SUPN
#Thank you, <UNK>.
Good morning, everyone, and thanks for taking the time to join us as we discuss our 2017 fourth quarter and full-year results.
2017 was another year of record growth and significant accomplishments for Supernus.
We closed the year with record quarterly and annual financial results.
Total revenues for 2017 grew by 41% reaching for the first time the $300 million mark with earnings before income tax growing by 100% and reaching a milestone of $100 million.
We were able to achieve the strong growth in earnings before income tax despite our increased investments in our sales force to a sizable expansion of 40 additional sales representatives and increased R&D investments behind 8 ongoing Phase III studies on SPN-810 and SPN-812.
Total net sales for 2017 grew by 40% over 2016 reaching $294.1 million at the top end of our revised guidance.
This robust performance in net sales was fueled primarily by the impressive launch of Trokendi XR in migraine and the continued strong growth in Oxtellar XR.
Total prescriptions for Trokendi XR and Oxtellar XR as reported by IQVIA showed growth of 34% in 2017 over full-year 2016 and 47% in the fourth quarter of 2017 over the same period in 2016.
The company launched Trokendi XR in April of 2017 as a new product for prophylaxis of migraine headaches in adults and adolescents 12 years and older.
At year-end 2016 prior to the launch of migraine, Trokendi XR had a national market share of approximately 2.87% of the total IQVIA topiramate prescriptions.
1 year later, as of the end of 2017, Trokendi XR reached a national market share of approximately 4.63% representing a 61% growth in market penetration.
The acceleration of Trokendi XR prescription growth continued in the fourth quarter of 2017 where total prescriptions increased by 16,470 prescriptions or 11.3% as compared to the third quarter of 2017.
This growth is more than 4x the increase of 3,654 prescriptions in the fourth quarter of 2016 over the third quarter of 2016.
In addition, Trokendi XR exited 2017 with an all-time high market share of 10.24% of topiramate prescriptions in our target call-on universe of physicians.
Similarly, Oxtellar XR exited 2017 with a market share of 10.22% of oxcarbazepine prescriptions in our target call-on universe of physicians.
Assuming consistent commercial execution and support for a product, typically a product's market share and the target call-on universe can be a good indicator for the levels where the national market share is heading to.
In summary, our commercial organization had a year of superb execution on both products.
We are very pleased with the double-digit prescription growth for Oxtellar XR in 2017 despite the fact that Trokendi XR received the bulk of our attention and resources for most of the year.
We continue to believe that the potential of Oxtellar XR and Trokendi XR in neurology is more than $500 million in peak sales and can exceed $800 million with the bipolar opportunity for Oxtellar XR.
Moving on to our pipeline and starting with SPN-812, a novel non-stimulant for ADHD.
Overall enrollment in the 4 ongoing Phase III trials has been progressing well and is at approximately 38% of the total number of patients to be randomized.
The program consists of 4 3-arm placebo-controlled trials, 2 of which are pediatric trials and the other 2 are adolescent trials.
In addition, patients who complete these trials can choose to enroll in an open-label extension trial.
We expect enrollment to continue till mid-2018 and to have data from this Phase III program available by the first quarter of 2019.
Regarding SPN-810, enrollment continues in both Phase III trials in impulsive aggression in pediatric patients who have ADHD.
The first trial is now at approximately 80% enrollment and the second trial is at approximately 65%.
Enrollment in both trials is expected to continue through mid-2018 and we anticipate having data by the first quarter of 2019.
In addition, a Phase III trial for SPN-810 treating impulsive aggression in adolescents who have ADHD is expected to start in mid-2018.
We do not expect this trial to materially affect the overall timing of the regulatory submission process for SPN-810.
Patients who have completed the SPN-810 trials continue to enter the open-label extension study at a high rate.
We believe this rate of enrollment, which is approximately 90%, reflects a high level of satisfaction from physicians and patients.
This study is important in collecting longer-term data on an increasingly larger number of patients as the open-label study continues.
The longer duration data will help provide us with a better picture of longer-term tolerability for SPN-810, particularly in growing young children.
Regarding Oxtellar XR, the investigator-sponsored trial in bipolar disorder is expected to complete enrollment by year-end 2018.
