Collegium Pharmaceutical Inc.
02/26/2026 | Press release | Distributed by Public on 02/26/2026 06:35
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this Form 10-K. The following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of many factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Form 10-K, including those set forth under "Forward-looking Statements" and "Risk Factors," as revised and supplemented by those risks described from time to time in other reports which we file with the SEC.
Our discussion and analysis of our financial condition and results of operations for the year ended December 31, 2025 as compared to December 31, 2024 are discussed below. For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024.
Overview
Our mission is to build a leading, diversified biopharmaceutical company committed to improving the lives of people living with serious medical conditions. We have developed, licensed, and acquired a portfolio of meaningfully differentiated products for use in the treatment of attention deficit hyperactivity disorder ("ADHD") and moderate to severe pain. We commercialize our products, consisting of Jornay PM, Belbuca, Xtampza ER, Nucynta ER and Nucynta IR (collectively the "Nucynta Products"), and Symproic, in the United States.
Jornay PM is a central nervous system ("CNS") stimulant prescription medicine that contains methylphenidate HCl, a Schedule II methylphenidate, which was approved by the U.S. Food and Drug Administration ("FDA") in August 2018 for the treatment of ADHD in people six years of age and older and currently the only FDA-approved stimulant medication that is dosed in the evening. We began recognizing product revenue related to Jornay PM in September 2024 following our acquisition of Ironshore Therapeutics Inc. ("Ironshore") (the "Ironshore Acquisition").
Belbuca is a buccal film that contains buprenorphine, a Schedule III opioid, and was approved by the FDA in October 2015 for severe and persistent pain that requires an extended treatment period with a daily opioid analgesic and for which alternative options are inadequate. We began shipping and recognizing product revenue related to Belbuca in March 2022 following our acquisition of BioDelivery Sciences International, Inc. ("BDSI").
Xtampza ER, an abuse-deterrent, extended-release, oral formulation of oxycodone, is a Schedule II opioid and was approved by the FDA in April 2016 for the management of severe and persistent pain that requires an extended treatment period with a daily opioid analgesic and for which alternative treatment options are inadequate. We commercially launched Xtampza ER in June 2016.
The Nucynta Products are extended-release ("ER") and immediate-release ("IR") oral formulations of tapentadol, a Schedule II opioid. In November 2008, the FDA approved Nucynta ER and Nucynta IR. Nucynta ER is indicated for the management of severe and persistent pain that requires an extended treatment period with a daily opioid analgesic, including neuropathic pain associated with diabetic peripheral neuropathy in adults, and for which alternate treatment options are inadequate. Nucynta IR is indicated for the management of acute pain severe enough to require an opioid analgesic and for which alternative treatments are inadequate in adults and pediatric patients aged 6 years and older with a body weight of at least 40 kg. We began shipping and recognizing product revenue on the Nucynta Products in January 2018 and began marketing the Nucynta Products in February 2018. In August 2023, the FDA granted New Patient Population exclusivity for Nucynta IR in pediatric patients. This grant extended the period of U.S. exclusivity for Nucynta IR from June 27, 2025 to July 3, 2026. In June 2024, the FDA granted pediatric exclusivity to the Nucynta Products for an additional six months, to January 3, 2027 for Nucynta IR and December 27, 2025 for Nucynta ER.
We have entered into an authorized generic agreement with Hikma Pharmaceuticals USA Inc. ("Hikma"), pursuant to which we granted Hikma rights relating to an authorized generic version of the Nucynta Products in the United States. In January 2026, a generic equivalent of Nucynta IR 50mg, 75mg and 100mg tablets was approved under an abbreviated New Drug Application ("ANDA") filed by a third party with the FDA, which carves out pediatric use from its label. As a result of the anticipated launch of the third-party generic equivalent of Nucynta IR, Hikma launched a generic version of Nucynta IR on February 25, 2026. Hikma is expected to launch a generic version of Nucynta ER in the first quarter of 2026.
Symproic, an oral formulation of naldemedine, was approved by the FDA in March 2017 for the treatment of opioid-induced constipation ("OIC") in adult patients with chronic non-cancer pain, including patients with chronic pain related to prior cancer or its treatment who do not require frequent (e.g., weekly) opioid dosage escalation. We began shipping and recognizing product revenue related to Symproic in March 2022 following our acquisition of BDSI.
Financial Operations Overview
Product Revenues
Product revenues through the year ended December 31, 2025 were generated from sales of Jornay PM, Belbuca, Xtampza ER, the Nucynta Products, and Symproic. In accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, ("ASC 606") product sales are recorded upon delivery of products to customers (upon the transfer of control of the product to the customer), net of a provision for estimated chargebacks, rebates, sales incentives and allowances, distribution service fees, and returns.
Cost of Product Revenues
Cost of product revenues include amortization and impairment expense for the intangible assets acquired in connection with business combinations and asset acquisitions, royalty expenses, the cost of active pharmaceutical ingredient, the cost of producing finished goods that correspond with revenue for the reporting period, as well as certain period costs related to freight, packaging, stability and quality testing. Refer to Note 5,License Agreements, and Note 11, Goodwill and Intangible Assets, for further detail around the intangible assets acquired from the Ironshore Acquisition, the BDSI Acquisition, the Nucynta Intangible Asset, and royalty expenses.
