Results
Supernus Pharmaceuticals Inc.
03/02/2026 | Press release | Distributed by Public on 03/02/2026 15:40
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes thereto, appearing elsewhere in this Annual Report on Form 10-K. In addition to historical information, some of the information in this discussion and analysis contains forward-looking statements reflecting our current expectations and involving risk and uncertainties. For example, statements regarding our expectations as to our plans and strategy for our business, future financial performance, expense levels, and liquidity sources are forward-looking statements. Our actual results and the timing of those events could differ materially from those discussed in our forward-looking statements because of many factors, including those set forth under the "Risk Factors" section and elsewhere in this report.
Unless the content requires otherwise, the words "Supernus," "we," "our" and "the Company" refer to Supernus Pharmaceuticals, Inc. and/or one or more of its subsidiaries, as the case may be. These terms are used solely for the convenience of the reader. Supernus Pharmaceuticals, Inc. and each of its subsidiaries are distinct legal entities. For example, MDD US Operations, LLC, a wholly-owned indirect subsidiary of Supernus Pharmaceuticals, Inc., is the exclusive licensee and distributor of APOKYN in the United States and its territories. Adamas Operations, LLC, a wholly-owned indirect subsidiary of Supernus Pharmaceuticals, Inc., wholly owns the patents and patent applications related to GOCOVRI and Osmolex ER and has a license agreement with Supernus Pharmaceuticals, Inc., granting Supernus Pharmaceuticals, Inc. rights to market and sell GOCOVRI and Osmolex ER. Sage Therapeutics, LLC, a wholly-owned indirect subsidiary of Supernus Pharmaceuticals, Inc., has granted Supernus Pharmaceuticals, Inc. a license to market and sell zuranolone in the United States.
Overview
We are a biopharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases. Our diverse neuroscience portfolio includes approved treatments for attention-deficit hyperactivity disorder (ADHD), dyskinesia in Parkinson's Disease (PD) patients receiving levodopa-based therapy, hypomobility in PD, postpartum depression (PPD), epilepsy, migraine, cervical dystonia, and chronic sialorrhea. We are developing a broad range of novel CNS product candidates including new potential treatments for epilepsy, depression, and other CNS disorders.
2025 Acquisition of Sage Therapeutics, Inc. (Sage) and Reorganization
On July 31, 2025, the Company completed its previously announced acquisition of Sage when Saphire, Inc., a Delaware corporation and wholly owned subsidiary of the Company (Purchaser), was merged with and into Sage (the Merger), with Sage continuing as the surviving corporation in the Merger as a wholly owned subsidiary of the Company (the Sage Acquisition). At the time of the Sage Acquisition, Sage had an established commercial product in its portfolio, ZURZUVAE.
Following the Sage Acquisition, during the third quarter of 2025, Sage Therapeutics, Inc. was reorganized into Sage Therapeutics, LLC.
We have a portfolio of commercial products and product candidates.
Commercial Products
•Qelbree®(viloxazine) extended-release capsules are a novel non-stimulant product indicated for the treatment of ADHD in adults and pediatric patients 6 years and older. 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. The Company launched Qelbree for pediatric patients in May 2021 and for adult patients in May 2022 in the United States (U.S.). In January 2025, the FDA approved an expanded label update for Qelbree to include new data on the pharmacodynamics and use in breastfeeding mothers.
•GOCOVRI® (amantadine) extended-release capsules are 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.
•ONAPGOTM(apomorphine hydrochloride) injection is the first and only subcutaneous apomorphine infusion device for the treatment of motor fluctuations in adults with advanced PD. ONAPGO was approved by the FDA in February 2025. ONAPGO was launched in April 2025.
•ZURZUVAE®(zuranolone) capsules are the first and only FDA approved oral medicine indicated for the treatment of PPD in adults. ZURZUVAE is a neuroactive steroid that is a positive allosteric modulator of GABAAreceptors, targeting
both synaptic and extrasynaptic GABAAreceptors, and is the first oral, once-daily, 14-day treatment specifically indicated for adults with PPD. ZURZUVAE became commercially available in the U.S. in December 2023 as a treatment option for women with PPD. We and our collaboration partner, Biogen, are jointly commercializing ZURZUVAE in the U.S. under a collaboration agreement (Biogen Collaboration Agreement). The Company and Biogen equally share in all operating profits and losses arising from sales of ZURZUVAE in the U.S., with Biogen recording such product sales.
•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.
•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. 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. It is also the first once-daily extended-release oxcarbazepine product indicated for the treatment of epilepsy in the U.S. market.
•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. It is the only botulinum toxin type B available on the market.
Research and Development
We are committed to the development of innovative product candidates in neurology and psychiatry, including the following:
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. 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.
SPN-820 (NV-5138)
SPN-820 is a novel, first in class, intracellular enhancer of mechanistic target of rapamycin complex 1 (mTORC1) signaling. Depression is associated with synapse loss and reduced synaptic plasticity in key brain regions including the prefrontal cortex and increasing mTORC1-mediated synaptic plasticity is a potential avenue to treat depression and associated symptoms. SPN-820 selectively binds to intracellular sestrin proteins and subsequently engages a cascade of multi-protein complexes, enhancing mTORC1 signaling. The intracellular mechanism and the lack of binding to cell surface receptors suggests the potential for a differentiated safety profile and is unlikely to have abuse potential.
In February 2025, the Company reported topline results from a randomized double-blind placebo-controlled Phase 2b study of SPN-820 in adults with treatment-resistant depression (TRD) following four weeks of chronic daily dosing. The study did not demonstrate a statistically significant improvement on the primary and secondary endpoints. The safety profile of SPN-820 was consistent with previous clinical trials, showing few adverse events.
