Collegium Pharmaceutical Inc.
11/06/2025 | Press release | Distributed by Public on 11/06/2025 06:36
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our Condensed Consolidated Financial Statements and related notes appearing elsewhere in this Quarterly Report, and in conjunction with management's discussion and analysis and our audited consolidated financial statements included in our Annual Report. The following discussion contains forward-looking statements that involve risks uncertainties and assumptions. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of many factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Quarterly Report, including those set forth under "Forward-looking Statements" and "Risk Factors," as revised and supplemented by those risks described from time to time in other reports which we file with the SEC.
Overview
We are building a leading, diversified biopharmaceutical company committed to improving the lives of people living with serious medical conditions. We have developed, licensed, and acquired a portfolio of meaningfully differentiated products for use in the treatment of moderate to severe pain and attention deficit hyperactivity disorder ("ADHD"), consisting of Jornay PM, Belbuca, Xtampza ER, Nucynta ER and Nucynta IR (collectively the "Nucynta Products"), and Symproic, in the United States.
Jornay PM is a central nervous system ("CNS") stimulant prescription medicine that contains methylphenidate HCl, which was approved by the U.S. Food and Drug Administration ("FDA") in August 2018 for the treatment of ADHD in people six years of age and older and currently the only FDA-approved stimulant medication that is dosed in the evening. We began recognizing product revenue related to Jornay PM in September 2024 following our acquisition of Ironshore Therapeutics Inc. ("Ironshore") (the "Ironshore Acquisition").
Belbuca is a buccal film that contains buprenorphine, a Schedule III opioid, and was approved by the FDA in October 2015 for severe and persistent pain that requires an extended treatment period with a daily opioid analgesic and for which alternative options are inadequate. We began shipping and recognizing product revenue related to Belbuca in March 2022 following our acquisition of BioDelivery Sciences International, Inc. ("BDSI").
Xtampza ER, an abuse-deterrent, oral formulation of oxycodone, was approved by the FDA in April 2016 for the management of severe and persistent pain that requires an extended treatment period with a daily opioid analgesic and for which alternative treatment options are inadequate. We commercially launched Xtampza ER in June 2016.
The Nucynta Products are extended-release ("ER") and immediate-release ("IR") formulations of tapentadol. Nucynta ER is indicated for the management of severe and persistent pain that requires an extended treatment period with a daily opioid analgesic, including neuropathic pain associated with diabetic peripheral neuropathy in adults, and for which alternate treatment options are inadequate. Nucynta IR is indicated for the management of acute pain severe enough to require an opioid analgesic and for which alternative treatments are inadequate in adults and pediatric patients aged 6 years and older with a body weight of at least 40 kg. We began shipping and recognizing product revenue on the Nucynta Products in January 2018 and began marketing the Nucynta Products in February 2018. In August 2023, the FDA granted New Patient Population exclusivity in pediatrics for Nucynta IR. This grant extended the period of U.S. exclusivity for Nucynta IR from June 27, 2025 to July 3, 2026. In June 2024, the FDA granted pediatric exclusivity to the Nucynta Products for an additional six months, to January 3, 2027 for Nucynta IR and December 27, 2025 for Nucynta ER.
Symproic was approved by the FDA in March 2017 for the treatment of opioid-induced constipation ("OIC") in adult patients with chronic non-cancer pain, including patients with chronic pain related to prior cancer or its treatment who do not require frequent (e.g., weekly) opioid dosage escalation. We began shipping and recognizing product revenue related to Symproic in March 2022 following our acquisition of BDSI.
Critical Accounting Policies and Significant Judgments and Estimates
We believe that several accounting policies are important to understanding our historical and future performance. We refer to these policies as "critical" because these specific areas generally require us to make judgments and estimates about matters that are uncertain at the time we make the estimate, and different estimates-which also would have been reasonable-could have been used, which would have resulted in different financial results. For a description of critical accounting policies that affect our significant judgments and estimates used in the preparation of our consolidated financial statements, refer to our Annual Report.
