What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-25 compared with 2024-02-27 · 393 added, 337 removed, 1036 unchanged (41% of the section changed)

58 unchanged sentences

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control over Financial Reporting.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

17 unchanged sentences

Consolidated Balance Sheets

(in thousands, except share amounts)

2023 December 31,

(in thousands, except share and per share data)

December 31, 2024 December 31, 2023

Current assets

16 unchanged sentences

Contingent consideration, current portion 47,340 52,070

Convertible notes, net — 401,968

Other current liabilities — 4,283

5 unchanged sentences

Total liabilities 332,340 356,157

Commitments and contingencies (Note 16)

Stockholders’ equity

3 unchanged sentences

Additional paid-in capital 479,440 439,493

Accumulated other comprehensive (loss) earnings, net of tax ( 593 ) ( 3,210 )

Accumulated other comprehensive loss, net of tax ( 189 ) ( 593 )

Retained earnings 556,426 482,561

5 unchanged sentences

(in thousands, except share and per share data)

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

Net product sales $ 637,696 $ 573,933 $ 649,432

Royalty and licensing revenues 33,588 17,806 12,271

Royalty, licensing and other revenues 24,121 33,588 17,806

Total revenues 661,817 607,521 667,238

7 unchanged sentences

Contingent consideration gain

( 6,110 ) ( 1,517 ) ( 510 )

Total costs and expenses 580,151 612,790 621,114

3 unchanged sentences

Interest expense — ( 2,415 ) ( 7,070 )

Total other income (expense) 8,038 14,619 ( 12,854 )

Total other income (expense), net 16,204 8,038 14,619

Earnings before income taxes 97,870 2,769 60,743

12 unchanged sentences

(in thousands)

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

7 unchanged sentences

Consolidated Statements of Changes in Stockholders' Equity

Years Ended December 31, 2021, 2022 and 2023

(in thousands, except share data)

3 unchanged sentences

Earnings (Loss) Retained

Deficit) Total

Stockholders'

1 unchanged sentence

Balance, December 31, 2021 53,256,094 $ 53 $ 434,337 $ 1,539 $ 379,922 $ 815,851

Cumulative effect of adoption of ASU 2020-06 — — ( 56,212 ) — 40,612 ( 15,600 )

Balance, January 1, 2022 53,256,094 53 378,125 1,539 420,534 800,251

Share-based compensation expense related to employee stock purchase plan and share-based awards — — 17,568 — — 17,568

3 unchanged sentences

Balance, December 31, 2022 54,253,796 54 408,115 ( 3,210 ) 481,245 886,204

Cumulative effect of adoption of ASU 2020-06 — — ( 56,212 ) — 40,612 ( 15,600 )

Balance, January 1, 2022 53,256,094 53 378,125 1,539 420,534 800,251

Share-based compensation expense related to employee stock purchase plan and share-based awards — — 26,759 — — 26,759

1 unchanged sentence

Net earnings — — — — 1,316 1,316

Unrealized loss on marketable securities, net of tax — — — ( 4,749 ) — ( 4,749 )

Unrealized gain on marketable securities, net of tax — — — 2,617 — 2,617

Balance, December 31, 2023 54,723,356 55 439,493 ( 593 ) 482,561 921,516

8 unchanged sentences

(in thousands)

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

3 unchanged sentences

Depreciation and amortization 80,414 84,859 85,543

Navitor investment R&D expense (see Note 4) — — 15,000

Other income from Navitor (see Note 4) — — ( 12,888 )

1 unchanged sentence

Amortization of deferred financing costs and debt discount — 532 2,112

Share-based compensation expense 26,759 17,568 17,910

Realized gains from sales of marketable securities ( 9 ) — ( 14 )

Amortization of premium/discount on marketable securities 1,823 ( 122 ) 3,233

Changes in fair value of contingent consideration ( 1,517 ) ( 510 ) ( 6,530 )

Other noncash adjustments, net 13,920 11,638 ( 1,420 )

Change in fair value of contingent consideration ( 6,110 ) ( 1,517 ) ( 510 )

Share-based compensation expense 27,755 26,759 17,568

Deferred income tax benefit ( 20,136 ) ( 25,714 ) ( 26,324 )

Inventory valuation write-down

8,876 8,023 10,442

Other noncash adjustments, net 7,525 5,897 1,196

Changes in operating assets and liabilities:

4 unchanged sentences

Accounts payable and other liabilities ( 15,015 ) ( 36,287 ) ( 19,163 )

Contingent consideration — ( 2,100 ) —

Payment of contingent consideration — — ( 2,100 )

Net cash provided by operating activities 171,951 111,085 116,826

Cash flows from investing activities

Sales and maturities of marketable securities 370,901 190,739 530,509

Purchases of marketable securities ( 688,013 ) ( 101,621 ) ( 406,990 )

Acquisition of USWM, net of cash acquired — — ( 950 )

Acquisition of Adamas, net of cash acquired — — ( 310,742 )

Distribution from Navitor — — 12,888

Purchase of property and equipment and deferred legal fees paid ( 551 ) ( 412 ) ( 2,045 )

Maturities of marketable securities 498,871 370,901 190,739

Purchases of property and equipment ( 725 ) ( 551 ) ( 412 )

Net cash provided by (used in) investing activities ( 189,867 ) 268,729 ( 216,663 )

Cash flows from financing activities

Proceeds from Credit Line

Payments on Credit Line — ( 93,000 ) —

Payment on convertible notes — ( 402,500 ) —

Proceeds from issuance of common stock 14,908 6,610 12,423

Employee taxes paid related to net share settlement of equity awards ( 2,715 ) ( 1,990 ) —

Proceeds from Line of Credit 93,000 — —

Payments on Line of Credit ( 93,000 ) — —

Payment on convertible notes ( 402,500 ) — —

Proceeds from governmental loan and grant — — 800

Repayment of acquired Adamas loan — — ( 138,315 )

Payment of contingent consideration — — ( 22,900 )

Net cash used in financing activities ( 397,880 ) ( 10,477 ) ( 130,420 )

Net cash provided by (used in) financing activities 12,193 ( 397,880 ) ( 10,477 )

Net change in cash and cash equivalents ( 5,723 ) ( 18,066 ) ( 110,314 )

1 unchanged sentence

Cash and cash equivalents at end of year

$ 69,331 $ 75,054 $ 93,120

Supplemental cash flow information

Cash paid for interest on debt $ 1,946 $ 2,516 $ 2,516

Cash paid for operating leases $ 17,112 $ 12,883 $ 11,908

Cash paid for income taxes $ 53,254 $ 36,602 $ 16,200

Noncash investing and financing activity:

Contingent consideration liability related to acquisitions $ — $ — $ 10,307

Cash paid for interest on debt $ — $ 1,946 $ 2,516

Noncash investing and financing activities

Property and equipment additions from utilization of tenant improvement allowance — — $ 580

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Supernus Pharmaceuticals, Inc.

(the Company) was incorporated in Delaware and commenced operations in 2005.

(the Company, see Consolidation in Note 2, Summary of Significant Accounting Policies ) was incorporated in Delaware and commenced operations in 2005.

The Company is a biopharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases.

The Company's diverse neuroscience portfolio includes approved treatments for epilepsy, migraine, attention-deficit hyperactivity disorder (ADHD), hypomobility in Parkinson's Disease (PD), cervical dystonia, chronic sialorrhea, dyskinesia in PD patients receiving levodopa-based therapy, and drug induced extrapyramidal reactions in adult patients.

The Company's diverse neuroscience portfolio includes approved treatments for attention-deficit hyperactivity disorder (ADHD), dyskinesia in Parkinson's Disease (PD) patients receiving levodopa-based therapy, hypomobility in PD, epilepsy, migraine, cervical dystonia, and chronic sialorrhea.

The Company is developing a broad range of novel CNS product candidates including new potential treatments for hypomobility in PD, epilepsy, depression, and other CNS disorders.

The Company has eight commercial products:

Qelbree ® , GOCOVRI ® , Oxtellar XR ® , Trokendi XR ® , APOKYN ® , XADAGO ® , MYOBLOC ® , and Osmolex ER ® .

In addition, SPN-830 (apomorphine infusion device) is a late-stage drug/device combination product candidate for the continuous treatment of motor fluctuations ("off" episodes) in PD patients that are not adequately controlled with oral levodopa and one or more adjunct PD medications.

Qelbree ® , GOCOVRI ® , Oxtellar XR ® , APOKYN ® , Trokendi XR ® , XADAGO ® , MYOBLOC ® and ONAPGO TM (formerly known as SPN-830).

In February 2025, the FDA approved ONAPGO (apomorphine hydrochloride) injection as the first and only subcutaneous apomorphine infusion device for the treatment of motor fluctuations in adults with advanced PD.

ONAPGO will be launched in the second quarter of 2025.

Summary of Significant Accounting Policies

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Reclassifications

Certain prior year amounts in the deferred income tax assets (liability) summary under Note 11, Income Tax Expense, have been reclassified to conform to the current year presentation.

The reclassifications did not affect the consolidated balance sheets, statements of earnings, or other consolidated financial statements for the years ended December 31, 2021, 2020, and 2019.

The prior year amounts related to the caption Inventory valuation write-down in the consolidated statements of cash flows has been reclassified to conform to current year presentation.

The reclassification did not affect the other consolidated financial statements.

Consolidation

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and its wholly-owned subsidiaries.

These are collectively referred to herein as "Supernus" or "the Company." All material intercompany transactions and balances have been eliminated in consolidation.

These are collectively referred to herein as "Supernus" or "the Company." Supernus Pharmaceuticals, Inc.

and each of its subsidiaries are distinct legal entities.

All material intercompany transactions and balances have been eliminated in consolidation.

The consolidated financial statements reflect the consolidation of entities in which the Company has a controlling financial interest.

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The Company continuously assesses whether it is the primary beneficiary of a VIE as changes to existing relationships or future transactions may affect its conclusions.

