Pacira BioSciences Inc (PCRX) Q1 2025 Earnings Call Highlights: Strong EXPAREL Sales and ...

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Fri, May 9, 2025, 1:41 AM 5 min read

EXPAREL Sales: Increased to $136.5 million from $132.4 million in 2024, driven by volume growth.
ZILRETTA Sales: Declined to $23.3 million from $25.8 million in 2024, due to sales force transition.
iovera Sales: Slightly up at $5.1 million compared to $5.0 million in 2024.
Non-GAAP Gross Margin: Improved to 81% from 72% last year.
Non-GAAP R&D Expense: Increased to $23.1 million from $16.4 million last year.
Non-GAAP SG&A Expense: Increased to $76.2 million from $63.8 million last year.
Adjusted EBITDA: $44.1 million for the first quarter.
Cash and Investments: $494 million.
Full Year Revenue Guidance: $725 to $765 million.
Full Year Non-GAAP Gross Margin Guidance: 76% to 78%.
Full Year Non-GAAP R&D Expense Guidance: $90 million to $105 million.
Full Year Non-GAAP SG&A Expense Guidance: $290 million to $320 million.
Stock Repurchase Program: $300 million authorization.

Warning! GuruFocus has detected 3 Warning Signs with PCRX.

Release Date: May 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Pacira BioSciences Inc (NASDAQ:PCRX) successfully settled its patent infringement litigation for EXPAREL, extending exclusivity to 2039.
The company reported a 7% increase in first-quarter average daily EXPAREL sales and volumes compared to 2024.
Pacira BioSciences Inc (NASDAQ:PCRX) expanded its EXPAREL patent estate, listing its 18th patent in the FDA's Orange Book.
The acquisition of GQ Bio added a novel platform, a pre-clinical portfolio, and a talented research team to the company.
The company announced a $300 million stock repurchase program, doubling the previous authorization, indicating confidence in its growth outlook.

Negative Points

First-quarter sales for ZILRETTA declined to $23.3 million from $25.8 million in 2024, impacted by the transition to new sales forces.
The adoption of NOPAIN reimbursement is expected to take time, with significant traction anticipated only in the second half of the year.
Non-GAAP SG&A expenses increased to $76.2 million from $63.8 million last year, due to investments in commercial and market access initiatives.
The company faces logistical challenges in hospital systems benefiting from NOPAIN, requiring efforts to expedite adoption.
EXPAREL's pricing was mostly flat, with potential mid-single-digit impacts from GPO contracts coming online.

Q & A Highlights

Q: What proportion of patients are covered by Medicare, and how does NOPAIN apply within each surgical segment? Are there any coverage trends you're noticing? A: Brendan Teehan, Chief Commercial Officer, explained that in the in-patient segment, over 50% is commercially covered. In the hospital out-patient setting and ASC, it skews more towards Medicare. For ASCs, almost three-quarters of the business is commercially covered.

Q: Regarding PCRX-201, what feedback are you receiving from doctors and patients about what needs to be shown for wide adoption? A: Frank Lee, CEO, noted that the current standard of care provides three to six months of benefit. If PCRX-201 can provide a year or more, it would be transformative. The two-year data shared so far is promising, and three-year data will be shared later this year.

Q: What are you doing to expedite the adoption of NOPAIN in hospital systems, and how is the education of NOPAIN progressing? A: Brendan Teehan highlighted that significant growth is seen in community hospitals and ambulatory surgery centers due to fewer decision-makers. Formulary wins at IDNs are expanding lines of use for EXPAREL. The momentum in IDNs is expected to increase in the latter part of the year.

Q: With the recent settlement agreement with Fresenius, what are your priorities for capital allocation, and would you consider expanding the pipeline through in-licensing deals? A: Frank Lee stated that the settlement provides visibility until 2039, allowing room for growth. Shawn Cross, CFO, added that capital allocation focuses on investing in the base business, advancing the pipeline, and returning capital to shareholders. They are open to disciplined opportunities for on-market products.

Q: Are there any EXPAREL enhancements in your line of sight that could extend its life cycle or expand its label? A: Frank Lee mentioned that they continue to innovate EXPAREL, with recent patents listed in the Orange Book. However, there are no new plans for additional indications for EXPAREL at this time.

Q: How will the elimination of RDF royalties impact gross margins, and how is this incorporated into the full-year guidance? A: Frank Lee noted that the elimination of RDF royalties will have a low single-digit impact on EXPAREL margins. Shawn Cross added that the first-quarter margins exceeded expectations, and they will reassess guidance after the second quarter.

Q: How do you see pricing progressing for the rest of the year as GPO contracts come online? A: Shawn Cross explained that EXPAREL's growth was driven by volume, and GPO contracts will have a mid-single-digit impact in the first year. They expect to lap the second GPO agreement in the fall.

Q: Can you provide an update on surgery volumes and any impact from macroeconomic factors? A: Frank Lee stated that there was no significant change in competition, and they have room for growth. Brendan Teehan mentioned a nominal decline in surgery room hours in the first quarter.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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