What happened

After reporting disappointing interim news from its phase 3 study of SPN-810 as a treatment for aggressive impulses in ADHD patients, shares in Supernus Pharmaceuticals (NASDAQ:SUPN) tumbled 23.4% today.

So what

Supernus Pharmaceuticals markets two commercial-stage epilepsy medicines, but a lot of investor's optimism has been tied instead to SPN-810, a drug that's being evaluated in two phase 3 trials for use in controlling aggressive impulses in ADHD patients.

A man holds his head in his hands in front of a chart showing a declining share price.

IMAGE SOURCE: GETTY IMAGES.

After the closing bell yesterday, Supernus Pharmaceuticals announced that it's discontinuing one of the two doses of SPN-810 that were being evaluated in its trials following an independent interim review. Until now, the company had been randomizing patients to receive 18 mg or 36 mg of SPN-810 or a placebo, but from now on it will study only the 36 mg dose.

Management thinks the 36 mg dose gives SPN-810 its best shot at a phase 3 success, but investors are concerned that abandoning the 18 mg dose implies a greater risk of an overall SPN-810 trial failure.

Now what

SPN-810 is the most advanced drug in Supernus Pharmaceuticals' pipeline, and investors are clearly disappointed that the interim SPN-810 data wasn't better. Nevertheless, investors might not want to get too bearish because of yesterday's news. SPN-810's trials continue to enroll patients, and there's still a chance that the 36 mg dose will be successful. Following today's drop in share price, a trial failure might already be priced in.

If so, an argument could be made for buying Supernus Pharmaceuticals' shares on sale. In the second quarter, net product sales of $73 million were up 46% from the same quarter in 2016, and EPS of $0.32 was up from $0.18 last year. Management's forecasting revenue of at least $280 million and operating income of at least $82 million this year, and the company appears on solid financial ground, with $198 million in cash and securities on its balance sheet exiting June.