Pacira at Raymond James Conference: Strategic Growth and Challenges

On Wednesday, 05 March 2025, Pacira Pharmaceuticals (NASDAQ: PCRX) presented its strategic vision at the Raymond James & Associates’ 46th Annual Institutional Investors Conference. The company outlined its ambitious "five by 30" strategy, aiming for leadership in non-opioid pain management, while acknowledging challenges such as litigation and market shifts.

Key Takeaways

• Pacira aims to transform into a leading biopharmaceutical company with its "five by 30" strategy.
• The No Pain Act is expected to boost revenue in the latter half of the year.
• Litigation with eVenus over EXPAREL remains a concern, but an at-risk generic launch is not anticipated.
• The acquisition of GQ Bio supports pipeline goals and financial efficiency.
• Pacira plans a $150 million share buyback to return equity to shareholders.

Financial Results

• Revenue: Pacira reported over $700 million in revenue for 2024.
• Cash Position: The company ended 2024 with $485 million in cash.
• Growth Rate: The top-line growth from 2023 to 2024 was 4%, with EXPAREL growing 3%.
• 2025 Guidance: Mid-single-digit growth is expected for EXPAREL, with a 6% increase at the midpoint.
• Margin Improvement: Aims to improve gross margins by 1 percentage point annually over five years.
• Spending Increases: R&D spending increased by 11%, while SG&A spending rose by 8% from Q4 2024.

Operational Updates

• No Pain Act: Pacira is capitalizing on this act to enhance revenue, forming GPO partnerships covering 80% of EXPAREL business.
• DTC Campaign: Initiating campaigns to increase patient awareness of non-opioid solutions.
• Manufacturing Expansion: Two new 200-liter suites for EXPAREL are expected to improve margins.
• Pipeline Development: Progressing with trials for EXPAREL (shoulder OA) and ioverao (spasticity), with data by mid-2026.

Future Outlook

• Five by 30 Strategy: Targets include treating over 3 million patients annually and achieving double-digit growth.
• PCRX-201 Program: Preparing for Phase 2 trials for osteoarthritis knee pain, with data expected by end-2026.
• Capital Allocation: Focus on reinvestment, balance sheet management, and a $150 million buyback program.

Q&A Highlights

• EXPAREL Litigation: No imminent risk of generic launch; legal protection efforts continue.
• Settlement Possibility: Open to settlement with eVenus if strategically beneficial.
• No Pain Act Impact: Expected to significantly boost EXPAREL and ioverao sales later in the year.
• GPO Strategy: GPO partnerships seen as vital despite associated discounts.
• PCRX-201 Potential: Promising early data for knee osteoarthritis pain relief.

In conclusion, Pacira remains optimistic about its strategic goals despite ongoing challenges. For more details, refer to the full transcript below.

Full transcript - Raymond James & Associates’ 46th Annual Institutional Investors Conference 2025:

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Hi, everyone. I’m Gary Nachman, a senior biopharma biotech analyst at Raymond James. And we’re very excited to have Sean Cross, CFO of Pacira with us. Pacira is focused on pain management and has a few non opioid products in the market for treating pain. The largest one being EXPAREL for post surgical pain, that’s starting to benefit from the new no pain policy implemented in the beginning of the year.

And now the company is also looking, to develop its pipeline and just announced a small deal last week for GQ Bio to help that cause. They just reported earnings last Thursday and gave solid guidance for 2025 and also gave bullish longer term projections for the company’s outlook earlier this year. So So it’s great to have you here, Sean, to talk through the Pacira story, and thank you for coming.

Sean Cross, CFO, Pacira: Thanks. Thanks for having us. Been a great conference so far.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Excellent. So since this is more of a generalist audience and people may not be as familiar with Pacira. First, spend a few minutes giving a high level view of the company’s strategy, how it’s been evolving, especially with new leadership in place, and then just a quick overview of your three marketed products.

Sean Cross, CFO, Pacira: Sounds great. So just at a high level, so Pacira is a commercial stage biopharmaceutical company, and our mission is to deliver innovative non opioid pain therapies to transform the lives of patients. So with regard to the strategy, earlier this this year, we unveiled something called the five by 30 strategy, which provides a roadmap for how we intend to evolve from a specialty pharmaceutical company to a more innovative biopharmaceutical company and become the therapeutic area leader in non opioid pain, in musculoskeletal pain and adjacencies. So from a also a high level, as Gary mentioned, generating revenue, we did just over 700,000,000 in revenue in 2024. We have about 800 employees.

