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Supernus Slashes IPO Price, Comes Out Strong on Debut

By Catherine Shaffer
Staff Writer

After dropping its price drastically from a target range of $12 to $14, Supernus Pharmaceuticals Inc., of Rockville, Md., priced an initial public offering of 10 million shares of common stock at $5 per share. But the stock (NASDAQ:SUPN) opened strong and by the end of the day had gained 37 cents, or 7.4 percent, to close at $5.37.

The company, which first filed its S-1 in late 2010, will use net proceeds of $47.8 million – or $55.5 million if underwriters exercise their overallotment option in full – for the commercial launch and launch preparation for its epilepsy drugs, SPN-538 and SPN-804, plus continued development of SPN-810 and SPN-812 for attention deficit hyperactivity disorder (ADHD). (See BioWorld Today, Dec. 28, 2010.)

Supernus specializes in developing products for central nervous system disorders, using its technology platforms, including the Microtrol multiparticulate delivery platform, the Solutrol matrix delivery platform and the EnSoTrol osmotic delivery system. Those technologies have been used in some approved and marketed products, including Carbatrol (carbamazepine), Equetro (carbamazepine), Adderall XR (mixed amphetamine salts), Sanctura XR (trospium chloride), Oracea (doxycycline) and Intuniv (guanfacine).

The company has submitted a new drug application for its lead epilepsy product, SPN-538, and has a PDUFA date approaching in July. The FDA will make a decision on next-in-line candidate SPN-804 in October.

SPN-538 is a once-daily, extended-release version of topiramate, which is marketed by Johnson & Johnson under the brand name Topamax. The drug enhances the inhibition of gamma-aminobutyric acid (GABA). It is currently only available in immediate-release form.

SPN-538 is intended to improve patient compliance and tolerability, delivering the drug at a lower input rate to produce more consistent blood levels over an extended period of time. Fourteen clinical trials support Supernus' application for SPN-538.

SPN-804 is a once-daily, extended-release formulation of oxcarbazepine, which is marketed by Novartis AG under the brand name Trileptal. Oxcarbazepine blocks voltage-dependent sodium channels, and is notorious for its many side effects, such as dizziness, double vision, somnolence, nausea and vomiting.

The extended-release formulation is designed to deliver lower peak plasma concentrations and more consistent blood levels of the drug compared to immediate-release formulations. Nine clinical trials support Supernus' application for SPN-804.

Its ADHD product, SPN-810, is in a Phase IIb trial for impulsive aggression in patients with ADHD, and SPN-812 completed a Phase IIa trial as a nonstimulant therapy for ADHD.

Supernus began a Phase IIb trial of SPN-810, with results expected in the second half of 2012. If approved, it would be the first product marketed in its indication. It has completed four prior trials of SPN-810.

In an open-label, dose-ranging trial in 78 children between 6 and 12 years of age, SPN-810 was well tolerated and produced improvements in outcome measures such as conduct problems and ADHD scales.

Supernus also is developing SPN-809, for depression, and has some other earlier-stage products.

SPN-812, a norepinephrin reuptake inhibitor, is in Phase II trials. Supernus contended it will be more effective, with a better side effect profile than other nonstimulant therapies. In its proof-of-concept Phase IIa trial completed in the first quarter of 2011 , SPN-812 was well tolerated and showed benefit over placebo as a treatment for ADHD.

The offering leaves about 24.9 million shares outstanding. Underwriters have been granted a 30-day option to purchase up to 1 .65 million additional shares of common stock at the IPO price.

In other financings news:

• DARA Biosciences Inc., of Raleigh, N.C., sold Series B-2 convertible preferred stock (convertible to 10.3 million shares of common stock), plus warrants to purchase an equal number of shares of common stock, for gross proceeds of $10.3 million. Proceeds will be used for the launch of Soltamox in breast cancer and Bionect in radiation skin damage in cancer treatment. Ladenburg Thalmann and Co. Inc. served as the placement agent for the offering.

• Galecto Biotech AB, of Lund, Sweden, added two additional investors, Sunstone Capital and SEED Capital to its first round financing to advance a series of small-molecule inhibitors of Galectin-3 for treating idiopathic pulmonary fibrosis and other conditions. SEED Capital's Carsten Shou is joining Galecto's board. Merck Serono Ventures and Novo A/S have previously invested in the company.

• Hatchtech Pty. Ltd., of Melbourne, Australia, said it secured additional capital, bringing the total funds raised in the current round to A$7.8 million (US$8.1 million). Funds will support ongoing preparations for Phase III trials testing the firm's head lice treatment DeOvo, a topical metalloprotease inhibitor designed to impede all stages of the louse life cycle, from egg to adult. The company also appointed a new CEO, Ross Macdonald.

• Raptor Pharmaceutical Corp., of Novato, Calif., agreed to an at-the-market stock sale with Cowen and Co. LLC to sell its common stock with a value up to $40 million. Cowen will act as the sales agent for any such sales, and the stock will be sold at market prices at that time. Proceeds will be used to support commercial launch of RP103, a delayed-release cysteamine bitartrate formulation, for nephropathic cystenosis, and to develop the same compound for non-alcoholic steatohepatitis and Huntington's disease.