Pacira BioSciences Q2 2025 Earnings Report

Pacira BioSciences EPS Results

• Actual EPS: $0.74
• Consensus EPS: $0.73
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $0.96

Pacira BioSciences Revenue Results

• Actual Revenue: $181.10 million
• Expected Revenue: $183.11 million
• Beat/Miss: Missed by -$2.01 million
• YoY Revenue Growth: +1.70%

Pacira BioSciences Announcement Details

• Quarter: Q2 2025
• Date: 8/5/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, August 5, 2025
• Conference Call Time: 4:30PM ET

Pacira 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. The company was founded in December 2006 and is headquartered in Tampa, FL.

Pacira BioSciences Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Improved EXPAREL performance drove 6% year-over-year volume growth—its highest rate in eight quarters—supporting a narrowed $730 million–$750 million revenue guidance.
• Positive Sentiment: Expanded market access with over 40 million commercial lives covered for EXPAREL, on track to reach 60 million by year-end and 100 million total lives across commercial and government payers.
• Positive Sentiment: Bolstered liquidity and capital structure via a new $300 million five-year revolver, repayment of term loan and convertible notes, ending Q2 with ~ $270 million in cash, and repurchased $50 million of common stock.
• Positive Sentiment: Executed a collaboration with Johnson & Johnson MedTech to co-promote ZILRETTA, doubling sales calls and extending reach into sports medicine, rheumatology, pain management, and other specialties.
• Neutral Sentiment: Presented three-year follow-up data showing sustained efficacy and safety of a single injection of PCRX201 and maintained on-track enrollment for the Phase II ASCEND study, with Part A concluding by year-end.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Pacira Biosciences Q2 twenty twenty five Earnings Conference Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone.

[Operator]

You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Susan Mesko, Head of Investor Relations. Please go ahead.

[Susan Mesco, VP - IR at Pacira BioSciences Inc]

Thank you. Good afternoon, everyone. Welcome to today's conference call to discuss our second quarter twenty twenty five financial results. Joining me are Frank Lee, Chief Executive Officer Brendan Teehan, chief commercial officer and Sean Cross, chief financial officer. Tony Malloy, chief legal and compliance officer, is also here for today's question and answer session.

[Susan Mesco, VP - IR at Pacira BioSciences Inc]

Before we begin, let me remind you that this call will include forward looking statements subject to the safe harbor provisions of federal securities laws. Such statements represent our judgment as of today and may involve risks and uncertainties. This may cause our actual results, performance, or achievements to differ materially. For information concerning risk factors that could affect the company, please refer to our filings with the SEC. These are available from the SEC or the Paceira website.

[Susan Mesco, VP - IR at Pacira BioSciences Inc]

Lastly, as a reminder, we will be discussing non GAAP financial measures on today's call. A description of these metrics along with our reconciliation to GAAP can be found in the news release issued earlier this afternoon. With that, I will now turn the call over to Frank Lee.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Thank you, Susan, and good afternoon, everyone. I'm pleased to report that the 2025 was marked by solid execution across our corporate, clinical, and commercial initiatives. The stage is set for accelerating top line growth in the second half of the year, and importantly, we delivered several key milestones to advance our five by-thirty path to growth and value creation. To remind you that this plan supports two broad strategic imperatives. First, growing our strong commercial based business, and second, advancing an innovative pipeline of potentially transformative assets such as PCRx201.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Notable second quarter accomplishments include the following: improving EXPAREL performance with 6% year over year volume growth, the highest in eight quarters strong commercial progress allowing us to reiterate and narrow our range for revenue guidance, favorable gross margins supporting an increase in guidance, enhanced capital structure and liquidity with a new $300,000,000 revolver and significant reduction of debt, and finally disciplined and strategic capital allocation with the repurchase of $50,000,000 of common stock. Brent and Sean will share more specifics on the quarter shortly. I'll begin with a high level overview of our commercial portfolio where our three best in class products continue to generate significant cash flow. Our flagship product, EXPAREL, the 2025 was marked by solid execution across three priorities, market access, awareness, and utilization. We now have a strong base to build on, and we're seeing encouraging momentum across key leading indicators for EXPAREL.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

