Pacira BioSciences, Inc.

Good day, and thank you for standing by. Welcome to the Q1 2026 Pacira, excuse me, 2026 Pacira Biosciences, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 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.

Thank you. Good afternoon, everyone. Welcome to today's conference call to discuss our first quarter 2026 financial results. Joining me are Frank Lee, Chief Executive Officer, Brendan Tehan, Chief Commercial Officer, and Sean Cross, Chief Financial Officer. Kristen Williams, Chief Administrative Officer and Secretary, Tony Molloy, Chief Legal Officer, and Jonathan Slonin, Chief Medical 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 or the PACIRA 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 this afternoon. With that, I will now turn the call over to Frank Lee.

Thank you, Susan, and good afternoon to everyone joining today's call. Just over a year ago, we introduced our 5 by 30 strategy. This plan was designed to accelerate performance and position the company for sustainable growth and shareholder value creation. To remind you, 5 by 30 was built to deliver measurable progress around five key goals, patient served, product revenue, profitability, pipeline, and partnerships. Collectively, we believe advancing these five goals will drive shareholder value into and well beyond 2030. Let me start by saying that I'm pleased with our first quarter results. I'd like to recognize our team for the remarkable efforts. Our solid first quarter results reinforce our confidence that 5x30 is delivering its intended business results, and we're on the right strategic path. One year into execution, our progress across all five goals is clear. This is reflected in our commercial performance, financial results, and pipeline advancements. I'll start with our flagship product, Expiril. Since our founding, Expiril has been the cornerstone of Passero's leadership in opioids-pairing innovation for post-surgical pain. Through the dedicated efforts of our team, Expiril is demonstrating renewed growth more than a decade after its initial launch. This is a rarity in the pharmaceutical industry, and a clear testament to the strength of our commercial, medical, and market access organizations. The accelerating volume growth we delivered in the second half of 2025 has continued into 2026. This momentum reflects a combination of fundamental improvements that are strengthening the long-term durability of our franchise, including expanding coverage outside the surgical bundle for Medicare patients following implementation of the No Pain Act at the beginning of 2025. a new product-specific J-code enabling streamlined billing and reimbursement, growing commercial payer coverage outside the surgical bundle, which Bren will discuss in more detail shortly, increased awareness and adoption of non-opioid stewardship programs as evidenced by encouraging market research results, enhanced intellectual property protection providing greater long-term visibility for the franchise. We now have 21 Orange Book-listed patents across two families protecting XBRL from generic challengers. This is a dramatic evolution from the single patent previously litigated and supported a favorable volume limited settlement in 2025. This multi-year XBRL patent infringement litigation began in 2021 and extended through 2024. In addition to XBRL leadership and post-surgical pain control, Zorreta and Ivera's position in early intervention OA pain management are expanding. For Zorreta, the year is off to a strong start with a 15% year-over-year increase in sales. We believe the growth initiatives we put in place last year are now beginning to deliver results. These include our dedicated Zorreta Salesforce, expanded patient access programs, and extended promotional reach through our Johnson & Johnson MedTech collaboration. From a life cycle management perspective, we're pleased to report enrollment has concluded for a phase three registration study in SHLDR-OA. This place is on track for top line results later this year. The unmet need for SHLDR-OA is significant. There are approximately one million injections for SHLDR-OA administered annually in the US, despite the absence of FDA approved products. If this phase three trial meets its objectives, Zaretta could become the first product with a labeled indication for shoulder OA. IAVERA also had a strong start to 2026, with first quarter sales increasing 21% over 2025. We're starting to see the benefits from last year's rollout of a product-specific reimbursement code and a dedicated sales force staffed with experienced medical device account managers. From a lifecycle management perspective, our registrational study and spasticity is on track with top-line results expected by year-end. Here, the unmet need remains high with 6.3 million patients with spasticity seeking treatment each year in the U.S. Together, we believe our strong commercial performance and advancing lifecycle management