Pacira BioSciences, Inc. (PCRX) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Pacira Biosciences investor call. [Operator Instructions] I would now like to introduce your host for today's conference call, Ms. Susan Mesco, Head of Investor Relations. You may begin.

Thank you, Kevin, and good morning, everyone. Welcome to today's conference call to discuss the approval of our supplemental new drug application to expand the use of EXPAREL to pediatric patients over 6 years of age. Joining me on today's call is Dave Stack, Chairman and Chief Executive Officer. Additional members of the Pacira executive leadership team are also available for today's question-and-answer session. Before we begin, let me remind you that today's 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 the company's filings with the SEC which are available from the SEC or our website. With that, I will now turn the call over to Dave Stack.

Thank you, Susan. Good morning, everyone, and thank you for joining us. Today is a very exciting day for Pacira, but also for patients, families and physicians who will benefit from the FDA's approval of EXPAREL as the first and only long-acting local analgesic for pediatrics, post-surgical pain management, allowing surgeons and anesthesiologists to replace pumps and catheters and to move opioids to rescue therapy only. With FDA's approval of our supplemental new drug application, EXPAREL is extremely well positioned for long-term market leadership as the only FDA-approved nonopioid long-acting local analgesic for infiltration in patients aged 6 and up and in adults as a brachial plexus nerve block for regional analgesia. It is important to note that the FDA did not limit our label to cardiovascular and spinal surgeries, the modalities studied in the PLAY trial. Rather, they provided a broad label that encompasses surgical procedures for pediatric patients 6 and up. This really is a testament to our excellent safety and efficacy profile with more than 8 million patients treated with EXPAREL since launch in the United States. Strategically, pediatrics is a very important addition to the EXPAREL label as there is an urgent need for nonopioid options for managing postsurgical pain in this vulnerable population. With this new indication, EXPAREL will be an imperative formulary listing to provide access to nonopioid postsurgical care for children, especially when parents are highly involved in the decision-making process. The sNDA was based on a positive data from the Phase III PLAY study of EXPAREL infiltration in pediatric patients undergoing spinal or cardiac surgeries. Overall, findings were consistent with the pharmacokinetic and safety profiles for adult patients with no safety concerns identified at a dose of 4 milligrams per kilogram. The PLAY study enrolled 98 patients to evaluate the pharmacokinetics and safety of EXPAREL for 2 patient groups: patients aged 12 to less than 17 years, and patients aged 6 to less than 12 years. The primary objective of the PLAY study were the pharmacokinetics and safety of EXPAREL. I cannot emphasize enough how important the clean safety profile of EXPAREL is for this approval and product launch. As you all know, the FDA is extremely stringent as they should be when it comes to the safety profile of approving drugs for use in children. The pediatric indication and label underscores the safety of our DepoFoam platform, which does not have the toxicity and safety warnings we have seen highlighted by regulators within package inserts of other drug delivery technologies. There are significant downsides associated with the current standard of care for managing postsurgical pain management in children, including opioids, epidural catheters and intravenous PCA pumps, elastomeric pumps and off-label use of local analgesics. We've had a series of ad boards in pediatric spine and general surgeon anesthesiologists and nurses. The market is all too familiar with the challenges of placing indwelling catheters in pediatric patients. Imagine trying to keep a catheter in a 7-year old on top of issues such as dislodgement, leaking and dose dumping. It is extremely gratifying to have the opportunity to redefine the paradigm of care for postsurgical pain management in children with our long-acting nonopioid option. EXPAREL is uniquely positioned to disrupt the status quo in this markets, first clinically proven safe alternative for postsurgical pain in children 6 and up with a single administration. With approximately 1 million pediatric procedures per year, we envision this to be at least a $100 million market opportunity. In terms of the launch, we are deploying a thoughtful gated approach to ensure providers understand the nuances of EXPAREL and are well prepared to achieve the best outcomes for the pediatric patients ages 6 and up. Our team is comprised of pediatric nurse specialists and key strategic account representatives who will initially target 64 of the most influential pediatric hospitals in 5 regions across the country. The goal is to ensure the most sophisticated children's hospitals and the KOL influencers who practice in those hospitals are the first on board with the rollout of EXPAREL for pediatric patients. We'll then partner with these top echelon of clinicians to deploy education across their networks and spheres of influence. We will leverage our state-of-the-art training center in Tampa, the PITT, to create a steady flow of medical education beginning with these leading pediatric KOLs. After the initial phase of the launch, we will support programs where KOLs tutor their own fellows from previous years on best practice use of EXPAREL in these pediatric environments. We will also educate pediatric nurses, so they will have the necessary tools to help drive change in pediatric practice patterns. Through public relations and social media, the Pacira team will mobilize parents to serve as passionate advocates for nonopioid approaches for managing postsurgical pain in their children. We are also launching Phase IV studies in procedures like appendicitis to help us provide very specific data about replacing catheter and pump with EXPAREL. Over time, we believe we will trigger a chain reaction with a close-knit pediatric community, moving EXPAREL-based multimodal protocols closer to the standard of care for our most vulnerable patient population. We will also be highlighting the pediatric approval at 2 near-term medical congresses, including IMS, the Annual Meeting of the Scoliosis Research Society that is taking place in late April and gathers the leading spine surgeons to discuss new and advanced techniques for spinal conditions and POSNA, the annual meeting of the Pediatric Orthopedic Society of North America that is taking place in May. We are also working with the FDA on 2 additional pediatric initiatives for EXPAREL: one for children younger than 6 and another for a potential nerve block indication. Before concluding, I'd like to acknowledge the many contributors whose efforts made this important approval possible. Our Pacira team remains steadfast in their commitment to delivering an opioid-free option to pediatric patients and deliver it on all facets of our pediatric program, including clinical development, regulatory, medical affairs and commercial, among others. Most importantly, I'd like to thank the patients, parents and clinicians who participated in the PLAY study. Their sense of urgency underscores the critical need for reducing the role of opioids as well as pumps and catheters for managing pain in children. We have an exciting period ahead of us as we advance our leadership position in nonopioid postsurgical pain management, delivering yet again for patients -- for pediatric patients. With that, I will turn the call over to Kevin to begin our Q&A session. Kevin?

