Collegium to Acquire U.S. Rights to Nucynta Franchise
[caption id="attachment_9277" align="aligncenter" width="747"] Press Release[/caption]
? Financially Transformative Acquisition ?
? Expected to Significantly Grow Net Income, EBITDA and Operating Cash Flows ?
? Structure of the Financing Allows for Rapid De-Leveraging ?
? Provides Financial Flexibility to Pursue Future Business Development Transactions ?
STOUGHTON, Mass., Feb. 06, 2020 (GLOBE NEWSWIRE) --?Collegium Pharmaceutical, Inc.?(Nasdaq: COLL), a specialty pharmaceutical company committed to being the leader in responsible pain management, today announced that it has entered into a definitive agreement to acquire the U.S. rights to the Nucynta Franchise from Assertio Therapeutics, Inc. (?Assertio?) for $375.0 million in cash. ?Acquiring the full U.S. rights to the Nucynta Franchise is financially transformative for Collegium,? said Joe Ciaffoni, President and Chief Executive Officer of Collegium. ?We expect the acquisition to improve annual EBITDA and operating cash flows by more than $100 million. The transaction is supported by a financing structure that allows for rapid de-leveraging and enables us to pursue future business development transactions.? Transaction Details- Collegium will make a cash payment to Assertio of $375.0 million, less royalties paid to Assertio in 2020, and subject to certain other adjustments. Collegium will assume the U.S. license for the Nucynta Franchise, and will no longer be required to pay royalties to Assertio.
- Collegium has secured debt financing commitments of $325.0 million that, together with cash on hand, will be used to fund the purchase price payable to Assertio.
- Collegium will continue to pay Grunenthal GmbH a flat 14% royalty on net sales of the Nucynta Franchise, but will no longer be required to pay a supplemental royalty on sales greater than $180.0 million.
- The transaction is expected to be immediately accretive and to significantly increase Collegium?s profitability and operating cash flows.
- The deal is expected to close on February 14, 2020, subject to satisfaction of customary closing conditions.
- The Nucynta Franchise, which includes both an extended-release and an immediate release formulation of tapentadol, is supported by patents with expiries in mid-June 2025, with the potential for a six-month pediatric extension.
- Importantly, Collegium assumes no liability, including litigation-related liability, related to the manufacture, sale or promotion of the Nucynta Franchise prior to Collegium?s licensing of the U.S. commercialization rights on January 9, 2018.
- Xtampza ER revenues are expected in the range of $150.0 million to $160.0 million.
- Nucynta Franchise revenues are expected in the range of $170.0 million to $180.0 million.
- Total operating expenses are expected in the range of $130.0 million to $140.0 million.
Reconciliation of GAAP to Non-GAAP Financial Information | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
? | ? | |||||||
? | ? | Illustrative Pro Forma | ||||||
? | ? | Annualized (1) | ||||||
Nine Months Ended | Twelve Months Ended | |||||||
September 30, | December 31, | |||||||
2019? | 2019 | |||||||
? | ? | ? | ? | ? | ? | |||
GAAP net loss | $ | ?(20,521 | ) | ? | $ | ?(27,361 | ) | |
EBITDA adjustments: | ? | ? | ? | ? | ? | |||
Interest expense | 698 | 931 | ||||||
Interest income | (1,552 | ) | (2,069 | ) | ||||
Depreciation expense | 535 | 713 | ||||||
Amortization expense | 11,064 | 14,752 | ||||||
Total EBITDA adjustments | $ | 10,745 | ? | $ | ?14,327 | |||
? | ? | ? | ? | ? | ? | |||
EBITDA | $ | ?(9,776 | ) | $ | ?(13,034 | ) | ||
Illustrative Pro Forma Adjustments | ||||||||
Nucynta royalties due to Assertio (2) | 94,163 | 118,842 | ||||||
Nucynta royalties due to Grunenthal (3) | ? | ? | ? | 6,958 | ||||
Total Illustrative Pro Forma Adjustments | $ | 94,163 | $ | 125,800 | ||||
Illustrative Pro Forma EBITDA | $ | 84,387 | $ | 112,766 | ||||
? | ? | ? | ? | ? | ||||
Change in EBITDA | $ | 94,163 | $ | 125,800 | ||||
(1)?Represents illustrative pro forma annualized GAAP net loss, interest expense, interest income, depreciation expense, and amortization expense based on annualizing the amounts disclosed for the nine months ended September 30, 2019 in the Condensed Consolidated Financial Statements as filed on Form 10-Q for the period ending September 30, 2019. | ||||||||
(2)?Represents calculated royalties due to Assertio under the Third Amendment to the Nucynta Commercialization Agreement, which are no longer required under the agreement to acquire the Nucynta Franchise. For the nine months ended September 30, 2019, the Company recognized product revenues, net from the Nucynta Products of $144,866, which results in $94,163 of calculated royalties due to Assertio (65% of net product revenues from the Nucynta Products).? The Company?s illustrative pro forma an
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