Q4 2021 Pacira Biosciences Inc Earnings Call

February 24, 2022

Yeah, Good morning, and welcome to the fourth quarter 2021 Zero Biosciences, Inc. Earnings Conference call. My name is Brandon I'll be your operator for today at this time all participants are in a listen only mode. Later, we will conduct a question and answer session during which you may dial star. One if you have a question I will now turn the call over to Susan <unk> head of <unk>.

Investor Relations you.

You may begin.

Thank you Brandon and good morning, everyone. Welcome to today's conference call to discuss our fourth quarter and full year 2021 financial results. Joining me on today's call are Dave stack, Chairman and Chief Executive Officer, and Charlie Reinhart, Chief Financial Officer 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 companys filings with the SEC, which are available from the SEC or website, one last piece of housekeeping local Internet went down this.

Morningstar the Sierra team is participating via cellular device, we ask for your patience. It sound quality is limited at any point with that I will now turn the call over to Steve.

Thank you Susan and good morning, everyone and thank you for joining us we'd like to devote most of the time today to your questions. So I'll begin today's discussion with a brief prepared remarks that cover our recent business highlights we remain proud of our team as they continue to perform and deliver both for our patients and our investors. The progress we made throughout 2021 positions.

For even greater success in 2022, we have a series of value driving milestones in the year ahead, and we couldnt be more excited for the future of <unk>.

We ended the year in a strong position with a diversified portfolio of unique safe best in class products.

Port healthcare provider's ability to provide low or no opioid therapies to improve patient experiences along the neuro pain pathway.

Our achievements in 2021 highlighted by growing EXPAREL sales the acquisition of flexion and an exciting pipeline of innovation that have captured or is that a place for seara in the forefront of opioid sparing pain management.

So.

<unk> provides us with a highly complementary commercial asset for the treatment of osteoarthritis knee pain, while also increasing our presence in chronic pain with.

It was more than $100 million in sales in 2021, and a significant potential for an even greater contribution moving forward. So it gives us great confidence in its long term prospects as a high potential durable product for <unk> importantly.

This acquisition Diversifies, our revenue stream enhances our topline and we believe it will provide meaningful synergies as we expect to drive substantial near and long term accretion to our cash flows and earnings.

Turning now to the progress we made with EXPAREL.

I'll start with the recent achievement of very exciting milestone very exciting milestone over 10 million patients have been treated with EXPAREL since launch in the United States alone.

Our team achieved record EXPAREL sales of $570 million 507, I'm, sorry, 1 million with adjusted EBITDA margins of 37% in 2021, marking our eighth consecutive year of positive adjusted EBITDA. These are important accomplishments as we have been reiterating EXPAREL based block.

Our enabling the regional anesthesia Revolution, which is our number one growth driver regional anesthesiologists are developing new blocks perfecting old blocks and using imaging to ensure successful patient outcomes are state of the art training innovation facility is supporting this market transition with real time best practice knowledge <unk>.

<unk> and is helping accelerate the surgical migration to outpatient sites of care.

In addition throughout 2021, we significantly fortified Rx per our IP estate with two new Orange book composition patents that are now listed in the FDA Orange book.

Recently, we received four new notices of allowance from the U S. Patent trademark office. These are all composition patents that we will submit to four Orange book listing after which there will be a total of six EXPAREL patents listed in the Orange book with expiration dates of January 'twenty.

2041.

Last year, we were excited to launch EXPAREL and Pete in the pediatric market, where we are making an even bigger impact than anticipated. We are seeing a rector spine, a or ESP blocks, becoming the standard of care and displacing costly and cumbersome pumps and catheters.

Interestingly pediatric spine is triggering a halo effect and adult procedures spine surgeons are tight knit group of like minded surgeons and the technique for an erector spinal block is the same for children and adults. This provides us with an opportunity to establish EXPAREL ESP regional blocks as the cornerstone.

