Q3 2024 Collegium Pharmaceutical Inc Earnings Call
Speaker Change: Greetings and welcome to the Collegium Pharmaceutical third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.
Speaker Change: If anyone should require operator assistance during this conference call, please press star zero on your telephone keypad. Please note that this conference call is being recorded. I will now turn the call over to Danielle Jessie, Director of Investor Relations at Collegium. Please go ahead.
Speaker Change: Welcome to Collegium Pharmaceutical's third quarter 2024 earnings conference call. I am joined today by Mike Heffernan, our Interim President and Chief Executive Officer, Founder, and Chairman. Colleen Tupper, our Chief Financial Officer, and Scott Dreyer, our Chief Commercial Officer.
Speaker Change: 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 Change: You are cautioned that such forward-looking statements involve risks and uncertainties, including and without limitation, the risk that we may not be able to successfully commercialize our products, that we may incur significant expense in doing so, that we may not prevail in current or future litigation pertaining to our business.
Speaker Change: risks related to our ability to realize the anticipated benefits and synergies of the recently completed acquisition of Iron Shore.
Speaker Change: the risk that the businesses will not be integrated successfully, and risks related to future opportunities and plans for Ironshore.
Speaker Change: These risks and other risks of the company are detailed in the company's periodic reports filed with the Securities and Exchange Commission. Our future results may differ materially from our current expectations discussed today.
Speaker Change: Our earnings press release and this call will include discussion of certain non-GAAP information. You can find our earnings press release, including relevant non-GAAP reconciliations, on our corporate website at collegiumpharma.com.
Speaker Change: I will now turn the call over to our Chairman, Interim President, and CEO, Mike Heffernan.
Mike Heffernan: Thank you, Danielle. Good afternoon and thank you everyone for joining the call. Today we will discuss Collegium's record financial performance during the third quarter and provide an update on our business, including the very exciting news that we have successfully completed our CEO search.
Mike Heffernan: At Collegium, we are focused on building a leading diversified specialty pharmaceutical company committed to improving the lives of people living with serious medical conditions.
Mike Heffernan: This quarter, we completed the acquisition of Ironshore Therapeutics and its commercial product, JoinAPM, and we're excited to welcome the employees of Ironshore to our team as we embark on our journey of improving the lives of patients in the ADHD community.
Mike Heffernan: We strive to do good as we do well, and I'd like to recognize the Collegium team for their commitment to our mission and continued dedication to making a positive impact on the communities we serve by driving equitable access to STEM education and advancing the next generation of life science leaders.
Mike Heffernan: Our third quarter and year-to-date results reflect Collegium's strong operational execution. We are on track to deliver on our 2024 financial commitments, as updated following the closing of our acquisition of Honorsure.
Mike Heffernan: We've made significant progress in successfully integrating Ironshore and we continue to generate robust operating cash flows and drive significant top and bottom line growth.
Mike Heffernan: including growing total revenue 17% with 11% growth in our pain portfolio revenue and adjusted EBITDA growth at 18% on a year-over-year basis in the third quarter.
Mike Heffernan: The financial strength of our pain business enabled our acquisition of Ironshore and its commercial product Joint APM, the central nervous system stimulant for the treatment of attention deficit hyperactivity disorder or ADHD in people six years of age and older.
Mike Heffernan: So an APM is a highly differentiated commercial asset that diversifies our product portfolio beyond pain and has significant revenue and growth potential and exclusivity into the 2030s.
Mike Heffernan: So an APM is expected to generate net revenue in excess of $100 million in 2024, expands our commercial presence into ADHD, a large and growing market, and is poised to become the leading growth driver for Collegium.
Mike Heffernan: Since closing the Ironshire acquisition in early September and for the balance of the year, we are focused on integrating the Ironshire business while maximizing the paying portfolio and developing the path to maximize growth of Journey.
Mike Heffernan: We will also continue our business development efforts to identify assets that allow us to build our expertise in a new therapeutic area beyond pain.
Mike Heffernan: As we look to close out a strong year, we are confident that we will deliver on our financial commitments and strategic objectives, enabling strong top and bottom line growth in 2025 and beyond.
Mike Heffernan: After an extensive search process, we are very excited to welcome Vikram Karnani as our new CEO, Chief Executive Officer, and member of our board, effective on November 12th.
