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What changed in SUPERNUS PHARMACEUTICALS, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of SUPERNUS PHARMACEUTICALS, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+627 added−631 removedSource: 10-K (2024-02-27) vs 10-K (2023-03-09)

Top changes in SUPERNUS PHARMACEUTICALS, INC.'s 2023 10-K

627 paragraphs added · 631 removed · 468 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

117 edited+37 added−26 removed217 unchanged
Biggest changePursuant to the Asset Purchase Agreement with Osmotica Pharmaceutical US LLC and Vertical Pharmaceuticals LLC (Osmotica) entered into on December 1, 2020 (transaction closed on January 4, 2021) both parties gave each other mutual releases and agreed to dismiss their respective claims relating to certain patent litigation; Adamas Operations acquired the global rights to Osmolex ER and existing inventory and the assumption of certain liabilities; and Osmotica agreed not to engage in the development, manufacture, or sale of any product in the U.S. that is a generic version of any dosage strength of Osmolex ER for a period of five years from the closing of the Asset Purchase Agreement.
Biggest changeOsmotica agreed not to engage in the development, manufacture, or sale of any product in the U.S. that is a generic version of any dosage strength of Osmolex ER for a period of five years from the closing of the Asset Purchase Agreement.
We have devoted and continue to devote significant resources to research and development activities. We expect to incur significant expenses as we continue developing each of our product candidates through FDA approval or until the program terminates; and expanding product indications for approved products and intellectual property portfolio.
We have devoted and continue to devote significant resources to research and development activities. We expect to incur significant expenses as we continue developing each of our product candidates through FDA approval or until the program terminates; and expanding product indications for approved products and our intellectual property portfolio.
We do not own or operate manufacturing facilities for the production of any of our product candidates beyond that used in Phase II clinical trials, nor do we have plans to develop our own manufacturing operations in the foreseeable future to support Phase III clinical trials or support commercial production. We currently employ internal resources to manage our manufacturing contractors.
We do not own or operate manufacturing facilities for the production of any of our product candidates beyond that used in Phase II clinical trials, nor do we have plans to develop our own manufacturing operations in the foreseeable future to support Phase III clinical trials or commercial production. We currently employ internal resources to manage our manufacturing contractors.
Under FCPA, it is illegal to pay, offer to pay, or authorize the payment of anything of value to any foreign government official, government staff member, political party, or political candidate in an attempt to obtain or retain business or otherwise influence a person working in an official capacity.
Under the FCPA, it is illegal to pay, offer to pay, or authorize the payment of anything of value to any foreign government official, government staff member, political party, or political candidate in an attempt to obtain or retain business or otherwise influence a person working in an official capacity.
Our total rewards package includes market-competitive pay, broad-based stock grants, bonuses, healthcare benefits, retirement savings plans, paid time off and family leave, and an Employee Assistance Program, and mental health services. We are committed to the safety, health, and security of our employees. We believe a hazard-free environment is critical for the success of our business.
Our total rewards package includes market-competitive pay, broad-based stock grants, bonuses, healthcare benefits, retirement savings plans, paid time off and family leave, an Employee Assistance Program, and mental health services. We are committed to the safety, health, and security of our employees. We believe a hazard-free environment is critical for the success of our business.
The February 2021 update to the label indication makes GOCOVRI the only medicine clinically proven and approved to reduce both "off" episodes and dyskinesia in PD patients taking a levodopa-based medication, resulting in a clinically meaningful increase in good "on" time without the need for a "trade-off' when managing motor complications.
The February 2021 update to the label indication makes GOCOVRI the only medicine clinically proven and approved to reduce both "off" episodes and dyskinesia in PD patients taking a levodopa-based medication, resulting in a clinically meaningful increase in good "on" time without the need for a "trade-off' when managing these motor complications.
We have agreements with CMOs headquartered North America, including: Patheon Pharmaceuticals, Inc. (a subsidiary of Thermo Fisher Scientific Inc.), Packaging Coordinators, Inc., Aphena Pharma Solutions, and Catalent Pharma Solutions, Europe, and Asia for the manufacturing and packaging of some of our commercial products, including those of our subsidiaries, as well as for our pipeline product candidates.
We have agreements with CMOs headquartered in North America, including: Patheon Pharmaceuticals, Inc. (a subsidiary of Thermo Fisher Scientific Inc.), Packaging Coordinators, Inc., Aphena Pharma Solutions, and Catalent Pharma Solutions, Europe, and Asia for the manufacturing and packaging of some of our commercial products, including those of our subsidiaries, as well as for our pipeline product candidates.
MYOBLOC ® MYOBLOC (rimabotulinumtoxinB) is a product indicated for the treatment of cervical dystonia to reduce the severity of abnormal head position and neck pain associated with cervical dystonia in adults and treatment sialorrhea in adults. MYOBLOC is the only Type B toxin available on the market. MYOBLOC injections must be administered by a physician.
MYOBLOC ® MYOBLOC (rimabotulinumtoxinB) is a product indicated for the treatment of cervical dystonia to reduce the severity of abnormal head position and neck pain associated with cervical dystonia in adults and treatment of chronic sialorrhea in adults. MYOBLOC is the only Type B toxin available on the market. MYOBLOC injections must be administered by a physician.
We, or our subsidiaries, own all of the issued patents for Trokendi XR, Oxtellar XR, Qelbree, GOCOVRI, Osmolex ER, as well as the pending U.S. patent applications for Oxtellar XR, Qelbree, GOCOVRI, and Osmolex ER. We have a license from Zambon for the U.S. patents that cover XADAGO. The Company has ongoing litigations concerning Trokendi XR, Oxtellar XR and XADAGO.
We, or our subsidiaries, own all the issued patents for Trokendi XR, Oxtellar XR, Qelbree, GOCOVRI, Osmolex ER, as well as the pending U.S. patent applications for Oxtellar XR, Qelbree, and GOCOVRI. We have a license from Zambon for the U.S. patents that cover XADAGO. The Company has ongoing litigations concerning Trokendi XR, Oxtellar XR and XADAGO.
The CIA has a term of five years, with the final Reporting Period ending in April 2024, and imposes material burdens on the Company, its officers and directors to take actions designed to insure compliance with applicable healthcare laws, including requirements to maintain specific compliance positions within the Company, to report any non-compliance with the terms of the agreement, to submit annual reports to the Office of Inspector General of the U.S.
The CIA has a term of five years, with the final Reporting Period ending in April 2024, and imposes material burdens on the Company, its officers and directors to take actions designed to ensure compliance with applicable healthcare laws, including requirements to maintain specific compliance positions within the Company, to report any non-compliance with the terms of the agreement, to submit annual reports to the Office of Inspector General of the U.S.
With the launches of Qelbree for both pediatric and adult patients, we expanded our sales efforts to market the commercial product to the relevant physician audience of psychiatrists, pediatricians, primary care physicians and allied health professionals. Our sales representatives who previously supported Trokendi XR and Oxtellar XR now devote their full efforts to the launch of Qelbree.
With the launches of Qelbree for both pediatric and adult patients, we expanded our sales efforts to market the commercial product to the relevant physician audience of psychiatrists, pediatricians, primary care physicians and allied health professionals. Our sales representatives who previously supported Trokendi XR and Oxtellar XR now devote their full efforts to the promotion of Qelbree.
ADHD market has increased with the commercial launch of several branded products in recent years, as well as the launch of generic versions of branded drugs, such as Adderall XR, Intuniv, Kapvay and Strattera. Treatment options for ADHD in the U.S. market can be broadly classified as either stimulant or as non-stimulant products.
ADHD market has increased with the commercial launch of several branded products in recent years, as well as the launch of generic versions of branded drugs, such as Adderall XR, Concerta, Vyvanse, Intuniv, Kapvay and Strattera. Treatment options for ADHD in the U.S. market can be broadly classified as either stimulant or as non-stimulant products.
Market exclusivity provisions under the FDCA can also delay the submission or the approval of certain applications. The Federal Food, Drug, and Cosmetic Act (FDCA) provide a five-year period of non-patent marketing exclusivity within the U.S. to the first applicant to gain the approval of an NDA for an NCE.
Market exclusivity provisions under the Federal Food, Drug, and Cosmetic Act (FDCA) can also delay the submission or the approval of certain applications. The FDCA provides a five-year period of non-patent marketing exclusivity within the U.S. to the first applicant to gain the approval of an NDA for an NCE.
Extended release products may help patients improve adherence and, consequently, help patients enjoy a better quality of life. Trokendi XR competes with all immediate release and extended release topiramate products, including Topamax, Qudexy XR, and their related generic products. Oxtellar XR competes with all immediate release oxcarbazepine products, including Trileptal and its related generic products.
Extended-release products may help patients improve adherence and, consequently, help patients enjoy a better quality of life. Trokendi XR competes with all immediate-release and extended-release topiramate products, including Topamax, Qudexy XR, and other generic topiramate products. Oxtellar XR competes with all immediate-release oxcarbazepine products, including Trileptal and its related generic products.
In December 2021, we received a $12.9 million cash distribution pursuant to our ownership position in Navitor LLC following the sale of one of its subsidiaries. There are certain additional payment amounts that could be incurred by the Company. These costs are contingent upon Navitor and the Company achieving defined development milestones.
In December 2021, we received a $12.9 million cash distribution pursuant to our ownership position in Navitor LLC following the 16 Table of Contents sale of one of its subsidiaries. There are certain additional payment amounts that could be incurred by the Company. These costs are contingent upon Navitor and the Company achieving defined development milestones.
The IRB/ethics committee may also require the clinical trial at the site to be halted, either temporarily or permanently, for failure to comply with the IRB/ethics committee requirements, or they may impose other sanctions. Concurrent with clinical trials, companies usually complete additional animal studies and must develop additional information about the chemistry and physical characteristics of the product candidate.
The IRB/ethics committee may also require the clinical trial at the site to be halted, either temporarily or permanently, for failure to comply with the IRB/ethics committee requirements, or they may impose other sanctions. 18 Table of Contents Concurrent with clinical trials, companies usually complete additional animal studies and must develop additional information about the chemistry and physical characteristics of the product candidate.
The FDA may also require post-marketing testing, known as Phase IV testing, REMS, and surveillance to monitor the effects of an approved product, or place conditions on an approval that could restrict the distribution and use of the product. In addition, quality control, as well as the manufacture, packaging and labeling procedures must continue to conform to cGMPs after approval.
The FDA may also require post-marketing testing, known as Phase IV testing, REMS, and surveillance to monitor the effects of an approved product, or place conditions on an approval that could restrict the distribution and use of the product. 22 Table of Contents In addition, quality control, as well as the manufacture, packaging and labeling procedures must continue to conform to cGMPs after approval.
We acquired SPN-817, an antiepileptic, which we believe has an MOA different from that of other products and can therefore potentially represent a unique additional treatment alternative. Migraine Migraine is a painful, complex neurological disorder consisting of recurring painful attacks that can significantly disrupt time with loved ones, education, and careers.
We acquired SPN-817, an antiepileptic, which we believe has an MOA different from that of other products and can therefore potentially represent a unique additional treatment alternative. 9 Table of Contents Migraine Migraine is a painful, complex neurological disorder consisting of recurring painful attacks that can significantly disrupt time with loved ones, education, and careers.
For more information, refer to Part I, Item 3—Legal Proceedings in this annual Report on Form 10-K. Qelbree We have three families of pending U.S. non-provisional and foreign counterpart patent applications for Qelbree. Patents, if issued, could expire from 2029 to 2033.
For more information, refer to Part I, Item 3—Legal Proceedings in this annual Report on Form 10-K. 12 Table of Contents Qelbree We have three families of pending U.S. non-provisional and foreign counterpart patent applications for Qelbree. Patents, if issued, could expire from 2029 to 2033.
GOCOVRI, taken once daily at bedtime, provides an initial lag and a slow rise in amantadine concentration during the night, resulting in a high concentration from the morning and throughout the waking day. Additionally, in the clinical trials, the adjunctive use of GOCOVRI did not require changes to dopaminergic therapies.
GOCOVRI, taken once daily at bedtime, provides an 10 Table of Contents initial lag and a slow rise in amantadine concentration during the night, resulting in a high concentration from the morning and throughout the waking day. Additionally, in the clinical trials, the adjunctive use of GOCOVRI did not require changes to dopaminergic therapies.
These CMOs offer a comprehensive range of contract manufacturing and packaging services. We purchase APOKYN, MYOBLOC, XADAGO, and Osmolex ER as finished goods. APOKYN is manufactured and packaged in Europe for the U.S. market and is supplied to us by our licensing partner, Britannia.
These CMOs offer a comprehensive range of contract manufacturing and packaging services. 11 Table of Contents We purchase APOKYN, MYOBLOC, XADAGO, and Osmolex ER as finished goods. APOKYN is manufactured and packaged in Europe for the U.S. market and is supplied to us by our licensing partner, Britannia.
The results of pre-clinical testing, along with other information, including information abo ut product chemistry, product manufacturing and controls, and a proposed clinical trial protocol, are submitted to the FDA as part of the IND. Until the IND is approved or becomes effective following a waiting period, we may not start the clinical trials.
The results of pre-clinical testing, along with other information, including information abo ut product chemistry, product manufacturing and controls, and a proposed clinical trial protocol, are submitted to the FDA as part of the IND. Until the IND becomes effective following a waiting period, we may not start the clinical trials.
The intent of the PREA is to compel sponsors whose drugs have pediatric applicability to study those drugs in pediatric populations, rather than ignoring pediatric indications for adult indications that could be more economically desirable. The FDA may grant deferrals for submission of data, full waivers, or partial waivers of the data requirements.
The intent of the PREA is to compel sponsors whose drugs have pediatric applicability to study those drugs in pediatric populations, rather than ignoring pediatric 21 Table of Contents indications for adult indications that could be more economically desirable. The FDA may grant deferrals for submission of data, full waivers, or partial waivers of the data requirements.
During the exclusivity period, the FDA may not accept for review an abbreviated new drug application (ANDA) or a Section 505(b)(2) NDA submitted by another company for another version of such drug, where the applicant does not own or have a legal right of reference to all the data required for approval.
During the exclusivity period, the FDA may not accept for review an ANDA or a Section 505(b)(2) NDA submitted by another company for another version of such drug, where the applicant does not own or have a legal right of reference to all the data required for approval.
In addition, healthcare providers who prescribe our products and research institutions we collaborate with are subject to privacy and security requirements under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH).
In addition, healthcare providers who prescribe our products and research institutions we collaborate with are subject to privacy and security requirements under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended 24 Table of Contents by the Health Information Technology for Economic and Clinical Health Act (HITECH).
We also have the right under the Elan agreement to make use of, develop and offer for sale worldwide products containing Botulinum Toxin Type B. The Elan agreement may not be terminated for convenience. We also have an agreement with Elan and Eisai related to the marketing and distribution of NerBloc in Japan by Eisai.
We also have the right under the agreement to make use of, develop and offer for sale worldwide products containing Botulinum Toxin Type B. The agreement may not be terminated for convenience. In June 2023, we terminated the agreement with Elan and Eisai related to the marketing and distribution of NerBloc in Japan by Eisai.
While these are generally conducted in three sequential phases, the phases may overlap or be combined. • Phase I - Involves the first human tests of the drug, in a small number of healthy volunteers or in patients (15 to 30 individuals), to assess safety, tolerability, potential dosing, and if possible, early evidence on effectiveness. • Phase II - Involves trials in a relatively small group of patients (fewer than 100) to determine the effectiveness of the drug for a particular indication(s); dosage tolerance, and optimum dosage; and to identify common adverse effects and safety risks. • Phase III - Involves tests confirming favorable results in earlier phases, in a significantly larger patient population, and to further demonstrate efficacy and safety.
While these are generally conducted in three sequential phases, the phases may overlap or be combined. • Phase I - Involves the first human tests of the drug, in a small number of healthy volunteers or in patients, to assess safety, tolerability, potential dosing, and if possible, early evidence on effectiveness. • Phase II - Involves trials in a relatively small group of patients to determine the effectiveness of the drug for a particular indication(s); dosage tolerance, and optimum dosage; and to identify common adverse effects and safety risks. • Phase III - Involves tests confirming favorable results in earlier phases, in a significantly larger patient population, and to further demonstrate efficacy and safety.
This could restrict the commercial value of the product. Also, the FDA may require that certain contraindications, warnings, or precautions be included in the product labeling, as well as requiring Phase IV testing. New Drug Application Our activities encompass two types of NDAs: Section 505(b)(1) NDA (Full NDA) and Section 505(b)(2) NDA.
This could restrict the commercial value of the product. Also, the FDA may require that certain contraindications, warnings, or precautions be included in the product labeling, as well as requiring Phase IV testing or post approval marketing of commercial use. New Drug Application Our activities encompass two types of NDAs: Section 505(b)(1) NDA (Full NDA) and Section 505(b)(2) NDA.
In the event that XADAGO annual net sales exceed the specified U.S. annual net product sales thresholds, the royalty percent increases and could go as high as the mid-teens. Under the Supply Agreement, we must purchase from Zambon and Zambon must provide to us all XADAGO finished products for the U.S. market.
In the event that XADAGO annual net sales exceed the specified U.S. annual net product sales thresholds, the royalty percent increases and could go as high as the mid-teens. 15 Table of Contents Under the Supply Agreement, we must purchase from Zambon and Zambon must provide to us all XADAGO finished products for the U.S. market.
Throughout our operations, we strive to ensure that all our employees have access to safe workplaces that allow them to succeed in their jobs. Our experience and continuing focus on workplace safety has enabled us to preserve business continuity without sacrificing our commitment to keeping our colleagues and workplace visitors safe.
Throughout our operations, we strive to ensure that all our employees have access to safe 26 Table of Contents workplaces that allow them to succeed in their jobs. Our experience and continuing focus on workplace safety has enabled us to preserve business continuity without sacrificing our commitment to keeping our colleagues and workplace visitors safe.
Given the potency of SPN-817 (huperzine A), a novel extended release oral dosage form is critical to the success of this program because initial studies with the immediate release formulations of non-synthetic SPN-817 (huperzine A) have shown serious dose-limiting, side effects. The Company has commenced an open-label Phase II clinical study of SPN-817 in patients with treatment-resistant seizures.
Given the potency of SPN-817 (huperzine A), a novel extended-release oral dosage form is critical to the success of this program because initial studies with the immediate-release formulations of non-synthetic SPN-817 (huperzine A) have shown serious dose-limiting, side effects. We have commenced an open-label Phase IIa clinical study of SPN-817 in patients with treatment-resistant seizures.
Many large pharmaceutical and biotechnology companies, academic institutions, governmental agencies, and other public and private research organizations are commercializing or pursuing the development of products for the same molecule, compound, or diseases that we are currently pursuing or may target in the future. 8 Table of Conte n t s ADHD ADHD is a CNS disorder characterized by developmentally inappropriate levels of inattention, hyperactivity, and impul sivity.
Many large pharmaceutical and biotechnology companies, academic institutions, governmental agencies, and other public and private research organizations are commercializing or pursuing the development of products for the same molecule, compound, or diseases that we are currently pursuing or may target in the future. ADHD ADHD is a CNS disorder characterized by developmentally inappropriate levels of inattention, hyperactivity, and impul sivity.
Peak serum drug concentration conveniently occurs in the middle portion of a patient’s day when the drug is administered in the morning. 10 Table of Conte n t s According to their prescribing information, neither GOCOVRI nor Osmolex ER are interchangeable with other amantadine immediate- or extended-release products for their respective approved indications.
Peak serum drug concentration conveniently occurs in the middle portion of a patient’s day when the drug is administered in the morning. According to their prescribing information, neither GOCOVRI nor Osmolex ER are interchangeable with other amantadine immediate- or extended-release products for their respective approved indications.
We strive to create an environment where innovative ideas can flourish by demonstrating respect for each other and valuing the diverse opinions, backgrounds, and 26 Table of Conte n t s viewpoints of employees. We believe a diverse and inclusive workplace results in business growth and encourages increased innovation, retention of talent, and a more engaged workforce.
We strive to create an environment where innovative ideas can flourish by demonstrating respect for each other and valuing the diverse opinions, backgrounds, and viewpoints of employees. We believe a diverse and inclusive workplace results in business growth and encourages increased innovation, retention of talent, and a more engaged workforce.
Under these two options, the manufacturer demonstrates compliance with: • All cGMP regulations applicable to each separate regulated component included in the combination product; or 21 Table of Conte n t s • Either the drug cGMPs or the QSR, as well as with specified provisions from the other of these two sets of requirements (also called the "streamlined approach”).
Under these two options, the manufacturer demonstrates compliance with: • All cGMP regulations applicable to each separate regulated component included in the combination product; or • Either the drug cGMPs or the QSR, as well as with specified provisions from the other of these two sets of requirements (also called the "streamlined approach”).
Attracting, developing, and retaining talented people in technical, marketing, sales, research, and other positions is crucial to executing our strategy and our ability to compete effectively. As of December 31, 2022, we employed 612 full-time employees in the U.S. None of our employees are represented by a labor union. We consider relations with our employees to be go od.
Attracting, developing, and retaining talented people in technical, marketing, sales, research, and other positions is crucial to executing our strategy and our ability to compete effectively. As of December 31, 2023, we employed 652 full-time employees in the U.S. None of our employees are represented by a labor union. We consider relations with our employees to be good.
Failure to comply with such laws and regulations could result in government enforcement actions and create liability 24 Table of Conte n t s for us (including the imposition of significant penalties), private litigation and/or adverse publicity that negatively affects our business.
Failure to comply with such laws and regulations could result in government enforcement actions and create liability for us (including the imposition of significant penalties), private litigation and/or adverse publicity that negatively affects our business.
