Supernus Pharmaceuticals Inc

NASDAQ:SUPN

Earnings Call Analysis

Company Adjusts to Product Shift, Sets 2024 Outlook

In the fourth quarter of 2023, the company reported a slight decrease in total revenue to $164.3 million, primarily due to a $37.6 million decline in sales of Trokendi XR, although partially offset by sales growth in other products like Qelbree and GOCOVRI. Overall operating loss was about $1 million, compared to an operating earnings of $34.3 million in the same period of the previous year. The company took a $20.2 million impairment charge related to the loss of exclusivity of a product. Adjusted operating earnings were down from the previous year. Looking ahead, the company provides guidance for 2024, expecting total revenue to be between $580 million to $620 million and combined R&D and SG&A expenses to range from $430 million to $460 million, suggesting potential operating losses or break-even performance.

Surmounting Challenges with Growth in Core Products

The company faced a critical situation in 2023 due to the loss of exclusivity on Trokendi XR, a major revenue contributor. Nevertheless, impressive growth was delivered in other areas, overcoming Trokendi XR's decline. Excluding this product, there was an outstanding 26% growth in total revenues. Growth products Qelbree and GOCOVRI were particularly strong, with their combined net sales soaring by 57% compared to the previous year.

Remarkable Performance of Qelbree and Expansion Plans

Qelbree took center stage, marking its first full year with pediatric and adult indications leading to a remarkable 91% increase in prescriptions and a 129% jump in net sales from the previous year. The fourth quarter alone saw net sales of $46.4 million, a spectacular 97% rise over the same quarter in the prior year. The company has strategically set a target for gross to net deductions and achieved a 49.5% rate in the last quarter, improving the average net price per prescription. The current prescriber base expanded significantly, suggesting a high level of satisfaction with the product. The focus on the adult ADHD market in 2024 is expected to leverage nearly two-thirds of the total market potential.

GOCOVRI and Other Products Display Steady Performance

GOCOVRI prescriptions and net sales increased by 10% and 15% respectively in 2023, hitting a record $120 million in sales. Its unique market position has been a key driver of its performance. Oxtellar XR showed stable sales, while Trokendi XR declined due to exclusivity loss. Combined sales from these two are anticipated to retreat further in 2024, with sales projected between $125 million to $135 million.

Pipeline Development and Future Prospects

The company's CNS pipeline made significant strides with various clinical milestones expected over the next 12 to 18 months. Notable highlights include trials for Qelbree in ADHD patients with comorbidities and data releases for SPN-820 in major depressive disorder and SPN-817 in treatment-resistant seizures. Corporate efforts also include a strategic focus on identifying valuable growth opportunities within CNS.

Financial Outcomes and Revised Forcecast

Despite a $20.2 million impairment charge for XADAGO, the company recorded full-year 2023 net sales of $607.5 million. However, this was a decrease compared to the previous year's $667.2 million, largely due to the decline of Trokendi XR offset by growth in Qelbree and GOCOVRI. A focus on R&D and marketing strategies led to increased expenses but set the stage for long-term growth. The cash position remains strong, with the company holding around $271.5 million in cash, cash equivalents, and marketable securities. Furthermore, robust guidance for 2024 anticipates revenues between $580 million to $620 million, with substantial growth in core products expected to balance declines in legacy products.

Earnings Call Transcript 2023-Q4

[Operator]

Good afternoon, and welcome to the Supernus Pharmaceuticals Fourth Quarter and Full Year 2023 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Peter Vozzo of ICR Westwicke, Investor Relations representative for Supernus Pharmaceuticals. You may begin.

[Peter Vozzo]

Thank you, Rebecca. Good afternoon, everyone, and thank you for joining us today for Supernus Pharmaceuticals' Fourth Quarter and Full Year 2023 Financial Results Conference Call. Today, after the close of the market, the company issued a press release announcing these results. On the call with me today are Supernus' Chief Executive Officer, Jack Khattar; and Chief Financial Officer, Tim Dec.

Today's call is being made available via the Investor Relations section of the company's website at ir.supernus.com. During the course of this call, management may make certain forward-looking statements regarding future events and the company's future performance. These forward-looking statements reflect Supernus' current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the Risk Factors section of the company's latest SEC filings.

