COLL

COLLEGIUM PHARMACEUTICAL, INC

NASDAQ · HEALTH CARE · PHARMACEUTICAL PREPARATIONS

23.22

+0.26 +1.13%

USD · close Oct 26

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MKT CAP $755.9MP/E 18.7DIV YIELD —FCF YIELD 43.43%REV TTM $808.2M +14.3%NET INCOME $47.9M +32.1%NET CASH $118M52W 21.53 – 49.84SEC XBRL · TTM TO Invalid Date

How COLL rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

28%

of sentences unchanged

Added

211

new sentences

Dropped

129

sentences removed

Length

−1,494

words, now 12,764

New in FY2025

Such pricing regulations may address the rebates that manufacturers offer to pharmaceutical benefit managers, or the discounts that manufacturers provide others within the pharmaceutical distribution chain; • Social issues around the abuse of opioids, including law enforcement concerns over diversion of opioids and regulatory and enforcement efforts to combat abuse, could decrease the potential market for our opioid products and may adversely impact external investor perceptions of our business; • If the FDA or other applicable regulatory authorities approve generic products with claims that compete with our opioid products, our sales could decline; • If the third-party manufacturers of our products fail to devote sufficient time and resources to these products, or their performance is substandard, and/or we encounter challenges with our dedicated manufacturing suite at our third-party manufacturer’s site for the manufacturing of Xtampza ER, our costs may be higher than expected and could have a material adverse effect on our business; • Because we currently rely on a sole supplier or limited number of suppliers to manufacture the active pharmaceutical ingredient of our products, any production problems with any of these suppliers could have a material adverse effect on us; • We depend on wholesale pharmaceutical distributors for retail distribution of our products; if we lose any of our significant wholesale pharmaceutical distributors or their distribution network is disrupted, our financial condition and results of operations may be adversely affected; • Our products could be subject to post-marketing requirements, which requirements may, in some cases, not be capable of timely or satisfactory completion without participation in consortia over which we have limited control; • We may not realize all the anticipated benefits from our future acquisitions, and we may be unable to successfully integrate future acquisitions; • Our business may be adversely affected by certain events or circumstances outside our control, including macroeconomic conditions and geopolitical turmoil; • Litigation or regulatory action regarding opioid medications could negatively affect our business; • We face substantial competition from other biotechnology and pharmaceutical companies, which may result in others discovering, developing or commercializing products more successfully than we do; • Commercial sales of our products may expose us to expensive product liability claims, and we may not be able to maintain product liability insurance on reasonable terms or at all; • Our relationships with customers and payors are subject to applicable anti-kickback, fraud and abuse, transparency, and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, exclusion from government healthcare programs, contractual damages, reputational harm, administrative burdens, and diminished profits and future earnings; and • The price of our common stock may be volatile and you may lose all or part of your investment.
Risks Related to Our Financial Position and Capital Needs Our ability to maintain profitability is dependent upon our ability to continue successfully commercializing our products and any products that we may acquire in the future.
Our ability to generate revenue from our current or future products depends on a number of factors, including our ability to: • realize a commercially viable price for our products; • manufacture commercial quantities of our products at acceptable cost levels; • sustain a commercial organization capable of sales, marketing and distribution for the products we sell; • obtain coverage and adequate reimbursement from third parties, including government payors; • acquire new products, or develop new indications or line extensions for existing products, in the event that revenues from our existing products are impacted by price controls, loss of intellectual property exclusivity or competition; and • comply with existing and changing laws and regulations that apply to the pharmaceutical industry, including opioid manufacturers, and to our products specifically, including FDA post-marketing requirements.
If we fail to maintain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
As of December 31, 2025, we had a gross U.S. federal net operating loss (“NOL”) carryforward of approximately $66.6 million and state NOL carryovers of approximately $192.4 million.
