Supernus Pharmaceuticals 3Q 2026 Financial and Business Update Conference Call - SUPERNUS PHARMACEUTICALS INC

Good afternoon, and thank you for standing by. Welcome to the Superdness Pharmaceutical Third Quarter 2026 Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Instructions will follow at that time. Please be advised that today's conference is being recorded. I now will hand the conference over to Peter Vosso of ICR Healthcare Investor Relationships Representative for Sopranos Pharmaceuticals. Please go ahead. Thank you, Angela. Good afternoon, everyone, and thank you for joining us today for Sipernos Pharmaceticals Third Quarter 2026 Financial Results Conference Talk. Today, after the close of the market, the company issued a press release announcing these results. On the call with me today are Sopernos' Chief Executive Officer, Jack Attar, and Chief Financial Officer, Tim Deck. Today's call is being made available via the Investor Relations section of the company's website at www.ir.sopernus.com. Before we begin, I'd like to remind you that we will be making forward-looking statements. All of these statements are based on the beliefs and expectations of management as of today. Actual events or results could differ materially. We refer you to the documents we and Endivia Pharmaceuticals have filed with the SEC, including in periodic reports under the heading risk factors, which identify important factors that could cause actual results to differ materiallly from those expressed by the company verbally, as well as statements made within this afternoon's press release. call is being webcast live, and a link will be found at the Sopernos website at ir.sopernus.com, and a replay will be made available shortly after this call is concluded. I'll now turn the call over to Jack. Thank you, Peter. Good afternoon, everyone, and thanks for taking the time to join us on today's call. Today, we will focus on Soperna's strong 2026 third quarter and year-to-date results, which show the continued momentum across our commercial portfolio, specifically our growth products. After walking through these results, I'll provide a brief update on our transformative merger with Endivio Pharmaceuticals. For the third quarter of 2026, combined revenues of our growth products, Calvary, Zerzube, Onetco, and Gokabri, increased by 43% compared to the same period last year. Starting with Calvry in the third quarter, prescriptions as reported by IQVIA grew by 18% over the third order of 2025, outpacing the 10% growth in the ADHD market. Net sales were $91 million in the third quarter, representing a 12% increase over last year. Similarly, for the nine months ended September 30, 2026, Calgary achieved a robust growth of 18% in prescriptions and 15% in net sales compared to the same period last year, net sales for the 9-month period reached an all-time high of $258 million. dollars. Calgary's growth over the last year continues to come from both patient populations with third quarter adult prescription growth of 25 percent and pediatric prescription growth of 16 percent. In addition, the total quarterly number of prescribers for Calgary reached a high of approximately 46,000. Moving on to ANACO, during the third quarter of 2026, ANACo generated net sales of 17.1 million dollars up 27 percent compared to the second quarter of 2026. demand for the product continued to be healthy with more than 400 enrollment forms submitted in the court in the third quarter 2026 prescriptions grew by 17 compared to the second order of 20 26. as we announced last week the fda has recognized seven years of orphan drug exclusivity for gonadco for the treatment of motor fluctuations in adults with advanced parkinson disease this designation validates the urgent need for targeted therapies and helps safeguard continued innovation in a long underserved community in addition we submitted a supplemental new drug application to the fda the second source of supply with approval expected by mid-year 2027. Switching to Zarzuwe, Sopernos reported $42 million in collaboration revenues in the third quarter and $105 million for the nine-month period year-to-date. Full third quarter 2026 U.S. of Zarzuwa sales, as reported by Biogen, increased approximately by 53 percent compared to the same period in 2025. In the third quarter of 2026, Zerzuve saw strong growth in demand, with written prescriptions growing 43%, and the number of prescribers growing 42%, compared to the same period last year. Since launch, 87% of the prescriptions have come from repeat prescribes, and more than 43,000 patients have been treated with Zerzube. Switching now to recovery for the third quarter, the brand grew 4% in net sales and in prescriptions compared to the same period last year. Net sales reached an all-time high of $43 million in the third-quarter. Moving on to R&D, the SPN820 and SPN 817 Phase IIb studies continue to enroll subjects with major depressive disorder and focal seizures, respectively. The SPN443 program is expected to start the Phase 1 single ascending and multiple ascending dose study in adult healthy volunteers by the end of 2026. Now turning to the status of