Actual results may differ materially from those projected in these forward-looking statements. For the benefit of those of you who may be listening to the replay, this call is being held and recorded on September -- February 27, 2024. Since then, the company may have made additional announcements related to the topics discussed. Please reference the company's most recent press releases and current filings with the SEC. Supernus declines any obligation to update these forward-looking statements, except as required by applicable securities laws.

I will now turn the call over to Jack.

[Jack Khattar, executive]

Thank you, Peter. Good afternoon, everyone, and thanks for taking the time to join us on today's call. Our performance in 2023 underscores our strong execution and emphasis on growing our revenue base despite the loss of exclusivity on Trokendi XR. Excluding Trokendi XR, Supernus delivered strong growth of 26% in total revenues in 2023 compared to 2022. Specifically, our growth products, Qelbree and GOCOVRI delivered robust 57% growth in combined net sales compared to last year. In addition, combined full year 2023 net sales for Qelbree and GOCOVRI reached approximately $260 million, which significantly exceeded the $167 million decline in net sales of Trokendi XR.

As a result of our emphasis on growing the rest of our portfolio throughout 2023, Trokendi XR closed the year, representing only 13% of total revenues in the last quarter of 2023. Regarding Qelbree, the year 2023 was the first full year with both pediatric and adult indications. For the full year, Qelbree's prescriptions, as reported by IQVIA, reached 617,192 prescriptions, representing a growth rate of 91% compared to 2022. Net sales for 2023 recorded an even stronger growth rate of 129% benefiting from the prescription growth and the steady improvement in gross to net throughout the year. Moreover, Qelbree finished the year with a strong fourth quarter, reaching net sales of $46.4 million. That represents a 97% increase over the growth quarter -- of the fourth quarter of 2022 and a 25% sequential quarter-to-quarter increase from the third quarter of 2023.

In the fourth quarter, prescriptions grew by 47% compared to 2022, and we exceeded our goal of lowering the gross to net deductions to the 50% to 55% range. Actual gross to net for the fourth quarter 2023 was 49.5%, resulting in an average net price per prescription of $268 compared to 61% and $201, respectively, in the same period last year. For the year 2024, we expect the gross to net for Qelbree to be in the range of 50% to 55%, with fluctuations that you would typically expect on a quarterly basis. In 2023, Qelbree also expanded its base of prescribers ending the fourth quarter with approximately 25,938 prescribers, up from 16,822 in the fourth quarter of 2022.

We continue to be encouraged by the high level of satisfaction by Qelbree's prescribers. Satisfaction with Qelbree among the heavy prescribers is as high as their satisfaction with extended release stimulants and a significantly higher satisfaction with [indiscernible]. In 2024, we will be placing more emphasis on the adult segment that represents approximately 67% of the total ADHD market. We expect the ADHD market to have a nominal prescription growth rate in line with the 3% growth rate it had in 2023 when it reached an all-time high of 93.4 million annual prescriptions.

Switching now to GOCOVRI for full year 2023 prescriptions increased by 10% compared to 2022 and net sales increased by 15%, reaching a record of $120 million. We continue to be pleased with the performance of the brand based on its unique position in the marketplace, treating both of episodes and dyskinesia. The 2023 fourth quarter net sales were $32 million, up 10% compared to last year and flat compared to the third quarter as they were impacted by the timing of orders at year-end.

Switching to our legacy products, Oxtellar XR net sales were $113 million for full year 2023, essentially stable compared to 2022. In September 2024, we expect the introduction of the first generic of Oxtellar XR. For Trokendi XR, full year net sales were $94 million, down by 64% from the $261 million in 2022. In 2024, we don't expect an increase in the number of generic players in the market but expect further erosion in Trokendi XR sales. We anticipate combined net sales of Trokendi XR and Oxtellar XR in 2024 to be in the range of $125 million to $135 million.

Regarding SPN-830, the FDA has scheduled a pre-approval manufacturing facility inspection, which will take place in Europe this month and the FDA's review of the NDA remains ongoing with a PDUFA date of April 5, 2024. Assuming FDA approval, the company plans to launch SPN-830 in the second half of 2024 capitalizing on its existing infrastructure, including the sales force, nurse educators hub and patient services.

