Q3 2023 Collegium Pharmaceutical Inc Earnings Call
Greetings and welcome to Collegium Pharmaceuticals third quarter 2023 earnings conference call. At this time, all participants are in a listen only mode.
Speaker 1: Greetings and welcome to Collegium Pharmaceuticals' third quarter 2023 earnings conference call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation.
Question and answer session will follow the formal presentation. If anyone should require operator assistance. During this conference call. Please press star zero on your telephone keypad.
Speaker 1: If anyone should require operator assistance during this conference call, please press star zero on your telephone keypad.
Speaker 1: Please note that this conference call is being recorded. I will now turn the call over to Christopher James by his president of Invest Relations at Collision. Thank you. You may begin.
Please note that this conference call is being recorded I will now turn the call over to Christopher James Vice President of Investor Relations I call you. John. Thank you you may begin.
Speaker 2: Welcome to Collegium Pharmaceuticals third quarter 2023 earnings conference call.
Welcome to Collegium Pharmaceuticals third quarter 2023 earnings conference call.
Speaker 2: I'm joined today by Joe Shafone, our Chief Executive Officer, Colleen Tupper, our Chief Financial Officer, and Scott D'Rier, our Chief Commercial.
I'm joined today by Joseph Pony, Our Chief Executive Officer, Colin Tucker, Our Chief Financial Officer, and Scott Dreyer, Our Chief commercial officer.
Before we begin today's call we want to remind participants that none of the information presented today is intended to be promotional and that any forward. Looking statements made today are made pursuant to the safe Harbor provision of the private Securities Litigation Reform Act of 1995.
Speaker 2: Before we begin today's call, we want to remind participants that none of the information presented today is intended to be promoted.
Speaker 2: and that any forward-looking statements made today are made pursuant to the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1990.
Speaker 2: Your caution that such forward-looking statements involve risks and uncertainties, including and without limitation the risks that we may not be able to successfully commercialize our Maryland Department
You are cautioned that such forward looking statements involve risks and uncertainties, including and without limitation. The risks that we may not be able to successfully commercialize our products that we may incur significant expense and that we may not prevail in current or future litigation pertaining to our business. Please.
Speaker 2: that we may incur significant expense and that we may not prevail in current or future litigation pertaining to our business.
Speaker 2: These risks and other risks of the company are detailed in the company's periodic reports filed by the Securities and Exchange Commission.
These risks and other risks of the company are detailed in the Companys periodic reports filed with the Securities and Exchange Commission.
Speaker 2: Our future results made differ materially from our current expectations discussed today.
Our future results may differ materially from our current expectations discussed today.
Speaker 2: Our earnings press release and this call will include discussion of certain non-gap information.
Our earnings press release, and this call will include discussion of certain non-GAAP information.
Speaker 2: You can find our earnings press release, including relevant non-GAAP reconciliations, on our corporate website at collegiateinpharma.com.
You can find our earnings press release, including relevant non-GAAP reconciliations on our corporate website at Collegium pharma Dot Com I will now turn the call over to our CEO Joe ship only.
Speaker 2: I will now turn the call over to our CEO , Joe Schifone.
Speaker 3: Thank you, Chris. Good afternoon and thank you everyone for joining the call. Today we will discuss our progress on delivering a banner year, including our financial performance in the third quarter, provide an update on the payer landscape for extamsa ER in Belbucca, and discuss the NUSENTA regulatory extension.
Thank you Chris Good afternoon, and thank you everyone for joining the call.
Today, we will discuss our progress on delivering a banner year, including our financial performance in the third quarter provide an update on the payer landscape for <unk> E R and BELBUCA and discuss the NUCYNTA regulatory extension.
Speaker 3: We will also share our expectations for the remainder of the year and our outlook for 2024 and beyond.
We will also share our expectations for the remainder of the year and our outlook for 2024 and beyond.
Speaker 3: As we build a leading diversified specialty pharmaceutical company committed to improving the lives of people living with serious medical conditions, we strive to do good as we do well.
As we build a leading diversified specialty pharmaceutical company committed to improving the lives of people living with serious medical conditions, we strive to do good as we do well.
During the third quarter, we held our second annual day of service at our corporate headquarters, we partnered with science from scientists to build stem kits for some of the 12500 students they serve while our colleagues across the country volunteered at organizations that make a positive difference in their local communities.
Speaker 3: During the third quarter, we held our second annual day of service. At our corporate headquarters, we partnered with Science from Scientists to build STEM kits for some of the 12,500 students they serve, while our colleagues across the country volunteered at organizations that make a positive difference in their local community.
Speaker 3: I'd like to recognize the Collegium team for their commitment to healthier people, stronger community.
I'd like to recognize the Collegium team for their commitment to healthier people stronger communities.
Speaker 3: I am pleased to report that 2023 will be a banner year for Collegium Pharmaceuticals.
I am pleased to report that 2023 will be a banner year for Collegium pharmaceutical.
Speaker 3: Based on our performance in the third quarter, we are confident that we will deliver on our financial commitments and make meaningful progress on our capital deployment priorities.
Based on our performance in the third quarter, we are confident that we will deliver on our financial commitments and make meaningful progress on our capital deployment priorities.
Speaker 3: Key accomplishments in the third quarter of 2023 include. We delivered solid financial results, including record quarterly Belbuca revenue and record quarterly adjusted EBITDA. In the third quarter of this year, we grew revenue 8% and grew adjusted EBITDA at 2.5 times that rate at 19% compared to the third quarter of 2022.
Key accomplishments in the third quarter of 2023 include we delivered solid financial results, including record quarterly BELBUCA revenue and record quarterly adjusted EBITDA.
In the third quarter of this year, we grew revenue, 8% and grew adjusted EBITDA, two and a half times that rate at 19% compared to the third quarter of 2022.
Speaker 3: We completed the renegotiation of contracts representing 30% of all extensive E.R. prescription.
