PCRX - Earnings call transcript Q3 2018 | Pacira BioSciences, Inc.

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Operator

Good day, ladies and gentlemen and welcome to the Third Quarter 2018 Pacira Pharmaceuticals Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Susan Mesco, Head of Investor Relations. begin. may you Ma'am,

Susan Mesco

and discuss everyone. results. our Heather conference to call to third good you, Welcome morning today's Thank quarter financial

me Scranton, are Executive call Chief Financial and on Chairman our Joining Chief and Charlie Dave Reinhart, Officer; Chief our Stack, Richard Officer. Medical Officer; Dr. today's

filings refer call factors with and today expectations. our available we With represent Such to the affect Before today's our let uncertainties. and statements forward-looking the judgment turn remind me SEC which from Stack. information company. Dave include now SEC start, of are for website may statements the risks concerning or to involve based call that, Please the that our that as I will the you will over on risk could current

David M. Stack

Susan. Good and thanks everyone morning, for Thank joining. you,

team's pleased as are for EXPAREL our opioid-sparing quarter to of financial to Once outstanding room, number the are demand exposed third our opioid you in gateway share results like to an the results. abuse. We patients the of underscore and success solution operating risk decreasing misuse a who these the again, with and

As months we extremely of the quarter second XXXX quarter. of the quarter with XX% the final the by are over with level we and I'll third selling over days. interest of the key XXXX, mounting start despite demand. highlights sequentially from upon pleased and also off embark few two two a fewer EXPAREL grew grew

interest use EXPAREL plexus for X% Drilling procedures. we second upper levels. brachial of average down, the nerve higher sales daily of continued than seeing extremity terms sales, the a block were In EXPAREL as are quarter on

in and results iliaca as pectoralis regional blocks. achieving are newer and abdominis, a they Specifically, use fascial anesthesia blocks plexus game EXPAREL are many are such techniques, transverse the driving viewing as positive changer, with brachial plane that anesthesiologists

block's to opioid the trends encouraging from a minimization ambulatory We This XX of who very and the small nerve procedures delivering as critical Together, highly integrating an to both joint opioid-free our using mL results. XX a with the stories are catalyst we passion and for are strategy, growth shift continue EXPAREL promote to for both to a hear TYLENOL as mass relief. is will successful setting. marketing physicians triggering mL Much vials. J&J. EXPAREL's large Their platform significant and across is success new are commitment, including success attributable EXPAREL initiative that programs, pain post-surgical and multiple collaboration

January with CMS recognizing Commercial the access. reimbursement to the employer proposed On to separate July, significantly will EXPAREL, ambulatory need options. are coalitions access that and payers of the J centers We access front, non-opioid believe patient patient unbundling enhance increase in separate beginning X, code to also XXXX.

by and the new on that D is effect surgery. Aetna our in partner in settings. in X has and American Dental Association certain dental way code January paving brought will take use ambulatory our Here, The coverage expanding issued a also

a broad action pleased to delivered $XXX to million this passing from based address revising our $XXX million recovery. $XXX be All-in-all, designed momentum, opioid In package XXXX significant a have to Congress as full-year EXPAREL upwardly bipartisan seen very crisis, are and million response political to to We guidance forward to the treatment we well. prevention, by strong September, on $XXX million.

details more on bit strategic a to shift me our progress. let Now

providing Since and commitment strategic our to block share After need who pillars: second, of an at the those with where Recovery as Surgery and the update launch on for partnering the First, use the settings; is setting. within or expand an Pacira alternative protocols know, patients education access start we providing traction. gain solutions the awareness to improving sales vial key third, of Enhanced pre-launch eliminating sharing to outside this, and we introduction, in plexus in on as are in data opioid advancing focused opioids benchmark. post-surgical the you compared surgical our XX to of opioid-sparing brachial nerve increase EXPAREL many three by around To in driving a mission as clinical accomplish a As reducing average possible. to and continue I'll room; mL we've block the operating EXPAREL weekly seen early XXX% XX-week April, to

EXPAREL American was stories part pain management to Society their integral from suite country of hear EXPAREL of At now enthusiasm are anesthesiologists the Anesthesiologists, using success solutions. of the Meeting around palpable. around of continue We the the as who regularly post-surgical an October

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our wide off outside kicking on the Union; markets U.S. the details of expansion Rich protocols pain; provide China, Canada shortly. and of fracture; continued a these was key of ERAS and of initiatives initiatives affairs where or critical Key surgery; patients, Surgery our transverse rolling postsurgical broaden include completing European of advancing Enhanced for block, medical study, or as study options Recovery hip activities abdominis out EXPAREL. clinical, with Scranton EXPAREL-based to Beyond procedures. surgical will Phase Dr. advancing enrollment nerve our pediatric registration further After study and on and the regulatory across use for teams emphasis spine range plane in of launching innovative X in for studies C-section administered EXPAREL population C-section a regulatory a opioid-free a are TAP a need and for opioid-free follow-on highlights block,

turn we in a where commercial stand like awareness I'd I'll Now of of CMS our pillar to our second of access. start education, payer summary with expanding strategy; the to and initiatives. with some

the terms expect of is J reimburse provider will significant certain accelerate of unbundle Medicare, the we selling X% providers. and EXPAREL-specific drive average the reimbursement decision CMS's price to an but plus ambulatory removal centers to overall and only the for this also to patients cost hurdle transition setting. will ambulatory the EXPAREL code patient victory In a procedures believe imminently. healthcare not This system. at We and satisfaction, reduce of

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full for prepare January We expect initiatives to with code commercial on rollout payers as J the of advance additional X. we the

smoother We code them working J CMS have we focused the Medicare ambulatory EXPAREL facilitate as unfold take effect of on outpatient the commercial code. also begin now both reimbursement J reimbursement X, rule and final market and a with to Medicare payers, expect January commercial to for payers reimbursement. standardizes managers, who will to around the and team field centers are account Once

option and Surgeons account addition plastic AAOMS, This to an managing vulnerable code, DXXXX, used strong billing be their Association this are surgical pharmacologic dental overwhelming EXPAREL here dental that in from successfully managers access of issued site of news Many for We younger specifically non-opioid these need to following surgery majority see critical Maxillofacial field, community. are as prestigious would within has for surgery patients of common American a two is setting, where the Dental oral ambulatory to at means prefer pain an is pain. for In in societies opioids EXPAREL, of the population. and tooth for of first exposed national validates for oral use procedures Improving highlighting with EXPAREL a American outpatient like differentiating expanding clear support Association request in our agent The like long-acting new the the role are of can their a the infiltration solutions surgery the approaches dental – for EXPAREL of sustained-release for wisdom that interested opioid-free time, the good the Oral non-opioid or customers, control. patients who practice. engaging extractions.

D to as more to reimbursement and facilitate begin EXPAREL code to uptake more offer oral the surgeons and expect drive their We patients.

that In working will mL XX fact, our covering the notifying of options especially wisdom providers D partner, non-opioid offer commercial new payers the plans. they're actively who tooth code themselves, self-insured dental Aetna, impacted means for network as a like we their differentiating is are with other reimbursing already and vial. extractions EXPAREL And

pills the addicted representing on of their and their use patients prescribing. to pain or and gateway education with patients current opioids it XX% front, aged for prescription leftover was properly, a titled, had in they the campaign family among relations received report were to our especially XXXX prescribed procedures. even pain. surgery designates were did Last need of from with Exposing in not month, them nationwide of XX% survey millennial research published Key women include overdose. potent, an new of of opioid was Trends advance friends. sharing the reported common last findings of risk XXX and opioid patients leaving Persistent we the them becoming surgeons. year XX% public trends patients dose that or dispose though claims continue – pills so to the XX Opioid Nearly women of CDC analysis surgical around analysis pain of Use, opioid refilled after is help and XXX high them or awareness data daily surgery. raise a Silent concerning they And of opioid-sparing to the as in robust based a dependent manage millennials longer reported strategies. homes to management for On five over national one millennial The Persistent XX% surgical increased to men orthopedic patients XX. XXXX patients no most

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cuff launched each new The portfolio. educational medicine is being spine strategies our a rotator and materials, pleased relationship campaign focusing to which the is fractures. motivate Now include and features co-promotional patients of campaign A marketing recently that to cuff, co-branded sales to such opioid-sparing speak as J&J's key about well efforts here EXPAREL.com. EXPAREL differentiated as initiative opioid-free driving tools example the non-opioid will featuring further to doctors and solution agents DPS-Mitek approach. part is is The featuring for DePuy extend postsurgical We're brands sports pain micro repairs. the EXPAREL Suture, DYNACORD patients the Synthes' solution to of both key rotator materials relief. hip co-branded includes to site TYLENOL. It both also non-opioid with and for include a team procedures as a on total orthopedic their as a verticals is integrated initiative, digital into This for as improved

to continue collaboration. successful opportunities long-term J&J very near-term fostered the and very remain this about by We optimistic

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maternal-fetal We EXPAREL The last touch opioid-free are product as a line new cesarean anesthesiologists, long-lasting perioperative is obstetricians specialists, team for targeted quickly of their TAP pain item will that a sections I our to block and platform create management. with features pipeline. nurses working innovative on for

three-pronged Here we solutions innovative and non-opioid premier on management provider health a the regenerative approach. becoming are of pain focused through

EXPAREL This given the we of is intrathecal and local of and with our as non-opioid profile safety chronic for DepoFoam development flexibility are anesthetic well as and underway products. excellent program analgesics API platform, pain. delivery a novel other plan acute advancing First, for

preclinical in products DepoFoam-based several development. have we Second,

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expect Pacira expertise and We choice and the hospital assets announce couple as over strength, partner to commercial solidified markets of of our our DepoFoam where quarters. network. our next a financial these business given development in and partnership And is clinical ambulatory significant additional third,

technologies and is surgeons orthopedic team opportunities selectively of osteoarthritis, products Our in surgery, evaluating additional and to interest and anesthesiologists.

