Supernus Pharmaceuticals Faces Downgrade Amid Prescription Concerns

Overview of Recent Developments at Supernus Pharmaceuticals

Piper Sandler has recently downgraded Supernus Pharmaceuticals Inc (NASDAQ: SUPN) due to slower than anticipated growth in prescriptions for Qelbree, the company's top-selling ADHD medication. This decision stems from the surprising lack of an expected increase in Qelbree prescriptions as students return to school.

Qelbree's Current Performance

Qelbree (viloxazine) is designed for treating attention deficit hyperactivity disorder (ADHD) in both children and adults. In the second quarter, the sales figures reflected a significant year-over-year growth—up 92% at $59.4 million. Moreover, the total number of prescriptions reached 184,342, marking a 26% increase. However, despite these promising numbers, the anticipated surge during the back-to-school season has not occurred, leading to a re-evaluation of future sales projections.

Analyst Insights on Future Sales

The Piper analyst highlighted the management's recent focus on enhancing Qelbree's economic aspects, which includes reducing copayment assistance. This movement suggests that the growth trajectory of future prescription volumes may not be as strong as once predicted. While earlier estimates anticipated peak sales to approach $500 million, the analyst now considers $400 million a more plausible expectation.

Prescriptions Trends

Year-to-date, Qelbree prescriptions have surged by 91% in 2023 compared to the previous year. Nonetheless, the latest quarter has seen only a 1% increase in prescriptions in Q3, after a modest gain of 4% in Q2. In parallel, the ADHD medication market overall has faced a downturn, with a reported 2% decrease in prescriptions.

FDA Activities and Future Prospects

In recent updates, the FDA has accepted the resubmission of the new drug application (NDA) regarding Supernus’s apomorphine infusion device (SPN-830). This device is intended for managing motor fluctuations in patients with Parkinson’s disease. The upcoming user fee goal date (PDUFA date) for this application is set for February 2025. In April, the FDA had previously sent a Complete Response Letter, which indicated the need for additional product quality information.

Current Market Position

After the downgrade, Piper has adjusted its recommendation for Supernus Pharmaceuticals from Overweight to Neutral, assigning a target price of $36, decreased from $41. This adjustment reflects changing market conditions and the performance of Qelbree, which continues to show growth despite the adjustments in sales expectations.

Impact on Stock Performance

As of the latest reports, SUPN stock has seen a decline, dropping 7.17% to resting at $31.09. Investors remain watchful of both market trends and the ongoing developments in the pharmaceutical sector, particularly those impacting ADHD medications and related products.

Frequently Asked Questions

What factors contributed to Supernus Pharmaceuticals' downgrade?

The downgrade was primarily due to a slower-than-expected growth in Qelbree prescriptions.

How did Qelbree perform in the recent quarter?

In the second quarter, Qelbree's sales rose by 92% compared to the same quarter last year, totaling $59.4 million.

What are the new projections for Qelbree's sales?

The analyst has revised the peak sales expectation for Qelbree to $400 million, down from earlier estimates of $500 million.

What is the significance of the FDA resubmission for SPN-830?

The FDA has accepted the NDA resubmission for SPN-830, which is important for the treatment of motor fluctuations in Parkinson’s disease, with a review date set for February 2025.

How has the stock reacted to the downgrade?

Following the downgrade, SUPN stock has decreased by 7.17%, reflecting ongoing concerns about prescription growth and market position.

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