Mike Heffernan: The Board of Collegium is convinced he is the right leader with the right skills and the expertise and experience to lead Collegium to its next phase of growth.
Mike Heffernan: Vikram is a proven leader with more than 15 years of experience in the biofarm industry, including holding various leadership positions across commercial, medical affairs, and business development.
Mike Heffernan: Most recently, after the acquisition of Horizon by Amgen, he led Amgen's rare disease business as Executive Vice President and President of Global Commercial Operations and Medical Affairs.
Mike Heffernan: Prior to that, he held numerous leadership positions at Horizon Therapeutics through its rapid growth phase spanning many aspects of the business, including leading growth strategy and establishing and expanding Horizon's presence in international markets.
Speaker Change: He demonstrated success in building organizations and maximizing their potential through both organic growth and business development. This makes him the right fit to lead Collegium. With Vikram as our CEO, we are well positioned for continued success in 2025 and beyond.
Speaker Change: In the third quarter of 2024, we announced and closed the iron sure acquisition, which is expected to deliver on all our strategic objectives related to business development. In addition, we also drove strong revenue growth in our pain portfolio.
Recent key accomplishments and highlights include
Speaker Change: Since acquisition closed in September, we've seen accelerated growth in joint APM prescriptions during the back-to-school season.
Speaker Change: through the first three quarters of 2024, Dornier prescriptions are up 31.2% year over year.
Speaker Change: We delivered another strong quarter for Bell Buca, marked by record revenue of $53.2 million, up 17% year-over-year, and strong prescription growth of 3.5% year-over-year and 2.6% quarter-over-quarter.
Speaker Change: We generated record eXtamsa ER revenue of $49.5 million, up 24% year-over-year.
Speaker Change: We achieved new payer wins for Bell Bucca and Xtansi ER, which are expected to support revenue growth in 2025.
Speaker Change: We continued our history of leadership at Pain Week through the presentation of eight posters highlighting the clinical and population health impact of our differentiated pain portfolio.
Speaker Change: And we established our presence at key ADHD Congresses, including a presentation on Join APM, the American Academy of Child and Adolescent Psychiatry 2024 Annual Meeting, and the Canadian ADHD Resource Alliance 2024 Conference.
Speaker Change: I will now turn it over to Scott to give a commercial update.
Thanks, Mike.
Scott Dreyer: We're pleased to have completed our recent acquisition of Ironshore and are focused on integrating Joint APM into our portfolio of commercial assets.
Scott Dreyer: Jordan APM expands our commercial presence into the large and growing ADHD market and is poised to become our lead growth driver.
Scott Dreyer: Jordan APM is highly differentiated as the only stimulant ADHD medication with convenient evening dosing.
Scott Dreyer: Jordan APM provides symptom control upon awakening in the morning and throughout the day, limiting the need for short-acting stimulant add-ons.
Scott Dreyer: It has flexible dose-dependent duration, enabling treatment to be tailored to the patient's needs. This is important for pediatric, adolescent, and adult patients because it eliminates the need to dose at school or at work.
Scott Dreyer: The ADHD market has grown 5% on average over the past four years, and since 2022, JORN APM has delivered significant double-digit prescription growth.
Scott Dreyer: In 2023, total prescriptions for JORN APM grew 58% compared to 2022, to approximately 490,000.
Scott Dreyer: And through the first three quarters of 2024, joint APM prescriptions grew 31.2% year over year.
Scott Dreyer: In addition, Jordan APM has a broad and growing prescriber base with 22,600 prescribers in the third quarter, up 25% since the third quarter of 2023.
Scott Dreyer: Jordan APM delivered strong prescription growth in the third quarter, up over 30% year-over-year, and we are seeing an acceleration during the back-to-school season.
Scott Dreyer: Our commercial team successfully navigated through the acquisition transition and took the necessary actions to maximize the opportunity during the back-to-school season.
Scott Dreyer: This is a critical time in the ADHD market when demand typically increases and therapy switching occurs because patients currently being treated for ADHD often need a new option to control their symptoms.
Scott Dreyer: Leveraging the opportunity during the back-to-school season, average weekly prescriptions in October were 13,500 compared to 11,400 in July, an increase of 18%.
Scott Dreyer: This is an encouraging growth trajectory, and we're focused on continuing this momentum as we work to maximize the potential of JORN APM. Prescription performance is in line with our expectations, and the brand's on track to generate net revenue in excess of $100 million in 2024.
Scott Dreyer: With strong brand fundamentals and clinical differentiation, we see significant opportunity for JORN APM.
Scott Dreyer: We continue to believe it is poised to become Colledium's lead growth driver, complementing our leadership position in responsible pain management, and we're committed to investing in JORN APM to maximize the potential of this differentiated asset.
Scott Dreyer: Areas of focus include ensuring that the ADHD sales force is adequately sized to effectively reach our targeted HCPs.
Scott Dreyer: and raising awareness of Jordan APM's unique and differentiated profile among caregivers and patients to motivate them to ask their HCP about Jordan APM.
Speaker Change: At Collegium, we take pride in being the leader in responsible pain management with a unique and differentiated portfolio of products for the treatment of pain.
Speaker Change: The financial strength of Collegium has been fueled by the success of our pain portfolio and our commercial organization will continue to drive momentum and prioritize maximizing our pain products.
Speaker Change: Belbuca delivered another strong quarter with total prescriptions up 3.5% year over year, marking the fifth straight quarter of year-over-year prescription growth and driving record quarterly revenue. In addition, we've seen an acceleration in weekly prescriptions over the last few months.
Speaker Change: We're encouraged by this consistent growth trend, which speaks to the impact that our strong commercial execution is having on the brand and Bell Buick's differentiated product profile.
Speaker Change: Extampsa ER prescriptions were stable in the third quarter, in line with our expectations, and Extampsa ER's share of the OxyContin extended-release market achieved an all-time high of 38.1%.
Speaker Change: Average weekly prescriptions for eXtamsa ER in September and October were up 1%, compared to the average weekly in July and August, showing some momentum as we enter the fourth quarter.
Speaker Change: We expect revenue growth for the full year to be driven by improved gross to net, which has fueled the record net revenue in the third quarter.
Speaker Change: We're committed to educating physicians on eXtamsa ER's differentiated label and capitalizing on eXtamsa ER's strong access position in commercial and Part D.
Speaker Change: Our aspiration is to replace OxyContin utilization for appropriate patients due to Exstamps' superior abuse deterrent properties and labeling.
Speaker Change: The new SINTA franchise is a key contributor to our portfolio. The positive developments for the franchise, including the authorized generic agreement with HICMA and the six-month pediatric exclusivity extension.
Speaker Change: along with the execution of our market access strategy enable us to continue to manage the new SINTA franchise contribution in 2025 and beyond.
Speaker Change: We're committed to growing Paine franchise revenue in 2025 and beyond through a combination of driving demand for our highly differentiated products and enhancing the profitability of each brand.
Speaker Change: In support of that goal, our contracting strategy is clear. Achieve broad coverage for our products while delivering on our commitment to enhance profitability of our brands by managing gross to nets.
Speaker Change: We're pleased to share that Belbuca and Extamsa ER were both added to formulary for a large integrated health system that represents approximately 8 million commercial lives and 2 million Part D lives.
Speaker Change: We expect revenue growth from this expansion of coverage, however, because this system purchases directly and does not report prescriptions, we won't see the corresponding prescription volume in IQVIA data.
Speaker Change: In addition, and consistent with our focus on enhanced profitability, one Medicare Part D plan representing eight million covered lives will be removing both Exstamsa ER and Bell Buca from formulary effective January 1st.
Speaker Change: Xtamsin ER will be at parity with OxyContin within this plan, as both products are off-formulary.
Speaker Change: As a result of this change, we will pay zero rebates for Bell Buick and XTAMSA within this plan.
Speaker Change: These formulary removals will pressure prescriptions for both Exstamps and Bobuca in 2025, but are expected to be net revenue positive for both brands as the prescription decline is offset by profitability improvement.
Speaker Change: In closing, I want to thank the commercial team at Collegium for the strong execution and performance they've delivered for both our pain and ADHD businesses.
Speaker Change: As we finish the year, we're focused on driving momentum in our point paying portfolio and maximizing the potential of joint APM. We believe we're well positioned for meaningful growth in 2025 and beyond. I'll now hand the call over to Colleen for a discussion of the financials.
