Collegium Pharmaceutical, Inc.

Greetings and welcome to Collegium's 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. 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 Christopher James, Vice President of Investor Relations at Collegium. Thank you. You may begin.

Welcome to Collegium Pharmaceuticals' third quarter 2023 earnings conference call. I'm joined today by Joe Schifoni, our Chief Executive Officer, Colleen Tupper, 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. 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 products, that we may incur significant expense and that we may not prevail in current or future litigation pertaining to our business. 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. Our earnings press release on 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. I will now turn the call over to our CEO, Joe Schifoni.

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 Xtamsa ER and Bell Buca, and discuss the Nusenta regulatory extension. We will also share our expectations for the remainder of the year and our outlook for 2024 and beyond. 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 12,500 students they serve, while our colleagues across the country volunteered at organizations that make a positive difference in their local communities. I'd like to recognize the Collegium team for their commitment to healthier people, stronger communities. I am pleased to report that 2023 will be a banner year for Collegium Pharmaceutical. 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. Key accomplishments in the third quarter of 2023 include we delivered solid financial results, including record quarterly Belbuco revenue and record quarterly adjusted EBITDA. In the third quarter of this year, we grew revenue 8% and grew adjusted EBITDA at two and a half times that rate at 19% compared to the third quarter of 2022. We completed the renegotiation of contracts representing 30% of all Xtamsa ER prescriptions. Xtamsa ER will maintain its current formulary position and accounts representing 57% of the opportunity at an overall lower rebate level. In plans where Xtamsa ER will move to non-formulary, it will be at parity with OxyContin. We expect these successful renegotiations to drive Xtamsa ER revenue growth in 2024. 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 rebates. We also want a new Medicare part D plan representing approximately 1 million covered lives. These accomplishments will serve as a catalyst for Belbuco 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. 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. We received new patient population exclusivity for Nuscenta, extending the period of U.S. exclusivity from June 27, 2025 to July 3, 2026. With Nusenta representing 56% of Nusenta franchise revenue year-to-date, this positive event materially increases the value of the Nusenta franchise and improves our outlook for the business in 2025 and 2026. 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. 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 shareholders. 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. 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 and a half times that rate. Our accomplishments renegotiating of Belbuca and Xtansa ER payer contracts position both products for improved gross to nets to support revenue growth in 2024. We also expect Belbuca prescription growth. The financial strength of the company enables us to execute on our capital deployment strategy in a focused and disciplined manner. 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 2030s. We are locked into the rapid pay down of our debt, which strengthens our balance sheet every quarter. 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. 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. 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 NuSynta that we received, which extends U.S. exclusivity by 12 months from June 27, 2025 to July 3, 2026. With NuSynta representing 56% of NuSynta franchise revenue year to date, this represents a significant positive event that was not factored into our base case. We are pursuing and we are optimistic that we will achieve a pediatric extension for Nuscenta and Nuscenta ER. If successful, this will extend the exclusivity for Nuscenta ER to December 2025 and Nuscenta to January 2027, further strengthening our outlook. It is important to highlight that the 14% royalty we pay to Grunenthal on Nuscenta franchise sales gets reduced to 7% on June 27th, 2025. We also expect the Medicare Part D redesign in 2025 as part of the Inflation Reduction Act to have a positive impact on revenue, Xtamsa ER in particular. 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 paying 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.