Supernus Pharmaceuticals, Inc. (SUPN) Bundle
Understanding Supernus Pharmaceuticals, Inc. (SUPN) Revenue Streams
Understanding Supernus Pharmaceuticals, Inc.’s Revenue Streams
Net Product Sales: For the three months ended September 30, 2024, net product sales were $170.3 million, compared to $149.0 million for the same period in 2023, marking a year-over-year increase of 14%. For the nine months ended September 30, 2024, net product sales reached $471.3 million, up from $417.9 million for the corresponding period in 2023, reflecting a 13% increase.
Royalty, Licensing, and Other Revenues: Royalty and licensing revenues for the three months ended September 30, 2024, were $5.4 million, an increase from $4.9 million in 2023. For the nine months, these revenues totaled $16.4 million, down from $25.3 million in 2023, indicating a decrease of 35%.
| Revenue Source | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (%) | YTD 2024 (in millions) | YTD 2023 (in millions) | Change (%) |
|---|---|---|---|---|---|---|
| Net Product Sales | 170.3 | 149.0 | 14% | 471.3 | 417.9 | 13% |
| Royalty and Licensing Revenues | 5.4 | 4.9 | 10% | 16.4 | 25.3 | (35%) |
| Total Revenues | 175.7 | 153.9 | 14% | 487.7 | 443.2 | 10% |
Product Breakdown: The following table illustrates the breakdown of net product sales by product for Q3 2024 and YTD 2024:
| Product | Q3 2024 (in millions) | Q3 2023 (in millions) | YTD 2024 (in millions) | YTD 2023 (in millions) |
|---|---|---|---|---|
| Qelbree | 62.4 | 37.1 | 166.9 | 93.8 |
| GOCOVRI | 35.7 | 32.9 | 93.9 | 87.7 |
| Oxtellar XR | 29.8 | 29.6 | 86.3 | 82.4 |
| APOKYN | 19.9 | 21.5 | 53.8 | 56.3 |
| Trokendi XR | 15.3 | 20.6 | 48.4 | 74.7 |
| Other | 7.3 | 7.3 | 22.1 | 23.0 |
Significant Changes in Revenue Streams: The decline in net product sales for Trokendi XR is attributed to generic erosion, which impacted overall revenue. In contrast, the sales for Qelbree and GOCOVRI have shown significant growth, with Qelbree's sales increasing by 68% in Q3 2024 compared to Q3 2023.
As of September 30, 2024, the accrued product returns balance was $57.4 million, up from $54.3 million as of September 30, 2023, primarily due to higher net product sales. The accrued product rebates increased to $111.7 million from $108.1 million.
A Deep Dive into Supernus Pharmaceuticals, Inc. (SUPN) Profitability
A Deep Dive into Supernus Pharmaceuticals, Inc.'s Profitability
Gross Profit Margin: For the three months ended September 30, 2024, the gross profit margin was 90.8%, compared to 86.8% for the same period in 2023. For the nine months ended September 30, 2024, the gross profit margin was 89.0%, versus 84.0% in 2023.
Operating Profit Margin: The operating profit margin for the three months ended September 30, 2024, was 23.2%, significantly higher than 5.3% in 2023. For the nine months ended September 30, 2024, the operating profit margin was 12.4%, compared to (1.0%) in 2023.
Net Profit Margin: The net profit margin for the three months ended September 30, 2024, was 21.9%, compared to (10.7%) in 2023. For the nine months ended September 30, 2024, it was 12.0%, compared to 0.03% in 2023.
Trends in Profitability Over Time
Net product sales increased to $170.3 million for the three months ended September 30, 2024, from $149.0 million in 2023, marking a 14% increase. For the nine months, net product sales rose to $471.3 million from $417.9 million, a 13% increase.
Comparison of Profitability Ratios with Industry Averages
The average gross profit margin in the pharmaceutical industry typically hovers around 80%. The company's current gross profit margin of 90.8% indicates strong performance relative to industry standards. Additionally, the operating profit margin of 23.2% surpasses the industry average of approximately 15%.
Analysis of Operational Efficiency
The cost of goods sold (COGS) for the three months ended September 30, 2024, was $17.6 million, down from $19.6 million in 2023, indicating improved manufacturing efficiencies. For the nine months, COGS decreased to $51.8 million from $64.2 million year-over-year.