[Operator Instructions] Our first question comes from David Amsellem with Piper Sandler.

So I was wondering if you can help us frame the opportunity in peds, I guess, in terms of overall volumes, in terms of the addressable market? And then I know you talked about -- you've talked in the past and talked today also about specific procedures. But where do you think the low-hanging fruit is in terms of ped procedures? Where do you think you're going to get the earliest adoption?

Thanks, David. Thanks for the question. I have Roy Winston with me here, and I'm going to ask Roy to provide some color. He's been the chair of the pediatric ad boards that we've had with both physicians, nurses and anesthesiologists. But I'll answer the numbers question, David. There's roughly 1 million procedures in kids. And we've had a number of calls with major centers like Shriners Hospital, et cetera. And basically, anywhere where they're currently using a pump or a catheter, we see the opportunity to move these patients fairly quickly over to EXPAREL, thus the reason that we've got this gated launch where we want to make sure that the people who are the teachers in the pediatric community are fully aware of exactly the way to use EXPAREL in order to achieve best practice. And I'd ask Roy to comment. He's been a lot closer to actually being in the hospitals and working with the clinicians.

Right. Nice to meet you, David. So I think that we're going to look to do patients in places where they do a lot of high pain procedures. Things like appendectomy, which is the most common pediatric procedure, particularly ruptured appendectomy, a lot of the major tertiary, pediatric hospitals use catheters and pumps to treat those patients now. And we're a really attractive alternative to that because, number one, for the physician, not having to put a catheter in a patient saves time, saves failure as far as having to adjust it and all the things you have to do to make it successful. We really -- as a single-shot administration, I think, really make a big difference. We are a lower price point than that, which actually makes us very competitive in that marketplace, too, which is another important thing. And then the other thing is for the patients and the parents. I used to practice anesthesiology and put these catheters in, and I think when you see the faces of parents when their kids have a catheter hanging out of them, and if you're able to accomplish this without a catheter, I think you've done a good service for the patients. And then those catheters also have to be removed. Even know it's tolerated well, just when you try to take a band-aid off a kid, it's tough. So trying to pull a catheter out of the kid, it's another procedure. So I think we offer really attractive solutions, things like appendectomy, thoracotomy, abdominal surgeries, major GU procedures that are getting these catheters. And then the other group are the ones that are getting PCA pumps right now, patient-controlled analgesia with opioids. There's still a tremendous amount of first-line opioid use in these patients. And with opioid, you run the risk of nausea vomiting, respiratory depression and all the things that come along with it. I hope that helps answer the question.

And David, I would only add that scoliosis was part of the trial. After the trial ended, we continued to work with those folks to the point where we had a cadaver lab, where we looked at new approaches for using field blocks and infiltration in these scoliosis patients to make sure that when we launch, we've ironed out a lot of the bugs. That's highly unusual in my career at least to have folks that were so interested in this, that we started working on best practice approaches before we even had approval. So there's a lot of interest in the marketplace. And that can work both ways. We don't want people jumping out and using it today without being trained, which is why we're taking the approach that we're taking.

Our next question comes from Balaji Prasad with Barclays.