Drug Development Process The research and development process generally begins with discovery research, which focuses on the identification of a molecule that has the desired effect against a given disease. The FDA requires submission of an IND, which must become effective before human clinical trial testing may commence.
Drug Development Process The research and development process generally begins with discovery research, which focuses on the identification of a molecule that has the desired effect against a given disease. If clinical testing is to initiate in the United States, the FDA requires submission of an IND, which must become effective before human clinical trial testing may commence.
We also will have the first right of refusal for any compound with a similar MOA to NV-5138 on mTORC1 in the central nervous system. 16 Table of Conte n t s See Part II, Item 8, Financial Statements and Supplementary Data , Note 5, Investments , in the Notes to the Consolidated Financial Statements.
We also will have the first right of refusal for any compound with a similar MOA to NV-5138 on mTORC1 in the central nervous system. See Part II, Item 8, Financial Statements and Supplementary Data , Note 4, Investments , in the Notes to the Consolidated Financial Statements.
Alternatively, these trials may be conducted to assess the effectiveness of a product candidate in a new patient population. U.S. FDA Review and Approval Processes Drug development is an inherently uncertain process with a high risk of failure at every stage of development. After the completion of the required clinical testing, an NDA is prepared and submitted to the FDA.
Alternatively, these trials may be conducted to assess the effectiveness of a product candidate in a new patient population. U.S. FDA Review and Approval Processes Drug development is an inherently uncertain process with a high risk of failure at every stage of development.
Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
Our expectations regarding our research and development programs are subject to the risks described under Item 1A—Risk Factors—Risks Related to Our Industry and Business , which includes the following risks among others — (1) The Company's financial condition and results of operations for fiscal year 2023 and beyond may be materially and adversely affected by the ongoing COVID-19 pandemic; and (2) Delays and failures in the completion of clinical development of our product candidates would increase our costs, delay, or limit our ability to generate revenues.
Our expectations regarding our research and development programs are subject to the risks described under Item 1A—Risk Factors—Risks Related to Our Industry and Business , which includes the risk that the Company's financial condition and results of operations for fiscal year 2023 and beyond may be materially and adversely affected by delays and failures in the completion of clinical development of our product candidates, which could increase our costs or delay or limit our ability to generate revenues.
Most 9 Table of Conte n t s notably, this includes anti-CGRPs (calcitonin gene related peptide), which is a class of products first introduced in 2018; Botox; beta-blockers; valproic acid; and amitriptyline.
Most notably, this includes anti-CGRPs (calcitonin gene related peptide), which is a class of products first introduced in 2018; Botox; beta-blockers; valproic acid; and amitriptyline.
If granted, pediatric exclusivity, provides an additional six months of exclusivity to be attached to any existing exclusivity (e.g., three or five year exclusivity) or 23 Table of Conte n t s to patent protection for a drug.
If granted, pediatric exclusivity, provides an additional six months of exclusivity to be attached to any existing exclusivity (e.g., three or five year exclusivity) or to patent protection for a drug.
A complete response letter outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application. If and when those deficiencies have been addressed, the FDA will re-initiate review.
A complete response letter outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application. If and when those deficiencies have been timely addressed, the FDA will re-initiate review. If it is satisfied that the deficiencies have been addressed, the FDA will issue an approval letter.
Under the CIA, the MDD Subsidiaries agreed to pay $17.5 million to resolve U.S. Department of Justice allegations that the MDD Subsidiaries violated the False Claims Act by paying kickbacks to induce the use of APOKYN and MYOBLOC (collectively, the MDD Products). The fine was paid by the MDD Subsidiaries prior to the closing of the USWM Acquisition.
Department of Health and Human Services. Under the CIA, the MDD Subsidiaries agreed to pay $17.5 million to resolve U.S. Department of Justice allegations that the MDD Subsidiaries violated the False Claims Act by paying kickbacks to induce the use of APOKYN and MYOBLOC (collectively, the MDD Products).
The advisory committee reviews and evaluates information and prepares a recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. After the FDA evaluates the information provided in the NDA, it issues either an approval letter or a complete response letter.
The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. After the FDA evaluates the information provided in the NDA, it issues either an approval letter or a complete response letter.
Efficacy and symptom improvement was observed early in treatment in clinical studies. Also, it has a proven safety and tolerability profile, with no evidence of abuse potential in clinical studies. Qelbree is the first nonstimulant treatment for ADHD approved by the FDA in over a decade. Competition in the U.S.
Our product, Qelbree is a novel nonstimulant taken once-daily for full-day exposure. Efficacy and symptom improvement was observed early in treatment in clinical studies. Also, it has a proven safety and tolerability profile, with no evidence of abuse potential in clinical studies. Qelbree is the first nonstimulant treatment for ADHD approved by the FDA in over a decade.
In the U.S., a patent's term may be lengthened via a patent term adjustment (PTA), which compensates a patentee for administrative delays by the USPTO in granting a patent.
In the U.S., a patent's term may be lengthened via a patent term adjustment (PTA), which compensates a patentee for administrative delays by the USPTO in granting a patent. Alternatively, a patent's term may be shortened if a patent is terminally disclaimed over another patent.
With the alternative of immobility and limited function, we believe the rapid and reliable reduction of "off" episode symptoms is of utmost importance to patients. APOKYN competes with all apomorphine hydrochloride products, including KYNMOBI. It also competes with other pro re nata (PRN) therapies such as Inbrija, and other adjunctive therapies, including NOURIANZ.
With the alternative of immobility and limited function, we believe the rapid and reliable reduction of "off" episode symptoms is of utmost importance to patients. APOKYN competes with pro re nata therapies such as Inbrija, and other adjunctive therapies, including NOURIANZ. APOKYN also competes with other products for the treatment of PD, both branded and generic, including levodopa products.
The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing, which is based on the agency's threshold determination that the NDA is sufficiently complete to permit substantive review. Additional information may be requested, rather than accepting an application for filing.
The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing, which is based on the agency's threshold determination that the NDA is sufficiently complete to permit substantive review. Sponsors will be notified if the application's review will proceed.
We believe our current sales forces are effectively targeting healthcare providers to support and grow our current commercial products. As a result of the acquisitions in 2021 and 2020, we established our commercial capabilities in the Parkinson's area with a focus on serving movement disorder specialists and other specialized health care providers in the U.S.
As a result of the acquisitions in 2021 and 2020, we established our commercial capabilities in the Parkinson's area with a focus on serving movement disorder specialists and other specialized health care providers in the U.S.
In a third family, we have four patents issued in the U.S. covering modified release formulations of viloxazine hydrochloride, three of which cover Qelbree. We also have patents issued in certain foreign countries.
In a third family, we have four patents issued in the U.S. covering modified release formulations of viloxazine hydrochloride, three of which cover Qelbree. We also have patents issued in certain foreign countries. We own all the issued patents and the pending patent applications. Trokendi XR We currently have 10 U.S. patents that cover Trokendi XR.
Osmolex ER ® Osmolex ER (amantadine) extended release tablets is for the treatment of PD and drug-induced extrapyramidal reactions in adult patients. Osmolex ER was approved by the FDA in February 2018.
MYOBLOC was approved by the FDA in August 2019 for the treatment of chronic sialorrhea in adults and in December 2000 for the treatment of adults with cervical dystonia. Osmolex ER ® Osmolex ER (amantadine) extended-release tablets is for the treatment of PD and drug-induced extrapyramidal reactions in adult patients. Osmolex ER was approved by the FDA in February 2018.
Osmolex ER is manufactured and packaged in the U.S. by Osmotica Pharmaceutical US LLC (Osmotica), which is the sole manufacturer of Osmolex ER and a subsidiary of Osmotica Pharmaceuticals plc. 11 Table of Conte n t s Refer to Part I, Item 1A — Risk Factors — If we fail to produce our products and product candidates in the volumes that we require on a timely basis or fail to comply with stringent regulations applicable to pharmaceutical drug manufacturers, we may face delays in the development and commercialization of our products and product candidates or be required to withdraw our products from the market for risks associated with manufacturing and supply of our products and product candidates.
Refer to Part I, Item 1A — Risk Factors — If we fail to produce our products and product candidates in the volumes that we require on a timely basis or fail to comply with stringent regulations applicable to pharmaceutical drug manufacturers, we may face delays in the development and commercialization of our products and product candidates or be required to withdraw our products from the market for risks associated with manufacturing and supply of our products and product candidates.
FDA approval of the NDA is required before marketing of the product may begin in the U.S. The NDA must include the results of all preclinical, clinical, and other testing, along with a description of the manufacturing process, validation of the manufacturing process, analytical tests conducted on the drug, proposed labeling, and other relevant information.
The NDA must include the results of all preclinical, clinical, and other testing, along with a description of the manufacturing process, validation of the manufacturing process, analytical tests conducted on the drug, proposed labeling, and other relevant information. The NDA requests approval to market the product.
Although many patients may be inattentive, hyperactive, or impulsive, the level of severity and degree of functional impairment, and considerations as to what may be behind the underlying symptoms determine which patients meet the diagnosis and therefore should be treated for ADHD. Qelbree is a novel nonstimulant taken once-daily for full-day exposure.
Although many patients may be inattentive, hyperactive, or impulsive, the level of severity and degree of functional impairment, and considerations as to what may be behind the underlying symptoms determine which patients meet the diagnosis and therefore should be treated for ADHD. Competition in the U.S.
Post-Approval Regulatory Requirements Any drugs for which we receive FDA approval are subject to continuing regulation by the FDA, including, among other things: record-keeping requirements; reporting of AE’s with the product; providing the FDA with updated safety and efficacy information; product sampling and distribution requirements; complying with certain electronic records and signature requirements; and complying with FDA promotion and advertising requirements. 22 Table of Conte n t s Drugs may be promot ed only for the approved indication and in accordance with the provisions of the approved label.
Post-Approval Regulatory Requirements Any drugs for which we receive FDA approval are subject to continuing regulation by the FDA, including, among other things: record-keeping requirements; reporting of adverse events with the product; providing the FDA with updated safety and efficacy information; product sampling and distribution requirements; complying with certain electronic records and signature requirements; and complying with FDA promotion and advertising requirements.
A Phase I trial demonstrated early proof of concept in which a single dose of SPN-820 showed a rapid and sustained improvement in core symptoms, with favorable safety and tolerability in patients with treatment resistant depression.
A Phase I trial demonstrated early proof of concept in which a single dose of SPN-820 showed a rapid and sustained improvement in core symptoms, with favorable safety and tolerability in patients with treatment resistant depression. We believe the novel mechanism of action (MOA) in depression may improve symptoms of depression in patients who have failed other agents.
Under these in-licensing agreements, we or our subsidiaries may be required to pay certain amounts upon the achievem ent of defined milestones. If these products are ultimately commercialized, we or the applicable subsidiary are also obligated to pay royalties to third parties, computed as a percentage of net product sales, for each respective product under a license agreement.
If these products are ultimately commercialized, we or the applicable subsidiary are also obligated to pay royalties to third parties, computed as a percentage of net product sales, for each respective product under a license agreement.
Other Intellectual Property Rights We, including our subsidiaries, seek trademark protection in the U.S. and internationally, where available and when appropriate. We, including our subsidiaries, have filed for trademark protection for several marks, which are used in connection with our pharmaceutical research and development collaborations as well as with our products and those of our subsidiaries.
We, including our subsidiaries, have filed for trademark protection for several marks, which are used in connection with our pharmaceutical research and development collaborations as well as with our products and those of our subsidiaries.
GOCOVRI has been granted orphan drug exclusivity until August 24, 2024 for the treatment of dyskinesia in patients with PD receiving levodopa-based therapy with or without concomitant dopaminergic medications.
GOCOVRI has been granted orphan drug exclusivity until August 24, 2024 for the treatment of dyskinesia in patients with PD receiving levodopa-based therapy with or without concomitant dopaminergic medications. Oxtellar XR ® Oxtellar XR is indicated for treatment of partial-onset seizure in adults and children 6 years of age and older.
The False Claims Act provides that any Person who knowingly submits false claims to the government is liable for treble damages as well as additional penalties.
The fine was paid by the MDD Subsidiaries prior to the closing of the USWM Acquisition. The False Claims Act provides that any Person who knowingly submits false claims to the government is liable for treble damages as well as additional penalties.
Trokendi XR ® Trokendi XR is indicated for (1) Epilepsy: initial monotherapy for the treatment of partial-onset and primary generalized tonic-clonic (PGTC) seizure in patients 6 years of age and older (1.1); adjunctive therapy for the treatment of partial-onset, primary generalized tonic-clonic seizures, or seizures associated with Lennox-Gastaut Syndrome in patients 6 years of age and older (1.2); and for (2) preventive treatment of migraine in patients 12 years of age and older.
For more information, refer to Part I, Item I—Business — Intellectual Property and Exclusivity in this annual Report on Form 10-K. 5 Table of Contents Trokendi XR ® Trokendi XR is indicated for (1) epilepsy: initial monotherapy for the treatment of partial-onset and primary generalized tonic-clonic (PGTC) seizure in patients 6 years of age and older (1.1); adjunctive therapy for the treatment of partial-onset, primary generalized tonic-clonic seizures, or seizures associated with Lennox-Gastaut Syndrome in patients 6 years of age and older (1.2); and for (2) preventive treatment of migraine in patients 12 years of age and older.
If the FDA changes its interpretation of Section 505(b)(2), or if the FDA's interpretation is successfully challenged in court, this could delay or even prevent the FDA from approving any Section 505(b)(2) NDA that we submit. By its very nature, a Section 505(b)(1) NDA submission carries a higher degree of regulatory approval risk than a Section 505(b)(2) NDA submission.
If the FDA changes its 20 Table of Contents interpretation of Section 505(b)(2), or if the FDA's interpretation is successfully challenged in court, this could delay or even prevent the FDA from approving any Section 505(b)(2) NDA that we submit.
We have agreed to use commercially reasonable efforts to develop and commercialize XADAGO under the agreement. Either party may terminate the agreement under certain circumstances, including a material breach of the agreement by the other. MYOBLOC In May 2004, we entered into an asset purchase agreement with Elan Pharmaceuticals (Elan agreement), now a subsidiary of Perrigo Company (Perrigo).
We have agreed to use commercially reasonable efforts to develop and commercialize XADAGO under the agreement. Either party may terminate the agreement under certain circumstances, including a material breach of the agreement by the other.
Changes to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, may require submission for further review and approval by the FDA before the change can be implemented. Adverse event reporting and submission of periodic reports is required following marketing approval.
Drugs may be promot ed only for the approved indication and in accordance with the provisions of the approved label. Changes to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, may require submission for further review and approval by the FDA before the change can be implemented.
Further, the FDA also will not approve, as applicable, a Section 505(b)(2) NDA application until any non-patent exclusivity has expired, for example: five-year exclusivity period for obtaining approval of an NCE; or three year exclusivity period for an approval based on new clinical trials; or pediatric exclusivity, listed in the Orange Book for the referenced product. 20 Table of Conte n t s A section 505(b)(2) NDA applicant must send notice of the Paragraph IV certification to the owner of the referenced NDA for the previously approved product and relevant patent holders within 20 days after the Section 505(b)(2) NDA has been accepted for filing by the FDA.
Further, the FDA also will not approve, as applicable, a Section 505(b)(2) NDA application until any non-patent exclusivity has expired, for example: five-year exclusivity period for obtaining approval of an NCE; or three year exclusivity period for an approval based on new clinical trials; or pediatric exclusivity, listed in the Orange Book for the referenced product.
This permits the patent term to be extended as compensation for that portion of a patent term lost during the FDA regulatory review process. The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Amendments, permits a PTE of up to five years beyond the expiry date of the patent.
The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Amendments, permits a PTE of up to five years beyond the expiry date of the patent. The length of the PTE is related to the length of time the drug is under FDA review.
The review process may be extended by the FDA for three additional months to consider new information submitted during the review for clarification purposes. The FDA may also refer applications for novel drug products or drug products that present difficult questions of safety or efficacy to an advisory committee, which is typically a panel that includes clinicians and other experts.
The FDA may also refer applications for novel drug products or drug products that present difficult questions of safety or efficacy to an advisory committee, which is typically a panel that includes clinicians and other experts. The advisory committee reviews and evaluates information and prepares a recommendation as to whether the application should be approved.
The ten issued U.S. patents covering Oxtellar XR will expire no earlier than 2027. We own all of the issued patents and the pending U.S. patent applications. We also own additional foreign patents for extended release oxcarbazepine. XADAGO As an NCE, XADAGO was under the 5-year FDA exclusivity period that expired on March 21, 2022.
The 11 issued U.S. patents covering Oxtellar XR will expire no earlier than 2027. We own all of the issued patents and the pending U.S. patent applications. We also own additional foreign patents for extended-release oxcarbazepine.
Our extensive expertise in product development has been built over the past 30 years: initially as a stand-alone development organization; then, as a United States (U.S.) subsidiary of Shire Plc (Shire, a subsidiary of Takeda Pharmaceutical Company Ltd.); then upon our acquisition of substantially all of the assets of Shire Laboratories, Inc. in 2005, as Supernus Pharmaceuticals. 4 Table of Conte n t s Adamas Acquisition and Reorganization On October 10, 2021, the Company entered into an Agreement and Plan of Merger by and among the Company, Adamas Pharmaceuticals, Inc.
Our extensive expertise in product development has been built over the past 30 years: initially as a stand-alone development organization; then, as a United States (U.S.) subsidiary of Shire Plc (Shire, a subsidiary of Takeda Pharmaceutical Company Ltd.); then upon our acquisition of substantially all of the assets of Shire Laboratories, Inc. in 2005, as Supernus Pharmaceuticals. 4 Table of Contents Our Strategy Our mission is to improve the lives of patients suffering from CNS diseases.
We are actively exploring a broad range of strategic opportunities. This includes in-licensing products and entering into co-promotion and co-development partnerships for our commercial products and product candidates.
We will continue to evaluate and develop additional CNS product candidates that we believe have significant commercial potential through our internal research and development efforts. • Target strategic business development opportunities. We are actively exploring a broad range of strategic opportunities. This includes in-licensing products and entering into co-promotion and co-development partnerships for our commercial products and product candidates.
The ten issued U.S. patents covering Trokendi XR will expire no earlier than 2027. The Company has entered into settlement agreements with third parties, permitting the sale of a generic version of Trokendi XR on or after January 1, 2023. Oxtellar XR Our extended release oxcarbazepine patent portfolio currently includes 13 U.S. patents, ten of which cover Oxtellar XR.
The Company has entered into settlement agreements with third parties, permitting the sale of a generic version of Trokendi XR beginning in January 2023 and entitling the Company to receive royalties on those sales. Oxtellar XR Our extended-release oxcarbazepine patent portfolio currently includes 14 U.S. patents, 11 of which cover Oxtellar XR.
In other disease states such as severe depression, inadequate mTORC1 activity contributes to disease pathology by limiting energy utilization and protein synthesis, leading to impaired function. Multiple preclinical studies have shown that mTORC1 activation is required for the efficacy of many rapid-acting antidepressant compounds, including but not limited to modulators of the N-methyl-D-aspartic-acid (NMDA)-mediated signaling pathway like ketamine.
Multiple preclinical studies have shown that mTORC1 activation is required for the efficacy of many rapid-acting antidepressant compounds, including but not limited to modulators of the N-methyl-D-aspartic-acid (NMDA)-mediated signaling 7 Table of Contents pathway like ketamine.
We are focused on completing and optimizing the synthesis process of the synthetic drug as well as developing a novel dosage form.
SPN-817 has received Orphan Drug designation for both Dravet Syndrome and Lennox-Gastaut Syndrome from the FDA. We are focused on completing and optimizing the synthesis process of the synthetic drug as well as developing a novel dosage form.
These patents and patent applications are owned by Adamas Operations and, as of the first quarter of 2022 are licensed to Supernus Pharmaceuticals, Inc. We, through our subsidiary Adamas Operations, own additional foreign patents and patent applications covering amantadine extended release.
We have additional pending applications containing method and composition claims relating to the pharmacokinetic profile and dosing, and formulations of amantadine extended release. The issued patents expire through 2038. These patents and patent applications are owned by Adamas Operations and, as of the first quarter of 2022 are licensed to Supernus Pharmaceuticals, Inc.
A third-party payor's decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved.
A third-party payor's decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.
The Company is eligible to receive royalties under the Zydus Agreements based on net product sales and the number of generic equivalent products on the market in the U.S. Zydus launched its generic version of Trokendi XR in the first quarter of 2023.
Under certain licensing arrangements, the Company is eligible to receive royalties based on net product sales as defined in the and the number of generic equivalent products on the market in the U.S. We currently receive royalties from third parties related to certain agreements for Trokendi XR.
We believe 7 Table of Conte n t s the novel MOA in depression may improve symptoms of depression in patients who have failed other agents. An Investigational New Drug (IND) application was submitted to the FDA in September 2021. We initiated a Phase II multi-center, randomized double-blind placebo-controlled parallel design study of SPN-820 in adults with treatment resistant depression.
An Investigational New Drug (IND) application was submitted to the FDA in September 2021. We initiated a Phase II multi-center, randomized double-blind placebo-controlled parallel design study of SPN-820 in adults with treatment resistant depression. The study will examine the efficacy and safety of SPN-820 over a course of five weeks of treatment in approximately 270 patients.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRI S K FACTORS. • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, also imposes certain requirements relating to the privacy, security, and transmission of individually identifiable health information; • Federal physician payment transparency requirements under the Affordable Care Act, commonly referred to as the Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics, and medical supplies to report to the HHS information related to physician payments, and to report other transfers of value, physician ownership, and investment interests; • Federal price reporting laws, which require us to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on our commercial products; • FDCA, which among other things, strictly regulates drug product marketing, prohibits manufacturers from marketing drug products for off-label use, and regulates the distribution of drug samples; and • State law equivalents of each of the above federal laws, such as state anti-kickback laws, physician payment, and drug pricing transparency laws, and false claims laws which may apply to our business practices, including, but not limited to: research, distribution, sales and marketing arrangements; claims for items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines, and the applicable compliance guidance promulgated by the federal government; otherwise restrict payments that may be made to healthcare providers; and state laws governing the privacy and security of health information in certain circumstances.
