Sage Acquisition

9 Months Ended

Sep. 30, 2025

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Sage Acquisition

Sage Acquisition

On July 31, 2025 (the "Sage Closing Date"), the Company completed its acquisition of all the outstanding equity of Sage Therapeutics, Inc. pursuant to the Merger Agreement dated June 13, 2025 (the "Sage Acquisition"). Under the terms of the Merger Agreement, the Company commenced a tender offer to acquire all outstanding shares of Sage, par value $0.0001 per share (the "Shares" and each, a "Share"), at an offer price of (i) $8.50 per share in cash, less any applicable withholding taxes and without interest (the "Cash Amount"; an aggregate of approximately $561 million), plus (ii) one contingent value right per Share (the "CVR"; an aggregate of approximately $234 million, subject to the achievement of specific contingencies), which represents the right to receive up to $3.50, which is governed by the terms of a contingent value rights agreement entered into between the Company and CVR Agent (the "Sage CVR Agreement"), in cash, less any applicable withholding taxes and without interest. The transaction provides Supernus with the right to develop and market ZURZUVAE® (zuranolone) capsules, the first and only U.S. Food and Drug Administration (FDA)-approved oral medicine indicated for the treatment of adults with postpartum depression (PPD), and a late-stage product candidate. For the three and nine months ended September 30, 2025, the Company incurred transaction costs of $8.6 million and $10.0 million, respectively, to complete the acquisition which were included in Selling, general and administrative expense in the condensed consolidated statements of earnings.

Contingent payments of up to $234 million are due to the sellers upon the achievement of certain milestones related to the development and commercial sale of ZURZUVAE. In connection therewith, the Company recorded a contingent consideration liability of $11.4 million as of the date of acquisition to reflect the estimated fair value of the contingent consideration. The estimated fair value of the contingent consideration was determined using a market participant with a Monte Carlo simulation for the sales-based milestones and income approach for the other milestones. The key assumptions considered include the estimated amount and timing of projected cash flows, probability of milestone achievement, volatility, estimated discount rates and risk-free interest rate. In each reporting period after the acquisition, the Company will revalue the contingent consideration liability and will record increases or decreases in the fair value of the liability in its condensed consolidated statements of earnings. Changes in fair value will result from changes in actual and projected milestone achievement, as well as changes to forecasts. The inputs and assumptions may not be observable in the market, but reflect the assumptions the Company believes would be made by a market participant. The possible outcomes for the contingent consideration range from $0 to $234 million on an undiscounted basis. See Note 7, Contingent Consideration, for further discussion.

In connection with the acquisition, the vesting of certain outstanding Sage stock options, restricted stock units, and performance stock units was accelerated upon closing of the acquisition and replaced with the right to receive one CVR per share. The purchase price for Sage includes $4.1 million related to Sage awards where vesting was accelerated in connection with the acquisition. The Company recognized compensation expense of $22.9 million immediately in the post-combination period related to awards that were accelerated to vest upon closing of the acquisition. See Note 10, Share-based Payments, for further discussion.

The acquisition is being accounted for as a business combination under the acquisition method of accounting, in accordance with ASC 805, Business Combinations. The excess of the purchase price over the fair value of the net assets acquired

was recorded as goodwill. The estimated fair values of the assets acquired and liabilities assumed, including goodwill, have been included in the Company's consolidated financial statements since the Sage Closing Date.

The Company's accounting for this acquisition is preliminary and fair value estimates for the assets acquired and liabilities assumed and the Company's estimates and assumptions are subject to change as the Company obtains additional information for its estimates during the measurement period. During the measurement period, if the Company obtains new information regarding facts and circumstances that existed as of the Sage Closing Date that, if known, would have resulted in revised estimated values of those assets or liabilities, the Company will accordingly revise its estimates of fair values and purchase price allocation. The effect of measurement period adjustments on the estimated fair value elements will be reflected as if the adjustments had been made as of the Sage Closing Date. The impact of all changes that do not qualify as measurement period adjustments will be included in current period earnings.

The Company expects to finalize its purchase price allocation within one year of the Sage Closing Date. In addition, the Company continues to analyze and assess relevant information necessary to determine, recognize and record at fair value the assets acquired and liabilities assumed in the following areas: inventory, prepaid and other assets, intangible assets, tax assets and liabilities, and certain existing or potential reserves, including those for legal or contract-related matters. The activities the Company is currently undertaking, include but are not limited to the following: review of acquired contracts and other contract-related and legal matters; review and evaluation of the accounting policies, tax positions, and other tax-related matters. Further, the Company is in the process of obtaining input from third party valuation firms with respect to the fair value of the acquired intangible assets and inventory, and other information necessary to record and measure the assets acquired and liabilities assumed. Accordingly, the preliminary recognition and measurement of assets acquired and liabilities assumed as of the Sage Closing Date are subject to change.