This randomized open-label study is designed to enroll approximately 90 patients among 3 study sites with each patient completing 6 weeks of therapy on either Oxtellar XR or oxcarbazepine immediate release added to existing therapy.
We're very excited about our late stage pipeline, which now consists of 3 sizable opportunities in psychiatry with SPN-810 and SPN-812 in Phase III clinical testing and Oxtellar XR in a mid-stage proof-of-concept trial.
Our strategy in 2018 is to advance our SPN-810 and SPN-812 through Phase III clinical development moving us closer to our goal of delivering from our current pipeline 2 novel and differentiated treatments, both addressing billion dollar market opportunities.
Finally, we continue to be active on the corporate development side looking for neurology and psychiatry assets that represent a strategic fit with our portfolio.
I will now turn the call over to Greg, who will provide more details on our fourth quarter and full-year operating performance.
Thanks, <UNK>, and good morning, everyone.
As I review our fourth quarter and full-year 2017 financial results, I'm reminding listeners to refer to the fourth quarter and full-year earnings press release issued yesterday after the market closed.
Net product sales for Trokendi XR for the fourth quarter of 2017 were $69.1 million, a 48% increase as compared to the prior year period.
Net product sales for Oxtellar XR in the fourth quarter of 2017 was $17.2 million, a 19.4% increase as compared to the prior year period.
Total revenue for the fourth quarter of 2017 was $88.4 million, a 41.7% increase as compared to $62.4 million in 2016.
Total revenue for the fourth quarter of 2017 included net product sales of $86.3 million, non-cash royalty revenue of $2 million and licensing revenue of $72,000 as compared to $61.1 million, $1.2 million and $52,000 respectively in the fourth quarter of 2016.
As regards full-year results, net product sales for Trokendi XR were $226.5 million, a 43% increase as compared to 2016.
Net product sales for Oxtellar XR for full-year 2017 was $67.6 million, a 30.8% increase as compared to 2016.
I want to point out that net product sales grew by approximately $84 million from 2016 to 2017 whereas net product sales grew by approximately $67 million from 2015 to 2016.
These data clearly demonstrate that growth in net product sales has accelerated from 2016 into 2017.
Total revenue for full-year 2017 was $302.2 million as compared to $215 million in 2016.
Total revenue for full-year 2017 included net product sales of $294.1 million, non-cash royalty revenue of $6.4 million and licensing revenue of $1.8 million as compared to $210.1 million, $4.7 million and $0.2 million respectively for 2016.
Turning now to expenses.
For the fourth quarter of 2017, research and development expenses were $16.2 million as compared to $13.3 million in the same quarter in the prior year.
For full-year 2017, research and development expenses were $49.6 million as compared to $42.8 million for 2016.
The year-over-year increase is primarily due to the initiation of the 4 Phase III clinical trials for SPN-812, which commenced in the second half of 2017.
Selling, general and administrative expenses in the fourth quarter of 2017 were $33.8 million as compared to $29.1 million in the same quarter of the previous year.
For full-year 2017, selling, general and administrative expenses were $137.9 million as compared to $106 million in 2016.
The increase for both periods is primarily to the expansion of the salesforce by 40 sales representatives.
These were fully deployed as of the fourth quarter of 2017.
In addition, the development and production of promotional materials and marketing programs associated with the launch of the migraine indication for Trokendi XR and an increase in share-based compensation expense contributed to the year-over-year expense increase.
Operating earnings in the fourth quarter of 2017 were $34.3 million, a 110.4% increase over $16.3 million in the same period the prior year.
Operating earnings for full-year 2017 were $99.5 million, an 83.6% increase over $54.2 million in 2016.
The improvement in operating earnings in both periods is primarily due to increased net product sales.
GAAP net earnings in the fourth quarter of 2017 were $13.7 million as compared to $14.3 million in the same period last year.
GAAP net earnings for full-year 2017 were $57.3 million as compared to $91.2 million in 2016.
Both the fourth quarter and full-year 2017 net earnings results reflect the impact of non-recurring tax items.
First, there is an unfavorable impact of approximately $10 million in 2017 related to the enactment of the Tax Cuts and Jobs Act in 2017.
Second, the release of a valuation allowance on our deferred tax assets in 2016 created a non-recurring favorable impact of $56 million in 2016.
