I think it's starting the counter over there.
Okay, yeah. Hi, good afternoon, everybody. Thanks for joining us, day one at Cantor's Global Healthcare Conference. I'm Kristen Kluska, one of the biotech analysts at Cantor. I'm joined by Ayan Hussein, my colleague, and we're both very pleased to be hosting Jack Khattar, the President and CEO of Supernus Pharmaceuticals. Thanks for being here, Jack.
Thank you for having me. Good afternoon, everyone.
To kick things off, do you mind providing us with a very high-level overview of the company?
Yeah, sure. Just as a quick reminder, I will be making forward-looking statements, so please check our SEC filings for all the risk factors associated with the business. Supernus, especially for those of you who do not know us, we are a CNS-based company focused on therapeutic areas like ADHD, postpartum depression, Parkinson's, and so forth. We are a company that has R&D. We have our internal R&D capabilities, as well as we have a portfolio of commercial products. Our guidance for this year that we just updated in August is $860 million- $890 million in revenues and an adjusted EBITDA of $150 million- $180 million. Our main brands are Qelbree, which is a novel non-stimulant in the ADHD market. We also launched ONAPGO about a year and a half, which is a new infusion device, apomorphine for the Parkinson's treatment of off episodes.
We completed an acquisition last year, which is the Sage acquisition, that gave us a really incredibly exciting product, which is Zurzuvae. Zurzuvae is the only approved product for postpartum depression. We market that product in the U.S. in collaboration with Biogen. Very recently, we announced the intent to merge with Indivior Pharmaceuticals, which is an incredible opportunity for both sides of the equation. I am sure we will probably talk more about it today. We are very excited about that, and we are looking at potentially closing the deal in the fourth quarter of this year.
Thanks for that overview. For investors that are brand new to the company who may be coming from the Indivior shareholder side of things, what should they know about your leadership style and top priorities for the company?
Well, as far as we are concerned at Supernus, we are always looking forward for the next 5- 10 years and so forth. We periodically and very frequently update our vision. We have a vision for our company. It is a vision that is not set by one person. It is not just my vision, it is a vision of all our employees. They all buy into it. Everybody knows what our vision, it is clear, it is specific, and every single employee, whoever is in whatever function, they know what their role is in helping us achieve that vision. Then we have very specific strategies that will get us to that vision and accomplish that vision. Actually, our vision for 2027 was to get $1 billion in revenue. We set that vision for ourselves back in 2021, when we had about half a billion dollars.
We said we want to double our size by 2027, and we're pretty much well on our way to achieve that on our own, obviously.
Okay. I would also add that things I've gotten to know about you personally is you're very big on company morale. That's very important to you, and most investors will be happy to hear you're conservative a lot of the time in guidance.
Well, we tend to be very realistic. Let me put it this way, you get what you see here. We are very much straightforward, transparent. That's our approach in everything we do, the way we work with investors, shareholders, board, everything.
Yeah.
Life is much simpler and easier that way. We're very transparent about what's happening with the business, the ups and downs, the risks associated with it. Yes, we do tend to be a little bit on the conservative side because we like to make promises that we can actually deliver on and set out expectations out there that will become a reality. We're always being challenged sometimes, people pushing us a little bit because somebody else said something else about a specific category or market, but we really stick to our assumptions, what we believe is a reasonable guidance that we come up with every year. Yeah.
Okay. Ayan and I are going to plan to try to touch on as many products as we can, but maybe just a high level since you have so many.
Okay.
Starting with Qelbree for ADHD, it is a core revenue pillar for you and just celebrated its fifth year anniversary. How should we be thinking about the growth trajectory from here, and are there certain patient populations where there is more still to unlock than others?
Yeah, Qelbree has been a phenomenal product. It actually represents innovation in the space that hasn't happened in a decade or more. It is a novel non-stimulant that we launched about five years ago, and the product has been doing phenomenally well. It continues to do very well. We just talked about it, and when we issued the second quarter results, we had 25% growth on the adult patient population and adult prescriptions and 14% on the pediatric side.
