Executive Summary / Key Takeaways

• Supernus Pharmaceuticals is undergoing a significant transformation, pivoting from legacy products to a diversified portfolio of four high-growth CNS assets: Qelbree, GOCOVRI, ONAPGO, and the recently acquired ZURZUVAE.
• The strategic acquisition of Sage Therapeutics, Inc. in July 2025, adding ZURZUVAE for postpartum depression, is a cornerstone for accelerating mid- to long-term revenue and cash flow growth, with substantial integration synergies anticipated.
• The company's differentiated technologies, such as Qelbree's multimodal non-stimulant action and ONAPGO's unique apomorphine infusion, provide strong competitive advantages in their respective markets.
• Despite facing generic erosion of older products and initial supply constraints for ONAPGO, Supernus maintains a robust financial position with no debt and updated 2025 guidance reflecting an improved outlook for revenue and non-GAAP operating earnings.
• A dynamic pipeline and a proactive corporate development strategy, including exploring opportunities in women's health and rare diseases, underscore the company's commitment to sustained innovation and market leadership in CNS.

CNS Specialization and a New Growth Chapter

Supernus Pharmaceuticals, Inc., founded in 2005, has established itself as a biopharmaceutical company dedicated to developing and commercializing treatments for central nervous system (CNS) diseases. The company's journey has been marked by strategic acquisitions and product innovations, evolving from an early focus on reformulated drugs to its current position as a specialized CNS player. Key historical milestones include the 2020 acquisition of USWM Enterprises, LLC, which brought APOKYN, ONAPGO, XADAGO, and MYOBLOC into the portfolio, and the 2021 acquisition of Adamas Pharmaceuticals, Inc., adding GOCOVRI. The most transformative event, however, was the July 2025 acquisition of Sage Therapeutics, Inc. (SAGE), which introduced ZURZUVAE, a groundbreaking treatment for postpartum depression (PPD). This acquisition signals a clear strategic pivot, shifting the company's emphasis from its maturing legacy products, Trokendi XR and Oxtellar XR, towards a dynamic portfolio of four core growth drivers.

The broader CNS market provides a fertile ground for Supernus's specialized approach. The Attention-Deficit Hyperactivity Disorder (ADHD) market, for instance, was valued at $18.75 billion in 2024 and is projected to grow at a Compound Annual Growth Rate (CAGR) of 7.1% to reach $32.90 billion by 2032. Similarly, the Parkinson's Disease (PD) treatment market, estimated at $5.65 billion in 2024, is expected to grow at a CAGR of 5.04% to $7.58 billion by 2030. The Postpartum Depression (PPD) market, valued at $1 billion in 2024, is anticipated to expand at a CAGR of 9.2% to $2.3 billion by 2034. Even the Epilepsy treatment market, at $8.3 billion in 2024, is forecast to grow at a 4.6% CAGR to $13 billion by 2034. These robust market trends underscore the significant opportunities Supernus aims to capture with its targeted therapies.

Differentiated Technologies Fueling Market Penetration

Supernus's investment thesis is deeply rooted in its ability to develop and commercialize products with distinct technological advantages and novel mechanisms of action (MOAs). These differentiators are crucial for carving out market share and sustaining growth in competitive CNS therapeutic areas.

Qelbree (viloxazine extended-release capsules), a non-stimulant for ADHD, exemplifies this approach. Its core technology involves a unique multimodal pharmacodynamic profile, characterized by partial agonist activity at the serotonin 5 HT2C receptor and inhibition of norepinephrine transport . This dual action provides tangible benefits, including 24-hour coverage, which eliminates the need for multiple daily doses, and a high adult patient satisfaction rate of approximately 80%, significantly surpassing that of some alternatives like Strattera (around 53%) . Qelbree also plays a vital role in combination therapy, with 35% to 40% of adult prescriptions used alongside stimulants, allowing physicians to potentially taper stimulant doses over time . This non-stimulant profile is particularly beneficial for ADHD patients with comorbidities like depression and anxiety, where stimulants may be contraindicated . For investors, Qelbree's differentiated MOA and patient-centric benefits establish a strong competitive moat, driving consistent volume growth and market penetration.

ONAPGO (apomorphine hydrochloride injection), approved in February 2025 and launched in April 2025, represents a significant advancement for adults with advanced Parkinson's disease experiencing motor fluctuations. It is the first and only subcutaneous apomorphine infusion device available . Apomorphine, as a direct dopamine agonist, is structurally similar to dopamine, boasts strong receptor binding across D1-D5 receptors, and exhibits excellent brain penetration without requiring metabolic conversion . This is a key differentiator from levodopa/carbidopa pumps, as ONAPGO can be used as an add-on to existing oral levodopa/carbidopa therapy, offering physicians greater flexibility in treatment regimens . The company further enhances ONAPGO's value proposition with a "best-in-class service" model, including a nurse education program and access support, which is a critical operational advantage in managing complex PD therapies . This comprehensive approach addresses a substantial unmet need, offering a unique and highly supported therapeutic option.

