Everyone. My name is Anthea Li, part of the spec pharma team at Jefferies. Welcome to our healthcare conference in New York. Really great to have Frank Lee with Pacira BioSciences, CEO of Pacira BioSciences, here with us. Thank you for being here with us.
Well, thanks for the kind invitation. Yeah.
Yeah, absolutely. For those who are unfamiliar with Pacira, perhaps we could start with a quick introduction of the company. What are the key goals for this year, and the outlook?
Great. Well, thanks for the invitation, just as way of background, Pacira's a leader in non-opioid pain management therapies. We have three in-line products, EXPAREL, ZILRETTA, and iovera, and we're building a pipeline as well. That's an overview of the company. The company's been around for 15 plus years, and we're doing some exciting things under our new 5x30 strategy for growth.
Great. I think first off, starting with EXPAREL, you've guided to revenue of $600-$620 for EXPAREL this year. Can you talk a little bit about that guidance, the growth that you've been seeing, and the pushes and pulls between the high and low end of guidance for this year?
Sure. EXPAREL, as we look back at 2025, what we saw was that second half of the year, volume started to accelerate. We talked about that at the beginning of last year, that with NOPAIN Act as a catalyst for growth. It's not just NOPAIN Act, but the expansion into commercial payers and all that we're doing in our commercial medical market access teams, that we would see volume grow. It did. We saw volume grow to 8% in the second half of 2025, with a baseline before of around 3.5%. That continued in the first quarter. We saw 7% volume growth in the first quarter. We believe that starting in the middle of the year when we anniversary our last group purchasing organization, that we'll start to see volume growth and dollar growth start to converge.
Right.
Then, as you might imagine then, you put on top of that any price increases that we take, and then you can pretty easily get to an idea that double-digit growth is certainly possible.
Right. You've talked about NOPAIN Act being a catalyst for EXPAREL, but also that there's been a little bit more of an administrative lag for larger hospitals to come on board. How are you seeing that progress in terms of implementing NOPAIN Act across the board? Should that be more of a second half weighted event, or are you already seeing early signs of that earlier in the year?
Our investments in commercial medical market access are paying off. At the highest level, growth starts with access. We were pleased to share that at the end of last quarter, we're up to 110 million lives covered outside of the bundle. Right? We've got some more lives to go, but that's a lot of lives that we've got covered outside of the surgical bundle, meaning that EXPAREL, it gets reimbursed at ASP plus six or better. What we're seeing in commercial plans is it can range up to ASP plus 29%. We've done a good job of expanding payer access and payment outside of the bundle. What we've seen is that the early uptake has been very strong in ASCs, in the outpatient setting. In the larger institutions, it takes a little more time because of some of the reviews and number of stakeholders involved.
I really think that as we progress forward, we're going to get to that at the highest level, a tipping point when the majority of patients are covered in outside the bundle reimbursement. Secondly, when we're going to start to see the momentum build in larger hospitals. I think we'll start to see that as we move forward in the not-too-distant future. Yeah.
Got it. That's interesting, the ASP plus 29%. What are the factors that influence how much payers reimburse on top of the ASP?
Yeah, payers, like they do in many other therapeutic areas, will look at the overall value. What's the value of this particular molecule product? As you might have seen from some of our press releases and presentations at medical meetings, I'm really pleased to say that the investments that we made in health economics and outcomes research are bearing fruit. What does it say? It says that by utilizing EXPAREL, you minimize overall costs to the healthcare institution, you improve patient satisfaction. It's good for not only the healthcare system, but also the patient. Those data are really encouraging. In fact, we've just done some additional analysis, and we can talk about sort of the future of NOPAIN Act, and working with one of the leading hospital networks, it's the largest hospital network in the U.S., to analyze some early claims data.
As you might know, we had done some market research to suggest that 750 survey respondents said, "Hey, NOPAIN Act is having an impact on opioid prescribing in the hospital." Okay? Number of stakeholders, 750 respondents. Now we've validated that with some claims analysis with the largest hospital network in the U.S. You'll see those data being published and presented in meetings. When you step back, those are the kind of data analyses that payers look at.
