Good day, and thank you for standing by. Welcome to the Q4 2023 Pacira BioSciences 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 one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Susan Mesco, Head of Investor Relations. Please go ahead. Thank you, and good morning, everyone. Welcome to today's conference call to discuss our fourth quarter and full year 2023 financial results. Joining me are Frank Lee, Chief Executive Officer, Tony Molloy, Chief Legal Counsel, a nd Charlie Reinhart, Chief Financial Officer. Jonathan Slonin, Chief Medical Officer, is also here for today's question-and-answer session. Before we begin, let me remind you that this call will include forward-looking statements based on current expectations. Such statements represent our judgment as of today and may involve risks and uncertainties. For information concerning risk factors that could affect the company, please refer to our filings with the SEC, which are available from the SEC or the Pacira website. Before turning the call over to Frank, I'd like to mention that going forward in 2024, we will be shifting the timing of our quarterly calls to post-market, with an expected start time of 4:30 P.M. Eastern Time. With that, it is my pleasure to welcome Frank Lee. Well, thank you, Susan, and good morning, everyone. I'm excited to speak to you today as the new CEO of Pacira BioSciences. I was drawn to this organization because Pacira is the leader in non-opioid pain management. Pacira has market-leading products, a clear sense of purpose, a talented team, and unwavering commitment to transforming the lives of patients by expanding access to opioid-sparing pain management. I was especially inspired by the team's steadfast commitment to working with leading medical societies and patient organizations to get NOPAIN over the finish line, and this legislation is a real testament to Pacira's leadership. It's been a busy and productive time since I joined the company last month. I've met with colleagues here in New Jersey, and at our Science Center campus, in San Diego. I've also received valuable feedback on our culture and met with key stakeholders. Now that I've spent several weeks listening and learning, there's no doubt this team is highly committed to our corporate mission and the impact that our three trusted products are making in patients' lives. Consequently, I'm even more enthusiastic for Pacira and the patients we serve. This is a special company that I'm both humbled and honored to lead through this next phase of growth. While much has been accomplished, it's still early days in my tenure here at Pacira. I'm excited to continue to work with the team and our stakeholders to define a thoughtful path for long-term growth, and I look forward to sharing more details as the year progresses. That said, we're taking several steps to ensure we are fit for growth going forward and best positioned for sustainable success. We've initiated an organizational restructuring that includes the following key changes: reshaping our executive team and launching searches for a new position, Chief Commercial Officer and a Chief Business Officer. Reallocating our efforts and resources from ex-U.S. markets and certain early-stage development programs to the U.S. market. Reprioritizing investments to focus on NOPAIN readiness and enhancing key commercial capabilities, such as strategic and national accounts, marketing, market access, and reimbursement. And finally, doing a thorough strategic review of our pipeline and therapeutic area strategy. Going forward, we'll foster a culture we call One Pacira, grounded on key values and behaviors that enable the whole organization to work as a united team. For the remainder of today's call, I'd like to focus on EXPAREL, the product that will drive substantial growth in 2025 and beyond. EXPAREL recently passed the 14 million patient mark, and we're confident in its potential to grow to blockbuster status. This year, we're advancing three key drivers. First, launching EXPAREL in two new lower extremity nerve block indications. Second, preparing for the launch and rollout of NOPAIN in 2025. Third, expanding access through 340B pricing and new GPO partnerships. I'll start with lower extremity nerve blocks. Our sales force is ready and the launch is officially underway. Importantly, we're going to market with an overwhelmingly positive body of data from two head-to-head phase III studies demonstrating four days of superiority over bupi. The first study evaluated EXPAREL as a sciatic nerve block in popliteal fossa for bunionectomy. EXPAREL achieved a 44% reduction in pain scores while reducing opioid consumption by 61% versus bupi. In addition, patients who received EXPAREL were five times more likely to be opioid-free. The second study evaluated EXPAREL as an adductor canal block for total knee arthroplasty. In this study, EXPAREL achieved statistically significant reductions in pain scores and a 23% reduction in opioid consumption versus bupi. These results are highly significant, with P values of less than 0.01. With respect to safety, EXPAREL was well tolerated, with a safety