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What changed in COLLEGIUM PHARMACEUTICAL, INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of COLLEGIUM PHARMACEUTICAL, INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+328 added−311 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-22)

Top changes in COLLEGIUM PHARMACEUTICAL, INC's 2024 10-K

328 paragraphs added · 311 removed · 251 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

85 edited+36 added−24 removed139 unchanged
Biggest changeUpon closing the BDSI Acquisition, we acquired Belbuca and Symproic. ​ 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.
Biggest changeFood 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. ​ The acquisition of Ironshore expands our business beyond pain management and establishes a commercial presence in neuropsychiatry via the ADHD market. ​ Belbuca ​ 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. ​ Xtampza ER ​ Xtampza ER is an abuse-deterrent, extended-release, oral formulation of oxycodone, a Schedule II opioid.
Regional Marketing Leader – Neuroscience, Executive Director Customer Marketing and Solutions, Sr. Director of Strategic Planning and Director of Cardiovascular Marketing. Mr. Dreyer received a B.S. in Biology from Messiah College. ​ Shirley Kuhlmann, Executive Vice President, General Counsel and Chief Administrative Officer . Ms.
Regional Marketing Leader – Neuroscience, Executive Director Customer Marketing and Solutions, Sr. Director of Strategic Planning and Director of Cardiovascular Marketing. Mr. Dreyer received a B.S. in Biology from Messiah College. ​ Shirley Kuhlmann, Executive Vice President, Chief Administrative Officer and General Counsel. Ms.
There are also analogous state and foreign laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws which may apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to file reports with states regarding pricing and marketing information, such as the tracking and reporting of gifts, compensation and other remuneration and items of value provided to healthcare professionals and entities; state and local laws requiring the registration of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. ​ Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that some of a pharmaceutical manufacturer’s business activities could be subject to challenge under one or more of such laws.
There are also analogous state and foreign laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws which may apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government that 17 ​ otherwise restricts payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to file reports with states regarding pricing and marketing information, such as the tracking and reporting of gifts, compensation and other remuneration and items of value provided to healthcare professionals and entities; state and local laws requiring the registration of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. ​ Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that some of a pharmaceutical manufacturer’s business activities could be subject to challenge under one or more of such laws.
HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions. ​ The federal Physician Payments Sunshine Act, created under the ACA, and its implementing regulations, requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the CMS under the Open Payments Program, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), to certain non-physician providers such as physician assistants and nurse 15 ​ practitioners, and to teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. ​ Federal price reporting laws require manufacturers to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on approved products.
HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions. ​ The federal Physician Payments Sunshine Act, created under the ACA, and its implementing regulations, requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the CMS under the Open Payments Program, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), to certain non-physician providers such as physician assistants and nurse practitioners, and to teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. ​ Federal price reporting laws require manufacturers to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on approved products.
Failure to meet FDA requirements for approval would also result in a medication not being approved for marketing. ​ The process of developing a pharmaceutical product and obtaining FDA approval to market the medication in the United States typically involves: ​ ● completion of preclinical laboratory and animal testing and formulation studies in compliance with the FDA’s good laboratory practices (“GLP”) and regulations; 8 ​ ● submission to the FDA of an Investigational New Drug (“IND”) application for human clinical testing, which becomes effective 30 days after submission and, if not placed on clinical hold, before human clinical trials may begin in the United States; ● approval by an independent institutional review board, at each clinical trial site before each trial may be initiated; ● performance of adequate and well - controlled human clinical trials in accordance with current good clinical practices (“GCP”) and FDA regulations to establish the safety and effectiveness of the proposed drug product for each indication for which FDA approval is sought; ● satisfactory completion of an FDA pre - approval inspection of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s current good manufacturing practices (“cGMP”) and regulations; ● submission to the FDA of a NDA or, in the case of a generic drug, an abbreviated NDA (“ANDA”); ● satisfactory completion of a review by an FDA advisory committee, if convened; and ● FDA review and approval of the NDA or ANDA. ​ Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the application type, complexity, and novelty of the product or disease. ​ Preclinical tests include laboratory evaluation of product chemistry, formulation, stability and toxicity, as well as animal studies to assess the characteristics and potential safety and efficacy of the product candidate.
Failure to meet FDA requirements for approval would also result in a medication not being approved for marketing. ​ The process of developing a pharmaceutical product and obtaining FDA approval to market the medication in the United States typically involves: ​ ● completion of preclinical laboratory and animal testing and formulation studies in compliance with the FDA’s good laboratory practices (“GLP”) and regulations; ● submission to the FDA of an Investigational New Drug (“IND”) application for human clinical testing, which becomes effective 30 days after submission and, if not placed on clinical hold, before human clinical trials may begin in the United States; ● approval by an independent institutional review board, at each clinical trial site before each trial may be initiated; ● performance of adequate and well - controlled human clinical trials in accordance with current good clinical practices (“GCP”) and FDA regulations to establish the safety and effectiveness of the proposed drug product for each indication for which FDA approval is sought; ● satisfactory completion of an FDA pre - approval inspection of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s current good manufacturing practices (“cGMP”) and regulations; 9 ​ ● submission to the FDA of a NDA or, in the case of a generic drug, an abbreviated NDA (“ANDA”); ● satisfactory completion of a review by an FDA advisory committee, if convened; and ● FDA review and approval of the NDA or ANDA. ​ Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the application type, complexity, and novelty of the product or disease. ​ Preclinical tests include laboratory evaluation of product chemistry, formulation, stability and toxicity, as well as animal studies to assess the characteristics and potential safety and efficacy of the product candidate.
The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel as they strive to increase stockholder value and contribute to the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives. ​ Employee Training and Development ​ We believe career development begins with good conversations between employees and their managers that ensure regular feedback, and we have implemented tools and annual processes that allow all employees in conjunction with their managers to explore possibilities and drive development action.
The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel as they strive to increase stockholder value and 20 ​ contribute to the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives. ​ Employee Training and Development ​ We believe career development begins with good conversations between employees and their managers that ensure regular feedback, and we have implemented tools and annual processes that allow all employees in conjunction with their managers to explore possibilities and drive development action.
This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug products. ​ Post-Approval Requirements ​ Once an NDA is approved, a product will be subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to drug listing and registration, recordkeeping, periodic reporting, product sampling and distribution, adverse event reporting and advertising, marketing and promotion restrictions.
This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug products. ​ Post-Approval Requirements ​ Once an NDA is approved, a product will be subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to drug listing and establishment registration, recordkeeping, periodic reporting, product sampling and distribution, adverse event reporting and advertising, marketing and promotion restrictions.
Exclusivity ​ Upon approval of an NDA for a new chemical entity (“NCE”), which is a drug that contains no active moiety that has been approved by the FDA in any other NDA, that drug receives five years of marketing exclusivity during which time the FDA cannot receive any ANDA seeking approval of a generic version of that drug or any Section 505(b)(2) NDA, 12 ​ discussed in more detail below, that relies on the FDA’s findings of safety and effectiveness regarding the NCE drug.
Exclusivity ​ Upon approval of an NDA for a new chemical entity (“NCE”), which is a drug that contains no active moiety that has been approved by the FDA in any other NDA, that drug receives five years of marketing exclusivity during which time the FDA cannot receive any ANDA seeking approval of a generic version of that drug or any Section 505(b)(2) NDA, discussed in more detail below, that relies on the FDA’s findings of safety and effectiveness regarding the NCE drug.
Among the provisions of the Affordable Care Act of importance to the pharmaceutical and biotechnology industry are the following: ​ ● an annual, non-deductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs; ● an increase in the rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13% of the average manufacturer price for branded and generic drugs, respectively; ● a Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (later amended to 70%) point-of-sale discounts to negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; ● extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; ● expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the Federal Poverty Level, thereby potentially increasing manufacturers’ Medicaid rebate liability; ● expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; ● a licensure framework for follow - on biologic products; ● a Patient - Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; ● a requirement to annually report drug samples that manufacturers and distributors provide to physicians; and ● establishment of a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. ​ The Affordable Care Act has been subject to challenges in the courts.
Among the provisions of the ACA of importance to the pharmaceutical and biotechnology industry are the following: ​ ● an annual, non-deductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs; ● an increase in the rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13% of the average manufacturer price for branded and generic drugs, respectively; ● a Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (later amended to 70%) point-of-sale discounts to negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; ● extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; ● expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the Federal Poverty Level, thereby potentially increasing manufacturers’ Medicaid rebate liability; ● expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; ● a licensure framework for follow - on biologic products; ● a Patient - Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; ● a requirement to annually report drug samples that manufacturers and distributors provide to physicians; and ● establishment of a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. ​ The ACA has been subject to challenges in the courts.
Regulatory authorities may withdraw product approvals, request product recalls, or take other punitive action if a company fails to comply with regulatory standards, if it encounters problems following initial marketing, or if previously unrecognized problems are subsequently discovered. 11 ​ ​ The FDA may require post-approval studies, including post-marketing surveillance and observational studies and clinical trials, if the FDA finds that scientific data, including information regarding related drugs, warrant them.
Regulatory authorities may withdraw product approvals, request product recalls, or take other punitive action if a company fails to comply with regulatory standards, if it encounters problems following initial marketing, or if previously unrecognized problems are subsequently discovered. ​ The FDA may require post-approval studies, including post-marketing surveillance and observational studies and clinical trials, if the FDA finds that scientific data, including information regarding related drugs, warrant them.
No ANDA application will receive final approval before any applicable non-patent exclusivity listed in the Orange Book for the referenced product has expired. ​ Section 505(b)(2) NDAs ​ A Section 505(b)(2) NDA is a special type of NDA often used by applicants seeking approval for new or improved formulations or new uses of previously approved active moieties.
No ANDA application will receive final approval before any applicable non-patent exclusivity listed in the Orange Book for the referenced product has expired. ​ 14 ​ Section 505(b)(2) NDAs ​ A Section 505(b)(2) NDA is a special type of NDA often used by applicants seeking approval for new or improved formulations or new uses of previously approved active moieties.
These ETASU include REMS-compliant accredited continuing education for healthcare providers, which includes all healthcare providers who prescribe or are involved in the management of patients with pain; information provided to prescribers that they can use 10 ​ to educate patients in the safe use, storage, and disposal of opioids; and information provided to prescribers about the existence of the REMS and the strong recommendation that they complete the available training.
These ETASU include REMS-compliant accredited continuing education for healthcare providers, which includes all healthcare providers who prescribe or are involved in the management of patients with pain; information provided to prescribers that they can use to educate patients in the safe use, storage, and disposal of opioids; and information provided to prescribers about the existence of the REMS and the strong recommendation that they complete the available training.
A pharmaceutical product may be listed as Schedule II, III, IV or V, with Schedule II substances considered to present the highest risk of abuse and Schedule V substances the lowest relative risk of abuse among such substances. ​ Xtampza ER and the Nucynta Products are listed by the DEA as Schedule II controlled substances under the CSA, while Belbuca is listed as a Schedule III controlled substance.
A pharmaceutical product may be listed as Schedule II, III, IV or V, with Schedule II substances considered to present the highest risk of abuse and Schedule V substances the lowest relative risk of abuse among such substances. ​ Jornay, Xtampza ER, and the Nucynta Products are listed by the DEA as Schedule II controlled substances under the CSA, while Belbuca is listed as a Schedule III controlled substance.
Moreover, even if the applicant believes it has addressed the deficiencies, it is possible that approval may not ultimately be obtained. ​ Where a sponsor wishes to expand the originally approved prescribing information, such as by adding a new indication, it must submit and obtain approval of a sNDA.
Moreover, even if the applicant believes it has addressed the deficiencies, it is possible that approval may not ultimately be obtained. ​ 11 ​ Where a sponsor wishes to expand the originally approved prescribing information, such as by adding a new indication, it must submit and obtain approval of a sNDA.
Xtampza ER and the Nucynta Products are classified by the DEA as Schedule II controlled substances, meaning these products have a high potential for abuse and dependence but are recognized as having an accepted medical use. Belbuca is classified as a Schedule III controlled substance, meaning it has a moderate to low potential for abuse.
Xtampza ER, Jornay and the Nucynta Products are classified by the DEA as Schedule II controlled substances, meaning these products have a high potential for abuse and dependence but are recognized as having an accepted medical use. Belbuca is classified as a Schedule III controlled substance, meaning it has a moderate to low potential for abuse.
We facilitate transparent communications through various channels, such as quarterly all-employee meetings, small-group employee conversations with our Chief Executive Officer, and periodic employee engagement surveys. ​ 18 ​ Talent Acquisition and Retention ​ We seek to identify, recruit, retain, incentivize, and integrate our existing and new employees, advisors, and consultants.
We facilitate transparent communications through various channels, such as quarterly all-employee meetings, small-group employee conversations with our Chief Executive Officer, and periodic employee engagement surveys. ​ Talent Acquisition and Retention ​ We seek to identify, recruit, retain, incentivize, and integrate our existing and new employees, advisors, and consultants.
Dreyer joined us in January 2018 as Senior Vice President of Sales, Marketing, Commercial Capabilities and Training. He has over 25 years of commercial experience across sales, marketing, commercial operations and strategic planning, all within the biopharma industry. Most recently, Mr. Dreyer was Senior Vice President, Marketing and Commercial Operations for The Medicines Company.
Dreyer joined us in January 2018 as Senior Vice President of Sales, Marketing, Commercial Capabilities and Training. He has over 25 years of commercial experience 21 ​ across sales, marketing, commercial operations and strategic planning, all within the biopharma industry. Most recently, Mr. Dreyer was Senior Vice President, Marketing and Commercial Operations for The Medicines Company.
Kuhlmann received a B.A. in Economics and Political Science from Columbia University and a J.D. from the Emory University School of Law. 20 ​ ​ Thomas Smith, M.D., Executive Vice President and Chief Medical Officer. Dr. Smith has served as our Chief Medical Officer since March 2022 following the acquisition of BDSI. Dr.
Kuhlmann received a B.A. in Economics and Political Science from Columbia University and a J.D. from the Emory University School of Law. ​ Thomas Smith, M.D., Executive Vice President and Chief Medical Officer. Dr. Smith has served as our Chief Medical Officer since March 2022 following the acquisition of BDSI. Dr.
The committee discussed post-marketing requirements (“PMRs”) 3033-11, issued to holders of NDAs for extended-release and long-acting opioid analgesics to evaluate long-term efficacy of opioid analgesics and the risk of opioid-induced hyperalgesia. The discussion focused on a clinical trial designed to address these objectives.
The committee discussed post-marketing requirements (“PMRs”) 3033-11, issued to holders of NDAs for extended-release and long-acting opioid analgesics to evaluate long-term efficacy of opioid analgesics and the risk of opioid-induced 13 ​ hyperalgesia. The discussion focused on a clinical trial designed to address these objectives.
Annually, the DEA establishes an aggregate quota for how much active opioid ingredients, such as oxycodone and tapentadol, may be produced in total in the United States based on the DEA’s estimate of the quantity needed to meet legitimate scientific and medicinal needs.
Annually, the DEA establishes an aggregate quota for how much active opioid ingredients, such as oxycodone, tapentadol, and methylphenidate, may be produced in total in the United States based on the DEA’s estimate of the quantity needed to meet legitimate scientific and medicinal needs.
The FDA has encouraged the development of prescription opioids with abuse-deterrent formulations to help combat the opioid crisis, and expanding access to abuse deterrent formulations is part of the FDA’s comprehensive Opioids Action Plan. These technologies, however, do not eliminate the possibility of 5 ​ misuse and abuse.
The FDA has encouraged the development of prescription opioids with abuse-deterrent formulations to help combat the opioid crisis, and expanding access to abuse deterrent formulations is part of the FDA’s comprehensive Opioids Action Plan. These technologies, however, do not eliminate the possibility of misuse and abuse.
For example, separate registrations are needed for import and manufacturing, and each registration will specify which schedules of controlled substances are authorized. 13 ​ ​ In addition, a DEA quota system controls and limits the availability and production of controlled substances in Schedule I or II.
For example, separate registrations are needed for import and manufacturing, and each registration will specify which schedules of controlled substances are authorized. ​ In addition, a DEA quota system controls and limits the availability and production of controlled substances in Schedule I or II.
The beginning of the opioid overdose epidemic in the late 1990s was marked by a rise in prescription opioid overdose deaths. For a variety of reasons, heroin use began increasing in the mid-2000s, and had surpassed prescription opioids as a cause of opioid-related overdose by 2016.
The beginning of the opioid overdose epidemic in 5 ​ the late 1990s was marked by a rise in prescription opioid overdose deaths. For a variety of reasons, heroin use began increasing in the mid-2000s, and had surpassed prescription opioids as a cause of opioid-related overdose by 2016.
The final guidance also provides examples of product label claims that may be made based on the results of the corresponding studies and clinical trials. 9 ​ ​ After completion of the required clinical testing, an NDA is prepared and submitted to the FDA.
The final guidance also provides examples of product label claims that may be made based on the results of the corresponding studies and clinical trials. ​ After completion of the required clinical testing, an NDA is prepared and submitted to the FDA.
Part D prescription drug plan sponsors are not required to pay for all covered Part D drugs, and each drug plan can develop its own drug formulary that identifies which drugs it will cover and at what tier or level.
Part D prescription drug plan sponsors are not required to pay for all covered Part D drugs, and each drug plan can develop its 18 ​ own drug formulary that identifies which drugs it will cover and at what tier or level.
As a result, the Supreme Court did not rule on the constitutionality of the Affordable Care Act or any of its provisions. ​ In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.
As a result, the Supreme Court did not rule on the constitutionality of the ACA or any of its provisions. ​ In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.
As an integral part of educating clinicians regarding the properties and differentiated profiles of our products, our sales force is trained to share information relating to significant risks associated with prescription opioids, including risks relating to addiction, abuse, and misuse. ​ We primarily sell our products to wholesalers that, in turn, distribute our products to retail outlets (such as drug store and supermarket chains and independent pharmacies), managed health care organizations and government agencies.
As an integral part of educating clinicians regarding the properties and differentiated profiles of our products, our sales force is trained to share information relating to significant risks associated with prescription opioids and stimulants, as applicable, including risks relating to addiction, abuse, and misuse. ​ We primarily sell our products to wholesalers that, in turn, distribute our products to retail outlets (such as drug store and supermarket chains and independent pharmacies), managed health care organizations and government agencies.
Symproic is manufactured by UPM Pharmaceuticals in Bristol, Tennessee and packaged by Sharp Packaging Solutions in Allentown, Pennsylvania. ​ Drug Substances ​ The API used to formulate the products in our portfolio and DEA drug scheduling are as follows: ​ ​ ​ ​ ​ ​ Product ​ API ​ DEA Drug Schedule Xtampza ER ​ Oxycodone ​ Schedule II Nucynta IR ​ Tapentadol ​ Schedule II Nucynta ER ​ Tapentadol ​ Schedule II Belbuca ​ Buprenorphine ​ Schedule III Symproic ​ Naldemedine ​ Not a controlled substance ​ Oxycodone, tapentadol, and buprenorphine are classified as narcotic controlled substances under U.S. federal law.
Symproic is manufactured by UPM Pharmaceuticals in Bristol, Tennessee and packaged by Sharp Packaging Solutions in Allentown, Pennsylvania. ​ Drug Substances ​ The API used to formulate the products in our portfolio and DEA drug scheduling are as follows: ​ ​ ​ ​ ​ ​ Product ​ API ​ DEA Drug Schedule Xtampza ER ​ Oxycodone ​ Schedule II Nucynta IR ​ Tapentadol ​ Schedule II Nucynta ER ​ Tapentadol ​ Schedule II Jornay ​ Methylphenidate ​ Schedule II Belbuca ​ Buprenorphine ​ Schedule III Symproic ​ Naldemedine ​ Not a controlled substance ​ Oxycodone, tapentadol, methylphenidate, and buprenorphine are classified as narcotic controlled substances under U.S. federal law.
Moreover, no abuse deterrence technology, including DETERx, is able to deter the most common form of abuse—swallowing a number of intact capsules or tablets to achieve a feeling of euphoria. ​ Legislative and Regulatory Actions ​ In response to widespread prescription opioid abuse, the U.S. government and a number of state legislatures enacted new legislation and regulations intended to fight the opioid epidemic.
Moreover, no abuse deterrence technology, including DETERx, is able to deter the most common form of abuse, i.e., swallowing a number of intact capsules or tablets to achieve a feeling of euphoria. ​ Legislative and Regulatory Actions ​ In response to widespread prescription opioid abuse, the U.S. government and a number of state legislatures enacted new legislation and regulations intended to fight the opioid epidemic.
Xtampza ER and the Nucynta Products are regulated as Schedule II controlled substances, and thus, are subject to the DEA’s production and procurement quota system.
Jornay, Xtampza ER, and the Nucynta Products are regulated as Schedule II controlled substances, and thus, are subject to the DEA’s production and procurement quota system.
The SEC also maintains a website, at www.sec.gov, that contains reports, proxy and information statements and other information regarding us and other issuers that file electronically. The information contained on, or that can be accessed through, our website is not a part of or incorporated by reference in this Form 10-K. ​ ​ ​ 21 ​
The SEC also maintains a website, at www.sec.gov, that contains reports, proxy and information statements and other information regarding us and other issuers that file electronically. The information contained on, or that can be accessed through, our website is not a part of or incorporated by reference in this Form 10-K. ​ ​ ​ 22 ​
The Budget Control Act of 2011 and subsequent legislation has resulted in reductions to Medicare payments to providers of up to 2% per fiscal year, which will remain in effect through 2030 unless additional action is taken by Congress. 17 ​ ​ The American Taxpayer Relief Act of 2012 reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
The Budget Control Act of 2011 and subsequent legislation has resulted in reductions to Medicare payments to providers of up to 2% per fiscal year, which will remain in effect through 2031 unless additional action is taken by Congress. ​ The American Taxpayer Relief Act of 2012 reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
Some manufacturers, including Collegium, will qualify for a “phase in” of rebate utilization for the LIS population which should limit our exposure in the short term, but will increase it over time. The implementation of the IRA is currently subject to ongoing litigation that challenges the constitutionality of the IRA’s Medicare drug price negotiation program.
