Collegium Reports Record Third Quarter 2024 Financial Results
COLL 11.07.2024
Drug:unknown Belbuca
Drug:unknown Xtampza ER
Diseases:ADHD
Date of Upcoming Event:2024-09-01
Name of Upcoming Event:PAINWeek Conference 2024
Date of Upcoming Event:2024-09-01
Name of Upcoming Event:American Academy of Child and Adolescent Psychiatry (AACAP) 2024 Annual Meeting
Date of Upcoming Event:2024-09-01
Name of Upcoming Event:Canadian ADHD Resource Alliance (CADDRA) 2024 ADHD Conference
Date of Upcoming Event:2024-09-01
Name of Upcoming Event:2024 Psych Congress
About Gravity Analytica
– Generated Record Q3’24 Net Revenue of
– Achieved Q3’24 GAAP Net Income of
– Delivered Record Q3’24 Adjusted EBITDA of
– Closed Acquisition of Ironshore Therapeutics, Establishing Presence in Neurology (ADHD) –
– Appointed
– Conference Call Scheduled for Today at
“Collegium’s strong operational execution led to record quarterly pain portfolio revenue, with 11% year-over-year growth, and enabled our recent acquisition of
“Collegium continues to deliver on our commitment to top- and bottom- line growth, and we are on track to achieve our financial guidance for the year. The performance of our pain portfolio this quarter, including record Belbuca and Xtampza ER revenue, coupled with the immediate accretion from Jornay PM, which is expected to deliver pro forma net revenue in excess of
Business Highlights
- In
September 2024 , announced the closing of the acquisition ofIronshore Therapeutics Inc. (Ironshore ), which included commercial product Jornay PM for the treatment of ADHD, establishing a presence in neurology. Jornay PM is poised to become Collegium’s lead growth driver. - Jornay PM prescriptions grew 31.2% year-over-year in the nine months ended
September 30, 2024 . - Grew Belbuca total prescriptions 3.5% year-over-year and 2.6% quarter-over-quarter in the quarter ended
September 30, 2024 . Belbuca net revenue was a record$53.2 million , up 17% year-over-year. - Xtampza ER net revenue was a record
$49.5 million , up 24% year-over-year. - Achieved a new payor win for Belbuca and Xtampza ER in a large integrated health system that represents approximately eight million commercial lives and two million Medicare Part D lives.
- Presented eight posters at
PAINWeek Conference 2024 highlighting clinical and population health impact of Collegium’s differentiated pain portfolio. - Presented a poster on Jornay PM at
American Academy of Child and Adolescent Psychiatry (AACAP) 2024 Annual Meeting and Canadian ADHD Resource Alliance (CADDRA) 2024ADHD Conference and had commercial and medical presence at 2024Psych Congress . - In
November 2024 , announced thatVikram Karnani has been appointed President and Chief Executive Officer of Collegium and will join its Board of Directors effectiveNovember 12, 2024 .
Financial Guidance for 2024
The Company reaffirms its full-year 2024 guidance as updated in
| Product Revenues, Net | to |
| Adjusted Operating Expenses(Excluding Stock-Based Compensation) | to |
| Adjusted EBITDA(Excluding Stock-Based Compensation) | to |
Financial Results for Quarter Ended
- Product revenues, net were
$159.3 million for the quarter endedSeptember 30, 2024 (the 2024 Quarter), compared to$136.7 million for the quarter endedSeptember 30, 2023 (the 2023 Quarter), representing a 17% increase year-over-year. - GAAP operating expenses were
$62.0 million for the 2024 Quarter, compared to$35.3 million for the 2023 Quarter, representing a 76% increase year-over-year. Adjusted operating expenses, which exclude stock-based compensation and acquisition related expenses, were$34.8 million for the 2024 Quarter, compared to$28.3 million for the 2023 Quarter, representing a 23% increase year-over-year. - GAAP net income for the 2024 Quarter was
$9.3 million , with$0.29 GAAP earnings per share (basic) and$0.27 GAAP earnings per share (diluted), compared to GAAP net income for the 2023 Quarter of$20.6 million , with$0.61 GAAP earnings per share (basic) and$0.53 GAAP earnings per share (diluted). Non-GAAP adjusted net income for the 2024 Quarter was$63.5 million , with$1.61 adjusted earnings per share, compared to non-GAAP adjusted net income for the 2023 Quarter of$55.0 million , with$1.34 adjusted earnings per share. - Adjusted EBITDA for the 2024 Quarter was
$105.1 million , compared to$89.4 million for the 2023 Quarter, representing an 18% increase year-over-year. - The Company exited the 2024 Quarter with cash, cash equivalents and marketable securities of
$120.0 million , down from$310.5 million as ofDecember 31, 2023 .
Conference Call Information
The Company will host a conference call and live audio webcast on
About
Collegium is a leading, diversified specialty pharmaceutical company committed to improving the lives of people living with serious medical conditions. Collegium’s headquarters are located in Stoughton,
Non-GAAP Financial Measures
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 from adjusted EBITDA, as well as any applicable income items or credit adjustments 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, 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; 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 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 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.