Results of Operations
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2025 |
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2024 |
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2025 |
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2024 |
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(in thousands) |
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(in thousands) |
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Product revenues, net |
$ |
209,361 |
$ |
159,301 |
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$ |
575,118 |
$ |
449,500 |
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Cost of product revenues |
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Cost of product revenues (excluding intangible asset amortization) |
|
24,717 |
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21,706 |
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73,820 |
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60,611 |
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Intangible asset amortization |
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55,473 |
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40,801 |
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166,419 |
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109,833 |
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Total cost of product revenues |
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80,190 |
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62,507 |
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240,239 |
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170,444 |
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Gross profit |
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129,171 |
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96,794 |
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334,879 |
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279,056 |
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Operating expenses |
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Selling, general and administrative |
67,103 |
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61,955 |
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217,163 |
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147,272 |
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Gain on fair value remeasurement of contingent consideration |
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(19) |
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- |
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(1,163) |
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- |
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Total operating expenses |
67,084 |
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61,955 |
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216,000 |
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147,272 |
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Income from operations |
62,087 |
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34,839 |
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118,879 |
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131,784 |
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Interest expense |
(21,767) |
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(18,394) |
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(63,020) |
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(51,320) |
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Interest income |
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3,116 |
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3,280 |
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7,724 |
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12,164 |
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Loss on extinguishment of debt |
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- |
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(4,145) |
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- |
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(11,329) |
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Income before income taxes |
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43,436 |
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15,580 |
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63,583 |
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81,299 |
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Provision for income taxes |
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11,929 |
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6,245 |
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17,676 |
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24,645 |
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Net income |
$ |
31,507 |
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$ |
9,335 |
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$ |
45,907 |
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$ |
56,654 |
Comparison of the three months ended September 30, 2025 and September 30, 2024
Product revenues, net
Product revenues, net were $209.4 million for the three months ended September 30, 2025 (the "2025 Quarter"), compared to $159.3 million for the three months ended September 30, 2024 (the "2024 Quarter"). The $50.1 million increase is primarily due to increased revenue for Jornay PM of $33.8 million, the Nucynta Products of $9.7 million, Belbuca of $5.1 million, Xtampza ER of $1.0 million, and Symproic of $0.5 million.
The increase in revenue for Jornay PM of $33.8 million is due to the acquisition of the product from the Ironshore Acquisition in September 2024.
The increase in revenue for the Nucynta Products of $9.7 million is primarily due to lower gross-to-net adjustments related to provisions for rebates, including the recognition of $2.8 million related to certain rebate settlements during the 2025 Quarter. In addition, revenue increased due to lower gross-to-net adjustments related to returns as well as higher gross price. These increases were partially offset by lower sales volume.
The increase in revenue for Belbuca of $5.1 million is primarily due to lower gross-to-net adjustments related to provisions for rebates, higher sales volume, and higher gross price, partially offset by higher gross-to-net adjustments related to provisions for chargebacks.
The increase in revenue for Xtampza ER of $1.0 million is primarily due to lower gross-to-net adjustments related to provisions for rebates and higher gross price, partially offset by lower sales volume.
Cost of product revenues
Cost of product revenues (excluding intangible asset amortization) was $24.7 million for the 2025 Quarter, compared to $21.7 million for the 2024 Quarter. The $3.0 million increase was primarily due to the 2025 Quarter including $3.1 million of royalty expense related to the Company's license agreement with Grünenthal that is subject to future recovery, partially offset by lower current period royalty expense. In addition, cost of product revenues increased due to the 2025 Quarter including cost of product revenues from Jornay PM for a full quarter, which was acquired in September 2024.
Intangible asset amortization was $55.5 million for the 2025 Quarter, compared to $40.8 million for the 2024 Quarter. The $14.7 million increase was due to the 2025 Quarter including a full quarter of amortization from the intangible asset acquired in the Ironshore Acquisition in September 2024.
