Company: SUPN
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001356576-25-000017
Chunk: 354

Company: SUPERNUS PHARMACEUTICALS, INC.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1A
Chunk 354
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 cost of royalties; cost to write down inventory to net realizable value and manufacturing overhead costs, including quality control and assurance.Research and Development ExpensesResearch and development expenditures are expensed as incurred. These expenses include: employee salaries, benefits, and share-based compensation; cost of contract research and development services provided by third parties; costs for preclinical and clinical studies; cost of acquiring or manufacturing clinical trial materials; regulatory costs; research facilities costs; depreciation expense and allocated occupancy expenses; and license fees and milestone payments related to in-licensed products and technologies. Acquired IPR&D assets that are used for research and development and have no future alternative use are expensed as incurred in-process research and development.The Company estimates preclinical and clinical trial expenses based on services performed pursuant to contracts with research institutions, clinical investigators, clinical research organizations (CROs), and other service providers that perform 

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Table of ContentsSupernus Pharmaceuticals, Inc.Notes to Consolidated Financial Statements (Continued)2. Summary of Significant Accounting Policies (Continued)

services on the Company's behalf. In recording service fees, the Company estimates the cost of those services performed on behalf of the Company during the current period and compares those costs with the cumulative expenses recorded and payments made for such services. As appropriate, the Company accrues additional expense for services that have been delivered or defers nonrefundable advance payments until the related services are performed. If the actual timing of the performance of services or the level of effort varies from our estimate, the Company adjusts its accrued expenses, or its deferred advance payments, accordingly. If the Company subsequently determines that it no longer expects the services associated with a nonrefundable advance payment to be rendered, the remaining portion of that advance payment is charged to expense in the period in which such determination is made.Share-Based CompensationStock Options The Company recognizes share-based compensation expense over the service period, using the straight-line method. Employee share-based compensation for stock options is determined using the Black-Scholes option-pricing model to compute the fair value of option grants as of their grant date. Forfeitures are accounted for as incurred. The Company uses the following assumptions for estimating the fair value of option grants:•Fair Value of Common Stock—The fair value of the common stock underlying the option grants is determined based on observable market prices of the Company's common stock.•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