IPO Report: Collegium Pharmaceutical (COLL)

Francis Gaskins |

Collegium Pharmaceutical (COLL) is a specialty pharmaceutical company developing and planning to commercialize next-generation abuse-deterrent products that incorporate its patented DETERx® platform technology for the treatment of chronic pain and other diseases. It is based in Canton, MA.

Eleven other companies are scheduled for the week of May 4. The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: Jefferies, Piper Jaffray
Co-managers: Wells Fargo Securities, Needham & Company

End of lockup (180 days): Tuesday, November 3, 2015
End of 25-day quiet period: Monday, June 1, 2015

COLL scheduled a $75 million IPO with a market capitalization of $251 million at a price range midpoint of $13 for Thursday, May 7, 2015 on Nasdaq.

Collegium Pharmaceutical Summary

COLL is a specialty pharmaceutical company developing and planning to commercialize next-generation abuse-deterrent products that incorporate its patented DETERx® platform technology for the treatment of chronic pain and other diseases.

COLL’s lead product candidate, Xtampza ER™, or Xtampza, is an abuse-deterrent, extended-release, oral formulation of oxycodone, a widely prescribed opioid medication.

Collegium Pharmaceutical Valuation

Glossary  

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

Collegium Pharmaceutical (COLL)

$217

no rev

-12.0

2.1

2.4

35%

             

Collegium Pharmaceutical Conclusion

Neutral

Oral formulation of narcotic oxycodone, abuse deterrent                                                            

OxyContin® OP had $2.5bb in US sales in '14                                                               

FDA Fast Track review date goal of 10/15/15                                                                 

Price to book of 2.1, relatively low                                                                    

P/E of -12 indicating moderate cash burn rate relative to market cap                                                       

No revenue                                                                  

Shareholders not buying                                                                       

Collegium Pharmaceutical Business

COLL is a specialty pharmaceutical company developing and planning to commercialize next-generation abuse-deterrent products that incorporate its patented DETERx® platform technology for the treatment of chronic pain and other diseases.

COLL’s lead product candidate, Xtampza ER™, or Xtampza, is an abuse-deterrent, extended-release, oral formulation of oxycodone, a widely prescribed opioid medication.

Xtampza has the same active ingredient as OxyContin® OP, which is the largest selling abuse-deterrent, extended-release opioid in the United States by dollars, with $2.5 billion in U.S. sales in 2014.

Collegium Pharmaceutical FDA Fast Track

Xtampza has received Fast Track status from the U.S. Food and Drug Administration, or FDA. COLL’s new drug application, or NDA, filing for Xtampza was accepted by the FDA on February 10, 2015.

On February 25, 2015, the FDA set a Prescription Drug User Fee Act, or PDUFA, goal date of October 12, 2015 for completion of its review of the Xtampza NDA.

If Regulatory Approval

If COLL obtains regulatory approval for Xtampza, then the company expects to incur significant commercialization expenses related to marketing, product sales and reimbursement functions.

Initially COLL plans to detail Xtampza to approximately 10,000 physicians who write more than 50% of the branded extended-release oral opioid prescriptions in the United States with a sales team of approximately 100 sales representatives.

In addition, COLL plans to deploy a separate, focused sales team to detail Xtampza to nursing homes, hospices and other institutions treating large populations of the elderly and other patients who need chronic pain relief and have difficulty swallowing.

Accordingly, COLL will seek to fund operations through public or private equity or debt financings or other sources

Collegium Pharmaceutical Preclinical & Clinical Programs

COLL  conducted a comprehensive preclinical and clinical program for Xtampza consistent with FDA guidance on abuse-deterrence.

These studies and clinical trials demonstrated that chewing, crushing and/or dissolving Xtampza, and then taking it orally or smoking, snorting or injecting it did not meaningfully change its drug release profile or safety characteristics.

By contrast, clinical trials performed by COLL  and others — including a head-to-head clinical trial comparing Xtampza with OxyContin OP — have shown that drug abusers can achieve rapid release and absorption of the active ingredient by manipulating OxyContin OP using common household tools and methods commonly available on the Internet.

In addition, COLL’s preclinical studies and clinical trials have shown that the contents of the Xtampza capsule can be removed from the capsule and sprinkled on food, directly into the mouth or administered through feeding tubes, without compromising their drug release profile, safety or abuse-deterrent characteristics.

By contrast, OxyContin OP, which is formulated in hard tablets, has a black box warning label stating that crushing, dissolving or chewing can cause rapid release and absorption of a potentially fatal dose of the active ingredient. COLL believes that Xtampza, if approved, can address the pain management needs of the approximately 11 million patients in the United States who suffer from chronic pain and have difficulty swallowing.

