Supernus Pharmaceuticals' Earnings Call: Significant Increase Reported in Total Revenue
Supernus Pharmaceuticals, Inc. (SUPN) reported strong financial performance in its third-quarter earnings call on November 4, 2024. The company announced that total revenue reached $175.7 million, fueled by the growth of key products such as Qelbree and GOCOVRI. Net product sales also rose significantly, increasing to $170.3 million. Supernus highlighted a 19% growth in Qelbree prescriptions and an 8% year-over-year increase in GOCOVRI net sales. Despite the strong overall performance, there was a decline in net sales for older products, Trokendi XR and Oxtellar XR.
Key Points
Total revenue for the third quarter increased from $153.9 million in the same period last year to $175.7 million. Net product sales made up $170.3 million of the total revenue. Qelbree prescriptions grew by 19%, reaching net sales of $62 million. GOCOVRI net sales increased by 8%, rising to $36 million. Sales of older products Trokendi XR and Oxtellar XR experienced a decline, with Trokendi XR sales decreasing by 26%. Supernus raised its full-year revenue forecast for 2024 to between $630 million and $650 million. GAAP operating income is expected to be between $50 million and $65 million.
Company Outlook
Supernus anticipates continued erosion in Trokendi XR sales. The company raised its sales target for Trokendi XR and Oxtellar XR to approximately $155 million for 2024. The revenue forecast for 2024 has been increased to the range of $630 million to $650 million. GAAP operating income is projected to be between $50 million and $65 million, while non-GAAP operating income is expected to be between $150 million and $170 million.
Negative Points
Trokendi XR sales fell by 26%, dropping to $15 million. Oxtellar XR sales remained flat at $30 million.
Positive Points
Strong growth in Qelbree and GOCOVRI sales. Cash reserves increased to approximately $403.2 million, demonstrating robust operational cash generation.
Shortcomings
Combined R&D and SG&A expenses showed a slight decline, indicating potential cost-saving measures.
Q&A Highlights
Positive results regarding SPN-817 reducing seizure frequency by 56% in maintenance phase. Approval for the apomorphine pump is expected by February 2025, with anticipated market introduction benefiting from increasing awareness. Optimism surrounding the study of SPN-820 for treatment-resistant depression (TRD) based on promising results in major depressive disorder (MDD) trials.
In summary, Supernus Pharmaceuticals demonstrated strong financial performance in key product sales and a solid increase in cash reserves for the third quarter of 2024. The company's strategic focus on prioritizing the acquisition of commercial products and late-stage pipeline assets, along with the anticipated launch of new therapies, positions it well for continued growth and innovation in the pharmaceutical industry.
InvestingPro Insights
The strong performance of Supernus Pharmaceuticals in the third quarter of 2024 is backed by InvestingPro data. The company's revenue growth of 6.79% over the past twelve months and an impressive 14.17% increase in the latest quarter align with the reported total revenue of $175.7 million. This growth trend is particularly remarkable given the challenging market conditions for some older products.
InvestingPro Tips underscore Supernus' financial strength, noting that the company "has more cash on its balance sheet than debt" and that "its liquid assets exceed its short-term liabilities." This strong financial position is reflected in the company's significant cash reserves of $403.2 million mentioned in the earnings report.
The company's impressive 89.04% gross profit margin over the past twelve months highlights the efficiency in the production and sale of its pharmaceutical products. This high margin likely contributes to Supernus' ability to invest in research and development while maintaining profitability.
One InvestingPro Tip states, "net income is expected to increase this year," which aligns with the company's upgraded full-year revenue forecast for 2024 and the positive outlook for key products like Qelbree and GOCOVRI.
Investors may also find it interesting that Supernus is trading at a low P/E ratio according to its near-term earnings growth, with a PEG ratio of 0.24. This suggests that the stock may be undervalued considering growth expectations.
For readers seeking a more comprehensive analysis, InvestingPro provides 12 additional tips on Supernus Pharmaceuticals, offering a deeper understanding of the company's financial health and market position.