Collegium to Acquire Ironshore Therapeutics, Expands into Neurology

Collegium Pharmaceutical, Inc. and Ironshore Therapeutics Inc. have entered into a definitive agreement where Collegium will acquire Ironshore for $525 million with an additional potential milestone payment of $25 million. Ironshore, a private pharmaceutical company, markets Jornay PM, a CNS stimulant prescribed for ADHD in individuals aged six and older. Jornay PM is unique as it is the only stimulant medication taken in the evening.

The acquisition aligns with Collegium's strategy to diversify its commercial portfolio and establish a presence in the growing ADHD market. This acquisition will not only bolster Collegium’s product line but is also expected to be immediately beneficial to its adjusted EBITDA, enhancing financial performance. Michael Heffernan, Chairman and Interim CEO of Collegium, highlighted that Jornay PM's addition signifies an entry into a robust market where the company can utilize its commercial expertise to maximize the product’s potential. The transaction’s financing, supported by Collegium’s cash reserves and favorable new financing terms, will reduce the company's cost of capital and provide greater debt management flexibility.

Stephanie Read, CEO of Ironshore, expressed enthusiasm about the acquisition, acknowledging the value that Collegium recognizes in Jornay PM and its future growth potential. The transition is seen as a positive step for Jornay PM’s continued success.

Strategically, this acquisition will enable Collegium to expand beyond pain management and tap into the ADHD market. Jornay PM's net revenue is projected to surpass $100 million in 2024, and prescriptions for the first half of 2024 have already shown a 32% year-over-year increase. Supported by 16 patents with expiries extending to 2032, Jornay PM is positioned to be a key growth driver for Collegium.

The financial details of the acquisition reveal that Collegium will fund the $525 million purchase price using its existing cash and a new five-year secured loan from Pharmakon Advisors, LP, replacing the existing loan with improved interest terms. This transaction is expected to close in the third quarter of 2024, pending regulatory approvals.

Both companies have appointed financial and legal advisors to facilitate the acquisition. Lazard is advising Collegium, while Centerview Partners is advising Ironshore. Legal counsel for Collegium is Hogan Lovells, and Goodwin Procter LLP is representing Ironshore.

Collegium also provided preliminary financial results for the second quarter of 2024, estimating net product revenues of $145 million, a 7% increase compared to the same period in 2023. The company reaffirmed its 2024 financial guidance, projecting net product revenues between $580 million and $595 million, adjusted operating expenses between $120 million and $125 million, and adjusted EBITDA between $380 million and $395 million.

A conference call to discuss the acquisition and financial results is scheduled for July 29, 2024. Collegium has also provided detailed safety information for Jornay PM, noting its potential for abuse and misuse, contraindications, and various warnings and precautions for patients.

Collegium Pharmaceutical is a specialist in developing treatments for serious medical conditions, headquartered in Stoughton, Massachusetts. Ironshore Therapeutics focuses on innovative treatments aimed at improving patient and caregiver lives.

The acquisition of Ironshore by Collegium Pharmaceutical signifies a strategic move to diversify its portfolio and establish a stronger foothold in the ADHD market, promising significant financial and commercial benefits. The transaction is poised to enhance Collegium’s market presence and financial stability moving forward.