Core Insights - Third Avenue Small-Cap Value Fund reported a return of 7.18% in Q3 2025, underperforming the MSCI USA Small-Cap Value Index at 8.97% and the Russell 2000 Value Index at 12.60% [1] - The fund's performance was positively influenced by a diverse range of businesses, with Supernus Pharmaceuticals, Inc. being the largest contributor [3] Company Performance - Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN) experienced a one-month return of -4.85% but saw a significant 29.42% increase in value over the past 52 weeks, closing at $47.11 per share with a market capitalization of $2.691 billion on November 5, 2025 [2] - The company is benefiting from a strong financial position, current profitability, an expanding neurology drug portfolio, and effective capital allocation, which facilitated a successful acquisition during the quarter [3] Hedge Fund Interest - Supernus Pharmaceuticals, Inc. was held by 25 hedge fund portfolios at the end of Q2 2025, a slight decrease from 26 in the previous quarter, indicating a stable but cautious interest among hedge funds [4]

Core Insights - Supernus Pharmaceuticals (SUPN) reported quarterly earnings of $1.01 per share, exceeding the Zacks Consensus Estimate of $0.82 per share, but down from $1.06 per share a year ago, resulting in an earnings surprise of +23.17% [1] - The company achieved revenues of $192.1 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 5.52% and showing an increase from $175.69 million year-over-year [2] - Supernus shares have increased approximately 54% year-to-date, significantly outperforming the S&P 500's gain of 16.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.62 on revenues of $208 million, while the estimate for the current fiscal year is $2.65 on revenues of $705.3 million [7] - The estimate revisions trend for Supernus was favorable prior to the earnings release, contributing to a Zacks Rank 1 (Strong Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Medical - Generic Drugs industry, to which Supernus belongs, is currently ranked in the top 18% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $192.1 million, up from $175.7 million in the same quarter last year, representing a 25% increase [10] - Net product sales were $168.5 million, with collaboration revenues from Zurzuvae at $20.2 million and other revenues at $3.4 million [10] - GAAP net loss was $45.1 million for Q3 2025, compared to a net income of $38.5 million in the same quarter last year [12] - Adjusted operating earnings on a non-GAAP basis were $41.9 million, down from $67.7 million in the same quarter of the prior year [12] - For the nine months ended September 30, 2025, total revenues were $507.4 million, compared to $487.7 million in the same period last year [14] Business Line Data and Key Metrics Changes - Onapco generated net sales of $6.8 million in Q3 2025, a significant increase from $1.6 million in Q2 2025 [4] - Zurzuvae collaboration revenue was $20.2 million, reflecting a 150% increase compared to the same period in 2024 [5] - Qelbree experienced a 23% growth in prescriptions and a 31% increase in net sales compared to the same period last year [6] - Gocovri's net sales grew by 15% in Q3 2025 compared to the same period last year [7] Market Data and Key Metrics Changes - The total ADHD market grew by 12% in prescriptions in Q3 2025 compared to Q3 2024, with adult segment prescriptions growing by 16% [6] - Pediatric prescriptions for Qelbree grew by 19% in Q3 2025 compared to the same period last year [7] Company Strategy and Development Direction - The company is focused on integrating Sage and expects potential synergies of up to $200 million annually by mid-2026 [6] - Corporate development remains a priority, with a focus on additional strategic opportunities to strengthen growth in CNS [8] - The company aims to position itself as a long-term growth entity while generating strong cash flows through an expanded product portfolio [75] Management's Comments on Operating Environment and Future Outlook - Management noted strong operating results driven by growth products and expressed commitment to resolving supply constraints for Onapco [4][5] - The integration of Sage is on track for completion by year-end, with expectations for continued revenue growth [6][15] - Management updated full-year 2025 revenue guidance to $685-$705 million, reflecting strong performance in the first nine months [15] Other Important Information - The company had approximately $281 million in cash and equivalents as of September 30, 2025, down from $454 million at the end of 2024 [14] - The balance sheet remains strong with no debt, providing financial flexibility for potential M&A opportunities [14] Q&A Session Summary Question: Onapco's strong start and potential patient demand - Management indicated that Onapco exceeded expectations in demand, but supply constraints limited the ability to meet all patient needs [18][19] Question: Expectations for Q4 performance - Management stated that the situation is fluid, making it difficult to predict Q4 performance relative to Q3 [23][24] Question: Rate limiting steps for Onapco supply - Management identified capacity issues related to cartridge filling as the main constraint and is working to resolve it [29][33] Question: Pricing expectations for Onapco - Management expects the annual cost for a patient to be around $105,000, with gross to net deductions to be clarified in future quarters [47][48] Question: Expansion into women's health - Management expressed interest in exploring acquisitions in women's health and other synergistic areas following the Sage acquisition [49][50]

