Session. I'm Andrew Tsai, Senior Biotech Analyst at Jefferies. Thanks for joining today. It's my pleasure to have Jack Khattar next to me, CEO of Supernus. Welcome, Jack. Thank you. Thanks for having us. As usual, those who may be less familiar with the Supernus story, any opening remarks you'd like to make about your story, what you're working on, and key priorities over the next year? Yeah, sure. Good afternoon. Please, just as a quick reminder, I'll be making forward-looking statements, so please check the SEC filings for all the risk factors. Very quickly, for those of you who may not be familiar with us, we're a CNS-focused biopharmaceutical company. We have about eight products on the market, a good portfolio of products, some of which are legacy products that are going through LOE, and then the others that are really significant growth drivers behind the business. Our big product right now that is really carrying a lot of the burden is Qelbree, which is a novel ADHD treatment that we launched in May of 2021. It has been a fairly successful product, and I'm sure we'll talk about a little bit more later. Also, we're very excited about a very recent product that we launched only a few weeks ago, and that is ONAPGO, which is an infusion device for Parkinson's. We have a fairly strong presence in the Parkinson's space with four products on the market, more than any other player in the space. We also have a fairly good pipeline in phase II or earlier. At the same time, we have a strong balance sheet, good cash flows, with profitable revenues around the $600 million mark, and still good profitability despite the loss of exclusivity on our flagship products. Great. In my notes, you're expected to do $600 million and $630 million in revenue this year. You did $660 million in 2023, but one of your—or last year, I believe—but one of your products, Oxtellar XR, went generic last year. Is it fair to assume you're doing a good job, by the way, offsetting the revenue loss? Is it fair to assume 2025 could be the trough year for your total revenue going forward? Yeah, I mean, 2025 will be the first year where Oxtellar XR has a full year of being generic because it went generic in September of last year. Theoretically, the answer would be yes from that perspective. Also because Qelbree's growth, GOCOVRI's growth, and ONAPGO now, so we have three growth drivers, should certainly more than compensate for the losses on the revenue side with the other products. Okay. Maybe today we'd love to talk about Qelbree, ONAPGO, and then maybe your pipeline. Starting with Qelbree, I always ask you, what inning are we in with this launch? It launched in 2021. You're at about a $260 million run rate now. How big can this product become in your view? Yeah, I mean, I maintain to say we are in the early innings. This is a huge category, 100 million prescriptions a year. We're not even close to a little bit flirting with the 1% market penetration, so we still have a long way to go. More importantly, I mean, the product is really a great product clinically, medically, all the data we keep generating on it, not only the phase III program, of course, but also the other phase IV clinical studies that we've done since the launch of the product. It continues to be a great product with a great response. Our penetration, specifically in the adult and also the pediatric, is still in the early stages. Even if you assume 4% market share, 5% market share, I mean, this is a multi-hundred million dollar opportunity for us. Great. During first quarter earnings, it seemed as if you did bless 2025 consensus of around $290 million for the full year. Do you still feel good about that number following the Q2 trends of Qelbree right now? Yeah, I mean, nothing really happened one way or the other other than continued to really perform pretty well, so we're comfortable with that. Great. Remind us, as we look ahead in 2025, the key growth drivers for this product. Is it fair to assume this year might be more driven by volume rather than price, or not necessarily? I mean, price increases have been very modest. We had some benefit like last year on the gross to net because of certain movements within the gross to net, different factors and dynamics there that were more favorable to us. The bottom line, I mean, the product growth is mainly driven by its growth in prescriptions. I mean, it's really very solid volume growth, and that's what's driving the franchise. We're into almost now year five into the launch, and we're still growing in the 20+% from a prescription perspective. We are very optimistic about the potential here. Great. Speaking of volume, based on the weekly scripts, maybe you're on pace to do 5% growth quarter over quarter this quarter. I could be wrong, correct me if I'm wrong. Regardless, it's an acceleration from what you saw in the first quarter. Could Q3 and Q4 look even stronger than Q2? Yeah, I mean, typically Q3, you might get even another uptick because of the back-to-school season. I mean, although the back-to-school season is not always a calendar season, I try to remind folks a little bit about that. It's not a pure calendar seasonality because clearly a lot of folks get out of school in May, some in June, and then not everybody goes back to school exactly at the same time. Certainly Q3, if you look historically, tends to be of an uptick versus Q2, and then Q4 even sometimes does even better. That was