Earnings call transcript Q4 2022

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Operator

Good day and thank you for standing by. Welcome to the Quarter Four 2022 Pacira BioSciences, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. advised conference be being Please Instructions] that is today's recorded. [Operator

the now to like would conference to ahead. I go hand over Please Susan Mesco.

Susan Mesco

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

call Officer; me Medical Chairman and Winston, Charlie Reinhart, Chief Dave Chief Joining are Stack, Officer; Executive the Roy on and Chief Financial Officer.

our team question-and-answer today's are session. for Additional here executive members of

Such based statements that you our Before we on call include today current forward-looking me expectations. risks of begin, as this statements involve and represent will judgment remind may let and uncertainties.

concerning that the SEC, risk which For or the information the the from available factors SEC Company, to please refer are with our affect filings Company's website. could

Dave that, Stack. With now over will I turn the to call

Dave Stack

and highlights the to before strong to was a position Susan. for call year as of morning, you financial for today's strength. start XXXX continue market, you, joining turning business prepared outperform We'll Good remarks recent Pacira elective from another with surgery everyone, thank operating your questions. covering us. Thank we

XX% record a million revenues $XXX XXXX. over in of XXXX, posted We increase

quarter, per Our and of the adjusted million adjusted the $XXX for for operating line, year with year share earnings the and of the $X.XX drove $X.XX EBITDA significantly and million for diluted combined growing discipline top positive $XX ongoing for quarter.

our and while Our fund impressive of and B. our loan we optimizing also are initiatives positive sheet marks performance adjusted balance year to proud the our growth records of earnings us prepayment term allows external ninth This with planned internal of. that consecutive

XX patients Regional pleased to our EXPAREL treated in for the driver. performed where be growth report more surgeons analgesia substantial some anesthesiologists by techniques am now States. to and continue a I now specifics Turning United we have million to than franchise,

most shift and market a recent enabling fostering patient The paradigm outpatient increasing from continue is recovery settings Surgical to XXXX procedures significant IQVIA further from procedural times. same-day inpatient shift. data and to this rates. surgeries care July accelerating rolling by XX-month migrate in EXPAREL illustrates

a was the of use procedures, XX% women's market a market The continues to but inpatient C-sections EXPAREL year-over-year with health, decline enable increase. outpace inpatient year-over-year with market year-over-year X%. for significantly hospital increase hospital procedure the EXPAREL setting. year-over-year, by For the grew of experienced demonstrated of X%. XX% outpatient in growing interest growth the in this flat and EXPAREL

with greater while Across experienced spine, outpatient joints, breast continue to strong both including: increases; key XX% with XX% see and increase. we than and a XX% EXPAREL shoulder general increase; with each procedures, oncology, growth, a near increase; surgery XX% Total gynecologic a

For IQVIA available investor are your these is on our which website. summarized reference, our deck, in points data

market's XXXX, we will migration through several support ongoing continue In to initiatives. patient-centric the

$X.X supply than billion organizational On capacity have of the price. the our margins annually optimized we to more at manufacturing worth a current top priority. gross EXPAREL Improving front, is

addressed different supply our issues margins the that have three negatively We last of manufacturing quarters for XXXX. chain and impacted

an mid-XX% of over to We improve see year XXXX margins expect aim time. full reaching in the range with to

EXPAREL, enhanced for support and benefit FDA the for intellectual we assay weeks expect coming product protection. additional following: approval Some the property an rate, margins to improve product-specific will updates, including failure back that secure our release in

to in for support line in manufacturing and XXX-liter track batches CRE qualification facility fill new is and ZILRETTA our yield EXPAREL on remain supplemental Diego this expect to a improve test XXXX; from our future phase, underway, anticipated the growth. we application San are we quality new line in drug

and in which ioveraº, improving expanding drive programs new and advancing For use to and EXPAREL fully manufacturing we are cost online, manufacturer lower we expansion, growth With volume benefit capacity expand our are margins, contract new with seeing unit now margins. outpatient volume settings.

rolled vulnerable we or out the are October, the particularly patient Participation with EXPAREL-based, patients. opioid-sparing populations surgical can to opportunity low-income access for XXXB uninsured two XXXB In EXPAREL. to addiction regimens. to These pricing greatly from Starting provides gateway expand in access. opioid benefit and of

exactly XXXB we After and XXX volume weeks, to XX will an selling million within with our procedures. nearly are would representing thought significant this purchasers believe market we discount we non-XXXB naive an in increase EXPAREL-relevant and overall X% We business be price. where XX drive aggregate expansion net and both existing program

the and neutral accessed to their We we revenues XXXB XXXX program pool perform pricing end want of significantly providers who more expect the patients procedures. surgeon to the outpatient to by net slightly be as to accretive a of larger

self-insured to will for pave will law Act. CMS. XXXB non-opioid to This outpatient in follow NOPAIN commercial mandate payers Importantly, CMS in in was NOPAIN treatments into and with pain new will for pathway nearly leverage the reimbursement legislation beginning us expected the way signed reimbursement postsurgical procedures, on and settings market million XXXX. provide for EXPAREL-relevant a December important XX

monitoring either of accelerate with actively prior the to XXX,XXX through efforts are period access deaths appreciate more Americans died overdose who urgency opioids. the Washington, involving policymakers a to a the improving We for non-opioid than XX-month than D.C. more to drug XXXX, regulation. of or amendment ended March given will We in XXXX, these X/X technical in implementation believe options

outpatient use non-opioid non-opioid for advancing to eligible lower-margin many especially soft solution to our these for while provide migrate are to help procedures hospitals mission systems programs positioning to procedures a Both care as while patients meaningful pain as possible to the opportunity health control affording pain management and rescue offer only. hospital opioids they and to will NOPAIN continue sites. XXXB tissue as assist