Research and Development Expenses
Research and development expenses have historically consisted of product development expenses incurred in identifying, developing, and testing product candidates including stock-based compensation; costs associated with conducting our clinical and non-clinical activities, including clinical and non-clinical trials that we conduct for post-marketing requirements; and costs for laboratory supplies, depreciation of lab equipment, and other expenses including allocated expenses for rent and maintenance of facilities. These costs have historically been expensed as incurred.
As of April 1, 2022, we focused entirely on commercial products rather than research and development and redirected resources from research and development activities. As such, there were no expenses incurred in research and development after the three months ended March 31, 2022.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of salaries and employee-related costs, including stock-based compensation and travel expenses for our employees. Other selling, general and administrative expenses include expenses related to commercial activities, such as sales, marketing, and market access, facility-related costs, professional fees for directors, accounting and legal services, and expenses associated with obtaining and maintaining patents. As we continue to invest in the commercialization of our products, we expect our selling, general and administrative expenses to continue to be substantial for the foreseeable future.
Interest Expense
Interest expense consists primarily of cash and non-cash interest costs related to our debt, including term loans, delayed draw term loans, a revolving credit facility, and convertible notes. Our term loans consist of the term loan issued in December 2025 (the "2025 Term Loan"), which was issued along with a delayed draw term loan and revolving credit facility (collectively, the "2025 Credit Facility"), as well as the term loan issued in July 2024 in connection with the Ironshore Acquisition (the "2024 Term Loan") and the term loan issued in March 2022 in connection with the BDSI Acquisition (the "2022 Term Loan"). Our convertible notes consist of the convertible notes issued in February 2023 (the "2029 Convertible Notes") and the convertible notes issued in February 2020 in connection with the Nucynta Acquisition (the "2026 Convertible Notes").
Interest Income
Interest income consists of interest and amortization of premiums and discounts on investments earned on our cash, cash equivalents, and marketable securities.
Provision for Income Taxes
The provision for income taxes reflects expense or tax benefit for federal and state income taxes, as well as the impact of non-deductible expenses.
Critical Accounting Policies and Estimates
Our "Management's Discussion and Analysis of Financial Condition and Results of Operations" are based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. Estimates include revenue recognition, including the estimates of product returns, discounts and allowances related to commercial sales of our products, estimates related to the fair value of assets acquired and liabilities assumed in business combinations, including acquired intangible assets and the fair value of inventory acquired, estimates utilized in the ongoing valuation of inventory related to potential unsalable product, estimates of useful lives with respect to intangible assets, accounting for stock-based compensation, contingencies, impairment of goodwill and intangible assets, and deferred tax valuation allowances. We base our estimates and assumptions on historical experience when available and on various factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.
We believe that several accounting policies are important to understanding our historical and future performance. We refer to these policies as "critical" because these specific areas generally require us to make judgments and estimates about matters that are uncertain at the time we make the estimate, and different estimates-which also would have been reasonable-could have been used, which would have resulted in different financial results. While our significant accounting policies are described in more detail in Note 2, Summary of Significant Accounting Policies,to our consolidated financial statements appearing elsewhere in this Form 10-K, we believe the following accounting policies to be most critical to the significant judgments and estimates used in the preparation of our consolidated financial statements.
Revenue Recognition
Our accounting policy for revenue recognition will have a substantial impact on reported results and relies on certain estimates. Estimates are based on historical experience, current conditions and various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amounts of revenues and expenses. Actual results may differ from these estimates under different assumptions or conditions.
Product Revenue
Our only source of revenue to date has been generated by sales of our products, which are primarily sold to distributors ("customers"), which in turn sell the product to pharmacies and others for the treatment of patients. Revenue for product sales is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. This generally occurs upon delivery to our customers when estimated provisions for chargebacks, rebates, sales incentives and allowances, distribution service fees, and returns are reasonably determinable. Therefore, product sales are recorded upon delivery to our customers net of estimated rebates and incentives, product returns, and trade allowances and chargebacks.
Sales Deductions
Sales deductions consist primarily of provisions for: (i) rebates and incentives, including managed care rebates, government rebates, co-pay program incentives, and sales incentives and allowances; (ii) product returns, including return estimates for our products; and (iii) trade allowances and chargebacks, including fees for distribution service fees, prompt pay discounts, and chargebacks. We estimate the amount of variable consideration that should be included in revenue under the expected value method for all sales deductions other than trade allowances, which are estimated under the most likely amount method. These provisions reflect our best estimates of the amount of revenue to which we are entitled based on the terms of our contracts.
Provisions for rebates and incentives are based on the estimated amount of rebates and incentives to be claimed on the related sales from the period. As our rebates and incentives are based on products dispensed to patients, we are required to estimate the expected value of claims at the time of product delivery to distributors. Given that distributors sell the product to pharmacies, which in turn dispense the product to patients, claims can be submitted significantly after the related sales are recognized. Our estimates of these claims are based on the historical experience of existing or similar programs, including current contractual and statutory requirements, specific known market events and trends, industry data, and estimated distribution channel inventory levels. Accruals and related reserves required for rebates and incentives are adjusted as new information becomes available, including actual claims. If actual results vary, we may need to adjust these estimates, which could have an effect on earnings in the period of the adjustment.
