8-K
COLLEGIUM PHARMACEUTICAL, INC (COLL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 10, 2022
COLLEGIUM PHARMACEUTICAL, INC.
(Exact name of registrant as specified in its charter)
| | | |
|---|---|---|
| Virginia | 001-37372 | 03-0416362 |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| | | |
| 100 Technology Center Drive | | 02072 |
| Suite 300 | | (Zip Code) |
| Stoughton , MA | | |
| (Address of principal executive offices) | | |
Registrant’s telephone number, including area code: ( 781 ) 713-3699
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| | | |
|---|---|---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common stock, par value $0.001 per share | COLL | The NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On May 10, 2022, Collegium Pharmaceutical, Inc. issued a press release announcing its financial results for the quarterly period ended March 31, 2022. The full text of the press release issued in connection with the announcement is attached hereto as Exhibit 99.1 and is being furnished, not filed, under Item 2.02 of this Current Report on Form 8-K.
Item 7.01Regulation FD Disclosure.
On May 10, 2022, Collegium Pharmaceutical, Inc. released an earnings presentation. The presentation is attached hereto as Exhibit 99.2 and is being furnished, not filed, under Item 7.01 of this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| | | |
|---|---|---|
| Exhibit | **** | |
| No. | | Description |
| 99.1 | | Press Release, dated May 10, 2022 |
| 99.2 | | Earnings Presentation, dated May 10, 2022 |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | |
|---|---|---|
| | Collegium Pharmaceutical, Inc. | |
| | | |
| | By: | /s/ Colleen Tupper |
| | | Colleen Tupper |
| | | Executive Vice President and Chief Financial Officer |
Dated: May 10, 2022
Exhibit 99.1
Collegium Reports First Quarter 2022 Financial Results
- Generated Net Revenue of $83.8 Million -
- Completed BDSI Acquisition; On Track to Exceed Targeted Run Rate Synergies of at Least $75 Million -
- Resolved All Opioid-Industry Litigation -
- Reaffirms 2022 Financial Guidance -
- Conference Call Scheduled for Today at 4:30 p.m. ET -
STOUGHTON, Mass., May 10, 2022 -- Collegium Pharmaceutical, Inc. (Nasdaq: COLL) today reported its financial results for the first quarter 2022 and provided a corporate update.
“2022 is a pivotal year for Collegium, and we made excellent progress in the quarter versus our critical priorities,” said Joe Ciaffoni, President and Chief Executive Officer of Collegium. “The acquisition of BDSI was strategically and financially transformational for our organization, and integration has been seamless to date. For the remainder of the year, we are focused on growing revenue for Belbuca^®^and^^Xtampza^®^ ER, renegotiating Xtampza ER contracts, exceeding our targeted run rate synergies, and deploying capital to create shareholder value.”
“Our organization is financially strong and well-positioned to embark upon a period of growth and value creation,” said Colleen Tupper, Chief Financial Officer of Collegium. “We are on track to exceed our targeted run rate synergies of at least $75 million, and we expect an acceleration in operating cash flow for the remainder of the year. Our capital allocation priorities are business development, rapidly paying down debt, and opportunistically leveraging our share repurchase program to return capital to shareholders.”
Recent Business Highlights
| ● | Closed the acquisition of BDSI; on track to exceed targeted run rate synergies of at least $75 million |
|---|---|
| ● | Seamlessly transitioned BDSI core operations and achieved day-one field force readiness |
| --- | --- |
| ● | Grew Belbuca and Xtampza ER total prescriptions 4% and 3%, respectively, over the first quarter of 2021 |
| --- | --- |
| ● | Received approval from the FDA for the Prior Approval Supplement for a new Nucynta^®^ ER manufacturing site; technology transfer on track to be completed in 2022 |
| --- | --- |
| ● | Executed Master Settlement Agreement resolving all 27 pending opioid-related lawsuits brought against the Company by cities, counties, and other subdivisions in the United States |
| --- | --- |
| ● | Appointed Dr. Thomas B. Smith as Chief Medical Officer |
| --- | --- |
| ● | Strengthened Board of Directors with the appointment of Neil F. McFarlane, former Chief Executive Officer and director of Adamas Pharmaceuticals |
| --- | --- |
Financial Results for the First Quarter Ended March 31, 2022
| ● | Total net product revenues were $83.8 million for the quarter ended March 31, 2022 (the “2022 Quarter”), compared to $87.7 million for the quarter ended March 31, 2021 (the “2021 Quarter”) |
|---|---|
| ● | GAAP operating expenses were $58.5 million for the 2022 Quarter, compared to $34.4 million for the 2021 Quarter; adjusted operating expenses, which excludes stock-based compensation of $6.1 million and acquisition related expenses of $27.2 million, were $25.2 million for the 2022 Quarter, compared to $27.5 million for the 2021 Quarter, which excludes stock-based compensation of $6.9 million |
| --- | --- |
| ● | Net loss for the 2022 Quarter, which includes acquisition related expenses, was $13.1 million, or $0.39 loss per share (basic and diluted), compared to net income of $15.7 million, or $0.45 earnings per share (basic) and $0.41 earnings per share (diluted), for the 2021 Quarter; Income from operations, excluding acquisition related expenses, for the 2022 Quarter was $17.2 million |
| --- | --- |
| ● | Adjusted EBITDA for the 2022 Quarter was $43.5 million, compared to $45.3 million for the 2021 Quarter |
| --- | --- |
| ● | The Company exited the 2022 Quarter with a cash balance of $106.7 million |
| --- | --- |
Financial Guidance for 2022
The Company reaffirms financial guidance for the full year 2022, originally provided on April 5, 2022:
| ● | Total product revenues are expected in the range of $450.0 million to $465.0 million, up approximately 65% at the midpoint compared to net product revenue of $276.9 million in 2021; |
|---|---|
| ● | Total adjusted operating expenses, which excludes stock-based compensation expense and acquisition related expenses, are expected in the range of $130.0 million to $140.0 million; and |
| --- | --- |
| ● | Total adjusted EBITDA which excludes stock-based compensation and acquisition related expenses, is expected in the range of $235.0 million to $250.0 million. |
| --- | --- |
Conference Call Information
The Company will host a conference call and live audio webcast on Tuesday, May 10, 2022, at 4:30 p.m. Eastern Time. To access the conference call, please dial (877) 407-8037 (U.S.) or (201) 689-8037 (International) and reference the “Collegium Q1 2022 Earnings Call.” An audio webcast will be accessible from the Investors section of the Company’s website: www.collegiumpharma.com. The webcast will be available for replay on the Company’s website approximately two hours after the event.
