Q2 2022 Supernus Pharmaceuticals Inc Earnings Call
Operator: Good afternoon and welcome to Supernus Pharmaceuticals' second quarter 2022 financial results conference call.
Good afternoon, and welcome to <unk> Pharmaceuticals, second quarter 2022 financial results Conference call.
Operator: At this time, all participants are in a listen-only mode, and later we will conduct a question and answer session.
At this time all participants are in a listen only mode and later, we will conduct a question and answer session to ask a question. During the session you will need to press star one one on your telephone you will then hear an automated message advising your hand as.
Operator: To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised.
Operator: As a reminder, this conference call is being recorded.
As a reminder, this conference call is being recorded I would now like to turn the conference over to Peter Basso of ICR Westwick Investor Relations representative.
Operator: I would now like to turn the conference over to Peter Vozzo of ICR Westwick, Investor Relations Representative for Supernus Pharmaceuticals.
Pharmaceuticals, you may begin.
Peter Vozzo: You may begin.
Thank you Jason Good afternoon, everyone and thank you for joining us today for <unk> Pharmaceuticals second quarter 2022 financial results conference call today. After the close of market. The company issued a press release announcing these results on the call with me today are <unk>, Chief Executive Officer, Jackatar, and Chief Financial Officer, Tim Dec.
Peter Vozzo: Thank you, Jason.
Peter Vozzo: Good afternoon, everyone, and thank you for joining us today for Supernus Pharmaceuticals' second quarter 2022 financial results conference call. Today, after the close of the market, the company issued a press release announcing these results.
Peter Vozzo: On the call with me today are Supernus' Chief Executive Officer, Jack Khattar, and Chief Financial Officer, Tim Dec. Today's call is being made available via the Investor Relations section of the company's website at ir.supernus.com.
Today's call is being made available via the Investor Relations section of the company's website at IR <unk> Dot com following remarks by management, we will open the call to questions. During the course of this call management may make certain forward looking statements regarding future events and the company's future performance. These forward looking statements refer.
Peter Vozzo: Following remarks by management, we will open the call to questions.
Peter Vozzo: During the course of this call, management may make certain forward-looking statements regarding future events and the company's future performance. These forward-looking statements reflect Supernus' current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the risk factors section of the company's latest SEC filings. Actual results may differ materially from those projected in these forward-looking statements.
<unk> current perspective on existing trends and information any such forward looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the risk factors section of the company's latest SEC filings actual results may differ materially from those projected in these forward looking statements for the benefit of those who may be less.
Peter Vozzo: For the benefit of those who may be listening to the replay, this call is being held and recorded on August 4, 2022.
Turning to the replay this call is being held and recorded on August 4th 2022. Since then the company may have made additional announcements related to the topics discussed. Please reference the company's most recent press releases and current filings with the SEC.
Peter Vozzo: Since then, the company may have made additional announcements related to the topics discussed.
Peter Vozzo: Please reference the company's most recent press releases and current filings with the SEC. Supernus declines any obligation to update these forward-looking statements except as required by applicable securities laws.
<unk> declines any obligation to update these forward looking statements, except as required by applicable securities laws.
Jack Khattar: I will now turn the call over to Jack.
Now ill turn the call over to Jack.
Jack Khattar: Thank you, Peter.
Thank you Peter good afternoon, everyone and thanks for taking the time to join US as we discuss our 2022 second quarter results.
Jack Khattar: Good afternoon, everyone, and thanks for taking the time to join us as we discuss our 2022 second quarter results. During the first half of 2022, we continued to execute on our long-term growth strategy, focusing on successfully transitioning from our legacy and mature products to our growth products.
During the first half of 2022, we continue to execute on our long term growth strategy focusing on successfully transitioning from our legacy in mature products our growth products.
Jack Khattar: For the first half of this year, total revenues were $322.6 million, representing an 18 percent increase over the same period last year, and adjusted non-GAAP operating earnings were $65.7 million, a 5 percent increase over the first half of last year, reflecting continued significant investment in CalBRE and its launch activities. Regarding CalBRE, we received approval for adult ADHD in April 2022. We launched the product in late May, expanding the market opportunity for CalBRE into the largest segment of the ADHD market.
For the first half of this year total revenues were $322 $6 million, representing an 18% increase over the same period last year.
And adjusted non-GAAP operating earnings were $65 7 million, a 5% increase over the first half of last year, reflecting continued significant investment in Calgary and its launch activities.
Regarding Calgary, we received approval for adult ADHD in April 2022.
We launched the product in late May expanding the market opportunity for Calgary into the largest segment of the ADHD market.
Jack Khattar: CalBRE represents true innovation in the adult market as the first novel non-stimulant to be introduced in 20 years.
Category represents true innovation in the adult market as the first novel non stimulant to be introduced in 20 years.
Jack Khattar: As mentioned previously, according to IQVIA exponent 52-week data, the adult market represents approximately 68 percent of the total market's prescription. The adult segment has been growing at a faster rate than the pediatric market and tends to, be less seasonal.
