Good afternoon, and welcome to Supernus Pharmaceuticals' Second Quarter 2021 Financial Results Conference Call. At this time, all participants are on a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Peter Vozzo, of Westwicke, Investor Relations representative for Supernus Pharmaceuticals. You may begin.

Thank you, Josh. Good afternoon, everyone, and thank you for joining us today for Supernus Pharmaceuticals second quarter 2021 financial results conference call. Today, after the close of the market, the company issued a press release announcing these results. On the call with me today are Supernus' Chief Executive Officer, Jack Khattar; and Jim Kelly, Chief Financial Officer. Today's call is being made available via the Investor Relations section of the company's website at ir.supernus.com. Following remarks by management, we will open the call to questions. During the course of this call, management may make certain forward-looking statements regarding future events and the company's future performance. These forward-looking statements reflect Supernus' current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the Risk Factors section of the company's latest SEC filings. Actual results may differ materially from those projected in these forward-looking statements. For the benefit of those of you who may be listening to the replay, this call is being held and recorded on August 4, 2021, at approximately 4:30 PM Eastern Time. Since then, the company may have made additional announcements related to the topics discussed. Please reference the company's most recent press releases and current filings with the SEC. Supernus declines any obligation to update these forward-looking statements, except as required by applicable securities laws. I will now turn the call over to Jack.

Thank you, Peter. Good afternoon, everyone, and thanks for taking the time to join us as we discuss our 2021 second quarter results. During the second quarter, we continue to make significant regulatory, operational and commercial progress, highlighted by the approval of Qelbree and its launch at the end of May for the treatment of ADHD in pediatric patients. The early performance of Qelbree is on track with our expectations. Healthcare providers are excited about Qelbree as the first novel non-scheduled medication option for ADHD in over a decade. Qelbree’s prescriber base is rapidly expanding each week and healthcare providers expect to increase prescribing significantly, as children get back to school this fall. We are encouraged by the early clinical feedback which has been positive and in line with the results of our Phase III clinical trials. Reports from the field indicate that patients are experiencing demonstrated improvement in ADHD symptoms as early as week one, with continued improvement over the subsequent weeks. Having a once-daily rapid and extended release sprinklable capsule for a full day exposure has been well received and the safety and tolerability profile is allowing patients to stay on therapy. Early trends and prescriptions reflect the heavy sampling programs with patients starting on a two to four weeks of samples. Over 25,000 starter kits have been distributed since the launch and in preparation for the Baptist school season. We look forward to the Baptist school season to be in full swing, so that we can help as many pediatric patients as possible. Regarding managed care coverage, overall, more than 60% of lives in the paediatric market have access to Qelbree, after just three months on the market and compared to other three branded non-stimulants, Qelbree is at an advantage or is at parity in more than…

All right. Thank you, Jack. Good afternoon, everyone. As we review our second quarter results, please refer to today's press release. I begin with our revenue and earnings before turning to discuss operating expenses. As a reminder, in June of 2020, we closed the acquisition of the US WorldMeds products. This means our prior year comparisons reflect a partial quarter financial impact of that acquisition. Total revenue for the second quarter of 2021 was 141.3 million, an increase of 12% as compared to 126.7 million in the same quarter last year. Total revenue in the current quarter was comprised of net product sales of 138.6 million and royalty revenue of 2.7 million. NET product sales in the second quarter grew by 14.6 million or 12% compared to the prior year. Year-over-year growth for Oxtellar XR sales and the benefit of a full quarter sales for APOKYN, MYOBLOC, XADAGO was partially offset by a decline in Trokendi XR. Qelbree was launched in late May, and we're happy to report our initial 300,000 in sales for the second quarter of 2021. Qelbree net sales include a temporarily high commercial co-pay deduction, as we support patients during the early launch period, while we continue our commercial contracting efforts to establish access for patients. Regarding current quarter inventory levels, we saw a decrease of less than $1 million for inventory held by our direct purchasers as compared to the end of the first quarter of 2021. Now this excludes the initial stocking activity for Qelbree. Operating earnings were $34.1 million for the second quarter of 2021, compared to $45.5 million in the same period the previous year. Net earnings were $23.7 million for the second quarter of 2021 or $0.43 per diluted share, compared to $34.7 million or $0.65 per diluted share in the…

Thank you. Our first question comes from David Steinberg with Jefferies. You may proceed with your question.