Some manufacturers, including Collegium, may be able to qualify for a “phase in” of rebate utilization for the LIS population which should limit our exposure in the short term, but will increase it over time. The implementation of the IRA is currently subject to ongoing litigation that challenges the constitutionality of the IRA’s Medicare drug price negotiation program.
Smith has more than twenty-five years of experience in a variety of leadership roles at various major pharmaceutical companies, including serving as the Chief Medical Officer for BDSI from July 2018 to March 2022, Charleston Laboratories from January 2017 to July 2018, Ameritox and Mallinckrodt Pharmaceuticals. Prior to these, Dr.
Smith has more than 25 years of experience in a variety of leadership roles at various major pharmaceutical companies, including serving as the Chief Medical Officer for BDSI from July 2018 to March 2022, Charleston Laboratories from January 2017 to July 2018, Ameritox and Mallinckrodt Pharmaceuticals. Prior to these, Dr.
The Criminal Healthcare Fraud statute, 18 U.S.C. § 1347 prohibits knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third-party payors.
The Criminal Healthcare Fraud statute, 18 U.S.C. § 1347, for example, prohibits knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third-party payors.
The RADARS data represents a single snapshot in time and is subject to change. Therefore, we plan to continue monitoring real world data characterizing the rate of abuse, misuse, and diversion of Xtampza. ​ Nucynta Products ​ The Nucynta Products are extended-release (“ER”) and immediate-release (“IR”) oral formulations of tapentadol.
The RADARS data represents a single snapshot in time and is subject to change. Therefore, we plan to continue monitoring real world data characterizing the rate of abuse, misuse, and diversion of Xtampza. ​ Nucynta Products ​ The Nucynta Products are extended-release (“ER”) and immediate-release (“IR”) oral formulations of tapentadol, a Schedule II opioid.
We also employ a market-access team to support our formulary approval and payor contracting. ​ Our marketing strategy focuses on increasing awareness of the differentiated features of our products.
We also employ a market-access team to support our formulary approval and payor contracting across our portfolio. ​ Our marketing strategy focuses on increasing awareness of the differentiated features of our products.
Removal of the drug rebate cap can result in paying rebate payments to Medicaid that are higher than the sale price of the drug. ​ The Inflation Reduction Act of 2022 (“IRA”) contains substantial drug pricing reforms, including the establishment of a drug price negotiation program within the U.S.
Removal of the drug rebate cap may result in paying rebate payments to Medicaid that are higher than the sale price of the drug. ​ 19 ​ The Inflation Reduction Act of 2022 (“IRA”) contains substantial drug pricing reforms, including the establishment of a drug price negotiation program within the U.S.
Our contract manufacturers must receive a quarterly quota from the DEA to produce or procure any Schedule I or Schedule II substance, including oxycodone base for use in manufacturing Xtampza ER and tapentadol for use in manufacturing the Nucynta Products.
Our contract manufacturers must receive a quarterly quota from the DEA to produce or procure any Schedule I or Schedule II substance, including methylphenidate for use in manufacturing 15 ​ Jornay, oxycodone base for use in manufacturing Xtampza ER and tapentadol for use in manufacturing the Nucynta Products.
As a reflection of this commitment, our annual Corporate Scorecard has included metrics relating to our performance relative to specific ESG initiatives. ​ In February 2024, we published our annual ESG report on our corporate website highlighting our ESG accomplishments to date.
As a reflection of this commitment, our annual Corporate Scorecard has included metrics relating to our performance relative to specific ESG initiatives. ​ In February 2025, we published our third annual ESG report on our corporate website highlighting our ESG accomplishments to date.
As a result, our operations and business could be adversely affected by current and future third-party payor policies as well as healthcare legislative reforms. ​ While we cannot predict whether any proposed cost-containment measures will be adopted or otherwise implemented in the future, these requirements or any announcement or adoption of such proposals could have a material adverse effect on our ability to obtain adequate prices for our products and any other products we may seek to commercialize, and to operate profitably. 16 ​ ​ Healthcare Reform ​ In the United States, there have been a number of legislative and regulatory changes to the healthcare system that could affect our future results of operations.
As a result, our operations and business could be adversely affected by current and future third-party payor policies as well as healthcare legislative reforms. ​ While we cannot predict whether any proposed cost-containment measures will be adopted or otherwise implemented in the future, the impact of changes in agency leadership, or whether the Trump Administration may propose additional regulatory reforms, these requirements or any announcement or adoption of such proposals could have a material adverse effect on our ability to obtain adequate prices for our products and any other products we may seek to commercialize, and to operate profitably. ​ Healthcare Reform ​ In the United States, there have been a number of legislative and regulatory changes to the healthcare system that could affect our future results of operations.
Any reduction in payment that results from Medicare Part D may result in a similar reduction in payments from non-governmental payors. ​ In March 2010, the Affordable Care Act was enacted, which significantly changed the way healthcare is financed by both governmental and private insurers.
Any reduction in payment that results from Medicare Part D may result in a similar reduction in payments from non-governmental payors. ​ In March 2010, the ACA was enacted, which significantly changed the way healthcare is financed by both governmental and private insurers.
In 2022, 8.9 million, or 3.2% of people aged 12 and older, reported opioid misuse in the prior year as collected by the National Survey on Drug Use and Health sponsored by the Substance Abuse and Mental Health Services Administration (“SAMHSA”).
In 2023, 8.9 million, or 3.1% of people aged 12 and older, reported opioid misuse in the prior year as collected by the National Survey on Drug Use and Health sponsored by the Substance Abuse and Mental Health Services Administration (“SAMHSA”).
In addition, the government may assert that a claim including items or services resulting from a violation of 42 U.S.C. § 1320a-7b, constitutes a false or fraudulent claim for purposes of the civil False Claims Act (discussed below) or the civil monetary penalties statute, which imposes fines against any person who is determined to have presented or caused to be presented claims to a federal healthcare program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.
In addition, the government may assert that a claim including items or services resulting from a violation of the AKS, constitutes a false or fraudulent claim for purposes of the civil False Claims Act (discussed below) or the civil monetary penalties statute, which imposes fines against any person who is determined to have presented or caused to be presented claims to a federal healthcare program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.
As we seek to build and sustain a challenging, inspiring, and inclusive environment for our employees, we have focused on talent acquisition and retention; employee training and development; diversity and inclusion; and employee health and safety. At Collegium, we recognize that we have a responsibility to hold ourselves to the highest standard of business and professional ethics.
As we seek to build and sustain a challenging, inspiring, and inclusive environment for our employees, we have focused on talent acquisition and retention; employee training and development; nurturing a positive culture; and employee health and safety. At Collegium, we recognize that we have a responsibility to hold ourselves to the highest standard of business and professional ethics.
Violations of the federal Anti-Kickback Statute can result in significant criminal fines, exclusion from participation in Medicare and Medicaid and follow-on civil litigation, among other things, for both entities and individuals. ​ Other federal healthcare fraud-related laws also provide criminal liability for violations.
Violations of the AKS can 16 ​ result in significant criminal fines, exclusion from participation in Medicare and Medicaid and follow-on civil litigation, among other things, for both entities and individuals. ​ Other federal healthcare fraud-related laws also provide criminal liability for violations.
Remuneration is not defined in the federal Anti-Kickback Statute and has been broadly interpreted to include anything of value, including for example, gifts, discounts, 14 ​ coupons, the furnishing of supplies or equipment, credit arrangements, payments of cash, waivers of payments, ownership interests and providing anything at less than its fair market value.
Remuneration is not defined in the AKS and has been broadly interpreted to include anything of value, including for example, gifts, discounts, coupons, the furnishing of supplies or equipment, credit arrangements, payments of cash, waivers of payments, ownership interests and providing anything at less than its fair market value.
The limited aggregate amount of opioids that the DEA allows to be produced in the United States each year is allocated among individual companies, who must submit applications quarterly to the DEA for individual production and procurement quotas.
The limited aggregate amount of opioids that the DEA allows to be produced in the United States each year is allocated among individual companies, who must submit applications, at least twice a year, to the DEA for individual production and procurement quotas.
Additionally, 6.9% of the U.S. adult population, approximately 17.1 million people, suffer from high-impact chronic pain that frequently limits life or work activities. ​ A 2011 report from the Institute of Medicine estimated that chronic pain costs the U.S. between $560.0 and $635.0 billion per year in direct medical costs and lost productivity, which does not include the cost of care for institutionalized 4 ​ individuals (e.g., nursing home residents, prisoners), military personnel, or children, or the costs associated with caregiving.
Additionally, 8.5% of the U.S. adult population suffer from high-impact chronic pain that frequently limits life or work activities. ​ A 2011 report from the Institute of Medicine estimated that chronic pain costs the U.S. between $560.0 and $635.0 billion per year in direct medical costs and lost productivity, which does not include the cost of care for institutionalized individuals (e.g., nursing home residents, prisoners), military personnel, or children, or the costs associated with caregiving.
The federal Anti-Kickback Statute and implementing regulations provide for certain exceptions for “safe harbors” for certain discounting, rebating or personal services arrangements, among other things. However, the lack of uniform court interpretation of the Anti-Kickback Statute makes compliance with the law difficult.
The AKS and implementing regulations provide exceptions under certain “safe harbors” for discounting, rebating or personal services arrangements, among other things. However, the lack of uniform court interpretation of the AKS makes compliance with the law difficult.
Pursuant to agreements reached during reauthorization of the Prescription Drug User Fee Act (“PDUFA”), the FDA has a goal of acting on most original NDAs within six months or ten months of the application submission or filing date, depending on the nature of the drug and application type.
Pursuant to agreements reached during reauthorization of the Prescription Drug User Fee Act (“PDUFA”), the FDA has a goal of acting on most original NDAs within six months or ten months of the application filing date, depending on the nature of the drug and whether the application is assigned a priority or standard review.
Extended-release opioids are designed to offer more convenient dosing with a longer period of consistent blood levels of the active drug as compared to immediate-release formulations. ​ In 2023, there were approximately 139.7 million prescriptions for opioids written in the United States, representing a 3.8% decline from 2022 levels and including approximately 13.6 million prescriptions for long-acting/extended-release opioids, and approximately 126.1 million prescriptions for immediate-release opioids.
Extended-release opioids are designed to offer more convenient dosing with a longer period of consistent blood levels of the active drug as compared to immediate-release formulations. ​ In 2024, there were approximately 136.3 million prescriptions for opioids written in the United States, representing a 2.5% decline from 2023 levels and including approximately 10.2 million prescriptions for long-acting/extended-release opioids, and approximately 126.1 million prescriptions for immediate-release opioids.
In 2021, the number of reported deaths involving prescription opioids totaled 16,706, worsening from 2019 levels. ​ Extended-release opioids may be especially attractive to people who abuse opioids because, if the extended-release mechanism can be defeated through tampering, many extended-release products quickly deliver a relatively large amount of active pharmaceutical ingredient (“API”) (i.e., an effect known as “dose dumping”).
In 2022, the number of reported deaths involving prescription opioids declined to 14,716, an improvement from 2020 levels. ​ Extended-release opioids may be especially attractive to people who abuse opioids because, if the extended-release mechanism can be defeated through tampering, many extended-release products quickly deliver a relatively large amount of active pharmaceutical ingredient (“API”) (i.e., an effect known as “dose dumping”).
The IRA also redesigned Medicare Part D to reallocate cost across the various stakeholders: CMS, payors, manufacturers, and beneficiaries. Certain aspects of the Part D redesign take effect in 2024 which ultimately shifts some liability from beneficiaries to the payors. Starting in 2025, all remaining components of the Part D Redesign will take effect.
The IRA also redesigned Medicare Part D to reallocate cost across the various stakeholders: CMS, payors, manufacturers, and beneficiaries. Certain aspects of the Part D redesign took effect in 2024 which ultimately shifts some liability from beneficiaries to the payors.
Paul, Minnesota or Sharp Packaging Solutions in 6 ​ Allentown, Pennsylvania where it is converted into individual dosage units and, ultimately, into finished goods. For the Belbuca product portfolio, we are currently qualifying alternate bulk and secondary packaging operations at our existing manufacturer’s sites.
Paul, Minnesota or Sharp Packaging Solutions in Allentown, Pennsylvania or Adhesives Research in Glen Rock, Pennsylvania where it is converted into individual dosage units and, ultimately, into finished goods. For the Belbuca product portfolio, we are currently qualifying alternate bulk and secondary packaging operations at our existing manufacturer’s sites. ​ Xtampza ER is manufactured using a proprietary process.
Other jurisdictions may enact similar or novel measures intended to reduce or constrain the growth of pharmaceutical spending or otherwise impose policy measures (either opioid-specific or applicable to the pharmaceutical industry as a whole) that could increase our operating costs associated with compliance. ​ Manufacturing of Our Products ​ Overview ​ Xtampza ER is manufactured using a proprietary process.
Other jurisdictions may enact similar or novel measures intended to reduce or constrain the growth of pharmaceutical spending or otherwise impose policy measures (either opioid-specific or applicable to the pharmaceutical industry as a whole) that could increase our operating costs associated with compliance. ​ 6 ​ Manufacturing of Our Products ​ Overview ​ Jornay is manufactured pursuant to supply agreements with third-party manufacturers.
Nucynta ER is protected by four issued patents in the United States (which cover the drug substance, drug product, certain characteristics of the dosage form, and methods of treating patients) that are projected to expire in 2024, 2025, and 2028.
Nucynta IR is also covered by New Patient Population exclusivity in pediatric patients that is projected to expire in 2027. Nucynta ER is protected by three issued patents in the United States (which cover the drug substance, drug product, certain characteristics of the dosage form, and methods of treating patients) that are projected to expire in 2025, 2028, and 2029.
Under the federal Anti-Kickback Statute and the applicable criminal healthcare fraud statutes contained within 42 U.S.C. § 1320a-7b, a person or entity need not have actual knowledge of this statute or specific intent to violate it in order to have committed a violation.
Under the AKS and the applicable criminal healthcare fraud statutes, a person or entity need not have actual knowledge of this statute or specific intent to violate it in order to have committed a violation.
Our Executive Officers ​ The following table lists the positions, names and ages of our executive officers as of February 22, 2024: ​ ​ ​ ​ ​ ​ Name ​ Age ​ Position(s) Joseph Ciaffoni ​ 52 ​ Director, President and Chief Executive Officer Colleen Tupper ​ 48 ​ Executive Vice President and Chief Financial Officer Scott Dreyer ​ 51 ​ Executive Vice President and Chief Commercial Officer Shirley Kuhlmann ​ 40 ​ Executive Vice President, General Counsel and Chief Administrative Officer Thomas Smith ​ 63 ​ Executive Vice President and Chief Medical Officer ​ Joseph Ciaffoni, Director, President and Chief Executive Officer.
Our Executive Officers ​ The following table lists the positions, names and ages of our executive officers as of February 27, 2025: ​ ​ ​ ​ ​ ​ Name ​ Age ​ Position(s) Vikram Karnani ​ 50 ​ Director, President and Chief Executive Officer Colleen Tupper ​ 49 ​ Executive Vice President and Chief Financial Officer Scott Dreyer ​ 52 ​ Executive Vice President and Chief Commercial Officer Shirley Kuhlmann ​ 41 ​ Executive Vice President, Chief Administrative Officer and General Counsel Thomas Smith ​ 64 ​ Executive Vice President and Chief Medical Officer ​ Vikram Karnani, Director, President and Chief Executive Officer.
Except for licenses from Grünenthal GmbH to commercialize the Nucynta Products in the United States and its territories, and a license from Shionogi to commercialize Symproic in the United States and its territories, our technology and products are not in-licensed from any third party, and we own all of the rights to Xtampza ER.
Except for the Grünenthal License and the Shionogi License, our technology and products are not in-licensed from any third party, and we own all of the rights to Xtampza ER, Belbuca and Jornay.
Clinical trials must be conducted: (i) in compliance with federal regulations and GCP, an international standard for the design, conduct, performance, monitoring, auditing, recording, analyses, and reporting of clinical trials that provides assurance that the data and reported results are credible and accurate, and that the rights, integrity, and confidentiality of trial subjects are protected; and (ii) under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and any effectiveness criteria to be evaluated. ​ Clinical trials to support NDAs for marketing approval are typically conducted in three sequential phases, but the phases may overlap or be combined. ​ ● Phase 1 : This phase includes the initial introduction of an investigational new drug into patients or healthy volunteer subjects.
Clinical trials must be conducted: (i) in compliance with federal regulations and GCP, an international standard for the design, conduct, performance, monitoring, auditing, recording, analyses, and reporting of clinical trials that provides assurance that the data and reported results are credible and accurate, and that the rights, integrity, and confidentiality of trial subjects are protected; and (ii) under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and any effectiveness criteria to be evaluated.
We provide all employees and their families with access to a variety of innovative, flexible, and convenient health and wellness programs.
We provide all employees and their families with access to a variety of innovative, flexible, and convenient health and wellness programs. Employees As of December 31, 2024, we had a total of 357 full-time employees.
The FDA has issued two compliance policy guidances that establish a one-year stabilization period from November 2023 to November 2024 for trading partners to continue to build and validate interoperable systems and processes to meet certain requirements of the DSCSA.
The FDA established a one-year stabilization period until November 2024 for trading partners to continue to build and validate interoperable systems and processes to meet certain requirements of the DSCSA.
The effect of the IRA on our business and the pharmaceutical industry in general is not yet known. ​ Our Environmental, Social, and Governance (“ESG”) Initiatives ​ Our commitment to serving as a responsible corporate citizen is rooted in our longstanding history of advancing our mission, executing our commercial strategy, governing our business to drive efficiency and value creation, and supporting our communities.
The effect of the IRA on our business and the pharmaceutical industry in general is not yet known. ​ In addition, the Trump Administration is likely to propose new regulations that reform healthcare delivery in the United States, including related to healthcare and drug costs and pharmacy benefit manager reform, among other areas, the effect of which on our business and the pharmaceutical industry in general is not yet known. ​ Our Environmental, Social, and Governance (“ESG”) Initiatives ​ Our commitment to serving as a responsible corporate citizen is rooted in our longstanding history of advancing our mission, executing our commercial strategy, governing our business to drive efficiency and value creation, and supporting our communities.
Belbuca is protected by three issued patents in the United States (which cover a method of treating patients) that are projected to expire in 2027 and 2032. ​ We have concluded that some of our technology is best protected as proprietary know-how, rather than through obtaining patents.
Belbuca is protected by three issued patents in the United States (which cover a method of treating patients) that are projected to expire in 2027 and 2032.
Due to the controlled substances classification, the manufacturing, shipping, dispensing and storing of these products are subject to a high degree of regulation, as described in more detail under the caption “— Government Regulation — DEA and Opioid Regulation.” ​ We currently procure the API used in our products from a sole supplier or limited number of suppliers. ​ Marketing and Commercialization ​ We commercialize our products in the United States with a dedicated field sales force, consisting of approximately 110 sales representatives and managers, to call on the approximately 10,000 health care professionals who write approximately 66% of the branded extended-release opioid prescriptions in the United States, with a primary focus on pain specialists.
Due to the controlled substances classification, the manufacturing, shipping, dispensing and storing of these products are subject to a high degree of regulation, as described in more detail under the caption “— Government Regulation — DEA and Opioid Regulation.” ​ We currently procure the API used in our products from a sole supplier or limited number of suppliers. ​ 7 ​ Marketing and Commercialization ​ We commercialize our products in the United States through two dedicated field sales forces, one focused on our pain portfolio and the other on ADHD.
Ultimately, the existing coverage gap will be removed and replaced with greater exposure for manufacturers after the beneficiary pays their deductible. Additionally, the exemption previously applied on the low-income subsidy (“LIS”) population has been removed and increases manufacturer rebate exposure for that population.
Starting on January 1, 2025, all remaining components of the Part D Redesign took effect, including, eliminating the previous coverage gap which has been replaced with greater exposure for manufacturers after the beneficiary pays their deductible. Additionally, the exemption previously applied on the low-income subsidy (“LIS”) population has been removed and increases manufacturer rebate exposure for that population.
This grant extended the period of U.S. exclusivity for Nucynta IR from June 27, 2025 to July 3, 2026. ​ We began commercializing the Nucynta Products in 2018 pursuant to a commercialization agreement (the “Nucynta Commercialization Agreement”) with Assertio Therapeutics, Inc.
This grant extended the period of U.S. exclusivity for Nucynta IR from June 27, 2025 to July 3, 2026.
The overall prevalence of chronic pain among adults in the United States is 20.9%, affecting approximately 51.6 million Americans.
The overall prevalence of chronic pain among adults in the United States is 24.3%.
Nucynta ER is currently manufactured by Patheon. Nucynta IR is manufactured by Halo Pharmaceutical, Inc. in Whippany, New Jersey. ​ Belbuca and Symproic are manufactured pursuant to supply agreements with third-party manufacturers. Belbuca laminate (i.e., bulk product) is produced by Adhesives Research in Glen Rock, Pennsylvania. Belbuca laminate is then sent to either LTS Therapy Systems (formerly Tapemark) in St.
Belbuca laminate (i.e., bulk product) is produced by Adhesives Research in Glen Rock, Pennsylvania and LTS Therapy Systems (formerly Tapemark) in St. Paul, Minnesota. Belbuca laminate is then sent to either LTS Therapy Systems (formerly Tapemark) in St.
