Okay, I think we're on now. All right, why don't we get started? Good afternoon, well, still it's good morning, everybody. For those who don't know me, I'm Glen Santangelo. I cover the specialty pharma sector at Jefferies. You know, for our next presentation, we're excited to have Pacira BioSciences with us. Representing the company to my left is Dave Stack, who I think most of you know, is the Chairman and CEO. In the front row over there, Charlie Reinhart, he's the numbers man, CFO. Wanna raise your hand, Charlie? And Susan Mesco, to his left, heads the investor relations function. So if you have any questions, you know, after the presentation, obviously just feel free to track myself or Susan down, and we're happy to try to help. We have about 25 minutes, so we're gonna rifle through a whole bunch of questions in a fireside chat format. Dave is more than happy, I think, to take any questions from the audience. If anyone has any, we have a mic that we're happy to pass around, so at any time, I guess, feel free to raise your hand, and we can maybe work that in. Otherwise, I'll just keep going. You know, Dave, just, you know, it's probably worth spending a minute for anyone that's new, you know, to the Pacira story. Just give us an overview, you know, of your three products, EXPAREL, ZILRETTA, and iovera. You know, maybe just, you know, a quick one-liner on how you view each of the three products and how they're differentiated in the market today, and then we can just sort of jump right into it. Sure. So, you know, major product, EXPAREL, it's the only extended release product that's available for acute pain. It's bupivacaine in an extended duration delivery technology we call multivesicular liposomes. By the way, it's the only long-acting product that's available for nerve block, as well as field blocks, and for pediatrics. ZILRETTA is a product that's approved for OA of the knee. It's a corticosteroid, and again, in a PLGA formulation, it's the only product that's approved for long-duration therapy for osteoarthritis of the knee, corticosteroid. And iovera is a handheld cryo device. It produces cold, and we basically, we've now moved towards promotion of a non-drug nerve block for knee pain, and about to be studied for spasticity, which we think is a major opportunity from a medical need perspective, as well as from a shareholder revenue perspective. Sure. Okay, you know, since we're fresh off third quarter, what can you maybe just give us a quick, you know, again, 30 seconds on the quarter? Sure. Maybe how you did relative to expectations. Any, any- Sure ... surprises in the quarter? No real surprises. Holding our own in a difficult operating environment. You know, straightened out gross margins, which I think is really important, going forward for us. You know, 5% procedure growth, $53 million in Adjusted EBITDA. So, you know, I think as, as we continue forward and, with new indications, one of which we got last Friday, and a couple of other things that are moving us forward here, I think it positions us well for 2024 and beyond. You know, you said you're sort of finding your way through in a tough sort of procedure market. You know, obviously, EXPAREL is the main driver of revenue growth for the company. I think it was down 3% in the quarter, maybe a little bit lower than I think what consensus was looking for. Could you maybe talk about that, that tough market you were sort of just describing and, and maybe what some of the, the headwinds are in the market, just so- Sure ... we can dive in from there? So, I mean, by our numbers, Glen, it was up slightly in the quarter. There were two more selling days. So there were 64 selling days instead of 62, so we were actually up modestly for the quarter. The big headwind, frankly, is cost, and this will hit a number of things as we go forward, right? But the big... You know, the hospitals are in difficult financial shape. I mean, I think everybody realizes that procedures are moving from inpatient procedures to outpatient procedures. What's probably not as obvious is the procedures that the hospitals are losing are all of their profit. Not all of their, but it's the majority of their profit-generating big procedures like knees and hips and spine and bariatrics, et cetera. The outpatient market, which is currently approaching 75% of the total procedures in our TAM, is also under pressure from a cost perspective, but it's more related to low reimbursement. So, you know, that's, as we look forward, curing the reimbursement issue is one of our major objectives as we move forward. With EXPAREL, you said up slightly, 64 versus 62 selling days. Can you break that down in terms of volume and price this quarter? Uh- Roughly? You mean, well, it was 5%. The procedure volume was 5% still. Procedure was 5%? Okay. Yeah, and price was, 340B. It's not price, really- Right ... but the 340B is coming back to more