Operating expenses
Selling, general and administrative expenses were $67.1 million for the 2025 Quarter, compared to $62.0 million for the 2024 Quarter. The $5.1 million increase was primarily related to:
| ● | an increase in salaries, wages and benefits of $13.1 million, primarily due to additional headcount added as a result of the Ironshore Acquisition in September 2024, including the sales force that promotes Jornay PM; |
| ● | an increase in sales and marketing expenses of $8.2 million, primarily due to expenses incurred to support the ongoing commercialization of Jornay PM following the Ironshore Acquisition in September 2024; |
| ● | an increase in audit and legal fees of $1.7 million, primarily due to expenses related to litigation and increased accounting and tax expenses; partially offset by |
| ● | a decrease in acquisition related expenses of $18.3 million due to the 2024 Quarter including a higher amount of acquisition related expenses incurred immediately following the closing of the Ironshore Acquisition in September 2024. |
Gain on fair value remeasurement of contingent consideration was less than $0.1 million in the 2025 Quarter, compared to none in the 2024 Quarter. The increase was due to the revaluation of the contingent consideration associated with the Ironshore Acquisition in September 2024.
Interest expense and Interest income
Interest expense was $21.8 million for the 2025 Quarter, compared to $18.4 million for the 2024 Quarter. The $3.4 million increase was primarily due to a $2.2 million increase in interest expense related to the deferred royalty obligation that was assumed as part of the Ironshore Acquisition in September 2024. Interest expense from term loans was materially consistent in the 2025 Quarter compared to the 2024 Quarter due to the refinancing of our term loan in the third quarter of 2024, which resulted in a lower interest rate offset by a higher principal balance.
Interest income was $3.1 million for the 2025 Quarter, compared to $3.3 million for the 2024 Quarter. The $0.2 million decrease was primarily due to lower interest rates earned on cash equivalents and marketable securities in the 2025 Quarter compared to the 2024 Quarter.
Loss on extinguishment of debt
There was no loss on extinguishment of debt in the 2025 Quarter, compared to $4.1 million in the 2024 Quarter. The $4.1 million decrease was due to the 2024 Quarter including a $4.1 million loss on extinguishment due to the extinguishment of assumed debt from the Ironshore Acquisition during the 2024 Quarter.
Taxes
The provision for income taxes was $11.9 million for the 2025 Quarter, compared to $6.2 million for the 2024 Quarter. The $5.7 million increase is primarily due to higher earnings before taxes in the 2025 Quarter compared to the 2024 Quarter, partially offset by the impact of discrete nondeductible costs associated with debt extinguishment in the 2024 Quarter. The effective tax rate was 27.5% and 40.1% in the 2025 Quarter and 2024 Quarter, respectively.
Comparison of the nine months ended September 30, 2025 and September 30, 2024
Product revenues, net
Product revenues, net were $575.1 million for the nine months ended September 30, 2025 (the "2025 Period"), compared to $449.5 million for the nine months ended September 30, 2024 (the "2024 Period"). The $125.6 million increase is primarily due to increased revenue for Jornay PM of $95.0 million, Nucynta Products of $13.6 million, Xtampza ER of $10.8 million, Belbuca of $6.5 million, partially offset by decreased revenue for Symproic of $0.3 million.
The increase in revenue for Jornay PM of $95.0 million is due to the acquisition of the product from the Ironshore Acquisition in September 2024.
The increase in revenue for the Nucynta Products of $13.6 million is primarily due to lower gross-to-net adjustments related to provisions for rebates. In addition, revenue increased due to lower gross-to-net adjustments related to returns as well as higher gross price. These increases were partially offset by lower sales volume.
The increase in revenue for Xtampza ER of $10.8 million is primarily due to lower gross-to-net adjustments related to provisions for rebates, including the recognition of $3.2 million related to certain rebate settlements during the period. In addition, revenue increased due to higher gross price partially offset by lower sales volume.
The increase in revenue for Belbuca of $6.5 million is primarily due to lower gross-to-net adjustments related to provisions for rebates and higher gross price, partially offset by higher gross-to-net adjustments related to provisions for chargebacks and lower sales volume.
Cost of product revenues
Cost of product revenues (excluding intangible asset amortization) was $73.8 million for the 2025 Period, compared to $60.6 million for the 2024 Period. The $13.2 million increase was primarily due to the 2025 Period including cost of product revenues from Jornay PM, which was acquired in September 2024 and included an additional $4.1 million related to the step-up basis in inventory. In addition, cost of product revenues increased due to the 2025 Period including $3.1 million of royalty expense related to the Company's license agreement with Grünenthal that is subject to future recovery, partially offset by lower current period royalty expense.