EXPAREL Pacira requested highly workshops. alone, to erector significant pain blocks infield physicians more Training regional our for provided We the Innovation plane and well also as XXXX for ultrasound-based and X,XXX programs need as opioid-sparing spinae, the Centers management transverse -- select pectoralis training than events. significant with educational at educational In supporting are abdominis our our most

educational blocks. pain workshops non-opioid, for visibility Our our among in surgeons of EXPAREL awareness increased growing solutions. provide expand are programs market's management ZILRETTA also interest and office-based ioveraº the accommodating ioveraº to osteoarthritis seeking drug-free alternative base also an for long-acting customer These nerve

last our of advanced training capacity and as a This our innovation second workshops, trading and intelligence host features adaptive software. lab labs doubled in as hall, have broadcast with dry education now state-of-the-art With to than facility lecture more and in space wet XXX-seat program. artificial we opening meaningful center other ultrasound interactive cadaver Houston, for both well studio month's

only and United training block featuring with fact, in for phantoms is In it the training scoring. States facility the user simulation-based computerized

supported and strong are initiatives a growing growth EXPAREL Our by patent estate.

for would patents, claim each potential of establishing to have successfully generic to currently every overcome a many get long-acting Book-listed non-opioid the are confident alternative years management, viable that commercially come. have no As to branded With and highly postsurgical market reminder, EXPAREL will any bioequivalence we to maintain leader Orange scale. within the one of we as a pain position patents for eight its commercial well-entrenched point at our

more Long can by continue Outside recoveries. surgeries progress. Kingdom access in the international believe care for departments. has United new United our to across we help a wait and recently General EXPAREL EXPAREL the securing team from and make appointed elective health enabling steady approval pharmacy been Europe, we rapid are the overwhelming Manager, this hospital list We improve business systems dynamic developing for States, by further

regulatory are Brazil December, partner Latin our South in EuroPharma approval we for approval and and the on focused for EXPAREL in in other submitted In now countries. America, submitting

procedures. the exterminator On supplemental label block the attractive of of front, to month, market. this places our on ZILRETTA to regulatory lower serving ioveraº EXPAREL application quarter last of submitted fourth FDA, include the in we year. us track line This EXPAREL, and approval the segments drug Complementing new seeking for pre-surgical are the expansion time

selling our all which aligned we realignment, three annual full our field ZILRETTA in sales products single during meeting, national With this unit held ioveraº a significantly sales managers increasing calls. frequency and formally base sales and account are force all and our smaller with we month, increase with trained team as in anticipated threefold we are in territories XXX-person our and now a reach size, portfolio. Last

milestones several XX for have for on XX track also next and ZILRETTA the value-creating We ioveraº. months to

showing clinically World For more showed for ZILRETTA, will Roy Osteoarthritic The glycemic will and the spikes data pain. data with promoting knee next place in safety share osteoarthritic at on Congress to now its taking Society momentarily. Research reductions data we presented advantages patients month. meaningful be these are diabetic Denver

injections. for this This dance with child's and ioveraº, several bridge is last can which want that golf, their their walk patients for blocks, pain play or provides we quarter control who drug-free commercial cell weddings. large months pay for nerve PRP at simply of concept the cash on For the beach immediate are to initiatives grandchildren the a launching market market stem and plasma lifestyle important or new platelet following for

Professional at to nationwide. a Through multiyear We the advertising awareness using Association, a digital partner commercial become in markets official in-person the we of ioveraº recently non-opioid also access Ladies initiative, broadcast, tournaments ioveraº benefits or management of this and Golf driving direct-to-consumer will be signed to how the the LPGA. product for deal of key and presence

on-label Our which pain is treating customers are spasticity, an also using use. related for to ioveraº

study track the this of on begin middle of the registration are around year. for the to treatment We spasticity

patients with spasticity, one least There with only options of be at in game spasticity. have dissatisfied patients treatment with received In million treatment have diagnosed the receiving treatment toxin. current patients are ioveraº changer. United currently these potential to XX.X XXX,XXX million to market, severe modality, approximately moderate are underscores the a of these XX% currently This inadequate. the spasticity, highly has a States while are X.X that

produces product programs we for gene opportunities label PCRX development of earlier-stage portfolio, product expansion our advancing that therapy an a the portfolio RA intracellular include candidate XXX, novel Beyond new exciting for neo-osteoarthritis. commercial that IL-X have

and X were Our Phase compelling. efficacy data safety findings data preliminary

level gene meetings of at months. with data observed coming presented efficacy orthopedic be lowest These and the the Importantly, in will greatest dose. the was therapy

internal continue pipeline. liposome advance multi-visit We our to

is Phase EXPAREL quarter. for and intrathecal for study this of administration continues on Our X track completion

will bupivacaine longer-lasting multivesicular low or back formulation or a a year later block initiate Phase dexamethasone chronic pain. liposome formulation a as liposome studies XX-milligram pain block this and We nerve also our for for field and X multivesicular

addition while These current offers along Biotherapeutics GQ product the to externally and in participate candidates a In addressing exciting pathway opportunities development portfolio several pain internal base. sourced have investments programs, strategic to customer Cartronics. of of Genosense, spine in biopharma, neural that we the our targeting include the us our innovation opportunity

more over Roy Officer, Winston, that, our the some clinical like Roy? value of to summarize Medical from programs. our the I'd turn Chief With to drivers to detail near-term on some call upcoming

