Good afternoon, and welcome to Supernus Pharmaceuticals' First Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this conference call is being recorded. And I would now like to turn the call over to Peter Vozzo of Westwicke, Investor Relations representative for Supernus Pharmaceuticals. Sir, you may begin.

Thank you, Chris. Good afternoon, everyone and thank you for joining us today for Supernus Pharmaceuticals' first quarter 2022 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 Chief Financial Officer, Tim Dec. 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 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 who may be listening to the replay. This call is being held and recorded on May 9, 2022. 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 declined 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 2022 first quarter results. Following a productive year end 2021 in which we work towards minimizing the impact of the 2023 Trokendi XR transition. We have continued to execute on our long-term growth strategy and focus on our strategic priorities. To quickly recap our overall performance in the first quarter of this year. Total revenues were $152.5 million, representing a 16% increase over the first quarter of last year. And adjusted non-GAAP operating earnings were $28 million, an 11% increase over the first quarter of last year. The first quarter of 2022 represents the first full quarter we record on all products combined from the acquisitions in 2020 and 2021. Note that net sales of Trokendi XR as a percentage of total revenue was 41% in the first quarter of 2022, significantly down from 72% in the first quarter of 2020, which was the last full quarter before both acquisitions. This was the result of great execution and corporate development and commercial operations diversifying our revenue base to minimize the impact of the 2023 Trokendi XR transition on our overall performance. Regarding Qelbree, the product is off to a great start this year with continued momentum and prescription growth and shipments. We are actively preparing for the launch in the adult market after recently receiving approval from the FDA for the treatment of adults. For decades, adult patients had only one non-stimulant treatment option available to them. We are proud to be bringing innovation to the marketplace with a first novel non-stimulant in 20 years. Adult patients now have a new, safe and effective treatment option that helps them stay away from controlled substances that have high potential of abuse and…

Thank you, Jack. Good afternoon, everyone. As I review our first quarter 2022 results, please refer to today's press release. Total revenue for the first quarter of 2022 was $152.5 million, a 16% increase compared to $130.9 million in the same quarter last year. Total revenue in the first quarter of 2022 was comprised of net product sales of $147.5 million and royalty revenue of $5 million. The increase in net product sales was primarily due to net product sales of GOCOVRI from the acquisition of Adamas in November 2021, and growth in new product sales of Qelbree which was launched in the second quarter of 2021. For the first quarter of 2022, combined R&D and SG&A expenses were $111.3 million as compared to $95.7 million for the same period in 2021. The increase in expenses is primarily due to activities to support the launch of Qelbree and integration costs associated with the Adamas acquisition. Amortization of intangible assets for the first quarter 2022 was $20.6 million compared to $6 million for the same period in 2021. The increase is primarily due to the acquired intangible assets of Adamas. Other income for the first quarter of 2022 was $12.8 million compared to other expense of $2.3 million for the same period in 2021. The increase is primarily due to gain recognized from the sale of a subsidiary of Navitor. Operating earnings on a GAAP basis for the first quarter of 2022 was $2 million, as compared to $13.2 million for the same period in 2021. The decrease in GAAP operating earnings is primarily attributable to the aforementioned amortization of intangibles associated with the Adamas and higher expenses to support the launch of Qelbree. On a non-GAAP basis, which excludes amortization of intangibles, share based compensation, contingent consideration and depreciation. Adjusted…

Our first question comes from David Amsellem of Piper Sandler.

Hey, thanks. So just have a couple. First on Qelbree. Jack referenced progress in the managed care landscape. I wanted to get us a sense for how payer landscape will evolve with adults now and the label is access going to generally be the same or how we should think about contracting as it is now and just the overall trend for gross to net particularly again with adults in the labels. So that's number one. Number two is on GOCOVRI. Another payer related question maybe just on this one. Volumes are growing nicely. But as the footprint of the product grows, do you think any differently about how you interface with payers in terms of contracting? Do you think you're going to need to contract historically that hasn't been contracted products? So how do you think about that? And then lastly, on APOKYN, is the decline year-over-year more from the generic or KYNMOBI or bit above? Thanks?

Yes. So on the first question on Qelbree and managed care, and now with the recent approval for adults, any contracting that we have done basically covers the product, whether it's pediatric or adults. So from that perspective, our discussions with managed care with the payers, the PBMs, and so forth, and the Medicaid in the different states is about all the patient population. So the recent approval should not restart a lot of these discussions or negotiations that have already occurred. Now we continue to work closely with the some of the PBMs with whom we haven't concluded or executed any specific contracts. We've been very pleased with the first major one that we landed in the fall of last year. That was CVS where we have a tier two status. We're very happy with the partnership and appreciate the partnership with CVS. And the attitude that everybody who's here is actually trying to do something positive or making something which is a non-controlled substance available to 10 million adults or 16 million patients out there where most of the therapies are controlled substances, 90% of the market is stimulants so we're happy to do that. And we're happy to partner with everybody else who's willing to really play a positive role here and trying to give people another alternative that is not a controlled substance that is not subject to high abuse potential and so forth. I mean, we also, the crisis that we just went over, obviously, in the pain area, and we're hoping to make a positive impact in ADHD with Qelbree, which has an incredibly unique profile. And on top of that is an uncontrolled substance. So we continue to have these discussions with the older PBMs. And hopefully, we'll make some more progress as…

Our next question comes from Annabel Samimy with Stifel.

