Amidst the evolving pharmaceutical sector, Supernus Pharmaceuticals (SUPN) has achieved notable growth, with its stock price increasing 31% over the past year. However, despite the recent rally, Supernus remains 20% below its 2018 highs, raising questions about its future trajectory.
Brokers from SkylineSFO suggest that long-term investors may want to consider whether they should follow Aristotle Capital Boston in scaling back their holdings in the stock, given the company’s performance and valuation concerns.
What Happened?
Aristotle Capital Boston, in its November 14 SEC filing, disclosed it had sold 503,122 shares of Supernus Pharmaceuticals during the third quarter of 2025. This move resulted in a $10.9 million reduction in its position, with the fund holding 305,273 shares valued at $14.6 million as of September 30.
The sale likely represents a profit-taking strategy, reflecting a cautious approach toward a stock that has executed well operationally but faces tougher questions about valuation and long-term sustainability.
After the sale, Supernus Pharmaceuticals represented only 0.75% of Aristotle Capital’s 13F AUM. The fund’s largest holdings now include Dycom, ACI Worldwide, and Huron Consulting, all of which have experienced strong performance recently.
Supernus Pharmaceuticals: A Snapshot
Supernus Pharmaceuticals specializes in developing branded medications for central nervous system (CNS) disorders, providing treatments for conditions like migraine, epilepsy, Parkinson’s disease, and ADHD. Its product portfolio includes Oxtellar XR, Trokendi XR, Qelbree, and various therapies for Parkinson’s. These products target a critical market in the U.S., serving neurologists, psychiatrists, and other healthcare professionals involved in treating CNS disorders.
In the third quarter of 2025, Supernus reported $192.1 million in revenue, marking a 9% year-over-year increase. The company’s key growth products, including Qelbree and GOCOVRI, showed continued expansion, while ONAPGO contributed its first full quarter of sales following its launch. Additionally, Supernus raised its full-year revenue guidance, reflecting confidence in its near-term execution.
However, despite these promising figures, profitability has been uneven. GAAP results showed a net loss year-over-year, largely due to acquisition-related costs tied to the Sage deal. Meanwhile, adjusted operating earnings declined, raising concerns about cost management and the integration risk tied to the company’s expanding product portfolio.
Profitability Challenges and Market Position
While Supernus maintains robust revenue growth, it faces the persistent challenge of increasing expenses and the integration risks linked to its recent acquisitions. The company holds over $280 million in cash, offering significant financial flexibility. However, investors need to consider the potential risks of rising costs and the unpredictable dynamics of incorporating new assets into the business.
Despite these challenges, Supernus Pharmaceuticals is a key player in the CNS therapeutics sector, with a strong product portfolio and a diversified revenue stream. However, the stock’s valuation and operational efficiency are under closer scrutiny, especially as it remains well below its previous highs, despite the recent rally.
A Market Outperformer but Still Below Historical Peaks
Despite a 31% gain over the past year, Supernus shares are still 20% below their 2018 highs, prompting investors to reconsider the stock’s valuation. The company’s strong product pipeline and recent revenue growth have not been enough to push the stock beyond its previous highs, which raises questions about the stock’s future in a long-term portfolio.
Aristotle Capital Boston’s decision to reduce its position in Supernus Pharmaceuticals could indicate profit-taking as the fund reallocates capital into higher-conviction holdings with stronger long-term growth potential. This strategy highlights a prudent approach, especially when stock prices have been volatile, even amidst solid operational performance.
Final Take: Should Investors Follow Suit?
For long-term investors, Supernus remains an intriguing stock, with its strong revenue growth and solid pipeline in the CNS therapeutics sector. However, it also presents risks tied to rising expenses, integration challenges, and market volatility. The recent pullback in stock price might represent a buying opportunity, but investors should be cautious and closely monitor the company’s next steps regarding product integration and operational efficiency.
Analysts suggest that those considering Supernus should evaluate the company’s ability to balance growth with cost control and ensure that its product portfolio continues to deliver sustainable revenue. For those with a long-term perspective, the current market correction might offer a favorable entry point for patient investors.
In conclusion, while Supernus continues to show operational momentum, its valuation remains a critical factor to consider, especially as the company faces increased competition and challenges in managing its expanded portfolio. Investors should remain cautious, but Supernus may still have the potential to rebound in the long run.
