Pacira at Needham Conference: Non-Opioid Pain Focus

On Monday, 07 April 2025, Pacira Biosciences (NASDAQ: PCRX) presented at the 24th Annual Needham Virtual Healthcare Conference. The company outlined its ambitious "5 by 30" strategic plan, aiming to lead in non-opioid pain therapies. While the company is optimistic about growth, challenges such as IP litigation and competitive pressures remain.

Key Takeaways

• Pacira's "5 by 30" plan targets leadership in musculoskeletal pain with five novel programs by 2030.
• The company expects a double-digit compound annual growth rate (CAGR) over the next five years.
• The "No Pain Act" is seen as a catalyst for growth in non-opioid solutions.
• 2025 sales guidance is set between $725 million and $765 million.
• New leadership appointments aim to modernize and enhance commercial operations.

Financial Results

• Pacira anticipates a double-digit CAGR over the next five years.
• 2025 sales are projected between $725 million and $765 million.
• The company aims to improve gross margins by 5 percentage points over five years.
• EXPAREL's growth was modest, with a 1.5% increase from Q1 2023 to Q1 2024.
• ZILRETTA's 2024 revenue was approximately $118 million.

Operational Updates

• New CEO Frank Lee and CFO Sean Cross joined in 2024, alongside other key leadership changes.
• EXPAREL and ioverao are included in the "No Pain Act," supporting non-opioid pain management.
• ZILRETTA's marketing and specialty pharmacy programs are being enhanced.
• ioverao received CMS reimbursement codes and new product innovations.

Future Outlook

• Pacira plans to develop five novel programs by the decade's end.
• The company continues to focus on de-risked business development opportunities.
• Legal strategies regarding EXPAREL IP are advancing, including appeals and lawsuits.
• The "No Pain Act" is expected to positively impact EXPAREL and ioverao.

Q&A Highlights

• Surgical volumes are not expected to hinder EXPAREL's growth.
• Tariff exemptions on pharmaceuticals are in place, with manufacturing in the US and UK.
• No imminent generic launch for EXPAREL is anticipated.
• Pacira balances commercial investments with pipeline growth, maintaining strong margins.

For a detailed review of Pacira's presentation, please refer to the full transcript below.

Full transcript - 24th Annual Needham Virtual Healthcare Conference:

Serge Belanger, Healthcare Analyst, Needham: Hi. Good morning. I'm Serge Belanger, one of the healthcare analysts at Needham. Wanna welcome you to our twenty fourth annual healthcare conference. And for next fireside chat session, we have Pacira Biosciences.

The company's CFO Sean Cross is with us to to talk about the company. I'll hand it over to to Sean in a in a few seconds so he can give us a a quick overview for those who aren't familiar with Pacira. And just wanna highlight that we do have the capabilities to take q and a. For those listening in on the portal, you can submit questions there and we'll take them as as they come in. So that being said, Sean, if you can provide just a quick overview of the company, I think it'd be useful to to start our fireside here.

Sean Cross, CFO, Pacira Biosciences: Great, yeah, thanks for having us. We appreciate being able to attend the conference. I can't believe it's been twenty four years, so congrats on that one. So just a brief company overview for those of you who don't know Pacira, I can go through some recent developments and our priorities for 2025 also, but the headline is we were a biopharmaceutical company that delivers innovative non opioid pain therapies with the goal of transforming the lives of patients. So the key here is non opioid pain therapies.

We'll talk about our three commercial products here in a second, but earlier this year we announced our five by 30 plan, which is a sort of a high level plan that we were implementing over the next five years to transition into a innovative biopharmaceutical organization on the back of three best in class products that we're currently commercializing. So in terms of the five by 30 plan, there's sort of two broad strategic initiatives here. The first is accelerating and focusing on growth in our strong commercial base business. And again, for those who haven't followed Pacira over the years, we have three best in class products that are generating significant cash flow. They're called EXPAREL, ZILRETTA and ioverao.