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (Continued)

Use of Estimates

3 unchanged sentences

information from other sources, including public and proprietary sources;

and other assumptions that the Company believes are

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (Continued)

reasonable under the circumstances.

and other assumptions that the Company believes are reasonable under the circumstances.

Actual results could differ materially from the Company’s estimates.

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corporate and municipal debt securities.

and other fixed income securities.

The Company places all investments with governmental, industrial, or financial institutions whose debt is rated as investment grade.

1 unchanged sentence

The Company classifies all available-for-sale marketable securities with maturities greater than one year from the balance sheet date as non-current assets.

Any unrealized holding gains or losses on debt securities, including their tax effect, are reported as components of Other comprehensive earnings (loss) in the consolidated statement of comprehensive earnings.

Any unrealized holding gains or losses on debt securities, including their tax effect, are reported as components of Other comprehensive gain (loss) in the consolidated statement of comprehensive earnings.

Realized gains and losses, included in Interest and other income, net in the consolidated statement of earnings, are determined using the specific identification method for determining the cost of securities sold.

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While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed as of the acquisition date, estimates are inherently uncertain and subject to refinement.

As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.

As a result, during the measurement period,

Supernus Pharmaceuticals, Inc.

1 unchanged sentence

Summary of Significant Accounting Policies (Continued)

which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.

Upon the conclusion of the measurement period, any subsequent adjustments are recorded to our consolidated statements of earnings in the period that these adjustments are identified.

7 unchanged sentences

Changes in any of the inputs not related to facts and circumstances existing as of the acquisition date may result in a significant fair value adjustment, which can impact the results of operations in the period in which the adjustment is made.

Changes that are not measurement period adjustments are reported on the consolidated statement of earnings in Contingent consideration (gain) expense .

Changes that are not measurement period adjustments are reported on the consolidated statement of earnings in Contingent consideration gain .

Additional information regarding contingent consideration is included in Note 6, Contingent Consideration.

8 unchanged sentences

Substantially all of the Company's cash, cash equivalents, and marketable securities are maintained in U.S.

government agency debt and debt of well-known, investment grade corporations.

Treasury bills and notes;

bank certificates of deposit;

governmental agency debt securities;

and corporate and municipal debt securities.

The Company places all investments with governmental, industrial, or financial institutions whose debt is rated as investment grade.

Deposits held with banks may exceed the amount of governmental insurance provided on such deposits.

14 unchanged sentences

These are valued using the first-in, first-out method.

The Company writes down inventory that has become obsolete or has a cost basis in excess of its expected net realizable value.

Expired inventory is destroyed, and the related costs are recognized as Cost of goods sold in the consolidated statement of earnings.

The Company periodically reviews inventory and records write-downs for any excess, expired and obsolete inventory, and for inventory that has a cost basis in excess of its expected net realizable value based on estimates of product demand, production requirements, market conditions, regulatory requirements and spoilage.

The write-down to net realizable value is recorded in the period in which impairment is identified and is recorded as a component of Cost of goods sold in the consolidated statement of earnings.

Property and Equipment

Property and equipment are stated at cost.

Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to operations.

Repairs and maintenance costs are expensed as incurred.

Depreciation and amortization are computed using the straight-line method over the following useful lives:

Computer equipment 3 years - 5 years

3 years - 5 years

Lab equipment and furniture

5 years - 10 years

Leasehold improvements

Shorter of lease term or useful life

Intangible Assets

8 unchanged sentences

Upon successful completion of the project, the Company will determine the then-useful life of the intangible asset.

This is generally determined as the period over which the substantial majority of the cash flows are expected to be generated.

This is generally determined as the period over which the substantial

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (Continued)

majority of the cash flows are expected to be generated.

The capitalized amount is then amortized over its estimated useful life.

6 unchanged sentences

If impairment is determined, the Company writes down the asset to its estimated fair value and records an impairment loss equal to the excess of the carrying value of the long-lived asset over its estimated fair value in the period at which such a determination is made.

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (Continued)

Impairment of Indefinite-Lived Intangible Assets

15 unchanged sentences

If the carrying amount of the reporting unit exceeds its fair value, the Company writes down the goodwill to the estimated fair value, and an impairment loss equal to the difference is recognized in the consolidated statement of earnings in the period at which such determination is made.

Interest Expense

Interest expense includes the amortization of deferred financing costs and debt discount incurred by the Company in connection with the issuance of $ 402.5 million of 0.625 % Convertible Senior Notes due 2023 (see Note 14, Interest Expense ).

The Company amortizes the deferred financing costs and debt discount over the term of the debt, using the effective interest method.

Interest expense also includes stated interest in connection with the Company's debt instruments.

Revenue Recognition

The Company determines revenue recognition for our contractual arrangements with customers based on the following five steps:

(1) identify each contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to our performance obligations in the contract; and (5) recognize revenue when (or as) the Company satisfy the relevant performance obligation.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.

The Company recognizes revenue in an amount that reflects the consideration the Company expects to receive in

Supernus Pharmaceuticals, Inc.

1 unchanged sentence

Summary of Significant Accounting Policies (Continued)

exchange for those goods or services.

Revenue Recognition

The Company determines revenue recognition for our contractual arrangements with customers based on the following five steps:

The Company recognizes revenue in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

The Company does not adjust revenue for any financing effects in transactions where the Company expects the period between the transfer of the goods or services and collection to be less than one year.

3 unchanged sentences

Customers purchase product to fulfill orders from retail pharmacy chains and independent pharmacies of varying size and purchasing power.

The Company recognizes gross revenue when its customers take control of its products, including title and ownership.

The Company recognizes gross product sales when its customers take control of its products, including title and ownership.

Customer orders are generally fulfilled within a few days of order receipt, resulting in minimal order backlog.

38 unchanged sentences

The liability is recorded as a component of current liabilities on the consolidated balance sheets.

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (Continued)

• Returns - Sales of the Company's products are not subject to a general right of return.

1 unchanged sentence

However, the Company will accept a return of product that is damaged or defective when shipped from its third party fulfillment centers.

The Company will also accept a return of expired product six months prior to and up to 12 months subsequent to the product's expiry date for certain products.

The Company will also accept a return of expired product six months prior to and up to twelve months subsequent to the product's expiry date for certain products.

Expired or defective returned product cannot be re-sold and is therefore destroyed.

2 unchanged sentences

This liability is recorded as a component of current liabilities on the consolidated balance sheets.

The Company estimates the liability for

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (Continued)

returns primarily based on the actual returns experience for its commercial products.

Because the Company's products have a shelf life up to 48 months from the date of manufacture, and because the Company accepts return of product up to 12 months post its expiry date, there is a time lag of several years between the time when the product is sold and the time when the Company may issue credit on the expired product.

The Company estimates the liability for returns primarily based on the actual returns experience for its commercial products.

Because the Company's products have a shelf life up to forty-eight months from the date of manufacture, and because the Company accepts return of product up to twelve months post its expiry date, there is a time lag of several years between the time when the product is sold and the time when the Company may issue credit on the expired product.

• Sales discounts - Distributors and wholesalers of the Company's pharmaceutical products are generally offered various forms of consideration, including allowances, service fees and prompt payment discounts, for distributing our products.

3 unchanged sentences

The Company accounts for these discounts at the time of sale as a reduction to gross product sales and accounts receivable, net.

Licensing Revenue

Royalty, Licensing, and Other Revenues

Royalty revenues include cash royalty amounts received from third parties pursuant to settlement agreements and agreements with collaboration partners for the right to use the Company's intellectual property as a functional license.

These agreements may include sales-based royalties on the licensed intellectual property to which the royalties relate and milestone payments based on the level of sales (collectively, "sales-based royalties").

For arrangements that include sales-based royalties and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

If it is probable that a significant revenue reversal will not occur, the Company will estimate the royalty revenues using the most likely amount method.

Certain of the Company’s royalty revenues are recognized by the Company based on information supplied to the Company by its licensees and require estimates to be made.

Sales-based royalties are recorded based on estimated net sales of the underlying product.

Differences between actual royalty revenues and estimated royalty revenues are reconciled and adjusted for in the period in which they become known, which is generally within the following quarter.

The difference between the Company’s actual and estimated royalty revenues has not been material to date.

Historically, royalty revenues also included noncash royalty revenues for amounts earned pursuant to its royalty agreement with United Therapeutics Corporation (United Therapeutics) and was based on estimated product sales of Orenitram by United Therapeutics.

During the second quarter of 2023, full ownership of the royalty rights has reverted back to the Company as the cumulative payment threshold has been reached (see Note 3, Disaggregated Revenues).

There are no guaranteed amounts owed to the Company related to any of these royalty revenue agreements.

License and Collaboration Arrangements

At contract inception, the Company analyzes its collaboration arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (ASC 808) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities.

At contract inception, the Company analyzes its collaboration arrangements to assess whether they are within the scope of Accounting Standards Codification 808, Collaborative Arrangements (ASC 808) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities.

For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and therefore within the scope of ASC Topic 606, Revenue from Contracts with Customers (ASC 606).

For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently.

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (Continued)

In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the five-step model under ASC 606 noted above.

16 unchanged sentences

obtaining regulatory approval) represent variable consideration and would be included in the transaction price subject to any constraints.

If the milestone payments relate to future development, the timing of recognition depends upon historical experience, the specific facts

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (Continued)

and circumstances, and the significance a third-party has on the outcome.

If the milestone payments relate to future development, the timing of recognition depends upon historical experience, the specific facts and circumstances, and the significance a third-party has on the outcome.

Milestone payments that are not within the control of the Company, such as approval from regulatory authorities or where attainment of the specified event is dependent on the development activities of a third-party, are fully constrained and are not included in the transaction price until the period in which those regulatory approvals are obtained, or the specified event occurs due to the inherent uncertainty with the approval process.

For milestone payments to be received upon the achievement of a sales threshold, the revenue from the milestone payments is recognized at the later of when the actual sales are incurred or the performance obligation to which the sales relate has been satisfied as noted below.

Royalty Revenues

If it is probable that a significant revenue reversal will not occur, the Company will estimate the royalty revenues using the most likely amount method.

