Mike Heffernan - Chief Executive Officer Paul Brannelly - Chief Financial Officer Barry Duke - Chief Commercial Officer.

David Steinberg - Jefferies Tim Lugo - William Blair & Company Serge Belanger - Needham and Company Ken Trbovich - Janney.

Good afternoon. Welcome to the First Quarter Earnings Call for Collegium Pharmaceuticals Incorporated. Before we begin the call today, we wish to inform participants that various remarks we may constitute forward-looking statements pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.

These include statements of our plans, prospects and expectations including our plan to commercialize Xtampza, clinical development of product candidate, our ability to obtain and maintain regulatory approval and degree of market acceptance of our products and product candidates.

Actual results may differ materially from those indicted by these statements as a result of various important factors including those discussed in the Risk Factor section of our most recent Annual Report on Form 10-K, which is on file with the SEC and any other filings we may make with the SEC.

Any forward-looking statements represent our views as of today only. We may update these statements in the future, but we disclaim any obligation to do so. Therefore you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.

Our future results may differ materially from our current expectations discussed today. I will now turn the call over to Collegium CEO, Mike Heffernan, you may begin..

Thank you. Good afternoon. It’s Mike Heffernan.

I’m CEO of Collegium and with me today is Paul Brannelly, our CFO; who will review Collegium's financial results; and Barry Duke, our Chief Commercial Officer, who will provide a high level overview of our key commercial initiatives as we prepare for the launch of Xtampza ER, our abuse-deterrent, extended-release oxycodone for the treatment of chronic pain.

The last four months have been exciting and eventful time for Collegium. As a recap, we’ve raised capital on a follow on offering in January that provided us with the financial resources to adequately prepare and execute successful product launch.

In February, we won our patent infringement lawsuit against Purdue Pharma extinguishing the 30-month stay and allowing for the launch of Xtampa ER. We subsequently received FDA approval on April 26 with what we believe is the most comprehensive abuse-deterrent label of any ADF opioid approved to date.

Last week, we released positive top line data for study comparing the effect of crushing Xtampa ER versus OxyContin and an immediate release oxycodone [indiscernible]. We have completed enrollment in our proof-of-concept study with the correct hydrocrodone ER candidate that we will be reporting on that data later in the second quarter.

We also have made progress on identification and evaluation of complementary products as we strive to become a leading company in pain management. In addition, throughout this period, we have made significant progress in preparing for the June Xtampza ER launch, which Barry will highlight in a few minutes.

As I mentioned, a few weeks ago, we received FDA final approval for Xtampza ER with a label that was substantially similar to the one we outlined after our tentative approval in November.

The label includes a stationary made dose administration line, a patient could take capsule whole, they can open the capsule and sprinkle it on food, they could pour it into a cup and then directly in their mouth, or they can pour it through a feeding tube.

Regardless of the chosen administration method, the PK characteristics of the product remain the same providing for significant flexibility for patients with varying stages of dysplasia from those who simply can’t follow pill to those who require feeding tubes for their food intake.

In addition, the product label includes specific abuse-deterrent labeling consistent with FDA’s guidance on abuse-deterrent opioids. This includes Category 1 in vitro data and Category 2 pharmacokinetic data and Category 3 nasal and oral human abuse potential data. It is the most comprehensive abuse-deterrent label approved to-date.

Xtampza ER only approved abuse-deterrent product that is Category 2 pharmacokinetic labeling. The label includes PK data from 2 studies on the effecting chewing and/or crushing Xtampza ER. The data demonstrates that there was no change in the PK profile that Cmax, Tmax, or AUC when manipulating the product versus taking it intact.

As mentioned earlier, these attributes are deterrent abuse, but they’re also very important for providing for techniques for patients that may inappropriately miss use their product.

Because the PK profile doesn’t change, the label does not include the multiple warnings found in all other ER opioids that requires the product to be taken whole stating that it should not be crushed, chewed or dissolved, which can cause potentially fatal over dose.

Last week, we’ve released top line data on a second Xtampza ER versus OxyContin oral PK study that we have included. This study is important because crushing is one of the most common and simple method used by drug abusers to enhance their drug high.