Biggest changeRISK FACTORS. • The HHS OIG Special Fraud Alert published on November 16, 2020, which addresses the manufacturer Speaker Programs, and signals both a narrower government view of AKS compliance with respect to such programs as well as the potential for increased enforcement in the space by government oversight agencies such as OIG and the Department of Justice; • Federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things: individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent; knowingly making a false statement material to an obligation to pay or transmit money to the federal government; or knowingly concealing or improperly avoiding or decreasing an obligation to pay money to the federal government; • Federal physician payment transparency requirements under the ACA, commonly referred to as the Physician Payments Sunshine Act, which requires manufacturers of drugs, devices, biologics, and medical supplies to report to HHS information related to physician payments, and to report other transfers of value, physician ownership, and investment interests; • Federal price reporting laws, which require the Company to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on the Company's commercial products; • The FDCA, which among other things, strictly regulates drug product marketing, prohibits manufacturers from marketing drug products for off-label use, and regulates the distribution of drug samples; • State law equivalents of each of the above federal laws, such as state anti-kickback laws, physician payment, and drug pricing transparency laws, and false claims laws, which may apply to the Company's business practices, including, but not limited to: (i) research, distribution, sales and marketing arrangements; (ii) claims for items or services reimbursed by any third-party payor, including commercial insurers; (iii) state laws that require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines, and the applicable compliance guidance promulgated by the federal government; and (iv) state laws that otherwise restrict payments that may be made to healthcare providers.
Participation under the VHCA requires submission of pricing data and calculation of discounts and rebates pursuant to complex statutory formulas, as well as the entry into government procurement contracts governed by the Federal Acquisition Regulations; • Similar healthcare laws in the European Union and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers.
Participation under the VHCA requires submission of pricing data and calculation of discounts and rebates pursuant to complex statutory formulas, as well as the entry into government procurement contracts governed by the Federal Acquisition Regulations; and • Similar healthcare laws in the European Union and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers.
The integration of acquired businesses may also result in material challenges to the Company’s control environment, including: managing a larger, more complex combined business; maintaining employee morale and retaining key management and other employees; unanticipated issues in integrating financial reporting, information technology infrastructure; and harmonizing the companies’ operating practices, internal controls, compliance programs and other policies, procedures, and processes.
The integration of acquired businesses may also result in material challenges to the Company’s control environment, including: managing a larger, more complex combined business; maintaining employee morale and retaining key management and other employees; unanticipated issues in integrating financial reporting and information technology infrastructure; and harmonizing the companies’ operating practices, internal controls, compliance programs and other policies, procedures, and processes.
Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition, and results of operations, and impair our ability to satisfy our obligations under the notes.
Indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition, and results of operations, and impair our ability to satisfy our obligations under the notes.
If we are unable to promptly post additional collateral, or reduce the level of borrowings pursuant to the credit line, the lender has the right, in its discretion, to liquidate, transfer, withdraw or sell all or any part of the collateral and apply the proceeds to the repay the borrowings.
If we are unable to promptly post additional collateral, or reduce the level of borrowings pursuant to the Credit Line, the lender has the right, in its discretion, to liquidate, transfer, withdraw or sell all or any part of the collateral and apply the proceeds to repay the borrowings.
Regulations include, but are not limited to, the: • Federal healthcare program Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs.
Regulations include, but are not limited to: • The federal healthcare program Anti-Kickback Statute (AKS), which prohibits, among other things, persons from knowingly and willfully soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs.
Moreover, we are required to maintain effective disclosure controls and procedures in order to provide reasonable assurance that the information required to be reported in our periodic reports filed with the SEC is recorded, processed, summarized, and reported within the time periods specified by the SEC's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Moreover, we are required to maintain effective disclosure controls and procedures in order to provide reasonable assurance that the information required to be reported in our periodic reports filed with the SEC is recorded, processed, summarized, and reported within the time periods specified by the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
Factors that may cause a change in circumstances, indicating that the carrying value of our goodwill or amortizable intangible assets may not be recoverable, include a decline in our stock price and market capitalization, reduced future cash flow estimates if significant and prolonged negative industry or economic trends exist or significant changes occur in the competitive landscape and slower growth rates in industry segments in which we participate.
Factors that may cause a change in circumstances, indicating that the carrying value of our goodwill or intangible assets may not be recoverable, include a decline in our stock price and market capitalization, reduced future cash flow estimates if significant and prolonged negative industry or economic trends exist, significant changes occur in the competitive landscape and slower growth rates in industry segments in which we participate.
We received approval for Qelbree from the FDA, based on certain post-marketing commitments, including the requirement to conduct a clinical efficacy and six month open label safety extension study for ADHD in pediatric patients 4 to 5 years of age, a lactation study and a descriptive study related to the use of Qelbree during pregnancy, and to assess the risks of adverse events an potential complications.
We received approval for Qelbree from the FDA, based on certain post-marketing commitments, including the requirement to conduct a clinical efficacy and six month open label safety extension study for ADHD in pediatric patients 4 to 5 years of age, a lactation study and a descriptive study related to the use of Qelbree during pregnancy, and to assess the risks of adverse events and potential complications.
If a significant percentage of our workforce is unable to work, including because of illness or travel or government restrictions in connection with the pandemic, our operations may be negatively impacted. During a pandemic, government restrictions and social distancing guidelines may continue to drive an increased reliance on working from home for our employees.
If a significant percentage of our workforce is unable to work, including because of illness or travel or government restrictions in connection with the pandemic, our operations may be negatively impacted. During a pandemic, government restrictions and social distancing guidelines may drive an increased reliance on working from home for our employees.
Such pressures could have a material adverse impact on our business, financial condition, and results of operations. We depend on wholesalers, distributors, and specialty pharmacies for the retail distribution of our products. If we lose any of our significant wholesaler, distributor, or specialty pharmacy accounts, our business could be harmed.
Such pressures could have a material adverse impact on our business, financial condition, and results of operations. We depend on wholesalers, distributors, and specialty pharmacies for the distribution of our products. If we lose any of our significant wholesaler, distributor, or specialty pharmacy accounts, our business could be harmed.
We may be required to record a significant charge in our consolidated financial statements during the period in which any impairment of our goodwill or intangible assets is determined, negatively affecting our results of operations and equity book value, the effect of which could be material.
We may be required to record a significant charge in our consolidated financial statements during the period in which any impairment of our goodwill or other intangible assets is determined, negatively affecting our results of operations and equity book value, the effect of which could be material.
Manufacturers of pharmaceutical products need to comply with cGMP requirements and other requirements enforced by the FDA, including electronic tracking and submission. These requirements include quality control, quality assurance, and the maintenance of records and documentation. Manufacturers of our products and product candidates may be unable to comply with these cGMP requirements and other FDA and similar foreign regulatory requirements.
Manufacturers of pharmaceutical products need to comply with cGMP requirements and other requirements enforced by the FDA, including electronic tracking and submission. These requirements include quality control, quality assurance, and the maintenance of records and documentation. Manufacturers of our products and product candidates may be unable to comply with all cGMP requirements and other FDA and similar foreign regulatory requirements.
The majority of our product sales are to pharmaceutical wholesalers, specialty pharmacies, and distributors who, in turn, sell our products to pharmacies, hospitals, and other customers, including federal and state entities. The majority of sales of Oxtellar XR, Trokendi XR, XADAGO, and MYOBLOC are made to wholesalers and distributors.
The majority of our product sales are to pharmaceutical wholesalers, specialty pharmacies, and distributors who, in turn, sell our products to pharmacies, hospitals, and other customers, including federal and state entities. The majority of sales of Qelbree, Oxtellar XR, Trokendi XR, XADAGO, and MYOBLOC are made to wholesalers and distributors.
Upon the vesting of each of these options, the holder may exercise his or her options, and upon the vesting of the restricted stock units and performance stock units the holder will receive shares of common stock, which would, in any case, result in dilution to investors.
Upon the vesting of each of these options, the holder may exercise his or her options, and following the vesting of the restricted stock units and performance stock units the holder will receive shares of common stock, which would, in any case, result in dilution to investors.
As a supplier of pharmaceuticals, certain U.S. federal and state healthcare laws and regulations pertaining to patients' rights to privacy, fraud and abuse protection, and others, are and will be applicable to our business.
As a supplier of pharmaceuticals, certain U.S. federal and state healthcare laws and regulations pertaining to patients' rights to privacy, fraud and abuse protection, and others, are and will continue to be applicable to our business.
Generally, an ownership change occurs when certain shareholders change their aggregate ownership position by more than 50 percentage points over their lowest ownership percentage in a testing period, which is typically three years, or since the last ownership change. Our acquired tax attributes are subject to Section 382 limitations. As of December 31, 2022, we had U.S.
Generally, an ownership change occurs when certain shareholders change their aggregate ownership position by more than 50 percentage points over their lowest ownership percentage in a testing period, which is typically three years, or since the last ownership change. Our acquired tax attributes are subject to Section 382 limitations. As of December 31, 2023, we had U.S.
We rely on outsourcing arrangements for some of our critical activities, including manufacturing, preclinical and clinical research, data collection and analysis, and electronic submission of regulatory filings. We may have limited control over third parties, and we cannot guarantee that they will perform their obligations in an effective, competent, and timely manner.
RISK FACTORS. We rely on outsourcing arrangements for some of our critical activities, including manufacturing, preclinical and clinical research, data collection and analysis, and electronic submission of regulatory filings. We may have limited control over third parties, and we cannot guarantee that they will perform their obligations in an effective, competent, and timely manner.
If generics or other versions of extended or controlled release oxcarbazepine or topiramate, or other products including generics containing apomorphine hydrochloride, amantadine, or viloxazine hydrochloride, are approved and successfully commercialized, our business could be materially harmed. Third parties have, and in the future may, receive approval to manufacture and market their own versions of extended release topiramate in the U.S.
If generics or other versions of our products including generics containing oxcarbazepine. topiramate, apomorphine hydrochloride, amantadine, safinamide or viloxazine hydrochloride, are approved and successfully commercialized, our business could be materially harmed. Third parties have, and in the future may, receive approval to manufacture and market their own versions of extended-release topiramate in the U.S.
In addition, any testing conducted by us in connection with Section 404(a) of the Sarbanes-Oxley Act of 2002 (SOX), or the subsequent testing by our independent registered public accounting firm in connection with Section 404(b) of SOX, may reveal additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses.
In addition, any testing conducted by us in connection with Section 404(a) of the Sarbanes-Oxley Act of 2002 (SOX), or the subsequent testing by our independent registered public accounting firm in connection with Section 404(b) of SOX, may in the future reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses.
Our financial performance, including our ability to replace revenue and income lost to generic products and other competitors as well as to grow our business, depends heavily on the commercial success of our products. A substantial amount of our resources are focused on generating, maintaining and/or expanding the revenue generated by our approved products in the U.S.
Our financial performance, including our ability to replace revenue and income lost to generic products and other competitors as well as to grow our business, depends heavily on the commercial success of our products. A substantial amount of our resources is focused on generating, maintaining and/or expanding the revenue generated by our approved products in the U.S.
The financial markets, global economy and supply chains have and may continue to be adversely affected by the pandemic, economic conditions and current or anticipated geopolitical events, including the impact of military conflicts, sanctions imposed in response to such conflicts, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
The financial markets, global economy and supply chains have and may continue to be adversely affected by pandemics, economic conditions and current or anticipated geopolitical events, including the impact of military conflicts, sanctions imposed in response to such conflicts, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
If we materially breach the Britannia Supply Agreement, or Britannia chooses to terminate the Britannia Supply Agreement for convenience, we could lose the right and resources necessary for the manufacture of APOKYN or could incur significant costs implementing technology transfer assistance. We also have agreements with leading CMOs to manufacture our commercial products and the API for such products.
If we materially breach the Britannia Supply Agreement, or Britannia chooses to terminate the Britannia Supply Agreement for convenience, we could lose the right and resources necessary for the manufacture of APOKYN or could incur significant costs implementing technology transfer assistance. We also have agreements with leading CMOs to manufacture other commercial products and the API for such products.
To market any product outside of the U.S., we must establish and comply with numerous and varying regulatory requirements of other regulatory jurisdictions regarding safety and efficacy. Approval procedures vary among jurisdictions and can involve product testing and administrative review periods different from, and greater than, those in the U.S.
To market any product outside of the U.S., we must establish and comply with numerous and varying regulatory requirements of other regulatory jurisdictions regarding safety and efficacy. Approval procedures vary among jurisdictions and can involve product testing and administrative review periods different from, and longer than, those in the U.S.
Among the provisions of the HealthCare Reform Law of importance to our products and product candidates are the following: • An annual, nondeductible fee payable to the U.S. federal government by any entity that manufactures or imports specified branded prescription drugs or biologic agents.
Among the provisions of the HealthCare Reform Law of importance to the Company's products and product candidates are the following: • An annual, nondeductible fee payable to the U.S. federal government by any entity that manufactures or imports specified branded prescription drugs or biologic agents.
Our business, operations, and financial condition could be adversely affected. 47 • We could be involved in lawsuits to protect or enforce our patents, which could be expensive, time consuming, distracting, and ultimately unsuccessful. 49 • Limitations on our patent rights relating to our products and product candidates may limit our ability to prevent third parties from competing against us. 49 • We face potential litigation and product liability exposures.
Our business, operations, and financial condition could be adversely affected. 47 • We could be involved in lawsuits to protect or enforce our patents, which could be expensive, time consuming, distracting, and ultimately unsuccessful. 49 • Limitations on our patent rights relating to our products and product candidates may limit our ability to prevent third parties from competing with us. 50 • We face potential litigation and product liability exposures.
The integration of acquired businesses, including the acquisition of Adamas in November 2021, may result in our systems and controls becoming increasingly complex and more difficult to manage, regardless of whether such acquired business was previously privately or publicly held.
The integration of acquired businesses, such as the acquisition of Adamas in November 2021, may result in our systems and controls becoming increasingly complex and more difficult to manage, regardless of whether such acquired business was previously privately or publicly held.
If collaboration partners fail to develop or fail to effectively commercialize our products for any of these reasons, we may not be able to replace the collaboration partner with another partner to develop and commercialize the product under the terms of the collaboration, if at all.
RISK FACTORS. If collaboration partners fail to develop or fail to effectively commercialize our products for any of these reasons, we may not be able to replace the collaboration partner with another partner to develop and commercialize the product under the terms of the collaboration, if at all.
There can be no assurance that our product candidates will not be subject to the same risks. Limitations on our patent rights relating to our products and product candidates may limit our ability to prevent third parties from competing against us.
There can be no assurance that our product candidates will not be subject to the same risks. Limitations on our patent rights relating to our products and product candidates may limit our ability to prevent third parties from competing with us.
There is a risk that supplies of our products or product candidates may be significantly delayed by or may become unavailable as a result of manufacturing, equipment, process, supply chain or business-related issues affecting our suppliers.
There is a risk that supplies of our products or product candidates may be significantly delayed by or may become unavailable as a result of manufacturing, equipment, process, supply chain or business-related issues or geopolitical events affecting our suppliers.
Healthcare reform measures could hinder or prevent the commercial success of our products or product candidates. The U.S., certain states, and certain foreign governments have shown significant, increased interest in pursuing healthcare reform and changes to the healthcare delivery system.
Healthcare reform measures could hinder or prevent the commercial success of our products or product candidates. The U.S. and certain states have shown significant, increased interest in pursuing healthcare reform and changes to the healthcare delivery system.
Congress may consider other legislation to repeal or replace elements of the HealthCare Reform Law. It is difficult to predict the extent to which any of these changes to the HealthCare Reform Law, or additional changes if made, may impact our business or any financial condition.
Congress may consider other legislation to repeal or replace elements of the HealthCare Reform Law. It is difficult to predict the extent to which any of these changes to the HealthCare Reform Law, or additional changes if made, may impact the Company's business or any financial condition.
If we fail to produce our products and product candidates in the volumes that we require on a timely basis or fail to comply with stringent regulations applicable to pharmaceutical drug manufacturers, we may face delays in the development and commercialization of our products and product candidates or be required to withdraw our products from the market. 34 27 Table of Contents ITEM 1 A.
If we fail to produce our products and product candidates in the volumes that we require on a timely basis or fail to comply with stringent regulations applicable to pharmaceutical drug manufacturers, we may face delays in the development and commercialization of our products and product candidates or be required to withdraw our products from the market. 34 Table of Contents ITEM 1A.
If our financial results are below expectations for a particular period, the market price of our common stock may drop significantly. We may not be able to effectively market and sell our product candidates, if approved, in the U.S. We plan on building or expanding our sales and marketing capabilities in the U.S. to commercialize our product candidates if approved.
If our financial results are below expectations for a particular period, the market price of our common stock may drop significantly. We may not be able to effectively market and sell our product candidates, if approved, in the U.S. We plan on expanding our sales and marketing capabilities in the U.S. to commercialize new product candidates if approved.
Risks Related to Securities Markets and Investment in Our Stock The issuance of additional shares of our common stock, or instruments convertible into or rights to acquire shares or our common stock, or market sales of our common stock, could affect the market price of our common stock and the 2023 Notes.
Risks Related to Securities Markets and Investment in Our Stock The issuance of additional shares of our common stock, or instruments convertible into or rights to acquire shares or our common stock, or market sales of our common stock, could affect the market price of our common stock.
We may also encounter similar risks with the other products and product candidates where raw materials or finished goods are purchased from suppliers outside the U.S., such as the case for example for SPN-830, APOKYN, XADAGO, and MYOBLOC where various suppliers are based in Europe.
We may also encounter similar risks with the other products and product candidates where raw materials or finished goods are purchased from suppliers outside the U.S., as is the case for example for SPN-830, Qelbree, APOKYN, XADAGO, and MYOBLOC where various suppliers are based in Europe.
For example, recently we or our subsidiaries have been involved in litigations alleging violation of federal and state false claims acts and antitrust laws. For more information, refer to Part I, Item 3 - Legal Proceedings contained in this Annual Report Form 10-K.
For example, in recent years we or our subsidiaries have been involved in litigations alleging violation of federal and state false claims acts and antitrust laws. For more information, refer to Part I, Item 3 - Legal Proceedings contained in this Annual Report Form 10-K.
In regards to the USWM Acquisition, the Company acquired the right to further develop and commercialize APOKYN, XADAGO, and the Apomorphine Infusion Device (SPN-830) in the U.S. and MYOBLOC worldwide (the Products) for an upfront cash payment of $300 million and the potential for additional contingent consideration payments of up to $230 million.
As part of the USWM Acquisition, the Company acquired the right to further develop and commercialize APOKYN, XADAGO, and the Apomorphine Infusion Device (SPN-830) in the U.S. and MYOBLOC worldwide (the Products) for an upfront cash payment of $300 million and the potential for additional contingent consideration payments of up to $230 million.
Healthcare cost containment legislation and the failure of third-party payors to provide appropriate levels of coverage and reimbursement for the use of products and treatments facilitated by our products could harm our business and prospects. Our products are dependent upon the coverage decisions and reimbursement policies established by government healthcare programs and private health insurers.
Healthcare cost containment legislation and the failure of third-party payors to provide appropriate levels of coverage and reimbursement for the use of products and treatments facilitated by our products could harm our business and prospects. The Company's products are dependent on the coverage decisions and reimbursement policies established by government healthcare programs and private health insurers.
If any of our major products, including, Oxtellar XR ® , Qelbree ® , GOCOVRI ® , or APOKYN ® , were to become subject to problems, such as changes in prescription growth rates, unexpected side effects, loss of intellectual property protection, supply chain or product supply shortages, regulatory proceedings, changes in labeling, publicity adversely affecting doctor or patient confidence in our product, material product liability litigation, pressure from new or existing competitive products, or adverse changes in coverage under managed care programs, the adverse impact on our revenue and profit could be significant.
If any of our major products, including were to become subject to problems, such as changes in prescription growth rates, unexpected side effects, loss of intellectual property protection, supply chain or product supply shortages, regulatory proceedings, changes in labeling, publicity adversely affecting doctor or patient confidence in our product, material product liability litigation, pressure from new or existing competitive products, or adverse changes in coverage under managed care programs, the adverse impact on our revenue and profit could be significant.
As evidenced by the passage of the American Rescue Plan Act of 2021 and the Inflation Reduction Act of 2022, discussed in greater detail below, we expect these challenges to continue and to potentially intensify in 2023 and following years, as political pressures mount, and healthcare payors, including government-controlled health authorities, insurance companies, and managed care organizations, step up initiatives to reduce the overall cost of healthcare, restrict access to higher-priced new medicines, increase the use of generic products and impose overall price cuts.
As evidenced by the passage of the American Rescue Plan Act of 2021 and IRA of 2022, discussed in greater detail below, we expect these challenges to continue and to potentially intensify in 2024 and following years, as political pressures mount, and healthcare payors, including government-controlled health authorities, insurance companies, and managed care organizations, step up initiatives to reduce the overall cost of healthcare, restrict access to higher-priced new medicines, increase the use of generic products and impose overall price cuts.
We expect our selling, general and administrative costs to continue to increase as we continue to support the ongoing commercialization of our products and to further increase in anticipation of launching our product candidates. While we operated profitably in 2022, we cannot be certain that we will continue to do so.
We expect our selling, general and administrative costs to continue to increase as we continue to support the ongoing commercialization of our products and to further increase in anticipation of launching new product candidates. While we operated profitably in 2023, we cannot be certain that we will continue to do so.
