25th Annual Needham Virtual Healthcare Conference

Hey, good afternoon. I'm Serge Belanger, one of the healthcare analysts at Needham & Company. I want to welcome everybody this afternoon to Needham's 25th Annual Healthcare Conference. For our next Fireside Chat session, we have Collegium Pharmaceutical with us. The company I've covered for a long time, Speck Pharma Company in the CNS and pain space. From the company, we have the president and CEO, Vikram Karnani, as well as the chief financial officer, Colleen Tupper. So I want to welcome you both, and I'll hand it over to you. Maybe we can start with a quick overview for those who are unfamiliar with Collegium.

Thank you, Serge. Let me just start out by saying, you know, just a high-level overview for our 2026 guidance. Our 2026 guidance reflects our existing business and does not yet reflect the expected impact of the Astaris acquisition. With that said, total revenues in the range of $805 to $825 million, which represents 4% year-over-year growth. Specifically, Jornay PM revenue, about $190 to $200 million, which represents at the midpoint 31% growth year-over-year. and adjusted EBITDA in the range of $455 million to $475 million, which represents 1% year-over-year growth. Primary drivers for our growth, during APM volume growth is expected to drive the majority of its growth due to the impact of our sales and marketing efforts and investments made in the tail end of 2025, partially offset by a low single-legit decline in the paying portfolio, which is primarily driven by the Nusinta franchise. Areas for potential upside that folks should be looking out for, possible Jone APM, could outperform expectations as it did in 2025. Less impact from the Nusinta AG than perhaps forecasted. And then, you know, upon pursuant to the close of the Asteris acquisition, you know, expected immediate accretion from the Asteris acquisition, which, as I've said before, will be reflected in updated guidance post-deal close. So with that, I'll turn it back over to you, Serge.

All right. Thank you. Maybe we'll start with the Asteris acquisition since it's only a few weeks old. I think people are still getting familiar with the asset and what it represents to Collegium. So maybe we can start with that. What is Asteris? How does it compare to Jornay? We know it's in the ADHD space. And why was it a good fit for Collegium?

So starting out with what it is. Astaris is the first and the only ADHD treatment with both fast and long-acting medicines in one capsule. The immediate release medicine allows for a rapid onset of effect and followed by a different extended release profile, which provides effect of duration throughout the day. It's highly complementary to Jornay, and it's differentiated from Jornay. Because of these different delivery profiles, what we hear back from physicians is that they most commonly prescribe Jornapium to those patients who need efficacy upon awakening in the morning, while the primary patient type for Asteris is that patient that requires rapid onset and a duration of efficacy throughout the day. And just thinking about why is it a good fit for Collegium, number one, it allows for greater patient impact. We're able to bring two differentiated but yet complementary medicines to physicians so that they can expand their impact to a broader set of patients. It immediately expands our position in ADHD. It's highly differentiated and complementary to Jornay. And then from a cost efficiency standpoint, we expect that we will be able to leverage our existing ADHD commercial infrastructure to continue to commercialize STERIs. Importantly, it extends the durability of our ADHD revenues with exclusivity into December 2037, which is substantially longer than Jornay. It further diversifies our revenue base beyond medicines for our responsible pain management franchise. And then, look, it immediately improves our financial profile. We expect the deal to be immediately creative to adjusted EBITDA with even greater contribution in 2027. And I think just one thing I'll highlight around the IP behind the product, the strength of the IP, it is supported by six orange book listed patents, most of which expire in December 2037. Those patents include drug substance, composition, formulation, and method of use claims. And there will be no generic filers to date. So because of all of these reasons, we think it's a pretty good fit within our portfolio.

Okay. And I'll ask Colleen to just go over the outline of the transactions, the upfront payment, and some of the potential milestones that are part of the transaction.

Yeah, absolutely. So Collegium is acquiring Astaris and all related IP and global rights from Corium, which is a private company. We are paying $650 million upfront. We are gaining an asset that is unencumbered by any royalties. So there was a recent royalty settlement. Now there's no further royalty obligation. The potential milestone payments are dependent on future commercial manufacturing and regulatory milestones that if they were achieved would trigger up to an additional $135 million in additional payments to Corium shareholders.

Okay. So they're all sales-based. There's no regulatory or other?

There are manufacturing, and I said manufacturing and regulatory, but in the manufacturing process improvement space.