the trend we had last year, actually. There is no reason for us to believe it should be any different this year. It's really all about continued promotion. This is a very promotion-sensitive category. As long as we continue to push it, we're very dedicated to it with a very significant investment on both on the pediatric side and the adult side. We're pushing on both patient populations clearly. Right. You have a digital DTC running as well. That's right. Okay. And And then gross to net, I think you've guided previously this year could be in the 50-55% range. In first quarter, I believe it was 51-52%. Typically, Q1 is the highest out of the year. Does that mean Q2, Q3, Q4 for you, for Qelbree, could be lower than 51%? I mean, that's typically the normal trend, and you would think that what would happen, unless something happens on a quarter to quarter where sometimes we get these one-time fluctuations or aberrations between the quarters that could push it one way or the other. Yes, I mean, our annual target has been the $50-$55. We are starting in a good position in Q1 around the $52. It should improve unless something else happens that could push it in the other direction. Yeah. I was really thinking about the tail of Qelbree. Remind us the latest on when IP expires for this product. IP, the last expire is 2035. We had a patent extension recently that added two years. It used to be 2033. We do have another patent in 2033, and we have another one in 2029, but the last one to expire is 2035. Great. Before this fireside, I had prepared some of these questions that we did learn. I was wondering, typically for NCE generic and file, I believe, four years into the launch. I was wondering if four years into the anniversary of your launch would be April of this year. I had not seen any filers, basically, but we did learn about some filers in the register last week. How many are there? What would be the next steps? Are you looking to settle? If so, what would be that settlement range or date, do you think? Yeah, I mean, it's correct. Typically in an NCE, five-year exclusivity after year four, you'll have a bunch of ANDAs that get filed, and that is the case here as well. We announced that. We have numerous parties that filed. Now, I mean, it just takes its course. You just let the process take its course. We're reviewing these ANDAs. We'll see what the issues are. Typically within 45 days, if it merits it, you initiate a lawsuit potentially if these folks are infringing and what have you. As far as what the potential outcomes, I mean, historically, we've done it as far as to what really merits from a case perspective. We've gone to trial. We're not afraid of going to trial. We've done it before, and we've won, and we've settled as well. I mean, all outcomes are potential. There could be potential outcomes out there. All the possibilities are open. I should have emphasized that one of the value propositions of Qelbree is this is one of the only few non-stimulants out there. Looking ahead, there are potential competitors. I think Otsuka might be filing over the next 12 months, and then you have Axsome working on their phase III compound as well. What are your thoughts on competition and why it would not impact Qelbree's longer-term growth trajectory? I mean, from what I know on centanafadine, which is the Otsuka's molecule, I mean, we don't know whether the jury is out whether it's a non-stimulant or a stimulant. So we're not sure yet. It could actually be either way. It is a triple reuptake inhibitor from what we know. Therefore, it all depends on the abuse liability data that the company may have generated and whether they'll be able to convince the FDA and the DEA that it shouldn't be classified. That remains to be seen. As far as the efficacy of the program, of course, I mean, it does work. They did show that in clinical trials. On the other side with Axsome, with the SUNOSI product, they did recently publish some of the data. I think there is more work probably to be done there as far as the doses, the different range of doses that you might need, especially in an area like this for ADHD, and especially that you're looking at different patient populations from pediatric to adolescent to adult. I think there might be some more work there that they might have to do to show the FDA the doses, the minimum effective dose, maximum effective dose, and in between, how can you titrate so that psychiatrists can be able to treat the different patients. Right. Right. Okay. I mean, big picture is multiple players can share the market, or? I mean, historically, for those people who know us, I mean, we're not afraid of competition. We compete pretty well across all areas in epilepsy, migraine, ADHD, Parkinson's. It really doesn't matter. I tend to be typically a believer that sometimes actually competition is good. It helps you build the market, especially in certain situations where you are trying to build a certain segment of the market, and the more noise you have, the better it is. We would welcome, like we're doing now with ONAPGO, not to change the subject, but pretty much we're building a whole new segment in the Parkinson's space with infusion devices. Two companies doing that is still better than one. Okay. Speaking on ONAPGO, your Parkinson's pump, apomorphine pump, it launched in April of this year. Big picture, what's the peak sales potential of this product? Why would Parkinson's