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Supernus Pharma: Inching Closer To FDA Decision

Supernus 061112

Epilepsy is a chronic neurological disorder, characterized by repeated seizures. It is estimated that about 3 million people in the U.S. and around 50 million people worldwide suffer from epilepsy. Apart from the social stigma associated with this disorder, it is also said to increase a person's risk of premature death by about two to three times compared to the general population.

Antiepileptic drugs, or AEDs, are the mainstay of treatment for epilepsy. Working to enhance the therapeutic benefits of approved antiepileptic drugs through advanced extended release formulations by applying its proprietary technologies is a specialty pharmaceutical company Supernus Pharmaceuticals Inc.(SUPN).

For readers who are new to Supernus Pharma, here's what to expect in the coming months...

The company has two epilepsy drug candidates that are under FDA review - SPN-538, an extended-release version of Johnson & Johnson's (JNJ) Topamax, and SPN-804, an extended-release version of Norvatis AG's (NVS) Trileptal. Both Topamax and Trileptal are available in generic forms.

The approval for SPN-538 and SPN-804 is being sought under 505(b)(2) regulatory pathway that allows a company to rely, at least in part, on the FDA's findings of safety and/or effectiveness for a previously approved drug.

According to Supernus, SPN-538 is designed to improve patient compliance and to have a better tolerability profile compared to the current immediate release products that are taken multiple times per day. Note that Topamax is currently available only in immediate release form. SPN-804 is believed to have the potential of improving the tolerability of Trileptal by reducing the side effects experienced by patients.

Though the exact decision dates are not known, the FDA is expected to make a decision on SPN-538 in July while the regulatory agency's decision on SPN-804 is anticipated in October of this year.

Also in the company's product pipeline are two drug candidates for Attention-Deficit-Hyperactivity Disorder, or ADHD, namely SPN-810 and SPN-812.

An estimated 6% to 9% of all school-age children and 3% to 5% of adults in the United States are reportedly affected by ADHD. About 25% of children with ADHD also exhibit persistent conduct problems, such as impulsive aggression, according to a report published in the Journal of the American Academy of Child and Adolescent Psychiatry.

* SPN-810 is under a phase IIb trial as a potential treatment for impulsive aggression in patients with ADHD. The results of this trial are expected in the second half of 2012.

* SPN-812 is currently in phase II development as a novel non-stimulant treatment for ADHD.

The company has licensed one of its proprietary technologies to United Therapeutics Corp. (UTHR) for treprostinil diethanolamine sustained release tablets for the treatment of pulmonary arterial hypertension, or PAH, as well as for other indications. Treprostinil diethanolamine sustained release tablets for PAH is under FDA review with a decision date set for October 27, 2012.

Supernus Pharma is entitled to receive single digit gross royalties based on worldwide net sales if United Therapeutics receives FDA approval for oral treprostinil. The company is also eligible to receive milestones and royalties for use of oral treprostinil in other indications.

A quick look at the company's balance sheet...

Since inception in 2005, Supernus Pharma has incurred significant operating losses and as of March 31, 2012, had an accumulated deficit of about $49.2 million. The company has never generated any revenues from the sales of its own products and its current revenue stream includes development and milestone revenues.

In the quarter ended March 31, 2012, Supernus Pharma's net loss applicable to common shareholders narrowed to $10.1 million from $11.9 million in the year-ago quarter. Adjusted for the 4 for 1 reverse stock split in April 2012, the quarterly per share losses were $6.05 and $7.48 in 2012 and 2011, respectively. Revenue in the quarter was $208 thousand compared to nil revenue in the same period of last year.

The company ended the quarter with $37.4 million in cash. In May 2012, the company realized cash proceeds of $47.6 million from the initial public offering of its common stock. Supernus Pharma expects the capital to be sufficient to fund operations into the second quarter of 2013.

Supernus Pharma went public on the NASDAQ stock exchange as recently as May 1, 2012, pricing its shares at $5 each. The stock has thus far hit a low of $4.30 and a high of $7.01. SUPN closed Friday's trading at $5.07, down 3.24%.

As the FDA decision dates draw near, it will be interesting to watch how SUPN's stock price plays out. Will Supernus Pharma's epilepsy drug candidates pass the regulatory muster and reach pharmacy shelves? Stay tuned...

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