It is also potential cause of an over dose by an unsuspecting patients who misuse their medication to make it easier to swallow. Results from this study essentially match the results from the first study.

The study demonstrated that crushing had little to no effect on Xtampza ER, yet OxyContin was transformed from extended-release product to an immediate release oxycodone product. After crushing OxyContin, it was in fact bioequivalent immediate release to oxycodone.

A portion of the data from our first comparative study is already included in the approved product label. It is listed as the old pharmacokinetic study 2. This data was also published in June 2015 in Pain Medicine. The data included in the label does not currently include the OxyContin comparative on that study.

This second study was completed to replicate the findings in the first study with a goal of attempting the supplemental product label with this information of the future. In addition to the oral PK study, the label also included a description of 2 nasal PK studies that both had similar findings.

The PK data from nasal study 2 is included in [indiscernible]. Tmax, where the blood level is lower or Xtampza ER when it’s noted versus when it’s taken orally and Tmax or time to treat blood level showed not change.

This clearly demonstrates that based upon the pharmacokinetic data if an abuser wants to take Xtampza and they are high, it would not get the desired result. This is further supported by the nasal human abuse potential study in the label. Finally, an update on launch timing.

We have completed the manufacturing of our commercial suppliers and we are currently packaging the bottles for product launch. On our last call, we had estimated that product launch would occur in June and this remains our current target.

I’d like to remind everyone that we have schedule an Investor day in New York for May 25 at which time we will focus the discussion on our commercial plans for Xtampza ER. I’ll now turn it over to Paul to discuss the financials..

Thanks, Mike. Good afternoon, everyone. Since we issued a detailed press release this afternoon and plan to file our 10-Q soon. I’ll just review the financial highlights. As of March 31, our cash balance was $134.7 million, compared to our December 31 cash balance of $95.7 million.

Cash increased as a result of the net proceeds of our January 2016 follow-on offering. We believe that our existing cash resources are sufficient to fund our operations into early 2018 including the commercial launch of Xtampza as well as continued clinical development of our second product candidate.

For the first quarter of 2016, our net loss was $15.7 million, compared to $3.7 million for the first quarter of 2015, resulting in a net loss per share of $0.68 for 2016. For 2015, we had basic earnings per share of $0.34 and diluted loss per share of $0.65.

In 2015, basic and diluted net loss per share was different due to the treatment of dividend accrued on preferred stock prior to the closing of our Series B financing in March 2015.

The large increase in our net loss is primarily due to the cost related to the preparation for the commercial launch of Xtampza, including headcount as well as the initiation of additional clinical trials for Xtampza and our second product candidate. Net loss included stock-based compensation of $1.1 million for 2016 and $113,000 for 2015.

As Mike mentioned, our Investor Day will be on May 25, that will start at 10:00 AM at the Saint Regis Hotel in New York City. At Investor Day, we will present details of our commercial strategy for the Xtampza launch as well as provide an update on other programs.

In the next few days, we will issue a press release with additional details including registration instructions. I will now turn the call over to Barry Duke for commercial updates..

Thanks, Paul. I will keep my prepared remarks brief today as both Mike and Paul has noticed who have a more robust commercial discussion on May 25 at our Investor Day in New York City. There, our Vice President of Marketing, Sales and Market Access and Trade will join me in providing more in depth details regarding our commercial strategies.

We will also share more detailed insights from our market research and methods testing and from our early interactions with healthcare practitioners and payers. Since our last call, we have completed hiring of our sales force.

A total of 118 retailer office based representatives in 24 long-term care and institution representatives and are now training and preparing the team for launch. Pursuant to our recent FDA approval, the marketing team is inputting the final touches on all our promotional pieces.

Our national sales meeting is scheduled for next month in anticipation of our midyear launch. Agreements that are in placed with our 3PL and the major wholesalers and we expect to have product into the wholesalers in June with pull-through plans in place for the retail channel.

We will also have our patient support and hub services program fully functional for a launch. We continue to refine our strategy and learning through advisory boards, key opinion leader in payer meeting and attendance at relevant medical meetings. For example, this week we will had an exhibit at American Pain Society’s meeting in Austin, Texas.