Certain of the Company’s royalty revenues are recognized by the Company based on information supplied to the Company by its licensees and require estimates to be made.

Sales-based royalties are recorded based on estimated net sales of the underlying product.

Differences between actual royalty revenues and estimated royalty revenues are reconciled and adjusted for in the period in which they become known, which is generally within the following quarter.

The difference between the Company’s actual and estimated royalty revenues has not been material to date.

Royalty revenues also includes noncash royalty revenues for amounts earned pursuant to its royalty agreement with United Therapeutics Corporation (United Therapeutics) and is based on estimated product sales of Orenitram by United Therapeutics (see Note 3, Disaggregated Revenues ).

This agreement includes the right to use the Company's intellectual property as a functional license.

In 2014, the Company sold certain of these royalty rights to Healthcare Royalty Partners III, L.P.

(HC Royalty).

Pursuant to this agreement, the Company recorded a nonrecourse liability related to this transaction and amortizes this liability as noncash royalty revenues.

The Company also recognizes noncash interest expense related to the nonrecourse liability and accrues interest expense at an estimated effective interest rate (see Note 14, Interest Expense ).

This interest rate is determined based on projections of HC Royalty's rate of return.

During the second quarter of 2023, full ownership of the royalty rights has reverted back to the Company as the cumulative payment threshold has been reached (see Note 3, Disaggregated Revenues and Note 15, Commitments and Contingencies ).

There are no guaranteed amounts owed to the Company related to any of these royalty revenue agreements.

Cost of Goods Sold

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• Expected Volatility —Volatility is a measure of the amount by which the Company's share price has historically fluctuated or is expected to fluctuate on a daily basis and is expected to fluctuate (i.e., expected volatility) in the future.

• Dividend Yield —The Company has never declared or paid dividends and has no plans to do so in the foreseeable future.

Dividend yield is therefore zero .

• Expected Dividend Yield —The Company has never declared or paid dividends and has no plans to do so in the foreseeable future.

The expected dividend yield is therefore zero .

• Expected Term —This is the period of time during which options are expected to remain unexercised.

For the years ended December 31, 2023, and 2022, we determined the expected term based on the historical exercise behavior of the stock option plan participants.

The Company determines the expected term based on the historical exercise behavior of the stock option plan participants.

Options have a maximum contractual term of ten years .

5 unchanged sentences

RSUs granted to directors generally vest over a one year term.

Forfeitures are accounted for as incurred.

Performance Stock Units (PSUs)

4 unchanged sentences

Forfeitures are accounted for as incurred.

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (Continued)

Market-Based Awards

2 unchanged sentences

Forfeitures are accounted for as incurred.

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (Continued)

The Company estimates the fair value of these awards as of the grant date using a Monte Carlo simulation that incorporates option-pricing inputs.

17 unchanged sentences

Advertising Expense

Advertising expense includes the cost of promotional materials and activities, such as television, print media, digital marketing, marketing programs and speaker programs.

Advertising expense includes the cost of promotional materials and activities, such as print materials and digital marketing, marketing programs and speaker programs.

The cost of the Company's advertising efforts are expensed as incurred.

1 unchanged sentence

These expenses are recorded as a component of Selling, general and administrative expenses in the consolidated statements of earnings.

Insurance Recoveries

The Company has several policies with third-party insurers that provide for the recovery of certain costs incurred by the Company.

The Company records our rights to insurance recoveries as a receivable when the respective costs are reimbursable under applicable insurance policies, it is probable that such costs will be reimbursed, and reimbursement can be reasonably estimated.

As such, the Company estimates the percentage of costs that will be reimbursed by the insurance provider to determine the amount to record for the insurance recovery receivable.

The Company recorded approximately $ 14.2 million of insurance recoveries during the year ended December 31, 2024.

There were no insurance recoveries during the years ended December 31, 2023 and 2022, respectively.

To date, there have not been any material adjustments to our prior estimates of the insurance recovery receivable.

Insurance recoveries recognized in fiscal year 2024 were recorded as a reduction to Selling, general and administrative expenses .

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (Continued)

Interest Expense

Interest expense included the amortization of deferred financing costs and debt discount incurred by the Company in connection with the issuance of $ 402.5 million of 0.625 % Convertible Senior Notes which were due and paid in 2023 (see Note 15, Interest Expense ).

The Company amortized deferred financing costs and debt discounts over the term of the debt, using the effective interest method.

Interest expense also includes stated interest in connection with the Company's debt instruments.

The Company utilizes the asset and liability method of accounting for income taxes.

4 unchanged sentences

The Company's policy is to recognize any interest and penalties related to income taxes as income tax expense in the relevant period.

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (Continued)

Recently Issued Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280) - The new standard, issued in November 2023, improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker.

Accounting Pronouncements Adopted

On January 1, 2024, the Company adopted Accounting Standards Update (ASU) 2023-07, Improvements to Reportable Segment Disclosures (Topic 280).

The new standard improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker.

ASU 2023-07 also clarifies that entities with a single reportable segment are subject to both new and existing reporting requirements under Topic 280.

The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis, with early adoption permitted.

The Company plans to adopt the guidance for the fiscal year ending December 31, 2024.

We expect ASU 2023-07 to require additional disclosures in the notes to our consolidated financial statements.

The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements.

See Note 13, Segment Reporting.

Accounting Pronouncements Not Yet Adopted

ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740) - The new standard, issued in December 2023, requires entities to disclose additional information with respect to the effective tax rate reconciliation and to disclose the disaggregation by jurisdiction of income tax expense and income taxes paid.

4 unchanged sentences

The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements.

ASU 2024-03, Disaggregation of Income Statement Expenses (Topic 220) - The new standard, issued in November 2024, requires additional disclosure in tabular format, about the nature of specific types of expense captions presented on the face of the income statement as well as disclosures about selling expenses.

The new standard does not change the requirements for the presentation of expenses on the face of the income statement.

The standard is effective with annual periods beginning after December 15, 2026.

Early adoption and retrospective application are permitted.

The Company plans to adopt the guidance for the fiscal year ending December 31, 2026.

We expect ASU 2024-03 to require additional disclosures in the notes to our consolidated financial statements.

The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements.

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (Continued)

SEC Final Climate Rule

In March 2024, the U.S.

Securities and Exchange Commission (SEC) adopted the final rule under SEC Release No.

33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors (Final Rule).

This rule will require registrants to disclose certain climate-related information in registration statements and annual reports with staggered compliance dates for large accelerated filers for the various aspects of the Final Rule.

On April 4, 2024, the SEC issued an order staying the Final Rule.

The SEC’s administrative stay is expected to remain in place until the completion of litigation filed in various federal courts challenging, among other things, the agency’s authority to adopt the Final Rule.

The Company is evaluating the final rule to determine its impact on the Company's disclosures.

Disaggregated Revenues

The following table summarizes the disaggregation of revenues by product or source (dollars in thousands):

Years Ended December 31,

The following table provides information regarding total revenues (dollars in thousands):

Year Ended December 31,

2024 2023 2022

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Oxtellar XR 99,464 113,404 115,345

Trokendi XR 94,336 261,221 304,817

APOKYN 73,926 75,083 75,305

Trokendi XR 63,201 94,336 261,221

29,008 31,281 31,818

Total net product sales 637,696 573,933 649,432

Royalty and licensing revenues 33,588 17,806 12,271

Royalty, licensing and other revenues 24,121 33,588 17,806

Total revenues $ 661,817 $ 607,521 $ 667,238

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(1) Includes net product sales of MYOBLOC, XADAGO and Osmolex ER.

The Company recognized noncash royalty revenues of $ 4.0 million, $ 9.8 million, and $ 9.4 million for the years ended December 31, 2023, 2022, and 2021, respectively, pursuant to the Company's agreement with HC Royalty (see Note 2, Summary of Significant Accounting Policies ).

Adjustments related to prior year sales in 2023, 2022, and 2021 have amounted to less than 1 % of net product sales for each of the respective periods.

In December 2023, the Company submitted to the FDA a notification of discontinuance to withdraw Osmolex ER from distribution.

Distribution of Osmolex ER ceased on April 1, 2024.

The Company recognized noncash royalty revenues of $ 4.0 million, and $ 9.8 million for the years ended December 31, 2023 and 2022, respectively.

The Company no longer recognizes noncash royalty revenue as ownership of the royalty rights reverted back to the Company during the second quarter of 2023 (see Note 2, Summary of Significant Accounting Policies).

Adjustments related to prior year sales in 2024 was less than 3 % of net product sales.

The majority of the adjustment is attributable to Qelbree, reflecting favorable actual returns experienced in 2024.

As a result, the Company changed its estimated provision for product returns based on the most recent experience.

In 2023 and 2022, adjustments related to prior year sales have amounted to less than 1 % of net product sales for each of the respective periods.

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

The following table shows the percentage of net product sales to total net product sales:

Percentage of Net Product Sales

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

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Oxtellar XR 16 % 20 % 18 %

Trokendi XR 16 % 40 % 54 %

APOKYN 12 % 13 % 12 %

Trokendi XR 10 % 16 % 40 %

Total 100 % 100 % 100 %

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(1) Includes net product sales of MYOBLOC, XADAGO and Osmolex ER.

Supernus Pharmaceuticals, Inc.

Notes to Financial Statements (Continued)

Marketable Securities

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Total fair value $ 384,281 $ 196,437

The contractual maturities of the unrestricted available-for-sale marketable securities held by the Company are as follows (dollars in thousands):

December 31, 2023

Less than 1 year $ 179,820

1 year to 2 years 16,617

Total $ 196,437

As of December 31, 2024, all of our unrestricted available-for-sale marketable securities have contractual maturities of one year or less.

There was no impairment on any available-for-sale marketable securities as of December 31, 2024 and December 31, 2023.

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Under the terms of the Development Agreement, the Company and Navitor Inc.

will jointly conduct a Phase II clinical program for NV-5138 (SPN-820) for treatment-resistant depression.

The Company will bear all of the Phase I and Phase II development costs incurred by either party, up to a maximum of $ 50 million.