Research and development expenses were $29.0 million for the three months ended September 30, 2024, compared to $22.7 million in 2023. For the nine months, R&D expenses rose to $80.1 million from $68.2 million.
Selling, general and administrative expenses decreased to $69.8 million in Q3 2024, down from $82.7 million in Q3 2023, reflecting effective cost management strategies.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Product Sales | $170.3 million | $149.0 million | $471.3 million | $417.9 million |
| Gross Profit Margin | 90.8% | 86.8% | 89.0% | 84.0% |
| Operating Profit Margin | 23.2% | 5.3% | 12.4% | (1.0%) |
| Net Profit Margin | 21.9% | (10.7%) | 12.0% | 0.03% |
| Cost of Goods Sold | $17.6 million | $19.6 million | $51.8 million | $64.2 million |
| R&D Expenses | $29.0 million | $22.7 million | $80.1 million | $68.2 million |
| SG&A Expenses | $69.8 million | $82.7 million | $242.2 million | $255.1 million |
Debt vs. Equity: How Supernus Pharmaceuticals, Inc. (SUPN) Finances Its Growth
Debt vs. Equity: How Supernus Pharmaceuticals Finances Its Growth
The financial health of a company can often be evaluated by examining its debt and equity structure. For Supernus Pharmaceuticals, Inc. (SUPN), understanding its approach to financing growth through debt and equity is crucial for investors. Below is a comprehensive breakdown of the company's current debt levels, debt-to-equity ratio, recent debt issuances, and its overall balance between debt and equity financing.
Overview of the Company's Debt Levels
As of September 30, 2024, Supernus Pharmaceuticals reported the following debt levels:
- Long-term debt: $0
- Short-term debt: $0
This indicates that the company has effectively eliminated any outstanding debt, particularly after repaying its credit line and convertible senior notes earlier in 2023.
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio is a key indicator of financial leverage. For Supernus Pharmaceuticals, the debt-to-equity ratio is calculated as follows:
- Debt-to-equity ratio: 0 (since there is no debt)
In comparison, the pharmaceutical industry average debt-to-equity ratio typically ranges from 0.5 to 1.0. This places Supernus in a favorable position, indicating lower financial risk and greater financial flexibility than many of its peers.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In March 2023, the company borrowed $93 million under a credit line to refinance existing debt, which was subsequently repaid in full during the second quarter of 2023. As of September 30, 2024, there were no outstanding borrowings. Additionally, the company has maintained a strong credit profile, with no current ratings assigned due to the absence of outstanding debt.
How the Company Balances Between Debt Financing and Equity Funding
Supernus Pharmaceuticals has relied heavily on equity financing to fund its operations and growth initiatives. As of September 30, 2024, the company's equity structure is as follows:
| Component | Amount (in thousands) |
|---|---|
| Common Stock | $55 |
| Additional Paid-in Capital | $465,919 |
| Accumulated Other Comprehensive Earnings | $78 |
| Retained Earnings | $541,098 |
| Total Stockholders’ Equity | $1,007,150 |
This equity structure demonstrates the company's strategy to finance growth through equity rather than incurring debt, which aligns with its current financial position of having no debt.
Assessing Supernus Pharmaceuticals, Inc. (SUPN) Liquidity
Assessing Supernus Pharmaceuticals, Inc. Liquidity
Current Ratio: As of September 30, 2024, the current ratio stands at 1.56, calculated from current assets of $403.2 million and current liabilities of $258.0 million.
Quick Ratio: The quick ratio is approximately 1.27, reflecting a strong liquidity position, calculated using liquid assets excluding inventories.
Analysis of Working Capital Trends
Working capital as of September 30, 2024, is $145.2 million, showing an increase from $139.3 million as of December 31, 2023. This reflects better management of current assets and liabilities.
| Period | Current Assets (in millions) | Current Liabilities (in millions) | Working Capital (in millions) |
|---|---|---|---|
| September 30, 2024 | $403.2 | $258.0 | $145.2 |
| December 31, 2023 | $394.5 | $255.2 | $139.3 |
Cash Flow Statements Overview
Operating Cash Flow: For the nine months ended September 30, 2024, net cash provided by operating activities was $127.5 million, a significant increase from $66.1 million in the same period of 2023.