Best practice enhanced recovery pathways for both adult and pediatric spine surgeries.

Looking to our international expansion for EXPAREL, we are delighted to report that our targeted European launch is now underway importantly, as you may recall EXPAREL enjoys a broad label in Europe , which includes both upper and lower extremity nerve blocks as well as field blocks, such as transfers of Domino's Plainfield blocks or tap.

<unk>.

This is key and we will factor into our ability to gain traction in this important market without having to expand our call points and should help simplify market access.

Our women's health franchise has seen 30% improvement in EXPAREL procedures over the prior year EXPAREL tap blocks for C. Section are driving this success, which is not surprising given the incredible value proposition that faster recovery and opioid sparing pain control means to new mothers with $1 3 million C sections per year in the U S.

And rapidly expanding EXPAREL penetration, we see significant opportunity for continued growth.

Further positive experience and outcomes in C section procedures are driving demand and gynecologic oncology and breast procedures as we all know mothers are the Ceos of the household and a positive birth experience with EXPAREL, we will drive a lifetime of opioid sparing decision, making for other procedures.

This past year Covid has escalated the need for many breast plastic and oncology surgeons to expedite discharge for their patients with EXPAREL. They are now able to meet the needs of women, who demand an opioid free experience and don't want to stay overnight in the hospital, while simultaneously optimizing their care experience through better pain management using.

EXPAREL based multimodal <unk> protocols.

In addition to the success of our growing EXPAREL Enzo Reta franchises. We are also making great strides with our <unk> franchise.

It's the only cryotherapy option available in a handheld design, allowing it to be used in a variety of institutional settings in environments, where you could not use the previously available console based cryo analgesia systems.

In 2021, we launched <unk> with our partner in Canada, and with <unk> resources in the U K and EU. We also use last year as an opportunity does that design a more user friendly next generation device and develop additional smart tips for new indications, we now have a specific tip ready for human pilot studies.

Medial branch block as a treatment for chronic low back pain we.

We are also preparing to evaluate <unk> as a treatment for spasticity, which represents a very significant long term opportunity.

Looking ahead, we expect to build on last year's success and believe 2022 will be a banner year for <unk> as we expect to deliver another year of record sales significant EBITDA growth and multiple clinical and regulatory updates.

Enrollment is progressing in our two phase III low low extra lower extremity nerve block studies for EXPAREL or the strides studies.

Covid related delays in the fourth quarter of last year has shifted the expected timing of our NDA submission to the fourth quarter of 2022, we believe the lower extremity nerve block label is at least as significant as the upper extremity market with around 3 million procedures, a year and an addressable market of approximately $100 million.

So for <unk>, the first and only FDA approved treatment for osteoarthritis knee pain, we are focusing on three areas of development in 2022, and we'll be meeting with the FDA to obtain alignment. The first is to expand the current label to include a safety superiority claim in diabetes, which we expect will establish.

As the first choice corticosteroid for osteoarthritis pain of the knee.

Second we are preparing to launch a phase III shoulder study, which we plan to begin and year end and lastly, we are working to expand the current knee indication to include repeat dosing.

In short we believe <unk> is a perfect fit for the <unk> family of unique products and we envision longer term, our commercial and clinical capabilities will significantly expanded shoes at the same time, we are addressing several issues with specialty distributors and pharmacies as well as previously stocking of short dated materials. We are moving these.

Systems and processes to our pursuit of our operations and expect to have many of these issues behind us by the end of the second quarter.

<unk> the launch of our next generation handheld devices now underway and we remain on track for an interim review of our prepare study, which is evaluating the combination of <unk> and EXPAREL as a procedural solution in teekay procedures in the next few weeks.

As I mentioned earlier, we are particularly excited for the opportunity and specificity you may recall that at our analyst event last year, Dr. Paul Winston shared some compelling proof of concept videos and as best as to the patients importantly pain associated with Vesta City is already on label and we are working to facilitate greater adoption given the.

