Pacira BioSciences, Inc. (PCRX) Earnings

Management highlights

• Introduced 5 by 30 strategy a year ago to accelerate performance and position for sustainable growth. • Pleased with first quarter results, reinforcing confidence in 5x30 strategy. • Expiril showing renewed growth with volume growth continuing into 2026, driven by factors like expanding coverage, new J-code, growing payer coverage, increased awareness, and enhanced IP. • Zorreta had 15% Y/Y sales increase, with growth initiatives like dedicated sales force, expanded patient access, and collaboration with J&J MedTech, phase three registration study in SHLDR-OA concluded. • Ivera had 21% Y/Y sales increase in Q1 2026,受益于产品特定报销代码推出和专业销售团队，注册研究进展顺利. • Advancing innovative clinical stage pipeline, including PCRX201 on track for top-line data later this year, PCRX2002 expected to begin Phase II development later this year, and gene therapy platform generating promising preclinical candidates. • Partnerships remain key pillar, taking disciplined approach to business development.

Guidance

• Total revenues of $745 to $770 million. • For XBRL, net product sales of $600 to $620 million. • Non-GAAP gross margins of 77% to 79%. • Non-GAAP R&D expense of $105 to $115 million. • Non-GAAP SG&A expense of $320 to $340 million. • Stock-based compensation of $54 to $62 million. • Anticipate remainder of 2026 will largely follow historical patterns for quarterly trends, with Q2 R&D spend expected to uptick then decline, and Q4 margins slightly below range due to higher-cost inventory and other expenses.

Segment performance

Expiril: First quarter net sales increased to 143.3 million versus 136.5 million in 2025, volume growth of approximately 7% was partially offset by a shift in vial mix and discounting. Zorreta: First quarter sales improved by 15% to 26.8 million versus 23.3 million in 2025. Ivera: Sales increased 21% to 6.2 million compared to 5.1 million in the first quarter of 2025. Revenue contribution % not explicitly stated in absolute terms but each product's growth is highlighted.

Analyst Q&A

• Q: Just as a starting point, if you could help us walk through a little bit about the cadence for R&D spend through the rest of the year.

  A: As mentioned, preparing for initiation of Part B of the Ascend study for PCRx201 and certain export product development efforts, expect an uptick in Q2 from $25.4 million in Q1 to low $30 million range, then come back down closer to Q1 levels in Q3 and Q4.

• Q: One thing that I've been curious about is sort of the expiration of the Obamacare subsidies. And we've started to see some decline in terms of enrollments. And, you know, I think if we look at results for some of the med tech companies in the first quarter and even some of the hospital names, it has not seen anything dramatic. But I'm just curious you know, what you are hearing, you know, from sort of the hospital channel, you know, in terms of their perspective on how they're thinking about the rest of the year playing out.

  A: We will keep a close eye on those procedures where XBRL is favored for addressing, and we'll continue to kind of give updates as we see it play out. I think it's just too early to say.

• Q: Earlier this week, we saw data from a cell-free regenerative therapy for NeoA with a headline efficacy of 93% of patients demonstrating clinically meaningful improvements in mobility and pain reduction. There's not a lot of information on that trial, so I'm curious how you guys are framing that data. and how 201 will differentiate from that product. And then any additional color on what promising efficacy trends would look like for PCRx201's readout would be helpful as well.

  A: Not commenting on any specific company. We are confident that The HTAC platform is the right modality for sustained relief of knee osteoarthritis. We have made tremendous progress in scaling up. We are finalizing our commercial scale manufacturing for Part B. As we articulated before, an anticipated enrollment is right on time. To answer your Second question, we're expecting the top-line data from Part A to read out at the end of the year. Just to remind you, its primary efficacy is safety, and what we will be looking at is the totality of the data to understand how PCRx201 performs in a randomized clinical control trial with an active comparator. So, we are looking at safety as our primary efficacy, but we will also be looking at the secondary endpoints around efficacy as well.

• Q: How would you characterize elective procedure trends exiting March, any lasting impact from the winter storms? And then separately, how should we think about potential upside from ex-U.S. partnerships across the portfolio?

  A: If we look at the moving annual total for procedures where XBRL would assist that's largely flat year over year, despite X4L being up over 7%. If we look specifically at the first quarter, market procedures are up in the mid-single digits, I would say 4% to 5%, as opposed to X4L, if that gives you some sense. And then we'll look to see how that progresses here in the second quarter. And just to answer your question about XUS partnership. So let me take a step back here a little bit. This is an important part of our five by 30 strategy in terms of signing five partnerships, both here in the US and XUS. So as you know, XUS, we've signed a partnership with LG Chem, their leading company in Asia Pacific. And we have plans to sign similar types of partnerships in the other major geographies. And it's premature to provide guidance on these kinds of partnerships and the top line impact. But I would say it's not insignificant. These will be important partnerships that will drive revenue not only through 2030, but well beyond 2030.

• Q: The first one, kind of a follow-up to the previous question around the impact of winter storms. I think you were expecting a potential softer 1Q because of those storms. Looks like all three of your products had some pretty solid year-over-year growth. So just curious if there was any impact or you were able to recapture it over the remainder of the quarter. And then my second question regarding no pain. If I remember correctly, the No Pain Act is kind of a three-year term ending in 2027. Just curious if there's any legislation in development here to extend or modify that term.

  A: The winter storms do have an impact. They impact both the ability to ship, but also, as you would expect in those geographies where those surgeries might have taken place, those surgeries did not happen. which lead to rescheduling, not necessarily within the quarter. So I think there is some kind of carryover as patients look to be rescheduled for those procedures. Despite that, I think we are very pleased with the performance of X4L volume vis-a-vis the total available market. So that's what I would say for winter storms. I believe we are past that and looking forward to the second quarter. Thanks, Brent. And Serge, with regard to your question about no pain, thanks for that. No pain indeed initially is scheduled to expire at the end of 2027. That said, we have been staying very close to CMS and other stakeholders. And what we're very encouraged about is not only the uptake of no pain, but also the expansion of coverage to commercial lives. And so, Bren mentioned earlier that now we have a total of 110 million outside the bundle and growing. And so, as you know, no pain is primarily covering Medicare lives. And so, what we can tell you is that we're very encouraged by the discussions we've had about the market research and the uptake of no pain with CMS and other stakeholders. We're going to confirm a lot of what we're seeing through claims analysis. And I would say that no pain is doing what it's intended to do, and the commercial payers are also coming on board, which is highly encouraging.

• Q: I just wanted to ask you about Sean, I think I heard you say you expect SG&A to be lower in the second half. Can you talk to the magnitude of the shutdown you're expecting in the second half? SG&A seems to have elevated the past five quarters relative to 2024. I'm just trying to get a sense of what the normalized run rate is going forward.

  A: Thanks for the question. So we, if you look at the, we reported 83.9 million in SCNA this quarter. And you can take a look at, without providing, you know, super specific detail, but you can take a look at the information we filed in our proxy on Tuesday or Wednesday. That provides some of the magnitude of what we anticipate. spending during the proxy season that would be, you know, above in, you know, the typical sort of course of events. And then we anticipate sort of coming back down in Q3 and Q4 to sort of, you know, perhaps a little bit below where we even spent in this quarter. Kind of generally, directionally correct.