We completed the renegotiation of contracts, representing 30% of all extends to ER prescriptions.
Speaker 3: Extancy ER will maintain its current formulary position and accounts representing 57% of the opportunity at an overall lower rebate level.
<unk> will maintain its current formulary position and accounts, representing 57% of the opportunity at an overall lower rebate level.
Speaker 3: and plans where Xfam-CER will move to non-formulary, it will be at parity with OxyCod.
And plans were extensive E. R will move to non formulary it will be at parity with oxy cotton, we expect the successful renegotiations to drive extensive E. Our revenue growth in 2024.
Speaker 3: We expect these successful renegotiations to drive expansive ER revenue growth in 2024.
We successfully renegotiated our major Medicare part D contract for BELBUCA, representing 12% of total prescriptions and which we maintained access and materially rolled back rebates. We also won a new Medicare part D plan, representing approximately 1 million covered lives.
Speaker 3: We successfully renegotiated a major Medicare Part D contract for Belbuca, representing 12% of total prescriptions, in which we maintained access and materially rolled back rebate.
Speaker 3: We also want a new Medicare Part D plan representing approximately 1 million covered lives.
Speaker 3: These accomplishments will serve as a catalyst for Belbuco revenue growth and prescription growth in 2024.
These accomplishments will serve as a catalyst for BELBUCA revenue growth and prescription growth in 2024.
We participated in pain week, the largest pain conference in the United States, which included 10 poster presentations, highlighting clinical and real world real World data on our differentiated pain portfolio.
Speaker 3: We participated in pain week, the largest pain conference in the United States, which included 10 poster presentations, highlighting clinical and real world real world data on our differentiated pain portfolio.
We ended the quarter with over $300 million in cash and marketable securities all while executing on our capital deployment strategy, which included paying down $45 $8 million in debt and executing an accelerated share repurchase program, which returned $50 million in capital to shareholders.
Speaker 3: We ended the quarter with over $300 million in cash and marketable securities, all while executing on our capital deployment strategy, which included paying down $45.8 million in debt and executing an accelerated share repurchase program, which returned $50 million in capital to shareholders at its conclusion on October 31st, 2023.
<unk> at its conclusion on October 31, 2023.
Speaker 3: We received new patient population exclusivity for Nusinta, extending the period of US exclusivity from June 27, 2025 to July 3, 2026.
We received new patient population exclusivity for NUCYNTA, extending the period of U S. Exclusivity from June 27, 2025 to July 3rd 2026, with NUCYNTA, representing 56% of NUCYNTA franchise revenue year to date this positive event.
Speaker 3: With NUSINTAA representing 56% of NUSINTAA franchise revenue year to date, this positive event materially increases the value of the NUSINTAA franchise and improves our outlook for the business in 2025 and 2026.
Early increases the value of the NUCYNTA franchise and improves our outlook for the business in 2025 and 2026.
Speaker 3: We plan to submit a pediatric extension in December that would potentially extend exclusivity of the entire franchise in additional six months. We expected decision in the second half of 2024.
We plan to submit a pediatric extension in December that would potentially extend exclusivity of the entire franchise an additional six months, we expect a decision in the second half of 2024.
Speaker 3: And our board authorizes to enter into a new $25 million accelerated share repurchase program further reinforcing our commitment to opportunistically return capital to our shareholder.
And our board authorized us to enter into a new $25 million accelerated share repurchase program further reinforcing our commitment to Opportunistically return capital to our shareholders.
Speaker 3: We are executing our two-pronged strategy of maximizing the potential of our differentiated paying portfolio and deploying capital to create value for our shareholders.
We are executing our two pronged strategy of maximizing the potential of our differentiated pain portfolio and deploying capital to create value for our shareholders.
Speaker 3: Our record financial performance in 2023, along with our accomplishments in the third quarter, have us on track to deliver a banner year.
Our record financial performance in 2023, along with our accomplishments in the third quarter have us on track to deliver a banner year.
For full year 2023, we expect to grow revenue greater than 20% year over year and adjusted EBITDA at one five times that rate or.
Speaker 3: For full year 2023, we expect to grow revenue greater than 20% year over year and adjusted EBITDA at 1 and 1 and 1 1-1 times that rate. Our accomplishments renegotiating a Bell Buca and Expansa ER payer contracts position both products for improved growth to nets to support revenue growth in 2024. We also expect Bell Buca prescription growth.
Our accomplishments renegotiating of BELBUCA and extensive E. Our payer contracts position both products for improved gross to nets to support revenue growth in 2024, we also expect BELBUCA prescription growth.
Speaker 3: The financial strength of the company enables us to execute on our capital deployment strategy in a focused and disciplined manner.
The financial strength of the company enables us to execute on our capital deployment strategy and a focused and disciplined manner.
Speaker 3: Business development remains our top priority. We are actively engaged on multiple fronts and continue to pursue differentiated commercial stage assets with peak sales potential of over $150 million and exclusivity into the 2030.
This development remains our top priority. We are actively engaged on multiple fronts and continue to pursue differentiated commercial stage assets with peak sales potential of over $150 million and exclusivity into the 20 <unk>. We are locked into the rapid paydown of our debt which stood.
Speaker 3: We are locked into the rapid paydown of our debt, which strengthens our balance sheet every quarter.
<unk>, our balance sheet every quarter.
Speaker 3: As we have demonstrated to our completed $50 million accelerated share repurchase program, and now our additional $25 million accelerated share repurchase program, we are committed to opportunistically returning value to our shareholders.
As we have demonstrated through our completed $50 million accelerated share repurchase program and now our additional $25 million accelerated share repurchase program. We are committed to opportunistically returning value to our shareholders.
Speaker 3: We believe that our stock continues to be significantly undervalued, and we will continue to leverage our share repurchase program to return capital to our shareholders.
