Good afternoon. My name is Bob Klingenberger. I am Executive Director at Morgan Stanley. I am really pleased to be joined by the Collegium team here this afternoon, Vikram Karnani, CEO, and Colleen Tupper, CFO. Just before we get started, for any research disclaimers, please just visit morganstanley.com/researchdisclosure. If any questions, please reach out to your Morgan Stanley representative. Like I said, thrilled to be joined here by the Collegium team. I think, Vikram and Colleen, just maybe to kind of kick things off, historically, I think the company has been viewed as really a pain management company.
I think fair to say that the story today is increasingly diversified. Just maybe to kick us off, it would be great if you could kind of describe the transformation and how you guys, especially Vikram, since you have been in the seat, have really kind of transformed the profile the last couple of years.
Yeah. First of all, thank you. Thanks for having us. Give you a little bit of background on Collegium. We describe ourselves as a dynamic, growing biopharmaceutical company, focusing on improving the lives of people living with serious and often misunderstood conditions. There are three main components to how we do what we do. We identify differentiated commercial assets or medicines that address meaningful unmet needs for patients. We apply focused commercial execution strategies and efforts to accelerate growth. Then finally, we create value through strategic acquisition and business development. We have gotten really good at acquiring companies or products, integrating them, and quickly putting them on a path to growth.
To date, as you rightly identified, we have built the industry's leading organization when it comes to supporting patients with severe pain, and more recently, over the last couple of years, have started the diversification part of our journey and have really expanded into ADHD. While the pain portfolio remains a significant portion of our business, in the last couple of years, the ADHD portfolio has grown to almost 30% of our annual revenues now. Our first ADHD medicine, which we acquired in 2024, JORNAY pm, grew 48% in 2025, and we expect approximately 31% growth this year. That is at the midpoint of our annual guidance. That represents revenues of about $190 million- $200 million in 2026.
In May, we acquired our second ADHD medicine, AZSTARYS, which is a highly complementary offering to JORNAY pm, and we expect that to deliver $65 million-$75 million in revenues in a partial year, because the deal closed in May. When you take a step back and look at our total diversified portfolio of medicines, both between pain as well as ADHD, it represents about $825 million-$855 million in revenue this year. That is our updated guidance. It represents 8% annual year-over-year growth, and it puts us on a path to achieving a $1+ billion in revenue in the future. Most importantly, this growing business also continues to be highly profitable. Our EBITDA margins are in excess of 50%, well above the typical margins that you see in our industry, especially for mid-sized, specialty pharma companies or even commercial biotech companies.
Looking ahead, we remain focused on our efforts to drive growth in ADHD, maintain the durability of our pain portfolio, and then frankly, deploy capital in a highly disciplined manner through business development and expanding the portfolio, debt reduction, strengthen the balance sheet, and then continue to be opportunistic when it comes to buying back shares. In a nutshell, that is the company.
Yeah. No, look, I think you covered a lot of stuff that we will get into in a little bit more detail, but I think a really helpful overview. I think the first piece that you sort of touched on there was ADHD becoming an increasingly important part of the business, especially with the recent acquisition and how do you think about, sort of you mentioned the products being highly complementary, JORNAY and AZSTARYS. How do you think about the complementary nature and how you are positioned in that space?
Look, I think it is important to understand. Take a step back and just let us talk about the ADHD market as a whole. In 2025 alone, there were 111 million prescriptions written in this market, so it is a very large market. It is also a growing market, enjoying about 8% CAGR between 2020 to 2025. So 111 million prescriptions growing at a fairly high growth rate, which signals high patient unmet need. Patients on average will try and cycle between two to three different ADHD medicines before they finally arrive on the one that actually works for them. Of the 111 million prescriptions, almost 90% of those prescriptions were written for stimulants, and the balance is for non-stimulants. The vast majority are stimulants. And of that 90%, which represents close to 100 million prescriptions, about 26 million prescriptions were for the methylphenidate category.
So just to give you a sense of size. What this implies is there is a significant amount of opportunity for both JORNAY as well as AZSTARYS to grow within the methylphenidate stimulant category. As a reference point, both JORNAY and AZSTARYS in 2025 did about 760,000 prescriptions each. Right? So 26 million prescriptions written annually. Each of these brands at 760,000. So significant opportunity. Talking about the differentiation and the complementary nature of the two medicines, JORNAY pm is the only stimulant ADHD medicine that is taken at night, and it provides morning efficacy upon awakening, which is a significant state of unmet need for ADHD patients. It's one of the most frequently prescribed medicine to patients that have some structure to their schedule and can predictably They need to wake up at a certain time. Think of school-going kids, for example. Right?
