Welcome to Collegium Pharmaceuticals First Quarter 2020 Earnings Conference Call. This is Alex Dasalla, Head of Investor Relations for Collegium. I am joined today by Joe Ciaffoni, our Chief Executive Officer; Paul Brannelly, our Chief Financial Officer; and Scott Dreyer, our Chief Commercial Officer. Before we begin today's call, we want to remind participants that none of the information presented today is intended to be promotional and that any forward-looking statements made today are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. You are cautioned that such forward-looking statements involve risks and uncertainties, including and without limitation, the impact of the COVID-19 pandemic, the risks that we may not be able to successfully commercialize Xtampza ER and the Nucynta franchise, and that we may incur significant expense and may not prevail in current or future opioid industry litigation and investigation, patent infringement litigation or other litigation pertaining to our products. These risks and other risks of the company are detailed in the company's periodic reports filed with the Securities and Exchange Commission. Our future results may differ materially from our current expectations discussed today. Our earnings press release and this call will include discussion of certain non-GAAP information. You can find our earnings press release including relevant non-GAAP reconciliations on our corporate website at collegiumpharma.com. I will now turn the call over to Collegium's CEO, Joe Ciaffoni.

Thank you, Alex. Good afternoon and thank you everyone for joining us. I want to start by acknowledging the challenging situation the COVID-19 pandemic has created for so many people. Our thoughts and hearts go out to everyone who has been impacted. In April, Collegium Pharmaceutical made a $240,000 donation to the Life Science Cares COVID-19 Response Fund, including $40,000, which was raised through our employer match program. Life Science Cares is a non-profit organization focused on eliminating the impact of poverty in our neighborhoods in the Greater Boston area. We are committed to acting in a socially responsible manner. Turning to the impacts the pandemic has had on our organization, I am pleased to report that our people and their families are healthy and have been working remotely since March 16. I have been amazed by how fast our team has been able to adapt and inspired by their resolve. Our home office team transitioned in a seamless manner and is advancing all essential business activities. Collegium's field-based teams are finding ways to increase the quantity of customer interactions each week and importantly, are leveraging technology to improve the quality of those interactions too. Due to the efforts of our supply chain team and manufacturing partners, we do not anticipate any disruption or issues in our ability to supply the market. We are on track to achieve our broad priorities and remain confident that 2020 will be a transformative year for Collegium Pharmaceutical. In the first quarter, we made significant progress versus each of our broad priorities. Specifically, Xtampza ER total prescriptions due to brand and total prescription market share immediately accelerated in January, driven by new exclusive ER oxycodone formulary wins, representing 35 million lives that took effect on January 1. In the first quarter, Xtampza ER was the fastest growing extended release opioid and we remain confident that it will be the market leader, no later than 2023. In late February, we began to see the growth trajectory of Xtampza ER being impacted by COVID-19. Moving forward, we expect Xtampza ER to continue to grow, but at a moderated rate due to COVID-19. Moving to the Nucynta franchise, we saw the rate of declines slow in Q1 '20 versus Q1 '19. As a mature franchise, we expect Nucynta to be less impacted by COVID-19 as we're seeing signs in the market that the disruption to in-person office visits is leading the continuity of care for patients whose pain is under control. We are unrelenting in our commitment to leverage, not grow our cost structure. From the perspective of operating expenditures, the impact of COVID-19 will be favorable in 2020. The acquisition of the Nucynta franchise was a key component of our mid-term growth strategy. The financial benefits of that transaction are apparent. We remain active and engaged in our pursuit of non-opioid pain solutions that are in later stages of development. We believe the impact of COVID-19 is neutral to positive as it pertains to completing a business development transaction. Collegium Pharmaceutical was profitable in the first quarter and will be increasingly profitable throughout 2020. We also expect to accumulate cash and pay down debt. I would like to recognize and thank my colleagues at Collegium Pharmaceutical for their commitment to making a positive difference in the lives of people suffering from pain and in our communities. I admire their ability to stay focused during this pandemic and propel the organization forward in our quest to become the leader in responsible pain management. In the face of unprecedented challenges, Collegium Pharmaceuticals is uniquely positioned and on track to make 2020 a transformative year. This is a testament to our product portfolio, financial strength and most of all, our people. I will now hand the call over to Paul for a discussion of the financials.

