Executive Summary / Key Takeaways

• Collegium Pharmaceutical is successfully executing a strategic pivot, leveraging its durable, cash-generating pain management portfolio to fund expansion into the high-growth neuropsychiatry market via the acquisition of Jornay PM.
• Jornay PM, a differentiated ADHD treatment with unique evening dosing technology, is rapidly becoming the company's lead growth driver, demonstrating strong prescription and revenue growth since its acquisition in September 2024.
• The established pain portfolio, including Belbuca, Xtampza ER, and the Nucynta franchise, continues to provide a robust financial foundation through consistent revenue, favorable gross-to-net dynamics, and extended exclusivities, generating significant operating cash flow.
• Collegium maintains a strong financial position, marked by substantial cash generation, disciplined debt management (targeting net leverage below 1x by year-end 2025), and a commitment to returning value through share repurchases.
• The company's 2025 guidance reflects confidence in continued double-digit top- and bottom-line growth, driven by targeted investments in Jornay PM and the underlying strength of the pain business, positioning Collegium for sustained profitability and value creation.

A Strategic Evolution: From Pain Leadership to Diversified Growth

Collegium Pharmaceutical, Inc., founded with the ambition to lead in responsible pain management, has strategically evolved into a diversified biopharmaceutical company. Its journey began with a focus on developing differentiated pain therapies, culminating in the commercialization of products like Xtampza ER, Belbuca, and the Nucynta franchise. This portfolio, built through organic development and strategic acquisitions like BioDelivery Sciences International (BDSI), established Collegium as a significant player in the pain market, known for products incorporating abuse-deterrent technologies and unique formulations.

The company's narrative entered a new chapter with the acquisition of Ironshore Therapeutics in September 2024. This pivotal move signaled a deliberate expansion beyond pain into the neuropsychiatry market with Jornay PM, a treatment for ADHD. This diversification leverages Collegium's commercial expertise while establishing a presence in a large and growing therapeutic area, positioning Jornay PM as the cornerstone of the company's next phase of growth.

The Enduring Strength of the Pain Portfolio

The pain management portfolio remains the bedrock of Collegium's financial strength, generating substantial and durable cash flows that underpin the company's strategic initiatives. In the first quarter of 2025, this segment contributed $149.2 million in net revenue, representing a 3% increase year-over-year. This growth, while modest compared to the new ADHD segment, reflects the portfolio's stability and the effectiveness of the company's commercial and payer strategies.

Key contributors within the pain portfolio include:

• Belbuca: This buccal film formulation of buprenorphine generated $51.7 million in Q1 2025 revenue, up 2% year-over-year. As the only long-acting opioid utilizing buprenorphine buccal film technology, it holds a differentiated position, viewed favorably by healthcare professionals and demonstrating consistent prescription growth trends. Its exclusivity is projected through January 2027.
• Xtampza ER: An abuse-deterrent oral oxycodone formulation, Xtampza ER delivered $47.6 million in Q1 2025 revenue, a 4% increase year-over-year. Its revenue growth has been significantly influenced by favorable gross-to-net adjustments and higher gross prices, alongside successful payer strategy execution. Xtampza ER's proprietary DETERx technology provides superior abuse-deterrent properties, differentiating it within the market and contributing to its all-time high share of the OxyContin extended-release market (38.1% in Q3 2024). Exclusivity extends to September 2033.
• Nucynta Products (ER and IR): These tapentadol formulations contributed $47.1 million in Q1 2025 revenue, up 4% year-over-year. Despite a year-over-year decline in 2024 due to the elimination of the Medicaid cap, the franchise is expected to return to relative stability in 2025, bolstered by recent pediatric exclusivity extensions that push exclusivity for Nucynta ER to July 2027 and Nucynta IR to January 2027, as well as an authorized generic agreement with Hikma.

Management believes the pain portfolio's revenue stream is longer and more robust than currently appreciated by the market, providing a strong, ongoing source of profitability and cash generation.

Jornay PM: The Catalyst for Accelerated Growth

The acquisition of Jornay PM marks a transformative step for Collegium, establishing a significant presence in the ADHD market and introducing a product poised to become the company's primary growth engine. Jornay PM, a methylphenidate HCl stimulant, is uniquely differentiated by its evening dosing, designed to provide symptom control from morning awakening through the day, potentially reducing the need for supplemental daytime dosing. This feature is highly valued by healthcare professionals and caregivers, contributing to Jornay's high rankings in market research for all-day control and evening symptom management.

In its second full quarter under Collegium's ownership, Jornay PM generated $28.5 million in net revenue in Q1 2025, driving the majority of the company's overall 23% year-over-year revenue growth. Prescription growth for Jornay PM was a robust 24% year-over-year in Q1 2025, and its market share in the long-acting branded methylphenidate segment reached 20.3%, up 6.4% year-over-year. The product benefits from strong market access, with 80% coverage across commercial and Medicaid segments.

Collegium is making targeted investments to accelerate Jornay's growth, including expanding its dedicated ADHD sales force from approximately 125 to 180 representatives, increasing coverage to approximately 21,000 prescribers. Complementary digital marketing and social media initiatives are aimed at raising awareness among patients and caregivers to drive demand. While the full impact of these investments is expected in 2026 and beyond, they are anticipated to support significant growth in the near term.

Technological Differentiation and Competitive Landscape

Collegium's competitive positioning is significantly shaped by its differentiated product technologies, particularly in the pain market.