Finally, the commercial team is committed to responsible promotion with Xtampza. We do not need to and or plan to expand the ER opioid market. With Xtampza, we provide a new extended release Oxycodone alternative.

With a new standard and abuse-deterred and flexible administration features for appropriate patient suffered with chroic pain for whom non-opioid sources are no longer an option. We continue to receive positive feedback as HPCP’s reacted to Xtampza product profile and approved label.

We also consistently hear that access and distribution, our potential barriers to adoption and we will remain focused in diligence and providing the appropriate solution for these issues. We look forward to discussing in more detail later in the month at our Investor Day. Now, I’ll turn it back over Mike Heffernan..

Thanks, Barry, and Paul. We will now open it up to questions..

[Operator Instructions] Our first question comes from David Amsellem of Piper Jaffray. Your line is open..

Hi, [indiscernible] this is on for David. So, I just had two quick questions.

Given all the alarm in public health circles, opioid over use and abuse on the recent CDC guidelines, do you see pressure on your opioids and if so would that prove to be a headwind for the Xtampza launch?.

Yes, good question. From our perspective, when you look at the opioid market, there’s 250 million prescriptions every year in the U.S. for opioids and there is 26 million for extended-release opioids.

So, when we look at the CDC guidelines around appropriate opioid prescribing, we’re very supportive of not everything in the CDC guidelines, but the concept of appropriate and responsible of good prescribing.

So if you think about the numbers, if you took 26 million ER opioid prescriptions per year and that number was even decreased by 10% or 15%, which is not now when you look at the market over time. Still the market size is very large. So we do not see a headwind, as a matter of fact we see a benefit.

The more doctors think about prescribing abuse-deterrent opioids and opioids with better protection against abuse, I think the more that Xtampza would stand out as a relevant option for the doctor. Only 5% of the entire opioid market today is written for abuse-deterrent products.

So, I think the real goal here is to try to increase the amount of abuse-deterrent products in the opioid market versus trying to build the market or expand the market..

Okay.

Thank you, also a quick follow-up, in your discussions with payers, have you found that they place a lot of value on the abuse-deterrent properties or I guess if you think about it another way, do you see it as a public health issue where they would kind of overlook the drug cost, just trying to get a sense of how payers are thinking about the product?.

So, this is Barry, I’ll take that question. So, we’ve had over 30 plus meeting with payers to point it and I think it’s a mixed reaction. Certain payers – I think all the payers are aware this is a crises – a public health crises, so they are certainly sensitized and I think appreciate over the new technology we are bringing forward.

I wouldn’t say all of them or at a point where they are ready to look past the cost of a branded product, but I think we’re making big headwinds. There is a number of different legislation going on at the state level that also will continue to help drive abuse-deterrent acceptance out there, but a little bit of a mix bag at this point..

Okay. Thank you..

And our next question comes from David Steinberg of Jefferies. Your line is open..

Thanks.

There is some thought in opioid circle that the FDA may require training for doctors given all the noise and public safety issues, is that correct and is that something that your sales force will be doing and is it really matter?.

Yeah. So last week, he was in Adcom and part of the Adcom was looking at the class-wide extended release/long acting opioid REMS and now analyzing the effectiveness of that REMS.

And one of the key recommendations they came out of that from the advisory Board to the FDA was that they should require set of voluntary training which is part of the current ER long-acting REMS program. They should require mandatory opioid training as part of DA licensing.

Now, clearly that would require the DA to make a change in the way they certify and license practitioners, but the Collegium is very supportive of mandatory education and we actually think it would be much more effective way for practitioners to get trained on continued macro education specific to opioid and to broaden the educational training for much wider group of practitioners.

So I don’t think one of the things that was brought up at the Adcom was whether there was a requirement for restrictive REMS and there was a wide lease, but that would not be the right thing to do with number of patients, with the number of prescriptions and a number of prescribers for opioid..

Okay.

Now, we have a product to approve, they’re going to launch it, any guidance to us in terms of what level of sales collision we need to breakeven?.