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Richard E. Scranton

last great all Dave clinical million good on we regulatory today's has to spoke, Thanks, used progress, continued morning approval. and we our than executing X.X strategies. have patients more Since joining been call. and EXPAREL to make in since

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government claim. an bodies critical to with linking providers, on and private these of necessary opioid-sparing academic discuss patient-reported and in payers Choice reported later need we opioid the reducing need evidence opioid-sparing study. this the in the define area year measure epidural. help administered opioid-sparing an reduction on In as the will in clinical C-section of to elements an patient provide opioid great believe patient follow-on will known benefits there discussions will outcomes our what will that by enthusiasm We define addition, opioids of healthcare outcomes an benefits outcomes to Choice to reductions utilize the our to and continue improvements therapy. or the via eliminating around support constitutes deal Based regulators. this be to work study believe meaningfulness are claim, for of Linking launch

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for of Europe, marketing on authorization quarter first XXXX. track our to Turning remains application

acute and in seeking of approval local the setting for for regional analgesia pain We adults. will be EXPAREL

and trial with with of With at discuss filing over Program our to studies European Nuance Charlie? that, Biotech. have will be Investigation requirements a in PIP to peripheral the meeting part partners I'll our clinical Pediatric Charlie path finally regulatory and the financial And to approved walk regulators recently China, we the nerve call blocks. results. includes or requested along turn through Our

Charles A. Reinhart III

and Thank you, Rich good morning everyone.

our I metrics, our will A you remind of be I'd GAAP can quarter this with financial third we to release. this be measures press to non-GAAP financial Before description reconciliation these results, along discussing morning's morning. that like in found review

our strong third to we and of the over another quarter fruit, of pleased position With company. $XXX be EXPAREL drivers representing prior EXPAREL million, full-year the multiple now sales million $XXX from for range million EXPAREL quarter XX% The sales $XX.X are very was bearing increase to EXPAREL a raise XXXX $XXX third once our quarter were to XXXX. Net again $XXX million of to in million. guidance our to growth

gross of XXXX for non-GAAP year. XX% XX% versus third third the the last quarter quarter Our was margin of for

by impacted was and Our XXXX of quarter facility third for research margin favorably for increase third $XX in Swindon. versus to our manufacturing which gross last expenses driven development XXXX of utilization The cost in quarter the million increased largely the up per of the R&D was increased year. Non-GAAP capacity scale our vial. million third lowered quarter $XX.X by

expect production We are the stages our stage first the process within few the of commercial the expansion regulatory and final of for now in next to months. begin capacity

engaging million of increased affairs activities, public the Our of improving options are and third last and third as XXXX compared with general, promotional surgery higher incremental J&J to related access our on year, to in and and $XX.X non-GAAP commissions, managers expenses compensation campaign new our of linked directly oral expenses for expanded of who focused ambulatory are to both the outpatient $XX.X quarter to which plexus of EXPAREL; block. for to incentive primarily including to quarter and administrative million the specialists; account well sales; plastic launch sales nerve like as non-opioid brachial EXPAREL internal due centers team increased selling,

year. share resulted or non-GAAP net per the for for the and net diluted of to $X.X $X.XX diluted million basic per of last All XXXX, and of compared basic share or quarter third non-GAAP income million this income third $XX.X of quarter of in $X.XX

cash quarter and with our the strong, remains approximately Finally, we cash as ended million in position investments. $XXX

to ahead Looking full-year our guidance. financial

margin The to range increasing our non-GAAP improving XX% Non-GAAP our XX% of to financial and to to operator $XXX to non-GAAP $XX XX%. full-year expense XX% previously session. million the expense million, to of end to of the guided that million guidance, R&D be remainder million. over stock-based begin expense million, the of addition Operator? In we're EXPAREL the from SG&A of range, same. million also With guidance to gross XXXX Q&A we to in noting $XX guidance sales our remains $XXX that, call high our now expect of turn to will I $XX compensation this today, $XX

Operator

Thank you.

question Your Randall RBC. from first comes with Stanicky

is line Your open.

Randall S. Stanicky

still questions. the start-off, been just in have maybe perhaps accelerating us some Great, and you trends we trends Dave seeing about you've in a sense, those give know I – don't acceleration thanks guys. track get September, to monthly monthly couple have looked? of upper talked terms or Just Charlie, Is But the are recent to color those past have and if teens? you that I of growth continuing? still in Can in trends October, months. a how

Charles A. Reinhart III

consistent That I the growth XX%. we period throughout obviously So say, frankly. revenue reported was would of reasonably

Randall S. Stanicky

Okay.

at look raised There's least be about in we that things to XX%. it's as in row. all confidence acceleration a continuing of that going you growth the I growth quarters growth and mean, no my quarter thinking level fair? on, conservative the if of guidance, high two implying, in have is for think guys' given We slowdown your raised at that a remains that – last or bolted guidance fourth guidance the is that you've when bar. I beaten So correct, should and math you've