Compliance with Section 404 of SOX, the Dodd-Frank Act of 2010, as well as rules of the Securities and Exchange Commission and NASDAQ, for example, has resulted in significant initial cost to us as well as ongoing increases in our legal, audit and financial reporting costs.
Compliance with Section 404 of SOX, the Dodd-Frank Act of 2010, as well as rules of the Securities and Exchange Commission and NASDAQ, for example, has resulted in significant initial costs to us as well as ongoing legal, audit and financial reporting costs.
Federal net operating loss carryforwards of approximately $416.7 million. Future changes in stock ownership may also trigger an additional ownership change and, consequently, another Section 382 limitation. Any limitation may result in expiration of a portion of the net operating loss or tax credit carryforwards before utilization, which would reduce our gross deferred income tax assets.
Federal net operating loss carryforwards of approximately $374.0 million. Future changes in stock ownership may also trigger an additional ownership change and, consequently, another Section 382 limitation. Any limitation may result in expiration of a portion of the net operating loss or tax credit carryforwards before utilization, which would reduce our gross deferred income tax assets.
The ability of some of our product candidates to reach their potential could be limited if our future collaborators fail to apply sufficient development or commercialization efforts related to those product candidates; • Decide not to devote the necessary resources due to internal constraints, such as limited personnel with the requisite scientific expertise, limited cash resources, or in the belief that other internal drug development programs may have a higher likelihood of obtaining marketing approval, or may potentially generate a greater return on investment; • Develop and commercialize, either alone or with others, drugs that are similar to or competitive with the product candidates that are the subject of their collaboration with us; • Not have necessary and sufficient resources to develop the product candidate through clinical development, marketing approval, and commercialization; • Fail to comply with applicable regulatory requirements; 39 Table of Contents ITEM 1 A.
The ability of some of our product candidates to reach their potential could be limited if our future collaborators fail to apply sufficient development or commercialization efforts related to those product candidates; • Decide not to devote the necessary resources due to internal constraints, such as limited personnel with the requisite scientific expertise, limited cash resources, or in the belief that other internal drug development programs may have a higher likelihood of obtaining marketing approval, or may potentially generate a greater return on investment; • Develop and commercialize, either alone or with others, drugs that are similar to or competitive with the product candidates that are the subject of their collaboration with us; • Not have necessary and sufficient resources to develop the product candidate through clinical development, marketing approval, and commercialization; • Fail to comply with applicable regulatory requirements; • Are unable to obtain the necessary marketing approvals; or • Breach or terminate their arrangement with us. 39 Table of Contents ITEM 1A.
If our products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply.
If the Company's products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply.
Under the Veterans Health Care Act (VHCA) drug companies are required to offer certain pharmaceutical products at a reduced price to a number of federal agencies including the United States Department of Veterans Affairs and United States Department of Defense, the Public Health Service and certain private Public Health Service—designated entities in order to participate in other federal funding programs including Medicare and Medicaid.
Under the VHCA, drug companies are required to offer certain pharmaceutical products at a reduced price to several federal agencies, including the United States Department of Veterans Affairs and United States Department of Defense, the Public Health Service, and certain private Public Health Service—designated entities, in order to participate in other federal funding programs including Medicare and Medicaid.
As a result of the ongoing COVID-19 pandemic, economic conditions and other geopolitical events, the global credit and financial markets have experienced extreme volatility and disruptions, which has included severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, and increases in inflation and uncertainty about economic stability.
As a result of the COVID-19 pandemic, economic conditions and other geopolitical events, in recent years the global credit and financial markets have experienced extreme volatility and disruptions, which has included periods of severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, and increases in inflation and uncertainty about economic stability.
Our personnel, systems and facilities currently in place may not be adequate to support future growth. Our future financial performance and our ability to compete effectively will depend, to a significant degree, on our ability to effectively manage our recent and any future growth. We increased employee headcount from 575 employees in 2021 to 612 employees in 2022.
Our personnel, systems and facilities currently in place may not be adequate to support future growth. Our future financial performance and our ability to compete effectively will depend, to a significant degree, on our ability to effectively manage our recent and any future growth. We increased employee headcount from 612 employees in 2022 to 652 employees in 2023.
These and other provisions in our certificate of incorporation, our bylaws, and in the Delaware General Corporation Law could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors.
RISK FACTORS. provisions in our certificate of incorporation, our bylaws, and in the Delaware General Corporation Law could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors.
If we issue additional shares of our common stock or issue rights to acquire shares of our common stock, if any of our existing stockholders sells a substantial amount of our common stock, or if the market perceives that such issuances or sales may occur, then the trading price of our common stock, and, accordingly, the 2023 Notes, may significantly decrease.
If we issue additional shares of our common stock or issue rights to acquire shares of our common stock, if any of our existing stockholders sells a substantial amount of our common stock, or if the market perceives that such issuances or sales may occur, then the trading price of our common stock may significantly decrease.
RI S K FACTORS. new legislation reverses prior precedent holding that the Orphan Drug Act unambiguously requires that the FDA recognize the orphan exclusivity period, regardless of showing clinical superiority. The FDA may further reevaluate the Orphan Drug Act, including the FDARA amendment, its regulations, and policies.
The new legislation reverses prior precedent holding that the Orphan Drug Act unambiguously requires that the FDA recognize the orphan exclusivity period, regardless of showing clinical superiority. The FDA may further reevaluate the Orphan Drug Act, including the FDARA amendment, its regulations, and policies.
We are a party to and rely on several arrangements with third parties. These arrangements give us rights to intellectual property that are necessary for the development of certain of our product candidates. In addition, we may enter into similar arrangements in the future for other product candidates. Our current arrangements impose various development, financial and other obligations on us.
We are party to and rely on several arrangements with third parties which provide us with rights to intellectual property that are necessary for the development of certain of our product candidates. In addition, we may enter into similar arrangements in the future for other product candidates. Our current arrangements impose various development, financial and other obligations on us.
These CMOs offer a comprehensive range of contract manufacturing services. 38 Table of Contents ITEM 1 A. RI S K FACTORS. We have a license agreement with United Therapeutics Corporation to use one of our proprietary technologies in an oral formulation of treprostinil diethanolamine, or treprostinil, for the treatment of pulmonary arterial hypertension and for other indications.
These CMOs offer a comprehensive range of contract manufacturing services. 38 Table of Contents ITEM 1A. RISK FACTORS. We have a license agreement with United Therapeutics Corporation to use one of our proprietary technologies in an oral formulation of treprostinil diethanolamine, or treprostinil, for the treatment of pulmonary arterial hypertension and for other indications.
Any penalties, damages, fines, curtailment or restructuring of our operations could adversely affect our ability to operate our business and could impair our financial results. Although compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, the risks cannot be entirely eliminated.
Any penalties, damages, fines, curtailment or restructuring of the Company's operations could adversely affect its ability to operate its business and could impair its financial results. Although compliance efforts can mitigate the risk of investigation and prosecution for violations of these laws, the risks cannot be entirely eliminated.
RI S K FACTORS. Notwithstanding the approval of many products by the FDA pursuant to Sections 505(b)(1) and 505(b)(2), over the last few years, some pharmaceutical companies and others have objected to the FDA's interpretation of Section 505(b)(2).
Notwithstanding the approval of many products by the FDA pursuant to Sections 505(b)(1) and 505(b)(2), over the last few years, some pharmaceutical companies and others have objected to the FDA's interpretation of Section 505(b)(2).
FDARA, among other things, codified the FDA's pre-existing regulatory interpretation to require that a drug sponsor demonstrate clinical superiority of an orphan drug that is otherwise the same as a previously approved drug for the same rare disease in order to receive orphan drug exclusivity. The 43 Table of Contents ITEM 1 A.
FDARA, among other things, codified the FDA's pre-existing regulatory interpretation to require that a drug sponsor demonstrate clinical superiority of an orphan drug that is otherwise the same as a previously approved drug for the same rare disease in order to receive orphan drug exclusivity.
The implementation of cost containment measures or other healthcare reforms could result in reduced demand for our product candidates or additional pricing pressures and may prevent us from being able to generate revenue, attain profitability or commercialize our drugs.
The implementation of cost containment measures or other healthcare reforms could result in reduced demand for the Company's product candidates or additional pricing pressures and may prevent the Company from being able to generate revenue, attain profitability or commercialize its drugs.
RI S K FACTORS. insurance costs and changes in the insurance markets, we cannot provide assurance that insurance coverage will continue to be available on terms similar to those presently available to us or available at all. Any such losses not covered by insurance could have a material adverse effect on our financial condition, results of operations, and cash flows.
Further, due to rising insurance costs and changes in the insurance markets, we cannot provide assurance that insurance coverage will continue to be available on terms similar to those presently available to us or available at all. Any such losses not covered by insurance could have a material adverse effect on our financial condition, results of operations, and cash flows.
These policies affect which products customers purchase and the prices customers are willing to pay. Reimbursement varies by country and can significantly impact the acceptance of new products and technologies. Even if we develop a promising new product, we may find limited demand for the product unless appropriate reimbursement approval is obtained from private and governmental third-party payors.
These policies affect which products customers purchase and the prices customers are willing to pay. Reimbursement varies by country and can significantly impact the acceptance of new products and technologies. Even if the Company develops a promising new product, there may be limited demand for the product unless appropriate reimbursement approval is obtained from private and governmental third-party payors.
As noted in the "Business" section of this report, sales of a generic version of Trokendi XR ® began in January 2023 and we expect those competitive products to significantly impact the sales of Trokendi XR and have an adverse impact on our revenue and profit.
As noted in the "Business" section of this report, sales of a generic version of Trokendi XR ® began in January 2023 and those competitive products have significantly impacted the sales of Trokendi XR and have had an adverse impact on our revenue and profit.
We may not realize all the economic benefits from the acquisition, which could cause an impairment of goodwill or intangibles. We review our amortizable intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. We test goodwill for impairment at least annually.
We may not realize all the economic benefits from the acquisition, which could cause an impairment of goodwill or other intangibles. We review our intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
For example, during the current pandemic, the Company’s sales force is functioning largely utilizing digital engagement tools, tactics, and virtual detailing, which may be less effective than the Company’s ordinary course sales and marketing programs.
For example, during the COVID-19 pandemic, the Company’s sales force was functioning largely utilizing digital engagement tools, tactics, and virtual detailing, which may be less effective than the Company's ordinary course sales and marketing programs.
This distribution network has undergone and may continue to undergo significant consolidation marked by mergers and acquisitions. As a result, a small number of large wholesale distributors control a significant share of the market. Consolidation of drug wholesalers has increased. This may result in increased competition and pricing pressures on pharmaceutical products.
This distribution network has undergone and may continue to undergo significant consolidation marked by mergers and acquisitions. As a result, a small number of large wholesale distributors control a significant share of the market. 32 Table of Contents ITEM 1A. RISK FACTORS. Consolidation of drug wholesalers has increased. This may result in increased competition and pricing pressures on pharmaceutical products.
As a result, capital appreciation, if any, of our common stock will be your sole source of gain for 66 Table of Contents ITEM 1 A. RI S K FACTORS. the foreseeable future. There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares.
As a result, capital appreciation, if any, of our common stock will be your sole source of gain for 65 Table of Contents ITEM 1A. RISK FACTORS. the foreseeable future. There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares.
We expect that healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and lower reimbursement, and additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government-funded programs may result in a similar reduction in payments from private payors.
Future healthcare reform measures may result in more rigorous coverage criteria and lower reimbursement, and additional downward pressure on the price that the Company receives for any approved product. Any reduction in reimbursement from Medicare or other government-funded programs may result in a similar reduction in payments from private payors.
We may not be able to attract or motivate qualified management, scientific and clinical personnel in the future due to the intense competition for qualified personnel among biotechnology, pharmaceutical, and other businesses. Our industry has experienced a high rate of turnover of management personnel in recent years.
We may not be able to attract or motivate qualified management, scientific and clinical personnel in the future due to the intense competition for qualified personnel among biotechnology, pharmaceutical, and other businesses. Our industry has 53 Table of Contents ITEM 1A. RISK FACTORS. experienced a high rate of turnover of management personnel in recent years.
If we are slow or unable to adapt to changes in existing requirements or to adopt new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we have obtained, adversely affecting our business, prospects, and ability to achieve or sustain profitability.
If we are unable to adapt on a timely basis, or at all, to changes in existing requirements or to adopt new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we have obtained, adversely affecting our business, prospects, and ability to achieve or sustain profitability.
If our operations are found to be in violation of any of the laws described above or in violation of any governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, and the curtailment, or restructuring of our operations.
If the Company's operations are found to be in violation of any of the laws described above or in violation of any governmental regulations that apply to us, then it may be subject to penalties, including civil and criminal penalties, damages, fines, and the curtailment, or restructuring of its operations.
If companies with modified-release oxcarbazepine products outside of the U.S. pursue or obtain approval of their products within the U.S., such competing products may limit the potential success of Oxtellar XR in the U.S. Our business and growth prospects could be materially impaired.
If companies with modified-release oxcarbazepine products outside of the U.S. pursue or obtain approval of their products within the U.S., such competing products may limit the potential success of Oxtellar XR in the U.S. Our business and growth prospects could be materially impaired. 30 Table of Contents ITEM 1A. RISK FACTORS.
We face competition from a number of sources, some of which may target the same indications as to our products and product candidates. These include large pharmaceutical companies, smaller pharmaceutical companies, biotechnology companies, academic institutions, government agencies, and private and public research institutions.
We face competition from a number of sources, some of which may target the same indications as to our products and product candidates. These include large pharmaceutical companies, smaller pharmaceutical companies, biotechnology companies, academic institutions, government agencies, and private and public research institutions. 36 Table of Contents ITEM 1A. RISK FACTORS.
Although these various restrictions and covenants on us do not currently impact our products, product candidates, or business, they could in the future limit or delay our ability to take advantage of business opportunities that may relate to such compounds.
Although these various restrictions and covenants on us do not currently impact our products, product candidates, or business, they could in the future limit or delay our ability to take advantage of business opportunities that may relate to such compounds. 54 Table of Contents ITEM 1A. RISK FACTORS.
Although we believe that our existing financing sources, including the Credit Line, are adequate for our current operations, reductions in our available credit, or the inability to draw on the Credit Line, could have an adverse effect on our business, financial condition and results of operations. Changes in interest rates could adversely affect the profitability of the Company.
Although we believe that our existing financing sources, including the Credit Line, are adequate for our current operations, reductions in our available credit, or the inability to draw on the Credit Line, could have an adverse effect on our business, financial condition and results of operations.
As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards and tax credit carryforwards to reduce U.S. federal and state income tax may be subject to limitations, which could potentially result in increased future cash tax liability to us.
As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards and tax credit carryforwards to reduce U.S. federal and state income tax may be subject to limitations, which could potentially result in increased future cash tax liability to us. 56 Table of Contents ITEM 1A. RISK FACTORS.
There may be issued patents of third parties that we are currently unaware of and that may be infringed by our products or our collaborators' approved products. These patents could prevent us from being able to maximize revenue generated by our products or our product candidates.
There may be issued patents of third parties that we are currently unaware of and that may be infringed by our products or our collaborators' approved products. These patents could prevent us from being able to 50 Table of Contents ITEM 1A. RISK FACTORS. maximize revenue generated by our products or our product candidates.
Effective internal control over financial reporting and adequate disclosure controls and procedures are designed to prevent fraud. Our failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations.
Maintaining effective internal control over financial reporting is necessary for us to produce reliable financial statements. Effective internal control over financial reporting and adequate disclosure controls and procedures are designed to prevent fraud. Our failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations.
In October 2022, we received a Complete Response Letter ("CRL") from the FDA regarding the NDA for SPN-830 requesting additional information and analysis related to the infusion device and drug product across several areas of the NDA.
We resubmitted the NDA for SPN-830 in December 2021 and we received FDA acceptance for review of NDA for SPN-830 during February 2022. In October 2022, we received a Complete Response Letter ("CRL") from the FDA regarding the NDA for SPN-830 requesting additional information and analysis related to the infusion device and drug product across several areas of the NDA.
These provisions may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect such acquirer's own slate of directors or otherwise attempting to obtain control of our Company; • Our stockholders may not act by written consent.
Furthermore, stockholders may only remove a member of our board of directors for cause. These provisions may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect such acquirer's own slate of directors or otherwise attempting to obtain control of our Company; • Our stockholders may not act by written consent.
If our past or present operations are found to be in violation of any such laws or any other governmental regulations that may apply to us, we may be subject to penalties, both civil and criminal, damages, fines, exclusion from federal healthcare programs, and/or the curtailment or restructuring of our operations.
If the Company's past or present operations are found to be in violation of any such laws or any other governmental regulations that may apply it, then the Company may be subject to penalties, both civil and criminal, damages, fines, exclusion from federal healthcare programs, and/or the curtailment or restructuring of its operations.
DQSA requires such tracking to be done farther down the distribution chain, including (i) wholesalers' verification and tracking in November 2019, (ii) pharmacy verification and tracking in the Fall of 2020, and (iii) at the unit level throughout the entire supply chain near the end of 2023.
DSCSA requires such tracking to be done farther down the distribution chain, including (i) wholesalers' verification and tracking in November 2019, (ii) pharmacy verification and tracking in the Fall of 2020, and (iii) at the unit level throughout the entire supply chain during the fourth quarter of 2023.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

49 edited+28 added−12 removed58 unchanged
Biggest changeOn March 16, 2020, a shareholder derivative lawsuit was filed by Patrick Van Camp in federal court in the Northern District of California (Case No. 4:20-cv-01815) naming Adamas and certain of Adamas's former directors and officers as defendants. This lawsuit alleges certain of Adamas's former directors and officers breached fiduciary duties and violated the Securities Exchange Act of 1934.
Biggest changeThe deadline for plaintiff to file a motion for preliminary approval of the class action settlement, or for the parties to submit a joint report updating the court of settlement status, is March 1, 2024. 74 Table of Contents On March 16, 2020, a shareholder derivative lawsuit was filed by Patrick Van Camp in federal court in the Northern District of California (Case No. 4:20-cv-01815) naming Adamas and certain of Adamas's former directors and officers as defendants.
Patent Nos. 8,298,576; 8,298,580; 8,663,683; 8,877,248; 8,889,191; 8,992,989; 9,549,940; 9,555,004; 9,622,983; and 10,314,790 generally cover once-a-day topiramate formulations and methods of treating or preventing seizures and migraines using those formulations.
Patent Nos. 8,298,576; 8,298,580; 8,663,683; 8,877,248; 8,889,191; 8,992,989; 9,549,940; 9,555,004; 9,622,983; and 10,314,790 generally cover once-a-day topiramate formulations and methods of treating or preventing seizures and migraines using those formulations.
Patent Nos. 8,298,576; 8,298,580; 8,663,683; 8,877,248; 8,889,191; 8,992,989; 9,549,940; 9,555,004; 9,622,983; and 10,314,790 generally cover once-a-day topiramate formulations and methods of treating or preventing seizures and migraines using those formulations.
Patent Nos. 8,298,576; 8,298,580; 8,663,683; 8,877,248; 8,889,191; 8,992,989; 9,549,940; 9,555,004; 9,622,983; and 10,314,790 generally cover once-a-day topiramate formulations and methods of treating or preventing seizures and migraines using those formulations.
The FDA Orange Book currently lists United States Patent No. 8,298,576 as expiring on April 4, 2028 and United States Patent Nos. 8,298,580; 8,663,683; 8,877,248; 8,889,191; 8,992,989; 9,549,940; 9,555,004; 9,622,983; and 10,314,790 as expiring on November 16, 2027.
The FDA Orange Book currently lists United States Patent No. 8,298,576 as expiring on April 4, 2028, and United States Patent Nos. 8,298,580; 8,663,683; 8,877,248; 8,889,191; 8,992,989; 9,549,940; 9,555,004; 9,622,983; and 10,314,790 as expiring on November 16, 2027.
Patent Nos. 8,298,576; 8,298,580; 8,663,683; 8,877,248; 8,889,191; 8,992,989; 9,549,940; 9,555,004; 9,622,983; and 10,314,790 generally cover once-a-day topiramate formulations and methods of treating or preventing seizures and migraines using those formulations.
Patent Nos. 8,298,576; 8,298,580; 8,663,683; 8,877,248; 8,889,191; 8,992,989; 9,549,940; 9,555,004; 9,622,983; and 10,314,790 generally cover once-a-day topiramate formulations and methods of treating or preventing seizures and migraines using those formulations.
No. 21-cv-12133 (KM)(MAH) (D.N.J.) The Company received a Paragraph IV Notice Letter from generic drug maker RiconPharma LLC dated April 20, 2021 directed to nine of its Oxtellar XR® Orange Book patents. Supernus’s U.S. Patent Nos. 7,722,898; 7,910,131; 8,617,600; 8,821,930; 9,119,791; 9,351,975; 9,370,525; 9,855,278; and 10,220,042 generally cover once-a-day oxcarbazepine formulations and methods of treating seizures using those formulations.
No. 21-cv-12133 (MEF)(MAH) (D.N.J.) The Company received a Paragraph IV Notice Letter from generic drug maker RiconPharma LLC dated April 20, 2021, directed to nine of its Oxtellar XR ® Orange Book patents. Supernus’s U.S. Patent Nos. 7,722,898; 7,910,131; 8,617,600; 8,821,930; 9,119,791; 9,351,975; 9,370,525; 9,855,278; and 10,220,042 generally cover once-a-day oxcarbazepine formulations and methods of treating seizures using those formulations.
The FDA Orange Book currently lists all ten of the Oxtellar XR® Orange Book patents as expiring on April 13, 2027. On October 28, 2022, the Company filed a lawsuit against Ajanta alleging infringement of the Company’s ten Oxtellar XR® patents. The Complaint—filed in the U.S.