profile consistent with bupi. These positive outcomes were achieved with 10 ml dose, making a single dose EXPAREL nerve block a very attractive value proposition to the anesthesia and surgical community for knee and foot and ankle surgeries across all sites of care. The sciatic nerve block study in the popliteal fossa recently published online in the Journal of Clinical Anesthesia, and we're working to secure publication of the TKA study. We believe this is going to be a $100 million opportunity over time. We have strong presence in TKA, where anesthesiologists are already doing adductor canal blocks with bupi, so we expect faster uptake in this segment, which is over one million procedures. Conversely, we have very limited presence in other lower extremity procedures like ACL repair or foot and ankle procedures, so we expect uptake in these segments to be slower. Switching gears to NOPAIN, we believe will be an important event for both patients and Pacira. As you know, products used to manage post-surgical pain are largely reimbursed as part of the bundled procedure payment. Bundled reimbursement incentivizes the use of cheaper generic approaches to managing post-surgical pain that often incorporate opioids. Financial pressures facing healthcare systems further incentivize cost-driven approaches. NOPAIN Act mandates separate CMS reimbursement of non-opioid therapies for post-surgical pain relief across all outpatient settings. It will eliminate the cost barrier by fully reimbursing at average selling price, or ASP, + 6% beginning January 2025. There are roughly six million annual CMS procedures in the outpatient settings, with a split of roughly 3.5 million procedures in the hospital outpatient settings and 2.5 million procedures performed at ambulatory surgical centers. As a first step, we'll be allocating resources to drive education and to help healthcare systems implement EXPAREL as a best practice standard of care for CMS patients. The value proposition is clear, as a recent review of five-year real-world Medicare claims data for hospital outpatient procedures demonstrated a significant correlation between EXPAREL utilization and improved patient outcomes, including opioid prescription fills, emergency room visits, and hospital admissions. These data were published in the Journal of Medical Economics. Over time, as we underscore the value of EXPAREL is providing to CMS patients, we're hopeful commercial payers will be compelled to follow suit and provide separate coverage to another 12 million outpatient procedures. We have been paving the way for NOPAIN through our investments in 340B pricing and new GPO partnerships, such as a recently announced deal with Premier, whose significant network of hospitals and healthcare systems covers nearly 20% of EXPAREL relevant market procedures. These programs assist healthcare systems in affording the opportunity to improve patient care through best practice pain management. Our customers will have a favorable acquisition cost, and once NOPAIN takes effect next year, they'll be reimbursed at ASP +6%. In 2024, we're preparing for NOPAIN as we would a new product launch, because it's that important. To ensure readiness, we'll be enhancing our commercial organization with new talent and expertise to ensure operational excellence within critical functions, such as marketing, strategic accounts, market access, and reimbursement. We'll also be investing in programs to drive awareness and education and action across key decision makers and sites. We'll track and update you on our progress during the course of the year. We believe NOPAIN will result in accelerated and sustainable growth beginning in 2025, that will drive EXPAREL to blockbuster status. As we do this, we'll hold the bar high with respect to resource allocation and strong execution. Before turning the call over to Tony, I'd like to highlight the FDA's recent approval of our sNDA for our 200-liter manufacturing suite in San Diego. This enhanced 200-liter manufacturing process is just another example of how the Pacira team continues to innovate and augment our broad IP estate with new EXPAREL patents. Our strong and growing patent estate leaves us confident that our EXPAREL franchise is well protected and positioned to drive significant and durable long-term sales growth, as a potential generic would have to successfully litigate and overcome all of our EXPAREL patents. With that, I'll turn the call over to Tony Molloy, our Chief Legal Counsel, for his review of our recent Paragraph IV litigation and next steps. Thanks, Frank, and good morning to all on the call. I'd like to take a few minutes to update you on the status of our patent infringement lawsuit against eVenus. As background, Pacira initiated this litigation in the U.S. District Court of New Jersey after receiving notice from eVenus that they submitted an abbreviated new drug application, or ANDA, to the FDA with a Paragraph IV certification seeking authorization for a generic version of EXPAREL. This first lawsuit alleges patent infringement of EXPAREL U.S. Patent Number 11,033,495, or the "495 Patent." The 495 Patent