Colleen Tupper: Thanks, Scott. Good afternoon, everyone. Our third quarter performance reflects strong revenue growth, impactful business development, significant bottom line expansion, and robust operating cash flows.
Colleen Tupper: Financial highlights for the third quarter include total net product revenues were a record $159.3 million in the third quarter, up 17% year over year.
Colleen Tupper: In line with our expectations for the third quarter, Drenet revenues were $8 million, which reflect less than one month of commercial sales and the effect of legacy ordering patterns during the ownership transition.
Colleen Tupper: The Payne portfolio delivered strong performance with record revenue of $151.3 million up 11% year over year.
Colleen Tupper: Belbuca Net Revenue was a record $53.2 million, up 17% year-over-year.
Colleen Tupper: Ex-SAMHSA ER net revenue was a record $49.5 million, up 24% year-over-year, and Ex-SAMHSA ER gross-to-net was 50.8% in the third quarter.
Colleen Tupper: The third quarter did benefit from a one-time favorable managed care rebate adjustment resulting from a formulary review. With this benefit factored in, we now expect full-year eXtensa ER gross-to-net to be approximately 55% in 2024, which is the low end of the range we previously communicated.
Colleen Tupper: NUCENTIA franchise net revenue was $45.1 million, down 5% year over year.
Colleen Tupper: Gap operating expenses were $62 million, up 76% year-over-year. This quarter included $19.9 million in acquisition-related expenses associated with the Ironshore acquisition.
Colleen Tupper: Adjusted operating expenses, which excludes stock-based compensation and acquisition-related expenses, were $34.8 million, up 23% year-over-year.
Colleen Tupper: Gap net income for the third quarter was $9.3 million, down 55% year-over-year.
Colleen Tupper: Non-GAAP adjusted EBITDA was a record $105.1 million, up 18% year-over-year.
Colleen Tupper: Gap earnings per share was $0.29 basic and $0.27 diluted in the third quarter compared to gap earnings per share of $0.61 basic and $0.53 diluted in the prior year period.
Colleen Tupper: Non-GAAP-adjusted earnings per share was $1.61 in the third quarter, up 20% year-over-year.
Colleen Tupper: Please see our press release issued earlier today for a reconciliation of GAAP to non-GAAP results.
Colleen Tupper: We generated another quarter of strong operating cash flows, enabling us to execute our capital deployment strategy and complete the acquisition of Ironshore, which utilized approximately $200 million of cash on hand.
Colleen Tupper: We are reaffirming our 2024 financial guidance which we updated following the close of the Ironshore acquisition.
Colleen Tupper: Belbuca revenue growth is primarily fueled by full-year prescription growth while revenue growth for Extensa ER is driven by growth to net improvement.
Colleen Tupper: 2024 full-year pro forma journey PM net revenue is expected to be in excess of 100 million dollars
Colleen Tupper: For the new SINTA franchise, on a full-year basis, due to the elimination of the Medicaid cap by the American Recovery Act, we expect some pressure on the new SINTA franchise year-over-year revenues in 2024, with a return to relative year-over-year stability in 2025.
Colleen Tupper: We expect adjusting operating expenses in the range of $150 to $155 million and adjusted EBITDA in the range of $395 to $405 million.
Colleen Tupper: With our strong financial performance thus far, we are well positioned to deliver on our financial commitments for 2024.
Colleen Tupper: We remain focused on our capital deployment strategy to create long-term value for our shareholders by executing on business development through the integration of Jordan APM, paying down debt, and opportunistically repurchasing shares.
Colleen Tupper: We have a proven track record of successful business development, including the acquisitions of the Nucinta franchise and Bell Buca, and we will leverage this expertise to efficiently integrate and maximize the potential of Jordan APM.
Colleen Tupper: We are already seeing immediate accretion with the addition of JORN-APM and expect the product to be accretive to adjusted EBITDA in 2025.
Colleen Tupper: We're committed to investing in the continued growth of JORN-APM as we look to build a new therapeutic area of focus beyond pain.
Colleen Tupper: We are also focused on managing our debt. With the Ironshore acquisition, we secured a $646 million new term loan from Pharmacon. $320.8 million of the new term loan was used to replace our prior loan with Pharmacon.