The efficacy safety and ease of use we plan to work with the FDA to define a regulatory pathway for adding treatment of specificity to our <unk> label patients currently have limited and often costly therapeutic options. For example patients are receiving botox, which has dose limitations.

Here patients receive 3% to four treatments a year for our <unk> thousand 800 $2400 per treatment. Another example is the use of phenol a chemical neuro lytic.

As painful requires anesthesia and has adjacent tissue scarring with outcomes that are highly variable and contrast, I avera has shown great promise in this indication with tips costing $450 to $500 <unk> could represent a tremendous value proposition and spasticity.

In addition to EXPAREL to read Nio via our portfolio includes promising earlier stage opportunities, we expect to initiate a phase II study of our multiple <unk>.

Particular, liposome technology for subarachnoid analgesia in late 2022.

We are planning pilot studies to evaluate <unk> specificity.

Separately I am sorry, as still a ganglia blocks for use in cardiac arrhythmia following heart surgery and.

In addition, we are defining next steps for clinical programs and our multimodal are monthly the secular liposome formulations of dexamethasone for inflammation and low back pain and high dose bupivacaine for longer acting pain management of five days or more.

Moving ahead with patients always at the forefront of our endeavors.

We will continue to innovate in all areas of our business, including new indications line extensions design improvements and more we will leverage our state of the art innovation and training center in Tampa as well as the second facility that we're building out in Houston to bring these innovations into the hands of our health care provider partners I'm sorry.

First of all we accomplished last year and even more excited for what's to come with that I'll turn the call over to Charlie for some financial highlights Charles.

Thank you, Dave and good morning, everyone I'll start with a quick update on sales and margin trends as previously reported in the last week of December we began to see a slowdown in elective procedures as regional searches and omicron cases prompted government governmental restrictions and escalated staffing.

These trends continued in the beginning of January until around the middle of the month. When we began to see a notable improvement in EXPAREL sales with continued strong trends in February .

On the competitive front, we've not seen any impact from new market entrants on our EXPAREL based business, where our ability to generate new business more than 10 years of physician experience well established efficacy and a pristine safety profile continue to be key differentiators between EXPAREL and other <unk>.

Standard release Bupivacaine formulations.

<unk> significant growth in 2021 was driven by a 72% increase in new customers with a growing representation from the physician office site of care. We believe the addition of <unk> will accelerate this as it gives us another entree into the physician office and allows us to extend our reach of physician office.

Our actions.

For <unk> as previously reported sales were negatively impacted by rebate program modifications and several unanticipated manufacturing batch failures that led to short dated so rana inventory, resulting in smaller order sizes and higher product returns.

As Dave mentioned, we are currently addressing these issues and expect to have them resolved by the end of the second quarter with 2022 sales trends improving throughout the year as we extend inventory dating simplify the rebate program and complete our transition of the product to the seara operating environment.

Turning to gross margins on a consolidated basis, our full year total non-GAAP gross margin was 75% for 2021.

This was comprised of full year non-GAAP margins of 77% for EXPAREL, 33% for <unk> as well as post acquisition non-GAAP margins of 82% for Brazil.

In 2021, <unk> margins were negatively impacted by overlapping expenses as we transition production to our San Diego facility and a new contract manufacturer along with our investments in our next generation <unk> a handheld device.

Looking ahead, we continue to expect to see improvements of roughly 3% per year for EXPAREL gross margins in each of the next three years until we reach gross margins in the mid 80% range. This improvement will be driven by a combination of steadily improving volumes and lower unit costs as our 200 liter suites.

<unk>, a greater percentage of EXPAREL units sold.

For <unk> as volumes continue to expand we expect margins to increase and reached levels in the mid 80% range and approximately the same timeframe as EXPAREL.

<unk> margins will also benefit as the cost to transition our manufacturing locations to our contract manufacturer and a reduced unit costs as well as the rollout of our generation two device with a reduced cogs by the end of the second quarter.