claims composition of EXPAREL made using an enhanced manufacturing process, which was the result of several years of innovation by the Pacira scientific team, with an investment exceeding $100 million. The five-day bench trial concluded on February 14th, and we are currently engaged in post-trial briefings, with closing arguments set for May 2nd. We expect the judge to rule on the 495 case before the expiration of the 30-month stay on July 1st. We are confident in our position, our '495 Patent, and the related 2041 expiry, and we stand ready to engage the court in the event of any decision. A second patent infringement suit is also underway in the U.S. District Court of New Jersey, alleging infringement of U.S. Patent Number 11,426,348, or the '348 Patent, which claims composition of matter for EXPAREL. The trial date has not been set for the '348 Patent litigation. The '495 and '348 patents are just two deliverables from our comprehensive and growing patent portfolio. Our efforts continue to bear fruit by listing additional patents in the FDA Orange Book. We also have additional notices of allowance from the U.S. Patent and Trademark Office, and further applications are being prosecuted. These include chemical composition, product by process, method of use, and process patents. Many of these patents will qualify for listing in the FDA Orange Book. It is important to note that the FDA has established extremely rigorous hurdles for proving bioequivalence to a multivesicular liposomal bupivacaine, and this would have to be accomplished without infringing on the broad Pacira patent estate. We know consistently manufacturing EXPAREL would be extremely challenging for a potential generic, since Pacira is the only company to manufacture multivesicular liposomal products at commercial scale, with more than 20 years of expertise in doing so. For eVenus to be successful in the 495 case, the 348 case, as well as any future patent litigation, they will have to overcome every one of our patents. This is in addition to establishing bioequivalence and securing approval from the FDA, which they've not done yet. Bottom line, we firmly believe we have built an extensive portfolio of intellectual property around our EXPAREL franchise, and it is well protected from multiple directions. Generic attempts are commonplace for successful products like EXPAREL. We continue to have a thriving EXPAREL franchise that is supported by a strong and growing patent estate that we will continue to vigorously defend. With that, I will turn the call over to Charlie for his financial report. Thank you, Tony, and good morning, everyone. To remind you, I will be discussing non-GAAP financial measures this morning. A description of these metrics, along with our reconciliation to GAAP, can be found in the news release we issued this morning. I'll start with an update on sales and margin trends. Starting with EXPAREL, fourth quarter EXPAREL sales of $143.9 million were 4% higher than 2022. Fourth quarter ZILRETTA sales increased to $28.7 million versus $28 million for 2022, and iovera sales improved to $6 million, compared to $4.6 million reported in 2022. Turning to gross margins. On a consolidated basis, our fourth quarter non-GAAP gross margin percentage was 74%. Fourth quarter EXPAREL margins were in the high 70% range, as expected, but were partially offset by lower margins for ZILRETTA and iovera. For non-GAAP R&D expense, the fourth quarter increased to $16.6 million from the $15.7 million reported in 2022. This year-over-year increase primarily relates to startup activities for the ZILRETTA phase III study in shoulder OA. Non-GAAP SG&A expense came in at $57.4 million for the fourth quarter, which is up from $54.7 million in 2022. This increase is largely due to legal fees associated with the Paragraph Four and other litigation. Fourth quarter interest expense improved to $3.4 million versus the $11 million reported last year. This was driven by the interest expense savings associated with the retirement of our Term Loan B on March 31st, using a new Term Loan A and cash on hand. And lastly, we delivered another quarter of significantly positive adjusted EBITDA of $65.4 million. Turning to our outlook for 2024. Today, we are guiding to full-year total revenues of $680 million-$705 million. This range assumes mid-single-digit volume growth for EXPAREL and ZILRETTA and a low teens growth rate for iovera. To remind you, EXPAREL volume growth will be largely offset by a lower net selling price due to our investment in expanding market access through our new GPO partnerships, which are expected to have a mid-single-digit impact on our selling price while growing volumes over time. As Frank mentioned, we believe these GPO partnerships are a core investment to ensure NOPAIN readiness in January 2025. For expenses, 2024 guidance is as follows: non-GAAP consolidated gross margins of 74%-76%, non-GAAP research and development expense of $70 million-$80 million, non-GAAP SG&A expense of $245 million-$265 million, and finally, non-cash compensation expense of $50 million-$55 million. As Frank highlighted, underpinning our sharp