On the other hand, AZSTARYS is the first and only ADHD medicine that has both fast and long-acting medicines in one capsule. So rapid onset of action lasting several hours, up to 13 hours. AZSTARYS is most often prescribed to those patients who would say that their morning is manageable but are really in need for rapid onset of action and need flexibility in their schedule. Then, of course, have continuous therapeutic coverage as a need for the rest of the day. Together, these two medicines provide very nice complementary set of options for physicians, and pre-acquisition, that's what we heard back from physicians, and post-acquisition, as now we've been out there for a few months promoting both medicines, those practices have been validated.
Yeah. And just, I think, helpful to lay out, right, the landscape, and I think one of the proof points, at least as you all have done with JORNAY, which you've had in your portfolio for a couple of years now, is really change the trajectory of that product. So could you talk about You talked about the differentiation from it's the only therapy that you can take at night and wake up with the effect. What else has been a factor as you've really expanded that product and it's continued to see growth, as you've talked about with the guidance for this year?
Yeah, look, as a reminder, we talked about the fact that JORNAY grew 48% year-over-year in 2025 and is expected to grow 31% this year. So very healthy growth rates for this medicine. This growth is driven by a few factors. Number one, the profile of JORNAY pm is viewed highly favorably by physicians. When we've done research, as a reminder, it's the only ADHD medicine that you take at night, gives you efficacy upon awakening in the morning. Physicians ranked JORNAY, in market research, ranked JORNAY as the number one branded ADHD medicine in the category in terms of product differentiation, with a score that is far higher than even the second-ranked medicine in the same category.
In addition, in the same research, more than 70% of physicians indicated a strong intent to increase prescribing, which was also the highest among all branded medicines in this category. Secondly, we know ADHD is a highly promotionally sensitive market. Based on growing opportunities within this space, we have increased the size of our sales force that is calling on physicians and increased the size of the called on HCP universe for these medicines. The current sales force is about 190 representatives promoting both JORNAY as well as AZSTARYS, and our early insights are suggesting that physicians are very receptive to a single sales force that brings both JORNAY and AZSTARYS, both complementary medicines to physicians. It improves our commercial efficiency, and it also expands our reach at the same time.
I think in today's day and age, what has proven particularly effective is marketing through digital and social media channels. We've successfully raised awareness of JORNAY over the last couple of years, both with physicians as well as with patients and caregivers. So I think in terms of future growth, I would say that we continue to see growth in new prescribers. In our last earnings call, we talked about the fact that JORNAY now is prescribed by more than 30,000 physicians, which represented more than 17% growth year-over-year. So we continue to expand the universe of physicians that are prescribing JORNAY, and within the practices that are prescribing JORNAY, we're starting to see increased depth or increased prescribing within the practice. So both increased depth as well as breadth of prescribing will drive JORNAY growth in the future.
Yeah. I think when you first acquired the product, you had a peak opportunity in the couple hundred million category. Obviously, with the growth you've seen, you talked about the areas that you feel like you can continue to expand the product, but I guess how should we be thinking about the long-term trajectory?
We've never actually provided a specific peak sales estimate for JORNAY or for AZSTARYS for that matter. I think the range, if you look at sell-side estimates, they're probably in the $300 million-$500 million range. But we definitely have not provided any peak sales estimates. In addition, we're yet to see the potential impact of having AZSTARYS now in the portfolio as well. And like I said, we're one of the only teams that is out there that is promoting a portfolio of branded medicines, both that are considered highly differentiated, highly complementary, and bringing value to patients. What I can tell you is that based on our experience thus far, based on the KPIs that we follow, and based on the momentum that we see, we will continue to increase the number of prescribers that will prescribe JORNAY and AZSTARYS.
We will continue to see increased depth of prescribing for both JORNAY as well as AZSTARYS within the prescriber universe and solid profitability for the brand. Both JORNAY and AZSTARYS enjoy very good payer coverage. The access is very good. Our patient support programs, our copay assistance programs are viewed very favorably by patients as well as physicians. Strong execution in the future will continue to drive momentum for both these medicines.
Yeah. You touched on this, I know, when you acquired AZSTARYS, but maybe just kind of remind us a little bit. You've talked about the 190 reps that you have in terms of needing with both products, or any plans in terms of expansion and just how do you take some of the playbook you've run for success with JORNAY and kind of apply it to AZSTARYS as well?
Yeah. Look, as a reminder, pre-acquisition, about 180 representatives were promoting JORNAY alone. Based on our analytics at the time, that was the right size. Our target universe that we were going to call on was about 21,000 physicians. Post-acquisition, when we redid all the analysis, we increased our target universe to now 27,000 physicians. We are able to do that with a very modest increase in the sales force size. We have now gone from 180 representatives to 190 representatives. Just adding 10 more geographies allows us to very efficiently and effectively call on that entire universe of physicians of about 27,000 targets. I think in addition to the efforts of our sales force, something that we saw deliver impact in 2025 in the tail end of the year, was the increase in our marketing efforts.
