Release Date: May 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Pacira BioSciences Inc (PCRX, Financial) reported solid sales growth for EXPAREL, ZILRETTA, and iovera°, with EXPAREL sales increasing to $132.4 million in Q1 2024.
- The company is advancing the launch of EXPAREL in new lower extremity nerve block indications, which is receiving positive market receptivity.
- Pacira BioSciences Inc (PCRX) is preparing for significant reimbursement opportunities with the implementation of NOPAIN, which will provide separate CMS reimbursement for EXPAREL starting in 2025.
- The company announced a $150 million stock repurchase plan, underscoring confidence in its growth outlook and belief in the stock's value.
- PCRX-201, a novel gene therapy product candidate, has shown promising preliminary results and received the FDA's first ever Regenerative Medicine Advance Therapy (RMAT) Designation for gene therapy in osteoarthritis.
Negative Points
- While EXPAREL's margins were within the guided range, ZILRETTA and iovera° margins weighed on consolidated margins for the quarter.
- The company faces challenges with the uptake of EXPAREL in lower extremity procedures like ACL repair, expecting a slower market uptake.
- There are ongoing legal and patent challenges, including the 495 patent litigation with eVenus, which could impact the company's competitive edge.
- The company is undergoing a transition period with significant changes in the commercial organization, which could lead to execution risks.
- Pacira BioSciences Inc (PCRX) is heavily reliant on the successful implementation and market adoption of NOPAIN legislation for future growth, which may not meet expectations or could face delays.
Q & A Highlights
Q: Can you comment on the cadence of contracting for EXPAREL and its impact on performance over 2024?
A: Frank D. Lee, CEO of Pacira BioSciences, mentioned that it's still early days since the Premier partnership began in January, but they are excited about the initial results. They expect to sign a second contract in the second quarter and possibly another in the third quarter. Charles A. Reinhart, CFO, added that the contracts are expected to roll out throughout the year, and by the end of the year, they anticipate having three active GPO relationships.
Q: How are you preparing for the NOPAIN legislation's impact in 2025, and what can we expect in terms of EXPAREL's trajectory with the 6 million CMS patients?
A: Frank D. Lee explained that they are reallocating resources towards NOPAIN and working closely with various partners to prepare the market. They expect to have a clearer view by the end of the year on how they will model the uptake of NOPAIN. He emphasized that they are focusing on educating about outpatient reimbursement at ASP plus 6% starting in January 2025.
Q: What are the next steps for PCRX-201 following encouraging Phase I study results?
A: Frank D. Lee stated that they are excited about PCRX-201's potential as a disease-modifying agent for osteoarthritis and are preparing to submit two-year data for presentation. They believe PCRX-201 could offer a transformative treatment by providing pain relief and function improvement for a year or more, which would be significant for both patients and the healthcare system.
Q: Can you discuss the dialogue with commercial plans regarding NOPAIN and your confidence that they will follow CMS's lead?
A: Frank D. Lee acknowledged that commercial payers typically take time to follow CMS's lead. They are currently focused on ensuring that CMS patients have access to EXPAREL under the new reimbursement model and will use this as a lever to encourage quicker adoption by commercial payers.
Q: What is the expected impact of the 495 patent litigation with eVenus, and when is the ruling anticipated?
A: Frank D. Lee expects a ruling by the end of June and noted that this is just the first of several patents that will need to be litigated. Kristen Williams, Chief Administrative Officer, added that they continue to produce new IP around EXPAREL, which could further complicate eVenus's path to market.
Q: How is the commercial organization being modernized in preparation for NOPAIN, and what are the plans for the share buyback?
A: Frank D. Lee mentioned that they are on track with bolstering their commercial, medical, and market access organizations, expecting to have most of it in place by the second half of the year. Charles A. Reinhart discussed the $150 million stock repurchase plan, emphasizing that it will be used opportunistically to benefit shareholders while balancing other financial needs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