The Company initiated a follow-on Phase 2b multi-center, randomized, double-blind, placebo-controlled trial in approximately 200 adults with MDD. The study will examine the safety and tolerability of SPN-820 2400 mg given intermittently (twice weekly) as an adjunctive treatment to the current baseline antidepressant therapy, as well as assess the rapid onset of improvement in depressive symptoms.
SPN-443 - Novel stimulant for the treatment of ADHD/CNS
The Company completed a Phase 1 single dose study in healthy adults in 2024 following submission of an Investigational New Drug Application. The study was a first in human, pilot pharmacokinetic study of two oral formulations of SPN-443 in healthy adults. The primary objective of the study was to assess safety and tolerability. This molecule, along with its major metabolites, is an inhibitor of norepinephrine, dopamine and serotonin, also known as a triple reuptake inhibitor. Both formulations of SPN-443 showed adequate bioavailability and were well tolerated. The Company plans to initiate Single Ascending Dose (SAD) and Multiple Ascending Dose (MAD) studies in the second half of 2026.
Zuranolone
The Company has granted Biogen sole rights to develop and commercialize zuranolone outside the U.S., other than in Japan, Taiwan and South Korea where it has granted those rights to Shionogi & Co., Ltd. (Shionogi). Shionogi is currently developing zuranolone for the treatment of patients with MDD in Japan, and in the third quarter of 2024, Shionogi reported that it submitted a new drug application (NDA) in Japan for zuranolone for the treatment of MDD. In the third quarter of 2025, Biogen received approval for zuranolone for the treatment of PPD by the European Medicines Agency (EMA) and Medicines Healthcare Regulatory Agency (MHRA) in Europe and the United Kingdom (U.K.) respectively. In the fourth quarter of 2025, zuranolone received Health Canada Authorization in Canada for treatment indicated for adults with PPD. Also in the fourth quarter of 2025, Shionogi received approval for a product containing zuranolone for the treatment of MDD by the Pharmaceuticals and Medical Devices Agency in Japan. No product containing zuranolone is approved for the treatment of MDD in the United States.
Product Pipeline Update
SPN-817 - Novel first-in-class highly selective AChE inhibitor for epilepsy
•The Phase 2b randomized, double-blind, placebo-controlled study of 3mg and 4mg twice daily doses is ongoing with a targeted enrollment of approximately 258 adult patients with treatment resistant focal seizures.
SPN-820 - Novel first-in-class molecule that increases mTORC1 mediated synaptic function for depression
•The Company initiated a follow-on Phase 2b multi-center, randomized, double-blind, placebo-controlled trial in approximately 200 adults with MDD. The study will examine the safety and tolerability of SPN-820 2400 mg given intermittently (twice weekly) as an adjunctive treatment to the current baseline antidepressant therapy, as well as assess the rapid onset of improvement in depressive symptoms.
SPN-443 - Novel stimulant for attention-deficit/hyperactivity disorder (ADHD)
•The Company expects to initiate a Phase 1 single-ascending/multiple-ascending dose study in adult healthy volunteers in the second half of 2026.
Critical Accounting Policies and the Use of Estimates
The significant accounting policies and basis of presentation for our consolidated financial statements are described in Part II, Item 8-Financial Statements and Supplementary Data, Note 2, Summary of Significant Accounting Policies, in the Notes to the Consolidated Financial Statements. Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP), requiring us to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and other related disclosures. 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:
•Revenue recognition;
•Business combination and valuation of acquired assets;
•Valuation of contingent consideration;
•Impairment of definite-lived intangible assets
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. 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. In making these estimates, we consider: historical experience; product price increases; current contractual arrangements under applicable payor programs; unbilled claims; processing time lags for claims; inventory levels in the wholesale, specialty pharmacy, and retail distribution channel; and product life cycle. We adjust our estimates at the earlier of when the most likely amount of consideration we expect to receive changes, or when the consideration becomes fixed. Variable consideration on product sales is only recognized when it is probable that a significant reversal will not occur. If actual results in the future vary from our estimates, we adjust our estimates in the period identified. These adjustments could materially affect net product sales and earnings in the period in which the adjustment(s) is recorded. Refer toPart II, Item 8-Financial Statements and Supplementary Data, Note 2, Summary of Significant Accounting Policies, in the Notes to the Consolidated Financial Statements, for further discussion on each of the different sales deductions. While sales rebates have been relatively predictable based on historical experience such that there have not been material changes in estimates in prior periods, there have been critical estimates associated with rebates and returns that may result in significant variability as further discussed below.
Returns
We maintain a return policy that allows our customers to return products within a specified period of time. Sales of our products are not subject to a general right of return; however, we will accept return of expired product 6 months prior to, and up to twelve months subsequent to, the product's expiry date for certain products. Our products have a shelf life of up to 48 months from date of manufacture. The product return accrual is estimated principally based on historical experience, the level and estimated shelf life of inventory in the distribution channel, changes in the current wholesaler prices, our return policy and expected market events, including generic competition. The time lag from date of sale of our products when we accrue our provision for product returns and the time at which we issue credit for expired product can occur up to several years after the sale of our product. Estimates associated with our provision for product returns are particularly susceptible to adjustment given the extensive time lag. The Company launched Qelbree in May 2021. The Company is actively monitoring returns activity in light of the timeline from the date of sale and the time at which we issue credit for expired products. We had favorable actual returns in 2024 and 2025 for Qelbree and as a result, the Company changed its estimated provision for Qelbree product returns based on the most recent experience. The Company has entered into settlement and license agreements with third parties, permitting the sale of a generic version of Trokendi XR beginning in January 2023. In addition, the Company entered into settlement and license agreements with third parties, permitting the sale of a generic version of Oxtellar XR beginning in September 2024. 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. The entry of a generic competitor may cause our future Trokendi XR and Oxtellar XR product return rates to change from historical trends, and this change could have a material effect on the future provision for product returns.
