Conference Transcript - SUPN 2026-05-12

Chi Fong, Analyst — BFA

All right, everyone. Good afternoon. My name is Chi Fong. I'm with the U.S. biopharmaceutical team here at BFA, and I cover Sopernis Pharmaceutical myself. And I'm pleased to host the CEO of Sopernis Pharmaceutical, Jack Katar, here. And Jack, welcome here. Thank you for having me. So maybe I'll start with some high-level questions before I dive deeper into the products. And so Supernus has four growth products at different maturity stages right now. And I guess at a high level, how do you decide when and where to invest aggressively to drive top-line growth versus, say, maximizing operating leverage and focusing on margin profile?

Jack Khattar, CEO

Yeah. And again, thank you, everyone, for joining. I just try to remind everyone about the forward-looking statements I will be making. So please check our SEC filings for all the risk factors associated with the business. So to answer your question, I mean, we're very focused on growth. We are a growth company, and everything we are focused on is to bring in and continue to grow our product portfolio. And, of course, we go through cycles like every pharma in our industry as far as loss of exclusivities, new growth cycles, and so forth. And we just managed to put behind us the first LOE cycle, so to speak, of our, you know, legacy products, Trucandy XR, Hoxtell XR. And now we're very focused on the four growth products that we have, you know, starting with Calbreeze or Zuve, Onapco and GoCovary. And we continue to generate very strong cash flow. So our emphasis will continue to be, as time goes on, clearly to increase the leverage from an operating margin expansion perspective. You know, we are at a point now, we're pretty much in the middle and continue to be in the middle of launching Zerzuve and Onapco. These are fairly, very new two products. Calibri is more like in year six, actually, believe it or not, you know, still investing behind it. But therefore, we don't have ahead of us immediate right now as an immediate need of expanding the fixed cost structure or any specific infrastructure. And therefore, we should be able as to continue to increase the revenue top line to increase the operating margin as well. So we're in a very good spot right now. Now, having said that, we are believers in continued R&D spending and M&A at the same time. We don't believe one of these strategies can do it by itself because science doesn't always work the way you would like it to. And similarly, you don't always find the right things at the right price at the right time to acquire. So you really need both strategies. And that's how we've been able to continue to not just survive, but really grow the company over the years. speaking of bd um it sounds like that's still the top of the priority in terms of capital allocation and maybe just checking the box i know this is something that you is not in your interest area in the past in terms of buyback is it still not an area of interest for the company yeah certainly buybacks um dividends any of those tools are not something that is really of interest to us As I mentioned, we are a very highly driven growth company, so clearly we can see a much better use of our cash by investing heavily into, you know, growth in general.

Chi Fong, Analyst — BFA

You guys have provided peak sales guidance for specific products, say Unabco per se. What's your philosophy of providing additional long-term guidance? You talk about margin profile, that sort of thing, but what's the philosophy of providing sort of more long-term guidance beyond what you've provided on specific products?

Jack Khattar, CEO

Typically, we try to stay away from giving specific guidance on every specific product we have. Recently, we did on Trocandy XR, Oxtellar XR because of the unique situation of the LOEs, and therefore at least try to bracket it for shareholders, investors, so they can look at the rest of the business outside, you know, those legacy products that we're losing exclusivity on. So they can really separate the growth from, you know, the mature products. And then on UNAPCO, we did a product-specific guidance because of the unique situation, which is the supply constraint that we just went through. So we don't expect us to continue to do that on UNAPCO. We just did it this year, of course, until we stabilized the business and go back, you know, pretty much, which we are on that track at this point, rebounding back, you know, from the supply constraints. So once we do that, you know, we're not going to be giving specific guidance on these products.

Chi Fong, Analyst — BFA

Maybe it's a good segue for me to go to Onabco. So this is a new Parkinson's drug for Sopernus. It's off to a strong start. there was some supply shortage, transient shortage in 1Q has been resolved since February. So can you talk about how the rebound has been so far?