As mentioned previously according to IQ via exponents 52 week data.
Both market represents approximately 68% of the total markets prescriptions adult segment has been growing at a faster rate than the pediatric market and tends to be less seasonal.
Jack Khattar: Calvary's launch continues to progress well with increased momentum in prescription growth, and shipments. During the second quarter of 2022, total IQVIA prescriptions for Calvary reached 62,938, representing an increase of 33% compared to the first quarter of 2022. Prescriptions in the most recent month of June reached 23,403, the highest monthly total, since the launch of the product. Calvary continues to expand its base of prescribers with over 9,276 prescribers in the second, quarter of 2022, up from 6,900 prescribers in the first quarter of 2022. The product is supported by a sales force of approximately 195 sales representatives, calling on pediatricians, child and adult psychiatrists.
Calgary launch continues to progress well with increased momentum and prescription growth in shipments during the second quarter of 2022 called IQ via prescriptions for Calgary reached 62, 1938, representing an increase of 33% compared to the first quarter of 2022.
Sure.
Prescriptions in their most recent month of June reached 23400, <unk> the highest monthly total since the launch of the product.
Category continues to expand its base of prescribers with over 9276 prescribers in the second quarter of 2022 up from 6900 prescribers in the first quarter of 2022.
The product is supported by our sales force of approximately 195 sales representatives, calling on pediatricians.
Charles and adult psychiatrist.
Jack Khattar: The company will be increasing its commercial spend in the third quarter of this year as, Calvary builds more momentum behind the adult launch and our preparation for the upcoming back-to-school season.
The company would be increasing its commercial spend in the third quarter of this year as scale rebuilds more momentum behind the adult launch and our preparation for the upcoming back to school season.
Jack Khattar: Following recovery, the product delivered another quarter of solid growth with net sales, reaching $24.7 million in the second quarter of 2022, representing a 23% increase compared to the $20.1 million reported by Adamus in the second quarter in 2021.
Regarding the recovery the product delivered another quarter of solid growth with net sales, reaching $24 7 million in the second quarter of 2022, representing a 23% increase compared to the $21 million reported by <unk> in the second quarter and 2021.
Also total prescriptions reached 10929 in the second quarter of 2022 growing by approximately 16% over the same period last year.
Jack Khattar: Also total prescriptions reached 10,929 in the second quarter of 2022, growing by approximately, 16% over the same period last year.
Moving on to the pipeline, we continue to work closely with the FDA as it reviews, the new drug application for SPN 830 hour infusion device for the continuous treatment of motor fluctuations in Parkinson's disease.
Jack Khattar: Moving on to the pipeline, we continue to work closely with the FDA as it reviews the, new drug application for SPN 830, our infusion device for the continuous treatment of motor fluctuations and Parkinson's disease.
Jack Khattar: The company is preparing for the commercial launch of SPN 830 in the first quarter of, 2023, assuming timely approval by the FDA. The PDUFA target action date for SPN 830 is in early October of this year.
The company is preparing for the commercial launch of SPN 830 in the first quarter of 2023, assuming timely approval by the FDA.
<unk> target action date for SPN 830 is in early October of this year.
Jack Khattar: For SPN 820, our first-in-class orally active mTORC1 activator, we continue to enroll patients, in a phase two multicenter randomized double-blind placebo control study in adults with treatment-resistant depression. The study will examine the efficacy and safety of SPN 820 over the course of five weeks of, treatment in approximately 270 patients. The primary outcome measure is a change from baseline to end-of-treatment period on the, Montgomery Asperg Depression Rating Scale total score, a standard depression rating scale.
For SPN eight 'twenty, our first in class orally active <unk> activator, we continue to enroll patients in a phase III multicenter randomized double blind placebo controlled study in adults with treatment resistant depression study will examine the efficacy and safety of SPN 820 over the course of five.
Weeks of treatment and approximately 270 patients.
The primary outcome measure is the change from baseline to end of treatment period on the Montgomery <unk> Depression rating scale total score.
Standard depression rating scale.
Jack Khattar: We are on track to initiate an open-label phase two clinical study with SPN 817 in the, fourth quarter of this year in patients with treatment-resistant seizures. SPN 817 represents a novel mechanism of action for an anticonvulsant and utilizes synthetic, form of buprazine A, which is a potent acetylcholinesterase inhibitor with pharmacological activities in CNS conditions such as epilepsy.
We are on track to initiate an open label Phase II clinical study with SPN 807 in the fourth quarter of this year in patients with treatment resistance seizures.
SPN 807 represents a novel mechanism of action for an anti <unk> on the Ballston and utilizes synthetic form of <unk>, which is a potent <unk> inhibitor with pharmacological activities in CNS conditions, such as epilepsy.
Jack Khattar: Acceler-XR continues to perform well, delivering a strong quarter with net product sales of, $30 million, a 20% increase compared to the same period last year, while net product sales of Trukendi-XR were approximately $72 million, down from $79 million last year.
<unk> XR continues to perform well delivering a strong quarter with net product sales of $30 million, a 20% increase compared to the same period last year, while net product sales of Trokendi XR was approximately $72 million down from $79 million last year.
Jack Khattar: On Apekin, the company continues to monitor the situation surrounding the approved generic, cartridge and to date has not seen a meaningful impact on our business.
On APAC and the company continues to monitor the situation surrounding the approved generic quarters and to date has not seen a meaningful impact on our business.
Jack Khattar: Finally, we continue to be active in corporate development, looking for strategic opportunities, to further strengthen our future growth and leadership position in CNS.
We continue to be active in corporate development looking for strategic opportunities to further strengthen our future growth and leadership position in CNS.
Jack Khattar: With that, I will now turn the call over to Tim.
With that I will now turn the call over for them.
Timothy Dec: Thank you, Jack.
Thank you Jack good afternoon, everyone.
Timothy Dec: Good afternoon, everyone.
Timothy Dec: As I review our second quarter 2022 results, please refer to today's press release.
As I review, our second quarter 2022 results. Please refer to today's press release.
Total revenue for the second quarter, 2022 was $170 1 million, a 20% increase compared to $141 3 million in the same quarter last year.
Timothy Dec: Total revenue for the second quarter of 2022 was $170.1 million, a 20% increase compared, to $141.3 million in the same quarter last year. Total revenue in the second quarter of 2022 was comprised of net product sales of $165.5, million and royalty revenue of $4.6 million. The increase was primarily due to net product sales of GoCovery from the acquisition of, Adonis in November 2021 and growth in net product sales of Kelbree and Oxteller XR.
Total revenue in the second quarter of 2022 was comprised of net product sales of $165 5 million and royalty revenue of $4 6 million.
The increase was primarily due to net product sales of co coverage from the acquisition of <unk> in November 2021, and growth from net product sales of Calvary stellar XR.
Timothy Dec: For the second quarter of 2022, combined R&D and SG&A expenses were $116.9 million as compared, to $85 million for the same period in 2021. The increase in expense is due to activities to support the launch of Kelbree and costs, to support GoCovery.
For the second quarter of 2022, combined R&D and SG&A expenses were $116 9 million as compared to $85 million for the same period in 2021.
The increase in expenses due to activities to support the launch of Calgary.
To support co Capri.
Amortization of intangible assets for the second quarter of 2022 or.
Timothy Dec: The increase in the amount of intangible assets for the second quarter of 2022 were $20.6, million compared to $6 million for the first same period in 2021. The increase is due to the Adonis acquisition.
There were $26 million compared to $6 million for the same period in 2021.
The increase is due to the <unk> acquisition.
Timothy Dec: Operating earnings on a gap basis for the second quarter of 2022 were $11.3 million, as compared to $34.1 million for the same quarter in 2021. The decrease in gap operating earnings is primarily attributable to the aforementioned, amortization of intangibles associated with Adonis acquisition and higher expenses to support the launch of Kelbree as well as costs associated with GoCovery.
Operating earnings on a GAAP basis for the second quarter 2022 were $11 3 million as compared to $34 1 million for the same quarter in 2021.
The decrease in GAAP operating earnings is primarily attributable to the aforementioned amortization of intangibles associated with the <unk> acquisition and higher expenses to support the launch of Calgary as well as costs associated with <unk>.
Timothy Dec: On a non-gap basis, which excludes amortization of intangibles, share-based compensation, contingent consideration, and depreciation, adjusted operating earnings were $37.6 million compared to $37.4 million in the second quarter of 2021.
On a non-GAAP basis, which excludes amortization of intangibles and share based compensation contingent consideration and depreciation adjusted operating earnings were $37 6 million compared to $37 4 million in the second quarter of 2021.
Timothy Dec: As I mentioned on a previous call, the company adopted a new accounting standard related, to the treatment of convertible debt instruments in January of this year using the modified retrospective approach. The company is now required to use the if-converted method for the convertible debt. Based on this new standard, there is now approximately $6.8 million additional shares in the diluted, EPS calculation.
As I mentioned on our previous call. The company adopted a new accounting standard related to the treatment of convertible debt instruments in January of this year using the modified retrospective approach the.
The company is now required to use the if converted method for the convertible debt.
Based on this new standard terrorism now approximately $6 8 million additional shares in the diluted EPS calculation.
Timothy Dec: The gap net earnings were $7.9 million for the second quarter of 2022 or $0.14 per diluted, share compared to $23.7 million or $0.43 per diluted share in the same period last Last year, total revenue for the six months ended June 30, 2022, was $322.6 million, an, 18% increase compared to $272.3 million in the same period last year. Total revenue was comprised of net product sales of $313 million and royalty revenue, of $9.6 million.
GAAP net earnings or.
Were $7 9 million for the second quarter of 2022, or <unk> 14 per diluted share compared to $23 7 million or <unk> 43 per diluted share in the same period last year.