About Collegium Pharmaceutical, Inc.
Collegium is a diversified, specialty pharmaceutical company committed to improving the lives of people living with serious medical conditions. Collegium’s headquarters are located in Stoughton, Massachusetts. For more information, please visit the Company’s website at www.collegiumpharma.com.
Non-GAAP Financial Measures
To supplement our financial results presented on a GAAP basis, we have included information about certain non-GAAP financial measures such as adjusted EBITDA and adjusted operating expenses. We use these non-GAAP financial measures to understand, manage and evaluate our business as we believe they provide additional information on the performance of our business. We believe that the presentation of these non-GAAP financial measures, taken in conjunction with our results under GAAP, provide analysts, investors, lenders and other third parties insight into our view and assessment of our ongoing operating performance. In addition, we believe that the presentation of these non-GAAP financial measures, when viewed with our results under GAAP and the accompanying reconciliations, provide supplementary information that may be useful to analysts, investors, lenders, and other third parties in assessing our performance and results from period to period. We report these non-GAAP financial measures to portray the results of our operations prior to considering certain income statement elements. These non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, net income or other financial measures calculated in accordance with GAAP.
Adjusted EBITDA is a non-GAAP financial measure that represents GAAP net income adjusted to exclude interest expense, interest income, the benefit from or provision for income taxes, depreciation, amortization, stock-based compensation, and other adjustments to reflect changes that occur in our business but do not represent ongoing operations. Adjusted EBITDA, as used by us, may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
There are several limitations related to the use of adjusted EBITDA rather than net income, which is the nearest GAAP equivalent, such as:
| ● | adjusted EBITDA excludes depreciation and amortization, and, although these are non-cash expenses, the assets being depreciated or amortized may have to be replaced in the future, the cash requirements for which are not reflected in adjusted EBITDA; |
|---|---|
| ● | we exclude stock-based compensation expense from adjusted EBITDA although (a) it has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy and (b) if we did not pay out a portion of our compensation in the form of stock-based compensation, the cash salary expense included in operating expenses would be higher, which would affect our cash position; |
| --- | --- |
| ● | adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; |
| --- | --- |
| ● | adjusted EBITDA does not reflect the benefit from or provision for income taxes or the cash requirements to pay taxes; |
| --- | --- |
| ● | adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; |
| --- | --- |
| ● | we exclude restructuring expenses from adjusted EBITDA. Restructuring expenses primarily include employee severance and contract termination costs that are not related to acquisitions. The amount and/or frequency of these restructuring expenses are not part of our underlying business; |
| --- | --- |
| ● | we exclude litigation settlements from adjusted EBITDA, as well as any applicable income items or credit adjustments due to subsequent changes in estimates. This does not include our legal fees to defend claims, which are expensed as incurred; |
| --- | --- |
| ● | we exclude acquisition related expenses as the amount and/or frequency of these expenses are not part of our underlying business. Acquisition related expenses include transaction costs, which primarily consisted of financial advisory, banking, legal, and regulatory fees, and other consulting fees, incurred to complete the acquisition, employee-related expenses (severance cost and benefits) for terminated employees after the acquisition, and miscellaneous other acquisition expenses incurred; and |
| --- | --- |
| ● | we exclude recognition of the step-up basis in inventory from acquisitions as the amount and/or frequency of these expenses are not part of our underlying business. |
| --- | --- |
Adjusted operating expenses is a non-GAAP financial measure that represents GAAP operating expenses adjusted to exclude stock-based compensation expense, and other adjustments to reflect changes that occur in our business but do not represent ongoing operations.
