Live Earnings Conference Call: Pacira BioSciences will host a live Q1 2025 earnings call on May 8, 2025 at 4:30PM ET. Follow this link to get details and listen to Pacira BioSciences' Q1 2025 earnings call when it goes live. Get details. NASDAQ:PCRX Pacira BioSciences Q4 2023 Earnings Report $25.16 +0.01 (+0.04%) Closing price 05/7/2025 03:59 PM EasternExtended Trading$25.17 +0.01 (+0.04%) As of 04:01 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Pacira BioSciences EPS ResultsActual EPS$0.71Consensus EPS $0.71Beat/MissMet ExpectationsOne Year Ago EPSN/APacira BioSciences Revenue ResultsActual Revenue$181.24 millionExpected Revenue$180.60 millionBeat/MissBeat by +$640.00 thousandYoY Revenue GrowthN/APacira BioSciences Announcement DetailsQuarterQ4 2023Date2/29/2024TimeN/AConference Call DateThursday, February 29, 2024Conference Call Time8:30AM ETUpcoming EarningsPacira BioSciences' Q1 2025 earnings is scheduled for Thursday, May 8, 2025, with a conference call scheduled at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Pacira BioSciences Q4 2023 Earnings Call TranscriptProvided by QuartrFebruary 29, 2024 ShareLink copied to clipboard.There are 12 speakers on the call. Operator00:00:00Good day, and thank you for standing by. Welcome to the Q4 2023 Pacira Biosciences 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. Please be advised that today's conference is being recorded. Operator00:00:26I'd now like to hand the conference over to your first speaker today, Susan Mesko, Head of Investor Relations. Please go ahead. Speaker 100:00:40Thank you, and good morning, everyone. Welcome to today's conference call to discuss our Q4 and full year 2023 financial results. Joining me are Frank Lee, Chief Executive Officer Tony Malloy, Chief Legal Counsel and Charlie Reinhart, Chief Financial Officer. Jonathan Slonin, Chief Medical Officer, is also here for today's question and answer session. Before we begin, let me remind you that this call will include forward looking statements based on current expectations. Speaker 100:01:10Such statements represent our judgment as of today and may involve risks and uncertainties. For information concerning risk factors that could affect the company, please refer to our filings with the SEC, which are available from the SEC or the Pacira website. Before turning the call over to Frank, I'd like to mention that going forward in 2024, we will be shifting the timing of our quarterly calls to post market with an expected start time of 4:30 p. M. Eastern Time. Speaker 100:01:40With that, it is my pleasure to welcome Frank Leigh. Speaker 200:01:43Well, thank you, Susan, and good morning, everyone. I'm excited to speak to you today as the new CEO of Pacera Biosciences. I was drawn to this organization because Pacerra is the leader in non opioid pain management. KOCERA has market leading products, a clear sense of purpose, a talented team and unwavering commitment to transforming lives of patients by expanding access to opioid sparing pain management. I was especially inspired by the team's steadfast commitment to working with leading medical societies and patient organizations to get no pain over the finish line. Speaker 200:02:23And this legislation is a real testament to Pacera's leadership. It's been a busy and productive time since I joined the company last month. I've met with colleagues here in New Jersey and at our Science Center campus in San Diego. I've also received valuable feedback on our culture and met with key stakeholders. Now that I've spent several weeks listening and learning, there's no doubt this team is highly committed to our corporate mission and the impact that our 3 trusted products are making in patients' lives. Speaker 200:02:58Consequently, I'm even more enthusiastic for PERSERA and the patients we serve. This is a special company that I'm both humbled and honored to lead through this next phase of growth. While much has been accomplished, it's still early days in my tenure here at Pacera. I'm excited to continue to work with the team and our stakeholders to define a thoughtful path for long term growth. And I look forward to sharing more details as the year progresses. Speaker 200:03:27That said, we're taking several steps to ensure we are fit for growth going forward and best positioned for sustainable success. We've initiated an organizational restructuring that includes the following key changes. Reshaping our executive team and launching searches for a new position, Chief Commercial Officer and Chief Business Officer. Reallocating our efforts and resources from ex U. S. Speaker 200:03:58Markets and certain early stage development programs to the U. S. Market. Reprioritizing investments to focus on no pain readiness and enhancing key commercial capabilities such as strategic and national accounts, marketing, marketing access and reimbursement. And finally, doing a thorough strategic review of our pipeline and therapeutic area strategy. Speaker 200:04:29Going forward, we'll foster a culture we call 1 PERSERA, grounded on key values and behaviors that enable organization to work as a United team. For the remainder of today's call, I'd like to focus on EXPAREL, the product that will drive substantial growth in 2025 and beyond. EXPAREL recently passed the 14,000,000 patient mark and we're confident in its potential to grow to blockbuster status. This year, we're advancing 3 key drivers. 1st, launching EXPAREL in 2 new lower extremity nerve block indications 2nd, preparing for the launch and rollout of no pain in 2025. Speaker 200:05:12And 3rd, expanding access to 340B pricing and new GPO partnerships. I'll start with lower extremity nerve blocks. Our sales force is ready and the launch is officially underway. Importantly, we're going to market with an overwhelmingly positive body of data from 2 head to head Phase 3 studies demonstrating 4 days of superiority over BP. The first study evaluated EXPAREL as a sciatic nerve block in public field fascia for bunionectomy. Speaker 200:05:51EXPAREL achieved a 44% reduction in pain scores while reducing opioid consumption by 61% versus bup. In addition, patients who received EXPAREL were 5 times more likely to be opioid free. The second study evaluated EXPAREL as an adductor canal block for total knee arthroplasty. In this study, EXPAREL achieved statistically significant reductions in pain scores and a 23% reduction in opioid consumption versus BUPE. These results are highly significant with P values of less than 0.01. Speaker 200:06:28With respect to safety, EXPAREL was well tolerated with a safety profile consistent with BUPE. These positive outcomes were achieved with 10 ml dose, making a single dose EXPAREL nerve block a very attractive value proposition to the anesthesia and surgical community for knee and foot and ankle surgeries across all sites of care. The sciatic nerve block study in the Papatea of Austria recently published online in the Journal of Clinical Anesthesia. And we're working to secure publication of the TKA study. We believe this is going to be a $100,000,000 opportunity over time. Speaker 200:07:11We have strong presence in TKA, where anesthesiologists are already doing adductor canal blocks with bupip. So we expect faster uptake in this segment, which is over a 1,000,000 procedures. Conversely, we have very limited presence in other lower extremity procedures like ACL repair or foot and ankle procedures. So we expect uptake in these segments to be slower. Switching gears to no pain, we believe will be an important event for both patients and Pacerra. Speaker 200:07:46As you know, products used to manage postsurgical pain are largely reimbursed as part of the bundled procedure payment. Bundle reimbursement incentivizes the use of cheaper generic approaches to managing prosurgical pain that often incorporate opioids. Financial pressures facing healthcare systems further incentivize cost driven approaches. No pain mandates separate CMS reimbursement of non opioid therapies for postsurgical pain relief across all outpatient settings. It will eliminate the cost period by fully reimbursing at average selling price or ASP plus 6% beginning January of 2025. Speaker 200:08:33There are roughly 6,000,000 annual CMS procedures in the outpatient settings with a split of roughly 3,500,000 procedures in the hospital outpatient settings and 2,500,000 procedures performed at ambulatory surgical centers. As a first step, we'll be allocating resources to drive education and to help healthcare systems implement EXPAREL as a best practice standard of care for CMS patients. The value proposition is clear as a recent review of 5 year real world Medicare claims data for hospital outpatient procedures demonstrated a significant correlation between EXPAREL utilization and improved patient outcomes, including opioid prescription fills, emergency room visits and hospital admissions. These data were published in the Journal of Medical Economics. Over time, as we underscore the value of EXPAREL is providing to CMS patients, we're hopeful commercial payers will be compelled to follow suit and provide separate coverage to another 12,000,000 outpatient procedures. Speaker 200:09:48We have been paving the way for no pain through our investments in 340B pricing and new GPO partnerships, such as our recently announced deal with Premier, whose significant network of hospitals and healthcare systems covers nearly 20% of EXPAREL relevant market procedures. These programs assist healthcare systems in affording the opportunity to improve patient care through best practice pain management. Our customers will have a favorable acquisition cost and once no pain takes effect next year, they'll be reimbursed at ASP plus 6. In 2024, we're preparing for no pain as we would a new product launch because it's that important. To ensure readiness, we'll be enhancing our commercial organization with new talent and expertise to ensure operational excellence within critical functions such as marketing, strategic accounts, market access and reimbursement. Speaker 200:10:47We'll also be investing in programs to drive awareness and education and action across key decision makers and sites. We'll track and update you on our progress during the course of the year. We believe no pain will result in accelerated and sustainable growth beginning in 2025 that will drive EXPAREL to blockbuster status. As we do this, we'll hold the bar high with respect to resource allocation and strong execution. Before turning the call over to Tony, I'd like to highlight the FDA's recent approval of our sNDA for our 200 liter manufacturing suite in San Diego. Speaker 200:11:28This enhanced 200 liter manufacturing process is just another example of how the Pacira team continues to innovate and augment our broad IP estate with new EXPAREL patents. Our strong and growing patent estate leaves us confident that our EXPAREL franchise is well protected and positioned to drive significant and durable long term sales growth as a potential generic would have to successfully