will support durable top-line growth. Importantly, this momentum further strengthens our leadership in post-surgical pain control and early intervention OA pain management. In tandem with the momentum across our commercial portfolio through our five by 30 strategy, we're now advancing an innovative clinical stage pipeline. Here we're prioritizing mechanistically de-risk assets with the potential to drive shareholder value well beyond 2030. In addition to clinical data readouts for our commercial products, our clinical stage assets are entering a catalyst rich period. Key upcoming milestones include PCRX201, our locally administered gene therapy for NeoA, remains on track for top-line data later this year. With approximately 15 million people in the U.S. affected by NeoA and limited durable treatment options, the unmet need remains high. I'll talk in greater detail about PCRX201 shortly. PCRX2002, our novel hydrogel formulation of the non-opioid analgesic ropivacaine for post-surgical pain. PCR-X2002 was designed to deliver rapid onset and long-acting analgesia from a single application at the time of surgery. We expect to begin Phase II development later this year. This asset has the potential to complement Expirel as an easy-to-use, longer-acting therapy with patent protection extending to 2042. Additionally, Our gene therapy platform continues to generate promising preclinical candidates to advance our 5 by 30 pipeline goal. These include PCRX1003 for degenerative disease, PCRX1002 for dry eye disease, PCRX1001 for K9OA, which we believe has significant out-licensing potential. Let me briefly highlight PCRX201. our lead HCaD program, which represents a potential paradigm shift for the treatment of NeoA. Building on the encouraging durability we observed in our phase one study, our two-part phase two ASCEND study is on track. Part A is fully enrolled with 49 patients, and as previously mentioned, we'll have top-line results from this 52-week study later this year. Like most phase two studies, ASCEND is not powered for efficacy. The primary objective is safety, but we'll also be looking for efficacy trends. Key secondary endpoints include changes in pain and function from baseline, as measured by numerical rating scale, WOMAC, and COOS scores. In parallel, we're advancing a commercially viable manufacturing process for PCRX201. This work is critical to enabling the initiation of Part B around mid-year. We expect Part B to enroll roughly 90 additional patients across three arms, two different doses of PCRX201 and an active steroid comparator. While it's premature to quantify the commercial opportunity, we believe PCRX201 has three key attributes that underscore its market potential. First is durability. We believe that demonstrating a treatment effect lasting one year represent a transformational advance in EOA. This would be significantly longer than currently available in EOA treatments, which generally provide durability of approximately three to six months. Second is cost of goods. PCRx201 is locally delivered. 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. This is an important consideration for any therapy intended for chronic, high prevalence conditions like osteoarthritis. And third is health economic value. If the durability we're targeting is borne out clinically, we believe PSERF 201 could offer attractive value for the healthcare system. As a reminder, PCRX201 is an IL-1 receptor antagonist. IL-1 is a well-validated de-risk target for reducing inflammation. There are currently two FDA-approved drugs that block the IL-1 pathway in other inflammatory joint conditions. Neither one is practical for early OA intervention because their short half-life would require very high systemic doses or daily knee injections. PCR-X201 is complementary to Xilretta and Iovera and could expand our leadership in early intervention OA pain management. Briefly turning to partnerships, which remain a key pillar of our 5 by 30 strategy. We're taking a disciplined, targeted approach to business development. We're prioritizing strategically aligned assets that are financially accretive and leverage our commercial infrastructure. In parallel, we're utilizing strategic partnerships to access new sources of revenue by expanding our commercial reach into untapped U.S. and international markets. Our strategic collaboration with market leaders Johnson & Johnson MedTech and LG Chem are both excellent examples of our strategy in motion. These partnerships advance our goal of five partnerships by 2030 and efficiently expand our commercial coverage and geographic reach. In summary, we're pleased with our first quarter results and the momentum behind our 5 by 30 strategy. With clear progress across every 5 by 30 goal, we remain confident we'll deliver sustainable growth and value creation into and well beyond 2030. With that, I'd like to turn the call over to Bren to share more details on our first quarter commercial performance.

Thank you Frank, and good afternoon to all joining us today. I'm pleased to report that the upward momentum we observed in the second half of 2025 has continued into 2026. Our commercial execution is on point, demand trends are strong across the complete portfolio, and we're delivering top line growth consistent with what we previewed in February. I'll start with our flagship product, Expirel, where we're outperforming last year's first quarter volume growth while continuing to expand patient and provider access. We continue to see excellent momentum in hospital outpatient and ASC settings where an increasing number of Expirel-assisted procedures are taking place and where our customers are seeing favorable reimbursement. Our focus, beyond sharing excellent clinical outcomes, is demonstrating the enhanced economic value of Expirel. To support this, we recently presented data from real-world studies highlighting XBRL's compelling value proposition, along with several health economics and outcome studies at key congresses that include the Orthopedic Research Society, the American Academy of Orthopedic Surgeons, and the Academy of Managed Care Pharmacy. These real-world data demonstrate both the clinical and economic value XBRL delivers. We look forward to reporting additional data readouts as the year progresses. Our initiatives include the comprehensive real-world IGORD registry, which now has more than 3,500 OA patients enrolled and is providing valuable information for Expirel, Zolretta, Iovera, as well as other treatments. These data are helping guide best practice for knee OA patients across their treatment journey. Importantly, commercial payers continue to recognize the Expirel value proposition and implement no-pain-like policies that reimburse outside the surgical bundle. We have now surpassed 110 million covered lives with separate reimbursement outside of the bundle for XBRL. With a growing critical mass of coverage, we expect accelerating change in the market throughout the remainder of the year. In short, we are extremely encouraged by the progress made in the first quarter, building on the momentum from 2025. Demand is being driven by powerful combination of expanding reimbursement growing protocol adoption, and compelling real-world evidence, all supporting each other and growing our business. With a strong finish to 2025 and a solid start to 2026, XBRL continues to gain share as institutions commit to best practice opioid sparing care. We remain confident in our ability to deliver durable, sustainable growth for XBRL as access widens and best practices evolve. Turning to Xilretta and Iovera, Both products are off to a strong start to 2026, as valuable commercial investments we made last year begin to bear fruit. As you know, last year we rolled out a dedicated Pacira sales force for Zulretta to ensure a focused promotional impact. In addition, we essentially tripled our U.S. commercial reach for Zulretta through a strategic collaboration with J&J MedTech. For Iovera, we are benefiting similarly from a dedicated sales force we onboarded last year. Looking ahead, we believe both Zillretta and Iovera have significant upside potential to become more meaningful sources of revenue. In summary, we're pleased with a strong start to 2026 across our three commercial products, and we believe we are well-positioned to deliver a successful year of sustainable top-line growth. With that, I will turn the call over to Sean for his financial review.

Thank you, Brian.