EXPAREL is the market leading long acting local analgesic for post surgical pain, so provide it's applied during a surgery and provides up to seventy two hours of pain relief when the pain is worse, you know, that sort of the pain spike it blunts or eliminates that for patients. It is again long acting local analgesic for post surgical pain. The second product and our second largest product is called ZILRETTA. It's the only FDA approved extended release intra articular corticosteroid injection that provides up to three months of osteoarthritis knee pain relief. And then the third product is called ioverao, it's the only novel handheld device that provides immediate long lasting drug free pain control using advanced cold technology and you can see more details for all of these products on website.

And so out of the five by 30, in terms of growing the base business, there's three components of that. The first is to treat more than three million patients with a Paceira product annually, again, greater than three million patients. The second is reinvigorating the top line growth to double digit CAGR over the next five years and then the third is to improve our gross margins by five percentage points over the next five years, so approximately a point a year. Then in terms of the second strategic imperative with regard to the five by 30 plan is doing business development deals, know, slash partnering transactions, you know, and building out an innovative pipeline with five novel programs in development at the end of the decade. And we're focused on musculoskeletal pain and adjacencies with the key goal of becoming the therapeutic area leader in musculoskeletal pain and adjacencies.

And in terms of the pipeline, we're really focused on prioritizing mid to late stage de risked opportunities. So more specifically, product candidates with validated mechanisms of action, you know, and reimbursement pathways. So we will take a look at and we are taking a look at potential candidates where, know, with of course the scientific and the clinical as well as the corporate access or the reimbursement team in parallel just to make sure that we've checked all the boxes before we move forward with something. And also we recently announced the acquisition of our remaining ownership stake of a company outside of Berlin called GQ Bio, which was the innovator of our key pipeline program called PCRX201 that I'm guessing we'll talk about a little bit later. But that acquisition is sort of reflective of this five by 30 strategy by adding this very interesting first of a kind high capacity local delivery platform for genetic medicines.

The transaction also brings us a preclinical portfolio with disease modifying potential in prevalent musculoskeletal disease of some R and D talent, but also the opportunity for our BD team to potentially monetize the platform in areas that are in therapeutic areas that are non core to us. So that's a little bit of a mouthful, but sort of for those who aren't familiar with Pacira, hopefully gives you a decent overview of what we're up to.

Serge Belanger, Healthcare Analyst, Needham: That's amazing. You said nice overview. I think starting in late twenty twenty three, the company underwent a variety of different changes, especially at the at the management level. Just curious what brought on these changes and what enhancement enhancements or additional capabilities you were looking for in these organizational changes?

Sean Cross, CFO, Pacira Biosciences: Yeah, absolutely. So, we feel very fortunate for a largely new management team to sort of take the reins from a group that carved an asset out of Sky Pharma, did a series A, took the company public and ultimately set the foundations for a company that's generating over $700,000,000 a year in revenue and generating significant cash flow. When the board, you know, the board's gone through a bit of a refresh, you know, as time has gone by and they brought in a new CEO, Frank Lee, earlier in 2024, so just over, you know, a year and a quarter ago roughly. Then since that time, I came on board in October, we recently appointed Brendan Tien as Chief Commercial Officer, Chris Corbett, who's a long time Genentech vet as Chief Business Officer and they're sort of reflective of our bringing additional experience to Pacira at this important stage of our evolution. So then sort of double clicking beyond the executive team, when Frank came on board, the company has made significant progress over the past year.

That's really enhancing the organization with new talent and capabilities. So put together, what Frank calls the foundation for a modernized commercial medical and market access powerhouse and that in addition to some recent regulatory success that we've seen in implementation with regard to the No Pain Act that we believe this is the right foundation that can help accelerate the company's growth here over time. So it was medical market access and improving the capabilities of clinical operations for the pipeline and then bringing on some additional senior leadership team that we feel will help us achieve one of the key components of the five by 30, which is double digit top line growth over the next five years.

Serge Belanger, Healthcare Analyst, Needham: And the company provided 2025 guidance a couple months ago. Maybe if you can just talk about the top line part, I think seven twenty five to seven sixty five for in sales for for this year. You know, what are the main drivers for that and what do you expect from each of your your products?