We believe that our stock continues to be significantly undervalued and we will continue to leverage our share repurchase program to return capital to our shareholders.
Speaker 3: Since our second quarter earnings call in August , our outlook for the business in 2025 and 2026 has improved. This is driven by the new patient population exclusivity for new center that we received, which extends US exclusivity by 12 months from June 27th, 2025 to July 3rd, 2026.
Since our second quarter earnings call in August our outlook for the business in 2025 in 2026 has improved this is driven by the new patient population exclusivity for NUCYNTA that we received which extends U S. Exclusivity by 12 months from June 27th 2025.
July three 2026 with NUCYNTA, representing 56% of NUCYNTA franchise revenue year to date. This represents a significant positive event that was not factored into our base case.
Speaker 3: With NUSINTA representing 56% of NUSINTA franchise revenue year to date, this represents a significant positive event that was not factored into our base case.
Speaker 3: We are pursuing and we are optimistic that we will achieve a pediatric extension for Nusinta and Nusinta ER. It's successful this will extend the exclusivity for Nusinta ER to December 2025 and Nusinta to January 2027 further strengthening our outlook for the future.
We are pursuing and we are optimistic that we will achieve a pediatric extension for NUCYNTA and NUCYNTA ER.
If successful this will extend the exclusivity for NUCYNTA ER to December 2025, and NUCYNTA to January 2027, further strengthening our outlook.
Speaker 3: It is important to highlight that the 14% royalty we paid a grown and fall on new center franchise sales gets reduced to 7% on June 27 2025.
It is important to highlight that the 14% royalty we paid of Grunenthal on NUCYNTA franchise sales gets reduced to 7% on June 27 2025.
Speaker 3: We also expect the Medicare Part D redesign in 2025 as part of the Inflation Reduction Act to have a positive impact on revenue extamps the ER in particular.
We also expect the Medicare part D redesign in 2025 as part of the inflation reduction act to have a positive impact on revenue <unk> E. R. In particular.
Speaker 3: 2023 is on track to be a banner year for Collegium. We are executing our two-pronged strategy of maximizing the potential of our differentiated pain portfolio and deploying capital to create value for our shareholders. For the remainder of the year, we are focused on achieving our financial objectives in preparing for success in 2024. I will now hand the call over to Colleen to discuss the financial.
2023 is on track to be a banner year for Collegium, we are executing our two pronged strategy of maximizing the potential of our differentiated pain portfolio and deploying capital to create value for our shareholders for the remainder of the year. We are focused on achieving our financial objectives and preparing for success.
In 2024, I will now hand, the call over to Colleen to discuss the financials.
Speaker 4: Thanks, Joe. Good afternoon, everyone. We are confident we will achieve our financial objectives for 2023. In the third quarter, we grew revenue 8% year over year, while adjusted Eva Duck grew at two and a half times that-
Thanks, Joe Good afternoon, everyone. We are confident we will achieve our financial objectives for 2023 in the third quarter. We grew revenue 8% year over year, while adjusted EBITDA grew at two and a half times that rate as expected, we sequentially reduced operating expenses and generated.
Speaker 4: As expected, we sequentially reduced operating expenses and generated positive operating cash flows while paying down $45.8 million in debt and executing an accelerated share repurchase program, which returned $50 million in capital to shareholders at its completion on October 31.
Positive operating cash flows while paying down $45 $8 million in debt and executing an accelerated share repurchase program, which returned $50 million in capital to shareholders at its completion on October 31st.
Speaker 4: Financial highlights for the third quarter include net product revenues were $136.7 million in the third quarter, up 8% year over year. As expected, revenue in the third quarter reflects higher coverage gap expense, also known as the donut hole in Medicare coverage. As is typical, we expect revenue in the fourth quarter to be substantially higher than the third quarter.
Financial highlights for the third quarter include.
<unk> net product revenues were $136 $7 million in the third quarter up 8% year over year as expected revenue in the third quarter reflects higher coverage cap expense also known as the donut hole in Medicare coverage as is typical we expect revenue in the fourth quarter to be sequentially higher than the third quarter.
Speaker 4: They'll be you can net revenue with a record $45.4 million up 17% year over year.
BELBUCA net revenue was a record $45 $4 million up 17% year over year.
Speaker 4: SAMHSA ER revenue was $39.8 million, up 2% year over year, and a SAMHSA ER grossed to net was 64.6% in the third quarter.
<unk> revenue was $39 $8 million up 2% year over year and extends to our gross to net was 64, 6% in the third quarter.
Speaker 4: The prior year comparator for SAMHSA ER is challenging, given we had a favorable return adjustment of approximately $8.1 million in the third quarter of 2022. We expect full year SAMHSA ER gross to net to be between 60 to 62% in 2023. 100 basis points lower than our previous.
The prior year comparator for <unk> ER is challenging given we had a favorable returns adjustment of approximately $8 $1 million in the third quarter of 2022.
We expect full year extensive E. Our gross to net to be between 60% to 62% in 2023 100 basis points lower than our previous range.
Speaker 4: News Center franchise net revenue was $47.5 million up 7% year over year. DAP operating expenses were $35.3 million down 8% year over year and adjusted operating expenses were $28.3 million down 13% year over year.
Center franchise, net revenue was $47 $5 million up 7% year over year.
GAAP operating expenses were $35 $3 million down 8% year over year, and adjusted operating expenses were $28 $3 million down 13% year over year.
Speaker 4: Net income for the third quarter was $20.6 million compared to half a million dollars in the prior year.
Net income for the third quarter was $26 million compared to half a million dollars in the prior year period.
Speaker 4: Non-Dap Adjusted EBITDA was 89.4 million up 19% year over year.
non-GAAP adjusted EBITDA was $89 4 million up 19% year over year.
Speaker 4: Gap earnings per share was $0.61 basic and 53 cents diluted in the third quarter compared to Gap earnings per share of 1 cent basic and diluted in the prior year period.