The brand is novel, but it is also very unique and differentiated in the marketplace. It is basically a non-stimulant that works. It is that simple. We have had non-stimulants historically, primarily Strattera and Intuniv. They didn't really always work well, specifically Strattera, where you have to wait five, six, seven, even eight weeks into therapy and you still don't know whether your child is going to get the benefit of that medication.
As a parent, you can imagine five, six, seven, eight weeks with bad report cards, suspension letters. The kid is not doing well in school. They don't have any friends who want to hang around them. That is like eternity. You struggle every night in doing the homework. Parents typically say, "You know what? I'm going to go to the stimulants." That is why historically the market has been 90% stimulant and 10% non-stimulant. Today you have Qelbree, which is an option that people didn't have before. As a parent, I do have that internal conflict always. I want my kid to do very well in school. I want them to feel accepted. I want them to have friends. I want them to have great report cards. But I don't want to put them on controlled substances.
I am torn in the middle because I do not have a great non-stimulant that works. With Qelbree, within a week, as early as week one, you can tell whether it is going to work for your child, so you do not have to wait for six, seven, eight weeks into the school year. Also, you walk out of the physician's office with a sample for two weeks, free two-week sample, so you can try the product and a prescription. In the worst case, if it does not work for your child, you can always go back and put them on Adderall or a stimulant. It is a great value proposition for parents to give them that chance, give them that option that now for sure, you can actually give it a try to get your kid on a non-stimulant or a non-controlled substance.
For adult, it is a slightly different value proposition. Adults actually love their stimulants. They like to take them. They like how they make them feel and so forth. They are actually, despite the side effects of stimulants and what comes as baggage with stimulants, they do not want to give them up. Physicians do not want to also stop the stimulant therapy abruptly because some patients go through withdrawal. They also do not want to really take patients off by taking them completely off their stimulants. What they tend to do is reduce and taper off the stimulant dose. Let us say you are on Adderall XR 50 mg, next week you will be on 40 mg, 30 mg, 20 mg, and at the same time, you will be adding Qelbree. You will be titrating Qelbree up, starting with 100, 150, 200, and so forth.
Eventually, you will take the patient off the stimulant. 40% of our prescriptions on Qelbree actually are in combination with a stimulant in the adult space. The adult segment, to your question, is one of the important segments in the market. It is the fastest-growing segment, has been the fastest-growing segment, and we are pretty happy with the growth rates that we are getting from the adult. As I mentioned in Q2, we grew by 25% in prescriptions in adult and 14% on the pediatric side. It is a great product. The other aspect of it for adults is the comorbidities. Viloxazine, which is the drug in Qelbree, has also serotonin activity, is not just a norepinephrine reuptake inhibitor, but it does have serotonin modulation. It is in our label. We got that label changed last year.
We also did a phase IV study in comorbidities because a lot of physicians have been asking us over the years, what is it about Qelbree that makes patients feel good? It is not just about makes patients feel focused or have more attention regarding ADHD, but in general, they tend to feel good overall. Their mood is much better. We did the study in comorbidities, meaning in patients, ADHD with depression, ADHD with anxiety, and we published the data. Qelbree did really well on all the metrics, not only in, of course, addressing the ADHD symptoms, but also cutting depression in half, cutting anxiety in half. Actually, the molecule Viloxazine used to be an antidepressant in Europe for many, many years. We were not really surprised with those kind of results. That is something which is important for the adult population.
Obviously, we don't promote it in that sense because we can't. We just publish the data and let physicians know about the sign. There's a lot of factors that really helping Qelbree to grow in the adult segment as well as on the pediatric side.
Okay, great. Let's switch gears now to ONAPGO for Parkinson's disease. Investors have pointed out that script trends are looking nice these days. Are there any changes to the dynamic of your partner's capacity to consider through the end of the year? How was this capacity embedded in your original revenue guidance for this product?
Yeah, as many of you know, we went through a supply constraint on ONAPGO when we launched it back in 2025, April 2025. The demand actually was way overwhelming, above the forecast and by multiples. We ended up in a crunch from a supply perspective. We've paused patient initiation in the October-November timeframe. Then very recently, early this year in February, we did say that that situation pretty much has been resolved. We have secured the supply for 2026 and well into 2027. Where we stand today, I would like to say basically the supply constraints are behind us. We're pretty happy with where we are from a supply perspective.