focus on growth will be a commitment to solid execution and delivering on the expectations that we set by providing guidance we can confidently stand behind. With respect to our capital allocation strategy for 2024, in the near term, we are investing to ensure commercial readiness for the rollout of NOPAIN in 2025 and to support long-term growth. We are also planning for the retirement of debt, including the face value of our convertible notes in August 2025 and the subsequent repayment of our Term Loan A. We will continue to regularly assess our capital allocation strategy. As detailed plans for NOPAIN are implemented this year, we look forward to sharing more specifics. With that, I'll turn the call back over to Frank. Thanks, Charlie. As you may have seen today, we reported that Charlie will be stepping down as our Chief Financial Officer at the end of the year. I'd like to personally recognize him for his eight years of financial leadership at Pacira. We're on solid financial and operational footing, and we wish Charlie all the best as he prepares for his well-deserved next chapter. In closing, let me summarize. We are sharply focused on driving long-term growth. We have three great products, and there's no question about that. We currently have the lower extremity launch, which will be a solid tailwind for EXPAREL. We have a significant catalyst ahead in NOPAIN, and 2024 will be a key setup year to ensure we are fit for driving growth in 2025 and beyond. To that end, we're reshaping our executive team, reallocating ex-U.S. and early-stage development resources to the U.S. market, and reprioritizing investments to focus on NOPAIN readiness and enhancing key commercial capabilities. Lastly, we're confident in our strong and growing intellectual property estate, and we'll continue to vigorously defend our EXPAREL franchise. As we progress through the course of this year, I look forward to sharing updates on the lower extremity nerve block launch, NOPAIN readiness, our progress in reshaping our culture and capabilities, and crystallizing our long-term vision and growth, growth strategies. I want to take a moment to applaud the dedicated and talented Pacira team, who have built a successful and sustainable business that we're now scaling to drive EXPAREL to blockbuster status. I also want to thank you, our shareholders and partners in this journey, for the warm welcome and encouragement I've received since taking the helm at Pacira. Together, we're changing the course of pain management and hopefully saving patients from the deadly effects of opioid addiction. With that, operator, we're ready to open the call for questions. Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of David. David Amsellem from Piper Sandler. The line is now yours. Hey, thanks. So just got a few questions here. Frank, I guess there's a lot of things that are kind of works in progress, but can you just talk broadly about where you want to take the cost structure, and particularly, the R&D infrastructure? How are you thinking about margin expansion over time, not just from EXPAREL benefiting from NOPAIN, but just looking at the cost structure, in particular, the extent to which you can gain operating leverage? So that's number one. Number two, regarding NOPAIN, can you talk more broadly about what you think, and I know it's early, but what you think the volume trajectory could look like next year? Maybe just help us better understand your general thinking on what the impact to sales and volumes could be. And I'll stop there. Hi, good morning, David. Frank Lee here. Thanks for the question. You were kind of breaking up a little bit on me there, but I think what I heard you ask about is, you know, cost, you know, going forward, particularly in R&D, and also maybe providing a little bit more color on NOPAIN in 25 and beyond. So as it relates to cost and R&D, I may have mentioned in my script that, we've taken a look at some early development programs, and based on our efforts now to reallocate our resources towards growing growth, driving growth of EXPAREL, we've, stopped certain programs that are in early development and reallocated those expenses towards those things that'll drive EXPAREL growth, for example, like our efforts towards NOPAIN. I can tell you we've reallocated substantial resources towards NOPAIN going forward. With regard to the opportunity on NOPAIN, Charlie, maybe you can speak a little bit towards the volumes and the procedures that are impacted by NOPAIN. Yeah. So, David, I think you're aware that NOPAIN is focused, actually, on the outpatient setting from the HOPD. CMS has roughly six million procedures in the combination of HOPD and the ASC settings, with about 3.5 million in HOPD and 2.5 million in ASC. So, obviously, you know, NOPAIN relates to CMS. There are additional 12 million patients all in our TAM, in a combination of HOPD and ASC that are commercial backed, commercial payers as well. So NOPAIN is gonna focus, initially on CMS, and then it's EXPAREL's, or excuse me, Pacira's focus to get the commercial payers on board as well. So we're really excited about it. I don't think that's all gonna happen in 2025, but obviously, the beginning of that process will. Thank you, Charlie. Let me just add that as we grow, margin will improve accordingly. In addition, as we think about the customers that are impacted by NOPAIN, these large strategic customers, we are making investments there to better serve those customers going forward. Maybe just a quick follow-up. Are you gonna devote significant resources to ZILRETTA and iovera going forward? So let me just start by saying we've got three great products, and I like all of them a lot. That said, we are hyper-focused on driving EXPAREL growth. So we'll focus on that first, and then, of course, as needed, we'll pay some attention to ZILRETTA and iovera° to make sure those businesses go forward. But if you think about where we're reallocating our resources and where we expect to drive growth, it's EXPAREL. Thank you. Thank you for your question. One moment, please. Our next question comes from the line of Gregory Renza from RBC Capital Markets. The floor is yours. Hey, good morning, Frank and team. Thanks for the time today, and thanks for taking our questions. Frank, maybe just looking at 2024, and Charlie, it's helpful that we heard some color on the revenue guidance. I'm just curious if you could provide just maybe a little more detail, some of those pushes and pulls, certainly, as you've offered, you know, the total portfolio outlook for 2024. Just wanted to see if you had any additional detail on... And number one, just the character of that and how it sort of translates over the trajectory of 2024, if anything we should be thinking about. And then, secondly, maybe just longer term, Frank, as you're, you know, reiterating your confidence in EXPAREL on the tailwind with NOPAIN, just wanted your color on, you know, thinking about the longer term, just the commentaries and the color on EXPAREL driving $1 billion-plus in sales longer term. Just wanted to hear your latest thoughts on really where the ceiling is for EXPAREL in the out years. Thanks so much. Yeah. Thanks for the questions, Greg. First, with regard to revenue for 2024, maybe some initial comments here, and then I'll turn it over to Charlie. What we're trying to do this year is to be conservative in terms of the way we provide guidance, and provide you guidance that we can stand behind. So, as the year goes forward, we expect to tighten the guidance, as we have additional information, but that's what we expect, number one. And it's a set-up year for 2025. And Charlie, maybe you can provide a little bit more color to your comments on 2024. Sure. So we mentioned in our comments that we expected both EXPAREL and ZILRETTA to have kind of mid-single digit volume growth. ZILRETTA doesn't have any other changes to its gross to net, but with the implementation of the GPO contracts, that impact on gross to net will pretty much offset the base business volume growth for EXPAREL, and therefore, the upside in the revenue in 2024 was probably going to be mostly NOPAIN. So you know, overall, when we look at the P&L for 2024, I say this, Gregory: We'll have modestly higher revenues. We'll have modestly expanded gross margins. We'll have an R&D line that, you know, is the same guidance as last year, and we've increased our investment in SG&A to drive growth for NOPAIN next year... kind of all resulting in a bottom line that should look pretty close to what we saw this year. And so that's the way we think about it. 2024 is a bridge to 2025. We're making really important investments in order to capitalize on NOPAIN in 2025. And overall, the year will look better than 2023. So we thought that was a pretty good situation to be in. Thanks, Charlie. Just about the long term. First, let me just say that it's still early days in my tenure. That said, just some color about long term. In particular, I think you had mentioned NOPAIN. So first off, about 75% of EXPAREL relevant procedures are in the outpatient setting. And as you know, NOPAIN is really impacting outpatient reimbursement, specifically for CMS patients. So that's important to note. Secondly is that, commercial payers will be important in terms of a lever to accelerate that growth, and so we're taking steps now to make sure that we're serving the commercial payer customers in the way they need to be served. And third is, as you may have mentioned- as I've mentioned earlier, we're enhancing and bolstering our commercial capabilities. We have great products, and we need to get them to more patients and serve our customers at a higher level, and so we'll do that. So those factors, I think, are going to be important as we think about driving growth with EXPAREL, let's say, in the midterm. Over the long term, what we're doing now is we're taking a very thoughtful look at our pipeline, and we're taking a very thoughtful look at our strategic outlook as it relates to our therapeutic area strategy. And so as the year goes on, we'll be able to communicate that more clearly to you, and so that'll help drive some of our future growth over the long term as well. Great, Frank. Thanks, Charlie. That's very helpful. Thank you for your question. That's great. One moment, please. Our next question comes from the line of Gary Nachman from Raymond James. The floor is yours. Hi, guys. Good morning and welcome, Frank. Maybe you could just talk a little bit more about the additional GPO contracting for EXPAREL you're planning on doing this year. How many more of these could you potentially do? And I know Charlie said, you know, that should impact net price in the mid-single digits. Just how much visibility do you have on that? Are you very confident that that's only gonna be the impact just in terms of net price? And then just how much are you expecting the lower extremity nerve block to contribute this year? And what are you doing to support that launch? And I know you talked about, you know, shifting some resources and more SG&A spend, and I'm just wondering if there are other pockets of EXPAREL, just in terms of, you know, different areas, different indications, that you're gonna be investing more behind, this year as you've taken a closer look of the overall market. Thanks. Thanks for the questions, Gary. Let me hit the GPO one and turn it over to Charlie for additional detail. With respect to GPO contracting, just at a high level, our product, EXPAREL, is utilized in both the hospital and HOPD setting, of course, in the outpatient ASC as well. And so in these kinds of settings, it's very commonplace for products to participate in GPOs. So that's number one. What that does is it makes spending at the hospital, at the institution, be compliant spend versus non-compliant spend. And so what that means is it's not a flag, so that there's not yet another hurdle for physicians to utilize EXPAREL in these settings. And so, we're participating in the Premier GPO contract, as we mentioned previously. We expect to sign a couple more in the coming months ahead. And what that does is it not only enhances access, but it also we're able to tap into the services that GPOs provide in helping to educate their membership. In our case, this is gonna be very helpful as we think about NOPAIN education and what that means in terms of making that take hold in the institutions and all the steps that it takes. So, Charlie, maybe over to you. Sure. So Gary, Frank mentioned there are a couple other GPO organizations we're in the midst of having conversations with. We expect to sign a couple more this year. The ones that we're looking at are the most significant ones, particularly with respect to our TAM. And when you add all three of those together, it's roughly two-thirds of our TAM, from a procedural perspective, are covered by these three organizations. Now, as far as what our confidence level is on the impact, I'd say we're pretty confident. We know what the terms of the contracts will be. We know basically what proportion of our current business is likely to be impacted. And frankly, if I've underestimated the cost, it's probably a good thing because that means they're driving volume and driving revenue, and that is exactly what we want them to do. So ultimately, you know, I think that in 2024, the volume vial growth, the base of the base business of EXPAREL will kind of equate to what the cost of the GPO is. And we expect them to help us really prepare for NOPAIN. We NOPAIN is like a product launch for us, and we wanna make sure that we've got the broadest access possible when NOPAIN starts, and we view this as an important way to get there. Thanks, Charlie. The question about lower extremity, Gary, I'm really happy to say that we're just coming off of our national sales meeting that was at the end of January, and our sales reps are very excited to take this new data. This is the first controlled data versus an active control. It's very positive, as I mentioned earlier in my talk. And so I would say they're very excited to be in front of their customers. Early feedback has been very positive. That said, it's early days. You know, they've only been out there for about a week or so, so we'll have more news for you as the year goes on. As we talked about before, some use is already taking place in that setting. However, we think there's incremental sales there as well. As the year goes on, we'll provide you further updates. Okay. And just, are there any other areas, indications, whether it's obstetrics or, you know, there were some other markets that have been talked about in the past, or peds or just, you know, where you think there could be upside if you focus more of your efforts behind them? Yeah, thanks, Gary. I mean, certainly, there are some other areas that we've talked about. One of the things that we're doing now is we're taking a very thoughtful review of our entire pipeline, as well as programs that we have ongoing. And so, as we move forward, we'll be able to communicate more about that with you. I do see quite a bit of potential for EXPAREL. I also wanna make sure that we're doing the kinds of studies that are required to get the right kind of reimbursement, right kind of differentiation in the marketplace. Okay, great. Thank you. Thank you for your question. One moment, please. Our next question comes from the