Pacira at RBC Conference: Strategic Growth and Gene Therapy Focus

On Wednesday, 21 May 2025, Pacira Biosciences (NASDAQ:PCRX) participated in the RBC Capital Markets Global Healthcare Conference 2025. Led by CEO Frank Lee, the discussion centered around the company’s strategic goals and recent financial performance. While Pacira outlined ambitious growth plans, the company also acknowledged challenges in reorganizing its sales operations.

Key Takeaways

• Pacira’s "5x30" initiative aims for five strategic objectives by 2030, including double-digit growth and expanding patient reach to over 3 million.
• EXPAREL sales grew by 7% in Q1 2025, while ZILRETTA and ioverao faced flat to slightly declining performances.
• The acquisition of GQ Bio enhances Pacira’s position in gene therapy, particularly with PCRX201 for osteoarthritis.
• Pacira plans to establish five partnerships by 2030 to expand its commercial reach.
• The company anticipates improved performance for No Pain in the second half of the year.

Financial Results

Pacira reported a 7% growth in average daily sales for EXPAREL in the first quarter of 2025, marking a positive shift from previous trends. However, sales for ZILRETTA and ioverao remained flat or slightly declined due to recent sales force restructuring. The company aims for double-digit growth by 2030 and targets a 5-point margin expansion, supported by the RDF litigation win and scaling manufacturing operations.

Operational Updates

Pacira has reorganized its commercial operations, creating dedicated sales teams for EXPAREL, ZILRETTA, and ioverao. The focus is on expanding commercial payer coverage for No Pain, with promising signs of early adoption. The company expects significant uptake of No Pain in the second half of the year as it builds on CMS’s budget-neutral approval.

Future Outlook

The "5x30" initiative is central to Pacira’s future strategy, with goals to help over 3 million patients by 2030, achieve double-digit growth, and develop five novel projects. PCRX201, a gene therapy candidate for osteoarthritis, is a key project, with three-year data to be shared at EULAR. The company also plans to host an R&D day later this year to showcase its pipeline.

Q&A Highlights

During the Q&A, Frank Lee emphasized the importance of the EXPAREL settlement, which limits competitor entry and secures revenue visibility. He also highlighted PCRX201’s potential as a gene therapy for a broad patient population, noting its favorable safety profile and local injection method.

In conclusion, Pacira’s strategic initiatives and focus on innovative therapies position the company for potential growth. Readers are encouraged to refer to the full transcript for more detailed insights.

Full transcript - RBC Capital Markets Global Healthcare Conference 2025:

Greg Renza, Biotech Analyst, RBC: Welcome back everyone to the twenty twenty five RBC Global Healthcare Conference. My name is Greg Renza, one of the biotech analysts, and we’re pleased to be joined now by Pacira Biosciences. Joining us from the company is the Chief Executive Officer, Frank Lee. Frank, great to see you. Thanks for being here.

Frank Lee, Chief Executive Officer, Pacira Biosciences: Good to see you, Greg. Yeah. Happy to be here.

Greg Renza, Biotech Analyst, RBC: Great. Great. Well, always a lot going on in the external landscape, but there’s as much going on in Pacira as well. So a lot of developments over 2025 so far and just a short few months we we we’ve we’ve been through. But maybe to start off, Frank, just give us an overview of PACER, maybe those who are not familiar or coming back to the coming back to the story, with respect to EXPAREL and just the opportunity in non opioid pain relief?

Frank Lee, Chief Executive Officer, Pacira Biosciences: Sure. Can you all hear me okay? Yeah, am I coming through? Okay, good. We’re good.

All right. Well, great to be here. And for those of you that aren’t familiar with Pacira, we’re very much focused on non opioid, innovative non opioid pain management therapies. And so if you take a look at our portfolio now, we have three products that generate over, what, dollars 700,000,000 in sales this year. So it’s a very healthy cash flow generating business.

And we’re now shifting our focus to building our pipeline as well. And so and it’s led by a product called PCRX201, which is an exciting product that we can talk about a little bit that really has, in my view, the opportunity to truly transform how we think about osteoarthritis of the knee and perhaps other joints. And we also have a platform around this as well. So this is the first lead molecule. And so you can think about Vocera as a company now that has a strong cash flow generating business that’s now shifting its focus to further building out an innovative pipeline in pain, and specifically musculoskeletal pain and those adjacencies.