We also had U.S. federal tax credits of approximately $0.7 million.
Refer to Note 19, Income Taxes , to our consolidated financial statements included in Part IV of this Annual Report on Form 10-K for more information.
We have substantial outstanding indebtedness, which may adversely affect our business, financial condition and results of operations.
In December 2025, we entered into a Credit Agreement by and among us, the lenders from time to time party thereto and Truist Bank, as administrative agent (the “2025 Credit Agreement”), of which $580.0 million in principal was outstanding as of December 31, 2025 (the “2025 Term Loan”).
In addition, we have $241.5 million in 2.875% convertible senior notes due in 2029 (the “2029 Convertible Notes”).
We may also incur additional indebtedness to meet future financing needs.
Our existing and future levels of indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, and among other things: • requiring the dedication of a substantial portion of our cash flows from operations to service our indebtedness, which will reduce the amount of cash available for operations, working capital, capital expenditures, expansion, acquisitions or general corporate or other purposes; • limiting our ability to obtain additional financing; • limiting our flexibility to plan for, or react to, changes in our business; • exposing us to the risk of increased interest rates as certain of our borrowings, including the 2025 Term Loan, are at variable rates of interest; • diluting the interests of our existing shareholders as a result of issuing shares of our common stock upon conversion of the 2029 Convertible Notes; • placing us at a possible competitive disadvantage with competitors that are less leveraged than we are or have better access to capital; and • increasing our vulnerability to downturns in our business, our industry or the economy in general.
Holders of our 2029 Convertible Notes, subject to a limited exception described in the notes, may require us to repurchase their notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any.
Applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the notes or pay the cash amounts due upon conversion, and any failure by us to repurchase notes or to pay the cash amounts due upon the conversion when required would constitute a default under the indenture.
Additionally, the indenture governing the 2029 Convertible Notes and our 2025 Credit Agreement contain certain covenants and obligations applicable to us, including, without limitation, covenants that limit our ability to incur additional indebtedness or liens, make acquisitions or other investments or dispose of assets outside the ordinary course of business, which could limit our ability to capitalize on business opportunities that may arise or otherwise place us at a competitive disadvantage relative to our competitors.
Failure to comply with covenants in the indenture governing the 2029 Convertible Notes or in the 2025 Credit Agreement would constitute an event of default under those instruments, notwithstanding our ability to meet our debt service obligations.
The 2025 Credit Agreement includes various customary remedies for the lenders following an event of default, including the acceleration of repayment of outstanding amounts under the 2025 Credit Agreement and execution upon the collateral securing obligations under the 2025 Credit Agreement.
In addition, because our assets are pledged as a security under the 2025 Credit Agreement, if we are not able to cure any default or repay outstanding borrowings, our assets would be subject to the risk of foreclosure by our lenders.
Further, amounts outstanding under our 2025 Credit Agreement bear an annual interest rate equal to term Secured Overnight Financing Rate (“SOFR”) plus a spread adjustment ranging from 2.75% to 3.75%.
To the extent the interest rates applicable to our floating rate debt increase, our interest expense will increase, in which event we may have difficulties making interest payments and funding our other fixed costs, and our available cash flow for general corporate requirements may be adversely affected.
Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our business, financial condition, or results of operations.
Events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
Any decline in available funding or access to cash and liquidity resources could, among other risks, adversely impact our ability to meet our financial obligations, which could have material adverse impacts on our liquidity and our business, financial condition, or results of operations.
Risks Related to our Products If we cannot continue successfully commercializing our products and any products that we may acquire in the future, our business, financial condition and results of operations may be materially adversely affected and the price of our common stock may decline.