The Company has not provided a reconciliation of its full-year 2022 guidance for adjusted EBITDA or adjusted operating expenses to the most directly comparable forward-looking GAAP measures because it is unable to predict, without unreasonable efforts, the timing and amount of items that would be included in such a reconciliation, including, but not limited to, stock-based compensation expense. These items are uncertain and depend on various factors that could have a material impact on GAAP net income and operating expenses for the guidance period.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. We may, in some cases, use terms such as "predicts," "forecasts," "believes," "potential," "proposed," "continue," "estimates," "anticipates," "expects," "plans," "intends," "may," "could," "might," "should" or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Examples of forward-looking statements contained in this press release include, among others, statements related to our full-year 2022 financial guidance, including total projected product revenue, adjusted operating expenses and adjusted EBITDA, current and future market opportunities for our products and our assumptions related thereto, expectations (financial or otherwise) and intentions, and other statements that are not historical facts. Such statements are subject to numerous important factors, risks and uncertainties that may cause actual events or results, performance, or achievements to differ materially from the company's current expectations. Actual results may differ materially from management’s expectations and such forward-looking statements in this press release could be affected as a result of various important factors, including risks relating to, among others: risks related to the ability to realize the anticipated benefits of our acquisition of BDSI, including the possibility that the expected benefits from the BDSI acquisition will not be realized or will not be realized within the expected time period; the risk that BDSI’s business will not be integrated successfully; negative effects of the consummation of the BDSI acquisition on the market price of our common stock and/or operating results; unknown liabilities; risks related to future opportunities and plans for the products acquired with BDSI, including uncertainty of the expected financial performance of such products; the impact of the COVID-19 pandemic on our ability to conduct our business, reach our customers, and supply the market with our products; our ability to commercialize and grow sales of our products; our ability to manage our relationships with licensors; the success of competing products that are or become available; our ability to obtain and maintain regulatory approval of our products and any product candidates, and any related restrictions, limitations, and/or warnings in the label of an approved product; the size of the markets for our products and product candidates, and our ability to service those markets; our ability to obtain reimbursement and third-party payor contracts for our products; the rate and degree of market acceptance of our products and product candidates; the costs of commercialization activities, including marketing, sales and distribution; changing market conditions for our products; the outcome of any patent infringement, opioid-related or other litigation that may be brought by or against us, including litigation with Purdue Pharma, L.P.; the outcome of any governmental investigation related to our business; our ability to secure adequate supplies of active pharmaceutical ingredient for each of our products and manufacture adequate supplies of commercially saleable inventory; our ability to obtain funding for our operations and business development; regulatory developments in the U.S.; our expectations regarding our ability to obtain and maintain sufficient intellectual property protection for our products; our ability to comply with stringent U.S. and foreign government regulation in the manufacture of pharmaceutical products, including U.S. Drug Enforcement Agency, or DEA, compliance; our customer concentration; and the accuracy of our estimates regarding expenses, revenue, capital requirements and need for additional financing. These and other risks are described under the heading "Risk Factors" in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and other filings with the SEC. Any forward-looking statements that we make in this press release speak only as of the date of this press release. We assume no obligation to update our forward-looking statements whether as a result of new information, future events or otherwise, after the date of this press release.
Contact: Alex Dasalla
Head of Investor Relations
adasalla@collegiumpharma.com
Collegium Pharmaceutical, Inc.
Unaudited Selected Consolidated Balance Sheet Information
(in thousands)
| | | | | | | |
|---|---|---|---|---|---|---|
| | | March 31, | | December 31, | ||
| | 2022 | | 2021 | |||
| Cash and cash equivalents | | $ | 106,698 | | $ | 186,426 |
| Accounts receivable, net | | 166,345 | | | 105,844 | |
| Inventory | | 80,146 | | | 17,394 | |
| Prepaid expenses and other current assets | | 10,449 | | | 5,879 | |
| Property and equipment, net | | | 20,202 | | | 19,491 |
| Operating lease assets | | 7,812 | | | 7,644 | |
| Intangible assets, net | | 694,799 | | | 268,723 | |
| Restricted cash | | 2,547 | | | 2,547 | |
| Deferred tax assets | | | 25,554 | | | 78,042 |
| Other noncurrent assets | | 77 | | | 87 | |
| Goodwill | | | 131,512 | | | — |
| Total assets | | $ | 1,246,141 | | $ | 692,077 |
| | | | | | | |
| Accounts payable and accrued expenses | | 44,919 | | | 33,403 | |
| Accrued rebates, returns and discounts | | 227,476 | | | 196,996 | |
| Term notes payable | | 628,390 | | | 110,019 | |
| Convertible senior notes | | | 140,189 | | | 139,966 |
| Operating lease liabilities | | 9,091 | | | 8,765 | |
| Shareholders’ equity | | 196,076 | | | 202,928 | |
| Total liabilities and stockholders’ equity | | $ | 1,246,141 | | $ | 692,077 |
Collegium Pharmaceutical, Inc.
Unaudited Condensed Statements of Operations
(in thousands, except share and per share amounts)
| | | | | | |
|---|---|---|---|---|---|
| | Three Months Ended March 31, | ||||
| | 2022 | | 2021 | ||
| Product revenues, net | $ | 83,751 | | $ | 87,721 |
| Cost of product revenues | | | | | |
| Cost of product revenues (excluding intangible asset amortization) | | 16,332 | | | 15,328 |
| Intangible asset amortization | | 18,923 | | | 16,795 |
| Total cost of products revenues | 35,255 | | | 32,123 | |
| Gross profit | | 48,496 | | | 55,598 |
| Operating expenses | | | | | |
| Research and development | | 3,983 | | | 2,930 |
| Selling, general and administrative | 54,528 | | 31,476 | ||
| Total operating expenses | 58,511 | | 34,406 | ||
| (Loss) income from operations | (10,015) | | 21,192 | ||
| Interest expense | (5,831) | | (5,721) | ||
| Interest income | | 4 | | | 3 |
| (Loss) income before income taxes | | (15,842) | | | 15,474 |
| (Benefit from) Provision for income taxes | | (2,773) | | | (188) |
| Net (loss) income | $ | (13,069) | | $ | 15,662 |
| | | | | | |
| (Loss) earnings per share — basic | $ | (0.39) | | $ | 0.45 |
| Weighted-average shares — basic | | 33,673,912 | | | 34,951,740 |
| | | | | | |
| (Loss) earnings per share — diluted | $ | (0.39) | | $ | 0.41 |
| Weighted-average shares — diluted | | 33,673,912 | | | 41,160,092 |
Collegium Pharmaceutical, Inc.