And so we think it’s an area that we can we are leading now and we can further lead and innovate going forward. So it’s an exciting time. When you think about the company, I’ve been with the company now for about almost eighteen months, eighteen months, and we’ve accomplished a lot. We’ve transformed the Board, the management team, the strategy. And in fact, if you think about just this year, our stock actually has performed very, very well relative to the indexes and our peers.

And why is that? Because we’ve been able to take this overhang that we had on the stock with respect to the Paragraph IV litigation around EXPAREL. And we’ve got a really great settlement there that gives us visibility out to 2,039. And so that was a positive. In addition to that, now we’ve listed additional Orange Book patents as well as we recently won a case against RDF, which provides better margins.

So all of that combined and leading up to that gave us a lot of confidence to think about the strategy that we call 5x30. And so that’s how we’ve kind of come to 2025. And a lot of the 5x30 is now really starting to play out the way we wanted to.

Greg Renza, Biotech Analyst, RBC: And Frank, if you could maybe just lay out some of those 5x30 objectives. And this is the concept of you, your pedigree and your team are really rooted in innovation. You’ve got the cash flows from EXPAREL and from your portfolio, and you’re transitioning that to longer term visibility. So maybe lay out some of those objectives and how they tie to the imperatives you have for the company today. Sure.

We put a lot

Frank Lee, Chief Executive Officer, Pacira Biosciences: of thought into this. As I mentioned, we rolled this out early this year. And the actual investor reaction to that was very positive. And then further positive when we settled the paragraph four litigation, etcetera. And so what are those five things?

And we put a lot of thought into this. Number one, first and foremost, in 02/1930, so these are five things by 02/1930, we want to be helping more than 3,000,000 patients in that year. And right now, we sit around 2.4 give or take plus minus this year. Number two, we said we want to be between now and then growing at double digits. Okay.

And as you know, historically, we’ve been at low single digits, right? And that’s changed a little bit in quarter one. We’ll talk a little bit about that. The third thing is expanding our margins by five points, at least five points. And the recent RDF litigation win and some things that we’ve done around moving our manufacturing to a larger scale are going to help us do that.

So we have visibility into that in addition to the volumes that we’ll drive. And then importantly now, those are the things that are around the current business. But the last two are really about how do we accelerate our future pipeline. And so five novel projects in development by 02/1930, and we already have the lead off batter in 02/2001. We’ve got some other things planned.

And then secondly, and this goes both to development and commercialization, but five partnerships. So there are opportunities where we could have partners help us commercialize our products in ways that we can’t, for example, outside of The U. S. Right now, we only sell our products in The U. S.

And so there are opportunities outside The U. S. For all three of our products. And then even in The US, there might be certain segments of customers that others can reach better than we can more efficiently. And then secondly, as we think about partnerships and development, there are opportunities to make sure that we participate in those transformative treatments, potentially transformative, but in a risk adjusted way.

So it’s not just by ourselves. So those are the five things that we laid out. And again, the investor sentiment is very positive coming out of that. And we’ve been able to build on that with some of the things that we’ve been able to demonstrate that support that we are tracking to those 5x30.

Greg Renza, Biotech Analyst, RBC: The 5x30 came, you established that in first part of the year. The settlement came, which you’ve referenced. You’ve alluded to the visibility into the 2030s. Maybe just provide a little more detail on how that’s removed that overhang on the stock, which you mentioned, but how does it remove the overhang on execution to give you comfort that these revenues have durability, not just in this decade, but potentially beyond?

Frank Lee, Chief Executive Officer, Pacira Biosciences: Yes, it’s a good question. So EXPAREL is an amazing product, I have to tell you, and so is ZILRETTA and ioverao. And I can tell you from personal experience, my mom has had ZILRETTA and other family members are going to get EXPAREL very soon. So these are great products that have a tremendous impact on patients’ lives. I’m convinced of it.

