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, a company I've covered for a long time, a specialty 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. 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 just a high-level overview of our 2026 guidance. Our 2026 guidance reflects our existing business and does not yet reflect the expected impact of the AZSTARYS acquisition. With that said, total revenues are in the range of $805 million to $825 million, which represents 4% year-over-year growth. Specifically, Jornay PM revenue, about $190 million to $200 million, which represents, at the midpoint, 31% year-over-year growth, and adjusted EBITDA in the range of $455 million to $475 million, which represents 1% year-over-year growth. Primary drivers for our growth, Jornay PM 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-digit decline in the pain portfolio, which is primarily driven by the Nucynta franchise.
Areas for potential upside that folks should be looking out for, possible Jornay PM could outperform expectations as it did in 2025. Less impact from the Nucynta AG than perhaps forecasted, and then pursuant to the close of the AZSTARYS acquisition, expected immediate accretion from the AZSTARYS acquisition, which as I've said before, will be reflected in our updated guidance post-deal close. With that, I'll turn it back over to you, Serge.
All right. Thank you. Maybe we'll start with the AZSTARYS 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 AZSTARYS? How does it compare to Jornay? We know it's in the ADHD space, and why was it a good fit for Collegium?
Sure. Starting out with what it is. AZSTARYS 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 an 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 Jornay PM to those patients who need efficacy upon awakening in the morning. While the primary patient type for AZSTARYS is that patient that requires rapid onset and a duration of efficacy throughout the day. Just thinking about why is it a good fit for Collegium. Look, number one, it allows for greater patient impact, right?
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. From a cost efficiency standpoint, we expect that we will be able to leverage our existing ADHD commercial infrastructure to continue to commercialize AZSTARYS. 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. Look, it immediately improves our financial profile, right? We expect the deal to be immediately accretive to adjusted EBITDA with even greater contribution in 2027.
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 have been no generic filers to date. Because of all of these reasons, we think it's a pretty good fit within our portfolio.
Okay. 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. Collegium's acquiring AZSTARYS 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. There was a recent royalty settlement, and now there is 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. They're all sales-based. There's no regulatory or other.
There are manufacturing.
Okay
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 they're different molecules. They may address different segments of the ADHD market, but how are you thinking about it. How would you answer that question?
I don't think so. 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. Recall, we expanded the sales force last year significantly from 125 reps 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. We've seen the impact of all of that. As previously mentioned, AZSTARYS is highly complementary to and differentiated from Jornay PM. 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 off Jornay due to the acquisition of AZSTARYS.
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. Maybe if you could talk broadly about what kind of coverage, payer coverage the product has, and how much reps did Corium have marketing the asset?
Yep, happy to. Starting out with payers, AZSTARYS has pretty broad coverage to begin with. As we go through the process of bringing AZSTARYS into our portfolio, we're starting out in quite a good position from a payer coverage standpoint. As you know, our payer strategy has always been focused on balancing broad coverage with enhancing profitability by managing gross to nets. Right, and we expect that we will evaluate any potential opportunities for improvement with that strategy in mind for AZSTARYS, much like what we did with Jornay PM upon the acquisition of Ironshore. As far as the commercial team is concerned, while Corium has done a really nice job launching and building AZSTARYS to its current levels, they've done so with much more limited resources than Collegium. For example, their ADHD sales force is approximately 100 reps, while Collegium's is 180 reps.
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. We can provide those details upon closing.
Okay. Remind me again when AZSTARYS received FDA approval and was launched?
AZSTARYS, I believe, was launched, I believe, in 2021, and it has experienced significant growth in the first two to three years in 2022, 2023, and 2024. Frankly, it had quite a successful launch. Corium 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. In terms of the most recent sales level, I don't know, remind me again what you disclosed.
Yeah. Because Corium is a privately held company, they have not publicly disclosed their net revenues. In terms of prescriptions, AZSTARYS generated over 760,000 prescriptions in 2025. What we've said at the announcement of the deal is that we expect AZSTARYS 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. I guess when the transaction closes and you update guidance, well, that'll be part of the updated guidance.
That's right.
Okay. 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 AZSTARYS to improve the gross to nets as you incorporate it in your commercial infrastructure?
Maybe Colleen can take the gross-to-net question.
Yeah. I'll jump on that. While AZSTARYS 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 and look to optimize and improve those gross to nets where we can.
Okay. Maybe it's worth just providing an overview of the current ADHD market and where each product will be able to, you expect, what they will thrive within the segments.
Yeah. If you take a step back, the ADHD market is actually quite big. You have over 110 million prescriptions that were written in the ADHD market in 2025, and most of these prescriptions are generics. Stimulants, which is where AZSTARYS and Jornay PM both fit in, stimulants represent about 90% of the total market, and both AZSTARYS and Jornay PM primarily source prescriptions from generic stimulants. 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. Obviously, you're expecting some pretty significant growth, again from the product in 2026. I guess, where have you been successful in driving the volume? Is it just the sales force expansion or the increased awareness as once you took the product over?
Yeah, I would say both, right? If we go back to 2025, we have seen that prescription growth was driven by increased promotion, which was driven by the sales force expansion in the Q2 . Additionally, as a result of that expansion, not only did prescriptions increase at the same writers, but there was a significant growth in number of new writers, which is really what gives us the confidence of continuing to drive growth in 2026 and beyond. As new writers come on board, we work with them to make sure that the appropriate patients get prescribed Jornay PM. When physicians tend to see success with their first couple of patients, we're able to drive further depth within the existing prescriber base.