Excluding these 2 non-recurring impacts from the reported results in 2017 and 2016, net earnings would have increased by 307% for the quarter and 90% for the full year.
I refer you to table in our fourth quarter and full-year 2017 press release issued yesterday for further detail.
Going forward, we expect that the Tax Cuts and Jobs Act will have a beneficial impact on the company yielding an effective tax rate in 2018 ranging from 23% to 25%.
GAAP diluted earnings per share for the fourth quarter of 2017 and 2016 were $0.26 per share.
GAAP diluted earnings per share were $1.08 in 2017 compared to $1.76 per share in 2016.
Excluding the non-recurring tax effects on net earnings as just described, diluted earnings per share in the fourth quarter of 2017 would have been $0.44 per share or 4x higher than $0.10 per share in the fourth quarter of 2016.
Full-year diluted earnings per share for 2017 would have been $1.26 as compared to $0.68 in 2016 or an increase of 85%.
Weighted average diluted common shares outstanding were approximately 53.5 million and 53.3 million in the fourth quarter and full-year of 2017 respectively as compared to approximately 52 million and 51.7 million in each of the respective periods the prior year.
As of December 31, 2017 the company had $273.7 million in cash, cash equivalents, marketable securities and long-term marketable securities, a $108.2 million increase or 65% higher than $165.5 million as of December 31, 2016.
Now turning to financial guidance for 2018.
We expect full-year 2018 net product sales to be in the range of $375 million to $400 million.
At the midpoint of the range, this represents year-over-year growth of approximately $93 million or 32% as compared to 2017.
R&D expenses in 2018 are expected to total approximately $80 million.
Operating earnings are expected to range from $125 million to $135 million.
Full-year 2018 operating earnings include approximately $7 million of licensing and non-cash royalty revenue.
I will now turn the call back to the operator for questions.
Regarding SPN-810, let me just clarify what we've been saying.
The 90% that we've been citing, that's actually the rate of enrollment into the open-label extension out of those who complete the first main section of the trials and that continues to be the case actually.
So, that has not changed.
We continue to see 90%, 91% enrollment from those who complete the main trial and enroll ---+ choose to enroll into the open-label extension.
So, we continue to be very excited about the program.
And as you may have noticed, we also are planning on initiating a third trial, which is an adolescent patient population, hopefully by mid of this year.
So, that's a new trial that we are embarking on to generate data in the adolescent patient population that we believe we need to have some of that data in the NDA filing.
So, we continue to be excited about the program and what we continue to see in the open-label extension.
As far as business development, our strategy continues to be consistent with what we've been saying as far as the kind of assets that we are looking at, the priorities that we are looking at in neurology and psychiatry combined.
We are looking at earlier stage kind of pipeline opportunities as well because you're absolutely right, 12 months from now or less than 12 months from now hopefully we're looking at positive data from both 810 and 812 and these 2 products are marching towards an NDA filing, we have to reload the pipeline.
So, we're very conscious about that and we're working pretty hard to reload the pipeline with earlier stage assets.
And clearly once we have something which is more meaningful or something more concrete, we'll be more than happy to share that with everyone.
But, Ken, clearly one of the places the company's going to look very keenly are other indications for 810 for IA and diseases such as autism, schizophrenia, PTSD, et cetera that we've said before and I think we'll be trying to frame those out in a more discrete sort of way as we move forward.
I'll comment on the salesforce expansion and let Greg take the other 3 questions.
As far as the salesforce, we ---+ as we've always done it in the past is we do things in stages and step-wise approach because we always want to make sure any additional investment, whether it's in the salesforce or R&D or whatever it is, is going to give us the return we expect.
So, clearly we will be monitoring closely the growth in prescriptions and the expansion and the activity in the field and we'll make these decisions whether we need to expand or we are interested in expanding the salesforce any further more than we've already done.
We feel very comfortable with the size that we have now.
But exactly to your point if we continue to see acceleration in the growth and specifically related to the expansion we just did back in the fourth quarter of last year, absolutely we will be even more excited and more encouraged to expand it further if we believe that return on investment is going to be coming.
So with that, I'll let Greg answer the other questions on SG&A, stocking and free cash flow.
Regards stocking, destocking; we look at that very, very carefully.
There are I think minor perturbations quarter-to-quarter as they always are, but we have not seen ---+ and even going into this quarter we have not seen any significant movements one way or the other in terms of stocking or destocking.