On the market access front, we continue to advocate for expanded patient access to opioid sparing pain therapies. To that end, we're pleased to see a new policy outlined by CMS and its preliminary rule for 2026. CMS is proposing to completely phase out its inpatient only list over the next three years, starting with the removal of hundreds of procedures in 2026. In parallel, many of these procedures will be added to its list of procedures covered in ambulatory surgical centers. We believe this will enhance the EXPAREL market opportunity in the outpatient settings.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

On the IP front, our legal team secured a favorable reexamination of our four ninety five patent from the US Patent and Trademark Office. Importantly, during this process, we amended the patent's claims to add volume limitations and to address other issues noted in the New Jersey court's opinion last year. The four ninety five patent will be reissued shortly, and we believe it will be the strongest in our uric acid family of patents. In parallel, the team continues to innovate and expand our uric acid and IVRA patent families with two new patents. Both claim XPEL composition are listed in the FDA's orange book with exclusivity into the 2040s.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Shifting gears to strategic partnerships, a key component of 5x30 with an objective of five partnerships by 02/1930. We recently executed a potentially transformative collaboration with Johnson and Johnson MedTech for Zoleta. We believe this will significantly expand our reach and patient access for ZILRETTA. The proven long lasting benefits of ZILRETTA and its distinct mechanism of action make it an ideal addition to J and J Meditex's existing portfolio of OA pain solutions. Because there's no one size fits all for treating patients suffering from OA pain, a personalized approach is essential.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

With a highly complementary non opioid option, the J and J med tech team would better support multiple treatment paths and improve the patient journey. For Pocera, this collaboration essentially doubles our sales calls for ZILRETTA, which is promotion responsive product. It gives us access to a well established team and an extensive customer base. These relationships span a variety of physician specialists beyond orthopedics, such as sports medicine, osteopathy, pain management, and rheumatology. We believe this will meaningfully accelerate the ZILRETTA growth trajectory in an efficient manner.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

As for growth margins, enhanced manufacturing efficiencies have allowed us to increase our full year guidance. This is a result of a multiyear investment in our 200 liter facilities in Swindon and San Diego. These suites provide ample capacity to meet demand with more favorable cost structure and manufacturing yields. Turning now to our pipeline, we're focused on becoming the therapeutic area leader in musculoskeletal pain and adjacencies, these are large markets with high unmet patient need. Our two registrational studies for ZILRETTA in the shoulder OA and ioverao in spasticity are progressing according to plan.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

To further solidify our leadership in opioid sparing innovation, we're advancing innovations in genicular outcomes registry or ICOR. PACERRA designed this comprehensive, prospective, observational, real world study in the interest of science, not as a health authority obligation. OA is a unique condition that patients live with for decades and receive a myriad of pain treatments as their disease progresses. IGOR is positioned to provide in-depth insights into the patient journey, and we're capturing clinical and economic data as well as patient reported outcomes. Its potential for meaningful insights is better than any known OA registry of its kind.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

With over 2,500 patients enrolled to date and growing, eye door is now bearing fruit. Recent and upcoming publications are further reinforcing the value of our products. In addition, we believe the insights gained from eye door will support much needed innovation and new product development for treating away pain. PCARX-two zero one is a great example of innovation that we believe has the potential to revolutionize the treatment landscape. Clinical data continue to underscore the promise and disease modifying potential of PCARX201 and the HCAD platform.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

In June, we presented three year follow-up data at the European Alliance of Associations for Rheumatology Congress. Very few OA studies reached such a milestone for study duration. Results showed that a single intra articular injection of PCRX201 was well tolerated with sustained efficacy through three years. In addition, we're making great progress enrolling our phase two ASCEND study with enrollment in Part A on track to conclude by year end. Beyond PTARX-two zero one, we have a promising portfolio of other HCAD platform based assets that may have disease modifying potential in other musculoskeletal diseases and adjacencies.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

We look forward to sharing more as the year progresses. In summary, this quarter is marked by solid execution across corporate, clinical, and commercial initiatives, as well as delivery of key milestones that advance our five by 30 strategy. With that, I'd like to turn the call over to Bren to share more details on our commercial performance on the second quarter.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