The FDA Orange Book lists all ten of the Company’s Oxtellar XR ® patents as expiring on April 13, 2027. On October 28, 2022, the Company filed a lawsuit against Ajanta alleging infringement of the Company’s ten Oxtellar XR ® patents. The Complaint—filed in the U.S.
On August 25, 2022, the Ninth Circuit sided with the defendants by reversing the District Court’s public disclosure bar rulings and remanding the case back to the District Court to decide certain issues in the first instance. On October 11, 2022, the plaintiff filed a petition for rehearing with the Ninth Circuit which was denied on November 3, 2022.
On August 25, 2022, the Ninth Circuit sided with the defendants by reversing the District Court’s public disclosure bar rulings and remanding the case back to the District Court to decide certain issues in the first instance. On October 11, 2022, the plaintiff filed a petition for rehearing with the Ninth Circuit, which was denied.
That Order further indicated that this action, i.e., C.A. No. 22-cv-322 (D.N.J.), will also be stayed. The Court lifted the stay of both actions on July 1, 2022. Pursuant to the Court’s January 27, 2022 and July 1, 2022 Orders, the 30-month Stay was extended by 152 days from November 14, 2022 to April 15, 2023.
That Order further indicated that this action, i.e., C.A. No. 22-cv-322 (D.N.J.), will also be stayed. The Court lifted the stay of both actions on July 1, 2022. 68 Table of Contents Pursuant to the Court’s January 27, 2022, and July 1, 2022, Orders, the 30-month Stay was extended by 152 days from November 14, 2022, to April 15, 2023.
Del.) On October 3, 2022, Sage Chemical, Inc. and TruPharma, LLC filed a lawsuit in the United States District Court for the District of Delaware alleging that Supernus Pharmaceuticals, Inc., Britannia Pharmaceuticals Limited (Britannia), and US WorldMeds Partners, LLC (US WorldMeds) violated state and federal antitrust law in connection with APOKYN® (apomorphine HCl).
Del.) On October 3, 2022, Sage Chemical, Inc. and TruPharma, LLC filed a lawsuit in the United States District Court for the District of Delaware alleging that Supernus Pharmaceuticals, Inc., Britannia Pharmaceuticals Limited (“Britannia”), and US WorldMeds Partners, LLC (“US WorldMeds”) violated state and federal antitrust law in connection with APOKYN ® (apomorphine HCl).
Patent Nos. 8,298,576; 8,298,580; 8,663,683; 8,877,248; 8,889,191; 8,992,989; 9,549,940; 9,555,004; 9,622,983; and 10,314,790 generally cover once-a-day 70 Table of Contents topiramate formulations and methods of treating or preventing seizures and migraines using those formulations.
Patent Nos. 8,298,576; 8,298,580; 8,663,683; 8,877,248; 8,889,191; 8,992,989; 9,549,940; 9,555,004; 9,622,983; and 10,314,790 generally cover once-a-day topiramate formulations and methods of treating or preventing seizures and migraines using those formulations.
This case is currently stayed pending Adamas's and Allergan's interlocutory appeal of the District Court's December 11, 2020 order denying Adamas's and Allergan's motions to dismiss the complaint. The appeal is pending in the United States Court of Appeals for the Ninth Circuit (Case No. 21-80005). Argument was held on January 10, 2022.
This case is currently stayed pending Adamas's and Allergan's interlocutory appeal of the District Court's December 11, 2020 order denying Adamas's and Allergan's motions to dismiss the complaint. The appeal was heard by the United States Court of Appeals for the Ninth Circuit (Case No. 21-80005). Argument was held on January 10, 2022.
On October 16, 2022, Plaintiffs amended their complaint to add additional defendants MDD US Enterprises, LLC, MDD US Operations, LLC (each subsidiaries of Supernus Pharmaceuticals, Inc.), USWM, LLC (“USWM”), Paul Breckinridge Jones, Sr., Herbert Lee Warren, Jr., Henry Van Den Berg, and Kristin L. Gullo.
On October 16, 2022, Plaintiffs amended their complaint to add additional defendants MDD US Enterprises, LLC, MDD US Operations, LLC (each a subsidiary of Supernus Pharmaceuticals, Inc.), USWM, LLC (“USWM”), Paul Breckinridge Jones, Sr., Herbert Lee Warren, Jr., Henry Van Den Berg, and Kristin L. Gullo.
On January 3, 2023, Ajanta answered the Complaint and denied the substantive allegations of the Complaint, asserting affirmative defenses that include non-infringement and invalidity. Ajanta also asserted Counterclaims seeking declaratory judgments of non-infringement and invalidity. On January 24, 2023, the Company filed its Reply, denying the substantive allegations of Ajanta’s Counterclaims.
On January 3, 2023, Ajanta answered the Complaint and denied the substantive allegations of the Complaint, asserting affirmative defenses that include non-infringement and invalidity. Ajanta also 69 Table of Contents asserted Counterclaims seeking declaratory judgments of non-infringement and invalidity. On January 24, 2023, the Company filed its Reply, denying the substantive allegations of Ajanta’s Counterclaims.
On December 6, 68 Table of Contents 2021, the Court signed an Order withdrawing the Jury demand from Ricon’s answer. On December 13, 2021, Ricon filed an amended Answer to Supernus’s Complaint. On December 15, 2021, the Company filed its reply, denying the substantive allegations of Ricon’s Counterclaims.
On December 6, 2021, the Court signed an Order withdrawing the Jury demand from Ricon’s answer. On December 13, 2021, Ricon filed an amended Answer to Supernus’s Complaint. On December 15, 2021, the Company filed its reply, denying the substantive allegations of Ricon’s Counterclaims.
Adamas believes it has strong factual and legal defenses to all actions and intends to defend itself vigorously. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 73 Table of Contents PART II
Adamas believes it has strong factual and legal defenses to all actions and intends to defend itself vigorously. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. PART II
On November 22, 2022, the Court issued an Order consolidating for all purposes this lawsuit with another pending lawsuit against Ricon, C.A. No. 22-cv-6340 (D.N.J.), discussed in Section IV below. The Court issued a revised Scheduling Order on February 9, 2023 that provides a Joint Final Pretrial Order deadline of January 11, 2024.
On November 22, 2022, the Court issued an Order consolidating for all purposes this lawsuit with another pending lawsuit against Ricon, C.A. No. 22-cv-6340 (D.N.J.), discussed in Section IV, below. The Court issued a revised Scheduling Order on June 27, 2023, that provides a Joint Final Pretrial Order deadline of July 12, 2024.
Del.) The Company received a Paragraph IV Notice Letter from generic drug maker Lupin Limited dated July 29, 2021 directed to ten of its Trokendi XR® Orange Book patents. Supernus’s U.S.
No. 21-cv-1293 (MN) (D. Del.) The Company received a Paragraph IV Notice Letter from generic drug maker Lupin Limited dated July 29, 2021, directed to ten of its Trokendi XR ® Orange Book patents. Supernus’s U.S.
Filing the Complaint within 45 days of receiving each of the Defendants' Paragraph IV notice letters entitles the Plaintiffs to an automatic stay preventing the FDA from approving the Defendants' ANDAs for 30 months from the date of the Plaintiffs' receipt of the Paragraph IV Notice Letters. The parties agreed on a case schedule.
Filing the Complaint within 45 days of receiving each of the Defendants' Paragraph IV notice letters entitles the Plaintiffs to an automatic stay preventing the FDA from approving the Defendants' ANDAs for 30 months from the date of the Plaintiffs' receipt of the Paragraph IV Notice Letters.
On June 7, 2021, Ajanta answered the Complaint and denied the substantive allegations of the Complaint, asserting affirmative defenses that include non-infringement and invalidity. Ajanta also asserted Counterclaims seeking declaratory judgments of non‑infringement and 69 Table of Contents invalidity for the Trokendi XR® Orange Book patents.
On June 7, 2021, Ajanta answered the Complaint and denied the substantive allegations of the Complaint, asserting affirmative defenses that include non-infringement and invalidity. Ajanta also asserted Counterclaims seeking declaratory judgments of non‑infringement and invalidity for the Trokendi XR ® Orange Book patents. On June 28, 2021, the Company filed its reply, denying the substantive allegations of Ajanta’s Counterclaims.
Adamas is named as a nominal defendant only. On April 6, 2020, another, virtually identical, shareholder derivative lawsuit was filed by James Druzbik in federal court in the Northern District of California (Case No. 4:20- cv-02320) naming Adamas and certain of Adamas's former directors and officers as defendants.
On April 6, 2020, another, virtually identical, shareholder derivative lawsuit was filed by James Druzbik in federal court in the Northern District of California (Case No. 4:20- cv-02320) naming Adamas and certain of Adamas's former directors and officers as defendants. This lawsuit contained the same allegations, claims, and defendants as the first derivative action.
On January 10, 2023, Defendants filed an Omnibus Motion to Dismiss the Amended Complaint seeking dismissal of each of Plaintiffs’ claims and the lawsuit in its entirety and US WorldMeds with USWM, Britannia, and the group of individual defendants each filed separate motions to dismiss. Plaintiffs’ responses are due on March 13, 2023.
On January 10, 2023, Defendants filed an Omnibus Motion to Dismiss the Amended Complaint seeking dismissal of each of Plaintiffs’ claims and the lawsuit in its entirety and US WorldMeds with USWM, Britannia, and the group of individual defendants each filed separate motions to dismiss. As of April 12, 2023, briefing on those motions is now complete.
Fact discovery is ongoing with the remaining defendants. Adamas Litigation In November 2012, Adamas Pharmaceuticals, Inc. (Adamas) granted Forest Laboratories Holdings Limited, an indirect wholly-owned subsidiary of Allergan plc (Forest), an exclusive license to certain of Adamas's intellectual property rights relating to human therapeutics containing memantine in the United States.
(Adamas) granted Forest Laboratories Holdings Limited, an indirect wholly-owned subsidiary of Allergan plc (Forest), an exclusive license to certain of Adamas's intellectual property rights relating to human therapeutics containing memantine in the United States.
Pretrial discovery is ongoing as of the date of this submission. Supernus Pharmaceuticals, Inc. v. Torrent Pharmaceuticals Ltd., et al., C.A. No. 21-cv-14268 (GC)(LHG) (D.N.J.) The Company received a Paragraph IV Notice Letter from generic drug maker Torrent Pharmaceuticals Ltd. dated June 15, 2021 directed to ten of its Trokendi XR® Orange Book patents. Supernus’s U.S.
No. 21-cv-14268 (GC)(DEA) (D.N.J.) The Company received a Paragraph IV Notice Letter from generic drug maker Torrent Pharmaceuticals Ltd. dated June 15, 2021, directed to ten of its Trokendi XR ® Orange Book patents. Supernus’s U.S.
A number of companies have submitted ANDAs including one or more certifications to the FDA, pursuant to 21 U.S.C. § 355(j)(2)(A)(vii)(iv), requesting approval to manufacture and market generic versions of Namzaric, on which Adamas became entitled to receive royalties from Forest beginning in May 2020. 72 Table of Contents Adamas and Forest have settled with all such Namzaric ANDA filers, including all first filers on all the available dosage forms of Namzaric.
Since 2018 multiple generic companies have launched generic versions of NAMENDA XR. A number of companies have submitted ANDAs including one or more certifications to the FDA, pursuant to 21 U.S.C. § 355(j)(2)(A)(vii)(iv), requesting approval to manufacture and market generic versions of Namzaric, on which Adamas became entitled to receive royalties from Forest beginning in May 2020.
No. 21-cv-6964 (GC)(LHG) (D.N.J.) The Company received a Paragraph IV Notice Letter from generic drug maker Ajanta Pharma Limited dated February 10, 2021 directed to ten of its Trokendi XR® Orange Book patents. Supernus’s U.S.
The agreement has been submitted to the applicable governmental agencies. Trokendi XR ® VI. Supernus Pharmaceuticals, Inc. v. Ajanta Pharma Limited, et al., C.A. No. 21-cv-6964 (GC)(DEA) (D.N.J.) The Company received a Paragraph IV Notice Letter from generic drug maker Ajanta Pharma Limited dated February 10, 2021, directed to ten of its Trokendi XR ® Orange Book patents. Supernus’s U.S.
The agreement has been submitted to the applicable governmental agencies. ___________________ [1] Previously, the Company was in a lawsuit against Zydus Pharmaceuticals (USA) Inc. and Cadila Healthcare Limited concerning an Abbreviated New Drug Application (“ANDA”) for Zydus’s proposed generic equivalents of the 25 mg, 50 mg, and 100 mg strengths of Trokendi XR®.
Patent Nos. 8,298,576; 8,298,580; 8,663,683; [1] Previously, the Company was in a lawsuit against Zydus Pharmaceuticals (USA) Inc. and Cadila Healthcare Limited concerning an Abbreviated New Drug Application (“ANDA”) for Zydus’s proposed generic equivalents of the 25 mg, 50 mg, and 100 mg strengths of Trokendi XR ® .
District Court for the District of New Jersey—alleges, inter alia, that Ricon infringed U.S. Patent No. 11,166,960 by submitting to the FDA an Abbreviated New Drug Application (“ANDA”) seeking to market a generic version of Oxtellar XR® prior to the expiration of U.S. Patent No. 11,166,960.
District Court for the District of New Jersey—alleges, inter alia, that Ascent infringed the Company’s Trokendi XR ® patents by submitting to the FDA an Abbreviated New Drug Application (“ANDA”) seeking to market a generic version of Trokendi XR ® prior to the expiration of the Company’s patents.
ITEM 3. LEGAL PROCEEDINGS. From time to time and in the ordinary course of business, Supernus Pharmaceuticals, Inc. ("Company") and any of its subsidiaries may be subject to various claims, charges and litigation.
ITEM 3. LEGAL PROCEEDINGS. From time to time and in the ordinary course of business, Supernus Pharmaceuticals, Inc. ("Company") and any of its subsidiaries may be subject to various claims, charges and litigation. Parent and any of its subsidiaries may be required to file infringement claims against third parties for the infringement of our patents. Oxtellar XR ® I.
(collectively, “Apotex”) dated May 13, 2020 directed to nine of its Oxtellar XR® Orange Book patents. Supernus’s U.S. Patent Nos. 7,722,898; 7,910,131; 8,617,600; 8,821,930; 9,119,791; 9,351,975; 9,370,525; 9,855,278; and 10,220,042 generally cover once-a-day oxcarbazepine formulations and methods of treating seizures using those formulations.
Patent Nos. 7,722,898; 7,910,131; 8,617,600; 8,821,930; 9,119,791; 9,351,975; 9,370,525; 9,855,278; and 10,220,042 generally cover once-a-day oxcarbazepine formulations and methods of treating seizures using those formulations. The FDA Orange Book lists all nine of the Company’s Oxtellar XR ® patents as expiring on April 13, 2027.
Subject to those agreements, the earliest date on which any of these agreements grant a license to market a Namzaric ANDA filer's generic version of Namzaric is January 1, 2025 (or earlier in certain circumstances).
Adamas and Forest have settled with all such Namzaric ANDA filers, including all first filers on all the available dosage forms of Namzaric. Subject to those agreements, the earliest date on which any of these agreements grant a license to market a Namzaric ANDA filer's generic version of Namzaric is January 1, 2025 (or earlier in certain circumstances).
On November 22, 2022, the Court issued an Order consolidating for all purposes this lawsuit with another pending lawsuit against Ricon, C.A. No. 21-cv-12133 (D.N.J.), discussed in Section III above. The Court further ordered that this action, C.A. No. 22-cv-6340 (D.N.J.), be administratively terminated. Supernus Pharmaceuticals, Inc. v. Ajanta Pharma Limited, C.A. No. 22-cv-1431 (D.
No. 21-cv-12133 (D.N.J.), discussed in Section III, above. The Court further ordered that this action—C.A. No. 22-cv-6340 (D.N.J.)—be administratively terminated. V. Supernus Pharmaceuticals, Inc. v. Ajanta Pharma Limited, C.A. No. 22-cv-1431 (GBW) (D.
The Notice Letter is directed to the Oxtellar XR® Orange Book patents, namely United States Patent Nos. 7,722,898, 7,910,131, 8,617,600, 8,821,930, 9,119,791, 9,351,975, 9,370,525, 9,855,278, 10,220,042, and 11,166,960. These patents generally cover once-a-day oxcarbazepine formulations and methods of treating seizures using those formulations.
Del.) The Company received a Paragraph IV Notice Letter from generic drug maker Ajanta Pharma Limited (“Ajanta”) dated September 19, 2022, directed to ten of its Oxtellar XR ® Orange Book patents. Supernus’s U.S. Patent Nos. 7,722,898; 7,910,131; 8,617,600; 8,821,930; 9,119,791; 9,351,975; 9,370,525; 9,855,278; 10,220,042; and 11,166,960 generally cover once-a-day oxcarbazepine formulations and methods of treating seizures using those formulations.
The FDA Orange Book lists all nine of the Company’s Oxtellar XR® patents as expiring on April 13, 2027. On June 26, 2020, the Company filed a lawsuit against Apotex alleging infringement of the Company’s nine patents. The Complaint—filed in the U.S.
On June 26, 2020, the Company filed a lawsuit against Apotex alleging infringement of the Company’s nine patents. The Complaint—filed in the U.S.
Pretrial discovery is ongoing as of the date of this submission. Supernus Pharmaceuticals, Inc. v. Dr. Reddy's Laboratories, Ltd., et al., C.A. No. 22-cv-4705 (GC)(LHG) (D.N.J.) The Company received a Paragraph IV Notice Letter from generic drug makers Dr, Reddy’s Laboratories Ltd. and Dr.
The agreement has been submitted to the applicable governmental agencies. XI. Supernus Pharmaceuticals, Inc. v. Dr. Reddy’s Laboratories, Ltd., et al., C.A. No. 22-cv-4705 (GC)(JBD) (D.N.J.) The Company received a Paragraph IV Notice Letter from generic drug makers Dr, Reddy’s Laboratories Ltd. and Dr.
Pretrial discovery is ongoing as of the date of this submission. Supernus Pharmaceuticals, Inc. v. RiconPharma LLC, et al., C.A. No. 22-cv-6340 (KM)(MAH) (D.N.J.) The Company received a Paragraph IV Notice Letter from generic drug maker RiconPharma, LLC (“Ricon”) dated October 7, 2022 directed to one of its Oxtellar XR® Orange Book patents. Supernus’s U.S.
Pretrial discovery is ongoing as of the date of this letter. 72 Table of Contents XIII. Supernus Pharmaceuticals, Inc. v. Ascent Pharmaceuticals Inc., et al., C.A. No. 23-cv-5720 (E.D.N.Y.) The Company received a Paragraph IV Notice Letter from generic drug maker Ascent Pharmaceuticals Inc. dated June 15, 2023, directed to ten of its Trokendi XR® Orange Book patents. Supernus’s U.S.
On August 1, 2022, the Court issued an Order consolidating this lawsuit with another pending lawsuit against Apotex, C.A. No. 20-cv-7870 (D.N.J.), discussed in Section 1, above, and administratively terminated C.A. No. 22-cv-322. As of the date of this submission, C.A. No. 22-cv-322 (D.N.J.) remains administratively terminated. Supernus Pharmaceuticals, Inc. v. RiconPharma LLC, et al., C.A.
On August 1, 2022, the Court issued an Order consolidating this lawsuit with another pending lawsuit against Apotex, C.A. No. 20-cv-7870 (D.N.J.), discussed in Section I, above, and administratively terminated C.A. No. 22-cv-322 (D.N.J.). In related action C.A. No. 20-cv-7870 (D.N.J.), the Court issued a revised Scheduling Order on December 20, 2022, that further extends the 30-month stay.
On June 28, 2021, the Company filed its reply, denying the substantive allegations of Ajanta’s Counterclaims. Following the initial Rule 16 Scheduling Conference, the Court issued a case schedule. On December 17, 2021, the Court issued an order consolidating this lawsuit with the lawsuit against Torrent, discussed in Section VII below.
Following the initial Rule 16 Scheduling Conference, the Court issued a case schedule. On December 17, 2021, the Court issued an order consolidating this lawsuit with the lawsuit against Torrent, discussed in Section VII, below. The consolidation order extended the 30‑month stay preventing the FDA from approving Ajanta’s ANDA to December 16, 2023.
Following the initial Rule 16 Scheduling Conference, the Court issued a case schedule. On December 17, 2021, the Court issued an order consolidating this lawsuit with the lawsuit against Ajanta, discussed in Section VI, above. On January 24, 2023, the Court amended the scheduling order. Under the amended scheduling order, the Final Pretrial Conference is set for June 26, 2023.
Following the initial Rule 16 Scheduling Conference, the Court issued a case schedule. On December 17, 2021, the Court issued an order consolidating this lawsuit with the lawsuit against Ajanta, discussed in Section VI, above. The Court held a bench trial between July 31, 2023, and August 3, 2023. Closing arguments for the trial were held on October 4, 2023.
Parent and any of its subsidiaries may be required to file infringement claims against third parties for the infringement of our patents. 67 Table of Contents Oxtellar XR ® Supernus Pharmaceuticals, Inc. v. Apotex Inc., et al., C.A. No. 20-cv-7870 (FLW)(TJB) (D.N.J.) The Company received a Paragraph IV Notice Letter from generic drug makers Apotex Inc. and Apotex Corp.
Supernus Pharmaceuticals, Inc. v. Apotex Inc., et al., C.A. No. 20-cv-7870 (MAS)(TJB) (D.N.J.) The Company received a Paragraph IV Notice Letter from generic drug makers Apotex Inc. and Apotex Corp. (collectively, “Apotex”) dated May 13, 2020, directed to nine of its Oxtellar XR ® Orange Book patents. Supernus’s U.S.
