COLLEGIUM PHARMACEUTICAL, INC Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Strategic Priorities: Focus on driving growth in Jornay PM, maximizing the value of the pain portfolio, and strategically deploying capital.
• Jornay Performance: Second full quarter of ownership saw 24% year-over-year prescription growth and $28.5 million in net revenue. Expanded the sales force by approximately 55 representatives, bringing the total ADHD sales force to about 180 reps.
• Pain Portfolio: Delivered $149.2 million in sales, with all three pain medicines experiencing single-digit revenue growth.
• Leadership and Board Updates: Added new executive leadership (e.g., David Dieter as EVP, General Counsel) and Board members. Authorized a $25 million accelerated share repurchase program.
• Cash Flow and Debt: Generated $55.4 million in cash from operations, ended Q1 with $197.8 million in cash, cash equivalents, and marketable securities, and paid down $16.1 million of debt. Expect net leverage to be less than 1x by the end of 2025.

Segment Performance

• Jornay PM: In the second full quarter of ownership, prescriptions grew 24% year-over-year, generating $28.5 million in net revenue. Full-year Jornay net revenue is expected to exceed $135 million, representing at least 34% annual growth from 2024. Revenue contribution: at least 34% of the expected $735 million to $750 million net product revenues for 2025.
• Pain Portfolio: Generated $149.2 million in sales, up 3% year-over-year. All three pain medicines achieved single-digit revenue growth. Revenue contribution: the remaining portion of the $735 million to $750 million net product revenues for 2025.

Guidance

• Net Product Revenues: Expected to be in the range of $735 million to $750 million, an 18% year-over-year increase, primarily driven by Jornay and the pain portfolio.
• Adjusted EBITDA: Projected to be between $435 million and $450 million, a 10% year-over-year growth.
• Adjusted Operating Expenses: Anticipated to be between $220 million and $230 million, with quarterly expenses trending down in the second half of the year.
• Share Repurchase: Board authorized a $25 million accelerated share repurchase as part of a $150 million program.

Risks

• Commercialization Risks: Uncertainty in successfully commercializing products and incurring significant expenses.
• Litigation Risks: Potential litigation pertaining to the business that could impact financial results.
• Market and Economic Pressures: Broader political and economic pressures in the healthcare sector that could affect business operations.

Question and Answer

• Q: As we head to the tail end of the school year, how would Jornay scripts trend before the new season pick-up, and what are the details of the sales force expansion? A: Seasonally, scripts may slow slightly in May-June due to summer holiday effects, then accelerate in the back-to-school season. The sales force expanded from 125 to 180 reps, targeting 21,000 prescribers (up from 17,000), increasing reach and frequency to drive prescription growth.
• Q: Utilization of Jornay PM technology for other compounds and the company's appetite for business development (BD)? A: Conversations about using Jornay's technology for other compounds occurred prior to acquisition. The company takes a disciplined approach to BD, focusing on creating value for shareholders through strategic BD, debt repayment, and share repurchases.
• Q: Size of Jornay sales organization at steady state, peak sales expectations, and potential size of BD transactions? A: Sales force sized at 180 reps based on target audience and productivity. Peak sales trajectory for Jornay will be evaluated after seeing the impact of the sales force expansion. The company has capacity to do meaningful transactions given its ability to generate cash flows, with net debt to EBITDA expected to be less than 1x by year-end, allowing for potential transactions if the right opportunity arises.