Total revenue for the six months ended June 32022 was $322 6 million, an 18% increase compared to $272 3 million in the same period last year.
Total revenue was comprised of net product sales of $313 million and royalty revenue of $9 6 million.
Timothy Dec: This increase was primarily due to net product sales of GoCover from the acquisition of Adamus, in November of 2021, and growth in net product sales of Crowdley and Expeller XR, all set in part by a decline in net product sales of Trukindi XR and Apikin.
This increase was primarily due to net product sales of Coke covered from the acquisition of the Donaldson November of 2021 and growth in net product sales of <unk>, Alex stellar XR offset in part by a decline in net product sales of Trokendi XR and <unk>.
Timothy Dec: For the six months ended June 30, 2022, combined R&D and SG&A expenses were $228.2 million, as compared to $180.7 million for the same period in 2021. The increase in expenses is primarily due to the activity support to launch of Calgary, and cost to support GoCover.
For the six months ended June 32022, combined R&D and SG&A expenses were $228 2 million as compared to $180 7 million for the same period in 2021.
The increase in expenses is primarily due to the activity to support the launch of Calgary and cost to support co company.
Amortization of intangible assets for the first six months of June 32022 was $41 3 million compared to $12 million for the same period in 2021.
Timothy Dec: Amortization of intangible assets for the first six months of June 30, 2022, was $41.3, million compared to $12 million for the same period in 2021. Again, the increase is due to the Adamus acquisition.
Again, the increase is due to the <unk> acquisition.
Timothy Dec: Operating earnings on a gap basis for the first six months ended June 30, 2022, was, $13.3 million as compared to $47.3 million for the same period in 2021. The decrease in gap operating earnings is primarily attributable to the aforementioned, amortization of intangibles associated with the Adamus acquisition, higher expenses to support the Calgary launch, as well as costs associated with GoCover.
Operating earnings on a GAAP basis for the first six months ended June 32022 was $13 3 million as compared to $47 3 million for the same period in 2021.
The decrease in GAAP operating earnings was primarily attributable to the aforementioned amortization of intangibles associated with the Diamond acquisition higher expenses to support the <unk> launch as well as costs associated with co company.
Timothy Dec: Other income expense for the first six months ended June 30, 2022, was $12.7 million of, income as compared to $5.2 million of expense in the first six months of 2021. This change, as discussed on our prior call, was primarily due to a $12.9 million gain, recognized on our share of a distribution from the sale of a subsidiary of Navator.
Other income expense for the first six months ended June 32022 was $12.
$7 million of income as compared to $5 2 million of expense in the first six months of 2021.
This change as discussed on our prior call was primarily due to a $12 $9 million gain recognized on our share of distribution from the sale of a subsidiary of NAFTA.
Timothy Dec: Income tax for the first six months ended December 30, 2022, was a tax benefit of $7.4, million as compared to income tax expense of $12.7 million for the same period in 2021. Again, as discussed on our last call, this benefit was due to a corporate reorganization, of the Adamus entities in Q1 of this year that impacted certain state apportionment factors, which resulted in a favorable income tax of approximately $16 million on a non-gap basis, which excludes amortization of intangibles, share-based compensation, contingent consider, and appreciation.
Income tax for the first six months ended December 32022 was a tax benefit of $7 4 million as compared to income tax expense of $12 7 million for the same period in 2021.
Again as discussed on our last call. This benefit was due to our corporate reorganization of the <unk> entities in Q1 of this year that impacted certain state apportionment factors, which resulted in a favorable impact on income.
Income tax of approximately $16 million.
On a net on a non-GAAP basis, which excludes amortization of intangibles share based compensation contingent consider an appreciation adjusted operating earnings were $65 7 million compared to $62 7 million in the same period of 2020.
Timothy Dec: Adjusted operating earnings were $65.7 million compared to $62.7 million in the same period of 2021.
Timothy Dec: Gap net earnings was $33.5 million for the first six months ended June 30, 2022, or $0.57 per diluted share compared to $29.4 million or $0.54 per diluted share in the same period last year. As of June 30, 2022, the company had approximately $508.2 million in cash, cash equivalents, and marketable securities compared to $458.8 million as of, December 30, 2021. The increase is primarily due to cash generated from operations.
GAAP net earnings was $33 5 million for the first six months ended June 32022, or <unk> 57 per diluted share compared to $29 4 million or <unk> 54 per diluted share in the same period last year.
As of June 32022, the company had approximately $508 2 million in cash cash equivalents and marketable securities compared to $458 8 million as of December 30, <unk> 2021. The increase is primarily due to cash generated from operations.
Timothy Dec: For the full year 2022, the company reiterates its prior financial guidance for total revenue, combined R&D and SG&A expenses, and GAAP and non-GAAP operating earnings. As such, we expect total revenues to range from $640 million to $680 million, comprised of net product sales and royalty revenue. For the full year 2022, we expect combined R&D and SG&A expenses to range from $460 million to $490 million. This range includes the significant increase in marketing spend in the third quarter that Jack mentioned that relates to the continued support of Calgary and its launch in the adult market.