Moving on to our CNS pipeline of novel product candidates. We made great progress in 2023 setting the stage for a rich calendar of clinical milestones and data releases over the next 12 to 18 months across several programs. First, the company initiated a Phase IV study with Qelbree in ADHD patients with comorbid mood disorders, such as depression and anxiety. This trial is expected to include approximately 500 patients with data expected in the first half of 2025. Second, the company also initiated a Phase II open-label study with SPN-820 in approximately 40 subjects with major depressive disorder. This study has the potential of providing data on this first-in-class molecule by the end of this year.

Third, our ongoing Phase IIb multicenter randomized double-blind placebo-controlled study of SPN-820 in adults with treatment-resistant depression has now enrolled approximately 120 patients. We expect top line data from this trial in the first half of 2025. Fourth, the company expects to report interim results from approximately 1/2 of the targeted randomized patients from its Phase IIa study on SPN-817 in treatment-resistant seizures in May 2024. This study is examining the safety and tolerability and efficacy of SPN-817 as adjunctive therapy in adult patients with treatment-resistant seizures. Top line results for the full study are expected in the second half of 2024.

Fifth, the initiation of the Phase IIb placebo-controlled study with SPN-817 in patients with treatment resistant focal seizures in the second half of this year. And finally, initiation of a Phase I single-dose study of SPN-443 in healthy results following the submission of an IND. SPN-443 is our new stimulant [indiscernible] product candidate for ADHD and other CNS disorders. Regarding corporate development, the company continues to be active looking for strategic opportunities to further strengthen our future growth and leadership position in CNS.

With that, I will now turn the call over to Tim.

[Timothy Dec, executive]

Thank you, Jack. Good afternoon, everyone. As I review our fourth quarter and full year 2023 results, please refer to today's press release and 10-K that was filed earlier today. Total revenue for the fourth quarter of 2023 was $164.3 million compared to $167.3 million in the prior year quarter. Total revenue in the fourth quarter of 2023 was comprised of net product sales of $156 million and royalty and licensing revenues of $8.3 million. The $7.8 million decrease in net product sales was primarily due to a $37.6 million decline in net product sales of Trokendi XR, partially offset by a $25.6 million increase in net product sales of our growth products, Qelbree and GOCOVRI. Excluding net product sales of Trokendi XR in both periods, total revenues for the fourth quarter of 2023 [ increased ] 31% compared to the prior year quarter.

For the fourth quarter of 2023, combined R&D and SG&A expenses were $104.6 million as compared to $91.7 million for the same period in 2022. The increase was primarily due to R&D spend associated with the clinical programs for SPN-817 and SPN-820 as we continue to progress our pipeline and an increase in selling and marketing expenses due to increase in the ADHD sales personnel and other Qelbree marketing initiatives. During the fourth quarter of 2023, we booked a $20.2 million intangible asset impairment charge mainly related to [ XADAGO ]. This noncash charge reflects the forthcoming loss of exclusivity of [ XADAGO ] December of 2027.

As a result of the impairment charge, operating loss for the fourth quarter of 2023 was approximately $1 million as compared to operating earnings of $34.3 million for the same period in 2022. Income tax benefit in the fourth quarter of 2023 was $185,000 as compared to income tax expense of $9.7 million in the same period of 2022. Net earnings was $1.7 million for the fourth quarter of 2023 or earnings per diluted share of $0.02 compared to net earnings of $25.5 million or earnings per diluted share of $0.43 in the same prior year quarter.

On a non-GAAP basis, which excludes amortization of intangibles, impairment charges, share-based compensation, contingent consideration and depreciation, adjusted operating earnings for the fourth quarter of 2023 was $47.1 million compared to $57.6 million in the same quarter of 2022. Total revenue for the full year 2023 was $607.5 million compared to $667.2 million in 2022. Total revenue was comprised of net product sales of $573.9 million and royalty and licensing revenues of $33.6 million. The $75.5 million decrease in net product sales was primarily due to $166.9 million decline in net product sales of Trokendi XR, partially offset by a $94.1 million increase in net product sales of our growth products Qelbree and GOCOVRI. Excluding net product sales for Trokendi XR in both periods, total revenues for full 2023 increased 26% compared to full year 2022. Combined R&D and SG&A expenses for the full year of 2023 was $428 million as compared to $451.8 million for the prior year.