Colleen Tupper: Reducing our interest rate on this balance by 300 basis points.
Colleen Tupper: In addition to the significant improvement in our cost of capital, the new loan also has a longer term, lower amortization, and more prepayment flexibility.
Colleen Tupper: We estimate that our net leverage at year-end will be less than two times EBITDA based on estimated fiscal year 2024 combined EBITDA.
Colleen Tupper: In addition, we have $115 million remaining in the $150 million share repurchase program approved by our board earlier this year.
Colleen Tupper: We are confident in the strength of our business and the value it will continue to generate and will opportunistically leverage share repurchases to return value to shareholders.
Colleen Tupper: Looking forward to 2025 and beyond, we will continue to leverage the momentum and financial strength of our core paying business to deliver on our financial commitments of growing revenue, increasing profitability, and generating robust cash flows.
Colleen Tupper: The outlook of our pain business is bolstered by the recent positive developments for our pain portfolio. The NuSynta franchise authorized generic agreement with HICMA and the Pediatric Exclusivity Extension, along with our successful payer strategy and tailwinds from the Medicare Part D redesign, are expected to drive organic growth in 2025.
Colleen Tupper: At the same time, we are focused on integrating and maximizing the value of JORN APM and investing in its future growth. JORN APM is poised to be our lead growth driver as we build on the positive momentum we are already seeing just a month into owning the product.
Colleen Tupper: We remain dedicated to the disciplined execution of our capital deployment strategy as we look to expand our portfolio of commercial products, pay down debt, and opportunistically return value to shareholders through share repurchases.
I will now turn the call back to Mike.
Thanks, Kelly.
Mike Heffernan: We are proud of our accomplishments in the third quarter, which positioned us for continued success in 2025. For the remainder of the year, we are focused on integrating and maximizing joint APM in addition to delivering on the financial and strategic commitments
Mike Heffernan: of the core pain business. We are confident in our ability to deliver record financial results, generate robust cash flows, and deploy capital in a disciplined manner.
Speaker Change: I'd like to personally thank the Collegium leadership team for their exceptional stewardship through the transformational Iron Shore acquisition.
Speaker Change: And we're very excited to welcome Vikram as our new CEO this month to join our strong team. With his extensive commercial and business development experience, I am confident he is the right person to lead Collegium through this next phase of growth.
I will now open the call up for questions. Operator?
Thank you.
Speaker Change: Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your headset before pressing the start keys.
Speaker Change: And our first question comes from the line of Wes Soluski with True Securities. Please proceed.
Speaker Change: Good evening, thank you for taking my questions. I have a few maybe first for Mike or Colleen. Well congrats on the impressive CEO selection and although it might be premature but given Vikram's strong rare disease background
Speaker Change: Would you expect any divergence in BD plans into new therapeutic areas, or do you essentially expect to continue to anchor around the new neuro category?
Speaker Change: And then maybe for Scott, what are the plans for Bilbuqa and your investment efforts leading into LOE? And then what is the value proposition of Bilbuqa against some of the other chronic pain products, specifically those undergoing clinical trials?
Speaker Change: Can you talk about the back-to-school season with Journey? How much of that script growth
Speaker Change: What's tied to the ownership change? And what do you, I guess, envision the peak sales potential or peak market share potential from journey across the ADHD market? And then, in general, can you highlight how impactful is the back to school season seasonality to this product? Sorry for the mouthful, but thank you.
Mike Heffernan: Thank you, Les, for the question. This is Mike. I'll start at the beginning and then I'll ask Scott to jump in on some of the other questions.
Mike Heffernan: As it relates to our strategy, since we closed the Iron Shore acquisition in early September and as I mentioned for the balance of the year, we're really focused on integrating Journey and growing Journey as well as maximizing our pain portfolio.
Mike Heffernan: So that is a key part of our strategy. We'll also continue our business development efforts to identify assets that allow us to build our expertise in a new therapeutic area beyond pain.
Mike Heffernan: You know, as Vikram gets further acquainted with the business, he'll work with both our leadership team as well as the board to further build out Collegium's strategy and execution and further put a fine point on the business development strategy.
I'll pass it to Scott to answer the question.