our transformative merger with Indivior Pharmaceuticals. I'm pleased to report that Supernas and Indivio shareholders voted to approve the merger on October 15, and we expect this transaction to close on November 2. As you may have seen earlier today, NDBU's results for the 3 months and 9 months ended September 30, 2026 were also strong and driven by continued record performance of Sublocate. Combined with Soperno's solid performance and output, the new company will be starting from a position of strength with significant earnings and cash flow potential. The combined company will have a commercial portfolio of 11 differentiated medicines across psychiatry, neurology, and addiction, with key growth products currently expected to continue growing well into the 2030s. In addition, we will have the profitability, cash flow generation, and financial capacity to pursue further growth opportunities, including driving growth in our existing commercial portfolio, advancing our novel pipeline, and pursuing future business development. Our near-term priorities are to work through the integration of the two companies, ensure that our key growth drivers remain on track, and to progress our pipeline. Integration planning has been underway and we remain confident in capturing the $125 million of expected annual cost synergies that we previously discussed. With this merger on the verge of closing we're entering an exciting new chapter that builds on a strong foundation we expect to provide combined full year 2027 guidance in february during the release of fourth quarter and full year twenty twenty six results with that i will now turn the call over to tim thank you jack good afternoon everyone as i review our third quarter 2026 results please refer to today's press release and thank you that was filed earlier today we achieved record total revenue of 226.8 million for the third quarter of 2026 an increase of 18 percent compared to the same quarter last year total revenue in the third quarter of twenty twenty six was comprised of net product sales of 178.6 million collaboration revenues associated with Zirzuvae of $41.7 million, and royalties, licensing, and other revenues of $6.5 million. Please note, collaborative revenues represent approximately 50% of the sales of Zirchuvae reported by Biogen. The increase in total revenues was primarily due to the increase in net sales of our growth products, Calvary, GoCovery, Zirvuvae, and Anapco. For the third quarter of 2026, combined R&D and SG&A expenses were $153.8 million as compared to $209 million for the same quarter last year. Operating earnings on a GAAP basis for the third-quarter of 2027 was $21.2 million as compared to an operating loss of $60.2 for the quarter last. The change was primarily due to the acquisition-related costs for the SAGE acquisition in the third quarter of 2025, partially offset by higher revenues. Gap net earnings was $20.9 million for the third quarter of 2026, or $0.35 per diluted share, compared to a gap net loss of $45.1 million, or a loss of 80 cents per dilute share, in the same quarter of last year. a non-GAAP basis, which excludes amortization of intangibles, share-based compensation, contingent consideration, and depreciation, adjusted operating earnings for the third quarter of 2026 was $55.2 million, compared to $41.9 million in the same quarter of prior year. Total revenues for the first nine months of 2027 were $653.5 million, excluding net product sales of Kekendi XR and Oxtelder XR, total revenues for the first nine months increased 37% compared to the same period last year. Total revenues were comprised of net product sales of $495 million, Zerzuva-related collaboration revenues of $104.7 million, and royalty licensing and other revenues of $53.8 million. Combined R&D and SG&A expenses for the nine months ended September 30, 2026, were $481.5 million as compared to $444.6 million for last year. The increase was primarily due to an increase in SG&a expenses associated with the collaboration agreement with Biogen. Operating loss on a gap basis for the first nine months was $45.1 million as compared to an operating loss of $58.3 million for 2025. Gap net loss was $39.8 million for the first nine month or a loss of 69 cents per diluted share compared to a gap net loss of of $34.4 million, or $0.61 per diluted share, in 2025. On a non-GAAP basis, which excludes amortization intangibles, share-based compensation, contingent consideration, depreciation, and acquisition-related cost, adjusted operating earnings for the first nine months were $115.2 million, compared to $110.2 for the same period last year. As of September 30th, 2026, the company had approximately $359 million in cash, cash equivalents, and marketable securities, compared to $309 million as of December 31st, 2025. Now turning to guidance, for full year 2026 the company, on a stand-alone basis, is raising its financial guidance for total revenue and non-guide operating earnings. As such, we now expect full-year 2026 total revenues to range from $875 million to $900 million, up from the previous guidance of $860 million to 890. And finally, we expect full year 2026 