Historically, we have experienced changes in estimates in return reserve calculations, but those adjustments have not been material to net earnings (loss). Adjustments related to prior year sales for product returns in 2025 and 2024 was less than 4% of net product sales for each respective period and was less than 1% of net product sales in 2023. 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. Rebates paid under public sector programs are generally mandated under law, whereas private sector rebates are generally contractually negotiated by us with managed care providers. Both types of rebates vary over time. Rebate amounts are typically based upon the volume of purchases using contractual or statutory prices, which may vary by product and by payer. For each type of rebate, the factors used in the calculations of the accruals for that rebate include the identification of the products subject to the rebate, applicable price terms and estimated lag time between sale and payment of the rebate, which can be significant. In order to establish the rebate accruals, we use both internal and external data to estimate the level of inventory in the distribution channel and the rebate claims processing lag time for each type of rebate. To estimate the rebate percentage or net price, we track sales by product and by customer or payer. 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. Historically, adjustments to rebate accruals have not been material to net earnings (loss).
Specifically, a significant portion of rebates we pay are on state Medicaid programs. We participate in state Medicaid programs wherein the lag time from the date of sale of our product when we accrue for provision for rebates and the ultimate invoicing by the individual state Medicaid program can occur up to several quarters after the sale of our product. Because of the time lag for Medicaid, in any particular quarter, our adjustments may incorporate revisions of accruals for prior periods. Estimates associated with our participation in state Medicaid programs are particularly susceptible to adjustment given the extensive time lag. Historically, adjustments to rebate accruals have not been material to net earnings (loss), but there continues to be an extensive time lag related to certain programs that could result in variability in future periods.
For a roll-forward of the accrued sales deductions, see the section entitled Results of Operations - Revenues - Sales deductions and related accruals.
Business Combinations and Valuation of Acquired Assets
The Company completed the Sage Acquisition on July 31, 2025. The transaction was accounted for as a business combination.
The acquisition method of accounting requires that we recognize the assets acquired and liabilities assumed at their acquisition date fair values. Goodwill is measured as the excess of consideration transferred over the acquisition date net fair values of the assets acquired and the liabilities assumed. The purchase price allocation is a critical accounting policy because the estimation of fair values of acquired assets and assumed liabilities is judgmental and requires various assumptions. Further, the amounts and useful lives assigned to depreciable and amortizable assets versus amounts assigned to goodwill, which is not amortized, can significantly affect the results of operations in the period of and for periods subsequent to a business combination.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction, and therefore represents an exit price. When identifiable intangible assets, are acquired, we determine the fair values of the assets as of the acquisition date. An income approach, which generally relies upon projected cash flow models, is used in estimating the fair value of the acquired intangible assets. These cash flow projections are based on management's estimates of economic and market conditions including: the estimated future cash flows from revenues of acquired assets; the timing and projection of costs and expenses, discount rates; and tax rates.
While we use our best estimates and assumptions as part of the process to value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. During the measurement period, which occurs before finalization of the purchase price allocation, changes in assumptions and estimates that result in adjustments to the fair values of assets acquired and liabilities assumed, if based on facts and circumstances existing at the acquisition date, are recorded on a retroactive basis as of the acquisition date, with the corresponding offset to goodwill. Any adjustments not based on facts and circumstances existing at the acquisition date, or if subsequent to the conclusion of the measurement period, will be recorded to our consolidated statements of earnings.
Refer to Note 3,Sage Acquisition, for further information.
Valuation of Contingent Consideration
We record contingent consideration resulting from a business combination at its fair value on the acquisition date. During the measurement period, if we obtain new information regarding facts and circumstances that existed as of the Sage Acquisition Closing Date that, if known, would have resulted in revised estimates of fair values of acquired assets, assumed liabilities or contingent consideration, the Company will accordingly revise its estimates of fair values and purchase price allocation. In addition, on a quarterly basis, we will revalue the contingent consideration liability and record increases or decreases in their fair value as an adjustment to operating earnings. The determination of the initial and subsequent value of the contingent consideration liability requires significant judgment by management. Changes in any of the inputs not related to facts and circumstances existing as of the acquisition date may result in a significant fair value adjustment, which can impact the results of operations in the period in which the adjustment is made.
As of December 31, 2025 and December 31, 2024 the Company reported contingent consideration liability of $31.3 million and $47.3 million, respectively, in its consolidated balance sheets related to the Sage Acquisition, USWM Acquisition, and Adamas Acquisition. There was no contingent consideration liability related to the USWM Acquisition and Adamas Acquisition as of December 31, 2025.
The Sage contingent consideration liability was $11.4 million as of the Sage acquisition date, and $31.3 million as of December 31, 2025. The contingent consideration is primarily associated with the fair value of the regulatory and commercial milestone and the sales-based milestones contingent consideration payments. The contingent consideration is related to one non-tradable contingent value right (CVR) which represents the contractual right to receive a contingent payment upon the achievement of the applicable regulatory and commercial milestone and sales-based milestones. The estimated fair value of the contingent consideration was determined using the Monte Carlo simulation. The key assumptions considered in estimating the fair value includes the estimated probability and timing of milestone achievement, such as the probability and timing of obtaining regulatory approval and first commercial sale in Japan, the estimated amount and timing of projected revenues, volatility, estimated discount rates and risk-free interest rate. The drug regulatory approval process is inherently uncertain, and any adverse action taken by the Pharmaceuticals and Medical Devices Agency in Japan can potentially impact our estimated fair value of the regulatory and commercial activities milestone. The possible outcomes for the contingent consideration range from $0 to $234 million on an undiscounted basis. Refer to Note 3, Sage Acquisition, and Note 7, Contingent Consideration, for further information. Subsequent to the Sage Acquisition, in December 2025, Shionogi, the Company's collaboration business partner, announced that it obtained manufacturing and marketing approval in Japan for ZURZUVAE®Capsules 30 mg for the indication of depression and depressive state. As a result, the Company's contingent consideration liability increased as of December 31, 2025.