Intangible asset amortization was $166.4 million for the 2025 Period, compared to $109.8 million for the 2024 Period. The $56.6 million increase was due to the 2025 Period including a full quarter of amortization from the intangible asset acquired in the Ironshore Acquisition in September 2024.
Operating Expenses
Selling, general and administrative expenses were $217.2 million for the 2025 Period, compared to $147.3 million for the 2024 Period. The $69.9 million increase was primarily related to:
| ● | an increase in salaries, wages and benefits of $42.2 million, primarily due to additional headcount added as a result of the Ironshore Acquisition in September 2024, including the sales force that promotes Jornay PM, as well as expenses incurred as a result of certain executive transitions announced in the 2025 Period, including stock-based compensation expenses of $2.6 million related to accelerated equity awards and severance, benefits, and related expenses incurred of $1.4 million; |
| ● | an increase in sales and marketing expenses of $34.7 million, primarily due to expenses incurred to support the ongoing commercialization of Jornay PM following the Ironshore Acquisition in September 2024; |
| ● | an increase in audit and legal fees of $3.9 million, primarily due to expenses related to litigation and increased accounting and tax expenses; |
| ● | an increase in regulatory expenses of $2.7 million due to increased Prescription Drug User Fee Act ("PDUFA") fees and post-marketing expenses related to the addition of Jornay PM; partially offset by |
| ● | a decrease in acquisition related expenses of $16.1 million due to the Ironshore Acquisition in September 2024. |
Gain on fair value remeasurement of contingent consideration was $1.2 million in the 2025 Period, compared to none in the 2024 Period. The $1.2 million increase was due to the revaluation of the contingent consideration associated with the Ironshore Acquisition.
Interest expense and Interest income
Interest expense was $63.0 million for the 2025 Period, compared to $51.3 million for the 2024 Period. The $11.7 million increase was primarily due to higher interest expense of $9.3 million related to the deferred royalty obligation that was assumed as part of the Ironshore Acquisition in September 2024. In addition, interest expense from term loans increased due to an overall higher principal balance in the 2025 Period compared to the 2024 Period, partially offset by lower interest rates following the refinancing of our term loan in the third quarter of 2024.
Interest income was $7.7 million for the 2025 Period, compared to $12.2 million for the 2024 Period. The $4.5 million decrease was primarily due to lower interest rates earned on cash equivalents and marketable securities as well as a lower overall balance invested in the 2025 Period compared to the 2024 Period.
Loss on extinguishment of debt
There was no loss on extinguishment of debt in the 2025 Period, compared to $11.3 million in the 2024 Period. The $11.3 million decrease was due to the 2024 Period including, the remaining $26.4 million of convertible notes due in 2026 were redeemed, resulting in a $7.2 million loss on extinguishment as well as assumed debt from the Ironshore Acquisition was extinguished, resulting in a loss on extinguishment of $4.1 million in the 2024 Period.
Taxes
The provision for income taxes was $17.7 million for the 2025 Period, compared to $24.6 million for the 2024 Period. The $6.9 million decrease is primarily due to lower earnings before taxes in the 2025 Period compared to the 2024 Period, as well as the impact of discrete nondeductible costs associated with debt extinguishment in the 2024 Period. The effective tax rate was 27.8% and 30.3% in the 2025 Period and 2024 Period, respectively.
Liquidity and Capital Resources
Sources of Liquidity
Historically, we have funded our operations primarily through private placements and/or public offerings of our preferred stock, common stock, and convertible notes; term loan debt; and cash inflows from sales of our products. We are primarily dependent on the commercial success of Jornay PM, Belbuca, Xtampza ER, and the Nucynta Products.