GAAP earnings per share was <unk> 61, basic and <unk> 53 cents diluted in the third quarter compared to GAAP earnings per share of one basic and diluted in the prior year period.
Speaker 4: Non-gap adjusted earnings per share was $1.34 in the third quarter, up 22% year-over-
non-GAAP adjusted earnings per share was $1 34 in the third quarter up 22% year over year.
Speaker 4: Please see our press release issued earlier today for a reconciliation of gap to non-gap results.
Please see our press release issued earlier today for a reconciliation of GAAP to non-GAAP results.
Speaker 4: As of September 30th, 2023, we had $304,304,000,000 in cash, cash equivalents, and marketable security.
As of September 32023, we had 304 million $304 6 million in cash cash equivalents and marketable securities.
Speaker 4: During the third quarter, we paid down $45.8 million in debt related to our term notes. We ended the third quarter at 1.2 times net debt to adjusted evata and expected the end of the year at approximately once.
During the third quarter, we paid down $45 $8 million in debt related to our term notes. We ended the third quarter at one two times net debt to adjusted EBITDA and expect to end the year at approximately one times.
Speaker 4: Moving to our 2023 financial guidance, we are on track to deliver on all our financial commitments. We are tightening the guidance range as a cross-almet-
Moving to our 2023 financial guidance, we are on track to deliver on all our financial commitments. We are tightening the guidance ranges across all metrics for 2023, we expect net product revenues in the range of $565 million to $570 million, we expect adjusted op.
Speaker 4: For 2023, we expect net product revenues in the range of 565 to 570 million dollars.
Speaker 4: We expect adjusted operating expenses in the range of $125 to $130 million. And adjusted EBITDA in the range of $360 to $365 million.
<unk> expenses in the range of $125 million to $130 million and adjusted EBITDA in the range of $360 million to $365 million.
Speaker 4: We are on track to achieve our 2023 financial guidance, as well as deliver on our commitment to a strong second half of 2023.
We are on track to achieve our 2023 financial guidance as well as deliver on our commitment to a strong second half of 2023.
Speaker 4: On our second quarter earnings call in August , we stated we would increase revenue and decrease expenses in the second half of the year as compared to the first.
On our second quarter earnings call in August we stated we would increase revenue and decrease expenses in the second half of the year as compared to the first.
We grew revenue and decreased expenses sequentially in the third quarter and expect to do the same in the fourth.
Speaker 4: We grew revenue in decreased expenses, sequentially in the third quarter, and expect to do the same in the fourth.
We look forward to providing 2024 financial guidance in early January which will reflect reflect continued top and bottom line growth.
Speaker 4: We look forward to providing 2024 financial guidance in early January , which will reflect continued top and bottom line growth.
We remain focused on creating long term value for our shareholders through capital deployment strategy.
Speaker 4: We remain focused on creating long-term value for our shareholders through capital deployment strategy.
Speaker 4: Is this development remains our top priority and we are committed to taking a disciplined approach while focusing near-term on rapidly paying down debt and utilizing our Share Repurchase Program to create value for our share.
Business development remains our top priority and we are committed to taking a disciplined approach, while focusing near term on rapidly paying down debt and utilizing our share repurchase program to create value for our shareholders.
Speaker 4: We are locked into rapidly de-leveraging the balance sheet, paying down over $160 million of debt in 2023, which would put us at approximately one time's net debt to adjust to the EBITDA at year end. Our ability to de-lever quickly is a testament to our strong past generation.
We are locked into rapidly deleveraging the balance sheet paying down over $160 million of debt in 2023, which would put us at approximately one times net debt to adjusted EBITDA at year end, our ability to Delever quickly is a testament to our strong cash generation.
We are committed to opportunistically, returning capital to shareholders and have a strong track record of doing so since 2021, we've returned $112 million of capital to our shareholders at an average share price of $20 72 per share inclusive of a $25 million accelerated share repurchase program.
Speaker 4: Since 2021, we've returned $112 million of capital to our shareholders at an average share price of $20.72 per share, inclusive of a $25 million accelerated share repurchase program in 2021 and the $50 million accelerated share repurchase program that closed at the end of October .
In 2021, and the $50 million accelerated share repurchase program that closed at the end of October.
Speaker 4: As part of this $50 million accelerated share repurchase program, we bought back nearly 2.2 million shares at an average share price of $23.9.
As part of this $50 million accelerated share repurchase program, we bought back nearly two 2 million shares at an average share price of $23 nine.
Speaker 4: Further reinforcing our commitment to deliver value to our shareholders through effective capital deployment. Today we announced as part of our $100 million share repurchase program. Our board has authorized us to enter into a new $25 million accelerated share repurchase program. We believe that our stock continues to be significantly undervalued and we view our share repurchase program as productive use of our capital to generate high returns for our shareholders. I will.
Further reinforcing our commitment to deliver value to our shareholders through effective capital deployment today, we announced as part of our $100 million share repurchase program. Our board has authorized us to enter into a new $25 million accelerated share repurchase program. We believe that our stock continues to be significantly.
Undervalued and we view our share repurchase program as productive use of our capital to generate high returns for our shareholders.
I will now turn it over to Scott.
Speaker 3: Thanks, Colleen. At Collegium, we're proud to be the leader in responsible pain management. Belbucca, Extansa ER and Nucinta ER have a combined 50% share of the branded ER market. In recent market research, 70% of HCPs indicated that they intend to prescribe more Belbucca and Extansa ER. 30% intend to maintain their prescribing, and none intend to decrease their prescribing.
Thanks Colleen.
At Collegium, we're proud to be the leader in responsible pain management BELBUCA extends to ER and NUCYNTA ER have a combined 50% share of the branded ER market.
In recent market research, 70% of HCP has indicated that they intend to prescribe more BELBUCA and extends to EUR, 30% intend to maintain their prescribing and none intend to decrease their prescribing.