Thank you, Frank, and good afternoon to all joining us today. I'm excited to share a few highlights of the strong progress we've been making on the commercial front. Significant second quarter revenues were driven by improving EXPAREL volume growth of 6%. This is a twofold increase over the 3% year over year growth in the 2025 and the 2024. As Frank mentioned, during the first half of the year, we were sharply focused on establishing a foundation to support sustainable top line growth.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

We made great strides expanding physician and payer awareness around no pain. As you know, this is an important shift in reimbursement policy and represents a significant opportunity to broaden EXPAREL utilization in outpatient procedures. As expected, we are seeing robust momentum from leading indicators as we head further into the year. These data reinforce our confidence that EXPAREL is well positioned for steadily improving year over year growth as the year progresses. I'll start with market access where we've made terrific progress that is driving change.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

In addition to clinical value, accounts consider market access for their specific patient population when making decisions. Here, we're focusing on highlighting EXPAREL's clinical and economic value to national, regional, and local commercial plans with real world evidence. We're excited to report we are tracking ahead of plan and are maintaining a strong pace expanding our commercial coverage map. We currently estimate more than 40,000,000 commercial lives now have access to EXPAREL via separate reimbursement outside the bundle. We'll continue our efforts to expand access, and we are on track to reach 60,000,000 covered commercial lives by the end of this year.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

This positions us to exit the year with a total covered of nearly 100,000,000 lives across both commercial and government payers. As we gain critical mass of coverage, we're creating increased leverage amongst our practices for broader EXPAREL utilization. Importantly, our payer progress has been strategic, focusing on key markets with high procedural volumes. We've prioritized our top five states, which collectively account for roughly 40% of EXPAREL volumes. We are steadily expanding coverage and estimate that we will soon have the majority of lives covered in these top states.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

Coupled with this progress, we continue to see strong and growing utilization of the EXPAREL J code with an increasingly favorable payer mix. We're also utilizing our strategic pricing programs as important tools to expand patient access. Through these preferential pricing programs, healthcare systems can afford the opportunity to be at the forefront of opioid sparing pain management. On the GPO front, we're excited to have signed our third partnership in the second quarter and it's off to an excellent start. With this agreement, we now have more than 80% of our EXPAREL business under contracted pricing, which is predicated on driving volume growth.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

Our pricing strategy is performing according to plan with our contracted business delivering high single digit volume growth thus far. We expect this to accelerate over time and with only a modest impact on net sales dollars. Switching gears to awareness. Our market research is showing increasing awareness among formulary decision makers, namely surgeons and anesthesiologists. As a reminder, it will take time for broader market adoption.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

Of those who indicated their facility would adopt CMS reimbursement guidelines, approximately seventy five percent reported implementation could take six months to a year. Approximately sixty percent expressed a willingness to place EXPAREL on formulary in light of separate reimbursement with the highest level coming from surgeons and anesthesiologists. Importantly, these key physician stakeholders are critical voices in driving institutional change with a growing number already taking first steps, such as P and C committee meetings and reevaluating formulary status. This research aligns with the real time EXPAREL utilization data we're seeing in the market. Faster adoption is taking place within community hospitals and ambulatory surgery centers where we're seeing high single to low double digit volume growth.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

Decision making in these settings is more streamlined, enabling faster adoption to take advantage of the no pain value proposition. Beyond the early adopters, year over year growth in the hospital setting has improved from a low single digit percentage to a mid single digit percentage with the academic segment returning to growth. We've also secured multiple formulary wins at large integrated delivery networks and major national healthcare systems. These accounts are delivering an early lift in volumes after more fully understanding the value of EXPAREL unlocked by no pain. We expect these trends to accelerate as expanding commercial coverage further enhances the value proposition and drives policy change.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

Turning to our other products. As you may recall, we started the year with a new sales team supporting ZILRETTA and ioverao. The team has begun to hit its stride and we are confident these products are back on track for improving growth as the year progresses. We look forward to the second half of the year and reporting additional commercial progress on future calls. With that, I will turn the call over to Sean for his review of the financials.

[Shawn Cross, CFO at Pacira BioSciences Inc]

Thank you, Brent. I'll start with an update on sales and margin trends. Second quarter EXPAREL sales increased to 142,900,000.0 versus 136,900,000.0 in 2024. Sales growth of 4% was driven by improving volume growth of 6%, which was partially offset by a shift in vial mix and discounting. Second quarter ZILRETTA sales were $31,300,000 versus the $30,700,000 reported in 2024.

[Shawn Cross, CFO at Pacira BioSciences Inc]

Looking ahead, with our new partnership with JHA, MedTech, and other programs, we believe the foundation is set for improving growth. For ioverao, second quarter sales were $5,600,000 compared to $5,700,000 in the 2024. Turning to gross margins. On a consolidated basis, our second quarter non GAAP gross margin improved to 82% versus 76% last year. Gross margins continue to benefit from the improved costs and efficiencies of our two large scale manufacturing suites.

[Shawn Cross, CFO at Pacira BioSciences Inc]

With these suites now consistently producing commercial supply, we have ample capacity to meet the growing demand for EXPAREL. As a result, we have decommissioned our first generation 45 liter suite located in San Diego and optimized our workforce accordingly. We expect these changes will benefit our income statement through a $13,000,000 annual reduction in operating expenses that will begin in the third quarter. For non GAAP R and D expense, the second quarter increased to $24,700,000 from $18,400,000 reported last year. This increase relates to the strong enrollment in Part A of our phase two study of PCRX201, as well as expenses associated with the ZILRETTA, ioverao registrational studies.

[Shawn Cross, CFO at Pacira BioSciences Inc]

Non GAAP SG and A expense came in at $77,200,000 for the second quarter, which is up from $59,000,000 last year. This increase is largely due to investments in our commercial, medical, and market access organization, targeted marketing initiatives, and field force expansion. All of this resulted in another quarter of significant adjusted EBITDA of $54,300,000 for the second quarter. As for the balance sheet, we continue to operate from a position of strength. In July, we bolstered our liquidity and financial flexibility with the new $300,000,000 five year revolving credit facility.

[Shawn Cross, CFO at Pacira BioSciences Inc]

We used an initial draw of approximately 100,000,000 to fully repay our term loan a. This new revolver will also benefit interest expense with an annualized savings of 60 basis points beginning in 2026 with no amortization requirements. In addition, we recently repaid our August 2025 convertible notes with cash on hand. Taking this into account, along with RDS repayment of the EXPAREL royalties, we ended the quarter with pro form a cash and investments of approximately $270,000,000 With a business that is producing significant operating cash flow, we are well equipped to advance our five by 30 strategy and create shareholder value. We are also taking a disciplined approach to capital allocation where we are focusing on three areas.

[Shawn Cross, CFO at Pacira BioSciences Inc]

First, accelerating growth in our best in class based business. Second, advancing an innovative pipeline to become the leader in musculoskeletal pain and adjacencies. And third, opportunistically returning capital to shareholders. During the second quarter, we executed $50,000,000 in share repurchases, retired approximately 2,000,000 shares of common stock. This is in addition to the $25,000,000 repurchase executed last year.

[Shawn Cross, CFO at Pacira BioSciences Inc]

To remind you, we have approximately $250,000,000 remaining under our current buyback authorization, which runs through the 2026. We will continue to be opportunistic with stock repurchases given what we believe is a significant disconnect in our market valuation. As we execute 5x30, we expect to prioritize accretive opportunities that benefit operating margins to enhance shareholder value. That brings us to our full year P and L guidance for 2025. Today, we are narrowing our range for full year revenue guidance to $730,000,000 to $750,000,000 In addition, we are increasing our guidance for non GAAP gross margins to 78% to 80% from our previous range of 76% to 78%.