Charles A. Reinhart III

remain our very Randall, optimistic. what are about in excited we're very So, seeing and we business

in an the being that comment the quarter. to is The consider it last about year other statement. only thing conservative I fourth accurate probably is our sales think changed trajectory

increased fourth growth and it remind to for the So we for you, quarter. had just QX XX% through roughly QX X% to

the fourth quarters. is a the stronger been than growth other denominator percent in little has all. in it That's So quarter

Randall S. Stanicky

J&J Dave it. further expand closing What's there. like Got opportunities to this integrate next going that I then the yourself relationship initiatives the And talked relationship I And mean, TYLENOL, to about on you've additional with the there? relationships, if those into forward? it so are know, step you sounds what and side, J&J so to be? continued there new continuing would

David M. Stack

answer any the thanks The around the the we've first, mean, being the Yes, driven really opioid-sparing strategic in – is than now many that's developed marketplace the got. well, question of Randall. intent more is interest J&J for by I we're driving in decisions somebody's office. And that passionate

that customers So as the have with we J&J, nausea working for to for and to pretty palpable the marketplace have The are pilot other in regard customers regular with and opportunity different working look within with patients easy their we're bariatrics with the opioid-sparing all example groups the and vomiting issues solutions. folks need the where of understand. have discussions be not in best forward, opioid with an you that would who and about

two focus strategic are to, at able going. and where customers by marry the they're the driven So new from on an referenced we're entered the have that Johnson fracture, what's think efforts. I during number the to the being they developments is where that of other hip input customer both who with phase and where our have, organizations & we're a and benefit a development primary of the clinical as and one, And well lot development a relationship development Johnson opioid-sparing spine they opioid-sparing Rich is their device is call. number a a There's solution. others. talking going which marry in a DYNACORD being with lot that We there's done where mentioned, And of between we've programs initiatives would and which DYNACORD we're with very of the bases

with I J&J we tell actually together relationships movement opportunity around put was that the anticipated personal So to the I some here think folks the never it as the you would product. and well this the when have speaks we as of

Randall S. Stanicky

thanks. That's great. Dave,

David M. Stack

Thanks, Randall.

Operator

Thank you.

from Jaffray. Your David next comes Piper question with Amsellem

is line Your open.

David A. Amsellem

Hey, thanks.

few. had a Just

we think the the product, brachial a benefit way of you it how of about which growth the shoulder? of Maybe have and do the sense going announcement unbundling plexus to program. So, better you to to had continued better could are to and extent follow the XXXX I of sense asking lead look wanted is regarding could unbundling how of to to the a much about that's you on the then being know pilot the about think how talk big that, those talk Aetna unbundling. surgical we you if commercial as be? think can two, get impactful extent in forward Thanks. centers? And positive the done – should one. regarding And of as particularly insurers that the procedures CMS your So I about ambulatory in of as are which number to a that's But the part and plexus? qualitatively mix, way impactful number brachial

David M. Stack

Thanks, David.

will the the to strategic is One that as of relates reimbursement. real frankly us the standardize CMS it approval it opportunities for

understand direction, be why describe opposite Let solved, this a the to David, me take it solution. in if the easier that's it'll being is problem and I

the some the some have problem payers The been real reimbursement the issue they into are is by you us for milligram, they because the has coming a EXPAREL their many by protocols, and big use et The of cetera. by how some set a that for payers that a for payers that their believe general would for get led to a and and So mills, a to individual for milliliter, of with code map up their EXPAREL tell has road by of the paid. how the road code they of absence SOP is own own providers today. some bundling a procedure EXPAREL use numbers J map J we billing pay don't code and

that of way this believe the important in making their to ability across for terms more continuum providers is than we easy to EXPAREL bill Medicare. us relatively So really to it the standardize local for

are there it's procedures brachial of block terms these But in a working a scenarios, our that to I already done it them also actually would are of in quite a where So the have profit important was ambulatory that margins thin. be plexus center many surgery and commonplace in is if qualitative that think of know change, an marquee hypothesis. impact to

we the already be. standard an care where move may block ability places opportunity the think to is going environment using EXPAREL that bill plexus to they're where not in accelerate having it they even brachial from is the so, that to really for scenarios currently And to of other

hernia of year like repair joints will is outpatient that remember highly are environment, it abdominal have an be CMS pretty a joint by for the to surgeries, done and next good commercial but that with the an initiatives likely payers we ambulatory encouraging many be paid things setting in procedures we so, that And total number intelligence now. the in some also have of

so reimbursement. specific will broad to that it code of not to that J J a specific procedures And for is code is The possible. care, J code make or areas

order a that to setting. care to for forward. we provide one of kinds all ASC in opportunities working that. us I very We've them you to are one mean, to example. that there with move hysterectomies achieve specific very believes the move opportunity ambulatory is it'll give And specific provider So just got

is about J national an code the So then course thinking big the quite of is of in you to a how a from that cost motivator favorable ambulatory setting care. And use I improve start payers perspective. care a cost patient to people environment care for see can

David A. Amsellem

Thank helpful. That's you. Okay.

David M. Stack

Thanks, David.

Operator

you. Thank

next Steinberg Your from comes with Jefferies. question David

line Your open. is

David Michael Steinberg

and much good of questions. morning. very Thanks Couple

then some profitable. XX were you are smaller the what it's increased and the the oral in of a Could sort I terms know the place And was sales view for mL EXPAREL that second you that seeing in know most And Health underestimated And setting? out will the surgery can that And stopped. this size what mL of an and you question you with been is, number. critical even it's Symphony know then Thanks. mass recent You recently, and long back-burnered, that the wondering data of this XXX% the with any setting? things Symphony in a market. force? there's of of tight Do the of I Aetna sort less break very oral Symphony that touched area have AAMOS right how gets surgery area your you sales kind the about over market? I quarter, I it time? mentioned talk you're in correlate part way and that of But actual surgery on in better quarter. momentum because Was sales upfront whether going oral changes smaller vials time more vial and a correlation. have the Health correlated and in

David M. Stack

David. your answer I'll first Thanks, question.

strategic paying for tool it's first for molar are EXPAREL is predictor avoid commercial you're and payers think in I interest There probably best third for in that for important think that folks of other these them. payers the and strategic great is an the to exposure us. those having being opioids extraction, seeing – from so I commercial what Aetna of future the

so do oral we to see we opioid-sparing important on that actually D that see to have a reason that us. as surgery to increase continued and momentum We to I with code, patient patients. surgery you a And oral will when per basis, solution marry a way an in and believe every it's provide quite think prominence

of But on define regular a that it specifically are done of see environment. these being to oral is national mL is vial. order point a basis surgery can momentum, each mL As orders XX the you product see because procedures most is are are ambulatory X how a groups It out, we in exactly But practices, – who we an tooth. the daily the for used, oral surgery number going and on basis. especially, a there we because can't

so, specifically out that And allow was the care folks and beyond folks that XX focus of and retail surgery setting. part reason have plastic we to surgery put the oral the the there of basis ambulatory are a

It's quarter-to-quarter difficult I and month-to-month important I data to would very be and and have what gaps driver. you've a we of surgery marketplaces an our I proved me appreciate know I here and do. David, the just now, what think how growth you. – a the oral I it value to have quite wrong while for is didn't been no this yes, So, discussions. EXPAREL fully I and tell to on to Symphony the know be. what don't they basis data, they and do analyze figure on idea their to try might sit out try when

admit just feed that on to So going I'm to one. the have

David Michael Steinberg

Fair enough.

Next question.

units very addiction reimbursement the ASC the goals sharply XX,XXX XXXX. peak rationale CMS's in combating the commission certain outlining be rules XXX,XXX packaging a in the certain EXPAREL detailed to EXPAREL with of in they of calendar total declined doing put so, around year agency policy the the document consistent year present units drug opioid in a XXXX calendar for units governing for So, use in ASC crisis. from setting. CMS year July, upgrading changing and the And about document, a of drugs in found proposed in that And to per setting

period, potential decline So a around you that's a if price. XXX,XXX that over List/WAC total $XXX three-year which use in lost current million sales setting represent the annual $XX those of

even was that I $XX about thinking that number, if reasonable $XX that potential way around it? Is upside million if would about you net, the or million assuming to you a would So is say this incremental of is about XX% be you contribution. annual it the and once in instituted, assume gross a run thinking EXPAREL

David M. Stack

David, and of the that now the it's the got they a is are we not the of for because unreasonable, of frankly many of between and but time as EXPAREL realize over think been the And the negotiated. I reasons rates out ambulatory benefit, had there pilots – not that are didn't covered have procedures part been think many ASC the not have those contracted payer. payers part force providers reason sales I we've these these

but J had very future. in a to in code those have be cases, opportunity gives to the straight-line many us the they have discussions, So

out for time, don't appropriate think well, is you in think have that I XXXX. that would I million $XX if I look So to number ask you –

more gradual I be that. think marketplace will in uptake than the this a

we ability on as would outpatient I then out number current patient trying discussions marketplace and physician would the be that demand code impact that to I a that the the to J how based that out that, figure quite reason as is, as market looking static quite have. think you to I at a think payers, say demand well is you much lot that than to look the more tell move with And in would if than our they their conservative. see patients further market

get that's that your answer we to So won't question forward quite going conservative I year, million next David? but $XX that date. think that Does after

David Michael Steinberg

Very does. helpful. David. it Yes, you, Thank

David M. Stack

well. papers couple And there we has through there marketplace, that helped as are are think take And the that product different where that the by like of Randall economists would written of are noise you Right. out use of the a there's me ways if out biopsies never a done places something all XX% pain, long-acting for acute things like in surgeries suggest number going projections inpatient ambulatory XX If your would in why why can XX% be heavily means the even close years in suggest done would I might environment. an environment then are which very we over flip. next to investing be that that million an eight understand in and to you $XX that's that's to care, true, And today, being conservative. ambulatory is the

David Michael Steinberg

Great. Thanks.