In July 2024, we amended and replaced our existing term loan with a $645.8 million secured term loan (the "2024 Term Loan"), consisting of a $320.8 million initial term loan and a $325.0 million delayed draw term loan. We used the proceeds of the initial term loan to refinance in full all outstanding indebtedness under our prior term loan. We used the proceeds of the delayed draw term loan to fund a portion of the consideration to complete the Ironshore Acquisition and, pay fees and expenses in connection with the Ironshore Acquisition and the 2024 Term Loan. We will use the remainder for general corporate purposes. As of September 30, 2025, the outstanding principal balance of the 2024 Term Loan was $581.3 million. The 2024 Term Loan is scheduled to mature on July 28, 2029 (provided, however, that if the aggregate principal amount outstanding under the 2029 Convertibles Notes is more than $50.0 million as of November 18, 2028, then the 2024 Term Loan will mature on November 18, 2028). We are required to pay the principal balance under the 2024 Term Loan in equal quarterly installments of $16.1 million with a $387.5 million final payment due at maturity.
As of September 30, 2025, the outstanding principal balance of the 2029 Convertible Notes was $241.5 million. The $241.5 million principal balance is due in 2029.
As of September 30, 2025, we had $285.9 million in cash, cash equivalents, and marketable securities. We believe that our cash, cash equivalents, and marketable securitiesas of September 30, 2025, together with expected cash inflows from operations, will enable us to fund our operating expenses, debt service, and capital expenditure requirements under our current business plan for the foreseeable future.
Borrowing Arrangements
The following transactions represent our material borrowing arrangements: the 2024 Term Loan and the 2029 Convertible Notes. Refer to Note 11, Term Notes Payable, and Note 12, Convertible Senior Notes, for more information.
Cash Flows
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Nine Months Ended September 30, |
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2025 |
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2024 |
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(in thousands) |
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Net cash provided by operating activities |
$ |
206,275 |
$ |
120,336 |
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|
Net cash used in investing activities |
(43,463) |
|
(275,997) |
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Net cash used in financing activities |
(88,424) |
|
(19,326) |
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Net increase (decrease) in cash, cash equivalents and restricted cash |
$ |
74,388 |
|
$ |
(174,987) |
Operating activities. Cash provided by operating activities was $206.3 million for the 2025 Period, compared to $120.3 million for the 2024 Period. The $86.0 million increase was primarily due to the increase in cash flow from operating results after adjustment for non-cash items that are included in net income as well as due to changes in working capital, which were significantly impacted by the payment of assumed liabilities from Ironshore in the 2024 Period.
Investing activities. Cash used in investing activities was $43.5 million for the 2025 Period, compared to $276.0 million for the 2024 Period. The $232.5 million decrease was primarily due to the 2024 Period including $267.5 million of cash used for the Ironshore Acquisition in September 2024, partially offset by a $35.0 million increase in cash used in investing in marketable securities.
Financing activities. Cash used in financing activities was $88.4 million for the 2025 Period, compared to $19.3 million in the 2024 Period. The $69.1 million increase was primarily due to:
| ● | the 2024 Period including $313.2 million of proceeds from the term note modification that occurred in the 2024 Period; partially offset by |
| ● | the 2024 Period including the repayment of assumed debt from the Ironshore Acquisition of $164.6 million; |
| ● | lower repayments of term notes of $43.2 million; and |
| ● | the 2024 Period including the redemption of our 2026 Convertible Notes of $33.2 million. |
Funding Requirements and Outlook
We believe that our cash, cash equivalents, and marketable securities as of September 30, 2025, together with expected cash inflows from operations, will enable us to fund our operating expenses, debt service, and capital expenditure requirements under our current business plan for the foreseeable future. However, we are subject to all the risks common to the commercialization and development of new pharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.
