Good day, and thank you for standing by. Welcome to the Q4 2023 Pacira BioSciences Earnings Conference Call. [Operator Instructions] 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 Malloy, Chief Legal Counsel; and 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..

first, launching EXPAREL in two new lower extremity nerve block indications; second, preparing for the launch of NOPAIN in 2025; and third, expanding access to 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 4 days of superiority over bupi. The first study evaluated EXPAREL as a sciatic nerve block in popliteal posterior 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 5x more likely to be opioid-free. The second study evaluated EXPAREL as an adductor canal block for total knee orchioplasty.

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 the 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 posterior 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 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 a 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 postsurgical pain are largely reimbursed as part of the bundled procedure payment. Bundled reimbursement incentivizes the use of cheaper generic approaches to managing postsurgical pain that often incorporate opioids. Financial pressures facing health care systems further incentivize cost-driven approaches.

NOPAIN mandates separate CMS reimbursement of non-opioid therapies for postsurgical pain relief across all outpatient settings. It will eliminate the cost period by fully reimbursing at average selling price, or ASP, plus 6% beginning January 2025.

There are roughly 6 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 health care systems implement EXPAREL as the best practice standard of care for CMS patients.

The value proposition is clear as a recent review of 5-year real-world Medicare claims data for hospital outpatient procedures demonstrated a significant correlation between EXPAREL utilization and improved patient outcomes, including opioid prescription pills, 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've been paving the way for NOPAIN through our investments in 340B pricing and new GPO partnerships, such as our recently announced deal with Premier, whose significant network of hospitals and health care systems covers nearly 20% of EXPAREL relevant market procedures.

These programs assist health care 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 tax effect next year, they'll be reimbursed at ASP plus 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 Malloy, 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 the Paragraph IV certification seeking authorization for a generic version of EXPAREL. This first lawsuit alleges patent infringement of EXPAREL U.S. patent number 11033495 or the 495 patent.

The 495 patent claims composition of EXPAREL made using an enhanced manufacturing process which was a result of several years of innovation by the Pacira scientific team, with an investment exceeding $100 million.

The 5-day bench trial concluded on February 14, and we are currently engaged in post-trial briefings, with closing arguments set for May 2. We expect the judge to rule on the 495 case before the expiration of the 30-month stay on July 1.

We are confident in our position, our 495 patent and the related 2041 expiry, and we stand ready to engage the core with it 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 11426348, 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 state. 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 contemplated 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..

non-GAAP consolidated gross margins of 74% to 76%; non-GAAP research and development expense of $70 million to $80 million; non-GAAP SG&A expense of $245 million to $265 million; and finally, noncash compensation expense of $50 million to $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 pain 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..

Thank you, 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 8 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 in 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 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 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..

[Operator Instructions] Our first question comes from the line of David Amsellem from Piper Sandler..

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, particularly the R&D infrastructure, how you're thinking about margin expansion over time, not just from EXPAREL benefiting from NOPAIN, but just looking at the cost structure, in particular in the expansion that you can gain operating leverage from that formal launch.

Number two, regarding NOPAIN, can you talk more broadly about what do you think, and I know it's early, but what do you think the volume trajectory could look like next year? And maybe just help us better understand your general thinking on what the impact of [indiscernible] sales and volumes would be, and I'll stop there..

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 cost 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 in 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 will 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..

So David, I think you're aware that NOPAIN is focused actually on the outpatient setting from the HOPD. CMS has roughly 6 million procedures in the combination of HOPD in the ASC settings, with about 3.5 million in HOPD and 2.5 million in ASC. So obviously, NOPAIN relates to CMS.

There are additional 12 million patients, all in our TAM, in the combination of HOPD and ASC, that are commercial backed -- commercial payers as well. So NOPAIN is going to focus initially on CMS and then it's EXPAREL's -- or excuse me, Pacira's focused to get the commercial payers on board as well. So we're really excited about it.

I don't think that's all going to happen in 2025, but obviously, the beginning of that process will..

And let me just add -- thanks, Charlie. Let me just adductor 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 going to 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..

Our next question comes from the line of Gregory Renza from RBC Capital Markets..

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 the total portfolio outlook for 2024.

I 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, anything we should be thinking about? And then secondly, maybe just longer term, Frank, as you're reiterating your confidence in EXPAREL, on the tailwind with NOPAIN, just wanted your color on 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..