Impairment of Definite-Lived Intangible Assets
Management assesses the potential impairment of our finite-lived intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The carrying amount of the definite-lived intangible assets, net was $569.5 million as of December 31, 2025. Changes that could prompt such an assessment may include significant or adverse changes in the legal and regulatory environment, the introduction or advancement of competitive products and product candidates, changes in market demand, declining revenue and/or other events that indicate it is more likely than not that fair value is less than its carrying value. If a review of the definite-lived intangibles indicates that the carrying value of certain of these assets is more than the estimated undiscounted future cash flows, an impairment charge is made, as required, to adjust the carrying value to the estimated fair value. Evaluating for impairment requires judgment, including evaluating current economic and competitive circumstances, estimating future cash flows, future growth rates and future profitability. The primary inputs and assumptions used in the model included timing and projections of estimated future revenues and cash flows, loss of exclusivity, and discount rate. If the carrying amount of the asset exceeds its fair value, the Company writes down the asset to its estimated fair value, and an impairment loss equal to the difference between the assets fair value and carrying value is recognized in the consolidated statement of earnings (loss) in the period at which such determination is made. The use of different assumptions could increase or decrease the estimated fair value of assets and could therefore affect any impairment measurement. The Company recognized impairment charges of $20.2 million in 2023 mainly due to the partial write-off of the carrying value of some of its acquired intangible assets, primarily XADAGO. The primary factors that led to the impairment determinations were the following: (1) the performance of the commercial products; (2) forthcoming loss of exclusivity of XADAGO in December 2027, or earlier under certain circumstances, due to settlement agreements with third party generic companies; and (3) the change in the Company's future outlook of the brands.
Results of Operations
In this section, we discuss the results of our operations for the year ended December 31, 2025, compared to the year ended December 31, 2024. Our Annual Report on Form 10-K for the year ended December 31, 2024, includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2023, in Part II, Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operations.
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. The following table provides information regarding our revenues during the years ended December 31, 2025 and 2024 (dollars in thousands):
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| Year Ended December 31, | Change | ||||||||||||||||||||||
| 2025 | 2024 | Amount | Percent | ||||||||||||||||||||
| Net product sales | |||||||||||||||||||||||
| Qelbree | $ | 304,654 | $ | 241,273 | $ | 63,381 | 26 | % | |||||||||||||||
| GOCOVRI | 146,824 | 130,824 | 16,000 | 12 | % | ||||||||||||||||||
| Oxtellar XR | 40,700 | 99,464 | (58,764) | (59) | % | ||||||||||||||||||
| APOKYN | 47,771 | 73,926 | (26,155) | (35) | % | ||||||||||||||||||
| Trokendi XR | 42,421 | 63,201 | (20,780) | (33) | % | ||||||||||||||||||
| ONAPGO | 17,254 | - | 17,254 | 100 | % | ||||||||||||||||||
|
Other(1)
|
26,912 | 29,008 | (2,096) | (7) | % | ||||||||||||||||||
| Total net product sales | $ | 626,536 | $ | 637,696 | $ | (11,160) | (2) | % | |||||||||||||||
| Collaboration revenue (ZURZUVAE) | 52,996 | - | 52,996 | 100 | % | ||||||||||||||||||
| Royalty, licensing, and other revenues | 39,420 | 24,121 | 15,299 | 63 | % | ||||||||||||||||||
| Total revenues | $ | 718,952 | $ | 661,817 | $ | 57,135 | 9 | % | |||||||||||||||
(1)Includes net product sales of MYOBLOC, XADAGO and Osmolex ER.
Net Product Sales
Net product sales decreased by $11.2 million from $637.7 million in 2024 to $626.5 million in 2025. The decrease was primarily due to the decline in net product sales of APOKYN due to lower volume, and decline in net product sales of Oxtellar XR and Trokendi XR due to generic erosion, partially offset by the increases in net product sales from Qelbree and GOCOVRI due to higher volume and higher price, and ONAPGO, which was launched in the second quarter of 2025.
On November 4, 2025, we announced that due to stronger than expected demand for ONAPGO, supplier constraints are impacting our ability to fully meet this demand. ONAPGO is manufactured in Europe, supplied to us by our ONAPGO licensing partner, and packaged in the U.S. by a third-party contract manufacturing organization. We currently rely on single source suppliers to produce and package final dosage forms for ONAPGO. On February 24, 2026, we announced that we have made progress in securing additional product supply of ONAPGO from the current supplier and as a result, has resumed new patient initiation. In addition, we are working with a second supplier that is expected to begin supplying ONAPGO in 2027. A change in any of the suppliers would require regulatory approval which could cause a further delay in manufacturing and a possible loss of sales, which could affect future operating results adversely.
Sales Deductions and Related Accruals
We record accrued product returns and accrued product rebates as current liabilities inAccrued 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. 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.