We have significant future capital requirements, including:
| ● | expected operating expenses to manufacture and commercialize our products and to operate our organization; |
| ● | repayment of outstanding principal amounts and interest in connection with our 2024 Term Loan and 2029 Convertible Notes; |
| ● | royalties we pay on sales of certain products within our portfolio; |
| ● | operating lease obligations; |
| ● | minimum purchase obligations in connection with our contract manufacturer; |
| ● | cash paid for income taxes; |
| ● | deferred royalty obligation in connection with Jornay PM; and |
| ● | contingent payment upon the achievement of a financial milestone based on net revenues of Jornay PM. |
In addition, we have significant potential future capital requirements, including:
| ● | we may enter into business development transactions, including acquisitions, collaborations, licensing arrangements and equity investments, that require additional capital; |
| ● | any judgments rendered against us in connection with any of the litigation matters set forth in Note 16, Commitments and Contingencies, to our financial statements; and |
| ● | in July 2025, our Board of Directors authorized a new share repurchase program for the repurchase of up to $150.0 million of shares of our common stock through December 31, 2026. Future share repurchases will depend upon, among other factors, our cash balances and potential future capital requirements, our results of operations and financial conditions, the price of our common stock on the NASDAQ Global Select Market, and other factors that we may deem relevant. |
Additional Information
To supplement our financial results presented on a GAAP basis, we have included information about certain non-GAAP financial measures. We believe the presentation of these non-GAAP financial measures, when viewed with our results under GAAP and the accompanying reconciliations, provide analysts, investors, lenders, and other third parties with insights into how we evaluate normal operational activities, including our ability to generate cash from operations, on a comparable year-over-year basis and manage our budgeting and forecasting. In addition, certain non-GAAP financial measures, primarily adjusted EBITDA, are used to measure performance when determining components of annual compensation for substantially all non-sales force employees, including senior management.
We may discuss the following financial measures that are not calculated in accordance with GAAP in our quarterly and annual reports, earnings press releases and conference calls.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that represents GAAP net income or loss 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 or loss, 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; |
| ● | 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 stock-based compensation expense from adjusted EBITDA although: (i) 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 (ii) 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; |
| ● | we exclude impairment expenses from adjusted EBITDA and, although these are non-cash expenses, the asset(s) being impaired may have to be replaced in the future, the cash requirements for which are not reflected in adjusted EBITDA; |
| ● | 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 and contingencies that are subject to recovery from adjusted EBITDA, as well as any applicable income items, credit adjustments, or recoveries 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, legal defense expenses for specific acquired claims that relate to acts that occurred prior to our acquisition, and miscellaneous other acquisition related expenses incurred; |
| ● | we exclude recognition of the step-up basis in inventory from acquisitions (i.e., the adjustment to record inventory from historic cost to fair value at acquisition) as the adjustment does not reflect the ongoing expense associated with sale of our products as part of our underlying business; |
| ● | we exclude losses on extinguishments of debt as these expenses are episodic in nature and do not directly correlate to the cost of operating our business on an ongoing basis; |
| ● | we exclude executive transition expenses from adjusted EBITDA as the amount and/or frequency of these expenses are episodic in nature and do not directly correlate to the cost of operating our business on an ongoing basis; and |
| ● | we exclude other expenses, from time to time, that are episodic in nature and do not directly correlate to the cost of operating our business on an ongoing basis. |
Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024 was as follows:
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2025 |
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2024 |
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2025 |
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2024 |
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(in thousands) |
||||||||||
|
GAAP net income |
|
$ |
31,507 |
|
$ |
9,335 |
|
$ |
45,907 |
|
$ |
56,654 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
21,767 |
|
|
18,394 |
|
|
63,020 |
|
|
51,320 |
|
Interest income |
|
|
(3,116) |
|
|
(3,280) |
|
|
(7,724) |
|
|
(12,164) |
|
Loss on extinguishment of debt |
|
|
- |
|
|
4,145 |
|
|
- |
|
|
11,329 |
|
Provision for income taxes |
|
|
11,929 |
|
|
6,245 |
|
|
17,676 |
|
|
24,645 |
|
Depreciation |
|
|
1,033 |
|
|
946 |
|
|
3,259 |
|
|
2,815 |
|
Amortization |
|
|
55,473 |
|
|
40,801 |
|
|
166,419 |
|
|
109,833 |
|
Stock-based compensation |
|
|
9,811 |
|
|
7,317 |
|
|
32,153 |
|
|
24,804 |
|
Litigation settlements and contingencies |
|
|
3,058 |
|
|
- |
|
|
3,058 |
|
|
- |
|
Recognition of step-up basis in inventory |
|
|
- |
|
|
1,301 |
|
|
5,431 |
|
|
1,301 |
|
Executive transition expense |
|
|
- |
|
|
- |
|
|
1,397 |
|
|
3,051 |
|
Acquisition related expenses |
|
|
1,552 |
|
|
19,886 |
|
|
3,776 |
|
|
19,886 |
|
Gain on fair value remeasurement of contingent consideration |
|
|
(19) |
|
|
- |
|
|
(1,163) |
|
|
- |
|
Total adjustments |
|
$ |
101,488 |
|
$ |
95,755 |
|
$ |
287,302 |
|
$ |
236,820 |
|
Adjusted EBITDA |
|
$ |
132,995 |
|
$ |
105,090 |
|
$ |
333,209 |
|
$ |
293,474 |
Adjusted EBITDA was $133.0 million for the 2025 Quarter compared to $105.1 million for the 2024 Quarter. The $27.9 million increase was primarily due to higher product revenues of $50.1 million, partially offset by higher adjusted operating expenses of $20.9 million and higher cost of product revenues (excluding intangible asset amortization, recognition of step-up basis inventory, and contingencies) of $1.2 million.