Our business and future success are substantially dependent on our ability to continue successfully commercializing our products, including Jornay PM, Belbuca, Xtampza ER, the Nucynta Products, Symproic, and any products that we may acquire in the future.
Our ability to continue successfully commercializing our products will depend on many factors, including but not limited to: • our ability to manufacture commercial quantities of our products at reasonable cost and with sufficient speed to meet commercial demand; • our ability to execute sales and marketing strategies successfully and continually; • our success in educating physicians, patients and caregivers about the benefits, administration, use and coverage of our products; • with respect to Xtampza ER, the perceived availability and advantages, relative cost, relative safety and relative efficacy of other abuse-deterrent products and treatments with similar indications; • our ability to defend successfully any challenges to our intellectual property or suits asserting patent infringement relating to our products; • the availability and quality of coverage and adequate reimbursement for our products; • a continued acceptable safety profile of our products; • our ability to acquire new products, or develop new indications or line extensions for existing products, in the event that revenues from our existing products are impacted by price controls, loss of intellectual property exclusivity or competition; and • our ability to comply with applicable legal and regulatory requirements, including any additional manufacturing or packaging requirements that may become applicable to certain opioid products.
Many of these matters are beyond our control and are subject to other risks described elsewhere in this “Risk Factors” section.
If we cannot do so, or are significantly delayed in doing so, our business will be materially harmed.
Despite receiving approval by the FDA, additional data may emerge that could change the FDA’s position on the product labeling of any of our products, including our abuse-deterrent claims with respect to Xtampza ER, and our ability to market our products successfully may be adversely affected.
Xtampza ER was approved with label language describing abuse-deterrent properties of the formulation with respect to the nasal and IV routes of abuse, consistent with Guidance for Industry, “Abuse-Deterrent Opioids- Evaluation and Labeling.” In November 2017, the FDA approved a supplemental NDA for Xtampza ER to include comparative oral pharmacokinetic data from a clinical study evaluating the effect of physical manipulation by crushing Xtampza ER compared with OxyContin and a control (oxycodone hydrochloride immediate-release), results from an oral human abuse potential study and the addition of an oral abuse deterrent claim.
The FDA can require changes to the product labeling for any of our products at any time, which can impact our ability to generate product sales.
For example, on July 31, 2025, the FDA announced that it will be requiring safety related labeling changes for all opioid pain medications, including clearer risk information, dosing warnings, use limits, treatment guidance, safe discontinuation instructions, information on overdose reversal agents, an enhanced drug interaction warning, additional overdose risk information, and digestive health information.
We have implemented the required labeling changes and continue to monitor and comply with applicable FDA requirements.
Additionally, if the FDA determines that our post-marketing data for Xtampza ER does not demonstrate that the abuse-deterrent properties result in reduction of abuse, or demonstrates a shift to routes of abuse that present a greater risk, the FDA may find that product labeling revisions are needed, and potentially require the removal of our abuse-deterrence claims, which would have a material adverse effect on our ability to continue successfully commercializing Xtampza ER.
The imposition of label changes now or in the future could delay or preclude us from realizing the full commercial potential of our products.
Our opioid products are subject to mandatory REMS programs, which could increase the cost, burden and liability associated with the commercialization of these products.
The FDA has imposed a class-wide REMS on all IR, ER and long-acting opioid drug products (known as the Opioid Analgesic REMS).
As opioids, Xtampza ER, the Nucynta Products and Belbuca are subject to the Opioid Analgesic REMS.
Any modification of the Opioid Analgesic REMS by the FDA to impose additional or more burdensome requirements could increase the costs associated with marketing these products and/or reduce the willingness of healthcare providers to prescribe these products, which would have a material adverse effect on our ability to continue to successfully commercialize and generate sufficient revenue from these products.