Scott Dreyer: Got it. All right, Les. So starting with Belbuca LOE, look, the biggest thing I'd say there is
Scott Dreyer: We are investing through the tape. We don't view Bell Buca as an asset where we're in harvest mode. The fact of the matter is, you look at the current LOE assumptions, we think there may be some upside there. So we're investing fully in the product.
to your question about, you know,
Scott Dreyer: competition in the vertex product first. I just say any new product in pain. We're a fan of it. The leader in responsible pain management. We believe in options that come to the market that are helpful for patients. That said.
That product has no competition in the chronic pain place.
Scott Dreyer: The buprenorphine market is growing and Belbuca is highly differentiated within the market.
Scott Dreyer: On back to school, which you asked about, Jordan A., look, we're really happy with what's happened during the back to school season. So we closed the deal kind of in the middle of the season, the season kicks in in the August.
Scott Dreyer, Christopher James, Joseph Ciaffoni, Michael Heffernan
Scott Dreyer: focusing on execution, you know, we've seen if you look at the average weeklies, we've seen 18% growth
Scott Dreyer: comparing October versus July. We expect that momentum to continue as the season typically has an impact that carries into November. I think it's just going to set us on a great trajectory as we enter 2025.
Scott Dreyer: You asked about peak sales, and we don't give peak sales guidance, so we're not going to give any more color on that. I'll just reinforce the growth trajectory of Journey is very strong, and we expect that to continue as we go into next year.
Excellent, thank you for that caller.
Speaker Change: And the next question comes from the line of David Ancelin with Piper Sandler, please proceed
David Ancelin: Thanks. So on Journey PM, can you remind us how you're thinking about the gross dinette spread going forward?
Whether you can give us a range or
just give us some sense of.
David Ancelin: What the gross net looks like in relation to other branded agents for ADHD. That would be helpful. That's number one.
David Ancelin: And then number two, just coming back to business development and M&A. So with Journey, you've got sort of an interesting and somewhat diverse call audience. I believe there's...
pediatricians, general practitioners, psychiatrists who are prescribing the product.
call audience and the commercial infrastructure you have.
How does that inform how you're thinking about...
future business development M&A, thanks
Speaker Change: Thanks, David. Scott, do you want to take the first question on JORN API?
and Gretchen Atkins.
Scott Dreyer: Sure, so Colleen and I will tag team on this one. First, I'll just start with coverage and reinforce that when you look at coverage for the brand, it's very strong right now. 60% of the business is in commercial, 40% is in Medicaid, and Journey has coverage across 80% of that overall. So what that means is we're happy with the coverage.
Scott Dreyer: We will primarily spend our time integrating journey and thinking about a lot about how to grow it and then as Vikram comes in and we analyze the opportunities that are in front of us.
Scott Dreyer: We will as we move into next year I'm sure move our business development strategy forward such that we will be looking to you know really leveraging new expertise beyond pain.
Scott Dreyer: Okay.
Speaker Change: That's helpful. Thank you.
Speaker Change: Okay.
Speaker Change: And our next question comes from the line of Serge Belanger with Needham and company. Please proceed.
Speaker Change: Hi, good afternoon.
Speaker Change: Couple of questions for Us I guess, the first one regarding the ongoing integration of journey P. M. Scott I think you talked about sales force sizing for that product just curious what the correct.
Speaker Change: So the Salesforce is and how youre thinking about the modifications to that.
Speaker Change: And then secondly regarding the changes to our formulary coverage on both extends on BELBUCA.
Speaker Change: I think there are two pieces so.
Speaker Change: First on where you're losing exclusivity.
Speaker Change:
Speaker Change: Curious how many prescriptions are at risk here and on the new planned is there an existing oxy business. That's allowed to do that provides the conversion opportunities for that new any formulary.
Speaker Change: Yeah, that's it thanks.
Serge Belanger: Great. Thanks Serge.
Speaker Change: Scott It sounds like these are both for you on the integration for us.
Scott Dreyer: It sounds good yeah. So so search first when it comes to the sales force and our current situations. So currently we have we have about 150 salespeople all in that's reps and management and we're doing the work right now to assess where we go from here, we believe that we need to expand a bit to get the coverage, we want and look our focal point is.
