Collegium Pharma Leans on ADHD to Drive Growth

Collegium Pharmaceutical Inc. ((COLL)) has held its Q1 earnings call. Read on for the main highlights of the call.

Collegium Pharmaceutical’s latest earnings call struck an upbeat tone, highlighting solid prescription momentum, a resilient pain franchise, and strong cash generation, all underpinned by a sizable ADHD acquisition meant to extend growth. Management balanced this optimism with candid discussion of rising expenses, generic pressure and higher leverage, but emphasized data-backed execution and reaffirmed guidance, signaling confidence in the company’s growth trajectory.

Broad-Based Revenue Growth Supports Bullish Narrative

Collegium opened the call by underscoring strong top-line performance, with total net product revenues reaching $193.5 million in the first quarter, a 9% year-over-year increase. The pain portfolio remained a key pillar, delivering $154.6 million in net revenues, up 4% from a year ago, reinforcing management’s message that the base business is durable even as new growth drivers emerge.

JORNAY PM Emerges as a High-Growth Engine

JORNAY PM stood out as the primary growth engine, with more than 206,000 prescriptions in the quarter, up 14% year-over-year, and net revenue of $38.9 million, up 36% despite a tough comparison distorted by prior destocking. The product’s prescriber base rose to roughly 30,000 and market share in long-acting branded methylphenidate climbed to 26%, prompting management to guide for 2026 JORNAY revenue of $190 million to $200 million, implying roughly 31% growth at the midpoint.

Pain Franchise Shows Stability Amid Market Pressures

The company’s core pain products delivered steady, if unspectacular, growth, with Belbuca revenue edging up 2% year-over-year to $52.6 million and Xtampza ER rising 7% to $50.8 million in the quarter. The Nucynta franchise held flat at $47.0 million, including $2.7 million of profit share from an authorized generic, underscoring both the resilience of the portfolio and the competitive pressures that could cap upside in this segment.

Strong Earnings and Cash Flow Bolster Investment Case

Profitability metrics provided a key support for the bullish tone, as non-GAAP adjusted EBITDA rose 9% year-over-year to $103.9 million and GAAP net income surged to $14.5 million, roughly a fivefold increase. Operating cash flow reached $57.1 million and cash, cash equivalents and marketable securities climbed to $421.8 million, up $35.1 million since year-end, giving Collegium ample financial firepower for both deals and shareholder returns.

AZSTARYS Deal Extends ADHD Footprint and Patent Life

A centerpiece of the call was the planned $650 million cash acquisition of AZSTARYS, plus up to $135 million in contingent milestones, which is on track to close in the second quarter after the HSR waiting period expired. Management expects AZSTARYS to be immediately accretive to adjusted EBITDA, contribute more than $50 million in pro forma net revenue in the second half of 2026, deliver over $50 million in cost synergies within 12 months and extend portfolio revenue visibility through patent protection lasting to December 2037.

Commercial Execution Backed by Favorable Market Research

Management highlighted improved commercial execution, citing that unaided recall of JORNAY among healthcare professionals rose to 67% from 52% year-over-year, pointing to stronger brand awareness. Surveys also showed that 70% of clinicians intend to increase JORNAY prescribing and about 54% plan to raise AZSTARYS use, with patient and caregiver requests proving highly influential, as more than 70% of those requests are reportedly honored.

Flexible Capital Allocation Strategy Balances Growth and Returns

Collegium described a funding plan for AZSTARYS that blends growth investment with balance sheet discipline, including $350 million of cash on hand and a $300 million delayed-draw term loan. Management anticipates net debt to adjusted EBITDA of roughly 2x post-close and reiterated its commitment to rapid deleveraging, while noting it still has $150 million of remaining share repurchase authorization after returning $222 million to investors since 2021.

Brand Partnerships Deepen ADHD Engagement

Beyond the numbers, Collegium is investing in brand and community initiatives to deepen its position in ADHD, launching the “Embrace Your Sparkle” campaign with Paris Hilton and partnerships such as Boston Legacy FC and CHADD. Management framed these efforts as a way to broaden patient and caregiver engagement, aiming to translate heightened awareness into sustained prescription growth across its ADHD portfolio.

Rising Operating Costs Reflect Aggressive Growth Investments

The company acknowledged that growth is coming with a cost, as GAAP operating expenses climbed 14% year-over-year to $86.4 million and non-GAAP adjusted operating expenses rose 11% to $69.3 million. These increases were driven by an expanded ADHD sales force and new marketing campaigns, which management characterized as deliberate, long-term investments but also as a full-year headwind to 2026 earnings.

Nucynta Faces Ongoing Generic and Pricing Headwinds

Generic dynamics around Nucynta remained a key risk topic, with Hikma launching authorized generic versions of both Nucynta and Nucynta ER, even as Collegium benefits from a profit-sharing arrangement that contributed $2.7 million in the quarter. Management stressed that current guidance already assumes continued generic pressure on branded volumes and pricing, yet emphasized that flat franchise revenue underscores a managed, rather than precipitous, erosion of this legacy asset.

Seasonality and Pricing Offset Script Weakness

The call also addressed seasonal softness, as first-quarter prescription volumes across the pain portfolio were pressured by deductible resets and higher out-of-pocket costs for patients. Despite year-over-year script declines, revenues improved, reflecting price increases and favorable gross-to-net trends, though management cautioned that such dynamics can introduce quarterly volatility and should be considered when interpreting short-term results.

Higher Leverage and Modest EBITDA Growth Temper Upside

While management framed leverage as manageable, the planned $300 million term loan to fund AZSTARYS will raise net debt to adjusted EBITDA to about 2x, introducing some financing risk in the near term. Additionally, the reaffirmed 2026 adjusted EBITDA outlook, excluding the acquisition, implies roughly 1% year-over-year growth, signaling limited margin expansion in the near term as the company absorbs higher operating costs and invests for future growth.

Forward Guidance Underscores Steady Base and ADHD Upside

Collegium reaffirmed 2026 guidance excluding AZSTARYS, projecting total product revenues of $805 million to $825 million, roughly 4% year-over-year growth, with JORNAY revenue expected between $190 million and $200 million and gross-to-net staying in the mid-60% range. Adjusted EBITDA is guided to $455 million to $475 million, about 1% growth, while the company expects AZSTARYS, once closed, to add more than $50 million of second-half 2026 revenue and over $50 million in cost synergies within a year, with combined-company guidance to follow after the transaction is complete.

Collegium’s earnings call painted the picture of a specialty pharma company leaning hard into ADHD as a long-term growth runway while extracting solid cash from a stable pain franchise. Investors are being asked to tolerate higher expenses and modest near-term EBITDA growth in exchange for a bigger, longer-lived portfolio and immediate accretion from AZSTARYS, a trade-off management argues positions the company for durable, cash-generative expansion.