Reconciliation of GAAP Net Income to Adjusted EBITDA
(in thousands)
(unaudited)
| | | | | | |
|---|---|---|---|---|---|
| | | | | | |
| | Three Months Ended March 31, | ||||
| | 2022 | | 2021 | ||
| GAAP Net (loss) income | $ | (13,069) | | $ | 15,662 |
| Adjustments: | | | | | |
| Interest expense | | 5,831 | | | 5,721 |
| Interest income | | (4) | | | (3) |
| (Benefit from) Provision for income taxes | | (2,773) | | | (188) |
| Depreciation | | 715 | | | 439 |
| Amortization | | 18,923 | | | 16,795 |
| Stock-based compensation expense | | 6,135 | | | 6,879 |
| Acquisition related expense | | 27,167 | | | — |
| Recognition of step-up basis in inventory | | 603 | | | — |
| Total adjustments | $ | 56,597 | | $ | 29,643 |
| Adjusted EBITDA | $ | 43,528 | | $ | 45,305 |
Collegium Pharmaceutical, Inc.
Reconciliation of GAAP Operating Expenses to Adjusted Operating Expenses
(in thousands)
(unaudited)
| | | | | | |
|---|---|---|---|---|---|
| | Three Months Ended March 31, | ||||
| | | 2022 | | | 2021 |
| GAAP Operating expenses | $ | 58,511 | | $ | 34,406 |
| Adjustments: | | | | | |
| Stock-based compensation | | 6,135 | | | 6,879 |
| Acquisition related expense | | 27,167 | | | — |
| Total adjustments | | 33,302 | | | 6,879 |
| Adjusted operating expenses | $ | 25,209 | | $ | 27,527 |
Exhibit 99.2
| May 10,<br>2022<br> | Nasdaq: COLL<br>Q1FY22 Earnings Report |
|---|---|
| Forward<br>-<br>Looking Statements<br>This presentation contains forward<br>-<br>looking statements within the meaning of The Private Securities Litigation Reform Act of 1995<br>.. We may, in some cases, use terms such as "predicts," "forecasts," "believes," "potential," "proposed," "continue," "estimat<br>es,<br>" "anticipates," "expects,"<br>"plans," "intends," "may," "could," "might," "should" or other words that convey uncertainty of future events or outcomes to<br>ide<br>ntify these forward<br>-<br>looking statements. Examples of forward<br>-<br>looking statements contained in this presentation include, among oth<br>ers, statements related<br>to our full<br>-<br>year 2022 financial guidance, including total projected product revenue, adjusted operating expenses and adjusted EB<br>ITDA, current and future market opportunities for our products and our assumptions related thereto, expectations (financial o<br>r o<br>therwise) and intentions,<br>and other statements that are not historical facts. Such statements are subject to numerous important factors, risks and unce<br>rta<br>inties that may cause actual events or results, performance, or achievements to differ materially from the company's current<br>exp<br>ectations. Actual results<br>may differ materially from management’s expectations and such forward<br>-<br>looking statements in this presentation could be affected<br>as a result of various important factors, including risks relating to, among others: risks related to the ability to realize<br>the<br>anticipated benefits of our<br>acquisition of BDSI, including the possibility that the expected benefits from the BDSI acquisition will not be realized or w<br>ill<br>not be realized within the expected time period; the risk that BDSI’s business will not be integrated successfully; negative<br>ef<br>fects of the consummation of the BDSI<br>acquisition on the market price of our common stock and/or operating results; unknown liabilities; risks related to future op<br>por<br>tunities and plans for the products acquired with BDSI, including uncertainty of the expected financial performance of such<br>pro<br>ducts; the impact of the<br>COVID<br>-<br>19 pandemic on our ability to conduct our business, reach our customers, and supply the market with our products; our abil<br>ity to commercialize and grow sales of our products; our ability to manage our relationships with licensors; the success of c<br>omp<br>eting products that are or<br>become available; our ability to obtain and maintain regulatory approval of our products and any product candidates, and any<br>rel<br>ated restrictions, limitations, and/or warnings in the label of an approved product; the size of the markets for our products<br>an<br>d product candidates, and our<br>ability to service those markets; our ability to obtain reimbursement and third<br>-<br>party payor contracts for our products; the rate<br>and degree of market acceptance of our products and product candidates; the costs of commercialization activities, including<br>ma<br>rketing, sales and<br>distribution; changing market conditions for our products; the outcome of any patent infringement, opioid<br>-<br>related or other litig<br>ation that may be brought by or against us, including litigation with Purdue Pharma, L.P.; the outcome of any governmental in<br>ves<br>tigation related to our<br>business; our ability to secure adequate supplies of active pharmaceutical ingredient for each of