litigate and overcome all of our EXPAREL patents. With that, I'll turn the call over to Tony Molloy, our Chief Legal Counsel for his review of our recent Paragraph 4 litigation and next steps. Speaker 300:12:12Thanks, Frank, and good morning to all on the call. I'd like to take a few minutes to update you on the status of our patent infringement lawsuit against uvenus. As background, Pacira initiated this litigation in the U. S. District Court of New Jersey after receiving notice from Evenus that they submitted an abbreviated new drug application or ANDA to the FDA with a Paragraph IV certification seeking authorization for a generic version of EXPAREL. Speaker 300:12:41This first lawsuit alleges patent infringement of EXPAREL U. S. Patent number 11033495 or the 495 patent. The 495 patent claims composition of EXPAREL made using an enhanced manufacturing process, which was the result of several years of innovation by the Pacira Scientific team with an investment exceeding $100,000,000 The 5 day bench trial concluded on February 14 and we are currently engaged in post trial briefings with closing arguments set for May 2. We expect the judge to rule on the 4 95 case before the expiration of the 30 month stay on July 1. Speaker 300:13:25We are confident in our position, our 495 patent and the related 2,041 expiry and we stand ready to engage the court with it in the event of any decision. A second patent infringement suit is also underway in the U. S. District Court of New Jersey, alleging infringement of U. S. Speaker 300:13:46Patent number 1,124,348 or the 348 patent, which claims composition of matter for EXPAREL. The trial date has not been set for the 348 patent litigation. The 495 and 348 patents are just 2 deliverables from our comprehensive and growing patent portfolio. Our efforts continue to bear fruit by listing additional patents in the FDA orange book. We also have additional notices of allowance from the U. Speaker 300:14:17S. Patent and Trademark Office and further applications are being prosecuted. These include chemical composition, product by process, method of use and process patents. Many of these patents will qualify for listing in the FDA orange book. It is important to note that the FDA has established extremely rigorous hurdles for proving bioequivalents to a multivesicular leptodomal bupivacaine and this would have to be accomplished without infringing on the broad Pacira patent estate. Speaker 300:14:52We know consistently manufacturing EXPAREL would be extremely challenging for a potential generic. Since Pacira is the only company to manufacture multivesicular liposomal products at commercial scale with more than 20 years of expertise in doing so. Breveen is to be successful in the 4 95 case, the 348 case as well as any future patent litigation, they will have to overcome every one of our patents. This is in addition to establishing bioequivalents and securing approval from the FDA, which they've not done yet. Bottom line, we firmly believe we have built an extensive portfolio of intellectual property around our EXPAREL franchise and is well protected from multiple directions. Speaker 300:15:40Generic attempts are commonplace for successful products like EXPAREL. We continue to have a thriving EXPAREL franchise that is supported by strong and growing patent estate that we will continue to vigorously defend. With that, I will turn the call over to Charlie for his financial report. Speaker 400:15:58Thank you, Tony, and good morning, everyone. To remind you, I will be discussing non GAAP financial measures this morning. A description of these metrics along with our reconciliation to GAAP can be found in the news release we issued this morning. I'll start with an update on sales and margin trends. Starting with EXPAREL, 4th quarter EXPAREL sales of $143,900,000 were 4% higher than 2022. Speaker 400:16:274th quarter ZILRETTA sales increased to $28,700,000 versus $28,000,000 for 2022 and ioverao sales improved to $6,000,000 compared to $4,600,000 reported in 2022. Turning to gross margins. On a consolidated basis, our 4th quarter non GAAP gross margin percentage was 74%. 4th quarter EXPAREL margins were in the high 70% range as expected, but were partially offset by lower margins for ZILRETTA and ioverao. For non GAAP R and D expense, the 4th quarter increased to $16,600,000 from the $15,700,000 reported in 2022. Speaker 400:17:13This year over year increase primarily relates to startup activities for the ZILRETTA Phase 3 study in shoulder OA. Non GAAP SG and A expense came in at $57,400,000 for the 4th quarter, which is up from $54,700,000 in 2022. This increase is largely due to legal fees associated with the Paragraph 4 and other litigation. 4th quarter interest quarter interest expense improved to $3,400,000 versus the $11,000,000 reported last year. This was driven by the interest expense savings associated with Speaker 200:17:56the Speaker 400:18:00And lastly, we delivered another quarter of significantly positive adjusted EBITDA of $65,400,000 Turning to our outlook for 2024. Today, we are guiding to full year total revenues of $680,000,000 to $705,000,000 This range assumes mid single digit volume growth for EXPAREL and ZILRETTA and a low teens growth rate for ioverao. To remind you, EXPAREL volume growth will be largely offset by a lower net selling price due to our investment in expanding market access through our new GPO partnerships, which are expected to have a mid single digit impact on our selling price while growing volumes over time. As Frank mentioned, we believe these GPO partnerships are a core investment to ensure no pain readiness in January 2025. For expenses, 2024 guidance is as follows: non GAAP consolidated gross margins of 74% to 76%, non GAAP research and development expense of $70,000,000 to $80,000,000 non GAAP SG and A expense of $245,000,000 to $265,000,000 and finally non cash compensation expense of $50,000,000 to $55,000,000 As Frank highlighted, underpinning our sharp focus on growth will be a commitment to solid execution and delivering on the expectations that we set by providing guidance we can confidently stand behind. Speaker 400:19:38With respect to our capital allocation strategy for 2024, in the near term, we are investing to ensure commercial readiness for the rollout of no pain in 2025 and to support long term growth. We are also planning for the retirement of debt, including the face value of our convertible notes in August 2025 and the subsequent repayment of our Term Loan A. We will continue to regularly assess our capital allocation strategy. As detailed plans for no pain are implemented this year, we look forward to sharing more specifics. With that, I'll turn the call back over to Frank. Speaker 200:20:18Thanks, Charlie. As you may have seen today, we reported that Charlie will be financial leadership at Pacera. We're on solid financial and operational footing and we wish Charlie all the best as he prepares for his well deserved next chapter. In closing, let me summarize. We are sharply focused on driving long term growth. Speaker 200:20:48We have 3 great products and there's no question about that. We currently have the lower extremity launch, which will be a solid tailwind for EXPAREL. We have a significant catalyst ahead in no pain. And in 2024 will be a key setup year to ensure we are fit for driving growth in 2025 and beyond. To that end, we're reshaping our executive team, reallocating ex U. Speaker 200:21:15S. And early stage development resources to the U. S. Market and reprioritizing investments to focus on no pain readiness and enhancing key commercial capabilities. Lastly, we're confident in our strong and growing intellectual property estate and will continue to vigorously defend our EXPAREL franchise. Speaker 200:21:39As we progress through the course of this year, I look forward to sharing updates on the lower extremity nerve block launch, no pain readiness, our progress in reshaping our culture and capabilities and crystallizing our long term vision and growth strategies. I want to take a moment to applaud the dedicated and talented Pacera team who have built a successful and sustainable business that we're now scaling to drive EXPAREL to blockbuster status. I also want to thank you, our shareholders and partners in this journey for the warm welcome and encouragement I've received since taking the helm at FOCERA. Together, we're changing the course of pain management and hopefully saving patients from the deadly effects of opioid addiction. With that operator, we're ready to open the call for questions. Operator00:22:32Thank you. At this time, we will conduct the question and answer session. Our first question comes from the line of David Amsellem from Piper Sandler. Your line is now yours. Speaker 500:23:04Hey, thanks. So just got a few questions here. Frank, I guess there's a lot of things that are kind of works in progress, but can you just talk broadly about where you want to take the cost structure, particularly the R and D infrastructure? How are you thinking about margin expansion over time, not just from EXPAREL no pain, but just looking at the cost structure in particular and the extent in which you can gain operating leverage. That's number 1. Speaker 500:23:41Number 2, regarding No Pain, can you talk more broadly about what you think and I know it's early, but what do you think the volume trajectory could look like next year? And maybe just help us better understand your general thinking on what the impact to sales and volumes could be? And I'll stop there. Speaker 200:24:13Hi, good morning, David. Frank Lee here. Thanks for the question. You were kind of breaking up a little bit on me there, but I think what I heard you ask about is cost going forward, particularly in R and D and also maybe providing a little bit more color on no pain in 2025 beyond. So as it relates to cost and R and D, I may have mentioned in my script that we've taken a look at some early development programs and based on our efforts now to reallocate our resources towards growing growth, driving growth of EXPAREL. Speaker 200:24:51We've stopped certain programs that are in early development and reallocated those expenses towards those things that will drive EXPAREL growth. For example, like our efforts towards no pain. I can tell you we've reallocated substantial resources towards no pain going forward. With regard to the opportunity on no pain, Charlie, maybe you can speak a little bit towards the volumes and the procedures that are impacted by no pain. Speaker 400:25:21So David, I think you're aware that no pain is focused actually on the outpatient setting from the HOPD. CMS has roughly 6,000,000 procedures in the combination of HOPD and the ASC settings with about 3.5 in HOPD and 2.5 in ASC. So obviously, no pain relates to CMS. There are additional 12,000,000 patients all in our TAM in combination of HOPD and ASC that are commercial backed, commercial payers as well. So No Pain is going to focus initially on CMS and then it's EXPAREL's or excuse