For the full year 2022, the company, we reiterate its prior financial guidance for total revenue combined R&D and SG&A expenses, and GAAP and non-GAAP operating earnings.
As such we expect total revenues to range from 640 million to $680 million comprised of net product sales and royalty revenue.
For the full year 2022, we expect combined R&D and SG&A expenses to range from $460 million to $490 million.
This range includes the significant increase in marketing spend in the third quarter that Jack mentioned that relates to the continued support of calories and its launch and the adult market.
Timothy Dec: Overall, we expect full year 2022 GAAP operating earnings to range from $20 million to $40 million, and non-GAAP operating, earnings to range from $130 million to $165 million.
Overall, we expect full year 2022, GAAP operating earnings to range from $20 million to $40 million and non-GAAP operating earnings to range from $130 million to $165 million.
Timothy Dec: With that, I will now turn the call
With that I will now turn the call over to the operator for Q&A.
Timothy Dec: over to the operator for Q&A.
Thank you Tim.
At this time, we will conduct a question and answer session. As a reminder to everybody to ask a question you will need to press star one one on your telephone and wait for your name to be announced please stand by while we can pile the Q&A roster.
Operator: Thank you, Tim.
Operator: At this time, we will conduct the question and answer session.
Operator: As a reminder to everybody, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced.
Our first question comes from David <unk> and Salon.
Operator: Please
Sandler Your line is now open.
Hey, Thanks, just had a couple so first on calibration can you just talk about the gross to net and specifically how we should think about.
Operator: stand by while we compile the Q&A roster.
Operator: Our first question comes from David Amsalom of Hyper Sandler.
The extent to which the gross to net may moderate as the year progresses and.
David Amsellem: Your line is now open.
And related to that.
Talk about contracting activity even.
Where things stand.
With the Big Pbms.
David Amsellem: Hey, thanks.
That's the first question and then.
The second question is on Trokendi.
I know it might be a little bit early to talk about.
David Amsellem: So, just had a couple.
The market dynamics are still kind of fluid here in terms of generic presence can you talk about how youre thinking about erosion of trokendi.
Upon generic market formation early next year.
And what are your latest expectations.
For competitive dynamics there. Thank you.
David Amsellem: So, first on Calgary, can you just talk about the growth to net and specifically how we should think about the extent to which the growth to net may moderate as the year progresses?
Yes, So let me take the first one regarding <unk> and the gross to net.
You may recall or most of the folks might recall and about a quarter ago. We said by the time, we launched the evolve we would have we would like to be somewhere in the $50 to 55% gross to net.
And actually we are not too far off we are a little bit more in the very low 60, so to speak at this point and that is due to the fact, we haven't been able to finalize negotiations on one of the key contracts as far as the Pbms are concerned.
David Amsellem: And related to that, talk about contracting activities and just where things stand with the big PBMs.
We're getting closer negotiation wise, so ultimately regarding your question as to how we see it progressing through the rest of the year I mean, certainly.
We would shoot forward in part given what we're trying to target is somewhere in the $50 to 55.
Could be.
Next quarter or definitely by the end of the fourth quarter, So which would be our targets on an ongoing basis. If you remember I mean, that's really where we see this going on an ongoing basis for Calgary.
Sure.
As far as the contracting activity as I mentioned I mean, the other big Pbms, we continue our negotiations with them and I think we're getting into potentially a more reasonable domain here or we can actually have a meaningful discussion before that.
Our position is very very far apart. So we're making progress it is slower than we would like it to be but nevertheless, our position.
As far as how we approach of the business and how we build it does not really changed much.
We would rather help our patients to get access to our medications through co pays and patient assistant program.
Then just paying exorbitant rebates, so that really don't add much value to be honest with you. So.
That's our position and we have continued to grow the business and we're very very pleased with the growth in the prescriptions and so forth and we have no problem at all continue to fund the business, so that way and help our patients.
And in the end really show everybody that this is a product that's going to be heavily utilized there is a major need in the markets, where our product is unique us calibrate.
On Trokendi XR.
You said it right.
It's one of the difficult questions, obviously that as time goes on as to how we formulate toward next year and what kind of how do we model at this point, we've been always looking for next year.
Guided folks mostly look at the 90% of our Oregon over 12 months and which is your typical type of erosion for a product like this that is heavily retail mass market so to speak like migraine.
Brand loyalty it doesn't tend to be sticky so to speak or very high from that perspective. Unlike other potential areas of neurology, where there might be a little bit more higher brand loyalty.
So therefore, we would like people to look at that as more of like a base case scenario and then of course as time goes on and as we get closer to the January indefinitely. In February next year, when we talk about guidance and so forth hopefully will give people a much better color on it a little bit more clarity.
As we gain more competitive information on potentially the number of generics the timing of these genetics and more importantly, the number of skus that are going to be.
Penetrated by the genetics so.