and 171 more.

Gone since FY2024

Such pricing regulations may address the rebates that manufacturers offer to pharmaceutical benefit managers, or the discounts that manufacturers provide others within the pharmaceutical distribution chain; ● Social issues around the abuse of opioids, including law enforcement concerns over diversion of opioids and regulatory and enforcement efforts to combat abuse, could decrease the potential market for our opioid products and may adversely impact external investor perceptions of our business; ● If the FDA or other applicable regulatory authorities approve generic products with abuse deterrent claims that compete with our opioid products, our sales could decline; ● If the third-party manufacturers of our products fail to devote sufficient time and resources to these products, or their performance is substandard, and/or we encounter challenges with our dedicated manufacturing suite at our third-party manufacturer’s site for the manufacturing of Xtampza ER, our costs may be higher than expected and could have a material adverse effect on our business; ● Because we currently rely on a sole supplier or limited number of suppliers to manufacture the active pharmaceutical ingredient of our products, any production problems with any of these suppliers could have a material adverse effect on us; ● We depend on wholesale pharmaceutical distributors for retail distribution of our products; if we lose any of our significant wholesale pharmaceutical distributors or their distribution network is disrupted, our financial condition and results of operations may be adversely affected; ● Our products could be subject to post-marketing requirements, which requirements may, in some cases, not be capable of timely or satisfactory completion without participation in consortia over which we have limited control; ● Our business may be adversely affected by certain events or circumstances outside our control, including macroeconomic conditions and geopolitical turmoil; ● Litigation or regulatory action regarding opioid medications could negatively affect our business; ● We face substantial competition from other biotechnology and pharmaceutical companies, which may result in others discovering, developing or commercializing products more successfully than we do; ● Commercial sales of our products may expose us to expensive product liability claims, and we may not be able to maintain product liability insurance on reasonable terms or at all; ● Our relationships with customers and payors are subject to applicable anti-kickback, fraud and abuse, transparency, and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, exclusion from government healthcare programs, contractual damages, reputational harm, administrative burdens, and diminished profits and future earnings; and ● The price of our common stock may be volatile and you may lose all or part of your investment. Risks Related to Our Financial Position and Capital Needs Our ability to maintain profitability is dependent upon our ability to continue successfully commercializing our products and any products that we may acquire in the future.
Our ability to generate revenue from our current or future products depends on a number of factors, including our ability to: ● realize a commercially viable price for our products; ● manufacture commercial quantities of our products at acceptable cost levels; ● sustain a commercial organization capable of sales, marketing and distribution for the products we sell; ● obtain coverage and adequate reimbursement from third parties, including government payors; ● acquire new products, or develop new indications or line extensions for existing products, in the event that revenues from our existing products are impacted by price controls, loss of intellectual property exclusivity or competition; and ● comply with existing and changing laws and regulations that apply to the pharmaceutical industry, including opioid manufacturers, and to our products specifically, including FDA post-marketing requirements. If we fail to maintain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations. Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. As of December 31, 2024, we had a gross U.S. federal net operating loss (“NOL”) carryforward of approximately $102.1 million and state NOL carryovers of approximately $199.0 million.
We also had U.S. federal tax credits of approximately $1.0 million.
Refer to Note 19, Income Taxes , to our consolidated financial statements included in Part IV of this Annual Report on Form 10-K for more information. We have substantial outstanding indebtedness, which may adversely affect our business, financial condition and results of operations. In July 2024, in connection with the Ironshore acquisition, we entered into a Second Amended and Restated Loan Agreement by and among us, certain of our subsidiaries party thereto as guarantors, BioPharma Credit PLC as collateral agent, and BioPharma Credit Investments V (Master) LP and BPCR Limited Partnership (investment funds managed by Pharmakon Advisors, LP) as the lenders (the “Lenders”) party thereto (the “2024 Loan Agreement”), of which $629.7 million in principal was outstanding as of December 31, 2024 (the “2024 Term Loan”).
In addition, we have $241.5 million in 2.875% convertible senior notes due in 2029 (the “2029 Convertible Notes”). We may also incur additional indebtedness to meet future financing needs.