Roy Winston

is for management. payers for us but and Thanks, This an exciting patients, safe for not at Pacira, seeking providers pain options and effective Dave. time, only opioid-free

nerve lower our extremity with start block. I'll

which is supplemental the As to a FDA, two to basis To X been we include new will PDUFA awaiting of come mentioned, the acceptance, by submitted expected which has letter submission Dave our the our drug official XX-day studies. are and you, are standard date. Phase remind application

which consumption hours nerve fossa The from for Both zero was the dose and canal knee dose, milligrams. reductions is the the study in statistical arthroplasty, a the single the bupivacaine. sciatic of dose Both pain in nerve popliteal to studies significant achieved femoral block through for second secondary block primary XX compared ml the opioid in total first XXX was single XX a postsurgical and when bunionectomy. active key comparator, utilize endpoints adductor and

new evidence reach strong these than the ankle, a media of into label. superiority nerve indications two adding bupivacaine block include our knee, will extend million surgeries lower new These to foot more X procedures. for additional EXPAREL over representing expansion significantly should indications leg, the support two data and believe We annual provide claim and in these for label

study year to of label exposure forward this is designed minimizing very and later the U.S. data procedures. to also practice were pediatric nerve and begun years these look leaders, publish lower opinion population. on in to the of the into extremity age. to to in in zero opioids vulnerable to literature expansion this guidelines we've We to EXPAREL key strong block EU six that them include as our begin support track with from to society Working use to evidence deliver incorporate a We patients

that diabetes. to Phase will study X immediate-release of X and Turning to investigators were meaningful suggesting ZILRETTA. type of leads a for hypoglycemic-related adverse groups. March, present the in the associated randomized patients versus receive triamcinolone short-term reduction two with triamcinolone, was to glycemic compared ZILRETTA hyperglycemia treatment fewer clinically In with ZILRETTA results knee a and Participants OA ZILRETTA spikes or events.

XX% for those treated or health range, and care addition, especially knee disease. significantly repeat being Remember approximately OA improve utilization. management, target corticosteroid in and X ZILRETTA In bilateral patients group or those that the that longer diabetes had pre-diabetic, duration the improve which are glucose complications knee helps needing pain for of is reduce patients' have glucose dosing also type have important which well-being

expansion and Phase study. a expect middle includes year. also initiate the a to safety study We This this diabetes new knee OA X of Phase study ZILRETTA X label Shoulder OA in around

study would goal orthopedic a ZILRETTA ZILRETTA osteoarthritis. the the the versus guidelines shoulder the corticosteroid society important Our new as equally as place and first will care. and approved to shoulder adding ZILRETTA of evaluate Both studies label, position ZILRETTA of superiority management only as standard triamcinolone with claim into for and pain to

what in itself. are about of seeing we are ioveraº Turning spasticity we to ioveraº, treatment excited the using for

now ioveraº physician as itself. we are pain mentioned, treating of are launching spasticity treatment new with revolutionary in a registration the parallel, study In the we to Dave this evaluate a spasticity is As on and around specialists ioveraº for value already setting. associated educating label,

Academic This Paul progressive in last as team in the spasticity Association data spasticity, of Anaheim was functional week. President is presented of ongoing treatment a cryoneurolysis Presentations the from demonstrating data and extremity data based over XX ongoing Canadian of his upper recently from evaluating Winston included improvement for the of Meeting from in at study on held period. Rehabilitation. Physiatrists, Winston, research Dr. patients XXX-day participating a his strong Annual Medicine Association follow-up the which Dr. work an and of Physical

lower cryoneurolysis old a side extremities risk of patients extension spastic botulinum receiving medial three XXX following A study report artery manageable pain cryoneurolysis. the After and cerebral therapy and patient clinically were toxin shoulder and presented injection ongoing demonstrated and for ankle movements, and upper inflection. from evaluating easily male studies from dose XX-year profile. profile a characterize in observational one- XX-year showed of to spasticity immediate managing significant safety therapy. also the reported with Data Data low three-month hemiplegia treatment stroke, of and improvement highly a case patient physical had a ioveraº The history follow-up relief. elbow effect

second XXXX. to or review which we We the patients, the the kick Because conclude before will quarter expansion expected treatment months, as study FDA our line on XXXX. the in have year. and quarter for to spasticity-label versus would time a to of in this study adult and place the off XXX(k) with evaluate is of end met ioveraº us The of the is market device, [sham] third expect as anticipate ioveraº of a year three of six early spasticity the second enrollment of

superiority the and also study demonstrate tremendous are second can It a shareholders. Pacira of to toxic. is planning paradigm, ioveraº our treatment spasticity spasticity comparator that disrupt creation belief completely in for We active the current designed patients to iovera versus relief bringing value

low back we to treat medial completed a ioveraº, block for ablation Lastly pain. versus evaluating study radiofrequency as have branch the ioveraº

a expect at of end XXXX. conference the before We to data present scientific these

to call financial his I'll Charlie turn Charlie? With for the overview. over that,

Charlie Reinhart

we you, issued can Roy, for be with everyone. To and GAAP, metrics, with start some discussing good this on our results our the release then and these this I'll financial along in walk XXXX A you, reconciliation news remind of Thank be morning. to description measures commentary found outlook XXXX. morning. will I through non-GAAP our morning,

in Starting Let's price for to volume October with flat net offset year quarter. outperform update drug partially XXXX. EXPAREL, the and X% in daily quarter selling $XXX.X market, of of and where our with net begin $XXX XXXB due the an coming to on at million a by pricing sales surgical margin implementation growth a continue for Fourth with sales lower EXPAREL trends. we average was million

to be awareness we diabetic exited care the accelerate portfolio, $XXX.X to needs in ZILRETTA for broaden such continues line meaningful a to XXXX. top as patients. addition with education sales sales the around Pacira we saw in and We to post-acquisition adding highly value as ZILRETTA improving those and our treating unique its patients, which accretive expect trends million we especially as year,

million. full of ioveraº, sales year For $XX.X

expect launch NFL in sales We commercial in awareness gain and Association, collaborations demand spasticity new education the of pain professional the beyond, organizations sports initiatives and growth PGA with with momentum Alumni pay market, as the like well to and and XXXX cash as and Tour LPGA. Champions the the