As regards the quarter-to-quarter drop off in SG&A, I'd say that's really the confluence of some lumpy spending programs which sort of ramped up in the third quarter.
These would include some Medical Affairs Programs, which do tend to have some lumpiness to their spending patterns.
Number 2, some one-time expenditures associated with the onboarding the sales force, the expenses with onboarding the group that tend to be very front-end loaded and once they're employed into the field, expenses do tend to wane off a little bit.
And then programs, particularly in the supply chain area regarding ---+ regarding samples and other programs which we have running there.
Regarding free cash flow for the year, I would expect it to be on par with the free cash flow for this year so I would say something around $100 million is probably a reasonable expectation.
Regarding Oxtellar XR, it's a little bit different than Trokendi XR situation because Oxtellar XR, we only go to neurologists and therefore we don't even have contact with psychiatrists who use of oxcarbazepine in bipolar or other psychiatric disorders.
So if there is any usage currently on Oxtellar XR, it's probably very, very negligible if anything at all in the psychiatry space and therefore we look at the bipolar opportunity for Oxtellar XR as completely 100% an incremental add-on opportunity to our current franchise in the epilepsy space.
As far as Trokendi XR or even Oxtellar XR in general as far as managed care and coverage and so forth, I mean the environment is always challenging and continues to be challenging as you rightfully pointed to.
We don't expect significant changes in 2018 versus the year before, but on that front we always take it day by day and month by month and so forth and we monitor it very closely.
But these 2 products continue to enjoy very, very strong levels of coverage in both areas, epilepsy and migraine.
We know ---+ because it's an open label so we can see what is going on and we can have some observations of how patients are doing in the trial and so forth and the feedback we will be getting from the investigators.
So, clearly we could jump in a little bit ahead of the enrollment completion if things are going extremely well.
We will not start Phase III studies this year so that's for sure, but it remains to be seen.
I mean if by August, September, October things look good and the study is going very well, then we could potentially trigger Phase III in 2019.
We don't have to wait all the way till the end of the trial.
Regarding 810 and 812 and the question on the salesforce size depending on which one launches before obviously, but give or take we're looking at the first product to be supported by a salesforce somewhere between 130 reps and 170 reps in the psychiatry space.
And then once the second product is launched about a year later, and that's about the timing we would like to devote for these launches so we can do an excellent job in launching each product, then we will augment it by the remaining number so that we can hit somewhere around 300 sales representatives in total for the psychiatry business behind 810 and 812.
Now at the same time, we have also few Oxtellar XR in bipolar, which is also synergistic with 810 and 812 potentially from a salesforce point of view and by targeting psychiatrists.
So once we are in the marketplace, and hopefully we will be with all 3 opportunities, we envision the salesforce to be closer to the 350 sales representative.
So, that's the kind of planning we're working on as far as these 3 assets in that space.
The big obviously unknown here is which one is going to come first and so forth, but as we get closer, we'll get a clear picture is 812 going to launch before 810 or 810 is going to jump in ahead because it could have a priority review.
So, I mean we really don't know at this point.
But 812 seems to be now enrolling much faster than 810 so we always said there is a likelihood it could jump in front of 810 and therefore we'll have to make decisions.
We don't want to launch 2 products on top of each other so one may end up being in the 2020, another one in 2021.
It all remains to be seen.
As far as the ---+ your question on manufacturing and batches and the scale-up.
Definitely just by the fact that we started Phase III studies, Phase III studies use clinical supplies that are actually from the commercial side.
So, the answer is yes.
We've already scaled up the product and the manufacturing on a commercial scale and things went pretty well on that front as well.
Regarding the potential of the assets and I wasn't clear whether you're referring to the SPN-810 and 812, each of these ---+ each of these assets about $750 million or were you referring to the Oxtellar XR, Trokendi XR combination.
Yes.
I mean for Trokendi XR, Oxtellar XR, we continue to say $500 million in neurology and more than $800 million in psychiatry.
I did also reference in the prepared remarks that for the call-on universe of physicians, we're already at 10% market share in both products and typically that market share is a leading indicator.
All other things being equal; product support, market dynamics, everything; that typically is a good leading indicator as to where the national market share could be heading to.