Jack Khattar, CEO

Yeah, I mean, actually, as we just mentioned very recently on our earnings call, we've been very pleased with the rebound. We did announce, as you mentioned, around the end of the third week, end of February, around that time, that we're going back to normal, so to speak, initiating new patients back to, you know, the right track and launching the product. And March was the first month, of course, full month since we made that change and re-initiation of patients. And we're very pleased with all the metrics in March from prescriptions, number of prescribers, the activity behind, you know, the brand across several measures. So in certain cases, actually even higher than before the supply constraint. So we're very pleased with that rebound. And the key is, of course, to continue to work through the backlog that the supply constraint has created because, interestingly, the demand continued to be strong despite the supply constraints. Physicians continued to submit patient forms. They realized we were very transparent with everybody about the supply situation. And despite that, they continue to line up patients and put them on the wait list, so to speak, and submit their forms to get on UNAPCO at the right time. So we're very encouraged by that. We got about 500 new forms during the fourth quarter of last year in the thick of the supply constraint and another 400 forms even in Q1 of 2026. So we're very pleased with the demand. And clearly now we're very focused on processing these as quickly as possible and getting them through the process, you know, to create new shipments and new patients on therapy.

Chi Fong, Analyst — BFA

Okay, great. I recorded where I think roughly around 570 forms that were in queue. And you mentioned 400 forms that were newly submitted. Maybe can you just walk us through the dynamic here and typically, as you see on your end, what's the typical turnaround time and success rate for conversion of these forms?

Jack Khattar, CEO

Yeah, the forms were 400 that were generated in the queue and about that were generated as new forms. And the 570 are the number of patients who are in the queue. They are in the process waiting to get the shipment. So, they're two different numbers, obviously. And these numbers are always fluid, and it's always in flux because we always continue to add to the funnel with new forms, and then we continue to process some. And also, some of them basically drop off, you know, because the process is too lengthy or the medical condition of the patient changes over time, you know, for a host of reasons. You know, sometimes some of these don't really translate on the actual patients. um but all in all i mean the process takes several weeks unfortunately through the process you have different inefficiencies i mean you'll be amazed sometimes we get the forms and half of them don't have all the information that is required so you have to go back to the physician's office you have to go back to the patient you have to look for the new and you know the information that's missing without that information the hub can't can't really process these forms and then you have to go through the insurance so i mean for all kind of reasons uh it takes several weeks for a form to actually translate into an actual shipment and um just to confirm the 400 new

Chi Fong, Analyst — BFA

forms and the 570 that i didn't queue those are mutually exclusive yes that's correct okay so we're talking about 970 forms if i do the math correctly that's right okay got it um So does Supernus have a dedicated team helping with the processing these enrollment forms?

Jack Khattar, CEO

Yeah, I mean, we have different teams at different stages of the process. So, you know, you have folks who help the physician's office in making sure the forms are completed, follow up with patients, you know, and so forth. Then you have field reimbursement specialists that work hand-in-hand with the hub services to get the insurance process going, making sure all the information is there for the process and for the approval to come in. Then that goes to the pharmacy for shipments. So we have people who follow up with the pharmacy to make sure they ship on time and so forth. And also on the other receiving end, we have the nurses who get notified that a patient is ready to be initiated, And therefore, these nurses call up patients at home and they set up an in-home visit. So we do that very high quality in-home visit with the patient to get them initiated on the drug, train them on how to use the pump, the device, go through the instruction, the titration, which is very important, you know, and so forth. And once they're initiated, we follow up with them. So it's not like a one-time visit and that's it. We follow up with phone calls. We even follow up with visits if that is needed. And also some of the nurses as well, you know, they loop back into the physician if there is important medical information that they gain during that process that they believe the physician should know about the patient, what they're going through, and so forth. So it's really a full service that we provide our patients to make sure, you know, the use of the product is as easy as possible for them.

Chi Fong, Analyst — BFA

Just to follow up on the number of new firms, 500 in 4Q, 400 in 1Q. So, help us understand, does that reflect a fluctuation in terms of demand on new starts, or did you guys stop taking new forms because of supply constraint?

Jack Khattar, CEO

Well, you have to factor also Q1. I mean, Q1 typically is slower, you know, in general, aside from supply issues or on any product. even some of our other products. So Q1 typically is a slower month in general. So that's what you're seeing probably there. Nothing too much I will read into, you know, 500 in Q4, but only 400 in Q1. So, yeah, I mean, it's fairly solid across.

Chi Fong, Analyst — BFA

I'm probably back at the wrong tree here, but given the demographics of these patients tend to be older, Do you think, you know, maybe 1Q, you're seeing some winter storm across the nation may have, you know, maybe contributing to some of these slowest new starts?