non-GAAP operating earnings to range from $160 million to 180, up from $150 million to 1.80. Assuming the merger with Endeavor closes on November 2nd, this financial guidance will no longer apply. In terms of the merger, we are extremely excited about the closing of this transformative merger. Since we announced the deal in early August, a tremendous amount of work has been done on planning the integration of the two companies, and we are ready to begin executing that plan next week. As Jack mentioned, we are not providing 2027 guidance today, but we do expect to do that in February of 2027. And finally, before we open the call to questions, please note that we would like to focus the Q&A on Sopernis standalone results and outlook. As you can appreciate, we're limited in what we can discuss during this pending merger at this time, and we'll do that at the appropriate time. With that, I now turn the call back over to the operator for Q&A. Thank you. At this time, we will conduct the question and answer session. To answer a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 2-1. Please press star 3-1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Christine Kluska of Cantor Fitzgerald. Your line is now open. Hi, everyone. Congrats on all the progress over the last quarter here. a couple questions from me. First on Zerzuve, I think the revenues here have been a lot higher than most of us expected when you first did this acquisition. So I'm curious if you and your partner feel like you're in a good position right now in terms of reps messaging out there or if there's any plans to grow this. And then second question on Inopco, wanted to get an update on the timeline from the enrollment form submission to initial shipment um how has that changed over time and do you expect it to continue or improve once you get the second manufacturer on board next year yeah hi kristen um yeah regarding the reserve um the brand is doing extremely well and we're very excited about what how it's doing now but also more importantly the future of the product um no matter what metric you look at it's really been phenomenal as far as the growth of the product of course this year we also started the dtc campaign we've been very encouraged with what we've seen so far early metrics but very good signals that there's a lot of great things that are coming out of that campaign so that's why we continue to see strong demand behind the product all-time high metrics across board number of prescribers patients and so forth so we're really excited and so far if you really look at the product since we launched it uh we've only treated a little bit north of 40 000 patients uh you know since launch so there is a lot of opportunity in front of us here there are a lot moms that need to really be aware of the disease step forward seek help so we're doing a lot of programs here to educate not just consumer the patient but also on the healthcare provider side as well to keep that momentum going behind the brand um as far as our neck was concerned um given that in the second quarter we pretty much relaunched the product and we went through the backlog that we had in the queue as far as the forms are concerned and processing them to actual shipments all that backlog is now behind us so the third quarter was a nice clean quarter so to speak from that perspective and that gave us a little bit more time actually to even try to optimize the process and we've done a lot of optimization and improvement in the process on the processing of the form to shipment So we are pretty much now back to normal timing as far as processing the form into shipments. We also have even improved a little bit on the conversion from form to shipments, so a little but every quarter there is more and more improvement as we go on because all the supply issues are behind us right now. And a lot of the folks who are in the queue are pretty fresh and new forms that have been submitted. so we don't have any more patients who are waiting for a long time to be processed and to get their product and then get the training on it and so forth so we're pretty happy that all that is behind us um and we continue to look forward here to focus on the demand and continue to build the demand and on the demanding similarly if you look uh not different than zurzube we continue to see very good metrics on an echo across you know different metrics here the prescriptions number of patients on therapy new riders all have grown in the quarter versus you know the previous score thanks and all the best into the expected closing of the merger next week thank you Thank you. Our next question comes from the line of Stacey Q. of TD Cowen. Your line is now open. Hey there, thanks so much for taking our questions. We have a couple. that we get asked by investors is around M&A. So with the merger set to close, Jack, is this a parallel track priority or something that might take some time to contemplate and execute on? So it's the first question that we do get a lot of inbounds on. And then a quick follow-up as we think about spend and synergies. We have the guidance on synergies with Indivier for next year, but maybe also remind us where you are with SAGE and SPEND, especially with the NICE survey growth. Are there any additional synergies that can be realized over there? Is that all done? And then last, on Calgary, just maybe talk about how net pricing is progressing and maybe expectations for the prescription trajectory for the rest of the year. Thanks so much. Yeah, regarding the M&A activity and whether it's a priority or not, I mean, we're always looking for potential opportunities to continue to grow our portfolio. You know, this is something that you never and you're not able really to predict timing of these type of things, but we will continue to be active in looking and searching and identifying and building relationships within the industry, of course, with the appropriate targets and companies that we would like to do and do partnerships with them. As far as the top priorities, of course, six months after the merger, as I mentioned, we will be very focused on the integration of the two companies, Indivior and Sopernis. So we will have plenty to do there. But during that time, of, course, our BD group can continue to search for other opportunities for future potential future transactions um regarding these synergies um uh the one as far as the uh current merger that we're working on um as we mentioned in our prepared remarks we feel pretty good about the target we put out there uh you know the 125 million on an annual basis so that we feel will be on track and we're uh very confident with our ability you know to hit that number and actually more so because we just went through it pretty much related to your second question on sage we actually hit our target of 200 million on that transaction maybe a little bit better we did so we feel pretty good about our chances of you know hitting the target we have on the individual merger and now regarding the last question as far as calgary i mean overall big picture of calgary is doing really well we're we're very pleased with calgary and the trends On the prescriptions, I mean, some of the things we haven't really mentioned, we don't talk about, but things like even if you look at new to brand prescriptions are up by like 23% in the third quarter. We had a very strong third quarter, very strong growth in the number of prescribers. So, overall, the brand is doing really well on the prescription side, and specifically on the adult side, which is a very important segment that we continue to emphasize, even during the back-to-school season, where typically we emphasize a little bit more on the pediatric because we want to build on the momentum of the back to school market dynamics. Even during that quarter, you know, adults continue to outperform the pediatric growth. So we're very pleased with both segments, the pediatric and the adult, and the product is so differentiated in the marketplace, you know, compared to the existing medications or even the recently approved products. Calgary has an incredibly unique position in the marketplaces, five years of experience. A lot of people have a lot of experience with the product now, so we really feel pretty good about the position of the product, its delivery, and its future. overall i mean we're still around one percent market share and this market has been incredibly resilient and continues to grow at 10 plus uh in prescription which is truly amazing in the cns space so we feel really good about the future of kelvin thanks so much appreciate it Thank you. Our next question comes from the line of Abigail Samami of Stifel. Your line is now open. Hi, it's Annabelle. Thanks for taking my call. in your own commercial portfolio, are there any specific initiatives, commercial initiatives that you're planning that you have been able to do before that could potentially facilitate continued growth of the projects? Like for example, Zerzuve, have you moved into more of the OBGYN space and are you doing anything there to potentially enhance some of the growth of some of your current portfolio? And then separately on ANAPGO, the 400 patient enrollment forms, is that a good run rate to start with? Because I know that it was sort of held back a little bit before, then you had a little bit of Ebola. So what is the right run rate for new patient enrollment for forms for ANAPCO? Thanks. Yeah, regarding the merger, I mean, that goes without saying. clearly going to be exploring all potential growth opportunities uh within the uh as i mentioned in my remarks within our existing portfolio which would be of course sublocate calibrate or napos or juve and and so forth uh so that will be one of the key areas where we would look at what else can we do is there any other programs we would like to consider you know and so far so that that's something definitely we'll be looking at to maximize these brands all of them and maximize the potential and growth in the future um and then as far as you know an echo and the run rate i mean it's been around the 400 it picked up a little bit but it's been around 400 425 you know it bounces around a little bit so at this point it looks like it's a good run rate as an assumption of course