So stay tuned for more and hopefully we can give more meaningful clarity as time goes on that.
David Amsellem: So, that is the first question.
Thank you David for your question.
Our next question comes from Ken Cacciatore from Cowen.
Your line is now okay. Thanks.
Thanks, so much Jack you've seen more product launches and then many pharma execs. So now that you've had a little bit of time with Calgary Youre understanding the where the pricing roughly its going to shake out in the coverage and the market opportunity and how it is.
Performing can you talk about what.
You think this could be this easily over half a billion dollar drug is the pathway here fairly clear in your mind is you've had this experience with it and then on the AP morphine pump I was wondering if you could help characterize the patient that this would be useful for maybe talk a little bit in comparing <unk>.
<unk> and maybe remind us of <unk> pricing is that something that you might be thinking about if were able to successfully get the pump on the market. Thanks. So much.
Sure.
Yes.
Guarding calibrate and.
What we've seen so far and also the different launches we've experienced over the years, even specifically in ADHD given our heritage in ADHD.
And given that we had been involved in products like Adderall, XR and in <unk> and <unk> and so many other products in this space.
Calibrate is truly a very unique product and it's proven to be that way through the feedback that we have been getting from the physicians and the patients about the product. This is not a threat data this is not.
Just another and norepinephrine reuptake inhibitor actually as I mentioned, many times and we continue to create more data actually showing that the mechanism of action of <unk> is very disciplined and <unk>. There are some similarity is whether it's really a different molecule that has a much higher activity on the sort of tone inside.
And so forth and Thats why probably its clinical profile as much.
Very different than <unk>.
Being a good anti depression for example, historically for people, who know about the molecule. So capably as truly unique as a novel non stimulant and it's starting to resonate with folks. We're extremely excited about the upswing that we are starting to see a meaningful increase in the June monthly prescription and we were up to 20%.
<unk> thousand prescriptions in the month of June .
We are really building significant momentum into the back to school season, which will be upon us very very soon.
All of that together with the adult launch as well as our direct to consumer campaign, which will intensify in the third quarter and Thats why our commercial spend is going to be.
Fairly significant in the third quarter. So we're really giving every shot every possible opportunity here for the product to be as big as we think so how big will the product be to your question. I mean this is a huge market one of the interestingly good news about the market, it's been growing at a much faster rate than we expected even way.
<unk> planning for the launch of calibrate so the ADHD market has been growing much faster than we felt a lot of activity in the market.
Even if you take a penetration of 5% to 10% market share.
Close to that $1 billion opportunity.
Assuming something like 175 to 200 or 250 net price.
Math is fairly straightforward as to how big this product can be so what makes us believe that we can get somewhere between five and 10% well historically.
So that that I was at around 7% market share. It was as high as 19 at some point, but it's stabilized ended up at an equilibrium of about 67% market share in <unk> and the 4% to 6% given the profile of Calgary and the feedback we're getting we believe we should be able to do definitely something like this or not.
Even higher than that and therefore, we think these are reasonable expectations behind the product for a product like this and.
And that's why you do see us very committed to the product. We're all in on it as far as investment is concerned and the launch of the product in both pediatric and adult.
Sure.
Regarding the second product on the pump and the infusion device for April morphine.
This product and of course, it's going to heavily depend on where we end up with a label as the FDA continues to review.
The NDA.
But certainly there is a very big gap in the marketplace here for.
More advanced patients in Parkinson's, who do get several of episodes during the day.
And they are not satisfied with a lot of the current products on the marketplace and therefore, they could really use a lot of help with a continuous infusion of April morphine throughout the day to help them and managing these episodes before they resort to a last.
<unk>, basically which is innovation of surgery or whether its deep brain stimulation.
Or even the whopper type of product, which is also fairly invasive as well so.
So from that perspective, we see our product occupying a space between.
Before the deep brain stimulation right before these invasive procedures.
For patients, who will have a little bit more advanced Parkinson's and could really benefit from a drug which is really a very good drug April morphine on a continuous and a subcutaneous pump.
Pricing.
From a pricing perspective, all I can tell you is what the whopper as I mean, the oil price in the 80 to 90000.
Annual cost per patient.
We havent formalized and finalize our pricing strategy, yet and so forth. So thats something we will refrain from making a comment on but that's where the work is.
And it has been.
Okay.
Thank you Ken for your question at this time there are no further questions. So I would like to turn it back now to Jack for closing remarks.
Thank you and concluding our call. This afternoon I would like to emphasize that calibrates and recoveries growth are our top priority. We are excited about calories increased momentum behind the adult launch and the preparation for the upcoming back to school season.
Similarly, we are pleased with the recoveries performance and continue to grow since the completion of their damaged integration.
And we look forward to building on that momentum for the remainder of the year I would like to thank our employees for delivering a solid quarter with record revenues force upon us and look forward to updating everyone through the second half of the year. Thank you.
Thank you for your participation in today's conference. This does conclude the program and you may now disconnect.