Clearly, by the way that they're reimbursing, they see the value. What I would expect is that as we go into second half of the year, you'll see more and more payer wins to expand that payer coverage outside of the bundle, and then we're going to get to that tipping point when most of the patients are covered by outside the bundle reimbursement.
Got it. Is there an opportunity to go back to the payers that already are covering EXPAREL but maybe at ASP plus six, or on the lower percentage with this real-world data and boost that as more of a financial incentive for EXPAREL uptake in addition to growing broad coverage as well?
Sure. There are a lot of ways to engage payers through contracting, and they determine reimbursement, so they'll see value and reimburse accordingly. Our main focus is access.
Patients, physicians, institutions need access. When access is available for the vast majority of patients that they see, that's when you're going to see behavior change pretty significantly.
Got it. Okay. You've talked about growing access. To what extent is EXPAREL growth now more weighted towards these new accounts versus increasing the depth of prescribing within the existing accounts?
Yeah, certainly. EXPAREL has been in the marketplace a very long time. What we see is really growth, the majority of it coming from those existing accounts. What we're doing now is further penetrating those lines of service. Maybe we were only in certain procedures, and now we're in additional procedures, or we're only penetrated a little bit in a certain line of service, and we're going much deeper. That's the kind of growth that we see, in addition to what I mentioned earlier, that outpatient ASC growth is pretty significant.
Mm-hmm. Are there particular segments in terms of surgeries that you're watching out for? Also on top of that, should we be seeing more, or should we expect some sort of seasonality to trend with procedural trends over the year as well?
Yeah, certainly. There is seasonality historically with EXPAREL. The mainstay of our business is orthopedics. That's core to us. The next is some soft tissue procedures. We start to think about plastics and dental kinds of spaces. I would think about it sort of in that priority.
Okay.
Yeah.
Got it. You've also talked about the future of NOPAIN .
I think the current legislation is slated to expire by the end of 2027. What are you seeing in the future of NOPAIN ? Are there legislative actions right now to extend that? What are the stakeholders or potential lobbyists saying as well?
I'm really proud of our efforts over the last, I would say, eight to nine years now, in advocating for NOPAIN with leading advocacy organizations and healthcare professional societies. As you know, that led to the approval of NOPAIN last year. Right
in January. As you mentioned, it is a three-year term initially. What are we doing to not only ensure that NOPAIN gets re-upped or renewed, but in fact expanded?
It's clear, based on the early data, that NOPAIN , as a catalyst, is doing exactly what it was intended to do. It's providing opportunities for commercial payers to come online to cover outside the bundle for those non-Medicare patients, which is fantastic. We're starting to see the early data to say that not only through research and market research, but also through claims analysis, that we're in fact decreasing opioid utilization. Just if we look in the hospital, never mind what we do outside of the hospital.
I think these are data that are important, and we're sharing those data with not only advocacy, but CMS as well, and they've been very interested. It's our plan that we will continue to analyze and share these data and move towards a goal of not only re-upping NOPAIN , but really thinking about expanding it to places like, for example, the inpatient setting, so it's not just limited to the outpatient Medicare. Also to think about what we can do separately for veterans, because as you know, they're covered by a different plan.
Got it. Okay. I want to also switch on to the other two products in the portfolio. Given your total guidance of total revenue of $745-$775 this year, how are you seeing that growth trajectory for those two other products?
Yeah, that's a good question. Last year, as I mentioned, we invested in commercial medical market access capabilities, and one piece of that was saying, "Gosh, instead of having one sales force sell all three products, which are very different products, why don't we think about having three separate sales forces sell those products?" Now EXPAREL has its own sales force, ZILRETTA, along with the J&J MedTech partnership that we can talk about, and of course, iovera, with its own sales force of people who really understand medical device as opposed to pharmaceuticals.
Because as you know, that's a very different world from a regulatory compliance, just go-to-market capabilities. What I'm pleased about is that we're starting to see the fruit of those kinds of investments. As you've seen in the first quarter results, ZILRETTA grew 15% year-over-year, and the partnership with Johnson & Johnson MedTech is really starting to get traction, because as you know, that expands our reach, and it's a nice complement to HAs. Patients will use various products over the course of their treatment cycle, and so it's a nice complement. For iovera, we saw a 21% year-over-year increase in quarter one. Again, focused execution by medical device people is really starting to bear fruit.