Reconciliations of adjusted EBITDA, adjusted operating expenses, adjusted net income, and adjusted earnings per share to the most directly comparable GAAP financial measures are included in this press release.
The Company has not provided a reconciliation of its full-year 2024 guidance for adjusted EBITDA or adjusted operating expenses to the most directly comparable forward-looking GAAP measures, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, because the Company is unable to predict, without unreasonable efforts, the timing and amount of items that would be included in such a reconciliation, including, but not limited to, stock-based compensation expense, acquisition related expense and litigation settlements. These items are uncertain and depend on various factors that are outside of the Company’s control or cannot be reasonably predicted. While the Company is unable to address the probable significance of these items, they could have a material impact on GAAP net income and operating expenses for the guidance period. A reconciliation of adjusted EBITDA or adjusted operating expenses would imply a degree of precision and certainty as to these future items that does not exist and could be confusing to investors.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. We may, in some cases, use terms such as "predicts," "forecasts," "believes," "potential," "proposed," "continue," "estimates," "anticipates," "expects," "plans," "intends," "may," "could," "might," "should" or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Examples of forward-looking statements contained in this press release include, among others, statements related to our full-year 2024 financial guidance, including projected product revenue, adjusted operating expenses and adjusted EBITDA, current and future market opportunities for our products and our assumptions related thereto, expectations (financial or otherwise) and intentions, and other statements that are not historical facts. Such statements are subject to numerous important factors, risks and uncertainties that may cause actual events or results, performance, or achievements to differ materially from the company's current expectations, including risks relating to, among others: unknown liabilities; risks related to future opportunities and plans for our products, including uncertainty of the expected financial performance of such products; our ability to commercialize and grow sales of our products; our ability to successfully integrate the operations of
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Unaudited Selected Consolidated Balance Sheet Information(in thousands) | ||||||||
, | , | |||||||
| 2024 | 2023 | |||||||
| Cash and cash equivalents | $ | 38,960 | $ | 238,947 | ||||
| Marketable securities | 80,997 | 71,601 | ||||||
| Accounts receivable, net | 228,456 | 179,525 | ||||||
| Inventory | 38,032 | 32,332 | ||||||
| Prepaid expenses and other current assets | 32,365 | 15,195 | ||||||
| Property and equipment, net | 14,614 | 15,983 | ||||||
| Operating lease assets | 6,169 | 6,029 | ||||||
| Intangible assets, net | 946,875 | 421,708 | ||||||
| Restricted cash | 26,047 | 1,047 | ||||||
| Deferred tax assets | 72,509 | 26,259 | ||||||
| Other noncurrent assets | 4,171 | 825 | ||||||
| 145,959 | 133,857 | |||||||
| Total assets | $ | 1,635,154 | $ | 1,143,308 | ||||
| Accounts payable and accrued liabilities | 50,742 | 46,263 | ||||||
| Accrued rebates, returns and discounts | 313,874 | 227,331 | ||||||
| Business combination consideration payable | 28,956 | — | ||||||
| Term notes payable | 630,299 | 405,046 | ||||||
| Convertible senior notes | 236,911 | 262,125 | ||||||
| Operating lease liabilities | 7,185 | 7,112 | ||||||
| Deferred royalty obligation | 118,812 | — | ||||||
| Deferred revenue | 10,000 | — | ||||||
| Contingent consideration | 4,096 | — | ||||||
| Shareholders’ equity | 234,279 | 195,431 | ||||||
| Total liabilities and shareholders’ equity | $ | 1,635,154 | $ | 1,143,308 | ||||
Unaudited Condensed Statements of Operations(in thousands, except share and per share amounts) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Product revenues, net | $ | 159,301 | $ | 136,709 | $ | 449,500 | $ | 417,022 | |||||||
| Cost of product revenues | |||||||||||||||
| Cost of product revenues (excluding intangible asset amortization) | 21,706 | 20,081 | 60,611 | 74,237 | |||||||||||
| Intangible asset amortization | 40,801 | 36,317 | 109,833 | 111,246 | |||||||||||
| Total cost of product revenues | 62,507 | 56,398 | 170,444 | 185,483 | |||||||||||
| Gross profit | 96,794 | 80,311 | 279,056 | 231,539 | |||||||||||