Jack Khattar, CEO

I mean, there's no question. We did have disruption, but I really like to use excuses like this, so to speak, because, you know, the demand softens. But, I mean, there is always some of that that happens in winter times. I mean, we face that most of the times. Yeah, absolutely. because if your rep is out of the field for two days out of five days, I mean, that's a lot of time, you know, for that one week out of the month. So, yes, I mean, it did impact it.

Chi Fong, Analyst — BFA

Okay, fair. So, I think there were 2,200 enrollment forms submitted by 645 prescribers so far since launch. which may be, if I do my math right, three to four forms per prescriber. So, curious, can you talk about opportunity to expand on both the breadth and the depth of prescribing?

Jack Khattar, CEO

I mean, certainly we're still in the real early, early times here. I mean, we just launched the product a year ago. So, clearly, we haven't reached every physician who is a potential prescriber here. Those we have reached, we certainly haven't hit them with the frequency that typically requires behavior, you know, is required to have behavior change as far as prescriptions are concerned. So there is a long way for us here to continue to build not only on the base, continue to increase the number of prescribers, but we also have a lot of prescribers who are what we say, I mean, they're adopting the product, but they're kind of dabblers, so to speak. They dabble with one or two prescriptions, and therefore we push pretty hard to get more depth into that, you know, practice. So because if you're a physician, I mean, we see obviously your prescription. And if you've been prescribing for three, four months in a row, one, two prescriptions, clearly you're happy with the product. Otherwise, you'll stop prescribing it. If you are happy with the product on one or two patients, why wouldn't you expand, you know, the use of the product? So we clearly, you know, challenge you in a nice way, of course. you know, why wouldn't you put more patients on the product? What is it that's holding you back up? And, you know, we challenge physicians and make sure, you know, they do present ONAPCO as a clear option for a lot of their patients.

Chi Fong, Analyst — BFA

Okay, great. So your current guidance for ONAPCO is $45 to $70 million. And I assume that taking to some assumption of a range of scenario on both demand and supply side, and one of the questions that have come up during the quarter was, let's just take demand out of the equation. How many patients can you supply with the current supplier, or alternatively, can you supply above the guidance?

Jack Khattar, CEO

I mean, clearly, when we came up with this guidance, you know, the 45 to 70 million, we had several things factor into it, not just demand, not just supply, not just even the resources are required to process the demand. Because I could have all the supply in the world, but if I can't process these forms and get the insurance process and all that, it doesn't matter how much product I have in the warehouse. So you really need all these factors. And that's what the guidance is built on, not one specific, you know, factor. Now, simplifying it, if you look at 45 or 70 million, basically 70 million means you have to have somewhere around 700, 800 patients all year round on Onapco. I mean, that's really what translates to about 70, you know, million. And the current supplier who we have, you know, we felt very comfortable, you know, they should be able to meet, you know, that kind of demand. Otherwise, our guidance would have been different if we felt, you know, supply is going to be a bottleneck or what have you. So we feel very comfortable with the guidance we gave. We didn't change the guidance recently in May in our earnings call. Typically, we like to make any changes if they are warranted. We like to make them more in August timeframe because you have a nice six months behind you. You really have a very good eye on the trend and what's happening through the year and you have a better, instead of doing changes early in the year and then you don't have to change it back again later on okay so you've also guided to bringing the second supplier up uh by mid-2027 so another question that i've got after the quarter was how good of a handle you have on the timing and what do you see as the biggest unknown in terms of the fda review process and timeline yeah we have actually pretty good feel for the timing specifically the submission. So, I mean, we know what we need to do. We've produced the batches already. We've put them on stability. So now it's just a matter of reading the stability, put the reports together, and make the submission. So there is really nothing holding it up from that perspective. And therefore, we feel pretty good about the submission in the third quarter. Now, is it July? Is it August? Is it September? I can't predict it to the month or to the week or what have you. And remember, summertime is summertime in Europe. But anyway, so we will be filing in the third quarter, and we have pretty good feel for that. Now the question is review time. We think the review time is more like six months, but sometimes because you have an inspection here that will be required, this is the first time this facility will be sourcing product to the U.S. market, and therefore the FDA has to inspect the facility. It's in Europe. So that we don't have control over, obviously, and that's why we gave a window of six to nine months, so to speak. So if we do file in the third quarter, a six-month review will get you into the end of Q1. A nine-month review will get you into the mid-year of 2027. I mean, simplistically that, but we feel pretty good about the timing, of course, of the submission.