Adjusted EBITDA was $333.2 million for the 2025 Period compared to $293.5 million for the 2024 Period. The $39.7 million increase was primarily due to higher product revenues of $125.6 million, partially offset by higher adjusted operating expenses of $80.3 million and higher cost of product revenues (excluding intangible asset amortization, recognition of step-up basis inventory, and contingencies) of $6.0 million.
Adjusted Operating Expenses
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.
Adjusted operating expenses for the three and nine months ended September 30, 2025 and 2024 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
|
September 30, |
|
September 30, |
||||||||
|
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||
|
|
|
(in thousands) |
||||||||||
|
GAAP operating expenses |
|
$ |
67,084 |
|
$ |
61,955 |
|
$ |
216,000 |
|
$ |
147,272 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
9,811 |
|
|
7,317 |
|
|
32,153 |
|
|
24,804 |
|
Executive transition expense |
|
|
- |
|
|
- |
|
|
1,397 |
|
|
3,051 |
|
Acquisition related expenses |
|
|
1,552 |
|
|
19,886 |
|
|
3,776 |
|
|
19,886 |
|
Gain on fair value remeasurement of contingent consideration |
|
|
(19) |
|
|
- |
|
|
(1,163) |
|
|
- |
|
Total adjustments |
|
$ |
11,344 |
|
$ |
27,203 |
|
$ |
36,163 |
|
$ |
47,741 |
|
Adjusted operating expenses |
|
$ |
55,740 |
|
$ |
34,752 |
|
$ |
179,837 |
|
$ |
99,531 |
Adjusted operating expenses were $55.7 million in the 2025 Quarter compared to $34.8 million in the 2024 Quarter. The $20.9 million increase was primarily driven by:
| ● | an increase in salaries, wages, and benefits (excluding stock-based compensation and executive transition expense) of $10.6 million, primarily due to additional headcount added as a result of the Ironshore Acquisition; and |
| ● | an increase in sales and marketing expenses of $8.2 million, primarily due to expenses incurred to support the ongoing commercialization of Jornay PM following the Ironshore Acquisition in September 2024, |
Adjusted operating expenses were $179.8 million in the 2025 Period compared to $99.5 million in the 2024 Period. The $80.3 million increase was primarily driven by:
| ● | an increase in salaries, wages, and benefits (excluding stock-based compensation and executive transition expense) of $36.5 million, primarily due to additional headcount added as a result of the Ironshore Acquisition; |
| ● | an increase in sales and marketing expenses of $34.7 million, primarily due to expenses incurred to support the ongoing commercialization of Jornay PM following the Ironshore Acquisition in September 2024; |
| ● | an increase in audit and legal fees of $3.9 million, primarily due to expenses related to litigation and increased accounting and tax expenses; and |
| ● | an increase in regulatory expenses of $2.7 million due to increased PDUFA fees and post-marketing expenses related to the addition of Jornay PM. |
Adjusted Net Income and Adjusted Earnings Per Share
Adjusted net income is a non-GAAP financial measure that represents GAAP net income or loss adjusted to exclude significant income and expense items that are non-cash or not indicative of ongoing operations, including consideration of the tax effect of the adjustments. Adjusted earnings per share is a non-GAAP financial measure that represents adjusted net income per share. Adjusted weighted-average shares - diluted is calculated in accordance with the treasury stock, if-converted, or contingently issuable accounting methods, depending on the nature of the security.