Congratulations on the approval. Dave, quick question on maybe first starting with the price. Can you kind of frame the average price per patient? And how is this going to be related to adult EXPAREL procedures? And secondly, since you spoke about the procedures, could you also help us understand if there are any procedures, which you consider as safer procedures to start with considering the age group of the patient and something that you would start with and then later on rollout to a broader number of procedures?

Thanks, Balaji. The price -- I mean, EXPAREL is going to -- is available as a 10 mL vial in the marketplace. At the lower doses, 4 milligrams per kilogram will take care of most patients in the 7 to 8, 9 range for sure. Once you get into the teen years, especially in males, you would reach a 266-milligram dose, which is the 20 ml dose, especially in male and especially in male athletes like football players, et cetera. So the price will be exactly the same. If they're using a 10 ml dose, that would be something in the range of $180. If they're using a 20 ml dose, that would be something in the range of $350. And so it's -- the package insert stipulates, Balaji, that it's 4 milligrams per kilogram up to a maximum of 266. So we don't think that people will split vial. So say, $180 for a smaller child and $350 for a larger child. Then as Roy pointed out, that is very competitive with pumps and catheters, which are the current standard of care. So we feel very good about that. In terms of the procedures, the -- all of these centers have different procedures where they have a basis of expertise. There are certain hospitals that you talk to for burns. There's others that you talk to that do just huge amounts of appendectomies, for example. There's others that do a lot of thoracotomies. We don't expect that there will be any need for a special training to provide an infiltration or a field block with EXPAREL, other than the normal course of training an anesthesiologist and/or a surgeon and their nursing teams that -- the simple things about EXPAREL, right? It stays where you put it. There is an opportunity in the package insert to put in free bupivacaine. It's the regular standing protocols that we have in our adult centers and where we've learned a lot. It's just a matter of taking the time to make sure that all of these people understand the nuances of EXPAREL. None of those with some exceptions like scoliosis really have any specifics by surgery. So we think this will replace pumps and catheters. It will move opioids to the -- to only when you can't control pain with a nonopioid regimen. And we think that's the best possible thing we can be doing. And we made the point in the script but having mom and dad along, we have a lot of experience with especially mom not wanting her child to have their first exposure to opioids being a surgical procedure, most likely or mostly what we've had so far is third molar extractions. But you can imagine, if you've got a scoliosis patient who might have a half a dozen interactions with the medical community through surgeries and the same thing with cardiac -- pediatric cardiac patients, you certainly wouldn't want your child to have multiple interactions with opioids as they continue to try to solve their medical problems. So we think this is really important, not only from the patient and the physician perspective. But all of the early work with mom and dad shows that there are going to be great advocates here for using something other than opioids.

Our next question comes from Greg Fraser with Truist Securities.

Congrats on the approval.

Thanks, Greg.

I wonder if you can comment more on the Phase IV plans and the types of studies that you intend to run. And when do you expect to have data in various procedures that will help inform docs on how to best use EXPAREL in pediatric procedures?

This is Roy's baby. There's not even any intro for me here. I'm just going to give it right to him, Greg.

Thanks, Dave. Well, so we're very excited to be doing some Phase IV studies. We're talking to some of the biggest pediatric hospitals now in the country. And what we'd like to do is pick a few areas where we see that there's a really unmet need for adequate pain control. And I think one of the biggest is going to be appendectomy that now are currently being treated with catheters. The standard of care in these pediatric hospitals for these, particularly the ruptured appendectomies is to put catheters in for 3, 4 days. Sometimes they send the patients home with the catheters. They have to come back to get the catheters removed. So for us, that we feel is one of those procedures that is a must-do. The other is thoracotomy. Any chest surgery is super painful. The place where EXPAREL shines is where a patient has a lot of postoperative pain. And so we're picking procedures that align with that. The other thing we're looking at is some of the congenital anomalies where patients are having restorative, orthopedic, oftentimes surgeries. And then the very last group, which may be the most exciting in some ways is the burn patient. The kids suffer some of the most horrendous and terrible burns. You walk through a pediatric burn unit. It's -- I can't even talk about it. It's so devastating. And really the painful part of the burn is where they take the harvest sites from. They use a machine that slices off a piece of skin that gets repurposed to cover the burn area as it heels, and that harvesting of the skin is very, very painful. So we've been talking to major burn centers. And right now, the only thing available are short-acting drugs, opioids or sometimes they actually keep the child to sleep for long periods of time intubated and heavily sedated so they can tolerate it. Now the ability to do this, I think, could really be just tremendously, and I hate to use the term game-changer, but in this case, I think it is. For some of these, they're harvesting huge areas of the back skin or even the scalp skin to cover facial burns. We're excited to do that, and we're going to start active discussions today actually about getting those started.