Our existing and future levels of indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, and among other things: ● requiring the dedication of a substantial portion of our cash flows from operations to service our indebtedness, which will reduce the amount of cash available for operations, working capital, capital expenditures, expansion, acquisitions or general corporate or other purposes; ● limiting our ability to obtain additional financing; ● limiting our flexibility to plan for, or react to, changes in our business; ● exposing us to the risk of increased interest rates as certain of our borrowings, including the 2024 Term Loan, are at variable rates of interest; ● diluting the interests of our existing shareholders as a result of issuing shares of our common stock upon conversion of the 2029 Convertible Notes; ● placing us at a possible competitive disadvantage with competitors that are less leveraged than we are or have better access to capital; and ● increasing our vulnerability to downturns in our business, our industry or the economy in general. Holders of our 2029 Convertible Notes, subject to a limited exception described in the notes, may require us to repurchase their notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any.
Applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the notes or pay the cash amounts due upon conversion, and any failure by us to repurchase notes or to pay the cash amounts due upon the conversion when required would constitute a default under the indenture. Additionally, the indenture governing the 2029 Convertible Notes and our 2024 Loan Agreement contain certain covenants and obligations applicable to us, including, without limitation, covenants that limit our ability to incur additional indebtedness or liens, make acquisitions or other investments or dispose of assets outside the ordinary course of business, which could limit our ability to capitalize on business opportunities that may arise or otherwise place us at a competitive disadvantage relative to our competitors. Failure to comply with covenants in the indenture governing the 2029 Convertible Notes or in the 2024 Loan Agreement would constitute an event of default under those instruments, notwithstanding our ability to meet our debt service obligations.
The 2024 Loan Agreement includes various customary remedies for the lenders following an event of default, including the acceleration of repayment of outstanding amounts under the 2024 Loan Agreement and execution upon the collateral securing obligations under the 2024 Loan Agreement.
In addition, because our assets are pledged as a security under the 2024 Loan Agreement, if we are not able to cure any default or repay outstanding borrowings, our assets would be subject to the risk of foreclosure by our lenders. Further, amounts outstanding under our 2024 Loan Agreement bear an annual interest rate equal to term Secured Overnight Financing Rate (“SOFR”) plus a spread adjustment of 0.13% plus 4.50%, and are subject to quarterly amortization payments equal to 2.50% of the original funded amount of the 2024 Term Loan.
To the extent the interest rates applicable to our floating rate debt increase, our interest expense will increase, in which event we may have difficulties making interest payments and funding our other fixed costs, and our available cash flow for general corporate requirements may be adversely affected. Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our business, financial condition, or results of operations. Events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
Any decline in available funding or access to cash and liquidity resources could, among other risks, adversely impact our ability to meet our financial obligations, which could have material adverse impacts on our liquidity and our business, financial condition, or results of operations. Risks Related to our Products If we cannot continue successfully commercializing our products and any products that we may acquire in the future, our business, financial condition and results of operations may be materially adversely affected and the price of our common stock may decline. Our business and future success are substantially dependent on our ability to continue successfully commercializing our products, including Jornay, Belbuca, Xtampza, the Nucynta Products, Symproic, and any products that we may acquire in the future. Our ability to continue successfully commercializing our products will depend on many factors, including but not limited to: ● our ability to manufacture commercial quantities of our products at reasonable cost and with sufficient speed to meet commercial demand; ● our ability to execute sales and marketing strategies successfully and continually; ● our success in educating physicians, patients and caregivers about the benefits, administration, use and coverage of our products; ● with respect to Xtampza ER, the perceived availability and advantages, relative cost, relative safety and relative efficacy of other abuse-deterrent products and treatments with similar indications; ● our ability to defend successfully any challenges to our intellectual property or suits asserting patent infringement relating to our products; ● the availability and quality of coverage and adequate reimbursement for our products; ● a continued acceptable safety profile of our products; ● our ability to acquire new products, or develop new indications or line extensions for existing products, in the event that revenues from our existing products are impacted by price controls, loss of intellectual property exclusivity or competition; and ● our ability to comply with applicable legal and regulatory requirements, including any additional manufacturing or packaging requirements that may become applicable to certain opioid products. Many of these matters are beyond our control and are subject to other risks described elsewhere in this “Risk Factors” section.