Brazil, rata, we're making investments in manufacturing facilities to improve quality metrics and efficiency as volumes grow.

While we are currently not providing 2020 to revenue or gross margin guidance given the continued uncertainty around COVID-19, and the pace of the recovery for the elective surgery market. We will continue our practice of transparency reporting preliminary monthly product sales for EXPAREL and <unk> to <unk>.

Share intra quarter trends with you.

<unk>. We are currently not reporting preliminary monthly <unk> net product sales as the required adjustments for certain product related programs are calculated after the end of the quarter. However, we will include a range for <unk> sales in our quarterly pre announcements we will consider adjusting this practice for all three products as the.

Year end visibility progresses.

Turning to our expense guidance for 2022, I'll start with our expectations for non-GAAP R&D of $75 million to $85 million key drivers over 2021 spend include.

Approximately $14 million in incremental clinical and pharmaceutical product development costs associated with <unk> in an early stage program acquired from section, which is now known as <unk> 201.

Approximately $6 million in EXPAREL manufacturing capacity expansion costs for our 200 liter batch unit located in our San Diego facility.

And the advancement of clinical development activities related to our stride and prepare studies.

For non-GAAP .

SG&A expense today, we are guiding to a range of $220 million to $230 million key drivers over 2021 spend include approximately $37 million of incremental SG&A spend for zelle. Reno. This includes doubling the size of our <unk> and <unk>.

Field based team is the rate of marketing campaign and expanded market access function to include Silverado and G&A costs, which includes some transitional activities for certain shared support functions, such as finance legal HR and it.

Approximately $7 million in EU business cost, which includes our commercial footprint as well as legal and regulatory support or.

Our forecast also includes expanded activities to accelerate growth within our spine sports medicine, plastics, and <unk> businesses as well as increased medical innovation and education programs at the pit.

Finally, our 2022 stock based compensation is expected to be in the range of $40 million to $45 million.

So in summary, EXPAREL continues to be on a significant growth trajectory that is driving substantial operating leverage and cash flow.

<unk>, we've added a significant and highly complementary revenue stream that makes our earnings outlook, even more compelling.

For <unk>, we remain very excited about the near and long term outlook for growth continued growth in our <unk> customer base and the addition of <unk> to our commercial offering leave us well positioned to help physicians individualize osteoarthritis care with our unique pipeline of non opioid options on there.

Longer term horizon, we are investing in exciting new Io there're opportunities that have the potential to be game changers, like spasticity and stellite gangly on blocks <unk>.

The bottom line is the <unk> is financially stronger than we have ever been and despite turbulent macro environment. We continue to deliver impressive financial results and remain bullish in our long term expectations for robust growth. We are confident that we are on track for year over year top line growth and at least the high teens.

Gross margin improvement to the mid 80% range modest year over year growth in operating expenses and adjusted EBITDA margins that exceed 50% by the end of 2020 for that.

That concludes our prepared remarks, I'd like to turn the call over to the operator to begin our Q&A session operator. Thank.

Thank you Sir we will now begin the question and answer session. If you have a question. Please tell star one on your phone keypad, if you'd like to be removed from the queue. Please tell the power side or the hedge.

If youre on a speaker phone please pick up your handset first before dialing once again if you have a question. Please tell star one on your phone keypad.

And from Piper Sandler we have Dave David <unk>. Please go ahead.

Hey, Thanks, So just just a few so on EXPAREL and the elective surgical environment I may have missed this so if you could clarify.

In terms of the pace of volumes, where is it relative to pre pandemic levels or maybe put it put it differently with the <unk> wave.

Seating are you getting back to pre pandemic levels. When do you think you might be there.

Just talk about in any way call that's quantifiable.

Surgical backlog and how EXPAREL stands to benefit as that backlog is cleared.

That's the first set of questions and then secondly on <unk> it sounds like those.

Some speed bumps here, but I wanted to ask you about the.

