Collegium Pharmaceutical Inc (COLL)

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3 Pharma Stocks Flashing 'Buy' Signals in December - Dec. 8

The pharmaceutical industry is well-positioned for robust growth, driven by growing healthcare expenditure globally and the rapid adoption of digital technologies. Given the industry’s tailwinds, fundamentally strong pharma stocks, Collegium Pharmaceutical (COLL), Eton Pharmaceuticals (ETON), and GSK plc (GSK) could be ideal buys this month

COLL is a specialty pharmaceutical company that develops and commercializes pain management medicines. The company’s portfolio includes Xtampza ER, an abuse-deterrent and oil formulation of oxycodone; Nucynta ER and Nucynta IR, which are formulations of tapentadol; Belbuca, a buccal film that contains buprenorphin; and Symproic.

On November 9, COLL entered into an Accelerated Share Repurchase (ASR) agreement with Jefferies LLC to repurchase $25 million of the company’s common stock. The company is executing the ASR as part of the $100 million share repurchase program authorized by its Board of Directors in January 2023.

“Our record financial performance in 2023 year-to-date puts Collegium on track to deliver a banner year. Our financial strength, underscored by robust cash generation, enables us to execute on our capital deployment strategy,” said Joe Ciaffoni, President and Chief Executive Officer of Collegium.

On August 24, COLL was granted New Patient Population exclusivity for Nucynta®, an immediate-release formulation of tapentadol, by the U.S. Food and Drug Administration (FDA). This grant extends the period of U.S. exclusivity for Nucynta from June 27, 2025, to July 3, 2026.

The grant of additional exclusivity recognizes the importance of Nucynta in treating acute, severe pain.

COLL’s net product revenues increased 7.6% year-over-year to $136.71 million in the third quarter that ended September 30, 2023. Its gross profit grew 36.5% from the year-ago value to $80.31 million. Its income from operations rose 119.9% year-over-year to $45.01 million. Its adjusted EBITDA was $89.40 million, up 19.4% from the prior year’s quarter.

In addition, COLL’s adjusted net income rose 29.3% from the prior year’s quarter to $55 million, and its adjusted EPS came in at $1.34, an increase of 21.9% year-over-year.

The company updated its full-year 2023 guidance. COLL reaffirmed net product revenues to $565.0 million-$570.0 million, and it expects its adjusted EBITDA to be in the range of $360 million and $365 million.

Street expects COLL’s revenue for the fourth quarter (ending December 2023) to increase 14% year-over-year to $147.80 million. Further, the consensus EPS estimate for the current quarter of $1.40 indicates an improvement of 28.8% year-over-year.

Shares of COLL have gained 27.1% over the past six months and 24.3% over the past year to close the last trading session at $27.18.

COLL’s solid prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

The stock has an A grade for Quality and B for Growth and Value. COLL is ranked #14 out of 157 stocks in the Medical – Pharmaceuticals industry.

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