we're working pretty hard to even increase it more and continue to know it hopefully as time goes on. Great, thank you. Thank you. Our next question comes from the line of Chi Phong of B of A. Your line is now open. Hey, guys. Thanks for taking my questions. First one I have is I want to ask about adjusted operating margin. So looking at the 3Q results and the guidance of the midpoint imply roughly around mid-20% margin, better than the mid-teens in the first two quarters. So, as we think about supernas as the current standalone entity, what's the opportunity for margin expansion next year relative to current level? Is it fair to assume a higher operating margin than the 20 percent implied in the 2026 guidance against for a superna standalone entity? Yeah, regarding the – I mean, this is a little bit of a difficult question because we're going to assume something that's not going to happen and the dynamics will change of course once we have the merge company but assume standalone and there is no merger or whatever clearly you know as time goes on our plan has been to continue to improve our operating margins so that goes without saying because it's a natural phase that you go through as you launch products you invest behind them you expand you you spend money on you know launching some of these products naturally as time goes on you'll be able to improve the operating margin because your investment level might not be exactly the same forever you know you'll you'll do that commensurate with the life cycle of every product so naturally the answer the short answer is yes we would have been able to improved our operating margin of course these comments only apply to supernova standalone, you know, but the new company will have a lot of different dynamics at that time. Got it. My second question, I want to ask about SPN817, which is currently in phase two development for epilepsy. I'm curious, can you talk about timing of the data and expectation for the readout yeah um right now given the rate of recruitment it looks like most likely and we'll we'll confirm that with a little bit more concrete data where we would like to see another quarter of recruitment before we put out a specific target but it looks like it's going to be in 2028. uh i don't have more specifics you know first quarter second quarter, third quarter, that will come back, you know, with more information as we get better feel for the recruitment. These epilepsy trials tend to be slow in general, so we're basically going very similar rates as everybody else in the industry in doing these trials, so 2028 will be a good guess, but when in 2028, we'll try to nail it down and get it a little tighter as time goes on. And if I may squeeze one in, this is a follow-up to Annabelle's question earlier. So I'm curious, so obviously more than 400 new forms were submitted for UNAPCO this quarter, similar to the runway the first couple of quarters. Jack, were you surprised that the number of new forms submitted haven't picked up meaningfully since the resolution of the supply shortage? And looking ahead, what are the upside levers that new forms and new scripts could pick up meaningfully from current runway? Yeah, I mean, the answer to the first question, it wasn't surprising because we knew we were relaunching the product, basically. So not that we're starting from scratch, but when you pause for three, four months, the heavy activity from a launch perspective, everybody slows down because of the supply issues and now you start again naturally you know you are more in a relaunch mode so we're really actually pretty pleased with the levels of forms that we have we always would love to have more don't get me wrong and clearly as I mentioned earlier I mean now that we have all these issues behind us the supply and as I imagined earlier the process also has gotten much smoother because the backlog is all cleared up. The conversion could potentially get better. So, I mean, all these will help us continue to feed the demand. Physicians will get positive and more positive feedback on the experience that their patients are having with the product. So I mean all this will help hopefully even, you know, make this even a much growing number as time goes on you know beyond the 400 and go above that so clearly stay tuned to any updates as time go on but we feel pretty good about the basic uh you know the basics for the demand of this product yeah okay great thanks so much I am not showing any more questions at this time. I will now turn it back over to Jack Kachar, President and CEO, for closing remarks. Thank you for joining us on this call today. We have positive momentum across our business, as evident with our strong third quarter and year-to-date performance in 2026. We continue to generate strong cash flows behind the strength of our growth products and through the efficiency of our operations. We're very excited about our future as a combined company with Indivio and the value it will create. Thanks again for joining us this afternoon. We look forward to providing you with further updates on our products. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.