our products and manufactur<br>e a<br>dequate supplies of commercially saleable inventory; our ability to obtain funding for our operations and business developmen<br>t;<br>regulatory developments<br>in the U.S.; our expectations regarding our ability to obtain and maintain sufficient intellectual property protection for ou<br>r p<br>roducts; our ability to comply with stringent U.S. and foreign government regulation in the manufacture of pharmaceutical pro<br>duc<br>ts, including U.S. Drug<br>Enforcement Agency, or DEA, compliance; our customer concentration; and the accuracy of our estimates regarding expenses, rev<br>enu<br>e, capital requirements and need for additional financing. These and other risks are described under the heading "Risk Factor<br>s"<br>in our Annual Reports<br>on Form 10<br>-<br>K and Quarterly Reports on Form 10<br>-<br>Q and other filings with the SEC. Any forward<br>-<br>looking statements that we make in t<br>his presentation speak only as of the date of this presentation. We assume no obligation to update our forward<br>-<br>looking statement<br>s whether as a result<br>of new information, future events or otherwise, after the date of this presentation.<br>Non<br>-<br>GAAP Financial Measures<br>To supplement our financial results presented on a GAAP basis, we have included information about certain non<br>-<br>GAAP financial mea<br>sures such as adjusted EBITDA and adjusted operating expenses. We use these non<br>-<br>GAAP financial measures to understand, manage an<br>d evaluate our<br>business as we believe they provide additional information on the performance of our business. We believe that the presentati<br>on<br>of these non<br>-<br>GAAP financial measures, taken in conjunction with our results under GAAP, provide analysts, investors, lenders and<br>other third parties<br>insight into our view and assessment of our ongoing operating performance. In addition, we believe that the presentation of t<br>hes<br>e non<br>-<br>GAAP financial measures, when viewed with our results under GAAP and the accompanying reconciliations, provide supplementa<br>ry information that<br>may be useful to analysts, investors, lenders, and other third parties in assessing our performance and results from period t<br>o p<br>eriod. We report these non<br>-<br>GAAP financial measures to portray the results of our operations prior to considering certain income<br>statement elements. These<br>non<br>-<br>GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, net income or othe<br>r financial measures calculated in accordance with GAAP.<br>Adjusted EBITDA is a non<br>-<br>GAAP financial measure that represents GAAP net income adjusted to exclude interest expense, interest i<br>ncome, the benefit from or provision for income taxes, depreciation, amortization, stock<br>-<br>based compensation, and other adjustmen<br>ts to reflect changes<br>that occur in our business but do not represent ongoing operations. Adjusted EBITDA, as used by us, may be calculated differe<br>ntl<br>y from, and therefore may not be comparable to, similarly titled measures used by other companies.<br>There are several limitations related to the use of adjusted EBITDA rather than net income, which is the nearest GAAP equival<br>ent<br>, such as:<br>•<br>adjusted EBITDA excludes depreciation and amortization, and, although these are non<br>-<br>cash expenses, the assets being depreciated<br>or amortized may have to be replaced in the future, the cash requirements for which are not reflected in adjusted EBITDA;<br>•<br>we exclude stock<br>-<br>based compensation expense from adjusted EBITDA although (a) it has been, and will continue to be for the fores<br>eeable future, a significant recurring expense for our business and an important part of our compensation strategy and (b) if<br>we<br>did not pay out a<br>portion of our compensation in the form of stock<br>-<br>based compensation, the cash salary expense included in operating expenses woul<br>d be higher, which would affect our cash position;<br>•<br>adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs;<br>•<br>adjusted EBITDA does not reflect the benefit from or provision for income taxes or the cash requirements to pay taxes;<br>•<br>adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual<br>com<br>mitments;<br>•<br>we exclude restructuring expenses from adjusted EBITDA. Restructuring expenses primarily include employee severance and contr<br>act<br>termination costs that are not related to acquisitions. The amount and/or frequency of these restructuring expenses are not p<br>ar<br>t of our underlying<br>business;<br>•<br>we exclude litigation settlements from adjusted EBITDA, as well as any applicable income items or credit adjustments due to s<br>ubs<br>equent changes in estimates. This does not include our legal fees to defend claims, which