These studies typically include several hundred to several thousand patients and are conducted to gather additional information about the effectiveness and safety of the drug in order to evaluate the overall risk-benefit relationship and provide an adequate basis for labeling. ​ For opioid products designed to deter abuse, FDA guidance regarding studies and clinical trials dictates what types of studies should be conducted to demonstrate abuse-deterrence, how those studies and clinical trials will be evaluated, and what product labeling claims may be approved based on the results of those studies and clinical trials.
These studies typically include several hundred to several thousand patients and are conducted to gather additional information about the effectiveness and safety of the drug in order to evaluate the overall risk-benefit relationship and provide an adequate basis for labeling. ​ Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval.
We have received trademark registration for Collegium Pharmaceutical, Inc., DETERx, and Xtampza ER in the United States, and acquired trademarks associated with the Nucynta Products in connection with the Nucynta Acquisition and Belbuca and Symproic in connection with the BDSI Acquisition. ​ Our business depends upon the skills, knowledge and experience of our scientific and technical personnel, as well as that of our advisors, consultants and other contractors.
We have received trademark registration for Collegium Pharmaceutical, Inc., DETERx, and Xtampza ER in the United States, and acquired trademarks associated with the Nucynta Products in connection with our acquisition of assets and commercialization responsibilities of the Nucynta Products from Assertio Therapeutics, Inc.
Symproic 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.
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. ​ Symproic ​ 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. ​ Attention Deficit Hyperactivity Disorder (ADHD) & Treatment ​ ADHD ​ ADHD is a CNS disorder characterized by developmentally inappropriate levels of inattention, hyperactivity, and impulsivity.
The American Rescue Plan Act of 2021 eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.
These laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on our customers and, accordingly, our financial operations. ​ The American Rescue Plan Act of 2021 eliminated the statutory Medicaid drug rebate cap, previously set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024.
Item 1. Business ​ Overview ​ Our mission is to build a leading, diversified specialty pharmaceutical company committed to improving the lives of people living with serious medical conditions.
Item 1. Business ​ 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.
Xtampza ER is an abuse-deterrent, extended-release, oral formulation of oxycodone. Xtampza ER is formulated using our novel abuse-deterrent technology platform, DETERx, which provides extended-release delivery, while also providing barriers to common methods of abuse and misuse (e.g., crushing, chewing, heating, and injecting).
Xtampza ER is formulated using our novel abuse-deterrent technology platform, DETERx, which provides extended-release delivery, which is designed to deter abuse and misuse (e.g., crushing, chewing, heating, and injecting). This technology combines an active opioid ingredient with a fatty acid and waxes to form microspheres that are filled into a capsule.
Our comprehensive performance review process ensures our employees are on track with their development throughout the year. ​ Diversity, Equity, and Inclusion ​ We are committed to fostering diversity, equity, and inclusion (“DEI”) in our workplace.
Our comprehensive performance review process ensures our employees are on track with their development throughout the year. ​ Employee Health and Safety We believe that the success of our business is fundamentally connected to the well-being of our employees; accordingly, we are committed to their health, safety, and wellness.
Abuse, misuse, and diversion of Xtampza ER has remained low compared to commonly abused 3 ​ schedule II opioid analgesics for three years after introduction into the U.S. market. Methods to defeat the tamper resistant properties of Xtampza ER are reported but there is no indication of widespread or expanding abuse or misuse in the data streams evaluated.
Methods to defeat the tamper resistant properties of Xtampza ER have been reported. However, there is no indication of widespread or expanding abuse or misuse in the data streams evaluated.
In connection with the 2018 REMS, the FDA also approved new product labeling containing information about the health care provider education available through the 2018 REMS. ​ Advertising and Promotion ​ The FDA and other federal regulatory agencies closely regulate the marketing and promotion of drugs through, among other things, guidance and regulations for direct-to-consumer advertising, communications regarding unapproved uses, industry-sponsored scientific and educational activities, and promotional activities involving the internet.
On October 31, 2024, FDA approved a modification to the opioid analgesic REMS to require manufacturers of opioid analgesics dispensed in outpatient settings to provide pre-paid drug mail-back envelopes (“MBEs”) upon request to become available by March 31, 2025 to pharmacies and other dispensers of opioid analgesics. ​ 12 ​ Advertising and Promotion ​ The FDA and other federal regulatory agencies closely regulate the marketing and promotion of drugs through, among other things, guidance and regulations for direct-to-consumer advertising, communications regarding unapproved uses, industry-sponsored scientific and educational activities, and promotional activities involving the internet.
As part of the Opioid PMR Consortium, Collegium is working with the FDA to redesign study 3033-11. ​ The Hatch-Waxman Amendments ​ Orange Book Listing ​ In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent with claims that cover the applicant’s product.
In addition to new legislation, FDA regulations, guidances, and policies are often revised or reinterpreted by the agency in ways that may significantly affect the manner in which pharmaceutical products are regulated and marketed ​ The Hatch-Waxman Amendments ​ Orange Book Listing ​ In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent with claims that cover the applicant’s product.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSuch failure could also be the basis for the FDA to issue a warning or untitled letter, withdraw approvals for products previously granted to us, or take other regulatory or legal action, including recall or seizure, total or partial suspension of production, refusal to approve pending applications or supplemental applications, detention of product, refusal to permit the import or export of products, injunction, imposing civil penalties or pursuing criminal prosecution. ​ Any stock out, or failure to obtain sufficient supplies of any of our products, or the necessary active pharmaceutical ingredients, excipients or components necessary to manufacture each of our products, could adversely affect our ability to commercialize such products, which could in turn adversely affect our results of operations and financial condition. ​ 34 ​ Because we currently rely on a sole supplier or limited number of suppliers to manufacture the active pharmaceutical ingredient of our products, any production problems with any of these suppliers could have a material adverse effect on us. ​ We currently rely on a sole supplier or limited number of suppliers to manufacture the active pharmaceutical ingredients of our products.
Biggest changeSuch failure could also be the basis for the FDA to issue a warning or untitled letter, withdraw approvals for products previously granted to us, or take other regulatory or legal action, including recall or seizure, total or partial suspension of production, refusal to approve 35 ​ pending applications or supplemental applications, detention of product, refusal to permit the import or export of products, injunction, imposing civil penalties or pursuing criminal prosecution.
Because of their restrictive nature, these regulations could limit commercialization of our products containing controlled substances. ​ Current and future legislation may increase the difficulty and cost for us to continue to commercialize our products and may reduce the prices we are able to obtain for our products. ​ In the United States, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system generally, and the manufacturing, distribution, and marketing of opioids in particular, that could affect our ability to commercialize our products.
Because of their restrictive nature, these regulations could limit commercialization of our products containing controlled substances. ​ Current and future legislation and regulatory changes may increase the difficulty and cost for us to continue to commercialize our products and may reduce the prices we are able to obtain for our products. ​ In the United States, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system generally, and the manufacturing, distribution, and marketing of opioids in particular, that could affect our ability to commercialize our products.
We contract with these suppliers for commercial supply to manufacture our products. Further, our suppliers for Xtampza ER and the Nucynta Products active pharmaceutical ingredients also supply our primary competitor in the extended-release oxycodone space, Purdue. Identifying alternate sources of active pharmaceutical ingredients for our products is generally time-consuming and costly.
We contract with these suppliers for commercial supply to manufacture our products. Further, our suppliers of the active pharmaceutical ingredients for Xtampza ER and the Nucynta Products also supply our primary competitor in the extended-release oxycodone space, Purdue. Identifying alternate sources of active pharmaceutical ingredients for our products is generally time-consuming and costly.
Acceptance and use of our products will depend on a number of factors including: ​ ● approved indications, warnings and precautions language that may be less desirable than competitive products; ● perceptions of physicians and other healthcare community members of the safety and efficacy of our products; ● perceptions by members of the healthcare community, including physicians, about the relevance and efficacy of our abuse deterrent technology; ● the availability of competitive products; ● the pricing and cost-effectiveness of our products relative to competing products; ● the potential and perceived advantages of our products over alternative treatments; ● the convenience and ease of administration to patients of our products; 29 ​ ● actual and perceived availability and quality of coverage and reimbursement for our products from government or other third-party payors; ● negative publicity related to our products or negative or positive publicity related to our competitors’ products; ● the prevalence and severity of adverse side effects; ● policy initiatives by FDA, HHS, DEA, or other federal or state agencies regarding opioids; ● our ability to comply with the Opioid Analgesic REMS; and ● the effectiveness of marketing and distribution efforts by us and any licensees and distributors. ​ If our products fail to have an adequate level of acceptance by the medical community, patients, or healthcare payors, we will not be able to generate sufficient revenue to remain profitable.
Acceptance and use of our products will depend on a number of factors including: ​ ● approved indications, warnings and precautions language that may be less desirable than competitive products; ● perceptions of physicians and other healthcare community members of the safety and efficacy of our products; ● perceptions by members of the healthcare community, including physicians, about the relevance and efficacy of our abuse deterrent technology; ● the availability of competitive products; ● the pricing and cost-effectiveness of our products relative to competing products; ● the potential and perceived advantages of our products over alternative treatments; ● the convenience and ease of administration to patients of our products; ● actual and perceived availability and quality of coverage and reimbursement for our products from government or other third-party payors; ● negative publicity related to our products or negative or positive publicity related to our competitors’ products; ● the prevalence and severity of adverse side effects; ● policy initiatives by FDA, HHS, DEA, or other federal or state agencies regarding opioids; ● our ability to comply with the Opioid Analgesic REMS; and ● the effectiveness of marketing and distribution efforts by us and any licensees and distributors. ​ If our products fail to have an adequate level of acceptance by the medical community, patients, or healthcare payors, we will not be able to generate sufficient revenue to remain profitable.
In particular, if the FDA determines that our post-marketing data for Xtampza ER does not demonstrate that the abuse-deterrent properties result in reduction of abuse, or demonstrates a shift to routes of abuse that present a greater risk, the FDA may find that product labeling revisions are needed, and potentially require the removal of our abuse-deterrence claims, which would have a material adverse effect on our ability to continue successfully commercializing Xtampza ER. ​ 26 ​ Our opioid products are subject to mandatory REMS programs, which could increase the cost, burden and liability associated with the commercialization of these products. ​ The FDA has imposed a class-wide REMS on all IR, ER and long-acting opioid drug products (known as the Opioid Analgesic REMS).
In particular, if the FDA determines that our post-marketing data for Xtampza ER does not demonstrate that the abuse-deterrent properties result in reduction of abuse, or demonstrates a shift to routes of abuse that present a greater risk, the FDA may find that product labeling revisions are needed, and potentially require the removal of our abuse-deterrence claims, which would have a material adverse effect on our ability to continue successfully commercializing Xtampza ER. ​ Our opioid products are subject to mandatory REMS programs, which could increase the cost, burden and liability associated with the commercialization of these products. ​ The FDA has imposed a class-wide REMS on all IR, ER and long-acting opioid drug products (known as the Opioid Analgesic REMS).
If a natural disaster, power outage, health epidemic or other event occurred that prevented us from using all or a significant portion of our facilities, that damaged critical infrastructure, such as the manufacturing facilities of our third-party contract manufacturers, or that otherwise disrupted operations, it might 38 ​ become difficult or, in certain cases, impossible for us to continue our business, and any disruption could last for a substantial period of time. ​ The disaster recovery and business continuity plans we have in place, and the technology that we may rely upon to implement such plans, may prove inadequate in the event of a serious disaster or similar event.
If a natural disaster, power outage, health epidemic or other event occurred that prevented us from using all or a significant portion of our facilities, that damaged critical infrastructure, such as the manufacturing facilities of our third-party contract manufacturers, or that otherwise disrupted operations, it might become difficult or, in certain cases, impossible for us to continue our business, and any disruption could last for a substantial period of time. ​ The disaster recovery and business continuity plans we have in place, and the technology that we may rely upon to implement such plans, may prove inadequate in the event of a serious disaster or similar event.
We cannot guarantee that we can manage these pricing pressures or that wholesaler purchases will not fluctuate unexpectedly from period to period. ​ 35 ​ Certain of our opioid products are subject to post-marketing requirements or commitments, which may, in some cases, not be capable of timely or satisfactory completion without participation in consortia over which we have limited control. ​ For certain of our products, we are subject to post-marketing requirements to conduct epidemiological studies and clinical trials, or, in some cases, to conduct post-marketing surveillance or observational studies to gather additional information about our products.
We cannot guarantee that we can manage these pricing pressures or that wholesaler purchases will not fluctuate unexpectedly from period to period. ​ Certain of our opioid products are subject to post-marketing requirements or commitments, which may, in some cases, not be capable of timely or satisfactory completion without participation in consortia over which we have limited control. ​ For certain of our products, we are subject to post-marketing requirements to conduct epidemiological studies and clinical trials, or, in some cases, to conduct post-marketing surveillance or observational studies to gather additional information about our products.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue and maintain profitability. ​ Social issues around the abuse of opioids, including law enforcement concerns over diversion of opioids and regulatory and enforcement efforts to combat abuse, could decrease the potential market for our products and may adversely impact external investor perceptions of our business. ​ Law enforcement and regulatory agencies may apply policies and guidelines that seek to limit the availability or use of opioids.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue and maintain profitability. ​ Social issues around the abuse of opioids and stimulants, including law enforcement concerns over diversion of opioids and regulatory and enforcement efforts to combat abuse, could decrease the potential market for our products and may adversely impact external investor perceptions of our business. ​ Law enforcement and regulatory agencies may apply policies and guidelines that seek to limit the availability or use of opioids and stimulants.
Violations, including promotion of our products for unapproved or off-label uses, are subject to enforcement letters, inquiries and investigations, and civil and criminal sanctions by government agencies. ​ In particular, Xtampza ER has FDA-approved product labeling that describes its abuse deterrent features, which allows us to promote those features and differentiate Xtampza ER from other opioid products containing the same active pharmaceutical ingredients.
Violations, including promotion of our products for unapproved or off-label uses, are subject to enforcement letters, inquiries and investigations, and civil and criminal sanctions by government agencies. ​ 27 ​ In particular, Xtampza ER has FDA-approved product labeling that describes its abuse deterrent features, which allows us to promote those features and differentiate Xtampza ER from other opioid products containing the same active pharmaceutical ingredients.
If we fail to maintain the patents and patent applications covering our products, our competitive position would be adversely affected. ​ Risks Related to the Commercialization of Our Products ​ If we are unable to utilize our own sales and marketing capabilities successfully or enter into strategic alliances with marketing collaborators, we may not continue to be successful in commercializing our products and may be unable to generate sufficient product revenue. ​ Our commercial organization continues to evolve and we cannot guarantee that we will continue to be successful in marketing our products.
If we fail to maintain the patents and patent applications covering our products, our competitive position would be adversely affected. ​ 29 ​ Risks Related to the Commercialization of Our Products ​ If we are unable to utilize our own sales and marketing capabilities successfully or enter into strategic alliances with marketing collaborators, we may not continue to be successful in commercializing our products and may be unable to generate sufficient product revenue. ​ Our commercial organization continues to evolve and we cannot guarantee that we will continue to be successful in marketing our products.
Similarly, to the extent opioid abuse becomes less prevalent or less urgent of a public health issue, regulators and third-party payors may not be willing to pay a premium for abuse-deterrent formulations of opioids. ​ Federal laws have been enacted to address the national epidemics of prescription opioid abuse and illicit opioid use, including the Comprehensive Addiction and Recovery Act and the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act.
Similarly, to the extent opioid and stimulant abuse becomes less prevalent or less urgent of a public health issue, regulators and third-party payors may not be willing to pay a premium for abuse-deterrent formulations of opioids. ​ Federal laws have been enacted to address the national epidemics of prescription opioid abuse and illicit opioid use, including the Comprehensive Addiction and Recovery Act and the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act.
Our reliance on a limited number of vendors and, in particular, Patheon as our single manufacturer for Xtampza ER and Nucynta ER, exposes us to the following risks, any of which could impact commercialization of our products, result in higher costs, or deprive us of potential product revenues: ​ ● Our contract manufacturer, or other third parties we rely on, may encounter difficulties in achieving the volume of production needed to satisfy commercial demand, may experience technical issues that impact quality or compliance with applicable and strictly enforced regulations governing the manufacture of pharmaceutical products, may be affected by natural disasters that interrupt or prevent manufacturing of our products, may experience shortages of qualified personnel to adequately staff production operations, may experience shortages of raw materials and may have difficulties finding replacement parts or equipment; ● Our contract manufacturer could default on their agreement with us to meet our requirements for commercial supplies of our products and/or we could experience technical problems in the operation of our dedicated manufacturing suite; ● The use of alternate manufacturers may be difficult because the number of potential manufacturers that have the necessary governmental licenses to produce narcotic products is limited.
Our reliance on a limited number of vendors and, in particular, Patheon as our single manufacturer for Xtampza ER and Nucynta ER, exposes us to the following risks, any of which could impact commercialization of our products, result in higher costs, or deprive us of potential product revenues: ​ ● Our contract manufacturers, or other third parties we rely on, may encounter difficulties in achieving the volume of production needed to satisfy commercial demand, may experience technical issues that impact quality or compliance with applicable and strictly enforced regulations governing the manufacture of pharmaceutical products, may be affected by natural disasters that interrupt or prevent manufacturing of our products, may experience shortages of qualified personnel to adequately staff production operations, may experience shortages of raw materials and may have difficulties finding replacement parts or equipment; ● Our contract manufacturers could default on their agreements with us to meet our requirements for commercial supplies of our products and/or we could experience technical problems in the operation of our dedicated manufacturing suite; ● The use of alternate manufacturers may be difficult because the number of potential manufacturers that have the necessary governmental licenses to produce narcotic products is limited.
Any decline in available funding or access to cash and liquidity resources could, among other risks, adversely impact our ability to meet our financial obligations, which could have material adverse impacts on our liquidity and our business, financial condition, or results of operations. ​ 25 ​ Risks Related to our Products ​ If we cannot continue successfully commercializing our products and any products that we may acquire in the future, our business, financial condition and results of operations may be materially adversely affected and the price of our common stock may decline. ​ Our business and future success are substantially dependent on our ability to continue successfully commercializing our products, including Xtampza ER, the Nucynta Products, Belbuca and Symproic, and any products that we may acquire in the future. ​ Our ability to continue successfully commercializing our products will depend on many factors, including but not limited to: ​ ● our ability to manufacture commercial quantities of our products at reasonable cost and with sufficient speed to meet commercial demand; ● our ability to execute sales and marketing strategies successfully and continually; ● our success in educating physicians, patients and caregivers about the benefits, administration, use and coverage of our products; ● with respect to Xtampza ER, the perceived availability and advantages, relative cost, relative safety and relative efficacy of other abuse-deterrent products and treatments with similar indications; ● our ability to defend successfully any challenges to our intellectual property or suits asserting patent infringement relating to our products; ● the availability and quality of coverage and adequate reimbursement for our products; ● a continued acceptable safety profile of our products; ● our ability to acquire new products, or develop new indications or line extensions for existing products, in the event that revenues from our existing products are impacted by price controls, loss of intellectual property exclusivity or competition; and ● our ability to comply with applicable legal and regulatory requirements, including any additional manufacturing or packaging requirements that may become applicable to certain opioid products. ​ Many of these matters are beyond our control and are subject to other risks described elsewhere in this “Risk Factors” section.
Any decline in available funding or access to cash and liquidity resources could, among other risks, adversely impact our ability to meet our financial obligations, which could have material adverse impacts on our liquidity and our business, financial condition, or results of operations. ​ Risks Related to our Products ​ If we cannot continue successfully commercializing our products and any products that we may acquire in the future, our business, financial condition and results of operations may be materially adversely affected and the price of our common stock may decline. ​ Our business and future success are substantially dependent on our ability to continue successfully commercializing our products, including Jornay, Belbuca, Xtampza, the Nucynta Products, Symproic, and any products that we may acquire in the future. ​ Our ability to continue successfully commercializing our products will depend on many factors, including but not limited to: ​ ● our ability to manufacture commercial quantities of our products at reasonable cost and with sufficient speed to meet commercial demand; ● our ability to execute sales and marketing strategies successfully and continually; ● our success in educating physicians, patients and caregivers about the benefits, administration, use and coverage of our products; ● with respect to Xtampza ER, the perceived availability and advantages, relative cost, relative safety and relative efficacy of other abuse-deterrent products and treatments with similar indications; 26 ​ ● our ability to defend successfully any challenges to our intellectual property or suits asserting patent infringement relating to our products; ● the availability and quality of coverage and adequate reimbursement for our products; ● a continued acceptable safety profile of our products; ● our ability to acquire new products, or develop new indications or line extensions for existing products, in the event that revenues from our existing products are impacted by price controls, loss of intellectual property exclusivity or competition; and ● our ability to comply with applicable legal and regulatory requirements, including any additional manufacturing or packaging requirements that may become applicable to certain opioid products. ​ Many of these matters are beyond our control and are subject to other risks described elsewhere in this “Risk Factors” section.
An economic downturn could result in business closures, higher levels of unemployment, or declines in consumer disposable income which 36 ​ could have an impact on the number of patients seeking and receiving treatment for conditions that might otherwise result in the prescription of our products, as patients may make efforts to avoid or postpone seeking non-essential medical care to allocate their resources to other priorities or essential items.
An economic downturn could result in business closures, higher levels of unemployment, or declines in consumer disposable income which could have an impact on the number of patients seeking and receiving treatment for conditions that might otherwise result in the prescription of our products, as patients may make efforts to avoid or postpone seeking non-essential medical care to allocate their resources to other priorities or essential items.