[Shawn Cross, CFO at Pacira BioSciences Inc]

2025 margins benefited from increased manufacturing efficiencies, favorable production volumes, and the elimination of our EXPAREL royalty obligation. We remain well positioned to achieve our five year goal of steadily expanding margins with a five percentage point improvement over 2024. We are reiterating all of our other financial guidance ranges as follows: non GAAP R and D expense of 90,000,000 to 105,000,000 non GAAP SG and A expense of $290,000,000 to $320,000,000 stock based compensation of 56,000,000 to $61,000,000 And lastly, for those modeling EBITDA, we expect our full year 2025 depreciation expense to be approximately 35,000,000. Looking ahead, with the commercial investments we've made, we expect to achieve sustainable earnings growth driven by improving sales, enhanced gross margins, and stabilizing operating expenses. In addition, opportunistic stock repurchases and reductions in share count will further enhance EPS. And with that, I'll turn the call back to Frank.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Thank you, Sean. In closing, I want to thank our entire team for their strong execution and dedication throughout the first half of the year. We've already achieved meaningful milestones that advance our five by 30 strategy and position us for sustainable success. With this foundation in place, we're entering the second half of the year with strong momentum and a clear focus on further accelerating growth.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Thank you again for joining us today and for your continued support and confidence in our mission. With that, operator, we're ready to open the call for questions.

[Operator]

Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you'll need to press 11 on your telephone and wait for your name to be announced. Our first question comes from Les Salusky with Truist Securities. Your line is open.

[Les Sulewski, VP - Biotech Equity Research at Truist Securities]

Good evening. Thank you for taking our questions. I have a couple. First, maybe could you provide some commentary around the new partnership with J and J MedTech on VILRETTA? And how does that compare to the previous co promote with J and J and EXPAREL?

[Les Sulewski, VP - Biotech Equity Research at Truist Securities]

And then as a follow-up, what are the economics on this partnership? And what assumptions can we derive from the strategy? Any figurative commentary would be helpful. My second question is around the third GPO. What are the expectations for impact to gross to net?

[Les Sulewski, VP - Biotech Equity Research at Truist Securities]

And then a couple more, just progress on the sales force expansion and maybe one for Sean. Appreciate the commentary around the expected savings on the consolidation of plans. But how do we kind of view the gross margin outlook in the second half and then into next year? Thank you.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Thanks, Les, for the question. It's Frank Lee here. First of all, let me just say before we jump into this, and I'll turn to Sean and Brent for some commentary here that I have to say I'm really proud of the team on executing on all fronts here across the entirety of the business, whether it's growth in revenue, it's margins, pipeline, IP, etcetera, there's a lot of activity that happened this year. And net net, it's a strong foundation for growth going forward. So let me just comment a little bit about the J and J partnership, and then I'll turn to Sean for gross and nets and some commentary about gross margin and then maybe a little bit about the sales force.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Just at a high level, just to remind everybody that the J and J partnership previously was for Expert Bowl, and that was prior to COVID. And during COVID, as we all know, the dynamics changed. So prior to that, it was a very successful partnership, and so the events of COVID led to the discontinuation of that particular partnership, but we've always appreciated J and J's capabilities and partnership there. So this particular partnership is now with ZILRETTA, which is in a very different setting under different circumstances. So that's as a high level overview.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Sean, maybe you could speak to gross to nets and gross margins as asset less asset?

[Shawn Cross, CFO at Pacira BioSciences Inc]

Sure. Happy to. So the the gross to net is pretty simple. It's a low single digit impact plus or minus 1% is a reasonable modeling, but that's pretty straightforward. And then with regard to gross margin outlook for second half and into next year, as we discussed, the team's doing a great job, and we benefited from increased production efficiencies, favorable production volumes, and again, very proud of the team so that we could raise the full year margin guidance to a range of 78% to 80%.

[Shawn Cross, CFO at Pacira BioSciences Inc]

And we'll provide another update in Q3 as things progress. And just as a reminder, there can be pretty significant quarter over quarter variations, one bad batch in a quarter, you take a charge for that quarter, but based upon how the team is doing, we're confident that we'll, in terms of raising the range to 7880%. And then going into next year, there's a plan for just relentless continuous improvement at manufacturing sites. And that's something again, we'll provide an update later. But the goal is to 5% improvement per our five by 30 plan and that continuous improvement will continue into next year.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Thanks, Sean. So, Brian, maybe you want us to talk about Salesforce expansion?