On October 3, 2022, Alkem answered the Complaint and denied the substantive allegations of the Complaint, asserting affirmative defenses that include non-infringement and invalidity. On October 26, 2022, the Court issued a scheduling order. The scheduling order states that the Pretrial Conference will be in May 2024 and that trial will commence in June 2024.
On October 11, 2023, Ascent Pharma answered the Complaint and denied the substantive allegations of the Complaint, asserting affirmative defenses that include non-infringement and invalidity. On November 21, 2023, the Court issued a scheduling order that provides for a Pretrial Conference in July 2025 and a bench trial in July/August 2025.
Patent No. 11,166,960 generally covers once-a-day oxcarbazepine formulations and methods of treating seizures using those formulations. The FDA Orange Book lists U.S. Patent No. 11,166,960 as expiring on April 13, 2027. On October 28, 2022, the Company filed a lawsuit against Ricon alleging infringement of U.S. Patent No. 11,166,960. The Complaint—filed in the U.S.
Patent No. 11,166,960 as expiring on April 13, 2027. On October 28, 2022, the Company filed a lawsuit against Ricon alleging infringement of U.S. Patent No. 11,166,960. The Complaint—filed in the U.S. District Court for the District of New Jersey—alleges, inter alia, that Ricon infringed U.S.
Pretrial discovery is ongoing as of the date of this submission. APOKYN® Sage Chemical, Inc., et al. v. Supernus Pharmaceuticals, Inc., et al., C.A. No. 22-cv-1302 (CFC) (D.
Supernus Pharmaceuticals, Inc., et al., C.A. No. 22-cv-1302 (CJB) (D.
The Court issued another Scheduling Order on February 17, 2023 that provides for a final pre-trial conference and trial in June 2023. Pretrial discovery is ongoing as of the date of this submission. Supernus Pharmaceuticals, Inc. v. Apotex Inc., et al., C.A.
Those motions remain pending. On April 10, 2023, the Court issued a scheduling order that provides for a Pretrial Conference on March 7, 2025, and a jury trial beginning on March 24, 2025. Pretrial discovery is ongoing as of the date of this filing. XADAGO ® On June 10, 2021, Newron Pharmaceuticals S.p.A. ("Newron"), Zambon S.p.A.
A settlement agreement was entered into between the Company and Zydus Pharmaceuticals (USA) Inc. and Cadila Healthcare Limited concerning the previous lawsuit. See https://www.sec.gov/Archives/edgar/data/1356576/000110465917031191/a17-10293_1ex10d1.htm. Supernus Pharmaceuticals, Inc. v. Alkem Laboratories Ltd., C.A. No. 22-cv-3511 (EEB)(SRH) (N.D.
A settlement agreement was entered into between the Company and Zydus Pharmaceuticals (USA) Inc. and Cadila Healthcare Limited concerning the previous lawsuit. See https://www.sec.gov/Archives/edgar/data/1356576/000110465917031191/a17-10293_1ex10d1.htm. 71 Table of Contents 8,877,248; 8,889,191; 8,992,989; 9,549,940; 9,555,004; 9,622,983; and 10,314,790 generally cover once-a-day topiramate formulations and methods of treating or preventing seizures and migraines using those formulations.
On October 7, 2022, DRL answered the Complaint and denied the substantive allegations of the Complaint, asserting affirmative defenses that include 71 Table of Contents non-infringement and invalidity. On February 21, 2023, the Court issued a Scheduling Order that sets the Final Pretrial Conference on June 24, 2024 and the trial to begin on July 22, 2024.
On October 7, 2022, DRL answered the Complaint and denied the substantive allegations of the Complaint, asserting affirmative defenses that include non-infringement and invalidity. The Company entered into a settlement agreement with DRL, and on June 28, 2023, a stipulation of dismissal without prejudice was entered by the U.S. District Court for the District of New Jersey.
On December 23, 2022, defendants filed renewed motions to dismiss directed to the remaining unresolved issue. The district court has set a hearing on the renewed motion to dismiss for March 17, 2023.
On December 23, 2022, defendants filed renewed motions to dismiss directed to the remaining unresolved issue. On March 20, 2023, the district court entered an order and final judgment dismissing with prejudice the FCA claim while declining to exercise supplemental jurisdiction over the state false claims act claims which were dismissed without prejudice.
A trial has been set for January 8, 2024. On March 22, 2022, defendant Optimus Pharma Pvt Ltd was dismissed from the case without prejudice. A claim construction hearing was held on December 1, 2022. On January 5, 2023, Defendants Aurobindo Pharma Limited and Aurobindo Pharma USA Inc were dismissed from the case without prejudice pursuant to a settlement agreement.
On March 22, 2022, defendant Optimus Pharma Pvt Ltd was dismissed from the case without prejudice. Between January 5, 2023, and November 22, 2023, Plaintiffs entered into settlement agreements with all remaining defendants. The settlement agreements have been submitted to the applicable governmental agencies. The case is closed. 73 Table of Contents Adamas Litigation In November 2012, Adamas Pharmaceuticals, Inc.
This lawsuit contains the same allegations, claims, and defendants as the first derivative action. Adamas is named as a nominal defendant only. In both actions, Plaintiffs seek unspecified monetary damages and other relief. These actions have been consolidated and are stayed pending resolution of the Zaidi class action.
Adamas is named as a nominal defendant only. In both actions, Plaintiffs sought unspecified monetary damages and other relief. These actions were consolidated. On May 16, 2023 the court entered an order dismissing the consolidated actions, without prejudice. The consolidated cases were closed on June 7, 2023.
Removed
Del.) The Company received a Paragraph IV Notice Letter from generic drug maker Ajanta Pharma Limited (“Ajanta”) dated September 19, 2022, advising the Company of the filing by Ajanta of an Abbreviated New Drug Application with the U.S. Food and Drug Administration (“FDA”) seeking approval for Oxcarbazepine Extended-Release Tablets, 150 mg, 300 mg, and 600 mg.
Added
The Company entered into a settlement agreement with Apotex, and on June 27, 2023, a stipulation of dismissal without prejudice was entered by the U.S. District Court for the District of New Jersey. The agreement has been submitted to the applicable governmental agencies. II. Supernus Pharmaceuticals, Inc. v. Apotex Inc., et al., C.A.
Removed
As of the date of this submission, the Court has not issued a case schedule. Trokendi XR ® Supernus Pharmaceuticals, Inc. v. Ajanta Pharma Limited, et al., C.A.
Added
The Company entered into a settlement agreement with Apotex, and on June 27, 2023, a stipulation of dismissal without prejudice was entered by the U.S. District Court for the District of New Jersey. The agreement has been submitted to the applicable governmental agencies. III. Supernus Pharmaceuticals, Inc. v. RiconPharma LLC, et al., C.A.
Removed
The consolidation order extended the 30‑month stay preventing the FDA from approving Ajanta’s ANDA to December 16, 2023. On January 24, 2023, the Court amended the scheduling order. Under the amended scheduling order, the Final Pretrial Conference is set for June 26, 2023. The amended scheduling order states that trial will begin on July 24, 2023.
Added
The Company entered into a settlement agreement with Ricon, and on August 21, 2023, a stipulation of dismissal without prejudice was entered by the U.S. District Court for the District of New Jersey. The agreement has been submitted to the applicable government agencies. IV. Supernus Pharmaceuticals, Inc. v. RiconPharma LLC, et al., C.A.
Removed
The amended scheduling order states that trial will begin on July 24, 2023. Pretrial discovery is ongoing as of the date of this submission. Supernus Pharmaceuticals, Inc. v. Lupin Limited, et al., C.A. No. 21-cv-1293 (MN) (D.
Added
No. 22-cv-6340 (KM)(MAH) (D.N.J.) The Company received a Paragraph IV Notice Letter from generic drug maker RiconPharma, LLC (“Ricon”) dated October 7, 2022, directed to one of its Oxtellar XR ® Orange Book patents. Supernus’s U.S. Patent No. 11,166,960 generally covers once-a-day oxcarbazepine formulations and methods of treating seizures using those formulations. The FDA Orange Book lists U.S.
Removed
On February 13, 2023, the Court issued a revised scheduling order that provides for the Final Pretrial Conference on January 11, 2024, and a 5-day bench trial beginning on January 22, 2024. Pretrial discovery is ongoing as of the date of this submission. Supernus Pharmaceuticals, Inc. v. Zydus Pharmaceuticals (USA) Inc., et al., C.A.
Added
Patent No. 11,166,960 by submitting to the FDA an Abbreviated New Drug Application (“ANDA”) seeking to market a generic version of Oxtellar XR ® prior to the expiration of U.S. Patent No. 11,166,960. On November 22, 2022, the Court issued an Order consolidating for all purposes this lawsuit with another pending lawsuit against Ricon, C.A.
Removed
District Court for the District of New Jersey.
Added
The Court issued a Scheduling Order on July 13, 2023, that sets a trial date of February 10, 2025. The Company entered into a settlement agreement with Ajanta, and on January 18, 2024, a stipulation of dismissal without prejudice was entered by the U.S. District Court for the District of Delaware.
Removed
On January 17, 2023 the Court issued an order that the parties shall meet and confer regarding the content of a proposed Scheduling Order, and shall submit such a proposed Scheduling Order to the Court no later than February 16, 2023.
Added
The Company entered into a settlement agreement with Ajanta, and on April 4, 2023, a stipulation of dismissal without prejudice was entered by the U.S. District Court for the District of New Jersey. The agreement has been submitted to the applicable governmental agencies. VII. Supernus Pharmaceuticals, Inc. v. Torrent Pharmaceuticals Ltd., et al., C.A.
Removed
On January 25, 2023, Defendants filed a motion to stay discovery and stay the deadline to submit a proposed scheduling order pending resolutions of Defendants’ motions to dismiss. Briefing on that motion concluded on February 6, 2023.
Added
On December 12, 2023, the Court issued an Order enjoining Torrent from launching its generic drug product through January 31, 2024, or until the Court’s trial decision issues, whichever is sooner.
Removed
As of the date of this submission, the Court has not issued a decision on Defendants’ motion to stay, but the Court has ordered that the parties need not meet and confer regarding the content of a proposed Scheduling Order or submit such a proposed order while the motion to stay remains pending.
Added
On January 30, 2024, the Court issued a Trial Opinion and Order, deciding in Supernus’s favor that the patent claims that Supernus asserted at trial against Torrent are both valid and infringed. The parties submitted a proposed final Judgment on February 20, 2024. 70 Table of Contents VIII. Supernus Pharmaceuticals, Inc. v. Lupin Limited, et al., C.A.
Removed
XADAGO ® On June 10, 2021, Newron Pharmaceuticals S.p.A. ("Newron"), Zambon S.p.A. ("Zambon") and Supernus Pharmaceuticals, Inc.
Added
On May 11, 2023, the Company and Lupin filed a Stipulation and [Proposed] Order to Amend Scheduling Order, that proposed an extension of the 30-month stay to March 30, 2024, but also stated that “the parties do not object to the Court exercising its discretion to further extend the expiration of the 30-month stay beyond the Proposed Date of March 30, 2024 as the Court deems appropriate.” The Company entered into a settlement agreement with Lupin, and on November 13, 2023, a stipulation of dismissal without prejudice was entered by the U.S.
Removed
Since 2018 multiple generic companies have launched generic versions of NAMENDA XR.
Added
District Court for the District of Delaware. The agreement has been submitted to the applicable governmental agencies. IX. Supernus Pharmaceuticals, Inc. v. Zydus Pharmaceuticals (USA) Inc., et al., C.A.
Removed
Plaintiff has until February 27, 2023 to file a third amended complaint or notice that Lead Plaintiff does not intend to amend, after which Defendants have sixty (60) days to file a motion to dismiss or otherwise respond to the operative complaint.
Added
District Court for the District of New Jersey. The agreement has been submitted to the applicable governmental agencies. X. Supernus Pharmaceuticals, Inc. v. Alkem Laboratories Ltd., C.A. No. 22-cv-3511 (EEB)(SRH) (N.D.
Added
On October 3, 2022, Alkem answered the Complaint and denied the substantive allegations of the Complaint, asserting affirmative defenses that include non-infringement and invalidity. The Company entered into a settlement agreement with Alkem, and on March 20, 2023, a stipulation of dismissal without prejudice was entered by the U.S. District Court for the Northern District of Illinois.
Added
The agreement has been submitted to the applicable governmental agencies. XII. Supernus Pharmaceuticals, Inc. v. Ascent Pharmaceuticals Inc., et al., C.A. No. 23-cv-4015 (GC)(DEA) (D.N.J.) The Company received a Paragraph IV Notice Letter from generic drug maker Ascent Pharmaceuticals Inc. dated June 15, 2023, directed to ten of its Trokendi XR ® Orange Book patents. Supernus’s U.S.
Added
The FDA Orange Book currently lists United States Patent No. 8,298,576 as expiring on April 4, 2028, and United States Patent Nos. 8,298,580; 8,663,683; 8,877,248; 8,889,191; 8,992,989; 9,549,940; 9,555,004; 9,622,983; and 10,314,790 as expiring on November 16, 2027. On July 26, 2023, the Company filed a lawsuit against Ascent Pharmaceuticals Inc., Camber Pharmaceuticals, Inc., and Hetero Labs Ltd.
Added
(collectively, “Ascent”) alleging infringement of the Company’s Trokendi XR ® Orange Book patents. The Complaint—filed in the U.S.
Added
Filing its July 26, 2023, Complaint within 45 days of receiving Ascent’s Paragraph IV certification notice entitles Supernus to an automatic stay preventing the FDA from approving Ascent’s ANDA for 30 months from the date of the Company’s receipt of the Paragraph IV Notice Letter.
Added
On September 28, 2023, the Court entered a stipulation of dismissal without prejudice as to only defendants Camber and Hetero, which included stipulations that, among other things: (i) Ascent Pharma will not contest personal jurisdiction or venue in this District for this Action; (ii) Camber and Hetero will be bound by any injunction in this Action to the extent it concerns the Ascent ANDA; and (iii) Ascent Pharma will collect and produce any relevant discovery that is in the possession, custody, or control of Camber and Hetero.
Added
Patent Nos. 8,298,576; 8,298,580; 8,663,683; 8,877,248; 8,889,191; 8,992,989; 9,549,940; 9,555,004; 9,622,983; and 10,314,790 generally cover once-a-day topiramate formulations and methods of treating or preventing seizures and migraines using those formulations.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−4 removed4 unchanged
Biggest changeNASDAQ Composite Index NASDAQ Pharmaceuticals Index NASDAQ Biotechnology Index December 31, 2017 100.00 100.00 100.00 100.00 December 31, 2018 83.36 97.16 88.43 91.14 December 31, 2019 59.52 132.81 98.32 114.02 December 31, 2020 63.14 192.47 122.84 144.15 December 31, 2021 73.17 235.15 109.09 144.18 December 31, 2022 89.51 158.65 87.93 129.59 The performance graph and related information shall not be deemed "soliciting material" or be "filed" with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference into such filing.
Biggest changeNASDAQ Composite Index NASDAQ Biotechnology Index December 31, 2018 100.00 100.00 100.00 December 31, 2019 71.40 136.69 125.11 December 31, 2020 75.74 198.10 158.17 December 31, 2021 87.78 242.03 158.20 December 31, 2022 107.38 163.28 142.19 December 31, 2023 87.12 236.17 148.72 The performance graph and related information shall not be deemed "soliciting material" or be "filed" with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference into such filing.
As of December 31, 2022, we had 16 holders of record of our common stock. The actual number of common stockholders is greater than the number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
As of December 31, 2023, we had 15 holders of record of our common stock. The actual number of common stockholders is greater than the number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
Historical price performance should not be relied upon as indicative of future stock performance. 74 Table of Contents ________________________________________________________________ * $100 invested on 12/31/2017 in stock or index, including reinvestment of dividends. Fiscal year ending December 31. Performance Graph Data Supernus Pharmaceuticals, Inc.
Historical price performance should not be relied upon as indicative of future stock performance. 75 Table of Contents ________________________________________________________________ * $100 invested on 12/31/2018 in stock or index, including reinvestment of dividends. Fiscal year ending December 31. Performance Graph Data Supernus Pharmaceuticals, Inc.
Performance Graph The following graph sets forth the Company's total cumulative stockholder return as compared to the NASDAQ Stock Market Composite Index and the NASDAQ Biotechnology Index for the period beginning December 31, 2017, and ending December 31, 2022.
Performance Graph The following graph sets forth the Company's total cumulative stockholder return as compared to the NASDAQ Stock Market Composite Index and the NASDAQ Biotechnology Index for the period beginning December 31, 2018, and ending December 31, 2023.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES. Market and Shareholder Information Our common stock has been listed on the NASDAQ Global Market under the symbol "SUPN" since May 1, 2012. On December 31, 2022, the closing price of our common stock on the NASDAQ Global Market was $35.67 per share.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES. Market and Shareholder Information Our common stock has been listed on the NASDAQ Global Market under the symbol "SUPN" since May 1, 2012. On December 29, 2023, the closing price of our common stock on the NASDAQ Global Market was $28.94 per share.
Removed
Option Grants During the three-month period ended December 31, 2022, the Company granted options to employees to purchase an aggregate of 56,850 shares of common stock at a weighted average exercise price of $35.23 per share. The options are exercisable for a period of ten years from the grant date.
Removed
These issuances were exempt from registration in reliance on Section 4(a)(2) of the Securities Act as transactions not involving any public offering.
Removed
The preceding graph and related table compare the cumulative total return on our common stock with the cumulative total returns of the Nasdaq Composite Index, the Nasdaq Pharmaceuticals Index, and the Nasdaq Biotechnology Index, assuming an investment of $100.00 on December 31, 2017 and the reinvestment of dividends.
Removed
The Nasdaq Biotechnology Index has replaced the Nasdaq Pharmaceuticals Index in this analysis as data from the Nasdaq Pharmaceuticals Index is no longer accessible and the presentation herein was calculated manually by a third-party data provider. During this transition year, we have continued to include the Nasdaq Pharmaceuticals Index in the graph and table. ITEM 6.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

67 edited+38 added−26 removed39 unchanged
Biggest changeThe year over year change of $134.8 million was primarily attributed to the following: • Cash outflows related to marketable securities activity were higher by $435.2 million in 2022 compared to 2021 due to higher purchases of marketable securities offset by lower proceeds from sales and maturities of marketable securities; • Cash outflows in 2021 of $311.7 million related to the Adamas acquisition; • Cash inflow from cash distribution received in 2021 of $12.9 million related to investment in Navitor. 85 Table of Contents Financing Activities Net cash used in financing activities was $10.5 million in 2022 compared to $130.4 million provided in the same period in 2021.
Biggest changeInvesting Activities Net cash provided by investing activities was $268.7 million in 2023 compared to $216.7 million used in 2022. The year over year change is primarily due to the proceeds from the maturities of investments in marketable securities which were used to pay off the 2023 Notes.
If the Company is unable to conclude that the indefinite intangible asset is not impaired during its qualitative assessment, the Company will perform a quantitative assessment by estimating the fair value of the indefinite-lived intangible asset and comparing the fair value to the carrying amount.
If the Company is unable to conclude that the indefinite-lived intangible asset is not impaired during its qualitative assessment, the Company will perform a quantitative assessment by estimating the fair value of the indefinite-lived intangible asset and comparing the fair value to the carrying amount.
In addition, there are two other regulatory and developmental contingent consideration milestone payments: the first is a $25 million milestone due upon the FDA's regulatory approval and $30 million upon commercial launch of SPN-830. If SPN-830 is approved by the FDA and commercially launched, we expect these milestones to become due and be paid in between 2023 and 2024.
In addition, there are two other regulatory and developmental contingent consideration milestone payments: the first is a $25 million milestone due upon the FDA's regulatory approval and $30 million upon commercial launch of SPN-830. If SPN-830 is approved by the FDA and commercially launched, we expect these milestones to become due and be paid in 2024.
Revenues Revenues consist primarily of net product sales of our commercial products in the U.S., supplemented by royalty revenues from our collaborative licensing arrangements.
Revenues Revenues consist primarily of net product sales of our commercial products in the U.S., supplemented by royalty and licensing revenues from our collaborative licensing arrangements.
Other Obligations We have other obligations in which the timing, likelihood and, in some situations, the amount of such payments are not known, which include the following: • any milestone payments which may become payable to third parties under license agreements or contractual agreements regarding our clinical trials, or those which may become payable upon achieving sales and developmental milestones per contractual agreements. • any future royalty payments to third parties. • liabilities related to uncertain tax positions.
Other Obligations We have other obligations in which the timing, likelihood and, in some situations, the amount of such payments are not known, which include the following: • any milestone payments which may become payable to third parties under license agreements or contractual agreements regarding our clinical trials, or those which may become payable upon achieving sales, regulatory, and developmental milestones per contractual agreements. • liabilities related to uncertain tax positions.
Our Annual Report on Form 10-K for the year ended December 31, 2021, includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2020, in Part II, Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations .
Our Annual Report on Form 10-K for the year ended December 31, 2022, includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2021, in Part II, Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations .
In addition, we do not engage in trading activities involving non-exchange traded contracts. Recently Issued Accounting Pronouncements For a discussion of new accounting pronouncements, see Note 2 in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report.
In addition, we do not engage in trading activities involving non-exchange traded contracts. Recently Issued Accounting Pronouncements For a discussion of new accounting pronouncements, see Note 2 in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report. 88 Table of Contents
In December 2021, we resubmitted the NDA to the FDA. In February 2022, we received a notice from the FDA that the resubmission of the NDA for SPN-830 was considered as a Standard Review and was assigned a PDUFA target action date in early October 2022.