The guidance that we issued earlier this year where we said $45 million- $70 million when we started reinitiating patients, we updated that guidance in August when we said it's going to be $55 million - $70 million. The guidance is not just a function of supply, it's a function, of course, of the demand out there. It's a function of our ability to process all that demand. Because we get the forms from physicians. The forms are being processed by the hub, by the specialty pharmacy, by our nurse network. They eventually get the product in the hands of the patient, get them trained on it, and so forth. All that is really built into the guidance, which we still, as of August, that's the update we gave, which is $55 million - $70 million.
We feel really good about everything that's going on with ONAPGO now. The backlog that has occurred because of the supply situation is pretty much resolved right now. We had about 700-plus patients backlog who were waiting for the product. And once we relaunched in February, when we announced that we are back on track, from that time until now, we pretty much resolved that whole backlog. A lot of these patients either got product or naturally, there's always attrition in the process.
Yeah.
People drop off for one reason or another. Either their medical situation changes, or they move on to a different product, or what have you. So right now in the queue, we have a lot of the patients who are fresh, new patients, new forms that are being into the system, and they are being processed under normal times or even improved times and with improved conversion rate from a form to the shipment. So we feel pretty good about where we are overall right now, especially that we have secured the supply for 2026 and even 2027. Yeah.
Yeah. Thinking about growth from here, you'll be submitting your regulatory filing this quarter to get another supplier on board. If this ultimately gets approved, how should we be thinking about the capacity that your European partner could help support out of the gate?
Yeah, as I just said, the third party that-
Yeah
has been supplying us and the third party with whom we had the issues from a supply point of view, they are actually well-equipped now to continue the supplies in 2026 and also through 2027. In the meantime, we still expect the second supplier, which is our current partner, to hopefully get online by mid-year 2027. We feel pretty good as to where we are.
Okay. Any thoughts as to how big this opportunity or product could be? I think it's safe to say that last year it beat your initial expectations, too.
Yeah, that's been a point of debate for a while, back to being conservative or not conservative. We've said, and we maintain at this point, that the peak sales of ONAPGO should be somewhere in the $200 million-$300 million. We also explained that the basic assumption behind that is that we are most likely going to get the patient who is well advanced into Parkinson's, which that's what the label says, for advanced Parkinson, which means these are the patients who have tried levodopa-carbidopa for a long time, have tried other adjunctive therapies for a long time, and they're not really getting that incremental benefit anymore.
They hit a ceiling as far as the benefit that they're getting from their medication, and therefore, they could really benefit from a continuous infusion of another drug, such as apomorphine, to help them instead of resorting to deep brain stimulation or invasive surgery. That is really the basic assumption. Clearly, if the therapeutic and the therapy migrates towards less severe patients, more patients like moderate patients, it opens it up, and it makes the market much wider for us, for our patients. That is something we're still trying to get a good handle on. Because of the disruption in the supply, we're starting to get early signs as to who that patient is. Who is that patient that is getting ONAPGO? Are they really very severe patients? Are they moderate patients? How much are they using per year? How many cartridges? All that remains to be seen.
Once we get a much better feel, we have more than just one data point or data points about it, then we are more than happy to update our forecast and say, "You know what? Yeah, maybe the 200 is very conservative. Maybe it is more like 300- 400," or whatever the number is. But certainly, we are not ready to do that yet until we get a. Because also, think about it this way. Even if you do a survey among physicians today, and they tell you, "These are the patients we are putting ONAPGO on," that doesn't mean that is what is going to stick on a steady-
Right
state basis. Because physicians themselves are experimenting with the new drug, and they are trying to find out where does this drug actually fall within the alternatives or their toolbox, so to speak, that they use, and which is the best patient that is more suited for ONAPGO. So I may do a survey a month later, it might shift a little bit. So until we get a little bit a better handle on it, and until physicians get more set with their prescription habits around the product, then we will have a much more concrete idea who is that patient.
Okay. All right. Moving on to Zurzuvae for postpartum depression. The launch is going better than our expectations here. What would you say have been some of the core drivers of this momentum?