Provisions for product returns, including returns for Jornay PM, Belbuca, Xtampza ER, the Nucynta Products, and Symproic, are based on product-level returns rates, including processed as well as unprocessed return claims, in addition to relevant market events and other factors. Estimates of the future product returns are made at the time of revenue recognition to determine the amount of consideration to which we expect to be entitled (that is, excluding the products expected to be returned). At the end of each reporting period, we analyze trends in returns rates and update our assessment of variable consideration for returns. To the extent we receive amounts in excess of what we expect to be entitled to receive due to a product return, we do not recognize revenue when we transfer products to customers but instead recognize those excess amounts received as a refund liability. We update the measurement of the refund liability at the end of each reporting period for changes in expectations about the amount of refunds with the corresponding adjustments recognized as revenue (or reductions of revenue).
We provide the right of return to our customers for an 18-month window beginning six months prior to expiration and up until twelve months after expiration. Our customers short-pay an existing invoice upon notice of a product return claim. Adjustments to the preliminary short-paid claims are processed when the return claim is validated and finalized. Our return policy requires that product is returned and that the return is claimed within the 18-month window. Refer to Note 3, Revenue from Contracts with Customers, for more information.
Provisions for trade allowances and chargebacks are primarily based on customer-level contractual terms. Accruals and related reserves are adjusted as new information becomes available, which generally consists of actual trade allowances and chargebacks processed. Actual results may differ from these estimates under different assumptions or conditions.
Business Combination Accounting and Valuation of Acquired Assets
We completed the Ironshore Acquisition in September 2024, which was accounted for as a business combination. To determine whether the acquisition should be accounted for as a business combination or as an asset acquisition, we make judgments regarding whether the acquired set of activities and assets met the definition of a business. Judgment is required in assessing whether the acquired processes or activities, along with their inputs, would be substantive to constitute a business, as defined by U.S. GAAP.
The acquisition method of accounting requires that we recognize the assets acquired and liabilities assumed at their acquisition date fair values. Goodwill is measured as the excess of consideration transferred over the acquisition date net fair values of the assets acquired and the liabilities assumed. The determination of the fair value of the acquired assets and liabilities assumed is a critical accounting estimate because the estimation of fair values requires significant management judgment and requires various assumptions based on non-observable inputs that are included in valuation models. An income approach, which generally relies upon projected cash flow models, is used in estimating the fair value of the acquired intangible assets and the deferred royalty obligation. The fair value of acquired inventory is based on inventory cost and other assumptions. The cash flow projections are based on management's estimates of economic and market conditions including the estimated future cash flows from revenues of acquired assets, the timing and projection of costs and expenses and the related profit margins, tax rates, and an appropriate discount rate.
During the measurement period, which occurs before finalization of the purchase price allocation, changes in assumptions and estimates that result in adjustments to the fair values of assets acquired and liabilities assumed, if based on facts and circumstances existing at the acquisition date, are recorded on a retroactive basis as of the acquisition date, with the corresponding offset to goodwill. Any adjustments not based on facts and circumstances existing at the acquisition date, or if subsequent to the conclusion of the measurement period, will be recorded to our consolidated statements of operations.
Income Taxes
We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax basis of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse.
We provide a valuation allowance when it is more likely than not that deferred tax assets will not be realized. In determining the extent to which a valuation allowance for deferred tax assets is required, we evaluate all available evidence including projections of future taxable income, carryback opportunities, reversal of certain deferred tax liabilities, and other tax planning strategies, all of which are subject to uncertainty. Certain deferred tax assets, such as net operating losses and tax credits, expire at varying dates and are generally subject to annual limitations under Section 382 of the Internal Revenue Code of 1986, as amended ("IRC 382"). Significant judgment is required in making these evaluations, including comparing future annual income projections to the expiration dates and annual limitations of such assets. To the extent our future expectations change, we would have to assess the recoverability of these deferred tax assets at that time.
We have maintained a valuation allowance on the portion of our deferred tax assets that are not more likely than not to be realized due to tax limitation or other conditions of $5.3 million as of December 31, 2025.
Results of Operations
In this section, we discuss the results of our operations for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Comparison of the Years Ended December 31, 2025 and 2024
The following table summarizes the results of our operations for the years ended December 31, 2025 and 2024:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Product revenues, net | $ | 780,567 | $ | 631,449 | |||||||
| Cost of product revenues | |||||||||||
| Cost of product revenues (excluding intangible asset amortization) | 95,418 | 88,801 | |||||||||
| Intangible asset amortization | 221,892 | 165,304 | |||||||||
| Total cost of product revenues | 317,310 | 254,105 | |||||||||
| Gross profit | 463,257 | 377,344 | |||||||||
| Operating expenses | |||||||||||
| Selling, general and administrative | 284,803 | 210,363 | |||||||||
| Gain on fair value remeasurement of contingent consideration | (1,182) | (2,914) | |||||||||
| Total operating expenses | 283,621 | 207,449 | |||||||||
| Income from operations | 179,636 | 169,895 | |||||||||
| Interest expense | (82,312) | (73,974) | |||||||||
| Interest income | 11,289 | 13,976 | |||||||||
| Loss on extinguishment of debt | (15,994) | (11,329) | |||||||||
| Income before income taxes | 92,619 | 98,568 | |||||||||
| Provision for income taxes | 29,749 | 29,378 | |||||||||
| Net income | $ | 62,870 | $ | 69,190 | |||||||
Product revenues, net
Product revenues, net were $780.6 million for the year ended December 31, 2025 ("2025"), compared to $631.4 million for the year ended December 31, 2024 ("2024"), representing a $149.2 million increase. The $149.2 million increase was primarily due to increases in revenue for Jornay PM of $111.7 million, the Nucynta Products of $19.8 million, Belbuca of $10.4 million, and Xtampza ER of $8.0 million, partially offset by decreases in revenue for Symproic and other of $0.7 million.