Speaker 2: In the same research, 80% rated the quality of their interactions with collegium sales professionals highly.
In the same research, 80% rated the quality of their interactions with Collegium sales professionals highly.
Speaker 5: Our pain portfolio is highly differentiated, and our commercial organization is engaged and committed to improving the lives of people living with serious medical conditions.
Our pain portfolio is highly differentiated and our commercial organization is engaged and committed to improving the lives of people living with serious medical conditions.
Speaker 5: In the third quarter, Belle Bucatoto prescriptions grew 1.2% year over year, and 1.4% first and second quarter of 2023. We anticipate Belle Bucat prescriptions will grow on a full year basis in 2023.
In the third quarter BELBUCA total prescriptions grew one 2% year over year, and one 4% versus the second quarter of 2023, we anticipate BELBUCA prescriptions will grow on a full year basis in 2023.
Speaker 5: While extamps at ER revenue was up 24.5% year to date, prescriptions have declined, which is disappointing.
While extends to ER revenue was up 24, 5% year to date prescriptions have declined which is disappointing.
Speaker 5: Total prescriptions were stable in the third quarter, a continuation of what we saw in the second quarter. Averaging around 12,000 prescriptions on a weekly basis.
Total prescriptions were stable in the third quarter, a continuation of what we saw in the second quarter, averaging around 12000 prescriptions on a weekly basis.
Speaker 5: For the remainder of the year, we'll be working on generating momentum for eXtamsa ER and taking actions to mitigate any pressure on prescriptions in 2024.
For the remainder of the year, we'll be working on generating momentum for extensive E R and taking actions to mitigate any pressure on prescriptions in 2024.
Speaker 5: Importantly, the new center franchise continues to be a relatively stable contributor and revenue grew 7% versus the same quarter in 2022.
Importantly, the NUCYNTA franchise continues to be a relatively stable contributor and revenue grew 7% versus the same quarter in 2022.
Speaker 5: I'm excited to report that we've successfully completed the contract negotiations with plans that account for approximately 30% of all of the SAMHSA ER prescription.
I'm excited to report that we've successfully completed the contract renegotiations with plans that account for approximately 30% of all external ER prescriptions. This was a top commercial priority in 2023 and will serve as a catalyst of revenue growth in 2024.
Speaker 5: This was a top commercial priority in 2023 and will serve as a catalyst of revenue growth in 2024.
Speaker 5: Now, let me take a moment to highlight the results of the EXTAMPSA ER contract renegotiation.
Now, let me take a moment to highlight the results of the <unk> ER contract renegotiations.
Speaker 5: In plans that represent approximately 57% of this opportunity, Xstamp CER will maintain its current formulary position at a lower overall rebate.
In plans that represent approximately 57% of this opportunity extends to ER will maintain its current formulary position at a lower overall rebate.
And plans that represent approximately 43% of this opportunity <unk> will move to a non formulary position and pay no rebates.
Speaker 5: In plans that represent approximately 43% of this opportunity, Ex-TAMSA ER will move to a non-formulary position and pay no rebate.
Speaker 5: In all plans where a fancy ER was removed, it will be at parity with OxyCone.
In all plans were extant CER was removed it will be at parity with oxycontin.
Speaker 5: Over the last two years, we've successfully renegotiated contracts that represented 84% of all extamps at ER prescription.
Over the last two years, we have successfully renegotiated contracts that represented 84% of all extends to ER prescriptions.
Speaker 5: In 77% of the renegotiation opportunity, we were able to maintain EXTAMPSA ER's formulary position and materially roll back the overall rebate level.
77% of the renegotiation opportunity, we were able to maintain extensive E. R. S formulary position and materially roll back the overall rebate level in.
Speaker 5: In 23% of the renegotiation opportunity, Ex-TAMSA ER was moved to a non-formulary position, and we no longer pay any renegotiation.
And 23% of the renegotiation opportunity <unk> was moved to a non formulary position and we no longer pay any rebates.
Speaker 5: As was the case in 2023, our market access strategy will drive EXTAMSA ER revenue growth in 2024.
As was the case in 2023, our market access strategy will drive extents, the ER revenue growth in 2024.
Our focus is now on pull through mitigating the impact of formulary position changes and importantly, striving to secure a new payer wins in commercial and Medicare part D.
Speaker 5: Our focus is now on pull through mitigating the impact of formulary position changes and importantly striving to secure new payer wins in commercial and Medicare Part D.
With BELBUCA, we successfully renegotiated its only major Medicare part D contract, representing 12% of all prescriptions I am pleased to report that we were able to maintain BELBUCA is formulary position at a meaningfully lower rate.
Speaker 5: With Belbuca, we successfully renegotiated its only major Medicare Part D contract representing 12% of all prescriptions.
Speaker 5: I'm pleased to report that we were able to maintain WQCIS formulary position at a meetably lower rate.
Speaker 5: In addition, we were able to add a new Medicare Part D plan representing approximately 1 million covered lives.
In addition, we were able to add a new Medicare part D plan, representing approximately 1 million covered lives in 2024, we expect to see BELBUCA revenue and prescription growth.
Speaker 5: In 2024, we expect to see Belbuco revenue and prescription growth.
Speaker 5: Our focus with Belbucca is pulling through our strong commercial access and continuing to grow volume in Medicare Part D.
Our focus with BELBUCA is pulling through our strong commercial access and continuing to grow volume and Medicare part D.
Speaker 5: In addition, we continue to work towards expanding Medicare Part D coverage moving forward. It's the right thing to do based off the differentiated clinical profile of Bill Buchan.
In addition, we continue to work towards expanding Medicare, Turkey, Medicare part D coverage moving forward. It's the right thing to do based off the differentiated clinical profile of BELBUCA.
In closing I'm proud of the accomplishments that the commercial organization has achieved this year, most notably the successful contract renegotiations for both extends to ER and BELBUCA, which will serve as a catalyst for revenue growth in 2024.