The acquisition of ZURZUVAE (zuranolone capsules) in July 2025 introduced the first and only FDA-approved oral medicine for postpartum depression in adults. ZURZUVAE is a neuroactive steroid and a positive allosteric modulator of GABA A receptors, enhancing GABA signaling at both synaptic and extrasynaptic receptors. This mechanism mimics the endogenous neurosteroid allopregnanolone, which is crucial for mood regulation, and has demonstrated rapid improvement in PPD symptoms, often as early as three days after treatment initiation. The convenience of a once-daily, 14-day oral treatment course is a significant benefit for new mothers, making it a groundbreaking option in women's mental health.

Supernus's pipeline further underscores its commitment to innovation. SPN-817, a novel synthetic form of huperzine A, is an acetylcholinesterase inhibitor in Phase 2b development for treatment-resistant focal seizures in epilepsy. Its cholinergic mechanism of action is distinct from other antiseizure medications. SPN-820, a first-in-class mTORC1 signaling enhancer, is being advanced into a Phase 2b study for major depressive disorder (MDD) by the end of 2025, with a novel intermittent dosing regimen (2,400 mg twice per week) based on the theory that this approach is more suitable for modulating the mTORC1 pathway . This aims to achieve rapid antidepressant effects without dissociative side effects. Additionally, SPN-443, a triple reuptake inhibitor (norepinephrine, dopamine, serotonin), is a stimulant-like product candidate for ADHD and other CNS disorders, with a Phase 1 study planned for 2026 . Its potential for a Schedule 4 classification, rather than Schedule 2, could offer a significant market advantage . These pipeline assets demonstrate Supernus's ongoing R&D capabilities, targeting unmet needs with novel MOAs and potentially improved therapeutic profiles, which is vital for long-term competitive differentiation and value creation.

Competitive Landscape and Strategic Positioning

Supernus operates as a specialized CNS player, strategically positioning itself to leverage its expertise and differentiated products against a diverse competitive field. While larger, more diversified pharmaceutical companies like AbbVie (ABBV) and Pfizer (PFE) possess vast resources for R&D, global distribution networks, and broader revenue streams, Supernus's focused approach in CNS allows for a deeper specialization and more agile operational execution. Its proprietary formulations, such as Qelbree's extended-release technology, offer patient-centric benefits like improved adherence, providing a qualitative edge in efficacy and convenience that can differentiate it from some of the broader offerings of its larger rivals.

In the Parkinson's disease market, ONAPGO's unique mechanism as a direct dopamine agonist and its ability to be used as an add-on to oral levodopa/carbidopa therapy distinguishes it from other infusion devices, including levodopa/carbidopa pumps that require replacement of oral therapy . This flexibility, coupled with Supernus's "best-in-class service" model for its Parkinson's franchise, creates a strong competitive advantage in patient support and retention . Against generics-focused players like Teva Pharmaceutical Industries (TEVA), Supernus's branded, innovative products command premium pricing and offer enhanced features, contrasting with Teva's cost-driven approach. While Teva's operational efficiencies in generics can lead to revenue stability in price-sensitive markets, Supernus aims to capture value through innovation in premium segments.

Supernus's competitive standing is also influenced by indirect competitors, including generic drug manufacturers that can erode market share for products like Trokendi XR and Oxtellar XR, and emerging digital health platforms that offer alternative mental health support. The company mitigates these threats through its robust R&D pipeline, which continuously seeks novel solutions, and its established infrastructure for rare and orphan diseases, where specialized support is paramount. High barriers to entry in the biopharmaceutical industry, such as substantial R&D costs and stringent regulatory requirements, further protect Supernus's position by limiting new entrants. However, the company remains vulnerable to potential impacts from U.S. Executive Orders aimed at lowering drug prices and ongoing legal proceedings, which could affect its financial performance and market positioning.

Financial Performance: A Portfolio in Transition

Supernus's financial performance in the first nine months of 2025 reflects a company in active transition, successfully shifting towards its growth drivers while absorbing significant strategic investments. Total revenues for the nine months ended September 30, 2025, reached $507.380 million, a 4% increase from $487.658 million in the same period of 2024 . This growth was predominantly fueled by the company's four key growth products, which collectively accounted for approximately 78% of total revenues in the third quarter of 2025 .

Qelbree demonstrated robust performance, with net product sales increasing 34% year-over-year to $223.708 million for the nine months ended September 30, 2025 . In the third quarter alone, Qelbree's net sales grew 31% to $81.416 million, supported by a 23% increase in IQVIA prescriptions . GOCOVRI also maintained strong momentum, with net product sales rising 15% to $108.198 million for the nine-month period and $40.849 million in the third quarter . This growth was significantly aided by the Medicare redesign in the first half of 2025, which reduced patient out-of-pocket costs and boosted prescription volumes .

The newly launched ONAPGO, approved in February 2025, generated $6.806 million in net sales in its first full quarter (Q3 2025), a substantial increase from $1.6 million in Q2 2025 . The product saw over 1,300 enrollment forms submitted by more than 450 prescribers, indicating strong initial demand . Collaboration revenue from ZURZUVAE, following the Sage acquisition on July 31, 2025, contributed $20.164 million in the third quarter, representing approximately two months of revenue . Biogen (BIIB), Supernus's partner, reported a 150% year-over-year increase in ZURZUVAE's U.S. sales for Q3 2025 .

Conversely, legacy products Trokendi XR and Oxtellar XR experienced significant declines due to generic erosion, with Oxtellar XR's net sales decreasing 60% in Q3 2025 compared to the prior year . This underscores the importance of the company's strategic pivot.

From a profitability standpoint, Supernus reported a GAAP operating loss of $60.231 million in Q3 2025 and $58.346 million for the nine months ended September 30, 2025 . This was primarily driven by approximately $70.9 million in acquisition-related costs and $30 million in Sage operating costs associated with the Sage acquisition . Despite these short-term impacts, the company's TTM Gross Profit Margin of 90.11% highlights the strong underlying economics of its product portfolio.

Supernus maintains a robust liquidity position, with approximately $281 million in cash, cash equivalents, and marketable securities as of September 30, 2025 . The company operates with no debt, providing significant financial flexibility for future strategic initiatives. Management believes these cash balances, combined with cash generated from operations, are sufficient to meet its financial requirements for the next 12 months and beyond .

Outlook and Strategic Trajectory

Supernus's updated full-year 2025 financial guidance reflects confidence in its strategic direction and the performance of its growth products. The company now expects total revenue to range from $685 million to $705 million, an increase from the previous range of $670 million to $700 million . This upward revision is primarily attributed to the strong performance in the first nine months of the year. The guidance for combined net sales of legacy products, Trokendi XR and Oxtellar XR, has also been adjusted upwards to $75 million to $85 million .

Despite the increased investment in R&D and SG&A, which remains unchanged at $505 million to $530 million, the GAAP operating loss is projected to improve, ranging from $65 million to $75 million . Non-GAAP operating earnings are expected to be between $125 million and $145 million, an increase from the prior guidance of $105 million to $135 million . These figures are underpinned by assumptions of continued strong prescription growth for Qelbree, with management expressing comfort around a $290 million consensus for the year, and ONAPGO sales contributing in the mid to high single-digit millions for 2025 .

The integration of Sage Therapeutics is on track for substantial completion by the end of 2025, with anticipated annual synergies of up to $200 million by mid-2026 . This integration is expected to significantly bolster future profitability. Corporate development remains a top priority, with Supernus actively seeking additional revenue-generating products or late-stage pipeline candidates. The Sage acquisition has opened new avenues in women's health, and the company is also exploring opportunities in rare diseases and other specialty areas that offer sufficient scale and leverage its existing infrastructure . The pipeline continues to advance, with a Phase IIb study for SPN-820 in MDD expected to commence by year-end 2025, and a lead indication for SPN-443 to be disclosed by the same timeframe .

Key Investment Risks

While Supernus's outlook is promising, several risks warrant investor attention. The most immediate operational challenge is the supply constraint for ONAPGO, driven by stronger-than-expected demand and issues with cartridge filling capacity . This has led to a temporary pause in new patient initiations, potentially impacting near-term sales and market penetration. The commercialization of ZURZUVAE carries inherent risks, including its boxed warning regarding driving impairment due to CNS depressant effects, which could affect patient willingness to use the product . Furthermore, patient acceptance and potential payor restrictions, such as prior authorization requirements or mandates for specific symptom severity, could limit its market uptake .

The continued generic erosion of legacy products like Trokendi XR and Oxtellar XR will exert ongoing pressure on overall revenue. Supernus is also involved in various legal proceedings, including an antitrust litigation related to APOKYN and several lawsuits stemming from the Sage acquisition, such as merger complaints, a securities class action, and an SEC investigation . The outcomes of these matters are uncertain and could result in substantial costs or damages. Finally, broader market and payor pressures, along with potential impacts from U.S. Executive Orders aimed at lowering pharmaceutical prices, could introduce variability in future profitability .

Conclusion

Supernus Pharmaceuticals is in the midst of a profound transformation, strategically reorienting its business around a robust and diversified portfolio of growth products in the CNS therapeutic area. The successful integration of ZURZUVAE, coupled with the strong performance of Qelbree and GOCOVRI, and the promising, albeit supply-constrained, launch of ONAPGO, positions the company for accelerated revenue and earnings growth. Its commitment to technological differentiation, exemplified by the unique mechanisms of action of its key products and an innovative R&D pipeline, forms a solid foundation for competitive advantage. While challenges such as legacy product erosion, ONAPGO supply issues, and ongoing legal matters require careful monitoring, Supernus's strong balance sheet, proactive corporate development strategy, and focused expertise in CNS diseases underscore its potential to create significant long-term value for investors. The company is actively building a future where its specialized innovations drive sustained market leadership and profitability.