like what we had projected in the beginning. So the allocation to 340B was about 23% of our total revenue for the quarter. Mm. So that was what drove the discount. So, you know, price was up very modestly, again, both in the- I'm sorry, you said 23%- Yeah ... of total revenue? Yeah. All right. If we just sort of unpack the guidance for a second, you know, the guidance of $535 million-$540 million, a little bit lower, implies a step up in EXPAREL and sort of 4Q, I think. And so I guess, just sort of based on, you know, what you've experienced over the first three quarters of the year, what sort of gives you confidence in that 4Q step up? It's what we've seen over the last post-pandemic, is that Q4 and Q1 are roughly the same, Q2, Q3, roughly the same on each other, and that's very different than what history would project. So the forecast for $535-$540 is the same 5% volume growth on a procedure basis. And, you know, a little bit from new opportunities, and I'm sure we're gonna talk about those, Glen. But, you know, we just achieved a lower extremity nerve block launch. And, you know, the issue around compounders and also will provide a bit below. But, you know, we're confident in $535-$540 based on Q1 was. You assume 5% procedure volume growth in 4Q. Anything sort of unique to the year-over-year comps, you know, when we look at third quarter versus fourth quarter or, you know, on an absolute basis, you know, what does 4Q look like relative to 3Q? 4Q is always benefits. Well, it used to benefit from plastic surgery between Christmas and New Year's, that people were getting enough plastic surgery as a holiday gift that you would see it in spades. That's completely missing. In fact, plastics are actually down materially from year-on-year. We think that's an issue of inflation. The big driver of Q4 versus the others is folks that have satisfied their deductible on an annual basis. And so for elective procedures, primarily knees and hips, you would expect Q4 to be stronger than the other months, and we do see some of that. But that's the primary difference between Q4 and the rest of the year. All right, so you're comfortable in a sequential step-up in 4Q? Yeah. Okay. You know, as to the extent that it's been... that it's driven our guidance, yes. Half the quarter's over, right? So far so good? Yeah, we've got a pretty good idea. Yeah. All right. All right, why don't we talk about, you know, the main question in my mind, sort of coming out of 3Q, you know, is the confidence in EXPAREL over the next 12 months in 2024. And I know you're not, you know, willing to give any guidance for 2024 at this point, but with NOPAIN sort of pushed out to 2025, I think a lot of investors push back and say: "Well, aren't we just sort of in this awkward holding pattern for sort of the next 12 months?" And, you know, we'll talk about TRICARE in a second and maybe, you know, more annualized 340B in a second. You know, absent TRICARE and the contribution from 340B, like, how do we think about EXPAREL in the 12 months sort of leading up to NOPAIN in 2025? Yeah. So the primary objective for 2024 is to make sure that we have access in all of the different markets where we participate, so that when we get NOPAIN, that we can maximize the opportunity of NOPAIN, right? We don't wanna be removed or have limited access, so that we have to go back through a formulary process when we get NOPAIN. So that's objective number one. We got lower extremity nerve block approved last Friday. And so, you know, combine that with the partnership with the American Society of Anesthesiologists, we see that as a growth driver for 2024. A little bit more unsettled from the public information so far, Glen, at least, is that we do expect a material bump from the compounders being forced off the market in the United States as we move into 2024. So, you know, those two things together, and we combine that with, you know, maintaining access through 340B, and 340B procedures are growing. We expect that we will see roughly that same activity as we get into GPO partnerships. And so, you know, right now, through 2023, we're on the low side of procedures. We see the procedures continue to normalize, especially as it relates to the mortality associated with the pandemic. You know, just as a frame of reference for the folks in the room, it looks like during the pandemic, roughly 0.5% of the American population passed away, and those folks would have been responsible for nearly 4% of the procedures that would have been done in 2022, 2023. Hmm. And so it sounds a bit morbid, but that pipeline is now- I'm sorry. Over what period you said? 0.5%? Well, yeah, 0.5% of the population passed away, and they would have been responsible for 4% of the procedures over the last two years. Hmm. And it's mostly CA, right? And, you know, then you would have soft tissue procedures as a result of those folks being around. So, you