Core Insights - Supernus Pharmaceuticals reported strong operating results for Q3 2025, driven by growth from its key products Qelbree, GOCOVRI, and collaboration revenue from ZURZUVAE, alongside a promising launch of ONAPGO [2][5]. Financial Performance - Combined revenues from the four growth products increased by 52% to $149.2 million in Q3 2025 compared to Q3 2024, contributing to total revenues of $192.1 million, a 9% increase year-over-year [5][9]. - The company completed the acquisition of Sage Therapeutics on July 31, 2025, which is expected to enhance its product portfolio [5]. - Cash, cash equivalents, and current marketable securities stood at approximately $281.2 million as of September 30, 2025 [5][15]. Product Highlights - ONAPGO generated net product sales of $6.8 million in its first full quarter post-launch, with over 1,300 enrollment forms submitted by prescribers [6]. - Collaboration revenue from ZURZUVAE was $20.2 million in Q3 2025, reflecting a 150% increase in U.S. sales compared to Q3 2024 [6][5]. - Qelbree's net sales rose by 31% to $81.4 million, while GOCOVRI's net sales increased by 15% to $40.8 million in Q3 2025 [6][5]. Product Pipeline - SPN-817, a novel AChE inhibitor for epilepsy, is currently in a Phase 2b study with an enrollment target of approximately 258 adult patients [4]. - SPN-820, aimed at treating major depressive disorder, is expected to initiate a Phase 2b trial by the end of 2025 [7]. - SPN-443, a novel stimulant for ADHD, is set to begin a Phase 1 study in 2026 [7]. Financial Guidance - The company updated its full-year 2025 revenue guidance to $685 - $705 million, reflecting strong performance in the first nine months [12]. - Adjusted operating earnings guidance for 2025 has been raised to $125 - $145 million [12].

Core Insights - Cwm LLC increased its holdings in Supernus Pharmaceuticals by 92.4% in Q2, owning 3,080 shares valued at $97,000 [2] - Other institutional investors also adjusted their stakes, with notable increases from GAMMA Investing LLC (116.7% increase) and State of Wyoming (58.8% increase) [3] - Insider trading activity included CEO Jack A. Khattar selling 140,000 shares for approximately $5.88 million, reducing his ownership by 11.96% [4] Institutional Holdings - Cwm LLC's investment grew to 3,080 shares after acquiring an additional 1,479 shares in Q2 [2] - Caitong International Asset Management and BI Asset Management both acquired new stakes in Q1, valued at approximately $41,000 and $46,000 respectively [3] - State of Wyoming increased its holdings to 4,754 shares, worth $156,000 after buying 1,761 additional shares [3] Insider Activity - CEO Jack A. Khattar sold 140,000 shares at an average price of $42.02, totaling $5,882,800, leaving him with 1,030,183 shares valued at approximately $43.29 million [4] - SVP Frank Mottola sold 14,000 shares at an average price of $44.51, resulting in a total transaction of $623,140 and a 47.46% decrease in ownership [4] - In the last three months, insiders sold 362,741 shares valued at $16.39 million, with insiders owning 8.80% of the stock [4] Stock Performance - Supernus Pharmaceuticals shares opened at $55.13, with a market capitalization of $3.09 billion and a P/E ratio of 47.94 [5] - The stock has a 1-year low of $29.16 and a high of $57.65, with a fifty-day moving average of $48.02 [5] Analyst Ratings - Bank of America initiated coverage with a "buy" rating and a target price of $65.00 [6] - Cantor Fitzgerald raised its price target from $46.00 to $63.00, maintaining an "overweight" rating [6] - The consensus rating for Supernus Pharmaceuticals is "Buy" with an average target price of $63.25 [6] Company Overview - Supernus Pharmaceuticals focuses on developing and commercializing products for central nervous system diseases [8] - Key products include Trokendi XR for epilepsy and migraine prophylaxis, and Oxtellar XR for partial onset seizures [8]