Investing Cash Flow: Net cash used in investing activities was ($177.2 million) for the nine months ended September 30, 2024, compared to $334.7 million provided in the same period of 2023, indicating a shift in investment strategy.
Financing Cash Flow: Net cash provided by financing activities was $6.3 million for the nine months ended September 30, 2024, a recovery from ($398.9 million) used in the same period of 2023.
| Cash Flow Type | 2024 (in millions) | 2023 (in millions) | Change (in millions) |
|---|---|---|---|
| Operating Activities | $127.5 | $66.1 | $61.4 |
| Investing Activities | ($177.2) | $334.7 | ($511.9) |
| Financing Activities | $6.3 | ($398.9) | $405.2 |
Potential Liquidity Concerns or Strengths
The company holds $403.2 million in cash and cash equivalents as of September 30, 2024, reflecting a robust liquidity position to meet short-term obligations. The liquidity ratio indicates that the company can cover its short-term liabilities comfortably.
However, the significant cash outflow in investing activities suggests ongoing investments that could impact liquidity if not managed properly. The ability to maintain or improve cash flows from operations will be critical in sustaining liquidity strength.
Is Supernus Pharmaceuticals, Inc. (SUPN) Overvalued or Undervalued?
Valuation Analysis
To determine if the company is overvalued or undervalued, we will analyze key financial ratios, stock price trends, dividend metrics, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The price-to-earnings (P/E) ratio provides insights into how much investors are willing to pay per dollar of earnings. As of September 30, 2024, the company's P/E ratio was approximately 26.9, calculated from earnings of $58.5 million and a market capitalization of around $1.57 billion.
Price-to-Book (P/B) Ratio
The price-to-book (P/B) ratio indicates the market's valuation of the company's equity. The P/B ratio as of September 30, 2024, was approximately 2.0, with total equity of $1.007 billion and a market value of $1.57 billion.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value-to-EBITDA (EV/EBITDA) ratio measures the company's total value compared to its earnings before interest, taxes, depreciation, and amortization. The EV/EBITDA ratio stood at around 18.4, with an enterprise value of approximately $1.89 billion and EBITDA of $102 million.
Stock Price Trends
Over the last 12 months, the stock price has shown significant activity:
- 12-month high: $37.50
- 12-month low: $22.00
- Current stock price (as of September 30, 2024): $28.00
This reflects a 25% decrease from the 12-month high.
Dividend Yield and Payout Ratios
The company does not currently pay a dividend, thus the dividend yield is 0%. The payout ratio is also not applicable given the absence of dividend payments.
Analyst Consensus on Stock Valuation
Analysts provide various ratings based on their valuation assessments. As of the latest reports, the consensus rating is:
- Buy: 5 analysts
- Hold: 7 analysts
- Sell: 2 analysts
This indicates a mixed sentiment among analysts.
Summary of Valuation Metrics
| Metric | Value |
|---|---|
| P/E Ratio | 26.9 |
| P/B Ratio | 2.0 |
| EV/EBITDA Ratio | 18.4 |
| 12-Month High | $37.50 |
| 12-Month Low | $22.00 |
| Current Stock Price | $28.00 |
| Dividend Yield | 0% |
| Analyst Consensus | Mixed |
Key Risks Facing Supernus Pharmaceuticals, Inc. (SUPN)
Key Risks Facing Supernus Pharmaceuticals, Inc.
Supernus Pharmaceuticals, Inc. faces several key risks that could impact its financial health. Understanding these risks is crucial for investors looking to assess the company's future performance.
Overview of Internal and External Risks
Internal and external risks include:
- Industry Competition: The pharmaceutical industry is highly competitive. The company faces pressure from established players and new entrants, particularly in the generic market.
- Regulatory Changes: Changes in regulations by the FDA and other agencies can significantly impact product approvals and market access.
- Market Conditions: Economic fluctuations can affect pricing strategies and demand for products.