And so when you step back a little bit, this Paragraph IV litigation has been ongoing for a long time, a long time. And of course, this litigation now puts an overhang on the stock because there’s not certainty. And as I said before, when I first came into the job eighteen months ago, I value certainty as much as any other investor. But we’ve got to get certainty on terms that give us visibility into transforming our business. And so I mean, I can tell you that with a lot of the team’s help and a lot of productive discussions, I was very pleased when we were able to announce that settlement because for those that aren’t familiar, that was around the April timeframe.

And what is that settlement? That settlement says it’s a volume limited entry settlement. So it’s not your classic one year entry and it’s done. So in year one, it’s high single digits and that grows to low 30s over five years. And then after that, it’s high 30s for the balance of the time, all the way out to 2,039, okay, 02/1939.

So that gives us fourteen years of visibility. On top of that, we continue to innovate. So we currently have 19 Orange Book listed patents and we continue to innovate. So the bar is getting higher and higher with respect to our IP. Okay.

And any potential entrant outside of the party that we settled with would need to overcome all of those patents and produce the product, which is no small feat, okay? And as I mentioned earlier, we’re getting more and more efficient at how we produce the product. We can talk a little bit more about that across our two sites. It gives me a lot of confidence because it’s volume limited. And when it’s volume limited, you might imagine there’s not an incentive to heavily discount on either party.

It’s volume limited, So it’s a very constructive, very, I would say, positive settlement for the company and for the other party. And it gives us a lot of visibility, if you think about how the market might expand over time as well. And so these cash flows can be utilized now to pivot the company towards more innovative products.

Greg Renza, Biotech Analyst, RBC: And all these developments really tie well together, the long term visibility, pipeline and investments that you’re striving for. And maybe when it comes to visibility, let’s talk near term as well and talk 2025 and some of the commercial dynamics that you mentioned just with your recent quarter release and how you think the business and EXPAREL is doing within the commercial setting now. Maybe walk us through some of those first quarter dynamics and the guidance that you and Sean and the team have put forth? And what should visibility for 2025 look like for EXPAREL?

Frank Lee, Chief Executive Officer, Pacira Biosciences: Sure. Well, let me start at the high level and drill down to maybe what happened this past quarter. So at a high level, again, the story here for Pacerra is we’ve got a different vision, right? And we can utilize our current business to fuel this pipeline, and it directly ties to 5x30. So let’s tie 5x30 and what’s happened to what’s happened in the first quarter, first ’4, ’5 months of the year.

So the first quarter, EXPAREL grew by if you look at average daily sales, because there are different number of selling days per quarter when you compare to last year, it grew by 7%. And so that’s very different than where EXPAREL was a year ago, with low single digits, Okay. So that’s an early indicator. ZILRETTA and ioverao were flat to slightly declining only because we’ve pivoted our organization now from one sales force selling all three products to three separate sales forces individually now focused on their particular product. This is very important.

We spent a good chunk of last year standing up a powerhouse, what I call commercial medical market access organization. So we have great products. Now we’ve got some reimbursement tailwinds, both for ioverao and EXPAREL. And we didn’t talk about ioverao, that’s included in No Pain. And so now we want to make sure that we’ve got a focused selling effort.

So we stood up that those three sales forces and I’ve got a lot of confidence that each one of these sales forces now will execute to the plan. So early signal is on EXPAREL 7% average daily sales growth as opposed to low single digits previously. And ZILRETTA and ioverao, a little flatter because we had to shift the field force and stand up two separate sales forces for those. And my sense is as we move towards the second half of the year, and I’ve always said that with no pain, it’s going to be the second half of the year before we start to see meaningful uptake on no pain. And I said that from the beginning and go back to the JPMorgan transcripts back in 2024, a day after I started.

And I’ve been very consistent with that and we can talk about why.

Greg Renza, Biotech Analyst, RBC: Yeah. Let’s do Yeah. Let’s talk about the no pain dynamics, reorg, the blocking and tackling, the positioning for success internally. And you’ve got potential tailwinds. The GPO contract, of course, is another consideration here and how you’re setting up there.

But with respect to No Pain, just walk us through that trajectory, the receptivity within the community and how that translates to this sort of backloaded impact?