We also are we ioveraº within new of as optimistic branch blocks media clinical spasticity in new investments. such and where remain indications the treatment making

operational On a and the XX% XX% the basis, part for supply quarter first gross XX% by of our one replenished part fourth disposable total were in margins in batch gross ioveraº. by for slightly the were manufacturing The and negatively scarcity ZILRETTA EXPAREL and non-GAAP was equipment. margins failures failures and fourth batch been for impacted have this the XXXX. quarter. margins. gross challenges to in for Turning year new our since product for quarter not early elevated used gross margin of Fourth experienced including consolidated higher-than-anticipated now percent of XX% we full EXPAREL, quarter XX% the have

Fourth R&D well was expansion clinical non-GAAP as million, pipeline. investments label as quarter studies expense in $XX.X ongoing our stage reflecting

and year, in million. non-GAAP $XX $XX.X was range $XX our million For line to guided of with full R&D million

non-GAAP fourth million. was quarter $XX.X SG&A Our expense

below our For SG&A full guided $XXX million was $XXX million, expense the non-GAAP year, range $XXX slightly to million. of

of we under principal make our another million cash around interest related XXXX. million which expense to term $XX of term points. basis In prepayment to was made loan December, The fourth notes. of to most interest XXXX. middle our significant we the convertible to remind floating strong XXX and the of remainder loan a outstanding To relates SOFR has use the of B expense B, primarily expense our finance, plus expect prepayment quarter $XX of you, position for Interest interest rate a

by are end year. We remainder to the refinance B also of the evaluating of Loan options the actively Term the

based will rates modeling be balance approximately with only current $X quarter, the minimum expense required $XX interest current interest full million per principal on purposes, outstanding of payments million. For of and the year

As discussed providing sales are in of we release, discontinuing monthly annual today's to press financial standard pre-pandemic and returning our guidance, we updates. are practice

the in currently year is is of global year-over-year we for For $XXX sales are growth to million, to line rate $XXX XXXX full EXPAREL, which product sales, as follows: with guidance guiding million XXXX. in

Given ongoing initiatives and expansion achievable control, expect new that and kick growth management pain in volume XXXB management OMFS, progresses well this outpatient, plastics, ongoing we for several such macro uncertainties expansion as we our as of to rehabilitation as and outside believe very markets. given is our in European for XXXX care customers, sports as initiatives new health with existing providers,

XX% to respect in to in the with second third quarters nearly and half trends of the and we anticipate EXPAREL the quarter. more the quarter, both for With fourth XX% heavily cadence, sales the weighted first be roughly to XXXX year second of XX% historical

on we challenges macroeconomic once year-over-year side long-term we return of and prospects expect the EXPAREL elective current on fully are other and the growth. remain EXPAREL double-digit to will very bullish steady growth our Importantly, market that normalizes, procedure

to of For ZILRETTA, million XXXX ioveraº, And million. guiding million $XX $XX of for sales $XXX are $XXX guiding to sales to we are to full million. year we

of On gross XX% to side, follows: the guidance XXXX non-GAAP is XX%. margins full year as for expense

be during spilled the than acknowledge range year XXXX quarter that grow volumes quarter challenges our to full margins gross operations. early strengthen and first slightly the to expect first sales into year manufacturing margin margins may guidance over lower modestly late due as We that

consistent $XXX of which Non-GAAP in of also $XX range expected XXXX; is XXXX; $XX million, million which $XX non-GAAP million. $XXX be the finally, million is compensation, to million, million stock-based to consistent to expense $XX to with R&D of is SG&A which with

financial In adjusted XXXX for of modest elective and Difficulty]. We share impressive summary, the $X.XX bullish $X.XX and ongoing year earnings adjusted to turning macro $XXX.X and despite adjusted five-year million year-over-year that quarter diluted normalizes. the [Technical for headwinds, results increases the in growth for with $XX.X million plan EBITDA teens per expenses Gross year-over-year our with and once Pacira delivered margin margins for surgery operating remain the EBITDA in fourth of line is exceed market improving, in XX%. top year

to operator That prepared I'd over the call Q&A the to turn Operator? concludes our begin session. remarks. to like our

Operator

question-and-answer Thank David of will from session. this question Instructions] comes you. first At time, Our we Piper [Operator a Sandler. Amsellem conduct

line Your is open.

ahead with your may question. go You

David Amsellem

I just had a few.

missed Regarding impact the this and And of the about guidance, talk you but providing? just XXXB I pricing in the terms implies the I of program talk what that about the direction and pricing implies? what net that of can apologize overall if discounts you're earlier,

new beyond. about expecting line And and the then customer guide implies secondly, what drive You're saying 'XX that regarding adds? you're growth can top you to accretion talk volume in

of So to in get in, customer new better I'm trying a terms adds? of you're what baking sense

tissue What's is some look normalization then I general your you it's different. will particular. it recover? you And or think the environment, about in to markedly as surgical you mean, longer-term event? question soft think the tissue Because soft side as at a last on the in normalization you with going XXXX, that's as charts, be on thinking when the -- obviously, there on are Do view