The significance of each wholesale pharmaceutical distributor account to our business adversely impacts our ability to negotiate favorable commercial terms with each such distributor, and as a result, we may be forced to accept terms that adversely impact our results of operations. ​ In addition, these wholesaler customers comprise a significant part of the distribution network for pharmaceutical products in the United States.
The significance of each wholesale pharmaceutical distributor account to our business adversely impacts our ability to negotiate favorable commercial terms 36 ​ with each such distributor, and as a result, we may be forced to accept terms that adversely impact our results of operations. ​ In addition, these wholesaler customers comprise a significant part of the distribution network for pharmaceutical products in the United States.
You are encouraged to carefully review our full discussion of the material risk factors relevant to an investment in our business, which follows the brief bulleted list of our principal risk factors set forth below: ● Our ability to maintain profitability is dependent upon our ability to continue successfully commercializing our products and any products we may acquire in the future; ● We have substantial outstanding indebtedness, which may adversely affect our business, financial condition and results of operations; ● Adverse developments affecting the financial services industry could adversely affect our business, financial condition, or results of operations; ● If we cannot continue successfully commercializing our products and any products that we may acquire in the future, our business, financial condition and results of operations may be materially adversely affected and the price of our common stock may decline; ● Despite receiving approval by the FDA, additional data may emerge that could change the FDA’s position on the product labeling of any of our products, including our abuse-deterrent claims with respect to Xtampza ER, and our ability to market our products successfully may be adversely affected; ● Xtampza ER, the Nucynta Products, and Belbuca are subject to mandatory REMS programs, which could increase the cost, burden and liability associated with the commercialization of these products; ● Failure to comply with ongoing governmental regulations for marketing our products, and in particular any failure to promote Xtampza ER’s abuse deterrent labeling in compliance with FDA regulations, could delay or inhibit our ability to generate revenues from their sale and could also expose us to claims or other sanctions; ● Unfavorable outcomes in intellectual property litigation could be costly and potentially limit our ability to commercialize our products; ● If we are unable to obtain or maintain intellectual property rights for our technologies, products or any products we may acquire, we may lose valuable assets or be unable to compete effectively in our market; ● We have been, and may continue to be, forced to litigate to enforce or defend our intellectual property, which could be expensive, time consuming and unsuccessful, and result in the loss of valuable assets; ● Obtaining and maintaining our patent protection depends on compliance with various procedural, document submissions, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements; ● If we are unable to utilize our own sales and marketing capabilities successfully or enter into strategic alliances with marketing collaborators, we may not continue to be successful in commercializing our products and may be unable to generate sufficient product revenue; ● If the medical community, patients, and healthcare payors do not accept and use our products, we will not achieve sufficient product revenues and our business will suffer; ● Our products contain controlled substances, the manufacture, use, sale, importation, exportation and distribution of which are subject to regulation by state and federal law enforcement and other regulatory agencies; ● Current and future legislation may increase the difficulty and cost for us to continue to commercialize our products and may reduce the prices we are able to obtain for our products; ● Our products may become subject to unfavorable pricing regulations or third-party coverage and reimbursement policies, which could have a material adverse effect on our business.
You are encouraged to carefully review our full discussion of the material risk factors relevant to an investment in our business, which follows the brief bulleted list of our principal risk factors set forth below: ● Our ability to maintain profitability is dependent upon our ability to continue successfully commercializing our products and any products we may acquire in the future; ● We have substantial outstanding indebtedness, which may adversely affect our business, financial condition and results of operations; ● Adverse developments affecting the financial services industry could adversely affect our business, financial condition, or results of operations; ● If we cannot continue successfully commercializing our products and any products that we may acquire in the future, our business, financial condition and results of operations may be materially adversely affected and the price of our common stock may decline; ● Despite receiving approval by the FDA, additional data may emerge that could change the FDA’s position on the product labeling of any of our products, including our abuse-deterrent claims with respect to Xtampza ER, and our ability to market our products successfully may be adversely affected; ● Belbuca, Xtampza ER, and the Nucynta Products are subject to mandatory Risk Evaluation and Mitigation Strategy (“REMS”) programs, which could increase the cost, burden and liability associated with the commercialization of these products; ● Failure to comply with ongoing governmental regulations for marketing our products, and in particular any failure to promote Xtampza ER’s abuse deterrent labeling in compliance with FDA regulations, could delay or inhibit our ability to generate revenues from their sale and could also expose us to claims or other sanctions; ● Unfavorable outcomes in intellectual property litigation could be costly and potentially limit our ability to commercialize our products; ● If we are unable to obtain or maintain intellectual property rights for our technologies, products or any products we may acquire, we may lose valuable assets or be unable to compete effectively in our market; ● We have been, and may continue to be, forced to litigate to enforce or defend our intellectual property, which could be expensive, time consuming and unsuccessful, and result in the loss of valuable assets; ● Obtaining and maintaining our patent protection depends on compliance with various procedural, document submissions, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements; ● If we are unable to utilize our own sales and marketing capabilities successfully or enter into strategic alliances with marketing collaborators, we may not continue to be successful in commercializing our products and may be unable to generate sufficient product revenue; ● If the medical community, patients, and healthcare payors do not accept and use our products, we will not achieve sufficient product revenues and our business will suffer; ● Our products contain controlled substances, the manufacture, use, sale, importation, exportation and distribution of which are subject to regulation by state and federal law enforcement and other regulatory agencies; ● Current and future legislation may increase the difficulty and cost for us to continue to commercialize our products and may reduce the prices we are able to obtain for our products; ● Our products may become subject to unfavorable pricing regulations or third-party coverage and reimbursement policies, which could have a material adverse effect on our business.
Our success depends in large part on our ability to obtain and maintain patent protection in the United States with respect to our proprietary technology and products. ​ The steps we have taken to protect our proprietary rights may not be adequate to preclude misappropriation of our proprietary information or infringement of our intellectual property rights in the United States.
Our success depends in large part on our ability to obtain and maintain patent protection in the United States with respect to our proprietary technology and products. ​ 28 ​ The steps we have taken to protect our proprietary rights may not be adequate to preclude misappropriation of our proprietary information or infringement of our intellectual property rights in the United States.
Liabilities for taxes or assessments under any such laws could have an adverse impact on our results of operations. ​ 30 ​ California and several other states have enacted legislation related to prescription drug pricing transparency and it is unclear the effect this legislation will have on our business.
Liabilities for taxes or assessments under any such laws could have an adverse impact on our results of operations. ​ California and several other states have enacted legislation related to prescription drug pricing transparency and it is unclear the effect this legislation will have on our business.
Share repurchases under the 2024-2025 Repurchase Program will depend upon, among other factors, our cash balances and potential future capital requirements, our results of operations and financial condition, the price of our common stock on the NASDAQ Global Select Market, and other factors that we may deem relevant.
Additional share repurchases under the 2024-2025 Repurchase Program will depend upon, among other factors, our cash balances and potential future capital requirements, our results of operations and financial condition, the price of our common stock on the Nasdaq Global Select Market, and other factors that we may deem relevant.
Our Systems, along with those of the third parties whom we rely on to process confidential and sensitive data in a variety of contexts, are potentially vulnerable to a variety of evolving threats that may expose this data to unauthorized persons or otherwise compromise its integrity.
Our Systems, along with those of the third parties whom we rely on to process confidential and sensitive data in a variety of contexts, are potentially vulnerable to a variety of evolving threats that may expose this data 37 ​ to unauthorized persons or otherwise compromise its integrity.
We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows.
We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over 40 ​ financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows.
If we cannot do so, or are significantly delayed in doing so, our business will be materially harmed. ​ Despite receiving approval by the FDA, additional data may emerge that could change the FDA’s position on the product labeling of any of our products, including our abuse-deterrent claims with respect to Xtampza ER, and our ability to market our products successfully may be adversely affected. ​ Xtampza ER was approved with label language describing abuse-deterrent properties of the formulation with respect to the nasal and IV routes of abuse, consistent with Guidance for Industry, “Abuse-Deterrent Opioids- Evaluation and Labeling.” In November 2017, the FDA approved a sNDA for Xtampza ER to include comparative oral pharmacokinetic data from a clinical study evaluating the effect of physical manipulation by crushing Xtampza ER compared with OxyContin and a control (oxycodone hydrochloride immediate-release), results from an oral human abuse potential study and the addition of an oral abuse deterrent claim. ​ The FDA can require changes to the product labeling for any of our products at any time which can impact our ability to generate product sales.
If we cannot do so, or are significantly delayed in doing so, our business will be materially harmed. ​ Despite receiving approval by the FDA, additional data may emerge that could change the FDA’s position on the product labeling of any of our products, including our abuse-deterrent claims with respect to Xtampza ER, and our ability to market our products successfully may be adversely affected. ​ Xtampza ER was approved with label language describing abuse-deterrent properties of the formulation with respect to the nasal and IV routes of abuse, consistent with Guidance for Industry, “Abuse-Deterrent Opioids- Evaluation and Labeling.” In November 2017, the FDA approved a supplemental NDA for Xtampza ER to include comparative oral pharmacokinetic data from a clinical study evaluating the effect of physical manipulation by crushing Xtampza ER compared with OxyContin and a control (oxycodone hydrochloride immediate-release), results from an oral human abuse potential study and the addition of an oral abuse deterrent claim. ​ The FDA can require changes to the product labeling for any of our products at any time which can impact our ability to generate product sales.
Such pricing regulations may address the rebates that manufacturers offer to pharmaceutical benefit managers, or the discounts that manufacturers provide others within the pharmaceutical distribution chain. ​ The regulations that govern marketing approvals, pricing and reimbursement for new drug products can vary widely.
Such pricing regulations may address the rebates that manufacturers offer to pharmaceutical benefit managers, or the discounts that manufacturers provide others within the pharmaceutical distribution chain. ​ The regulations that govern marketing approvals, pricing and reimbursement for drug products can vary widely.
The Federal Food, Drug, and Cosmetic Act, FDA regulations and other applicable regulations and policies provide incentives to manufacturers to 32 ​ create modified, non-infringing versions of a drug to facilitate the approval of an ANDA or other application for generic substitutes.
The Federal Food, Drug, and Cosmetic Act, FDA regulations and other applicable regulations and policies provide incentives to manufacturers to create modified, non-infringing versions of a drug to facilitate the approval of an ANDA or other application for generic substitutes.
Our existing and future levels of indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, and among other things: ​ ● requiring the dedication of a substantial portion of our cash flows from operations to service our indebtedness, which will reduce the amount of cash available for operations, working capital, capital expenditures, expansion, acquisitions or general corporate or other purposes; ● limiting our ability to obtain additional financing; ● limiting our flexibility to plan for, or react to, changes in our business; ● exposing us to the risk of increased interest rates as certain of our borrowings, including the 2022 Term Loan, are at variable rates of interest; ● diluting the interests of our existing shareholders as a result of issuing shares of our common stock upon conversion of the Convertible Notes; ● placing us at a possible competitive disadvantage with competitors that are less leveraged than we are or have better access to capital; and ● increasing our vulnerability to downturns in our business, our industry or the economy in general. ​ 24 ​ Holders of our Convertible Notes, subject to a limited exception described in the notes, may require us to repurchase their notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any.
Our existing and future levels of indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, and among other things: ​ ● requiring the dedication of a substantial portion of our cash flows from operations to service our indebtedness, which will reduce the amount of cash available for operations, working capital, capital expenditures, expansion, acquisitions or general corporate or other purposes; ● limiting our ability to obtain additional financing; ● limiting our flexibility to plan for, or react to, changes in our business; ● exposing us to the risk of increased interest rates as certain of our borrowings, including the 2024 Term Loan, are at variable rates of interest; ● diluting the interests of our existing shareholders as a result of issuing shares of our common stock upon conversion of the 2029 Convertible Notes; ● placing us at a possible competitive disadvantage with competitors that are less leveraged than we are or have better access to capital; and ● increasing our vulnerability to downturns in our business, our industry or the economy in general. ​ Holders of our 2029 Convertible Notes, subject to a limited exception described in the notes, may require us to repurchase their notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any.
Since we expect to rely on sales generated by Xtampza ER, the Nucynta Products, Belbuca, and Symproic for substantially all of our revenues for the foreseeable future, the failure of these products to maintain market acceptance would harm our business prospects. ​ Some of our products contain controlled substances, and the manufacture, use, sale, importation, exportation and distribution of which are subject to regulation by state and federal law enforcement and other regulatory agencies. ​ Some of our products contain controlled substances that are subject to state and federal laws and regulations regarding their manufacture, use, sale, importation, exportation and distribution.
Since we expect to rely on sales generated by Jornay, Belbuca, Xtampza ER, the Nucynta Products, and Symproic for substantially all of our revenues for the foreseeable future, the failure of these products to maintain market acceptance would harm our business prospects. ​ 30 ​ Some of our products contain controlled substances, and the manufacture, use, sale, importation, exportation and distribution of which are subject to regulation by state and federal law enforcement and other regulatory agencies. ​ Some of our products contain controlled substances that are subject to state and federal laws and regulations regarding their manufacture, use, sale, importation, exportation and distribution.
Such pricing regulations may address the 22 ​ rebates that manufacturers offer to pharmaceutical benefit managers, or the discounts that manufacturers provide others within the pharmaceutical distribution chain; ● Social issues around the abuse of opioids, including law enforcement concerns over diversion of opioids and regulatory and enforcement efforts to combat abuse, could decrease the potential market for our products and may adversely impact external investor perceptions of our business; ● If the FDA or other applicable regulatory authorities approve generic products with abuse deterrent claims that compete with our products, our sales could decline; ● If the third-party manufacturers of our products fail to devote sufficient time and resources to these products, or their performance is substandard, and/or we encounter challenges with our dedicated manufacturing suite at our third-party manufacturer’s site for the manufacturing of Xtampza ER, our costs may be higher than expected and could have a material adverse effect on our business; ● Because we currently rely on a sole supplier or limited number of suppliers to manufacture the active pharmaceutical ingredient of our products, any production problems with any of these suppliers could have a material adverse effect on us; ● We depend on wholesale pharmaceutical distributors for retail distribution of our products; if we lose any of our significant wholesale pharmaceutical distributors or their distribution network is disrupted, our financial condition and results of operations may be adversely affected; ● Our products could be subject to post-marketing requirements, which requirements may, in some cases, not be capable of timely or satisfactory completion without participation in consortia over which we have limited control; ● We may not realize all of the anticipated benefits from future acquisitions, and we may be unable to successfully integrate future acquisitions; ● Our business may be adversely affected by certain events or circumstances outside our control, including macroeconomic conditions and geopolitical turmoil; ● Litigation or regulatory action regarding opioid medications could negatively affect our business; ● We face substantial competition from other biotechnology and pharmaceutical companies, which may result in others discovering, developing or commercializing products more successfully than we do; ● Commercial sales of our products may expose us to expensive product liability claims, and we may not be able to maintain product liability insurance on reasonable terms or at all; ● Our relationships with customers and payors are subject to applicable anti-kickback, fraud and abuse, transparency, and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, exclusion from government healthcare programs, contractual damages, reputational harm, administrative burdens, and diminished profits and future earnings; and ● The price of our common stock may be volatile and you may lose all or part of your investment. ​ Risks Related to Our Financial Position and Capital Needs Our ability to maintain profitability is dependent upon our ability to continue successfully commercializing our products and any products that we may acquire in the future.
Such pricing regulations may address the 23 ​ rebates that manufacturers offer to pharmaceutical benefit managers, or the discounts that manufacturers provide others within the pharmaceutical distribution chain; ● Social issues around the abuse of opioids, including law enforcement concerns over diversion of opioids and regulatory and enforcement efforts to combat abuse, could decrease the potential market for our opioid products and may adversely impact external investor perceptions of our business; ● If the FDA or other applicable regulatory authorities approve generic products with abuse deterrent claims that compete with our opioid products, our sales could decline; ● If the third-party manufacturers of our products fail to devote sufficient time and resources to these products, or their performance is substandard, and/or we encounter challenges with our dedicated manufacturing suite at our third-party manufacturer’s site for the manufacturing of Xtampza ER, our costs may be higher than expected and could have a material adverse effect on our business; ● Because we currently rely on a sole supplier or limited number of suppliers to manufacture the active pharmaceutical ingredient of our products, any production problems with any of these suppliers could have a material adverse effect on us; ● We depend on wholesale pharmaceutical distributors for retail distribution of our products; if we lose any of our significant wholesale pharmaceutical distributors or their distribution network is disrupted, our financial condition and results of operations may be adversely affected; ● Our products could be subject to post-marketing requirements, which requirements may, in some cases, not be capable of timely or satisfactory completion without participation in consortia over which we have limited control; ● Our business may be adversely affected by certain events or circumstances outside our control, including macroeconomic conditions and geopolitical turmoil; ● Litigation or regulatory action regarding opioid medications could negatively affect our business; ● We face substantial competition from other biotechnology and pharmaceutical companies, which may result in others discovering, developing or commercializing products more successfully than we do; ● Commercial sales of our products may expose us to expensive product liability claims, and we may not be able to maintain product liability insurance on reasonable terms or at all; ● Our relationships with customers and payors are subject to applicable anti-kickback, fraud and abuse, transparency, and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, exclusion from government healthcare programs, contractual damages, reputational harm, administrative burdens, and diminished profits and future earnings; and ● The price of our common stock may be volatile and you may lose all or part of your investment. ​ Risks Related to Our Financial Position and Capital Needs Our ability to maintain profitability is dependent upon our ability to continue successfully commercializing our products and any products that we may acquire in the future.
In addition, in any such 27 ​ proceeding or litigation, we could be found liable for monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent.
In addition, in any such proceeding or litigation, we could be found liable for monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent.
The regulatory exclusivity period for Nucynta IR in the United States has been extended through July 3, 2026, following the grant of New Patient Population exclusivity in pediatrics by the FDA in August 2023 based on data from pediatric trials which were submitted in response to the FDA's Pediatric Written Request to evaluate the use of Nucynta as a treatment for pain in pediatric patients aged 6 years and older.
The regulatory exclusivity period for Nucynta IR in the United States has been extended through July 3, 2026, following the grant of New Patient Population exclusivity in pediatrics by the FDA in August 2023 based on data from pediatric trials which were submitted in response to the FDA's Pediatric Written Request (the “Written Request”) to evaluate the use of Nucynta as a treatment for pain in pediatric patients aged 6 years and older.
These generic equivalents would be significantly less costly than ours to bring to market and companies that produce generic equivalents are generally able to offer their products at lower prices.
These generic equivalents would be significantly less costly than ours to bring to market and companies that 33 ​ produce generic equivalents are generally able to offer their products at lower prices.
Such efforts may inhibit our ability to continue to commercialize our products. ​ Aggressive enforcement and unfavorable publicity regarding, for example, the use or misuse of oxycodone or other opioid drugs; the limitations of abuse-resistant formulations; the ability of people who abuse drugs to discover previously unknown ways to abuse opioid drugs, including Xtampza ER, the Nucynta Products and Belbuca; public inquiries and investigations into prescription drug abuse; litigation; or regulatory activity regarding sales, marketing, distribution or storage of opioid drugs could have a material adverse effect on our reputation.
Such efforts may inhibit our ability to continue to commercialize our products. ​ Aggressive enforcement and unfavorable publicity regarding, for example, the use or misuse of oxycodone or other opioid drugs; the limitations of abuse-resistant formulations; the ability of people who abuse drugs to discover previously unknown ways to abuse opioid drugs and stimulants, including Xtampza ER, the Nucynta Products, Belbuca and Jornay; public inquiries and investigations into prescription drug abuse; litigation; or regulatory activity regarding sales, marketing, distribution or storage of opioid and stimulant drugs could have a material adverse effect on our reputation.
A default under the indentures or a fundamental change could also result in a default under one or more of the agreements governing our other indebtedness, which may result in that other indebtedness becoming immediately payable in full. In such event, we may not have sufficient funds to satisfy all amounts that would become due.
A default under the indenture or a fundamental change could also result in a default under one or more of the agreements governing our other indebtedness, which may result in that other indebtedness becoming immediately payable in full. In such event, we may not have sufficient funds to satisfy all amounts that would become due.
In the second half of 2018, the FDA posted three revised product-specific guidances related to generic abuse-deterrent opioid formulations, including one guidance specifically relating to Xtampza ER, which recommend specific in vivo studies and in vitro study considerations for abuse deterrence evaluations.
In the second half of 2018, the FDA posted three revised product-specific guidances related to generic abuse-deterrent opioid formulations, including one guidance specifically relating to Xtampza ER, which recommended specific in vivo studies and in vitro study considerations for abuse deterrence evaluations.
Applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the notes or pay the cash amounts due upon conversion, and any failure by us to repurchase notes or to pay the cash amounts due upon the conversion when required would constitute a default under the indenture. ​ Additionally, the indentures governing the Convertible Notes and our 2022 Loan Agreement contain certain covenants and obligations applicable to us, including, without limitation, covenants that limit our ability to incur additional indebtedness or liens, make acquisitions or other investments or dispose of assets outside the ordinary course of business, which could limit our ability to capitalize on business opportunities that may arise or otherwise place us at a competitive disadvantage relative to our competitors. ​ Failure to comply with covenants in the indentures governing the Convertible Notes or in the 2022 Loan Agreement would constitute an event of default under those instruments, notwithstanding our ability to meet our debt service obligations.
Applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the notes or pay the cash amounts due upon conversion, and any failure by us to repurchase notes or to pay the cash amounts due upon the conversion when required would constitute a default under the indenture. ​ Additionally, the indenture governing the 2029 Convertible Notes and our 2024 Loan Agreement contain certain covenants and obligations applicable to us, including, without limitation, covenants that limit our ability to incur additional indebtedness or liens, make acquisitions or other investments or dispose of assets outside the ordinary course of business, which could limit our ability to capitalize on business opportunities that may arise or otherwise place us at a competitive disadvantage relative to our competitors. ​ Failure to comply with covenants in the indenture governing the 2029 Convertible Notes or in the 2024 Loan Agreement would constitute an event of default under those instruments, notwithstanding our ability to meet our debt service 25 ​ obligations.