The following table provides a summary of activities with respect to accrued product returns and rebates and sales discounts for the years ended December 31, 2025 and 2024 (dollars in thousands):
| Accrued Product Returns and Rebates | |||||||||||||||||||||||
|
Product Returns |
Product Rebates |
Sales Discounts
|
Total | ||||||||||||||||||||
| Balance at December 31, 2024 | $ | 53,375 | $ | 115,330 | $ | 12,347 | $ | 181,052 | |||||||||||||||
| Provision related to: | |||||||||||||||||||||||
| Current year sales | 10,563 | 433,223 | 72,982 | 516,768 | |||||||||||||||||||
| Prior year sales | (20,727) | (389) | 40 | (21,076) | |||||||||||||||||||
| Total provision | (10,164) | 432,834 | 73,022 | 495,692 | |||||||||||||||||||
| Less: Actual payments/credits | (5,411) | (424,867) | (71,892) | (502,170) | |||||||||||||||||||
| Balance at December 31, 2025 | $ | 37,800 | $ | 123,297 | $ | 13,477 | $ | 174,574 | |||||||||||||||
| Balance at December 31, 2023 | $ | 57,290 | $ | 96,984 | $ | 10,719 | $ | 164,993 | |||||||||||||||
| Provision related to: | |||||||||||||||||||||||
| Current year sales | 17,677 | 389,842 | 69,589 | 477,108 | |||||||||||||||||||
| Prior year sales | (11,943) | (2,049) | (42) | (14,034) | |||||||||||||||||||
| Total provision | 5,734 | 387,793 | 69,547 | 463,074 | |||||||||||||||||||
| Less: Actual payments/credits | (9,649) | (369,447) | (67,919) | (447,015) | |||||||||||||||||||
| Balance at December 31, 2024 | $ | 53,375 | $ | 115,330 | $ | 12,347 | $ | 181,052 | |||||||||||||||
Accrued Product Returns and Rebates
The accrued product returns balance decreased from $53.4 million as of December 31, 2024 to $37.8 million as of December 31, 2025. This decrease was primarily due to a decrease of $20.7 million of estimated provision for product returns related to prior year sales. The majority of the provision for product returns related to prior year sales is attributable to Qelbree, reflecting continued favorable actual returns experienced in 2025. As a result, the Company changed its estimated provision for product returns based on the most recent experience.
The accrued product rebates balance increased from $115.3 million as of December 31, 2024 to $123.3 million as of December 31, 2025 due to timing of payments associated with government programs.
Provision for Product Returns and Rebates
The provision for product returns decreased from $5.7 million in 2024 to $(10.2) million in 2025. The decrease was primarily due to the aforementioned $20.7 million of favorable adjustment in the estimated provision for product returns related to prior year sales.
The provision for product rebates increased from $387.8 million in 2024 to $432.8 million in 2025. The increase was primarily attributable to higher Qelbree sales and unfavorability in government programs as a result of product price increases in the first quarter of 2025.
Sales Discounts
The provision for sales discounts increased from $69.5 million in 2024 to $73.0 million in 2025 primarily attributable to new product launched in 2025 and higher Qelbree sales in 2025 compared to 2024.
Adjustments related to prior year sales
Adjustments related to prior year sales in 2025 of $21.1 million was approximately 4% of both net product sales and total provision for the year ended December 31, 2025. Adjustments related to prior year sales in 2024 of $14.0 million was less than 3% of both net product sales and total provision for the year ended December 31, 2024. As aforementioned, the majority of this adjustment is attributable to Qelbree, reflecting favorable actual returns experienced in 2025 and 2024.
Collaboration Revenue (ZURZUVAE)
Collaboration revenue (ZURZUVAE) was $53.0 million for the year ended December 31, 2025. The increase was due to the Sage Acquisition in July 2025.
Royalty, Licensing and Other Revenues
Royalty, licensing and other revenues increased by $15.3 million from $24.1 million in 2024 to $39.4 million in 2025, primarily due to an increase in licensing revenues related to the achievement of a regulatory milestone under our collaboration agreement with Shionogi. The royalty term for Orenitram is expected to cease in 2027 which may result in a future decrease to royalty revenues.
Cost of Revenues
The following table provides information regarding our cost of revenues for the years indicated (dollars in thousands):
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Year Ended December 31,
|
Change | ||||||||||||||||||||||
| 2025 | 2024 | Amount | Percent | ||||||||||||||||||||
|
Cost of revenues
|
$ | 74,562 | $ | 77,906 | $ | (3,344) | (4)% | ||||||||||||||||
Cost of revenues 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 revenues also includes our proportionate share of ZURZUVAE manufacturing costs under the Biogen Collaboration Agreement.
Cost of revenues decreased from $77.9 million in 2024 to $74.6 million in 2025. The decrease was primarily driven by lower APOKYN royalties due to lower sales and decrease in Oxtellar XR sales due to generic erosion, primarily offset by increases in cost of revenues from Qelbree due to higher sales, increase in cost of revenues from ONAPGO, which was launched in the second quarter of 2025, and increase in manufacturing costs related to ZURZUVAE under the Biogen Collaboration Agreement from the acquisition of Sage in July 2025.
Research and Development Expense
The following table provides information regarding our Research and development (R&D) expenses for the years indicated (dollars in thousands):
|
Year Ended December 31,
|
Change | ||||||||||||||||||||||
| 2025 | 2024 | Amount | Percent | ||||||||||||||||||||
| Research and development | $ | 106,235 | $ | 108,796 | $ | (2,561) | (2)% | ||||||||||||||||
R&D expenses decreased from $108.8 million in 2024 to $106.2 million in 2025. The decrease was primarily due to decreased clinical program costs on SPN-820, partially offset by the increase in clinical program costs on SPN-817 and the Company's share of R&D expenses from the collaboration arrangement with Biogen. The Company acquired a collaboration agreement with Biogen as part of the acquisition of Sage in July 2025.
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):
|
Year Ended December 31,
|
Change | ||||||||||||||||||||||
| 2025 | 2024 | Amount | Percent | ||||||||||||||||||||
| Selling and marketing expense | $ | 288,651 | $ | 227,293 | $ | 61,358 | 27% | ||||||||||||||||
| General and administrative expense | 196,912 | 94,289 | 102,623 | 109% | |||||||||||||||||||
| Total | $ | 485,563 | $ | 321,582 | $ | 163,981 | 51% | ||||||||||||||||
Selling and marketing expenses increased from $227.3 million in 2024 to $288.7 million in 2025. The increase was primarily due to higher professional and consulting expenses, higher employee-related expenses due to an increase in headcount because of the acquisition of Sage, higher marketing expense related to ONAPGO, which was launched in second quarter of 2025, and the Company's share of commercial expenses from the collaboration arrangement with Biogen in 2025.
General and administrative expenses increased from $94.3 million in 2024 to $196.9 million in 2025. The increase was primarily due to the acquisition-related costs associated with the acquisition of Sage in July 2025. The one-time acquisition-related costs consist primarily of transaction costs of $10.0 million, post-combination employee-related expenses of $38.3 million, and post-combination share-based compensation expense of $25.0 million associated with the acceleration of the vesting of certain Sage's equity awards under the terms of the Merger Agreement and change in value of contingent value rights of the portion of potential CVR payments to former Sage employees which are considered probable under the employee compensation accounting model as of the fourth quarter of 2025.
Amortization of Intangible Assets
The following table provides information regarding the amortization expense for intangible assets during the periods indicated (dollars in thousands):
|
Year Ended December 31,
|
Change | ||||||||||||||||||||||
| 2025 | 2024 | Amount | Percent | ||||||||||||||||||||
| Amortization of intangible assets | $ | 89,456 | $ | 77,977 | $ | 11,479 | 15% | ||||||||||||||||
Amortization of intangible assets increased from $78.0 million in 2024 to $89.5 million in 2025. The increase is primarily due to ONAPGO and ZURZUVAE intangible assets amortization expense in 2025 offset by amortization expense in 2024 for Oxtellar XR and Namzaric intangible assets, which were fully amortized in 2024. Prior to the FDA approval of ONAPGO in February 2024, ONAPGO was previously accounted for as an indefinite-lived intangible asset not subject to amortization. ZURZUVAE intangible asset was acquired as part of the Sage Acquisition in July 2025.
Contingent Consideration Loss (Gain)
The following table provides information regarding the Contingent consideration loss (gain) during the periods indicated (dollars in thousands):
|
Year Ended December 31,
|
Change | ||||||||||||||||||||||
| 2025 | 2024 | Amount | Percent | ||||||||||||||||||||
|
Contingent consideration loss (gain)
|
$ | 25,419 | $ | (6,110) | $ | 31,529 | (516)% | ||||||||||||||||
Contingent consideration was a loss of $25.4 million for the year ended December 31, 2025, and a gain of $6.1 million for the year ended December 31, 2024, respectively. The change was primarily due to an increase in fair value of the Sage contingent consideration associated with the regulatory and commercial milestone with the approval of ZURZUVAE for the treatment of MDD in Japan in December 2025, and the accretion of the USWM contingent consideration liabilities to the full milestone payment amounts with the approval of ONAPGO by the FDA in February 2025.
Other Income (Expense)
The following table provides the components of other income (expense) during the years indicated (dollars in thousands):
|
Year Ended December 31,
|
Change | ||||||||||||||||||||||
| 2025 | 2024 | Amount | Percent | ||||||||||||||||||||
| Interest and other income, net | $ | 13,253 | $ | 16,204 | $ | (2,951) | (18)% | ||||||||||||||||
| Total | $ | 13,253 | $ | 16,204 | $ | (2,951) | (18)% | ||||||||||||||||
Interest and other income, net decreased to $13.3 million in 2025 from $16.2 million in 2024. The decrease was due to lower interest income on marketable securities largely driven by sale of marketable securities holdings of which the proceeds were used to partially fund the Sage Acquisition in July 2025.
Income Tax Expense (Benefit)
The following table provides information regarding our income tax expense (benefit) during the periods indicated (dollars in thousands):
| Year Ended December 31, | Change | ||||||||||||||||||||||
| 2025 | 2024 | Dollar | Percent | ||||||||||||||||||||
|
Income tax expense (benefit)
|
$ | (10,480) | $ | 24,005 | $ | (34,485) | (144)% | ||||||||||||||||
| Effective tax rate | 21 | % | 25 | % | |||||||||||||||||||
Income tax expense (benefit) was a benefit of $10.5 million and expense of $24.0 million for the years ended December 31, 2025 and December 31, 2024, respectively. The 2025 income tax benefit is primarily driven by pre-tax book loss as compared to prior year. The effective tax rate is impacted by the favorable effect of state taxes and the research and development credit, which is offset by the effect of expenses related to current and prior year transactions that are not deductible for tax purposes. Included within transaction costs are payments to former employees of Sage which are not deductible for tax purposes.
Net Earnings (Loss)
The following table provides information regarding our Net earnings (loss) during the periods indicated (dollars in thousands):
|
Year Ended December 31,
|
Change | ||||||||||||||||||||||
| 2025 | 2024 | Amount | Percent | ||||||||||||||||||||
| Net earnings (loss) | $ | (38,550) | $ | 73,865 | $ | (112,415) | (152)% | ||||||||||||||||
The decrease in Net earnings (loss) was primarily due to higher amortization of intangible assets, higher selling, general, and administrative expenses, and higher contingent consideration loss as a result of the acquisition of Sage in 2025, offset by higher revenues.
