Collegium Pharma (COLL) Announces Proposed $125M Convertible Senior Notes Offering

Collegium Pharmaceutical, Inc. (NASDAQ: COLL) today announced its intention to offer, subject to market and other conditions, $125,000,000 aggregate principal amount of convertible senior notes due 2026 (the “notes”) in a public offering registered under the Securities Act of 1933, as amended. Collegium also expects to grant the underwriter of the notes a 30-day option to purchase up to an additional $18,750,000 principal amount of notes solely to cover over-allotments.

The notes will be senior, unsecured obligations of Collegium, will accrue interest payable semi-annually in arrears and will mature on February 15, 2026, unless earlier repurchased, redeemed or converted. Noteholders will have the right to convert their notes in certain circumstances and during specified periods. Collegium will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at Collegium’s election. Except as described in the immediately following sentence, Collegium may not redeem the notes prior to February 15, 2023. If the asset purchase agreement for the Nucynta Transaction (as defined below) is terminated in accordance with its terms, or Collegium’s board of directors determines that the Nucynta Transaction will not close or the Nucynta Transaction does not close by March 13, 2020, then the notes will be redeemable, in whole and not in part, at Collegium’s option, on a redemption date occurring on or before May 29, 2020, at a cash redemption price equal to 101% the principal amount of the notes to be redeemed, plus accrued and unpaid interest, plus the “applicable premium” described in the preliminary prospectus supplement for the offering of the notes. In addition, the notes will be redeemable, in whole and not in part, for cash at Collegium’s option at any time on or after February 15, 2023, but only if the last reported sale price per share of Collegium’s common stock exceeds 130% of the conversion price for a specified period of time, at a redemption price equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The interest rate, initial conversion rate and other terms of the notes will be determined at the pricing of the offering.

Collegium intends to use the net proceeds from the sale of the notes, together with cash on hand and borrowings under its credit facility, to fund the purchase price of Collegium’s previously announced acquisition of assets related to Nucynta ER and Nucynta from Assertio Therapeutics, Inc. (the “Nucynta Transaction”). Collegium intends to use the remaining net proceeds, if any, for general corporate purposes. The offering of notes is not contingent on the consummation of the Nucynta Transaction.

Jefferies LLC is acting as the sole book-running manager for the offering.

Collegium has filed a registration statement (including a prospectus), which was declared effective on November 6, 2019, and a preliminary prospectus supplement with the Securities and Exchange Commission (the “SEC”) for the offering of the notes.

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