Pacira BioSciences, Inc.

After this week's presentation, there will be a question and answer session. If you have a question during this session, you will need to press Star 1-1 on your telephone. You will then hear an automatic message advising you your hand is raised. Please note that today's conference is being recorded. I would now like to send the call over to Susan Mesko, Head of Desolations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to today's conference call to discuss our fourth quarter and full year 2024 financial results. Joining me are Frank Lee, Chief Executive Officer, and Sean Croft, Chief Financial Officer. Kristen Williams, Chief Administrative Officer, Tony Malloy, Chief Legal Officer, Jonathan Slonin, Chief Medical Officer, and Brendan Tehan, Chief Commercial Officer are also here for today's question and answer session. 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 FISERA website. 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.

Thank you, Susan, and good afternoon, everyone. The considerable progress we made in 2024 leaves us well-positioned for 2025 and beyond. Key highlights from last year include Record revenues of $701 million, the high end of our guided range. Separate CMS coverage and product-specific reimbursement codes for both Expiril and iAlvera. RMAT designation from the FDA for PCRx201 and the readout of compelling two-year data from our 72-patient phase one study. And importantly, establishing a best-in-class commercial market access, and medical powerhouse to drive top-line growth. Looking ahead, the year's off to a strong start. We're sharply focused on executing our 5x30 strategy and becoming an innovative biopharmaceutical organization. We believe executing on this strategy is the best way to achieve growth and value creation as a leader in musculoskeletal pain and adjacencies. The plan focuses on five key objectives that we intend to achieve by 2030. These objectives support two broad strategic imperatives. First, accelerating growth in our strong commercial-based business, and second, advancing an innovative pipeline of potentially transformative assets like PCRx201. To summarize our five by 30 goals, patience, We expect our products to be benefiting more than 3 million patients annually by 2030. Products. We plan to grow product revenues by double digit CAGR over the next five years. Profitability. We expect to achieve a five percentage point expansion in gross margin over 2024. Pipeline. We anticipate having five novel programs in our clinical development pipeline. And partnerships. We plan to establish at least five clinical or commercial partnerships. When we look at the Cirrus commercial-based business, we have a solid foundation. Our three best-in-class products are generating significant cash flow. Each of these franchises has ample room for increased penetration and market expansion, with multiple key growth drivers starting to kick in this year. For our flagship product, Expiril, the No Pain Act is now in effect. This means we have reimbursement pathway for 18 million outpatient surgical procedures. Approximately 6 million of these procedures have CMS coverage, and 12 million have commercial coverage. Expiril now has its own product-specific J-code with a reimbursement rate of average selling price plus 6%. Securing this code was a particularly important milestone as it will expand patient access to best practice opioids-bearing care. In addition, the J-code will streamline the reimbursement and billing process. It is also more likely to be recognized and covered by commercial payers. While it's still early days, our field teams are seeing evidence of progress since the rollout of no pain on January 1st. This includes recent formulary wins, as well as a rising level of awareness around the JCODE. While we're pleased with the positive early indicators, it will take time for our customers to adopt this new reimbursement. In addition, the IQVIA claims data can take up to four months to process. We look forward to sharing future updates as more data become available. On the payer front, we continue to highlight the XBRL value proposition with real-world evidence. In addition to CMS, we now have commercial payers beginning to recognize the importance of reimbursing XBRL outside of the bundled payment. Recent progress includes several national payers adopting no-paying-life policies. This represents roughly 40 million covered lives and more than doubles our previous commercial coverage map. Our teams will continue to focus on expanding coverage, and we'll keep you apprised on future calls. Along with favorable patient outcomes, separate reimbursement helps our customers navigate financial challenges. At the same time, it gives them the opportunity to be at the forefront of opioid-sparing pain management. This is especially relevant for those accounts receiving discounted pricing through 340B or GPO networks. And the benefit is mutual given the anticipated XBRL volume expansion. We launched two GPO partnerships last year. Both are performing according to plan with volumes up and only modest impact on net sales dollars. Our third and final GPO agreement is expected to go live in the first half of this year. And once completed, more than 80% of our current Xperil business will be under contract. Given our progress on the market access front, along with our learnings from market research, we believe it's the right time to invest in targeted direct-to-consumer marketing. We expect this DTC investment to expand utilization by driving patient demand for Xperil to be a part of their treatment plan for post-surgical pain. We will begin with targeted pilot programs in the first half of the year and adjust our investment accordingly based on the ROI data. These patient-focused programs augment the external value proposition we are presenting to physicians and other key stakeholders. Turning to Xilretta, a best-in-class product that is promotion sensitive. This year, we are focusing on generating additional share of voice increasing our reach, and driving awareness around its key advantages. It is the first and only long-acting, single-shot corticosteroid injection for osteoarthritis knee pain. Xelretta has demonstrated high patient satisfaction, up to four months of reliable pain relief, and fewer office visits. Xelretta also has a strong safety and pharmacokinetic profile as it remains localized in the knee. This allows for fewer systemic effects, including significant lower blood glucose spikes, an important benefit for diabetic patients. 