David M. Stack

Okay. Thanks.

Operator

you. Thank

from Sachs. comes Goldman question next with Flanders Dana Your

is line open. Your

Dana Flanders

key an across you channel? within maybe Can latest the ease or we're Charlie, that you just Or Swindon the us to given what Thanks. to could in seeing for just update dip you of My maybe that Hi. that the in a then setting? on continue of questions. coming we hospital flavor you're all? access QX just gross next And changing online? at is give the across the would margins Is to Is give your to expect my over gross Thanks discussion first stakeholders, the just expect EXPAREL outpatient seeing year? one, should strength strengthen second time? just margins, why us

Charles A. Reinhart III

gross And volume, total had that of margin take the a question, me those were of really We're year, all a let XX% XX% think good out, into where comes gross we Dana I lot guiding more strong good. factors So, we to margin We we There kinds the had go how et quarter. we're and comfortable this to had at quarter are yield, first. is where point. a had for which cetera.

on expect still of a number of out, range, capacities, more guidance that's in said specifics the we for XXXX be As in our we that to early when years XXXX far mid-$XX a couple as as expand times we'll margins going forward, we and manufacturing ultimately provide year. we that guidance and provide million the

David M. Stack

first take the I'll Dana. And piece,

see do So we improving yes, access.

On quite it's the interesting. side, impatient

$XXX, provide So mL community plexus we priced do XX EXPAREL the an anesthesiology specifically easy for brachial at to to blocks. leverage very point

controversy As efficacy you know EXPAREL. in anesthesia well, some marketplace about there's of the the been

of the efficacy. And And iliaca, kind rapidly getting that fascial $XXX. we've so, we're what pretty this days anesthesiologist the those that to group see X, we've created it TAPs X.X was I hospital a product. They for to and work? it's mL the and mean, important you really field And And procedures, are to discussion. the so, this for the an use play profound then opportunity blocks, are XX customer through people the way, demanding opportunity for to see said you knowledgeable use of PECs, changes conversation move a the drug doesn't the anesthesiologists in the of who stuff completely who that several see this during largely a the environment. once choose times have the the then joins us, and anesthesiologist then given EXPAREL referenced we use

and about of on the ambulatory environment, formulary that, big and are that lot people pain around halo have have fact EXPAREL, that demand very EXPAREL getting the hospital market, and last in managed is everyday. in-hospital who new that wins vocal the especially of some very people of interesting P&T you we start very are to the using – see that how with had So some reimbursed, a committees say in we discussions, success business in just ambulatory aggressively to XX the see to with their we've be the momentum want groups who drive hours had will there EXPAREL

Dana Flanders

Thank you. Great.

David M. Stack

Thanks, Dana.

Operator

you. Thank

question next Company. from comes Your with Needham Belanger Serge &

line is Your open.

Serge Belanger

me. morning. couple for A Good Hi. of questions

the for outpatient centers. set getting the unbundling ambulatory at time? that in you J are the segment that confident we're in on Have for unbundling First, hospital How movements surgery January. of seems expecting any point? the for this And heard the you code

David M. Stack

Serge. on you there if question, mean, that be need be. do to as not Good put going I some are use. to they're determine additional confident could whether not as is it's period We're it, to or the comment qualifiers

that few going be And fully code what expect so J we're and to good they the them have a sure don't putting in that hiring how We we and to code, ASP plus days. next that will enough but we're get fix field. sometime out will of the X%, receive payment a sense in a we're people

I the about very those mouth, I and CMS mean, had shows need we're discussions with think CMS. OPPD, And the right? our continue. of FDA, So those I So as the marketplace, as the the HHS the continue did will that, J but that a the we making rationale available on speaking that with with I discussions an very you well with productive other, code. and outpatient we with the discussions strategic care improve expect the There sort to strong in we've that same with is started code. code can't us can tell to OPPD J think We'll CMS way that EXPAREL for use for on we I by well. the ASC through on handicap patient work there's to that patient-directed follow

Serge Belanger

Okay.

this about that naturally pilot earlier XXXX? week, it pilot in in and program evaluating are this was do the is announced program (XX:XX:XX), expand you expect question by the could what Second sometime in they Aetna

David M. Stack

a letting it's it's pilot, The code. so bridge Aetna well, basically know, I to ambulating their Yeah. J basically mean, the centers

and does So now to Aetna what know is use is start going EXPAREL it can for advance J to people of is it. EXPAREL code and Aetna that these it in centers paying now pay lets that for the

kind happen? in procedures with it We've pilot, think to activity been determine they is number a educational with out talking how providers are What terms for of going to national working is the ready much require of product? We're getting activity for make best, them that and required very places And a true launch. so, So which order of is the to rapid us right? to to want it's pilot week in about, a this a it you ERAS do movement this support real of protocols?

partnership going with Aetna other learn I intended well. national are Aetna relationships use number and in of national experience idea should we'll So product, But programs enough those this idea has been we on a that isn't support to ambulatory mimicking intended also a personal great basis. not partner here. and we so with that both that as Their the there have to it's restrict very a a the are move our program, way have any be discussions that the and ongoing pilot And of will that add strong this that, we quickly right? folks providers, can expect

Serge Belanger

Thanks for questions. the taking

David M. Stack

Thanks.

Operator

you. Thank

comes Ami Fadia Leerink. Your question from next with

Your line open. is

Ami Fadia

now, for what the happening Good you to ASC come question. apologize this of of setting? do there's mix that previously. unbundling the that the the to the a if for decision What's was expanding on and ago, did still stance outpatient And morning. you. if then mix also? And was talked those data likelihood discussed And code couple your Thanks current CMS about scripts related of scripts. outpatient a the of include the separate EXPAREL think years possibility doesn't the hospital that, heard that what's in And XX%, future? settings J kind the as document CMS Thank in referenced I about U.S.? of those hospital well comment in script is a that? that a the that was had EXPAREL when And

David M. Stack

didn't have we a we had first (XX:XX:XX) C So code. a J,

Ami Fadia

C code. Yeah, sorry.

David M. Stack

– to point No, it that's to and okay. No, I'm not just different that trying out. is slightly

a analysis the that code, came we had about the was done when it So and about we've during C it phase. talked and to new was launch CMS

full to environment. make the about wouldn't generally launch an right have didn't anesthetics, use technology how during any local it's treatment drug really folks long-acting hard when run it folks and phase a therapies you're to access so that or outpatient to talking non-opioid to And the value to of

C certain at a very the had away, we've that discussion fact when different year. take to the would you look and understand this, first you have I scenario. context a probably not three in point, very average a we a looked a you way then you years it code the that is had five-year year great So different that of cordial a when on at the first that think the you got if than last to And is

two very would that payment there conclusion a So it a over that you moving the payment, was was different way see you five-year if CMS which looked took years year at the no would if that is when last you average relative a you the than there to come approached to last – it.

J to they're So I get I going are our think setting. ambulatory – think expectation code whether is to that for we going the a

the very discussions the had think have in – the clearly to CMS And been letters of are the collaborative of of goals meet all they I that have We interested in also much comment have and I think patient they very interested all trying Opioid been period. during the sent moved in and testimonies care. they by And is Commission. were

give after I and outpatient how we it we expect there. last the know. to same going discussion, to continue it around ambulatory CMS, related use. have were we to up, setting We'll I again, said gave will effort that's we that don't And the of discussions end that the successful as as Honestly, set so

but than gives confidence that more some us nothing So that.

Ami Fadia

Got it, thank you.

David M. Stack

you. Thank

Operator

Thank you.

Your from BMO. Nachman question with comes Gary next

Your line is open.

Gary Nachman

the groundwork little of are that Hi Dave, And when us the J have many managers Just you uptake for more how been a sense who year. laying new better they expectations working talk on the good get there? are How with a give field bit the ACSs. about code? morning. next

David M. Stack

mean, us for Yes, you've thanks known Gary. I a Gary. long time,

much in So mid-XXs. ambulatory is care the market the and you need XX-plus we market very concentrated. get the cut the to at market, of something But order in percent

have states you you opportunity So and where none. some cases regions states you huge whole and in in ambulatory you care, have have where have almost

And focus so, on very to there folks was already we would a a decided what putting do the have strong to to have where opportunity strong very places place in the was that by input take where these ambulatory existed. care them

so, here, being would what shows have always want And so be calls mean, I up the because to competitors. to tell just these of I much on I don't – I of that you say careful for plan the they're think we our – strategic people some

But would state. So nine I are and tell in there's bit I'll little here. one them a be of XX people careful you,

it concentrated the so, to And effort here. speaks

done And you that teams. have this in so, another includes product. internal before and what is reimbursement small it of expect, is And specialists doing that charge that team folks they're would many there's this for launching

the at local the and level, to are it. ambulatory IDMs they working pay the that. it. that groups all the of at for and think okay, they're sharing with the So are with for and want information then that top the coming they level And IDMs reps the care from They pay saying,

we're cover that that think You So not for given of in What's negative can bills we're gap? What's the that I to can be time we lot it, but rejected. folks is to a go the big thing trying access how web That's And days, strategy, we Aetna the there for of then folks. out some And to biggest a them payers. get and is, web possible to much don't these that access people commercial have something customers, ready with other all January right? and It's bill next right? the what they have pay those single folks missing, it and to X? some in these these get avoid. think don't so tell it. that's of that on you with We're it know XX having having we is want

are they all so, they where different with EXPAREL. terms slightly how are they to in of got And

as to of that's not, people a or as individually address learning group And what X. well opportunity reimbursement as these know Gary, who will that's January I we're on a helpful don't if to... customers comes so, how but folks have

Gary Nachman

is it? more. further that accounts in color the it then helpful. nerve about have With in overall number now existing And is Yeah. ordering accounts the No, penetrating of couple Or just EXPAREL increasing setting? hospital a block place, very been

David M. Stack

for number you almost actually. tell But basis the to on the that basis is number growing, accounts on happy I'm a is sure. daily weekly accounts No. of growing of both a

Gary Nachman

Okay.