Speaker 5: In closing, I'm proud of the accomplishments that the commercial organization has achieved this year, most notably the successful contract renegotiations for both EXTAMPSA ER and Bell Buca, which will serve as a catalyst for revenue growth in 2024. For the rest of the year, we're focused on finishing strong and generating momentum for 2024. I'll now turn the call back to
For the rest of the year, we're focused on finishing strong and generating momentum for 2024, I will now turn the call back to Joe.
Speaker 3: Thanks, Scott. We are on track to deliver a banner year in 2023. For the remainder of the year, we are focused on achieving our financial objectives in preparing for success in 2024. We are committed to creating long term value for our shareholders by taking a disciplined approach to capital deployment. I will now open the call up for questions. operator
Thanks Scott.
We are on track to deliver a banner year in 2023.
For the remainder of the year, we are focused on achieving our financial objectives and preparing for success. In 2024, we are committed to creating long term value for our shareholders by taking a disciplined approach to capital deployment I will now open the call up for questions operator.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad a.
Speaker 1: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question.
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Speaker 1: Thank you. Our first question comes from the line of David Asselin with Piper Sandler. Please proceed with your question.
Thank you. Our first question comes from the line of David <unk> with Piper Sandler. Please proceed with your question.
Speaker 6: Hey, thanks. So just a couple of questions here. So with the renegotiations, and I'm sorry if I missed this, can you talk to on Belbuca where you think the gross net will be next year relative to this year? And then on Xthamza, just talk about what the improvement in gross net next year versus this year will be. And then...
Hey, Thanks, So just a couple of questions here.
So with the renegotiations and I'm, sorry, if I missed this.
Can you talk to on BELBUCA, where you think the gross to net will be next year relative to this year.
And then on <unk>.
Just talk about what the improvement in gross net next year versus this year.
And then switching gears just on capital deployment.
Speaker 6: Switching gears just on capital deployment, I mean, in a.
Speaker 6: An environment where you don't...
And environment.
Where you don't.
Speaker 6: find an asset that suits you, where you don't pull the trigger on an acquisition. Do you get significantly more aggressive on buybacks? How do you think about that? Maybe I'll ask it a different way. How important is that?!
Find an asset that.
That suits you.
You don't pull the trigger on an acquisition do you get significantly more aggressive on buybacks, how do you think about that.
And maybe I'll ask it a different way is.
How important is it.
Speaker 6: to do an acquisition just in a vacuum. Thanks.
To do an acquisition just in a vacuum.
Speaker 3: David, thanks. I'll let Colleen take the first question on gross and that's for Stampton, Bell Buka. And then I'll come around to your question on Capitol.
Okay, David Thanks, I'll, let Collin take the first question on gross to nets for stamps and BELBUCA and then I'll come around to your question on capital deployment.
Speaker 4: Hey, David, thanks for the question. I guess first I'll frame for 2023. So, for Belbuca, gross to net have been in the low 50s and have been pretty stable. And for Extensa, we've updated our range in 2023 to 60 to 62%. With the renegotiations for both of those products, we do expect improvement from the 2023 level in 2024, and we will further update you in early January when we issue our guidance.
Hey, David Thanks for the question I guess first off frame for 2023, so for BELBUCA.
Must have been in the low fifties and have been pretty stable and for extend so we've updated our range in 2023 to 60% to 62% with the renegotiations for both of those products. We do expect improvement from the 2023 level in 2024, and we will further update you in early January when we issue our guidance.
And David with regards to your very good question on capital deployment. The first thing I want to emphasize is the financial strength of the business. We're on track this year to deliver the banner year that we set out to we're confident in growth in 2024, but really important to your question our outlook.
Speaker 3: And David, with regards to your very good question on capital deployment, the first thing I want to emphasize is the financial strength of the business. We're on track this year to deliver the banner year that we set out to. We're confident in growth in 2024, but really important to your question, our outlook in 2025 and 2026 has really improved with the new SINTA new patient population exclusivity.
In 2025, and 2026 has really improved with the NUCYNTA new patient population exclusivity. So the reason I make that point as we are actively engaged BD continues to be our top priority, but we are committed to being disciplined we don't have to do a deal.
Speaker 3: So the reason I make that point is we are actively engaged. BD continues to be our top priority, but we are committed to being disciplined. We don't have to do a deal.
Speaker 3: And I think the ability to be clear headed in our pursuit of an acquisition is our greatest strength.
And I think the ability to be clear headed in our pursuit of an acquisition is our greatest strength as you know we're locked into the paying down of our debt and as we've been very clear. We think there is a significant disconnect between the intrinsic value of the company and where our share price has been and as we've demonstrated.
Speaker 3: As you know, we're locked into the paying down of our debt. And as we've been very clear, we think there is a significant disconnect between the intrinsic value of the company and where our share price has been. And as we've demonstrated to the degree that persists, we're certainly glad and believe it's a really good use of capital to be leveraging our share repurchase program and would continue to do so.
To the degree that persist, we're certainly glad and believe it's a really good use of capital to be leveraging our share repurchase program and would continue to do so.
Okay. That's helpful. Thank you.
Great. Thanks, David.
Thank you. Our next question comes from the line of Tim Lugo with William Blair. Please proceed with your question.
Speaker 1: Thank you. Our next question comes from the line of Tim Lugo with William Blair. Please proceed with your questions.
Thank you for the questions can you give us a sense of how these non formulary discussions for extensive E are expected to play out.
Speaker 7: Thank you for the question. Can you give us a sense of how these non-formulated solutions for extensive ER are expected to play out? What levels of rebates are, I guess, expected to go away versus
What levels of rebates or I guess expected to go away vessel.
Speaker 7: what revenue might erode due to the non-formulare exhibition.
Well revenue minor role due to the non formulary position.
