Supernus Succeeds In Phase 3, But Could Face An Uphill Battle

|
About: Supernus Pharmaceuticals, Inc. (SUPN)
by: Terry Chrisomalis
Summary

Supernus announced that the primary endpoint was met in two phase 3 studies treating patients with ADHD using SPN-812.

Two additional late-stage studies using SPN-812 to treat adolescents with ADHD are expected to be reported this month and in Q1 2019, respectively.

With the completion of all the late-stage studies, Supernus expects to file an NDA for FDA approval by the second half of 2019.

It is estimated that SPN-812 in the ADHD space could produce $600 million in sales by 2025.

SPN-812 offers two distinct advantages over other competing ADHD drugs in that it may have slightly better safety and a more rapid onset of effect working within a 1-week period.

Recently, Supernus (SUPN) announced results from two phase 3 studies treating patients with ADHD using SPN-812. Both studies met the primary endpoint; however, the drug didn't end up being superior to generic alternatives in terms of efficacy. There are still two positives from these studies, which may allow the drug to earn a small chunk of the large ADHD market.

Phase 3 Data

The two pivotal phase 3 studies were P301 and P303 respectively. Patients were treated with different doses of SPN-812 in each of these studies. However, both studies achieved the primary endpoint which was a statistically significant improvement in the symptoms of ADHD from baseline to the end of study. The primary endpoint was measured using the ADHD Rating Scale-5.

For the P301 study, patients treated with both 100 mg and 200 mg doses of SPN-812 reached statistical significance compared to placebo of the primary endpoint. Those who were treated with 100 mg of SPN-812 had a -16.6 point change from baseline. This achieved statistical significance with a p-value of p=0.0004. Those treated with the higher dose of 200 mg had a -17.7 change which was statistically significant with a p-value of p<0.0001. The placebo only obtained a -10.9 point change at week 6.

For the P303 study, patients treated with both 200 mg and 400 mg doses of SPN-812. Those who received 200 mg doses of SPN-812 also reached statistical significance compared to placebo based on the primary endpoint. Those who received 200 mg of SPN-812 achieved a -17.6 point change, with a statistically significant p-value of p=0.0038. Those who took 400 mg had a -17.5 point change with a statistically significant value of p=0.0063. Those in the placebo group at week 8 ended with only a -11.7 point change.

Potential Market For SPN-812

Both of these studies met on the primary endpoint. There is one major problem with the results. That problem is that SPN-812 came out with comparable efficacy to other currently available therapies for ADHD. That's an issue because there has to be a reason why insurers or doctors would want to provide SPN-812 over cheaper generic alternatives. There is some good news on this front for Supernus' ADHD drug. That being the P301 study had SPN-812 achieve a rapid onset of effect for these patients. Why is that important? That's because patients benefit from the drug in a quicker time frame. For example, Eli Lilly's (LLY) Strattera was the first non-stimulant drug to be approved for ADHD back in 2002. The problem is that is started to be sold as a generic last year. This means that if SPN-812 is approved by the FDA, it will compete directly with this generic version. There are two places where SPN-812 may have some advantages. The first advantage is what I noted above, with respect to the rapid onset of effect. In study P301, SPN-812 was able to achieve a quick onset effect within one week of treatment. On the other hand, Strattera has an onset of effect of 4-6 weeks. In my opinion, this might be enough to help SPN-812 sell well in the market. The second item is that, as of right now, ADHD patients have limited options. This would open up another potential option that patients may use. That's because, on the safety front, SPN-812 may have a potential competitive advantage over Strattera. Strattera also faced some issues, but it managed to reach sales of $535 million before it started being sold as a generic in the United States. Shire's (SHPG) non-stimulant drug Intuniv has been on the market for a short period of time, but it only achieved $340 million in sales before being sold as a generic. I believe those advantages that were noted above will be enough for SPN-812 to generate similar if not slightly higher revenue.

Conclusion

These two positive phase 3 results are a good step in the right direction for Supernus obtaining FDA approval for SPN-812 in patients with ADHD. Before then, the company expects to report on two additional late-stage studies for this patient population. These studies are P302 and P304 respectively. They will each be reporting results in the coming quarters treating adolescents with ADHD. The phase 3 study results of P302 are expected sometime during this month, while the second phase 3 study of P304 is expecting to have results readout by Q1 2019. Collectively, all studies should be enough to where Supernus could file its NDA for FDA approval by the second half of 2019. An analyst estimates that sales of the drug could hit $600 million by 2025. The biggest risk is whether or not these competitive advantages noted above will be enough for Supernus' drug to compete well in this space. I believe that the advantage of having a rapid onset of effect within 1 week might be enough to carry it forward to generating a substantial amount of sales.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.