Pacira BioSciences, Inc. Q1 FY2025 earnings call

Management Statement and Operational Highlights

• 5x30 Plan: Focus on accelerating growth in commercial business and advancing pipeline. Settled EXPAREL patent litigation, expanding IP estate, and eliminating RDF royalties for EXPAREL.
• EXPAREL Progress: Early positive trends in sales and utilization, with new J code indicating enhanced reimbursement. Growth in community hospitals and ambulatory surgical centers, with increasing new and reactivated accounts.
• Pipeline Advancements: Acquisition of GQ Bio, progress with PCRX-201 including Phase 2 study dosing, and data presentations at medical meetings (e.g., two-year pain improvement data in OA).
• Sales Force Restructuring: Restructured field teams to prioritize EXPAREL, with new sales teams for ZILRETTA and iovera, and rolling out programs for ZILRETTA (value-based contracts, Medicare expansion) and iovera (SmartTip launch).

Segment Performance

• EXPAREL: First quarter sales reached $136.5 million, up from $132.4 million in 2024, driven by volume growth. Average daily sales and volumes rose ~7% after adjusting for fewer selling days in 2025. Gross margins benefited from eliminating RDF royalties, with a low single-digit percentage impact.
• ZILRETTA: First quarter sales declined to $23.3 million from $25.8 million in 2024 due to sales force transition. Spring rollout of new programs includes value-based contracts, broadening use in Medicare (no prior authorization for CMS patients), and driving awareness of its unique profile. Phase 3 registration study in shoulder OA on track for top-line results next year.
• iovera: First quarter sales were slightly up to $5.1 million from $5.0 million in 2024. Launching an innovative SmartTip for medial branch block, with Phase 3 registrational study for spasticity advancing.

Guidance

• Revenue: Total revenue for 2025 guided at $725 million to $765 million.
• Gross Margins: Non-GAAP gross margin expected 76% to 78%.
• R&D Expense: Non-GAAP R&D expense projected $90 million to $105 million.
• SG&A Expense: Non-GAAP SG&A expense expected $290 million to $320 million.
• Adjusted EBITDA: Significant adjusted EBITDA of $44.1 million in Q1.
• Share Repurchase: Board authorized $300 million share repurchase program running through end of 2026.

Risks

• Tariffs: Monitoring potential impact of tariffs, but currently not expecting material impact on operations.
• Market Adoption: Slow adoption of new reimbursement policies for EXPAREL may affect growth.

Question and Answer

• Q: Color on Medicare coverage proportion, coverage trends, and feedback on PCRX-201 for adoption A: Brendan Teehan mentioned Medicare coverage varies by surgical segment (more commercial in inpatient, more Medicare in outpatient/ASC). For PCRX-201, clinicians and patients value long-term benefit, and two-year data from the study is seen as transformative for wide adoption.
• Q: Capital allocation priorities, spending on commercial vs pipeline, potential larger transactions A: Shawn Cross stated focus on investing in the base business to capitalize on no pain, advancing the innovative pipeline, and share repurchase. Disciplined capital allocation with focus on accelerating EXPAREL growth and pipeline advancement, including potential strategic transactions.
• Q: EXPAREL enhancements, label expansion A: Frank Lee said they continue to innovate EXPAREL with new patents, but there are no plans for additional EXPAREL indications.
• Q: Gross margin impact from RDF royalty elimination, pricing progression A: Shawn Cross noted the RDF royalty elimination benefits margins, and pricing is progressing with GPO contracts, expecting mid-single-digit impact from GPOs over time.
• Q: Surgery volumes, competition A: Brendan Teehan mentioned nominal decline in surgical room hours, and no significant new competition for EXPAREL, with ample room for penetration in the market