Core Insights - The biotech sector is experiencing significant momentum, with many clinical-stage and commercial biopharma stocks reaching new 52-week highs due to breakthrough trial data, strategic deals, and earnings surprises [1] Company Summaries - **Metsera Inc. (MTSR)**: A clinical-stage biopharmaceutical company focused on developing hormone analog peptides for obesity and related metabolic diseases. Recently, Novo Nordisk made a $9 billion unsolicited acquisition proposal, which Metsera's board considers superior to its existing agreement with Pfizer [2][3]. Metsera announced positive Phase 2b results for its GLP-1 receptor agonist MET-097i, showing up to 14.1% weight loss after 28 weeks, supporting Phase 3 initiation in late 2025 [4]. The stock rose from $32.35 to a 52-week high of $66.10, a gain of 104.3% [5]. - **Indivior Plc (INDV)**: Develops buprenorphine-based therapies for opioid dependence. The company reported Q3 net income of $42 million, up from $22 million a year ago, with adjusted earnings of $93 million, exceeding Wall Street's expectations [6][7]. The stock increased from $20.86 to a 52-week high of $30.55, reflecting a 46.5% gain [7]. - **Insmed Inc. (INSM)**: Focused on therapies for serious and rare diseases, Insmed reported a Q3 net loss of $370 million but saw net product revenue rise to $142.3 million from $93.4 million last year [8][9]. The company raised its full-year 2025 revenue guidance for ARIKAYCE to $420 million - $430 million, indicating 15% - 18% growth year-over-year [10]. The stock surged from $76.54 to a 52-week high of $194.70, marking a 154.4% gain [10]. - **Ventyx Biosciences Inc. (VTYX)**: A clinical-stage biotech company developing therapies for autoimmune and neurodegenerative diseases. Ventyx reported positive Phase 2 results for its NLRP3 inhibitor VTX3232, showing strong safety and tolerability [11][13]. The stock rose from $3.01 to a 52-week high of $8.52, a gain of over 183% [14]. - **Inhibrx Biosciences Inc. (INBX)**: Focuses on oncology and rare diseases, announcing positive topline results from its ChonDRAgon study for ozekibart in chondrosarcoma [15]. The stock increased from $18.35 to a 52-week high of $83.78, representing a gain of 356.6% [16]. - **ABIVAX Société Anonyme (ABVX)**: Developing therapies for chronic inflammatory diseases, ABIVAX presented positive Phase 3 data for obefazimod in ulcerative colitis [17]. The stock rose from $7.83 to an all-time high of $106.73, marking a significant gain of 1263% [18]. - **Arrowhead Pharmaceuticals Inc. (ARWR)**: Developing RNAi-based therapies, Arrowhead finalized a licensing agreement with Novartis for ARO-SNCA, with financial terms including a $200 million upfront payment [19][20][21]. The stock increased from $29.70 to a 52-week high of $43.33, representing a gain of over 45% [21]. - **Kodiak Sciences Inc. (KOD)**: Focused on retinal diseases, Kodiak announced positive Phase 1b data for KSI-101, showing significant vision improvements [22][23][24]. The stock climbed from $8.98 to a 52-week high of $21.17, delivering a 135.7% gain [22]. - **Arcutis Biotherapeutics Inc. (ARQT)**: Focused on dermatological treatments, Arcutis reported Q3 net income of $7.4 million, a turnaround from a net loss last year, with revenue up 122% year-over-year [25][26]. The stock rose from $14.99 to a 52-week high of $27.08, representing a gain of over 80% [27]. - **Maze Therapeutics Inc. (MAZE)**: Developing precision therapies for various diseases, Maze announced positive Phase 1 results for MZE782 and secured $150 million in a private placement [28][29]. The stock rose from $11.21 to a new 52-week high of $34.29, returning a gain of 206% [29]. - **Supernus Pharmaceuticals Inc. (SUPN)**: Focused on CNS disorders, Supernus is expected to report Q3 earnings of $0.82 per share and revenue of $180.22 million [30][31]. The stock increased from $38.21 to a 52-week high of $57.65, representing a gain of over 50% [31].

Company Overview - Supernus Pharmaceuticals (SUPN) currently holds a Momentum Style Score of B, indicating potential for strong performance based on recent trends [3] - The company has a Zacks Rank of 1 (Strong Buy), which is associated with a historical outperformance in the market [4] Price Performance - Over the past week, SUPN shares have increased by 5.3%, while the Zacks Medical - Generic Drugs industry has only risen by 0.77% [6] - In a longer time frame, SUPN's shares have shown an 11.26% monthly price change compared to the industry's 10.78% [6] - Over the past quarter, SUPN shares have surged by 41.67%, and over the last year, they have gained 54.65%, significantly outperforming the S&P 500, which increased by 8.19% and 19.61% respectively [7] Trading Volume - The average 20-day trading volume for SUPN is 711,004 shares, which serves as a bullish indicator when combined with rising stock prices [8] Earnings Outlook - In the last two months, two earnings estimates for SUPN have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $2.18 to $2.55 [10] - For the next fiscal year, two estimates have also moved upwards without any downward revisions [10] Conclusion - Considering the positive price trends, strong earnings outlook, and favorable trading volume, SUPN is positioned as a 1 (Strong Buy) stock with a Momentum Score of B, making it a compelling option for investors seeking short-term gains [12]