know, we think that the procedures will continue to normalize, and we'll do slightly better than 5%. And you add on top of that lower extremity nerve block and compounders and improving gross margins, which is a critical component of the entire mix here. And, you know, we think we grow in 2024 into 2025. You think you'll grow 2024 into 2025? You'll grow 2024 over 2023? Correct. Okay. You mentioned, obviously, the big focus is access, right? Could you talk about some of the things you're doing to ensure you have adequate access, you know, heading into 2024 for 2025? Yep. Yeah, there's two separate marketplaces, and again, I'll try to be clear. So the hospital environment is about 25% of our total procedures today, and they are the most under pressure. And actually, as we've gone into the back half of this year, we've actually seen what almost approaches indiscriminate cost-cutting. And for the first time in my career, we have people telling us that they don't have any money, they're cutting the budget, and don't really have a frame of reference on how that impacts patient care, and good enough is good enough. And so it sort of tells you the scenario is not positive. So what we're doing to address that largely is, we will contract with GPOs for the first time for us. and the reason for that is we've been able to maintain our position in the marketplace over the years. We launched this product, we launched EXPAREL in 2012 with KOLs, you know, demanding EXPAREL as a non-opioid treatment regimen. As these folks have become employees of the hospital, we've lost any leverage associated with their threat to leave. Obviously, they're now employees, and the decision on access is increasingly being made by pharmacists and C-suite, CFOs. Hmm. In order to address that, we will work with the three major GPOs, starting in January for two of the three, and stabilize that internal, that 25% of the market that is inpatient right now. On the other side of the aisle, for outpatient therapies, which is the other 75% of our business, we are in 340B, and that's a 24% statutory discount to, you know, our ASP. And our expectation, Glen, is that we'll maintain that position through 2024, and then as we get into NOPAIN in 2025, the plan is to get out of 340B and replace a 24% discount with full ASP plus six reimbursement. And so what we're doing right now is looking at different parts of the marketplace, primarily peds and C-section and some things- Hmm ... like that, where patient populations- So- might lose the opportunity to have an option. That, that's super helpful. Thanks for all that detail. Can we just talk about these GPOs in a little- Sure ... bit more detail? I mean, when you think about the strategy there, is it somewhat of a similar framework to 340B, that you're gonna have to trade price for volume, but in your mind, that access is more important, right? As you prepare for 2025. Yeah. A couple things. As we look at 2023 right today, all of the growth for EXPAREL is in places where we have some form of a contract with these folks, so there clearly is some value to having a relationship through some type of contractual performance. The answer to your question is absolutely. It's a little bit different than 340B, where with 340B, currently, we're looking at something like 5.5%-6% at gross to net. When we look at the GPOs, it looks more like 4%. So currently, we're at 86%, gross to net, maybe a little bit better than that, Glen. Yep. You take the four, you go down to 82, you extract yourself from 340B, and you go back to 88, 89. Hmm. In 2025? In 2025. 88, 89. All right, can we dive into 340B a little bit? You know- Sure ... has the growth come from new accounts this year, like you would've expected? Was it a little better, a little bit worse? Hmm. Talk about the 340B experience. Yep. The growth is... This is one of the primary supporters of my previous comment. You know, the growth has come primarily from customers that are purchasing through 340B. The growth of the non-340B... Well, there's two, two buckets there. Just so everybody gets a frame of reference here, too, there's roughly 10 million procedures that are done in 340B-eligible hospitals that didn't have access to EXPAREL. So the reason we got into 340B was to address that marketplace. The people who had no access to 340B or to EXPAREL is slower than we would've anticipated. It is stronger, it gets stronger every quarter, Glen, but it's behind where we thought it was going to be when we made the initial discussions. And if we reflect back on that, we thought it was gonna be a 5% impact on gross to net. It's actually closer to 6%. Hmm ... which reflects the fact that the new customers that are naive to EXPAREL are slightly slower than we thought they were gonna be. You touched on this before. You said that there was gonna be a potential benefit from combating the illegal compounders. Could you maybe