Pacira BioSciences, Inc. Q3 FY2024 earnings call

• Refreshed mission to deliver innovative non-opioid pain care with guiding principles: keep patient at center, follow science, treat people well.
• Completed portfolio review and focused on musculoskeletal pain and adjacencies.
• Progress on NOPAIN reimbursement: EXPAREL to have J code in Jan 2025, CMS included iovera for separate reimbursement, partnered with GPOs like Vizient with more partnerships to go live.
• ZILRETTA and iovera performing as planned; ZILRETTA Phase 3 study for shoulder OA expected 2026 results; iovera registrational study for spasticity underway, preparing to file for new smart tip for chronic low back pain.
• Early stage pipeline: PCRX-201 showing promising Phase 1 results in knee OA, with two-year data to be reported at ACR.
• Patent litigation update: District Court ruling on 495 patent not as hoped, but legal strategy includes appellate review; awaiting trial date for 574 patent lawsuit.

EXPAREL third quarter sales increased to $132 million compared to $128.7 million in 2023. ZILRETTA third quarter sales were $28.4 million, essentially flat compared to $28.8 million in 2023. Iovera third quarter sales were $5.7 million compared to $5.3 million in the third quarter of 2023.

• Reiterating full-year 2024 guidance: total revenue 680 million to 705 million, non-GAAP gross margins 74% to 76%, non-GAAP R&D expense 70 million to 80 million, non-GAAP SG&A expense 245 million to 265 million, and stock-based compensation 50 million to 55 million.

• Patent litigation risk: District Court ruling on 495 patent not ideal, and awaiting trial for 574 patent lawsuit.
• Potential generic competition risk: Concerns about price erosion if generic entrants materialize, but multiple patents need to be overcome.

Q: Can you talk about how comfortable you are with your ability to hit the ground running with NOPAIN changes and ramp implementation on the customer end?

A: It will take customers some time to incorporate NOPAIN into their organizations, more likely in the second half of next year and onward to see real signs of it taking hold.

Q: On GPO contracting, how should we think about the onboarding process and messaging on NOPAIN and reimbursement?

A: Working closely with customers to understand GPO contracts and leverage NOPAIN for innovative treatments; generic success requires overcoming multiple patents.

Q: How to think about cost structure and margins with potential generic entrant? How about other filers on liposomal bupivacaine?

A: If single generic enters, price erosion expected but will compete; no visibility on new ANDA filers, no new filings noticed.

Q: Margin improvement, impact of new EXPAREL facility and GPO contracts?

A: Margin improvement driven by volume growth and 200-liter facility; year-to-date margins still within guided range with EXPAREL strong.

Q: On PCRX-201 program, any acceleration?

A: Excited about PCRX-201, will present 104-week data at ACR, CMC process ahead of schedule, next phase study to start early next year.

Q: Latest on ANDA product sample, iovera out-of-pocket cost, ZILRETTA script deterioration?

A: Not received ANDA product sample; iovera out-of-pocket cost around $450 with $255 additional reimbursement; ZILRETTA script deterioration due to promotionally responsive nature, expecting stability with marketing changes.