are expensed as incurred;<br>•<br>we exclude acquisition related expenses as the amount and/or frequency of these expenses are not part of our underlying busin<br>ess<br>.. Acquisition related expenses include transaction costs, which primarily consisted of financial advisory, banking, legal, an<br>d r<br>egulatory fees, and other<br>consulting fees, incurred to complete the acquisition, employee<br>-<br>related expenses (severance cost and benefits) for terminated em<br>ployees after the acquisition, and miscellaneous other acquisition expenses incurred; and<br>•<br>we exclude recognition of the step<br>-<br>up basis in inventory from acquisitions as the amount and/or frequency of these expenses are<br>not part of our underlying business.<br>Adjusted operating expenses is a non<br>-<br>GAAP financial measure that represents GAAP operating expenses adjusted to exclude stock<br>-<br>ba<br>sed compensation expense, and other adjustments to reflect changes that occur in our business but do not represent ongoing op<br>era<br>tions.<br>The Company has not provided a reconciliation of its full<br>-<br>year 2022 guidance for adjusted EBITDA or adjusted operating expenses<br>to the most directly comparable forward<br>-<br>looking GAAP measures because it is unable to predict, without unreasonable efforts, the<br>timing and amount of<br>items that would be included in such a reconciliation, including, but not limited to, stock<br>-<br>based compensation expense. These it<br>ems are uncertain and depend on various factors that could have a material impact on GAAP net income and operating expenses f<br>or<br>the guidance period. | |
| --- | |
| Building<br>a leading, diversified specialty<br>pharmaceutical company committed to improving<br>the lives of people living with serious medical<br>conditions<br>I<br>D<br>E<br>A<br>Uphold<br>I<br>ntegrity<br>Embrace<br>D<br>ifferences<br>Encourage<br>E<br>xpression<br>Be<br>A<br>ccountable<br>GUIDED BY OUR CORE VALUES<br>Mission Driven<br>Investor Presentation<br>3 | |
| --- | |
| Strong Culture and a Commitment to Our Communities<br>Investor Presentation<br>E<br>XTERNAL<br>R<br>ECOGNITION<br>C<br>OMMUNITY<br>P<br>ARTNERSHIPS<br>4 | |
| --- | |
| G<br>ROW<br>T<br>OP<br>AND<br>B<br>OTTOM<br>L<br>INES<br>I<br>NTEGRATE<br>BDSI<br>D<br>EPLOY<br>C<br>APITAL<br>Received approval from<br>FDA for the prior<br>approval supplement<br>for a new Nucynta<br>®<br>ER<br>manufacturing site<br>Resolved all 27<br>pending opioid<br>-<br>related lawsuits<br>Strengthened<br>Executive team and<br>Board of Directors<br>Q1 2022 Key Business Highlights<br>$<br>Investor Presentation<br>Closed strategically and<br>financially transformative<br>BDSI acquisition<br>On track to exceed targeted<br>run rate synergies of at least<br>$75M<br>Seamlessly integrated BDSI<br>core operations and<br>achieved day<br>-<br>one field force<br>readiness<br>Grew Belbuca<br>®<br>TRx<br>4% Y/Y<br>and Xtampza<br>®<br>ER<br>TRx<br>3% Y/Y<br>5 | |
| --- | |
| Collegium 3<br>-<br>Phase Action Agenda<br>P<br>HASE<br>1<br>S<br>EAMLESS<br>I<br>NTEGRATION<br>P<br>HASE<br>2<br>G<br>ENERATE<br>M<br>OMENTUM<br>P<br>HASE<br>3<br>A<br>CCELERATE<br>1.<br>Executed with no disruptions<br>to core operations<br>2.<br>Achieved day one field force<br>readiness<br>3.<br>Realized majority of targeted<br>run rate synergies<br>1.<br>Grow Belbuca and Xtampza ER<br>TRxs<br>2.<br>Complete<br>Xtampza<br>ER contract<br>renegotiations<br>3.<br>Achieve remainder of target<br>cost synergies<br>4.<br>Synthesize<br>Elyxyb<br>™<br>launch<br>learnings<br>1.<br>Propelled by Xtampza ER<br>gross<br>-<br>to<br>-<br>net of <65% in<br>January 2023<br>2.<br>Driven by Belbuca and<br>Xtampza ER<br>TRx<br>growth<br>3.<br>Bolstered by fully synergized<br>cost structure<br>TODAY<br>–<br>6/30/22<br>7/1/22<br>–<br>12/31/22<br>2023<br>Investor Presentation<br>6 | |
| --- | |
| 2022 Priorities<br>G<br>ROW<br>T<br>OP<br>L<br>INE<br>Grow<br>Belbuca<br>and<br>Xtampza ER<br>Maximize<br>Nucynta<br>Franchise and<br>Symproic<br>®<br>Launch<br>Elyxyb<br>Renegotiate<br>Xtampza<br>ER<br>c<br>ontracts<br>A<br>CCELERATE<br>B<br>OTTOM<br>L<br>INE<br>Exceed<br>targeted run rate<br>synergies of at<br>least $75 million<br>Maintain<br>financial<br>discipline<br>D<br>EPLOY<br>C<br>APITAL<br>Business<br>development<br>focused<br>on commercial<br>-<br>stage<br>neurology assets<br>Rapidly<br>pay down debt<br>Opportunistically<br>return<br>capital to shareholders<br>Investor Presentation<br>7 | |
| --- | |
| O<br>PPORTUNISTICALLY<br>R<br>ETURN<br>C<br>APITAL<br>TO<br>S<br>HAREHOLDERS<br>R<br>APIDLY<br>P<br>AYDOWN<br>D<br>EBT<br>F<br>OCUSED<br>B<br>USINESS<br>D<br>EVELOPMENT<br>Capital Allocation Priorities<br>•<br>Commercial<br>-<br>stage neurology assets with $150 million<br>peak sales potential<br>•<br>>$50M remaining on $100M share repurchase program<br>2<br>•<br>New $650M Pharmakon loan issued on 3/22/22<br>2<br>•<br>$100M to be repaid in first 12 months<br>1<br>•<br>>$450M to be repaid in first 36 months<br>1<br>1<br>2<br>3<br>1.<br>This financial data was provided by Collegium in its form 8<br>-<br>K filed with the SEC February 14, 2022.<br>2.<br>This financial data was provided by Collegium in its form 10<br>-<br>K filed with the SEC on February 24, 2022.<br>Investor Presentation<br>8 | |
| --- | |
| G<br>ROW<br>T<br>OP<br>AND<br>B<br>OTTOM<br>L<br>INES<br>D<br>EPLOY<br>C<br>APITAL<br>2022 is Off to a Strong Start<br>Investor Presentation<br>Growth and Value Creation<br>On track to exceed<br>targeted run rate<br>synergies of at least<br>$75M<br>Well<br>-<br>positioned to<br>achieve record<br>full<br>-<br>year revenue<br>and adjusted<br>EBITDA<br>Completed<br>strategically and<br>financially<br>transformative<br>acquisition of<br>BDSI<br>Resolved all 27<br>pending opioid<br>-<br>related lawsuits<br>$<br>Strong balance<br>sheet; expect<br>accelerating cash<br>flow<br>Strategically<br>investing in the<br>growth of our<br>business<br>9 | |
| --- | |
| Financial Highlights<br>Colleen Tupper, Executive Vice President & Chief Financial Officer | |
| --- | |
| E<br>XPECT<br>O<br>PERATING<br>C<br>ASH<br>F<br>LOW<br>TO<br>A<br>CCELERATE<br>F<br>OLLOWING<br>CLOSE<br>OF<br>BDSI<br>A<br>CQUISITION<br>11<br>Financial Highlights:<br>Leveraging Cost Structure and Generating Cash<br>1.<br>Adjusted operating expenses is a non<br>-<br>GAAP financial measure. See Non<br>-<br>GAAP Financial Measures on Slide 2 and Reconciliations on s<br>lides 24<br>-<br>25.<br>2.<br>This financial data was provided by Collegium Pharmaceutical, Inc. in its Quarterly Report on Form 10<br>-<br>Q filed with the SEC on Ma<br>y 10, 2022.<br>Investor Presentation<br>Operating Cash Flow<br>Q1FY22<br>ADJUSTED<br>O<br>PEX<br>,<br>30.1%<br>OF<br>REVENUE<br>130<br>BASIS<br>POINTS<br>O<br>VER<br>Q1FY21<br>Adjusted Opex<br>1<br>Q1FY22<br>$106.7<br>MILLION<br>F<br>OLLOWING<br>CLOSE<br>OF<br>BDSI<br>A<br>CQUISITION<br>Cash Balance<br>2 | |
| --- | |
| O<br>PPORTUNISTICALLY<br>R<br>ETURN<br>C<br>APITAL<br>TO<br>S<br>HAREHOLDERS<br>R<br>APIDLY<br>P<br>AYDOWN<br>D<br>EBT<br>F<br>OCUSED<br>B<br>USINESS<br>D<br>EVELOPMENT<br>Capital Allocation Priorities<br>•<br>Commercial<br>-<br>stage neurology assets with $150 million<br>peak sales potential<br>•<br>><br>$50M remaining on $100M share repurchase program<br>2<br>•<br>New $650M Pharmakon loan issued on 3/22/22<br>2<br>•<br>$100M to be repaid in first 12 months<br>1<br>•<br>>$450M to be repaid in first 36 months<br>1<br>1<br>2<br>3<br>1.<br>This financial data was provided by Collegium in its form 8<br>-<br>K filed with the SEC February 14, 2022.<br>2.<br>This financial data was provided by Collegium in its form 10<br>-<br>K filed with the SEC on February 24, 2022.<br>Investor Presentation<br>12 | |
| --- | |
| Collegium is in a Strong Financial Position and Executing to Plan<br>1,2<br>R<br>EVENUE<br>G<br>ROWTH<br>& S<br>CALE<br>$133M<br>S<br>IGNIFICANT<br>C<br>OST<br>L<br>EVERAGE<br>3<br>Est. 2022<br>Adj. EBITDA<br>of<br>$235<br>-<br>250M<br>~+105% y/y<br>at mid<br>-<br>point<br>1.<br>This financial data was provided by Collegium in its press release filed with the SEC on April 5, 2022.<br>2.<br>Percent change year<br>-<br>over<br>-<br>year is calculated based on financial data provided by Collegium on form 10<br>-<br>K filed with the SEC on Feb<br>ruary 24, 2022, compared to the mid<br>-<br>point of the guidance ranges<br>provided by Collegium in its press release filed with the SEC on April 5, 2022.<br>3.<br>Adjusted operating expenses is a non<br>-<br>GAAP financial measure<br>.. See Non<br>-<br>GAAP Financial Measures on Slide 2.<br>4.<br>Adjusted EBITDA is a non<br>-<br>GAAP financial measure.<br>See Non<br>-<br>GAAP Financial Measures on Slide 2.<br>5.<br>Details regarding the Pharmakon term<br>-<br>loan debt amortization schedule provided by Collegium on form SC TO<br>-<br>C filed with the SEC o<br>n February 14, 2022.<br>First year deleveraging of term loan of<br>$100M,<br>full<br>paydown over 4 years<br>Est. 2022 YE<br>D<br>ebt<br>/EBITDA ratio<br><3.0x<br>R<br>OBUST<br>C<br>ASH<br>F<br>LOWS<br>4<br>R<br>APID<br>D<br>ELEVERAGING<br>OF<br>B<br>ALANCE<br>S<br>HEET<br>5<br>Est. 2022<br>revenue<br>of<br>$450<br>-<br>465M<br>~+65% y/y<br>at mid<br>-<br>point<br>Est. 2022<br>Adj.<br>Op Ex<br>of<br>$130<br>-<br>140M<br>~+33% y/y<br>at mid<br>-<br>point<br>Expect to grow revenue approximately 2x the<br>rate of operating expenses<br>Investor Presentation<br>13 | |
| --- | |
| Commercial Update<br>Scott Dreyer, Executive Vice President & Chief Commercial Officer | |
| --- | |
| The Leader in Responsible Pain Management<br>Sources:<br>1.<br>IQVIA NPA, March 2022<br>2.<br>ATU (Attitudes, Trial & Awareness) Market Research Study fielded Q1 2021<br>A<br>CUTE<br>C<br>HRONIC<br>P<br>ORTFOLIO<br>S<br>PANS<br>THE<br>C<br>ONTINUUM<br>OF<br>C<br>ARE<br>Pain portfolio distinctly<br>positioned<br>and sources<br>differently<br>Highly differentiated<br>products<br>that are viewed<br>favorably by physicians,<br>with a high future intent<br>to prescribe<br>2<br>~50% market share<br>of<br>the branded ER market<br>1<br>Investor Presentation<br>15 | |
| --- | |
| Belbuca Expanded Market Position over Q1 2021<br>Investor Presentation<br>Sources:<br>1.<br>IQVIA NPA through March 2022<br>2.<br>Quarter<br>-<br>Ending Share<br>3.<br>IQVIA<br>Xponent<br>through March 2022<br>`<br>Total Prescriptions<br>1<br>116,900<br>+4%<br>Q1’22 vs. Q1’21<br>Branded Extended<br>-<br>Release Market<br>Share<br>1,2<br>17.4%<br>+2%<br>Q1’22 vs. Q1’21<br>Unique Prescribers<br>3<br>9,000<br>+8%<br>Q1’22 vs. Q1’21<br>16 | |
| --- | |
| Xtampza ER Expanded Market Position over Q1 2021<br>Investor Presentation<br>Sources:<br>1.<br>IQVIA NPA through March 2022<br>2.<br>Quarter<br>-<br>Ending Share<br>3.<br>IQVIA Monthly<br>Xponent<br>through March 2022<br>`<br>Total Prescriptions<br>1<br>166,400<br>+3%<br>Q1’22 vs. Q1’21<br>Oxycodone Extended<br>-<br>Release<br>Market Share<br>1,2<br>34.2%<br>+3.6%<br>Q1’22 vs. Q1’21<br>Unique Prescribers<br>3<br>18,700<br>+4%<br>Q1’22 vs. Q1’21<br>17 | |
| --- | |
Nucynta Franchise and Symproic are Contributors<br>Investor Presentation<br>Sources:<br>1.<br>IQVIA NPA through March 2022<br>2.<br>Quarter<br>-<br>Ending Share<br><br>Branded<br>Extended<br>-<br>Release<br>Market<br>Share<br>1,2<br>5.6%<br>Stable<br>Q1’22 vs. Q1’21<br><br>Total Prescriptions<br>1<br>17,800<br>+13.7%<br>Q1’22 vs. Q1’21<br>18 |
|
| --- | |
| A Strategic Foothold in Neurology<br>N<br>EUROLOGY<br>IS<br>A<br>T<br>ARGET<br>A<br>DJACENCY<br>E<br>LYXYB<br>L<br>AUNCH<br>O<br>PPORTUNITY<br>•<br>Focused and Phased Approach<br>•<br>25 territories, 3,500 targets<br>•<br>~15% of acute migraine market<br>•<br>Where we choose to play, we will play to win<br>•<br>Success<br>-<br>gated expansion<br>•<br>Business development priority<br>•<br>Aligned to organizational capabilities<br>•<br>Complementary to pain<br>Investor Presentation<br>19 | |
| --- | |
| 20<br>2022 Commercial Priorities<br>Maximize<br>potential of<br>Nucynta<br>Franchise and<br>Symproic<br>Launch<br>Elyxyb<br>in focused<br>and phased<br>approach<br>Achieve<br>gross<br>-<br>to<br>-<br>net of<br><65% for<br>Xtampza ER<br>beginning in<br>January 2023<br>Grow<br>Belbuca and<br>Xtampza ER | |
| --- | |
| Q&A | |
| --- | |
| Building a Leading, Diversified Specialty Pharmaceutical Company<br>D<br>IVERSE<br>AND<br>DURABLE<br>PORTFOLIO<br>S<br>TRONG<br>FINANCIAL<br>POSITION<br>L<br>ONG<br>-<br>T<br>ERM<br>V<br>ALUE<br>C<br>REATION<br>✓<br>Leadership in pain<br>✓<br>Strategic foothold in neurology<br>✓<br>Durable growth drivers<br>✓<br>Revenue expected to grow ~65% YoY<br>1<br>✓<br>Significant cost leverage: revenue expected to grow ~2x rate of OPEX<br>1<br>✓<br>Est. 2022 YE debt/EBITDA ratio <3.0x<br>1<br>✓<br>Focused<br>business<br>development<br>✓<br>Rapidly pay down debt<br>✓<br>Opportunistically return capital to shareholders<br>1.<br>Percent change year<br>-<br>over<br>-<br>year, growth rates and financial ratios are calculated based on financial data provided by Collegium on<br>form 10<br>-<br>K filed with the SEC on February 24, 2022, compared to the mid<br>-<br>point of the guidance ranges provided by Collegium in its press release filed with the SEC on April 5, 2022.<br>Investor Presentation<br>22 | |
| --- | |
| Non<br>-<br>GAAP Reconciliations | |
| --- | |
| 24<br>Collegium Pharmaceutical, Inc.<br>Reconciliation of GAAP Net Income to Adjusted EBITDA<br>(in thousands)<br>(unaudited)<br>GAAP net (loss) income<br>$<br> (13,069)<br>$<br> 15,662<br>Adjustments:<br>Interest expense<br> 5,831<br> 5,721<br>Interest income<br>(4)<br><br><br>(3)<br><br><br>(Benefit from) provision for income taxes<br> (2,773)<br> (188)<br>Depreciation<br>715<br><br><br>439<br><br><br>Amortization<br> 18,923<br> 16,795<br>Stock-based compensation expense<br>6,135<br><br><br>6,879<br><br><br>Acquisition related expenses<br> 27,167<br> -<br>Recognition of step-up basis in inventory<br>603<br><br><br> -<br>Total adjustments<br>$<br> 56,597<br>$<br> 29,643<br>Adjusted EBITDA<br>$<br> 43,528<br>$<br> 45,305<br>Three months ended March 31,<br>2022<br>2021 | |
| --- | |
| 25<br>2022<br>2021<br>GAAP Operating expenses<br>$<br> 58,511<br>$<br> 34,406<br>Adjustments:<br>Stock-based compensation<br> 6,135<br> 6,879<br>Acquisition related expenses<br> 27,167<br> -<br>Total adjustments<br> 33,302<br> 6,879<br>Adjusted operating expenses<br>$<br> 25,209<br>$<br> 27,527<br>Three months ended March 31,<br>Collegium Pharmaceutical, Inc.<br>Reconciliation of GAAP Operating Expenses to Adjusted Operating Expenses<br>(in thousands)<br>(unaudited) | |
| --- |