• DETERx Technology (Xtampza ER): This proprietary abuse-deterrent technology is designed to make the oxycodone formulation resistant to common methods of abuse like crushing for nasal insufflation or dissolving for injection. While precise, publicly available quantitative comparisons of abuse deterrence metrics against all competitors are not readily available, the company's FDA-approved labeling and market positioning emphasize these properties as a key differentiator, particularly against generic oxycodone products offered by competitors like Teva Pharmaceutical (TEVA) or legacy branded products like Purdue's OxyContin. This technological edge supports Xtampza ER's premium pricing and market share gains in the branded ER oxycodone segment.
• Buccal Film Technology (Belbuca): The unique buccal film delivery system for buprenorphine offers a distinct administration route and pharmacokinetic profile compared to oral or transdermal opioids. This technology contributes to Belbuca's ranking as a highly differentiated and favored branded ER opioid. Against competitors offering traditional oral or patch formulations, the buccal film provides a unique value proposition for patients and prescribers.
• Evening Dosing Technology (Jornay PM): Jornay PM's delayed-release and extended-release formulation allows for evening administration, providing symptom control upon waking. This contrasts with most stimulant ADHD medications that require morning dosing, sometimes necessitating additional doses later in the day. This technological feature is a primary driver of Jornay's differentiation and market favorability against other branded and generic methylphenidate products.

In the broader competitive landscape, Collegium operates alongside larger, more diversified pharmaceutical companies like Johnson & Johnson (JNJ) and Pfizer (PFE), as well as specialty and generic players like Teva and Endo International (ENDO). While these larger competitors possess greater R&D capabilities, financial resources, and broader portfolios, Collegium focuses on leveraging its technological advantages and commercial execution in specific market segments.

Financially, Collegium's profitability margins, particularly its gross margin (57.69% TTM), compare favorably to some competitors like Teva (49% TTM), although they may trail larger, more diversified players like JNJ (69% TTM) or Pfizer (74% TTM) with different product mixes. Collegium's growth trajectory, boosted by Jornay, is currently higher than the more stable growth rates of established large-cap pharma. However, Collegium carries a higher debt-to-equity ratio (3.60 TTM) compared to less leveraged companies like JNJ (0.51 TTM) or Pfizer (0.72 TTM), reflecting its acquisition strategy. Its focus on differentiated products and targeted commercial efforts allows it to compete effectively in its chosen niches despite the scale advantages of larger rivals.

Financial Strength and Disciplined Capital Deployment

Collegium's ability to generate robust operating cash flow provides a strong financial foundation for its growth strategy. In Q1 2025, the company generated $55.4 million in cash from operations, contributing to a cash, cash equivalents, and marketable securities balance of $197.8 million as of March 31, 2025.

The company actively manages its capital structure. In July 2024, it secured a $645.8 million secured term loan, partially used to refinance existing debt at a lower interest rate (300 basis points reduction on the refinanced portion) and fund a portion of the Ironshore acquisition. This new facility offers longer terms, lower amortization, and greater prepayment flexibility. Collegium is committed to rapid debt reduction, having repaid $16.1 million of the term loan principal in Q1 2025 and planning an additional $48.4 million in repayments during the remainder of 2025. This focus is expected to reduce net leverage from 1.5x net debt to EBITDA at the end of Q1 2025 to less than 1x by the end of 2025.

In addition to funding growth investments and reducing debt, Collegium is returning value to shareholders through share repurchases. The company authorized a $150 million share repurchase program in January 2024, having repurchased $60 million through March 31, 2025. In May 2025, the Board authorized a $25 million accelerated share repurchase program as part of this initiative.

The capital deployment strategy prioritizes disciplined business development, focusing on commercial assets that can add meaningful near-term revenue, particularly in areas adjacent to neuropsychiatry, while also considering capital-efficient opportunities like rare diseases.

Outlook and Guidance

Collegium has reaffirmed its full-year 2025 financial guidance, signaling confidence in its growth trajectory. The company expects:

• Net product revenues in the range of $735 million to $750 million, representing an 18% increase year-over-year.
• Jornay PM net revenue in excess of $135 million, reflecting at least 34% annual growth from its 2024 pro forma revenue.
• Adjusted EBITDA in the range of $435 million to $450 million, representing 10% growth year-over-year.
• Adjusted Operating Expenses in the range of $220 million to $230 million, with quarterly expenses expected to trend down in the second half of the year.

This guidance is predicated on the continued strong performance of the pain portfolio and the accelerated growth of Jornay PM, fueled by targeted investments. The company anticipates adjusted EBITDA margin improvement beginning in 2026 as the full impact of Jornay investments is realized.

Risks and Challenges

Despite the positive outlook, Collegium faces inherent risks common to the pharmaceutical industry. These include ongoing intellectual property litigation related to its key products, potential regulatory actions (such as changes to REMS programs, labeling requirements, or DEA quotas for controlled substances), and supply chain dependencies on third-party manufacturers and API suppliers. Competition from generic entrants and the development of new non-opioid pain therapies could impact market share and pricing power. Furthermore, macroeconomic conditions and geopolitical factors could affect demand and operational stability. The successful integration of acquired businesses, particularly Ironshore, and the realization of anticipated synergies also pose execution risks.

Conclusion

Collegium Pharmaceutical is executing a clear and compelling strategy to evolve beyond its foundation in pain management. By leveraging the durable, cash-generating power of its differentiated pain portfolio, the company is making significant investments to establish Jornay PM as a leading growth driver in the neuropsychiatry market. The strong performance in Q1 2025, coupled with reaffirmed double-digit growth guidance for the full year, underscores the momentum behind this strategic pivot. With a robust balance sheet, disciplined capital allocation focused on growth, debt reduction, and shareholder returns, and a portfolio of differentiated products supported by proprietary technologies, Collegium appears well-positioned to deliver on its mission and create long-term value for investors as it enters this new phase of diversified growth.