Frank Lee, Chief Executive Officer, Pacira Biosciences: Sure. We’re starting to see some encouraging signs of adoption in the smaller community settings where there aren’t as many stakeholders, okay, inside the hospital. We definitely started to see uptake in the ambulatory surgical centers, again, where, let’s say, aren’t as many stakeholders to manage inside that institution. Now as you start to get into larger and larger health systems, each hospital may have its own pharmacy. There’s a whole network there.

They have their own systems and some vary some systems are twenty, thirty hospitals. These take a little while to adopt. Now think about this, there’s a little bit of muscle memory in these larger systems. EXPAREL has been out there for a long time. So think about the things you do every day, muscle memory, if you go to Starbucks every morning at 07:00, that this is how things work out there.

So we have to help our customers overcome some of this muscle memory and let them know that, hey, you know what, in the outpatient setting for Medicare patients, it’s ASP plus 6% now. And on top of that, you still get what you got in the bundled payment. So this has been pulled out. This is an extra payment. It makes all a lot of sense, both clinically and financially to do that, right?

It’s a great product, now it’s financially appropriate. The other thing is we’re seeing encouraging signs that commercial payers are starting to follow suit, okay? And we’ll have an update for you as we go through the middle of the year. What I didn’t want to do is give you a minute by minute kind of how many covered lives you have. This if you step back from my own experience, I’ve been in this industry thirty plus years is there’s a tipping point when it comes to commercial payers, okay?

It’s no good if you just have a little bit of coverage. You need a decent amount of coverage and it varies by region. So now as you know, there are about 18,000,000 procedures that fall under, we think, broadly no pain. About 6,000,000 of those are directly covered by CMS. So we have those 6,000,000, we’re going to work on that.

The other 12,000,000 are covered by commercial payers. And so we’ve always said that it’s going to probably take, if you look at market analogs, a year to two years for commercial payers to follow suit with respect to what CMS is doing. Now what we’re encouraged by right now is that we’re starting to see activity a little sooner than we expected, to be honest with you, okay? And so I’m not sure if you know it or not, but CMS concluded that this is budget neutral to them. Now think about that.

Think about how many times CMS provides additional reimbursement for something, okay? This is budget neutral. So if you think about it from a commercial payers hat now, this should be a good thing for their respective members, right? And so we’re starting to see those kind of signs and we think there’ll be a tipping point at some point where both CMS covered patients and commercial pay patients start to make up the bulk of what they do And then they can just have their protocols and procedures be very consistent as opposed to trying to call out one type of patient versus another kind of patient. Does that help you a little bit?

Greg Renza, Biotech Analyst, RBC: Absolutely. Certainly, the granularity is key and that’s what investors want. And I respect, as you mentioned, just getting a blow by blow is very difficult, but it does take time. And I think there are some dynamics to appreciate across all these stakeholders, the pharmacies, the billers, the coders as well. So we need to leave time for the pipeline and for PCRX201 because, as you mentioned, you joining eighteen months ago, maybe that wasn’t why you joined the company, but I would say that you have been increasingly constructive on the target product profile on some of the the the build the building data.

So let let’s just, talk about, talk about your excitement and what you see in in this profile for for, frankly, an intra articular gene therapy, what this means for potential patients in this space? Sure. Just to wrap this up

Frank Lee, Chief Executive Officer, Pacira Biosciences: a little bit for the first three things around the 5x30, you can see now we have some tailwinds we’re going to execute towards double digit growth. And when we do that, it’s going to benefit margins. We just won the RDF case, which provides low single digit favorability. And so that’s why we got visibility into expanding margins. Now we switch gears to the pipeline.

I have to tell you, I’m being very, very transparent. When I first saw the asset, when I came into the job, I said, no, we’re not doing gene therapy, okay? We’re just we’re not doing gene therapy, we’re not doing cell therapy, we’re not doing anything that looks and smells like it, okay? Now what convinced me? What convinced me?

When I looked at the product and the platform, what I saw, number one, was really convincing data, 72 patients, Phase one. And when I dug in there, what I saw was that this is so the anti gene therapy of gene therapies. So this is local injection, very small amounts. The pathway is known, IL-one. There are two approved IL-one agents out there, right, that block that pathway.