Dave Stack

David. Thanks,

we our would think have to forecast a perfectly. understand implications David, with X% guidance, And right that first of that net. well, the So we and was have you in gross what now, guidance I discount

actually we is by their What modestly split these customers between gained purchases a plus from non-XXXB is purchases. and hospitals and XXXB, surprised sales. XXXB many XXXB We're regular program that new the that that the see ASP we there of as fact mix purchases of

worst So, weathered that we the we what of we'll think see.

pricing are terms not just more just non-XXXB started XXXB of at the end of increased non-XXXB actually to many are hospitals XXXB XXXB of And In said, sales seeing I previous -- purchasing. we -- we the as with those buying action immediately at the purchasers levels. October,

it. that if worse base will we've X% to obviously, that's think So purchasers. of thought. to an the is present it things are conversion. continuing probably than widen work that we in appropriate be unrolling of will pretty got way as terms we And we And the improve as But it do much

line script, And both the again also, their for with customers we a case get so and these see as the get anesthesiologists XXXB the surgeons, that to experience the when also and David, same we et us access to of EXPAREL time just going having patient hands-on way experience, folks from NOPAIN, we the to formulary for make shorten cetera. process, more through

So, that If answers not, come I hope your back me. to question.

what been the I are aggressive customers the much of have we that about new XXX% restricting And XXXB XXXB, hospitals group see that do almost new been about who either talks are coming just -- that's Pretty anticipated. our EXPAREL talked that of customer there because in purchasers have involvement. in. we have EXPAREL, are have so adds. customers also that as We see less a do We of

short-term patients And environments ready them some expense getting more had now encouraging certain as able to people those. for cases, that in also they all we've XXXB in situations, use tell a the of CMS when relatively reimbursed their treat to outpatient of be be for in with EXPAREL actually, the and us NOPAIN fully but will they are

happen new us of what overall, in David, for the in markets. very thought opening was we and very stages up going early So much positive to terms

and of good some and It's is margin David, a higher been -- totally cost tissue, the bariatrics soft joint, of interesting, spine example. would be consumed pretty the have almost the issue ASCs procedures, here the with terms again, higher higher-margin In

moving the have saving to in muted carriers the reimbursement us the for cases insurance has ASC. by are opportunity that the the fact their dollars So, thousands of by ASC been to

EXPAREL the previous And as $XXX in for for for of environment. well the of orthopedic the And quarters, tissue procedures. in for opportunity mutes reimbursed so, use soft seen the be to is save to the opportunity XX% really ASC we've over EXPAREL that

their are analysis left even hospital doesn't just that because margin, structure perform hospitals that procedures to the reimbursement of in cover the that is soft out gets struggling environment Who low in are the costs. the tissue

it's in again and and because because the these a them these hospitals write because, in prescription I'm environment, they surgeries cheap; margin department opioids: low in bupivacaine these indigent cases, are outpatient an of and getting are Part outpatient or pharmacy at many in environments, and -- a income a are and hospital And on opioids so, D. are patients bupivacaine these that these in free they they're consider is low or part sorry, filled because

those hospital talk structure folks of say, when we would to given arrow answer able love So will use the reimbursement, universally, could use in these and what if is you financial it, do? to given there's the an where be And margin. and afford procedures I'm EXPAREL I and to I the to my that doing

in period tissue tissue can the up only require years surgery, Because with is acuity there we three a marketplace, interesting low learn the with these David. the they demand thinking though, observation there, would not logical that to of just that they're come millions don't and explanation suggest when soft tissue of these the patients soft is time, and live we year, procedures. from a the So a patient to see if in walking around numbers months needs that there's done of out procedures, six we're pain that something in soft neighborhood of COVID

keep So, think able to order such I job and to pent-up things their in the the church demand that that. be to profile is get is ortho to and like real and be patients even work to need the walk pain in treated because

number but high a is we have real, propensity the explanation not is of pain near over the the learn years, in control pent-up that makes these very for And procedures, and to there's it have only is done last And if tissue, nowhere patients the relative demand apples-to-apples sense. to soft tissue soft procedures that live been that three it. with

Operator

comes from of question Santangelo This Glen Jefferies.

Your is open. line

Glen Santangelo

surgery to up asked to seem XQ? of you remarks, differences that some If And XQ, market. go market. of just the happened respect in that with you're surgical assessment of back Is prepared the said your a in the questions elective to EXPAREL you want your about? in X% the flat what in right, to of of on XXXB Dave, particular, fourth David correctly and follow being sort that remarks, a outperform that that some quarter, later I I on in to maybe pricing you I volume talked think continuing also Did grew the the then outlook. the offset fair I in hear quarter suggest program, in that with kind

Dave Stack

Glen. Yes. is, It

Glen Santangelo

Okay, perfect.

growth you're within growth, sort that we a sort guidance market expecting sure XXXX, low of I'm X% similar what at impact? overall assumption. then assumptions, those double-digit, that of of go on midpoint, would So the for for sort surgical with imply of you're forecasting if to not And type your the embedded based pricing which volume

Dave Stack

The the you our increase. just what in the January, raised price Remember X%. in Close, Glen. the the XX ml early and price we by is by XX of outlined between guidance difference ml X%

you so, And what is correct. said absolutely

of only it actually were roughly X% thinking which you net If back be trying do benefit happened 'XX course, to in would guide the what -- thing conservative to is we that range, that to a on into guidance, the the understand is XXXX X% data. X% what as down based to increase, there that that us the is then comes price X%

the macro we were then is would which that the assumption inflation. a impacted And if And the be is -- conservative market if to is by this trying our that what accomplish. that changes, reason primary guide, negatively is environment