Got it. Okay. I think one of the questions we get more often from investors about the transaction, what will be the impact to Jornay? Does it cannibalize Jornay? I know there are different molecules. molecules, they may address different segments of the ADHD market, but how are you thinking about,

how would you answer that question? You know, I don't think so. I think we, look, first of all, number one, we remain very confident in our ability to continue to grow Jornay driven by volume growth as a result of our sales and marketing efforts. And recall, we expanded the Salesforce last year significantly from 125 to 180 reps. We put forth a strong effort behind non-personal promotion and marketing programs in the back half of the year that was timed to align with the start of the back-to-school season. And we've seen the impact of all of that. As previously mentioned, Astaris is highly complementary to and differentiated from Jornay PM. And because of their different delivery profiles, the types of patients that most frequently are treated with these medicines, they differ. And therefore, we don't expect any significant degree of cannibalization of Jornay due to the acquisition of Astarts.

And I know the transaction has not closed yet, so you're likely limited in how much details you could provide of what the sales effort and what was behind the asset. But But maybe if you can talk broadly about what kind of coverage, pair coverage the product has and how much reps did Corium have marketing the asset?

Yeah, happy to. So starting out with pairs, Astaris has pretty broad coverage to begin with. So, you know, as we go through the process of bringing Astaris into our portfolio, we're starting out in quite a good position from a peer coverage standpoint. As you know, our peer strategy has always been focused on balancing broad coverage with enhancing profitability by managing close to NEPs. And we expect that we will evaluate any potential opportunities for improvement with that strategy in mind for Astaris, much like what we did with Journey upon the acquisition of Iron Shore. As far as the commercial team is concerned, while Corium has done a really nice job launching and building Astaris to its current levels, they've done so with much limited resources than Collegio. For example, their ADHD sales force is approximately 100 reps, while Collegium's is 180. At this point in time, we're working to evaluate what that appropriate resource base needs to look like to support future growth and how do we optimize the market opportunity for both products together. And we can provide those details upon closing.

Okay. And remind me again when Asteris received FDA approval and was launched.

Asteris, I believe, was launched, I believe, in 2021, and it has experienced significant growth in the first two to three years, in 22, 23, and 24. And frankly, it had quite a successful launch. Corian did a nice job with the resources that they did have, but it was certainly resource constrained. And that's where we saw an opportunity to really bring it into our portfolio, put our sales and marketing effort behind it, the commercial infrastructure that has been in place at Collegium for quite some time. And we believe we can definitely put it on a path to growth.

Okay. And in terms of the most recent sales level, I don't know, remind me again what you disclosed.

Yeah, so because Corium is a privately held company, they have not publicly disclosed their net revenues. In terms of prescriptions, Astaris generated over 760,000 prescriptions in 2025. And what we said at the announcement of the deal is that we expect Astaris to generate in excess of $50 million in net revenues in the second half of 2026, with additional growth to occur in 2027 and beyond.

Got it. And I guess when the transaction closes and you update guidance, that'll be part of the updated guidance. That's right. I recall when you acquired Jornay, the gross to nets on that product were very high, and that was one of the key growth levers that you were able to take advantage of and especially last year, is that an opportunity that also exists for Asteris to improve the growth to nets as you incorporate it in your commercial infrastructure?

Maybe Colleen take the growth to net question.

I'll jump on that. So while Asteris does have broad coverage and has really strong payer access, we do believe we are catching it at a bit of an inflated gross to net, and we would look to optimize it. I wouldn't expect to see significant change, but we will look at it just as we did when we acquired Jornay in and look to optimize and improve those gross to nets where we can.

Okay. And maybe it's worth just providing an overview of the current ADHD market and where each product will be able to, you expect they will thrive within the segments?

Yeah, if you take a step back, the ADHD market is actually quite big, right? You have over 110 million prescriptions that were written in the ADHD market in 2025. And most of these prescriptions are genetics. Stimulants, which is where Astaris and Jornay both fit in, their stimulants represent about 90% of the total market. And both Astaris and Jornay primarily source prescriptions from generic stimulants. So just given the sheer size of the segment, the stimulant segment, there is ample room for growth for both medicines.

Let's talk a little bit about Jornay. um obviously you're expecting some pretty significant growth again from from the product in 2026 um i guess what where have you been successful in driving the volume to just the salesforce expansion or the increased awareness as once you took the product over

Yeah, I would say both. If we go back to 2025, we have seen that prescription growth was driven by increased promotion, which was driven by the Salesforce expansion in the second quarter. Additionally, as a result of that expansion, not only did prescriptions increase at the same riders, but there was a significant growth in number of new riders, which is really what gives us the confidence of continuing to drive growth in 2026 and beyond. As new riders come on board, we work with them to make sure that the appropriate patients get prescribed during APM. And when physicians tend to see success with their first couple of patients, we're able to drive further depth within the existing prescriber base. So as we expanded the size of the sales force, we were not only driving prescription growth, but it was very important for us to drive new rider growth. And the foundation that was built in 2025 due to that new rider growth is what gives us the confidence that we'll be able to continue to drive prescription growth within existing as well as the new riders in 2026 and beyond. The other area of growth or other source of growth, the driver of growth, is the marketing efforts. You know, recall we did talk a lot about our non-personal promotion. The non-personal promotion reaches HCPs via web and social media, which supports the efforts of the Salesforce. The Salesforce calls on about 21,000 targets. In addition, the non-personal promotion reaches 50,000 additional HCPs beyond the target universe. So that's how we're able to leverage the sales efforts and the marketing efforts in a complementary way to reach a pretty sizable universe of HCP targets.