talk about that? Yeah. This is, this is an interesting one because, it's been around for a while, and we think that a lot of the recent aggressive nature of what's going on with these agents is, again, goes back to cost. And so these are products where, generic manufacturers are packaging multiple generics and comparing them to EXPAREL, and some cases, saying they're superior to EXPAREL. Hmm ... saying that they have opioid-free. Just to give you a frame of reference, these agents are either bupivacaine and ropivacaine. That's, you know, fair enough. They also contain ketamine, not yet... This is a bit of a Chinese menu, right? Yep. So they're not all in every one, but they contain ketamine with no reference that it's a Schedule III controlled substance. They contain ketorolac with no reference that it's got a black box warning for patient safety, for bleeding. And the one that scares the heck out of me is that they have clonidine, which is a blood alpha blocker for blood pressure. Again, with no notation that this compounded mixture has any of these issues that are associated with it. They have no FDA approval. They have no package insert. And the mystery to me is they talk about promoting off-label. I don't know how you promote off-label when you don't have one. But so we're following the lead of the GPO. We've been working with law enforcement and with the regulatory authorities now for quite some period of time, and the GLP-1s have made this- Hmm ... an easier path to tread for us. Hmm. So, let's see, a week ago, two weeks ago this coming Wednesday, we filed for injunctive relief, very much the way Novo led the way with GLP-1s. And finally, when a judge ruled that the legal system couldn't determine what was on the market or off the market, the FDA did actually declare that these compounders were not FDA-approved. So that leads the way for us to file for injunctive relief against the three primary vendors of these compounded cocktails. That was done, like I said, you know, a little over a week ago. We expect to get the initial response from these folks in the next few days, and we'll start to see the results of that. Just to give you the punchline here, the FDA, once they declared that these agents were illicit and not FDA-approved, the FDA gave them 30 days to take these products off the market, or they were gonna close the facilities. We expect to see the same kind of activity in terms of injunctions, and then there are other activities that are ongoing that we expect to be able to talk about with everybody over the next couple of months. You said, just to jump around, the lower extremity approval came Friday, right? Right. Friday. You know, gauge for us how important, how meaningful this can be. Like, how should we think about the impact on, on volumes here? Sure. So a couple things. First, it's a 10- ml dose, so it starts to address the cost issue because all of these trials were done compared to bupivacaine, so their superiority and versus bupivacaine. They all have whopping P- values for both pain control and opioid sparing at 96 hours, so this is four days of pain control with a half dose. So, you know, we think that it's not competitive with the cocktails, but it starts to move us in the right direction, if you will. Yep. We put in the call script for the third quarter that we thought that it would do $100 million by... There was a $100 million potential by year five, which is our current operating plan. There's really two, two distinct opportunities here. One of the indications of interest is for an adductor canal block, and roughly there's 1 million total knee arthroplasties done in the United States. EXPAREL is currently used in roughly a quarter of those. The focus initially will be where the doctors are using bupivacaine for an adductor canal today, which suggests that they're using some form of imaging. Good. So we wanna make sure, especially in these patients that are having a procedure done in an ambulatory surgery center and leaving in a few hours, that we have an effective block. So go to them, take out the bupivacaine, put in EXPAREL, stop writing for 60 Percocet, write for six, and move on. And then from there, we would grow into the orthopedic surgeons and other uses of the knee, as well as straight adductor canals for total knee arthroplasty. The other two million procedures are quite different. We don't have a lot of franchise in lower extremity nerve block for the lower leg or for foot and ankle. So it's PM&R docs, it's pain management and regenerative medicine docs, and it's podiatrists, and it's... That'll be a bit of a more progressive, kind of regular launch kind of thought process. We're running out of time. We only have about three minutes left, but there are a couple of other questions that I wanna hit. Sure. So, we'll go fast here. I mean, essentially, you know, it, it's interesting to me because we don't talk