The increase in revenue for Jornay PM of $111.7 million was due to 2025 including a full year of product revenues compared to a partial year in 2024 as the product was acquired from the Ironshore Acquisition in September 2024.
The increase in revenue for the Nucynta Products of $19.8 million was primarily due to lower gross-to-net adjustments related to provisions for rebates and higher gross price, partially offset by lower sales volume.
The increase in revenue for Belbuca of $10.4 million was primarily due to lower gross-to-net adjustments related to provisions for rebates and higher gross price, partially offset by higher gross-to-net adjustments related to provisions for chargebacks and lower sales volume.
The increase in revenue for Xtampza ER of $8.0 million was primarily due to lower gross-to-net adjustments related to provisions for rebates, including the recognition of $3.2 million related to certain rebate settlements during 2025. In addition, revenue increased due to higher gross price partially offset by lower sales volume.
Cost of product revenues
Cost of product revenues (excluding intangible asset amortization) was $95.4 million for 2025, compared to $88.8 million for 2024. The $6.6 million increase was primarily due to 2025 including a full year of cost of product revenues for Jornay PM compared to a partial year in 2024 as the product was acquired from the Ironshore Acquisition in September 2024. In addition, cost of product revenues increased due to 2025 including $3.1 million of royalty expense related to the Company's license agreement with Grünenthal that is subject to future recovery, partially offset by lower current period royalty expense.
Intangible asset amortization was $221.9 million for 2025, compared to $165.3 million for 2024. The $56.6 million increase in intangible asset amortization was primarily related to 2025 including a full year of amortization from the intangible asset acquired in the Ironshore Acquisition in September 2024.
Operating expenses
Selling, general and administrative expenses were $284.8 million for 2025, compared to $210.4 million for 2024. The $74.4 million increase was primarily related to:
•an increase in salaries, wages and benefits of $49.4 million primarily due to additional headcount added in 2025 as a result of the Ironshore Acquisition, including the expansion of the sales force that promotes Jornay PM in 2025, as well as expenses incurred as a result of certain executive transitions announced in 2025, including stock-based compensation expense of $2.6 million related to accelerated equity awards and severance, benefits, and related expenses incurred of $1.4 million;
•an increase in sales and marketing expenses of $37.6 million, primarily due to expenses incurred to support Jornay PM following the Ironshore Acquisition in September 2024; and
•an increase in audit and legal expenses of $4.9 million primarily due to expenses related to litigation; partially offset by:
•a decrease in acquisition related expenses of $20.1 million, as 2024 included transaction costs and other expenses incurred shortly after the Ironshore Acquisition that did not recur at the same level in 2025.
Gain on fair value remeasurement of contingent consideration was $1.2 million for 2025, compared to $2.9 million for 2024. The $1.7 million decrease was due to the revaluation of the contingent consideration associated with the Ironshore Acquisition and reflects the liability being reduced to zero in 2025 after the related milestone was not achieved.
Interest expense and Interest income
Interest expense was $82.3 million for 2025, compared to $74.0 million for 2024. The $8.3 million increase was primarily due to higher interest expense of $8.8 million related to the deferred royalty obligation that was assumed as part of the Ironshore Acquisition in September 2024. Interest expense from term loans was materially consistent in 2025 compared to 2024 due to the refinancing of our term loans in the third quarter of 2024 and the fourth quarter of 2025, which resulted in a lower interest rate offset by a higher principal balance.
Interest income was $11.3 million for 2025, compared to $14.0 million for 2024. The $2.7 million decrease was primarily due to lower interest rates earned on cash equivalents and marketable securities in 2025 compared to 2024.
Loss on extinguishment of debt
Loss on extinguishment of debt was $16.0 million for 2025, compared to $11.3 million for 2024. The $4.7 million increase was due to 2025 including a $16.0 million loss on extinguishment resulting from the repayment of the 2024 Term Loan. In 2024, the remaining $26.4 million of the 2026 Convertible Notes were redeemed, resulting in a $7.2 million loss on extinguishment. In addition, in 2024, assumed debt from the Ironshore Acquisition was extinguished, resulting in a loss on extinguishment of $4.1 million.
Income Taxes
The provision for income taxes was $29.7 million for 2025, compared to $29.4 million for 2024. The $0.3 million increase was primarily due to higher nondeductible items in 2025 compared to 2024, including the impact of nondeductible officer compensation, stock compensation, and provision-to-return adjustments, partially offset by lower earnings before taxes. The effective tax rate was 32.1% and 29.8% for 2025 and 2024, respectively.