I'll start with an update on sales and margin trends. First quarter XBRL net sales increased to 143.3 million versus 136.5 million in 2025. Volume growth of approximately 7% was partially offset by a shift in vial mix and discounting from our third GPO going live last year. In addition, first quarter sales were also impacted by winter storms disrupting shipping and triggering returns. As we move forward in 2026, we expect the delta between volume and revenue growth for the second quarter to be similar to the second half of 2025 and then narrow as we anniversary our third GPO agreement mid-year. For Zulretta, first quarter sales improved by 15% to 26.8 million versus the 23.3 million we reported in 2025. As Brent mentioned, this was largely attributable to the growth initiatives implemented last year, including our dedicated Solrenta sales force. For Iovera, sales increased 21% to 6.2 million compared to 5.1 million in the first quarter of 2025. Again, as Bryn mentioned earlier, this was largely attributable to the growth initiatives implemented last year, including our dedicated Iovera sales force. Turning to gross margins. On a consolidated basis, our first quarter non-GAAP gross margin was 80% versus 81% for last year. Gross margins continue to benefit from the improved costs and efficiencies of our enhanced larger scale expo manufacturing process and continuous improvement initiatives at both of our manufacturing facilities. The non-GAAP R&D expense, the first quarter increased to 25.4 million from 23.1 million reported last year. This increase relates to our advancing Phase II study of PCRx201, as well as our label expansion studies, all of which have anticipated top-line readouts later this year. In addition, we're supporting three promising HCaB-based preclinical programs. Non-GAAP SG&A expense came in at $83.9 million for the first quarter versus $76.2 million last year. You may recall that last year's SCNA expense was positively impacted by a favorable outcome to litigation and subsequent recovery of $5.2 million in legal fees. Taking this into account, we are largely in line with last year. As we discussed last quarter, we're now leveraging our existing commercial infrastructure, which is well equipped to support top line growth. All this resulted in another quarter of significant adjusted EBITDA of approximately $40.2 million for the first quarter. As for the balance sheet, we continue to be in a position of strength and end of the quarter with $202 million in cash and investments. With a strong balance sheet and a business that is producing significant operating cash flow, we believe we are well equipped to advance our 5x30 growth strategy and create shareholder value. With respect to capital deployment, we will continue to maintain a disciplined and strategic approach, focusing on three key areas. First, driving top line growth by leveraging our existing commercial infrastructure. Second, advancing an innovative pipeline and becoming the leader in musculoskeletal pain and adjacencies. We are prioritizing the creative in-market assets to leverage our established commercial footprint and de-risked clinical stage programs. And third, opportunistically returning capital to shareholders. During the first quarter, we executed another $50 million in share repurchases. As a result, we retired approximately 2.2 million shares of common stock. Since last year's start of the plan, we have decreased our share count by a total of approximately 9 million shares and reduced our outstanding common shares to 39.3 million. Remind you, as of March 31st, we had $100 million remaining under our share buyback authorization, which runs through the end of this year. Going forward, we are being committed to maintaining favorable operating margins while advancing our 5 by 30 strategy. This brings us to our full-year financial guidance for 2026, which we are reiterating today as follows. Total revenues of $745 to $770 million. For XBRL, net product sales of $600 to $620 million. With respect to quarterly trends, we anticipate the remainder of 2026 will largely follow historical patterns. For Zulretta and Iovera, our guidance assumes 2026 will be largely in line with 2025. While we are encouraged by both products' start to the year, we will wait to gain more visibility before updating our assumptions. The final component of our 2026 revenue guidance relates to $7 million in expected revenue from our licensing agreement for the veterinary market. Non-GAAP gross margins of 77% to 79%. When we strike the quarterly cadence, we expect the next two quarters to continue to benefit from the sale of lower-cost XRO inventory. For the fourth quarter, we expect margins to be slightly below our four-year guidance range due to the sale of higher-cost inventory as well as shutdown-related costs and other expenses. Non-GAAP R&D expense of $105 to $115 million. As we prepare to initiate Part B of our Phase 2 Ascend study of PCRx201 and certain XBRL and Xiliretta product development efforts, we expect an uptick in R&D expense during the second quarter, followed by a slight decline in quarterly spend as compared to the second quarter in the back half of the year. Non-GAAP SG&A expense of $320 to $340 million. Respect to the timing of SG&A spending, we expect the first half of the year to be higher than the second half as a result of proxy-related activities. Stock-based compensation of $54 to $62 million. And lastly, for those modeling adjusted EBITDA, we expect our 2026 depreciation expense to be approximately $30 million. And with that, I'll turn the call back over to Frank.

Thank you, Sean. In closing, 2026 is off to a strong start. CSERA is operating with momentum, clarity, and discipline. Our 5 by 30 strategy is driving strong execution. and reinforcing our leadership in post-surgical pain and early intervention OA pain management. We look forward to building on this momentum and positioning the company for sustainable growth and value creation through and beyond 2030. Thank you again for joining us today and for your continued support and confidence in our mission. With that, we're ready to open up the call for questions. Operator?

As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile our Q&A roster. Our first question will come from the line of Douglas Tsui of HC Wainwright. Your line is open, Douglas.

Hi, good afternoon. Thanks for taking the questions. I have two questions. Maybe, Sean, just as a starting point, if you could help us walk through a little bit about the cadence for R&D spend through the rest of the year. Just to confirm, it sounds like we're going to have a step up in 2Q followed by then sort of a re-step down in the third quarter, you know, just as we see 201 ramp up. You know, just sort of should we think then more spend in 2027? Thank you. And then I have a follow-up.

Hey, Doug. Thanks for the question. So, let me just turn it over to Sean, and he can walk us through that a little bit here.

