Greetings and welcome to the Collegium Pharmaceuticals Fourth Quarter and Full Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note that this conference call is being recorded. I'll now turn the call over to Danielle Jesse, the Director of Investor Relations at Collegium. Thank you and you may begin.

Welcome to Collegium Pharmaceuticals fourth quarter and full year 2024 earnings conference call. I am joined today by Vikram Karnani, our President and Chief Executive Officer; Colleen Tupper, 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, without limitation, the risks that we may not be able to successfully commercialize our products, that we may incur significant expense in doing so, and that we may not prevail in current or future litigation pertaining to our business. 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 our President and CEO, Vikram Karnani.

Thank you, Danielle. Good afternoon, and thank you everyone for joining the call. Today we will discuss Collegium's financial performance for the fourth quarter and full year 2024 and provide a business update. Let me start by saying how thankful I am for the opportunity to join Collegium at this exciting time in the company's journey. Having spent the last several years leading high-growth organizations, I'm energized by the opportunity to spearhead this team through its next phase of growth. Collegium has a successful track record of creating value through strong commercial execution and strategic acquisitions, all while maintaining financial discipline. The organization's commitment to improving the lives of people living with serious medical conditions and its strong culture are what attracted me to this role. The company has built a leading pain portfolio that generates strong cash flows, which enables investment in future growth. The Ironshore acquisition demonstrates that Collegium is well-positioned to make further investments that leverage our expertise and will drive a new phase of growth for the company. With Jornay poised to be Collegium's lead growth driver, the company is at an inflection in its growth trajectory. We have strong leadership and a deeply committed team of employees, and I am looking forward to collaborating with this accomplished team, working together towards our goal of building a leading diversified biopharmaceutical company. At Collegium, we strive to do good as we do well, and our values are highlighted in our 2024 ESG report that was published yesterday. I'd like to recognize the entire team for our commitment to Collegium's mission and for helping make a positive impact on the people and the communities we serve. 2024 was a transformational year for Collegium. We generated significant growth in our pain portfolio through strong operational execution. The robust durable cash flows generated by our pain business enabled us to acquire Ironshore Therapeutics and its lead medicine Jornay PM, establishing a new presence in neuropsychiatry. Jornay’s growth accelerated during our first full quarter of ownership. In the fourth quarter, we grew prescriptions 29% year-over-year and 11% quarter-over-quarter. Jornay net revenue on a pro forma basis was $100.7 million in 2024 and is expected to be in excess of $135 million in 2025, representing over 34% growth. Our pain portfolio generated 5% revenue growth in 2024 led by record revenues for both BELBUCA and Xtampza ER. We achieved our financial guidance for the year, growing total revenue 11%, while adjusted EBITDA grew 9% year-over-year. We opportunistically repurchased $60 million worth of shares in 2024. We strengthened the durability of the Nucynta franchise with several positive developments that extended projected exclusivity for Nucynta ER to July 2027, reinforcing this franchise as a robust revenue contributor this year and beyond. We appointed Nancy Lurker to our Board of Directors. Nancy's expertise in driving commercial growth and strategic acquisitions will be of great value to us as we work to advance our mission. We warmly welcome Nancy to the Board. And finally, I'm excited to welcome our new Head of Investor Relations, Ian Karp, to the Collegium team. Ian has a long history of leading Investor Relations for a number of leading biopharmaceutical companies, and we are thrilled that he has joined us for our next chapter of growth. As we look to 2025 and beyond, we will build on the momentum we generated across our commercial portfolio in 2024 and focus on three main priorities. The first is to drive significant growth in Jornay to maximize its potential as an important therapy for the ADHD community. Jornay is a highly differentiated medicine for the treatment of ADHD and has potential for significant growth with the right investments. We've identified opportunities to raise awareness of Jornay with healthcare professionals, patients, and caregivers, and will make targeted investments to unlock its full potential. We expect our investments to support growth in the near term, with the majority of the impact coming in 2026 and beyond. Our second priority is to maximize the pain portfolio. These medicines generate significant durable cash flows and we believe have a longer and more robust revenue stream that remains underappreciated. Our third priority, and frankly one that I’m spending a significant portion of my time on, is to strategically deploy capital to create shareholder value. We are focused on expanding and diversifying our portfolio through business development, as we did most recently with the Ironshore acquisition. We will continue to opportunistically leverage the share repurchase program and rapidly pay down debt. Our track record of disciplined capital deployment has put us in a position of financial strength relative to our peers, and we will continue to use these levers to create shareholder value. With that, I will now turn it over to Scott to give a commercial update.