We put out our new marketing campaigns, both in digital channels as well as social media. We had a social media influencer campaign that was launched last year. Throughout the course of the back-to-school season last year and into 2026, we continued to monitor the impact of all of these programs. Post-acquisition of AZSTARYS, we also increased the size of the MSL team to continue to help educate physicians on the benefits of both medicines. I think as I have already said, what we saw was a dramatic increase in growth in JORNAY. What we have seen with AZSTARYS is an opportunity to do much of the same, especially when it comes to highly efficient, targeted, cost-effective social media and digital marketing. What you should expect to see is some of those programs now play out in the back-to-school season this year.
We will monitor the impact and we will continue to refine our programs as we enter next year and beyond.
Yeah. No, exciting to have both of those in the ADHD franchise. We talked a little bit about the pain portfolio you mentioned in the introductory remarks. I know it remains an important source of revenue and cash flow. Just maybe talk about a little bit the different initiatives you have and some of the points of, I think durability, longevity for that franchise that I know you have discussed on recent earnings calls as well.
Yeah. Let me take a step back and just give you a headline on the pain business. I would invite Colleen to really go into some of the reasons why we should believe in the durability of the pain business being longer than I think what people might think. Our pain business, as a starting point, includes four differentiated medicines with abuse-deterrent attributes. The business generated in excess of $630 million in 2025 revenues. While the business is more mature, revenues grew 6% in 2025. Despite some generic pressure that is beginning to impact NUCYNTA this year, we believe that the durability of the full portfolio still remains underappreciated. Maybe Colleen can go into some of the dynamics here.
Yeah, absolutely. So XTAMPZA ER had revenues of about $200 million in 2025 and maintains its exclusivity until September of 2033. Prescription volumes have been down across all long-acting branded opioids this year. The XTAMPZA ER prescriptions in the second quarter were up 2% compared to the first quarter, and tracking similarly so far in the third quarter. This business continues to provide meaningful revenues on a very efficient footprint that is detailing not only XTAMPZA ER, but BELBUCA as well. The BELBUCA revenues in 2025 are about $222 million and has only what we believe is limited risk of near-term generic entrants. Teva would be the earliest possible entrant in January of 2027 due to settlement from 2018, which at the time, their business strategy was much different. To date, Teva has not received tentative approval and has relinquished its first filer exclusivity.
Importantly, it remains unclear whether or not Teva intends to reenter the generic opioid space. They have stopped distributing significant volumes of opioids, particularly oxycodone IR generic, and given their change in strategy to focus on complex generics, biosimilars, and new chemical entities, we do not know if they will really look to reenter this market to launch a generic of BELBUCA. Following that question, which we are now about four months away from really understanding and getting more certainty on what their actions will be, the next potential entrant would be Alvogen, which was fully litigated by the predecessor company, BioDelivery Sciences International, and Alvogen is currently barred from the market until December 2032.
Finally, there are two small other generic companies that are pursuing a non-infringement approach, one of which has had their litigation stayed indefinitely until they are able to produce a product. They have to date experienced six CRLs. Their path to the market would first require them to have technical success to prove that they can produce a comparable product, and then that would move into the litigation phase, and we feel strongly in our position there.
The last of those is currently under a 30-month stay, and again, we feel very strongly in our position there. The NUCYNTA franchise had revenues of just shy of $200 million in 2025, and here we do expect some declines over the next few years, as Vikram alluded to. Our authorized generic distributor launched a generic version of both NUCYNTA and NUCYNTA ER in the first quarter of this year, and prices were considerably lower than what we anticipated. They ultimately rebated the products more like an external generic product that is experiencing multi-source generics.
What you saw us do during our Q2 earnings call was moderate our guidance for the full year, which takes the impact of that pricing expectation into consideration. In addition, for NUCYNTA, a third-party generic company launched a generic version of NUCYNTA in February of 2026. That market is still predominantly branded. That player has captured about a 20% share and seems to have a cap on the supply that they are able to deliver. Ultimately, for 2026, what we saw is a more quick step down due to the price that our authorized generic partner put in place, and we think that is a bit of a reset, and then we will have more of a gradual erosion going forward. All of those dynamics have been contemplated in our most recent updated guidance that we issued early of August of 2026.
I think just ending on that to close up the NUCYNTA loop, looking ahead, we believe the likelihood of numerous generic entrants remains low for the NUCYNTA franchise, primarily due for supply constraints, manufacturing considerations, and frankly, the shrinking pie of value that is there. Overall, we believe our pain portfolio continues to provide a durable foundation of revenue, profitability, and cash flow that it supports both investment in future growth opportunities and long-term shareholder valuation. That part of our business, that portfolio, is supported by an efficient 95-territory sales force.