Thanks, Frank, and thanks for the question, Doug. Happy to provide a bit more detail on the R&D cadence this year. So, as mentioned in our remarks a few minutes ago, we were preparing for initiation of Part B. of the Ascend study for PCRx201, which we're excited about, and then certain export product development efforts. So we do expect an uptick in Q2 from the $25.4 million in Q1 that we spent. So just to provide a little more detail, we expect it to be in the low $30 million range, and then we'll come back down closer to the Q1 levels in Q3 and Q4. And that's how we see it playing out. And we'll obviously provide more updates as we get through the year.

Okay, great. That's very helpful with that specificity. And then just at a macro level, you know, one thing that I've been curious about is sort of the expiration of the Obamacare subsidies. And we've started to see some decline in terms of enrollments. And, you know, I think if we look at results for some of the med tech companies in the first quarter and even some of the hospital names, it has not seen anything dramatic. But I'm just curious you know, what you are hearing, you know, from sort of the hospital channel, you know, in terms of their perspective on how they're thinking about the rest of the year playing out. Thank you.

Thanks, Doug. Listen, we stay close to this, so let me turn this one over to Brent to give his perspective.

Doug, thanks so much for the question. Obviously, we're always looking at the broader macro environments, And I'm sure that people are taking a look at what those changes will mean to them individually. We will keep a close eye on those procedures where XBRL is, you know, favored for addressing, and we'll continue to kind of give updates as we see it play out. I think it's just too early to say.

Okay, great. Thank you very much, and I'll jump out for now.

And our next question will be coming from the line of Dennis Ding. Jeffrey, your line is open, Dennis.

Hi, this is Anthea on for Dennis. Thanks for taking our question. Earlier this week, we saw data from a cell-free regenerative therapy for NeoA with a headline efficacy of 93% of patients demonstrating clinically meaningful improvements in mobility and pain reduction. There's not a lot of information on that trial, so I'm curious how you guys are framing that data. and how 201 will differentiate from that product. And then any additional color on what promising efficacy trends would look like for PCRx201's readout would be helpful as well. Thank you.

Oh, hey, thanks for the question. And I didn't get the name of the company you mentioned. What was that?

I think Creative Medical Technology.

Yeah, so, okay. So there are a lot of different cell and regenerative therapy companies out there. And so let me turn it over to Jonathan to see if he has any perspective on that because, of course, there are lots of different studies out there with various levels of rigor.

Thanks, Frank.

Yeah, not commenting on any specific company. We are confident that The HTAC platform is the right modality for sustained relief of knee osteoarthritis. We have made tremendous progress in scaling up. We are finalizing our commercial scale manufacturing for Part B. As we articulated before, an anticipated enrollment is right on time. To answer your Second question, we're expecting the top-line data from Part A to read out at the end of the year. Just to remind you, its primary efficacy is safety, and what we will be looking at is the totality of the data to understand how PCRx201 performs in a randomized clinical control trial with an active comparator. So, we are looking at safety as our primary efficacy, but we will also be looking at the secondary endpoints around efficacy as well.

So, we will be

address revealing that data, and then we're going to go forward, we'll assess where we are at. But the trends that we're looking for are trends consistent with durability and efficacy from our phase one trial.

Okay, thank you.

And our next question will be coming from Les Saluski of Truist Securities. Your line is open, Les.

Hey, this is Jeevan on for Les. Thanks for taking our questions. How would you characterize elective procedure trends exiting March, any lasting impact from the winter storms? And then separately, how should we think about potential upside from ex-U.S. partnerships across the portfolio? Thank you.

Hey, thanks for the question, Jeevan. So I'll ask Brent to comment a little bit about what we saw. What we're seeing now, he mentioned it a little bit earlier. I'll let him comment on that a little bit, and then I'll mention a little bit about what to expect on XUS partnerships. So, Brent.

Yeah, Les, thank you so much for the question. If we look at the moving annual total for procedures where XBRL would assist that's largely flat year over year, despite X4L being up over 7%. If we look specifically at the first quarter, market procedures are up in the mid-single digits, I would say 4% to 5%, as opposed to X4L, if that gives you some sense. And then we'll look to see how that progresses here in the second quarter.