If we cannot do so, or are significantly delayed in doing so, our business will be materially harmed. Despite receiving approval by the FDA, additional data may emerge that could change the FDA’s position on the product labeling of any of our products, including our abuse-deterrent claims with respect to Xtampza ER, and our ability to market our products successfully may be adversely affected. Xtampza ER was approved with label language describing abuse-deterrent properties of the formulation with respect to the nasal and IV routes of abuse, consistent with Guidance for Industry, “Abuse-Deterrent Opioids- Evaluation and Labeling.” In November 2017, the FDA approved a supplemental NDA for Xtampza ER to include comparative oral pharmacokinetic data from a clinical study evaluating the effect of physical manipulation by crushing Xtampza ER compared with OxyContin and a control (oxycodone hydrochloride immediate-release), results from an oral human abuse potential study and the addition of an oral abuse deterrent claim. The FDA can require changes to the product labeling for any of our products at any time which can impact our ability to generate product sales.
In particular, if the FDA determines that our post-marketing data for Xtampza ER does not demonstrate that the abuse-deterrent properties result in reduction of abuse, or demonstrates a shift to routes of abuse that present a greater risk, the FDA may find that product labeling revisions are needed, and potentially require the removal of our abuse-deterrence claims, which would have a material adverse effect on our ability to continue successfully commercializing Xtampza ER. Our opioid products are subject to mandatory REMS programs, which could increase the cost, burden and liability associated with the commercialization of these products. The FDA has imposed a class-wide REMS on all IR, ER and long-acting opioid drug products (known as the Opioid Analgesic REMS).
As opioids, Xtampza ER, the Nucynta Products and Belbuca are subject to the Opioid Analgesic REMS. Any modification of the Opioid Analgesic REMS by the FDA to impose additional or more burdensome requirements could increase the costs associated with marketing these products and/or reduce the willingness of healthcare providers to prescribe these products, which would have a material adverse effect on our ability to continue to successfully commercialize and generate sufficient revenue from these products. Failure to comply with ongoing governmental regulations for marketing our products, and in particular any failure to promote Xtampza ER’s abuse deterrent labeling in compliance with FDA regulations, could delay or inhibit our ability to generate revenues from their sale and could also expose us to claims or other sanctions. In addition to scrutiny by the FDA, advertising and promotion of any pharmaceutical product marketed in the United States is heavily scrutinized by, among others, the Department of Justice, the Office of Inspector General for the U.S.
Violations, including promotion of our products for unapproved or off-label uses, are subject to enforcement letters, inquiries and investigations, and civil and criminal sanctions by government agencies. In particular, Xtampza ER has FDA-approved product labeling that describes its abuse deterrent features, which allows us to promote those features and differentiate Xtampza ER from other opioid products containing the same active pharmaceutical ingredients.
Because the FDA closely regulates promotional materials and other promotional activities, even though the FDA-approved product labeling includes a description of the abuse deterrent characteristics of Xtampza ER, the FDA may object to our marketing claims and product advertising campaigns. Engaging in off-label promotion of our products, including Xtampza ER, could subject us to false claims liability under federal and state statutes, and other litigation and/or investigations, and could lead to the issuance of warning letters or untitled letters, suspension or withdrawal of our products from the market, recalls, fines, disgorgement money, operating restrictions, injunctions, and civil or criminal prosecution.
Any of these consequences would harm the commercial success of our products, including Xtampza ER. Further, discovery of serious and unanticipated adverse events associated with the product; the emergence of other problems with the product, manufacturer or facility; or our failure to make required regulatory submissions may result in adverse regulatory actions, including withdrawal of the product from the market or the requirement to add or strengthen label warnings about the product.
The failure to obtain or maintain requisite governmental approvals or the imposition of additional or stronger warnings could delay or preclude us from realizing the full commercial potential of our products. Risks Related to Intellectual Property Unfavorable outcomes in intellectual property litigation could be costly and potentially limit our ability to commercialize our products. Our commercial success depends upon our ability to commercialize products without infringing the intellectual property rights of others.
We cannot currently determine the ultimate scope and validity of patents which may be granted to third parties in the future or which patents might be asserted to be infringed by the manufacture, use and sale of our products. If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing or commercializing our products and technology.
