Financial Data and Key Metrics Changes - First quarter EXPAREL sales increased to $136.5 million compared to $132.4 million in 2024, driven by volume growth [34] - First quarter non-GAAP gross margin improved to 81% from 72% year-over-year [35] - Adjusted EBITDA for the first quarter was $44.1 million [35] - The company has $494 million in cash and investments, indicating a strong balance sheet [37] Business Line Data and Key Metrics Changes - ZILRETTA sales declined to $23.3 million from $25.8 million in 2024, attributed to the transition to new sales forces [34] - Ioverao sales slightly increased to $5.1 million from $5 million in the first quarter of 2024 [34] - The transition to new sales teams for ZILRETTA and Ioverao is expected to stabilize and improve sales in the upcoming quarters [35] Market Data and Key Metrics Changes - First quarter average daily EXPAREL sales and volumes were up approximately 7% over 2024 after adjusting for two fewer selling days in 2025 [12] - There was a more than 30% increase in both new and reactivated EXPAREL accounts [12] - The company is seeing encouraging early indicators in the adoption of the "no pain" reimbursement pathway for outpatient surgical procedures [11] Company Strategy and Development Direction - The company introduced a "five by 30" strategy aimed at accelerating growth in its commercial business and advancing its innovative pipeline [6] - The settlement of patent litigation for EXPAREL extends exclusivity to 2039, providing a strong foundation for future growth [10] - The company is focusing on becoming a leader in musculoskeletal pain and exploring partnerships for its HCAD platform [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the early signs of growth and the potential for significant cash flow from EXPAREL [10][22] - The company anticipates a more meaningful uptick in sales in the second half of the year as awareness of the "no pain" initiative grows [40] - Management is closely monitoring potential tariff impacts but does not expect material effects on operations [40] Other Important Information - The company announced a $300 million stock repurchase program, reflecting confidence in its growth outlook [21] - The HCAD platform is expected to unlock new gene therapies for common diseases, aligning with the company's strategic objectives [32] Q&A Session Summary Question: What proportion of patients are covered by Medicare and how does "no pain" apply? - The company indicated that over 50% of inpatient procedures are commercially covered, while outpatient settings skew more towards Medicare [49] Question: What needs to be shown for wide adoption of PCRX201? - Management noted that providing a year or more of benefit compared to the current standard of care would be transformative [50] Question: What are the logistical challenges with "no pain" and how is education progressing? - The company is seeing significant growth in adoption in community hospitals and ambulatory surgery centers, with ongoing education efforts for larger institutions [57] Question: How will capital be allocated post-settlement with Fresenius? - The company plans to invest in its base business to capitalize on "no pain," advance its pipeline, and return capital to shareholders through the buyback program [64] Question: Are there any enhancements for EXPAREL to extend its lifecycle? - The company continues to innovate EXPAREL and has recently listed additional patents, but there are no new plans for additional indications [73] Question: What is the outlook on gross margins and pricing? - The elimination of RDF royalties is expected to improve gross margins, and pricing is anticipated to remain stable with GPO contracts coming online [86] Question: What is the current competitive landscape? - Management stated that there is no significant new competition, and there remains ample room for growth in market penetration [91]

Financial Data and Key Metrics Changes - In Q1 2025, EXPAREL sales increased to $136.5 million from $132.4 million in Q1 2024, driven by volume growth, with average daily sales and volumes up approximately 7% after adjusting for two fewer selling days in 2025 [34] - Non-GAAP gross margin improved to 81% in Q1 2025 compared to 72% in the previous year, benefiting from improved costs and efficiencies in manufacturing [35] - Adjusted EBITDA for Q1 2025 was $44.1 million, indicating strong operational performance [38] Business Line Data and Key Metrics Changes - ZILRETTA sales declined to $23.3 million in Q1 2025 from $25.8 million in Q1 2024, attributed to the transition to new sales forces [34] - Ioverao sales slightly increased to $5.1 million in Q1 2025 from $5.0 million in Q1 2024 [34] Market Data and Key Metrics Changes - The "no pain" reimbursement pathway is expected to cover 18 million outpatient surgical procedures, with approximately 6 million being CMS procedures now covered [12] - Early indicators show a more than 30% increase in both new and reactivated EXPAREL accounts, indicating growing market penetration [13] Company Strategy and Development Direction - The company introduced a "five by 30" strategy aimed at accelerating growth in its commercial business and advancing an innovative pipeline, including PCRX201 [6] - The settlement of patent litigation for EXPAREL extends exclusivity to 2039, providing a strong foundation for future growth [7][10] - The company is focusing on becoming a leader in musculoskeletal pain and exploring partnerships for its HCAD platform [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the early positive trends in EXPAREL sales and the potential for significant cash flow generation [11] - The company anticipates a meaningful uptick in sales in the second half of the year as awareness of the "no pain" initiative grows [41] Other Important Information - A new stock repurchase program of $300 million was authorized, reflecting the company's commitment to shareholder value [22] - The company is closely monitoring potential tariff impacts but does not expect material effects on operations [42] Q&A Session Summary Question: Coverage of "no pain" for Medicare patients - The company indicated that over 50% of inpatient procedures are commercially covered, while outpatient settings skew more towards Medicare [50] Question: Adoption requirements for PCRX201 - Management noted that providing a year or more of benefit compared to the current standard of care would be transformative for adoption [51] Question: Logistical challenges with "no pain" - The company is seeing significant growth in community hospitals and ambulatory surgical centers, with expectations for larger institutions to follow [58] Question: Capital allocation priorities post-settlement - The company plans to invest in its base business to capitalize on "no pain" while also advancing its innovative pipeline and returning capital to shareholders [65] Question: Enhancements for EXPAREL - The company continues to innovate EXPAREL and has recently listed its eighteenth patent, indicating ongoing development [73] Question: Gross margins and RDF royalty elimination - The elimination of RDF royalties is expected to improve margins, but overall margins will also improve with increased product sales [78] Question: Pricing trends and GPO contracts - Pricing was mostly flat, with expectations for mid-single-digit impacts as GPO contracts come online [85] Question: Surgery volumes and competition - The company reported a nominal decline in surgical room hours in Q1, but does not see significant new competition impacting its market position [92]