There are certain additional payments which could be incurred by the Company that are contingent upon Navitor Inc.

will jointly conduct a Phase 2 clinical program for NV-5138 (SPN-820) for treatment-resistant depression.

The Company will bear all of the Phase 1 and Phase 2 development costs incurred by either party, up to a maximum of $ 50 million, which amount could be increased under the terms of the Development Agreement upon Navitor Inc.’s request and the Company’s consent.

In 2020, the Company paid a one-time, nonrefundable, and non-creditable fee of $ 10 million for the option to acquire or license NV-5138 (SPN-820) and made a $ 15 million equity investment representing approximately 13 % ownership in Navitor Inc.

There are also certain additional payments which could be incurred by the Company that are contingent upon Navitor Inc.

achieving defined milestones.

These milestone payments include an additional license or acquisition fee depending on whether the Company ultimately licenses or acquires NV-5138, and subsequent clinical, regulatory and sales milestone payments.

The Company has an option to acquire or license NV-5138 (SPN-820), for which additional payments would be required.

In addition to entering into the Development Agreement in April 2020, the Company acquired Series D Preferred Shares of Navitor Inc.

(the "Navitor Shares") for $ 15 million, representing an approximately 13 % ownership position in Navitor Inc.

As part of a legal restructuring in March 2021, the Company's Navitor Shares were exchanged for membership interests in Navitor Pharmaceutics LLC, which became the sole shareholder of Navitor Inc.

The Company has determined that although Navitor LLC is a VIE, the Company does not consolidate the results of this VIE into its financial results because the Company lacks the power to direct the activities that most significantly impact Navitor’s economic performance.

The Company records its share of the results of Navitor LLC, a private company, on a quarter lag as the financial information of Navitor LLC is not available on a sufficiently timely basis for the Company to apply the equity method of accounting.

In December 2021, Navitor LLC sold one of its subsidiaries and distributed cash to its members in accordance with each member's share of the proceeds from the sale.

The Company received $ 12.9 million in December 2021 from Navitor LLC in connection with this sale.

As the Company's policy is to record its share of the results in its equity method investment on a quarter lag as previously indicated, the Company recorded the cash amount received in Other current liabilities in the consolidated balance sheets as of December 31, 2021.

In the first quarter of 2022, the Company determined its estimated share of Navitor LLC's year-end 2021 earnings and recorded a gain of $ 12.9 million in Interest and other income, net in the consolidated statement of earnings.

These payments include an additional license or acquisition fee depending on whether the Company ultimately licenses or acquires NV-5138 (SPN-820), and subsequent clinical, regulatory and sales milestone payments.

The total payments, exclusive of the royalty payments on net sales of NV-5138 (SPN-820) and development costs paid by the Company under the agreement, have the potential to reach $ 410 million to $ 475 million, which includes an aggregate upfront payment of $ 25 million paid in 2020 for the option to acquire or license NV-5138 (SPN-820) and the equity investment, an additional license or acquisition fee depending on whether the

Supernus Pharmaceuticals, Inc.

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Investments (Continued)

The maximum exposure to losses related to Navitor LLC is approximately $ 50 million for Phase I and Phase II development of NV-5138 (SPN-820), and the cost of other development and formulation activities provided by the Company.

Company ultimately licenses or acquires NV-5138 (SPN-820), and subsequent clinical, regulatory and sales based milestone payments.

The Company also will have the first right of refusal for any compound with a similar mechanism of action to NV-5138 (SPN-820) on mTORC1 in the central nervous system.

In addition to entering into the Development Agreement in April 2020, as mentioned above , the Company acquired Series D Preferred Shares of Navitor Inc.

(the Navitor Shares), an equity investment representing an approximately 13 % ownership position in Navitor Inc.

As part of a legal restructuring in March 2021, the Company's Navitor Inc.

Shares were exchanged for membership interests in Navitor Pharmaceutics LLC (Navitor LLC), which became the sole shareholder of Navitor Inc.

In the second quarter of 2024, the Company consented to payment of additional Phase 2 development costs for NV-5138 (SPN-820) as they are incurred, but reserves the right to terminate payment of future development costs at its discretion.

The maximum exposure to losses related to Navitor LLC includes the approximately $ 50.0 million for Phase 1 and Phase 2 development of NV-5138 (SPN-820) already paid by the Company, plus the cost of other development and formulation activities provided by the Company and additional Phase 2 development costs the Company agreed to pay pursuant to the Development Agreement.

Subsequent to the Development Agreement entered into in 2020, no additional equity investment has been made or financing has been provided to Navitor Inc.

or Navitor LLC.

In December 2021, Navitor LLC sold one of its subsidiaries and distributed cash to its members in accordance with each member's share of the proceeds from the sale.

The Company received $ 12.9 million in December 2021 from Navitor LLC in connection with this sale.

Fair Value of Financial Instruments

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The Company's financial assets and liabilities that are required to be measured at fair value on a recurring basis are as follows (dollars in thousands):

Fair Value Measurements at December 31, 2023

Total Fair Value at December 31, 2023 Quoted Prices

in Active Markets

for Identical Assets

(Level 1) Significant

(Level 2) Unobservable

Inputs that Reflect the Company's own Assumptions

Fair Value Measurements

Total Fair Value at December 31, 2024

Cash and cash equivalents

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Marketable securities

Corporate, U.S.

government agency and municipal debt securities 179,820 — 179,820 —

Long term marketable securities

Corporate and municipal debt securities 16,617 — 16,617 —

Corporate debt securities 355,201 — 355,201 —

U.S government agency securities 29,080 — 29,080 —

Other noncurrent assets

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Total liabilities at fair value $ 47,340 $ — $ — $ 47,340

Fair Value Measurements at December 31, 2022

Total Fair Value at December 31, 2022 Quoted Prices

in Active Markets

for Identical Assets

(Level 1) Significant

(Level 2) Unobservable

Inputs that Reflect the Company's own Assumptions

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Fair Value of Financial Instruments (Continued)

Fair Value Measurements

Total Fair Value at December 31, 2023 Level 1

Cash and cash equivalents

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Marketable securities

Corporate, U.S.

government agency and municipal debt securities 368,214 — 368,214 —

Corporate debt securities 78,007 — 78,007 —

Municipal debt securities 10,916 — 10,916 —

government agency debt securities 90,897 — 90,897 —

Long-term marketable securities

Corporate and municipal debt securities 93,896 — 93,896 —

Corporate debt securities 16,617 — 16,617 —

Other noncurrent assets

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Total liabilities at fair value $ 53,450 $ — $ — $ 53,450

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Fair Value of Financial Instruments (Continued)

Other Financial Instruments

The carrying amounts of other financial instruments, including accounts receivable, accounts payable, and accrued expenses, approximate fair value due to their short-term maturities.

Financial Liabilities Recorded at Carrying Value

The following table sets forth the carrying value and fair value of the Company's financial liabilities that are not carried at fair value (dollars in thousands):

December 31, 2022

Carrying Value Fair Value (Level 2)

Convertible notes, net $ 401,968 $ 395,959

The fair value was estimated based on actual trading information, and quoted prices, both provided by bond traders.

Contingent Consideration

The following table provides the current and long-term portions related to the contingent consideration for the USWM Acquisition and Adamas Acquisition (dollars in thousands):

The following table provides the current and long-term portions related to the contingent consideration for the USWM Acquisition and Adamas Acquisition (as defined below) (dollars in thousands):

2024 December 31,

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Total $ 47,340 $ 53,450

The Company's contingent consideration liabilities are related to the USWM Acquisition in 2020 (as defined below) and the Adamas Acquisition in 2021.

The Company's contingent consideration liabilities are related to the USWM Acquisition in 2020 and the Adamas Acquisition in 2021.

The contingent consideration liabilities are measured at fair value on a recurring basis using either a Monte Carlo simulation or the income approach.

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Changes in any of those inputs together or in isolation may result in significantly lower or higher fair value measurement.

The change in fair value is reported on the consolidated statement of earnings in Contingent consideration (gain) expense .

USWM Contingent Consideration

On June 9, 2020 (the USWM Closing Date), the Company completed its acquisition of all the outstanding equity of USWM Enterprises, LLC (USWM Enterprises) (USWM Acquisition).

The USWM Acquisition included potential additional contingent consideration payments for regulatory and development milestones and sales-based milestones.

As of December 31, 2023, the remaining potential contingent consideration payments include the following:

• Regulatory and developmental milestones:

• The potential $ 55 million in regulatory and development milestones is comprised of (1) $ 25 million related to the FDA's approval of the SPN-830 NDA and (2) $ 30 million related to the subsequent commercial product launch.

• The $ 30 million sales-based milestone that was due upon the achievement of certain U.S.

net product sales of APOKYN in 2023 was not achieved.

The key assumptions considered in estimating the fair value include the estimated probability and timing of milestone achievement, such as the probability and timing of obtaining regulatory approval, discount rate, and the estimated amount and timing of projected revenues from the acquired USWM products.

The change in fair value is reported on the consolidated statement of earnings in Contingent consideration gain .

Supernus Pharmaceuticals, Inc.

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Contingent Consideration (Continued)

USWM Contingent Consideration

On June 9, 2020 (the USWM Closing Date), the Company completed its acquisition of all the outstanding equity of USWM Enterprises, LLC (USWM Enterprises) (USWM Acquisition).

The USWM Acquisition included potential additional contingent consideration payments for regulatory and development milestones and sales-based milestones.

As of December 31, 2024, the remaining potential contingent consideration payments are up to $ 55 million in regulatory and development milestones comprised of (1) $ 25 million related to the FDA's approval of the SPN-830 NDA and (2) $ 30 million related to the subsequent commercial product launch.

In February 2025, the FDA approved ONAPGO (apomorphine hydrochloride) injection, formerly known as SPN-830, as the first and only subcutaneous apomorphine infusion device for the treatment of motor fluctuations in adults with advanced PD.

ONAPGO will be launched in the second quarter of 2025.

