Collegium Pharmaceutical enters the back half of August with a charged setup — a stock down 21% in a month, short interest at multi-year highs, and options traders flipping sharply bullish even as bears rebuild positions.
The most striking development this week is the short-side rebuild. Short interest has climbed 13% over the past week to 18.3% of free float — a level that ranks in the 4th percentile of the ORTEX universe by days-to-cover, meaning this is among the most heavily shorted names in the market. The ORTEX short score reinforces the signal: it has risen from 72.6 on August 10 to 77.8 on August 18, the highest reading in the tracked window. Shorts are not just holding — they are pressing. Yet the lending market tells a different story about squeeze risk. Borrow availability, while tighter than a week ago, is still running at 135%, meaning for every share currently borrowed, another 1.35 are available in the lending pool. Cost to borrow is just 0.51%, barely above its 30-day average. The infrastructure for a squeeze is not in place; shorts are working comfortably, not expensively.
Options positioning has done the opposite of the short book. The put/call ratio has collapsed to 0.33 — nearly two standard deviations below its 20-day mean of 1.27, and the sharpest swing toward calls seen in months. Through July and into early August, PCR was consistently running above 1.5, meaning protective puts dominated. That regime flipped sharply after August 11. Call buyers are now in charge of the options market, a posture far more bullish than the rest of the positioning data would suggest. The divergence between heavy short interest and aggressive call buying is the central tension in COLL right now.
The catalyst for all of this is clear. Collegium reported Q2 results on August 6 and the stock fell 17.5% on the day, extending to a 21% loss over the following five sessions. The bear case is playing out: lower-than-expected net pricing on Nucynta dragged down guidance, and the pain portfolio is under real pressure. Analysts responded swiftly. Barclays cut its target from $56 to $48 this week while keeping Overweight. Needham dropped from $56 to $46 the day of earnings, also maintaining Buy. Piper Sandler trimmed from $45 to $43 on a Neutral. The direction of travel is uniformly downward on price targets, though the majority of the Street is still constructive — mean target is $49.60 against a current price of $28.50, implying significant upside on consensus numbers. The bull case rests on ADHD product Azstarys momentum into the back-to-school period, Belbuca's generic protection running to 2032, and a cash position of $129 million with manageable leverage. The EV/EBITDA sits at just 3.5x and PE at 3.9x — cheap multiples that underpin the contrarian call-buying activity.
Institutional ownership shows some funds adding into weakness. BlackRock added 307,000 shares as of July 31. Janus Henderson increased its stake by 377,000 shares over the same period. Principal Global added 337,000. These are not trivial moves for a stock of this size, and they suggest at least some large-cap managers see the post-earnings dislocation as an entry point rather than a warning. Insider data is stale — the most recent trades date to mid-May and were all small-scale director sells, none of which changes the current thesis.
The next earnings date is November 5. What to watch before then is whether the back-to-school Azstarys dynamic shows up in any channel data or prescription trends, and whether the gap between the 18%-short positioning and the aggressively call-heavy options market begins to close — in one direction or the other.
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