COLLEGIUM PHARMACEUTICAL, INCCOLL
COLLEGIUM PHARMACEUTICAL, INC Income Taxes Disclosure
Income Taxes
The Company's income before tax is all related to domestic operations.
Income taxes paid, net of refunds received consisted of the following:
| Year Ended December 31, 2025 | ||||||||
| Federal | $ | 49,788 | ||||||
| State | 10,253 | |||||||
| Total income taxes paid, net of refunds received | $ | 60,041 | ||||||
No individual jurisdiction other than federal accounted for more than 5% of total taxes paid, net of refunds received.
The provision for income taxes consisted of the following:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current provision: | |||||||||||||||||
| Federal | $ | 44,063 | $ | 45,343 | $ | 21,504 | |||||||||||
| State | 11,343 | 10,849 | 8,227 | ||||||||||||||
| 55,406 | 56,192 | 29,731 | |||||||||||||||
| Deferred benefit: | |||||||||||||||||
| Federal | $ | (21,098) | $ | (23,977) | $ | (1,401) | |||||||||||
| State | (4,559) | (2,837) | (752) | ||||||||||||||
| (25,657) | (26,814) | (2,153) | |||||||||||||||
| Provision for income taxes | $ | 29,749 | $ | 29,378 | $ | 27,578 | |||||||||||
The following is a reconciliation of income tax expense with income taxes at the U.S. statutory rate for the year ended December 31, 2025:
| Year Ended December 31, 2025 | ||||||||||||||
| Amount | Percent | |||||||||||||
| U.S. federal statutory rate | $ | 19,450 | 21.0 | % | ||||||||||
| State and local income tax, net of federal income tax effect (1) | 4,670 | 5.0 | % | |||||||||||
| Nontaxable or nondeductible items | ||||||||||||||
| Nondeductible officer compensation | 3,296 | 3.6 | % | |||||||||||
| Stock compensation | (1,377) | (1.5) | % | |||||||||||
| Other | 2,242 | 2.4 | % | |||||||||||
| Other adjustments | 1,468 | 1.6 | % | |||||||||||
| Total effective tax rate | $ | 29,749 | 32.1 | % | ||||||||||
(1) - For the period presented, state income taxes in Georgia, New York, California, Massachusetts, Florida, and Colorado comprise the majority of state income taxes.
During the year ended December 31, 2025, the effective tax rate was impacted by permanent differences, including nondeductible officer compensation and excess benefits from stock compensation. Other nontaxable or nondeductible items primarily relate to nondeductible meals expense, nondeductible Branded Prescription Drug fees, and provision-to-return adjustments. Other adjustments primarily relate to prior period adjustments to income taxes payable.
A reconciliation of income tax expense for the years ended December 31, 2024 and 2023 computed at the statutory federal income tax rate to income taxes as reflected in the consolidated financial statements is as follows:
| Years Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Federal income tax expense at statutory rate | 21.0 | % | 21.0 | % | ||||||||||
| Change resulting from: | ||||||||||||||
| State income tax, net of federal benefit | 5.5 | 4.9 | ||||||||||||
| Permanent difference - debt extinguishment | 1.7 | 7.1 | ||||||||||||
| Permanent differences - all other | 1.1 | 1.3 | ||||||||||||
| Stock compensation | 0.8 | 1.0 | ||||||||||||
| Change in tax rates and other | (0.7) | 0.4 | ||||||||||||
| Change in valuation allowance | 0.4 | 0.7 | ||||||||||||
| Effective income tax rate | 29.8 | % | 36.4 | % | ||||||||||
During the years ended December 31, 2024 and 2023, the effective tax rate was impacted by permanent differences, including the extinguishment of the Company’s 2026 convertible notes, for which certain extinguishment costs were not deductible for tax purposes. Stock compensation, including the impact of excess benefits and 162(m) limitations, impacted the effective tax rate at varying percentages each year due to changes in the non-deductible amount and profit before tax.
Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The significant components of the Company’s deferred tax assets and liabilities are comprised of the following:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 17,954 | $ | 26,586 | |||||||
| Research and development credits | 898 | 1,238 | |||||||||
| Operating lease liabilities | 1,308 | 1,604 | |||||||||
| Accrued rebates, returns and discounts | 34,808 | 45,774 | |||||||||
| Stock-based compensation | 8,451 | 7,621 | |||||||||
| Accrued liabilities and other | 7,685 | 8,791 | |||||||||
| Capitalized research and development | — | 468 | |||||||||
| Intangible assets | 45,467 | 37,928 | |||||||||
| Deferred royalty obligation | 30,398 | 28,712 | |||||||||
| Gross deferred tax assets: | 146,969 | 158,722 | |||||||||
| Valuation allowance | (5,289) | (6,498) | |||||||||
| Total deferred tax assets: | 141,680 | 152,224 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Debt discount | — | (45) | |||||||||
| Operating lease right-of-use assets | (989) | (1,372) | |||||||||
| Intangible assets | (25,997) | (49,964) | |||||||||
| Property and equipment | (2,155) | (2,810) | |||||||||
| Total deferred tax liabilities: | (29,141) | (54,191) | |||||||||
| Net deferred tax assets | $ | 112,539 | $ | 98,033 | |||||||
The Company provides a valuation allowance when it is more-likely-than-not that deferred tax assets will not be realized. In determining the extent to which a valuation allowance for deferred tax assets is required, the Company evaluates all available evidence including projections of future taxable income, carryback opportunities, reversal of certain deferred tax liabilities, and other tax planning strategies. The Company maintains a partial valuation against its federal and state net operating losses and federal R&D credits as of December 31, 2025 and 2024. The valuation allowance was $5,289 and $6,498 as of December 31, 2025 and 2024, respectively, and reflects limitations based on the Company’s ability to use such assets prior to expiration. The change in the valuation allowance decreased the provision for income taxes by $23 in the year ended December 31, 2025 and increased the provision for income taxes by $431 and $527 in the years ended December 31, 2024 and 2023, respectively.
The Tax Cuts and Jobs Act of 2017 (“TCJA”) will generally allow losses incurred after 2017 to be carried over indefinitely but will generally limit the net operating loss (“NOL”) deduction to the lesser of the NOL carryover or 80% of a corporation’s taxable income (subject to Internal Revenue Code Sections 382 and 383). Also, there will be no carryback for losses incurred after 2017. Losses incurred prior to 2018 will generally be deductible to the extent of the lesser of a corporation’s NOL carryover or 100% of a corporation’s taxable income (subject to Internal Revenue Code Section 382 and 383) and be available for twenty years from the period the loss was generated.
As of December 31, 2025, the Company had gross U.S. federal net operating loss carryforwards of $66,588, of which $24,600 arose prior to 2018 and are available to offset future taxable income, if any, through 2037. The remaining $41,988 are available for an indefinite period. As of December 31, 2024, the Company had gross U.S. federal net operating loss carryforwards of $102,148.
As of December 31, 2025 and 2024, the Company also had gross U.S. state net operating loss carryforwards of $192,380 and $198,986, respectively, which may be available to offset future income tax liabilities and expire at various dates through 2042.
As of December 31, 2025 and 2024, the Company had federal research and development tax credit carryforwards of approximately $680 and $1,025, respectively.
The Company has completed studies to assess the impact of ownership changes, if any, on the Company’s ability to use its NOL and tax credit carryovers as defined under Section 382 of the Internal Revenue Code (“IRC 382”). The Company concluded that there were ownership changes that occurred during the years 2006, 2012 and 2015 that would be subject to IRC 382 limitations. The Company acquired $234,675 of net operating loss carryforward from the BDSI Acquisition. The Company concluded that there were ownership changes for BDSI that occurred during the years 2006 and 2022 that would be subject to IRC 382 limitations. These IRC 382 annual limitations may limit the Company’s ability to use pre-ownership change federal NOL carryovers and pre-ownership change federal tax credit carryovers. As of December 31, 2025, remaining net operating losses of $66,588 are subject to limitation.
The Company files income tax returns in the United States and in several states. The federal and state income tax returns are generally subject to tax examinations for the tax years ended December 31, 2021 through December 31, 2025. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state tax authorities to the extent utilized in a future period.
The Company has not recognized deferred tax assets for certain federal and state research and development credits related to uncertain tax positions, and that is included in the tabular rollforward of uncertain tax positions. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (“UTB”) is as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Gross UTB Balance as of January 1 | $ | 11,306 | $ | 11,306 | $ | 11,400 | |||||||||||
| Additions based on tax positions related to the current year | — | — | — | ||||||||||||||
| Additions for tax positions related to acquisitions | — | — | — | ||||||||||||||
| (Reductions) additions for tax positions of prior years | (806) | — | (94) | ||||||||||||||
| Gross UTB Balance as of December 31 | $ | 10,500 | $ | 11,306 | $ | 11,306 | |||||||||||
| Net UTB impacting the effective tax rate as of December 31 excluding valuation allowance impacts, if any | $ | 10,469 | $ | 11,275 | $ | 11,275 | |||||||||||
As of December 31, 2025 and 2024, the Company had no accrued interest or penalties related to uncertain tax positions. During the years ended December 31, 2025, 2024 and 2023, no interest or penalties related to uncertain tax positions have been recognized in the Company’s statements of operations.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Mar 7, 2018 | |
| 2016 | Mar 10, 2017 | |
| 2015 | Mar 18, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.