Thanks. A couple questions. First, Jack, you mentioned you've already distributed 25,000 starter packs, what will be the number before the back-to-school season starts? And do you have any sense of the initial prescriptions, what percent of the scripts are actually conversions from the free starter packs? And what percentage sort of scripts that started without a sample? And then final question is how long do you expect a sample, i.e., when will scripts -- when will we able to be see the sort of the normal course of the scripts playing out versus freebies? Thanks.

Sure. Yes, the 25,000 starter kits, that's the distribution to-date to the high prescribers and our target physicians in the universe that we are targeting for . This will continue this effort will continue to your question, will continue throughout we expected the at least the first six months of launching the product until we have a very strong coverage across the board, across all the plans with whom we are currently negotiating and we'll continue to negotiate the contracts. So, therefore, there is no specific timing we say we'll stop sampling or not and -- samples actually will continue. They're not only for launch, they will also continue on an ongoing basis. Nevertheless, they may not be at the same rate as they are now. So, we will fine-tune that as time goes on, but they will always be there. And that is one of the advantages we have currently in the marketplace versus every other company out there, really giving patients a free product to try the product and see for themselves the performance of the product. So, we're very pleased with the fact that we can actually sample the product, we're happy to do that. We want to help patients to get on the product and continue to do that. As far as your questions on conversion and script with and without samples, I mean, we have a very small database right now. So, it's not like we have a lot of data points that we can size from, but as time goes on, we can certainly get a better feel for it. So, I don't have any specific numbers that can give me -- or can be a good predictor for the next three months, which are really the most important ones, which is the back-to-school season.

. Our next question comes from David Amsellem with Piper Sandler. You may proceed with your question.

Hey, thanks. And just a couple on Qelbree. So Jack, you mentioned covered lives. I'm interested in what kind of utilization management you're seeing? I know, these are early days, but you know, are you are you seeing or do you have contracts in place where or situations, repairs and making patients stuff through other non-stimulants like Strattera with Adderall? And just talk about just generally what utilization management is looking like or what you think will look like over time? And then secondly, regarding copay assistance. I know you mentioned how that impacted the net sales number in the quarter. But going forward, I am assuming you're going to be sub-sizing out of pocket expenses in a significant way. So what implications does that have for the gross-to-net? And what's your latest thinking on the gross-to-net? Thanks.

Yeah, sure. Yeah, clearly, I mean, the various components within the gross in that and the lifecycle of a product they always shift around and at the beginning, when you have a launch like this, there is a heavy emphasis on the copay and the patient assistance to get patients the medication and help them with the cost of the medication until the coverage becomes and gets to a level where we're pretty pleased with. So certainly at this point, as Jim pointed out, and as you mentioned in your question, you know, the copay is a big component of the gross-to-net. Overtime, of course, as we have more contracts in place, the rebates then become a bigger piece and the copay starts going down as part of the gross-to-net and they hopefully balance out each other at a point where the polo gross-to-net on an ongoing basis will decline overall. So these are all the different moving parts clearly with different parts being heavier upfront, behind the launch, behind the trial and making sure that patients get access to the product until later on when we have the contracts in place that will pick up you know some of that gross-to-net and the piece -- and that will depend on the utilization to your question in a lot of these plans. So the heavier the utilization obviously, the bigger the rebate portion will be, but also will be the lower the copay portion. Regarding the kind of coverage, we have so far, it really as mixed among so many of the plans. There is step edits. Some of them have one, some of them have two, some of them are stimulants, some are non-stimulants, its really a mixed bag at this point. And we're working through all that. We…

Okay. Thanks Jack.

I'm not showing any further questions. At this time. I would now like to turn the call back over to Jack Khattar for any further remarks.

Thank you. We remain very focused on the launch of Qelbree, especially as we head into the back-to-school season. In addition, we continue to advance SPN-830 along its regulatory pathway towards potential approval. Qelbree and SPN-830 represent a very important growth drivers for the company and we're committed to progressing them towards commercialization and market success. Thanks again for joining us today. We look forward to updating you on our progress throughout the year.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.