Q3 2024 Supernus Pharmaceuticals Inc Earnings Call
Okay.
Speaker Change: Good afternoon, and welcome to separately promising third quarter because of the 24 financial results Conference call.
Speaker Change: This time, all participants are in listen only mode.
Later, we will conduct a question answer session and instructions will follow at that time as a reminder, this conference call is being recorded I would now like.
To turn the conference over to Peter Bartholow, ICR Investor Relations representative a separate each pharmaceuticals, you may begin.
Peter Bartholow: Thank you Martin good afternoon, everyone and thank you for joining us today for <unk> Pharmaceuticals third quarter 2024 financial results conference call today. After the close of the market. The company issued a press release announcing these results.
On the call with me today are Chief Executive Officer, Jackatar, Chief Financial Officer, Tim Dec.
Speaker Change: Calls being made available via the Investor Relations section of the company's website at IR <unk> com. During the course of this call management may make certain forward looking statements regarding future events.
Speaker Change: These future performance. These forward looking statements reflects <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.
Speaker Change: Actual results may differ materially from those projected in these forward looking statements for the benefit of those who may be listening to the replay. This call is being held and recorded on November four 2024.
Speaker Change: 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 the SEC so price declines any obligation to update these forward.
Except as required by applicable securities laws announcing comedy.
Speaker Change: Thank you Pedro good afternoon, everyone and thanks for taking the time to join us on today's call.
Speaker Change: The third quarter of 'twenty 'twenty, four and was characterized by strong performance from the company's key growth drivers Calgary Bukavu.
Significant operating earnings growth and advancement of our product pipeline.
Speaker Change: Although revenues, excluding Trokendi XR amongst others are increased 26% in the third.
Speaker Change: Sure.
Speaker Change: Driving this growth was cannabis and robust performance with 19% growth in prescriptions as reported by Ikea and 68% growth in net sales.
Speaker Change: <unk> reached another all time quarterly high of 194000, and net sales were 62 million, representing an approximate annualized run rate of $250 million.
Speaker Change: Gross to net deductions during the third quarter of this year, we're slightly below our revised target range of 45% to 50%, but within expectation based on fluctuations that you would typically expect on a quarterly basis.
Speaker Change: During the third quarter, we further expanded its base of prescribers by more than 2000 prescribers ending the quarter with approximately 30854 up from 28 326 in the second quarter of 'twenty what's important.
Speaker Change: For the back to school season, LG performed well with a prescription growth in September of 14% over June.
Speaker Change: Finally for the nine first nine months of this year with Ikea prescriptions grew by 25% compared to the same period last year outpacing ADHD market growth of 9% for the same period.
Speaker Change: Regarding the recovery the recovery from the first quarter continued with net sales increasing to $36 million in the third quarter of 'twenty 'twenty, four representing an 8% growth over the same period in <unk>.
Speaker Change: <unk>.
Speaker Change: Switching now to our legacy products ox validates our net sales for the third quarter of 2024 or $30 million essentially flat compared to the third quarter last year, and Portugal needs. Our third quarter net sales were $15 million down 26% from the same quarter of last year.
Speaker Change: For the first nine months of 2024 net sales of Trokendi XR were down 35%. We expect further erosion in Trokendi XR sales for the remainder of 'twenty and into 2020 five.
Speaker Change: The first generic oral selinexor.
Speaker Change: Market in early September of this year, resulting in a sequential decline in monthly prescriptions or 26% compared to August 24, we expect further erosion in the brand prescriptions in the fourth quarter given.
Speaker Change: Given the trends in the first nine months of 'twenty 'twenty, four and our expectations for Selinexor for the remainder of 'twenty 'twenty. Four we are raising the target combined net sales of Trokendi XR and I'll spell that we saw in 2024 to be approximately $155 million.
Speaker Change: Regarding SPN eight very in August 24, the FDA acknowledged the resubmission of our new drug application when it could do for date of February one 2025.
Speaker Change: We remain committed to Parkinson's patients, who need this new treatment option and assuming finally SBA approval look forward to launching the product in the first half of 2020 five.