Liquidity and Capital Resources
Sources of Liquidity
Historically, we have funded our operations primarily through public offerings of our common stock, private placements of term debt; convertible notes; and cash inflows from sales of our products. We are primarily dependent on the commercial success of Jornay PM, Belbuca, Xtampza ER, and the Nucynta Products.
In December 2025, we entered into the 2025 Credit Agreement, which consists of the $580.0 million 2025 Term Loan, a $300.0 million of delayed draw term loan commitments, and a $100.0 million revolving credit facility, which is fully available as of December 31, 2025. The 2025 Term Loan was used to repay in full the remaining outstanding obligations under the 2024 Term Loan and to pay fees and expenses relating to the entry into the 2025 Credit Agreement and the remainder for general corporate purposes.
As of December 31, 2025, the outstanding principal balance of the 2025 Term Loan was $580.0 million, of which $29.0 million in principal payments are due within the next 12 months. As of December 31, 2025, the outstanding principal balance of the 2029 Convertible Notes was $241.5 million. As of December 31, 2025, and December 31, 2024, we had $231.3 million and $70.6 million in cash and cash equivalents, respectively.
We believe that our cash, cash equivalents, and marketable securities as of December 31, 2025, together with expected cash inflows from operations, will enable us to fund our operating expenses, debt service and capital expenditure requirements under our current business plan for the foreseeable future.
Borrowing Arrangements and Equity Offerings
Our material borrowing arrangements and equity offerings are the 2025 Credit Facility and the 2029 Convertible Notes. Refer to Note 14, Debt, for more information.
Cash flows
In this section, we discuss cash flows for the year ended December 31, 2025 compared to the year ended December 31, 2024.
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Net cash provided by operating activities | $ | 329,323 | $ | 204,980 | |||||||
| Net cash used in investing activities | (63,532) | (287,759) | |||||||||
| Net cash used in financing activities | (110,245) | (60,603) | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 155,546 | $ | (143,382) | |||||||
Operating activities.Cash provided by operating activities was $329.3 million in 2025, compared to $205.0 million in 2024. The $124.3 million increase in cash provided by operating activities was primarily due to the increase in cash flow from operating results after adjustment for non-cash items that are included in net income as well as due to changes in working capital, which were significantly impacted by the payment of assumed liabilities from Ironshore in 2024.
Investing activities.Cash used in investing activities was $63.5 million in 2025, compared to $287.8 million in 2024. The $224.3 million decreasein cash used in investing activities was primarily due 2024 including $267.5 million of cash used to acquire Ironshore (net of cash acquired), partially offset by a $43.2 million increase in cash used in investing in marketable securities.
Financing activities.Cash used in financing activities was $110.2 million in 2025, compared to $60.6 million in 2024. The $49.6 million increase in cash used in financing activities was primarily due to:
•an increase in cash used for repayments of term loans of $527.7 million; and
•an increase in deferred purchase price payments related to the Ironshore Acquisition of $7.6 million; partially offset by:
•an increase in cash provided by term note financings of $252.0 million;
•2024 including the repayment of assumed debt from the Ironshore Acquisition of $164.6 million, which did not recur in 2025;
•a decrease in cash used to repurchase common stock of $34.9 million; and
•2024 including the redemption of $33.2 million of the remaining 2026 Convertible Notes, which did not recur in 2025.
Funding requirements
We believe that our cash, cash equivalents, and marketable securities as of December 31, 2025, together with expected cash inflows from operations, will enable us to fund our operating expenses, debt service and capital expenditure requirements under our current business plan for the foreseeable future. However, we are subject to all the risks common to the commercialization and development of new pharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.
We have significant future capital requirements, including:
•expected operating expenses to manufacture and commercialize our products and to operate our organization;
•repayment of outstanding principal amounts and interest in connection with our 2025 Term Loan and 2029 Convertible Notes;
•royalties we pay on sales of certain products within our portfolio;
•payment of income taxes;
•deferred royalty obligation in connection with Jornay PM;
•operating lease obligations;
•minimum purchase obligations in connection with our contract manufacturer; and
•contingent payment upon the achievement of a financial milestone based on net revenues of Jornay PM.
In addition, we have significant potential future capital requirements, including:
•we may enter into business development transactions, including acquisitions, collaborations, licensing arrangements and equity investments, that require additional capital;
•any judgments rendered against us in connection with any of the litigation matters set forth in Note 13, Commitments and Contingencies, to our financial statements; and
•in July 2025, our Board of Directors authorized a new share repurchase program for the repurchase of up to $150.0 million of shares of our common stock through December 31, 2026. As of December 31, 2025, $150.0 million remained available for share repurchases under the 2025-2026 Repurchase Program. Future share repurchases will depend upon, among other factors, our cash balances and potential future capital requirements, our results of operations and financial conditions, the price of our common stock on the Nasdaq Global Select Market, and other factors that we may deem relevant.
Contractual Obligations
Our contractual obligations as of December 31, 2025 that will affect our future liquidity include our term loans, including interest; convertible senior notes, including interest; operating lease obligations; deferred royalty obligation; and purchase obligations. For further detail regarding our term loans and convertible senior notes, refer to Note 14, Debt.For further detail regarding our deferred royalty obligation, refer to Note 15, Deferred Royalty Obligation.For further detail regarding our operating lease obligations, refer to Note 16, Leases.
