Collegium Acquires Ironshore Therapeutics

Collegium Pharmaceutical, Inc., a prominent specialty pharmaceutical company, has announced the successful acquisition of Ironshore Therapeutics Inc., a private firm known for marketing and distributing Jornay PM (methylphenidate HCl). Jornay PM is a central nervous system stimulant used to treat attention deficit hyperactivity disorder (ADHD). With this acquisition, Collegium aims to expand its reach in the neurology sector, particularly the growing ADHD market.

Michael Heffernan, Collegium’s Chairman and Interim President and CEO, expressed satisfaction with the acquisition, highlighting it as a significant milestone for the company. He emphasized that integrating Jornay PM into Collegium’s portfolio not only establishes a presence in the ADHD market but also leverages the company’s commercial strengths. This move is expected to drive growth and provide immediate financial benefits to both the top and bottom lines of Collegium's financial statements.

Strategically, the acquisition aligns with Collegium’s mission to diversify its specialty pharmaceutical portfolio beyond pain management. Jornay PM is expected to become a major growth driver, with projected net revenue exceeding $100 million in 2024. The medication has shown a 32% increase in prescriptions during the first half of 2024 compared to the same period in the previous year. For the entire year of 2023, it generated about 490,000 prescriptions, marking a 58% rise from 2022. Jornay PM is distinguished by its evening dosing and smooth therapeutic effect, which are supported by 16 patents listed in the Orange Book, expiring in 2032.

Financially, the acquisition of Ironshore Therapeutics is anticipated to enhance Collegium’s revenue base, immediately contribute to adjusted EBITDA, and accelerate cash flow generation. The deal, valued at $525 million, was financed through a combination of $200 million in existing cash and $325 million from a term loan managed by Pharmakon Advisors, LP. An additional $25 million may be paid to Ironshore shareholders if Jornay PM's net revenue surpasses a certain threshold in 2025. The remaining funds from the term loan were used to repay a previous $320.8 million loan, effectively reducing Collegium's interest rate by 300 basis points.

Collegium has also updated its financial guidance for 2024 to reflect the anticipated impact of the Ironshore acquisition. The projected product revenues are now expected to be between $620.0 million and $635.0 million. Adjusted operating expenses, excluding stock-based compensation, are anticipated to be in the range of $150.0 million to $155.0 million. Adjusted EBITDA is projected to be between $395.0 million and $405.0 million.

Jornay PM, indicated for ADHD in patients aged six and older, has a high potential for misuse and addiction. It carries a boxed warning highlighting the risks of abuse, misuse, and addiction, which can result in overdose and death. Before prescribing, healthcare providers are advised to assess each patient’s risk and provide education on proper storage and disposal. Continuous monitoring for signs of misuse and addiction is recommended throughout the treatment period.

Common adverse reactions to Jornay PM include decreased appetite, insomnia, nausea, vomiting, and increased blood pressure. In pediatric patients aged 6 to 12, additional reactions such as headache, psychomotor hyperactivity, and mood swings may occur. The drug is contraindicated in patients with known hypersensitivity to methylphenidate or concurrent use of monoamine oxidase inhibitors (MAOIs).

In conclusion, the acquisition of Ironshore Therapeutics positions Collegium Pharmaceutical for significant growth in the ADHD market with Jornay PM as a central product. This strategic move is expected to enhance Collegium’s financial performance and expand its presence in the specialty pharmaceutical sector.

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