And I guess if you take a 10% market share and project it out, out of the total potential, you could say yes, potentially Trokendi XR, Oxtellar XR in neurology could be $700 million or $750 million.
That could work out absolutely.
And then with the bipolar opportunity, we're definitely approaching $1 billion for both products combined.
And then finally, your question regarding the gross to net.
I mean moving forward, we've said we're not going to really make any specific comments on the gross to net or give folks any forecast on gross to net and so forth; but we are very, very excited about the guidance we gave for 2018 with net product sales growing in the midpoint of the range of about 32%.
I think this is amazing growth for products that have been in the market close to 5 years or even a little bit more than 5 years to continue to deliver the kind of growth in this space is really incredible.
Regarding the open label.
I mean the enrollment is 90% plus and people are actually sticking around meaning they are in the open-label extension for a duration, if I recall closer to the 7, 8 months, which is really extremely a good number because remember these folks have to show up at the site every other month or so for testing, safety monitoring and collection of data.
Some people at one point give up all that and say that's too much of a hassle.
So we're very, very encouraged with the length of stay of these patients in the open-label extension in addition to the fact that so many of them are actually choosing to enroll from the beginning.
And the safety, tolerability, side effects; it's your typical collection of that data that you would expect from any open-label extension that we're trying to gather on the study.
I mean you're hitting on one of the key criteria we've been looking at and we've talked about on the BD side, which is potentially looking for an asset in psychiatry that could be launched before 810 and 812.
And you're absolutely right that as time goes on and as that window narrows between us launching 810 or 812 or any of our own pipeline, it becomes harder to bring in another asset ---+ never mind the 3 we already have, to bring in another 1 and launch 4 products in psychiatry.
So, clearly a lot is going into the planning and the timing of these assets and the kind of things we look for and the difficulty obviously in BD is, as some of you may know, you're looking at some assets and typically you think it will launch in a certain time frame; but by the time you look at it, it's always later and later meaning it might end up overlap over 812 and 810.
So, we are very conscious about all that from a planning point of view because we want to make sure whatever we launch, we want to do an excellent job.
You only launch a product once and we want to make sure we get it the right whatever product we're launching.
And therefore, we will be very hesitant to do something just for the sake of doing it and jeopardizing our own launches for our own products and that's why we take a very disciplined approach in the kind of assets that we look for and try to bring in-house.
And over time as we get closer to end of '18 and '19, most likely we are looking at that time for more mid-stage or even earlier stage kind of assets versus later stage kind of assets for the same reason I mentioned.
That is correct if you acquire something already in the market.
If you acquire something that you would be launching, you're always launching the first product.
So, the first product will always be the first product without the benefit of your existence in psychiatry, right.
So at any point in time, there will always be a product which is the first product to be launched for Supernus to be in psychiatry.
The benefit will come in only if you're able to acquire something already launched in psychiatry and you take it over and then you can almost overnight establish your presence there.
And that's something we consider clearly because whether I launch product A or I launch product B as the first product in psychiatry, pretty much the challenges and opportunities are pretty much the same in trying to establish Supernus as a name, as a player in that space.
I mean the activity will pretty much have to be the same thing.
Our interest in adolescent has been right from the beginning of the program.
I don't know if you remember, we had talked about adolescent way back last year about potentially adding that patient population to the 301, 302 studies, the first 2 studies that we are currently doing in pediatrics.
And the only reason we did not end up adding the adolescent patients to those ongoing studies is because of the interim analysis that we did and we said let's just keep it clean one patient population, let's not introduce any other variables into the existing studies and that's why we took the time to go and discuss it back with the FD<UNK>
We continue to be interested in launching a product in all patient populations not just pediatric or adolescent, even eventually hopefully in the adult segment as well, and we submitted the protocol to the agency and that's what they have right now in front of them.
And as you might imagine given our experience now with the pediatric trials, we believe we can execute the adolescent trials with all the learnings we've had from the pediatric trials and hopefully do them even quicker and the adolescent trial is not going to be the same size as doing 2 pediatric trials clearly as far as the number of patients you need to add.
So therefore to your last question, we don't expect any significant material impact on the submission and the reason we say that is because also that is still open to negotiation with the FDA as far as to how we roll the NDA and what kind of data they are requiring or will require on adolescent patients for the initial NDA and also it's open because we have the potential of getting a priority view.