The decrease was primarily due to higher sales and marketing expenses in 2022 to support the launch of Qelbree in the adult population, partially offset by an increase in R&D expenses associated with the clinical programs for SPN-817 and SPN-820 as we continue to progress our pipeline. In addition to the items above, full year 2023 include the aforementioned noncash impairment charge of $20.2 million, resulting in an operating loss for full year 2023 of $5.3 million as compared to operating earnings of $46.1 million for the prior year.

Income tax expense for full year 2023 was $1.5 million as compared to income tax expense of $32,000 for full year 2022. Net earnings were $1.3 million for the full year 2023 or $0.02 per diluted share compared to $60.7 million or $1.04 per diluted share for the full year 2022. On a non-GAAP basis, adjusted operating earnings was $125.1 million for the full year 2023 compared to $148.8 million the prior year. As of December 31, 2023, the company had approximately $271.5 million in cash, cash equivalents and marketable securities compared to $555.2 million as of December 31, 2022. The decrease was due to the repayment of the convertible security notes due 2023, offset by approximately $120 million of cash generated from operations.

The company has a strong balance sheet and significant financial flexibility for potential M&A and other value-creating opportunities. Now turning to guidance. For full year 2024, we expect total revenue to range from $580 million to $620 million, comprised of net product sales and royalty and licensing revenues. Note that total revenue guidance for full year 2024 assumes approximately $125 million to $135 million of combined net sales of Trokendi XR and Oxtellar XR. We anticipate the increase in net sales of our growth products in 2024 will substantially offset the expected decline in combined net sales of Trokendi XR and Oxtellar XR.

For the full year 2024, we expect combined R&D and SG&A expenses to range from $430 million to $460 million. This reflects an increased level of R&D spend in 2024 as our pipeline progresses, especially for the Phase II programs for SPN-817 and SPN-820. Overall, we expect full year 2024 operating loss in the range of $30 million to breakeven. And finally, we expect non-GAAP operating earnings to range from $80 million to $110 million.

Please refer to the press release issued prior to this call and identifies the various ranges of reconciling items between GAAP and non-GAAP. We expect 2024 will be the year we substantially transition from our legacy products to our growth products. Despite the anticipated erosion of sales on Trokendi XR and Oxtellar XR, we expect our growth products to help drive this anticipated level of non-GAAP earnings in 2024.

With that, I now turn the call back over to the operator for Q&A.

[Operator]

[Operator Instructions] Our first question comes from the line of Andrew Tsai of Jefferies.

[Lin Tsai, analyst]

Congrats on the quarter. Maybe 2 questions on my side. The first 1 on overall guidance and Qelbree. So in terms of the total revenue guidance, just curious what dynamics are you guys specifically assuming for you to guide to the low end as well as the high end of your total revenue guidance? And secondly, if we backed out the individual products other than Qelbree from your total revenue guidance for 2024, is it reasonable to assume your guidance might imply Qelbree sales could come in above consensus of around [ 210 ] currently?

[Jack Khattar, executive]

Andrew, this is Jack. I mean when we try to build the guidance, we try to accomplish a couple of things. First, to help folks with the Trokendi XR, Oxtellar XR situation and the potential impact of the generics. So that's why we try to isolate these 2 components. What's really left is, of course, as the main drivers of GOCOVRI and Qelbree. So with GOCOVRI, if you try to assume growth rates that are pretty much in line with the last couple of years, I think you can get to a reasonable estimate there on what that product could end up being or doing in 2024.

You back out also something similar on APOKYN and the other products. So yes, I mean, Qelbree -- could cable be in the 200 to 220 or somewhere in that range, I mean that is a possibility, and it's not out of reach or an unreasonable level. So hopefully, that will address both questions.

[Lin Tsai, analyst]

Perfect. And then maybe a follow-up question is the SPN-817 epilepsy top line interim data, Phase II data coming up. Will that be a distinct press release in May? Or will that be shared in conjunction with your Q1 EPS? And then secondly, could you give us a flavor of what you plan to share that day? Should we expect efficacy curves, safety, AE breakdowns and other detailed information. So basically, just curious how much detail you're planning to provide.

[Jack Khattar, executive]

Yes, the plan is and hopefully, all the data will be available for that timing. It's to really issue the data with our earnings call. So the earnings call typically like the first week or early second week of May. So that's typically and that's what the plan is to issue the data as part of the earnings call. What would the data include? Certainly, it will include the efficacy, seizure reductions, some of the key endpoints that we're looking at in the study as well as, of course, safety, AEs and so forth. So absolutely, I mean, we're trying to give as much of a full picture as possible for the first 50% of the patients, which is the target by May and then ideally, I know we did say on the call that the full study will be given in the second half -- I mean clearly, we will work hard to try to do it maybe in August, which would be our next earnings call where we can report for the full study.

I mean that would be great if we can do that. But for now until we know the the flow of the data, how quickly these patients will finish the maintenance period and when would the data be available, we can't say for sure. Now August, we're saying second half. But certainly, in May, we will be able to update you at that time.

[Operator]

Our next question comes from the line of David Amsellem of Piper Sandler.

[David Amsellem, analyst]

So wanted to dig a little deeper on Qelbree. So looking at the prescription trends recently and also in the fourth quarter, it looks a little softer than what we had been seeing. So I wanted to get some perspective on the different moving parts in both the ped and adult ADHD market and what might be driving the volume trajectory currently? And also, how that ties into your commentary regarding co-pay assistance. I think, Jack, you had mentioned recently that you're paring back some of that co-pay assistance.

So how should we think about the impact there? And what does that mean for the prescription trajectory of Qelbree going forward? And then just another question on the guide. Do you have any risk-adjusted contribution for 830 in there? Just wanted to clarify what you may or may not have on that product as it relates to the overall top line guidance?

[Jack Khattar, executive]

Yes. So I'll take the second one first. I mean the SPN-830, we really don't have much in the guidance or nothing meaningful. So the guidance doesn't include really much there. As well as your question on Qelbree. So I'll start by going back to the third quarter back-to-school season, some of you may remember at that time and throughout the year, we kept saying our target for gross to net is 50% to 55%. And we obviously don't want to do anything significant as far as any changes in the copay card and the features of the co-pay card and the levels of benefits that, that [ card ] offers during the back-to-school season because we don't want to impact the momentum behind the prescription growth during that very important season for the brand. .

And therefore, we instituted a lot of these changes more at the tail end of the third quarter and beginning during the fourth quarter. And that's why actually we've been able to achieve our goal or even surpass that goal by getting around 49.5% gross to net on Qelbree. Now clearly, that always comes at the cost or sacrificing certain things on the prescription trends. And you always put more pressure on the prescriptions when you make changes like this.

But basically, you're resetting the stage and you're resetting the baseline. So you won't have that pressure every single quarter moving forward. But when you first make these changes on the co-pay, you're going to get the biggest impact from a prescription trend perspective and momentum. And that's why alluding to your question, yes, in the fourth quarter, we saw a sequential growth of about, if I'm not mistaken, 5% or 6%. And then in 1Q of 2024, it is a little bit even softer because, of course, in 1Q, you always have the additional pressures of high deductibles, insurance resets and so forth. So all these factors are converging as far as 1Q is concerned and that's why you're seeing the softness that we're all looking at with the prescriptions.

So that's pretty much the trending. So we're very happy that this is behind us more or less. This is behind us meaning the major changes in the co-pay are now behind us.

I think we've been able to really manage it extremely well. The team has done an amazing job in the fourth quarter despite the pressures on the prescriptions and so forth from a net sales perspective, we had a very, very strong quarter despite the pressure on the prescriptions. And as I mentioned in my prepared remarks, the average net price went up to $268. So that's a very healthy increase and improvement, clearly with the value of the prescription. And we'll continue to do that throughout 2024.

Any other opportunities we see and the other areas we see to continue that improvement, again, without hurting too much the prescription momentum. Now as far as prescription in the underlying business, I mean, we continue to really be very happy with the performance of Qelbree. The survey that I referenced a little bit in my remarks, I mean, prescribers who actually use Qelbree, especially heavy prescribers, their satisfaction level with Qelbree is equivalent to their satisfaction level with stimulants.

If you pause for a second and think about that, I mean that is truly remarkable for a nonstimulant to be delivering and really performing in physicians' minds as well as extended release stimulants because extended release stimulants are the gold standard in treating ADHD. And for Qelbree to be performing around that same level and to deliver satisfaction among prescribers that is really equivalent to XR stimulants, that is very remarkable for the product and continues to give us confidence that the product will continue to grow. I mean we have still so much room to grow in a 93 million prescriptions a year market where we did last year, 617,000 prescriptions. So clearly, we have a lot of room to go, and we look to 2024 for even further growth on all the momentum that we built in the 2023.