As such, the Company paid the $ 25 million milestone related to the FDA's approval of the SPN-830 NDA in February 2025, and expects the remaining $ 30 million milestones to be due and paid in 2025.

Adamas Contingent Consideration

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Each CVR represents the contractual right to receive a contingent payment of $ 0.50 per share in cash, less any applicable withholding taxes and without interest, upon the achievement of the applicable milestone (each such amount, a Milestone Payment) in accordance with the terms of a Contingent Value Rights Agreement entered into between the Company and American Stock Transfer & Trust Company, LLC, as rights agent, as further defined in the CVR agreement.

One Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $ 150 million during any consecutive 12-month period ending on or before December 31, 2024 (Milestone 2024).

Another Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $ 225 million during any consecutive 12-month period ending on or before December 31, 2025 (Milestone 2025 and, together with Milestone 2024, the Milestones).

One Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $ 150 million during any consecutive twelve-month period ending on or before December 31, 2024 (Milestone 2024).

Another Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $ 225 million during any consecutive twelve-month period ending on or before December 31, 2025 (Milestone 2025 and, together with Milestone 2024, the Milestones).

Each Milestone may only be achieved once.

The possible outcomes for the contingent consideration range from $ 0 to $ 50.9 million on an undiscounted basis.

As of December 31, 2024, the 2024 Milestone was not met and the possible outcomes for the remaining 2025 Milestone contingent consideration is $ 0 or $ 25.0 million on an undiscounted basis.

The key assumptions considered in estimating the fair value of the Adamas sales-based milestones include the estimated revenue projections, volatility, estimated discount rates and risk-free interest rate.

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Contingent Consideration (Continued)

Change in the Fair Value of Contingent Consideration

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USWM Acquisition Adamas Acquisition Total

Balance at December 31, 2020 $ 76,700 $ — $ 76,700

Initial estimate of contingent consideration at Closing Date — 10,307 10,307

Change in fair value recognized in earnings ( 6,530 ) — ( 6,530 )

Balance at December 31, 2021 70,170 10,307 80,477

Balance, December 31, 2021 $ 70,170 $ 10,307 $ 80,477

Milestone payments ( 25,000 ) — ( 25,000 )

Change in fair value recognized in earnings 1,100 ( 1,610 ) ( 510 )

Balance at December 31, 2022 $ 46,270 $ 8,697 $ 54,967

Balance, December 31, 2022 46,270 8,697 54,967

Change in fair value recognized in earnings 130 ( 1,647 ) ( 1,517 )

Balance at December 31, 2023 $ 46,400 $ 7,050 $ 53,450

Balance, December 31, 2023 46,400 7,050 53,450

Change in fair value recognized in earnings 940 ( 7,050 ) ( 6,110 )

Balance, December 31, 2024 $ 47,340 $ — $ 47,340

The Company recorded the following changes in fair value of the contingent consideration liability for the USWM milestones:

• For the year ended December 31, 2023, the Company recorded $ 0.1 million expense which was primarily driven by the passage of time, as well as the change in timing of milestone achievement and estimated discount rate in the first quarter of 2023.

• For the year ended December 31, 2024, the Company recorded a $ 0.9 million expense which was primarily driven by passage of time, as well as the change in timing of milestone achievement and estimated discount rate.

• For the year ended December 31, 2023, the Company recorded a $ 0.1 million expense which was primarily driven by the passage of time and, as well as the change in timing of milestone achievement and estimated discount rate.

• For the year ended December 31, 2022, the Company recorded a $ 1.1 million expense which was primarily driven by the passage of time and the accretion to the payout amount related to the milestone achieved in the first quarter of 2022.

• For the year ended December 31, 2021, the Company recorded a $ 6.5 million gain which was primarily due to the write-down of the sales based contingent consideration liabilities offset by an increase in the estimated fair value of regulatory and developmental milestones due to the passage of time.

The Company paid $ 25 million of the USWM contingent consideration in the first quarter of 2022 of which

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Contingent Consideration (Continued)

$ 22.9 million represents the acquisition date fair value of the contingent consideration liability and was reported under cash flows from financing activities.

The Company paid $ 25 million of the USWM contingent consideration in the first quarter of 2022 of which $ 22.9 million represents the acquisition date fair value of the contingent consideration liability and was reported under cash flows from financing activities.

The remaining $ 2.1 million represents the excess of the acquisition date fair value and was reported under cash flows from operating activities.

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The Company recorded the following changes in fair value of the contingent consideration liabilities for the Adamas CVRs:

• For the year ended December 31, 2023, the Company recorded a $ 1.6 million gain which was primarily driven by the passage of time.

• For the year ended December 31, 2022, the Company recorded a $ 1.6 million gain primarily due to changes in market data and revenue projections.

• For the year ended December 31, 2024, the Company recorded a $ 7.1 million gain which was primarily driven by the non achievement of Milestone 2024.

• For the year ended December 31, 2023, the Company recorded a $ 1.6 million gain primarily driven by the passage of time.

• For the year ended December 31, 2022, the Company recorded $ 1.6 million gain which was primarily due to changes in market data and revenue projections.

Goodwill and Intangible Assets, Net

The following table sets forth the gross carrying amounts of goodwill (dollars in thousands):

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Goodwill and Intangible Assets, Net (Continued)

2024 December 31,

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Remaining Weighted

Average Amortization Period

(Years) Carrying Amount, Gross Accumulated Amortization Carrying Amount, Net Carrying Amount, Gross Accumulated Amortization Carrying Amount, Net

Average Life (Years) Carrying Amount, Gross Accumulated Amortization Carrying Amount, Net Carrying Amount, Gross Accumulated Amortization Carrying Amount, Net

Acquired in-process research and development $ 124,000 $ — $ 124,000 $ 124,000 $ — $ 124,000

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Total intangible assets 5.92 $ 829,131 $ ( 307,219 ) $ 521,912 $ 829,131 $ ( 229,242 ) $ 599,889

Amortization expense for intangible assets was $ 78.0 million, $ 82.4 million, and $ 82.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Patent defense costs are deferred legal fees incurred in conjunction with defending patents for Oxtellar XR and Trokendi XR.

patents covering Trokendi XR and Oxtellar XR will expire no earlier than 2027.

In regards to Trokendi XR, the Company entered into settlement agreements that allowed third parties to enter the market by January 1, 2023.

In regards to Oxtellar XR, the Company entered into settlement and license agreements that allows third parties to enter the market in September 2024, or sooner under certain conditions.

In regards to XADAGO, the Company entered into settlement and license agreements that allows third parties to enter the market in December 2027, or sooner under certain conditions.

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Goodwill and Intangible Assets, Net (Continued)

In the fourth quarter of 2023, the Company recognized impairment charges of $ 20.2 million mainly due to the partial write-off of the carrying value of some of its acquired intangible assets, primarily XADAGO.

The Company entered into settlement agreements that allowed third parties to enter the Trokendi XR market on January 1, 2023.

The Company entered into settlement and license agreements that allowed a third party to enter the Oxtellar XR market in September 2024.

The Company entered into settlement and license agreements that allows third parties to enter the XADAGO market in December 2027, or sooner under certain conditions.

In the fourth quarter of 2023, the Company recognized impairment charges of $ 20.2 million related to some of its acquired intangible assets, primarily XADAGO.

The primary factors that led to the impairment determinations were the following:

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The impairment loss is reported as Intangible asset impairment charges in the consolidated statements of earnings.

Amortization expense for intangible assets was approximately $ 82.4 million, $ 82.6 million, and $ 30.0 million for the years ended December 31, 2023, 2022, and 2021, respectively.

The following table sets forth the anticipated annual amortization expense for definite-lived intangible assets.

Actual amortization expense to be reported in future periods could differ from these estimates as a result of acquisitions, divestitures, and asset impairments, among other factors (dollars in thousands):

Actual amortization expense to be reported in future periods could differ from these estimates as a result of acquisitions, divestitures, and

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Goodwill and Intangible Assets, Net (Continued)

asset impairments, among other factors (dollars in thousands):

Estimated Amortization Expense

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Thereafter 46,813

The 0.625 % Convertible Senior Notes Due 2023 (2023 Notes), which were issued in March 2018, bear interest at an annual rate of 0.625 %, payable semi-annually in arrears on April 1 and October 1 of each year.

The 0.625 % Convertible Senior Notes Due 2023 (2023 Notes), which were issued in March 2018 with a total principal amount of $ 402.5 million and interest at an annual rate of 0.625 %, payable semi-annually in arrears on April 1 and October 1 of each year.

The 2023 Notes matured on April 1, 2023.

On March 30, 2023, the Company transferred funds totaling $ 403.8 million to the Trustee (Wilmington Trust) related to the repayment of the 2023 Notes which was reported as restricted cash in the first quarter of 2023.

On April 1, 2023, the Company paid the total principal amount due of $ 402.5 million under the 2023 Notes and the remaining outstanding interest due of $ 1.3 million with the restricted cash.

On April 1, 2023, the Company paid the total principal amount due of $ 402.5 million under the 2023 Notes and the remaining outstanding interest due of $ 1.3 million.

No 2023 Notes were converted.

Contemporaneous with the issuance of the 2023 Notes, the Company also entered into separate privately negotiated convertible note hedge transactions (collectively, the Convertible Note Hedge Transactions) with each of the call spread counterparties.

The Company issued 402,500 convertible note hedge options.

The Convertible Note Hedge Transactions were expected to reduce the potential dilution of the Company’s common stock upon conversion of the 2023 Notes, and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted 2023 Notes, as the case may be.

As of March 31, 2023, the Convertible Note Hedges have expired.

The Convertible Note Hedge Transactions were expected to reduce the potential dilution of the Company’s common stock upon conversion of the 2023 Notes, and/or offset any potential cash payments the Company would have been required to make in excess of the principal amount of converted 2023 Notes, as the case may be.

The Convertible Note Hedges expired on March 30, 2023.

Concurrently with entering into the Convertible Note Hedge Transactions, the Company also entered into separate privately negotiated warrant transactions (collectively, the Warrant Transactions) with each of the call spread counterparties.