| Operating expenses | |||||||||||||||
| Selling, general and administrative | 61,955 | 35,298 | 147,272 | 126,266 | |||||||||||
| Total operating expenses | 61,955 | 35,298 | 147,272 | 126,266 | |||||||||||
| Income from operations | 34,839 | 45,013 | 131,784 | 105,273 | |||||||||||
| Interest expense | (18,394 | ) | (20,768 | ) | (51,320 | ) | (64,058 | ) | |||||||
| Interest income | 3,280 | 4,538 | 12,164 | 11,312 | |||||||||||
| Loss on extinguishment of debt | (4,145 | ) | — | (11,329 | ) | (23,504 | ) | ||||||||
| Income before income taxes | 15,580 | 28,783 | 81,299 | 29,023 | |||||||||||
| Provision for income taxes | 6,245 | 8,149 | 24,645 | 12,808 | |||||||||||
| Net income | $ | 9,335 | $ | 20,634 | $ | 56,654 | $ | 16,215 | |||||||
| Earnings per share — basic | $ | 0.29 | $ | 0.61 | $ | 1.75 | $ | 0.47 | |||||||
| Weighted-average shares — basic | 32,259,468 | 33,744,209 | 32,339,401 | 34,226,488 | |||||||||||
| Earnings per share — diluted | $ | 0.27 | $ | 0.53 | $ | 1.51 | $ | 0.46 | |||||||
| Weighted-average shares — diluted | 40,163,266 | 42,058,821 | 40,400,483 | 35,149,154 | |||||||||||
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA(in thousands)(unaudited) | |||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| GAAP net income | $ | 9,335 | $ | 20,634 | $ | 56,654 | $ | 16,215 | |||||||||
| Adjustments: | |||||||||||||||||
| Interest expense | 18,394 | 20,768 | 51,320 | 64,058 | |||||||||||||
| Interest income | (3,280 | ) | (4,538 | ) | (12,164 | ) | (11,312 | ) | |||||||||
| Loss on extinguishment of debt | 4,145 | — | 11,329 | 23,504 | |||||||||||||
| Provision for income taxes | 6,245 | 8,149 | 24,645 | 12,808 | |||||||||||||
| Depreciation | 946 | 835 | 2,815 | 2,547 | |||||||||||||
| Amortization | 40,801 | 36,317 | 109,833 | 111,246 | |||||||||||||
| Stock-based compensation | 7,317 | 7,027 | 24,804 | 20,134 | |||||||||||||
| Litigation settlements | — | — | — | 8,500 | |||||||||||||
| Recognition of step-up basis in inventory | 1,301 | 198 | 1,301 | 15,116 | |||||||||||||
| CEO transition expense | — | — | 3,051 | — | |||||||||||||
| Acquisition related expenses | 19,886 | — | 19,886 | — | |||||||||||||
| Total adjustments | $ | 95,755 | $ | 68,756 | $ | 236,820 | $ | 246,601 | |||||||||
| Adjusted EBITDA | $ | 105,090 | $ | 89,390 | $ | 293,474 | $ | 262,816 | |||||||||
Reconciliation of GAAP Operating Expenses to Adjusted Operating Expenses(in thousands)(unaudited) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| GAAP operating expenses | $ | 61,955 | $ | 35,298 | $ | 147,272 | $ | 126,266 | |||||||
| Adjustments: | |||||||||||||||
| Stock-based compensation | 7,317 | 7,027 | 24,804 | 20,134 | |||||||||||
| Litigation settlements | — | — | — | 8,500 | |||||||||||
| CEO transition expense | — | — | 3,051 | — | |||||||||||
| Acquisition related expenses | 19,886 | — | 19,886 | — | |||||||||||
| Total adjustments | $ | 27,203 | $ | 7,027 | $ | 47,741 | $ | 28,634 | |||||||
| Adjusted operating expenses | $ | 34,752 | $ | 28,271 | $ | 99,531 | $ | 97,632 | |||||||
Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income and Adjusted Earnings Per Share(in thousands, except share and per share amounts)(unaudited) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| GAAP net income | $ | 9,335 | $ | 20,634 | $ | 56,654 | $ | 16,215 | |||||||
| Adjustments: | |||||||||||||||
| Non-cash interest expense | 1,681 | 2,124 | 5,065 | 6,672 | |||||||||||
| Loss on extinguishment of debt | 4,145 | — | 11,329 | 23,504 | |||||||||||
| Amortization | 40,801 | 36,317 | 109,833 | 111,246 | |||||||||||
| Stock-based compensation | 7,317 | 7,027 | 24,804 | 20,134 | |||||||||||
| Litigation settlements | — | — | — | 8,500 | |||||||||||
| Recognition of step-up basis in inventory | 1,301 | 198 | 1,301 | 15,116 | |||||||||||
| CEO transition expense | — | — | 3,051 | — | |||||||||||
| Acquisition related expenses | 19,886 | — | 19,886 | — | |||||||||||
| Income tax effect of above adjustments(1) | (20,974 | ) | (11,300 | ) | (45,635 | ) | (42,274 | ) | |||||||
| Total adjustments | $ | 54,157 | $ | 34,366 | $ | 129,634 | $ | 142,898 | |||||||
| Non-GAAP adjusted net income | $ | 63,492 | $ | 55,000 | $ | 186,288 | $ | 159,113 | |||||||
| Adjusted weighted-average shares — diluted(2) | 40,163,266 | 42,058,820 | 40,400,483 | 41,679,546 | |||||||||||
| Adjusted earnings per share(2) | $ | 1.61 | $ | 1.34 | $ | 4.71 | $ | 3.91 | |||||||
| (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 | |
| (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 added-back to non-GAAP adjusted net income. For the three months ended |
Source: Collegium Pharmaceutical, Inc.