Adjusted net income and adjusted earnings per share for the three and nine months ended September 30, 2025 and 2024 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||
|
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||
|
|
|
(in thousands, except share and per share data) |
||||||||||
|
GAAP net income |
|
$ |
31,507 |
|
$ |
9,335 |
|
$ |
45,907 |
|
$ |
56,654 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash interest expense |
|
|
1,343 |
|
|
1,681 |
|
|
4,065 |
|
|
5,065 |
|
Loss on extinguishment of debt |
|
|
- |
|
|
4,145 |
|
|
- |
|
|
11,329 |
|
Amortization |
|
|
55,473 |
|
|
40,801 |
|
|
166,419 |
|
|
109,833 |
|
Stock-based compensation |
|
|
9,811 |
|
|
7,317 |
|
|
32,153 |
|
|
24,804 |
|
Litigation settlements and contingencies |
|
|
3,058 |
|
|
- |
|
|
3,058 |
|
|
- |
|
Recognition of step-up basis in inventory |
|
|
- |
|
|
1,301 |
|
|
5,431 |
|
|
1,301 |
|
Executive transition expense |
|
|
- |
|
|
- |
|
|
1,397 |
|
|
3,051 |
|
Acquisition related expenses |
|
|
1,552 |
|
|
19,886 |
|
|
3,776 |
|
|
19,886 |
|
Gain on fair value remeasurement of contingent consideration |
|
|
(19) |
|
|
- |
|
|
(1,163) |
|
|
- |
|
Income tax effect of above adjustments (1) |
|
|
(15,453) |
|
|
(20,974) |
|
|
(52,061) |
|
|
(45,635) |
|
Total adjustments |
|
$ |
55,765 |
|
$ |
54,157 |
|
$ |
163,075 |
|
$ |
129,634 |
|
Non-GAAP adjusted net income |
|
$ |
87,272 |
|
$ |
63,492 |
|
$ |
208,982 |
|
$ |
186,288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted weighted-average shares - diluted (2) |
|
|
39,439,890 |
|
|
40,163,266 |
|
|
39,386,071 |
|
|
40,400,483 |
|
Adjusted earnings per share (2) |
|
$ |
2.25 |
|
$ |
1.61 |
|
$ |
5.41 |
|
$ |
4.71 |
| (1) | The income tax effect of the adjustments was calculated by applying our blended federal and state statutory rate to the items that have a tax effect. The blended federal and state statutory rate for the three months ended September 30, 2025 and 2024 were 21.8% and 28.1%, respectively; and the blended federal and state statutory rate for the nine months ended September 30, 2025 and 2024 were 24.5% and 27.1%, respectively. As such, the non-GAAP effective tax rates for the three months ended September 30, 2025 and 2024 were 21.7% and 27.9%, respectively; and the non-GAAP effective tax rates for the nine months ended September 30, 2025 and 2024 were 24.2% and 26.0%, respectively. |
| (2) | Adjusted weighted-average shares - diluted were calculated using the "if-converted" method for our convertible notes in accordance with ASC 260, Earnings per Share. As such, adjusted weighted-average shares - diluted includes shares related to the assumed conversion of our convertible notes and the associated cash interest expense is added-back to non-GAAP adjusted net income. For the three and nine months ended September 30, 2025 and 2024, adjusted weighted-average shares - diluted includes 6,606,305 shares attributable to our convertible notes. In addition, adjusted earnings per share includes other potentially dilutive securities to the extent that they are not antidilutive. |
Contractual Obligations
There have been no material changes to the contractual obligations and commitments described under Management's Discussion and Analysis of Financial Condition and Results of Operations from our most recently filed Annual Report.
Collegium Pharmaceutical Inc. published this content on November 06, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 06, 2025 at 12:36 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]