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The Warrant Transactions were intended to partially offset the cost to the Company of the purchased Convertible Note Hedge Transactions;

however, the Warrant Transactions could have had a dilutive effect with respect to the Company’s common

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Convertible Senior Notes Due 2023 (Continued)

stock, to the extent that the market price per share of the Company’s common stock, as measured under the terms of the Warrant Transactions, exceeded the strike price of the warrants.

however, the Warrant Transactions could have had a dilutive effect with respect to the Company’s common stock, to the extent that the market price per share of the Company’s common stock, as measured under the terms of the Warrant Transactions, exceeded the strike price of the warrants.

The warrants expired unexercised on November 22, 2023.

As of December 31, 2022 , the liability component of the 2023 Notes consists of the following (dollars in thousands):

2023 Notes $ 402,500

Unamortized debt discount and deferred financing costs ( 532 )

Total carrying value $ 401,968

The Company adopted ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, on January 1, 2022 using the modified retrospective method of transition resulting in an increase in the carrying amount of the debt by $ 20.6 million as of the adoption date.

No 2023 Notes were ever converted.

Uncommitted Demand Secured Line of Credit

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Upon certain customary events of default, all amounts due under the Credit Line will become immediately due and payable without demand, and UBS has the right, in its discretion, to liquidate, transfer, withdraw or sell all or any part of the Collateral and apply the proceeds to repay any borrowings pursuant to the Credit Line.

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Debt (Continued)

The Company has the right to repay any variable rate advance under the Credit Line at any time, in whole or in part, without penalty.

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2021 Equity Incentive Plan (2021 Plan) which was approved by the stockholders in June 2021.

The 2021 Plan is the successor to, and replaced the 2012 Equity Incentive Plan, as

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Share-Based Payments (Continued)

amended (the 2012 Plan).

The 2021 Plan is the successor to, and replaced the 2012 Equity Incentive Plan, as amended (the 2012 Plan).

The 2021 Plan is administered by the Company's Board of Directors and the Company's Compensation Committee of the Board.

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and other awards that are convertible into or otherwise based on the Company's common stock, to the Company's key employees, directors, consultants, and advisors.

The maximum number of shares that can be issued under the 2021 Plan shall not exceed 4,951,859 shares, which is the sum of (i) 2,000,000 shares and (ii) the approximately 2,951,859 shares that were available for grant under the 2012 Plan as of April 16, 2021.

On June 14, 2024, the Company's shareholders approved, and the Company has adopted, the Amended and Restated 2021 Equity Incentive Plan (the Amended 2021 Plan) to increase the number of shares of the Company's common stock available for issuance under the 2021 Plan by 4,000,000 shares.

The maximum number of shares that can be issued under the Amended 2021 Plan is 15,012,893 shares of the Company's common stock which includes the (i) 4,000,000 shares added pursuant to the adoption of the Amended 2021 Plan, (ii) the number of shares that remain available to be issued or transferred pursuant to awards under the 2021 Equity Incentive Plan as of the adoption date of the Amended 2021 Plan, and (iii) the number of shares that have already been issued or transferred pursuant to awards under the 2021 Plan prior to the approval by the Company’s stockholders of the Amended 2021 Plan.

Option awards are granted with an exercise price equal to the closing price of the Company's common stock as of the grant date.

Options and awards granted have a 10 year contractual term.

Options and awards granted have a ten year contractual term.

Options and awards granted to employees, consultants and advisors generally vest in four equivalent annual installments, starting on the first anniversary of the grant's date.

2 unchanged sentences

The Company has adopted the Supernus Pharmaceuticals, Inc.

2012 Employee Stock Purchase Plan, as amended (the ESPP).

2012 Employee Stock Purchase Plan (as amended to date, the ESPP).

The ESPP allows eligible employees the opportunity to acquire shares of the Company's common stock at periodic intervals through accumulated payroll deductions.

These deductions are applied at the semi-annual purchase dates of June 30 and December 31 to purchase shares of common stock at a discount.

These deductions are applied at the semi-annual purchase dates of June 30 and December 31 to purchase shares of common stock from the Company at a discount.

Eligible employees may purchase shares at the lower of 85 % of the fair market value at either the first day of the purchase period or the fair market value at the end of the purchase period.

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The Company records compensation expense related to its ESPP.

Share-based compensation expense

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Share-Based Payments (Continued)

Share-based compensation expense is as follows (dollars in thousands):

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

2 unchanged sentences

Total $ 27,755 $ 26,759 $ 17,568

Stock Option and Stock Appreciation Rights

The following table summarizes stock option and stock appreciation rights (SAR) activities:

Options & SARs Weighted

The following table summarizes stock option activities:

Exercise Price

15 unchanged sentences

Exercisable 4,137,283 $ 29.54 4.4 $ 30,396

The weighted average grant date fair value of options granted for the years ended December 31, 2024, 2023, and 2022 were $ 16.57 , $ 21.30 , and $ 18.10 per share, respectively.

The aggregate intrinsic value of shares exercised for the years ended December 31, 2024, 2023, and 2022 were $ 14.4 million, $ 5.1 million, and $ 16.3 million, respectively.

Proceeds from the options exercised for the years ended December 31, 2024, 2023, and 2022 were $ 6.8 million, $ 4.3 million, and $ 10.4 million, respectively.

The total fair value of the underlying common stock related to options that vested during the years ended December 31, 2024, 2023, and 2022 were approximately $ 16.7 million, $ 14.8 million, and $ 13.9 million, respectively.

Supernus Pharmaceuticals, Inc.

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Share-Based Payments (Continued)

The weighted-average grant date fair value of options granted for the years ended December 31, 2023, 2022, and 2021 were $ 21.3 million, $ 18.1 million, and $ 16.3 million per share, respectively.

The aggregate intrinsic value of shares exercised for the years ended December 31, 2023, 2022, and 2021 were $ 5.1 million, $ 16.3 million, and $ 2.8 million, respectively.

Proceeds from the options exercised for the years ended December 31, 2023, 2022, and 2021 were $ 4.3 million, $ 10.4 million, and $ 4.9 million, respectively.

The total fair value of the underlying common stock related to shares that vested during the years ended December 31, 2023, 2022, and 2021 were approximately $ 14.8 million, $ 13.9 million, and $ 13.9 million, respectively.

The fair value of each option award is estimated on the date of the grant, using the Black-Scholes option-pricing model and the assumptions in the following table:

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

5 unchanged sentences

58.71 % - 60.15 %

Dividend yield 0 % 0 % 0 %

Expected dividend yield 0 % 0 % 0 %

Expected term 5.77 years - 7.91 years

9 unchanged sentences

RSUs Weighted-

Grant Date Fair Value per Share Aggregate Intrinsic Value

(in thousands) Aggregate Fair Value

(in thousands)

Grant Date Fair Value per Share

Nonvested, December 31, 2022 131,960 $ 32.17

7 unchanged sentences

Nonvested, December 31, 2024 378,165 $ 32.48

The total aggregate grant date fair value of RSUs that vested during the years ended December 31, 2024, 2023, and 2022 were $ 3.7 million, $ 1.5 million, and $ 0.6 million, respectively.

As of December 31, 2024, the total unrecognized compensation expense was $ 8.4 million.

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Nonvested, December 31, 2024 324,685 $ 28.80 20,000 $ 28.63 344,685 $ 28.79

The total fair value of PSUs that vested during the years ended December 31, 2023, 2022, and 2021 were $ 4.1 million, $ 1.0 million, and $ 1.2 million, respectively.

The total intrinsic value of PSUs vested during the years ended December 31, 2023, 2022, and 2021 were $ 0.5 million, $ 0.2 million, and $ 0.0 million , respectively.

The total aggregate grant date fair value of PSUs that vested during the years ended December 31, 2024, 2023, and 2022 were $ 3.9 million, $ 4.1 million, and $ 1.0 million, respectively.

Performance-Based Awards

The performance-based PSU awards require certain performance targets to be achieved in order to vest.

Vesting is also subject to continued service requirements through the date of achievement of the performance target is certified.

Vesting is also subject to continued service requirements through the date the achievement of the performance target is certified.

As of December 31, 2024, the total unrecognized compensation expense was $ 6.1 million.

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Basic earnings per share (EPS) is calculated using the weighted average number of common shares outstanding.

Diluted EPS is calculated using the weighted average number of common shares outstanding, including the dilutive effect of the Company’s stock option grants, SARs, RSUs, employee stock purchase plan (ESPP) awards, and the 2023 Notes, as determined per the if-converted method for the years ended December 31, 2023 and December 31, 2022 in connection with the adoption of ASU 2020-06, and the treasury stock method for the year ended December 31, 2021.

Diluted EPS is calculated using the weighted average number of common shares outstanding, including the dilutive effect of the Company’s stock options, stock awards, and employee stock purchase plan (ESPP) awards using the treasury-stock method, and the 2023 Notes using the if-converted method.

Supernus Pharmaceuticals, Inc.

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The following table sets forth the computation of basic and diluted EPS for the years ended December 31, 2024, 2023 and 2022 (dollars in thousands, except share and per share amounts):

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

4 unchanged sentences

Effect of dilutive securities:

Stock options, RSUs and SARs 970,547 1,230,721 1,257,414

Stock options and stock awards 858,474 970,547 1,230,721

Convertible notes — — 6,783,936

3 unchanged sentences

Effect of Convertible Notes and Related Convertible Note Hedges and Warrants

The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method of transition.

ASU 2020-06 requires the application of the if-converted method for calculating diluted EPS, whereas the Company previously calculated diluted EPS under the treasury stock method.

As a result of the adoption of ASU 2020-06, the 6.8 million in dilutive shares associated with the conversion of the 2023 Notes were included in the calculation of diluted EPS for the year ended December 31, 2022 because their inclusion would be dilutive.

For the year ended December 31, 2021, the Company calculated diluted earnings per share using the treasury stock method wherein the shares associated with the conversion of the 2023 Notes were excluded as the Company assumed the 2023 Notes would be settled entirely or partly in cash.