Speaker Change: Moving on to our CNS pipeline of novel product candidates, we announced exciting data recently and we have several catalysts coming up in the near to mid term period.
Speaker Change: On SPN 820 in October we provided data from our exploratory open label Phase Iia study in adults with major depressive disorder.
Speaker Change: In this study <unk> demonstrated a rapid decrease in depression symptoms beginning within hours of the first dose as well as a substantial effect on depression symptoms observed into depression scales, Madras and empty sales.
Speaker Change: In addition, the data showed a substantial reduction of 80% and suicidal ideation and a well tolerated safety profile with few adverse events and a low discontinuation rate.
Speaker Change: The company expects to provide data from its phase two be double blind placebo controlled.
Speaker Change: Study of SPN eight wining in adults with treatment resistant depression in the first half of 2025.
Speaker Change: Enrollment of approximately 236 subjects is expected to complete in November of this year.
Speaker Change: Moving on to SPN 817, the company has been conducting an open label Phase Iia study in patients with treatment resistance seizures.
Speaker Change: In May 2024, the company announced data from a planned interim analysis from the initial stage of the study or stage.
Speaker Change: The company has now completed enrollment of stage, a and as a reporting topline data from all subjects with focal seizures.
Speaker Change: See the three milligram.
Speaker Change: Four milligram twice daily doses.
Speaker Change: We completed the maintenance period and enrolled in a post maintenance extension period.
Speaker Change: And the maintenance period, SPN 817, showing that 56% median seizure reduction from baseline with 70% of subjects, having 30% or more seed a reduction.
Speaker Change: And 60% of subjects, having 50% of seasonal reduction and 30% of subjects, having 75% or more seizure reduction.
Speaker Change: And then post maintenance expansion period.
Speaker Change: 817 showed a 66% median seizure reduction from baseline was 83% of subjects, having 30% or more cedar production, 67% of subjects, having 50% or more seasonal reduction and 50% of subjects having 75.
Speaker Change: Or more senior a reduction.
Speaker Change: Regarding Cedar Freedom, we saw in the maintenance period, one subject out of annual 10%, who completed a post baseline seizure diary at at least one four we see a free period.
Speaker Change: Similarly in the post maintenance expansion period, one out of six subjects with 17% at at least one four week season three period.
Speaker Change: Assessment by MP track and validated cognitive screening tool designed for patients with epilepsy, and negated that 75% of 16 subjects was equally split between those will improve and those would have no change in cognitive function.
Speaker Change: SPN 817 was safe and had acceptable tolerability with two subjects. The 26 subjects will enter the maintenance period discontinuing because of treatment related adverse events.
Speaker Change: Stage B of the Phase Iia study is ongoing and includes the concomitant use of <unk>.
Speaker Change: By MAA to reduce causing adverse events observed in this study.
Speaker Change: A phase II randomized double blind placebo controlled study in patients with treatment resistant focal seizures and is expected to start by the end of 'twenty before studying the three milligram and four milligram doses.
Speaker Change: Also the company initiated dosing in a phase one single dose study of SPM or three in healthy adults SPM or threes, our new product candidates for CNS disorders.
Speaker Change: Finally, we remain active in corporate developers looking for strategic opportunities to further strengthen our future overall leadership position in CNS with that I will now turn the call over to Dan.
Dan: Thank you Jack good afternoon, everyone.
Dan: As I review, our third quarter 2024 results. Please refer to today's press release and 10-Q.
Speaker Change: Were filed earlier today.
Dan: Total revenue for the third quarter of 2024 was 170, $175 7 million compared to $153 9 million in the same quarter last year.
Speaker Change: Total revenue in the third quarter of 2024 was comprised of net product sales of $170 3 million and royalty and other revenues of $5 4 million.
Speaker Change: The increase in net product sales was primarily due to the increase in net product sales from our growth products Calgary annual cap.
Speaker Change: Excluding net product sales for Trokendi XR <unk> XR total revenues for the third quarter of 2024 increased 26% compared to the same quarter last year.
Speaker Change: For the third quarter of 2020 for combined R&D and SG&A expenses were $98 8 million as compared to $105 4 million for the same quarter last year.