Thanks, Vikram, and good afternoon, everyone. I'm excited to share our fourth quarter commercial results with you, highlighting the momentum we created heading into 2025. I'll begin with Jornay, our lead growth driver. The ADHD market is large and has been growing at 6% on average from 2019 to 2024. Stimulant medications, including methylphenidates and amphetamines, make up almost 90% of the market. Within stimulants, 30% of use is methylphenidate products and the use of methylphenidate is skewed towards the pediatric population, with 70% of prescriptions for pediatrics and adolescents and 30% for adults. Prescribing is highly concentrated with approximately 20,000 healthcare providers writing one-third of prescriptions. The majority of the prescribers are neuropsychiatrists or pediatricians. As healthcare providers choose a medication for their ADHD patients, they're looking for a medication that provides efficacy upon awakening in the morning and a long-lasting duration of effect that can provide symptom control throughout the day. Jornay has a profile that has the potential to meet that need. Jornay is highly differentiated, as the only stimulant ADHD medication with convenient evening dosing. Jornay provides symptom control upon awakening in the morning and throughout the day, limiting the need for short-acting stimulant add-ons. It has flexible dose-dependent duration, enabling treatment to be tailored to the patient's needs. This is important for pediatric, adolescent, and adult patients because it eliminates the need to dose throughout the day at school or at work. In market research, healthcare providers ranked Jornay as the number one recognized brand, both for achieving all-day symptom control with one dose and for controlling evening symptoms after school or work. Jornay is the highest-rated brand by targeted healthcare professionals in terms of product favorability. And when patients and caregivers request to try Jornay, healthcare providers honor that request. In addition, Jornay has strong market access coverage. Approximately 65% of the business is commercial and 35% is Medicaid, with Jornay having 80% coverage across the entire book of business. Since we acquired Jornay, we generated momentum and accelerated growth even before making key targeted investments in the brand. This strong performance speaks to Jornay's potential and supports its position as our lead growth driver. During the fourth quarter, our first full quarter owning Jornay, prescriptions were up 29% year-over-year and 11% quarter-over-quarter. For the full year 2024, Jornay prescriptions grew to 636,200, up 31% compared to 2023. Additionally, Jornay has a broad and growing prescriber base with 24,300 prescribers in the fourth quarter, up 26% since the fourth quarter of 2023. As we head into early 2025, we're encouraged to see this momentum continue despite the typical first-quarter dynamics where deductibles reset and out-of-pocket costs increase for patients. Jornay achieved an all-time high for weekly prescriptions in the middle of January and is performing in line with our expectations to start the year. With strong brand fundamentals and clinical differentiation, we see significant opportunity for Jornay and we're committed to investing in the brand to maximize its growth. We've identified two main areas to make targeted investments to impact Jornay's growth in 2025 and further accelerate growth in 2026 and beyond. The first is increasing awareness and adoption with healthcare professionals. To do this, we're expanding the sales force to ensure it is optimally sized to reach our target audience. We're expanding the sales force from approximately 125 to 180 sales representatives. We're making great progress with this work and we expect to have the expanded sales force hired, trained, and calling on healthcare providers in April. To complement and amplify the efforts of the sales force, we'll also invest in non-personal promotion to increase awareness and usage of Jornay among prescribers. The second area of focus is raising awareness of Jornay's unique and differentiated profile among patients and caregivers. Market research shows that patients and caregivers' requests are a top influencer of healthcare provider trial, and patients and caregivers have limited knowledge of Jornay and its differentiated profile. Therefore, we'll invest in digital marketing and social media strategies and tactics designed to raise awareness among patients and caregivers and motivate them to ask their healthcare provider about Jornay. While we expect to benefit from these investments toward the end of 2025, the majority of the impact will be in 2026 and beyond. These investments and their expected impact are included in our 2025 financial guidance. Turning to our pain portfolio. At Collegium, we take pride in being the leader in responsible pain management with a unique and differentiated portfolio of medicines for the treatment of pain. Belbuca, Xtampza ER, and Nucynta ER collectively represent over half of the branded ER market, demonstrating the ongoing strength and reach of our portfolio. Our commercial organization will continue to capitalize on the momentum we generated for our pain portfolio in 2024. Belbuca delivered another strong quarter with total prescriptions up 5.6% year-over-year, marking the sixth straight quarter of year-over-year prescription growth and driving record quarterly revenue. In addition, we saw acceleration in prescriptions at the end of the year with 6.3% year-over-year growth in the month of December. We're encouraged by this consistent growth trend, which speaks to the impact that our strong commercial execution is having on the brand and Belbuca's differentiated profile. We expect pressure on prescriptions in the first quarter due to a formulary change that occurred starting on January 1, as well as the typical first quarter dynamics driven by patient deductible resets. That said, we expect full-year prescription growth as well as positive net revenue impacts from the formulary change. Xtampza ER prescriptions grew 2.6% in the fourth quarter compared to the third quarter of 2024, and we saw acceleration of average weekly prescriptions in the month of December. We're encouraged that we were able to generate momentum heading into 2025. We achieved full-year gross to net of 52.7%, which reflects the successful execution of our payer strategy and drove record revenue for Xtampza in the fourth quarter and for the full year. We expect pressure on prescriptions in the first quarter due to a formulary change that occurred starting on January 1, as well as the typical first-quarter dynamics driven by patient deductible resets. We’re focused on educating physicians on Xtampza ER’s differentiated label and capitalizing on its strong market access position. Our aspiration is to increase utilization for appropriate patients due to Xtampza ER’s superior abuse deterrent properties and labeling. The Nucynta franchise is a key contributor to our pain portfolio with a robust revenue stream. The positive developments for the franchise, including the new patient population exclusivity extension, six-month pediatric exclusivity extension, and recent Grunenthal settlement with Teva, extended exclusivity of Nucynta of 1.5 years from June of '25 to January of '27, and Nucynta ER two years from June of '25 to July of '27. This coupled with the authorized generic agreement with Hikma enables us to continue to maximize and enhance the durability of the Nucynta franchise in 2025 and beyond. In closing, I’m proud of the commercial accomplishments in 2024, which included integrating and accelerating growth for Jornay, delivering strong performance in our pain portfolio, and generating momentum for all of our growth drivers in the fourth quarter. We’re now focused on commercial execution, maximizing the potential of the pain portfolio, and accelerating the performance of Jornay in 2025. I’ll now hand the call over to Colleen to discuss financial highlights.