A finding of infringement could prevent us from commercializing our products or force us to cease some of our business operations. Any litigation, including any interference or derivation proceedings to determine priority of inventions, oppositions, reexaminations, inter partes reviews or other post-grant review proceedings to patents in the United States, or litigation against our collaborators may be costly and time consuming and could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
Ultimately, the outcome of such litigation, including our pending litigation with Purdue, could compromise the validity and scope of our patents or other proprietary rights or hinder our ability to manufacture and market our products. If we are unable to obtain or maintain intellectual property rights for our technologies, products or any products we may acquire, we may lose valuable assets or be unable to compete effectively in our market. We depend on our ability to protect our proprietary technology.
Our success depends in large part on our ability to obtain and maintain patent protection in the United States with respect to our proprietary technology and products. The steps we have taken to protect our proprietary rights may not be adequate to preclude misappropriation of our proprietary information or infringement of our intellectual property rights in the United States.
The rights already granted under any of our currently issued patents and those that may be granted under future issued patents may not provide us with the proprietary protection or competitive advantages we are seeking. We have been, and may continue to be, forced to litigate to enforce or defend our intellectual property, which could be expensive, time consuming and unsuccessful, and result in the loss of valuable assets. We have been, and may continue to be, forced to litigate to enforce or defend our intellectual property rights against infringement and unauthorized use by competitors, and to protect our trade secrets, including in connection with our pending litigation against generic competitors that have filed Paragraph IV Certifications relating to certain of our products.
Many of our current and potential competitors have the ability to dedicate substantially greater resources to defend their intellectual property rights than we can. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating our intellectual property.
In addition, an adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated, held unenforceable or interpreted narrowly. If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed. In addition to seeking patents for some of our technology and products, we rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position.
If any of our trade secrets were to be disclosed or independently developed, our competitive position would be harmed. Obtaining and maintaining our patent protection depends on compliance with various procedural, document submissions, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements. The United States Patent and Trademark Office (“USPTO”) requires compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process.
If we fail to maintain the patents and patent applications covering our products, our competitive position would be adversely affected. Risks Related to the Commercialization of Our Products If we are unable to utilize our own sales and marketing capabilities successfully or enter into strategic alliances with marketing collaborators, we may not continue to be successful in commercializing our products and may be unable to generate sufficient product revenue. Our commercial organization continues to evolve and we cannot guarantee that we will continue to be successful in marketing our products.
In connection with the Ironshore Acquisition, we acquired the sales force supporting Jornay and we cannot guarantee that we will be able to successfully grow the Jornay sales infrastructure, while continuing to support and maintain our existing sales organization.
If we are unable to continue to grow and maintain adequate sales, marketing and distribution capabilities, whether independently or with third parties, including with respect to our acquisition of Jornay, we may not be able to generate sufficient product revenue and may not remain profitable.
Factors that may inhibit our efforts to continue successfully commercializing our products in the United States include: ● our inability to recruit and retain adequate numbers of effective sales and marketing personnel; ● the inability of sales personnel to reach adequate numbers of physicians who may prescribe our products; and ● unforeseen costs and expenses associated with creating and maintaining an independent sales and marketing organization. If we are not successful in retaining sales and marketing personnel or in maintaining our sales and marketing infrastructure or if we do not preserve strategic alliances with marketing collaborators, agreements with contract sales organizations or collaboration arrangements, we will have difficulty in continuing to commercialize our products. If the medical community, patients, and healthcare payors do not accept and use our products, we will not achieve sufficient product revenues and our business will suffer.