And you've had the product now in your hands for a couple of years. Any thoughts on potential peak sales for the product?

At this point in time, and we have not talked about peak sales for Jornay. And as we said before, part of the reason is we're only now starting to see the impact of the expanded sales force fully. We're still working through the impact of the non-personal promotion efforts that were put in place in the second half of last year. There's typically a time lag between taking the initiative and seeing the impact on scripts. When we have seen more of that impact and have a little bit more information, I'm sure we'll be able to have a more educated estimate of what that peak sales should look like.

And once the Asteris transaction closes, should we expect your total number of sales rep will see a bump up?

You know, I think we're going through that work right now. to figure out what that resource base needs to look like to maximize the growth of both Jornay as well as Starrus. So once we've done that work, after close, we'll be able to talk about what that Salesforce base looks like going forward.

Let's talk a little bit about the Payne portfolio. I feel most of these products have reached, they're all at a mature stage at the moment um maybe we'll start with extamsa just kind of what's driving growth going forward today and going in the next years

sure so i can i can cover that so with extamsa notably revenue grew about four percent year over year in fiscal year 2025 and showed strong average weekly prescriptions at the end of the year from the October to December timeframe. We expect to see flat to low single-digit revenue growth, driven primarily by price and gross-to-net improvements aligned with our payer strategy rather than volume. Early this year, in January 2026, Stamps did secure new exclusive access for about 2 million commercial lives. And regarding gross-to-nets, over the past several years, As you know, we've successfully renegotiated payer contracts to manage the gross-to-nets and ended fiscal 2025 with full-year gross-to-nets in the low 40s, and that came down from a high in the low 70s several years ago. And we expect in 2026 gross-to-nets to remain stable.

Okay. And the DIP there, or the exclusivity period, still no change on potential? I think it's in the early 2030s?

Yeah, there's been one filer to date. We settled with that filer that was TEVA for September of 2033.

Okay. Also no change on a potential generic OxyContin product? That's still unlikely?

No. We have not seen anything in the marketplace where Purdue is a private company. There is a limited amount of information. I think the market was expecting that generic to launch somewhere late 2024 through now, and it hasn't occurred. So we continue to monitor. We have not seen any activity.

Okay. And Bill Buca sees a little more volume growth than the other two.

Yeah, as I think about the expectations for Bell Buca, I would flag that in 2025, revenue grew about 5% and also showed strong average weekly prescriptions late in the year. Similar to XAMPSA in 2026, we expect and our guidance reflects flat to low single-digit revenue growth. Again, it's a combination there of volume and gross demand improvements.

And lastly, Nucenta, we've seen the authorized generic launch and starting to impact the branded prescription volumes a little bit. That is right.

So for 2026, our guidance, although we do not give product level guidance, if you were to back Jornet out of the total revenue, you'd see that we have taken about a 2% reduction overall in the pain portfolio. That is related to and fully contemplates the Nucinta generic situation. And so what we've seen transpire in the first quarter was that a external generic entrant came into the marketplace for Nucinta IR and our authorized generic partner, Hikma, launched. That external generic entrant seems to have limited access to product. Their volumes have been fairly low thus far. So we're not seeing anything unexpected from that. And also strategically, the Nucenta ER authorized generic with our partner Hikma launched late in the first quarter as well.

Okay. And the launch of the DAG, was that based on a generic also launching or is just part of the contracted arrangement with DICMA?

So we had strategically entered into that authorized generic arrangement and allowed for a date certain launch so that we could continue to share in the economics. And that agreement was highly favorable to Collegium from a profit share perspective. The actual sequence of events as they occurred was for Nucenta IR. The third party did launch and then Hikma launched right after. And for Nucentic ER, Hikma is the only product in the marketplace currently. We expect external generics, the first to arrive, if they choose to arrive, would be Teva in July of 2027, and then Rhodes could launch in 2028.