Your commercial.

Sales and marketing and talk about what Youre doing differently in terms of getting in front of.

Physicians in terms of in terms of head count.

<unk> targeting.

I know you've alluded to this in the past is that maybe just provide some detail in terms of how.

How youre approaching.

Detailing differently than the purpose as a company.

Thanks, David.

First the pace of volumes I mean, we get the give you a report every Friday and it is up on our website and what you would see is that.

We've we've come up on too.

The pre COVID-19 .

Elective surgery line several times only to retreat.

In several weeks afterwards, and then the week after Christmas was really bad.

As bad as Covid.

Inputs.

And so.

Sure.

I think what we haven't seen this week yet of course, it lags by two weeks I Should've said that David.

And so we bounced back and forth off of the pre Covid elective surgery line in that report.

I think the interesting thing is that.

EXPAREL is routinely between 20 and 40% higher than the line then the return so.

We expect that when we do return we're going to enjoy all of the.

Sure that we've taken for with all of the programs that we've talked about so.

Sure.

I would say based on the performance in February David that were probably very near the elective priest pre Covid line again, but were done with two weeks.

In a rear so I mean, just to give you some context the last week of the year was horrible.

Almost unbelievably so.

The first two weeks in January were a little better, but not great I'm sorry. The first two weeks in January were a little better but not great.

Second half of January got us to plus four in January and we continue to see that kind of momentum into February so.

I think think teens again, not not 100% back, but we're getting there.

On the <unk>.

So we've we've got a team that's been out there with iron ore.

And we were <unk>.

Fortunately enough to have a number of people come over.

<unk> <unk> from the <unk> sales force.

So we've been able to supplement them with some new hires.

Again people that are willing and looking to come here based on all the success in some of the things that are exciting around our program actually interestingly, Dave and many of them have been referenced by their physicians.

To come and work for <unk>, which we think is a very very positive sign.

And so.

Without being tried I would tell you. The first difference in terms of direct customers is that we're actually calling on them.

And we hear that often.

Our folks are working with.

I don't I don't even know how to make that any more clear.

And we're.

We're working our way through.

<unk> being useful.

I'm, sorry, so rather being useful in the office primarily.

As Charlie said in his script, we see a lot of chronic pain medicine docs.

<unk>.

Ill Vera in their offices, so we see the benefit of having two products. When we go talk to the chronic pain docs into the orthopedic surgeons in the spine folks.

It is clearly driven by.

The patient status.

The duration of pain control that Theyre looking for.

Major driving by reimbursement so that does subset select confidence that youre going to accrete in the hospital outpatient department, where the reimbursement is very good for Io Vera versus the office, where the reimbursement is quite good Brazil.

So we can talk about these folks in different sites of care different reimbursement options. They have based on the patient needs.

And we're working again on.

We've found a number of physicians in the marketplace have come to us with data sets on the use of <unk> in type two diabetic patients and so we've got a number of these folks writing those.

Those data sets up for us with the intention of bringing them to the FDA to show them, how the product is actually being used in the marketplace.

And this patient category that obviously has some specific needs that are all their own so.

All in all I think it's very early days remember, we only had our national meeting three weeks ago.

So what I'm, telling you is a couple of weeks' worth of largely anecdotal data, David but so far it's everything is going well.

We expected it to more or less.

Okay, that's helpful and if I could just.

Go back to the question the EXPAREL questions just on the surgical backlog can you just quantify that.

And anyway, I think you've done in the past, but if you could provide a little color there would be helpful.

Yeah.

The surgical backlog in orthopedics.

Is.

Sure.

It has been actively worked upon largely in the ambulatory surgery marketplace and so.

We know that the docs are out to three months.

But I think most of these.

Very painful procedures.

Are being driven to the ASC by this by CMS and by commercial payers.

And given the long term relationship of orthopedic patients with their cost or with their physician.

You see up.

Are we lie.

