Company: SUPN
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001356576-25-000071
Chunk: 118

Company: SUPERNUS PHARMACEUTICALS, INC.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 118
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 a vendor-customer relationship and therefore represent performance obligations within the scope of ASC 606. The Company determined that the performance obligations in the Shionogi Collaboration Agreement included the license to zuranolone and the supply of certain materials during the clinical development phase, which includes the supply of API. The performance obligation related to the license to zuranolone was determined to be distinct from other performance obligations and therefore was a separate performance obligation for which control was transferred upon signing. The obligation to provide certain clinical materials, including API for use during the development period, was determined to be a separate performance obligation. For additional information on the collaboration agreements with Biogen and Shionogi, as well as the Company's other collaboration arrangements, refer to Note 15, Collaboration Agreements. Costs of RevenuesCosts of revenues includes primarily cost of materials; third-party manufacturing costs; freight and distribution costs; direct labor; cost of royalties; cost to write down inventory to net realizable value; manufacturing overhead costs, including quality control and assurance; and may also include period costs related to certain inventory manufacturing services. Fair value of inventories acquired through business combinations or asset acquisitions include an inventory step-up within the value of inventories. The inventory step-up value is amortized as the related inventory is sold, and included in costs of revenues. Costs of revenues also includes our proportionate share of ZURZUVAE manufacturing costs under the Biogen Collaboration Agreement, (for additional information, refer to Note 15, Collaboration Agreements). Advertising ExpenseAdvertising expense includes the cost of promotional materials and activities, such as printed materials and digital marketing, marketing programs and speaker programs. The cost of the Company's advertising efforts is expensed as incurred.The Company incurred $22.4 million and $73.9 million in advertising expense for the three and nine months ended September 30, 2025 and $19.6 million and $67.5 million for the three and nine months ended September 30, 2024, respectively. These expenses are recorded as a component of Selling, general and administrative expenses in the unaudited condensed consolidated statements of earnings.

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Insurance RecoveriesThe Company has several policies with third-party insurers that provide for the recovery of certain costs incurred by the Company. The Company records its rights to insurance recoveries as a receivables 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