The following preliminary purchase price allocation table presents the Company' preliminary estimates of the fair value of assets acquired and liabilities assumed as of the Sage Closing Date (unaudited, dollars in thousands):

	Fair Value (unaudited)
Cash and cash equivalents	$	243,197
Marketable securities	93,181
Accounts receivable, net	23,291
Inventories, net	50,714
Prepaid expenses and other current assets	18,674
Restricted cash	1,450
Operating lease asset (1)	5,630
Intangible assets	166,500
Other assets	1,102
Total fair value of assets acquired	603,739
Accounts payable and accrued liabilities	44,232
Operating lease liability (1)	12,380
Total fair value of liabilities assumed	56,612
Total identifiable net assets	$	547,127
Goodwill	2,061
Total purchase price	$	549,188
Cash consideration paid for Sage's common stock	$	533,667
Cash consideration paid for cash settlement of Sage's equity awards	4,073
Fair value of contingent consideration	11,448
Total purchase price	$	549,188

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(1) Refer to Note 13, Leases, for further discussion of the acquired lease asset and assumed lease liability.

Acquired Inventory

The fair value of the inventory was estimated using the comparative sales method, which estimated the expected sales price of the product, reduced by all costs expected to be incurred to complete or to dispose of the inventory, as well as a profit on the sale.

Acquired Lease

As part of the Sage Acquisition, the Company acquired a lease for commercial real estate. The Company recognized a right-of-use asset and operating lease liability at the acquisition date. The amounts recognized reflect the present value of remaining lease payments, discounted at the Company's incremental borrowing rate. The fair value of the lease ROU asset was measured at an amount equal to the lease liability and evaluated for favorable or unfavorable lease terms when compared with market terms. Refer to Note 13, Leases, for further discussion of the acquired lease asset and assumed lease liability.

Acquired Intangible Assets

The acquired intangible asset include the acquired developed technology and product rights. The Company estimated the fair value of the acquired intangible asset as of the Sage Closing Date using the income approach. The fair value measurements of the acquired intangible assets were estimated based on significant unobservable inputs and therefore, represent a Level 3 fair value measurement. Some of the more significant inputs and assumptions used in the intangible assets valuation include: the estimated future cash flows from product sales, probability of achieving regulatory approval in ex-US territories, the timing and projection of costs and expenses, discount rates, and tax rates.

The following table summarizes the purchase price allocation, and the average remaining useful lives for identifiable intangible assets (unaudited, dollars in thousands):

	Fair Value (unaudited)		Estimated Useful Lives (in years)
Acquired developed technology and product rights	$	166,500	8
Total intangible assets	$	166,500

Acquired intangible assets are amortized over their estimated useful lives on a straight-line basis.

Goodwill

Goodwill was calculated as the excess of the consideration paid consequent to completing the acquisition, compared to

the net assets recognized. Goodwill represents the future economic benefits from the other acquired assets, and which could not be

individually identified and separately valued. Goodwill is primarily attributable to the additional acquired growth platforms and

an expanded revenue base. Goodwill is not deductible for tax purposes.

Revenues and Net Earnings of Sage

The operations of Sage and its subsidiaries have been included in the Company's condensed consolidated statements of earnings for the period subsequent to the Sage Closing Date, and through September 30, 2025. Total revenues of $20.1 million and net loss of $65.4 million were recorded from the Sage Closing Date through the period ended September 30, 2025.

Pro forma Information

The following table presents the unaudited pro forma combined financial information for each of the periods presented as if the Sage Acquisition had occurred on January 1, 2024 (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(unaudited)				(unaudited)
Pro forma total revenues	$	199,637	$	187,560	$	560,639	$	516,085
Pro forma net loss	$	(24,386)	$	(62,559)	$	(140,531)	$	(321,112)

The unaudited pro forma combined financial information is based on historical financial information and the Company's preliminary allocation of purchase price; therefore, it is subject to subsequent adjustment upon finalization of the purchase price allocation. In order to reflect the occurrence of the acquisition as if it had occurred on January 1, 2024, the unaudited pro forma combined financial information reflects the recognition of amortization expense on intangible asset; the estimated reduction in the Company's interest income generated from marketable securities that were liquidated to fund the purchase price of the Sage Acquisition, and the estimated tax impact of the pro forma adjustments.

The unaudited pro forma combined financial information also reflects the recognition of material non-recurring costs incurred directly as a result of the Sage Acquisition primarily pertaining to the following:

•Transaction-related expenses incurred by the Company of $10.0 million during the nine months ended September 30, 2025 are assumed to have occurred on the pro forma close date of January 1, 2024, and recognized as if incurred in the first quarter of 2024;

•Post-combination employee-related expenses incurred by the Company of $38.0 million that were incurred during the nine months ended September 30, 2025 are assumed to have occurred on the pro forma close date of January 1, 2024, and recognized as if incurred in the first quarter of 2024;

•Post-combination share-based compensation expense of $22.9 million incurred to accelerate the vesting of certain equity awards under the terms of the Merger Agreement are assumed to have occurred on the pro forma close date of January 1, 2024, and recognized as if incurred in the first quarter of 2024. This amount does not reflect any post-combination expense related to potential CVR payments to former Sage employees because payment is not considered probable under the employee compensation accounting model.

The unaudited pro forma combined financial information should not necessarily be considered indicative of the results that would have occurred if the acquisition had been consummated on the assumed completion date, nor are they indicative of future results.