Yeah, Zurzuvae is a very exciting product. It is an area where it is so much under-diagnosed, under-treated. The knowledge, the awareness about the disease is fairly low. Actually, among patients, women in general, you will be surprised, a lot of women who get diagnosed with PPD, about 80% of them never heard about postpartum depression. They tend to confuse, actually, a lot of the symptoms they go through, things like feeling sad, isolation, fatigue, lack of sleep, the stress, all that. They associate all that with the experience they just went through. Because they went through delivery, they have a newborn, they have a new schedule, they have a lot of more stress in their life. They do not realize or recognize that actually that is a postpartum depression.
That is why this year we have decided with Biogen, our partner, to start a DTC campaign to increase that awareness among women, help them really understand what is postpartum depression. Specifically help them understand this is not their fault. A lot of women, moms, unfortunately, they feel guilty about it. They feel ashamed about it. They want to talk about it to their doctor. They do not want to come forward. We are trying to explain it to them, this is something hormonal. This is not really their fault or anything that has to do with what they did or did not do. Please step forward, talk about it to your physician, seek help. There is a lot of room for us to grow on that product, back to your question, and we are doing the education not just on the patient side, but also on the provider side.
You know, OB/GYNs who tend to be mainly the initial touch point with mom when she comes back for checkup after delivery and so forth. Not all of them are comfortable with diagnosing psychiatric conditions. They go to medical school, and they get trained on delivering babies, not on treating depression or what have you. We have a program actually to help them understand the disease, help them diagnose it, help them look for signals that will identify these patients and really get them the help they need too. So that we are coming to it from both ends, the patient and the healthcare provider, and like this, we can have more people seek help and get the help they need. There is about 500,000 women every single year, who suffer from these symptoms, postpartum depression, and only about 45%-48% get diagnosed.
There are a lot of people out there that we could still really help with them.
Yeah. What are the latest thoughts around what peak sales could be here?
We haven't talked about that. Okay. Historically, what I try to tell folks is look at the deal that we did when we acquired Sage. There were certain CVRs, milestones that are attached to sales brackets or certain sales levels. These are real sales levels. We hope to achieve them, and we're more than happy to pay these milestones or CVRs if they do occur. That'll give you an idea as to where we believe where the product could potentially get to.
All right. So moving on to the proposed merger with Indivior. I know there's only so much that you can say about this, but just big picture, what is the potential that you see in the company, and how could this influence Supernus future cash flows?
Yeah. This merger is extremely exciting for us. We hope shareholders on both sides are looking at it the same way. This is something that's going to truly enable the combined merged company to do a lot of things that otherwise neither company is going to be able to do on their own. Yes, as Supernus on our own, we could be and continue to be successful doing the things we've done for so many years and continue to build our portfolios and secure future growth through R&D and M&A. It will take us way more years to get it to the scale and the level that we will be able to do when we merge these two companies together. Similarly, on the Indivior side, it's a one product company, basically. They need the diversification.
Also, they need to do things, and they could be successful on their own, but combined with Supernus and the abilities and capabilities that we have at Supernus, create a fairly powerful, unique combination with resources, with very good cash flow generation, a nice clean balance sheet that allows us to do what we call the next step, the next thing. This merger is not about just creating the merger. It's about also what it will allow us to do next from a growth perspective and continue to build the company moving forward.
Should the transaction close in the fourth quarter, what are going to be some of the first things that you see as an organization doing?
We are still shooting for the fourth quarter, but the first most important thing is clearly looking at the current portfolio that we will have as a combined company, which will be a nice diversified portfolio of growth product. Of course, the leading product will be SUBLOCADE. Qelbree, ONAPGO, Zurzuvae, and also the elacridar recovery which continues to grow also. We will look at these products and make sure they are resourced well so that we can continue with the growth of this product and the investment behind them. Secondly, of course, we have the R&D capability at Supernus. We've had for a while. We have very exciting pipeline with couple assets in the phase II stage.