Sean Cross, CFO, Pacira Biosciences: Yeah, absolutely. So as you mentioned, we put out guidance sort of a handful of weeks ago and as mentioned just a few moments ago with this upgraded commercial medical market access powerhouse concept that the we expect the commercial investments we made in 2024 will begin to bear fruit and enable our top line to achieve that double digit CAGR over our five year planning period. So for EXPAREL, as we talked about very briefly, a few moments ago, there's a bipartisan act called no pain, which includes 11 non opioid pain products, which is encouraging and providing economic incentive to for providers and payers to enable patients to have more cutting edge modern non opioid pain solutions. EXPAREL and ioverao are two of our products are two of the eleven's, we're pretty proud about that. So again, on EXPAREL, we're pleased with the positive early signs around no pain with regard to some formulary wins as well as recognition of the new J code that we achieved or that we received late last year.

And we also mentioned this is a no pain is not a light switch, it's going to take some time for our customers to integrate this new reimbursement. But again, we're seeing some early signs of success in recognition of no pain and expect more meaningful update to begin in the second half of the year. So we would anticipate, so if you look at EXPAREL and I'll just give you a couple of specific examples off the top of my head and if I'm off by a tiny amount, you know, in advance and take it with a grain of salt, but you know, Q1 over Q1 growth for XBREL twenty two to twenty three was under 1% and I think it was around 0.9%, twenty three to twenty four Q1 to Q1 was roughly 1.5%. So if we start to see an uptick in EXPAREL in the second half of the year on the back of the no pain, that's just sort of a benchmark to keep in mind where we were growing sub 2% over the past couple of years quarter over quarter, but we're excited about where we potentially can take EXPAREL on the back of no pain.

For ZILRETTA, which is our knee OA pain corticosteroid injection, long acting, this is a profitable product, it's a significant contributor to the top line, it did almost 120,000,000 in 2024, closer to 118, but within spitting distance, we're excited about where we can take ZILRETTA. This is a product that's promotionally sensitive and we as you know, mentioned in terms of sort of modernizing our sales and marketing infrastructure, we made a number of changes in the latter part of last year, to better focus on generating additional share of voice, increasing the reach, driving awareness around ZILRETTA's key advantages. So we're excited about where we can take ZILRETTA, these changes will take time to bear fruit, but we do achieve believes ZILRETTA will be capable of achieving year over year growth as 2025 progresses and as we get into 2026. For Alvera, which is our smaller product, we also have a key growth driver kicking in this year with separate CMS reimbursement. We received a product specific C code last year C9809 and this is really important as physicians are now eligible to receive up to $256 for ioverao when it's administered in ASC or HOPD settings via this new code.

And this is in addition to the procedural fees that they already received. Now just, you know, ioverao is on a much smaller base, but we see the product having the ability to grow over time. And then to that end, we are we got approval for an innovative smart tip for the ioverao device that was approved late last year. And this is specifically designed as a medial branch block for the millions of patients in America who suffer from low back pain. So that's a potential driver for us here going forward and we're pretty excited about the potential there.

Serge Belanger, Healthcare Analyst, Needham: Okay, I wanted to dig a little bit more on and No Pain. I guess first on Xperil, for those who've been following the the story for a long time, surgery volumes were, you know, a key driver for EXPAREL growth. So just curious where those those volumes are and whether they've able or growing at this point?

Sean Cross, CFO, Pacira Biosciences: You know, it's we're not seeing any difference than over the last couple of years, you know, thankfully we're post COVID. But in terms of surgical volumes, you know, we're not hearing anything that's a headwind by any stretch of the imagination for EXPAREL. But with regard to, you know, no pain, there's no pain act, again, was about bipartisan acts we talked about earlier. We really think that we're as mentioned pleased by the early positive signs around no pain. It is going to take time for our customers to integrate this new reimbursement and I'll give you an anecdote, we've the executive leadership team has been doing field rides with certain in certain geographies and having conversations and you know, getting to know better some of our important customers.