Yes. 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 setup 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 were 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 overall, when we look at the P&L for 2024, I say this, Gregory, we'll have modestly higher revenues will have modestly-expanded gross margins. We'll have an R&D line that 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, it looks -- should look pretty close to what we saw this year. And so that's the way we think about it. We -- '24 is a bridge to '25. We're making really important investments in order to capitalize on NOPAIN in '25.

And overall, the year will look better than '23. 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 and the way they need to be served. And third is, as you may have -- as I have 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 will help drive some of our future growth over the long term as well..

Our next question comes from the line of Gary Nachman from Raymond James..

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. So how many more of these could you potentially do? And I know Charlie said that should impact net price in mid-single digits.

Just how much visibility do you have on that? Are you very confident that that's only going to 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 shifting some resources and more SG&A spend.

And I'm just wondering if there are other pockets of EXPAREL, just in terms of different areas, different indications that you're going to be investing more behind this year as you've taken a closer look of the overall market?.

Thanks for the questions, Gary. Let me hit the GPO one, and then 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 broadly 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. And what that does is it makes spending at the hospital, at the institution be compliant spend versus noncompliant 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 not only enhances access, but also we're able to tap into the services that GPOs provide in helping to educate their membership. In our case, this is going to 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 of other GPO organizations were in the midst of discussed -- 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 2/3 of our TAM, from a procedural perspective, were 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, I think that in '24, the volume vial growth 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 no NOPAIN.

NOPAIN is like a product launch for us, and we want to 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 control data versus an active control. And it's very positive, as I mentioned earlier in my talk.

And so they're very -- 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. 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've talked about before, some use is already taking place in that setting.

However, we think there's incremental sales there as well. So 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 -- there were some other markets that have been talked about in the past or peds or just where you think there could be upside if you focus more of your efforts behind them..

Yes. 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 want to 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..

Our next question comes from the line of Les Sulewski from Truist Securities..

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 the 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..

Thanks, Les. Thanks for the question. You had asked about optionality regarding the unfavorable rate ruling against us, et cetera. 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. First, to level set, like most IP cases, this matter is going to take many years to be resolved in the core system, not just for this case, but as well as future litigation covering our patents.

And as I'm sure you can 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 it -- 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've asked also less 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 so far, we've received very positive feedback with our two new lower extremity indications. As you know, EXPAREL achieved 4 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 -- very low p-value for those, showing the benefits of employing these two blocks. So any time 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, EXPAREL being used as a nerve block or a [indiscernible] plane block, it's providing deep analgesia needed for the prevention of postoperative acute breakthrough pain. Whereas when you saw in the Nav1.8 studies, they enroll 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 discharges post part of their multimodal program. So bottom line, we see these as rather complementary, where as EXPAREL would prevent pain, these other products seem to help treat pain..

Thanks, Jonathan..

Our next question comes from the line of Balaji Prasad from Barclays..

To The extent that, again, 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 multilamelar 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 deficiency 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 is CCO, commercial officer and the business officer will bring to the company and to EXPAREL..

Balaji, thanks for the question. 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 going to 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 going to 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 going to be very, very important.

Now that we are participating in 340B as well as in the future GPO contracting, we're going to have ways to make sure that we reach the C-suite and the pharmacy customers in ways that we're not reaching them currently, and 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 will inform our future investments in the pipeline as well as our thinking about what else fits into our portfolio.

So with that, let me turn it over to Tony..

Thanks. Unfortunately, details of the eVenus products 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..

[Operator Instructions] Our next question comes from the line of Serge Belanger from Needham..

This is Serge. I guess first question regarding the restructuring 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 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 pain going forward. And as we mentioned earlier, we're treating NOPAIN like a new product launch. So in a new product launch here, you want to make sure you have the appropriate share of voice, and we're going to 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 going to bolster some abilities around marketing efforts and digital pricing and reimbursement, again, to better serve the kinds of customers that we're interacting with on a regular basis. So that's important.

With respect to 340B, 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 6 in the outpatient setting for NOPAIN pain, that should be an attractive value proposition for our customers. So that's -- I believe I hit on all three of your questions. Yes.

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 a little bit of color on each one. So Jonathan....

Yes. 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 need 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 [ IGORA ] 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..

This now concludes our speaker -- 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. Throughout the balance of the year, we will continue to ensure we are well positioned for the long-term success.

The opioid epidemic continues to be a national crisis, underscoring the vital importance of our mission. Thank you, and stay well..

Thank you. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect..