of the curve. What can you do differently that Sage could not do, and why do you think your sales under you and Biogen will accelerate even faster in 2026?
Yeah, I mean, the product has been very consistent in the last three quarters. Actually, you'll see it's about 19% to 20% quarter over quarter continued growth. We're very happy with that. This is not an issue that we can do better than Sage or they didn't do something they should have done. I mean, it's still very much early in the launch, about a year and a half, almost two years now, closing on two years since its launch. It's really in the real early, early launch. This is a category where we're building the market. With Biogen, of course, together as partners, we're building the market here, the postpartum depression. The awareness of the drug, the screening, diagnosis levels, all these are not at optimal levels.
There is a lot to be done education-wise, not just from a patient-consumer perspective, but also on the diagnosis side with physicians. I mean, typically, think about it this way. OB-GYNs are not really trained to treat depression, right? This is a new area for them to know how to screen for it, how to diagnose, how to prescribe medication, and if they're not comfortable, who to refer it to, and so forth. The good news is everything that has been done so far actually is working, meaning OB-GYNs who get trained and who really get that education, they are adopters. They do prescribe. Actually, once they prescribe, they tend to be repeat writers. The experience with the product has been amazing as far as its delivery. It is clearly a very unique product for this disease because it works at day three.
That's a rapid response from a depression perspective. It's only a 14-day course. If you compare that to what people use today, which is mainly SSRIs, that are not studied for postpartum depression, there is no data to prove that they actually work or not. SSRIs, as we all know, sometimes take weeks and weeks for them to work or not work to find out whether they actually work. This is probably the worst you could do for a patient. Think about the mother who just delivered. She's going through all these feelings, emotions, symptoms, and so forth to have them wait for weeks and weeks. Sometimes, in most severe cases, of course, you have feelings that develop towards the baby, the mom, self-injury, all these things. That's probably one of the most horrible things you could do.
A product that works by day three, and it's 14 days, and you're done, it's really a great, great alternative out there for patients. We're very hopeful. I mean, as far as growth is concerned, I mean, this is only the beginning. It's only a two-year-old product.
Right, right. As that's growing, I do remember Sage working a lot on their pre or earlier stage pipeline. Now you have access to all of those compounds. Is that something we can expect you to come to the street, let's just say 2026, 2027, and introduce new assets from the Sage library?
I mean, potentially. I mean, there's a lot of great stuff. I mean, they were for, I don't know, 10 or 15 years working very heavily on the discovery side. So they have incredible science over the years. They have thousands, thousands of molecules and actually a couple of platforms that they never disclose publicly. So we looked at all that portfolio, and absolutely at the right time, we will disclose whether we'll take something to the next step or move it forward. Right now, we've been studying that. We've done a lot of work on it evaluation-wise. We consolidated all that with our own discovery programs because we had our own platforms as well. So we look at all that as one portfolio and prioritize that, of course, according to risk, potential, and so forth.
Understood. In the last two minutes, I think we all know Qelbree is probably or should continue growing next year. You are working in terms of the pipeline also, an mTOR inhibitor, SPN-820, and then SPN-817 for your epilepsy compound, both in phase 2B. Maybe talk about the next steps when we get data and so forth.
Yeah, on both programs, data probably in 2027. I mean, on 817, the phase 2B program has been going on. That's epilepsy, typically tends to be a little slower from a recruitment perspective. SNP-820, the depression program, we will be initiating the study by year-end, and therefore, it will take 2026 to do the enrollment, of course, and therefore data in 2027. I don't expect data before that. As we get closer, we know better on the recruitment side. We could nail it down a little bit. Is it first half, second half? We'll communicate that as we get closer.
Okay, okay. Is there anything else you're working on in the pipeline that you can bring to the marketplace over time?
I mean, there is a program, which we just 443, which is a novel stimulant in ADHD, and that will be an incredibly great product for us given how invested and the extent of experience we have in the ADHD space. In 2026, we will do a SAD-MAD study on that. This is a completely homegrown novel molecule, actually, from our discovery program. We are very excited about that molecule and its potential.
That one would be maybe a less strict scheduling alternative.
Yeah, from a profile perspective, we're hoping eventually we could get more like a C4 scheduling, not a C2, unlike the amphetamines and methylphenidates, which would be a huge difference versus the products.
Okay. That's all the time we have. Thank you, Jack, for all the opportunities.
Thank you.
Thanks, everyone, for listening.