Bullish indicating open at $55-$60, IPO prices at $37
Piper Sandler has maintained a Neutral stance on Collegium Pharmaceutical (NASDAQ: NASDAQ:COLL), with a steady price target of $37.00.
The firm's position follows recent meetings between Collegium's senior management, investors, and Piper Sandler, focusing on the company's strategic moves, including the acquisition of Ironshore and the addition of Jornay PM to their product line.
Jornay PM, an FDA-approved, delayed-release oral medication for ADHD, is seen as a key asset for Collegium as it prepares for the potential loss of exclusivity for its pain medication Belbuca in 2027. Despite the fact that Jornay PM holds exclusivity until 2032, Piper Sandler notes that questions about the long-term value of Collegium may persist.
The firm acknowledges Collegium's proactive approach to addressing these concerns, anticipating continued efforts in business development and mergers and acquisitions. The goal would be to acquire more assets that can benefit from the company's established commercial infrastructure.
In other recent news, Collegium Pharmaceutical reported its second-quarter 2024 earnings, highlighting an adjusted diluted earnings per share (EPS) of $1.62 on revenue of $145.3 million, surpassing consensus estimates.
Additionally, the company reaffirmed its sales guidance for the pain business, projecting revenues between $580 million and $595 million for the year. Collegium also announced its plans to acquire Ironshore Therapeutics, which is expected to diversify its portfolio with the addition of Jornay PM, a treatment for ADHD, and contribute over $100 million in net revenue for 2024.
Piper Sandler, however, has adjusted its price target for Collegium, reducing it to $37.00 from the previous target of $39.00, while maintaining a Neutral rating on the stock. The firm's adjustment follows the acquisition announcement and is influenced by the impending loss of exclusivity for several of Collegium's key products: Nucynta ER in December 2025, Nucynta IR and Belbuca both in January 2027. Despite the expected increase in EBITDA, which Collegium describes as "highly" accretive for the year 2025, Piper Sandler remains cautious.
InvestingPro Insights
Recent InvestingPro data provides additional context to Piper Sandler's Neutral stance on Collegium Pharmaceutical (NASDAQ:COLL). The company's P/E ratio of 11.97 suggests a relatively attractive valuation, which aligns with an InvestingPro Tip indicating that the stock's valuation implies a strong free cash flow yield. This could be seen as a positive factor for investors considering the company's future prospects.
Despite the challenges highlighted in the article, Collegium has shown solid financial performance. The company's revenue grew by 7.39% in the last twelve months, with a robust gross profit margin of 86.23%. These figures demonstrate Collegium's ability to generate strong returns from its product portfolio, which includes Belbuca and the newly acquired Jornay PM.
An InvestingPro Tip reveals that management has been aggressively buying back shares, which could be interpreted as a sign of confidence in the company's future. This action, combined with the expected growth in net income this year, may help address some of the long-term value concerns mentioned in the article.
For investors seeking more comprehensive analysis, InvestingPro offers 10 additional tips for Collegium Pharmaceutical, providing deeper insights into the company's financial health and market position.
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