Collegium Pharmaceuticals has reported robust financial performance for the third quarter of 2023. The company recorded record quarterly revenue for Belbuca and adjusted EBITDA, and ended the quarter with over $300 million in cash and securities. Collegium expects to meet their financial commitments for 2023 and anticipates a positive impact from the Medicare Part D redesign in 2025.
Key takeaways from the earning call:
- Collegium successfully renegotiated contracts for Xtampza ER, maintaining its formulary position with a lower rebate level.
- The company renegotiated a significant Medicare Part D contract for Belbuca and won a new Medicare Part D plan, representing approximately 1 million covered lives.
- Collegium received new patient population exclusivity for Nucynta, which extends its U.S. exclusivity period.
- The company plans to submit a pediatric extension for Nucynta and Nucynta ER.
- Collegium remains committed to capital deployment and returning value to shareholders through debt reduction and share repurchase programs, including a new $25 million accelerated share repurchase program.
- The company expects revenue growth for Xtampza ER, driven by improved gross to net, but anticipates pressure on prescription volume due to removal from formularies.
- Collegium is open to acquisitions that align with their criteria for a differentiated commercial stage asset and will focus on strategically oriented deals.
During the earnings call, Collegium Pharmaceutical (NASDAQ:COLL) executives discussed their plans for revenue growth and capital allocation. They expect to see revenue growth for Xtampza ER, driven by an improved gross-to-net ratio, despite potential pressure on prescription volume due to removal from formularies. They also mentioned moderating price increases due to the Inflation Reduction Act.
In terms of capital deployment, Collegium plans to stay opportunistic in business development, de-leveraging, and share repurchases. The company announced a new $25 million accelerated share repurchase program. Additionally, they mentioned that Belbuca had gained coverage for an additional 1 million lives in the Medicare Part D plan and continue to support Belbuca and Xtampza ER as their growth drivers.
Scott Dreyer, a representative from the company, also discussed the decline in prescriptions for Xtampza and outlined the levers they have to mitigate this decline. The company has a co-pay program to offset costs for patients and is focusing on commercialization efforts and marketing activities. They also mentioned that patients sometimes switch from Xtampza to Belbuca.
In terms of Medicare Part D, the company is targeting the first quarter of 2024 for opportunities with renewals. They mentioned being open to acquisitions that align with their criteria for a differentiated commercial stage asset. The company will focus on strategically oriented deals and will ensure the price is comfortable and creates value for shareholders before making a move. The call concluded with the company expressing gratitude for participation and looking forward to providing updates on their progress.
InvestingPro Insights
In line with the recent performance of Collegium Pharmaceuticals, InvestingPro data and tips provide some valuable insights. The company's market cap stands at 753.03M USD, indicating a relatively small yet potentially agile player in the pharmaceutical sector. The P/E ratio is currently at -67.28, which is expected to adjust to -88.88 by Q2 2023. This suggests that the company is not profitable currently, a fact confirmed by the negative basic EPS of -0.33 USD as of Q2 2023.
InvestingPro Tips highlight the company's aggressive share buyback strategy, which aligns with Collegium's commitment to returning value to shareholders as mentioned in their recent earnings call. The tips also suggest that the company's net income is expected to grow this year, which would be a positive development for investors.
Furthermore, the company's valuation implies a strong free cash flow yield, indicating that Collegium is efficiently generating cash. However, it's crucial to note that the company does not pay a dividend to shareholders, which might be a factor to consider for income-focused investors.
For more detailed insights and tips, consider exploring the InvestingPro platform, which offers a plethora of additional tips and real-time data metrics for a comprehensive understanding of your investments.
Full transcript - COLL Q3 2023:
Operator: Greetings, and welcome to Collegium Pharmaceuticals Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. Please note that this conference call is being recorded. I will now turn the call over to Christopher James, Vice President of Investor Relations at Collegium. Thank you. You may begin.
Christopher James: Welcome to Collegium Pharmaceuticals third quarter 2023 earnings conference call. I'm joined today by Joe Ciaffoni, our Chief Executive Officer; Colleen Tupper, our Chief Financial Officer; and Scott Dreyer, our Chief Commercial Officer. Before we begin today's call, we want to remind participants that none of the information presented today is intended to be promotional and then any forward-looking statements made today are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. You are cautioned that such forward-looking statements involve risks and uncertainties including and without limitation, the risks that we may not be able to successfully commercialize our products, that we may incur significant expense and that we may not prevail in current or future litigation pertaining to our business. These risks and other risks of the company are detailed in the company's periodic reports filed with the Securities and Exchange Commission. Our future results may differ materially from our current expectations discussed today. Our earnings press release and this call will include discussion of certain non-GAAP information. You can find our earnings press release including relevant non-GAAP reconciliations on our corporate website at collegiumpharma.com. I will now turn the call over to our CEO, Joe Ciaffoni.