A number of states also independently regulate these drugs, including oxycodone, tapentadol and buprenorphine , as controlled substances.
A number of states also independently regulate these drugs, including oxycodone, tapentadol, methylphenidate and buprenorphine , as controlled substances.
These laws are described in more detail in our Annual Report under the caption “Business — Government Regulation — DEA and Opioid Regulation.” ​ If the FDA or other applicable regulatory authorities approve generic products with claims that compete with our products, our sales could decline. ​ Once an NDA, including a Section 505(b)(2) application, is approved, the product covered thereby becomes a “listed drug” which can, in turn, be cited by potential competitors in support of approval of an ANDA.
These laws are described in more detail under the section entitled “Business — Government Regulation — DEA and Opioid Regulation.” ​ If the FDA or other applicable regulatory authorities approve generic products with claims that compete with our products, our sales could decline. ​ Once an NDA, including a Section 505(b)(2) application, is approved, the product covered thereby becomes a “listed drug” which can, in turn, be cited by potential competitors in support of approval of an ANDA.
In the future, we may identify impurities, which could result in increased scrutiny by regulatory authorities, delays in our clinical programs and regulatory approval, increases in our operating expenses, failure to obtain or maintain approval or limitations in our commercial supply. ​ We depend on wholesale pharmaceutical distributors for retail distribution of our products; if we lose any of our significant wholesale pharmaceutical distributors or their distribution network is disrupted, our financial condition and results of operations may be adversely affected. ​ A significant percentage of our product shipments are to a limited number of independent wholesale pharmaceutical distributors.
In the future, we may identify impurities, which could result in increased scrutiny by regulatory authorities, delays in our clinical programs and regulatory approval, increases in our operating expenses, failure to obtain or maintain approval or limitations in our commercial supply. ​ We depend on wholesale pharmaceutical distributors for retail distribution of our products; if we lose any of our significant wholesale pharmaceutical distributors or their distribution network is disrupted, our financial condition and results of operations may be adversely affected. ​ A significant percentage of our product shipments are to three of our wholesale pharmaceutical distributors.
A finding of infringement could prevent us from commercializing our products or force us to cease some of our business operations. ​ Any litigation, including any interference or derivation proceedings to determine priority of inventions, oppositions or other post-grant review proceedings to patents in the United States, or litigation against our collaborators may be costly and time consuming and could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
A finding of infringement could prevent us from commercializing our products or force us to cease some of our business operations. ​ Any litigation, including any interference or derivation proceedings to determine priority of inventions, oppositions, reexaminations, inter partes reviews or other post-grant review proceedings to patents in the United States, or litigation against our collaborators may be costly and time consuming and could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
Our contract manufacturer and vendors may not perform as agreed or may not remain in the contract manufacturing business for the time required to produce, store and distribute our products successfully; and ● If our contract manufacturer were to terminate our arrangement or fail to meet our commercial manufacturing demands, we may be forced to delay our development and commercial programs. ​ Failure to obtain the necessary active pharmaceutical ingredients, excipients or components necessary to manufacture our products could adversely affect our ability to continue to commercialize our products, which could in turn adversely affect our results of operations and financial condition.
Our contract manufacturers and vendors may not perform as agreed or may not remain in the contract manufacturing business for the time required to produce, store and distribute our products successfully; and ● If our contract manufacturers were to terminate our arrangements or fail to meet our commercial manufacturing demands, we may be forced to delay our development and commercial programs. ​ Failure to obtain the necessary active pharmaceutical ingredients, excipients or components necessary to manufacture our products could adversely affect our ability to continue to commercialize our products, which could in turn adversely affect our results of operations and financial condition.
While we and our suppliers are still able to receive sufficient inventory of the key materials and components needed, we could experience pressure on our supply chain, including shipping delays, higher prices from suppliers, and reduced availability of materials, including excipients and packaging components. To date, supply chain pressure has not had a material impact on our results of operations.
While we and our suppliers are still able to receive sufficient inventory of the key materials and components needed, we could experience pressure on our supply chain, including shipping delays, higher prices from suppliers, and reduced availability of materials, including excipients and packaging components. To date, supply chain interruptions have not had a material impact on our results of operations.
Further, our insurance coverage may not be adequate or sufficient in type or amount to protect us from or to mitigate liabilities arising out of our privacy and security practices. ​ Litigation or regulatory action regarding opioid medications could negatively affect our business. ​ Beginning in 2018, lawsuits alleging damages related to opioids have been filed naming us as a defendant along with other manufacturers of prescription opioid medications.
Further, while we maintain cybersecurity insurance, our insurance coverage may not be adequate or sufficient in type or amount to protect us from or to mitigate liabilities arising out of our privacy and security practices. ​ Litigation or regulatory action regarding opioid medications could negatively affect our business. ​ Beginning in 2018, lawsuits alleging damages related to opioids have been filed naming us as a defendant along with other manufacturers of prescription opioid medications.
An adverse resolution of any of these lawsuits or investigations may involve injunctive relief or substantial monetary penalties, either or both of which could have a material adverse effect on our reputation, business, results of operations and cash flows. ​ We face substantial competition from other biotechnology and pharmaceutical companies, which may result in others discovering, developing or commercializing products more successfully than we do. ​ Competition in the pain and opioid market is intense.
An adverse resolution of any of these lawsuits or investigations may involve injunctive relief or substantial monetary penalties, either or both of which could have a material adverse effect on our reputation, business, results of operations and cash flows. ​ We face substantial competition from other biotechnology and pharmaceutical companies, which may result in others discovering, developing or commercializing products more successfully than we do. ​ Competition in the pharmaceutical industry is intense.
The 2022 Loan Agreement includes various customary remedies for the lenders following an event of default, including the acceleration of repayment of outstanding amounts under the 2022 Loan Agreement and execution upon the collateral securing obligations under the 2022 Loan Agreement.
The 2024 Loan Agreement includes various customary remedies for the lenders following an event of default, including the acceleration of repayment of outstanding amounts under the 2024 Loan Agreement and execution upon the collateral securing obligations under the 2024 Loan Agreement.
Any failure by our third-party manufacturer to comply with cGMP or failure to scale up manufacturing processes, including any failure to deliver sufficient quantities of products in a timely manner, could lead to inspection deficiencies, a shortage of commercial product, or potential products liability exposure for any noncompliant distributed products.
Any failure by our third-party manufacturer to comply with cGMP or failure to scale up manufacturing processes, including any failure to deliver sufficient quantities of products in a timely manner, could lead to inspection deficiencies, a shortage of commercial product, recalls, market withdrawals, or potential products liability exposure for any noncompliant distributed products.
For more information, refer to the section in our Annual Report entitled “Business — Government Regulation — DEA and Opioid Regulation.” We may not be able to obtain sufficient quantities of these controlled substances in order to meet commercial demand.
For more information, refer to the section entitled “Business — Government Regulation — DEA and Opioid Regulation.” We may not be able to obtain sufficient quantities of these controlled substances in order to meet commercial demand.
The U.S. federal and state NOL carryforwards expire at various dates through 2037. Federal NOLs and certain state NOLs incurred in 2018 and onward have an indefinite expiration under the Tax Cuts and Jobs Act of 2017 and applicable state statutes. We also had U.S. federal tax credits of approximately $1.0 million, and state tax credits of approximately $0.7 million.
The U.S. federal and state NOL carryforwards expire at various dates through 2037. Federal NOLs and certain state NOLs incurred in 2018 and onward have an indefinite expiration under the Tax Cuts and Jobs Act of 2017 and applicable state statutes. We also had U.S. federal tax credits of approximately $1.0 million. We do not have any state tax credits.
Our ability to generate revenue from our current or future products depends on a number of factors, including our ability to: ​ ● realize a commercially viable price for our products; ● manufacture commercial quantities of our products at acceptable cost levels; ● sustain a commercial organization capable of sales, marketing and distribution for the products we sell; ● obtain coverage and adequate reimbursement from third parties, including government payors; ● acquire new products, or develop new indications or line extensions for existing products, in the event that revenues from our existing products are impacted by price controls, loss of intellectual property exclusivity or competition; and ● comply with existing and changing laws and regulations that apply to the pharmaceutical industry, including opioid manufacturers, and to our products specifically, including FDA post-marketing requirements. ​ 23 ​ If we fail to maintain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations. ​ Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. ​ As of December 31, 2023, we had a U.S. federal net operating loss (“NOL”) carryforward of approximately $137.5 million and state NOL carryovers of approximately $202.4 million.
Our ability to generate revenue from our current or future products depends on a number of factors, including our ability to: ​ ● realize a commercially viable price for our products; ● manufacture commercial quantities of our products at acceptable cost levels; ● sustain a commercial organization capable of sales, marketing and distribution for the products we sell; ● obtain coverage and adequate reimbursement from third parties, including government payors; ● acquire new products, or develop new indications or line extensions for existing products, in the event that revenues from our existing products are impacted by price controls, loss of intellectual property exclusivity or competition; and ● comply with existing and changing laws and regulations that apply to the pharmaceutical industry, including opioid manufacturers, and to our products specifically, including FDA post-marketing requirements. ​ If we fail to maintain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations. 24 ​ ​ Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. ​ As of December 31, 2024, we had a gross U.S. federal net operating loss (“NOL”) carryforward of approximately $102.1 million and state NOL carryovers of approximately $199.0 million.
If we are unable to continue to grow and maintain adequate sales, marketing and distribution capabilities, whether independently or with third parties, including with respect to our recent acquisition of Belbuca and Symproic, we may not be able to generate sufficient product revenue and may not remain profitable.
If we are unable to continue to grow and maintain adequate sales, marketing and distribution capabilities, whether independently or with third parties, including with respect to our acquisition of Jornay, we may not be able to generate sufficient product revenue and may not remain profitable.
These threats may include, but are not limited to, social-engineering attacks (including through phishing attacks), business email compromise, online and offline fraud, malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, access attacks (such as credential stuffing), personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats. ​ We may expend significant resources to try to protect against these threats to our Systems.
These threats may include, but are not limited to, social-engineering attacks (including through phishing attacks), business email compromise, online and offline fraud, malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, access attacks (such as credential stuffing), personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.
We believe that we will continue to be subject to ANDA-related litigation, which can be costly and distracting and has the potential to impact the long-term value of our products. ​ We may seek FDA pediatric exclusivity for some of our products.
We believe that we will continue to be subject to ANDA-related litigation, which can be costly and distracting and has the potential to impact the long-term value of our products. ​ We have sought in the past, and may seek in the future, FDA pediatric exclusivity for some of our products.
Additionally, under FDORA, FDA will assign therapeutic equivalence ratings for certain prescription drugs approved via the Section 505(b)(2) NDA pathway with respect to other approved drug products and it is unclear how assignment of these ratings will impact the market opportunity for our products.
Additionally, under the Food and Drug Omnibus Reform Act of 2022, FDA will assign therapeutic equivalence ratings for certain prescription drugs approved via the Section 505(b)(2) NDA pathway with respect to other approved drug products and it is unclear how assignment of these ratings will impact the market opportunity for our products.
These circumstances, in addition to the impact of geopolitical turmoil, such as the ongoing Ukrainian War and current conflict in Israel and Gaza (including any escalation or expansion), social unrest, political instability in the United States and elsewhere, terrorism, cyberwarfare or other acts of war, may result in reduced demand for our products and negatively impact our sales, results of operations, and liquidity. ​ Security breaches and other disruptions to our, or our vendors’, information technology systems may compromise our information and expose us to liability that could adversely impact our financial condition, operations, and reputation. ​ We, our collaborators, third-party providers, distributors, customers and other contractors utilize information technology systems and networks (“Systems”) to transmit, store and otherwise process electronic data in connection with our business activities, including our supply chain processes, operations and communications including, in some cases, our business proprietary information, and Electronic Data Interchange (“EDI”) on purchase orders, invoices, chargebacks, among other things.
These circumstances, in addition to the impact of geopolitical turmoil, conflicts involving China, wars between Russia-Ukraine and Israel-Hamas (including any escalation or expansion), social unrest, political instability in the United States and elsewhere, terrorism, cyberwarfare or other acts of war, may result in reduced demand for our products and negatively impact our sales, results of operations, and liquidity. ​ Security breaches and other disruptions to our, or our vendors’, information technology systems may compromise our information and expose us to liability that could adversely impact our financial condition, operations, and reputation. ​ We, our collaborators, third-party providers, distributors, customers and other contractors utilize information technology systems and networks (“Systems”) to transmit, store and otherwise process electronic data in connection with our business activities, including our supply chain processes, operations and communications including, in some cases, our business proprietary information, and Electronic Data Interchange (“EDI”) on purchase orders, invoices, chargebacks, among other things.
We currently rely, and expect to continue to rely, on a limited number of experienced personnel and contract manufacturers for our products, as well as other vendors to formulate, test, supply, store and distribute our products, and we control only certain aspects of their activities. ​ In 2020, we completed the build-out of a dedicated manufacturing suite for Xtampza ER at a site operated by our contract manufacturing organization, Patheon, part of Thermo Fisher Scientific.
We currently rely, and expect to continue to rely, on a limited number of experienced personnel and contract manufacturers for our products, as well as 34 ​ other vendors to formulate, test, supply, store and distribute our products, and we control only certain aspects of their activities. ​ Xtampza ER is manufactured in a dedicated suite at a site operated by our contract manufacturing organization, Patheon, part of Thermo Fisher Scientific.
If commercial demand for Xtampza ER, or any of our other approved products, increases and we cannot meet such demand in a timely fashion because of our limited supply of its active pharmaceutical ingredient (in the case of Xtampza ER, oxycodone) then physicians may perceive such product as unavailable and may be less likely to prescribe it in the future. ​ In addition, controlled substances are also subject to regulations governing manufacturing, labeling, packaging, testing, dispensing, production and procurement quotas (for Schedule I and II substances), recordkeeping, reporting, handling, shipment and disposal.
If commercial demand for Xtampza ER, the Nucynta Products or Jornay, increases and we cannot meet such demand in a timely fashion because of our limited supply of their active pharmaceutical ingredients, then physicians may perceive such product as unavailable and may be less likely to prescribe it in the future. ​ In addition, controlled substances are also subject to regulations governing manufacturing, labeling, packaging, testing, dispensing, production and procurement quotas (for Schedule I and II substances), recordkeeping, reporting, handling, shipment and disposal.
We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing of our products may be. In addition, increased scrutiny by the U.S.
We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing of our products may be. Moreover, the U.S.
Any such delay could have a material adverse effect on our business. ​ Global supply chain disruptions and shortages may limit manufacturing and commercial supply of our products and have a material impact on our business. ​ There are currently global supply chain disruptions and shortages caused by a variety of factors, including geopolitical turmoil, such as the Ukrainian War and current conflict in Israel and Gaza.
Any such delay could have a material adverse effect on our business. ​ Supply chain disruptions and shortages may limit manufacturing and commercial supply of our products and have a material impact on our business. ​ There are currently global supply chain disruptions and shortages caused by a variety of factors, including geopolitical turmoil, such as conflicts involving China, the Russia-Ukrainian War and the Israel-Hamas war.
The effect of the IRA on our business and the pharmaceutical industry in general is not yet known. ​ 31 ​ Our inability to expand and maintain coverage and profitable reimbursement rates from both government-funded and private payors for our products could have a material adverse effect on our operating results, our ability to raise capital needed to continue to commercialize our products and our overall financial condition. ​ The Affordable Care Act and any changes in healthcare law may increase the difficulty and cost for us to continue to commercialize our products and affect the prices we may obtain. ​ The United States and many foreign jurisdictions have enacted or proposed legislative and regulatory changes affecting the healthcare system that may affect our ability to profitably sell our products, including implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. ​ The Affordable Care Act was intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.
Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from policy and payment limitations in setting their own reimbursement policies. ​ Our inability to expand and maintain coverage and profitable reimbursement rates from both government-funded and private payors for our products could have a material adverse effect on our operating results, our ability to raise capital needed to continue to commercialize our products and our overall financial condition. 32 ​ ​ The Affordable Care Act and any changes in healthcare law may increase the difficulty and cost for us to continue to commercialize our products and affect the prices we may obtain. ​ The United States and many foreign jurisdictions have enacted or proposed legislative and regulatory changes affecting the healthcare system that may affect our ability to profitably sell our products, including implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. ​ The Affordable Care Act was intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.
We are cooperating fully in the open investigations. Managing litigation and responding to governmental investigations is costly and may involve a significant diversion of management attention. Such proceedings are 37 ​ unpredictable and may develop over lengthy periods of time.
Managing litigation and responding to governmental investigations is costly and may involve a significant diversion of management attention. Such proceedings are unpredictable and may develop over lengthy periods of time.
For our opioid products, we generally intend to fulfill our PMRs by virtue of our participation in the Opioid PMR Consortium (“OPC”).
For our opioid products, we generally intend to fulfill our post-marketing requirements (“PMRs”) by virtue of our participation in the Opioid PMR Consortium (“OPC”).
Xtampza ER’s active ingredient, oxycodone, and the Nucynta Products’ active ingredient, tapentadol, are both classified as Schedule II controlled substances under the CSA and regulations of the DEA and the active ingredient in Belbuca, buprenorphine, is classified as a Schedule III controlled substance .
Jornay’s active ingredient, methylphenidate hydrochloride, Xtampza ER’s active ingredient, oxycodone, and the Nucynta Products’ active ingredient, tapentadol hydrochloride are each classified as Schedule II controlled substances under the Controlled Substances Act (“CSA”) and regulations of the DEA, and the active ingredient in Belbuca, buprenorphine hydrochloride, is classified as a Schedule III controlled substance .
In addition, we have $26.4 million in 2.625% Convertible Senior Notes due in 2026 (the “2026 Convertible Notes”) and $241.5 million in 2.875% Convertible Senior Notes due 2029 (the “2029 Convertible Notes” and, together with the 2026 Convertible Notes, the “Convertible Notes”). We may also incur additional indebtedness to meet future financing needs.
In addition, we have $241.5 million in 2.875% convertible senior notes due in 2029 (the “2029 Convertible Notes”). ​ We may also incur additional indebtedness to meet future financing needs.
We expect that changes to the Affordable Care Act, the Medicare and Medicaid programs, changes allowing the federal government to directly negotiate drug prices and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare industry. ​ Any reduction in reimbursement from Medicare, Medicaid, or other government programs may result in a similar reduction in payments from private payors.
We expect that additional changes to the Affordable Care Act, the Medicare and Medicaid programs, changes in the Inflation Reduction Act of 2022 that allow the federal government to directly negotiate drug prices, and changes stemming from other healthcare reform measures, including any new regulatory measures proposed or implemented by the Trump Administration, especially with regard to healthcare access and cost, as well as other legislation in individual states, could have a material adverse effect on the healthcare industry. ​ Any reduction in reimbursement from Medicare, Medicaid, or other government programs may result in a similar reduction in payments from private payors.
If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor, or those with whom they communicate, from using 28 ​ that technology or information to compete with us.
In addition, some courts in the United States may be less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor, or those with whom they communicate, from using that technology or information to compete with us.
Earlier market entry of generic abuse-deterrent formulations could have a material adverse effect on our business. ​ Risks Related to Our Dependence on Third Parties ​ If the third-party manufacturers of our products fail to devote sufficient time and resources to these products, or their performance is substandard, and/or we encounter challenges with our dedicated manufacturing suite at our third-party manufacturer’s site for the manufacturing of Xtampza ER, our costs may be higher than expected and could have a material adverse effect on our business. ​ We do not own any manufacturing facilities in drug development and commercial manufacturing.
If we are required to provide product samples or allocate additional resources to respond to such requests or any legal challenges under this law, our business could be adversely impacted. ​ Risks Related to Our Dependence on Third Parties ​ If the third-party manufacturers of our products fail to devote sufficient time and resources to these products, or their performance is substandard, and/or we encounter challenges with our dedicated manufacturing suite at our third-party manufacturer’s site for the manufacturing of Xtampza ER, our costs may be higher than expected and could have a material adverse effect on our business. ​ We do not own any manufacturing facilities in drug development and commercial manufacturing.
Additional dilution may result from the issuance of shares of our common stock in connection with collaborations or manufacturing arrangements or in connection with other financing efforts. ​ There can be no assurance that we will repurchase additional shares of our common stock at all or at favorable prices. ​ In August 2021, our Board of Directors authorized a repurchase program for the repurchase of up to $100 million of shares of our common stock at any time or times through December 31, 2022 (the “Prior Repurchase Program”).
Additional dilution may result from the issuance of shares of our common stock in connection with collaborations or manufacturing arrangements or in connection with other financing efforts. ​ There can be no assurance that we will repurchase additional shares of our common stock at all or at favorable prices. ​ In January 2024, our Board of Directors authorized a share repurchase program for the repurchase of up to $150.0 million of shares of our common stock through June 30, 2025 (the “2024-2025 Repurchase Program”).
Refer to the section in our Annual Report entitled “Business — Government Regulation — Healthcare Reform.” ​ Further changes to and under the Affordable Care Act remain possible. It is unknown what form any such changes or any law proposed to replace the Affordable Care Act would take, and how or whether it may affect our business in the future.
It is unknown what form any such changes or any law proposed to replace the Affordable Care Act would take, and how or whether it may affect our business in the future.
Current and future legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals.
Current and future legislation may significantly change these approval requirements in ways that could involve additional costs and cause delays in obtaining approvals. Pricing limitations may hinder our ability to recoup our investment in our products.