And I was in Central California in mid February, so just about six weeks ago and we were at a hospital that is a real proponent and user of EXPAREL and part of the reason for our visit was to help the broader team prepare for what was going to be sort of a key meeting to discuss the potential rollout of no pain and where they might want to take EXPAREL. In addition, additional indications or additional surgeries compared to how they've been using it in the past, despite their enthusiasm for the product on the clinical side. And it was a little surprising to me that it took this proponent of EXPAREL six weeks to get together, the hospital, pharmacists, somebody from the finance team, surgeon champions, the OR nurses, etc. To get together, but it's just, I think a reflection of some of these larger bureaucracies where it took some time to get everybody's calendars aligned and to talk about the No Pain Act. And so it's just again, it's sort of an anecdote and reflector of that we expect more meaningful uptake to begin in the second half of the year as sort of these battleships get turned and where they're implementing the reimbursement and understanding, you know, frontline level, what does ASP plus six mean for them on the bottom line.

So again, the big picture year over year growth in our guidance is largely aligned around EXPAREL volume and sales dollars, sales dollars, sorry. You know, the January price increase is largely offset by discounting associated with our GPO partnerships. So we expect, again, the top line is a reflection largely of volume growth.

Serge Belanger, Healthcare Analyst, Needham: So is is there no pain rollout going as as expected or if just curious if the changes at HHS have also impacted CMS kind of

Sean Cross, CFO, Pacira Biosciences: Yeah, you know, I think the on the you know, my tea leaves are probably is as good as yours in this regard, but again, we haven't seen any of the these changes at CMS or FDA affect us at least near term directly. As a reminder, it was a bipartisan bill and the first Trump administration was, you know, had an initiative to focus on battling the opioid crisis and we and these two of the 11 products are part of the solution. So we feel pretty good about where we are, but of course, we're keeping our eyes sort of wide open.

Serge Belanger, Healthcare Analyst, Needham: Okay.

Sean Cross, CFO, Pacira Biosciences: And then just as a reminder, EXPAREL was previously reimbursed by CMS as part of a bundled payment in hospital outpatient settings. Now it has its own product specific J code, we talked about ASP plus six and so basically means at a high level, we have a reimbursement pathway for approximately eighteen million outpatient surgical procedures, six million of those have CMS coverage and about twelve have commercial coverage. So we're, again, you know, cautiously optimistic, but keeping our eyes wide open with regard to, you know, what's happening at CMS and FDA.

Serge Belanger, Healthcare Analyst, Needham: Yeah, well, while we're on the subject of our government, you know, one of the topics right now, obviously, tariffs is is very focused.

Sean Cross, CFO, Pacira Biosciences: Yes.

Serge Belanger, Healthcare Analyst, Needham: I I know pharmaceutical products have been exempted, but here's what the situation would be and if there would be any impact for EXPAREL or any of your products?

Sean Cross, CFO, Pacira Biosciences: Yeah, we're of course, the work and looking at the extremes as you mentioned, we've, pharma has been sort of spared, but as we've seen some of these spontaneous decisions that can happen very quickly, we have to be sort of ready for everything. I think on the positive side that we do have manufacturing facility in San Diego. So we make EXPAREL domestically, we also have a facility in Swindon in The UK and we can sort of you know, ship the volume percentages you know, over time as necessary. We also assemble ioverao product in San Diego and but we do receive the tips for ioverao manufactured in Mexico, but you know, knock on wood there's you know, in terms of the grand scheme of things, you know, even in the extreme with regard to the tariffs on those tips and the API, it's we're pretty fortunate that we manufacture largely in The US and are feeling pretty good about where we are, but still being mindful that things can change very quickly.

Serge Belanger, Healthcare Analyst, Needham: Okay. Just going back to no pain quickly. Like in the past, Frank's talked about the, the opportunity in the ASCs and HOPDs was about 6,000,000 procedures covered under Medicare and another another 6,000,000 with with commercial. Is that kind of still the the rough outline of the numbers for the market opportunity?

Sean Cross, CFO, Pacira Biosciences: Yeah, so in terms of outpatient surgical procedures, there's approximately six million that have CMS coverage, twelve million have commercial coverage. And if you think about the total addressable market, approximately 75% of the EXPAREL relevant procedures are performed outside of the hospital inpatient setting. So the way I think about it is sort of forty-forty-twenty at a high level, so approximately 40% of the total addressable market is inpatient, that's roughly 8,000,000, eight point one million and approximately 40% in the outpatient and then another 20% at the ASC, the sort of the big picture.