In connection with the issuance of the 2023 Notes, the Company entered into Convertible Note Hedge and Warrant Transactions as described further in Note 8, Debt .

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In addition to the above described effect of the Convertible Note Hedge and Warrant Transactions, the Company also excluded the common stock equivalents of the following outstanding stock-based awards and shares associated with the conversion of the 2023 Notes in the calculation of diluted EPS, because their inclusion would be anti-dilutive:

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

Stock options, RSUs, PSUs 543,140 373,728 1,275,114

Stock options and stock awards 601,684 543,140 373,728

2023 Notes — 1,691,337 —

3 unchanged sentences

The summary of the income tax expense for the years ended December 31, 2024, 2023, and 2022 is as follows (dollars in thousands):

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

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federal statutory income tax rate to annual income tax expense at the Company's effective tax rate is as follows (dollars in thousands):

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

4 unchanged sentences

Research and development credits ( 8,628 ) ( 1,117 ) 237

Loss on investment ( 2,147 ) — —

Uncertain income tax position 2,620 ( 2,529 ) ( 1,992 )

4 unchanged sentences

Notes to Financial Statements (Continued)

Income Tax Expense (Continued)

Income Taxes (Continued)

The significant components of the Company's deferred income tax assets (liabilities) are as follows (dollars in thousands):

4 unchanged sentences

Accrued compensation and stock based compensation 15,912 15,613

Capitalized research and development 29,953 13,926

Operating lease liability 8,608 10,374

Capitalized research and development 47,103 29,953

Other 14,100 12,755

9 unchanged sentences

In assessing the realizability of deferred income tax assets, the Company considers whether it is more-likely-than-not that some or all of the deferred income tax assets will not be realized.

The ultimate realization of the deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the net operating loss (NOL) and tax credit carryforwards are available.

The ultimate realization of the deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the net operating loss (NOL) is available.

The Company considers projected future taxable income, the scheduled reversal of deferred income tax liabilities, and available tax planning strategies that can be implemented by the Company in making this assessment.

Based upon the level of historical taxable income and projections for future taxable income over the periods in which the NOL and credit carryforwards are available to reduce income taxes payable, management had determined it is not more-likely-than-not to realize all such net deferred tax assets.

A reconciliation of the deferred asset valuation allowance is as follows (dollars in thousands):

Years Ended December 31,

A reconciliation of the deferred tax asset valuation allowance is as follows (dollars in thousands):

Year Ended December 31,

2024 2023 2022

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(1) Amount comprised principally of acquisitions and purchase accounting adjustments in connect with acquisitions

The Company recorded a valuation allowance addition of $ 1.3 million for the year ended December 31, 2023.

The Company recorded a net valuation allowance addition of $ 5.9 million for the year ended December 31, 2024.

The valuation allowance is primarily related to federal and state net operating losses carryforwards acquired from the Adamas Acquisition that are not expected to be realizable in the future.

The Company has NOL carryforwards in several jurisdictions.

Due to changes in the Company's ownership, the utilization of net operating loss carryforwards that can be used to offset future taxable income are subject to annual limits in

Supernus Pharmaceuticals, Inc.

Notes to Financial Statements (Continued)

Income Tax Expense (Continued)

The Company has NOL carryforwards in several jurisdictions.

Due to changes in the Company's ownership, the utilization of net operating loss carryforwards that can be used to offset future taxable income are subject to annual limits in accordance with Internal Revenue Code (IRC) provisions, as well as similar state provisions.

Income Taxes (Continued)

accordance with Internal Revenue Code (IRC) provisions, as well as similar state provisions.

In addition, states may also impose other future limitations through state legislation or similar measures.

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The Company is no longer subject to U.S.

Federal income tax examinations for years prior to 2020.

Operating loss or tax credit carryforwards generated prior to 2020 may be subject to tax audit adjustment.

Federal income tax examinations for years prior to 2021 with the exception that operating loss or tax credit carryforwards generated prior to 2021 may be subject to tax audit adjustment.

The Company accounts for uncertain income tax positions pursuant to the guidance in ASC Topic 740, Income Taxes .

2 unchanged sentences

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (dollars in thousands):

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

5 unchanged sentences

Balance as of December 31 $ 5,840 $ 2,149 $ 4,323

The Company does not anticipate a material impact to the financial statements in the next 12 months as a result of uncertain tax positions and expiring statutes of limitation.

The Company does not anticipate a material impact to the financial statements in the next twelve months as a result of a change in liabilities for uncertain tax positions.

As of December 31, 2024, $ 3.5 million of the balance of unrecognized tax benefits was classified as Accounts payable and accrued liabilities .

At December 31, 2023 and 2022, respectively the balance of unrecognized tax benefits was classified as other long term liabilities.

All of our liabilities for unrecognized tax benefits would impact the effective tax rate, if recognized.

Office Space and Fleet Vehicle Leases

The Company has operating leases for its headquarters lease, certain other office space, and its fleet vehicles.

The Company has operating leases for its headquarters lease, certain office space, certain office equipment and its fleet vehicles.

With respect to the fleet vehicle leases, given the volume of individual leases involved in the overall arrangement, the Company applies a portfolio approach to effectively account for the operating lease assets and liabilities.

The Company also elected to combine the lease and non-lease components for the fleet vehicles and headquarters leases.

The Company made an accounting policy election, by class of underlying asset, to combine the lease and non-lease components for the headquarters, office space, office equipment and fleet vehicle leases.

The Company's headquarters lease commenced on February 1, 2019 (the Commencement Date) and will continue until April 30, 2034, unless earlier terminated in accordance with the terms of the lease.

The lease includes options to extend the lease for up to 10 years.

The lease includes options to extend the lease for up to ten years .

As part of the Adamas Acquisition, the Company acquired a lease for office space.

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This minimum purchase requirement represents the in-substance fixed contract consideration associated with the dedicated manufacturing facility which the Company accounts for as an embedded lease.

In October 2021, we entered into an amendment to the Merz Agreement which increased the price of the annual purchase commitment of MYOBLOC from € 3.0 million to approximately € 3.9 million.

The Company made an accounting policy election, by class of underlying asset, to not combine lease and non-lease components for the manufacturing facility.

5 unchanged sentences

Total lease assets $ 24,477 $ 28,994

Accounts payable and accrued liabilities

Lease liabilities, current

Operating lease liabilities, current portion Accounts payable and accrued liabilities 6,889 8,331

3 unchanged sentences

The components of operating lease costs are as follows (dollars in thousands):

Year Ended December 31,

2024 2023 2022

Operating lease cost:

3 unchanged sentences

Supplemental cash flow information related to leases is as follows (dollars in thousands):

Year Ended December 31,

2024 2023 2022

Cash paid for operating leases $ 17,283 $ 17,112 $ 12,883

Lease assets and tenant receivable obtained for new operating leases 7,170 1,867 10,868

Lease assets obtained for new operating leases 3,662 7,170 1,867

Supernus Pharmaceuticals, Inc.

1 unchanged sentence

Leases (Continued)

Weighted average lease term, and weighted average discount rate for operating leases as of December 31, 2023, are as follows:

Operating leases

The weighted average lease term and weighted average discount rate for operating leases are as follows:

Year Ended December 31,

Weighted-average remaining lease term (years) 7.0 7.3

8 unchanged sentences

(1) Calculated using the interest rate for each lease.

Segment Reporting

The Company operates in one operating segment and therefore has only one reportable segment.

The Company derives revenue primarily from sales of its commercial products in the U.S.

The Company's chief operating decision maker (CODM) is the chief executive officer.

The Company manages the business activities on a consolidated basis.

The CODM assesses performance of the Company, and decides how to allocate resources based on net income, which is reported in the consolidated statement of earnings as net earnings and allocates resources on a consolidated basis.

The CODM uses net earnings to decide whether to reinvest profits into the Company's current products or into other research and development initiatives for the Company's product candidates.

Net earnings is also used to monitor budget versus actual results.

The measure of the reportable segment assets is reported on the balance sheet as total assets.

The accounting policies of the reportable segment are the same as those described in Note 2, Summary of Significant Accounting Policies .

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Segment Reporting (Continued)

The following table shows the segment revenue, significant segment expenses and net earnings (dollars in thousands):

Year Ended December 31,

2024 2023 2022

Total revenues

$ 661,817 $ 607,521 $ 667,238

Significant Segment Expenses:

Cost of goods sold

77,906 83,779 87,221

Selling 153,105 149,955 147,289

Marketing 74,188 79,231 120,499

General and administrative 94,289 107,175 109,433

Research and development expenses

External development program expenses:

1,641 3,825 1,942

SPN-820 27,042 12,311 8,139

SPN-817 9,837 9,397 7,341

Qelbree 15,819 11,101 8,641

Early-stage programs and other expenses

16,352 20,467 16,929

Total external development program expenses

70,691 57,101 42,992

Internal employee-related expenses

38,105 34,492 31,560

Total research and development expenses

108,796 91,593 74,552

Other segment items (a)

79,668 94,472 67,533

$ 73,865 $ 1,316 $ 60,711

(a) Other segment items include amortization of intangible assets, intangible asset impairment charges, contingent consideration gain, net interest and other income, interest expense, and income tax expense, whose amounts are disclosed in the consolidated statement of earnings.

Composition of Other Balance Sheet Items

The following details the composition of other balance sheet items (dollars in thousands for amounts in tables):

Accounts Receivable

As of December 31, 2023, and December 31, 2022, the Company has reduced accounts receivable by approximately $ 10.7 million and $ 13.0 million, respectively.

Prompt pay discount and contractual service fees, which were originally recorded as reduction to revenues, represents estimated amounts not expected to be paid by our customers.

Accounts Receivable, Net

As of December 31, 2024, and December 31, 2023, the Company recorded allowances of approximately $ 12.3 million and $ 10.7 million, respectively, for prompt pay discount and contractual service fees paid to the Company's customers.

The Company's customers are primarily pharmaceutical wholesalers and distributors and specialty pharmacies.

The Company accounts for these prompt pay discount and contractual service fees as reduction to gross product sales at the time of sale.