Our purchase obligations represent the minimum purchase obligations of up to $3.0 million per year with our contract manufacturer which are in effect as of December 31, 2025 and will remain in effect each year until the termination of our manufacturing agreement.
We also have employment agreements with executive officers that would require us to make severance payments to them if we terminate their employment without cause or the executives resign for good reason. These payments are contingent upon the occurrence of various future events, and the amounts payable under these provisions depend upon the level of compensation at the time of termination of employment, and therefore, are not calculable at this time.
Non-GAAP Financial Measures
To supplement our financial results presented on a GAAP basis, we have included information about certain non-GAAP financial measures. We believe the presentation of these non-GAAP financial measures, when viewed with our results under GAAP and the accompanying reconciliations, provide analysts, investors, lenders, and other third parties with insights into how we evaluate normal operational activities, including our ability to generate cash from operations, on a
comparable year-over-year basis and manage our budgeting and forecasting. In addition, certain non-GAAP financial measures, primarily Adjusted EBITDA, are used to measure performance when determining components of annual compensation for substantially all non-sales force employees, including senior management.
We may discuss the following financial measures that are not calculated in accordance with GAAP in our quarterly and annual reports, earnings press releases and conference calls.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that represents GAAP net income or loss adjusted to exclude interest expense, interest income, the benefit from or provision for income taxes, depreciation, amortization, stock-based compensation, and other adjustments to reflect changes that occur in our business but do not represent ongoing operations. Adjusted EBITDA, as used by us, may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
There are several limitations related to the use of adjusted EBITDA rather than net income or loss, which is the nearest GAAP equivalent, such as:
•adjusted EBITDA excludes depreciation and amortization, and, although these are non-cash expenses, the assets being depreciated or amortized may have to be replaced in the future, the cash requirements for which are not reflected in adjusted EBITDA;
•adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs;
•adjusted EBITDA does not reflect the benefit from or provision for income taxes or the cash requirements to pay taxes;
•adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
•we exclude stock-based compensation expense from adjusted EBITDA although: (i) it has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; and (ii) if we did not pay out a portion of our compensation in the form of stock-based compensation, the cash salary expense included in operating expenses would be higher, which would affect our cash position;
•we exclude impairment expenses from adjusted EBITDA and, although these are non-cash expenses, the asset(s) being impaired may have to be replaced in the future, the cash requirements for which are not reflected in adjusted EBITDA;
•we exclude restructuring expenses from adjusted EBITDA. Restructuring expenses primarily include employee severance and contract termination costs that are not related to acquisitions. The amount and/or frequency of these restructuring expenses are not part of our underlying business;
•we exclude litigation settlements and contingencies that are subject to recovery from adjusted EBITDA, as well as any applicable income items, credit adjustments, or recoveries due to subsequent changes in estimates. This does not include our legal fees to defend claims, which are expensed as incurred;
•we exclude acquisition related expenses as the amount and/or frequency of these expenses are not part of our underlying business. Acquisition related expenses include transaction costs, which primarily consisted of financial advisory, banking, legal, and regulatory fees, and other consulting fees, incurred to complete the acquisition, employee-related expenses (severance cost and benefits) for terminated employees after the acquisition, legal defense expenses for specific acquired claims that relate to acts that occurred prior to our acquisition, and miscellaneous other acquisition related expenses incurred;
•we exclude recognition of the step-up basis in inventory from acquisitions (i.e., the adjustment to record inventory from historic cost to fair value at acquisition) as the adjustment does not reflect the ongoing expense associated with sale of our products as part of our underlying business;
•we exclude losses on extinguishments of debt as these expenses are episodic in nature and do not directly correlate to the cost of operating our business on an ongoing basis;
•we exclude executive transition expenses from adjusted EBITDA as the amount and/or frequency of these expenses are episodic in nature and do not directly correlate to the cost of operating our business on an ongoing basis; and
•we exclude other expenses, from time to time, that are episodic in nature and do not directly correlate to the cost of operating our business on an ongoing basis.
Adjusted EBITDA for the years ended December 31, 2025 and 2024 was as follows:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| GAAP net income | $ | 62,870 | $ | 69,190 | |||||||
| Adjustments: | |||||||||||
| Interest expense | 82,312 | 73,974 | |||||||||
| Interest income | (11,289) | (13,976) | |||||||||
| Loss on extinguishment of debt | 15,994 | 11,329 | |||||||||
| Provision for income taxes | 29,749 | 29,378 | |||||||||
| Depreciation | 4,182 | 3,856 | |||||||||
| Amortization | 221,892 | 165,304 | |||||||||
| Stock-based compensation | 41,906 | 32,400 | |||||||||
| Litigation settlements and contingencies | 3,058 | - | |||||||||
| Recognition of step-up basis in inventory | 5,431 | 5,269 | |||||||||
| Executive transition expense | 1,397 | 3,051 | |||||||||
| Acquisition related expenses | 4,175 | 24,329 | |||||||||
| Gain on fair value remeasurement of contingent consideration | (1,182) | (2,914) | |||||||||
| Total adjustments | $ | 397,625 | $ | 332,000 | |||||||
| Adjusted EBITDA | $ | 460,495 | $ | 401,190 | |||||||
Adjusted EBITDA was $460.5 million for 2025 compared to $401.2 million for 2024. The $59.3 million increase was primarily due to higher revenues of $149.2 million, partially offset by higher salaries, wages and benefits (excluding stock-based compensation and executive transition expense) of $41.6 million, higher sales and marketing expenses of $37.6 million, and higher audit and legal fees of $4.9 million.