me, Precira's focus to get the commercial payers on board as well. Speaker 400:26:09So we're really excited about it. I don't think that's all going to happen in 2025, but obviously the beginning of that process will. Speaker 200:26:18And let me just add, thank you, Charlie. Let me just add that as we grow, margin will improve accordingly. In addition, as we think about the customers that are impacted by No Pain, these large strategic customers, we are making investments there to better serve those customers going forward. Speaker 600:26:41Maybe just a quick follow-up. Speaker 500:26:43Are you going to devote significant resources to ZILRETTA and ioverao going forward? Speaker 200:26:50So let me just start by saying we've got 3 great products. And I like all of them a lot. That said, we are hyper focused on driving EXPAREL growth. So we'll focus on that first. And then of course, as needed, we'll pay some attention to ZILRETTA and ioverao to make sure those businesses go forward. Speaker 200:27:12But if you think about where we're reallocating our resources and where we expect to drive growth, it's EXPAREL. Speaker 500:27:20Okay. Thank you. Operator00:27:23Thank you for your question. One moment please. Our next question comes from the line of Gregory Resnick from RBC Capital Markets. The floor is yours. Speaker 700:27:39Hey, good morning Frank and team. Thanks for the time today and thanks for taking our question. Frank, maybe just looking at 2024 and Charlie, it's helpful that we heard some color on the revenue guidance. I'm just curious if you could provide just maybe a little more detail, some of those pushes and pulls certainly as you've offered the total portfolio outlook for 2024, just wanted to see if you had any additional detail on and number 1, just the character of that and how it sort of translates over the trajectory of 2024, if anything we should be thinking about? And then secondly, maybe just longer term, Frank, as you're reiterating your confidence in EXPAREL and the tailwind with no pain, just wanted your color on thinking about the longer term, just the commentaries and the color on EXPAREL driving $1,000,000,000 plus in sales longer term. Speaker 700:28:32Just wanted to hear your latest thoughts on really where the ceiling is for EXPAREL in the out years. Thanks so much. Speaker 200:28:40Yes. Thanks for the questions, Greg. First, with regard to revenue for 2024, maybe some initial comments here and then I'll turn it over to Charlie. What we're trying to do this year is to be conservative in terms of the way we provide guidance and provide you guidance that we can stand behind. So as the year goes forward, we expect to tighten the guidance as we have additional information, but that's what we expect, number 1. Speaker 200:29:14And it's a setup year for 2025. And Charlie, maybe you can provide a little bit more color to your comments on 2024. Sure. So we mentioned Speaker 400:29:29in our comments that we expected both EXPAREL and ZILRETTA to have kind of mid single digit volume growth. ZILRETTA doesn't have any other changes to its gross to net, but with the implementation of the GPO contracts, that impact on gross to net will pretty much offset the base business volume growth for EXPAREL and therefore the upside in the revenue in 2024 was probably going to be mostly no pain. So overall, when we look at the P and L for 2024, I say this, Greg, we'll have modestly higher revenues. We'll have modestly expanded gross margins. We'll have an R and D line that is the same guidance as last year. Speaker 400:30:24And we've increased our investment in SG and A to drive growth for No Pain next year, kind of all resulting in a bottom line that looks should look pretty close to what we saw this year. And so that's the way we think about it. We 2024 is a bridge to 2025. We're making really important investments in order to capitalize on no pain in 2025. And overall, the year will look better than 2023. Speaker 400:30:51So we thought that was a pretty good situation to be in. Speaker 200:30:57Thanks, Charlie. Just about the long term, first, let me just say that it's still early days in my tenure. That said, just some color about long term. In particular, I think you had mentioned no pain. So first off, about 75% of EXPAREL relevant procedures are in the outpatient setting. Speaker 200:31:21And as you know, no pain is really impacting outpatient reimbursement, specifically for CMS patients. So that's important to note. Secondly is that commercial payers will be important in terms of a lever to accelerate that growth. And so we're taking steps now to make sure that we're serving the commercial payer customers in the way they need to be served. And third is, as you may have mentioned as I've mentioned earlier, we're enhancing and bolstering our commercial capabilities. Speaker 200:31:53We have great products and we need to get them to more patients and serve our customers at a higher level. And so we'll do that. So those factors I think are going to be important as we think about driving growth with EXPAREL, let's say in the midterm. Over the long term, what we're doing now is we're taking a very thoughtful look at our pipeline, and we're taking a very thoughtful look at our strategic outlook as it relates to our therapeutic area strategy. And so as the year goes on, we'll be able to communicate that more clearly to you. Speaker 200:32:27And so that will help drive some of our future growth over the long term as well. Speaker 700:32:34Great, Frank. Thanks, Charlie. That's very helpful. Operator00:32:37Thank you for your question. One moment, please. Our next question comes from the line of Gary Nuschmidt from Raymond James. The floor is yours. Speaker 800:32:54Hi, guys. Good morning and welcome, Frank. Maybe you could just talk a little bit more about the additional GPO contracting for EXPAREL you're planning on doing this year. So how many more of these could you potentially do? And I know Charlie said that should impact net price in the mid single digits. Speaker 800:33:13Just how much visibility do you have on that? Are you very confident that that's only going to be the impact just in terms of net price? Speaker 500:33:23And then just how much Speaker 800:33:25are you expecting the lower extremity nerve block to contribute this year? And what are you doing to support that launch? And I know you talked about shifting some resources and more SG and A spend. And I'm just wondering if there are other pockets of EXPAREL, just in terms of different areas, different indications that you're going to be investing more behind this year as you've taken a closer look at the overall market? Thanks. Speaker 200:33:58Thanks for the questions, Gary. Let me hit the GPO one and turn it over to Charlie for additional detail. With respect to GPO contracting, just at a high level, our products, our product EXPAREL is utilized in both the hospital and HOPD setting, of course, in the probably outpatient ASC as well. And so in these kinds of settings, it's very commonplace for products to participate in GPOs. So that's number 1. Speaker 200:34:30And what that does is it makes spending at the hospital, at the institution, the compliance spend versus non compliance spend. And so what that means is, it's not a flag, so that there's not yet another hurdle for physicians to utilize EXPAREL in these settings. And so we're participating in the Premier GPO contract as we mentioned previously. We expect to sign a couple more in the coming months ahead. And what that does is not only enhances access, but it also we're able to tap into the services that GPOs provide and helping to educate their membership. Speaker 200:35:11In our case, this is going to be very helpful as we think about no pain education and what that means in terms of making that take hold and the institutions and all the steps that it takes. So, Charlie, maybe over to you. Sure. Speaker 400:35:26So Gary, Frank mentioned there are a couple other GPO organizations we're in the midst of discuss having conversations with. We expect to sign a couple more this year. The ones that we're looking at are the most significant ones, particularly with respect to our TAM. And when you add all three of those together, it's roughly 2 thirds of our TAM from a procedural perspective recovered by these 3 organizations. Now as far as what our confidence level is on the impact, I'd say we're pretty confident. Speaker 400:36:00We know what the terms of the contracts will be. We know basically what proportion of our current business is likely to be impacted. And frankly, if I've underestimated the cost, it's probably a good thing because that means they're driving volume and driving revenue and that is exactly what we want them to do. So ultimately, I think that in 2024, the volume vial growth of the base business of EXPAREL will kind of equate to what the cost of the GPO is. And we expect them to help us really prepare for notaine. Speaker 400:36:36I mean, notaine is like a product launch for us and we want to make sure that we've got the broadest access possible when notaine starts and we view this as an important way to get there. Speaker 200:36:48Thanks, Charlie. The question about lower extremity, Gary, I'm really happy to say that we're just coming off of our national sales meeting. That was at the end of January and our sales reps are very excited to take this new data. This is the 1st controlled data versus an active control. And it's very positive as I mentioned earlier in my talk. Speaker 200:37:13And so they're very I would say they're very excited to be in for their customers. Early feedback has been very positive. That said, it's early days. They've only been out there for about a week or so. So we'll have more news for you as the year goes on. Speaker 200:37:29As we talked about before, some use is already taking place in that setting. However, we think there's incremental sales there as well. So as the year goes on, we'll provide you further updates. Speaker 800:37:42Okay. And just, are there any other areas indications, whether it's obstetrics or there were some other markets that have been talked about in the past or peds or just where you think there could be upside if you focus more of your efforts behind them? Speaker 200:38:06Yes. Thanks, Gary. I mean, certainly there are some other areas that we've talked about. One of the things that we're doing now is we're taking a very thoughtful review of our entire pipeline as well as programs that we have ongoing. And so as we move forward, we'll be able to communicate more about that with you. Speaker 200:38:27I do see quite a bit of potential for EXPAREL. I also want to make sure that we're doing the kinds of studies that are required to get the right kind of reimbursement, right kind of differentiation in the marketplace. Speaker 800:38:40Okay, great. Thank you. Operator00:38:43Thank you for your question. One moment, please. Our next question comes from the line of Les Zaleski from Truist Securities. The floor is yours. Speaker 