Got it. Can you remind me when the full sales force, in terms of the three individual sales forces, were fully on board and in the field? What are you seeing in terms of their productivity?
Yeah, we had a reset year in 2024. It takes time, obviously, to recruit people, train people, get them on the ground, get them to customers, and be productive.
Right.
What I would say is we started to see the traction start to show up in the second half of last year through all those efforts. Now we're clearly seeing it in first quarter results.
Great. In terms of the J&J MedTech collaboration, what kind of metrics are you tracking on that launch? Any kind of leading indicators that you're pointing to to see the fruits of that expanded reach?
Sure. There are lots of different things that we can look at, but the ultimate test is how many scripts are we driving. Okay? In accounts where maybe previously we didn't get scripts, or in new accounts where we didn't have a presence, where J&J has a presence and there was no overlap. We're looking at that, and I think the results show. 15% year-over-year. You can't argue with that.
Is there opportunity to look at a similar type of partnership commercially for iovera as well? Is that something that you are evaluating? Also, what kind of successes do you want to see from the J&J MedTech collaboration to inform how you proceed with iovera?
Yeah, good question. As a part of our 5x30 strategy, the fifth pillar speaks to partnerships. This Johnson & Johnson MedTech partnership is for ZILRETTA in the U.S. only. Okay? Of course, we have the LG Chem partnership, which is for EXPAREL and ZILRETTA, starting in Korea and Thailand, but they have rights to it in Asia Pacific, broadly speaking. Of course, they're one of the leaders in that space. We're really pleased with that partnership. iovera, we're very open to partnerships, both in the U.S. and outside the U.S., because again, I think it efficiently extends our reach for a product like that. We remain open to that, and so expect that we're going to stay on track with respect to the 5 x30 goals. We've got two partnerships already. We want five by year 2030.
My sense is that we're very much on track for that. Yeah.
Are there considerations for EXPAREL as well, or do you feel like you are executing well on that on your own as well?
With EXPAREL, we've always had some partnerships here and there. For example, in the dental space and plastic spaces, we've always had some degree of partnerships. We are looking very carefully at where those kind of partnerships might be helpful, broadly speaking. Yes, we remain open to that. That's all a part of the consideration around 5x30 partnership goal.
Great. I think before we move on to pipeline and readouts that are upcoming on, I think there's been a little bit of noise around EXPAREL and Paragraph IV filers there. Remind us the runway in terms of exclusivity for EXPAREL with the Fresenius settlement, and then also how the patent estate is different now than when that settlement was reached?
Sure. Maybe a couple of points. Number one, what an ANDA means, and number two, sort of the then and now, which is very different. What does an ANDA mean? ANDA means that someone has met the minimum threshold to actually send something to the FDA, and the FDA has received it. Doesn't mean that the file is actually a file that's going to be approved, nor does it mean that they can manufacture it. Doesn't mean a lot of things, right? That's number one. Number two, that Markman hearing won't start until the first quarter next year, and really won't go to trial until end of the year, and that whole process will likely take all the way through April of 2030, roughly speaking. That's a quick primer on what an ANDA means and what to expect from the legal system.
From an IP perspective, if you go back in time a little bit, when we settled with Fresenius, we had one Orange Book listed patent. Now we have 21, and we continue to innovate. I really want to underscore that. Expect additional listings going forward. These are strong patents. Remember, the '495 patent that was originally litigated has now been re-examined, strengthened, and reissued by the U.S. Patent Office. For the key thing that the judge noted, which is the volume limitation. The first patent is re-examined, strengthened, and reissued, and we have 20 other patents and more coming across two different families. The second family has not yet been litigated. What I would say is that we're in a very strong patent position, and this is really about composition of matter and product by process patents.
These are not weak manufacturing patents. We feel very good about that, and we will continue to grow EXPAREL and build on the IP estate through research and development. Because fundamentally, this is a better product that we're producing. As you know, EXPAREL is not a small molecule per se. It's not a biologic. It's a little bit more like a biologic than a small molecule in the sense that if you might imagine, I'm sure you all have seen this, is soap bubbles. If you can imagine soap bubbles, each one containing a little bit of bupivacaine, and you've got a cluster of 1 million of those soap bubbles.