Glen Santangelo

pricing sort to regards surgery opioids between difference feel it's bupivacaine landscape. maybe like that's pricing it could overall relates some last sort you do having surgical okay. question overall EXPAREL? the you impact that you utilization, just And to issue it's of are think sort and of macroeconomic you of any And -- Perfect, And think you on of the issue? sort do comment of free the on competitive a just fact touched maybe the some these a of centers. and volume Or issue? on if of some And just my

Dave Stack

That's three-credit Glen. you, a Thank course.

providing third the to inpatients. Washington as And bundles. rail for I health So going reimbursement they Democrats raised for that mean, surgical of even discussions inside it DRG in environment, that's change. in our in the the not that discuss won't hospital, when D.C. the we're care. the anything is one-off issue I relates to and That's

saving commented are things For by on fact high-margin outpatients procedures that benefit like the is of vast insurance of that. carriers muted spine as ASC and the capacity majority the with these had the to we and joints XX% cost David, with I the of the a where the procedure XX% largely like ASC, that utilizing

appropriately procedures a to the middle reimbursement the tissue given given outpatient afford the in and structure are department. hospital they across cost are market more is But in the outpatient and the improved where there that buy In can inpatient use soft areas the can't areas, economic there of done market, are indigent do things that reimbursement. anything no low they there and many, many to is United especially the in the hospitals difficult States, but cheapest

So to I these many talked -- and of myself. folks

price opioid have as to down those EXPAREL folks many an XXXB, And an alternative reduced is patients importance environment mission as providing achieve that Glen, use so, to our the to able to the be -- to in to start at of opportunity a of possible.

are the in here still price. of XXX EXPAREL even places, afford can't still many There at they Florida, where them rural

So, important. is why NOPAIN in this driven Act price is it environment. And that's by the absolutely so

there convergence form largely being population. patients is So, the a poor social there of force of will this Act is under the right so patient NOPAIN these services, CMS, some and

for these ceiling, a settings, important reimburse surgeons' medicines market, the is soft tissue But that in of you basically, is product. will patients on we for that a forced use pain these see rural when absolutely cost -- non-opioid it that is very CMS these inflection EXPAREL. in rural for Because to in expect

Operator

Gregory, question RBC Gregory from your is Capital Renza comes line Markets. This of open.

Gregory Renza

but historicals? especially that, of more and Or other considerations comment online? that Congrats Do EXPAREL? price on as with well. coming Dave, this approach with touched about it Maybe to just a considering? to team on me. are the about progress. with organic Maybe for know are there respect patients increases a you are building theme you you just line prior maybe I we think could on kind the as your few in about How you the little, the strategizing

Dave Stack

as we back to I to of answer basis Well, use -- can January, Greg. the go and just I'll to that question. Thanks, Yes. an think your

of the procedures we've the effective historically So, for that many dose ml treated. their XX is

expect the in those for consumption this block, of year both where And the XX Roy extremity trials the and outlined achieved we trials at ml dose. lower late that opioid and that both launching nerve be year, to next for in early XX-hour was pain reduction

our of per being surgery. extractions X current fastest-growing with that largely, a our dose. XX mls up frankly, areas, and is oral these in is business maxillofacial ml lot also of a And you end in tube One

orthopedic of the of many also pediatric ml many are soft and the in procedures, tissue of procedures, but see very dose. kinds these done, And we XX that a procedures large abdominal not more being

pain So, reduced a XX getting are And where see days surgical dose. procedures XX procedural control we of is with basket the several and opioids ml of we mls.

strategy so, close surgical different ml because, the dose, and results the that the same So the will. And the if right? was half procedures, the in of you to broad XX here line was first gap with ml you the can between strategy, XX achieve

is one here. interesting question we as very from a forward go Your

is be like we that TRICARE, as NOPAIN, As by achieve will of our we and addressable outlook total XX% reimbursed our achieve something XXXX. market

There that go by don't the consistent to of XX%. we've made We intend in well. price this some so, models other increases. And we space price to that expect that suggest the raise be statement targeted CPI kinds with don't things are

that take approach. should We

And go EXPAREL. forward. so type that we increase we we for expect That's a of have would CPI as

ioveraº on dollars. these of COGS the priced think, help we Greg, -- us spasticity working to more are as things, runway which And improve on are is opportunities to to the the stellate strategic as our gives the margin, try lower ioveraº, some or hard blockade I importantly, patients. thousands competitive more in in lower ability ganglion of even we more gross For price we into and go

any help ioveraº really is continue in choices their any of treatment kind of price patients to to Our desperate intention pain afflictions. all the of who around kind $XXX, for straits, they these poor can that in of have control so given are that we

question. expect we're have that reimbursement. don't going that I we I your when So go to But answers crazy hope

to trying any I think increases we'll to to our use by be directed fair annual our offsetting shareholders in increases CPI employees. our merit and

But I don't think way. you're going to see us in inappropriate take advantage of this an

improve when online. sell, rather sell have lower two And we'd make the can XXX-liter and make. by believe can we can that think when selling facilities we more I we the margin COGS we we every vial gross and

into As we EXPAREL. billion $X we go make suggests XXXX, our of over that forecast can worth

every of rather And make be we get given might can that so, mission. price raise a margins vial into if would sell can the any kind we inappropriate, I the our in mid-XXs, much way than

Gregory Renza

Great. last What and the one lower AdCom? likelihood curious quick one prospects That's and preparing just helpful. you really an Are Maybe to I'm for is lay you out helpful thinking for extremity you're and about how just have sNDA. there? the one?

Dave Stack

No, see I'll has any Roy and comment if and Yes. idea. different

the mind, and say, data mean a no there's should astonishingly in was bupivacaine. I given is comparator positive. is, Now positive it's -- the dose the Greg, the ml I But XX here, my p-value astonishingly data

the and control And X.XXXXX canal XX opioids but a bunionectomy for X.XXX the dose for was XX foot and the control. popliteal and ml adductor ankle also it's ml it's I'm sciatic both -- block was in for dose block on sorry, So that opioids in X.XXX the with portion. a both pain trial, the and for that a popliteal and was pain

don't medical -- from regulatory this why in ideas? help see XX-day Roy, the here moving I marketplace on We'll We're agent relatively share in here all, getting but useful not that any I this guidance or at get providing say be not. January. our [indiscernible] we the process. letter would there anybody whether along in you a would So, community, filed soon. is have that they the different if need don't

Roy Winston

add just I'll Gregory. And thing one to that,

The bupivacaine EXPAREL NDA, bupivacaine, been two that placebo a always and sNDA studies always comparator, to we've we for went studies. in demonstrated right? And against have this with superiority submitted we time, other against

So, claim label. in we're actually asking superiority for a the

mind, in and asked against I -- how when started. originally people had to think studies of And we against we've first one active went that well, keep FDA the go But here, these comparator? an Well, active an -- against these the criticisms you don't go of us come both say, placebo comparator.

meaningful XX a was statistical said, significance. demonstrated XX, And and of and instead like clinically, it Dave dose meaningful it reductions ml only the such

like we're of are low. always feel chances I I extremely but an do for think the prepared AdCom, it

Operator

H.C. question from This Oren of of Livnat line comes the Wainwright.

open. Your line is

Oren Livnat

to Really couple appreciate returning me. for you guidance. A

EXPAREL XXXX. guidance, global help you sales can of wondering I'm the on if you in of the Firstly, sort noticed significance said ex-U.S. And I for that. quantify sales

guess, And sort does I effective on decrease neutral the, XXXB, of And begun year-end? revenue your that, by to price eventually that's that want surpassing then I about of accretion uptake that slight sort already end steady appreciate by understand to commentary I just XXXX. reflect

price initial that XXXX, acceleration maybe acceleration? existing to Or such kick we between NOPAIN in with there increase as that in seeing in even see the customers customers or XXXX on ostensibly that have do new do and we're XXXB? expected, you that front is wait in uptake see still uptake in, for expect to lag a and to beginning to Or

Dave Stack

Yes.

and sales to EXPAREL material is are in not rapidly that's the we increasing -- the ex-U.S. XXXX It it significant XXXX. anything a So, but are going percentage quite is it not well is to on numbers. doing be basis,

effectively. go there as still teaching is people and in to the we Important place in but going the products and how we're putting Interestingly, forward, process through use pieces XXXX, the high-end many and now training the there spasticity Paul we're ioveraº Winston a great interest Europe. deal over folks training of these folks. going is of Europe, and regularly across in formulary in

So Europe is material. will be XXXX not important, but

XXXB. the for of You've got all pieces

forecasted and we of the much a that convert off business comes list have list currently XXXB X% EXPAREL, pricing, are where to would from. of that's we So, purchasing and how people that who of

new purchased starting never hospitals but we online before, And folks places come increases, they the see then that which these these board, these new -- XXXB as as a just and ability the to especially online, help way. in margin, will that places the total volume these we are and EXPAREL material are on gross come volume, bring have to address folks in

so go we And as that XXXX. will we that, grow expect through

something moving half second X% the as be action from will of to loaded year. most of that get into approaches And neutrality so the the back-end we

Oren Livnat

margin of is gross these at issues I little year-end. guidance spillover. than Can you I characterize longer gross modeled least little had On guess guess mentioned on margins. some conservative bit through your And you have XXXX just persisted a how a of I that be entirely now totally conservative? smooth front? volume based? may be are Are you of continued it's and little Or batch that leaving you a little in sort that sailing and assuming guidance more had that you've sales to for a room failures

Dave Stack

in total things not are we vitro We get No, forecasting a variabilities of that the issues had good test will the test see, new test we some were current Yes. method. where to causing couple was that removed actually or in test based here. We've replace lots approved. us soon-to-be for sure. sale, on reject What mentioned in this test some the there's we

-- to in shape. got make to And supply inability EXPAREL. the we're We've good we're need we with access not things everything are of associated that currently then our all

So remember, the late that we in before. bet XXs Oren,

we're normal really to some So the in talking largely these things pandemic. to pandemic that and one-off view, were issues, back our that about without looks were the where we supply before more of something driven going the by

before. the coming this pick go volume get We're partway we've XX% we it been and in through once to late range rest of there the we thinking get XX% year So that we more then up online. we as

Operator

of comes line Wedbush. of question This from Argyrides Andreas the

open. is line Your

Andreas Argyrides

the progress. Congrats on

Just on the -- NOPAIN couple a Act here. on

you that to being -- And of up the trying NOPAIN the implementation for Just EXPAREL likelihood that then the this follow-ups. would of 'XX? of included have a are occur. the thinking sense some to XXXX measures ways And be pushed the what in get years. from would Act I about into some So then this perpetuity act how are the three

Dave Stack

Yes.

through had a bill start it Congress original going the as date. So, was XXXX

to are side hard primary the we've of number that be and ladder low folks advocacy groups on actively patient a the got the got patient so, therapy beneficiaries of lobby -- us socioeconomic the working working and treatment for Congress. that aisle. non-opioid we've groups of going And are would the the with represent advocacy we who disadvantaged And

and rule-making House Now, move start the have forward take XXXX, those and could forward been XXXX in the also process, is that normal would to actively has that technical it we amendment to and possible date everything push it XXXX. possible It's for their a involved would CMS, approved currently that in are discussions.