900:39:00Good morning. Thank you for taking my questions. I have 2. First, can you talk about some optionality that you have regarding a potential unfavorable brewing regarding the $495,000,000 patent in July? And then second, you now have data showing EXPAREL duration of up to 96 hours. Speaker 900:39:19What has been some of the feedback you've been getting from physicians regarding need for additional post operative pain management? And how would EXPARELA treatment coincide with other non opioid treatments that are undergoing clinical trials, specifically VX-five forty eight? Thank you. Speaker 200:39:37Thanks Les. Thanks for the question. You had asked about optionality regarding the unfavorable rate ruling against us etcetera. So let me just say this, number 1, as Tony mentioned, we're very confident in where we stand. And so I'll just say that at the beginning. Speaker 200:39:55And Tony, let me turn it over to you for some additional comments. Speaker 300:39:59Thanks Frank and good morning Russ. First to level set, like most IP cases, this matter is going to take many years to be resolved in the court system, not just for this case, but as well as future litigation covering our patents. And as I'm sure you could appreciate, it wouldn't be in our best interest to publicly share details around our legal strategy other than to say that we believe that we have a strong legal case and that Evenus is infringing on our patents. Several years ago, we undertook an extensive strategy to protect EXPAREL and the EXPAREL franchise from many directions. And you're starting to see that now with the number patents that are issuing and that have issued and we'll continue to defend those patents vigorously. Speaker 200:40:59Thanks, Tony. You've asked also less about the lower extremity nerve block and how that might play into the NAV 1.8. So let me turn it over to Jonathan here for some comments. Speaker 1000:41:14Thanks, Frank. So far we've received very positive feedback with our 2 new lower extremity indications. As you know, EXPAREL achieved 4 days of superior pain control and opioid consumption versus bupivacaine. So an active comparator, very, very high quality trials with a very high P value, very low P value for those showing the benefits of employing these 2 blocks. So anytime we can expand opportunities for our patients and surgeons, that's a plus. Speaker 1000:41:52When you talk about lower extremity, these nerve block indications target 2 large markets around the knee, most likely TKA as well as other sort of knee repairs and then foot and ankle as well. As far as other products in the space, we always welcome innovation for our patients and we are pleased to see that the non opioid space is attracting investments. Specifically towards VX-five 548, as you inquired about, we see these as having a complementary rather than a competitive mechanism of action. So remember, Esparil being used as an nerve block or a fascial plane block is providing deep analgesia needed for the prevention of post operative acute breakthrough pain, whereas when you saw in the NAV1H studies, they enrolled patients who already had pain. So the goal was breakthrough pain reduction rather than breakthrough pain prevention. Speaker 1000:43:02So this mechanism may offer patients the opportunity to transition to an oral medication post operatively and discharges post part of their multimodal program. So bottom line, we see these as rather complementary where as EXPAREL would prevent pain, these other products seem to help treat pain. Speaker 200:43:27Thanks, Jonathan. Thank you. Operator00:43:32Thanks for your question. One moment, please. Our next question comes from the line of Badajeep Prasad from Barclays. The floor is yours. Speaker 600:43:49Good morning and thank you for the question. So to the extent that you can with regard to the litigation with EVNUS, I know you can't comment more on it, but could you help us understand or confirm if the technology that Evenoz has is a multilamilar technology versus multivascular, at least that's what our channel checks seem to indicate, 1. And 2, stepping back, Frank, going back to the restructuring and the steps taken, can you discuss the deficiencies or the processes that you noted in the company as it took charge to embark on this measure? And curious on how your go to market is going to change with what a CCO, a commercial officer and their business officer will bring to the company and to expiry? Thank you. Speaker 200:44:39Balaji, thanks for the question. Good morning. Let me address the restructuring question first and then I'll turn it over to Tony to comment what we can on the litigation. First of all, I want to come back to we are structuring the organization so that we're fit for growth going forward. There were a lot of great things that helped to bring the company to where it is today. Speaker 200:45:04And it's remarkable that we've been able to treat 14,000,000 patients so far to date. Now as we look at the future, we're going to need a different set of skill sets to take us to a next level of performance and growth that is driving EXPAREL to blockbuster status and growing our other products as well and further building on our leadership in pain management. So that said, what we've done is we created a new position, Chief Commercial Officer. It's quite common for companies like ours to have a Chief Commercial Officer who has a lot of expertise in driving not only growth, but organizationally structuring ourselves so that we have those capabilities to grow in the future. And so that position is one that we are actively looking to fill. Speaker 200:45:54And secondly, as we think about some other capabilities in the organization, I may have mentioned earlier that serving our large strategic customers is going to be very, very important. Now that we are participating in 340B as well as in the future GPO contracting, we're going to have ways to make sure that we reach the C suite and the pharmacy customers in ways that we're not reaching them currently. And this is very important for products like ours in these kinds of settings. So those are some of the 2 key things that we're acting on now. And as I mentioned, we're for the mid and long term embarking on a very thorough strategic review of our pipeline and our therapeutic area strategy. Speaker 200:46:37That will inform our future investments in the pipeline as well as our thinking about what else fits into our portfolio. So with that, let me turn it over to Tony. Speaker 300:46:49Thanks and good morning Balaji. Unfortunately details of the eVenus product are protected by the court's protective order. So we can't comment on the eVenus product. Speaker 200:47:03Thanks, Tony. Balaji, anything else that we can answer? Speaker 1000:47:06I'm good. Thank you. Operator00:47:09Thank you for your question. One moment, please. Our next question comes from the line of Sergey Brinjak from Needham. The floor is yours. Speaker 1100:47:32Hi, good morning. This is Serge. I guess first question regarding the restructuring of the commercial infrastructure. I know the company had changed their sales force makeup. I think over the last year, kind of streamlined it so the sales force would promote all three products. Speaker 1100:47:55Just curious what changes you're implementing? Is it really just a refocusing of efforts or we could see an expansion of those current efforts? And then secondly, on the 340B program, what should we expect at least for 2024 and heading into 2025 regarding that program? Thanks. Speaker 200:48:19Thanks for the question, Serge. Few things regarding broadly our commercial effort, sales force in particular. As you noted, currently our sales force promotes all three products and there are no changes planned in the near term around that. What we are looking at are ways to make sure that we have the necessary share of voice required for no pain going forward. As we mentioned earlier, we're treating no pain like a new product launch. Speaker 200:48:49So in a new product launch here, you want to make sure you have the appropriate share of voice and we're going to make sure that happens. So if we need to bolster it, we will, particularly around EXPAREL. So that's number 1. Number 2, broadly with respect to our marketing efforts and other efforts, we're going to bolster some capabilities around marketing insights, digital pricing and reimbursement, again, to better serve the kinds of customers that we're interacting with on a regular basis. So that's important. Speaker 200:49:22With respect to 340B, we have we've always looked at our strategy there in terms of taking a look at our return on investment and our strategy going forward. Based on that, we have no plans to change our strategy in 340B at this time, but we'll continue to evaluate that as we move forward. As you might imagine, 340B and GPO now provides a good entry point, good entry point to accessing our product and combined with ASP plus 6 in the outpatient setting for no pain, that should be an attractive value proposition for our customers. So that's I believe I hit on all three of your questions. Anything else, Serge? Speaker 1100:50:10I guess just on the DR and D front, I think there were some efforts around ZILRETTA, I think a shoulder OA study as well as around ioverao. Any changes to those at this point or those are all under evaluation? Speaker 200:50:27The studies are underway. And so let me turn it over to Jonathan. He can provide just a little bit of color on each one. So Jonathan? Speaker 1000:50:36Yes. So on the ZILRETTA front, we've kicked off our shoulder study. And so we're actively screening patients now, which will provide expansion beyond the knee for ZILRETTA. As far as ioverao goes, as well we've kicked off our study in the spasticity space, which will provide us a significant opportunity to help those patients and meet an unmet need as far as current treatments are concerned. We also have our IGOR registry, which collects real world data and we're starting to publish data from that showing how these two products work in the real world. Speaker 200:51:32Great. Thanks, Joe. Thank you. Operator00:51:35Thank you for your question. This now concludes our speaker our question and answer session. I would now like to turn it back to Susan Mesko, Head of Investor Relations, for closing remarks. The floor is yours. Speaker 100:51:51Thank you, Gerald, and thanks to all of the call for your questions and time today. We are excited about the opportunities that lie ahead for us. Throughout the balance of the year, we will continue to ensure we are well positioned for the long term success. The opioid epidemic continues to be a national crisis underscoring the vital importance of our mission. Thank you and stay well. Operator00:52:14Thank you. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallPacira BioSciences Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(10-K) Pacira BioSciences Earnings HeadlinesPacira BioSciences soars 52% following InvestingPro’s October Fair Value alertMay 5 at 7:32 PM | investing.comPacira BioSciences to Present New Data on Clinical Immunogenicity of Intra-Articular PCRX-201 and Its Implications for Dosing Strategy in Knee OsteoarthritisMay 2, 2025 | globenewswire.comThe Trump Dump is starting; Get out of stocks now?The first 365 days of the Trump presidency… Will be the best time to get rich in American history.May 8, 2025 | Paradigm Press (Ad)Brokerages Set Pacira BioSciences, Inc. (NASDAQ:PCRX) PT at $26.67May 2, 2025 | americanbankingnews.comPacira’s gene therapy shows sustained benefits in trial for knee osteoarthritisApril 29, 2025 | finance.yahoo.comPacira to Report First Quarter 2025 Financial Results on Thursday May 8, 2025April 29, 2025 | globenewswire.comSee More Pacira BioSciences Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Pacira BioSciences? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Pacira BioSciences and other key companies, straight to your email. Email Address About Pacira BioSciencesPacira BioSciences (NASDAQ:PCRX) is a holding company, which engages in the provision of non-opioid pain management and regenerative health solutions to improve patients’ journeys along the neural pain pathway. Its products include EXPAREL, iovera, and DepoFoam. 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There are 12 speakers on the call. Operator00:00:00Good day, and thank you for standing by. Welcome to the Q4 2023 Pacira Biosciences 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. Please be advised that today's conference is being recorded. Operator00:00:26I'd now like to hand the conference over to your first speaker today, Susan Mesko, Head of Investor Relations. Please go ahead. Speaker 100:00:40Thank you, and good morning, everyone. Welcome to today's conference call to discuss our Q4 and full year 2023 financial results. Joining me are Frank Lee, Chief Executive Officer Tony Malloy, Chief Legal Counsel and Charlie Reinhart, Chief Financial Officer. Jonathan Slonin, Chief Medical Officer, is also here for today's question and answer session. Before we begin, let me remind you that this call will include forward looking statements based on current expectations. Speaker 100:01:10Such statements represent our judgment as of today and may involve risks and uncertainties. For information concerning risk factors that could affect the company, please refer to our filings with the SEC, which are available from the SEC or the Pacira website. Before turning the call over to Frank, I'd like to mention that going forward in 2024, we will be shifting the timing of our quarterly calls to post market with an expected start time of 4:30 p. M. Eastern Time. Speaker 100:01:40With that, it is my pleasure to welcome Frank Leigh. Speaker 200:01:43Well, thank you, Susan, and good morning, everyone. I'm excited to speak to you today as the new CEO of Pacera Biosciences. I was drawn to this organization because Pacerra is the leader in non opioid pain management. KOCERA has market leading products, a clear sense of purpose, a talented team and unwavering commitment to transforming lives of patients by expanding access to opioid sparing pain management. I was especially inspired by the team's steadfast commitment to working with leading medical societies and patient organizations to get no pain over the finish line. Speaker 200:02:23And this legislation is a real testament to Pacera's leadership. It's been a busy and productive time since I joined the company last month. I've met with colleagues here in New Jersey and at our Science Center campus in San Diego. I've also received valuable feedback on our culture and met with key stakeholders. Now that I've spent several weeks listening and learning, there's no doubt this team is highly committed to our corporate mission and the impact that our 3 trusted products are making in patients' lives. Speaker 200:02:58Consequently, I'm even more enthusiastic for PERSERA and the patients we serve. This is a special company that I'm both humbled and honored to lead through this next phase of growth. While much has been accomplished, it's still early days in my tenure here at Pacera. I'm excited to continue to work with the team and our stakeholders to define a thoughtful path for long term growth. And I look forward to sharing more details as the year progresses. Speaker 200:03:27That said, we're taking several steps to ensure we are fit for growth going forward and best positioned for sustainable success. We've initiated an organizational restructuring that includes the following key changes. Reshaping our executive team and launching searches for a new position, Chief Commercial Officer and Chief Business Officer. Reallocating our efforts and resources from ex U. S. Speaker 200:03:58Markets and certain early stage development programs to the U. S. Market. Reprioritizing investments to focus on no pain readiness and enhancing key commercial capabilities such as strategic and national accounts, marketing, marketing access and reimbursement. And finally, doing a thorough strategic review of our pipeline and therapeutic area strategy. Speaker 200:04:29Going forward, we'll foster a culture we call 1 PERSERA, grounded on key values and behaviors that enable organization to work as a United team. For the remainder of today's call, I'd like to focus on EXPAREL, the product that will drive substantial growth in 2025 and beyond. EXPAREL recently passed the 14,000,000 patient mark and we're confident in its potential to grow to blockbuster status. This year, we're advancing 3 key drivers. 1st, launching EXPAREL in 2 new lower extremity nerve block indications 2nd, preparing for the launch and rollout of no pain in 2025. Speaker 200:05:12And 3rd, expanding access to 340B pricing and new GPO partnerships. I'll start with lower extremity nerve blocks. Our sales force is ready and the launch is officially underway. Importantly, we're going to market with an overwhelmingly positive body of data from 2 head to head Phase 3 studies demonstrating 4 days of superiority over BP. The first study evaluated EXPAREL as a sciatic nerve block in public field fascia for bunionectomy. Speaker 200:05:51EXPAREL achieved a 44% reduction in pain scores while reducing opioid consumption by 61% versus bup. In addition, patients who received EXPAREL were 5 times more likely to be opioid free. The second study evaluated EXPAREL as an adductor canal block for total knee arthroplasty. In this study, EXPAREL achieved statistically significant reductions in pain scores and a 23% reduction in opioid consumption versus BUPE. These results are highly significant with P values of less than 0.01. Speaker 200:06:28With respect to safety, EXPAREL was well tolerated with a safety profile consistent with BUPE. These positive outcomes were achieved with 10 ml dose, making a single dose EXPAREL nerve block a very attractive value proposition to the anesthesia and surgical community for knee and foot and ankle surgeries across all sites of care. The sciatic nerve block study in the Papatea of Austria recently published online in the Journal of Clinical Anesthesia. And we're working to secure publication of the TKA study. We believe this is going to be a $100,000,000 opportunity over time. Speaker 200:07:11We have strong presence in TKA, where anesthesiologists are already doing adductor canal blocks with bupip. So we expect faster uptake in this segment, which is over a 1,000,000 procedures. Conversely, we have very limited presence in other lower extremity procedures like ACL repair or foot and ankle procedures. So we expect uptake in these segments to be slower. Switching gears to no pain, we believe will be an important event for both patients and Pacerra. Speaker 200:07:46As you know, products used to manage postsurgical pain are largely reimbursed as part of the bundled procedure payment. Bundle reimbursement incentivizes the use of cheaper generic approaches to managing prosurgical pain that often incorporate opioids. Financial pressures facing healthcare systems further incentivize cost driven approaches. No pain mandates separate CMS reimbursement of non opioid therapies for postsurgical pain relief across all outpatient settings. It will eliminate the cost period by fully reimbursing at average selling price or ASP plus 6% beginning January of 2025. Speaker 200:08:33There are roughly 6,000,000 annual CMS procedures in the outpatient settings with a split of roughly 3,500,000 procedures in the hospital outpatient settings and 2,500,000 procedures performed at ambulatory surgical centers. As a first step, we'll be allocating resources to drive education and to help healthcare systems implement EXPAREL as a best practice standard of care for CMS patients. The value proposition is clear as a recent review of 5 year real world Medicare claims data for hospital outpatient procedures demonstrated a significant correlation between EXPAREL utilization and improved patient outcomes, including opioid prescription fills, emergency room visits and hospital admissions. These data were published in the Journal of Medical Economics. Over time, as we underscore the value of EXPAREL is providing to CMS patients, we're hopeful commercial payers will be compelled to follow suit and provide separate coverage to another 12,000,000 outpatient procedures. Speaker 200:09:48We have been paving the way for no pain through our investments in 340B pricing and new GPO partnerships, such as our recently announced deal with Premier, whose significant network of hospitals and healthcare systems covers nearly 20% of EXPAREL relevant market procedures. These programs assist healthcare systems in affording the opportunity to improve patient care through best practice pain management. Our customers will have a favorable acquisition cost and once no pain takes effect next year, they'll be reimbursed at ASP plus 6. In 2024, we're preparing for no pain as we would a new product launch because it's that important. To ensure readiness, we'll be enhancing our commercial organization with new talent and expertise to ensure operational excellence within critical functions such as marketing, strategic accounts, market access and reimbursement. Speaker 200:10:47We'll also be investing in programs to drive awareness and education and action across key decision makers and sites. We'll track and update you on our progress during the course of the year. We believe no pain will result in accelerated and sustainable growth beginning in 2025 that will drive EXPAREL to blockbuster status. As we do this, we'll hold the bar high with respect to resource allocation and strong execution. Before turning the call over to Tony, I'd like to highlight the FDA's recent approval of our sNDA for our 200 liter manufacturing suite in San Diego. Speaker 200:11:28This enhanced 200 liter manufacturing process is just another example of how the Pacira team continues to innovate and augment our broad IP estate with new EXPAREL patents. Our strong and growing patent estate leaves us confident that our