Financial Condition, Liquidity and Capital Resources
Summary of Cash Flows
The following table summarizes the major sources and uses of cash for the periods set forth below (dollars in thousands):
|
Year Ended December 31,
|
Change | ||||||||||||||||
| 2025 | 2024 | Amount | |||||||||||||||
| Net cash provided by (used in): | |||||||||||||||||
| Operating activities | $ | 47,331 | $ | 171,951 | $ | (124,620) | |||||||||||
| Investing activities | 4,106 | (189,867) | 193,973 | ||||||||||||||
| Financing activities | 9,130 | 12,193 | (3,063) | ||||||||||||||
|
Net change in cash, cash equivalents, and restricted cash
|
$ | 60,567 | $ | (5,723) | $ | 66,290 | |||||||||||
Operating Activities
Net cash provided by operating activities was $47.3 million in 2025 compared to $172.0 million in 2024. The decrease in cash flows provided by operating activities was primarily due to the decrease in net earnings for the year ended December 31, 2025 as well as changes in working capital. The Company reported a net loss of $38.6 million and net earnings of $73.9 million for the years ended December 31, 2025 and December 31, 2024, respectively. The decline in earnings is principally due to higher costs and expense in 2025 primarily due to the Sage Acquisition in July 2025. The Company recorded $72.9 million acquisition-related costs in 2025.
Investing Activities
Net cash provided by investing activities was $4.1 million in 2025 compared to $189.9 million used in investing activities in 2024. The change was primarily due to the following:
•Net cash inflows from marketable securities activity were higher in 2025 compared to the same period in 2024 due to maturities of the marketable securities, whereby the proceeds were used to fund the Sage Acquisition in 2025 offset by
•Cash outflows related to the Sage Acquisition in 2025 (net of cash acquired) of $293.1 million.
Net cash used in investing activities in 2024 was primarily due to purchases of marketable securities, partially offset by higher cash inflows from the maturities of marketable securities.
Financing Activities
Net cash provided by financing activities was $9.1 million in 2025 compared to $12.2 million provided in the same period in 2024. The change was primarily due to the payment of the USWM contingent consideration milestones, offset by higher proceeds from the issuances of common stock in 2025 due to exercising of stock options.
Cash, Cash Equivalents, Marketable Securities, and Restricted Cash
Cash and cash equivalents, marketable securities, and restricted cash are comprised of the following (dollars in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Cash and cash equivalents | $ | 128,448 | $ | 69,331 | |||||||
| Marketable securities | 180,222 | 384,281 | |||||||||
| Restricted cash | 1,450 | - | |||||||||
| Total | $ | 310,120 | $ | 453,612 | |||||||
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. Continued cash generation is highly dependent on the success of our commercial products, as well as the success of our product candidates if approved by the FDA. 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 and Oxtellar XR in September 2024; the potential unfavorable impact of the forthcoming loss of exclusivity of XADAGO; funding for research and development of our product candidates; the additional funding for the launch of ONAPGO, which was approved by the FDA in February 2025 and launched in April 2025, and the additional funding for the marketing of ZURZUVAE which was acquired as part of the Sage Acquisition in July 2025. Our marketable securities were lower in 2025 than during 2024 as a portion of the marketable securities we held were sold to fund the Sage Acquisition.
The Company believes its balances of cash, cash equivalents and unrestricted marketable securities, which totaled $308.7 million as of December 31, 2025, along with cash generated from ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements over the next twelve months and beyond.
We may, from time to time, consider raising additional capital through: new collaborative arrangements; strategic alliances; additional equity and/or debt financings; or financing from other sources, especially in conjunction with opportunistic business development initiatives. We will continue to actively manage our capital structure and to consider all financing opportunities that could strengthen our long-term financial profile. Any such capital raises may or may not be similar to transactions in which we have engaged in the past. There can be no assurance that any such financing opportunities will be available on acceptable terms, if at all.
Material Cash Requirements
Our material cash requirements include the following contractual and other obligations.
Leases
Our operating lease commitments include leases of fleet vehicles, leases of certain facilities, including the lease of the current headquarters office and laboratory space. As of December 31, 2025, we have fixed lease payment obligations of $47.0
million, with $12.4 million payable within twelve months. Refer to Note 13, Leasesin 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. An amendment to the contract manufacturing agreement with Merz was executed in July 2025. Amendments to the contract manufacturing agreement in July 2025 included, among other things, the removal of the annual minimum purchase requirement of MYOBLOC, and the Company's agreement to pay a nonrefundable annual fee of €3.0 million to cover general maintenance and reservation costs for the manufacturing facilities. For further discussion on the embedded operating lease related to the Merz Agreement, refer to Note 13, Leasesin the Notes to the Consolidated Financial Statements in Part II, Item 8of this report.
Milestone Payment Obligations from Acquisitions
As of December 31, 2025, no amounts are due from the contingent consideration milestone payable related to the Adamas Acquisition. As of December 31, 2024, there was one remaining outstanding milestone, Milestone 2025. Milestone 2025 (subject to certain terms and conditions and may only be achieved once) is payable upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $225 million during any consecutive twelve-month period ending on or before December 31, 2025. At December 31, 2025, Milestone 2025 was not met in 2025 and therefore is no longer outstanding nor payable.
We also had contingent consideration milestones payable related to the USWM Acquisition. At December 31, 2024, there were two remaining outstanding milestones, one related to the approval of ONAPGO and the other related to the commercial launch of ONAPGO. Both milestones were met in 2025 and the liability was accreted to the milestone amounts due resulting in the recognition of $7.7 million change in fair value of contingent consideration during 2025. In February 2025, the Company paid the $25 million milestone related to the FDA's approval of ONAPGO in February 2025. ONAPGO was launched in April 2025 and the $30 million milestone payment related to the commercial launch of ONAPGO, subject to certain holdbacks as permitted under the Sale and Purchase Agreement Relating to USWM Enterprises, LLC, dated April 28, 2020, by and between US WorldMeds Partners, LLC and Supernus Pharmaceuticals, Inc., (USWM Sale and Purchase Agreement) became due and payable. Of the $30 million, the Company paid $2.3 million in the second quarter of 2025 and the remaining amount held was reclassified to Other current liabilities in the consolidated balance sheet as the milestone had been met but payment remains subject to certain holdbacks permitted under the USWM Sale and Purchase Agreement. The Company paid $1.9 million of the principal amount held back in the third quarter of 2025. The outstanding liability as of December 31, 2025 is $26.6 million, which included the principal amount held back and the interest. During the third quarter of 2025, USWorldsMeds Partners, LLC filed a complaint in the Superior Court of the State of Delaware seeking payment for the withheld amount, plus interest, attorney's fees and costs. See Part I Item 3 Legal Proceedingsfor further information on this matter.