Hi, thanks for taking our question. This is Jack calling in for Annabel. For GOCOVRI, acknowledging that prescription trends are positive, this isn't a new product. So in terms of messaging to physicians who should know the benefit to it already, what was lacking? And what more do you need to do to reach your target audience? And will you need to invest a lot more here? Or are you just going to leverage the infrastructure and the critical mass that you've already had in Parkinson's? And for BD, what are you seeing in that landscape? Obviously, the market conditions may make some sellers capitulate, have conversations picked up? And can we see anything more this year given the upcoming Trokendi draw.

Yes, regarding GOCOVRI, we view GOCOVRI still a new car. So for us, this is very important product for our future growth. And it is a future of growing assets. And we will continue to invest in, it's really the short answer here. As far as the messaging or anything that has changed from before, I mean the product was launched back in the ’17, ‘18 timeframe, but also was relaunched again in 2021, which was a recent, fairly recent launch, when the label was expanded. So again, we continue to see GOCOVRI as a major product for us with future momentum future growth, specifically with the expansion of the label, which was only recently about 14 months ago. And we continue to invest with the product and message, the product appropriately positioning, if especially it's a very unique clinical profile. It's the only product approved for dyskinesia and the treatment of off episodes. There is no other product in the marketplace with that unique label. And that message is resonating with physicians and we continue to see obviously the results that we recorded with continued future growth in prescriptions. Now the product certainly does benefit regarding your other portion of the question does benefit from our existing infrastructure and our existence in Parkinson's overall. So that's part of the rationale that why we made the acquisition and the unique synergies between the US WorldMeds acquisition and the Adamas acquisition, obviously, in general. So we'll continue to benefit from that overtime. And then finally, to get into second question on business development, and the evaluations are getting hit no question, we all see the take in the marketplace. But typically, our experience in these kinds of cycles, it really is depend on a case by case scenario, if you have certain companies and they already have a long cash runway, and they don't need to tap into the capital markets, typically their expectations of value, don't change that quickly with the market. Others who may be a little bit more of a desperate need to raise cash so their expectations might start becoming more closer to the reasonable range, so to speak. So it's really a mixed bag, all dependent on case by case scenario, whoever the target is at that time. But we continue to look at the different things that are available out there, we're very focused on trying to expand also our pipeline, as we mentioned a few times before, as we launch Qelbree in the adult space. And hopefully, we will launch the pump pending FDA approval in the first quarter of next year. The latest assets in our pipeline is in Phase II. So if we can find something at a later stage that will be ideal, and we're fairly agnostic, whether that is in neurology or psychiatry.

Great. Thank you. And if I could have one more question. For APOKYN, we've heard the comments about how the dynamics of the circle of care with the product will make it difficult for generics to penetrate. But it seems like most of the comments are geared to new onboarding patients, are there still barriers for patients currently on APOKYN, or in other words, why can't be generic just be used for the refills.

With the circle of care and the patient journey on APOKYN is not a very straightforward simple one so to speak, there's a lot of hand holding. There's a lot of important services that we offer to the patients, not just later after they got the prescription, even at the beginning when the prescription is initiated with a new patient. With the nurse educators and the network that we have out there, they reach out to the patient, they set up appointments with them, they do training around the product, and they follow up with the patient on a routine basis. So this is not just initiation of new patients, but also continuous maintenance of the patient, making sure they're doing well with the product. If they have any questions any feedback, that feedback actually goes back to the prescribing physician. So there is a closed loop of feedback we have surrounding the patient and the services we offer. And then in addition to all that, clearly, the cartridge that was recently approved as a generic to our cartridge still have to be used with our device and our pen. So that will not be available for the generics, obviously. So we view that situation so far has been evolving in the right direction for us. As I mentioned in my prepared remarks, we haven't seen any significant impact of the business as of today.

Speakers, I do not see any further questions in the queue. I will turn the conference back over to Jack Khattar for closing remarks.

Thank you. Well, we are executing on our strategic priorities focusing on our two key growth drivers for our future growth, Qelbree and GOCOVRI. We're very pleased with the first quarter growth from these two products and look forward on building on the momentum for the rest of 2022. We will continue to work with the FDA to progress SPN-830 towards the potential approval by the FDA and to prepare for the potential launch in the first quarter of 2023. I would like to thank all our employees for delivering another solid quarter which positions us well for the remainder of the year. Thanks again for joining us today. We'll look forward to updating you on our progress throughout the year.

That concludes today's conference call. Thank you all for participating. You may now disconnect and have a pleasant day.