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

Yeah, sure. Thanks for the question. We are excited about the focus we're able to provide to all three of our assets. We have a team in ZILRETTA and iovera that have now gotten more and more experience with their target audience. I think they're hitting their stride and beginning to improve in our overall performance there.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

Equally excited about what we're seeing with EXPAREL, not only in terms of what we've seen for no pain execution, but also significant formulary wins both at IDNs and large healthcare systems. And I think we're also bolstered by improving commercial coverage, as you heard from my prepared comments.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Thanks, Brian. So the last part of it, Les, you'd asked about the economics of changing med tech. We're not going to go into the details here, but what we can say is, number one, it's reflected in the guidance, and we expect this to be beneficial in 2026. Okay.

[Les Sulewski, VP - Biotech Equity Research at Truist Securities]

Very helpful. Thank you.

[Operator]

Next question comes from Belanger with Needham and Company.

[John Gionco, Equity Research Analyst - Biopharma at Needham & Company]

Hi, this is John on for Serge today. Thanks for taking my question. Just a quick one regarding surgery volumes. Can you just give us a little bit of color on what you saw in the second quarter and then what you're seeing, I guess, to the first month, the third quarter and in which section, in which settings you think you're seeing the most traction at this time? Thanks.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Thanks, John. We can't go into specifics about how this quarter started, and so you'll have to wait till next quarter about that. But I'm gonna turn to Bren here to talk a little bit about kind of what we're seeing in volumes over the course of the first half here.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

For sure. And actually, I'm encouraged by what we've seen for EXPAREL volumes in light of what the broader market has looked like. For us, at least the most recent data points we've seen would suggest that surgery outpatient case volumes are slightly down in the second quarter versus same time last year. And I see more inpatient surgery kind of flat comparatively speaking. That said, to have seen the progress that we have in the HOPD or the outpatient setting for community hospitals, as well as in ambulatory surgery centers is very encouraging.

[John Gionco, Equity Research Analyst - Biopharma at Needham & Company]

Great, and if I could just have a quick follow-up, you mentioned having 40,000,000 commercial lives under having EXPAREL access and looking to get to sixty million by the end of the year, And then a 100,000,000 of total lives covered across commercial and government providers. Just curious where where the focus might be in terms of making gains, you know, throughout the remainder of this year and then into next year.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

Sure. Thanks for the question, John. And I would say that we've been as strategic as we can be with especially regional plans. We're trying to align as best we possibly can our surgical volumes and opportunity with those large regional payer plans. Of course, we will be opportunistic and I think we're also seeing a number of national plans start to really embrace no pain, to see reimbursement outside of the bundle.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

So we're encouraged with what we've seen through the first half of the year and a couple of very recent wins as well. So we'll continue to pursue that. We know that there's kind of a tipping point for our customers when they see not only reimbursement from CMS, but a preponderance of their commercial lives being covered as well.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Yeah, John, let me just add to that. I have to say that I'm very pleased with what progress we've made on the commercial payer front, broadly market access. As we had talked about before, no pain was actually enacted. Getting commercial payers to adopt sooner rather than later was important, and oftentimes this can take years. And so really proud of the market access team for what they've accomplished.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

This is ahead of our plans, and I think to the extent that we hit our target end of the year of 100,000,000 total, that'll be a really great accomplishment.

[Operator]

Great, thank you. Our next question comes from Gary Nachman with Raymond James.

[Denis Reznik, Senior Equity Research Associate at Raymond James]

Hey, guys. This is Dennis Resnick on for Gary Nachman. Thanks for taking our questions. So first, you've previously talked about expanding the current suite of products ex US with a partner. So can you provide an update on how those conversations are going?

[Denis Reznik, Senior Equity Research Associate at Raymond James]

What are you looking for in a partner? When do you think a deal could materialize? And would you look for a partner for all three products at once, or would you go one by one? And then I've got a couple of follow ups. Thank you.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Thanks, Dennis. Really good questions. Indeed, we believe there are markets outside The US with meaningful opportunity for all of our products. Of course, the initial focus, you know, certainly our flagship product, EXPAREL, but ZILRETTA and IONVERA potential there as well. So we're making good progress.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

And if you think about our five by 30 goal of having five partnerships in this time frame, we think we're well on track. So I can't give you any specific dates, but what I can tell you is that there's been very good interest. And as we think about potential strategic partners, they would of course be leaders in their field, at meaningful penetration in a portfolio, and values that are aligned with ours. So those are some of the things that we look for, and the good news is I think that there are meaningful partners out there. And so we'll keep you apprised of how things are progressing, but I can tell you now that we're active in the process and that we're pleased with the kind of dialogue we're having.