patients use this pump over AbbVie's recently approved U.S. product? Yeah, I mean, our pump, just for the audience, has apomorphine in it. The AbbVie's pump, VYALEV, has a prodrug of levodopa carbidopa. Why would a physician choose one versus the other? If you look at the efficacy data, they're pretty close. That's not really, there's not really a lot of differences there, although there's never been a head-to-head trial, but from what we know and from what our data looks like. Therefore, it's up to the physician. It depends on the patient that you're looking at. If they have a patient that has been on levodopa carbidopa for a long time, which most of patients are, especially as they get into the advanced stage of the disease, and that's the label they have and the label we have, which is advanced Parkinson's, are you going to stick with levodopa carbidopa or are you going to try something else that could work? Therefore, based on that analysis and that equation for what's right for that patient, you might choose to continue with levodopa carbidopa but try the infusion because it may work a little bit better than the oral. You might say, you know what, I want to try something else. Apomorphine is very well established that it's a very efficacious molecule, and therefore I'll try another product that could be a good dopamine agonist. In that case, you could use ONAPGO. With ONAPGO, you can continue with the oral levodopa carbidopa. They can be used together. With Vyalev, you have to replace the oral. You can't have both of them. Again, it's a choice that the physician would have to make based on the patient profile, the patient they're looking at. It's a little bit early for us now because we're only about a month, month and a half into the launch and knowing exactly the patient profile based on the patients that we see are starting on ONAPGO. That'll take us a while to decide where the therapy is going and in which direction it will end up. The peak sales potential of your product, do you think? I mean, we've talked about a $200 million to $300 million peak. I tell folks all the time because people challenge us, and rightfully so, that maybe we're way too conservative. Again, it really depends on the patient profile because advanced Parkinson's could mean different things to different physicians. It could mean to one physician a patient who's been diagnosed only three years ago but really struggling with a lot of the meds that they're on, the oral therapies, and so forth. Therefore, you might give them the infusion device at that time. For another physician, maybe it has to be at least a 10-year diagnosis. The patient has exhausted every single potential drug out there, and then I consider them to be advanced, progressed. From the experience we know from Europe, the product has been on the market for 30 some years. Physicians do use it for earlier stage disease, mid-stage disease, and so forth. Over time, there is a possibility that it could migrate towards more moderate, less severe patients. If that is the case, then it clearly opens up the opportunity, and it could be a much bigger product from that perspective. I see. You mentioned early May that over 100 prescribers have submitted at least one patient enrollment form for ONAPGO. What is that latest number right now as of early June? Yeah, I mean, right now we have data slightly a little bit different, but we have more than 200 actually prescribers of ONAPGO, which is fairly significant, much more than we thought initially we would get at this stage. As I said initially, we're very encouraged with the response we're getting. We have 500 or more as far as enrollment for patient enrollment forms. The funnel is getting filled up pretty nicely. Again, I caution folks because it's early. Hopefully, this is not a bolus rush on the product, which is because people have been waiting for the product for a while. We very diligently monitor on a weekly basis that we have continued steady flow of these forms that are coming in, initiation forms. It's still like this, and that continues to apply. Hopefully one taper off, and we'll change on a quarter to quarter basis. At this point, very encouraging. Right. How long does it take an enrollment form to translate to a reimbursed patient? Yeah, typically from the time the physician's office sends that form, it takes several weeks for it to be completed. A lot of times the information is not complete back and forth between the physician, the patient, the hub, and then the insurance process. It takes several weeks until the product gets shipped to the patient, and the patient gets initiated by our nurse network. Okay, got it. Consensus is $1.8 million for the quarter. Is that appropriate or any color on that? This one is going to be hard for me to predict because it is so early and it's so bumpy and will probably be bumpy. I will refrain from making a specific prediction. Understood. I mean, for the year, we're sticking with the 7-9% or high single digit, so to speak, annual guidance because as you might appreciate, it could be bumpy, especially quarter to quarter. So far, so good. Steady cadence is what you're seeing. Okay. And then moving on to your other pipeline products, unless you wanted anything else to discuss on ONAPGO. No. I'm pretty pleased with how it's going. Yeah. Your other pipeline product, SPN-820, is a novel mTORC1 inhibitor. You decided to initiate, pursue a phase II-B