will in week. fact, we next Washington In be

is be think the about then start XXXX. for that And be point, -- about and established. different new folks this might the folks that can them talking code who approving folks ways you of Andreas, who XXXX. who currently code so reimbursed XXX,XXX make We're There's starting overdose. to time more died a a a approving folks for we J C can need drug XXXX a if a for And or have

have But chance to those outcome here other here, I the that I chance the handicap in going a a time. now are to zero tell the than on positive best as than but -- we're February. don't we're that, right better in things can that's working know those that sit there's real we a you how

we when the probably guys said were the you I government working what here takes back. Christie me that's Chris about never is extension, know Chris anything mean, is On And on Board. our the timing that to talking

what was three-year in trimmed a have So, was five-year the horizon. a we back a horizon. bill was -- to It

find you we to years, and very that improvement think given in but comfortable the that and after be out. fact that going with is will difficult be the major take change back tell a we're that, that would this very, three I this health to for government we'll care, pretty

maintain We're pretty good benefits. since XXXX. ASC show to We've been too, to them at working now able them reimbursement with the the

do us So, people how all I things the representing with right to we Washington. think in know these

Andreas Argyrides

factored on be a just results here? extent the from extremities. study And would the To STRIDE follow-up great. then what lower Okay, FDA into the

Dave Stack

STRIDE study, XX-hour that first p-value a had, while the had question we hours. was endpoint, a is The The missed its we indication is, of of Chris. yes, included. XX it's both, compilation data The it that

use So can even around of front care the the regulators and the care a difference larger XX of you standard addresses that's the clinical we what duration the whole the demonstrating the that data And strategy in you here here. take extend in if that first that the to set is program. was pain end, hours, to XX

goes So, the FDA. package both of data to that these we the will sets and include

Roy Winston

had too a thing is in the study all STRIDE The that those anesthetic. other general patients

than and So little longer had. bupivacaine comparator takes they they the set a when to up woke up actual

during something postoperative management. And we really right? never pain for surgery, to positioned EXPAREL ever help you It's as the

anesthesia So for surgery, that's what's out why is studies to we which there today. standard having the of regional evolve practice really two the be the next patients

If you're anesthesia bunionectomy, knee, general anesthetic. or regional of are total ankle with those anesthetic, and for most a having little with done patients a the being sedation along it not

I to was So, did look that study the superior STRIDE we the that three, endpoint, comparative if four, days again, to for the reduction not makes hours, primary XX XX active you bupivacaine but think at when demonstrate demonstrated, pain meaningful sense. two, we really

Operator

of Our Greg Securities. final Fraser comes today Truist question from

ahead. go Please open. is line Your

Gregory Fraser

need guidance the see your in pricing target over much quantify get you mid-XXs? gross to or study? to the volume study the margin, that until can will later spasticity, the more include come Will not On study? to from And longer-term on program? XXXB and can impact that size [indiscernible] time growth talk of you bit of a then about design how on registration or do year the this And the you discounting

Dave Stack

Roy and Greg start, or ask I'll spasticity the ask up to issue. pick

answer gross margin, we've in different a so sort mean, on positioning. the the given of So I the --

the no net at gross impact on margin, So the margin It's all. has on -- well, XXXB right?

see longer XXX-liter facilities scale gross sale Diego currently facilities year, than Greg, this two is we're to is the term opportunity gives XXX facility -- time the what so, San more of us more gross margin XXXB at XX-liter volume ability the the And we get from on. NOPAIN. approved the in to that and at from end And product over And margin commercial volume for the better making significantly from those the opportunity two with have liters. the

So not improved, where we liters best have to a environment. as cost improve when to margins. we the with a cost variable Diego in great San Swindon But allow XXX both fixed environment, U.K. but us will an improvement in go gross

is enhancement that volume XXXB us. gross a about piece look the And at that [two] XXXB and it. if the flipped It's both allows be to the customers. the a margin So for XXXB you from viable current procedures opportunity of of procedures, XX% have

XXXB that make the an the once price and $X allow increases customers to on we annual us offset So helps the discounts. worth can billion capacity basis EXPAREL, the increased us gross of with these margin the new

to as us that's we business the so, address these of next the towards neutrality of come the volume you come from new the as allows line why on end customers start to -- at And XXXB in look end gross expansion year, up to the and the to margin year.

a a really and pieces, NOPAIN the very formula accounts different having that of all don't complex these all EXPAREL sight these is aspect used naive It's order of these we also of that previously assimilate but of surgeons using to EXPAREL in our lose strategy. important additional fact

be You successful going assume good we when that NOPAIN. with had some that XXXB, could probably to did from we feelings were pretty we this

capacity these opportunity strategies. is this opportunity of big an get have then us increase treatment to increasing So, patients for and who margins to number no-opioid by the one increasing

Operator

I'll back remarks. CEO, concludes closing over now and That you. turn Thank Stack, Chairman our call segment. the Q&A for to Dave

Dave Stack

on Chris, you, Thank for to call today. questions and time the your thanks everyone and

making grow clinical on steady variety strengthen as offerings, our over the milestones revenue, expect XX deliver advance you cash product balance margins, value-driving flow product As see, we to next gross and can XX progress to months our pipeline sheet. improve and of to we're a increase expand

in The expect pain management ahead. Pacira solidifies progress. the you in role and global updated to to this look years work, And further non-opioid our have important market keeping need a we opportunities We remains growth for on significant its forward as imperative. leadership

up Miami. us is for Barclays in Conference Next the

Thanks all, and stay Goodbye. well.

Operator

for you the conference. conclude in participation This thank your And program. today's does

conference disconnect. now The shortly. begin may You will

Pacira BioSciences (PCRX) 28 Feb 232022 Q4 Earnings call transcript