Thanks, Scott. Good afternoon, everyone. In 2024, through our dedication to operational excellence, we generated strong financial results and delivered on our 2024 guidance. We grew revenue by 11% and adjusted EBITDA by 9%, generated robust operating cash flows, and strategically deployed capital. Successful execution of our 2024 financial and strategic priorities establishes a strong foundation for 2025 financial guidance that reflects significant top and bottom line growth. As we head into the year, we plan to further strengthen our financial position and create value through disciplined capital deployment. Financial highlights for the fourth quarter and full year include, net product revenues were a record $181.9 million for the fourth quarter, up 22% year over year. 2024 net product revenues were a record $631.4 million, up 11% year over year. Jornay net revenue was $29.3 million in the fourth quarter, which represents our first full quarter of ownership. Pro forma full year net revenue was $100.7 million, inclusive of $37.2 million recognized by Collegium. Belbuca net revenue was a record $55.2 million in the fourth quarter, up 12% year over year, and a record $211.3 million in 2024, up 16% year over year. Xtampza ER net revenue was a record $51.5 million in the quarter, up 6% year over year. For 2024, Xtampza ER net revenue was a record $191.3 million, up 8% year over year. Full year gross to net was 52.7%, coming in better than our expectation of approximately 55%. Nucynta franchise net revenue was $41.8 million in the fourth quarter, down 11% year over year, and $176.5 million in 2024, down 7% year over year. GAAP operating expenses were $60.2 million in the fourth quarter, up 83% year over year. For 2024, GAAP operating expenses were $207.4 million, up 30% year over year. Non-GAAP adjusted operating expenses were $51.1 million in the quarter, up 97% year over year. For 2024, adjusted operating expenses were $150.6 million, up 22% year over year. As a reminder, adjusted operating expenses increased in 2024 due to the additional operational costs associated with having Jornay in our portfolio. GAAP net income for the fourth quarter was $12.5 million compared to $31.9 million in the fourth quarter of 2023. For 2024, net income was $69.2 million compared to $48.2 million in 2023. Non-GAAP adjusted EBITDA was a record $107.7 million for the fourth quarter, up 3% year-over-year, and a record $401.2 million for 2024, up 9% year-over-year. GAAP earnings per share were $0.39 basic and $0.36 diluted in the fourth quarter, compared to GAAP earnings per share of $0.99 basic and $0.82 diluted in the prior year period. GAAP earnings per share was $2.14 basic and $1.86 diluted in 2024 versus GAAP earnings per share of $1.43 basic and $1.29 diluted in 2023. Non-GAAP adjusted earnings per share was $1.77 in the fourth quarter versus $1.58 in the fourth quarter of 2023. For 2024, non-GAAP adjusted earnings per share was $6.45 versus $5.47 in the prior year. Please see our press release issued earlier today for a reconciliation of GAAP to non-GAAP results. As of December 31, we had $162.8 million in cash, cash equivalents, and marketable securities. During 2024, $200 million of cash on hand funded our acquisition of Ironshore Therapeutics, and we deployed $60 million for share repurchases as part of our share repurchase program. We reaffirm our 2025 guidance, which was issued in January. For the year, we expect net product revenues in the range of $735 million to $750 million. This growth is forecasted to be primarily driven by Jornay, where we expect net product revenues in excess of $135 million, supported by continued durable performance from our pain portfolio. As is typical within our space, we expect a modest quarter-over-quarter decline in revenue in the first quarter due to typical dynamics where deductibles reset and out-of-pocket costs increase for patients. We expect adjusted EBITDA in the range of $435 million to $450 million and adjusted operating expenses in the range of $220 million to $230 million. As Scott previously mentioned, the increase in adjusted operating expenses reflects targeted investments to support Jornay near-term growth and drive significant momentum in 2026 and beyond. With these investments, we are still expecting over 10% adjusted EBITDA growth this year, with improvement in adjusted EBITDA margin beginning in 2026. This is a testament to our financial strength and the strong financial foundation that our pain business provides. Our spend is expected to be front-loaded into the first half of the year as we roll out these commercial initiatives in early 2025. We remain committed to strategically deploying capital to create value for our shareholders. We plan to invest in Jornay to drive growth, expand our portfolio through business development while opportunistically leveraging our share repurchase program and rapidly paying down our debt. In 2024, we repurchased $60 million in shares, including $25 million repurchased in the fourth quarter of 2024 and $35 million through an accelerated share repurchase program in May 2024. We have $90 million remaining in our share repurchase program, which is authorized by our Board through Q2 of 2025. Finally, we remain focused on paying down our debt. We ended 2024 with net leverage of less than two times and expect to end 2025 with net leverage of less than one time. I will now turn the call back to Vikram.