study, I believe, in MDD depression, even though unfortunately the prior phase II-B study in TRD, treatment-resistant depression, did not separate from placebo. Why is this going to be different this time? Yeah, sure. Let me back up a little bit so that folks can understand the background as to how we got to where we are today. This is a molecule where initially the innovator had done a very small proof of concept study with just one single dose, 2,400 mg. They measured the MADRS, and it was a placebo-controlled study, but very small. It separated from placebo on MADRS. The effect was maintained with only one single dose, 2,400 mg, through 72 hours. They did not give the drug every single day. They just gave it only once and measured the effect through day three. When we took on the program and we finished a lot of the phase I, SAD, MAD studies, everything pointed to the direction that probably we do not need to be at 2,400 mg. We could be in the 1,600 mg on a daily basis. That is what we chose to move forward with, with the phase II-B study that we did. We chose TRD for all kinds of different reasons at that time, commercial opportunity, and so forth. The phase II-B was 1,600 mg every single day. This is an mTORC1 activator. From a biology perspective, that is very important in the analysis because when the study did not separate from placebo, and that's the study that failed and we announced fairly recently, we suspected that it's more related to the dosing regimen than anything else because at the same time, after we had initiated the phase II-B that failed, we had initiated also an open label study repeating the once every three-day dose that the innovator had done way back in the phase I and did it through day 10. We did three doses basically over that period of time, but they were intermittent dosing, 2400 mg, and that showed us phenomenal results. Now, having said that, it was open label, just to be clear. The results were really strong. Even if you apply average placebo effects in different studies to that open label data, it's still like, wow, this is really a drug that potentially is working very well. Looking at that data, looking at the phase II-B and the single daily dose regimen and why it failed, looking at the biology of the mTORC1 activator, and there is more and more emerging data showing that not all targets in CNS really need to be engaged every single day. Actually hitting them frequently every day could give you a counter effect. We think mTORC1 is one of those type of mechanisms. Therefore, because if you do the activation on the mTORC1 side, basically what you're doing is you're increasing protein synthesis. If you do not allow the system to kind of digest that impact, that effect to get the most benefit out of it, and therefore give it about a day or two to rest, reset, and then you hit it with a second dose on day three, you may not get the best benefit out of it. Given the collective amount of data we have, understanding of the biology, the mechanism of action, that is why we chose to, certainly not a small decision, but to invest again in another phase II-B in MDD, but only with intermittent dosing at the 2400 mg. I see. Dosed every three days, 2,400 mg. 2400 mg. Ultimately, what kind of placebo-adjusted delta do you think you can show then with this drug? I mean, hopefully we'll show something. I mean, it's not going to be exactly like the open label, of course, because open label adjusted to the placebo effects that we see normally, I mean, that could be very profound. Now, clinically we know and medically, a five-point to seven-point reduction on MADRS is a clinically meaningful reduction. So certainly we would hope to be in that region or even better than that. To be clear, placebo-adjusted or just absolute reduction? Placebo-adjusted. Wow. Okay. Because other drugs show closer to two. Yeah. Okay. Your study starts when and when can we get the data? We're hoping to start the study before year-end. I mean, we're still working on the timelines. We haven't finalized that yet because, as you might imagine, we have to do now clinical supply, everything else to get ready for the study. Most likely before year-end, we'll start it. Data, I mean, you're not looking at data till 2027, clearly. We'll be a little bit more specific as we get closer and find the timelines. Right. I think one silver lining from the failed study in TRD was that it seems as if the placebo behavior was typical or normal, suggesting you can't control for placebo. Yeah, absolutely. I mean, the study that did not show separation, it was not because of managing the study. I mean, everything was so clean. All the sites were fairly consistent. We did not have sites that were completely outliers that really caused aberrations in the data or anything. We did not see anything among demographics. Even some patients were borderline MDD, TRD. We did not see a difference there, which led us to believe it is not really the indication here that is causing the difference between the open label and the placebo. It was more the dosing regimen. Understood. In the meantime, would you consider pursuing other indications for 820, or is this it? You're just going to run this? For now, we need to get an answer to the question on the intermittent dosing before we explore another indication. Of course. Okay. Moving on to your other pipeline product, SPN-817, acetylcholinesterase inhibitor for epilepsy. I