[Denis Reznik, Senior Equity Research Associate at Raymond James]

That's great. And then if I may ask for some more color on PCRx-two zero one and the recent three year data, kind of any color you can give about the significance of it and the feedback from the poster presentations? And then on the ongoing Phase II, it's nice to see enrollment going so well. Can you just remind us how many total sites you plan on having and the split between how many are in The U. S. Versus SQS? Thanks.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Yeah, thanks for the question. Two zero one, I have to tell you there's been very good excitement about two zero one. As we all know, there's been a lack of innovation in broadly the OA and the knee space, and a big reason why we have, in essence breakthrough status for gene therapies, the RMAT designation. So the data that we recently presented were three year data, and as I mentioned in my comments, there are very few studies that follow patients with OA of the knee after three years, and we're seeing still very good response, very good safety profile and data that we've observed. Of course, this is an open label study, and we'll know a lot more as we progress and report on our ASCEND study.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

So to answer your question about the response from investigators, thought leaders, etcetera, on 02/2001, there's been a lot of great excitement about that one, number one. Number two is that as we think about the ASCEND study, we haven't provided all the specifics about number of sites, etcetera, but what we can tell you is that there are three arms, and one is the control, is the steroid control, and then two other arms that are the steroid plus PCRX201. And so we're more than halfway through our enrollment. That's progressing very, very well, And so we expect to be completed by the end of this year for Part A, and then Part B will start next year. So bottom line is we'll have some initial data, as we've talked about before, from Part A sometime towards the '6, early 'twenty seven, in that time frame.

[Denis Reznik, Senior Equity Research Associate at Raymond James]

Great. Thanks so much, and congrats on all the progress.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Thank you.

[Operator]

Our next question comes from Douglas Maym with RBC Capital Markets.

[Douglas Miehm, Healthcare Analyst at RBC Capital Markets]

Excuse me, good afternoon, everyone. My question just has to do with the guidance. Saw that you tightened it, 07:30 to 07:50 now. But what I'm curious about is back in q one when you were looking at these numbers and you had a wider range, what is it that's changed that's moved you away from, let's say, the upper end, the $7.50 to $7.65? Is it more price or is it no pain and the discussions that you're having with payers a little slower than you anticipated? Just curious about that.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Thanks for the question, Douglas. You know, obviously ahead of launch of something like this, there are uncertainties, and of course we provided a guidance range where we thought was reasonable. It all comes down to just some of the fundamentals that we talked about and Brent addressed, which is market access. To what extent could we get commercial payers to come on board along with now this new CMS reimbursement, enough so that we have tipping points in certain geographic areas where the majority of patients, let's say, are covered under this new approach to reimburse EXPAREL. That's when meaningful change really happens.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

And so without having some initial data, we had to provide that kind of a range. And now we have better certainty as we've now got a half the year under our belt, and so that's why I think we can provide this more narrow range. So the midpoint hasn't changed, if that's your question, of course, but I think it's really about market access, about tipping point where the majority of patients are covered under this kind of reimbursement, and then of course after that we'll be driving awareness and utilization because access is available for the majority of patients.

[Douglas Miehm, Healthcare Analyst at RBC Capital Markets]

Okay. And then just as a follow-up, the J and J deal does look good on ZILRETTA, and I'm curious as we go into 2026, what in particular, where do you think that they're going to be able to add the greatest value to the product? And I'll leave it there. Thank you.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Yeah, thanks, I'm gonna look over here to Brent to answer that.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

Yeah, just to reiterate, we're thrilled to have this opportunity. I spent the first half of my career at J and J and it's wonderful to be partners with them again here. As Frank shared in his prepared comments, this essentially doubles our ability to reach our audience with a promotionally sensitive product like ZILRETTA. And beyond that, J and J has a great deal of experience in the space and a broader customer base than we were originally calling on with ZILRETTA. So coming into play in much more prominence are groups like sports medicine, some of the pain management centers, and in particular rheumatologists.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

All of that I think expands our messaging for ZILRETTA to an audience that needs to know that they have an option beyond the 's, many of which are not able to give more than once or twice in a year. So it's really a nice complement to their portfolio and a very logical product to have in their bag for the 'eight treatment journey.