Chi Fong, Analyst — BFA

Okay, great. Another question that's come up after the quarter was when and to what extent you can negotiate with the first supplier or current supplier to improve or increase the capacity. And that's, you know, anytime before the second supplier becomes online.

Jack Khattar, CEO

Yeah, I mean, all this has actually been worked out and have been done already before we even announced that we're back on track, meaning we've looked into 2026. We've looked at the capacity of the current supplier and what they can do. We've looked at the second supplier and what is the potential timing bringing them online. So we've looked at all that clearly and the different scenarios or potential outcomes that could happen. And we felt pretty comfortable, clearly, not just meeting the 2026 supply requirements, but also the 2027. And in 2027, I mean, once we get the second supplier, it doesn't mean I stop getting product from the current supplier. I mean, these are not necessarily mutually exclusive. You know, we will have two suppliers, you know, helping us meet the further extra growing demand in 2027. And I did mention occasionally that we also have a third supplier that we're lining up, of course, because we believe the demand will be there for the product and we will need the capacity. And even without the third supplier, I mean, the second supplier has a much bigger capacity, much larger capacity than the current supplier. So the two suppliers together will be adequate for 2027, no question about it, accounting for growth, of course. And then beyond that, we will have even a third supplier on top of that.

Chi Fong, Analyst — BFA

Okay, great. On the earnings curve, you've talked about the evolving demodographic differences between Onapco and Violift. And so I'm curious if, based on this learning, how much you refine your commercial strategy to maximize Onapco's sales opportunity?

Jack Khattar, CEO

I mean, big picture, this actually supply-constrained situation, interestingly, if it highlighted something to me, it highlighted one very important aspect, and that is Onapco and Viola are very different products, and there is a need for both of them. And they can very well coexist together, and there is a different patient for a different product here. Um, and clearly even during the time when we had the supply can stain, we still have generated significant demand. So clearly these two pumps are not interchangeable. They're not substitutable, you know, they're not, and physicians view a lot of different patients that need different therapies here. And of course the, the main difference is you have a different drug, you know, they're both infusion devices, but clearly they're very different drugs. And you have patients who may never continue to be able to benefit from a levodopa carbidopa, and therefore a physician might want to give them something else, like apomorphine, which is Onapco. Or a physician might feel, now, you know what, a levodopa carbidopa in a different form may still benefit that patient, so let me try the other infusion device, and so forth. And of course, over the years, I mean, you're going to have patients who may try both, or who may switch from one versus the other because they're different devices, different drugs. They have different profiles in general, the way they are used, conveniences, AEs, you know, they're all, it's a different product, obviously. But all in all, I think we are both, you know, ourselves and our competitor, we're building a whole new segment here together, a whole new area which didn't exist about a year ago or a year and a half ago and it sounds like the demand is fairly robust you know for both products and physicians are really responding pretty well with all kind of patient types and putting a lot of different patients on these infusion devices.

Chi Fong, Analyst — BFA

Okay okay yeah so curious if you have any thoughts about what's the expected duration of therapy for Onabco as they say and you have been running some long-term extension studies to evaluate safety and adherence data for UNAPCO, such as the Infusion trial. So, curious, any learnings there in which are your expectations on typical durational therapy for UNAPCO? Yeah.

Jack Khattar, CEO

What we really have, the best things we have is few studies that actually have been done in Europe, because in Europe, the apomorphine infusion device has been available for decades, you know, a couple decades, if not more than that. So there has been several studies following, you know, different sets of patients over time, and it varies. It's all over the place. It's a little bit hard for us to say anything specific on NAPCO now because it's still early and we don't have real-time, real-world evidence, so to speak. But if you look at these studies, it really varies between as low as six months on the product and as long as six years or even longer than that. Now, clearly, you've got to keep in mind this is an elderly patient population, so years and years and years, it becomes very difficult after that because a lot of these patients, unfortunately, their medical condition really gets worse over time or they have other complications. But on an average, you know, there are studies that show a median of around, you know, four to six years that people stay on these infusion devices, but it could be as little as six And if they do go through it at six months, it could be because they titrated so quickly, they couldn't tolerate, you know, tolerate the nausea. From our experience so far, what we're finding out is if you do the titration the right way through the nurse and the training that we provide, actually, a lot of patients don't even feel nausea. But you have to do it patiently, you have to titrate slow and low, and you'll be able to tolerate the medication. And if you do tolerate the medication, I mean, we could see how you could stay on the drug for six years or whatever, if we end up duplicating the European experience.

