Supernus Pharmaceuticals, Inc.

Good afternoon and welcome to Sopranos Pharmaceuticals' fourth quarter and full year 2022 financial results conference call. At this time, all participants are in 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, and I would now like to turn the conference over to Peter Vazzo of ICR Westwick, Investor Relations Representative for Sopranos Pharmaceuticals. Sir, you may begin.

Thank you, Chris. Good afternoon, everyone, and thank you for joining us today for Sopernos Pharmaceuticals' fourth quarter and full year 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 Sopernos' Chief Executive Officer, Jack Katar, and Chief Financial Officer, Tim Deck. Today's call is being made available via the investor relations section of the company's website, at ir.sopernis.com. 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 Sopernis' 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 February 28, 2023. 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. Sopernis declines any obligation to update these forward-looking statements, except as required by applicable securities laws. I'll 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 fourth quarter and full year results. I would like to first make a few comments about the full year 2022 and then get into more details about specific product updates and accomplishments. We closed another great year preparing Supernas for the loss of exclusivity of Trochendi XR, and the transition to our growth brands. I'm proud of our employees for excellent planning and execution over the past few years, putting Sopernos in the best possible position to successfully transition from our mature brands and setting the stage to deliver double-digit growth in 2024 and beyond. As we exited the fourth quarter of 2022, products acquired or launched since 2020 accounted for approximately 48% of our total net product sales. In total, Sopernos achieved in 2022 record revenues of $667 million, up 15% compared to 2021, despite a significant 14% decline or $43.6 million decline in net sales of Trucan DXR. In 2022, we will also continue to advance our pipeline assets with our two lead product candidates, SPN820 and SPN817, now in Phase II development. Both product candidates represent novel therapies in CNS with unique mechanisms of action to treat depression and epilepsy, respectively. Now starting with an update on Calvary. 2022 represented a milestone year establishing the product as one of the fastest growing brands in the ADHD market. Calvary's total annual IQVIA prescriptions reached approximately 322,624 prescriptions, representing growth of about 526% compared to 2021. In the fourth quarter of 2022, total IQVIA prescriptions for Calvary reached 117,635 prescriptions, representing a sequential increase of 24% compared to the third quarter of 2022. More importantly, in the most recent month of January 2023, the IQVIA monthly prescriptions reached an all-time high of 42,881. This represents an annual run rate for Calvary of more than half a million prescriptions. Calvary is off to a great start in 2023, capitalizing on several dynamics that we believe will set up the brand very nicely for continued robust growth in 2023. I will elaborate on each one of these dynamics separately. The ADHD market has grown at a much faster rate than we expected over the past two years. In 2022, the market grew by 9% in total annual prescriptions, reaching more than 90 million prescriptions. This followed another healthy increase in 2021 of 8.5% in total prescriptions. Second, over the past 12 months, we have seen a steady increase in the average wholesale acquisition costs per prescription for Calvary, reaching $488 in January 2023, up by 20% compared to January 2022. This is primarily due to physicians titrating up in dose for pediatric patients closer to an average daily dose of 300 milligram, and for adult patients closer to an average daily dose of 500 milligram. It is also the result of a 47% sequential quarterly growth in adult prescriptions in the fourth quarter of 2022. With such robust growth, the adult prescriptions represented 22% of total CalVries prescriptions in the fourth quarter, up from only 3% before the adult launch. During the fourth quarter, the pediatric prescriptions' sequential growth was a healthy 19% on top of the strong growth during the back-to-school season in the third quarter of 2022. The third important dynamic is the significant improvement in managed care coverage, which should lead to an increase in the 2023 net price per prescription. At the beginning of 2023, we signed a contract with a second key pharmacy benefit manager, which should allow us to get to the target range of 50% to 55% in gross to net that we discussed last year. We are also pleased with the Medicaid approval rate for Calvary's prescriptions, which is now above 70% with preferred access in several important states. The fourth dynamic that I will highlight is the continued growth in Calvary's base of prescribers, with over 16,822 prescribers in the fourth quarter of 2022, up from 14,265 prescribers in the third quarter of 2022. In addition to these highlighted dynamics, we are excited about our planned expansion of our sales force in the second quarter of 2023 by approximately 45 sales representatives to give us broader reach and increased capacity to deliver higher frequency on high-decile prescribers. This expansion will allow us to cover more than 50% of the ADHD market. In summary, Calvary continues to perform across several important growth metrics, giving us confidence in its growth potential in 2023, and more importantly, in 2024 and beyond. Switching now to GoCovery, we are very pleased with the brand's performance in its first year, having gone through the integration process of our acquisition of Adamas and having transitioned to a new sales force. This commercial organization, including our Parkinson's sales force, did an outstanding job integrating the brand and managing to achieve record sales of $104 million, while also supporting Apokon, our second Parkinson's product. In 2022, GoCoveri delivered strong growth of 19% and 13% in net sales and prescriptions, respectively, compared to 2021. and exited the year with a solid fourth quarter performance with a record high quarterly net sales of 29.2 million. Oxfeller XR continues to be steady with net product sales of 115 million for full year 2022, representing a 4% increase compared to 2021. For full year 2022, nut product sales for Tricandy XR were $261 million down from $305 million in 2021. We significantly reduced our in-person sales efforts in the second half of 2022 and continue to provide support to physicians and patients through various sales and marketing programs. In January 2023, the first generic to three out of four product strengths of Trocandy XR was introduced. Trocandy XR IQVIA monthly prescriptions for January 2023 were 23,840, declining by 34% compared to January 2022. Based on the most recent IQVIA weekly prescription data for the week ending February 17, Trukendi XR prescriptions declined by 38% compared to the week ending January 13, which is the last week before the generic impact. Based on the generic erosion today and the possibility of other generic entries, we are expecting revenues from Trukendi XR in 2023 to be in the range of $60 to $80 million. Moving on to the pipeline, we will be meeting with the FDA in April this year regarding the resubmission of the NDA for SPN830, our apomorphine infusion device. We will announce the timing of our resubmission after our discussion with the FDA. We initiated the open-label Phase II clinical study with SPN817 in adult patients with treatment-resistant seizures. The study will include up to eight sites in Australia and randomize approximately 35 patients. Depending on the rate of enrollment, top-line data could be available in the first half of 2024. For SPNA20, our first-in-class orally active mTORC1 activator, the Phase II multicenter randomized double-blind placebo-controlled study in adults with treatment-resistant depression is ongoing with 25 sites activated. The study will examine the efficacy and safety of A20 over a course of five weeks of treatment in approximately 270 patients. The primary outcome measure is the change from baseline to end of treatment period on the Montgomery-Asbrook depression rating scale total score, which is a standard depression rating scale. Finally, we continue to be active in corporate development, looking for strategic opportunities to further strengthen our future growth and leadership position in CNS. In summary, we are confident that our growth drivers and solid foundation will allow us to offset the impact coming from the loss of exclusivity of Trocan DXR and allow us to return to revenue and non-GAAP operating income growth in 2024 and beyond. With that, I will now turn the call over to Tim.