[Douglas Miehm, Healthcare Analyst at RBC Capital Markets]

Excellent, thank you.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Thank you, Douglas.

[Operator]

Our next question comes from Hardik Parikh with JPMorgan.

[Hardik Parikh, Equity Research - U.S. Pharma & Biotech at J.P. Morgan]

Hey, thanks for the questions today and thanks for the update Frank and team. I had a couple of questions. First is just wondering, you mentioned that survey you guys had done and you're talking about organizations who plan to add EXPAREL to the formularies that could take six to twelve months to start adopting. I was wondering, did you get any more color from that survey in terms of what are the gating factors that kind of lead to that six to twelve month timeframe? And then the second part is when your sales teams are pitching to various stakeholders, qualitatively how much of the discussion is on educating on no pain versus explaining the benefits of EXPAREL relative to alternatives? Thank you.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

So I'm going look to Brent here on that

[Hardik Parikh, Equity Research - U.S. Pharma & Biotech at J.P. Morgan]

one as well.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

So Brent, thanks, Hardik. Yeah, for sure. If you go back to when No Pain went into effect, which is January, most of the time, when you're asking your audience why it might take them a little bit of time to effect that change, A lot of it is to confirm they're going to get the reimbursement that they believe is coming. They also understand that CMS, while that accounts for a significant number of procedures, it's about a third of the total.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

So they want to see will commercial follow that plan. So as we've been updating with every earnings call, we want to put increasing points on the board for commercial coverage outside of the bundle. As that becomes reality in a variety of geographic areas, we see increasing numbers of payers come on board with EXPAREL reimbursement outside the bundle. And then just speaking about how we speak about EXPAREL, let's be clear, we are obviously excited about what no pain means in terms of the value proposition, the enhanced value proposition for EXPAREL. But the majority of our time is spent explaining what differentiates EXPAREL from alternatives and why it leads to the types of outcomes that our patients deserve.

[Brendan Teehan, Chief Commercial Officer at Pacira BioSciences Inc]

And I think you'll see more of that in the second half of the year as we look to amplify that message and make sure that patients, caregivers, and physicians understand what makes EXPAREL the best choice for procedures for which it's approved.

[Frank Lee, CEO & Director at Pacira BioSciences Inc]

Thanks, Brendan. Let me just add to that that regard to the health economic value proposition, so important in these settings, increasingly important as we go forward. And as we step back, I mentioned that we have two thousand five hundred patients in this IGOR registry that follows patients through their OA of the knee journey. And we think that's going to provide some really great insights into not only the value of our products, but some other products that are used in this setting, and give us, again, better confidence that we'll be able to provide more patients access to our medicines.

[Hardik Parikh, Equity Research - U.S. Pharma & Biotech at J.P. Morgan]

Thank you for the color.

[Operator]

And this concludes the question and answer session. I would now like to turn it back to Susan for closing remarks.

[Susan Mesco, VP - IR at Pacira BioSciences Inc]

Thank you, Sean, and thanks to all on the call for your questions and time today. We're energized by the opportunities ahead and remain focused on executing our five by 30 growth strategy with discipline and purpose. As we move through the remainder of the year, we are confident in our ability to build on our momentum and position Pacira for long term success. Thank you again for your continued support and be well.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Participants

Executives

• Susan Mesco, VP - IR
• Frank Lee, CEO & Director
• Brendan Teehan, Chief Commercial Officer
• Shawn Cross, CFO

Analysts

• Les Sulewski, VP - Biotech Equity Research at Truist Securities
• John Gionco, Equity Research Analyst - Biopharma at Needham & Company
• Denis Reznik, Senior Equity Research Associate at Raymond James
• Douglas Miehm, Healthcare Analyst at RBC Capital Markets
• Hardik Parikh, Equity Research - U.S. Pharma & Biotech at J.P. Morgan