Joe Ciaffoni: Thank you, Chris. Good afternoon, and thank you everyone for joining the call. Today we will discuss our progress on delivering a banner year including our financial performance in the third quarter, provide an update on the payer landscape for Xtampza ER and Belbuca and discuss the Nucynta regulatory extension. We'll also share our expectations for the remainder of the year and our outlook for 2024 and beyond. As we build a leading diversified specialty pharmaceutical company committed to improving the lives of people living with serious medical conditions, we strive to do good as we do well. During the third quarter, we held our second Annual Day of Service. At our corporate headquarters we partnered with science from scientists to build STEM kits for some of the 12,500 students they serve, while our colleagues across the country volunteered at organizations that make a positive difference in their local communities. I'd like to recognize the Collegium team for their commitment to healthier people, stronger communities. I am pleased to report that 2023 will be a banner year for Collegium Pharmaceutical. Based on our performance in the third quarter, we are confident that we will deliver on our financial commitments and make meaningful progress on our capital deployment priorities. Key accomplishments in the third quarter of 2023 include we delivered solid financial results including record quarterly Belbuca revenue and record quarterly adjusted EBITDA. In the third quarter of this year we grew revenue 8% and grew adjusted EBITDA at 2.5x that rate at 19% compared to the third quarter of 2022. We completed the renegotiation of contracts representing 30% of all Xtampza ER prescriptions. Xtampza ER will maintain its current formulary position and accounts representing 57% of the opportunity at an overall lower rebate level, and plans were Xtampza ER will move to non-formulary, it will be at parity with OxyContin. We expect these successful re-negotiations to drive Xtampza ER revenue growth in 2024. We successfully re-negotiated a major Medicare Part D contract for Belbuca representing 12% of total prescriptions, in which we maintained access and materially rolled back rebates. We also won a new Medicare Part D plan representing approximately $1 million covered lives. These accomplishments will serve as a catalyst for Belbuca revenue growth and prescription growth in 2024. We participated in PAINWeek the largest PAIN Conference in the United States, which included 10 poster presentations highlighting clinical and real world data on our differentiated PAIN portfolio. We ended the quarter with over $300 million in cash and marketable securities, all while executing on our capital deployment strategy, which included paying down $45.8 million in debt and executing an accelerated share repurchase program, which returned $50 million in capital to shareholders at its conclusion on 31st, 2023. We received new patient population exclusivity for Nucynta extending the period of U.S., exclusivity from June 27th, 2025 to July 3rd, 2026. With Nucynta representing 56% of Nucynta franchise revenue year-to-date this positive event materially increases the value of the Nucynta franchise and improves our outlook for the business in 2025, in 2026. We plan to submit a pediatric extension in December that would potentially extend exclusivity of the entire franchise an additional six months. We expect a decision in the second half of 2024. And our Board authorized us to enter into a new $25 million accelerated share repurchase program further reinforcing our commitment to opportunistically return capital to our shareholders. We are executing our two-pronged strategy of maximizing the potential of our differentiated PAIN portfolio and deploying capital to create value for our shareholders. Our record financial performance in 2023 along with our accomplishments in the third quarter have us on track to deliver a banner year. For full-year 2023, we expect to grow revenue greater than 20% year-over-year and adjusted EBITDA at 1.5x that rate. Our accomplishments renegotiating of Belbuca and Xtampza ER payor contracts position both products for improved gross-to-nets to support revenue growth in 2024. We also expect Belbuca prescription growth. The financial strength of the company enables us to execute on our capital deployment strategy in a focused and disciplined manner. Business development remains our top priority. We are actively engaged on multiple fronts and continue to pursue differentiated commercial stage assets with peak sales potential of over $150 million and exclusivity into the 2030s. We are locked into the rapid pay down of our debt, which strengthens our balance sheet every quarter. As we have demonstrated through our completed $50 million accelerated share repurchase program, and now our additional $25 million accelerated share repurchase program, we are committed to opportunistically returning value to our shareholders. We believe that our stock continues to be significantly undervalued and we will continue to leverage our share repurchase program to return capital to our shareholders. Since our second quarter earnings call in August, our outlook for the business in 2025 and 2026 has improved. This is driven by the new patient population exclusivity for Nucynta that we receive, which extends U.S. exclusivity by 12 months from June 27th, 2025 to July 3rd, 2026. With Nucynta representing 56% of Nucynta franchise revenue year-to-date, this represents a significant positive event that was not factored into our base case. We are pursuing and we are optimistic that we will achieve a pediatric extension for Nucynta and Nucynta ER. If successful, this will extend the exclusivity for Nucynta ER to December 2025 and Nucynta to January 2027, further strengthening our outlook. It is important to highlight that the 14% royalty we pay to Grunenthal on Nucynta franchise sales gets reduced to 7% on June 27th 2025. We also expect the Medicare Part D redesign in 2025 as part of the Inflation Reduction Act to have a positive impact on revenue Xtampza ER in particular. 2023 is on track to be a banner year for Collegium. We are executing our two-pronged strategy of maximizing the potential of our differentiated PAIN portfolio and deploying capital to create value for our shareholders. For the remainder of the year, we are focused on achieving our financial objectives and preparing for success in 2024. I will now hand the call over to Colleen to discuss the financials.