line of Les Sulewski from Truist Securities. The floor is yours. Good morning. Thank you for taking my questions. I have two. First, can you talk about some optionality that you have regarding a potential unfavorable ruling regarding the 495 patent in July? And then second, you now have data showing EXPAREL duration of up to 96 hours. What has been some of the feedback you've been getting from physicians regarding need for additional postoperative pain management? And how would EXPAREL treatment coincide with other non-opioid treatments that are undergoing clinical trials, specifically, VX-548? Thank you. Thanks, Les. Thanks for the question. You asked about optionality regarding the unfavorable rate ruling against us, etc. So let me just say this, number one, that, as Tony mentioned, we're very confident in where we stand. And so I'll just say that at the beginning, and, Tony, let me turn it over to you for some additional comments. Thanks, Frank, and good morning, Les. First, to level set, like most IP cases, this matter is gonna take many years to be resolved in the court system, not just for this case, but as well as future litigation covering our patents. As I'm sure you could appreciate, it wouldn't be in our best interest to publicly share details around our legal strategy, other than to say that we believe that we have a strong legal case, and that eVenus is infringing on our patents. Several years ago, we undertook an extensive strategy to protect EXPAREL and the EXPAREL franchise from many directions, and you're starting to see that now with the number of patents that are issuing and that have issued, and we'll continue to defend those patents vigorously. Thanks, Tony. You'd asked also, Les, about the lower extremity nerve block and how that might play into the Nav1.8. So let me turn it over to Jonathan here for some comments. Thanks, Frank. So far, we've received very positive feedback with our two new lower extremity indications. As you know, you know, EXPAREL achieved four days of superior pain control and opioid consumption versus bupivacaine. So an active comparator, very, very high-quality trials with a very high p-value or a very low p-value for those, showing the benefits of employing these two blocks. So anytime we can expand opportunities for our patients and surgeons, that's a plus. When you talk about lower extremity, these nerve block indications target two large markets around the knee, most likely TKA, as well as other sort of knee repairs, and then foot and ankle as well. As far as other products in the space, we always welcome innovation for our patients, and we are pleased to see that the non-opioid space is attracting investments. Specifically towards VX-548, as you inquired about, we see these as having a complementary rather than a competitive mechanism of action. So remember, you know, EXPAREL being used as a nerve block or a fascial plane block is providing deep analgesia needed for the prevention of postoperative acute breakthrough pain, whereas when you saw in the NAV1.8 studies, they enrolled patients who already had pain. So the goal was breakthrough pain reduction rather than breakthrough pain prevention. So this mechanism may offer patients the opportunity to transition to an oral medication postoperatively and discharge as part of their multimodal program. So bottom line, we see these as rather complementary, whereas EXPAREL would prevent pain, these other products seem to help treat pain. Great. Thanks, Jonathan. Thank you. Thanks for your question. One moment, please. Our next question comes from the line of Balaji Prasad from Barclays. The floor is yours. Good morning, and thank you for the questions. So to the extent that you can with regard to the litigation with eVenus, I know you can't comment more on it, but could you help us understand or confirm if the technology that eVenus has is a multilamellar technology versus multivesicular? At least that's what our channel checks seem to indicate, one. And two, stepping back, Frank, going back to the restructuring and the steps taken, can you discuss the deficiencies or the processes that you noted in the company as it took charge to embark on this measure? And I'm also just curious on how your go-to-market is going to change with what a CCO, a commercial officer, and a business officer will bring to the company and to EXPAREL. Thank you. Balaji, thanks for the question. Good morning. Let me address the restructuring question first, and then I'll turn it over to Tony to comment what we can on the litigation. First of all, I'm gonna come back to we are structuring the organization so that we're fit for growth going forward. There were a lot of great things that helped to bring the company to where it is today, and it's remarkable that we've been able to treat 14 million patients so far to date. Now, as we look at the future, we're gonna need a different set of skill sets to take us to a next level of performance and growth that is driving EXPAREL to blockbuster status and growing our other products as well, and further building on our leadership in pain management. So that said, what we've