Sure Tim This is Joe I'll take that one.
Speaker 3: Sure, Tim, this is Joe. I'll take that one. I think I understand the question you're asking. So look, with what we accomplished with extamps of E.R. this year, we expect to see revenue with extamps at grow. And that will be driven by improved.
Think I understand the question you're asking so look with what we accomplished with <unk>. This year, we expect to see revenue with extensor grow.
And that will be driven by improved gross to net.
From a prescription perspective, there is the potential that there will be pressure on prescription and what prescriptions and what we're focused on.
Speaker 3: From a prescription perspective, there's the potential that there will be pressure on prescription and what prescriptions and what we're focused on as we finish the year and as we get into next year is mitigating any pressure that being removed from those formularies may put on eXtamsa prescriptions. And the key point I would emphasize is that in no plan where eXtamsa ER was removed from formulary was OxyContin.
We finished the year and as we get into next year is mitigating any pressure that being removed from those formularies may put an expanse of prescriptions and the key point I would emphasize is that in no planned work stamp CER was removed from formulary was oxy cotton added.
Okay understood.
Speaker 7: Okay, understood and you give us a sense around what's around gross than that and just gross price increases. I know that that's something that the class had traditionally. Um, before.
Can you give us a sense of are less around <unk>.
Gross price increases.
There are about something which of course had a traditionally.
Performed poorly.
Serge Thanks for the question as you saw at the start of 2023, we moderated our price increases a bit given the inflation reduction Act and we will continue to assess and you do the math around that to optimize the level of price increase that we can take at the start of the year and ensuring we don't have a tip over to that.
Speaker 4: So, there are some things for the question as you saw at the start of 2023. We moderated our price increases a bit given the inflation reduction act. And we will continue to assess and you do the math around that to optimize the level of price increase that we can take at the start of the year in ensuring we don't have a tip over to the rebate being an excess of the benefit of the price. So, you'll see slightly moderated as you saw in 2020.
The rebate being in excess of the benefit of the price. So youll see slightly moderated as you saw in 2023.
Speaker 7: Okay, understand. And maybe one last question. You know, with the new 25 million accelerate share repurchase program on top of the 50 you did earlier in the year. Can you give us an insight into you know, what's kind of the capital deployment process for sizing these repurchase programs? And I assume they allow plenty of room for business development, but
Okay understood and then maybe one last question.
Our new $25 million several share repurchase program on top of the 15 you did earlier in the year can you just give us an insight into what some of the capital deployment process for sizing liens repurchase programs.
I assume there while plenty of room for business development.
Speaker 7: you know, maybe just how we should think about these programs going into 2024.
Maybe just how we should think about these programs going into 2024.
Sure, Tim I'll have calling take that one.
Speaker 4: Yeah, thanks Tim. So I would say we're optimizing our capital allocation based on our priorities. And we really think it's an end, not an or, where we're ensuring that we can stay opportunistic on the BD front. And if we see something, we can pull the trigger there, continuing to rapidly deliver based on our schedule there, over the total four year period for our term loan, and then opportunistically return shares to sharehold is via the Share Repurchase Program. So as you've seen this year, we've been pretty active in the back after the year, which by with the new $25 million that will bring our total to $75 million this year. And we believe our stock remains undervalued. And that's a tool I would expect we continue to value going forward.
Yeah. Thanks, Tim So I would say we are optimizing our capital allocation based on our priorities and we really think it's an and not an or where we're ensuring that we can stay opportunistic on the BD front and if we see something we can pull the trigger there continuing to rapidly delever based on our schedule there over.
Total four year period for our term loan and then Opportunistically return shares.
To our shareholders via the share repurchase program. So as you've seen this year, we've been pretty active in the back half of the year, which with the new $25 million that will bring our total to $75 million. This year and we believe our stock remains undervalued and Thats a tool I would expect we continue to value going forward.
Thank you.
Speaker 8: Thank you.
Yes.
Thanks, Tom.
Thank you. Our next question comes from the line of Serge Belanger with Needham. Please proceed with your question.
Speaker 1: Thank you. Our next question comes from the line of Serge Bellinger with Needham. Please proceed with your question.
Hey, good afternoon, thanks for taking my questions.
Speaker 9: Thank you, Dr. Union. Thanks for taking my questions. The first one on Belbyuta, maybe if you can just talk about the new Medicare Part D plan, if you said it was about a million additional covered lives, how does that compare to the existing major Medicare Part D contract that Belbyuta had?
The first one on BELBUCA.
Maybe if you can just talk about the new Medicare part D plan.
You said it was about a 1 million additional covered lives how does that compare to the existing major Medicare part D contracts.
BELBUCA had.
Speaker 9: And secondly, now that new synthetic exclusivity has been extended and the economics will improve any plans to add additional resources behind that product. Thanks.
Secondly, now that NUCYNTA.
NUCYNTA exclusivity has been extended.
And the economics will improve any plans to add additional resources behind that product.
Yes.
Speaker 5: Thanks for the question, Serge. I'll have Scott take the first one, and then I'll comment on the new center. Yeah, thanks surge in terms of the 1,000,000 lives. That's across some regional party plans. And to your question about how it compares to what we currently have, where we're currently covered that large plan for about 12,000,000 lives. So it adds another 1,000,000. And what we're excited about is look, it opens the opportunity to fuel growth and we'll continue to engage payers to try to expand coverage.
Thanks for the question Serge I'll have Scott take the first one and then I'll comment on the NUCYNTA, yes. Thanks surge in terms of the 1 million lives that's across some regional part D plans and to your question about how it compares to what we currently have we're currently covered that large plan for about 12 million lives. So it adds another million.
And what we're excited about is look it opens the opportunity to fuel growth and we'll continue to engage payers to try to expand coverage further great and with regards to NUCYNTA Serge the extension will not result in any additional investment.
