Collegium Pharmaceutical Inc (COLL)

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Investing $5,000 in These 2 Biotechs Could Make You Rich
These two companies aren't reinventing the wheel, but they still have the potential for tremendous growth.

Dated 25 October 2020

Collegium Pharmaceuticals (NASDAQ:COLL) and Athenex (NASDAQ:ATNX) may not be the most popular stocks on the market in terms of media coverage, but both might just make you rich with a well-timed investment. Unlike many of their compatriots in the world of small market cap biotechs, these two companies have regularly recurring revenues. While neither has consistently profitable operations at present, evidence suggests that they can achieve it within the next few years, making each a great candidate for investors' portfolios

What's more, these two stocks have similar paths toward profitability: Increasing the sales volume of their existing products on the market while finalizing their late-stage pipeline projects and moving them toward commercialization. There's going to be a lot going on with these companies over the near term, and growth investors should pay close attention if they want to have a shot at reaping the benefits of their successes. Let's dive in and explore Collegium and Athenex's prospects.


Collegium has gotten its first taste of profits

Collegium, a pain medicine company, derives its revenue from opioid analgesics that have been formulated for extended release. By changing the formulation of these highly effective medicines to include delayed release and other anti-abuse features, Collegium hopes to steal market share from generic opioid pain medicine manufacturers as well as branded opioid analgesics, both of which carry a high risk of addiction. Given the state of the opioid abuse epidemic in the U.S., Collegium's approach could provide clinicians the pain-relief tools their patients need, but without as much risk of future abuse.

Collegium has three products that are approved for sale, including its Xtampza extended release oxycodone tablets for pain relief. Since its regulatory approval in 2016, Xtampza has proven popular. The drug holds 23.5% of the extended-release market for oxycodone as of Q2 2020, ended June 30, up from 21.8% market share in Q1. The company expects the drug's market share to increase as a result of new development activity, which should lead to two new therapy formulations relatively soon.

In the meantime, Collegium posted a profit for the first time in the recent quarter, thanks to Xtampza sales of $33.6 million -- an increase of 29% from the same quarter last year. But its profitability is still tenuous, with a margin less than 1%. Nonetheless, Xtampza's growth appears to be accelerating rather than slowing down, which puts Collegium on a trajectory that could make its shareholders rich as its products become the go-to for pain relief, especially in areas where opioid abuse is rife.

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