A field force in The US, we manufacture two of our products at a site in San Diego, generating significant cash flow, ended the year with about $485,000,000 in cash. And also we’re excited about, our pipeline programs, which includes two programs that are registrational trials focused on indication expansion for two of our existing on market assets and then also an earlier stage program called PCRX two zero one that could be potentially transformative for osteoarthritis pain of the knee that we’ll read out at the end of next year.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Yeah. No. That’s good. We’ll dig into all that deeper. So thank you for that.

So just regarding the five by 30 long term projections that you guys laid out in early January, just describe the components of that, explain your confidence that you can achieve those objectives. And I guess the one people are most focused on, in particular, some of the key factors that are expected to drive a low double digit growth CAGR for revenue, between now and the end of the decade. I think, you know, people were happy to see that long term guidance. So just explain your confidence.

Sean Cross, CFO, Pacira: Yeah. So thanks. We’re I don’t think we wouldn’t put out these long term objectives if we if we weren’t confident we could achieve them. But there’s, you know, five key components, of course, in the five by 30, and these are high level goals that we’re looking to achieve by the end of the decade. The first surrounds patients, with the goal of treating annually more than three million patients with Pacira products.

The second, is products, and that’s generating double digit compound annual growth of our existing portfolio over the next five years. Three is profitability, and that’s focused on gross margin. And we intend to improve gross margins by approximately a percentage point a year. So we achieve a five point improvement over the next five years. Number four is, is pipeline where we intend to have five novel programs in clinical development over the next five years.

And then the final is partnerships. So we intend to enter enter into both commercial and pipeline partnerships to expand the business over the next five years. So those are sort of the high level aspirational goals that we’ve put forth in January of this year.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Okay. And then just dig a little deeper on the revenue, getting to the low double digit CAGR, what you feel the big drivers of that are, when you think of the three market products, and then we’ll dig more into the key products.

Sean Cross, CFO, Pacira: Yes. So we have a couple of tailwinds that are both from a company perspective as well as a regulatory perspective. So last year, we spent a considerable amount of time and effort modernizing our sales and marketing infrastructure to put in place a marketing medical and market access powerhouse to set us up to be successful to take advantage of something called the No Pain Act. So the No Pain Act went into effect on January first of this year, which provides favorable reimbursement in CMS, for patients to be able to have access to non opioid pain solutions in certain settings. So that opens up the door, particularly in the hospital in the ASC setting, where many non opioid pain products were bundled into one reimbursement, whereas this now separates them from the bundle and provides incentives so the patients can receive modern cutting edge non opioid pain therapies, in particular for postoperative pain.

But our ioverao product is also one of the 11 products that’s involved in the Snow Pain Act. So there is some some tailwinds that we see, you know, not only based upon the infrastructure and modernization that we’ve implemented over the past year, but also taking advantage of the No Pain Act.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Okay. That’s helpful. In order to achieve that, obviously, you’re very confident that we’re not going to see a generic version of EXPAREL over that period of time. So let’s address that. So where do you currently stand on the EXPAREL litigation with eVenus, the generic filer?

You know, what’s your latest thinking on when or if eVenus could launch a generic at risk?

Sean Cross, CFO, Pacira: Sure. The the the the common question we’ve been receiving since, since last summer. So let me just begin by saying, and Frank mentioned this several times on the the earnings call last week, that we do not believe an at risk risk launch is imminent. So that is sort of point number one with the backdrop. We are continuing to advance three sort of legal processes that are ongoing.

The first is we filed an appeal, as you know, for the patent that was that was overturned last summer. That appeal was filed in September, and we anticipate that process will take fifteen to eighteen months before we get a ruling. And then in parallel, we also have two patent infringement lawsuits ongoing, including a more recent one for a new family of of intellectual property that we feel is much stronger than than some of the the previous families, even though we still believe in, of course, the earlier filings. So, you know, the those trial dates have not been set yet, so that will be ongoing in parallel. And then in the background, the team continues to innovate.

We have more patents forthcoming, and we feel strongly about the, the intellectual property.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Okay. One of the things that people have been talking about a lot is a possibility of a settlement. So I’ll just ask the question. Is there any dialogue between you and e Venus? Is that something that we should think is a possibility?