Thanks, Joe. Good afternoon, everyone. Driven by Xtampza ER growth, the acquisition of the U.S. rights to the Nucynta franchise and continued financial discipline, we are confident that 2020 will be a financially transformative year for Collegium. We expect to significantly increase our profitability and operating cash flow. Total product revenue was $76.5 million for the first quarter of 2020. Xtampza ER revenue was $31.5 million, which is an increase of 25% from the first quarter of 2019 and an increase of 15% from the fourth quarter of 2019. Days on hand for Xtampza ER remains stable from year-end levels. The gross to net discount for Xtampza ER was 63% for the quarter. As discussed on prior calls, the gross to net discount may be lumpy throughout the year and is expected to be in the low-60% range for 2020. Nucynta revenue was $45 million for the first quarter of 2020, which is a decrease of 9% from the first quarter of 2019 and a decrease of 4% from the fourth quarter of 2019. The decrease in Nucynta revenue was partially driven by a reduction in wholesaler inventory of approximately 1.5 days. With the acquisition of the Nucynta franchise during the first quarter of 2020, we have updated our income statement presentation. The updated presentation includes sub totals for gross profit and operating expenses. Additionally, amortization of the Nucynta intangible asset is disclosed separately from other COGS. We believe this updated income statement presentation will provide better usability in consideration of the financial guidance that we provide. Even though the Nucynta franchise purchase agreement eliminated royalties owed to Assertio for Nucynta sales in 2020, accounting rules require us to include an adjustment of $14.2 million in COGS for royalties that would have been paid according to the previous Commercialization Agreement. Non-GAAP adjusted income has been adjusted to exclude this Nucynta royalty adjustment. Operating expenses were $33.9 million for the first quarter of 2020, which is a 4% decrease from the first quarter of 2019. Excluding stock-based compensation, operating expenses decreased by 7%. Despite the accounting impact of the $14.2 million Nucynta royalty adjustment, we were profitable on a GAAP basis in the first quarter of 2020. Our GAAP net income was $450,000 compared to a GAAP net loss of $9.7 million for the prior year quarter. Our non-GAAP adjusted income was $31.2 million for the first quarter of 2020 compared to a non-GAAP adjusted loss of $1.7 million for the prior year quarter. As of March 31, 2020, our cash balance was $116.2 million, which is a $53.8 million decrease from our December 31, 2019 balance. The first quarter included cash outflows related to the acquisition of the Nucynta franchise, including the repayment of our old venture debt facility of $11.5 million and a $50 million cash payment used in the purchase of Nucynta. For the remainder of 2020, we expect to generate significant quarterly cash flow and expect to end the year with at least $180 million in cash while repaying $37.5 million of our term notes. With one quarter of 2020 behind us, and a better understanding of the potential impact of COVID-19, we are updating our guidance for 2020. We are reducing our Xtampza ER revenue guidance to a range of $130 million to $140 million from our prior guidance of $150 million to $160 million. We are reaffirming our prior guidance for the Nucynta franchise revenue in the range of $170 million to $180 million. We are reducing our total operating expense guidance to a range of $120 million to $130 million from our prior guidance of $130 million to $140 million. Please note that our operating expense guidance includes stock-based compensation expense of approximately $20 million. And we are also tightening the range of our non-GAAP adjusted income guidance to $125 million to $135 million from our prior guidance of $125 million to $140 million. Collegium is fortunate to be in a strong financial position that allows us to adapt to the realities of the COVID-19 pandemic without changing our expectation of making 2020 a financially transformative year.