Core Insights - SUPN has shown significant growth with a revenue of $165 million in its second-quarter fiscal 2025 earnings report and has launched a new treatment for Parkinson's disease [1] - The stock has increased by 46% this year, indicating strong investor interest, particularly from institutional investors [2][3] - SUPN has a strong fundamental backdrop with an estimated EPS growth of +36.2% this year and a 1-year sales growth rate of +8.9% [4][6] Institutional Support - There has been strong institutional demand for SUPN, evidenced by unusual trading volumes and a history of outlier inflow signals [3][7] - The stock has been a top-rated pick at MoneyFlows for years, reflecting unusual buy pressure and growing fundamentals [5] Financial Performance - SUPN has demonstrated robust financial performance with a remarkable 3-year EPS growth rate of +1,792.4% [6] - The combination of strong fundamentals and significant money flows has historically led to substantial stock price increases [4][7] Price Prediction - Given the historical gains and strong fundamentals, SUPN is considered a potential candidate for a diversified investment portfolio [8]

Core Viewpoint - The market anticipates a year-over-year decline in Supernus Pharmaceuticals' earnings despite an increase in revenues when the company reports its quarterly results for the period ending September 2025 [1][3]. Earnings Expectations - Supernus is expected to report earnings of $0.47 per share, reflecting a significant year-over-year decrease of 55.7%. Revenue is projected to be $182.06 million, which is a 3.6% increase compared to the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 14.29% higher in the last 30 days, indicating a reassessment by analysts of their initial estimates [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate matches the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%. This suggests no recent differing analyst views from the consensus [12]. Historical Performance - In the last reported quarter, Supernus exceeded the expected earnings of $0.47 per share by delivering $0.91, resulting in a surprise of +93.62%. The company has beaten consensus EPS estimates in all of the last four quarters [13][14]. Investment Considerations - Despite the positive historical performance, Supernus does not appear to be a strong candidate for an earnings beat this time. Investors are advised to consider other factors beyond earnings results when making investment decisions [15][17].

Performance Overview - The Third Avenue Small-Cap Value Fund returned 7.18% in Q3 2025, underperforming the MSCI USA Small Cap Value Index at 8.97% and the Russell 2000 Value Index at 12.60% [2] - The Fund's annualized returns for the trailing three-year and five-year periods were 15.11% and 16.09%, respectively [2] Positive Contributors - Supernus Pharmaceuticals (SUPN) was the largest positive contributor, benefiting from a strong financial position, profitability, an expanding neurology drug portfolio, and a successful acquisition [3] - Investors Title Company (ITIC) saw positive performance due to increased real estate refinancing activity [3] - UMB Financial Corporation (UMBF) successfully integrated its acquisition of Heartland Financial, showcasing operational competence [3] Negative Contributors - Atlanta Braves Holdings (BATRA) was a negative contributor, though it is perceived to have an attractive asset base and potential for favorable resource conversion [4] - UniFirst Corporation (UNF) faced pressure to demonstrate its value proposition after rejecting an acquisition offer from Cintas Corporation (CTAS) [4] - FRP Holdings (FRPH) was impacted by a lack of confidence in government spending affecting the D.C. metro area [4] Investment Strategy - The Fund focuses on acquiring companies in transitional states, aiming to capitalize on undervalued businesses with potential for future growth [5] - Investment activity emphasizes companies that are well-financed, trading at discounts to net asset value, and have identifiable levers for value creation [6] - The Fund's turnover rate is approximately 20%, indicating a long-term investment horizon of about five years, contrasting with the average turnover of 91.7% in the small-cap value fund universe [7] Types of Investment Opportunities - The Fund identifies three broad types of investment opportunities: 1. Companies facing industry-wide headwinds that can improve through restructuring [9] 2. Companies with current economic returns that have underappreciated self-help opportunities [9] 3. Event-driven situations that offer unique return profiles through transformational changes [9] Recent Transactions - Ambac Financial (AMBC) completed the sale of its legacy financial guarantee business, leading to a significant cash inflow and a transformation towards insurance distribution [11][12] - The Fund initiated new positions in Boise Cascade (BCC) and Rogers Corporation (ROG) during the quarter, while also adding to existing positions like UniFirst Corporation (UNF) [14] Company Profiles - Boise Cascade is a leading manufacturer and distributor of building materials, facing challenges due to slowing housing activity but retaining a strong financial position [15][16] - Rogers Corporation specializes in electronic and materials technology solutions, facing growth challenges but possessing valuable intellectual property and a strong balance sheet [18][19][20]