Scott Dreyer: Maximizing the potential in raising awareness and that means we're looking at where prescribing happens in ensuring that we have enough coverage to get the reach and frequency that's needed to continue to accelerate the growth of the brand and so when we get to January on our Opex guidance that will all include any final choices, we make on the sales force to your second question.
Scott Dreyer: About the formulary changes so we'll take them one by one in terms of the addition, 8 million lives in commercial 2 million lives in part D. At the integrated health system that I mentioned right now, there's a little bit of oxy cotton business in there, but not much so it's a little bit different than the conversion opportunities we've had.
Scott Dreyer: Had in the past and more of our starting with fresh coverage when it comes to oxycontin. When it comes to BELBUCA. There is some use but a lot of opportunity in front of us in the plan.
Speaker Change: In terms of scripts you said.
Speaker Change: We were we were removed from formulary at the part D plan that I mentioned with 8 million lives. So that's in that plan, it's about 12% of BELBUCA prescriptions, it's about 18% of extents the prescription that sit within that plan and as a reminder, you know, it's an opportunity where we were not willing to pay.
Speaker Change: What it would take to keep that access and the rebate will go to zero and so we are confident that it will be net revenue positive overall, while seeing the pressure on prescriptions in those plants hopefully that helps search.
Speaker Change: Yeah. So when you combine the two changes with the new edition and in a change to the existing formulary you think it'll be a wash in terms of.
Speaker Change: Precision volume for both extends and.
Speaker Change: BELBUCA.
Speaker Change: Well, yes, so it's a wash in terms of lives not in terms of prescriptions because as I mentioned for the integrated health system. They don't have prescriptions reported for IQ via so we'll have revenue that comes through but you will see no prescriptions, whereas where the removals happened that is directly IQ via impacted scripts. So.
Speaker Change: That will again all be factored in when we give our revenue guidance in January as we always do all those ins and outs will be there, but what's important is the revenue will be what will be different in terms of scripts.
Speaker Change: And those two different situations, so if that makes sense.
Speaker Change: Yeah, Thanks for the color.
Speaker Change: Yep.
Speaker Change: And the next question comes from the lineup or.
Speaker Change: <unk> with H C. Wainwright. Please proceed.
Speaker Change: Oh, Thanks, I have a couple just to follow up on the questions regarding victims appointment as CEO.
Speaker Change: Can you just talk about what made him a good fit.
Speaker Change: His experience in global rare disease versus your portfolio of mass market.
Speaker Change: ADHD and pain products should we take it to us.
Speaker Change: Should I assume that.
Speaker Change: Your existing core management competencies on that front, so maybe the elevated and he will be more focused on <unk>.
Speaker Change: Broadening your horizons into other areas or is he excited and prepared to take on maybe a different sort of.
Speaker Change: Book of business, and then I have follow ups.
Speaker Change: Thanks.
Speaker Change: Thank you Lorne.
Speaker Change: Let me, let me talk a little bit about victims experience.
Speaker Change: As I mentioned.
Speaker Change: He has been in the Biopharma for over 15 years, but he was involved in every aspect of the horizon business that business grew from $300 million in revenue to $4 billion and as we now have resulted in a $28 billion acquisition by Amgen.
Speaker Change: He successfully led the transformation of the company.
Speaker Change: It's commercial growth to building of its international.
Speaker Change: Vision and those skills, regardless of therapeutic expertise are certainly transferable when it comes to leveraging the growth of clean given the next phase of growth I think vikram and he'll talk to you about this because you start next week, but I think he's pretty excited about the base business that we've created at Collegium. It gives them a great substrate to build upon.
Speaker Change: With a very strong business in a very strong management team and so for any new CEO coming into a situation. He's got really the opportunity to already have a growth business and then take his expertise which is in addition to the expertise we already have and build on the growth. So we're really excited about having to join the company.
Got it and on <unk>.
Speaker Change: <unk> P M.
Speaker Change: You highlighted a pretty strong execution through back to school, but I can't imagine there wasn't some friction or disruption with the corporate change and yet it looks like you're in delivering a think about 25% year over year growth right. Now is it fair to say that you know youre not firing necessarily on all cylinders during that transition in may.
Speaker Change: Gross could actually inflect upwards again, even on a year over year basis with.