If the demand for Xtampza ER and any future related products never meets our expectations and forecasts, or if we do not produce the output we plan, we may not be able to realize the return on investment we anticipated, which would have a negative impact on our financial condition and results of operations. 33 ​ ​ We have also transitioned commercial manufacturing for Nucynta ER from Janssen to Patheon.
If the demand for Xtampza ER and any future related products never meets our expectations and forecasts, or if we do not produce the output we plan, we may not be able to realize the return on investment we anticipated, which would have a negative impact on our financial condition and results of operations. ​ Although we have identified alternate sources for these services, it would be time-consuming, and require us to incur additional costs, to qualify these sources.
There have been significant ongoing judicial, administrative, executive and legislative efforts to modify or eliminate the Affordable Care Act, and the Affordable Care Act has also been subject to challenges in the courts.
There have been significant ongoing judicial, administrative, executive and legislative efforts to modify or eliminate the Affordable Care Act, and the Affordable Care Act has also been subject to challenges in the courts. Refer to the section entitled “Business — Government Regulation — Healthcare Reform.” ​ Further changes to and under the Affordable Care Act remain possible.
As of December 31, 2023, there were outstanding options to purchase an 39 ​ aggregate of 1,176,750 shares of our common stock at a weighted average exercise price of $19.48 per share, of which options to purchase 1,158,209 shares of our common stock were then exercisable.
As of December 31, 2024, there were outstanding options to purchase an aggregate of 803,406 shares of our common stock at a weighted average exercise price of $20.84 per share, of which options to purchase 673,062 shares of our common stock were then exercisable.
Our competitors include major multinational pharmaceutical companies, biotechnology companies and universities and other research institutions. Our products compete with oral opioids, transdermal opioids, local anesthetic patches, stimulants and implantable and external infusion pumps that can be used for infusion of opioids and local anesthetics. Products of these types are marketed by Actavis, Endo, Mallinckrodt, Purdue, Teva, and others.
Our competitors include major multinational pharmaceutical companies, biotechnology companies and universities and other research institutions. Belbuca, Xtampza ER, and the Nucynta Products compete with oral opioids, transdermal opioids, local anesthetic patches, implantable and external infusion pumps that can be used for infusion of opioids and local anesthetics, and non-opioid oral analgesic.
Some of these current and potential future competitors may be addressing the same therapeutic areas or indications as we are. Many of our current and potential future competitors have significantly greater research and development capabilities than we do, have substantially more marketing, manufacturing, financial, technical, human and managerial resources than we do, and have more institutional experience than we do.
Many of our current and potential future competitors have significantly greater research and development capabilities than we do, have substantially more marketing, manufacturing, financial, technical, human and managerial resources than we do, and have more institutional experience than we do. ​ Our competitors have developed or may develop technologies that are, or may be, the basis for competitive products that are safer, more effective or less costly than our products.
If FDA deems these data to be responsive to its Written Request, the exclusivity of the entire Nucynta franchise could be extended an additional six months, to December 2025 for Nucynta ER and January 2027 for Nucynta IR.
In June 2024, we announced that the FDA deemed these data to be responsive to its Written Request, granting pediatric exclusivity to the entire Nucynta franchise for an additional six months, to December 27, 2025 for Nucynta ER and January 3, 2027 for Nucynta IR.
Refer to Note 18, Income Taxes , to our consolidated financial statements included in Part IV of this Annual Report on Form 10-K for more information. ​ We have substantial outstanding indebtedness, which may adversely affect our business, financial condition and results of operations. ​ In March 2022, we entered into a $650.0 million secured term loan (the “2022 Term Loan”) pursuant to our Amended and Restated Loan Agreement with BioPharma Credit PLC, as collateral agent and lender, and BioPharma Credit Investments V (Master) LP, as lender (as amended from time to time, the “2022 Loan Agreement”), of which $412.5 million in principal was outstanding as of December 31, 2023.
Refer to Note 19, Income Taxes , to our consolidated financial statements included in Part IV of this Annual Report on Form 10-K for more information. ​ We have substantial outstanding indebtedness, which may adversely affect our business, financial condition and results of operations. ​ In July 2024, in connection with the Ironshore acquisition, we entered into a Second Amended and Restated Loan Agreement by and among us, certain of our subsidiaries party thereto as guarantors, BioPharma Credit PLC as collateral agent, and BioPharma Credit Investments V (Master) LP and BPCR Limited Partnership (investment funds managed by Pharmakon Advisors, LP) as the lenders (the “Lenders”) party thereto (the “2024 Loan Agreement”), of which $629.7 million in principal was outstanding as of December 31, 2024 (the “2024 Term Loan”).
The FDA and other regulatory authorities require our products to be manufactured according to cGMP.
The FDA and other regulatory authorities require our products to be manufactured according to Current Good Manufacturing Practice regulations promulgated by the FDA (“cGMP”).
Pricing limitations may hinder our ability to recoup our investment in our products. ​ Our ability to commercialize any product successfully will also depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations.
Refer to the sections entitled “Business — Government Regulation — Third-Party Payor Coverage and Reimbursement” and “ — Healthcare Reform” for more information. ​ Our ability to market and sell any product successfully will also depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments are available from government health administration authorities, private health insurers and other organizations.
If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. ​ We or the third parties upon whom we depend may be adversely affected by natural disasters and/or health epidemics, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster. ​ Natural disasters could severely disrupt our operations, and have a material adverse effect on our business, results of operations, financial condition and prospects.
If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations.
In addition, because our assets are pledged as a security under the 2022 Loan Agreement, if we are not able to cure any default or repay outstanding borrowings, our assets would be subject to the risk of foreclosure by our lenders. ​ Further, amounts outstanding under our 2022 Loan Agreement historically bore interest at a rate based on the London Interbank Offered Rate (“LIBOR”), and, effective July 1, 2023, bears interest at a rate based on the Secured Overnight Financing Rate (“SOFR”) subject to a SOFR floor of 1.2%.
In addition, because our assets are pledged as a security under the 2024 Loan Agreement, if we are not able to cure any default or repay outstanding borrowings, our assets would be subject to the risk of foreclosure by our lenders. ​ Further, amounts outstanding under our 2024 Loan Agreement bear an annual interest rate equal to term Secured Overnight Financing Rate (“SOFR”) plus a spread adjustment of 0.13% plus 4.50%, and are subject to quarterly amortization payments equal to 2.50% of the original funded amount of the 2024 Term Loan.
Additionally, there may be certain PMRs or post-marketing commitments that we fulfill on our own for our products, including via the conduct of post-marketing surveillance or observational studies.
Additionally, there may be certain PMRs or post-marketing commitments that we fulfill on our own for our products, including via the conduct of post-marketing surveillance or observational studies. For example, under FDA’s post-marketing requirement 3033-11, holders of NDAs for extended-release and long-acting opioid analgesics to evaluate long-term efficacy of opioid analgesics and the risk of opioid-induced hyperalgesia.
However, there is no guarantee that FDA will agree that the Written Request has been satisfied and that we will receive this additional exclusivity, or that we will maintain such exclusivity, if granted. ​ In November 2017, the FDA issued a final guidance to assist industry in the development of generic versions of approved opioids with abuse-deterrent formulations, including recommendations about the types of studies that companies should conduct to demonstrate that the generic drug is no less abuse-deterrent than its brand-name counterpart.
These authorized generics and any other generic entrants into the market may impact our net revenue for the Nucynta Products. ​ In November 2017, the FDA issued a final guidance to assist the industry in the development of generic versions of approved opioids with abuse-deterrent formulations, including recommendations about the types of studies that companies should conduct to demonstrate that the generic drug is no less abuse-deterrent than its brand-name counterpart.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe individual occupying this role has over 20 years of experience in information technology and cybersecurity and has served in senior cybersecurity leadership positions for over 10 years. Thus, we believe our Head of Information Technology is well-qualified to serve in this role.
Biggest changeThe individual occupying this role has over 20 years of experience in information technology and cybersecurity and has served in senior cybersecurity leadership positions for over 10 years. Our Head of Information Technology conducts bi-weekly meetings with our information technology department to remain apprised of cybersecurity matters.
Although such risks have not materially affected us, including our business strategy, results of operations or financial condition, to date, we and/or our vendors have, from time to time, experienced threats to, or security incidents, related to our data and systems or that had the potential to otherwise impact our business.
Although such risks and incidents have not materially affected us, including our business strategy, results of operations or financial condition, to date, we and/or our vendors have, from time to time, experienced threats to, or security incidents, related to our data and systems or that had the potential to otherwise impact our business.
We also evaluate cybersecurity risks associated with third-party vendors that provide the hosted applications we use in our financial close process through review of their System and Organization Controls (“SOC”) 1 reports at least annually.
We also evaluate cybersecurity risks 41 ​ associated with third-party vendors that provide the hosted applications we use in our financial close process through review of their System and Organization Controls (“SOC”) 1 reports at least annually.
If a cybersecurity incident were to occur, our Head of Information Technology may inform our Executive Vice President and Head of Technological Operations and/or Audit Committee, depending on the severity of the incident in accordance with the established severity and response matrix as defined in our incident response plan. ​
In the event of a cybersecurity incident, our Head of Information Technology may inform our Executive Vice President and Head of Technological Operations and/or Audit Committee, depending on the severity of the incident in accordance with the established severity and response matrix as defined in our incident response plan. ​
As part of our incident response plan, our Cybersecurity Incident Response Team (a cross-functional taskforce comprised of senior representatives), would convene to assess the potential impact to our business, including financial reporting requirements and legal implications. 40 ​ ​ We, like other companies in our industry, face a number of cybersecurity risks in connection with our business.
As part of our incident response plan, our Cybersecurity Incident Response Team (a cross-functional taskforce comprised of senior representatives), is responsible for convening to assess the potential impact to our business, including financial reporting requirements and legal implications. ​ We, like other companies in our industry, face a number of cybersecurity risks, including cybersecurity incidents, in connection with our business.
The results are analyzed to identify vulnerabilities and then risk management/mitigation plans are designed, implemented, and evaluated for effectiveness. ​ If a cybersecurity incident were to occur, we would implement our incident response plan in an effort to contain and mitigate the threat.
The results are analyzed to identify vulnerabilities and then risk management/mitigation plans are designed, implemented, and evaluated for effectiveness. ​ In the event of a cybersecurity incident, we maintain an incident response plan in an effort to contain and mitigate the threat.
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Our Head of Information Technology conducts bi-weekly meetings with our information technology department to remain apprised of cybersecurity matters.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that appropriate alternative space is readily available on commercially reasonable terms. ​
Biggest changeWe believe that appropriate alternative space is readily available on commercially reasonable terms. ​ 42 ​
The corporate headquarters lease expires in July 2029 and the lease term may be extended for two additional five-year terms at our election. ​ We believe that our existing facilities are adequate for our current and expected future needs. We may seek to negotiate new leases or evaluate additional or alternate space for our operations.
The corporate headquarters lease expires in September 2029 and the lease term may be extended for two additional five-year terms at our election. ​ We believe that our existing facilities are adequate for our current and expected future needs. We may seek to negotiate new leases or evaluate additional or alternate space for our operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock Performance Graph The following graph sets forth the Company’s total cumulative shareholder return as compared to the NASDAQ Composite Index and the NASDAQ Biotechnology Index for the 5-year period beginning on December 31, 2018 through December 31, 2023.
Biggest changeDividends We have never declared or paid cash dividends on our common stock, and we do not expect to pay any cash dividends on our common stock in the foreseeable future. 43 ​ Stock Performance Graph The following graph sets forth the Company’s total cumulative shareholder return as compared to the NASDAQ Composite Index and the NASDAQ Biotechnology Index for the 5-year period beginning on December 31, 2019 through December 31, 2024.
(2) The difference, if any, between the total number of shares purchased and the total number of shares purchased as part of a publicly announced program relates to common stock withheld by us for employees to satisfy their tax withholding obligations arising upon the vesting of performance share units and restricted stock units granted under our Amended and Restated 2014 Stock Incentive Plan. ​ Item 6. [Reserved] ​ ​ 43 ​
(2) The difference, if any, between the total number of shares purchased and the total number of shares purchased as part of a publicly announced program relates to common stock withheld by us for employees to satisfy their tax withholding obligations arising upon the vesting of performance share units and restricted stock units granted under our Amended and Restated 2014 Stock Incentive Plan. ​ Item 6. [Reserved] ​ ​ 45 ​
Data for the NASDAQ Composite Index and NASDAQ Biotechnology Index assume reinvestment of dividends, however no dividends have been declared on our common stock to date. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, $100 investment in stock or index ​ 2018 ​ 2023 Collegium Pharmaceutical, Inc.
Data for the NASDAQ Composite Index and NASDAQ Biotechnology Index assume reinvestment of dividends, however no dividends have been declared on our common stock to date. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, $100 investment in stock or index ​ 2019 ​ 2024 Collegium Pharmaceutical, Inc.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock has been publicly traded on the NASDAQ Global Select Market under the symbol “COLL” since May 7, 2015.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock has been publicly traded on the NASDAQ Global Select Market under the symbol “COLL” since May 7, 2015. Prior to May 7, 2015, there was no public trading market for our common stock.
(COLL) ​ $ 100.00 ​ $ 179.27 NASDAQ Composite Index (IXIC) ​ $ 100.00 ​ $ 226.24 NASDAQ Biotechnology Index (NBI) ​ $ 100.00 ​ $ 143.60 ​ The performance graph and related information shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act, except to the extent that we specifically incorporate it by reference into such filing.
(COLL) ​ $ 100.00 ​ $ 139.21 NASDAQ Composite Index (IXIC) ​ $ 100.00 ​ $ 215.22 NASDAQ Biotechnology Index (NBI) ​ $ 100.00 ​ $ 113.84 ​ The performance graph and related information shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act, except to the extent that we specifically incorporate it by reference into such filing.
Prior to May 7, 2015, there was no public trading market for our common stock. 41 ​ Holders As of January 31, 2024, there were 12 holders of record of our common stock. The number of holders of record does not include beneficial owners whose shares are held by nominees in street name.
Holders As of January 31, 2025, there were 12 holders of record of our common stock. The number of holders of record does not include beneficial owners whose shares are held by nominees in street name.
Recent Sales of Unregistered Securities There were no unregistered sales of equity securities during the period covered by this Form 10-K. 42 ​ Purchases of Equity Securities by the Issuer and Affiliated Purchasers ​ The following table sets forth shares of common stock repurchased under our repurchase program authorized by our Board of Directors in January 2023 (the “2023 Repurchase Program”), as well as shares transferred to us from employees in satisfaction of minimum tax withholding obligations associated with the vesting of performance share units and restricted stock units during the three months ended December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Total number of shares purchased ​ Average Price Paid per Share ​ Total number of shares purchased as part of publicly announced plans or programs (1) ​ Maximum approximate dollar value of Shares that may yet be purchased under the plans or programs (in thousands) October 1, 2023 through October 31, 2023 467,247 ​ $ 23.10 ​ 462,442 ​ $ 50,000 November 1, 2023 through November 30, 2023 867,532 ​ ​ 27.09 ​ 865,426 ​ ​ 30,000 December 1, 2023 through December 31, 2023 59,791 ​ ​ 27.12 ​ 57,349 ​ ​ 25,000 Total 1,394,570 (2) ​ $ 25.75 ​ 1,385,217 (2) ​ $ 25,000 ​ (1) The 2023 Repurchase Program was announced on January 4, 2023.
Recent Sales of Unregistered Securities There were no unregistered sales of equity securities during the period covered by this Form 10-K. 44 ​ Purchases of Equity Securities by the Issuer and Affiliated Purchasers ​ The following table sets forth shares of common stock repurchased under our repurchase program authorized by our Board of Directors in January 2024 (the “2024-2025 Repurchase Program”), as well as shares transferred to us from employees in satisfaction of minimum tax withholding obligations associated with the vesting of performance share units and restricted stock units during the three months ended December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Total number of shares purchased ​ Average Price Paid per Share ​ Total number of shares purchased as part of publicly announced plans or programs (1) ​ Maximum approximate dollar value of Shares that may yet be purchased under the plans or programs (in thousands) October 1, 2024 through October 31, 2024 3,964 ​ $ 36.64 ​ — ​ $ 115,000 November 1, 2024 through November 30, 2024 113,896 ​ ​ 30.79 ​ 111,881 ​ ​ 111,557 December 1, 2024 through December 31, 2024 710,558 ​ ​ 30.44 ​ 708,273 ​ ​ 90,000 Total 828,418 (2) ​ $ 30.52 ​ 820,154 (2) ​ $ 90,000 ​ (1) The 2024-2025 Repurchase Program was announced on January 3, 2024.
The 2023 Repurchase Program provided for the repurchase of up to $100.0 million of outstanding shares of our common stock at any time or times through December 31, 2023. The 2023 Repurchase Program expired on December 31, 2023 with approximately $25.0 million available for repurchase at the time of expiration.
The 2024-2025 Repurchase Program provides for the repurchase of up to $150.0 million of outstanding shares of our common stock at any time or times through June 30, 2025. The 2024-2025 Repurchase Program did not expire during the three months ended December 31, 2024, nor do we currently plan to terminate the 2024-2025 Repurchase Program prior to expiration.
Removed
Dividends We have never declared or paid cash dividends on our common stock, and we do not expect to pay any cash dividends on our common stock in the foreseeable future.
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However, there can be no assurance as to the timing or number of shares of any repurchases in the future.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. [Reserved] ​ 43 ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 44 ​ Item 7A. Quantitative and Qualitative Disclosures about Market Risk ​ 56 ​ Item 8. Consolidated Financial Statements and Supplementary Data ​ 57 ​
Biggest changeItem 6. [Reserved] ​ 45 ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 46 ​ Item 7A. Quantitative and Qualitative Disclosures about Market Risk ​ 59 ​ Item 8. Consolidated Financial Statements and Supplementary Data ​ 60 ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe $101.0 million increase was primarily due to higher revenues and gross profit before excluded costs, partially offset by higher adjusted operating expenses. ​ 53 ​ The following is a summary of 2023 quarterly Adjusted EBITDA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ First Quarter ​ Second Quarter ​ Third Quarter ​ Fourth Quarter ​ (in thousands) GAAP net (loss) income ​ $ (17,426) ​ $ 13,007 ​ $ 20,634 ​ $ 31,940 Adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ​ 21,427 ​ ​ 21,863 ​ ​ 20,768 ​ ​ 19,281 Interest income ​ ​ (2,747) ​ ​ (4,027) ​ ​ (4,538) ​ ​ (4,303) Loss on extinguishment of debt ​ ​ 23,504 ​ ​ — ​ ​ — ​ ​ — (Benefit from) provision for income taxes ​ ​ (131) ​ ​ 4,790 ​ ​ 8,149 ​ ​ 14,770 Depreciation ​ ​ 817 ​ ​ 895 ​ ​ 835 ​ ​ 949 Amortization ​ ​ 37,466 ​ ​ 37,463 ​ ​ 36,317 ​ ​ 34,514 Stock-based compensation ​ ​ 6,035 ​ ​ 7,072 ​ ​ 7,027 ​ ​ 7,002 Litigation settlements ​ ​ 8,500 ​ ​ — ​ ​ — ​ ​ — Recognition of step-up basis in inventory ​ ​ 10,170 ​ ​ 4,748 ​ ​ 198 ​ ​ — Total adjustments ​ $ 105,041 ​ $ 72,804 ​ $ 68,756 ​ $ 72,213 Adjusted EBITDA ​ $ 87,615 ​ $ 85,811 ​ $ 89,390 ​ $ 104,153 ​ 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, 2023 and 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2023 ​ 2022 ​ (in thousands) GAAP operating expenses $ 159,208 ​ $ 176,169 Adjustments: ​ ​ ​ ​ ​ Stock-based compensation ​ 27,136 ​ ​ 22,874 Litigation settlements ​ 8,500 ​ ​ — Acquisition related expenses ​ — ​ ​ 31,297 Total adjustments $ 35,636 ​ $ 54,171 Adjusted operating expenses $ 123,572 ​ $ 121,998 ​ Adjusted operating expenses were $123.6 million for 2023 compared to $122.0 million for 2022.
Biggest changeThe $34.2 million increase was primarily due to higher revenues of $64.6 million, partially offset by higher salaries, wages and benefits (excluding stock-based compensation and CEO transition expense) of $14.7 million and higher sales and marketing expenses of $9.5 million. ​ The following is a summary of 2024 quarterly Adjusted EBITDA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ First Quarter ​ Second Quarter ​ Third Quarter ​ Fourth Quarter ​ (in thousands) GAAP Net income ​ $ 27,713 ​ $ 19,606 ​ $ 9,335 ​ $ 12,536 Adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ​ 17,339 ​ ​ 15,587 ​ ​ 18,394 ​ ​ 22,654 Interest income ​ ​ (4,487) ​ ​ (4,397) ​ ​ (3,280) ​ ​ (1,812) Loss on extinguishment of debt ​ ​ — ​ ​ 7,184 ​ ​ 4,145 ​ ​ — Provision for income taxes ​ ​ 8,909 ​ ​ 9,491 ​ ​ 6,245 ​ ​ 4,733 Depreciation ​ ​ 917 ​ ​ 952 ​ ​ 946 ​ ​ 1,041 Amortization ​ ​ 34,517 ​ ​ 34,515 ​ ​ 40,801 ​ ​ 55,471 Stock-based compensation ​ ​ 7,475 ​ ​ 10,012 ​ ​ 7,317 ​ ​ 7,596 Litigation settlements ​ ​ — ​ ​ — ​ ​ — ​ ​ — Recognition of step-up basis in inventory ​ ​ — ​ ​ — ​ ​ 1,301 ​ ​ 3,968 CEO transition expense ​ ​ — ​ ​ 3,051 ​ ​ — ​ ​ — Acquisition related expenses ​ ​ — ​ ​ — ​ ​ 19,886 ​ ​ 4,443 Gain on fair value remeasurement of contingent consideration ​ ​ — ​ ​ — ​ ​ — ​ ​ (2,914) Total adjustments ​ $ 64,670 ​ $ 76,395 ​ $ 95,755 ​ $ 95,180 Adjusted EBITDA ​ $ 92,383 ​ $ 96,001 ​ $ 105,090 ​ $ 107,716 ​ 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. ​ 56 ​ Adjusted operating expenses for the years ended December 31, 2024 and 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 ​ 2023 ​ (in thousands) GAAP operating expenses $ 207,449 ​ $ 159,208 Adjustments: ​ ​ ​ ​ ​ Stock-based compensation ​ 32,400 ​ ​ 27,136 Litigation settlements ​ — ​ ​ 8,500 CEO transition expense ​ 3,051 ​ ​ — Acquisition related expenses ​ 24,329 ​ ​ — Gain on fair value remeasurement of contingent consideration ​ (2,914) ​ ​ — Total adjustments $ 56,866 ​ $ 35,636 Adjusted operating expenses $ 150,583 ​ $ 123,572 ​ Adjusted operating expenses were $150.6 million for 2024 compared to $123.6 million for 2023.