Think about how you have to turn that into a lyophilized powder, be able to reconstitute itInject it into someone's body and have a PK profile that releases drug on the path that, on a trend that is consistent with the way it was approved. If it releases too much too soon, then it's toxic to the body, right? This is why it's a very different product than your typical, for example, if you were to manufacture an NSAID. Right?
As you know, biosimilars, same kind of idea. No biosimilar is exactly the same. That's why they have different INNs.
Right. Do you feel that the manufacturing aspect of it could also be a barrier, even if this goes through and their ANDA gets approved? We have seen some drugs that have generics that have their ANDA approved or settle their litigation or whatever, but can't get over that manufacturing hurdle.
Yeah. It is a difficult manufacturing process, I can tell you, because I started my life as a chemical engineer building manufacturing plants. This is one of the more difficult processes. That said, given enough time and money, people will figure it out.
Okay.
The biggest thing for us is continue to invest in innovation of not only EXPAREL, but also to diversify our product portfolio.
Yeah. Speaking of innovation, PCRX-201, we're going to see a readout coming out from that by the end of the year. I think maybe talk a little bit high level about the product, the indication, kind of what standard of care is.
Yeah
How you're positioning 201 there.
Sure. At the end of the year, we're going to have three important data readouts, starting with PCRX-201, but also, as you know, we'll have the OA of the shoulder readout for ZILRETTA, which would, if that's positive, that would be the first product approved for a shoulder OA indication, and spasticity for iovera.
Again, that would be the first medical device approved for spasticity. Coming back to PCRX-201, we think about it as local gene therapy for the masses. Okay? This is very different than systemic gene therapy for ultra-rare diseases. Very different. We're studying this for knee osteoarthritis, which in the U.S. is about 15 million patients. Right now, patients cycle through various treatments, including ZILRETTA, HAs, et cetera, and they all offer a range of anywhere from three to six months of benefit. What we saw in the phase I data is at least one year of benefit. In fact, we're about to report on some remarkable data following patients now for years, plural, as opposed to one year.
When we looked at those data, we said, "Wow, this is interesting." This platform is interesting because this platform is sort of like, I would say, a Mack truck as opposed to the AAV, which is like a compact car. You can fit 30,000 base pairs into this thing. Think about big genes, think about multiple genes being fitted into this thing, into this HCAd, high capacity adenovirus chassis, but injected locally so that you need very small amounts of it. By the way, from a safety standpoint, it's much better as well. Right? Because you're not bathing the whole body with the product. We're excited about this.
Based on that, we said, "Hey, we're going to start our phase II program," and what we'll see at the end of the year is Part A of the ASCEND study, which is for the first time, three different arms, including a control. We've got an active control, and we've got two different doses of PCRX-201, and we'll be reporting data at 52 weeks. When you take a look at various studies, there are not many studies that follow a control arm, an active control arm out to 52 weeks. We're going to learn a lot from this study. It is not powered for definitive efficacy, we will be looking for trends in terms of efficacy along the lines of what we saw before, WOMAC, et cetera.
Like I said, we're going to learn a lot about this patient population. Importantly, we're starting Part B of the study with commercially viable product. For those of you that follow cell and gene therapy, you know oftentimes the manufacturing process can be the rate-limiting step. We're really pleased to say we're right on track to start Part B with a commercially viable product mid this year on schedule. As we look at the end of the year, we're excited about the potential to be able to share some exciting results with controlled data, with a local gene therapy for the masses.
Great. You mentioned some of the long-term follow-up phase I data. When should we expect to see that, and what are the learnings from that ahead of the phase II readout?
Yeah. I think we'll learn more and more about the potential durability, and of course, looking at open label data, you've got to be careful doing that. We followed a substantial number of patients, so as you know, the phase I study included 72 patients.
With each year that goes by, you have less and less of those patients because you have dropouts. We have actually a substantial sample size. I would think about sometime again towards the end of the year where we'll be able to share more and more information about that.