that much about the TRICARE contract coming next year. We talk about, you know, the benefit of a full year 340B next year, then we talk about NOPAIN in 2025. I mean, not that you... I know you don't wanna give 2024 guidance, but maybe you'll give us 2025 guidance. I mean, I'll take a shot. If you look at the way the street has it modeled next year, kinda high single-digit revenue growth, they have the same exact growth modeled in 2025 as they do 2024, which seemingly doesn't make sense to us, just sort of given, you know, some of the catalysts you just talked about, right? You know, lower extremity being one, full year 340B being two, right? TRICARE next year, the improvement in gross to net in 2025. Where do you think the disconnect is? I think it's too high in 2024, and it's materially too low in 2025. Okay. Can we talk about the margins? Because that was interesting to me. I think, you know, from my notes, you did 77% margin this quarter. You hope to exit the year in the high 70s, but I'm trying to reconcile that back to the full year guidance of 72%-74%. Could you just sort of square that? Yeah. Q1 was 72%, Q2 was 74%, so or 75%, and so even with 77%, we have to be in the high, you know, in the high 70s as we exit the year to, you know, be in the range. So we'll be up a point versus the guidance from Q2, and it just didn't seem like it was worth it, Glen, to make a big deal about going- Yep ... from 74%-75%. But, you know, I think what's really important and embedded in there is ZILRETTA was not participating at any meaningful level, and that was all EXPAREL, and so we're in good shape with gross margin. Two more questions. You know, we talked about a lot about EXPAREL, but can you just give us 30 seconds on ZILRETTA and iovera? I mean, the results are generally sort of in line this quarter. I mean, as you look out to 2024, anything you wanna sort of point out, positive or negative, that we should be thinking about relative to those two products? You know, ZILRETTA, you know, growing at 10%, we think that that'll continue. Starting a shoulder study there and moving a lot of the business to specialty pharmacy, having a significant impact. So, you know, a steady grower, but not a world beater, Glen, is probably best. Yep. Iovera growing from a small N at 50% and expect that that'll continue for the next couple of years based on cash markets, and- I'm sorry, what was that growth rate? 50%, something in that range. Yep. It's just started a spasticity treatment trial- Yep ... which I think has the potential to make iovera a bigger product than ZILRETTA. Last question, can we talk about sort of capital allocation? I mean, the company's sitting with, I think $236 million in cash as of this quarter. Close. You know, a little over- Yeah, yeah ... $500 million in debt. I mean, you're basically at a very low leverage, about 1x, you know, round numbers. You know, we're talking about this big opportunity in 2025, and all these signs are pointing to 2025 with kind of the stock sort of trading where it is below its historic average multiple. I mean, how do you think about allocating that capital towards, you know, returning it to the stakeholders versus the additional business development, just sort of given where the shares are trading? Yeah, it's a continuing discussion with the board, and, you know, there's puts and takes. You know, we've got good insights from the banking community on which companies have benefited from stock buybacks and which have not. Hmm. You know, we're trying to figure out what's the right target in terms of the size of something like that, what's meaningful, but still- Yep ... get you where you wanna be. Yep. Well, we'll talk about it at the, the December board meeting for sure. It'll be another major topic at the, at the board meeting in December. And, you know, a little bit more information on where we are with compounders will probably help all of us. Yep. And, but it's, it's a fair comment. It's, it's something that we analyze at every board meeting, and we'll do it again this time. This is my bad. I should've started off congratulating on, congratulating you on your retirement. That's- Do you wanna share with these people how long you'll be around, you know? Sure. I don't know is the answer. You know, well, the plan is a new CEO plus several months. Right. And then- So you're not going anywhere anytime soon, hopefully? I hope I'm going somewhere. Dave's been married 46 years. But I don't know when. Seven grandchildren. Seven grandkids. Right? He's got a lot of things he wants to accomplish, so. Seven grandkids under eight and a wife of 46 years, and I've only been around for about 20 of it, so it's time for me to- Well, congratulations. It's time for me to go do something else and give somebody else a chance. Okay. Well, we look forward to the transition. Thank you, everyone. Good. Thank you. Appreciate the time. Thanks.