EXPAREL franchise is well protected and positioned to drive significant and durable long term sales growth as a potential generic would have to successfully litigate and overcome all of our EXPAREL patents. With that, I'll turn the call over to Tony Molloy, our Chief Legal Counsel for his review of our recent Paragraph 4 litigation and next steps. Speaker 300:12:12Thanks, Frank, and good morning to all on the call. I'd like to take a few minutes to update you on the status of our patent infringement lawsuit against uvenus. As background, Pacira initiated this litigation in the U. S. District Court of New Jersey after receiving notice from Evenus that they submitted an abbreviated new drug application or ANDA to the FDA with a Paragraph IV certification seeking authorization for a generic version of EXPAREL. Speaker 300:12:41This first lawsuit alleges patent infringement of EXPAREL U. S. Patent number 11033495 or the 495 patent. The 495 patent claims composition of EXPAREL made using an enhanced manufacturing process, which was the result of several years of innovation by the Pacira Scientific team with an investment exceeding $100,000,000 The 5 day bench trial concluded on February 14 and we are currently engaged in post trial briefings with closing arguments set for May 2. We expect the judge to rule on the 4 95 case before the expiration of the 30 month stay on July 1. Speaker 300:13:25We are confident in our position, our 495 patent and the related 2,041 expiry and we stand ready to engage the court with it in the event of any decision. A second patent infringement suit is also underway in the U. S. District Court of New Jersey, alleging infringement of U. S. Speaker 300:13:46Patent number 1,124,348 or the 348 patent, which claims composition of matter for EXPAREL. The trial date has not been set for the 348 patent litigation. The 495 and 348 patents are just 2 deliverables from our comprehensive and growing patent portfolio. Our efforts continue to bear fruit by listing additional patents in the FDA orange book. We also have additional notices of allowance from the U. Speaker 300:14:17S. Patent and Trademark Office and further applications are being prosecuted. These include chemical composition, product by process, method of use and process patents. Many of these patents will qualify for listing in the FDA orange book. It is important to note that the FDA has established extremely rigorous hurdles for proving bioequivalents to a multivesicular leptodomal bupivacaine and this would have to be accomplished without infringing on the broad Pacira patent estate. Speaker 300:14:52We know consistently manufacturing EXPAREL would be extremely challenging for a potential generic. Since Pacira is the only company to manufacture multivesicular liposomal products at commercial scale with more than 20 years of expertise in doing so. Breveen is to be successful in the 4 95 case, the 348 case as well as any future patent litigation, they will have to overcome every one of our patents. This is in addition to establishing bioequivalents and securing approval from the FDA, which they've not done yet. Bottom line, we firmly believe we have built an extensive portfolio of intellectual property around our EXPAREL franchise and is well protected from multiple directions. Speaker 300:15:40Generic attempts are commonplace for successful products like EXPAREL. We continue to have a thriving EXPAREL franchise that is supported by strong and growing patent estate that we will continue to vigorously defend. With that, I will turn the call over to Charlie for his financial report. Speaker 400:15:58Thank you, Tony, and good morning, everyone. To remind you, I will be discussing non GAAP financial measures this morning. A description of these metrics along with our reconciliation to GAAP can be found in the news release we issued this morning. I'll start with an update on sales and margin trends. Starting with EXPAREL, 4th quarter EXPAREL sales of $143,900,000 were 4% higher than 2022. Speaker 400:16:274th quarter ZILRETTA sales increased to $28,700,000 versus $28,000,000 for 2022 and ioverao sales improved to $6,000,000 compared to $4,600,000 reported in 2022. Turning to gross margins. On a consolidated basis, our 4th quarter non GAAP gross margin percentage was 74%. 4th quarter EXPAREL margins were in the high 70% range as expected, but were partially offset by lower margins for ZILRETTA and ioverao. For non GAAP R and D expense, the 4th quarter increased to $16,600,000 from the $15,700,000 reported in 2022. Speaker 400:17:13This year over year increase primarily relates to startup activities for the ZILRETTA Phase 3 study in shoulder OA. Non GAAP SG and A expense came in at $57,400,000 for the 4th quarter, which is up from $54,700,000 in 2022. This increase is largely due to legal fees associated with the Paragraph 4 and other litigation. 4th quarter interest quarter interest expense improved to $3,400,000 versus the $11,000,000 reported last year. This was driven by the interest expense savings associated with Speaker 200:17:56the Speaker 400:18:00And lastly, we delivered another quarter of significantly positive adjusted EBITDA of $65,400,000 Turning to our outlook for 2024. Today, we are guiding to full year total revenues of $680,000,000 to $705,000,000 This range assumes mid single digit volume growth for EXPAREL and ZILRETTA and a low teens growth rate for ioverao. To remind you, EXPAREL volume growth will be largely offset by a lower net selling price due to our investment in expanding market access through our new GPO partnerships, which are expected to have a mid single digit impact on our selling price while growing volumes over time. As Frank mentioned, we believe these GPO partnerships are a core investment to ensure no pain readiness in January 2025. For expenses, 2024 guidance is as follows: non GAAP consolidated gross margins of 74% to 76%, non GAAP research and development expense of $70,000,000 to $80,000,000 non GAAP SG and A expense of $245,000,000 to $265,000,000 and finally non cash compensation expense of $50,000,000 to $55,000,000 As Frank highlighted, underpinning our sharp focus on growth will be a commitment to solid execution and delivering on the expectations that we set by providing guidance we can confidently stand behind. Speaker 400:19:38With respect to our capital allocation strategy for 2024, in the near term, we are investing to ensure commercial readiness for the rollout of no pain in 2025 and to support long term growth. We are also planning for the retirement of debt, including the face value of our convertible notes in August 2025 and the subsequent repayment of our Term Loan A. We will continue to regularly assess our capital allocation strategy. As detailed plans for no pain are implemented this year, we look forward to sharing more specifics. With that, I'll turn the call back over to Frank. Speaker 200:20:18Thanks, Charlie. As you may have seen today, we reported that Charlie will be financial leadership at Pacera. We're on solid financial and operational footing and we wish Charlie all the best as he prepares for his well deserved next chapter. In closing, let me summarize. We are sharply focused on driving long term growth. Speaker 200:20:48We have 3 great products and there's no question about that. We currently have the lower extremity launch, which will be a solid tailwind for EXPAREL. We have a significant catalyst ahead in no pain. And in 2024 will be a key setup year to ensure we are fit for driving growth in 2025 and beyond. To that end, we're reshaping our executive team, reallocating ex U. Speaker 200:21:15S. And early stage development resources to the U. S. Market and reprioritizing investments to focus on no pain readiness and enhancing key commercial capabilities. Lastly, we're confident in our strong and growing intellectual property estate and will continue to vigorously defend our EXPAREL franchise. Speaker 200:21:39As we progress through the course of this year, I look forward to sharing updates on the lower extremity nerve block launch, no pain readiness, our progress in reshaping our culture and capabilities and crystallizing our long term vision and growth strategies. I want to take a moment to applaud the dedicated and talented Pacera team who have built a successful and sustainable business that we're now scaling to drive EXPAREL to blockbuster status. I also want to thank you, our shareholders and partners in this journey for the warm welcome and encouragement I've received since taking the helm at FOCERA. Together, we're changing the course of pain management and hopefully saving patients from the deadly effects of opioid addiction. With that operator, we're ready to open the call for questions. Operator00:22:32Thank you. At this time, we will conduct the question and answer session. Our first question comes from the line of David Amsellem from Piper Sandler. Your line is now yours. Speaker 500:23:04Hey, thanks. So just got a few questions here. Frank, I guess there's a lot of things that are kind of works in progress, but can you just talk broadly about where you want to take the cost structure, particularly the R and D infrastructure? How are you thinking about margin expansion over time, not just from EXPAREL no pain, but just looking at the cost structure in particular and the extent in which you can gain operating leverage. That's number 1. Speaker 500:23:41Number 2, regarding No Pain, can you talk more broadly about what you think and I know it's early, but what do you think the volume trajectory could look like next year? And maybe just help us better understand your general thinking on what the impact to sales and volumes could be? And I'll stop there. Speaker 200:24:13Hi, good morning, David. Frank Lee here. Thanks for the question. You were kind of breaking up a little bit on me there, but I think what I heard you ask about is cost going forward, particularly in R and D and also maybe providing a little bit more color on no pain in 2025 beyond. So as it relates to cost and R and D, I may have mentioned in my script that we've taken a look at some early development programs and based on our efforts now to reallocate our resources towards growing growth, driving growth of EXPAREL. Speaker 200:24:51We've stopped certain programs that are in early development and reallocated those expenses towards those things that will drive EXPAREL growth. For example, like our efforts towards no pain. I can tell you we've reallocated substantial resources towards no pain going forward. With regard to the opportunity on no pain, Charlie, maybe you can speak a little bit towards the volumes and the procedures that are impacted by no pain. Speaker 400:25:21So David, I think you're aware that no pain is focused actually on the outpatient setting from the HOPD. CMS has roughly 6,000,000 procedures in the combination of HOPD and the ASC settings with about 3.5 in HOPD and 2.5 in ASC. So obviously, no pain relates to CMS. There are additional 12,000,000 patients all in our TAM in