Colleen Tupper: Thanks, Joe. Good afternoon, everyone. We are confident we will achieve our financial objectives for 2023. In the third quarter, we grew revenue 8% year-over-year, while adjusted EBITDA grew at 2.5x that rate. As expected, we sequentially reduced operating expenses and generated positive operating cash flows, while paying down $45.8 million in debt and executing an accelerated share repurchase program, which returned $50 million in capital to shareholders at its completion on October 31st. Financial highlights for the third quarter include net product revenues were $136.7 million in the third quarter, up 8% year-over-year. As expected, revenue in the third quarter reflects higher coverage GAAP expense also known as the donut hole in Medicare coverage. As is typical, we expect revenue in the fourth quarter to be sequentially higher than the third quarter. Belbuca net revenue was a record $45.4 million, up 17% year-over-year. Xtampza ER revenue was $39.8 million, up 2% year-over-year and Xtampza ER gross-to-net was 64.6% in the third quarter. The prior year comparative for Xtampza ER is challenging given we had a favorable returns adjustment of approximately $8.1 million in the third quarter of 2022. We expect full-year Xtampza ER gross-to-net to be between 60% to 62% in 2023, 100 basis points lower than our previous range. Nucynta franchise net revenue was $47.5 million, up 7% year-over-year. GAAP operating expenses were $35.3 million, down 8% year-over-year and adjusted operating expenses were $28.3 million, down 13% year-over-year. Net income for the third quarter was $20.6 million compared to $0.5 million in the prior year period. Non-GAAP adjusted EBITDA was $89.4 million, up 19% year-over-year. GAAP earnings per share was $0.61 basic and $0.53 diluted in the third quarter, compared to GAAP earnings per share of $0.01 basic and diluted in the prior year period. Non-GAAP adjusted earnings per share was $1.34 in the third quarter, up 22% year-over-year. Please see our press release issued earlier today for a reconciliation of GAAP to non-GAAP results. As of September 30th, 2023, we had $304.6 million in cash, cash equivalents and marketable securities. During the third quarter, we paid down $45.8 million in debt related to our term notes. We ended the third quarter at 1.2x net debt to adjusted EBITDA and expect to end the year at approximately 1x. Moving to our 2023 financial guidance, we are on track to deliver on all our financial commitments. We are tightening the guidance ranges across all metrics. For 2023, we expect net product revenues in the range of $565 million to $570 million. We expect adjusted operating expenses in the range of $125 million to $130 million and adjusted EBITDA in the range of $360 million to $365 million. We are on track to achieve our 2023 financial guidance as well as deliver on our commitment to a strong second half of 2023. On our second quarter earnings call in August, we stated we would increase revenue and decrease expenses in the second half of the year as compared to the first. We grew revenue and decreased expenses sequentially in the third quarter and expect to do the same in the fourth. We look forward to providing 2024 financial guidance in early January, which will reflect continued top and bottom line growth. We remain focused on creating long-term value for our shareholders through capital deployment strategy. Business development remains our top priority and we are committed to taking a disciplined approach, while focusing near term on rapidly paying down debt and utilizing our share repurchase program to create value for our shareholders. We are locked in to rapidly deleveraging the balance sheet, paying down over $160 million of debt in 2023, which would put us at approximately 1x net debt to adjusted EBITDA at year-end. Our ability to de-lever quickly is a testament to our strong cash generation. We are committed to opportunistically returning capital to shareholders and have a strong track record of doing so. Since 2021, we've returned $112 million of capital to our shareholders at an average share price of $20.72 per share, inclusive of a $25 million accelerated share repurchase program in 2021 and the $50 million accelerated share repurchase program that closed at the end of October. As part of this $50 million accelerated share repurchase program, we bought back nearly 2.2 million shares at an average share price of $23.09. Further reinforcing our commitment to deliver value to our shareholders through effective capital deployment, today we announced as part of our $100 million share repurchase program, our Board has authorized us to enter into a new $25 million accelerated share repurchase program. We believe that our stock continues to be significantly undervalued and we view our share repurchase program as productive use of our capital to generate high returns for our shareholders. I will now turn it over to Scott.