Speaker Change: Settling of the organization right sizing and phase.
Speaker Change: Please resource allocation.
Speaker Change: Yeah. Thanks, Scott.
You want to take that.
Speaker Change: Yeah, that's great Yeah, Great question. So first I'd say really we didn't see disruption and that was purposeful because as as you may recall, we kept the entire sales force management gene and everybody intact to ensure continuity. So to the first question, yes firing on all cylinders year over year growth is actually up 31, 2% and that access.
Speaker Change: Laredo during back to school season, frankly at a greater rate than they accelerated last year during back to school season. So the team needs a tremendous amount of credit for that continuity during that time now to your question going forward of course, there's future opportunity and I would put it into a couple of buckets first heard execution right, we will bring our expertise.
Speaker Change: <unk> to ensure that we're executing on all cylinders in front of the customer that's number one number two as I mentioned in my prepared remarks will ensure that we're adequately adequately sized and investing from a marketing standpoint to drive awareness and uptake among hcp's first and then number three do you think.
Speaker Change: The profile I laid out of this product clearly, it's a product that if you're a caregiver and understand that there's a product for ADHD that you could dose once in the evening and that could carry you through that your child through the next day from upon awakening all the way through the day, that's a pretty interesting product for caregivers and for patients and the and the awareness there is very low.
Speaker Change: So we will take action and make investments to take advantage of that opportunity. So those are the things we'll be focused on as we move through 2025 to continue the growth momentum of the brand.
Speaker Change: Alright.
Speaker Change: And the market you know, it's obviously a highly genericize overall ADHD space, the Eni and that's fine.
Speaker Change: Mistaken theres only a couple real unique branded methylphenidate products out there.
Speaker Change: And you've got a.
Speaker Change: Our status as a pro drug a new guys with its pretty unique dosing can you talk about your field reception out there with regards to other branded competition in your differentiation and maybe how it seems to be shaking out in terms of patient or a physician preference for these two different value propositions.
Speaker Change: Yes, Scott you want to take that.
Scott Dreyer: Yeah. So a couple of insights I'd give you one if you just look at performance in the market the growth of G&A in the back to school season has exceeded the competitive sets. So that's number one number and that includes also calibrate as a non stimulant. So when you look at just the branded marketplace. The reception is really strong and growing when you look at <unk>.
Scott Dreyer: <unk> feedback what we're hearing is that they truly see the uniqueness not just of the evening dosing, but the fact that the product carries through the next day from morning through the day. So they look at you know for instance, and a star is as more of another kind of typical type of extended release product like a lot of the.
Scott Dreyer: Extended release products that have gone generic, but they see G&A as being truly different and the best evidence. We have of this is when someone's switches to G&A in the early data, we're seeing it's a stickier product and actually adherence is a little bit longer on it than other ADHD medications. So that's what we're seeing in the marketplace. The reception is good.
Scott Dreyer: The prescriber base as I shared is growing up 25% year over year, almost 23000 physicians in the third quarter. So there's a good receptivity there's momentum behind the drug and we're going to continue to try to continue to keep that going.
Speaker Change: And just lastly, one housekeeping thing I haven't run the math, yet with gross to nets and blow out extensively our numbers so maybe that.
Speaker Change: Lines up perfectly about where are there any material inventory moves on <unk> or any other products.
Speaker Change: We're down in the quarter.
Speaker Change: No I'd say, it's not Oh, sorry.
Speaker Change: Sorry, yes, I jumped into quick or and of course, the pain portfolio, it's pretty consistently around 15, plus or minus a half.
Speaker Change: On journey, because you know it was a little bit less than a month that we had ownership and they had for one of the big three wholesalers. A every other week ordering patterns, we have lower days on hand than you typically see so Jordan. They ended September just shy of 11 days on hand, and you would normally expect that to be about 15, but that was the <unk>.
Speaker Change: And the difference I'd call.
Speaker Change: Alright, thanks, so much.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen.
Speaker Change: There was a question and answer session I will turn the call back to my country My closing remarks.
Speaker Change: Thank you everyone for joining the call today have a great evening.
Speaker Change: This concludes today's conference you may disconnect your lines at this time thank.
Speaker Change: Thank you for your participation.
Speaker Change:
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