Collegium Pharmaceutical Intellectual Property

COLL’s patent portfolio directed toward Xtampza and its DETERx technology consists of six issued patents in the United States (four of which claim compositions of matter, one of which claims both compositions of matter and methods of use, and one of which claims methods of use), two pending applications in the European Union and one issued patent in each of Canada, Japan and Australia.

In addition, COLL has six patent applications pending in the United States, and two pending foreign patent applications (excluding Europe), in Japan and Canada.

COLL’s issued U.S. patents are projected to expire in 2023 and 2025, and its pending patent applications in the United States, if issued, would be projected to expire in 2023 and 2030.

In addition, COLL uses a unique and proprietary process to manufacture its products that requires significant know-how, which COLL currently protects as trade secrets.

Collegium Pharmaceutical Competition

Currently, the only opioid drugs on the market for chronic pain relief that have an abuse-deterrent label are OxyContin OP and Hysingla®, both of which are marketed by Purdue, and Embeda, which is marketed by Pfizer.

In addition, there is one other approved extended-release opioid that has abuse-deterrent labeling — Targiniq from Purdue — which is not currently on the market. Hysingla is a once a day hydrocodone extended-release product. Embeda is a combination of morphine and naltrexone, an opioid antagonist that can be sprinkled on soft food but contains a black box warning label stating that "crushing, dissolving or chewing can cause rapid release and absorption of a potentially fatal dose of the active drug."

Also, according to the warning labels of Oxycontin OP and other extended-release opioids, administration of the active ingredients by injection may result in necrosis, infection and increased risk of heart disease.

Targiniq is a combination of oxycodone and naloxone, an opioid antagonist. In 2014, sales of extended-release opioids in the United States were $6 billion, consisting of a number of large and small companies, including Purdue, Pfizer, Actavis, Endo Pharmaceuticals, Zogenix, Janssen Pharmaceuticals,

Mallinckrodt and several generic drug companies. A number of other large and small companies are developing abuse-deterrent drugs for chronic pain, including Teva Pharmaceutical Industries Ltd., Endo Health Solutions Inc., Nektar Therapeutics, Egalet Corporation, Inspirion Delivery Technologies, LLC, and KemPharm, Inc.

5% Shareholders Pre-IPO

Entities affiliated with Longitude Capital Partners, LLC    22.37%

Skyline Venture Partners V, L.P.             20.04%

Frazier Healthcare VI, L.P.          12.44%

TPG Biotechnology Partners IV, L.P.      8.68%

Entities affiliated with Boston Millennia Partners 7.77%

RA Capital Healthcare Fund, LP             6.08%

John G. Freund, M.D.    20.04%

Patrick Heron    12.44%

David Hirsch, M.D., Ph.D.         22.37%

Eran Nadav, Ph.D.        8.68%  

Collegium Pharmaceutical Dividends

No dividends are planned.

Collegium Pharmaceutical Use of Proceeds

COLL expects to receive $67 million from its IPO and use it for the following:

$45 million for the development of its commercial infrastructure to launch Xtampza, including building its sales, marketing and reimbursement functions. If Xtampza is approved in the United States, COLL plans to hire a team of approximately 100 sales representatives for the initial launch. In addition, COLL expects to deploy a smaller sales force to detail Xtampza to nursing homes, hospices and other institutions;

$15 million to fund research and development efforts of its other product candidates, including approximately $12.0 million to conduct clinical development for its second product candidate through its Phase 3 clinical trial (including Phase 1 bioequivalence clinical trials and abuse-deterrence studies and clinical trials); and

the remainder, if any, to fund working capital and general corporate purposes, which may include litigation expenses (including expenses relating to the Purdue litigation) and the acquisition or licensing of product candidates, technologies, compounds, other assets or complementary businesses.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
COLL Collegium Pharmaceutical Inc. 16.78 0.17 1.02 165,598

Comments

Emerging Growth

CMX Gold & Silver Corp.

CMX Gold & Silver Corp is an exploration stage company. The Company is engaged in the acquisition, exploration and development of silver and copper/gold properties in the USA.

Private Markets

Lyft

Lyft matches drivers using their own personal vehicles with passengers who request rides through the smartphone app, and the passengers pay automatically through the app. When using Lyft, passengers have…

WayBetter

The spark hit Jamie when he saw co-workers competing to lose weight. Instead of pizzas and subs, they were eating salads and jogging along the river. Some were sneakily leaving…