Scott Dreyer: Thanks, Colleen. At Collegium, we're proud to be the leader in responsible PAIN management. Belbuca, Xtampza ER, and Nucynta ER have a combined 50% share of the branded ER market. In recent market research, 70% of HCPs indicated that they intend to prescribe more Belbuca and Xtampza ER. 30% intend to maintain their prescribing and none intend to decrease their prescribing. In the same research, 80% rated the quality of their interactions with Collegium sales professionals highly. Our PAIN portfolio is highly differentiated and our commercial organization is engaged and committed to improving the lives of people living with serious medical conditions. In the third quarter, Belbuca total prescriptions grew 1.2% year-over-year and 1.4% versus the second quarter of 2023. We anticipate Belbuca prescriptions will grow on a full-year basis in 2023. While Xtampza ER revenue was up 24.5% year-to-date, prescriptions have declined, which is disappointing. Total prescriptions were stable in the third quarter, a continuation of what we saw in the second quarter, averaging around 12,000 prescriptions on a weekly basis. For the remainder of the year, we'll be working on generating momentum for Xtampza ER and taking actions to mitigate any pressure on prescriptions in 2024. Importantly, the Nucynta Franchise continues to be a relatively stable contributor and revenue grew 7% versus the same quarter in 2022. I'm excited to report that we've successfully completed the contract renegotiations with plans that that account for approximately 30% of all Xtampza ER prescriptions. This was a top commercial priority in 2023 and will serve as a catalyst of revenue growth in 2024. Now, let me take a moment to highlight the results of the Xtampza ER contract renegotiations. In plans that represent approximately 57% of this opportunity, Xtampza ER will maintain its current formulary position at a lower overall rebate. In plans that represent approximately 43% of this opportunity, Xtampza ER will move to a non-formulary position and pay no rebates. In all plans where Xtampza ER was removed, it will be at parity with OxyContin. Over the last two years, we have successfully renegotiated contracts that represented 84% of all Xtampza ER prescriptions. In 77% of the renegotiation opportunity, we were able to maintain Xtampza ER's formulary position and materially roll back the overall rebate level. In 23% of the renegotiation opportunity, Xtampza ER was moved to a non-formulary position and we no longer pay any rebates. As was the case in 2023, our market access strategy will drive Xtampza ER revenue growth in 2024. Our focus is now on pull through, mitigating the impact of formulary position changes, and importantly, striving to secure new payer wins in commercial and Medicare Part D. With Belbuca, we successfully renegotiated its only major Medicare Part D contract, representing 12% of all prescriptions. I am pleased to report that we were able to maintain Belbuca's formulary position at a meaningfully lower rate. In addition, we were able to add a new Medicare Part D plan representing approximately 1 million covered lives. In 2024, we expect to see Belbuca revenue and prescription growth. Our focus with Belbuca is pulling through our strong commercial access and continuing to grow volume in Medicare Part D. In addition, we continue to work towards expanding Medicare Part D coverage moving forward. It's the right thing to do based off the differentiated clinical profile of Belbuca. In closing, I'm proud of the accomplishments that the commercial organization has achieved this year. Most notably, the successful contract renegotiations for both Xtampza ER and Belbuca, which will serve as a catalyst for revenue growth in 2024. For the rest of the year, we're focused on finishing strong and generating momentum for 2024. I'll now turn the call back to Joe.
