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Surge in Xtampza Sales Bodes Well for Collegium Pharmaceutical

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Company overview

Collegium Pharmaceutical (COLL) is a specialty pharmaceutical company focused on bringing to market products for people suffering from pain. Xtampza, its first product on the market, is an abuse-deterrent, extended-release oral formulation of oxycodone, which is a widely prescribed opioid medication. In January 2018, Collegium began commercializing Nucynta products. Nucynta ER and Nucynta IR are formulations of tapentadol indicated for the management of pain.

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Top line

Collegium Pharmaceutical generated total revenues of $73.06 million in the second quarter of 2018 as compared with $3.56 million in the second quarter of 2017. Sales of Xtampza surged from $3.56 million in the second quarter of 2017 to $18.12 million in the second quarter of 2018. Nucynta generated sales of $54.94 million in the second quarter.

For fiscal 2018 and 2019, the company is expected to generate revenues of $293.41 million and $356.47 million, respectively, as compared with revenues of $28.48 million in fiscal 2017. Collegium Pharmaceutical incurred a cost of revenues of $46.84 million in the second quarter as compared with $577,000 in the second quarter of 2017. The company’s gross profit surged from $2.98 million in the second quarter of 2017 to $26.22 million in the second quarter of 2018.

Collegium Pharmaceutical’s gross margins contracted from 83.79% in the second quarter of 2017 to 35.89% in the second quarter of 2018. For fiscal 2018 and 2019, Collegium Pharmaceutical’s gross margins are expected at 35.94% and 45.14%, respectively.

Operating expenses

The selling, general, and administrative expenses incurred by Collegium Pharmaceutical increased from $22.06 million in the second quarter of 2017 to $31.28 million in the second quarter of 2018. Its research and development expenses also increased from $2.18 million in the second quarter of 2017 to $2.24 million in the second quarter of 2018. The total operating expenses incurred by the company increased from $24.82 million in the second quarter of 2017 to $80.35 million in the second quarter of 2018.

Due to the surge in revenues, Collegium Pharmaceutical’s operating loss narrowed from $21.26 million in the second quarter of 2017 to $7.29 million in the second quarter of 2018.

We’ll take a look at Collegium Pharmaceutical’s bottom line and valuations in the next part.

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