See Note 2, Summary of Accounting Policies - Revenue from Product Sales.

Inventories, net

5 unchanged sentences

Total $ 54,293 $ 77,408

The Company recorded inventory write-offs of $ 8.0 million and $ 10.4 million for the years ended December 31, 2023 and 2022, respectively.

Supernus Pharmaceuticals, Inc.

1 unchanged sentence

Composition of Other Balance Sheet Items (Continued)

The Company recorded inventory write-offs of $ 8.9 million and $ 8.0 million for the years ended December 31, 2024 and 2023, respectively.

The inventory write-offs are reported on the consolidated statement of earnings in Cost of goods sold .

Property and Equipment, net

5 unchanged sentences

Computer equipment 1,112 960

Construction-in-progress — 206

29,388 28,935

7 unchanged sentences

Accrued compensation, benefits, & related accruals 21,225 20,722

Accrued manufacturing expenses 11,652 15,216

Accrued sales & marketing 11,007 11,666

Accrued manufacturing expenses 11,652 11,652

Accrued R&D expenses 5,898 10,530

15 unchanged sentences

Interest expense consists of the following (dollars in thousands):

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

Interest expense $ — $ ( 1,321 ) $ ( 2,542 )

Noncash interest expense on nonrecourse liability related to sale of future royalties ( 562 ) ( 2,416 ) ( 3,727 )

Interest expense on nonrecourse liability related to sale of future royalties — ( 562 ) ( 2,416 )

Noncash interest expense on debt — ( 532 ) ( 2,112 )

8 unchanged sentences

If these products are ultimately commercialized, the Company is also obligated to pay royalties to third parties, computed as a percentage of net product sales, for each respective product under a license agreement.

Through the USWM Acquisition, the Company acquired licensing agreements with other pharmaceutical companies for APOKYN, XADAGO, and MYOBLOC.

Through the USWM Acquisition, the Company acquired licensing agreements with other pharmaceutical companies for APOKYN, ONAPGO, XADAGO, and MYOBLOC.

The Company is obligated to pay royalties to third parties, computed as a percentage of net product sales, for each of the products under the respective license agreements.

The royalty expense incurred for these acquired products is recognized as Cost of goods sold in the consolidated statements of earnings.

Royalty Agreement

In the third quarter of 2014, the Company received $ 30.0 million pursuant to a Royalty Interest Acquisition Agreement related to the purchase by HC Royalty of certain of the Company's rights under the Company's agreement with United Therapeutics related to the commercialization of Orenitram (treprostinil) Extended-Release Tablets.

The Company recorded a nonrecourse liability related to this transaction and amortizes this liability as noncash royalty revenues.

Full ownership of the royalty rights has reverted back to the Company as the cumulative payment threshold has been reached as of June 30, 2023 (see Note 2, Summary of Significant Accounting Policies - Royalty Revenues and Note 3, Disaggregated Revenues ).

As of December 31, 2022, the n onrecourse liability related to sale of future royalties was $ 6.0 million and was included in Other current liabilities as reported on the consolidated balance sheet.

USWM Enterprises Commitments Assumed

5 unchanged sentences

Under the CIA, the MDD Subsidiaries agreed to and paid $ 17.5 million to resolve U.S.

Department of Justice allegations that it violated the False Claims Act and

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Commitments and Contingencies (Continued)

committed to the establishment and ongoing maintenance of an effective compliance program.

Department of Justice allegations that it violated the False Claims Act and committed to the establishment and ongoing maintenance of an effective compliance program.

The fine was paid by the MDD Subsidiaries prior to closing of the USWM Acquisition.

As part of the USWM Acquisition, the Company assumed the obligations of the CIA and could become liable for payment of certain stipulated monetary penalties in the event of any CIA violations.

In addition, the Company will continue to maintain a broad array of processes, policies and procedures necessary to comply with the CIA through March 2024.

Data Breach-related Contingency

On November 24, 2021, the Company announced that it was the target of a ransomware attack.

The attack had no significant impact on our business and did not cause any long-term disruption to our operations.

Based on its internal investigation, the Company believes the criminal ransomware groups ("criminal groups") copied certain data from the Company's systems, encrypted certain data on the Company's systems, and then deployed malware designed to impede access to the Company's systems.

Thereafter the criminal groups contacted the Company and threatened to publish certain data copied from the Company's systems.

Upon detection of the ransomware attack, the Company notified government authorities, engaged third-party cybersecurity experts through our outside counsel, and commenced its recovery process.

The Company maintains redundant off-site data backups, which were verified to have not been compromised by the ransomware attack and were utilized to restore the data encrypted by the criminal groups.

In the fourth quarter of 2021, the Company had successfully recovered the impacted files and took additional steps designed to further protect its networks and files.

Furthermore, while the Company has not been the subject of any legal proceedings involving the attack, the likelihood that the Company could be the subject of claims from persons alleging they suffered damages from the incident or actions by governmental authorities is possible, but the amount of such fines, penalties or costs, if any, cannot be estimated at this time.

The Company continues to monitor the situation.

In addition, the Company will continue to maintain a broad array of processes, policies and procedures necessary to comply with the CIA and submitted its final report during the second quarter of 2024.

The Company remains subject to its obligations under the CIA until it receives official notification of release from the Office of the Inspector General.

Claims and Litigation

From time to time, the Company may be involved in various claims, litigation and legal proceedings.

These matters may involve patent litigation, product liability and other product-related litigation, commercial and other matters, and government investigations, among others.

These matters may involve patent litigation, product liability and other product-related litigation, commercial and other matters, and government

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Commitments and Contingencies (Continued)

investigations, among others.

On a quarterly basis, the Company reviews the status of each significant matter and assesses its potential financial exposure.

16 unchanged sentences

Argument was held on January 10, 2022.

On August 25, 2022, the Ninth Circuit sided with the defendants by reversing the District Court’s public disclosure bar

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Commitments and Contingencies (Continued)

rulings and remanding the case back to the District Court to decide certain issues in the first instance.

On August 25, 2022, the Ninth Circuit sided with the defendants by reversing the District Court’s public disclosure bar rulings and remanding the case back to the District Court to decide certain issues in the first instance.

On October 11, 2022, the plaintiff filed a petition for rehearing with the Ninth Circuit which was denied on November 3, 2022.

2 unchanged sentences

On April 19, 2023, the plaintiff appealed the District Court's dismissal of the Federal False Claims Act claim.

The appeal remains pending in the United States Court of Appeals for the Ninth Circuit.

On February 20, 2024, the plaintiff filed a motion for an indicative ruling and to set aside the judgment in the District Court, based on the same arguments raised in his appeal.

That motion was fully briefed and the District Court determined that the motion for an indicative ruling was suitable for determination without a hearing.

On May 7, 2024, the District Court denied the plaintiff’s motion for an indicative ruling.

The appeal is fully briefed, and the Ninth Circuit heard oral argument on November 21, 2024.

On January 29, 2025, the Ninth Circuit affirmed the District Court’s order dismissing the litigation.

The plaintiff intends to file a Petition for Panel and En Banc Rehearing and has asked the Ninth Circuit to extend his filing deadline until March 31, 2025.

The Company intends to defend itself vigorously.

However, the Company can offer no assurances that it will be successful in a litigation.

APOKYN Litigation

2 unchanged sentences

On January 10, 2023, the Company filed motions to dismiss all claims and the lawsuit in its entirety.

As of April 12, 2023, briefing on those motions is now complete.

Those motions remain pending.

On April 10, 2023, the Court issued a scheduling order that provides for a Pretrial Conference on March 7, 2025, and a jury trial beginning on March 24, 2025.

Pretrial discovery is ongoing.

The Company intends to defend itself vigorously.

However, the Company can offer no assurances that it will be successful in a litigation.

Apotex Settlement and License Agreement

The Company entered into settlement and license agreements dated June 21, 2023 with Apotex Inc.

The agreements settled ongoing patent litigation regarding Apotex ANDA filings seeking approval to market a generic version of the Company's 150mg, 300mg, and 600mg strength Oxtellar XR (extended-release oxcarbazepine) tablets in September 2024, or sooner under certain conditions.

Between May 9, 2024 and June 4, 2024, the Court ruled on all motions to dismiss, declining to dismiss any claims against the Company, its subsidiaries, or Britannia Pharmaceuticals Limited and dismissing US WorldMeds Partners, LLC, USWM, LLC, and all of the individual defendants (former US WorldMeds executives) out of the case completely.

The Court then lifted the stay on fact depositions, which are now well underway and are expected to be completed by first half of February 2025.

Plaintiffs moved to revive the claims against US WorldMeds Partners, LLC and USWM, LLC, but not the former individual defendants.

Briefing was complete on August 21, 2024 and the Court heard argument on the motion on August 29, 2024.

The Court entered an Order that revived the claims against US WorldMeds Partners, LLC and USWM, LLC on December 5, 2024.

The operative scheduling order sets the following

Supernus Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (Continued)

Commitments and Contingencies (Continued)

key deadlines:

end of fact discovery January 31, 2025 (however, certain fact depositions will likely occur in the first half of February by agreement of the parties);

expert discovery to conclude May 12, 2025;

case dispositive motions to be filed June 2, 2025;

hearing on case dispositive and Daubert motions on September 11, 2025;

pretrial conference December 10, 2025;

a ten-day jury trial to begin on January 5, 2026.

On January 3, 2025, the Court issued an Oral Order requiring the parties to “engage in in-person mediation in good faith” and jointly select an agreed-upon mediator.

The parties are working to schedule the mediation to occur in late April 2025 in compliance with Court’s Oral Order that the mediation conference “occur no later than May 2, 2025 (unless the parties stipulate to a later date and such date is approved by the Court)."

Subsequent Events

ONAPGO will be launched in the second quarter of 2025.

The Company paid the $ 25 million milestone related to the FDA's approval of the SPN-830 NDA in February 2025, and expects the remaining $ 30 million milestone to be due and paid in 2025.

Refer to Note 6, Contingent Consideration , for further information.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data