Joe Ciaffoni: Thanks, Scott. We are on track to deliver a banner year in 2023. For the remainder of the year, we are focused on achieving our financial objectives and preparing for success in 2024. We are committed to creating long-term value for our shareholders by taking a disciplined approach to capital deployment. I will now open the call up for questions. Operator?
Operator: Thank you. We will now be conducting a question-and-answer session. [Operator instructions]. Thank you. Our first question comes from the line of David Amsellem with Piper Sandler. Please proceed with your questions.
David Amsellem: Hey, thanks. So just a couple of questions here. So with the renegotiations, and I'm sorry if I missed this. Can you talk to, on Belbuca, where you think the gross to net will be next year relative to this year? And then on Xtampza, just talk about what the improvement in gross to net next year versus this year will be? And then switching gears just on capital deployment, I mean in an environment where you don't find an asset that suits you, where you don't pull the trigger on an acquisition, do you get significantly more aggressive on buybacks? How do you think about that and maybe I'll ask it a different way, is how important is it to do an acquisition just in a vacuum? Thanks.
Joe Ciaffoni: Okay. David, thanks. I'll let Colleen, take the first question on gross to nets for Xtampza and Belbuca, and then I'll come around to your question on capital deployment.
Colleen Tupper: Hey, David, thanks for the question. I guess first off-frame for 2023, so for Belbuca, gross to nets have been in the low 50s and have been pretty stable, and for Xtampza we've updated our range in 2023 to 60% to 62% with the renegotiations for both of those products, we do expect improvement from the 2023 through 2024, and we will further update you in early January when we issue our guidance.
Joe Ciaffoni: Okay. And David, with regards to your very good question on capital deployment, the first thing I want to emphasize is the financial strength of the business. We're on track this year to deliver the banner year that we set out to. We're confident in growth in 2024. But really important to your question, our outlook in 2025 and 2026 has really improved with the Nucynta new patient, population exclusivity. So the reason I make that point is we are actively engaged, BD continues to be our top priority, but we are committed to being disciplined. We don't have to do a deal, and I think the ability to be clear headed in our pursuit of an acquisition is our greatest strength. As you know we are locked into the paying down of our debt and as we've been very clear, we think there is a significant disconnect between the intrinsic value of the company and where our share price has been. And as we've demonstrated to the degree that persists, we're certainly glad and believe it's a really good use of capital to be leveraging our share repurchase program and would continue to do so.
David Amsellem: Okay, that's helpful. Thank you.
Joe Ciaffoni: Great. Thanks, David.
Operator: Thank you. Our next question comes from the line of Tim Lugo with William Blair. Please proceed with your question.
Tim Lugo: Thank you for the questions. Can you give us a sense of how the non-formulary positions for Xtampza ER expected to play out, what levels of rebates are I guess expected to go away versus what revenue might have [indiscernible] due to the non-formulary position?
Joe Ciaffoni: Sure, Tim, this is Joe. I'll take that one. I think I understand the question you're asking. So look, with what we accomplished with Xtampza ER this year, we expect to see revenue with Xtampza grow and that will be driven by improved gross to net. From a prescription perspective, there is the potential that there will be pressure on prescription and what prescriptions. And what we're focused on as we finish the year and as we get into next year is mitigating any pressure that being removed from those formularies may put on Xtampza prescriptions and the key point I would emphasize is that in no plan where Xtampza ER was removed from formulary was OxyContin added.
Tim Lugo: Okay, understood. Can you give us a sense around less around gross to net and just gross price increases, but that's something that the clients had traditionally performed yearly?
Colleen Tupper: Thanks for the question. As you saw at the start of 2023, we moderated our price increases a bit given the Inflation Reduction Act, and we will continue to assess and do the math around that to optimize the level of price increase that we can take at the start of the year and ensuring we don't have tip over to the rebate being in excess of the benefit of the price. So you'll see slightly moderated as you saw in 2023.
Tim Lugo: Okay understood. And then maybe one last question. With the new 25 million accelerated share repurchase program on top of the 50 million you did earlier in the year. Can you give us an insight into what kind of capital deployment process we're sizing these repurchase programs. And I assume they allow plenty of room for business development, but maybe just how we should think about these programs going into 2024?
Joe Ciaffoni: Sure, Tim. I'll let Colleen take that one.