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 writer growth. The foundation that was built in 2025, due to that new writer 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 writers in 2026 and beyond. The other area of growth, or other source of growth or the driver of growth is the marketing efforts. You recall, we did talk a lot about our non-personal promotion. The non-personal promotion reaches HCPs via web and social media, and which supports the efforts of the sales force. The sales force calls on about 21,000 targets. In addition, the non-personal promotion reaches 50,000 additional HCPs beyond the target universe.
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.
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, we have not talked about peak sales for Jornay. As we've 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.
Okay. Once the AZSTARYS transaction closes, should we expect your total number of sales rep will see a bump up?
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 AZSTARYS. Once we've done that work, after close, we'll be able to talk about what that sales force base looks like going forward.
Okay. Let's talk a little bit about the pain portfolio. I feel most of these products are at a mature stage at the moment. Maybe we'll start with Xtampza, just kind of what's driving growth going forward today and going in the next years.
Sure. I can cover that. With Xtampza, notably, revenue grew about 4% 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. In early this year, in January 2026, Xtampza did secure new exclusive access for about 2 million commercial lives. 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 40%, and that came down from a high in the low 70s% several years ago. We expect in 2026, gross to nets to remain stable.
Okay. The IP there, or the exclusivity period, still no change on potential. I think it's in the early 2030s when you lose it?
Yes. 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?
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.
Yeah
It hasn't occurred. We continue to monitor. We have not seen any activity.
Okay. BELBUCA, I think, sees a little more volume growth than the other two.
Yeah. As I think about the expectations for BELBUCA, I would flag that in 2025, revenue grew about 5% and also showed strong average weekly prescriptions late in the year. Similar to Xtampza, 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-to-net improvements.
Okay. Lastly, Nucynta. We've seen the authorized generic launch and starting to impact the branded prescription volumes a little bit.
That is right.
Yeah.
For 2026, our guidance, although we do not give product-level guidance, if you were to back Jornay 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 Nucynta generic situation. What we've seen transpire in the Q1 was that an external generic entrant came into the marketplace, for Nucynta 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.
Yeah.
We're not seeing anything unexpected from that. Also strategically, the Nucynta ER authorized generic with our partner, Hikma, launched late in the Q1 as well.
Okay. The launch of the AG, was that based on a generic also launching, or is just part of the contracted arrangement with Hikma?
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 Nucynta IR. The third party did launch, and then Hikma launched right after. For Nucynta 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. With the 2% reduction for the pain portfolio, more or less, whatever erosion you see out in Nucynta will be offset by some of the Xtampza and Nucynta growth?
Yeah. You'll see some erosion on Nucynta given these generic dynamics, and for Xtampza and BELBUCA, you'll see stable to low single-digit revenue growth.
Okay. Just going back to the guidance, maybe it's worth 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 gross to nets also on the pain products see some variability from quarter to quarter.
That's right. I would say across our portfolio, both in our ADHD and Jornay and our pain products, because they play in highly genericized markets, you have two seasonal pressures in the Q1 . 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 walkaway. The other impact is directly related to gross to nets, which is your cash outlay, your expense outlay in the Q1 for co-pay assistance is typically higher for the same reason, because deductibles have reset and patients haven't met those deductibles yet.
Okay.
Across our portfolio, we do in our Q3 and year-end calls, call the market's attention to that. You do see that negative seasonality.
All right. Just maybe an overview of the financials. I guess the debt level and the leverage will change a little bit once the transaction closes later this quarter, but maybe just preview what it could look like.
Yeah, that's right. We ended 2025 with net debt over EBITDA leverage rate at about one turn. 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.
Mm-hmm.
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 and 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 AZSTARYS acquisition upon close. 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 turns at the close.
Okay. Maybe a broader question regarding corporate strategy. Vikram, you've completed your first acquisition as CEO of the company. How do you think about the company going forward, and how are you attempting to transform the company with this asset, and how you look to the future?
Yeah. Thanks, Serge. I think, look, to start out, the strategic priorities kind of remain unchanged, right? The number one objective is to drive further growth in Jornay, and upon close, AZSTARYS as well. Continue to maximize the pain 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. In the longer run, we may be more open to thinking about R&D stage assets. 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 PM, and AZSTARYS 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. LOEs into the 2030s and beyond. 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.
We've said before that we are quite balanced in our capital deployment approach, which means while we continue to look for assets for 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. We continue to look at our capital deployment strategy with all three of those approaches in mind.
Yeah
As we also remain focused on driving our existing base business.
Okay. 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. Okay. 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, Jornay PM 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 AZSTARYS 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.
Look, the indicators of continued durability of our pain franchise, right? Performance of the Nucynta franchise authorized generics, that's a pretty important one that we should keep an eye on. 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. We watch for those. The response to BELBUCA LOE may be an indicator of their intentions across our entire pain portfolio. This is specifically referring to Teva, which Colleen talked about earlier. I would keep an eye on Jornay performance, the AZSTARYS acquisition, and further indicators of continued durability of the pain franchise.
Okay. 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.
Thank you.