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.


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.


Todd Campbell has no position in any of the stocks mentioned. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.