combination of HOPD and ASC that are commercial backed, commercial payers as well. So No Pain is going to focus initially on CMS and then it's EXPAREL's or excuse me, Precira's focus to get the commercial payers on board as well. Speaker 400:26:09So we're really excited about it. I don't think that's all going to happen in 2025, but obviously the beginning of that process will. Speaker 200:26:18And let me just add, thank you, Charlie. Let me just add that as we grow, margin will improve accordingly. In addition, as we think about the customers that are impacted by No Pain, these large strategic customers, we are making investments there to better serve those customers going forward. Speaker 600:26:41Maybe just a quick follow-up. Speaker 500:26:43Are you going to devote significant resources to ZILRETTA and ioverao going forward? Speaker 200:26:50So let me just start by saying we've got 3 great products. And I like all of them a lot. That said, we are hyper focused on driving EXPAREL growth. So we'll focus on that first. And then of course, as needed, we'll pay some attention to ZILRETTA and ioverao to make sure those businesses go forward. Speaker 200:27:12But if you think about where we're reallocating our resources and where we expect to drive growth, it's EXPAREL. Speaker 500:27:20Okay. Thank you. Operator00:27:23Thank you for your question. One moment please. Our next question comes from the line of Gregory Resnick from RBC Capital Markets. The floor is yours. Speaker 700:27:39Hey, good morning Frank and team. Thanks for the time today and thanks for taking our question. Frank, maybe just looking at 2024 and Charlie, it's helpful that we heard some color on the revenue guidance. I'm just curious if you could provide just maybe a little more detail, some of those pushes and pulls certainly as you've offered the total portfolio outlook for 2024, just wanted to see if you had any additional detail on and number 1, just the character of that and how it sort of translates over the trajectory of 2024, if anything we should be thinking about? And then secondly, maybe just longer term, Frank, as you're reiterating your confidence in EXPAREL and the tailwind with no pain, just wanted your color on thinking about the longer term, just the commentaries and the color on EXPAREL driving $1,000,000,000 plus in sales longer term. Speaker 700:28:32Just wanted to hear your latest thoughts on really where the ceiling is for EXPAREL in the out years. Thanks so much. Speaker 200:28:40Yes. Thanks for the questions, Greg. First, with regard to revenue for 2024, maybe some initial comments here and then I'll turn it over to Charlie. What we're trying to do this year is to be conservative in terms of the way we provide guidance and provide you guidance that we can stand behind. So as the year goes forward, we expect to tighten the guidance as we have additional information, but that's what we expect, number 1. Speaker 200:29:14And it's a setup year for 2025. And Charlie, maybe you can provide a little bit more color to your comments on 2024. Sure. So we mentioned Speaker 400:29:29in our comments that we expected both EXPAREL and ZILRETTA to have kind of mid single digit volume growth. ZILRETTA doesn't have any other changes to its gross to net, but with the implementation of the GPO contracts, that impact on gross to net will pretty much offset the base business volume growth for EXPAREL and therefore the upside in the revenue in 2024 was probably going to be mostly no pain. So overall, when we look at the P and L for 2024, I say this, Greg, we'll have modestly higher revenues. We'll have modestly expanded gross margins. We'll have an R and D line that is the same guidance as last year. Speaker 400:30:24And we've increased our investment in SG and A to drive growth for No Pain next year, kind of all resulting in a bottom line that looks should look pretty close to what we saw this year. And so that's the way we think about it. We 2024 is a bridge to 2025. We're making really important investments in order to capitalize on no pain in 2025. And overall, the year will look better than 2023. Speaker 400:30:51So we thought that was a pretty good situation to be in. Speaker 200:30:57Thanks, Charlie. Just about the long term, first, let me just say that it's still early days in my tenure. That said, just some color about long term. In particular, I think you had mentioned no pain. So first off, about 75% of EXPAREL relevant procedures are in the outpatient setting. Speaker 200:31:21And as you know, no pain is really impacting outpatient reimbursement, specifically for CMS patients. So that's important to note. Secondly is that commercial payers will be important in terms of a lever to accelerate that growth. And so we're taking steps now to make sure that we're serving the commercial payer customers in the way they need to be served. And third is, as you may have mentioned as I've mentioned earlier, we're enhancing and bolstering our commercial capabilities. Speaker 200:31:53We have great products and we need to get them to more patients and serve our customers at a higher level. And so we'll do that. So those factors I think are going to be important as we think about driving growth with EXPAREL, let's say in the midterm. Over the long term, what we're doing now is we're taking a very thoughtful look at our pipeline, and we're taking a very thoughtful look at our strategic outlook as it relates to our therapeutic area strategy. And so as the year goes on, we'll be able to communicate that more clearly to you. Speaker 200:32:27And so that will help drive some of our future growth over the long term as well. Speaker 700:32:34Great, Frank. Thanks, Charlie. That's very helpful. Operator00:32:37Thank you for your question. One moment, please. Our next question comes from the line of Gary Nuschmidt from Raymond James. The floor is yours. Speaker 800:32:54Hi, guys. Good morning and welcome, Frank. Maybe you could just talk a little bit more about the additional GPO contracting for EXPAREL you're planning on doing this year. So how many more of these could you potentially do? And I know Charlie said that should impact net price in the mid single digits. Speaker 800:33:13Just how much visibility do you have on that? Are you very confident that that's only going to be the impact just in terms of net price? Speaker 500:33:23And then just how much Speaker 800:33:25are you expecting the lower extremity nerve block to contribute this year? And what are you doing to support that launch? And I know you talked about shifting some resources and more SG and A spend. And I'm just wondering if there are other pockets of EXPAREL, just in terms of different areas, different indications that you're going to be investing more behind this year as you've taken a closer look at the overall market? Thanks. Speaker 200:33:58Thanks for the questions, Gary. Let me hit the GPO one and turn it over to Charlie for additional detail. With respect to GPO contracting, just at a high level, our products, our product EXPAREL is utilized in both the hospital and HOPD setting, of course, in the probably outpatient ASC as well. And so in these kinds of settings, it's very commonplace for products to participate in GPOs. So that's number 1. Speaker 200:34:30And what that does is it makes spending at the hospital, at the institution, the compliance spend versus non compliance spend. And so what that means is, it's not a flag, so that there's not yet another hurdle for physicians to utilize EXPAREL in these settings. And so we're participating in the Premier GPO contract as we mentioned previously. We expect to sign a couple more in the coming months ahead. And what that does is not only enhances access, but it also we're able to tap into the services that GPOs provide and helping to educate their membership. Speaker 200:35:11In our case, this is going to be very helpful as we think about no pain education and what that means in terms of making that take hold and the institutions and all the steps that it takes. So, Charlie, maybe over to you. Sure. Speaker 400:35:26So Gary, Frank mentioned there are a couple other GPO organizations we're in the midst of discuss having conversations with. We expect to sign a couple more this year. The ones that we're looking at are the most significant ones, particularly with respect to our TAM. And when you add all three of those together, it's roughly 2 thirds of our TAM from a procedural perspective recovered by these 3 organizations. Now as far as what our confidence level is on the impact, I'd say we're pretty confident. Speaker 400:36:00We know what the terms of the contracts will be. We know basically what proportion of our current business is likely to be impacted. And frankly, if I've underestimated the cost, it's probably a good thing because that means they're driving volume and driving revenue and that is exactly what we want them to do. So ultimately, I think that in 2024, the volume vial growth of the base business of EXPAREL will kind of equate to what the cost of the GPO is. And we expect them to help us really prepare for notaine. Speaker 400:36:36I mean, notaine is like a product launch for us and we want to make sure that we've got the broadest access possible when notaine starts and we view this as an important way to get there. Speaker 200:36:48Thanks, Charlie. The question about lower extremity, Gary, I'm really happy to say that we're just coming off of our national sales meeting. That was at the end of January and our sales reps are very excited to take this new data. This is the 1st controlled data versus an active control. And it's very positive as I mentioned earlier in my talk. Speaker 200:37:13And so they're very I would say they're very excited to be in for their customers. Early feedback has been very positive. That said, it's early days. They've only been out there for about a week or so. So we'll have more news for you as the year goes on. Speaker 200:37:29As we talked about before, some use is already taking place in that setting. However, we think there's incremental sales there as well. So as the year goes on, we'll provide you further updates. Speaker 800:37:42Okay. And just, are there any other areas indications, whether it's obstetrics or there were some other markets that have been talked about in the past or peds or just where you think there could be upside if you focus more of your efforts behind them? Speaker 200:38:06Yes. Thanks, Gary. I mean, certainly there are some other areas that we've talked about. One of the things that we're doing now is we're taking a very thoughtful review of our entire pipeline as well as programs that we have ongoing. And so as we move forward, we'll be able to communicate more about that with you. Speaker 200:38:27I do see quite a bit of potential for EXPAREL. I also want to make sure that we're doing the kinds of studies that are required to get the right kind of reimbursement, right kind of differentiation in the marketplace. Speaker 800:38:40Okay, great. Thank