Serge Belanger, Healthcare Analyst, Needham: We expect the commercial plans to mirror or follow what the the Medicare plans are doing in terms of coverage?

Sean Cross, CFO, Pacira Biosciences: Yeah. We we think they will. We we've seen a few commercial payers beginning to recognize the importance of reimbursing EXPAREL outside of the bundled payment and adopting no pain like policies. We think it's going to take some time, but we are we're encouraged about some early signs there.

Serge Belanger, Healthcare Analyst, Needham: One of the focuses ahead of no pain, was on expanding access. So the three forty b hospitals, I think you entered some GPO contracts. Where are those efforts now and are are they still ongoing? Should we expect more GPOs contracts to to come on board? Yeah.

Sean Cross, CFO, Pacira Biosciences: We have we have two GPOs on board. We we implemented one earlier in 2024 and then one in the second half of twenty twenty four and we anticipate the final GPO partnership, knock on wood will be inked in the first half of this year and once that happens, approximately 80% of the EXPAREL business will be covered by GPO partnerships. And I think it's pretty remarkable that EXPAREL ramped to more than a half a billion annual sales without participating in 340B or GPO partnerships until recently. And as you know, they're industry standard for hospital products. So it's you know, should just sort of help grease the wheels, so to speak in terms of, you know, us playing ball and being good partners and beginning to reinvigorate the top line growth for EXPAREL in particular.

Serge Belanger, Healthcare Analyst, Needham: Here's how you view the competitive outlook for EXPAREL and if you've gotten investors have been asking whether the the new Vertex product, the x five forty eight or or Xenrelaf by Huron is still kind of a a threat to to Xpero.

Sean Cross, CFO, Pacira Biosciences: Yeah, so we're not seeing, know, can we want as many patients as possible to, you know, have sort of modern non opioid pain, access to non opioid pain therapies. So we're super supportive of no pain and the 11 products that are in there. In terms of Heron, we don't see a tremendous amount from them out there. But again, if that works for certain patients, that's great to we're supporters of being able to provide non opioid pain therapies wherever possible. But I think from an EXPAREL, we've had over ten years of efficacy and safety track record, over 15,000,000 patients have been the beneficiaries of EXPAREL and we're very confident that it will remain the market leading branded long acting local analgesic for years to come.

In terms of Vertex, it's been I think particularly interesting where that you know, they're the megaphone that they're able to speak through and for the number of investors in particular who are invested and made a lot of money in Vertex stock, it's really provided an interesting opportunity for us to, you know, start getting some inbounds for more sort of biotech investors who maybe hadn't followed Pacira previously, but now that or had not focused on pain because they, you know, the assumption was it's largely genericized opioid market and not a lot of room for innovation, particularly because of those you know, cost advantages for generic opioid products. Now that Vertex is out there talking about the importance of an alternatives for modern non opioid pain alternatives, we view it as a positive. As a reminder, EXPAREL is utilized in the hospital or ASC setting, whereas the Vertex product is a prescription like you might get for an opioid after you have surgery. So we view it as complimentary and it has been interesting that we're getting a lot more attention with regard now that the sort of broader biopharma and even generalist universe is hearing what Vertex has to say about non opioid pain options?

Serge Belanger, Healthcare Analyst, Needham: I don't think we can speak about EXPAREL without talking about the IP.

Sean Cross, CFO, Pacira Biosciences: Of course.

Serge Belanger, Healthcare Analyst, Needham: It was took up a lot of oxygen back back in the summer last year. Right? So I guess curious where we are now and whether what should we should expect in terms of a potential generic for the product.