The other thing we also should have in 2024 is a full impact of our expansion of the sales force, clearly, which started in mid last year. So 2024 should have that impact with extend -- beyond extra reach among physicians or higher frequency among certain physicians that are more important for us who are heavy prescribers of ADHD. So all in all, we are very much looking forward to another strong year for Qelbree in 2024.

[David Amsellem, analyst]

That's very helpful, Jack. Just 1 quick follow-up. What do you expect the mix between adults and peds will look like as we move through the latter part of this year?

[Jack Khattar, executive]

Yes. We closed the year in 2023, a little bit above 30%, somewhere in the 31%, 31.5%. And as I mentioned in my remarks, our goal is to continue to push in the adult segment because, obviously, the adult segment is very important to us. We're finding out interestingly in that attitude and usage study we did is that about 40% of the usage of Qelbree in adult is in combination with stimulants. And that has a lot of ramifications, a lot of dynamics around it. It looks like that is really good 40%. But also that could mean initially they're using lower doses than what we would like them to be.

So from a total daily dose, we would hope as time goes on, and we're seeing that. But it's marginal, we see a creep up in the daily dose into what should be the total daily dose for adults. So as time goes on, we'll see them building up to the right levels, which should be in the 400 to 500-milligram total daily dose and above. But given that initially, a lot of folks are using it in combination with stimulants, most of them are starting with much lower doses than they really should. And we are working on that to encourage them to continue to push towards the target total daily dose because that also helps us in the -- from an efficacy perspective, perception of efficacy and so forth.

[Operator]

Our next question comes from the line of Stacy Ku of TD Cowen.

[Stacy Ku, analyst]

We have a few. So first, just on payer access reimbursement, do you have any remaining overall goals this year? And any guidance around any additional formulary wins. So just wondering, if you expect any additional contracting this year for Qelbree. And related to that, what do you think will be gross to nets this year? Are you providing any guidance for how it might settle over the year? Just curious since you're saying that right now, the adult doses is a touch lower, but might be driving kind of the net pricing as we kind of drive that adult growth? And that's my questions for now.

[Jack Khattar, executive]

Yes, regarding the payer access, we have contracts now with 2 major PBMs out of the 3 major ones. So I mean we continue -- the doors are always open, we always are talking to everybody all the time. And within the states, we continue to renew contracts, improve our position as time goes on, and we've made a lot of progress, actually, across several states, especially on the Medicaid side and improving our position as time goes on. So we're pretty happy with the commercial coverage as well as the Medicaid coverage on Qelbree at this point. It's actually, especially on the commercial side, it's pretty much at par with some of the other products or most of the products, the branded products in ADHD in the marketplace as well as at par with what we used to have for years of [indiscernible]. So we're very happy there, but there is always room for improvement, of course, as different cycles come up and renewal of certain contracts. .

And therefore, leading to the gross to net question, as we mentioned, I mean, the target will still be in the 50% to 55%. But of course, you're going to have the fluctuations that you typically see in the quarterly -- one quarter to another. So Q1 will always be the worst, as always is the case across our industry, across all products and then it will improve in the second quarter, improve a little bit better in the third quarter and then would be the best one in the fourth quarter. So you're going to follow the same natural trend that we've seen with Trokendi XR or Oxtellar XR as time goes on. But at this point, it looks like the 50% to 55% is still a good target, and we'll stay -- we'll try to be, I mean, below it if we can, of course.

But for the whole year combined, it will be in the 50% to 55%. So when you look actually at 2023, the total year gross to net was around 58%, just to give you a benchmark for the full year. So for us to continue to target 50% to 55% for full year 2024, that still is a significant improvement.

[Stacy Ku, analyst]

Got it. And then...

[Jack Khattar, executive]

I'm sorry, go ahead.

[Stacy Ku, analyst]

Go ahead, I can follow up with my other questions.