We have not provided any public guidance at this point and frankly it wouldn’t be responsible for us to do. So I think we will be in a much better position from next year to start to provide some breakeven numbers..

Right. Final question is Purdue has a lot to lose here by far they are the largest drug.

I’m sure they’re going to counter detail like crazy what and they are well known, what’s your counter detail to their counter detail?.

I think we stick to our message. I mean I don’t think we’ll be spending a lot of time talking about Oxycontin. I think we’ve spent a lot of time talking about the differentiation of Xtampza and what’s in the label around one that is stage opportunity which Oxycontin doesn’t play enough market at all.

And number two, the broad abuse-deterrent clients in the label. Specifically the category two claims around PK. Clearly, Oxycontin does not have any PK data in their or any category labeling. We know based on the study that we’ve run that are comparative and the data we’ve published that if you crush Oxycontin it becomes an iron [ph].

So, we certainly would end up in their label. So what we think is that not only it provides abuse protection, if somebody were to try to abuse it to break the time release system and get a quick fit. It also protects those patients who may not known me better and we think that level of safety margin is advantageous to the doctor and the patient..

Okay. And then finally, Mike, as we reset some interior sector, the company is making significant progress in identifying complementary products.

How should we think about timing and also how you’re going to pay for these products that you brand?.

So, timing is real time. We are looking and evaluating and so on. How we pay for will obviously be determined by with the overall cost in the structure of the deal. So more to come on that over the next short team weeks to months and we’ll certainly update everybody when we get there, when we get over the finished line. .

Thanks a lot. .

Thanks, David. .

And our next question comes from Tim Lugo. Your line is open sir..

Thanks for taking the question.

From the – regarding the recent Oxycontin comparative study, when are you planning I mean with the FDA with that data and potentially having it placed on a label and also, are you going to be releasing the PK curves at your upcoming May event?.

Yeah. Thanks Tim for the question. Let me take the first one first. So we realized based on questions and phone calls we’ve had that there was might have some confusion in some places with some of the data that we released and what we heard around questions was around the AUC.

So I just want to clarify for everybody that not just have a PK101 access, but what really matters in drug of use is how high in your blood level the product goes and how fast it gets there in that Cmax and Tmax that’s what determines what’s called abuse-closing which is how much somebody likes something.

One with respect that if you gave 40 milligrams of an IR, 40 milligrams of ER or 40 milligrams of delayed release, if all of that released just in the products then the AUC would always be the same, it should be, the real difference of Cmax and Tmax.

So we want to assure people that the Cmax and Tmax differential in that study with the same is what’s been reported in the label for our product in the past and again this state is actually published and one can go look at it from the first study in June – it was probably June 2015 and paid medicine.

Now, as it relates to discussing with the FDA that’s part of a broader strategy or broader regulatory strategy. So at this point in time, we are not prepared to give a specific date, but it’s something that obviously would be very advantageous for us to having a label and it is certainly a priority. .

And will you be releasing the whole curves sometime soon or potentially the medical meeting or maybe your Analyst Event?.

Yeah. Sorry, I missed that question, Tim. We will be talking in detail about the data at the May 25 meeting and we will present the curve. .

Great.

And for the hydrocrodone product, you mentioned data coming up, what exactly should we expect, is that also going to have a PK as well as – however [indiscernible] data from the upcoming release?.

So that data we will present later in the quarter. We finished the enrollment study and are waiting to collect all of the data and analyze the data. So the intent of the study was really proof-of-concept and proof-of-concept was if you take a couple of different candidates in, compare it from a PK standpoint to other hydrocrodone products.

And also, look at what happens when you tamper and does it have similar characteristics to our Xtampza product and the side which is the best candidate from most of buyer availability standpoint as well as tamper standpoint. So, our intent would be to provide an overview of the proof-of-concept data and the selection of our candidate. .

And are you comparing it to the combination products or the ER hydrocrodone out there or what’s the comparison?.

Yeah. The comparison in the study is both. We’re looking at – we will look at all hydrocrodone products and as we choose our regulatory strategy that will be an important concept..

Interesting, thanks for the questions. .

Yeah. Thanks, Tim..

