Pacira BioSciences, Inc. Q3 FY2025 earnings call

Key Points

• Strong execution across corporate, clinical, and commercial initiatives with 6% year-over-year revenue growth driven by EXPAREL and iovera.
• EXPAREL had year-over-year volume growth of ~9%, the highest quarterly growth in over 3 years, supported by commercial investments and manufacturing efficiencies.
• Increased full-year guidance due to improved manufacturing efficiencies, favorable production volumes, and elimination of EXPAREL royalty obligation.
• In-licensed AMT-143, a complementary long-acting non-opioid with potential for longer pain relief vs current local analgesics.
• PCRX-201 Phase II study enrollment ahead of plan, with 3-year follow-up data from Phase I showing sustained efficacy across all structural severity subgroups.
• Real-world data on EXPAREL showed reduced opioid use, lower costs, and improved recovery outcomes; IGOR registry has over 3,000 OA patients enrolled.
• Registrational studies for Zilretta in shoulder OA and iovera in spasticity progressing, with interim data expected next year.
• Solidified EXPAREL patent estate with 21st patent listed in FDA's Orange Book.

In the third quarter, EXPAREL had sales of $139.9 million in 2025 compared to $132.0 million in 2024, with year-over-year volume growth of approximately 9%. Zilretta had sales of $29.0 million in 2025 versus $28.4 million in 2024. Iovera saw sales grow to $6.5 million in 2025 from $5.7 million in 2024. EXPAREL's volume growth underscores the value of commercial investments and manufacturing efficiencies.

Guidance Details

• Increased non-GAAP gross margin guidance to 80%-82% from prior range of 78%-80%.
• Narrowed full-year revenue guidance to $725 million to $735 million.
• Narrowed non-GAAP R&D expense to $95 million to $105 million, non-GAAP SG&A expense to $310 million to $320 million, and stock-based compensation to $56 million to $59 million.
• Expect sustainable earnings from improving sales, enhanced gross margins, and stabilizing operating expenses.
• Executed $50 million in share repurchases in Q3, with ~$200 million remaining under current share buyback authorization through end of 2026.

Risks

• Generic attempts for EXPAREL, as indicated by Paragraph IV notifications, posing challenges to commercial success.
• Challenges in achieving faster adoption of NOPAIN in larger hospitals due to more decision-makers and longer implementation times.
• Potential delays in commercialization of pipeline assets, including uncertainties in trial timelines and market reception.

Q: How much of EXPAREL volume growth was tied to the GPO, and any comments on selling days?

A: Frank noted strong uptake from the GPO signed in June, with volume growth gap expected to narrow over time as agreements are anniversaryed. Shawn discussed volume trajectory and mix impact.

Q: Rationale for AMT-143 program and IP?

A: Brendan mentioned AMT-143's IP extends to 2042 with a solid state, and Jonathan highlighted it as a non-opioid pain solution complementary to EXPAREL.

Q: Awareness of NOPAIN in bigger hospitals and market growth?

A: Frank and Brendan discussed slower adoption in larger hospitals due to more decision-makers but improving awareness and formulary decisions in broader segments.

Q: BD strategy and feedback on PCRX-201?

A: Frank spoke about disciplined BD approach focusing on assets fitting musculoskeletal pain space, and Jonathan noted positive feedback on PCRX-201 with enthusiasm for its benefits over current treatments.

Q: Shift in bio mix and AMT-143 profile?

A: Shawn discussed mix impact from GPO discounting and volume convergence expected in 2026, while Frank elaborated on AMT-143's complementarity to EXPAREL and market need for longer-acting solutions.