And what would be a realistic time frame? I know, I mean, there’s a whole puzzle here that needs to be sorted through, but it sort of felt like there could be a logical path to that at some point.

Sean Cross, CFO, Pacira: Sure. So let me just, again, start that this is an active legal matter, so I need to be sort of very careful about about what we can say. That said, we’ll continue to take necessary steps to protect our intellectual property, the business, and the key stakeholders. But that said, we also recognize that there is an overhang and there there could be value as it relates to certainty. So if a settlement makes business and strategic sense, it’s something that we would certainly contemplate as business people.

And I think as Frank has said previously, you know, we could settle tomorrow if we wanted to have an unfavorable settlement for our key stakeholders. So in particular, with the backdrop of the new intellectual property, and the continued innovation, we feel feel pretty strongly about our position, but we also recognize the potential value of certainty for the right settlement.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Okay. That’s fair for the time being. Okay. So let’s get into the no pain implementation. And what you guys have been doing to take advantage of that.

Obviously, before you joined the company, there was a lot of prep work over the course of last year. But maybe you could talk about some of the key initiatives that are gonna take hold over the course of this year? And what’s been the early read on the overall awareness of no pain with both physicians and payers, just to give you comfort that this is something where you’re gonna get significant traction.

Sean Cross, CFO, Pacira: Yeah. Absolutely. So, you know, as you alluded to last year, we made significant progress on the commercial front, modernizing the sales and marketing infrastructure, establishing this marketing, medical and market access powerhouse, which is particularly key. As it relates to this, we formed two new GPO partnerships, as you know. And then in addition to that, we received a we secured a product specific J code for EXPAREL.

So with that as a backdrop, we’re we’ve continued these initiatives, including, we’re in the process of adding a third GPO partnership. And once that’s in place, approximately 80% of the EXPAREL business will be under contract. So that’s an important number one. And then in addition to that, because we’ve had we’ve engaged with the physicians and with the payers through this marketing medical and market access powerhouse concept, we believe it’s now time to, do some targeted DTC campaign where we’re now making patients aware of the No Pain Act even more than we have been previously, and also so they can advocate for themselves to have non opioid pain solutions provided during their during their care. So that’s we have a pilot study ongoing.

In the beginning of this year, we’ll certainly adjust accordingly based upon leading indicators. But, what we’ve seen so far is encouraging. And, and then some of the feedback that we’re getting from the field is that we’re again, it’s early days, but, we’re encouraged by the progress we’re making under the No Pain Act thus far.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Okay. That’s definitely good to hear. And I mean, this is going to be a gradual build, obviously, so it’s going to take some time. So we need to be a little patient. But when do you think we’re going to see a real inflection, particularly with EXPAREL and ioverao benefiting from this?

Sean Cross, CFO, Pacira: Yes. So I think we’ve said several times publicly that we anticipate this will will reflect in the top line in the second half of the year. You know, moving these hospitals who’ve been doing something the same way for the last ten years is like turning a battleship a little bit. We have to get all the key stakeholders in place, but the awareness with the physicians has always been there. And now we’re doing just very sort of hands on field work to to set these institutions up for success.

And I’ll give you even a little anecdote. So I was in the field two or three weeks ago, doing a field ride with one of our reps calling on hospitals. And this is a hospital that’s a a user of EXPAREL, and there’s physicians there that are advocates for EXPAREL. But it had taken until mid February to get all the key stakeholders into one room to discuss the implementation of how they can expand EXPAREL access using NoPayne. And it went even down to the detail of the IT person updating the code in the system that, you know, EXPAREL, as you know, comes in.

We sell it in twenty and ten milliliter vials, but the reimbursement is is done in milligrams. And so there’s, like, little details like that that are working through the system. So it’s a long winded way of saying that we anticipate for this and other reasons, we’ll see a real uptick in the second half of the year.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Okay. Good. You mentioned a third GPO that’s gonna be finalized, and that’s gonna happen sometime in the first half of this year. So maybe just take a step back and and talk about the strategy of of contracting with these three large GPOs that you said will get you coverage for about 80% of covered lives and just the process, you know, what sort of discounts you have to give up in order to get that and make sure that you have the increased utilization and just the overall impact on the gross to nets as a result of that and how you’re able to manage that.