Speaker Change: The slight decrease was primarily due to an insurance recovery for certain legal costs offset by increased R&D expense associated with the clinical programs for SPN 817, and is being in 'twenty as we continue to progress our pipeline.
Speaker Change: Operating earnings on a GAAP basis for the third quarter 2024 were $40 9 million as compared to $8 1 million for the same quarter last year.
Speaker Change: This is a $32 8 million increase in operating earnings compared to the same quarter last year.
Speaker Change: Triggered primarily by an increase in net product sales, but also by a decrease in cost of goods sold and the aforementioned decrease in SG&A.
Speaker Change: GAAP net earnings were $38 5 million for the third quarter of 2024, or <unk> 69 per diluted share.
Speaker Change: Compared to GAAP net loss of $16 million or 29 cents loss per diluted share in the same quarter last year.
Speaker Change: On a non-GAAP basis, which excludes amortization of intangibles and share based compensation contingent consideration and depreciation.
Speaker Change: Adjusted operating earnings for the third quarter of 2024 were $67 7 million compared with $37 3 million in the same quarter of last year.
Speaker Change: This represents a $34 million increase.
Speaker Change: Total revenue for the nine months ended September 32024, or $487 7 million compared to $443 2 million in the same period last year.
Speaker Change: Total revenues were comprised of net product sales of $471 3 million in royalties licensing and other revenues of $16 4 million.
Speaker Change: 13% increase in net product sales was primarily due to the increase in net product sales of our growth products Calgary and go country.
Speaker Change: Excluding net product sales for Trokendi, XR and accelerates our total revenues for the nine months ended September 32024 increased 23% compared to the same period last year.
Speaker Change: Combined R&D and SG&A expenses for the nine months ended September 32024 were $322 3 million as compared to $323 3 million for the same period last year.
Speaker Change: Operating earnings on a GAAP basis for the nine months ended September 32024, or $63 million as compared to an operating loss of $4 3 million for the same period last year.
Speaker Change: This is a $64 $6 million increase in operating earnings compared to the same period last year.
Speaker Change: Okay.
Speaker Change: GAAP net earnings were $58 5 million for the nine months ended September 32024, or $1 <unk> per diluted share.
Speaker Change: Compared to a 141000 or zero cents per diluted share in the same period last year.
Speaker Change: On a non-GAAP basis, which excludes amortization intangibles share based compensation contingent consideration and depreciation adjusted operating earnings were $135 4 million compared to $77 9 million in the same period last year.
Speaker Change: This is approximately 74% increase year over year.
Speaker Change: As of September 32024, the company had approximately $403 2 million in cash cash equivalents and current and long term marketable securities compared to $271 5 million as of December 30, <unk> 2023.
Speaker Change: This increase was primarily due to cash generated from operations.
Speaker Change: Based on the company based on that the company has a strong balance sheet with no debt with significant financial flexibility for potential M&A and other growth opportunities.
Speaker Change: Now turning to guidance for the full year 2024, and the company is raising its financial guidance.
Speaker Change: As a result, we expect total revenues to range from $630 million to $650 million up from the previous range of 600 million to $625 million.
Speaker Change: Comprised of net product sales royalties licensing and other revenue.
Speaker Change: For the full year 2024 weeks at combined R&D and SG&A expenses to range from $430 million to $450 million from the previous range of $430 million to $460 million.
Speaker Change: Overall, we expect full year 2024, GAAP operating earnings to range from 50 million to 65 million.
Speaker Change: And non-GAAP operating earnings to range from 150 million to $170 million.
Speaker Change: Please refer please refer to the earnings press release issued prior to this call by identifies the various ranges of reconciling items between GAAP and non-GAAP.
Speaker Change: With that I will now turn the call back over to the operator for Q&A.
Speaker Change: Thank you at this time, we will conduct a question answer session to ask a question you will need to press star one on your telephone to wait for your name to be announced to withdraw. Your question. Please press star one again, please stand by while the compile the Q&A roster.
Speaker Change: Our first question cultural lineup tend to sign of Jefferies. Your line is now open.