Chi Fong, Analyst — BFA

Okay, that sounds great. One of the questions that have come up was IP runway for the product. Can you talk about the key IP protections, any room for IP extensions, and sort of like the complexity of the product, having a device and different components, does it make it harder to genericize?

Jack Khattar, CEO

What the drug has today, ONAPCO has, is orphan drug designation. The FDA is still reviewing and hasn't ruled yet on the seven-year exclusivity, so we're waiting for that. That's really the protection that we have on the product. Clearly, it's not a simple product, as you pointed out, and everybody knows. We went through several rounds on the regulatory side to get this product. It's a fairly complex drug-device combination, so these are not easy products. Now, it doesn't mean people will not try. Of course, you know, you give people a lot of time and a lot of money. They can figure out something at some point, right? But that's really the protection that we have, you know, with the product. Also, you know, you need a lot of infrastructure around, you know, the product and services because the product is not just the product itself. We provide, as I mentioned, a lot of services with it as well.

Chi Fong, Analyst — BFA

Great. Maybe the last few minutes we should talk about Calbri. This is your non-stimulant drug for ADHD, six-year in the market, double-digit growth still. So can you talk about the opportunity here and the company's strategy for driving sustained growth for the near future?

Jack Khattar, CEO

Yeah, Calvary has been a great success for us. As you mentioned, we're into year six already in May, starting year six on the market. And we just, you know, with our earnings call, we reported 27% growth on the adult prescription base, 16% pediatrics. I mean, the growth continues to be very robust. As a reference, I mean, last year we did 935,000 prescriptions in a market which is 111 million prescriptions a year. So we clearly still have a huge potential for a novel non-stimulant that actually works. You know, we've had non-stimulants in the past, fairly limited number, but we've had them, but they really don't work as well at all. And Calgary significantly differentiates itself by the fact that it works as early as week one for children. For adults, maybe two weeks because you may have to titrate to a higher dose and you can find out whether it really works for you or not. For adults, which has been a major growth area for us, The market is about 70% of the prescriptions is for adults. In our case, it's only 30%. So we still have way even more room on the growth on the adult side. And there what we're finding out that a lot of adults are starting to appreciate the fact that Calvary is an all-day drug. It truly gives you all-day coverage. A lot of adults supplement their controlled release stimulants with immediate release stimulants later in the day because they lose coverage. A lot of XR controlled release stimulants only last 12 hours, 13 hours, you know, 14 hours, maybe. So if you need and you have a longer day, a lot of them supplement with the immediate release stimulant. And many of these adults are finding out that once they start using Calvary, they don't need anything else to supplement. because Calvary gives you true 24-hour coverage, and therefore, you know, it makes a big difference for them with a product like this. Also, in adults, there's a lot of comorbidities, and we generated, you know, very good data in a Phase 4 study on the use of Calvary in ADHD plus anxiety, ADHD plus depression, and so forth, and we, you know, published the data and so forth. That is not something on our label. Clearly, we don't promote it, but it's something that physicians have asked for as far as to help me understand how can I use the product in adults. And we generate very strong data in co-administration of Calvary also with stimulants, and that has been published as well. So we have a tremendous amount of data surrounding the product, which also ties into its mechanism of action, which is a multimodal pharmacodynamic profile hitting not only on the norepinephrine, but also on the serotonin modulation, which is very important in ADHD. And more and more data and evidence has been surfacing lately about the serotonin aspect and the treatment in ADHD. So all in all, that has helped us significantly and continue to grow the product specifically in the adult population.

Chi Fong, Analyst — BFA

Maybe the last 20 seconds, any thoughts on Oroxen Rho in HDHD? We cover alchemies following that data. We're going to have some early phase 1B data later in the year. So curious if you have any thoughts on Oroxen Rho in HDHD.

Jack Khattar, CEO

Yeah, I mean, it remains to be seen clearly as far as whether the preclinical models will end up translating into, you know, human data. I mean, preclinical models tend to be predictive in certain cases, and CNS then not. But it will be interesting to see what their first in human, you know, data shows, yeah.

Chi Fong, Analyst — BFA

Okay, great. We have against our time. Thanks so much, Jeff, for joining us today. Thank you.