Sean Cross, CFO, Pacira Biosciences: Yeah, no, appreciate that. And I think the yes, you would be remiss if we didn't ask about the litigation. I think that, you know, just a quick digression that on the positive side where, you know, once we announced the two year data for PCRX201 that helps sort of shift or balance out the conversation a little bit in terms of the future of the company. We announced that interesting two year data last December and we'll be announcing three year data at some point this year in addition to some other double clicks on individual patients, which we can if we have time, we could talk about that or we can do it at some other time. But the high level with regard to litigation, we're advancing three legal tracks, so nothing has changed since we, know, put out guidance or announced Q4, so advancing three legal tracks.

So the first one is an appeal and the second two were patent infringement lawsuits. So the appeal is we're pursuing an appellate review of the New Jersey court's finding that our four ninety five patent was not valid and that was as you referenced announced last summer and caused some significant pressure on the stock. So that appeal was filed in September of twenty twenty four and we'd expect the appeal process to take approximately fifteen to eighteen months. So you know, although we're confident in the appeal, we don't anticipate having really more visibility or sort of a definitive outcome until, you know, mid twenty twenty six plus or minus. So second, we're advancing a lawsuit against eVenus for infringement of our five seventy four patent and we believe the five seventy four patent addresses issues that the New Jersey District Court had with the four ninety five patent and it's a higher hurdle for eVenus to clear.

This we're awaiting a trial date, so this one is going to take longer than the appeal. And then the third is the team continues to innovate. We announced late November, early December plus or minus last year, the issuance of a first patent from a brand new family of patents called the nine forty patent and it's related to the 200 liter manufacturing process in San Diego and it provides protection into 2024. So we filed a separate patent infringement lawsuit against eVenus for this patent in not in New Jersey, but in the Northern District Of Illinois, which is for Syneas' place of principal place of business in The US. So that we also do not have a trial date yet for that and it's going to take similarly long to the May process.

So when we get the question, I'd say with moderate frequency is there going to be are we worried about an at risk launch by eVenus, you know, Fresenius Kabi who's their US marketing partner. And we don't believe that an at risk launch is imminent. As a reminder, we have I think we're now up to 18 Orange Book listed patents and we continue to innovate. So again, and some of this is based upon information we've received through the ongoing court proceeding, but we don't believe an at risk launch is imminent. And of course, if it were to our perception were to change, we would adjust our strategy accordingly.

So and of course, we're, you know, we understand the importance of keeping investors informed and we'll continue to provide updates as appropriate. But, you know, unfortunately, particularly with the appeal, we're not gonna hear anything until 2026.

Serge Belanger, Healthcare Analyst, Needham: Yeah. Do we we have visibility yet on whether they have the the ability to launch and supply this market or they're staying on the sidelines?

Sean Cross, CFO, Pacira Biosciences: Yeah. I know it's a good question. So, you know, one thing we do know is that they are required to provide us a sample, a commercial sample and so that we can can test it and see if it's actually you know, if it's actually EXPAREL or if it's some derivation of EXPAREL and they have not been able to do that and they've told us that they aren't able to do it currently. So as you can read a little bit between the lines, but it's just an additional sort of data point and reinforcement that we don't think an at risk launch is imminent.

Serge Belanger, Healthcare Analyst, Needham: Just wanted to touch on ZILRETTA for a bit here. You mentioned it was a a promotionally sensitive product. How can we get the, you know, additional growth out of ZILRETTA? I guess, is the first question and the second one just where you are in terms of the coverage for the product?

Sean Cross, CFO, Pacira Biosciences: Yeah. So you know, from a big picture perspective, I think in general, orthopedics are relatively familiar with ZILRETTA and they view the product favorably. But I'm sure it's the orthopedics who are familiar, but I say, you know, sort of in general, it's been kind of interesting that the overall awareness is relatively low, but that's something that we're I think excited about in terms of this medical market access powerhouse concept and that's something that we're working on to improve as we go forward. Patients who are able to have access to ZILRETTA view the product very favorably with the ability to have sort of three months plus or minus of pain relief. So we believe it can contribute to our top line growth here over time.