Speaker Change: Good afternoon, Thanks for taking my questions congratulations on the quarter.
Speaker Change: Thanks for the update.
Speaker Change: Sure.
Speaker Change: With this new dataset.
Speaker Change: We incorporated this correctly and that the overall seizure reduction for patients.
Speaker Change: Unlike doses through the maintenance period is now 56% on 10 total patients.
Speaker Change: With compassion.
Speaker Change: The 5% Platts time. So is the next batch of four patients performing in a way that to decrease the overall seizure reduction from 75% to 50% or 56% sorry.
Speaker Change: Sorry, you are cutting off a little bit, but I think I got the gist of the question.
Speaker Change: On 807 as far as the seizure reduction we continue to see.
Speaker Change: <unk> healthy levels of <unk> reduction very robust actually.
Speaker Change: And if you know from the data, we just announced today, you'll see that in the maintenance period, where we had 10 subjects at least under 10 subjects that were on the three milligram and four milligram twice daily.
Speaker Change: 56% reduction and then six of those ended up in the post maintenance extension period. So they stayed through their maintenance period and then.
Speaker Change: And the state and the study through the extension period.
Speaker Change: <unk> seen a reduction in net gaming <unk> up to 66%.
Speaker Change: Similarly, with the responder rates youll be youll noticed between the maintenance period in the post maintenance period, you'll notice that the rates are going up. So it's interestingly again. This is an exploratory study as we explained earlier the numbers are fairly small in general, but it's interesting to see that as such.
Speaker Change: Objects. So it seems like happening here is that a subject stayed longer on the drug stays in this study for longer and this is the first time, we have enough number of weeks so to speak as far as a leading data because when we reported the interim analysis way back we have only very few patients on fuel.
Speaker Change: Weeks treatment not for a long period of time.
Speaker Change: It's really nice to see that 80% of the subjects at 30% or more seizure reduction and even at 75% or more seasonable reduction.
Speaker Change: Very nice to see that 50% of patients had that level of seasonal reductions so.
Speaker Change: In General I mean, we think this the Swedish study at the end of the day achieve that objective of leading us to believe that this can be a very strong.
Speaker Change: Product in the <unk> area.
Speaker Change: We are improving and working on improving the tolerability as we discussed way back in May.
Speaker Change: The study achieved its objective and helping us decide what is the dose that we need to study further in the phase <unk> and that's why we take the three and four milligram because they seem to be that to appropriate doses based on the data. We have we have so far.
Speaker Change: And that's what we're studying in the phase two b. So all in all we still feel pretty good about the drug absolutely. This is an open label of course, its exploratory against smaller numbers and as we.
Speaker Change: Segment data more and more and cut it down we ended up with like two patients the patients that it becomes even less meaningful. So that's why we're trying to stay focused on the main based on population that we are moving forward with which is focal seizures.
Speaker Change: And the doses that we're going to move forward, which is three to 4 million come hopefully I answered most of your question.
Speaker Change: Yes. Thank you thank you and.
Speaker Change: As for the April morphine pump.
Speaker Change: Under review and noticed.
Speaker Change: Pleasure.
Speaker Change: And ladies spoke highly of its own.
Speaker Change: How are you thinking about.
Speaker Change: Pete across tier one review.
Speaker Change: Mike.
Speaker Change: Fashion approval will serve as a positive for you if that all securities.
Speaker Change:
Speaker Change: Yeah, I mean regarding the pump.
Speaker Change: We're very actually excited overall for patients in general for the category to see and hopefully our pump will be approved in February and to see these pumps eventually get to the marketplace.
Speaker Change: There's a lot of market education that has to occur and we welcome Linda.
Speaker Change: A company to be doing that with us and educating patients on the specific treatment segment that we will be creating together in the market in the U S.
Speaker Change: Outside the U S and that market segment have been around for a long time people have been using the pumps fairly well and are used to using them.
Speaker Change: So we welcome that opportunity. We think this is a great category. This is a very much needed treatment option for patients before they resort to innovate.
Speaker Change: Surgery of treatments.