In December 2021, we resubmitted the (New Drug Application) NDA to the FDA. In February 2022, we received a notice from the FDA that the resubmission of the NDA for SPN-830 was considered as a Standard Review and was assigned a PDUFA target action date in early October 2022.
For further discussion on the embedded operating lease related to the Merz Agreement, refer to Note 13, Leases in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this report. Milestone Payment Obligations The Company has contingent consideration milestones payable related to the Adamas Acquisition.
For further discussion on the embedded operating lease related to the Merz Agreement, refer to Note 12, Leases in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this report. Milestone Payment Obligations from Acquisitions The Company has contingent consideration milestones payable related to the Adamas Acquisition.
The Company believes its balances of cash, cash equivalents and unrestricted marketable securities, which totaled $555.2 million as of December 31, 2022, along with cash generated from ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements over the next 12 months and beyond.
The Company believes its balances of cash, cash equivalents and unrestricted marketable securities, which totaled $271.5 million as of December 31, 2023, along with cash generated from ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements over the next 12 months and beyond.
In regards to Trokendi XR, the Company has entered into settlement agreements with third parties, permitting the sale of a generic version of Trokendi XR on or after January 1, 2023. The Company is actively monitoring returns activity in light of the loss of exclusivity and potential sales decline based on timing of generic entry.
In regards to Trokendi XR, the Company has entered into settlement agreements with third parties permitting the sale of a generic version of Trokendi XR on January 1, 2023. The Company is actively monitoring returns activity in light of the loss of exclusivity and actual and possible further future sales decline based on timing of generic entry.
We also have contingent consideration milestones payable related to the USWM Acquisition. On February 18, 2022, the FDA accepted the SPN-830 NDA for review, and we paid the resulting $25 million milestone in the first quarter of 2022.
Each Milestone may only be achieved once. We also have contingent consideration milestones payable related to the USWM Acquisition. On February 18, 2022, the FDA accepted the SPN-830 NDA for review, and we paid the resulting $25 million milestone in the first quarter of 2022.
The development will initially focus on the drug's anticonvulsant activity, which has been shown in preclinical models to be effective for the treatment of partial seizures and Dravet Syndrome. SPN-817 is in clinical development and has received Orphan Drug designation for several epilepsy indications from the FDA.
The development will initially focus on the drug's anticonvulsant activity, which has been 78 Table of Contents shown in preclinical models to be effective for the treatment of epilepsy. SPN-817 is in clinical development and has received Orphan Drug designation for several epilepsy indications from the FDA.
Any adverse action by the FDA can potentially impact our estimated fair value of the IPR&D intangible asset. In October 2022, the FDA issued a CRL regarding the NDA for SPN-830.
Any adverse action by the FDA can potentially impact our estimated fair value of the IPR&D intangible asset. In October 2022, the FDA issued a CRL regarding the NDA for SPN-830. In October 2023, we resubmitted the NDA for SPN-830. In November 2023, the FDA accepted the resubmission of the NDA for SPN-830.
Adjustments related to prior year sales Adjustments related to prior year sales in 2022 of $4.0 million was less than 1% of both net product sales and total provision for the year ended December 31, 2022.
Adjustments related to prior year sales Adjustments related to prior year sales in 2023 of $1.5 million was less than 1% of both net product sales and total provision for the year ended December 31, 2023.
Another Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $225 million during any consecutive 12-month period ending on or before December 31, 2025 (Milestone 2025 and, together with Milestone 2024, the Milestones). Each Milestone may only be achieved once.
Another Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $225 million during any consecutive 12-month period 87 Table of Contents ending on or before December 31, 2025 (Milestone 2025 and, together with Milestone 2024, the Milestones).
SPN-820 - Novel first-in-class activator of mTORC1 • The Phase II multi-center randomized double-blind placebo-controlled parallel design study of SPN-820 in adults with treatment-resistant depression is ongoing. The study will examine the efficacy and safety of SPN-820 over a course of five weeks of treatment in approximately 270 patients.
SPN-820 - Novel first-in-class activator of mTORC1 for the treatment of depression • The Phase IIb multi-center randomized double-blind placebo-controlled parallel design study of SPN-820 in adults with treatment-resistant depression is ongoing. The study will examine the efficacy and safety of SPN-820 over a course of five weeks of treatment in approximately 268 patients in up to 50 clinical sites.
Commercial Products • Trokendi XR ® (topiramate) is the first once-daily extended-release topiramate product indicated for the treatment of epilepsy in patients 6 years of age and older in the United States (U.S.) market.
It is also the first once-daily extended-release oxcarbazepine product indicated for the treatment of epilepsy in the U.S. market. • Trokendi XR ® (topiramate) is the first once-daily extended-release topiramate product indicated for the treatment of epilepsy in patients 6 years of age and older in the U.S. market.
Cost of Goods Sold The following table provides information regarding our cost of goods sold for the years indicated (dollars in thousands): Change 2022 2021 Amount Percent Cost of goods sold $ 87,221 $ 75,061 $ 12,160 16% Cost of goods sold includes the cost of royalties; cost of materials, including active pharmaceutical ingredients (API); and cost to manufacture, including tableting, packaging, personnel, overhead, stability testing, and distribution.
Cost of Goods Sold The following table provides information regarding our cost of goods sold for the years indicated (dollars in thousands): Change 2023 2022 Amount Percent Cost of goods sold $ 83,779 $ 87,221 $ (3,442) (4)% Cost of goods sold includes the cost of royalties; cost of materials, including active pharmaceutical ingredients (API); and cost to manufacture, including tableting, packaging, personnel, overhead, stability testing, and distribution.
Contingent Consideration (Gain) Expense The following table provides information regarding the contingent consideration expense during the periods indicated (dollars in thousands): Change 2022 2021 Amount Percent Contingent consideration (gain) expense $ (510) $ (6,530) $ 6,020 (92)% Contingent consideration gain recorded for the years ended December 31, 2022 and December 31, 2021 of $0.5 million and $6.5 million, respectively.
Contingent Consideration Gain The following table provides information regarding the contingent consideration expense during the periods indicated (dollars in thousands): Change 2023 2022 Amount Percent Contingent consideration gain $ (1,517) $ (510) $ (1,007) 197% Contingent consideration gain recorded for the years ended December 31, 2023 and December 31, 2022 of $1.5 million and $0.5 million, respectively.
Food and Drug Administration (FDA) approved Qelbree for the treatment of ADHD in pediatric patients 6 to 17 years of age. In May 2021, the Company launched Qelbree for pediatric patients in the U.S. On April 29, 2022, the FDA approved Qelbree for treatment of ADHD in adult patients.
The United States Food and Drug Administration (FDA) approved Qelbree for the treatment of ADHD in pediatric patients 6 to 17 years of age in April 2021, and in adult patients in April 2022.
Liquidity and Capital Resources Cash and cash equivalents, marketable securities, and long term marketable securities presented below are as follows (dollars in thousands): December 31, 2022 Cash and cash equivalents $ 93,120 Marketable securities 368,214 Long term marketable securities 93,896 Total $ 555,230 We have financed our operations primarily with cash generated from product sales, supplemented by revenues from royalty and licensing arrangements, as well as proceeds from the sale of equity and debt securities.
Liquidity and Capital Resources Cash and cash equivalents, marketable securities, and long term marketable securities presented below are as follows (dollars in thousands): December 31, 2023 Cash and cash equivalents $ 75,054 Marketable securities 179,820 Long term marketable securities 16,617 Total $ 271,491 We have financed our operations primarily with cash generated from product sales, supplemented by revenues from royalty and licensing arrangements, as well as proceeds from the sale of equity and debt securities.
Research and Development We are committed to the development of innovative product candidates in neurology and psychiatry, including the following: Product Candidate Indication Development NDA SPN-830 Continuous treatment of motor fluctuations ("off" episodes) in PD patients Complete Response Letter (CRL) received from FDA in October 2022 SPN-820 Treatment-resistant depression Phase II SPN-817 Treatment-resistant seizures Phase I SPN-830 (apomorphine infusion device) SPN-830 is a late-stage drug/device combination product candidate for the continuous treatment of motor fluctuations ("off" episodes) in PD patients that are not adequately controlled with oral levodopa and one or more adjunct PD medications.
Research and Development We are committed to the development of innovative product candidates in neurology and psychiatry, including the following: SPN-830 (apomorphine infusion device) SPN-830 is a late-stage drug/device combination product candidate for the continuous treatment of motor fluctuations ("off" episodes) in PD patients that are not adequately controlled with oral levodopa and one or more adjunct PD medications.
As such, we are unable to make a reasonably reliable estimate regarding the timing of payments beyond 12 months. 87 Table of Contents Off-Balance Sheet Arrangements We do not currently have, nor have we ever had, any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes.
Off-Balance Sheet Arrangements We do not currently have, nor have we ever had, any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes.
The net cash provided by operating activities was $116.8 million in 2022 compared to $127.1 million in 2021. The year over year change was primarily driven by decrease in working capital which reflects the timing impacts of cash collections on receivables and settlement of payables, offset by an increase in operating earnings and non-cash items.
The year over year change was primarily driven by a decrease in working capital which reflects the timing impacts of cash collections on receivables and settlement of payables, lower inventory purchases in 2023 compared to 2022, and a decrease in operating earnings offset by an increase in non-cash items.
SPN-817 (huperzine A) SPN-817 represents a novel mechanism of action (MOA) for an anticonvulsant. SPN-817 is a novel synthetic form of huperzine A, whose MOA includes potent acetylcholinesterase inhibition, with pharmacological activities in CNS conditions such as epilepsy.
SPN-817 – Novel first-in-class highly selective AChE inhibitor for epilepsy SPN-817 represents a novel mechanism of action (MOA) for an anticonvulsant. SPN-817 is a novel synthetic form of huperzine A, a first in class, highly selective acetylcholinesterase (AChE) inhibitor, with pharmacological activities in CNS conditions such as focal epilepsy.
The FDA has made an initial determination that the amendment to the Company’s application in response to the CRL will be subject to a Class 2, or six-month, review timeline. In February 2023, the FDA granted the Company a Type C meeting request to discuss the CRL with the meeting scheduled in April 2023.
The FDA has made an initial determination that the amendment to the Company’s application in response to the CRL will be subject to a Class 2, or six-month, review timeline. In April 2023, the Company met with the FDA to discuss the CRL. In October 2023, the Company resubmitted the NDA for SPN-830.
While we expect continued profitability in future years, we anticipate there may be significant variability from year to year in the level of our profits particularly due to the commercial launch of Qelbree in May 2021; continued market and payor pressures for our commercial products; and the likely unfavorable impact of the loss of patent exclusivity for Trokendi XR in January 2023.
While we expect continued profitability in future years, we anticipate there may be significant variability from year to year in the level of our profits particularly due to continued market and payor pressures for our commercial products; the unfavorable impact of the loss of patent exclusivity for Trokendi XR in January 2023; the potential unfavorable impact of the forthcoming loss of exclusivity of Oxtellar XR and XADAGO; funding for research and development of our product candidates; and the additional funding to launch SPN-830, if approved by the FDA.
Although we believe the assumptions, judgments, and estimates we have used in our assessments are reasonable and appropriate, a material change in any of our assumptions or external factors could lead to impairment charges.
The carrying amount of the indefinite-lived intangible asset was $124.0 million as of December 31, 2023. Although we believe the assumptions, judgments, and estimates we have used in our assessments are reasonable and appropriate, a material change in any of our assumptions or external factors could lead to impairment charges.
This increase was primarily attributable to an increase in volume of products sold with the launch of Qelbree for pediatric patients in the second quarter of 2021 and for adults in second quarter of 2022, partially offset by lower sales of Trokendi XR. The provision for product rebates increased from $371.6 million in 2021 to $437.2 million in 2022.
Provision for returns and rebates The provision for product returns increased from $18.3 million in 2022 to $22.7 million in 2023. The increase was primarily attributable to an increase in volume of products sold with the launch of Qelbree for adults in 2022, partially offset by lower sales of Trokendi XR.
Research and Development Expenses The following table provides information regarding our research and development (R&D) expenses for the years indicated (dollars in thousands): Change 2022 2021 Amount Percent Research and development expense $ 74,552 $ 90,467 $ (15,915) (18)% R&D expenses decreased from $90.5 million in 2021 to $74.6 million in 2022.
Research and Development Expense The following table provides information regarding our research and development (R&D) expenses for the years indicated (dollars in thousands): Change 2023 2022 Amount Percent Research and development expense $ 91,593 $ 74,552 $ 17,041 23% R&D expenses increased from $74.6 million in 2022 to $91.6 million in 2023.
Manufacturing Purchase Obligations In October 2021, we entered into an amendment to the Merz Agreement which increased the price of the annual purchase commitment of MYOBLOC from €3.0 million to approximately €3.9 million.
Refer to Note 12, Leases in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this report. Manufacturing Purchase Obligations In October 2021, we entered into an amendment to the Merz Agreement which increased the price of the annual purchase commitment of MYOBLOC from €3.0 million to approximately €3.9 million.
If the IPR&D project is abandoned or regulatory approvals are not obtained, we may have a full or partial impairment charge related to the IPR&D, calculated as the excess carrying value of the IPR&D assets over the estimated fair value. 80 Table of Contents Results of Operations In this section, we discuss the results of our operations for the year ended December 31, 2022, compared to the year ended December 31, 2021.
If the IPR&D project is abandoned or regulatory approvals are not obtained, we may have a full or partial impairment charge related to the IPR&D, calculated as the excess carrying value of the IPR&D assets over the estimated fair value.
Product sales are recorded net of various forms of variable consideration, including: estimated rebates; sales discounts; and an estimated liability for future product returns (collectively, "sales deductions"). The variability in the net transaction price for our products arises primarily from the aforementioned sales deductions. Significant judgment is required in estimating certain sales deductions, including rebates and returns.
The variability in the net transaction price for our products arises primarily from the aforementioned sales deductions. Significant judgment is required in estimating certain sales deductions, including rebates and returns.
Interest and other income, net includes primarily interest earned from cash, cash equivalents, and marketable securities holdings. Interest and other income, net in creased from $10.6 million 2021 to $21.7 million in 2022. The increase in interest and other income, net was primarily due to $12.9 million recorded in 2022 in connection with the gain associated with the Navitor investment.
Interest and other income, net decreased from $21.7 million in 2022 to $10.5 million in 2023. The decrease in interest and other income, net was primarily due to $12.9 million recorded in 2022 in connection with the gain associated with the Navitor investment.
Both amounts are generally affected by changes in gross product sales, changes in the provision for net product sales deductions, and the timing of payments/credits. 81 Table of Contents The following table provides a summary of activities with respect to accrued product returns and rebates for the years ended December 31, 2022 and 2021 (dollars in thousands): Accrued Product Returns and Rebates Product Returns Product Rebates Allowance for Sales Discounts Total Balance at December 31, 2021 $ 35,127 $ 97,597 $ 13,537 $ 146,261 Provision Provision for sales in current year 22,129 437,323 76,079 535,531 Adjustments relating to prior year sales (3,866) (155) (3) (4,024) Total provision 18,263 437,168 76,076 531,507 Less: Actual payments/credits (8,382) (428,108) (76,618) (513,108) Balance at December 31, 2022 $ 45,008 $ 106,657 $ 12,995 $ 164,660 Balance at December 31, 2020 $ 29,603 $ 96,589 $ 11,404 $ 137,596 Adamas Acquisition liabilities assumed 223 2,194 271 2,688 Provision Provision for sales in current year 15,762 370,273 69,383 455,418 Adjustments relating to prior year sales (3,069) 1,335 19 (1,715) Total provision 12,693 371,608 69,402 453,703 Less: Actual payments/credits (7,392) (372,794) (67,540) (447,726) Balance at December 31, 2021 $ 35,127 $ 97,597 $ 13,537 $ 146,261 Accrued product returns and rebates The accrued product returns balance increased from $35.1 million as of December 31, 2021 to $45.0 million as of December 31, 2022 due to timing of related return activity and an increase in provision for product returns primarily for Qelbree.
Both amounts are generally affected by changes in gross product sales, changes in the provision for net product sales deductions, and the timing of payments/credits. 82 Table of Contents The following table provides a summary of activities with respect to accrued product returns and rebates for the years ended December 31, 2023 and 2022 (dollars in thousands): Accrued Product Returns and Rebates Product Returns Product Rebates Allowance for Sales Discounts Total Balance at December 31, 2022 $ 45,008 $ 106,657 $ 12,995 $ 164,660 Provision Provision for sales in current year 22,928 406,329 65,896 495,153 Adjustments relating to prior year sales (213) 1,672 31 1,490 Total provision 22,715 408,001 65,927 496,643 Less: Actual payments/credits (10,433) (417,674) (68,203) (496,310) Balance at December 31, 2023 $ 57,290 $ 96,984 $ 10,719 $ 164,993 Balance at December 31, 2021 $ 35,127 $ 97,597 $ 13,537 $ 146,261 Adamas Acquisition liabilities assumed Provision Provision for sales in current year 22,129 437,323 76,079 535,531 Adjustments relating to prior year sales (3,866) (155) (3) (4,024) Total provision 18,263 437,168 76,076 531,507 Less: Actual payments/credits (8,382) (428,108) (76,618) (513,108) Balance at December 31, 2022 $ 45,008 $ 106,657 $ 12,995 $ 164,660 Accrued product returns and rebates The accrued product returns balance increased from $45.0 million as of December 31, 2022 to $57.3 million as of December 31, 2023 due to timing of related return activity, and an increase in provision for product returns primarily for Qelbree.
Summary of Cash Flows The following table summarizes the major sources and uses of cash for the periods set forth below (dollars in thousands): December 31, Change 2022 2021 Amount Net cash provided by (used in): Operating activities $ 116,826 $ 127,127 $ (10,301) Investing activities (216,663) (81,913) (134,750) Financing activities (10,477) (130,420) 119,943 Net change in cash and cash equivalents $ (110,314) $ (85,206) $ (25,108) Operating Activities Net cash provided by operating activities is comprised of two components: cash provided by operating earnings; and cash provided by (used in) changes in working capital.
Summary of Cash Flows The following table summarizes the major sources and uses of cash for the periods set forth below (dollars in thousands): December 31, Change 2023 2022 Amount Net cash provided by (used in): Operating activities $ 111,085 $ 116,826 $ (5,741) Investing activities 268,729 (216,663) 485,392 Financing activities (397,880) (10,477) (387,403) Net change in cash and cash equivalents $ (18,066) $ (110,314) $ 92,248 Operating Activities Net cash provided by operating activities is comprised of two components: cash provided by operating earnings; and cash provided by (used in) changes in working capital.
We are obligated to pay royalties to third parties, computed as a percentage of net product sales, for each respective product under a license agreement, beginning upon commercialization. The amount of future royalty obligations are dependent on future net product sales of each of the respective products under a license agreement.
Royalty Payments We obtained exclusive licenses from third parties for proprietary rights to support our commercial products and product candidates. We are obligated to pay royalties to third parties, computed as a percentage of net product sales, for each respective product under a license agreement, beginning upon commercialization.
The Company is developing a broad range of novel CNS product candidates including new potential treatments for hypomobility in PD, epilepsy, depression, and other CNS disorders. We have a portfolio of commercial products and product candidates.
The Company is developing a broad range of novel CNS product candidates including new potential treatments for hypomobility in PD, epilepsy, depression, and other CNS disorders. Commercial Products • Qelbree ® (viloxazine) extended-release capsules is a novel non-stimulant product indicated for the treatment of ADHD in adults and pediatric patients 6 years and older.
Sales deductions and related accruals We record accrued product returns and accrued product rebates as current liabilities in Accrued product returns and rebates, on our consolidated balance sheets. We record sales discounts as a reduction against Accounts receivable, net on the consolidated balance sheets.
We record sales discounts as a reduction against Accounts receivable, net on the consolidated balance sheets.
Due to uncertainties in the timing of potential tax audits, the timing and the amounts associated with the resolution of these positions is uncertain.
Due to uncertainties in the timing of potential tax audits, the timing and the amounts associated with the resolution of these positions is uncertain. As such, we are unable to make a reasonably reliable estimate regarding the timing of payments beyond 12 months.
We evaluate inventory data reported by wholesalers, available prescription volume information, product pricing, historical experience and other factors in order to determine the adequacy of our accruals. We regularly monitor our accruals and record adjustments when rebate trends, rebate programs and contract terms, legislative changes, or other significant events indicate that a change in reserve is appropriate.
We evaluate inventory data reported by wholesalers, available prescription volume information, product pricing, historical experience and other factors in order to determine the adequacy of our accruals.
Revenue Recognition Our principal source of revenue is product sales. Revenue from product sales is recognized when physical control of our products is transferred to our customers, who are primarily pharmaceutical wholesalers, specialty pharmacies, and distributors.
Revenue from product sales is recognized when physical control of our products is transferred to our customers, who are primarily pharmaceutical wholesalers, specialty pharmacies, and distributors. Product sales are recorded net of various forms of variable consideration, including: estimated rebates; sales discounts; and an estimated liability for future product returns (collectively, "sales deductions").
Historically, adjustments to rebate accruals have not been material to net earnings. 79 Table of Contents Specifically, a significant portion of rebates we pay are on state Medicaid programs.
We regularly monitor our 80 Table of Contents accruals and record adjustments when rebate trends, rebate programs and contract terms, legislative changes, or other significant events indicate that a change in reserve is appropriate. Historically, adjustments to rebate accruals have not been material to net earnings. Specifically, a significant portion of rebates we pay are on state Medicaid programs.
Selling, General, and Administrative Expense The table below provides information regarding our selling, general, and administrative (SG&A) expenses for the years indicated (dollars in thousands): Change 2022 2021 Amount Percent Selling and marketing expense $ 267,788 $ 199,709 $ 68,079 34% General and administrative expense 109,433 105,050 4,383 4% Total $ 377,221 $ 304,759 $ 72,462 24% Selling and Marketing Expense Selling and marketing expenses increased from $199.7 million in 2021 to $267.8 million in 2022.