Acceptance and use of our products will depend on a number of factors including: ● approved indications, warnings and precautions language that may be less desirable than competitive products; ● perceptions of physicians and other healthcare community members of the safety and efficacy of our products; ● perceptions by members of the healthcare community, including physicians, about the relevance and efficacy of our abuse deterrent technology; ● the availability of competitive products; ● the pricing and cost-effectiveness of our products relative to competing products; ● the potential and perceived advantages of our products over alternative treatments; ● the convenience and ease of administration to patients of our products; ● actual and perceived availability and quality of coverage and reimbursement for our products from government or other third-party payors; ● negative publicity related to our products or negative or positive publicity related to our competitors’ products; ● the prevalence and severity of adverse side effects; ● policy initiatives by FDA, HHS, DEA, or other federal or state agencies regarding opioids; ● our ability to comply with the Opioid Analgesic REMS; and ● the effectiveness of marketing and distribution efforts by us and any licensees and distributors. If our products fail to have an adequate level of acceptance by the medical community, patients, or healthcare payors, we will not be able to generate sufficient revenue to remain profitable.
Since we expect to rely on sales generated by Jornay, Belbuca, Xtampza ER, the Nucynta Products, and Symproic for substantially all of our revenues for the foreseeable future, the failure of these products to maintain market acceptance would harm our business prospects. Some of our products contain controlled substances, and the manufacture, use, sale, importation, exportation and distribution of which are subject to regulation by state and federal law enforcement and other regulatory agencies. Some of our products contain controlled substances that are subject to state and federal laws and regulations regarding their manufacture, use, sale, importation, exportation and distribution.
Jornay’s active ingredient, methylphenidate hydrochloride, Xtampza ER’s active ingredient, oxycodone, and the Nucynta Products’ active ingredient, tapentadol hydrochloride are each classified as Schedule II controlled substances under the Controlled Substances Act (“CSA”) and regulations of the DEA, and the active ingredient in Belbuca, buprenorphine hydrochloride, is classified as a Schedule III controlled substance .
We and our suppliers, manufacturers, contractors, customers and distributors are required to obtain and maintain applicable registrations from state and federal law enforcement and regulatory agencies and comply with state and federal laws and regulations regarding the manufacture, use, sale, importation, exportation and distribution of controlled substances. Furthermore, the amount of Schedule II substances that can be obtained for clinical trials and commercial distribution is limited by the CSA and DEA regulations.
If commercial demand for Xtampza ER, the Nucynta Products or Jornay, increases and we cannot meet such demand in a timely fashion because of our limited supply of their active pharmaceutical ingredients, then physicians may perceive such product as unavailable and may be less likely to prescribe it in the future. In addition, controlled substances are also subject to regulations governing manufacturing, labeling, packaging, testing, dispensing, production and procurement quotas (for Schedule I and II substances), recordkeeping, reporting, handling, shipment and disposal.
The DEA and some states conduct periodic inspections of registered establishments that handle controlled substances. Failure to obtain and maintain required registrations or to comply with any applicable regulations could delay or preclude us from manufacturing and commercializing our products that contain controlled substances and subject us to enforcement action.
Because of their restrictive nature, these regulations could limit commercialization of our products containing controlled substances. Current and future legislation and regulatory changes may increase the difficulty and cost for us to continue to commercialize our products and may reduce the prices we are able to obtain for our products. In the United States, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system generally, and the manufacturing, distribution, and marketing of opioids in particular, that could affect our ability to commercialize our products.
Liabilities for taxes or assessments under any such laws could have an adverse impact on our results of operations. California and several other states have enacted legislation related to prescription drug pricing transparency and it is unclear the effect this legislation will have on our business.
Laws intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for health care and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms may continue the downward pressure on pharmaceutical pricing, especially under the Medicare program, and may also increase our regulatory burdens and operating costs. Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.
Congress of the FDA’s approval process may subject us to more stringent product labeling and post-marketing testing and other requirements. Further, changes in the leadership and funding of the FDA, CMS, NIH and other federal agencies under the Trump Administration as well as regulatory reforms that may be proposed or implemented by the Trump Administration may have a material effect on how pharmaceutical products are regulated. Proponents of drug reimportation may attempt to pass legislation that would directly allow reimportation under certain circumstances.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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