Supernus Faces New Patent Challenge for Trokendi XR

Supernus Pharmaceuticals, Inc. (SUPN) announced that it has received a Paragraph IV notice on Dec 8, 2014 from Par Pharmaceutical, Inc., which is looking to get its generic version of Supernus’ Trokendi XR capsules approved in the U.S.

Trokendi XR was launched in the third quarter of 2013 for the treatment of epilepsy. The product has five patents and is protected till 2027.

Supernus, which is currently reviewing the details of the Para IV notice, will most likely file a patent infringement lawsuit against Par. We note that Supernus is currently involved in a number of lawsuits related to its antiepileptic drug, Trokendi XR. Last month, the company had filed a patent infringement lawsuit against Zydus Pharmaceuticals (USA) Inc. and Cadila Healthcare Limited Limited, accusing both of infringing three patents covering Trokendi XR.

Trokendi XR and Oxtellar XR are the only marketed products at Supernus, with the company depending highly on Trokendi XR for growth. In the first nine months of 2014, Trokendi XR generated revenues of $42 million, comprising approximately 46% of total revenues. We believe that the earlier-than-expected entry of generic versions of Trokendi XR would have a major impact on the company’s financials.

However, we are pleased with Supernus’ efforts to advance its pipeline in the field of psychiatry. The company is working towards the development of a number of candidates including SPN-810 and SPN-812. Supernus is preparing to commence a phase III study on SPN-810 for the treatment of impulsive aggression in patients suffering from attention deficit hyperactivity disorder (ADHD) under the FDA’s Special Protocol Assessment program. Patient dosing in the phase III study is expected to begin in the second half of 2015. SPN-810 has fast track designation for this indication.

Additionally, Supernus intends to initiate the first pivotal study on SPN-812 in the second half of 2015 for the treatment of ADHD.

Supernus carries a Zacks Rank #2 (Buy). Other stocks looking good in the health care sector are Mylan, Inc. (MYL), Akorn, Inc. (AKRX) and Actavis plc (ACT). While Mylan and Akorn carry a Zacks Rank #1 (Strong Buy), Actavis holds a Zacks Rank #2 (Buy).

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