David Amsellem: The second question is on Trekendi.
The conference will begin shortly to raise your hand during Q&A you can dial one one.
David Amsellem: I know it might be, a little bit early to talk about it, but the market dynamics are still kind of fluid here in terms of generic presence.
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David Amsellem: Can you talk about how you are thinking about erosion of Trekendi upon generic market formation early next year?
Yes.
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David Amsellem: And what are your latest expectations for competitive dynamics there?
David Amsellem: Thank you.
Jack Khattar: Yeah, sure.
Jack Khattar: Sure.
Jack Khattar: Let me take the first one regarding Calgary and the growth to net.
Jack Khattar: Yeah, I mean, regarding Calbry and what we've seen so far, and also the different, launches we've experienced over the years, even specifically in ADHD, given our heritage in ADHD, and given that we had been involved in products like Aerolex R and Intunev and and so many other products in the space, Calbry is truly a very unique product, and it's proven to be that way through the feedback that we have been getting from the physicians and the patients about the product.
Jack Khattar: You may recall, or most of the folks might recall, when about a quarter ago, we said by the time we launched the adult, we would like to be somewhere in the 50 to 55% growth to net. And actually, we're not too far off.
Jack Khattar: This is not a stratera, this is not a just another epinephrine reuptake inhibitor.
Jack Khattar: We are a little bit more in the very low 60, so to speak, at this point.
Jack Khattar: Actually, as I mentioned many times, and we continue to create more data actually showing that the mechanism of action of Veloxacine is very different than Atomoxetine.
Jack Khattar: And that is due to the fact we haven't been able to finalize negotiations on one of the key, you know, contracts as far as the PBMs are concerned.
Jack Khattar: There are some similarities, but it's really a different molecule that, has a much higher activity on the serotonin side and so forth.
Jack Khattar: We're getting closer negotiation-wise.
Jack Khattar: And that's why probably its clinical profile is very different than Atomoxetine in being a good antidepressant, for example, historically, for people who know about the molecule.
Jack Khattar: So, ultimately, regarding your question as to how we see it progressing through the rest of the year, I mean, certainly, we would shoot for and target and what we're trying to target is somewhere in the 50 to 55, you know, could be, you know, next quarter, or definitely by the end of the fourth quarter.
Jack Khattar: So Calbry is truly unique as a novel non-stimulant, and it's starting to resonate with folks.
Jack Khattar: So, which would be our target on an ongoing basis.
Jack Khattar: We're extremely excited about the upswing that we're starting to see a meaningful, you know, increase in the June monthly prescriptions, and we were up to 23,000 prescriptions in the month of June, and we're really building significant momentum into the back-to-school season, which, you know, will be upon us very, very soon.
Jack Khattar: If you remember, I mean, that's really where we see this going on an ongoing basis for Calgary.
Jack Khattar: All that together with the adult launch as well as our direct-to-consumer campaign, which will intensify in the third quarter, and that's why our commercial spend is going to be fairly significant in the third quarter.
Jack Khattar: As far as the contracting activities I mentioned, the other big PBM, we continue our negotiations, with them and I think we're getting to potentially a more reasonable domain here where we can actually have a meaningful discussion.
Jack Khattar: So we're really giving every shot, every possible opportunity here for the product to be as big as we think.
Jack Khattar: Before that, our positions were very, very far apart, so we're making progress. It is slower than we would like it to be, but nevertheless, our position as far as how, we approach the business and how we build it does not really change much.
Jack Khattar: So how big will the product be, to your question?
Jack Khattar: We would rather help our patients get access to our medications through co-pays and patient, assistance program than just paying exorbitant rebates that really don't add much value to be honest with you.
Jack Khattar: I mean, this is a huge market. One of the, interestingly good news about the market, it's been growing at a much faster rate than we expected, even way back, planning for the launch of Calbry.
Jack Khattar: So that's our position and we continue to grow the business and we're very, very pleased, with the growth in the prescriptions and so forth and we have no problem at all continue to fund the business that way and help our patients and in the end really show everybody that this is a product that's going to be heavily utilized.
Jack Khattar: So the ADHD market has been growing much faster than we thought, a lot of activity in the market, and even if you take a penetration of 5 to 10 percent market share, you know, that's close to the billion-dollar opportunity. Assuming, you know, something like $175 to $200 or $250 net price, the math is fairly straightforward, you know, as to how big this product can be.
Jack Khattar: There is a major need in the market for a product as unique as Calgary.
Jack Khattar: So what makes us believe that we can get somewhere between 5 and 10 percent? Well, historically, Sretera was at around 7 percent market share. It was as high as 19 at some point, but it stabilized and ended up at an equilibrium of about 6-7 percent market share, in tune in the 4-6 percent.
Jack Khattar: On Trocandiaxor, you said it right, it's one of the difficult questions obviously as, time goes on as to how we formulate for next year and how do we model.
Jack Khattar: Given the profile of Calbry and the feedback we're getting, we believe we should be able, to do definitely something like this, if not even higher than that.