[Jack Khattar, executive]

No. I mean the other part was the total daily dose question. I mean, as I mentioned earlier, I mean, that actually applies to both pediatric and adult as you will typically expect with a new product, still in its embryonic kind of stages of -- with the launch, it's only been 2.5 or 3 years. it takes time for physicians to finally get to the total average daily dose that you would expect them. Some get there earlier than others.

But as they gain more and more experience with the product as we continue to educate them on how they should titrate and how they should target, which total daily dose, eventually, we will get there. And the target daily dose for kids is in the 300-milligram range and for the adults is in the 400 milligram to 500 milligram range.

[Stacy Ku, analyst]

Perfect. You just answered my last question.

[Operator]

[Operator Instructions] Our next question comes from the line of Annabel Samimy of Stifel.

[Jack Padovano, analyst]

This is Jack on for Annabel. So kind of on the topic of the previous quarter's call, I know you had mentioned that the start of the 2023 back-to-school season was relatively tempered, that the ADHD market might be normalizing to pre-COVID levels. Have you already kind of seen a rebound there? Or is Qelbree just performing, particularly well in relation to a weaker market?

[Jack Khattar, executive]

Yes. I mean the total ADHD market in 2023 in total grew by about 3%. If you compare that to 2022, 2021, that's much lower. In the previous couple of years, the market grew in the 7% to 9%. So clearly, we did see that burst of increased demand in medications for ADHD and the 2021, 2022, even a little bit in the 2020 time frame, and then in 2023, it took a little breather and started to normalize. And that's what -- as you rightfully pointed out, that's what we referred to back when we talked about the back-to-school season in November of last year. .

So for the full year, it's about 3%. And we expect this year for the market to probably deliver something in line. I mean whether it's 3%, 4%, maybe 5%, I really don't know. But it will be in the single digit, probably more in the 5% and lower in that ZIP Code. Now as far as Qelbree, of course, I mean we -- last year, the market grew by 3%, but we grew by 91%. So obviously, we're outpacing the market, and we continue to do that, and that's really what we need to continue to do to continue to increase our market share and penetration of both segments, not just the adult that I talked about, but also pediatric. I mean pediatric will continue to be a very important segment for us as well.

[Jack Padovano, analyst]

Great. And so building off that, are you considering doing any DTC campaigns to kind of maximize the opportunity for Qelbree? Or is that something that you're already doing? I know this category is particularly sensitive to promotion. So is there any way that you can kind of take advantage of that further?

[Jack Khattar, executive]

Yes. I mean on DTC, we have been doing and will continue to do. So direct-to-consumer is extremely important. The difference is always is the channels that you use in reaching the consumer. And it's heavily digital, as you would expect in today's times, I mean people don't sit in front of TV and watch prime TV anymore as they used to a long time ago. So we clearly use different channels to reach our audience. A lot of it is digital. The majority of it is digital, and we are very much in touch with patient advocacy groups, patient programs.

We have significant amount of programs to get to the patients from an education perspective as well as even within the office, the physician's office and so forth. So we have several programs and many efforts in the digital space, which are all DTC. We also have different influencers who are as well as folks -- people who will speak on behalf of the product because they have direct experience with the product, and they have a strong influence among consumers as well.

[Operator]

I am showing no further questions at this time. I would now like to turn it back to Jack Khattar for closing remarks.

[Jack Khattar, executive]

In concluding our call, this afternoon, we are very pleased with our performance in 2023. We finished the year in a position of strength with both Qelbree and GOCOVRI achieving record sales with strong prescription growth. In addition, as mentioned earlier, 2023 was a year of significant progress on our pipeline with numerous clinical milestones and catalysts over the next 12 to 18 months. We believe that we are well positioned for continued growth beyond the current transition and our focus on 3 key strategic areas. First, driving significant growth with Qelbree and GOCOVRI and together with the rest of the portfolio generating strong cash flow, allowing us to continue our investments in our pipeline. .

Excluding our legacy products, Trokendi XR and Oxtellar XR, our guidance for 2024 represents a healthy growth rate of approximately 22% in net sales. Second, the potential launch of a third growth product in our portfolio, assuming the FDA approval of SPN-830 NDA in April. And third, advancing our innovative R&D portfolio of differentiated first-in-class molecules that have several exciting and upcoming clinical milestones. Finally, we will continue to be focused on corporate development to augment our growth to external opportunities. Thanks for joining us this afternoon. We look forward to updating you on our next call.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.