The Company has contingent consideration milestones payable related to the Sage Acquisition. As of December 31, 2025, all milestone payments remain outstanding and payable upon achievement. Subject to the terms of the Sage CVR Agreement, $1.00 per share (equal to aggregate of $66.9 million) would be payable if in any calendar year between closing and end of 2027, annual net sales (as defined in the Sage CVR Agreement) of ZURZUVAE allocable to Supernus or any of its affiliates reach $250 million or more in the U.S., $1.00 per share (equal to aggregate of $66.9 million) would be payable if in any calendar year between closing and end of 2028, annual net sales (as defined in the Sage CVR Agreement) of ZURZUVAE allocable to Supernus or any of its affiliates reach $300 million or more in the U.S., (3) $1.00 per share (equal to aggregate of $66.9 million) would be payable if in any calendar year between closing and end of 2030, annual net sales (as defined in the Sage CVR Agreement) of ZURZUVAE allocable to Supernus or any of its affiliates reach $375 million or more in the U.S., and (4) $0.50 per share (equal to aggregate of $33.4 million) per share would be payable upon the first commercial sale in Japan to a third-party customer after regulatory approval for ZURZUVAE for the treatment of major depressive disorder (MDD) in Japan by June 30, 2026. As of December 31, 2025, the possible outcomes for the contingent consideration range, on an undiscounted basis, range from $0 to $234 million.
Further, with the Sage Acquisition in the third quarter of 2025, our investment balance decreased as marketable securities were sold to fund the acquisition of Sage. Refer to Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations and Management's discussion on Financial Condition, Liquidity and Capital Resourcesof this Annual Report on Form 10-K for the period ended December 31, 2025, and Note 1, Business Organization, in the Notes to the Consolidated Financial Statements in Part II, Item 8of this Annual Report.
In January 2026, the Company entered into an agreement with former Biscayne security holders wherein the Company will pay $10.0 million on June 30, 2026 for settlement of certain developmental milestones under the merger agreement entered into in 2018.
Biogen Collaboration Obligations
Pursuant to the Biogen Collaboration Agreement, we are jointly commercializing ZURZUVAE in the United States with Biogen. We have a contractual obligation to share equally in all operating profits and losses arising from the sales of ZURZUVAE in the U.S. Consequently, we are required to fund 50% of the development and commercialization expenses incurred for the U.S. market, including 50% of the costs associated with non-discretionary FDA post-marketing requirements, such as required studies in adolescent populations. To the extent that shared commercialization and development expenses exceed net revenues in any given period, we are obligated to make cash payments to fund our share of the operating loss.
While Biogen records net product sales for ZURZUVAE in the U.S., the collaboration necessitates a periodic reconciliation process to ensure the equal sharing of economics, which results in net expense reimbursement payments between the parties. We may incur obligations to reimburse Biogen for our share of selling, general, and administrative expenses, and research and development expenses, in each case, when Biogen's incurred costs exceed ours.
We are also currently responsible for the manufacturing supply chain for the collaboration. This requires us to finance the costs of manufacturing active pharmaceutical ingredients (API) and bulk drug product for commercialization in territories outside of the United States other than Japan, the Republic of Korea and Taiwan (the Biogen Territory). While Biogen is obligated to reimburse us for the costs of supply related to marketing and sales in the Biogen Territory, we are required to fund the initial cash payments to third-party contract manufacturing organizations prior to receiving reimbursement from Biogen. These manufacturing activities result in working capital requirements that fluctuate based, in part, on Biogen's long-term demand forecasts for sales in the Biogen Territory and will continue until such time as Biogen assumes manufacturing responsibilities for the Biogen Territory as permitted under the agreement.
Navitor Development Agreement
We have obligations from the Development Agreement with Navitor Inc. we entered into in April 2020. The Company can terminate the Development Agreement upon 30 days' notice. Under the terms of the Development Agreement, the Company and Navitor Inc. will jointly conduct a Phase 2 clinical program for NV-5138 (SPN-820) for treatment-resistant depression. The Company will bear all of Phase 1 and Phase 2 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. These milestone payments include an additional license or acquisition fee depending on whether the Company ultimately licenses or acquires NV-5138, and subsequent clinical, regulatory and sales milestone payments. The Company has an option to acquire or license NV-5138 (SPN-820), for which additional payments would be required. In the second quarter of 2024, the Company consented to payment of additional Phase II development costs for NV-5138 (SPN-820) as they are incurred, but reserves the right to terminate payment of future development costs at its discretion. On May 5, 2025, the Company entered into a binding memorandum of understanding (MOU) with Navitor Inc. Under the MOU, the Company agreed to conduct further development activities at its own cost and Navitor Inc. agreed to waive its right to receive the $100 million Initial Acquisition Fee under the Development Agreement. In addition, pursuant to the MOU the Company exercised the Purchase Option to purchase all assets of Navitor and its affiliates pursuant to the Development Agreement, subject to, among other things, completion of satisfactory due diligence by the Company, and negotiation and execution of a definitive Purchase Agreement. On June 24, 2025, October 31, 2025 and December 22, 2025, the Company amended the MOU with Navitor to extend the negotiation period.
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 amount of future royalty obligations are dependent on future net product sales of each of the respective products under a license agreement.
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. 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 twelve months.
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. 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, Summary of Significant Accounting Policiesin the Notes to Consolidated Financial Statements in Part II, Item 8of this report.
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