Sean Cross, CFO, Pacira: Yeah. Sure. So the high level is we believe these GPO relationships are important investments in the growth of of EXPAREL. So it’s next stage of growth. As you mentioned, the third and final partnership will happen this year.

But with regard to the gross and net discount, think about it in the sort of mid single digits to provide that favorable pricing for them, which ultimately, over time, will be made up in volume.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Okay. And your guidance for this year, if I recall correctly, implies about mid single digit growth, right, for the EXPAREL franchise, about 6% I think or so at the midpoint. And one of the things that you mentioned is that you also can take a little bit of price increase to help offset a few of those percentage points. So is that something that you think will be consistent going forward or this is really just the year where you need to absorb that? And then going forward next year and beyond, you know, it’s sort of not an issue.

Sean Cross, CFO, Pacira: Yeah. So I think so the guidance reflects a couple of things. You know, it’s a strategic approach and in this transformation to innovative biopharmaceutical company. And as it relates to the GPOs, we had one on board for all of last year. There’s another one that came on board in the second half of the year, then we’ll have the third here in the first half in in the coming months.

So when you think about sort of a full year run rate, you’ll you’ll see that in, you know, all of them onboard for a year in, by mid twenty twenty six. So that’s how I would think about that. And then with regard to, the the the sort of mid single digit growth rate, just sort of a step back and a reminder, the company’s growth on the top line from twenty twenty three to twenty twenty four was about 4%. EXPAREL grew 3%. So whether it’s extrapolation or interpolation, the math people in the room can tell me what the right term is.

But if you think about the second half of the year being where we’re seeing the real uptick in EXPAREL and ioverao with no pain And then, you know, basing that on the previous year’s 4% growth, you know, 6% sort of feels about right.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Okay. And most of the device companies, they talk about procedure growth somewhere in the mid single digit range, at least for ortho. I’m not sure as much about soft tissue. Maybe it’s a little lighter than that. But so you’re assuming for now that you’re gonna grow roughly in line with the market, but that’s gonna accelerate.

Right? And you should grow ahead of the market over time.

Sean Cross, CFO, Pacira: You can sort of do the modeling on what the first quarters looks like. We don’t provide quarterly guidance. But again, if you think about 4% last year and sort of a ramp in the tail end of this year. Now, of course, we hope we overachieve and we’re operating to be successful here and overachieve, but the 6% sort of makes sense based upon history and what we’re seeing in the early days of no pain.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Okay. Great. Got it. Alright. Another element of your 2025 guidance is that you also had much higher spend than the street was expecting because you’re investing behind no pain.

And as you mentioned in your opening remarks, also trying to build out the pipeline more. So just talk through that rationale, why you guys are confident you’re going to get a good ROI on those investments. I think for a number of years, an important part of the story was the improving operating leverage. So I guess that’s gonna take a little bit of a pause because you wanna really invest behind the growth.

Sean Cross, CFO, Pacira: Yeah. So again, as mentioned, you have 4% growth year over year. They’ve been, you know, similar probably, you know, 2022 to 2023. And we’re confident with this investment in DTC very selectively. There’s a whole ROI story here with regard to the five by 30 goal of of achieving a double digit CAGR over the next five years.

And it’s pretty simple math on if we can grow it 10% CAGR over the next five years, what the value is, in the future compared to growing three or 4%. So that’s, I think, an important observation with regard to the ROI. So in terms of the, increase in R and D and SG and A spending, just a quick reminder also, if you look at the year over year growth, it’s pretty significant. But the organization, just as a reminder, is very different at the end of twenty twenty four than it was at the beginning of 2024. So which is why we specifically put in our guidance, just as a reminder, with the hiring in place, the marketing and medical access powerhouse, and the preparatory work for the PCRX two zero one Phase two, if you do an annualized run rate of Q4 twenty twenty four spending, The increase in SG and A is approximately 8%.

And I don’t know what your economists say inflation is, so there’s the logical component. But also with regard to this platform in place, very targeted DTC spend, that’s largely the increase that you’ll see over last year where we’re put putting in these targeted DTC programs. And as we get leading indicators in the door with regard to success, we’ll adjust those accordingly. And then secondly, on the r and d side, it’s, it’s an 11% increase compared to 2024, so the run rate of q four twenty twenty four. And that, again, is a very logical reflection of a couple of things.