okay so with the the two percent reduction for the pain portfolio um more or less the whatever erosion you see out in the center will be offset by some of the extams a new

new center growth yeah you'll see you know you'll see some erosion on new center given these generic dynamics and for extensor and build buka you'll see stable to low single digit revenue

growth. Okay. And then just going back to the guidance, maybe it's where it's just highlighting the seasonality you see from quarter to quarter. I know that the ADHD product typically have some seasonality associated with them, but your growth to net also on the pain products see some

variability from quarter to quarter. That's right. I would say across our portfolio, both in our AD in Jornay and our pain products because they play in highly genericized markets you have two seasonal pressures in the first quarter the first is you can have a demand pressure when patients go to fill their first prescription of the year and their deductible has reset and there's some sticker shock and sometimes a higher degree of walk away the other impact is directly related to gross to nets, which is your cash outlay, your expense outlay in the first quarter for copay assistance is typically higher for the same reason, because deductibles have reset and patients haven't met those deductibles yet. Across our portfolio, we do in our third quarter and year end calls, you know, call the market's attention to that. You do

see that negative seasonality all right and then just uh maybe an overview of the the financials um i guess the the debt level and the leverage will change a little bit once the uh the transaction closes later this quarter but um maybe just preview what it it could look like yeah that's

right so we ended 2025 with uh net debt over ebitda leverage rate at about one turn um we at the end of 2025, we announced a new syndicated credit facility, if you recall, which included a $580 million term loan, a $300 million delayed draw, and a $100 million revolver. That new credit facility and our stepping into the banking syndicate allowed us lower cost of capital, as well as more flexible terms in terms of prepaying or paying down significant portions as in when we choose beyond our obligations. We did say upon announcement that we would use our $300 million delayed draw as part of the payment for the Estaris acquisition upon close. So that will be paid for with a combination of cash on the balance sheet and that delayed draw. And we expect to be about two terms at the close. Okay. And then maybe a broader

question regarding corporate strategy um rickram you've completed your your first acquisition as a ceo of the company um how do you think about the company going forward where and what you're attempting to um uh you know how you attempted to transform the company with this

asset and how you look to the future yeah thanks serge i think look at um the strategic to start out the strategic priorities kind of remain unchanged right the number one objective is drive further growth in journey and what upon close uh stars as well uh continue to maximize the paying portfolio the company's done an amazing job of doing that over several years and we want to continue to do that and then strategically deploy capital to create near and long-term shareholder value in the near term we remain focused on commercial or commercial ready assets We do not have the infrastructure to support R&D. So in the longer run, we may be more open to thinking about R&D stage assets. But right now, we remain focused on commercial and commercial-ready assets, which could allow us to develop a bit more scale and down the road, think about taking on more regulatory risk if that becomes something that we do. Therapeutic areas with call point synergies remain an area of focus for us as we look at other potential BD targets. Neuropsychiatry and pediatrics, because of the focus with Jornay, Anastares as well, once that becomes part of the portfolio. Other areas with cost-efficient sales and marketing requirements, for example, rare disease that we've talked about in the past, those remain of interest to us. And then, you know, LOEs into the 2030s and beyond. And look, I think we do believe that additional revenue growth and long-term value, while it will come from BD opportunities, we remain in a very strong financial position, which allows us to remain pretty disciplined when we deploy our capital. And we've said before that we are quite balanced in our capital deployment approach, which means while we continue to look for assets through business development, we also do remain open to opportunistically repurchasing shares, if that's the right thing to do at the time, or pay down debt and strengthen the balance sheet. So we continue to look at our capital deployment strategy with all three of those approaches in mind, as we also remain focused on driving our existing base business.

Okay. And maybe to wrap up, another common question we get from investors is they feel this is undervalued based on what the company has spent on the last two assets and where your market cap stands. They feel there's a significant undervaluation here. What do you think investors or even analysts are missing about the story that remains misunderstood or undervalued?

Look, I think that what investors, potential investors and our existing shareholders should continue to look at is the ability of the company to continue to drive revenue growth as well as adjusted EBITDA growth. We remain focused on generating cash flows and putting that cash to work by disciplined capital deployment. When I think about upcoming catalysts or milestones for the company, you know, your APM performance in 2026 is a big one. We've guided to 31% growth year-over-year at the midpoint, and that's driven by our expected full-year impact from sales and marketing investments that we made in 2025. The other catalyst, we've talked quite a bit about the status acquisition. Upon close, we'll talk about what the updated guidance would look like. That is something that we would expect investors to focus on. And then, look, indicators of continued durability of our paint franchise, right? Performance of the Nasinta franchise authorized generics, that's a pretty important one that we should keep an eye on. And then we always continue to watch for any indications from any other potential third-party generic threats that they don't plan to enter. We've said previously that we don't anticipate major entrants like you would typically see in other generic entry cases like we would in our market. But, you know, we watch for those. The response to Balbuca LOE may be an indicator of their intentions across our entire pain portfolio. This is specifically referring to Teva, which Colleen talked about earlier. So I would keep an eye on Jornet performance, the status acquisition, and further indicators of continued durability of the paint franchise.

Well, great wrap up. I want to thank you both for spending time with us this afternoon, telling us more about Collegium and your new acquisition. Thank you. Appreciate your time. Thanks for having us.