So, there is a lot of factors here that we don't have complete clarity on at this point.
And at the end of the day also as far as the timing of launch of SPN-810 ---+ related to the question I just answered a little bit before for <UNK>, as far as the launch of SPN-810, it may not matter at the end of the day whether the adolescent delays the program a couple months here or 6 months here or whatever it is because we may choose anyway to launch SPN-810 a year later after 812 regardless.
And therefore this whole issue of adolescent trial, it's not to us a major factor or may not be even on the critical path.
That is still a possibility.
We know we need to generate adolescent data and that's why we are interested in it because of 2 reasons, for the FDA as well as for us from a marketing point of view.
I mean ideally we would like to have an indication in both patient populations from day 1 as we get out of the gate from a marketing point of view, from maximizing the potential of the launch and so forth.
So, it's serving 2 purposes clearly.
How we roll that data into the NDA whether initially we just submit safety data and then roll in later the efficacy data or ---+ so that is still a little bit open, it is still influx at this point.
I mean we talk about this several times and our take on this whole situation is the following.
First of all, I think we are currently operating in the worst environment you could ever think with our 2 products, Oxtellar XR and Trokendi XR, where we have the exact same molecule in both of these products as the generics in the marketplace.
And I think from the results we've seen in the past 5 years, we've been very, very successful in penetrating these markets with very high market share penetration in both of them.
And therefore with viloxazine, which will be a new molecule in a Strattera generic market, so it's a very different scenario.
It's not like I'm coming in with another atomoxetine with a controlled release formulation and I'm trying to compete with the generic atomoxetine market or I have a guanfacine ---+ different version of guanfacine and competing with the Intuniv generic market.
With viloxazine or SPN-812, it's a new chemical entity that will be coming with a whole new Phase III clinical program, which by the way I didn't have on Trokendi XR.
We never had a Phase III clinical data and look at the results we've been able to generate there.
So with SPN-812 even if I do exactly what I did with Trokendi XR, which is the worst case scenario, I'm getting a 4% or 5% market share of the ADHD market and if I do that, that's easily a billion dollar product at peak.
And that's why sometimes I don't understand why people have $100 million in their models or in the pipelines because it just doesn't make any sense for us to do half what Intuniv did back in 2014 or '13 at peak.
So to us, it's fairly straightforward.
As far as the competitive products, we all know in this market there is always a hunger for products that actually work because not all patients respond to all products.
And when you're looking at the non-stimulant market, you only have really 2 major players and that's about it; Intuniv and Strattera and yes, you may have ---+ you will have or may have Synovia.
You look at many other CNS areas, you have 20 agents treating epilepsy.
So ADHD continues to be a market, which really needs extra options, needs new options and specifically in the non-stimulant segment that continues to be only an 8% or 9% of the whole ADHD market.
So, there is a huge room here for expansion of that pie of the non-stimulant market whether it's 2 players or 3 additional players and at end of the day, it's all about execution and the team who is actually launching these products and the product differentiation.
Regarding Oxtellar XR and Trokendi XR in the epilepsy space and any new agents that come to epilepsy.
Our market and our positioning in the market is not to convince the physician to use topiramate versus lamotrigine or versus valproic acid or versus a new chemical entity or new product that comes into epilepsy.
Our positioning is going to physicians who are already using topiramate and already using oxcarbazepine and try to switch these patients who currently are on these immediate release products, switch them to the extended release product.
This is not to say that they are not really competitors.
So in general, yes, we are competing with the whole epilepsy market absolutely; but our relevant market segment that we go after and that we target is really the topiramate market itself and the oxcarbazepine market itself.
And in general when you look at epilepsy and if you look at the IMS or IQVIA data over the last 20 years or decades, typically new chemical entity in epilepsy whether it's cannabinoid or ---+ which will probably be the first time ever we see cannabinoid approved in epilepsy, typically the uptake for new chemical entities in epilepsy in neurology is a slow uptake and the reason for that because a lot of these products over the years have not been any major breakthrough therapy.
They have been just an added option to the many options that already exist and so many neurologists are always hesitant to switch people just because all of a sudden there is a new chemical entity or a new molecule.
