Company: SUPN
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001356576-25-000071
Chunk: 163

Company: SUPERNUS PHARMACEUTICALS, INC.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 163
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 Goodwill. Any adjustments not based on facts and circumstances existing at the acquisition date, or if subsequent to the conclusion of the measurement period, will be recorded to our consolidated statements of earnings.

Refer to Note 3, Sage Acquisition, for further information.

Valuation of Contingent Consideration

44

We record contingent consideration resulting from a business combination at its fair value on the acquisition date. During the measurement period, if we obtain new information regarding facts and circumstances that existed as of the Sage Acquisition Closing Date that, if known, would have resulted in revised estimates of fair values of acquired assets, assumed liabilities or contingent consideration, the Company will accordingly revise its estimates of fair values and purchase price allocation. In addition, on a quarterly basis, we will revalue the contingent consideration liability and record increases or decreases in their fair value as an adjustment to operating earnings. The determination of the initial and subsequent value of the contingent consideration liability requires significant judgment by management. 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.

As of September 30, 2025 and December 31, 2024 the Company reported contingent consideration liability of $11.4 million and $47.0 million, respectively, in its condensed consolidated balance sheets related to the Sage Acquisition, USWM Acquisition, and Adamas Acquisition.

The Sage contingent consideration liability was $11.4 million as of September 30, 2025 is primarily associated with the fair value of the regulatory and commercial milestone and sale milestone contingent consideration payments. 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 in Japan. The drug regulatory approval process is inherently uncertain, and any adverse action taken by the Pharmaceuticals and Medical Devices Agency in Japan can potentially impact our estimated fair value of these regulatory and commercial activities milestones. The contingent consideration is related to one non-tradable contingent value right (CVR) which represents the contractual right to receive a contingent payment upon the achievement of the applicable regulatory and commercial milestones and sales-based milestones. The estimated fair value of the contingent consideration was determined using the Monte Carlo simulation. The key assumptions considered include the estimated amount and timing of projected cash flows, volatility, estimated discount rates and risk-free interest rate. The possible outcomes for the contingent consideration range from $0 to $234 million on an undiscounted basis