And our next question comes from Serge Belanger of Needham and Company. Your line is open..

Hi, good afternoon. One additional question on the comparative study that was released last week. You mentioned it was a second study, second comparative study.

How similar was it to the first one in terms of design and the results?.

The design itself was the same and the results were yearly the same. The numbers if you look at the graph, one to the other, they’re very, very similar. We will show that comparison on May 25 at our Investor Day..

Okay. So, your replication of the study was simply an FDA requirement..

The replication of the study was a desire to have replication to strengthen our story around trying to get the data included in the label. .

Okay. And then, if I recall, beyond the four orange book listed patents, there was two outstanding patents, non-orange book listed that was under litigation.

Just wanted to see if you could provide an update on those and whether you think there’ll be some resolution soon?.

Yeah. So there was actually a status conference on those patents, the remaining few patents was held on April 25 or April 26, which was agreed upon trial schedule was laid out. So what I can tell you is that there will not be resolution of this or will into 2017 and possibly 2018. So, as you can imagine these schedules are pretty drawn out.

We also reserve the right at any point in time to file for some re-judgment which we will consider if appropriate..

Okay.

But it shouldn’t impact any commercial aspect?.

Yes. So we do not expect to impact Xtampza in any way..

All right, thank you..

Thanks, Serge..

And our last question comes from Ken Trbovich of Janney. Your line is open. .

Thanks for taking the question. I know you guys spend a lot of time talking about the fact that you plan to prevent the curves for the second study of the Analyst Meeting. I guess my question really is focused on reagents [indiscernible] to expect the curve as opposed to a data table.

When I’m looking at the graph or I’m not looking at the graph, but I’m looking at the label. Table 3 validates extremely accurate specific as it relates to data from the studies. One of the question simply from the marketing perspective, visual images contain messages much easier, much simpler, much faster.

To what extend is the FDA willing to allow you guys to include the curve from the data rather than the raw data itself?.

Yeah. So that’s a question that we will be addressing in our promotional review and our preclinical promotional materials with the FDA. And what forum can we present the data? So, we do not know that full answer at this point in time. Clearly, we can present it in a bar graph, the data can easily presented that way.

I tend to believe that the table and the actual data itself count the story. I think request for the curve really comes from folks who are looking to see a business shift. Well, if the Cmax is the same and the Tmax is same and AUCs the same, then by fact you can shift curve.

So that being said, we’re happy to display the curves to folks who want a clear picture, but we think a table or a bar graph of the data that’s already in the label will certainly be suggested with doctors. We’ve tested that significantly with our key opinion leaders at Adcom and doctors certainly get it. .

And to what extent are you going to be able to incorporate the data that you do have in marketing whether I mean if you’re able to get this published before the FDA, would it give you a label, with data you use that on the marketing and before label exchange?.

No. We can only promote data that specifically in the label and that would be our intent..

Okay.

And then, just last question in terms of the sales force and the emphasis around long-term care and – I know obviously go out detail, the drug is extremely important but I think one of the questions that keeps coming up in my mind is whether or not you have enough time between now and perhaps July when some of the formularies might normally be updated? Is there any chance that you might be able to squeeze in and get some formulary wins between now and some of those midyear changes that occur with some of the plans?.

We definitely have been talking to lot of plans and I would say the answer is yes, there are opportunities for us to do that. We could certainly miss on some too. We know some of that had some pretty tight tough deadlines coming up, but we believe we’ll be able to get on much of that.

In the Part D side, they really can’t add anytime they want to though they tend to as we know only do it once a year, but they can really add anytime they want to. So again I think we should be able to get on some of those formularies we won’t get them all..

Okay. Thank you. Look forward to the Analyst Meeting on the 25..

Thanks, Kim..

I am showing no further questions at this time. I’d now like to turn the call back over to Collegium CEO, Mike Herrmann..

Thank you. I’d like to thank everyone for joining the Collegium conference call and we’ll continue to keep you updated on our progress and we look forward to seeing as many of you as possible at our Analyst Day in New York on May 25. Have a good evening..

Ladies and gentlemen, that concludes today’s conference. Thank you for your participant and have a wonderful day..