Jack Khattar: At this point, we've been always looking for next year and we've guided folks mostly, to look at a 90% erosion over 12 months, which is your typical type of erosion for a product like this that is heavily retail, mass market, so to speak, like migraine.
Jack Khattar: And therefore, we think these are reasonable expectations, you know, behind the product for a product like this.
Jack Khattar: Brand loyalty doesn't tend to be too sticky, so to speak, or very high from that perspective, unlike other potential areas in neurology where there might be a little bit more higher brand loyalty.
Jack Khattar: And that's why you do see us, you know, very committed to the product.
Jack Khattar: So, therefore, we would like people to look at that as more like a base case scenario, and then, of course, as time goes on and as we get closer to the January and definitely in February next year when we talk about guidance and so forth, hopefully we will give people much better color on it and a little bit more clarity as we gain more competitive information on potentially the number of generics, the timing of these generics, and more importantly, the number of SKUs that are going to be, you know, penetrated by the generics.
Okay.
Jack Khattar: We're all in on, it as far as investment is concerned and the launch of the product in both pediatric and adult.
Jack Khattar: So, stay tuned for more and hopefully we can give more meaningful clarity as time goes, on on that.
Sure.
Jack Khattar: Regarding the second product on the pump, you know, the infusion device for apomorphine, this product, and of course it's going to heavily depend on where we end up with the label as the FDA continues to review, you know, the NDA.
Jack Khattar: Thank you, David, for your question.
Yes.
Jack Khattar: But certainly there is a very big gap in the marketplace here for more advanced patients, and Parkinson's who do get several of episodes, you know, during the day.
Operator: Our next question comes from Ken Cacciatore from Cohen.
Okay.
Jack Khattar: And they're not satisfied with a lot of the current products on the marketplace.
Ken Cacciatore: Your line is now open.
Jack Khattar: And therefore, they could really use a lot of help with a continuous infusion of apomorphine, throughout the day to help them in managing these episodes before they resort to a last, you know, alternative basically, which is invasive surgery, whether it's deep brain stimulation, or even, you know, the Duopa type of product, which is also fairly, you know, invasive as well.
Okay.
Ken Cacciatore: Thanks.
Jack Khattar: So from that perspective, we see our product occupying a space between right before, you, know, the deep brain stimulation, right before these invasive procedures for patients who have a little bit more advanced Parkinson's and could really benefit from a drug, which is really a very good drug, apomorphine, on a continuous, in a subcutaneous, you know, pump.
Ken Cacciatore: Thanks so much.
Yes.
Jack Khattar: Pricing point, you know, from a pricing perspective, all I can tell you is what Duopa is. I mean, Duopa is in the 80 to 90,000, you know, annual cost per patient.
Ken Cacciatore: I've seen more product launches than many pharma execs, so now that you've had a little, bit of time with Kelbree, you're understanding where the pricing roughly is going to shake out in the coverage and the market opportunity and how it's performing.
Jack Khattar: You know, we haven't formalized and finalized our pricing strategy yet and so forth.
Ken Cacciatore: Can you talk about what you think this could be?
Okay.
Jack Khattar: So that's something we will refrain from making a comment on, but that's where Duopa is and, has been.
Ken Cacciatore: Is this easily over a half a billion dollar drug, is the pathway here fairly clear in, your mind as you've had this experience with it?
Jack Khattar: Thank you, Ken, for your question.
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Ken Cacciatore: And then, on the apomorphine pump, I was wondering if you could help characterize the, patient that this would be useful for.
Jack Khattar: At this time, there are no further questions, so I would like to turn it back now to Jack for closing remarks.
Ken Cacciatore: Maybe talk a little bit and compare and contrast to Duopa and maybe remind us of Duopa pricing.
Jack Khattar: Thank you.
Ken Cacciatore: Is that something that you might be thinking about if we're able to successfully get the, pump on the market?
Jack Khattar: In concluding our call this afternoon, I would like to emphasize that Calbree's and GoCalbree's, growth are our top priority.
Ken Cacciatore: Thanks so much.
Jack Khattar: We are excited about Calbree's increased momentum behind the adult launch and the preparation, for the upcoming back-to-school season.
Okay.
Jack Khattar: Similarly, we are pleased with GoCalbree's performance and continued growth since the, completion of the ADAMAS integration, and we look forward to building on that momentum for the remainder of the year.
Okay.
Jack Khattar: I would like to thank our employees for delivering a solid quarter with record revenues for Supernus, and look forward to updating everyone for the second half of the year.
Yes.
Jack Khattar: Thank you.
Yes.
Operator: Thank you for your participation in today's conference.
Okay.
Operator: This does conclude the program.
Sure.
Operator: You may now disconnect.
Okay.
Operator: The conference will begin shortly.
Operator: Copyright © 2021 Mooji Media Ltd. All Rights Reserved.
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Operator: No part of this recording may be reproduced, without Mooji Media Ltd.'s express consent.
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