Once a patient is stable, they are hesitant to switch them just because this is another exciting new product and they will only switch that patient if that patient is encountering issues or problems and so forth, which is ---+ also applies to our products.
However, in our case we offer them the same molecule and therefore the fear of switch or the resistance to switch may not be as a high as it is with completely new chemical entities.
So, that's a dynamic clearly which plays also in favor of Oxtellar XR and Trokendi XR.
As far as the CGRPs in migraine, I mean we continue to monitor the kind of data that continues to be released and we'll see when the first product gets launched or potentially 3 different products could be launched by year-end.
There is a lot of variables that are unknown at this point starting with the label they get, the pricing they come in at, the kind of coverage they may have and so forth.
For one thing we're already excited as far as the activity in the market, the activity in the whole category.
We think there's going to be a very heightened level of investment behind this category, behind prevention in migraine, which will benefit everybody in the marketplace.
And topiramate as a molecule is actually an excellent molecule for preventing migraines; if it is in the right formulation and in the right dosage form, it can be an excellent choice for many patients out there.
So in general, we're very excited about the activity in the market that's to come and we'll be watching closely as far as to the profile of these CGRPs.
Regarding your question, <UNK>, about sequential changes in operating expenses, I would think that it will be a fairly flattish quarter-to-quarter situation in aggregate.
There's some pushes and pulls here.
R&D spending more likely than not would be more front-end loaded in the year or heavier I would say in the first half versus the second half.
Why do I say that.
Because we're targeting to get most of the recruitment for 812 accomplished in that time frame.
Of course the recruitment for SPN-810 continues to roll forward rather steadily, but that too is expected to complete largely in the first 3 quarters.
Once the active part of the trials are done, there still is an open-label extension, but those tend to be less intensive from an activity and expense standpoint.
So, I think R&D maybe a little bit more emphasizing the first couple of quarters or maybe even the first 3 quarters.
Sales and marketing, further to <UNK>'s comment about competition, that might actually intensify more in the second and third quarter when CGRPs start launching and they get more active in the marketplace.
There are programs that we haven't played to address that competition and so I might expect that to intensify more towards the mid and back-end of the year.
G&A very, very difficult.
The timing of sample runs, our SOX 404 spending is tended to be higher this year versus last year, that will intensify over the course of the year.
Medical Affairs, very difficult to predict the timing of their programs and the like.
Unless we see realization with respect to supply chain, that was the word I was searching for earlier in that ---+ in the call, that program is running as well.
Tough to forecast exactly how that's going to lay out over the year.
So, G&A I would expect to be pretty flattish over the year as well.
So in aggregate, pretty flat with some emphasis, some differentiation amongst the individual subgroups.
If I could predict the recruitment, I would quit this job and do another job.
It's very difficult to say.
I don't know if it will be skewed quite that much.
Maybe $45 million/$35 million if everything kind of lines up exactly the way we think it should.
Tough to say.
I'm not ---+ let me say this thing.
I'm not surprised by the response that you got or the results from the survey.
All the work we've done so far, psychiatrists are very, very excited which is really related to the comment I made earlier ---+ are very excited about another novel new chemical entity in the ADHD space.
This is not to knock on other products, but a lot of psychiatrists voiced the frustration with a lot of the new products that have been coming to the place ---+ to the marketplace being just another formulation of amphetamine and methylphenidate and that's all that we keep getting, yet another dosage form and another formulation of these molecules that we've known for years.
We are looking for something different, we are looking for something that could really help the non-responders to some of these older molecules.
So in a way, it does confirm a lot of the things that we have been hearing during our research.
Thank you.
2017 was another outstanding year for Supernus with record financial results and significant accomplishments on the commercial side as well as on the R&D side.
February of 2018 represents the 5th year anniversary of launching our first commercial product Oxtellar XR and over that 5-year period, Supernus has delivered a compounded annual growth rate of 122% in net sales coupled with 118% compounded annual growth rate in operating income since we became profitable.
We have established a high growth and successful specialty CNS company with a solid foundation for sustainable future growth and expect 2018 to be yet another outstanding year with strong net product sales and operating income growth.
I thank all our employees for their continued commitment to our patients and to our longstanding heritage and reputation of delivering outstanding results.
Thank you, everyone, for joining us this morning and we look forward to updating you throughout the year.
