Thursday, December 2, 2021

A Small Cap Equity holding: Supernus Pharmaceuticals, Inc (SUPN, $29.61): “Adamas Family, a Super Acquistion” By: Kendra Preissner, AIM Student at Marquette University

 Supernus Pharmaceuticals, Inc (SUPN, $29.61): “Adamas Family, a Super Acquistion”

By: Kendra Preissner, AIM Student at Marquette University

Disclosure: The AIM Equity Fund currently holds this position. This article was written by myself, and it expresses my own opinions. I am not receiving compensation for it and I have no business relationship with any company whose stock is mentioned in this article.


Supernus Pharmaceuticals, Inc. (NYSE: SUPN) An award-winning biopharmaceutical company headquartered in the United States that focuses on commercializing and developing central nervous system (CNS) disease treatments. 

  SUPN is expected by Wall Street to have declining earning and lower revenues. This is based on the results of their third-quarter reports. 

• Some drivers that will help combat a significant decrease in earnings are the proprietary technology platforms, intellectual property and exclusivity, and projected acquisition of competing pharmaceutical company, Adamas Pharmaceuticals. 

• This $400 million deal to acquire Adamas Pharmaceuticals will significantly bolster SUPN’s Parkinson’s portfolio. 

• Projected growth due to collaboration propelled by a strong overlap with existing infrastructure between the two companies is $60 to $80 million

Key points: Famous actress, Holly Robinson Peete has partnered with Supernus Pharmaceuticals to help raise awareness about Attention-deficit/Hyperactivity disorder and neurodiversity during (ADHD) month. Peete has shared her journey about her personal experiences with ADHD because of her daughter, Ryan who was diagnosed. 

With the partnership with Peete as well as the deal of acquiring Adamas Pharmaceutical, SUPN is positioning itself to appeal to a wider base of patients and end-users. 

The acquisition of Adamas Pharmaceuticals will allow Supernus to build a strong and diversified portfolio of value-enhancing and clinically differentiated medicines targeted to combat central nervous system diseases.

The company has established a reputation for strong commercial execution and is forecasting strong performance with access to Adamas’ innovative therapies which will benefit their already existing and growing patient base. 

What has the stock done lately? As of Thursday, October 28, the stock is up 17.63% year to date. The company has outperformed the S&P 500 index on average over the past two years; however, the company’s performance has followed closely with that of the S&P small-cap healthcare index. 

 Past Year Performance: SUPN has increased 67.29% in value over the past year, but the stock still has room to grow. It has experienced a 67.20% 52-week change with a low of $17.20 and a high of $34.29 over the past 52-week range. 

Source: FactSet

My Takeaway

With the acquisition planning to take place and the partnership with Holly Robinson Peete as an advocate for the company, Supernus Pharmaceuaticals, Inc. has undoubtedly put itself in a position to generate impressive long-term growth and revenues if they continue to innovate and maintain a strong position in the health technology and pharmaceutical markets. These markets are fast-paced and pivot quickly so it is possible the acquisition might leave the company with a blind spot, where they are focusing too much on their acquisition rather than investing in R&D within their own company. Making note of this, the acquisition still places them in an appealing position within their market, allowing them more access to greater amounts of resources and supplier relations. 

Source: FactSet