Thanks, Paul. Fueled by 20 new exclusive ER oxycodone formulary wins, Xtampza ER immediately accelerated in January. In late February, we began to see the impact of COVID-19 on the growth trajectory. Despite this impact, Xtampza ER achieved all-time highs for total prescriptions, total and new-to-brand market share, total prescribers and total prescriptions per prescriber. In the first quarter, total prescriptions grew to 136,736, up 30% versus the first quarter of 2019 and 10.2% versus the fourth quarter of 2019. Xtampza ER total prescription OER market share was 21.8% in the first quarter, up 3.3% from the end of 2019. New-to-brand OER market share accelerated to 32.7% in the first quarter, up from 24.3%. There were 14,600 unique prescribers of Xtampza in the first quarter, an increase of 18% versus the first quarter of 2019. Importantly, the productivity of the prescriber base continued to improve and the average total prescriptions per prescriber increased to a new high of 9.4. We saw strong market share performance across all 49 commercial and Part D exclusive accounts and share acceleration within every one of the 20 new exclusives that went into effect on January 1. Aggregate ER oxycodone market share across all 49 exclusive accounts grew to 51% in March, up from a baseline of 40% in December. We expect continued market share growth within exclusive accounts. As a reference point, Xtampza ER exited 2019 with a 63% OER market share within accounts that were exclusive prior to January 1. Based on quantitative market research conducted in the first quarter of this year, 53% of our targeted healthcare providers intend to prescribe more Xtampza ER over the next 12 months compared to 62% who intend to prescribe less OxyContin. Nucynta franchise total prescriptions were 120,576 in the first quarter, representing a sequential decline of 6.1%, a significant improvement over the 11.3% decline in the first quarter of 2019. After three quarters of stable total prescription share for Nucynta ER, Nucynta ER branded ER share grew from 5.8% to 6.1% in the first quarter. We're encouraged by the signs that the decline is slowing and by the results of market research conducted with our targeted healthcare providers in the first quarter where 42% of prescribers stated their intend to increase prescribing of Nucynta ER. As it pertains to the impact of COVID-19 on the opioid market, the greatest impact has been on the decline of the new-to-brand market volume. Disrupting or changing treatments for chronic pain patients is a significant event, which takes time and consultation between a healthcare provider and their patient. While some of this is still occurring virtually, most pain specialists would prefer to make a treatment change via a live patient visit in their office. As a growth product, Xtampza ER is more dependent on new patient inflow than a mature brand, and we believe that the lower new-to-brand volume is having an impact on the ramp of growth for Xtampza ER. As a mature franchise, that is less dependent on new patient inflow and which we have forecasted will decline through the year, Nucynta is less impacted by this dynamic. Despite the impact of COVID-19, we believe Xtampza ER will continue to grow and we can slow the decline for the Nucynta franchise. Our sales force has been working remotely since March 16 and we've taken actions to enable them to be effective working remotely. These actions include the following: we launched new e-retailing capabilities and remote selling training for all our sales representatives, we launched new processes for our sales representatives to be able to get HCP's and patient resources like co-pay cards and patient assistance to their customers upon request. We improved our digital capabilities and increased our investment in non-personal promotion. We increased availability of digital resources for both healthcare professionals and patients on our brand websites and we continue to work closely with exclusive payor accounts to improve pull-through and continue to accelerate market share. In 2020, our commercial priorities are achievable. Grow Xtampza ER and slow the decline of the Nucynta franchise. 2020 is going to be a transformative year for Collegium and I look forward to updating you on our progress throughout the year. With that, I'll turn it back to Joe.

Thanks and I apologize if I missed this color since I joined late, but I wanted to get your thoughts on how forced switching away from OxyContin has been progressing or maybe a better term is delayed due to the pandemic. And are you seeing patients that normally would have been forced off, be allowed to stay on Oxy for an extended period, if you will, because of all the dislocation? So that's number one. And the number two is on Nucynta. Joe, I think in the past, you've alluded to reworking contracts or ridding yourself of contracts that had poor economics. So can you talk about the progress you've made there and what that implies for the profitability of Nucynta going forward either for this year or beyond 2020? Thanks.

Sure. Thanks, David. I'm going to pass the first question off to Scott to talk about the forced switches and then I'll come back and address the Nucynta market access question.