Thanks, Colleen. As I mentioned earlier in my remarks, this is an exciting time for our team at Collegium and for the patient communities we serve. The achievement of our financial commitments and the execution of our strategic priorities in 2024 have positioned us for a new phase of growth in 2025 and beyond. Looking ahead, we are focused on accelerating growth for Jornay, maximizing our PM portfolio, and strategically deploying capital to create value. I feel very fortunate to lead a company that is mission-focused, financially strong, and well positioned to deliver top and bottom line growth and create value for our shareholders. Before we open up the call for questions, I wanted to take a moment to thank the entire team at Collegium for their passion and dedication to helping make a difference in the lives of the patients we serve. With that, I will now open the call up for questions.

Thank you. At this time, we will be conducting a question-and-answer session. First question comes from Les Sulewski from Truist Securities. You may proceed with your question, Les.

Good afternoon. Thank you for taking my questions. Great to have you on the first call, Vikram. Perhaps I'll start there. Could you perhaps lay out any sort of path that you envision for Collegium over the next three to five years? And then perhaps give us an update on the business development opportunities. Would you say you're kind of in the early, mid, or late cycle of the next deal? And then for Colleen, perhaps could you quantify any synergies that you have been realizing from the integration of Ironshore? Lastly for the team, regarding the NOPAIN Act, are there any dynamic shifts to the pain treatment category that you'd expect, or is this minimal to your portfolio?

Yes. Maybe I'll kick it off. Thank you for the question. Look, let me first start out by saying that in the last call, it's a little over 3.5 months that I've been at Collegium. Much of what I came in with has been validated. This is a strong team with strong commercial execution, with the pain portfolio performing exceptionally well, as well as Jornay, which is a key part of our portfolio going forward. These performances lay a very strong financial foundation for us to continue to grow from. As we have said previously, our strategy for long-term growth is a function of both organic growth as well as inorganic growth. Organic growth, as we talked about earlier, we've done it with our main portfolio before and now we're doing it with Jornay. In terms of business development and inorganic growth, look, our primary focus is on commercial assets that can add meaningful revenue in the near term. In terms of the therapeutic area that we're looking at, there are logical adjacencies to our newly acquired ADHD asset that are our top priority. If you look at ADHD, neuropsychiatry, or even broader CNS, these are areas that we're quite interested in. Additionally, we're considering some other areas outside of pure neuro or neuropsych that are capital efficient, for example, rare or orphan diseases. Finally, we're not against looking beyond into other newer therapeutic areas as well. Although, as you go out further into other areas, the bar is certainly higher. We would ensure that any deal makes sense for us strategically as well as financially. Let me also end by noting that given our performance, and given where we ended last year at 1.9 times net debt over EBITDA, along with the anticipated performance this year where we expect to be less than one times net debt over EBITDA, we're in a pretty strong financial position. We're actively looking to expand our portfolio while also executing organically with the products we do have as well as pursuing the next deal. Maybe I'll now turn it over to Colleen.

Thanks so much for the question on synergies. Recall that the acquisition of Ironshore and Jornay as a product specifically was really about entering a new therapeutic area for us. We achieved the typical synergies you would expect in that situation, such as senior management overlap, facilities, and G&A type synergies. These were not a meaningful consideration as part of the deal. Really for us, it was the opportunity to invest strategically behind Jornay and drive that growth.

And I'll take the NO PAIN Act. Les, this is Scott. So on your question about the NO PAIN Act, yes, it had no impact on our portfolio positively or negatively. That's because the primary focus of that act is providing additional reimbursement in the inpatient setting, which does not affect our products since they are retail-based chronic pain therapies. So we see no impact on us at this time.

Great. Thank you, guys, and congrats on the progress.

Thank you. The next question comes from David Amsellem from Piper Sandler. Please proceed with your questions, David.

Yeah. Thanks. So with the sales force expansion, sorry if I missed this but just remind me how—what portion of ADHD prescribers or what portion of volumes does the expanded sales force encompass? And then, secondly, related to the sales organization, we've seen ADHD-focused sales forces even larger, much larger than the 180 that you're contemplating. So I guess the question is, over the long term, how are you thinking about the need for further expansion? Lastly, I had a question on long-term planning for how you're addressing the generic entry of BELBUCA and NUCYNTA, given that these are opioids and obviously there's a lot of baggage associated with generic companies and their role in opioids with the proper litigation. How are you planning for the loss of exclusivity for both products looking ahead to 2027?

Yeah. David, thanks for the questions. Look, so maybe I'll kick it off and then invite Scott to give some color on the sales force expansion in terms of what type of coverage universe we have as well as the size of the sales force. Then I’ll call on Colleen to give us some insights on the LOE question related to the pain products. First of all, we're highly encouraged with our performance to date with Jornay PM and the size of the sales force we have, which was 125 sales representatives that came over as part of the Ironshore acquisition. The performance we discussed in Q4 has essentially been delivered by that team, and we're thrilled with the progress. As we look into the future, we plan to expand the sales force by an additional 55 representatives, bringing the total to about 180. I’ll ask Scott to give some color on how that changes our coverage universe for healthcare providers and what it means for the business.

Yeah. Great. So, great questions, David. Firstly, in terms of ADHD prescribing in the U.S., there are over 300,000 physicians that write prescriptions. However, 20,000 drive one-third of overall prescriptions, so it presents a highly efficient way to approach the market. When we expand to 180, we expect to cover 60% of the long-acting market that drives overall prescriptions, which puts us at about 23,000 targets. This aligns with our goals. Regarding future sizing, we will look annually from a hygiene standpoint at coverage. But what I can tell you is that we do not anticipate significant growth but will always look to make sure we're efficiently deploying to cover the necessary doctors. That’s our current focus.

And then David, I will address your LOE question. Looking across our entire portfolio, there is no party that possesses the necessary combination of ingredients, regulatory clearance, legal clearance, and manufacturing capability to launch competitive generics against any product in our pain portfolio. Specifically, in relation to the Nucynta franchise, there is no party that holds the combination required for near-term competitive generic launch, which includes regulatory approval, cleared litigation, contractual hurdles, or access to commercially viable quantities of tapentadol, the API for Nucynta formulations. The LOE dates in our Nucynta franchise, due to some extensions we've been able to achieve, are now July 2027 for Nucynta ER and January 2027 for Nucynta IR. This situation holds true for BELBUCA and Xtampza ER as well. As we approach potential generic entrants, particularly with BELBUCA in January 2027, we will continue to invest through that date and reassess our strategies if a competitor arises. This is precisely why we have reinforced our belief in the longer and more robust revenue streams that remain underappreciated with this business.

And this is exactly why we've also reinforced that we believe we have a longer and more robust revenue stream that remains underappreciated with this business.

Its helpful color. Thanks, everyone.

Thanks.

Thanks, David.

Thank you. There are no further questions, so we have reached the end of the question-and-answer session. I would now like to turn the call back to Vikram Karnani for closing remarks. Thank you, sir.

Great. Thank you everyone for joining the call. Have a wonderful evening and good night.

Thank you. Ladies and gentlemen, that does conclude the call. You may now disconnect your lines.