We have two ongoing registrational trials for two of our existing products that are on market, so for EXPAREL and shoulder OA and then for ioverao and spasticity. So what you see in 2025 is a reflection of those ramping and so increased spend as you have more patients enrolled in the trial compared to last year. So a full year’s worth of spend, which is very logical and transparent increase. As a reminder, those trials read out at the end of or in the middle of twenty twenty six. That’s what we anticipate.

And those are both, indication expansion opportunities. So there is a assuming they’re significant ROI, in our opinion, to expand the the indications and the target audience, for those two, programs. In particular, for the ZILRETTA shoulder, there’s a million intra articular injections a year in the shoulder. There’s no long acting, alternative. So we think that’s a real opportunity for the company.

And then finally, with regard to the r and d spend, it’s the we have the preparatory work for the phase two trial for PCRX two zero one, our novel gene therapy program for pain associated with osteoarthritis in the knee. And what you’re seeing is a ramping of that phase two trial, the part a of the phase two trial, which we anticipate we’ll read out at the end of twenty twenty six. So this, again, it’s all, I think, relatively modest, very thoughtful about the potential ROI, and 11.8% increase with the backdrop of whatever percentage is, you know, from an inflation perspective is is relatively logical and and modest.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Okay. Great. That color was helpful. And then one of the targets in the five by 30 is to improve margins by five points over the next five years. So just to clarify that that’s operating margin.

And how much of that you think is gonna come from the gross margin line as you’re proven then? That’s a gross margin. That’s gross margin. Okay.

Sean Cross, CFO, Pacira: Gross margin. Yeah. So 5% increase in gross margin, and that will occur for two reasons. Number one is EXPAREL volumes growth will benefit from economies of scale, so a lot of typical manufacturing. And then secondly is we as you recall, we previously or historically been manufacturing EXPAREL in 45 liter suites.

Last year, we brought on board or brought online two two hundred liter suites, which as the mix of EXPAREL that’s sold, that comes out of the 200 liter suites, that’s a natural improvement in margin. Then, of course, and the team is just getting better every day. It’s a finicky product to make, and it’s, you know, ten years of learnings and and repetitions, and that will also naturally improve margins over time.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Okay. So you should get additional margin benefit on the operating line over the next five years as well. I mean, you would expect there to be if you’re gonna grow in the double digits, then you’re going to get some more leverage.

Sean Cross, CFO, Pacira: We should. And I think just as a reminder, the evolution to an innovative biopharmaceutical company, we will be continuing to invest in the sales and marketing infrastructure to drive that top line, but also be very thoughtful as it relates to R and D for indications where we believe there’s a high ROI.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Okay. Great. So on the pipeline, understanding you’re the CFO, Sean, and not the head of R and D. Armchair scientist. So we we could keep it at a high level.

But the PCRX two zero one, I mean, that that’s something that I’ve been really interested in for a long time even when it was part of flexion. Looking at a gene therapy for osteoarthritis of the knee. So maybe if you could just explain briefly how that works. I I think that’s sort of a novel concept for a lot of people, a gene therapy working locally in the knee. And then just when you said you’re gonna start the phase two, just when we could see that data?

I know Frank was particularly excited about what he saw with the early data.

Sean Cross, CFO, Pacira: Yeah. So thanks for the question. The so this is again, the CFO’s terms, gene therapy two point o. Just recall that the typical gene therapy is for very narrow rare indications. It’s incredibly expensive.

It’s administered systemically. It’s a one and done. And what you’ve seen, again, reimbursement in the millions of dollars, whereas this is completely opposite. It is not systemic. Again, it’s gene therapy two point o, and I’ll talk about a couple of features.

Again, the business person’s version of them

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: That’ll work here.

Sean Cross, CFO, Pacira: Where it is dosed in very small amounts. We just call it micro dosing into the into the joint, into the knee. So there’s no to very limited systemic exposure. So you don’t have the safety concerns associated with the systemic flooding in in the rare diseases. And then that’s also important with regard to a cost perspective.