It just so happens that they don’t work long enough. You’d have to be continuously be injecting your knee, okay? So this blocks IL-one RA, which is very well known. There’s clinical data available from two different products. And it does this so efficiently that what we see is very little immunogenicity around this.

So all the things that you might want to sort of tick off when you think about gene therapy, thought, gosh, low cost of goods in small amounts, potential to redose, that’s very interesting. And it’s locally injected, not systemically injected, so the adverse event safety profile is very good. And it’s a known pathway. So that all right, okay. And now let’s take a look at the data.

At the time, we had two year data and over seventy percent of patients responded fifty percent or better from baseline on the WOMAC Pain and Stiffness Scales. Now think about that. When you look at all of the trials in OA, we all know about the placebo response. So I asked the team, go back and take a look at all the placebo responses. The magnitude and duration of placebo response is about two points over three to six months.

You can do your own homework around that. What we saw is almost four points of improvement on that scale and durability after two years. Now we’re going to share three year data here pretty soon at EULAR. And so I got pretty excited about that. And so that’s just a start because we acquired GQ Bio, a company that we had a partnership with for 02/2001, because we like 02/2001 and we like what they have some other projects that they’re thinking about.

And we like the platform. This platform is an HCAD platform, high capacity adenovirus as opposed to AAV. Big platform, it’s sort of the semi truck as opposed to the compact car, okay? You can put 30,000 base pairs in this thing, right? And think about what else could be important here to be locally injected.

And even with 02/2001, we start with the knee, but we could go to other joints, right? And so and again, when you think about gene therapy, typically you see data sets that are five, ten patients. This is seventy two patients for Phase one followed for three years. So all of that all those things combined, I thought, you know what, I’m changing my mind. We’re going to go after this and we like it so much, we’re going go buy the company.

And we did so in a very disciplined way when you take a look at the transaction. We already owned a small proportion of the company, we bought the rest. So we’re going to have a bit of an R and D day, so to speak, probably second half of the year sometime, showcase a little bit of what we have. But we’re excited about it, yeah.

Greg Renza, Biotech Analyst, RBC: So multi three year data coming up, what do you think the Street investors need to see to maybe earn the appreciation that you’ve grown to develop with the program? And maybe to that, what are the next steps in development? Sure.

Frank Lee, Chief Executive Officer, Pacira Biosciences: You know what, I’d encourage investors to take off the traditional gene and cell therapy hat for a second. Okay. Take the hat off and look at this opportunity through a different set of eyes, right? And to say, gosh, I mean, put the gene therapy thing aside for a second, look at the data, look how this is administered, look how this is produced, look at the data around existing products in this pathway. And I think the more you look at the data, the more I think you’ll be convinced as I am that this truly has a potential to bring gene therapy to the masses, right?

Because currently gene therapy is all about rare diseases. This could be truly the first one for broad patient populations. And if you take a look at all the things that you’d want to check off, if you think about a concept like that, this one does that.

Greg Renza, Biotech Analyst, RBC: And you mentioned that GQ and the transaction you did, I’m hearing other the platform, other potential assets. Could you just give us a teaser of what you’re thinking when it comes to other potential programs that could

Frank Lee, Chief Executive Officer, Pacira Biosciences: come from this platform? Well, have to tune in next time. But we do have a number of projects, and now they’re called Pacerra, Germany. And we’re very glad to have our research colleagues. And if you think about this, it was it’s not only the platform, but it’s also a really talented group of people and capabilities around research that we didn’t have before, right?

Because previously, Pacira is a little more especially pharma. And in that setting, it’s really more about process development, right? This gives us now a capability and research in a very disciplined way, known platforms, small group of people, expertise, lots of other ideas about other genes that can be encoded. But again, thinking about all in the lens of locally administered because of all the benefits that come with that. Okay.

Greg Renza, Biotech Analyst, RBC: Great. Well, Frank, I know we’re just up on time. We didn’t even get to talk to ZILRETTA and ioverao. But we look forward to how two zero one develops, the EXPAREL certainty and the rest of the pipeline building towards 5x30. Thank you very

Frank Lee, Chief Executive Officer, Pacira Biosciences: much for joining All right. Thank you.

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