Speaker Change: And we think given the pumps could be fairly differentiated we will see what our label look like and how they compare.
Speaker Change: But there will be enough room for both products no question about it there is a lot of patients out there that are not really doing that well and they could do even better with products like this.
Speaker Change: Great and then last question. Thank you SPN 824.
Speaker Change: You saw the 22 point or so Matt addressed reduction by data and your recent <unk> study do you expect that.
Speaker Change: Level of drug effect to be replicated in your key Rd study with data in first half.
Speaker Change: I'm, just curious what you're assuming for drug and placebo at week five <unk>.
Speaker Change: The Rd study thank you.
Speaker Change: Yes.
Speaker Change: That's of course, the big question angle obviously.
Speaker Change: The study we reported on this open label study, where ultimately report on the <unk>.
Speaker Change: First half of next year as a placebo control now.
Speaker Change: Simplistically and I know, you're not supposed to do that because these studies.
Speaker Change: Label, and what have you, but if you look at all the production over a lot of the depression trials out there as you look at the on an average what the placebo rates are on Matamoros.
Speaker Change: I think I saw one report by someone research in this space looking at around 23 different studies placebo rates are in the five to 10 point reduction on mattress and if I apply that to our open label I still get.
Speaker Change: Very very meaningful reduction in Magnus with our open label data so.
Speaker Change: It's hard to predict that clearly.
Speaker Change: Obviously, Amazon going to have an open label study with this final data versus much lower deductions.
Speaker Change: The other.
Speaker Change: Thing is the new data, we just actually had a poster on site Congress in the most recent site on the square.
Speaker Change: We looked at remission data and responder type of data.
Speaker Change: Within four hours Youre looking at their mission of about 50, 35%.
Speaker Change: It's really about a 50% response to Madras.
Speaker Change: Within four hours of the dose and that goes up by <unk> 10 to <unk>.
Speaker Change: 63% longer admission at 84% was the response rate I mean, these are really fairly strong numbers again, we should all that a lot of these will continue to be the case or defense still beat.
Speaker Change: Obviously.
Speaker Change: Nicole.
Speaker Change: Alright, okay. Thank you so much.
Speaker Change: Sure.
Speaker Change: Thank you.
Speaker Change: Our next question.
Speaker Change: Our next question comes from the line of Stacy <unk> of TD Colin Your line is now open.
Stacy <unk>: Hi, there and congrats on a nice quarter, we have a few questions. So first just on kind of the key Calgary launch how are you thinking about the current volumes that youre seeing and whether youre on the right trajectory for 25 copper consensus I think expectations are closer to 282 million.
Speaker Change: At least on Factset.
Speaker Change: Are your is there and then as we think about kind of the net pricing we saw this quarter.
Speaker Change: How should we be thinking about the remainder of the year end.
Speaker Change: How that might look as it goes to 25 as we tie in that question around consensus so just.
Speaker Change: Curious your views as we look to next year as much as you can comment just give us some understanding that kind of the growth dynamics and to next year. This is the <unk>.
Speaker Change: First kind of set of two questions and then a quick follow up.
Speaker Change: For 'twenty.
Speaker Change: Yes.
Speaker Change: The dosing strategy in the MDT childish a touch different than PRD are you expecting the placebo response to be.
Speaker Change: Touchmark well control since youre, not having the patients coming as frequently and.
Speaker Change: There seems to be kind of a.
Speaker Change: Our need for the patients in the open label trial to come in very quick very frequently so just help us understand that dynamic as we think about placebo response, and what could be the book could be expectations for the TRT study. Thanks, so much.
Speaker Change: Yes regarding the <unk>.
Speaker Change: First question on <unk> funded volume.
Speaker Change: We've been very.
Speaker Change: <unk>.
Speaker Change: The way the product is growing has been growing in the kind of growth was strong in 2024 year to date about 25% on prescriptions.
Speaker Change: There are a couple of dynamics that we've been seeing in that market and all of the brands are one of them as we continue to see growth.
Speaker Change: And the 90 day prescriptions that is something which obviously when you read it yet David IMS data.
Speaker Change: You may not see it firsthand unless you really dig into it deeper.