Yeah, thanks David. So, yeah, when we look at what's happening in the market and the impact of COVID-19, kind of, late in February, yes, we see a delay in some of the switching. And the primary driver of that is that patients aren't going to doctor's offices. So physicians really want to consult the patient when they're switching a patient and so that decrease in overall visits is really having the most significant effect on timing of switching in the market.

David, you asked about our plans regarding flexibility in some cases where Xtampza has certain advantages. We believe there is some movement in that direction, but the main factor affecting our progress is the in-person visits, as Scott mentioned. Regarding Nucynta, our aim is to achieve stable revenue moving forward while also enhancing our operating contributions. On the payer side, we plan to pursue new contracts at rates beneficial to our franchise. Additionally, as you pointed out, we value the timing of the Nucynta transaction because, over the next few years, some contracts we acquired will expire. Our strategy will be twofold: we'll attempt to renegotiate those contracts at better rates, but for those we can’t renegotiate, we will allow them to expire. We expect to see the results of these decisions more prominently in 2021 and 2022, although some choices will be made in 2020. Furthermore, we believe that over the next three years, we can lower the cost of goods sold related not just to Nucynta but across the entire value chain, particularly as we transition Nucynta ER manufacturing from a Johnson & Johnson facility in Puerto Rico to Thermo Fisher in Cincinnati, where we also produce Xtampza ER. This approach will help us achieve stable revenue and maintain our operating contributions in the future.

Okay, great, that's helpful color. Thanks, Joe.

Thanks, David.

Hi, thanks for taking the questions. First, I just wanted a clarification on a comment on business development. So you mentioned that you view the COVID impact as kind of being neutral to favorable for business development. So maybe if you could just expand upon that. And then secondly, I wanted to ask about Nucynta IR, it’s a product we don't talk about as much as the ER product, but I'm wondering what you're seeing there and kind of what the patient base is for that, given that with the lack of elective surgery procedures, I would imagine that the IR opioid market is seeing the negative impact from some of that declining volume. Thanks.

Yeah, hey, Kevin. This is Joe. So from a BD perspective, the commentary that I made of our view is the COVID-19 impact will be neutral to positive. Obviously, a lot of different companies are going to experience COVID-19 in different ways. Some are being impacted from a valuation of the company, some will experience a P&L challenge, some will have delays from a clinical trial perspective. That could create pressure. So from our perspective, we're focused in, we've identified eight non-opioid pain solutions, all of which are either in Phase II or are ready to enter Phase II development. As you know, we're targeting that 2024 to 2026 window and my comment was to say, based on that high-level assessment, we're certainly not in a net worse position in terms of our view of the likelihood of being able to get the transaction done. And Scott can speak about Nucynta IR.

Yeah, so... Patient type. Yeah. Thanks a lot, Kevin. So, yes, when we look at IR, it actually travels along with ER. So this quarter versus first quarter '19, there was a decline, but it was significantly less than the first quarter of '19. And it's a product that's 70% of the time used for chronic pain patient treatment. And so it behaves a little differently than the traditional IR products.

Operator, next question.

Hey, good afternoon. Just a couple of questions for me. The first one, Joe, is on the guidance. We saw a lot of companies withdraw guidance entirely just because of the uncertainty around COVID. What gives you confidence or what are the assumptions behind your new guidance here?

Yeah, Serge, so I appreciate the question. I'll give a little perspective and then maybe Paul can give additional texture to the guidance. Look, the first thing is, we feel, when you look at the Nucynta transaction, it's financially transformative to the organization. And what we believe is happening in the market is continuity of care is benefiting the established products. So we feel comfortable with the guidance of Nucynta, which as you know, drives a lot of the cash flow and EBIT for the organization. The second thing, from an expense perspective, by the nature of our people working remotely, there's T&E related expenses, meetings, conferences and things like that, we otherwise, would have gone to, that we think will result in favorability from an expense perspective. And when you look at Xtampza, our basic assumption that we're making and the primary driver of what we think is putting pressure on the ramp of Xtampza is patients not being able to visit their physicians in person at the same rate. So the assumption of our guidance is that we don't anticipate a return to normal prior to the end of the year, meaning across the country, patients at the same rate they were, are visiting their physicians in the office and we also don't anticipate if we're fortunate enough to be able to bring our field force back to in-person customer interactions, that it will be at the same level across the country as it was prior to the event. And I don't know if, Paul, you want to add any additional comment.