The following is a summary of 2025 quarterly Adjusted EBITDA:
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| GAAP Net income | $ | 2,417 | $ | 11,983 | $ | 31,507 | $ | 16,963 | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
| Interest expense | 20,790 | 20,463 | 21,767 | 19,292 | ||||||||||||||||||||||
| Interest income | (2,225) | (2,383) | (3,116) | (3,565) | ||||||||||||||||||||||
| Loss on extinguishment of debt | - | - | - | 15,994 | ||||||||||||||||||||||
| Provision for income taxes | 705 | 5,042 | 11,929 | 12,073 | ||||||||||||||||||||||
| Depreciation | 1,091 | 1,135 | 1,033 | 923 | ||||||||||||||||||||||
| Amortization | 55,473 | 55,473 | 55,473 | 55,473 | ||||||||||||||||||||||
| Stock-based compensation | 11,524 | 10,818 | 9,811 | 9,753 | ||||||||||||||||||||||
| Litigation settlements and contingencies | - | - | 3,058 | - | ||||||||||||||||||||||
| Recognition of step-up basis in inventory | 3,477 | 1,954 | - | - | ||||||||||||||||||||||
| Executive transition expense | 1,397 | - | - | - | ||||||||||||||||||||||
| Acquisition related expenses | 1,289 | 935 | 1,552 | 399 | ||||||||||||||||||||||
| Gain on fair value remeasurement of contingent consideration | (786) | (358) | (19) | (19) | ||||||||||||||||||||||
| Total adjustments | $ | 92,735 | $ | 93,079 | $ | 101,488 | $ | 110,323 | ||||||||||||||||||
| Adjusted EBITDA | $ | 95,152 | $ | 105,062 | $ | 132,995 | $ | 127,286 | ||||||||||||||||||
Adjusted Operating Expenses
Adjusted operating expenses is a non-GAAP financial measure that represents GAAP operating expenses adjusted to exclude stock-based compensation expense, and other adjustments to reflect changes that occur in our business but do not represent ongoing operations.
Adjusted operating expenses for the years ended December 31, 2025 and 2024 were as follows:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| GAAP operating expenses | $ | 283,621 | $ | 207,449 | |||||||
| Adjustments: | |||||||||||
| Stock-based compensation | 41,906 | 32,400 | |||||||||
| Executive transition expense | 1,397 | 3,051 | |||||||||
| Acquisition related expenses | 4,175 | 24,329 | |||||||||
| Gain on fair value remeasurement of contingent consideration | (1,182) | (2,914) | |||||||||
| Total adjustments | $ | 46,296 | $ | 56,866 | |||||||
| Adjusted operating expenses | $ | 237,325 | $ | 150,583 | |||||||
Adjusted operating expenses were $237.3 million for 2025 compared to $150.6 million for 2024. The $86.7 million increase was primarily driven by:
•an increase in salaries, wages, and benefits (excluding stock-based compensation and executive transition expense) of $41.6 million, primarily due to additional headcount added as a result of the Ironshore Acquisition;
•an increase in sales and marketing expenses of $37.6 million, primarily due to expenses incurred to support the ongoing commercialization of Jornay PM following the Ironshore Acquisition in September 2024; and
•an increase in audit and legal fees of $4.9 million, primarily due to expenses related to litigation expenses.
The following is a summary of 2025 quarterly adjusted operating expenses:
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| GAAP operating expenses | $ | 75,637 | $ | 73,279 | $ | 67,084 | $ | 67,621 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Stock-based compensation | 11,524 | 10,818 | 9,811 | 9,753 | |||||||||||||||||||
| Executive transition expense | 1,397 | - | - | - | |||||||||||||||||||
| Acquisition related expenses | 1,289 | 935 | 1,552 | 399 | |||||||||||||||||||
| Gain on fair value remeasurement of contingent consideration | (786) | (358) | (19) | (19) | |||||||||||||||||||
| Total adjustments | $ | 13,424 | $ | 11,395 | $ | 11,344 | $ | 10,133 | |||||||||||||||
| Adjusted operating expenses | $ | 62,213 | $ | 61,884 | $ | 55,740 | $ | 57,488 | |||||||||||||||
Adjusted Net Income and Adjusted Earnings Per Share
Adjusted net income is a non-GAAP financial measure that represents GAAP net income or loss adjusted to exclude significant income and expense items that are non-cash or not indicative of ongoing operations, including consideration of the tax effect of the adjustments. Adjusted earnings per share is a non-GAAP financial measure that represents adjusted net income per share. Adjusted weighted-average shares - diluted is calculated in accordance with the treasury stock, if-converted, or contingently issuable accounting methods, depending on the nature of the security.