Great. On that, I think that last point, Colleen, you made, is sort of the cash flow for investment and growth. I think BD has been obviously a key part of the recent strategy for the company, including the AZSTARYS acquisition we have talked about. Maybe just if you guys could talk a little bit about sort of the characteristics you continue to look for in BD and where, I guess, specifically you feel the company kind of has a competitive advantage as an acquirer.
Yeah, look, let me clarify one thing. I think BD has been a core part of the capital deployment strategy for Collegium for many years. I think after the launch of the first product, XTAMPZA ER, years ago, the company has built both the pain portfolio and then more recently, the ADHD business on the backs of continuous business development. Look, we have a pretty clear set of criteria, at least we think, we have a pretty clear set of criteria for BD. We prioritize differentiated commercial or near commercial assets that diversify our product portfolio, significant revenue with meaningful growth potential, and exclusivity into the mid-2030s and beyond. Ideally, the ability to leverage our existing commercial footprint or requiring modest incremental commercial infrastructure build-out.
We have a really active and a very experienced BD team that is continuing to evaluate potential opportunities for medicines that we can expand our portfolio with and accelerate our growth. CNS remains a high area of interest, but it is not the only therapeutic area that we continue to evaluate. Other specialty conditions, for example, rare diseases, are part of our ongoing assessments as well, assuming that they offer a compelling path for building a franchise. That make sense?
Yeah. No, I think that answers that question, certainly. And maybe just Colleen, for you, as you think about the recent AZSTARYS deal, if you just maybe remind us where things sit in terms of leverage, what you have talked about in terms of pay down and guidance given post that deal.
Yeah. At the end of Q2, we had a debt of about $1.1 billion, which includes term loan of approximately $865 million that we executed last December. It was our first syndicated credit facility, and we also have about $240 million of convertible note outstanding. That puts us at the end of the second quarter at a net debt to EBITDA ratio of about 2.1x , on a midpoint of our guide of EBITDA of about $465 million. Moving forward, we would expect to maintain our previously communicated capital allocation strategy, which balances portfolio expansion, as Vikram just noted, and diversification through business development, as well as paying down our debt rapidly, which you have seen us do in prior acquisitions. We will lever up to consummate a deal, and then we quickly de-lever, which reinvigorates our firepower, and then also opportunistically returning value via share repurchases when appropriate.
Yeah. I think that has been clear from the track record, certainly. And I guess maybe taking a step back more broadly, having been in the seat a couple of years now almost, Vikram, as you think about, we talked about the durability of the portfolio, we talked about the growth opportunities in ADHD. As you maybe look to the end of the decade, which we are rapidly approaching, as you think about where you see Collegium sitting in that time period, if you just maybe reflect on that a little bit, where the company is headed.
Yeah, it's a great question. I think when we take a step back and think about the mission of the company. On the onset, where I started out by saying we're a dynamic, growing biopharmaceutical company that is trying to make a difference in the lives of patients through bringing meaningful medicines and addressing unmet patient need. That's the mission of the company, and frankly, the more patients that we can impact, I think is a strong measure of our success. Frankly, when you do it the right way, other key metrics like revenue, adjusted EBITDA, so on and so forth, all will continue to grow. So in the next three to five years, I would expect our business to be more diverse, far more differentiated, and far less reliant on just the pain portfolio.
The pain portfolio has served a very important purpose in the mission of the company, but it's clear we're on a journey to diversify our business. We've been on this journey for the last couple of years with the build-out of the ADHD portfolio, and I would expect that in the next three to five years, we continue that journey. We continue to be more diversified, bring more differentiated medicines into the portfolio, maybe add a third leg to the stool, and grow in newer therapeutic areas, or in specialty conditions like rare disease, as I noted previously. I think during this time, we also may very well expand our BD efforts to include medicines that are in clinical development, rather than remain solely focused on commercial medicines.
And what that gives us also is more option value, it gives us more longevity into the future and provides a more sustainable long-term view of the business of the company. I think in the next three to five years, I believe that if we continue to execute the way we have, we will be larger, we will be stronger, we will be more differentiated, we will be more diversified and continue to have a much greater impact on patient health. In a short few sentences, that's the direction of the company.
Yeah. Well, it's an exciting future ahead. I know we've covered a lot of ground, and we're kind of running up against time. Any kind of final comments either of you would want to add?
Thanks for the opportunity. Thanks for a great day here, and I look forward to continuing our path to great execution.
Okay. Fantastic. Well, thank you, Vikram, Colleen, appreciate the time, and thanks everyone for joining.
Thank you, Bob.
Thanks, Bob.