And just to answer your question about XUS partnership. So let me take a step back here a little bit. This is an important part of our five by 30 strategy in terms of signing five partnerships, both here in the US and XUS. So as you know, XUS, we've signed a partnership with LG Chem, their leading company in Asia Pacific. And we have plans to sign similar types of partnerships in the other major geographies. And it's premature to provide guidance on these kinds of partnerships and the top line impact. But I would say it's not insignificant. These will be important partnerships that will drive revenue not only through 2030, but well beyond 2030. So that's where we stand now. And as you know, the first partnership The intention is to file in the not too distant future, and so we'll be updating you on guidance around that starting in 27.

And our next question will be coming from the line of Serge Ballinger of Needham. Your line is open.

Good afternoon. Thanks for taking your questions. The first one, kind of a follow-up to the previous question around the impact of winter storms. I think you were expecting a potential softer 1Q because of those storms. Looks like all three of your products had some pretty solid year-over-year growth. So just curious if there was any impact or you were able to recapture it over the remainder of the quarter. And then my second question regarding no pain. If I remember correctly, the No Pain Act is kind of a three-year term ending in 2027. Just curious if there's any legislation in development here to extend or modify that term. Thanks.

Yeah, thanks for your question, Serge. Regarding the winter storm, we can provide a little bit more color on this, so I'll turn to Brent for that. And so, Bren, maybe you can talk a little bit about what we saw in the winter storms, and I'll speak to no pain.

Yes, sure. Thank you so much for the question, Serge. So, the winter storms do have an impact. They impact both the ability to ship, but also, as you would expect in those geographies where those surgeries might have taken place, those surgeries did not happen. which lead to rescheduling, not necessarily within the quarter. So I think there is some kind of carryover as patients look to be rescheduled for those procedures. Despite that, I think we are very pleased with the performance of X4L volume vis-a-vis the total available market. So that's what I would say for winter storms.

I believe we are past that and looking forward to the second quarter. Thanks, Brent. And Serge, with regard to your question about no pain, thanks for that.

No pain indeed initially is scheduled to expire at the end of 2027. That said, we have been staying very close to CMS and other stakeholders. And what we're very encouraged about is not only the uptake of no pain, but also the expansion of coverage to commercial lives. And so, Bren mentioned earlier that now we have a total of 110 million outside the bundle and growing. And so, as you know, no pain is primarily covering Medicare lives. And so, what we can tell you is that we're very encouraged by the discussions we've had about the market research and the uptake of no pain with CMS and other stakeholders. We're going to confirm a lot of what we're seeing through claims analysis. And I would say that no pain is doing what it's intended to do, and the commercial payers are also coming on board, which is highly encouraging. Thank you.

And our next question will be coming from the line of Hardik Parikh of JP Morgan. Your line is open.

Hey, everybody. Thanks for taking my question. I just wanted to ask you about Sean, I think I heard you say you expect SG&A to be lower in the second half. Can you talk to the magnitude of the shutdown you're expecting in the second half? SG&A seems to have elevated the past five quarters relative to 2024. I'm just trying to get a sense of what the normalized run rate is going forward.

Hey, thanks for that, Hardik. Let me turn it to Sean here.

Yeah, thanks for the question. So we, if you look at the, we reported 83.9 million in SCNA this quarter. And you can take a look at, without providing, you know, super specific detail, but you can take a look at the information we filed in our proxy on Tuesday or Wednesday. I'm losing track of time here. That provides some of the magnitude of what we anticipate. spending during the proxy season that would be, you know, above in, you know, the typical sort of course of events. And then we anticipate sort of coming back down in Q3 and Q4 to sort of, you know, perhaps a little bit below where we even spent in this quarter.

Kind of generally, directionally correct.

Thank you.

I would now like to turn the conference back to Susan for closing remarks.

Thank you, Operator, and thanks to all on the call for your questions and time today. We're excited about the opportunities ahead and remain focused on executing our 5 by 30 growth strategy with discipline and purpose. As we look to the remainder of 2026, we are confident in our ability to build on our momentum and position for CIRA for long-term success. Thank you again for your continued support. Good night. This concludes today's program. Thank you for participating. You may now disconnect.