Selling, General, and Administrative Expense The table below provides information regarding our selling, general, and administrative (SG&A) expenses for the years indicated (dollars in thousands): Change 2023 2022 Amount Percent Selling and marketing expense $ 229,186 $ 267,788 $ (38,602) (14)% General and administrative expense 107,175 109,433 (2,258) (2)% Total $ 336,361 $ 377,221 $ (40,860) (11)% Selling and Marketing Expense Selling and marketing expenses decreased from $267.8 million in 2022 to $229.2 million in 2023.
Some judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. We believe the judgments, estimates, and assumptions associated with the following critical accounting policies have the greatest potential impact on our consolidated financial statements: 78 Table of Contents • Revenue recognition; and • Impairment of intangible assets.
We believe the judgments, estimates, and assumptions associated with the following critical accounting policies have the greatest potential impact on our consolidated financial statements: 79 Table of Contents • Revenue recognition; and • Impairment of Indefinite-Lived Intangible Assets • Impairment of Definite-Lived Intangible Assets Revenue Recognition Our principal source of revenue is product sales.
The decrease in interest expense of $15.0 million was primarily related to the Company's adoption of ASU 2020-06. 84 Table of Contents Income Tax Expense The following table provides information regarding our income tax expense during the periods indicated (dollars in thousands): 2022 vs 2021 Change 2022 2021 Dollar Percent Income tax expense $ 32 $ 19,751 $ (19,719) ** Effective tax rate 0.1 % 27.0 % ______________________________ ** Indicates calculation result is equal to or greater than 100%.
The decrease in noncash interest expense of $1.9 million was due to the nonrecourse royalty liability related to the HC Royalty agreement being fully amortized as of June 30, 2023. 85 Table of Contents Income Tax Expense The following table provides information regarding our income tax expense during the periods indicated (dollars in thousands): 2023 vs 2022 Change 2023 2022 Dollar Percent Income tax expense $ 1,453 $ 32 $ 1,421 ** Effective tax rate 52.5 % 0.1 % ______________________________ ** Indicates calculation result is equal to or greater than 100% Income tax expense was $1.5 million and $32.0 thousand for the years ended December 31, 2023 and December 31, 2022, respectively.
We consider the positive results of clinical trials, industry benchmarks, available market data, and recent communications with the FDA regarding SPN-830 in determining the probability of technical and regulatory success input and assumption. The carrying amount of the indefinite-lived intangible asset was $124.0 million as of December 31, 2022.
The resubmission is now considered filed, with a user fee goal date (PDUFA date) of April 5, 2024. We consider the positive results of clinical trials, industry benchmarks, available market data, and recent communications with the FDA regarding SPN-830 in determining the probability of technical and regulatory success input and assumption.
The Company launched Qelbree for adult patients in May 2022. • GOCOVRI ® (amantadine) extended-release capsules is the first and only FDA approved medicine indicated for the treatment of dyskinesia in patients with PD receiving levodopa-based therapy, with or without concomitant dopaminergic medications, and as an adjunctive treatment to levodopa/carbidopa with PD experiencing "off" episodes. • APOKYN ® (apomorphine hydrochloride injection) is a product indicated for the acute, intermittent treatment of hypomobility, "off" episodes ("end-of-dose wearing off" and unpredictable "on/off" episodes) in patients with advanced PD. • XADAGO ® (safinamide) is a once-daily product indicated as adjunctive treatment to levodopa/carbidopa in patients with PD experiencing "off" episodes. • Osmolex ER ® (amantadine) extended-release is a once-daily product for the treatment of PD and drug-induced extrapyramidal reactions in adult patients. 76 Table of Contents • MYOBLOC ® (rimabotulinumtoxinB injection) is a product indicated for the treatment of cervical dystonia and chronic sialorrhea in adults.
It is also indicated for the prophylaxis of migraine headache in adults and adolescents 12 years and older. • APOKYN ® (apomorphine hydrochloride injection) is a product indicated for the acute, intermittent treatment of hypomobility, "off" episodes ("end-of-dose wearing off" and unpredictable "on/off" episodes) in patients with advanced PD. • XADAGO ® (safinamide) is a once-daily product indicated as adjunctive treatment to levodopa/carbidopa in patients with PD experiencing "off" episodes. • MYOBLOC ® (rimabotulinumtoxinB injection) is a product indicated for the treatment of cervical dystonia and chronic sialorrhea in adults.
Amortization of Intangible Assets The following table provides information regarding the amortization expense for intangible assets during the periods indicated (dollars in thousands): Change 2022 2021 Amount Percent Amortization of intangible assets $ 82,630 $ 29,989 $ 52,641 ** ______________________________ ** Indicates calculation result is equal to or greater than 100%.
Amortization of Intangible Assets The following table provides information regarding the amortization expense for intangible assets during the periods indicated (dollars in thousands): Change 2023 2022 Amount Percent Amortization of intangible assets $ 82,385 $ 82,630 $ (245) 0% 84 Table of Contents Amortization of intangible assets was materially consistent year-over-year.
Income tax expense was $32 thousand and $19.8 million for the years ended December 31, 2022 and December 31, 2021, respectively. The change in income tax expense and effective income tax rate was primarily due to tax benefits associated with the Adamas legal entities reorganization in the first quarter of 2022.
The income tax expense and effective tax rate in 2023 was primarily driven by near break-even pre-tax book income. The income tax expense and effective tax rate in 2022 was primarily driven by tax benefits associated with the Adamas legal entities reorganization in the first quarter of 2022.
The following table provides information regarding our revenues during the years ended December 31, 2022 and 2021 (dollars in thousands): Years Ended December 31, Change 2022 2021 Amount Percent Net product sales Trokendi XR $ 261,221 $ 304,817 $ (43,596) (14) % Oxtellar XR 115,345 110,708 4,637 4 % GOCOVRI 104,421 9,778 94,643 ** APOKYN 75,305 99,233 (23,928) (24) % Qelbree 61,322 9,879 51,443 ** Other (1) 31,818 33,089 (1,271) (4) % Total net product sales 649,432 567,504 81,928 14 % Royalty revenues 17,806 12,271 5,535 45 % Total revenues $ 667,238 $ 579,775 $ 87,463 15 % ______________________________ (1) Includes net product sales of MYOBLOC, XADAGO and Osmolex ER. ** Indicates calculation result is equal to or greater than 100%.
The following table provides information regarding our revenues during the years ended December 31, 2023 and 2022 (dollars in thousands): Years Ended December 31, Change 2023 2022 Amount Percent Net product sales Qelbree $ 140,192 $ 61,322 $ 78,870 129 % GOCOVRI 119,637 104,421 15,216 15 % Oxtellar XR 113,404 115,345 (1,941) (2) % Trokendi XR 94,336 261,221 (166,885) (64) % APOKYN 75,083 75,305 (222) — % Other (1) 31,281 31,818 (537) (2) % Total net product sales $ 573,933 $ 649,432 $ (75,499) (12) % Royalty and licensing revenues 33,588 17,806 15,782 89 % Total revenues $ 607,521 $ 667,238 $ (59,717) (9) % ______________________________ (1) Includes net product sales of MYOBLOC, XADAGO and Osmolex ER.
The accrued product rebates balance increased from $97.6 million as of December 31, 2021 to $106.7 million as of December 31, 2022 due to timing of payments and the increase in the provision. Provision for returns and rebates The provision for product returns increased from $12.7 million in 2021 to $18.3 million in 2022.
The accrued product rebates balance decreased from $106.7 million as of December 31, 2022 to $97.0 million as of December 31, 2023 due to lower gross sales primarily related to the loss of exclusivity on Trokendi XR, and timing of payments.
The primary outcome measure is the change from baseline to end of treatment period on the Montgomery-Asberg Depression Rating Scale (MADRS) Total Score, a standard depression rating scale. SPN-817 – A novel product candidate for the treatment of epilepsy • The Company has commenced an open-label Phase II clinical study of SPN-817 in patients with treatment-resistant seizures.
The primary outcome measure is the change from baseline to end of treatment period on the Montgomery-Asberg Depression Rating Scale (MADRS) Total Score. Approximately 118 patients have been enrolled in the trials, to date.
Adjustments related to prior year sales in 2021 of $1.7 million was less than 1% of both net product sales an total provision for the year ended December 31, 2021. 82 Table of Contents Royalty Revenues The following table provides information regarding our royalty revenues for the years indicated (dollars in thousands): Change 2022 2021 Amount Percent Royalty revenues $ 17,806 $ 12,271 $ 5,535 45% Royalty revenues increased by approximately $5.5 million, or 45%, in 2022 compared to 2021, primarily due to the full year of Namzaric royalties associated with the Adamas Acquisition.
Adjustments related to prior year sales in 2022 of $4.0 million was less than 1% of both net product sales and total provision for the year ended December 31, 2022. Royalty and Licensing Revenues Royalty and licensing revenues increased by approximately $15.8 million, or 89% in 2023 compared to 2022, primarily due to royalties on generic Trokendi XR.
SPN-820 (NV-5138) SPN-820 is a first-in-class, orally active small molecule that activates brain mechanistic target of rapamycin complex 1 (mTORC1), a gatekeeper of cellular metabolism and renewal. SPN-820 binds to and modulates sestrin, which senses amino acid availability in the brain, a potent natural activator of mTORC1.
SPN-820 – Novel first-in-class molecule that increases mTORC1 mediated synaptic function for depression SPN-820 is a first-in-class, orally active small molecule that increases the brain mechanistic target of rapamycin complex 1 (mTORC1) mediated synaptic function intracellularly.
Other Income (Expense) The following table provides the components of other income (expense) during the years indicated (dollars in thousands): Change 2022 2021 Amount Percent Interest and other income, net $ 21,689 $ 10,569 $ 11,120 ** Interest expense (4,654) (19,696) (15,042) 76% Interest expense on nonrecourse liability related to sale of future royalties (2,416) (3,727) (1,311) 35% Total $ 14,619 $ (12,854) $ 27,473 ** ______________________________ ** Indicates calculation result is equal to or greater than 100%.
Other Income (Expense) The following table provides the components of other income (expense) during the years indicated (dollars in thousands): Change 2023 2022 Amount Percent Interest income & other income, net $ 10,453 $ 21,689 $ (11,236) (52)% Interest expense (1,321) (2,542) (1,221) 48% Noncash interest expense on nonrecourse liability related to sale of future royalties (562) (2,416) (1,854) 77% Noncash interest expense on debt (532) (2,112) (1,580) 75% Total $ 8,038 $ 14,619 $ (6,581) (45)% Interest and other income, net includes primarily interest earned from cash, cash equivalents, and marketable securities holdings.
Partially offsetting this increase was a $43.6 million decrease in net product sales of Trokendi XR and a $23.9 million decrease in net product sales of APOKYN primarily attributable to the decline in unit demand due to competitive headwinds.
Net Product Sales Net product sales decreased by $75.5 million from $649.4 million in 2022 to $573.9 million in 2023. The decrease in net product sales was primarily due to the decline in net product sales of Trokendi XR which was partially offset by the increase in net product sales from Qelbree and GOCOVRI.
The increase was primarily due to higher professional and consulting costs and increased employee-related costs mainly to support IT and finance operations related to the ransomware incident, financial reporting and Adamas integration in 2022.
The decrease was primarily due to higher professional and consulting costs in 2022, mainly to support finance and information technology operations, which was partially offset by higher legal costs and share-based compensation expense in 2023.
The Company will bear all of Phase I and Phase II development costs incurred by either party, up to a maximum of $50 million. In addition, the Company will incur certain other research and development support costs. Royalty Payments We obtained exclusive licenses from third parties for proprietary rights to support our commercial products and product candidates.
The Company will bear all of Phase I and Phase II development costs incurred by either party, up to a maximum of $50 million. There are certain additional payments which could be incurred by the Company that are contingent upon Navitor Inc. achieving defined milestones.
Cost of goods sold increased from $75.1 million in 2021 to $87.2 million in 2022. The increase was primarily due to higher Qelbree sales, offset by lower royalty expense compared to the same period in the prior year.
Cost of goods sold decreased from $87.2 million in 2022 to $83.8 million in 2023. The decrease was primarily due to lower Trokendi XR costs in 2023 due to loss of patent exclusivity for Trokendi XR in January 2023 and a higher GOCOVRI inventory reserve in 2022 offset by Qelbree costs in 2023.
It is the only botulinum toxin type B available on the market.
It is the only botulinum toxin type B available on the market. • Osmolex ER ® (amantadine) extended-release tablets is for the treatment of PD and drug-induced extrapyramidal reactions in adult patients.
However, given the extensive number of inputs and assumptions, described above, future changes in our return reserves could be material. Rebates Rebates are discounts which we pay under either public sector or private sector health care programs.
Similarly, the Company is actively monitoring returns activity in light of the upcoming loss of exclusivity of Oxtellar XR. Rebates Rebates are discounts which we pay under either public sector or private sector health care programs.
Net Earnings The following table provides information regarding our net earnings during the periods indicated (dollars in thousands): Change 2022 2021 Amount Percent Net earnings $ 60,711 $ 53,424 $ 7,287 14% The increase in net earnings was primarily due to the decrease in income tax expense and interest expense, and an increase in interest income for the year ended December 31, 2022 compared to the same period in 2021.
Net Earnings The following table provides information regarding our net earnings during the periods indicated (dollars in thousands): Change 2023 2022 Amount Percent Net earnings $ 1,316 $ 60,711 $ (59,395) (98)% The decrease in net earnings was primarily due to the lower revenues in 2023 with the loss of exclusivity of Trokendi XR and the intangible asset impairment charges in the fourth quarter of 2023, partially offset by lower operating expenses.
This year over year change is primarily attributable to the repayment of the acquired debt from the Adamas Acquisition in prior year partially offset by the payment of a contingent consideration milestone associated with the USWM Acquisition in the first quarter of 2022 and the increase in proceeds from the issuance of common stock.
This increase was slightly offset by the payment of $22.9 million for a contingent consideration milestone associated with the USWM Acquisition during the same period in 2022.
Investing Activities Net cash used in investing activities was $216.7 million in 2022 compared to $81.9 million in 2021.
The net cash provided by operating activities was $111.1 million in 2023 compared to $116.8 million in 2022.
Product Pipeline Update SPN-830 (apomorphine infusion device) - Continuous treatment of motor fluctuations (“off” episodes) in Parkinson's Disease (PD) • The Company will be meeting with the FDA in April 2023 to discuss the CRL received in October 2022. The Company will announce the timing for our resubmission after our discussion with the FDA.
SPN-830 (apomorphine infusion device) - Continuous treatment of motor fluctuations (“off” episodes) in Parkinson's Disease (PD) • As previously disclosed, the FDA accepted the resubmission of the New Drug Application for SPN-830 for continuous treatment of motor fluctuations ("off" episodes) in Parkinson's disease (PD) and set a user fee goal date (PDUFA date) of April 5, 2024. • Assuming FDA approval, the Company expects to launch SPN-830 in the second half of 2024.
Removed
It is also indicated for the prophylaxis of migraine headache in adults and adolescents 12 years and older. • Oxtellar XR ® (oxcarbazepine) is indicated as therapy for the treatment of partial-onset seizures in patients 6 years of age and older.
Added
The Company launched Qelbree for pediatric patients in May 2021 and for adult patients in May 2022 in the United States (U.S.). • GOCOVRI ® (amantadine) extended-release capsules is the first and only FDA approved medicine indicated for the treatment of dyskinesia in patients with PD receiving levodopa-based therapy, with or without concomitant dopaminergic medications, and as an adjunctive treatment to levodopa/carbidopa with PD experiencing "off" episodes. • Oxtellar XR ® (oxcarbazepine) is indicated as therapy for the treatment of partial onset seizures in patients 6 years of age and older.
Removed
It is also the first once-daily extended-release oxcarbazepine product indicated for the treatment of epilepsy in the U.S. market. • Qelbree ® (viloxazine extended-release capsules) is a novel non-stimulant product indicated for the treatment of ADHD in adults and pediatric patients 6 years and older. On April 2, 2021, the U.S.
Added
In December 2023, the Company submitted to the FDA a notification of discontinuance to 77 Table of Contents withdraw Osmolex ER from distribution, stating that manufacturing has been discontinued and distribution of the product will cease by April 1, 2024.
Removed
Adamas Reorganization In the first quarter of 2022 and subsequent to the Adamas Acquisition, the Company completed a reorganization of the Adamas legal entities in an effort to obtain operational, legal and other benefits that also resulted in certain state tax efficiencies. The reorganization had no effect on the consolidated financial statements other than certain state tax efficiencies.
Added
Refer to discussion under the Operational Highlights section below for further regulatory update. In November 2023, the FDA accepted the resubmission of the NDA for SPN-830. The resubmission is now considered filed, with a user fee goal date (PDUFA date) of April 5, 2024.
Removed
(See Note 12, Income Taxes. 77 Table of Contents COVID-19 Impact While the impact of the ongoing COVID-19 pandemic did not have a material adverse effect on our financial position or results of operations for the year ended December 31, 2022, we continue to closely monitor the events and circumstances surrounding the COVID-19 pandemic and its impact on all aspects of our business operations.
Added
SPN-820 does not bind to or modulate any cell surface receptors and therefore is unlikely to have abuse potential given lack of binding to targets implicated in drug abuse. In addition, unlike leucine, it is not incorporated into proteins during protein synthesis, and therefore, it is more available at the target site in the brain than leucine.
Removed
Since the situation surrounding the COVID-19 pandemic remains fluid and the duration uncertain, the long-term nature and extent of the impacts of the pandemic on our business operations and financial position cannot be reasonably estimated at this time.
Added
Operational Highlights Qelbree - Novel non-stimulant for ADHD Update • Total IQVIA prescriptions were 617,192 for full year 2023, an increase of 91% compared to full year 2022. • The Company initiated a Phase IV open-label study to assess the efficacy of Qelbree over the course of 14 weeks of treatment in approximately 500 adults with ADHD and mood symptoms.
Removed
See “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for additional information on risk factors that could impact our business and our results.
Added
The primary outcome measure is change from baseline in the Adult ADHD Investigator Symptom Rating Scale (AISRS).
Removed
Operational Highlights Qelbree Update • Total IQVIA prescriptions were 117,635 in the fourth quarter of 2022, an increase of 24% compared to total prescriptions of 94,681 in the third quarter of 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2022, we had unrestricted cash and cash equivalents, marketable securities, and long term marketable securities of $555.2 million.
Biggest changeAs of December 31, 2023, we had unrestricted cash and cash equivalents, marketable securities, and long term marketable securities of $271.5 million. We fully repaid the outstanding principal and interest on the 2023 Notes in April 2023. We borrowed funds pursuant to our Credit Line in connection with the payment of the 2023 Notes.
If we borrow funds pursuant to our Credit Line, we will be subject to a collateral maintenance requirement. The Credit Line is secured primarily by our portfolio of marketable securities, which is primarily comprised of corporate and U.S. government agency and municipal debt securities and may fluctuate in value.
Any borrowed funds pursuant to our Credit Line are subject to a collateral maintenance requirement. The Credit Line is secured primarily by our portfolio of marketable securities, which is primarily comprised of corporate and U.S. government agency and municipal debt securities and may fluctuate in value.
Because of the relatively short period that we hold our investments and because we generally hold these securities to maturity, we do not believe that an increase in interest rates would have any significant impact on the realizable value of our investments.
Because of the relatively short period that we hold our investments and because we generally hold these securities to maturity, we do not believe that an increase in interest rates would have any significant impact on the realizable value of our investments. We may contract with clinical research organizations (CROs) and investigational sites globally.
Inflation generally affects us by increasing our cost of labor and the cost of services provided by our vendors. We do not believe that inflation and changing prices over the years ended December 31, 2022, and 2021 had a significant impact on our consolidated results of operations. 88 Table of Contents
We do not believe that inflation and changing prices over the years ended December 31, 2023, and 2022 had a significant impact on our consolidated results of operations. 89 Table of Contents
We do not hedge our foreign currency exchange rate risk. Transactions denominated in currencies other than the U.S. dollar are recorded based on exchange rates at the time such transactions arise. As of December 31, 2022, and December 31, 2021, substantially all of our liabilities were denominated in the U.S. dollar.
Currently, we have ongoing clinical trials being conducted outside the U.S. We do not hedge our foreign currency exchange rate risk. Transactions denominated in currencies other than the U.S. dollar are recorded based on exchange rates at the time such transactions arise.
We may borrow funds pursuant to our Credit Line at variable interest rates determined by reference to a reference rate and an applicable spread. Variable rate borrowing would expose us to interest rate risk as increases in interest rates would increase our borrowing costs.
We fully repaid the outstanding debt under the Credit Line in June 2023. In the future, we may borrow funds under the Credit Line. Variable rate borrowing, which may occur under the Credit Line, exposes us to interest rate risk as increases in interest rates would increase our borrowing costs.
Removed
In connection with the 2023 Notes, we have separately entered into Convertible Note Hedge Transactions and Warrant Transactions to reduce the potential dilution of the Company's common stock upon conversion of the 2023 Notes, and to partially offset the cost to purchase the Convertible Note Hedge Transactions, respectively.
Added
As of December 31, 2023, and December 31, 2022, substantially all of our liabilities were denominated in the U.S. dollar. Inflation generally affects us by increasing our cost of labor and the cost of services provided by our vendors.
Removed
We do not have any currency or other derivative financial instruments other than outstanding warrants to purchase common stock and the convertible note hedges. We may contract with clinical research organizations (CROs) and investigational sites globally. Currently, we have ongoing clinical trials, which are being conducted outside the U.S. for SPN-817.

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