Yeah, thanks, Joe, and thanks Serge for the question. The only other thing I'd just expand on what Joe said is how financially transformative the Nucynta deal is for Collegium. So we were profitable in the first quarter despite the Nucynta royalty adjustment of $14.2 million, but we'll be profitable for the remainder of the year and generating meaningful cash flow throughout the year, which is why we gave the cash guidance as well. So we'll end the year with over $180 million, while paying down $37.5 million of the term note. So we still expect to have a very strong year despite having to bring down the Xtampza revenue cuts.

Okay and then just a follow-up on Nucynta. Can you maybe talk about the market dynamics of that product and which would explain your success in growing market share over the last couple of quarters?

Okay. Scott, you can take.

Yeah. Thanks for the question, Serge. So, look, when we look at Nucynta ER, we believe that the stabilization is driven by the value proposition of the product and our commercial effectiveness being able to stabilize that product. As I've shared before and I'll share it again, when you talk to physicians, they have a strong intent to prescribe the product and they see it as highly favorable and differentiated. So I think those things have come together to allow us for four quarters to stabilize and are growing share.

I apologize for missing it during the three calls. Over the past four or five months, you've mentioned the possibility of some off-cycle wins; could you provide an update on that? I understand that your next call will be close to the announcement of the regular cycle wins, so is there a chance of any developments happening between now and then? Also, I need some clarification regarding the forced conversion. Do you need to be physically present in the doctor's office to adjudicate the script, or is it possible to do this via Zoom or another method? I just want to ensure I have this correct.

Great. Thanks, David. I'm going to let Scott start with the question around prescriptions and then I'll talk about the off-cycle payor wins.

Thanks, David. From a legislative perspective, changes were implemented that prevent new patients from being initiated via telemedicine and video conferencing. The issue lies in the fact that physicians prefer to make these changes during in-person visits. However, patient visits to physicians' offices have decreased significantly since the end of February due to COVID-19. While it is technically possible for physicians to make these changes, the drop in office visits is a significant barrier, as patients prefer to see their physician in person.

And, David, one other thing to that question, pain specialists relative to other physician groups were low users of telemedicine prior. And so, although, that's increasing, that's not been a common part of their practice, which is why we think the disruption to the patient flow was important and is having impact to the shifting of patients from oxycodone in these exclusive plans over to Xtampza. With regards to off-cycle payor wins, we continue to be actively engaged. I would say that we are encouraged and our commitment will be, if we achieve any that are material, we would communicate them. And I would also emphasize, we're looking to do three things now from an Xtampza perspective in terms of our payor strategy. One, in instances, we're looking to get additional exclusive. In certain situations, we are trying to do a parity so they get on equal status. As you know, every payor position we have that is not exclusive, Xtampza ER has actually disadvantaged oxycodone. So if we can achieve parity off-cycle, that would lead to a run-in to exclusive. That's part of our strategy and then in certain instances, we will also try to achieve a parity position because we think with our commercial scale, our overall breadth payor position, in terms of exclusive, that we can meaningfully move market share for put on equal footing with oxycodone. So anything material, we will communicate and encourage both for the potential of out-of-cycle, but also as we look to 2021 based on the discussions we're having.

There are no questions at this time. Please continue.

Okay, great. Thank you, operator. In the face of unprecedented challenges, Collegium Pharmaceuticals is uniquely positioned and on track to make 2020 a transformative year. I'm confident that we have the product portfolio, financial strength and, most important, people to make it happen. I look forward to updating you on our progress. Have a good evening. Stay healthy and be well.

This concludes today's conference call. You may now disconnect.