Speaker Change: And we're.
Speaker Change: Clothing that somewhere around the.
Speaker Change: 11% of the prescriptions for the brand by Mountain 90 day prescriptions, so and that has grown from about seven what used to be 7% of the prescriptions. So if that continues that really allows us also to have a prescription is much bigger than.
Speaker Change: Year to equal 30 day prescription.
Speaker Change: So on a capsule or <unk> basis, the brand is growing much faster than what you see in the TR access so.
Speaker Change: So that also tells us that people are sticking to the brand otherwise a physician will now give you a 90 day prescription they long thing.
Speaker Change: On the product clearly is hauswirth compliance and retention.
Speaker Change: You see also strong rates of retention.
Speaker Change: And what's really very healthy levels.
Speaker Change: In general on cattle will be compared to the ADHD market overall so.
Speaker Change: We're very optimistic as to where that brand is today and how healthy and robust.
Speaker Change: The performance has been so far and we assure that we continue in 2025 and clearly in February next year, we will talk a little bit more specifics as far as.
Speaker Change: The sales of anything specific as well as the growth rates and so forth.
Speaker Change: Regarding the net pricing.
Speaker Change: We continue to see very healthy net pricing this.
Speaker Change: This quarter as the gross to net improvements continue over time.
Speaker Change: The answer is yes, we will expect that similar net pricing for the rest of the year in 2024.
Speaker Change: Again for 2025, we will reserve any comment on that until we have the fourth quarter behind US then we can better.
Speaker Change: Discuss what 2025 might look like but overall, we're very pleased with gathered me the health of the product its strong performance.
Speaker Change: Compliance retention I mean, everything is pointing to the fact that the brand the product really works and it really works and people stick to it they are compliant and the physicians are happy with it once they tried a lot of these patients and I'm talking about both pediatric and adult for both based on <unk>.
Speaker Change: Not really.
Speaker Change: As far as the second question, which is more on the placebo response.
Speaker Change: That's really a very arm.
Speaker Change: Question to speculate on at this point.
Speaker Change: I mean, and DD versus D and whether the flexible dose versus the daily dose.
Speaker Change: Yes, I mean, the MDT try on that one single dose given every three days.
Speaker Change: Versus the <unk> was was in his daily dose, but lowered.
Speaker Change: This level 800, 1600 milligram versus placebo of 2400 milligram, it's really hard to predict.
Speaker Change: And speculate as to what the face to be placebo response will end up being.
Speaker Change: So on that one I think we'll just have to wait and see what the data will end up showing.
Speaker Change: Tom.
Speaker Change: Okay and that's it thank you.
Speaker Change: Thank you Amit next question.
Speaker Change: Our next question comes from the lineup.
Speaker Change: Piper Sandler your line is now open.
Speaker Change: Thanks, So I have a couple first can you give us your latest thoughts on capital deployment and how youre thinking about.
Speaker Change: M&A specifically.
Speaker Change: Whether you are prioritizing commercial stage.
Speaker Change: Assets versus.
Speaker Change: The pipeline focused assets in.
Speaker Change: How youre thinking about that particularly in the context of the advancement of your internal pipeline.
Speaker Change: So that's number one.
Speaker Change: And then secondly regarding calibrate wanted to pick your brain about how youre thinking.
Speaker Change: About the competitive landscape longer term, we're going to get data for axons oriented saw I believe in adult patients in the near future.
Speaker Change: As you're thinking about other non stimulant entrants like that product.
Speaker Change: Are you thinking about the potential impact to Calgary.
Speaker Change: Longer term if at all thank you.
Speaker Change: Regarding the first question on capital deployment and M&A, our priorities haven't really changed months, we continue to focus upon our priority would be commercial products that bring us towards revenue growth.
Speaker Change: Cash flow and so forth.
Speaker Change: The next priority would be pipeline assets that are at a later stage than our own pipelines. So.
Speaker Change: Clearly the bump hopefully with launch the bump, but beyond the pump hour to hour assets, our interface to or about the finished phase two will be.
