Supernus Pharmaceuticals Inc (SUPN) Investors Are Scared Off by Elimination of Low SPN-810 Dose; Cantor Makes a Bullish Case

Supernus investors are running for the hills, but analyst sees elimination of 18 mg dose as a good move.


Supernus Pharmaceuticals Inc (NASDAQ:SUPN) shares are crashing almost 21% to the market floor after the biotech firm made changes to its child aggression drug SPN-810 trial, a candidate designed to treat impulsive aggression in patients with ADHD. A third-party statistician advised Supernus to get rid of its low 18 mg dose option, instead choosing to just evaluate the higher 36 mg dose in investigative trials. This is all in hopes of being able to better achieve a successful trial of statistical significance.

Cantor analyst William Tanner believes this will be a “potentially effective SPN-810 dose” and as such, weighs in with a positive perspective despite investors racing away in a tizzy. “We view the news as good,” explains the analyst, who also anticipates that down the line an acquisition could follow suit “in the works,” as “BD activity remains a potential headline maker.”

For investors who became antsy upon the elimination of the lower dose, the analyst explains: “[…] we are encouraged that the tool evidently has discriminating power adequate to identify a dose that is unlikely to work. The fact that the lower dose was identified as apparently futile makes sense given the properties of dose responsiveness.”

Should the firm succeed in its Phase 3 trial with a “de-risked” SPN-810, the analyst would consider pTS values circling 85%, which he notes falls within the frame of historical drug approval probability following an NDA filing. In turn, this would lead the analyst to boost his SPN-810 valuation forecast up to $16 per share, likewise leading to a rise in his SUPN valuation expectations.

Moving forward, “We anticipate that the core Trokendi XR and Oxtellar XR businesses will continue to perform well, particularly the former, with the ongoing roll-out for the migraine prevention indication. Over the next 12-24 months, with provision of positive clinical trial data, we believe investors could come to better-appreciate the value of pipeline assets such as SPN-810 and SPN-812,” surmises Tanner.

Therefore, the analyst maintains an Overweight rating on SUPN stock with a $49 price target, which represents a just under 25% increase from current levels. (To watch Tanner’s track record, click here)

TipRanks analytics showcase SUPN as a Buy. Based on 5 analysts polled by TipRanks in the last 3 months, 3 rate a Buy on Supernus stock while 2 maintain a Hold. The 12-month average price target stands at $48.75, marking a 19% upside from where the stock is currently trading.