Lots of interest in the marketplace, Greg, and some of these major centers that I referenced that are centers of excellence for these different procedures would like to take the lead in defining a new way to treat pain in those procedures. So I think we're in a very good spot. My guess is that a Phase IV trial, it will take several months to get it up and running in peds. So you're probably talking about 15 months from now before we started to see any real data from any kickoff like this. That would be my guess, but it's nothing more than that at this point.

We may do a few pilots early on, too, to try to get some open-label data out there, so people can see what the case reports look like. And just recently, I've noticed that at -- they just had a meeting at the end of February, the Society of Pediatric Anesthesiologists, and there were a lot of case presentations of EXPAREL use for lots of different procedures. So there is stuff that's being accumulated.

Got it. That's very helpful. I just wanted to also follow-up on technique. Would you say that technique is just as important in pediatrics as in adults when EXPAREL is used via infiltration? And how do you manage, you using it early in launch, just to ensure that it's being administered in the appropriate way to maximize outcomes and to avoid some of the issues that arose with I guess, imperfect administration early on in the adult launch? It sounds like you think all the work that you've done on the adult side will help, but just any additional color on that would be helpful.

Yes. So that's a great point, a great question. I think that technique is at least as important with kids as with adults. But the good news here is that the pediatric group are already doing a ton of regional anesthesia. At every one of the major pediatric hospitals, pediatric regional anesthesia techniques are being utilized all the time. I think one of the challenges we faced early on with EXPAREL, regional anesthesia was a new field 10 years ago when EXPAREL launched, and we had to help find physicians who knew how to do the technique or provide training either by us or associated with places like NYSORA, things like that. But in the pediatric world, the physicians are very well-trained in regional analgesia and putting catheters in and doing these blocks. So we feel like it's going to be an easy transition, at least in that initial group. And then in some of the other groups where there's kind of the more minor procedures, there will be some training involved. But I think the initial thrust, we should not experience what we did with the adult population initially.

Yes. A lot of what we're doing, Greg, picks up on exactly what Roy just said. Remember, when we start talking to these folks, and realize that pumps and catheters are the really standard of care, especially in the advanced places, if you can put in a catheter it has to be put in, in close proximity. And a lot of the things that EXPAREL does, you would have to understand in order to be able to have an appropriate catheter placement. So we think we're in a more advanced position than we were when we started talking about infiltration and nobody was doing anything locally in those scenarios for the most part. So we have to be careful. We have to do it right to make sure we don't put any peds kids in harms way. But I think this is a little bit easier than what we faced when we went out to thousands and thousands of general surgeons, many of whom were not doing anything in an infiltrative way.

Our next question comes from Shveta Dighe with Wedbush Securities.

This is Shveta for Liana Moussatos. I had a couple of questions. Can you provide some color on the launch time lines for pediatric patients? And does Pacira need to hire additional sales reps? And the second question is, can you provide some more color on Pacira's initiatives to expand EXPAREL in children under the age of 6?

Sure. So first, we hired the pediatric nurse team several months ago, actually, in 2020. So they've been working with the KOLs and trying to understand and being trained on all of these different scenarios that we've talked about so far today. So we do not need to hire any additional personnel in order to launch the drug. And officially, the launch starts this morning. So we will -- I mean, this is a drug that's widely available and currently on the market. So we're going as of this morning. The other work we've been talking with the FDA for quite some time now. And in fact, the original discussions were gated at 6 and above and then 2 to 6 and then neonates to 2. So 2 to 6 and 0 to 2 will be the next protocols. They have largely been agreed. We'll work on that and get those trials started now that we've got approval for this. And the same for nerve block. I mean, they've been ongoing discussions. Having the current indication has allowed Roy to have some discussions with many of the docs in the marketplace on where are they doing peripheral nerve blocks in kids so that we can go back to the FDA, share that information with them and then agree on a protocol and patient numbers, et cetera. So both of those programs are in active discussion with the FDA. It will be years before we submit an sNDA. These trials are difficult to enroll when you have to get mom and dad to agree to surgery and to using a trial product in a baby. It's not an easy thing to do. But we are in negotiations with the FDA, and we'll continue those and move forward with both of those initiatives.

Got it. And congrats on the approval.

Thank you, Shveta.

And I'm not showing any further questions at this time. I'd like to turn the call back over to Dave Stack, Chairman and CEO, for closing remarks.

Thanks, Kevin, and Dave Stack doesn't have any idea where he put the page that Susan gave him that he's supposed to read. But Susan -- oh, wait a minute, I just found it, sorry. Thank you for participating and listening to today's conference call. We look forward to providing you additional updates on the first quarter conference call, which will take place in early May. Thanks again, and stay well.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.