Operational, Financial, and Strategic Risks
Recent earnings reports highlight several operational and financial risks:
- Patent Expiry: The loss of patent exclusivity for Trokendi XR in January 2023 has negatively impacted sales, leading to a decline in revenue streams.
- Dependence on Key Products: The company relies heavily on a few key products for revenue. For instance, net product sales for the three months ended September 30, 2024, were $170.3 million, with significant contributions from Qelbree and GOCOVRI.
- Research and Development Risks: R&D expenses increased to $80.1 million for the nine months ended September 30, 2024, up from $68.2 million in the prior year. This increase is associated with the costs of developing new drugs, which may not yield successful results.
Financial Data Overview
The company reported a net income of $58.5 million for the nine months ended September 30, 2024, compared to a minuscule net income of $141,000 for the same period in 2023. However, fluctuations in revenue, particularly from generic competition, pose a risk to future profitability.
| Financial Metric | 2024 (9 months) | 2023 (9 months) | Change |
|---|---|---|---|
| Net Product Sales | $471.3 million | $417.9 million | +12.8% |
| R&D Expenses | $80.1 million | $68.2 million | +17.5% |
| Net Income | $58.5 million | $141,000 | +41,471% |
Mitigation Strategies
The company has implemented various strategies to mitigate risks:
- Diversification: Expanding the product pipeline to reduce reliance on single products.
- Cost Management: Efforts to control R&D and SG&A expenses, which decreased to $242.2 million in 2024 from $255.1 million in 2023.
- Strategic Partnerships: Engaging in collaborations to enhance product development and market reach.
As of September 30, 2024, the company maintained cash and cash equivalents of $31.7 million, down from $75.1 million at the end of 2023. This liquidity position is crucial for funding operations and R&D initiatives.
Future Growth Prospects for Supernus Pharmaceuticals, Inc. (SUPN)
Future Growth Prospects for Supernus Pharmaceuticals, Inc.
Analysis of Key Growth Drivers
Key growth drivers for the company include product innovations, market expansions, and strategic acquisitions. The company has seen significant revenue contributions from its products, particularly from Qelbree and GOCOVRI. Net product sales for the three months ended September 30, 2024, were $170.3 million, compared to $149.0 million for the same period in 2023, marking a growth of 14%.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, net product sales reached $471.3 million, an increase from $417.9 million in 2023. This growth is expected to continue as the company expands its product offerings and market presence.
Strategic Initiatives or Partnerships that May Drive Future Growth
The company has initiated several strategic partnerships and collaborations aimed at enhancing its product pipeline. Recently, it completed the acquisition of USWM, which provides access to additional products and licensing agreements. This acquisition is anticipated to contribute to the company's revenue growth through expanded market access and product offerings.
Competitive Advantages that Position the Company for Growth
The company's competitive advantages include a robust product pipeline, strong market presence, and efficient operational capabilities. As of September 30, 2024, the company reported cash and cash equivalents totaling $31.7 million, alongside marketable securities of $371.5 million, providing a solid financial foundation for future investments.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Product Sales | $170.3 million | $149.0 million | 14% |
| Total Revenues | $175.7 million | $153.9 million | 14% |
| Net Earnings | $38.5 million | $(16.0) million | — |
| Cash and Cash Equivalents | $31.7 million | $94.9 million | (67%) |
| Marketable Securities | $371.5 million | $179.8 million | 107% |
Investment in Research and Development
The company has significantly increased its investment in research and development, with R&D expenses reaching $80.1 million for the nine months ended September 30, 2024, up from $68.2 million in the prior year. This focus on R&D is critical for sustaining growth and expanding its product pipeline.
Market Expansion Efforts
The company is actively pursuing market expansion initiatives, including the introduction of new products and exploring international markets. The anticipated launch of SPN-830 could further enhance its market position.
Long-Term Financial Outlook
Looking ahead, the company expects to maintain profitability with projected operating earnings of $60.3 million for the nine months ended September 30, 2024. This positive outlook is supported by a growing product portfolio and strategic market initiatives.
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Updated on 16 Nov 2024
Resources:
- Supernus Pharmaceuticals, Inc. (SUPN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Supernus Pharmaceuticals, Inc. (SUPN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Supernus Pharmaceuticals, Inc. (SUPN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.