14% of patients with osteoarthritis also have diabetes, so this represents a meaningful opportunity. In parallel with our commercial efforts, our Phase III Registrational Study is advancing in shoulder OA and is on track for top-line results next year. If approved, Xelredo would be the first and only long-acting steroid approved for use in shoulders. This is a sizable market with approximately 1 million intra-articular injections administered each year. Switching gears to Iovera. We have a key growth driver kicking in this year with separate CMS reimbursement now in effect via the product-specific code C9809. This is important as physicians are eligible to receive up to $256 for Iovera using this new code. This payment is in addition to the procedural fees they are receiving. We're also launching a new Iovera Smart Tip. This innovative tip was approved late last year and is specifically designed for use as a medial branch block to relieve low back pain. Millions of Americans suffer from chronic low back pain. It often leads to poor quality of life, disability, lost wages, and persistent prescription opioid use. Lastly, our registrational study of iverm for treatment of spasticity is advancing with top-line results expected next year. There is a significant lack of innovation and patient satisfaction in this debilitating condition. We believe IVR represents a novel approach for patients with moderate to severe spasticity seeking better treatment options. Turning now to our second strategic imperative, advancing an innovative pipeline. Here we're focused on becoming a therapeutic area leader in musculoskeletal pain and adjacencies. These are large markets, significantly lacking innovation. Nearly one in four Americans are living with chronic pain and seeking new interventions addressing its underlying costs. As we look to new product development, we'll prioritize mid- to late-stage de-risk opportunities. More specifically, product candidates with validated mechanisms and established reimbursement pathways. We'll also look to leverage our long-standing market leadership in treating pain in precise, targeted ways. Our recently announced acquisition of the remaining ownership stake So GQ Bio is a perfect example. It directly aligns with our 5x30 strategy by adding an exciting, first-of-its-kind, high-capacity local delivery platform for genetic medicines. This transaction also brings us a preclinical portfolio with disease-modifying potential in prevalent musculoskeletal diseases and research and development talent Further, it eliminates future milestones and builds upon the process development activities we've been advancing with GQ-Bio since 2023. In short, we know this technology very well. We believe there's a great potential for this platform to position us as a leading developer of novel treatments for underlying cause of chronic pain using a targeted molecular approach. We have a clear understanding of the safety and palatability of the high-capacity adenovirus or HCaD viral vector, which is based on AD5. This is a well-understood serotype that is very common in community circulation. We also have strong data suggesting it is not susceptible to preexisting neutralizing antibodies. This allows for the possibility of redosing. This platform solves many of the challenges that have made gene therapy inaccessible for common diseases. The HCaD vector is much more efficient at delivering genes into cells compared to many other gene therapies that rely on the adenovirus-associated virus, AAV vectors. As a result, the direct effect can be achieved with much smaller doses. The vector used in the HCaD platform can carry up to 30,000 base pairs of DNA which enables gene therapy with multiple or larger genes compared to AAV vectors. It is locally delivered and sustained. This differs from systemic approaches requiring much higher dosing to achieve the desired effect. Lower dose levels coupled with efficient manufacturing support, a favorable and commercially viable cost of goods profile. Another key advantage over other gene therapies. PCRX201 is a lead program from this platform, which we believe underscores its promise given its encouraging data in osteoarthritis. Last year, we reported compelling results from a robust Phase I study of PCRX201 in 72 patients with moderate to severe osteoarthritis. A single interarticular injection demonstrated unprecedented pain relief, and durability across all levels of disease severity for at least two years. The greatest efficacy was observed in the steroid pretreated group. In all three doses, more than 70% of patients saw at least a 50% improvement in pain versus baseline at week 16 and 78. PCRX201 was also well tolerated with no serious treatment emergent adverse events. We continue to follow these patients and look forward to reporting exciting three-year follow-up data later this year. While there's typically a placebo phenomenon within osteoarthritis pain studies, we are encouraged by our data. The magnitude and durability of efficacy far exceeds the placebo effect reported in published randomized studies. Patient enrollment is now open for our Phase II double-blind two-part study of PCRx201. The study will include an active steroid comparator. We will share additional details on the study design in the coming weeks, with top-line data from Part A expected late next year. Beyond PCRx201, the GQ transaction brings us several exciting product candidates in preclinical development. We've also identified numerous well-validated cytokines for musculoskeletal pain, and adjacencies that would be strong candidates for this platform. We're planning to share more details on the potential of this exciting platform through an educational webinar in the spring. For those areas outside of our strategic focus, we see great potential for partnering. This could extend the HCAHPS platform into other conditions of high-end met need where localized treatment with a therapeutic protein is warranted. Fittingly, this brings us to the last component of the 5x30 plan, forming five clinical or commercial partnerships over the next five years. As you know, our products are currently only marketed in the U.S. We believe there is a meaningful opportunity in certain key markets outside of the U.S. where our products can be financially viable and deliver value to patients. We will be actively seeking commercial partners to realize that potential. In parallel, we will also look to identify ways we can partner on development programs to balance portfolio risk. Before I turn the call over to Sean, I'd like to formally welcome two new additions to our executive team, Brendan Thien, our newly appointed Chief Commercial Officer, and Chris Corbett, who joined as our Chief Business Officer. These two executives bring extensive experience to Fisera at an important stage in our evolution. The board also recently appointed Laura Bregge as chair of the board, while former chair Paul Hastings and Andreas Wicke have both retired. As a reminder, our board refreshment began 15 months ago with the appointment of five new directors. These changes also significantly reduced the average tenure of our board for less than five years compared to nearly 12 years in 2023. We thank Paul and J.S. for their many contributions to the company. Moving forward, I have every confidence Laura, Brendan, and Chris will be key contributors to our next phase of growth. With that, I'll turn the call over to Sean for a review of the financials. Thank you, Frank.