Pacira BioSciences, Inc. (PCRX) Q4 2025 Earnings Call Transcript

EXPAREL: Delivered solid performance with early durable signs of volume-based growth achieved in the second half of 2025. Expanded NOPAIN education and awareness, increased commercial payer adoption, streamlined product acquisition via GPO contracting, and growing demand across all sites of care. Ended the year with 102 million lives with CMS or commercial coverage outside of the surgical bundle.

PCRX-201: Lead program from the proprietary HACd platform, with potential to revolutionize the OA treatment landscape. Phase II ASCEND study assessing safety and tolerability, with top-line data from Part A expected by the end of the year.

PCRX-2002: Longer-acting, easy-to-administer bupivacaine-based polymer gel. Phase II study for patients undergoing bunionectomy surgery expected to begin later this year.

LG Chem Partnership: Significant partnership to commercialize EXPAREL in select Asian-Pacific markets, starting with South Korea and Thailand. Regulatory filings anticipated this year, with revenues forecasted to begin in 2027.

J&J MedTech Partnership: Partnership to expand reach for ZILRETTA in the U.S., with their sales force now fully trained.

Manufacturing Efficiencies: Achieved a 5 percentage point improvement in margins over 2024 through enhanced manufacturing efficiencies. Higher production volumes resulted in lower per-unit costs.

NOPAIN Initiative: Secured separate reimbursement at ASP plus 6% for Medicare patients in outpatient settings. Expanded commercial coverage to 102 million lives outside the surgical bundle.

5x30 Strategy: Guiding growth with goals to help 3 million patients annually by 2030, achieve double-digit top-line growth, improve margins, advance 5 new pipeline programs, and establish 5 strategic partnerships.

IP Protection: Secured a volume-limited settlement with Fresenius, giving EXPAREL runway visibility through 2039. Strengthened IP estate to 21 patents across 2 families.

EXPAREL exclusivity and patent protection: Concerns were raised about the long-term exclusivity of EXPAREL, which could impact its market position. Although the company has secured a settlement and expanded its patent estate, any challenges to these patents or changes in the competitive landscape could pose risks.

Pipeline development and clinical milestones: The company is advancing several pipeline programs, including PCRX-201 and PCRX-2002. However, these programs are still in early stages, and their success is uncertain. Failure to achieve key clinical milestones or regulatory approvals could hinder growth.

Reimbursement and payer adoption: While progress has been made in securing reimbursement for EXPAREL, any changes in reimbursement policies or payer resistance could negatively impact sales and market access.

Manufacturing and cost efficiencies: The company has improved manufacturing efficiencies, but any disruptions in production or failure to maintain cost efficiencies could affect gross margins and profitability.

Litigation and business development costs: Unanticipated costs related to litigation and business development were noted, which could strain financial resources if such issues persist.

Economic and market conditions: Economic uncertainties, including the impact of storms in early 2026, could affect sales and operational performance.

Revenue Guidance for 2026: Total revenue is projected to be between $745 million and $770 million. EXPAREL sales are expected to range from $600 million to $620 million. Quarterly trends are anticipated to follow historical patterns, with the first quarter slightly lower due to January and February storms.

Gross Margin Projections: Non-GAAP gross margins are expected to be between 77% and 79% for 2026. The first three quarters will benefit from lower-cost inventory, while the fourth quarter will see higher-cost inventory sales and shutdown-related costs.

Pipeline Developments: Key clinical milestones include interim analysis for ZILRETTA in shoulder OA, top-line results from Phase II spasticity treatment study, and 52-week data from Part A of the Phase II ASCEND study for PCRX-201. A Phase II study for PCRX-2002 in bunionectomy surgery is also planned for later in the year.

EXPAREL Growth and Market Expansion: EXPAREL is expected to drive steady top-line growth in 2026 and beyond, supported by expanded commercial coverage and strategic pricing programs. The product is positioned for a steady cadence of growth.

Partnership Revenue Projections: Revenues from the LG Chem partnership are forecasted to begin in 2027 and extend through the life of patents into the 2040s. The J&J MedTech partnership is expected to gain traction in 2026.

R&D and SG&A Expense Guidance: Non-GAAP R&D expenses are projected to be $105 million to $115 million, reflecting a 5% increase over 2025. Non-GAAP SG&A expenses are expected to range from $320 million to $340 million, slightly increasing over 2025.

Share Repurchase: During the fourth quarter, Pacira executed an additional $50 million in share repurchases. This resulted in the retirement of approximately 2 million shares of common stock, reducing the outstanding shares to approximately 41 million as of year-end. As of December 31st, the company has $150 million remaining on its share buyback authorization, which runs through the end of the year. The company plans to continue opportunistic stock repurchases, citing a significant disconnect in market valuation.