SUPERNUS PHARMACEUTICALS INC (SUPN) SPO
|Company Name||SUPERNUS PHARMACEUTICALS INC|
|Company Address||1550 E GUDE DR
ROCKVILLE, MD 20850
|CEO||Jack A. Khattar|
|Employees (as of 9/30/2012)||80|
|State of Inc||DE|
|Fiscal Year End||--|
|Exchange||Nasdaq National Market|
|Shares Over Alloted||0|
|Shareholder Shares Offered||--|
|Lockup Period (days)||180|
|Quiet Period Expiration||1/9/2013|
We estimate that the net proceeds from the sale of common stock that we are offering will be approximately $44.7 million. This projection is based upon a public offering price of $8.00 per share, and after deducting underwriting discounts and commissions as well as estimated offering expenses payable by us. We anticipate that we will use the net proceeds as follows: º approximately $23.0 million for sales and marketing expenses to provide continued support of the commercial launch of Oxtellar XR and, after approval by the FDA, Trokendi XR; º approximately $4.0 million for the manufacture and supply of commercial quantities of Oxtellar XR and Trokendi XR inventory to be sold in connection with such commercial launch; º approximately $3.5 million to fund the continued clinical development of SPN-810, including: preclinical carcinogenicity testing; process development and scale up for commercial bulk active pharmaceutical ingredient; º approximately $2.5 million to fund the continued clinical development of SPN-812, including preclinical carcinogenicity testing, process development for commercial bulk active pharmaceutical ingredient, continued Phase II testing and formulation development; º approximately $3.0 million to fund Phase IV studies, and post-marketing formulation development and clinical work for Oxtellar XR and Trokendi XR; º approximately $4.5 million to fund our payment obligations under the term loans under our secured credit facility; and º the remainder, if any, for general corporate purposes including general and administrative expenses, capital expenditures and working capital. We believe that net proceeds from this offering will be sufficient to fund the expected commercial launch of Oxtellar XR in the first quarter of 2013, to obtain the final FDA approval for Trokendi XR and to fund the expected commercial launch of Trokendi XR in the third quarter of 2013. In addition, our operating plan, including our planned commercialization of Oxtellar XR and Trokendi XR, may change as a result of many factors. As of September 30, 2012, we had $26.0 million of term loans outstanding under our secured credit facility, of which $11.9 million mature in August 2014 and $14.1 million mature in January 2015. The term loans bear interest at a fixed rate per annum of 11.0%. We used the proceeds of the term loans to fund ongoing clinical trials for Oxtellar XR, Trokendi XR and SPN-810, to prepare for manufacturing validation of Oxtellar XR and Trokendi XR, to support formulation for various clinical stage products, to prepare commercial marketing of Trokendi XR and for regulatory filing fees. Although we currently anticipate that we will use the net proceeds as described above, there may be circumstances where a reallocation of funds may be necessary. The amounts and timing of our actual expenditures will depend upon numerous factors, including the progress of our development and commercialization efforts, the progress of our clinical trials, whether or not we enter into strategic collaborations or partnerships and our operating costs and expenditures. Accordingly, our management will have significant flexibility in applying these net proceeds. The costs and timing of drug development and commercialization and of regulatory approval, particularly conducting clinical studies, are highly uncertain, are subject to substantial risks and can often change. Accordingly, we may change the allocation of use of these proceeds as a result of contingencies such as the progress of research, progress of clinical trials, ability to secure approval of our products from the FDA, uptake of our products in the marketplace and competitive responses. Pending use of the proceeds from this offering as described above or otherwise, we intend to invest the net proceeds in short-term, interest-bearing, investment-grade securities.
The biotechnology and pharmaceutical industries are highly competitive. A number of multinational pharmaceutical companies as well as large biotechnology companies are pursuing the development of or are currently marketing pharmaceutical products in the anti-epilepsy and ADHD markets on which we are focusing. Epilepsy There are currently over 15 branded products, as well as their generic counterparts, on the U.S. market indicated to treat some form of epilepsy. Several NCEs are expected to enter the epilepsy market in the next few years. Based on IMS Health prescription data from 1994 to 2005 for NCE launches for seizure disorders, such NCEs, on average, experienced slow market penetration characterized by a 0.58% to 1.1% market share point gain on an annual basis. We believe this is because physicians are often reluctant to change a stable patient's existing therapy and risk a breakthrough seizure in their patients. If final approval is received, Trokendi XR (extended release topiramate) will compete with all immediate release topiramate products including Topamax and related generic products. We are aware that Upsher-Smith announced the initiation of a Phase III clinical trial for an extended release topiramate product, which it has described as an internally developed program for the management of epilepsy in adults using its proprietary formulation technology. If this product candidate is approved by the FDA before Trokendi XR, then Upsher-Smith could obtain three years of marketing exclusivity, which would significantly delay our entry into the U.S. market. Oxtellar XR (extended release oxcarbazepine) will compete with all immediate release oxcarbazepine products including Trileptal and related generic products. We are not aware of any other company that is currently developing an extended release oxcarbazepine anti-epileptic product in the United States. In addition, we believe that Oxtellar XR's once-daily formulation solves a drug delivery challenge specific to oxcarbazepine that must be overcome by all potential competitors. We are aware of companies who have modified-release oxcarbazepine products that are marketed outside of the United States but, to our knowledge, such products are not being pursued for the U.S. market. These modified-release oxcarbazepine products include Apydan, which is developed by Desitin Arzneimittel GmbH and requires twice-daily administration. ADHD Competition in the U.S. ADHD market has increased with the commercial launch of several products in recent years, including the launch of generic versions of branded drugs, such as Adderall XR. Shire plc is one of the leaders in the U.S. ADHD market with three products: Adderall XR, an extended release stimulant treatment designed to provide once-daily dosing; Vyvanse, a stimulant prodrug product launched in 2007; and Intuniv, a non-stimulant treatment launched in November 2009. Other stimulant products for the treatment of ADHD in the U.S. market include the following once-daily formulations: Concerta; Metadate CD; Ritalin LA; Focalin XR; and Daytrana. Other non-stimulants are Strattera and Kapvay. We are also aware of clinical development efforts by several large pharmaceutical companies including Shire plc, GlaxoSmithKline plc, Eisai Inc., AstraZeneca plc and Abbott Laboratories to develop additional treatment options for ADHD.
We are a specialty pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system, or CNS, diseases. Our extensive expertise in product development has been built over the past 20 years: initially as a stand alone development organization, then
as a U.S. subsidiary of Shire plc and, upon our acquisition of substantially all the assets of Shire Laboratories Inc. in late 2005, as Supernus Pharmaceuticals, Inc. We are planning for the commercial launch of two neurology products for the treatment of epilepsy in 2013 and are developing multiple product candidates in psychiatry to address the large market opportunity in attention deficit hyperactivity disorder, or ADHD, including ADHD patients with impulsive aggression. We intend to market our products in the United States through our own focused sales force targeting specialty physicians, including neurologists and psychiatrists, and to seek strategic collaborations with other pharmaceutical companies to license our products outside the United States. We use our proprietary technologies to enhance the therapeutic benefits of approved drugs through advanced extended release formulations. On October 19, 2012, the U.S. Food and Drug Administration, or the FDA, granted final approval of Oxtellar XR (extended release oxcarbazepine), formerly known as SPN-804, for the treatment of epilepsy. We anticipate the commercial launch of Oxtellar XR to occur during the first quarter of 2013. On November 15, 2012, the FDA granted a three year marketing exclusivity to Oxtellar XR. We believe that Oxtellar XR will be the first extended release formulation of oxcarbazepine for the treatment of epilepsy available in the U.S. On June 25, 2012, the FDA granted tentative approval of Trokendi XR (extended release topiramate), formerly known as SPN-538, for the treatment of epilepsy. The final approval for Trokendi XR may not be made effective until the expiration of the marketing exclusivity period that Topamax has regarding safety information of topiramate in a specific pediatric population. This marketing exclusivity expires on June 22, 2013. We are not required to complete any additional clinical trials for Trokendi XR. We anticipate the commercial launch of Trokendi XR to occur during the third quarter of 2013 assuming the receipt of final approval by the FDA. We believe that Trokendi XR will be the first extended release formulation of topiramate for the treatment of epilepsy available in the U.S. Our psychiatry product candidates include SPN-810 (molindone hydrochloride), which completed a Phase IIb trial as a novel treatment for impulsive aggression in patients with ADHD, and SPN-812, which completed a Phase IIa trial as a novel non-stimulant treatment for ADHD. In addition to these products and product candidates, we have several additional product candidates in various stages of development, including SPN-809, for which we submitted an investigational new drug application, or IND, in 2008. SPN-809 would represent a novel mechanism of action for the U.S. anti-depressant market. We believe our broad and diversified portfolio of product candidates provides us with multiple opportunities to achieve our goal of becoming a leading specialty pharmaceutical company focused on CNS diseases. The table below summarizes our current pipeline of novel products and product candidates. Product Indication Status Oxtellar XR Adjunctive therapy for epilepsy Final approval by FDA Trokendi XR Epilepsy Tentative approval by FDA SPN-810 Impulsive aggression in ADHD Phase IIb completed SPN-812 ADHD Phase IIa completed SPN-809 Depression IND filed ----- We were incorporated in Delaware in 2005. Our principal executive office is located at 1550 East Gude Drive, Rockville, Maryland 20850. Our telephone number is (301) 838-2500. We also maintain a website at www.supernus.com.
|Auditor||Ernst & Young LLP|
|Company Counsel||Saul Ewing LLP|
|Lead Underwriter||Cowen and Company, LLC|
|Lead Underwriter||Jefferies & Company, Inc|
|Lead Underwriter||Piper Jaffray & Co.|
|Transfer Agent||Computershare Trust Company, N.A|
|Underwriter||Lazard Capital Markets LLC|
|Underwriter||Stifel Nicolaus & Company, Incorporated|
|Underwriter Counsel||Goodwin Procter LLP|
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