In response to the announcement of good-but-not-great clinical data from two phase 3 studies, shares of Supernus Pharmaceuticals (NASDAQ: SUPN), a biopharma focused on diseases of the central nervous system, fell 13% as of 11:01 a.m. EST on Thursday.
Supernus shared data from its phase 3 P301 and P303 studies today. These trials were testing its experimental drug SPN-812 as a hopeful treatment for attention deficit hyperactivity disorder, or ADHD, in children ages 6 to 11.
Here are the key takeaways from the two studies.
- Primary endpoints were reached in both studies.
- SPN-812 was shown to be well tolerated by patients, with low rates of adverse events and discontinuation rates.
Management also stated that top-line data from its P302 study and P304 study should be available by the end of the year and the end of the first quarter of 2019, respectively.
A New Drug Application, or NDA, for SPN-812 is expected to be sent in during the back half of 2019. If all goes well, it should be on the market in the second half of 2020.
Supernus' CEO Jack Khattar stated, "We believe these data from the two pivotal Phase III studies, which are consistent with the Phase IIb data, demonstrate that SPN-812 is a well-differentiated novel non-stimulant treatment option for many children with ADHD."
So if the news was good, why is Wall Street knocking down the company's share price? The primary reason is that analysts were hoping that SPN-812 would take effect sooner and cause fewer side effects than currently existing drugs such as Eli Lilly & Company's Strattera. Without those benefits, it might be hard for Supernus to market the drug successfully.
Some market watchers still believe that SPN-812 could go on to generate hundreds of millions in annual sales if it finds its way to market. For context, Supernus is expected to generate about $400 million in total sales this year. If that prediction proves to be correct, then SPN-812 could still generate meaningful shareholder value one day.
My view is that Supernus' stock looks very cheap today when compared to its long-term growth potential. Opportunistic investors might want to take advantage of today's pullback by adding a few shares of this long-term winner to their portfolio.
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