done is we created a new position, Chief Commercial Officer. It's quite common for companies like ours to have a Chief Commercial Officer who has a lot of expertise in driving not only growth, but organizationally structuring ourselves so that we have those capabilities to grow in the future. And so that position is one that we are actively looking to fill. And secondly, as we think about some other capabilities in the organization, I may have mentioned earlier that serving our large strategic customers is gonna be very, very important. Now that we are participating in 340B as well as in the future GPO contracting, we're gonna have ways to make sure that we reach the C-suite and the pharmacy customers in ways that we're not reaching them currently. This is very important for products like ours in these kinds of settings. So those are some of the two key things that we're acting on now, and as I mentioned, we're for the mid and long term, embarking on a very thorough strategic review of our pipeline and our therapeutic area strategy. That'll inform our future investments in the pipeline, as well as our thinking about what else fits into our portfolio. With that, let me turn it over to Tony. Thanks, and good morning, Balaji. Unfortunately, details of the eVenus product are protected by the court's protective order, so we can't comment on the eVenus product. Thanks, Tony. Balaji, anything else that we can answer? I'm good. Thank you. Thank you for your question. One moment, please. As a reminder, if you'd like to ask a question, please press star one one on your telephone. Our next question comes from the line of Serge Belanger from Needham. The floor is yours. Hi, good morning. This is Serge. I guess first question regarding the restructuring of the commercial infrastructure. I know the company had changed their sales force makeup. I think over the last year, kind of streamlined it so the sales force would promote all three products. Just curious what changes you're implementing. Is it really just a refocusing of efforts, or we could see an expansion of those current efforts? And then secondly, on the 340B program, what should we expect at least for 2024 and heading into 2025, regarding that program? Thanks. Thanks for the question, Serge. A few things regarding broadly our commercial effort, sales force in particular. As you noted, currently, our sales force promotes all three products, and there are no changes planned in the near term around that. What we are looking at are ways to make sure that we have the necessary share of voice required for NOPAIN going forward. And as we mentioned earlier, we're treating NOPAIN like a new product launch. So in a new product launch here, you wanna make sure you have the appropriate share of voice, and we're gonna make sure that happens. So if we need to bolster it, we will, particularly around EXPAREL. So that's number one. Number two, broadly, with respect to our marketing efforts and other efforts, we're gonna bolster some capabilities around marketing insights, digital pricing and reimbursement, again, to better serve the kinds of customers that we're interacting with on a regular basis. So that's, that's important. With respect to 340B, we have, you know, we've always looked at our strategy there in terms of taking a look at our return on investment and our strategy going forward. Based on that, we have no plans to change our strategy in 340B at this time, but we'll continue to evaluate that as we move forward. As you might imagine, 340B and GPO now provides a good entry point to accessing our product, and combined with ASP plus six in the outpatient setting for NOPAIN, that should be an attractive value proposition for our customers. So that's... I believe I hit on all three of your questions. Yeah. Anything else, Serge? I guess just on the R&D front, I think there were some efforts around ZILRETTA, I think a shoulder OA study as well as around iovera. Any changes to those at this point, or those are all under evaluation? The studies are underway, and so let me turn it over to Jonathan, he can provide just a little bit of color on each one. So Jonathan, yeah. Yeah. So on the ZILRETTA front, we've kicked off our shoulder study, and so we're actively screening patients now, which will provide expansion beyond the knee for ZILRETTA. As far as iovera goes, as well, we've kicked off our study in the spasticity space, which will provide us a significant opportunity to help those patients and meet an unmet need as far as current treatments are concerned. We also have our iGOR registry, which collects real-world data, and we're starting to publish data from that, showing how these two products work in the real world. Great. Thank you. Thanks, Jonathan. Thank you for your question. This now concludes our question-and-answer session. I would now like to turn it back to Susan Mesco, Head of Investor Relations, for closing remarks. The floor is yours. Thank you, Gerald, and thanks to all on the call for your questions and time today. We are excited about the opportunities that lie ahead for us. 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