So if we look at the the manufacturing numbers that we have internally, this will be available to the masses, and we can still make a profit margin off of that for for common indications such as osteoarthritis of the knee where there’s fourteen million patients that suffer from this affliction that would at least theoretically be available as potential patients if this product gets approved. So what are the other features that are unique from previous gene therapies? It has something called an inducible promoter. So what does that mean? It is the product and the cells that are programmed to generate the therapeutic are only turned on when there’s inflammation.

So think about a a smart thermostat in your house where you have it set at whatever ambient temperature you like, it gets too hot, the thermostat recognizes that, it turns on the air conditioner, The temperature comes down, and then the thermostat turns off the air conditioner. So with this inducible promoter, it sort of more naturally mimics the sort of natural homeostasis or how your a healthy joint would react to inflammation. So and from a data perspective, it is very encouraging even for us laypeople where we published two year data. We had a poster presentation at ACR last year, which showed in seventy two patients, admittedly, this was not a placebo controlled trial. But there’s seventy two patients with moderate to severe osteoarthritis.

They received one injection. And two years later, seventy percent of the patients had a greater than fifty percent reduction in pain and and stiffness in their WOMAC scores. So this year, we’ll be presenting three year data. So again, one shot, three years, very clean safety profile, and a potential game changer, that could be, you know, for these patients who really haven’t had anything new in the last twenty years treated by rheumatologists. So as mentioned from a trial perspective, we continue to monitor the phase one patients.

And this year, we’ll begin the the phase two program, which will have a placebo arm, an active comparator, and then PCRX two zero one. And those data we anticipate will read out at the end of twenty twenty six.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: That was a great explanation. Oh, thank you. Well done. Okay. So how much of the excitement around 02/2001 was behind your decision to acquire the remaining stake in GQ Bio, which is where the technology originated, which just happened recently.

You picked up the 32,000,000.

Sean Cross, CFO, Pacira: So I think there’s a couple observations. First, one of the five by 30 key pillars is for an innovative pipeline and with five novel programs in clinical development by the end of the decade. So, GQ brings us this platform, so not just PCRX201, but the platform for any indication. They have an interesting preclinical pipeline that you could see on their website, but then there’s also the opportunity to add other cytokines into the specter and think about other indications. So there was a five by 30 aspect to it.

But then secondly, we also they have a terrific a small, terrific team of experienced scientists that bring a little bit of R that complements our development capabilities. And then finally, from the CFO’s perspective, it made a lot of financial sense. So we paid roughly $18,000,000 upfront, and that allows us to not have to pay up to $62,000,000 in milestones, including a $4,500,000 milestone when we begin phase two. So it’s sort of, you know, taking money out of one pocket and sticking it in the other. But for that $18,000,000 where the net present value on not having to pay those milestones makes a lot of financial sense.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Okay. In the last couple of minutes, we’re gonna stick with you as CFO and talk about the capital deployment and your priorities for use of cash with respect to debt pay down, share buyback, which I know you guys have been getting a lot of questions on just given the pressure on the stock that we saw last year. And now it’s rallied a bit, but you guys, I’m sure, feel that you’re very undervalued, assuming you feel good about the whole generic situation. And then also just reinvesting in the business, which is definitely a statement you made with your ’25 guidance.

Sean Cross, CFO, Pacira: Yeah. So as expected, I mean, we regularly review capital allocation with the board. It’s a constant, you know, topic of conversation and and analysis. We sort of think about it in four general buckets. Number one is reinvesting in the business and with a priority of accelerating growth of our existing portfolio.

The second is to be very thoughtful about research and development where we anticipate there’s a positive ROI. Again, talking about the ZILRETTA shoulder indication expansion, ioverao and spasticity, so balancing operating margins with with research and development and looking at the future. And then, of course, you mentioned managing our balance sheet. Just as a reminder, we have a convert coming due in August. It’s $202,500,000 We have a term loan A that’s just north of $100,000,000 coming due in 2028 and then another convert coming due in 2029.

So we think about that and what’s the optimal capital structure with regard to managing the balance sheet. And then, yes, of course, we returning equity to shareholders, we put a $150,000,000 buyback in place last year that runs through the end of twenty twenty six. And again, we the board and we put sort of all of this, in the mix when we’re thinking about capital allocation strategy.

Gary Nachman, Senior Biopharma Biotech Analyst, Raymond James: Okay, perfect. We’re up on time. So thank you so much, Sean. Good luck with all the progress. And thanks, everyone.

Enjoy the rest of the day and conference.

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