(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.
(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.
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; ● 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; ● adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; 52 ​ ● 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 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.
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.
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.
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. ​ 54 ​ 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.
These 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.
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.
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 44 ​ related to freight, packaging, stability and quality testing.
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.
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). 46 ​ At the end of each reporting period, we analyze trends in returns rates and update our assessment of variable consideration for returns.
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.
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. ​ Intangible Assets We record the fair value of acquired finite-lived intangible assets as of the transaction date.
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. ​ 49 ​ Intangible Assets We record the fair value of acquired finite-lived intangible assets as of the transaction date.
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.
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 48 ​ to estimate the expected value of claims at the time of product delivery to distributors.
Provisions for product returns, including returns for Xtampza, the Nucynta Products, Belbuca 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.
Provisions for product returns, including returns for Jornay, Belbuca, Xtampza, 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.
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 cause.
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.
Refer to Note 5, License Agreements , and Note 11, Goodwill and Intangible Assets, for further detail around the intangible assets acquired from the BDSI Acquisition, the Nucynta Intangible Asset and royalty expenses.
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.
Therefore, product sales are recorded upon delivery to our customers net of estimated chargebacks, rebates, sales incentives and allowances, distribution service fees, as well as estimated product returns. ​ 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.
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.
For a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, 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, 2022.
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, 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, 2023.
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, 2023 and will remain in effect each year until the termination of our manufacturing agreement.
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, 2024 and will remain in effect each year until the termination of our manufacturing agreement.
We began shipping and recognizing product sales 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 in pediatrics for Nucynta IR.
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 in pediatrics for Nucynta IR.
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, 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, intangible assets and deferred tax valuation allowances.
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.
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, 2023 that will affect our future liquidity include our term loan, including interest; convertible senior notes, including interest; operating lease obligations; and purchase obligations.
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, 2024 that will affect our future liquidity include our term loan, including interest; convertible senior notes, including interest; operating lease obligations; deferred royalty obligation, and purchase obligations.
We base our estimates and assumptions on 45 ​ 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 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.
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 $5.8 million as of December 31, 2023.
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 $6.5 million as of December 31, 2024.
As of December 31, 2023, our intangible assets included those acquired in connection with the BDSI Acquisition and the Nucynta Intangible Asset. 47 ​ Income Taxes We utilize the asset and liability method of accounting for income taxes.
As of December 31, 2024, our intangible assets included those acquired in connection with the Ironshore Acquisition, the BDSI Acquisition, and the Nucynta Intangible Asset. Income Taxes We utilize the asset and liability method of accounting for income taxes.
Overview ​ We are building a leading, diversified specialty pharmaceutical company committed to improving the lives of people living with serious medical conditions.
Overview ​ We are building a leading, diversified biopharmaceutical company committed to improving the lives of people living with serious medical conditions.
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.
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.
The blended federal and state statutory rate for the years ended December 31, 2023 and 2022 were 25.9% and 26.0%, respectively. As such, the non-GAAP effective tax rates for the years ended December 31, 2023 and 2022 were 23.4% and 25.4%, respectively.
The blended federal and state statutory rate for the years ended December 31, 2024 and 2023 were 26.5% and 25.9%, respectively. As such, the non-GAAP effective tax rates for the years ended December 31, 2024 and 2023 were 25.3% and 23.4%, respectively.
For the three months ended March 31, June 30, September 30, and December 31, 2023, adjusted weighted-average shares – diluted includes 4,646,372, 7,509,104, 7,509,104, and 7,509,104 shares, respectively, attributable to our convertible notes. In addition, adjusted earnings per share includes other potentially dilutive securities to the extent that they are not antidilutive. ​ ​
For the three months ended March 31, June 30, September 30, and December 31, 2024, adjusted weighted-average shares – diluted includes 7,509,104, 6,606,305, 6,606,305, and 6,606,305 shares, respectively, attributable to our convertible notes. In addition, adjusted earnings per share includes other potentially dilutive securities to the extent that they are not antidilutive. ​ ​
To determine whether the acquisition should be accounted for as a business combination or as an asset acquisition, we made certain judgments regarding whether the acquired set of activities and assets met the definition of a business.
To determine whether the acquisitions should be accounted for as business combinations or as asset acquisitions, we made certain judgments regarding whether the acquired set of activities and assets met the definition of a business.
For further detail regarding our term notes and convertible senior notes, refer to Note 14, Debt. For further detail regarding our operating lease obligations, refer to Note 15, Leases .
For further detail regarding our term notes 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 .
The effective tax rate was 36.4% and 13.3% for 2023 and 2022, respectively. ​ Liquidity and Capital Resources ​ Sources of Liquidity ​ Historically, we have funded our operations primarily through the private placements and/or public offerings of our preferred stock, common stock, and convertible notes; commercial bank debt; and cash inflows from sales of our products.
The effective tax rate was 29.8% and 36.4% for 2024 and 2023, 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.
Upon closing of the BDSI Acquisition, we acquired Belbuca and Symproic. ​ 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.
(“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.
The blended federal and state statutory rate for the three months ended March 31, June 30, September 30, and December 31, 2023 were 26.8%, 24.0%, 25.6%, and 25.9%, respectively. As such, the non-GAAP effective tax rates for the three months ended March 31, June 30, September 30, and December 31, 2023 were 21.5%, 23.5%, 24.7%, and 25.9%, respectively.
The blended federal and state statutory rate for the three months ended March 31, June 30, September 30, and December 31, 2024 were 26.6%, 25.9%, 28.1%, and 25.3%, respectively. As such, the non-GAAP effective tax rates for the three months ended March 31, June 30, September 30, and December 31, 2024 were 28.9%, 21.3%, 27.9%, and 23.5%, respectively.
For the years ended December 31, 2023 and 2022, adjusted weighted-average shares – diluted includes 6,793,421 and 4,925,134 shares, respectively, attributable to our convertible notes.
For the years ended December 31, 2024 and 2023, adjusted weighted-average shares – diluted includes 6,606,305 and 6,793,421 shares, respectively, attributable to our convertible notes.
As of December 31, 2023, and December 31, 2022, we had $238.9 million and $173.7 million in cash and cash equivalents, respectively. ​ We believe that our cash, cash equivalents, and marketable securities as of December 31, 2023, 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 ​ The following transactions represent our material borrowing arrangements and equity offerings: the 2022 Term Loan, the 2026 Convertible Notes, and the 2029 Convertible Notes.
As of December 31, 2024, and December 31, 2023, we had $70.6 million and $238.9 million in cash and cash equivalents, respectively. ​ Although our current assets of $482.3 million and current liabilities of $508.1 million resulted in a working capital deficit as of December 31, 2024, we believe that our cash, cash equivalents, and marketable securities as of December 31, 2024, 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 ​ The following transactions represent our material borrowing arrangements and equity offerings: the 2024 Term Loan, and the 2029 Convertible Notes.
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 2022 Term Loan and Convertible Notes; ● royalties we pay on sales of certain products within our portfolio; ● operating lease obligations; ● minimum purchase obligations in connection with our contract manufacturer; and ● cash paid for income taxes. ​ 51 ​ 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; and ● in January 2024, 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 June 30, 2025.
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 2024 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; ● 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. ​ 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 judgements 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 January 2024, our Board of Directors authorized a share repurchase program for the repurchase of up to $150.0 million of shares of our common stock through June 30, 2025.
We began shipping and recognizing product sales related to Belbuca and Symproic in March 2022. ​ Financial Operations Overview Product Revenues Product revenues through the year ended December 31, 2023 were primarily generated from sales of Xtampza ER, the Nucynta Products, Belbuca, and Symproic.
We began shipping and recognizing product revenue related to Symproic in March 2022 following our acquisition of BDSI. ​ 46 ​ Financial Operations Overview Product Revenues Product revenues through the year ended December 31, 2024 were generated from sales of Jornay, Belbuca, Xtampza ER, the Nucynta Products, and Symproic.
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 fair value of acquired inventory.
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.
As of December 31, 2023, the outstanding principal balance of the Convertible Notes was $267.9 million, of which $26.4 million is due in 2026 and $241.5 million is due in 2029.
As of December 31, 2024, the outstanding principal balance of the Convertible Notes was $241.5 million, which is due in 2029.
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, 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; and ● 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. ​ Adjusted EBITDA for the years ended December 31, 2023 and 2022 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2023 ​ 2022 ​ (in thousands) GAAP net income (loss) $ 48,155 ​ $ (25,002) Adjustments: ​ ​ ​ ​ ​ Interest expense ​ 83,339 ​ ​ 63,213 Interest income ​ (15,615) ​ ​ (1,047) Loss on extinguishment of debt ​ 23,504 ​ ​ — Provision for (benefit from) income taxes ​ 27,578 ​ ​ (3,845) Depreciation ​ 3,496 ​ ​ 2,684 Amortization ​ 145,760 ​ ​ 131,469 Impairment expense ​ — ​ ​ 4,786 Stock-based compensation ​ 27,136 ​ ​ 22,874 Litigation settlements ​ 8,500 ​ ​ — Acquisition related expenses ​ — ​ ​ 31,297 Recognition of step-up basis in inventory ​ 15,116 ​ ​ 39,584 Total adjustments $ 318,814 ​ $ 291,015 Adjusted EBITDA $ 366,969 ​ $ 266,013 ​ Adjusted EBITDA was $367.0 million for 2023 compared to $266.0 million for 2022.
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, 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; 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. ​ 55 ​ Adjusted EBITDA for the years ended December 31, 2024 and 2023 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 ​ 2023 ​ (in thousands) GAAP net income $ 69,190 ​ $ 48,155 Adjustments: ​ ​ ​ ​ ​ Interest expense ​ 73,974 ​ ​ 83,339 Interest income ​ (13,976) ​ ​ (15,615) Loss on extinguishment of debt ​ 11,329 ​ ​ 23,504 Provision for income taxes ​ 29,378 ​ ​ 27,578 Depreciation ​ 3,856 ​ ​ 3,496 Amortization ​ 165,304 ​ ​ 145,760 Stock-based compensation ​ 32,400 ​ ​ 27,136 Litigation settlements ​ — ​ ​ 8,500 Recognition of step-up basis in inventory ​ 5,269 ​ ​ 15,116 CEO transition expense ​ 3,051 ​ ​ — Acquisition related expenses ​ 24,329 ​ ​ — Gain on fair value remeasurement of contingent consideration ​ (2,914) ​ ​ — Total adjustments $ 332,000 ​ $ 318,814 Adjusted EBITDA $ 401,190 ​ $ 366,969 ​ Adjusted EBITDA was $401.2 million for 2024 compared to $367.0 million for 2023.
Cash provided by operating activities was $274.7 million in 2023, compared to $124.2 million in 2022.
Cash provided by operating activities was $205.0 million in 2024, compared to $274.7 million in 2023.
The $102.9 million increase is primarily due to increases in revenue for Belbuca of $55.6 million, Xtampza ER of $38.6 million, the Nucynta Products of $6.3 million, and Symproic of $4.2 million, partially offset by decreases in other revenue of $1.8 million. ​ The increase in revenue for Belbuca of $55.6 million and Symproic of $4.2 million is primarily due to a full year of revenue in 2023, compared to a partial year of revenue in 2022 due to the timing of the BDSI Acquisition. ​ The increase in revenue for Xtampza ER of $38.6 million is primarily due to lower gross-to-net adjustments primarily related to provisions for rebates and higher gross price, partially offset by lower sales volume and higher gross-to-net adjustments related to provisions for returns. ​ The increase in revenue for the Nucynta Products of $6.3 million is primarily due to lower gross-to-net adjustments primarily related to provisions for rebates and returns and higher gross price, partially offset by decreased sales volume. ​ Cost of product revenues ​ Cost of product revenues (excluding intangible asset amortization) was $94.8 million for 2023, compared to $118.2 million for 2022.
The $64.6 million increase is primarily due to increases in revenue for Jornay of $37.2 million, Belbuca of $29.2 million, and Xtampza ER of $14.0 million, partially offset by decreases in revenue for the Nucynta Products of $14.3 million and Symproic of $1.4 million. ​ The increase in revenue for Jornay of $37.2 million is due to the acquisition of the product from Ironshore in 2024. ​ The increase in revenue for Belbuca of $29.2 million is primarily due to higher sales volume, gross price, and lower gross-to-net adjustments related to provisions for rebates, partially offset by higher gross-to-net adjustments related to provisions for chargebacks. ​ The increase in revenue for Xtampza ER of $14.0 million is primarily due to lower gross-to-net adjustments related to provisions for rebates and higher gross price, partially offset by lower sales volume. ​ The decrease in revenue for the Nucynta Products of $14.3 million is primarily due to lower sales volume and higher gross-to-net adjustments related to provisions for rebates, partially offset by higher gross price. ​ Cost of product revenues ​ Cost of product revenues (excluding intangible asset amortization) was $88.8 million for 2024, compared to $94.8 million for 2023.
The $23.4 million decrease was primarily related to 2022 including higher cost of product revenues related to the step-up basis in inventory acquired from BDSI as well as lower sales volume in 2023 for Xtampza and the Nucynta Products. ​ Intangible asset amortization was $145.8 million for 2023, compared to $136.3 million for 2022.
The $6.0 million decrease was primarily related to 2023 including higher cost of product revenues related to the step-up basis in inventory acquired from BDSI, partially offset by cost of product revenues for Jornay as well as higher sales volume in 2024 for Belbuca. ​ Intangible asset amortization was $165.3 million for 2024, compared to $145.8 million for 2023.
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, 2023 and 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2023 ​ 2022 ​ (in thousands, except share and per share data) GAAP net income (loss) $ 48,155 ​ $ (25,002) Adjustments: ​ ​ ​ ​ ​ Non-cash interest expense ​ 8,635 ​ ​ 8,285 Loss on extinguishment of debt ​ 23,504 ​ ​ — Amortization ​ 145,760 ​ ​ 131,469 Impairment expense ​ — ​ ​ 4,786 Stock-based compensation ​ 27,136 ​ ​ 22,874 Litigation settlements ​ 8,500 ​ ​ — Acquisition related expenses ​ — ​ ​ 31,297 Recognition of step-up basis in inventory ​ 15,116 ​ ​ 39,584 Income tax effect of above adjustments (1) ​ (53,526) ​ ​ (60,553) Total adjustments $ 175,125 ​ $ 177,742 Non-GAAP adjusted net income $ 223,280 ​ $ 152,740 ​ ​ ​ ​ ​ ​ Adjusted weighted-average shares — diluted (2) ​ 41,788,125 ​ ​ 39,531,814 Adjusted earnings per share (2) $ 5.47 ​ $ 3.96 ​ (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.
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. ​ 57 ​ Adjusted net income and adjusted earnings per share for the years ended December 31, 2024 and 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 ​ 2023 ​ (in thousands, except share and per share data) GAAP net income $ 69,190 ​ $ 48,155 Adjustments: ​ ​ ​ ​ ​ Non-cash interest expense ​ 9,729 ​ ​ 8,635 Loss on extinguishment of debt ​ 11,329 ​ ​ 23,504 Amortization ​ 165,304 ​ ​ 145,760 Stock-based compensation ​ 32,400 ​ ​ 27,136 Litigation settlements ​ — ​ ​ 8,500 Recognition of step-up basis in inventory ​ 5,269 ​ ​ 15,116 CEO transition expense ​ 3,051 ​ ​ — Acquisition related expenses ​ 24,329 ​ ​ — Gain on fair value remeasurement of contingent consideration ​ (2,914) ​ ​ — Income tax effect of above adjustments (1) ​ (62,880) ​ ​ (53,526) Total adjustments $ 185,617 ​ $ 175,125 Non-GAAP adjusted net income $ 254,807 ​ $ 223,280 ​ ​ ​ ​ ​ ​ Adjusted weighted-average shares — diluted (2) ​ 40,424,180 ​ ​ 41,788,125 Adjusted earnings per share (2) $ 6.45 ​ $ 5.47 ​ (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.
We commercialize our pain portfolio, consisting of Xtampza ER, Nucynta ER and Nucynta IR (collectively the “Nucynta Products”), Belbuca, and Symproic, in the United States. ​ Xtampza ER, an abuse-deterrent, oral formulation of oxycodone, was approved by the United States Food and Drug Administration (“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.
(“BDSI”). ​ Xtampza ER, an abuse-deterrent, oral formulation of oxycodone, 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.
This increase was partially offset by a decrease in amortization expense as a result of the FDA granting New Patient Population exclusivity in pediatrics for Nucynta IR to July 3, 2026, resulting in an extension of the estimated useful life of the underlying intangible asset.
This increase was partially offset by a decrease as a result of the FDA granting New Patient Population exclusivity for Nucynta IR until July 3, 2026 in the third quarter of 2023, resulting in an extension of the estimated useful life of the underlying intangible asset and a reduction of amortization expense recognized in 2024. ​ 51 ​ Operating expenses ​ Selling, general and administrative expenses were $210.4 million for 2024, compared to $159.2 million for 2023.
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 BDSI Acquisition on March 22, 2022, which was accounted for as a business combination.
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.
The $576.9 million decrease was primarily due to: ● the repayment of the outstanding balance of the 2020 Term Loan and establishment of the 2022 Term Loan in connection with the BDSI Acquisition, which was accounted for as a debt modification and resulted in $517.7 million in proceeds from the term note modification in 2022; ● an increase in repayments of term notes of $87.5 million; and ● an increase in repurchases of common stock of $60.9 million, which includes $75.0 million related to accelerated share repurchases executed in 2023; partially offset by ● the repurchase of a portion of our 2026 Convertibles Notes and issuance of our 2029 Convertible Notes which resulted in net proceeds of $96.6 million in 2023. ​ Funding requirements We believe that our cash, cash equivalents, and marketable securities as of December 31, 2023, 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.
The $79.6 million decrease was primarily due to: ● an increase in proceeds received from the modification of term loans of $313.2 million; ● a decrease in repayments of term notes of $54.7 million; ● a decrease in cash used to repurchase common stock of $15.0 million; ● an increase in cash provided from stock option exercises of $1.6 million; partially offset by ● the payoff of assumed debt from Ironshore of $164.6 million in 2024; ● the repurchase of a portion of our 2026 Convertible Notes and issuance of our 2029 Convertible Notes which resulted in net proceeds of $96.6 million in 2023; ● the $33.2 million cash settlement of the remaining 2026 Convertible Notes in 2024; and ● an increase in payments for employee stock tax withholdings of $10.8 million. ​ 53 ​ Funding requirements We believe that our cash, cash equivalents, and marketable securities as of December 31, 2024, 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.
Other selling, general and administrative expenses include facility-related costs and 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.
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.
Cash used in financing activities was $140.2 million in 2023, compared to cash provided by financing activities of $436.7 million in 2022.
Cash used in financing activities was $60.6 million in 2024, compared to $140.2 million in 2023.
Interest Expense ​ Interest expense consists primarily of cash and non-cash interest costs related to our debt, including the term loan issued in March 2022 in connection with the BDSI Acquisition (the “2022 Term Loan”), the term notes (the “2020 Term Loan”) and convertible notes (the “2026 Convertible Notes”) issued in February 2020 in connection with the Nucynta Acquisition, and convertible notes issued in February 2023 (the “2029 Convertible Notes”). ​ On March 22, 2022 the outstanding balance related to the 2020 Term Loan was fully paid in connection with the closing of the BDSI Acquisition and establishment of the 2022 Term Loan. ​ Interest Income ​ Interest income consists of interest 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.
Interest Expense ​ Interest expense consists primarily of cash and non-cash interest costs related to our debt, including the term loan issued in March 2022 in connection with the BDSI Acquisition and refinancing our 2020 Term Loan (the “2022 Term Loan”), the term loan issued in July 2024 in connection with the Ironshore Acquisition (the “2024 Term Loan”), convertible notes issued in February 2020 in connection with the Nucynta Acquisition (the “2026 Convertible Notes”), and convertible notes issued in February 2023 (the “2029 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. 47 ​ ​ 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 $14.6 million increase was primarily due to a higher overall balance invested in 2023 compared to 2022 and higher interest rates earned on cash equivalents and marketable securities. ​ Loss on extinguishment of debt ​ We recognized a $23.5 million loss on extinguishment of debt in 2023 in connection with the repurchase of a portion of our 2026 Convertible Notes.
The $1.6 million decrease was primarily due to lower interest rates earned on cash equivalents and marketable securities as well as a lower overall average balance invested in 2024 compared to 2023. ​ Loss on extinguishment of debt ​ Loss on extinguishment of debt was $11.3 million for 2024, compared to $23.5 million for 2023.
Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes the results of our operations for the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2023 ​ 2022 ​ (in thousands) Product revenues, net $ 566,767 $ 463,933 Cost of product revenues ​ ​ ​ ​ ​ Cost of product revenues (excluding intangible asset amortization) ​ 94,838 ​ ​ 118,190 Intangible asset amortization and impairment ​ 145,760 ​ ​ 136,255 Total cost of products revenues ​ 240,598 ​ ​ 254,445 Gross profit ​ 326,169 ​ ​ 209,488 Operating expenses ​ ​ ​ ​ ​ Research and development ​ — ​ ​ 3,983 Selling, general and administrative 159,208 ​ 172,186 Total operating expenses 159,208 ​ 176,169 Income from operations 166,961 ​ 33,319 Interest expense (83,339) ​ (63,213) Interest income ​ 15,615 ​ ​ 1,047 Loss on extinguishment of debt ​ (23,504) ​ ​ — Income (loss) before income taxes ​ 75,733 ​ ​ (28,847) Provision for (benefit from) income taxes ​ 27,578 ​ ​ (3,845) Net income (loss) $ 48,155 ​ $ (25,002) ​ 48 ​ Product revenues, net ​ Product revenues, net were $566.8 million for the year ended December 31, 2023 (“2023”), compared to $463.9 million for the year ended December 31, 2022 (“2022”), representing a $102.9 million increase.
Results of Operations In this section, we discuss the results of our operations for the year ended December 31, 2024 compared to the year ended December 31, 2023. 50 ​ Comparison of the Years Ended December 31, 2024 and 2023 The following table summarizes the results of our operations for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 ​ 2023 ​ (in thousands) Product revenues, net $ 631,449 $ 566,767 Cost of product revenues ​ ​ ​ ​ ​ Cost of product revenues (excluding intangible asset amortization) ​ 88,801 ​ ​ 94,838 Intangible asset amortization and impairment ​ 165,304 ​ ​ 145,760 Total cost of products revenues ​ 254,105 ​ ​ 240,598 Gross profit ​ 377,344 ​ ​ 326,169 Operating expenses ​ ​ ​ ​ ​ Selling, general and administrative 210,363 ​ 159,208 Gain on fair value remeasurement of contingent consideration ​ (2,914) ​ ​ — Total operating expenses 207,449 ​ 159,208 Income from operations 169,895 ​ 166,961 Interest expense (73,974) ​ (83,339) Interest income ​ 13,976 ​ ​ 15,615 Loss on extinguishment of debt ​ (11,329) ​ ​ (23,504) Income before income taxes ​ 98,568 ​ ​ 75,733 Provision for income taxes ​ 29,378 ​ ​ 27,578 Net income $ 69,190 ​ $ 48,155 ​ Product revenues, net ​ Product revenues, net were $631.4 million for the year ended December 31, 2024 (“2024”), compared to $566.8 million for the year ended December 31, 2023 (“2023”), representing a $64.6 million increase.
The $13.0 million decrease was primarily related to: ● a decrease in acquisition related expenses classified as selling, general and administrative of $30.6 million; partially offset by ● an increase in salaries, wages, and benefits of $8.7 million, primarily due to increases in personnel costs for employees retained following the BDSI Acquisition and higher stock-based compensation expenses; ● an overall increase in audit and legal expenses of $5.0 million, primarily due to an $8.5 million litigation settlement; ● an increase in sales and marketing expenses of $3.1 million, primarily due to expenses incurred to support the ongoing commercialization of products acquired from BDSI; and ● an increase in regulatory expenses of $0.8 million, primarily due to a full year of expenses related to products acquired from BDSI. ​ Interest expense and Interest income ​ Interest expense was $83.3 million for 2023, compared to $63.2 million for 2022.
The $51.2 million increase was primarily related to: ● an increase in acquisition related expense of $24.3 million due to the Ironshore Acquisition; ● an increase in salaries, wages and benefits of $23.1 million primarily due to additional headcount added in September 2024 as a result of the Ironshore Acquisition, including the sales force that promotes Jornay, as well as expenses incurred as a result of the CEO transition announced in May 2024, including higher stock-based compensation expense of $3.7 million related to accelerated equity awards and higher severance, benefits, and related expenses incurred of $3.1 million; ● an increase in sales and marketing expenses of $9.5 million, primarily due to expenses incurred to support the ongoing commercialization of Jornay following the Ironshore Acquisition in September 2024; ● an increase in regulatory fees of $1.8 million primarily due to fees incurred for Jornay following the Ironshore Acquisition in September 2024; partially offset by ● an overall decrease in audit and legal expenses of $9.5 million, primarily due to an $8.5 million litigation settlement during 2023 and lower litigation related expenses. ​ Interest expense and Interest income ​ Interest expense was $74.0 million for 2024, compared to $83.3 million for 2023.
The $1.6 million increase was primarily driven by: ● an increase in salaries, wages, and benefits (excluding stock-based compensation) of $1.8 million, primarily due to increases in personnel costs for employees retained following the BDSI Acquisition; ● an increase in sales and marketing expenses of $3.1 million, primarily due to expenses incurred to support the ongoing commercialization of products acquired from BDSI; ● an increase in regulatory expenses of $0.8 million, primarily due to a full year of expenses related to products acquired from BDSI; partially offset by ● a decrease in audit and legal expenses (excluding litigation settlements) of $3.5 million. 54 ​ ​ The following is a summary of 2023 quarterly adjusted operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ First Quarter ​ Second Quarter ​ Third Quarter ​ Fourth Quarter ​ (in thousands) GAAP operating expenses $ 52,775 ​ $ 38,193 ​ $ 35,298 ​ $ 32,942 Adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation ​ 6,035 ​ ​ 7,072 ​ ​ 7,027 ​ ​ 7,002 Litigation settlements ​ 8,500 ​ ​ — ​ ​ — ​ ​ — Total adjustments ​ 14,535 ​ ​ 7,072 ​ ​ 7,027 ​ ​ 7,002 Adjusted operating expenses $ 38,240 ​ $ 31,121 ​ $ 28,271 ​ $ 25,940 ​ 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.
The $27.0 million increase was primarily driven by: ● an increase in salaries, wages, and benefits (excluding stock-based compensation and CEO transition expense) of $14.7 million, primarily due to increases in personnel costs for employees retained following the Ironshore Acquisition; ● an increase in sales and marketing expenses of $9.5 million, primarily due to expenses incurred to support the ongoing commercialization of Jornay following the Ironshore Acquisition in September 2024; and ● an increase in regulatory fees of $1.8 million, primarily due to fees incurred for Jornay following the Ironshore Acquisition in September 2024. ​ The following is a summary of 2024 quarterly adjusted operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ First Quarter ​ Second Quarter ​ Third Quarter ​ Fourth Quarter ​ (in thousands) GAAP operating expenses $ 41,982 ​ $ 43,335 ​ $ 61,955 ​ $ 60,177 Adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation ​ 7,475 ​ ​ 10,012 ​ ​ 7,317 ​ ​ 7,596 Litigation settlements ​ — ​ ​ — ​ ​ — ​ ​ — CEO transition expense ​ — ​ ​ 3,051 ​ ​ — ​ ​ — Acquisition related expenses ​ — ​ ​ — ​ ​ 19,886 ​ ​ 4,443 Gain on fair value remeasurement of contingent consideration ​ — ​ ​ — ​ ​ — ​ ​ (2,914) Total adjustments ​ 7,475 ​ ​ 13,063 ​ ​ 27,203 ​ ​ 9,125 Adjusted operating expenses $ 34,507 ​ $ 30,272 ​ $ 34,752 ​ $ 51,052 ​ 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.
As of December 31, 2023, the outstanding principal balance of the 2022 Term Loan was $412.5 million, of which $183.3 million in principal payments are due within the next 12 months.
We will use the remainder for general corporate purposes. ​ 52 ​ As of December 31, 2024, the outstanding principal balance of the 2024 Term Loan was $629.7 million, of which $64.6 million in principal payments are due within the next 12 months.
Cash used in investing activities was $70.8 million in 2023, compared to $573.7 million in 2022. The $502.9 million decrease in cash used in investing activities was primarily due to the use of $572.1 million for the BDSI Acquisition in 2022, net of cash acquired, partially offset by purchases and maturities of marketable securities in 2023. Financing activities.
The $217.0 million increase in cash used in investing activities was primarily due to $267.5 million cash paid to acquire Ironshore (net of cash acquired) and $18.8 million increase in purchases of marketable securities, partially offset by $70.6 million increase in maturities of marketable securities. Financing activities.
Results of Operations In this section, we discuss the results of our operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Our discussion and analysis of our financial condition and results of operations for the year ended Decemebr 31, 2024 as compared to December 31, 2023 are discussed below.
For a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, 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, 2022. ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2023 ​ 2022 ​ (in thousands) Net cash provided by operating activities $ 274,749 $ 124,230 Net cash used in investing activities (70,812) ​ (573,691) Net cash (used in) provided by financing activities (140,178) ​ 436,723 Net increase (decrease) in cash, cash equivalents and restricted cash $ 63,759 ​ $ (12,738) ​ Operating activities.
Refer to Note 14, Debt , for more information. ​ Cash flows ​ In this section, we discuss cash flows for the year ended December 31, 2024 compared to the year ended December 31, 2023. ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 ​ 2023 ​ (in thousands) Net cash provided by operating activities $ 204,980 $ 274,749 Net cash used in investing activities (287,759) ​ (70,812) Net cash (used in) provided by financing activities (60,603) ​ (140,178) Net (decrease) increase in cash, cash equivalents and restricted cash $ (143,382) ​ $ 63,759 ​ Operating activities.
In addition, adjusted earnings per share includes other potentially dilutive securities to the extent that they are not antidilutive. ​ 55 ​ The following is a summary of 2023 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 (loss) income $ (17,426) ​ $ 13,007 ​ $ 20,634 ​ $ 31,940 Adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-cash interest expense ​ 2,287 ​ ​ 2,261 ​ ​ 2,124 ​ ​ 1,963 Loss on extinguishment of debt ​ 23,504 ​ ​ — ​ ​ — ​ ​ — Amortization ​ 37,466 ​ ​ 37,463 ​ ​ 36,317 ​ ​ 34,514 Stock-based compensation ​ 6,035 ​ ​ 7,072 ​ ​ 7,027 ​ ​ 7,002 Litigation settlements ​ 8,500 ​ ​ — ​ ​ — ​ ​ — Recognition of step-up basis in inventory ​ 10,170 ​ ​ 4,748 ​ ​ 198 ​ ​ — Income tax effect of above adjustments (1) ​ (18,874) ​ ​ (12,100) ​ ​ (11,300) ​ ​ (11,252) Total adjustments $ 69,088 ​ $ 39,444 ​ $ 34,366 ​ $ 32,227 Non-GAAP adjusted net income $ 51,662 ​ $ 52,451 ​ $ 55,000 ​ $ 64,167 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted weighted-average shares — diluted (2) ​ 40,196,015 ​ ​ 42,849,952 ​ ​ 42,058,820 ​ ​ 41,279,982 Adjusted earnings per share (2) $ 1.32 ​ $ 1.26 ​ $ 1.34 ​ $ 1.58 ​ (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.
In addition, adjusted earnings per share includes other potentially dilutive securities to the extent that they are not antidilutive. ​ 58 ​ The following is a summary of 2024 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 $ 27,713 ​ $ 19,606 ​ $ 9,335 ​ $ 12,536 Adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-cash interest expense ​ 1,780 ​ ​ 1,604 ​ ​ 1,681 ​ ​ 4,664 Loss on extinguishment of debt ​ — ​ ​ 7,184 ​ ​ 4,145 ​ ​ — Amortization ​ 34,517 ​ ​ 34,515 ​ ​ 40,801 ​ ​ 55,471 Stock-based compensation ​ 7,475 ​ ​ 10,012 ​ ​ 7,317 ​ ​ 7,596 Recognition of step-up basis in inventory ​ — ​ ​ — ​ ​ 1,301 ​ ​ 3,968 CEO transition expense ​ — ​ ​ 3,051 ​ ​ — ​ ​ — Acquisition related expenses ​ — ​ ​ — ​ ​ 19,886 ​ ​ 4,443 Gain on fair value remeasurement of contingent consideration ​ — ​ ​ — ​ ​ — ​ ​ (2,914) Income tax effect of above adjustments (1) ​ (12,653) ​ ​ (12,008) ​ ​ (20,974) ​ ​ (17,245) Total adjustments $ 31,119 ​ $ 44,358 ​ $ 54,157 ​ $ 55,983 Non-GAAP adjusted net income $ 58,832 ​ $ 63,964 ​ $ 63,492 ​ $ 68,519 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted weighted-average shares — diluted (2) ​ 41,438,466 ​ ​ 40,383,695 ​ ​ 40,163,266 ​ ​ 40,109,649 Adjusted earnings per share (2) $ 1.45 ​ $ 1.62 ​ $ 1.61 ​ $ 1.77 ​ (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.
Therefore, the repurchase of the 2026 Convertible Notes was accounted for as a debt extinguishment. ​ Income Taxes ​ The provision for income taxes was $27.6 million for 2023, compared to a $3.8 million benefit from income taxes for 2022.
In addition, in 2024, assumed debt from the Ironshore Acquisition was redeemed, resulting in a loss on extinguishment of $4.1 million in 2024. ​ Income Taxes ​ The provision for income taxes was $29.4 million for 2024, compared to $27.6 million for 2023.
We are primarily dependent on the commercial success of Belbuca, Xtampza, and the Nucynta Products. In March 2022, our debt balance increased significantly as we modified the 2020 Term Loan with Pharmakon to an increased principal balance of $650.0 million to fund a portion of the consideration paid to complete the BDSI Acquisition.
We are primarily dependent on the commercial success of Jornay, Belbuca, Xtampza, and the Nucynta Products. ​ In July 2024, we amended and replaced our 2022 Term Loan with the 2024 Term Loan, which consisted of a $320.8 million initial term loan and a $325.0 million delayed draw term loan.
Removed
This grant extended the period of U.S. exclusivity for Nucynta IR from June 27, 2025 to July 3, 2026. ​ On March 22, 2022, we acquired BioDelivery Sciences International, Inc. (“BDSI”), a specialty pharmaceutical company working to deliver innovative therapies for individuals living with serious and debilitating chronic conditions (the “BDSI Acquisition”).
Added
We have developed, licensed, and acquired a portfolio of meaningfully differentiated products for use in the treatment of moderate to severe pain and attention deficit hyperactivity disorder (“ADHD”), consisting of Jornay PM (“Jornay”), Belbuca, Xtampza ER, Nucynta ER and Nucynta IR (collectively the “Nucynta Products”), and Symproic, in the United States. ​ Jornay is a central nervous system (“CNS”) stimulant prescription medicine that contains methylphenidate HCl, which was approved by the U.S.
Removed
During the year ended December 31, 2021, we removed the valuation allowance on the substantial majority of our deferred tax assets, resulting in the recognition of a discrete deferred tax benefit of $78.0 million in 2021. ​ Critical Accounting Policies and Significant Judgments 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”).
Added
Food and Drug Administration (“FDA”) in August 2018 for the treatment of attention deficit hyperactivity disorder (“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 in September 2024 following our acquisition of Ironshore Therapeutics Inc.
Removed
As a result of sustained positive earnings history as demonstrated through cumulative earnings, we are using projections of future taxable income as a source of realizing our deferred tax assets.
Added
We began shipping and recognizing product revenue related to Belbuca in March 2022 following our acquisition of BioDelivery Sciences International, Inc.
Removed
The $9.5 million increase in intangible asset amortization was due to a full year of amortization expense recognized in 2023 related to the intangible assets acquired from BDSI of which $435.0 million of consideration was allocated to our acquired intangible assets, compared to a partial year of amortization expense in 2022.
Added
This grant extended the period of U.S. exclusivity for Nucynta IR from June 27, 2025 to July 3, 2026. ​ Symproic 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.
Removed
The intangible assets are amortized on a straight-line basis over the respective estimated useful lives. ​ Operating expenses ​ We did not recognize research and development expenses in 2023, compared to $4.0 million recognized in 2022.
Added
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.
Removed
The $4.0 million decrease was due to redirection of resources from research and development activities during 2022 as we shifted our focus to supporting our commercial products rather than research and development. ​ Selling, general and administrative expenses were $159.2 million for 2023, compared to $172.2 million for 2022.
Added
Business Combination Accounting and Valuation of Acquired Assets We completed the Ironshore Acquisition in September 2024 and the BDSI Acquisition in March 2022, both of which were accounted for as business combinations.
Removed
The $20.1 million increase was primarily due to the 2022 Term Loan that we entered into in connection with the BDSI Acquisition, higher interest rates impacting our variable rate term loan debt, and higher interest expense due to the issuance of the 2029 Convertible Notes (offset by the partial repurchase of the 2026 Convertible Notes). ​ 49 ​ Interest income was $15.6 million for 2023, compared to $1.0 million for 2022.
Added
The $19.5 million increase in intangible asset amortization was primarily related to the Ironshore Acquisition in 2024.
Removed
This transaction involved a contemporaneous exchange of cash between us and holders of the 2026 Convertible Notes participating in the issuance of the 2029 Convertible Notes.
Added
The $9.3 million decrease was primarily due to lower interest expense associated with the 2022 Term as a result of a lower average overall principal balance during 2024, as well as a lower interest rate on the 2024 Term Loan. ​ Interest income was $14.0 million for 2024, compared to $15.6 million for 2023.
Removed
The repurchase of the 2026 Convertible Notes and issuance of the 2029 Convertible Notes were deemed to have substantially different terms based on the present value of the cash flows immediately prior to and after the exchange.
Added
The $12.2 million decrease was due to 2023 including a $23.5 million loss on extinguishment resulting from the repurchase of $117.4 million of the 2026 Convertible Notes in 2023. In 2024, the remaining $26.4 million of the 2026 Convertible Notes were redeemed, resulting in a $7.2 million loss on extinguishment in 2024.
Removed
The tax provision for 2023 was impacted by non-deductible costs, including non-deductible costs associated with the debt extinguishment that occurred in the first quarter of 2023 as well as non-deductible costs related to stock-based compensation, including 162(m) limitations. In 2022, we recognized a deferred tax benefit, partially offset by state income tax expense.
Added
The $1.8 million increase is primarily due to higher earnings before taxes in 2024, partially offset by 2023 including higher non-deductible costs associated with debt extinguishments.
Removed
The provision for income taxes in 2022 primarily consisted of state income tax for states for which our state-level NOLs did not fully offset state-level taxable income.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDue to the nature of our investments, we do not believe that the fair value of our investments has a material exposure to interest rate risk. ​ 56 ​ 2022 Term Loan ​ The 2022 Term Loan bears interest at a rate based upon the Secured Overnight Financing Rate (“SOFR”) plus a spread adjustment of 0.26% (subject to a floor of 1.20%), plus a margin of 7.5% per annum.
Biggest changeDue to the nature of our investments, we do not believe that the fair value of our investments has a material exposure to interest rate risk. 59 ​ ​ 2024 Term Loan ​ The 2024 Term Loan bears interest at a rate equal to bear an annual interest rate equal to Secured Overnight Financing Rate (“SOFR”) plus a spread adjustment of 0.13% plus + 4.50%, and is subject to quarterly amortization payments equal to 2.50% of the original funded amount of the 2024 Term Loan.
We account for marketable securities as available-for-sale, thus, no gains or losses are realized due to changes in the fair value of our marketable securities unless we sell our investments prior to maturity or incur a credit loss. Furthermore, our investment policy includes guidelines limiting the term-to-maturity of our investments.
We account for marketable securities as available-for-sale and, thus, no gains or losses are realized due to changes in the fair value of our marketable securities unless we sell our investments prior to maturity or incur a credit loss. Furthermore, our investment policy includes guidelines limiting the term-to-maturity of our investments.
Item 7A. Quantitative and Qualitative Disclosures about Market Risks ​ Our primary exposure to market risk is interest rate sensitivity in connection with our investment portfolio and the 2022 Term Loan. None of these market risk sensitive instruments are held for trading purposes. ​ Investment Portfolio ​ Our investment portfolio includes financial instruments that are sensitive to interest rate risks.
Item 7A. Quantitative and Qualitative Disclosures about Market Risks ​ Our primary exposure to market risk is interest rate sensitivity in connection with our investment portfolio and the 2024 Term Loan. None of these market risk sensitive instruments are held for trading purposes. ​ Investment Portfolio ​ Our investment portfolio includes financial instruments that are sensitive to interest rate risks.
We invest in instruments that meet the credit quality, diversification, liquidity, and maturity standards outlined in our investment policy. ​ As of December 31, 2023, our investment portfolio includes $82.0 million of cash equivalents and $71.6 million of marketable securities, which are primarily comprised of money market funds, U.S. Treasury securities, corporate debt, and government-sponsored securities.
We invest in instruments that meet the credit quality, diversification, liquidity, and maturity standards outlined in our investment policy. ​ As of December 31, 2024, our investment portfolio includes $38.1 million of cash equivalents and $92.2 million of marketable securities, which are primarily comprised of money market funds, commercial paper, corporate debt securities, and government-sponsored debt securities.
Based on the outstanding principal amount of the 2022 Term Loan as of December 31, 2023 of $412.5 million and the applicable interest rate, a hypothetical 1% increase or decrease in interest rates would increase or decrease future interest expense by approximately $4.1 million. ​
Based on the outstanding principal amount of the 2024 Term Loan as of December 31, 2024 of $629.7 million, a hypothetical 1% increase or decrease in interest rates would increase or decrease future annual interest expense by approximately $6.3 million. ​

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