David M. Stack

because It's you it's one hundred interesting Gary, have that because our have you several that you boxes, you almost to in order orders, I'd have when days sit hope have, two here, XXX benefit rather much people boxes, don't person really than see right? order big

Gary Nachman

would know new you penetrating it little but recent accounts initiatives, these flat-lined like have some to I number of used of sort a could bit, us that Right. like given in accelerated some of accounts. seemed it terms it and give then seem of a

David M. Stack

are their providers commercial really in in the daily a codes. should Steinberg, on we David at been them basis. EXPAREL back and us. to No – doubt in putting told to those providers D how many lot dental that with there's it. The he dental new and And times about And part be also and interesting And of we've you see the goes me mostly dental. meetings more interest as dental when customers dental moving the program excitement of is a that

Gary Nachman

one Thanks. getting trend How And a that investment, return Okay. more Charlie. about to that? directionally, do It should for levels next like go just investments just might but year? from much up on how spending into How think seems good then last expect XXXX? we you're

Charles A. Reinhart III

think really except going to I any say in give don't than there's we be we think it'll provide generality comments don't about we when more that you be XXXX And specifics changes. made we don't Gary, specific to I think will guidance. different where are. significantly XXXX, major we've

David M. Stack

Yeah.

it's covered. mean the that, has Swindon bring right, I associated I for they With of the the Gary, J&J new and us, with leverage here, execution. to of all all that now and – think bear lot beyond facilities about been costs already and even resources manufacturing the

a have to opportunity manufacture. we of lot So

somebody customer putting the some but think for than been where plan, doesn't selectively a around a prospecting. marketplace people that the it's I And put time rather almost have now else but into we're point certain book we're business, somebody to adequately for cover uses. covered, very in of there XXXX we it already at the

very now disparity and between all grow grow to distinct us about revenue requirement So I see versus we the think the a ability this leverage for is to expenses.

Gary Nachman

Thanks. Great. Okay.

David M. Stack

Gary. Thanks,

Operator

Thank you.

comes question next Peaker Cowen. Boris with Your from

line Your is open.

Boris Peaker

know shortage Great. Thanks in for curious taking may the just I that with impacting regards to question. future? to is And my how or in impact bupivacaine market? you're you EXPAREL what seeing was the the now

David M. Stack

wonder like dropped it's and the at bupivacaine thing can and us alternatives do it look street a they response that see tell, the into directives we time, available be out thanks tells sister we I a in many short to that shortage what can same the and fill the of selectively Right, with when that you. to general go I a dozen mean, honest elastomeric that into Very the you Yeah, is, see the same We are treat put we XXXX from a with we if and But question, would pharmacy don't not hospital, to when up amount hospital at for specifically same bupivacaine. looking Boris. go across difficult to caines use tell spaceship. and to pump that us they we use and for to bupivacaine, in are to of so mg, is use can by we the up they cases, telling its in XX want programs way, fill not just mg pumps. in they just patients they place. folks,

I is tell you – the full doesn't we So seem and same it issue I'll can't in whether the that on way. get what a country if exactly are across we bupivacaine EXPAREL administered to to the when be can grasp it's them comfortable because bupivacaine once we becomes what ERAS go available the of don't see back to again. shortage, clinicians a going is that bupivacaine tell you fairly with protocol the

So but and another us. for leverage think spotty, we it is important that it is point

Boris Peaker

it. Got

you is bupivacaine EXPAREL, would of you're disruption? your potential do And own any or And sources? if manufacturing there it, make so your you about concern from that external sourcing source

David M. Stack

No. not products to of all. now There's the on buy API dozens are of is issue who making related right folks the vile. that can ability the where every there be places The regulatory money you parenteral They're breakeven. is bupivacaine. That the issue it make process to make here losing – at settle and would able to to

API this not an manufacturing is this but into is – it's parenteral so And issue, a problem.

Boris Peaker

Great. very my Thank for questions. much you taking

David M. Stack

Thanks, Okay. Boris.

Operator

back showing to like to Chairman Thank time. I'm at CEO closing the I'd Stack, further questions remarks. this and call turn over you. for Dave And no

David M. Stack

Thank Heather. forward your updates additional you, morning. providing look the time you Thank questions for in to in this We future.

Conference London, Next you that We York. to up New look for in us Conference there. in forward the followed by Piper seeing Jefferies is

Operator

wonderful thank conclude gentlemen, may disconnect. day. in the conference. does participating This today's have And all Everyone you a you program. for and Ladies

Pacira BioSciences (PCRX) 1 Nov 182018 Q3 Earnings call transcript