Adjusted net income and adjusted earnings per share for the years ended December 31, 2025 and 2024 were as follows:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands, except share and per share data) | |||||||||||
| GAAP net income | $ | 62,870 | $ | 69,190 | |||||||
| Adjustments: | |||||||||||
| Non-cash interest expense | 5,341 | 9,729 | |||||||||
| Loss on extinguishment of debt | 15,994 | 11,329 | |||||||||
| Amortization | 221,892 | 165,304 | |||||||||
| Stock-based compensation | 41,906 | 32,400 | |||||||||
| Litigation settlements and contingencies | 3,058 | - | |||||||||
| Recognition of step-up basis in inventory | 5,431 | 5,269 | |||||||||
| Executive transition expense | 1,397 | 3,051 | |||||||||
| Acquisition related expenses | 4,175 | 24,329 | |||||||||
| Gain on fair value remeasurement of contingent consideration | (1,182) | (2,914) | |||||||||
|
Income tax effect of above adjustments (1)
|
(71,599) | (62,880) | |||||||||
| Total adjustments | $ | 226,413 | $ | 185,617 | |||||||
| Non-GAAP adjusted net income | $ | 289,283 | $ | 254,807 | |||||||
|
Adjusted weighted-average shares - diluted (2)
|
39,701,693 | 40,424,180 | |||||||||
|
Adjusted earnings per share (2)
|
$ | 7.42 | $ | 6.45 | |||||||
(1)The income tax effect of the adjustments was calculated by applying our blended federal and state statutory rate to the adjustments that have a tax effect. The blended federal and state statutory rate for the years ended December 31, 2025 and 2024 were 24.8% and 26.5%, respectively. As such, the non-GAAP effective tax rates for the years ended December 31, 2025 and 2024 were 24.0% and 25.3%, respectively.
(2)Adjusted weighted-average shares - diluted were calculated using the "if-converted" method for the convertibles notes in accordance with ASC 260, Earnings per Share. As such, adjusted weighted-average shares - diluted includes shares related to the assumed conversion of our convertible notes and the associated cash interest expense added-back to non-GAAP adjusted net income. For the years ended December 31, 2025 and 2024, adjusted weighted-average shares - diluted includes 6,606,305 attributable to our convertible notes. In addition, adjusted earnings per share includes other potentially dilutive securities to the extent that they are not antidilutive.
The following is a summary of 2025 quarterly adjusted net income and adjusted earnings per share:
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||||||||||
| GAAP net income | $ | 2,417 | $ | 11,983 | $ | 31,507 | $ | 16,963 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Non-cash interest expense | 1,367 | 1,355 | 1,343 | 1,276 | |||||||||||||||||||
| Loss on extinguishment of debt | - | - | - | 15,994 | |||||||||||||||||||
| Amortization | 55,473 | 55,473 | 55,473 | 55,473 | |||||||||||||||||||
| Stock-based compensation | 11,524 | 10,818 | 9,811 | 9,753 | |||||||||||||||||||
| Litigation settlements and contingencies | - | - | 3,058 | - | |||||||||||||||||||
| Recognition of step-up basis in inventory | 3,477 | 1,954 | - | - | |||||||||||||||||||
| Executive transition expense | 1,397 | - | - | - | |||||||||||||||||||
| Acquisition related expenses | 1,289 | 935 | 1,552 | 399 | |||||||||||||||||||
| Gain on fair value remeasurement of contingent consideration | (786) | (358) | (19) | (19) | |||||||||||||||||||
|
Income tax effect of above adjustments (1)
|
(18,737) | (17,871) | (15,453) | (19,538) | |||||||||||||||||||
| Total adjustments | $ | 55,004 | $ | 52,306 | $ | 55,765 | $ | 63,338 | |||||||||||||||
| Non-GAAP adjusted net income | $ | 57,421 | $ | 64,289 | $ | 87,272 | $ | 80,301 | |||||||||||||||
|
Adjusted weighted-average shares - diluted (2)
|
39,446,458 | 39,075,703 | 39,439,890 | 40,076,457 | |||||||||||||||||||
|
Adjusted earnings per share(2)
|
$ | 1.49 | $ | 1.68 | $ | 2.25 | $ | 2.04 | |||||||||||||||
(1)The income tax effect of the adjustments was calculated by applying our blended federal and state statutory rate to the adjustments that have a tax effect. The blended federal and state statutory rate for the three months ended March 31, June 30, September 30, and December 31, 2025 were 25.8%, 25.7%, 21.8%, and 25.5%, respectively. As such, the non-GAAP effective tax rates for the three months ended March 31, June 30, September 30, and December 31, 2025 were 25.4%, 25.5%, 21.7%, and 23.6%, respectively.
(2)Adjusted weighted-average shares - diluted were calculated using the "if-converted" method for the convertible notes in accordance with ASC 260, Earnings per Share. As such, adjusted weighted-average shares - diluted includes shares related to the assumed conversion of our convertible notes and the associated cash interest expense added-back to non-GAAP adjusted net income. For the three months ended March 31, June 30, September 30, and December 31, 2025, adjusted weighted-average shares - diluted includes 6,606,305 shares attributable to our convertible notes. In addition, adjusted earnings per share includes other potentially dilutive securities to the extent that they are not antidilutive.
Collegium Pharmaceutical Inc. published this content on February 26, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 26, 2026 at 12:35 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]