you. Operator00:38:43Thank you for your question. One moment, please. Our next question comes from the line of Les Zaleski from Truist Securities. The floor is yours. Speaker 900:39:00Good morning. Thank you for taking my questions. I have 2. First, can you talk about some optionality that you have regarding a potential unfavorable brewing regarding the $495,000,000 patent in July? And then second, you now have data showing EXPAREL duration of up to 96 hours. Speaker 900:39:19What has been some of the feedback you've been getting from physicians regarding need for additional post operative pain management? And how would EXPARELA treatment coincide with other non opioid treatments that are undergoing clinical trials, specifically VX-five forty eight? Thank you. Speaker 200:39:37Thanks Les. Thanks for the question. You had asked about optionality regarding the unfavorable rate ruling against us etcetera. So let me just say this, number 1, as Tony mentioned, we're very confident in where we stand. And so I'll just say that at the beginning. Speaker 200:39:55And Tony, let me turn it over to you for some additional comments. Speaker 300:39:59Thanks Frank and good morning Russ. First to level set, like most IP cases, this matter is going to take many years to be resolved in the court system, not just for this case, but as well as future litigation covering our patents. And as I'm sure you could appreciate, it wouldn't be in our best interest to publicly share details around our legal strategy other than to say that we believe that we have a strong legal case and that Evenus is infringing on our patents. Several years ago, we undertook an extensive strategy to protect EXPAREL and the EXPAREL franchise from many directions. And you're starting to see that now with the number patents that are issuing and that have issued and we'll continue to defend those patents vigorously. Speaker 200:40:59Thanks, Tony. You've asked also less about the lower extremity nerve block and how that might play into the NAV 1.8. So let me turn it over to Jonathan here for some comments. Speaker 1000:41:14Thanks, Frank. So far we've received very positive feedback with our 2 new lower extremity indications. As you know, EXPAREL achieved 4 days of superior pain control and opioid consumption versus bupivacaine. So an active comparator, very, very high quality trials with a very high P value, very low P value for those showing the benefits of employing these 2 blocks. So anytime we can expand opportunities for our patients and surgeons, that's a plus. Speaker 1000:41:52When you talk about lower extremity, these nerve block indications target 2 large markets around the knee, most likely TKA as well as other sort of knee repairs and then foot and ankle as well. As far as other products in the space, we always welcome innovation for our patients and we are pleased to see that the non opioid space is attracting investments. Specifically towards VX-five 548, as you inquired about, we see these as having a complementary rather than a competitive mechanism of action. So remember, Esparil being used as an nerve block or a fascial plane block is providing deep analgesia needed for the prevention of post operative acute breakthrough pain, whereas when you saw in the NAV1H studies, they enrolled patients who already had pain. So the goal was breakthrough pain reduction rather than breakthrough pain prevention. Speaker 1000:43:02So this mechanism may offer patients the opportunity to transition to an oral medication post operatively and discharges post part of their multimodal program. So bottom line, we see these as rather complementary where as EXPAREL would prevent pain, these other products seem to help treat pain. Speaker 200:43:27Thanks, Jonathan. Thank you. Operator00:43:32Thanks for your question. One moment, please. Our next question comes from the line of Badajeep Prasad from Barclays. The floor is yours. Speaker 600:43:49Good morning and thank you for the question. So to the extent that you can with regard to the litigation with EVNUS, I know you can't comment more on it, but could you help us understand or confirm if the technology that Evenoz has is a multilamilar technology versus multivascular, at least that's what our channel checks seem to indicate, 1. And 2, stepping back, Frank, going back to the restructuring and the steps taken, can you discuss the deficiencies or the processes that you noted in the company as it took charge to embark on this measure? And curious on how your go to market is going to change with what a CCO, a commercial officer and their business officer will bring to the company and to expiry? Thank you. Speaker 200:44:39Balaji, thanks for the question. Good morning. Let me address the restructuring question first and then I'll turn it over to Tony to comment what we can on the litigation. First of all, I want to come back to we are structuring the organization so that we're fit for growth going forward. There were a lot of great things that helped to bring the company to where it is today. Speaker 200:45:04And it's remarkable that we've been able to treat 14,000,000 patients so far to date. Now as we look at the future, we're going to need a different set of skill sets to take us to a next level of performance and growth that is driving EXPAREL to blockbuster status and growing our other products as well and further building on our leadership in pain management. So that said, what we've done is we created a new position, Chief Commercial Officer. It's quite common for companies like ours to have a Chief Commercial Officer who has a lot of expertise in driving not only growth, but organizationally structuring ourselves so that we have those capabilities to grow in the future. And so that position is one that we are actively looking to fill. Speaker 200:45:54And secondly, as we think about some other capabilities in the organization, I may have mentioned earlier that serving our large strategic customers is going to be very, very important. Now that we are participating in 340B as well as in the future GPO contracting, we're going to have ways to make sure that we reach the C suite and the pharmacy customers in ways that we're not reaching them currently. And this is very important for products like ours in these kinds of settings. So those are some of the 2 key things that we're acting on now. And as I mentioned, we're for the mid and long term embarking on a very thorough strategic review of our pipeline and our therapeutic area strategy. Speaker 200:46:37That will inform our future investments in the pipeline as well as our thinking about what else fits into our portfolio. So with that, let me turn it over to Tony. Speaker 300:46:49Thanks and good morning Balaji. Unfortunately details of the eVenus product are protected by the court's protective order. So we can't comment on the eVenus product. Speaker 200:47:03Thanks, Tony. Balaji, anything else that we can answer? Speaker 1000:47:06I'm good. Thank you. Operator00:47:09Thank you for your question. One moment, please. Our next question comes from the line of Sergey Brinjak from Needham. The floor is yours. Speaker 1100:47:32Hi, good morning. This is Serge. I guess first question regarding the restructuring of the commercial infrastructure. I know the company had changed their sales force makeup. I think over the last year, kind of streamlined it so the sales force would promote all three products. Speaker 1100:47:55Just curious what changes you're implementing? Is it really just a refocusing of efforts or we could see an expansion of those current efforts? And then secondly, on the 340B program, what should we expect at least for 2024 and heading into 2025 regarding that program? Thanks. Speaker 200:48:19Thanks for the question, Serge. Few things regarding broadly our commercial effort, sales force in particular. As you noted, currently our sales force promotes all three products and there are no changes planned in the near term around that. What we are looking at are ways to make sure that we have the necessary share of voice required for no pain going forward. As we mentioned earlier, we're treating no pain like a new product launch. Speaker 200:48:49So in a new product launch here, you want to make sure you have the appropriate share of voice and we're going to make sure that happens. So if we need to bolster it, we will, particularly around EXPAREL. So that's number 1. Number 2, broadly with respect to our marketing efforts and other efforts, we're going to bolster some capabilities around marketing insights, digital pricing and reimbursement, again, to better serve the kinds of customers that we're interacting with on a regular basis. So that's important. Speaker 200:49:22With respect to 340B, we have we've always looked at our strategy there in terms of taking a look at our return on investment and our strategy going forward. Based on that, we have no plans to change our strategy in 340B at this time, but we'll continue to evaluate that as we move forward. As you might imagine, 340B and GPO now provides a good entry point, good entry point to accessing our product and combined with ASP plus 6 in the outpatient setting for no pain, that should be an attractive value proposition for our customers. So that's I believe I hit on all three of your questions. Anything else, Serge? Speaker 1100:50:10I guess just on the DR and D front, I think there were some efforts around ZILRETTA, I think a shoulder OA study as well as around ioverao. Any changes to those at this point or those are all under evaluation? Speaker 200:50:27The studies are underway. And so let me turn it over to Jonathan. He can provide just a little bit of color on each one. So Jonathan? Speaker 1000:50:36Yes. So on the ZILRETTA front, we've kicked off our shoulder study. And so we're actively screening patients now, which will provide expansion beyond the knee for ZILRETTA. As far as ioverao goes, as well we've kicked off our study in the spasticity space, which will provide us a significant opportunity to help those patients and meet an unmet need as far as current treatments are concerned. We also have our IGOR registry, which collects real world data and we're starting to publish data from that showing how these two products work in the real world. Speaker 200:51:32Great. Thanks, Joe. Thank you. Operator00:51:35Thank you for your question. This now concludes our speaker our question and answer session. I would now like to turn it back to Susan Mesko, Head of Investor Relations, for closing remarks. The floor is yours. Speaker 100:51:51Thank you, Gerald, and thanks to all of the call for your questions and time today. We are excited about the opportunities that lie ahead for us. Throughout the balance of the year, we will continue to ensure we are well positioned for the long term success. The opioid epidemic continues to be a national crisis underscoring the vital importance of our mission. Thank you and stay well. Operator00:52:14Thank you. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.Read morePowered by