So what we're doing some things behind the scenes, rolling out a specialty pharmacy program to help alleviate some of the costs of acquisition for our customers and some other things that we'll talk about here over time. In terms of the level of coverage, it's typically administrated in the office setting and is in a good position with stable secure reimbursement via the J code. And then I think in terms of sort of looking forward where we are just as a reminder, we're running a phase three registration trial for ZILRETTA in shoulder OA and assuming this is successful, it could become the first and only long acting corticosteroid approved for shoulder OA. From a market potential perspective, there's approximately one million intra articular injections performed each year for pain associated with shoulder OA. So, keep an eye on that, it's enrolling nicely at the moment and we anticipate having a readout top line data for that phase three registrational study roughly in the middle of twenty twenty six, which is sort of a reflector of the advancement of our pipeline from a bigger picture where we have indication expanding, quote unquote relatively low risk trials for existing products.

So just as mentioned ZILRETTA and shoulder OA and we have a trial ongoing registration trial ongoing for spasticity, which is an indication for ioverao and that will read out in the middle of Q2 of twenty twenty six also. And then as a reminder, we have this very innovative potential game changer in PCRX201 for pain and stiffness associated with osteoarthritis of the knee. And we had two year data with one injection last December, we'll have three year data at some point in this year and we're also moving forward with a two part phase two trial for PCRX201. That is like I said, it's the business person here, it's a potential game changer, you can talk to the scientists to get more detail on that one. But yeah, so advancing not only sort of line extension indication expansion trials for ZILRETTA and shoulder OA, but also a potential game changer in PCRX two zero one in knee OA as well.

Serge Belanger, Healthcare Analyst, Needham: So so clearly there's, I guess, a an increase in focus on on r and d with the the five times 30 strategic growth plan. Think you've talked about BD. I mean, how much appetite is there to acquire new products and would they be more on the commercial side or are you willing to go earlier stage development similar to 02/2001?

Sean Cross, CFO, Pacira Biosciences: Yeah, so we'll continue to talk about the sort of evolution of the BD thesis, but the high level is as we advance into a revolve into a more innovative biopharmaceutical company, We're looking to add de risked as we talked about previously, don't want to take target risk, we want to make sure the product assuming it gets approved, we'll have reimbursement. We're doing all of that work upfront in parallel and with the goal of having five novel programs in clinical development by the end of the decade. And I think if you if I put on my former investment banker hat to the extent that we are able to successfully increase the top line growth and have a nice balance of indication expansion, as well as more novel products in clinical development. We're going be thoughtful about that, so we're not going to do something crazy and become EBITDA negative as an example, but I think we'll very thoughtfully invest in what we think are high potential ROI programs in development while operating margins and adjusted EBITDA and cash flow.

Serge Belanger, Healthcare Analyst, Needham: Yeah. Maybe just to wrap up, I've been following the company for a long time, but do you feel there's anything that's misunderstood or underappreciated in the current iteration of the company by investors?

Sean Cross, CFO, Pacira Biosciences: No. I I don't think so. I I think the and I believe the opportunity for we talked a little bit about Vertex earlier and then we also talked about kind of this concept of a refreshed management team and but also there's still lots of institutional knowledge around the table and the opportunity to take for Frank to take a fresh look at the three commercial products and how can we with IP going out to 2,044 for EXPAREL with the new patents, how can we reinvigorate top line growth and get patients more patients access to non opioid pain therapies. And then I think we'll again, we'll thoughtfully evolve the pipeline over time and once we see three year data, I think we'll end with the Vertex microphone, perhaps a broader group of investors will take a look at us and start focusing on the pipeline in addition to a company that's generating significant cash. So I feel like we're in a pretty unique position where we have the risk reward profile of significant potential upside with regard to the pipeline, but also sort of thoughtfully reinvesting in the business and making sure that we're growing the top line appropriately while maintaining strong balance sheet and margins.

So, you know, taking that financing risk off the table with a, you know, a biotech or a biopharma like pipeline leads, you know, I'm biased, but it seems pretty interesting to me.

Serge Belanger, Healthcare Analyst, Needham: Okay. I think we're up on time. So I have to end it here. So I wanna thank you Sean for spending time with us this afternoon, telling us more about Pacira. Appreciate it.

Sean Cross, CFO, Pacira Biosciences: Thank you. We look forward to seeing you in person. Talk to you soon.

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