Colleen Tupper: Yes, thanks, Tim. So I would say we're optimizing our capital allocation based on our priorities and we really think it's an and not an or where we are ensuring that we can stay opportunistic on the BD front. And if we see something we can pull the trigger there, continuing to rapidly de-lever based on our schedule there over the total four-year period for our term loan and then opportunistically return shares to shareholders via the share repurchase program. So as you've seen this year, we've been pretty active in the back half of the year which, but with the new $25 million that will bring our total to $75 million this year. And we believe our stock remains undervalued and that's a tool I would expect we continue to value going forward.
Tim Lugo: Thank you.
Joe Ciaffoni: Thanks, Tim.
Operator: Thank you. Our next question comes from the line of Serge Belanger with Needham. Please proceed with your question.
Serge Belanger: Hi. Good afternoon and thanks for taking my questions. The first one on Belbuca, maybe if you can just talk about the new Medicare Part D plan, you said it was about a 1 million additional covered lives, how does that compare to the existing major Medicare Part D contract that Belbuca had? And secondly, now that Nucynta exclusivity has been extended and the economics will improve, any plans to add additional resources behind that product? Thanks.
Christopher James: Thanks for the question. Serge, I'll have Scott pick the first one and then I'll comment on the Nucynta.
Scott Dreyer: Yes, thanks, Serge. In terms of the 1 million lives that's across some regional Part D plans. And to your question about how it compares to what we currently have. We're currently covered that large plan for about 12 million lives, so it adds another 1 million. And what we're excited about is look it opens the opportunity to fuel growth and we'll continue to engage payers to try to expand coverage further.
Christopher James: And with regards to Nucynta, Serge, the extension will not result in any additional investment beyond what it is that we've been doing. We continue to be committed to our entire PAIN portfolio, but clearly Belbuca and Xtampza ER are our growth drivers and the products where we will be providing the greatest support.
Operator: Thank you. [Operator Instructions]. Our next question comes from the line of Les Sulewski with Truist Securities. Please proceed with your question.
Les Sulewski: Good evening. Thank you for taking my questions. First on Xtampza, what levers do you have to mitigate the declining scripts. And then on Belbuca the patient -- what is the patient profile for Belbuca essentially, any transfers from Xtampza that you're seeing and when do 1 million of the Medicare Part D come online?
Christopher James: Les, thanks for the question. Scott will take those.
Scott Dreyer: Yes, thanks. So, to your first question, Les, when it comes to the levers that mitigate the erosion. The primary lever we have is look where those were lost were almost all commercial plans and so we have a co-pay program that offsets the cost to the patient, and that's a big lever for us in addition to our overall commercialization effort and push through with physicians across all our marketing and sales activities. In terms of the patients and kind of patient flows, what we see across the portfolio are the brands are each uniquely positioned in the minds of the physician and have a unique space, but by all means if someone fails on Xtampza, we will sometimes see a move to Belbuca and vice versa.
Joe Ciaffoni: Okay. And then Les, with regards to part the opportunity with all Part D plans really sets up for the first quarter of 2024. That's when the renewals take place which are 12 months. It's about 60% of them occur in that time period. So that's what we're focused on and targeting.
Les Sulewski: That's helpful. One more from me on the BD front. What's your funnel essentially look like now. Are there any opportunities essentially in other non-abuse-deterrent options available in the market now, and then, if not other opportunities out there and what does the competitive landscape essentially look like and also valuations in the current market environment. Thank you.
Joe Ciaffoni: Thanks for the question. So look therapeutically and we've talked about this in the past with the current market conditions, we're going to be very agile, I wouldn't say we're therapeutically agnostic. But we're open to anything that really hits the profile of a differentiated commercial stage asset with $150 million plus peak sales potential with exclusivity into the 2030s. Whatever acquisition, we're able to achieve, we will not be like the ones we've done in the past where we're leveraging our PAIN infrastructure, we'll be setting a second commercial beachhead. So these will be a lower synergy, more strategically oriented deal for Collegium and that's our focus. In terms of valuations, what I would say, Les, is right now, what we've seen is a lot of receptivity in willingness to engage. And whilst the financial strength of our company and the fact that we don't have to do a deal, we aspire to do one will continue to engage and work with urgency. But we won't strike until we get to a price that we're comfortable with and believe creates value for our shareholders.
Operator: Thank you. There are no further questions at this time. I would now like to turn the floor back over to Joe for closing comments.
Joe Ciaffoni: Thank you, operator and thank you everyone for joining the call. We look forward to updating you on our progress and we hope everyone has a great evening.
Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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