Okay.
Just ahead maybe of the Part A data. Yeah.
Okay, great. You mentioned the study's not powered for stats sake on efficacy, WOMAC pain and stiffness. What is kind of a clinically meaningful or good data on trends on those endpoints? How do you want to see those curves separate, for example?
Well, certainly we'd want to learn more about the control. Typically now a control, you wouldn't expect to see a control work for 52 weeks. Okay? If it does, we've got to do some additional thinking. All right? The two active arms in our phase I study, as you know, had greater than 70% of patients have a 50% or greater response versus baseline.
Yeah.
That's pretty significant. Okay. Most therapeutic areas, if you get a 15%-30% response, you're ringing the bell and saying, "Hey, this is something really different." Okay. To have, in our phase I study, over 70% of patients have a 50% or greater response versus their baseline, that's pretty impressive. Okay. Whether we'll see that kind of response in a phase II study, with a control or not, I don't know, but I think that when we take a look at the baseline and improvement over baseline, and when we take a look at relative to the control group, those are important things to keep in mind. We haven't set a specific anchor as of yet.
I think that as we get closer ahead of the data, we'll start to share with you what the market is saying is going to be important in terms of what's clinically meaningful, what's important, and how this could be potentially a breakthrough therapy for patients. As you know, this did receive our RMAT designation, which is the equivalent of breakthrough for cell and gene therapies. Stay tuned and we look forward to an event ahead of the data event at the end of this year where we can set maybe some of those goalposts better.
Got it. I think digging into the phase I, was there a kind of WOMAC improvement over time curves that you showed there, and what did that shape look like?
Susan Mesco, our Head of Investor Relations, will send you as many curves as you want to see. What we saw on those curves is that over the first, let's say a couple of months, we saw pretty significant improvement.
In this case, down is good. That was sustained over time, which is really remarkable, but fits with the idea that what we're doing is we're delivering instructions to the cell to produce IL-1 receptor antagonist. We know that blocking IL-1 works. There are two products already approved to block IL-1. They just have a very short half-life, and that's not a reasonable thing to ask patients to inject themselves every day, or just take a pill every day to hope that that's going to get better. With one injection and delivering instructions to the cell to produce more IL-1RA, it makes a lot of sense that we would see this kind of sustained response, because we're turning the cell into a little IL-1RA factory, so to speak.
If that works, I think that has implications. If that works in a controlled setting, see what we need to see, I think that has also implications on thinking about, where else could we take this platform? What are the other known pathways that we can impact in a localized way? That's why we've started to take a look at what about the eye? What about compartments in the back? What about the lung? We've got some important clinical programs that we're looking at, or preclinical programs, to further this idea. Of course, we've got a canine program that canines, if you have dogs, have OA. In fact, that's a pretty substantial market. If you follow Librela, it's over $500 million . That program, what we're testing is not only IL-1RA, but another gene.
The idea that two genes could be loaded in this platform and could be useful.
Right. I guess thinking about the control arm for 201, down is improvement. Do you expect it to have the kind of same dip in terms of improvement as 201 arms? Maybe that's not as durable, you see the curves widen over time? Do you feel like that improvement would probably not be as strong as 201's? Just kind of conceptually thinking about how those curves would look like.
It's really hard to say because there haven't been a lot of really well-controlled trials in this space, believe it or not. Yeah. This is going to be one of the first really well-controlled trials with an active comparator, not saline.
Right.
Okay? My general sense of what we should see is that, of course, a short-acting steroid should act like a short-acting steroid, and it shouldn't work for a year. It should work for more like months, a small number of months, as opposed to a year.
Yeah.
Whereas the active should work more like what I talked about. If we turn the body cell in the knee into a small IL-1RA production factory, that effect should continue over time. As you know, we have an inducible promoter. The cell is only on producing IL-1RA when there's inflammation, and it's off when there's no inflammation. In many ways, we think that helps with the durability of the effect because it's not on all the time.
Right.
It also helps with safety as well. Those are some of the things we think about. Yeah.
Got it. Okay. It seems like we are at time. Thank you for being here, Frank, and I hope you have a good rest of your conference.
Well, thank you for the invitation.