Speaker 3: And with regards to Nucenta Surge, the extension will not result in any additional investment beyond what it is that we've been doing. We continue to be committed to our entire pain portfolio, but clearly Bell Buick and Xstam CE are our growth drivers and the products where we'll be providing the greatest support.
Beyond what it is that we've been doing we continue to be committed to our entire pain portfolio, but clearly BELBUCA can extend CER our growth drivers and the products, where we will be providing the greatest support.
Thank you.
Speaker 1: As a reminder, press star 1 to ask a question at this time.
As a reminder, press star one to ask a question at this time.
Our next question comes from the line of Lee <unk> with <unk> Securities. Please proceed with your question.
Speaker 1: Our next question comes from the line of Lee Solv Eski with tourist securities. Please proceed.
Speaker 10: Good evening. Thank you for taking my questions. First, on Xtansa, what levers do you have to mitigate the declining scripts? And then on Dubuque, what is the patient profile for Dubuque, essentially, any transfers from Xtansa that you're seeing? And when do the 1 million of the Medicare Part D come online?
Good evening. Thank you for taking my questions first on <unk>.
What levers do you have to mitigate the declining scripts and then they'll be Luca.
The patient what is the patient profile from a UK essentially any transfers from our sponsor are youre seeing and <unk> 1 million of the Medicare part D come online.
Speaker 3: Okay. Les, thanks for the question. Scott, we'll take those.
Okay.
Thanks for the question Scott will take those.
Speaker 5: Yeah, thanks. So, so to your first question, Les, when it comes to the levers to mitigate the erosion, the primary lever we have is look where those were lost.
Yeah. Thanks, So to your first question less when it comes to the levers to mitigate the erosion. The primary lever. We have is look where those were lost where almost all commercial plans and so we have a co pay program that offsets the cost to the patient and that's a big lever for US in addition to our overall commercialization effort and push through with physicians.
Speaker 5: we're almost all commercial plans. And so we have a copay program that offsets the cost of the patient, and that's a big lever for us, in addition to our overall commercialization effort and push through with physicians across all our marketing and sales activities. In terms of the patient and kind of patient flows, what we see across the portfolios are, the brands are each uniquely positioned in the mind of a physician.
Across all of our marketing and sales activities in terms of the patients and kind of patient flows what we see across the portfolios are the brands are each uniquely positioned in the minds of a physician.
Speaker 5: and have a unique space. But by all means, if someone fails on extamps, we will sometimes see a move to Bellevueca and vice versa.
And have a unique space, but by all means if someone fails on extensive we will sometimes see a move to BELBUCA and vice versa.
Speaker 3: And then less with regards to part D, the opportunity with all part D plans really sets up for the first quarter of 2024. That's when the renewals take place which are 12 months. It's about 60% of them occur in that time period. So that's what we're focused on in target.
And then Wes with regards to part D. The opportunity with all part D plans really sets up for the first quarter of 2024, that's when the renewals take place, which are 12 months, it's about 60% of them occur in that time period. So that's what we're focused on and targeting.
That's helpful. One more from me on the BD front.
Speaker 10: That's helpful. One more for me on the beading front. What's your funnel essentially look like now? Are there any opportunities in other non-abuse deterrent options available in the market now? And then if not, other opportunities out there. What's the competitive landscape essentially look like? And also valuations in the current market environment. Thank you.
What's your funnel essentially look like now are there any opportunities as such.
And other non abuse deterrent options available in the market now and then if not other.
<unk> out there and what's the competitive landscape essentially look like and also valuations in the current market environment. Thank you.
Speaker 3: Sure, thanks for the question. So look, therapeutically, and we've talked about this in the past with the current market conditions, we're going to be very agile. I wouldn't say we're therapeutically agnostic, but we're open to anything that really hits the profile of a differentiated commercial stage asset with 150 million plus peak sales potential with exclusivity into the 2030s.
Sure. Thanks for the question, so look therapeutically and we've talked about this in the past with the current market conditions, we're going to be very agile I wouldn't say, we're therapeutically agnostic, but we're open to anything that really hits the profile of a differentiated commercial stage asset with 150.
Million plus peak sales potential with exclusivity into the 20 <unk>.
Speaker 3: Whatever acquisition we're able to achieve will not be like the ones we've done in the past where we're leveraging our pain infrastructure. We'll be setting a second commercial beachhead. So these will be a lower synergy, more strategically oriented deal for collegium. And that's our focus. In terms of valuations, what I would say less is right now what we've seen is a lot of receptivity in willingness to engage.
Acquisition, we're able to achieve we will not be like the ones. We've done in the past, where we're leveraging our pain infrastructure will be setting a second commercial beachhead. So these will be a lower synergy more strategically oriented deal for Collegium and Thats our focus.
In terms of valuations what I would say less is right now what we've seen is a lot of receptivity and willingness to engage and work with the financial strength of our company and the fact that we don't have to do a deal we aspire to do one.
Speaker 3: And look, with the financial strength of our company and the fact that we don't have to do a deal, we aspire to do one, we'll continue to engage and work with urgency, but we won't strike until we get to a price.
We will continue to engage and work with urgency, but we won't strike until we get to a price that we're comfortable with and believe creates value for our shareholders.
Speaker 3: that we're comfortable with and believe creates value for our share.
Speaker 1: Thank you. There are no further questions at this time. I would now like to turn the floor back over to Joe for closing comments.
Thank you.
There are no further questions at this time I would now like to turn the floor back over to Joe for closing comments.
Thank you operator, and thank you everyone for joining the call. We look forward to updating you on our progress and we hope everyone has a great evening.
Speaker 3: Thank you, operator and thank you everyone for joining the call. We look forward to updating you on our progress and we hope everyone has a great evening.
This concludes today's teleconference.
Speaker 1: you may disconnect your lines at this time. Thank you for your participation. Thank you.
You may disconnect your lines at this time.
You for your participation.
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