believe the phase II data could be year-end of next year. I don't know. Depending on the recruitment with epilepsy, epilepsy studies are notorious for being slow, unfortunately. This is a multi-country, multi-site, so it's a fairly complicated study, 200-plus patients. We'll see. We need probably another quarter or so to see how the recruitment goes, and then we can firm up the dates. Most likely we're talking about 2027 as well as far as data. Understood. Big picture, backtrack is remind us the intended profile of this compound, why you think it could be competitive in the epilepsy marketplace. Yeah, I mean, this product is a little bit different. We do have actually data from patients who have been on the drug, although very small N, for years, three, four, five years. Actually, one of the patients is still seizure-free, despite very severe epilepsy that this patient used to have. So in a way, we know it's not placebo. Placebo does not last that long. Clearly the drug is working. Of course, we had the open label study that we did last year, and the data was fairly profound as far as the efficacy. I mean, we had seizure reduction in the 58% in the maintenance period, and I think it continued to about 66%, if I'm not mistaken, through the post-maintenance period. The efficacy of the drug seems to be really good. We bumped against some tolerability issues on the titration side, which did not allow us to get as many patients as we would have liked on the open label. When we looked at the data, especially with the 3-4 mg b.i.d., the data seemed to be fairly consistent about the efficacy of the drug. That is what we are taking to the next step into the phase II-B study. Differentiation, clearly good efficacy, strong efficacy, but also given that the product, as you mentioned, is an acetylcholinesterase inhibitor, this class of drug is known to be pro-cognition. In epilepsy, cognition is a major issue. Actually, a lot of the drugs cause cognitive deficits, and the disease itself does cause also cognitive deficits because every seizure brings in more cell death in the brain and therefore causes or contributes to potential cognitive deficits. To have a molecule that can be efficacious, treats the seizures very well, but also helps either stabilize or improve cognition, that would be a major differentiation. We did see a signal of that in the open label because we measured cognition through EpiTrack, which is a very well-validated measure of cognition. Specifically, it was developed for epilepsy drugs. We used that in our open label, and we did see that a very big portion, about 75% of patients, either stayed stable, which is a win for epilepsy patients, not to get further decline, or improved. We are optimistic that we should have an impact on that. We are using that measure in the phase II-B as well. I see. What do you envision the peak sales potential for this drug to be if the profile does intend it? It's really, I mean, really early for us to predict because now we are going after the focal seizures, which is the biggest segment clearly, but it all ends up being, I mean, if this profile sticks, this is a multi-hundred million dollar opportunity by all means. This is something that can be very, very impactful to a lot of patients. Right. Data in 2027, how did you power the study? What is the placebo-adjusted seizure reduction you powered to show? I don't remember the exact number, but I mean, the thing is we didn't have any other placebo data from the previous one, from the open label and so forth, but using average kind of placebo rates and so forth. That's what we tried to use in the design of the study. We feel pretty good about the 200-plus patients. That's the size of the study across the two potencies. Right. In the last minute or two, as I think about the cadence of your catalyst, we're watching the ONAPGO Qelbree launch, and then we have your pipeline data sets later in 2027, more likely. There is a technical gap here, which raises a question. A BD, are you looking to in-license something? The latest and greatest on that front and want to be more aggressive. Yeah, I mean, BD is always a top priority for us. I try to emphasize that all the time. This is not something one day you say, "I'm going to take a break this quarter. I'm not going to do BD. I'll do it next quarter." We are very serious about BD, and we're always very active. It's been a very active, actually more active than we've ever had in the last, interestingly, 12 months ago, given the environment and a lot of the companies having issues or not able to fund certain projects or move to the next step. Now our top priorities, we're looking for commercial assets, but then right after that, assets that could be launched between 2026 and 2030. That's the time frame that we're looking at to potentially add more products to the portfolio where we can launch such product and add to our portfolio. We do have a very clean balance sheet, zero debt. We have a great capability and financing flexibility as to how we can fund those types of transactions, that's for sure. You're agnostic to indication area as well? Yeah, I mean, we are since CNS, whether psychiatry or neurology. Also, we've looked at other areas outside CNS, so we're not afraid in going into other areas as long as those targets are multi-asset targets. Right. Okay. Very good. Thank you so much for the update, Jack, and thanks everyone for listening. Thank you.