Also, we have a good discovery effort as well behind that. So we will look at the R&D effort, and we'll see what other resources we might be able to divert towards the R&D. Thirdly will be the continued M&A opportunities that I just mentioned. Clearly, again, with the merged company, we're going to have a much broader range of opportunities that we can look at, that otherwise each one of them can't look at on our own. And certainly as a company that will generate significant cash and so forth, we always look at different strategies. How can we maximize the return for our shareholders? If at some point we run out of ideas in growing the company or what have you, is a share buyback an idea?
Yes, of course, we could look at every other potential avenue here of returning capital to our shareholders if that is something makes sense.
Yeah.
It's our job to look at all the potential options out there.
Speaking of the pipeline for SPN-820 in depression, could you just walk us through the rationale behind the intermittent dosing strategy and why you believe this could be more successful here?
Yeah. On 820, which is for depression, going back a little bit when we first got that molecule, the innovator had done a phase I-B study where they studied 2,400 mg as a single dose, and they dosed it only once, and they read the results on MADRS, HAMD-6, 72 hours later. That gave us some idea that potentially you may not need to dose this drug every single day.
Because of the mTORC1 activation and the mechanism of action of this drug. When we took over the program, we did the SAD and MAD study. We did extensive work on the dose levels, the PK/PD, a lot of work on the CNS fluid concentrations, the drug penetration to the CNS system, and the biomarkers. We came to the conclusion that actually the dosing should be somewhere probably between 1,600 mg and 2,400 mg. We started a phase II-B study at that time, which was in TRD of 1,600 mg every single dose, every single day.
But we always had that question in the back of our mind: Do we really need to do it every single day? Of course, that's why you do these phase I and phase II studies.
Right.
You're still learning about the mechanism. This is a completely novel mechanism. So in parallel, we started a second study at that time, which is an open-label study, where we did 2,400 mg intermittent dosing every three days to mimic what was done initially at the phase I-B stage. And sure enough, the open label, of course, reads way before the phase II-B read, which is blinded. The open-label study was remarkable as far as the data. Now, it was open label, so obviously with that main caveat. It is open label, it is an MDD. Nevertheless, all the endpoints, all the things that we measured pointed in the right direction that we have some activity here, something is happening clearly. It's not like a fluke that it just happened, and there is something about the intermittent dosing.
As time went on, more and more bio-evidence from a data perspective has emerged. Things like the psychedelics, the ketamines, and so forth, that not every CNS target actually needs to be engaged every single day to get the maximum benefit. We believe the mTORC1 modulation, which SPN-820 is about, which works intracellularly, not extracellularly on certain receptors, is that kind of mechanism that you have to hit the mTOR, but you need to give it a couple days to reset and get the benefit of that dose. That's why we started a new study earlier this year, a new phase II-B study, placebo-controlled, which does study the 2,400 mg intermittent dosing against placebo in MDD. That's the study that is going on right now.
Because the 1,600 mg every single day didn't end up separating from placebo, so we came to the conclusion that it has to be the intermittent dosing, specifically related to the mechanism and how this drug actually work, that's going to give us the effect that we're looking for. If we are right, this product will be a game changer in this depression market. This is an oral drug that actually have shown us that it could work within hours, not weeks, within hours. It's an oral drug and doesn't have any of the hallucinations or effects that you see with psychedelics. You don't need the clinical supervision that you'll have to do with the psychedelics and so forth. So if our hypothesis actually proves to be correct, this could be a truly a game changer in the depression market.
Thank you for that. For the last two minutes or so, if you could just quickly talk about the latest work going on at Supernus in building out the pipeline and some of the assets that you acquired through the M&A.
Yeah. Behind SPN-820, we have also SPN-817, which is a really very potent seizure medication that could have procognitive effects, and that's how it could differentiate it from other epilepsy drugs. We have several discovery platforms that we used to have a couple of them when we were Supernus, then we augmented those capabilities when we did the acquisition with Sage Therapeutics. Hopefully in the near future at some point, we will be unveiling a lot of these kind of programs and what's behind them. They are early at this point. We're trying to build some more data around some of these molecules. They're all innovative, new molecules, and new platforms.
Great. You did that in less than one minute. Thank you so much, Jack.
All right. Thank you.
Thanks, everyone.