Speaker Change: So anything in phase III or anything in the NDA stage or whatever it will be something of a focus for us. So we can bring in other products and launch other products I'll, let them on pipeline.
Speaker Change: So that's the focus of our activity than it has been the case for a long time right now and we continue to focus on CNS as our top priority but.
Speaker Change: Mentioned.
Speaker Change: Several times before that we have not.
Speaker Change: Shy about looking at other specific therapeutic areas, where we can make an impact and we can market those products efficiently and effectively other specialty areas.
Speaker Change: Situations will have to be a little bit more of a multi asset viable situations not just one product.
Speaker Change: But potentially a product with a pipeline or a couple of products and multiple and where we can build a very strong presence in that new area or whatever that new area might be.
Speaker Change: So we're agnostic whether it's neurology psychiatry. So we continue to look at both areas.
Speaker Change: Our presence failure.
Speaker Change: And both of these areas from a salesforce commercial infrastructure perspective.
Speaker Change: As far as competition to kind of leave it at some point there will be competition.
Speaker Change: <unk> about it.
Speaker Change: You really have to see at the end of the day. The profile of these two products for us to really make a comment one way or the other in Hollywood, they compare to <unk> or what kind of patient profiles would be ideal for these new products.
Speaker Change: So clearly we're watching the situation and see as data comes out of the potential competitors.
Speaker Change: See how they can further.
Speaker Change: Against Calgary or compare.
Speaker Change: Compared to <unk> <unk> in general.
Speaker Change: Gains to be seen.
Speaker Change: And then also what are there.
Speaker Change: Stimulants of non stimulants that's another.
Speaker Change: Key fact of Cleveland.
Speaker Change: That's helpful. If I may just say kind of a quick follow up just regarding M&A.
Speaker Change: Is there a pro forma net leverage target beyond which you would not be comfortable going in the context of.
Speaker Change: A transaction, particularly for our commercial stage asset.
Speaker Change: We are trying to.
Speaker Change: Stay fundamental and how we run the business and also conservative as far as leverage so.
Speaker Change: Don't want to over leverage.
Speaker Change: We are comfortable in the two five to three times EBITDA maybe.
Speaker Change: As far as we go.
Speaker Change: At the end of the day it all depends as we all know it really depends on the health of the assets that you're acquiring and how quickly you may be able to pay off the debt.
Speaker Change: Therefore, he might make different decisions on leverage depending on that situation. So.
Speaker Change: These assets are fairly fairly strong cash flows with longevity clearly in high growth rates you.
Speaker Change: He might be able to feel a little bit more comfortable and leveraged a little bit higher.
Speaker Change: But overall I mean give an update to any asset that <unk> will be behavior would.
Speaker Change: We'd be comfortable with above that that gets a little bit.
Speaker Change: And especially if there is no longevity or month ideal longevity, I should say or ideal growth rates for these assets.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you our next question.
Speaker Change: Again as a reminder to ask a question you will need to press star one one telephone.
Speaker Change: I am showing no further questions at this time.
Speaker Change: Active jackatar for closing remarks.
Speaker Change: Thank you.
Speaker Change: Concluding our call. This afternoon, we thank you for joining us to learn about our strong performance in the third quarter and first nine months of this year.
Speaker Change: Company has executed remarkably well.
Speaker Change: <unk> transition and the loss of exclusivity on two of its legacy products, excluding our legacy products. The Kennedy XR amongst others are we continued to deliver robust double digit growth in revenues as a result, trokendi XR represented only 9% of total revenues in the third quarter of <unk>.
Mauro: 24 Mauro.
Mauro: Moreover, the company continued to generate strong cash flows behind the strength of its portfolio, particularly as growth products and through the efficiency of its operations and.
Mauro: In addition, we continued to advance our product pipeline and announcing positive top line data from our open label Phase II studies on SPN 817, and SPN 820, and we look forward to the upcoming catalysts over the next several months. Thanks again for joining US. This afternoon, we look forward to updating you on <unk>.
Mauro: Our next call.
Speaker Change: Thank you for your participation in today's conference because it does conclude the program you may now disconnect.
Mauro: Yes.
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