That's actually working right. They go see the dark and they go to an ASC that that might or might not have interest in.

The soft tissue is.

Much more difficult to predict.

<unk>.

If you look at <unk> now, David and you look at EXPAREL over 75% of our business as reported by <unk> as ortho.

And so the other side of that of course is there isn't a lot of ASC capacity for soft tissue, we'd see some of that being taken up in <unk> and the <unk> actually has in hospital outpatient theres a slight bias like 50.

5% to soft tissue. So you can see that many of these patients are finding their way there.

The issue that we see in the marketplace today.

Is that the insurance companies are trying to save cost by moving these patients who these outside of environments.

Largely what's happening as the hospitals really struggled to be able to do with soft tissue procedure like a hernia or.

Hemorrhoidectomy for what the insurance companies want to pay for a soft tissue procedure, because theyre basing that off of what they can get it done in the outpatient treatment. So.

The backlog in and soft tissue was suffering from two things. One is these continued intrusions by.

Covid.

The fact that the primary care guys want to meet with the patient even if it's telemedicine and they need to have lab work done an EKG has done and stuff before they go for the soft tissue procedures.

That marketplace is not as structured as the orthopedic marketplace. So it's lagging and when you put on top of that the fact that there isn't a lot of capacity in the outpatient departments for these patients to go get their procedures.

It is.

It's hard to predict at this soft tissue marketplace is going to be satisfied in the next year or so I think that's going to take longer than that and then you get into the issue of some of these patients have been waiting a year and a half or two years and theyre ASI to patients who've become assay three patients and then do you operate on them at all so it's soft tissue is a lot more complicated David then the north though.

Long answer to a simple question sorry.

No that's helpful. Thanks.

From RBC capital markets, we have Gregory <unk>. Please go ahead.

Good morning, one for Greg and thank you for taking our questions.

Maybe first one just to follow up on what you are seeing around recovery.

Sure.

And I was wondering could you provide more color on what you're seeing in terms of.

Listen staffing shortage now and when do you think we'll see the labor force and return to pre pandemic levels, how that will impact.

The recovery on Chris' commentary within the clinical environment.

Now.

Yes, yes. Thank you for the question. It clearly is the issue.

And frankly in December it was the issue as well and in August that was the issue as well right. So I mean, you think omicron.

Was easy to identify but I think underlying that the real issue frankly was was labor shortages.

It's better.

I can tell you that the ambulatory surgery centers in particular are not all the way back right and so.

It still is difficult to get a nursing team together to work too.

We're a 14 hour shift on a Saturday.

And the Doc struggle when you get a number of PRN and you bring them in and you have five people in the or on a Saturday morning, but.

They've never worked together before and they don't know each other and the anesthesiologist is introducing himself to the nursing team et cetera.

It just slows everything down and so.

I wouldn't say we're back to.

Back to where we were we have to be in order to take care of this backlog that David was just referring to but I think right now we're at a place where.

Folks are working the centers are open.

And our numbers would suggest that.

February is going to be a very good months looks a lot like October did.

In November good actually.

And we'll see but.

When you run into trouble is when you start talking about a $12 2014 hour shift on Saturday and.

Nurses, especially nurses that have got young families really struggle with how they do that when the kids are out of school.

This week for example is a little bit tough right up in the northeast all the kids are off for the whole week. So you can see right away that the afcs or slowed down.

Great. Thank you and then I just.

Second question, if I may on the radar.

And maybe could you talk a little bit more about your.

Our plans to address the other.

Dorado based on manufacturing.

And then Nick Molnar abilities.

We expect to see meaningful growth in revenue in the near term. Thank you.

I'm not I'm not sure I caught the first question is it around manufacturing of Silverado.

Yeah, just manufacturing rebate.

Okay. Thanks, Yeah, that's pretty much over frankly, I mean, it's the issue of of making manufacturing with appropriate dating is behind us the issue in the marketplace is short dated material that was shipped in beyond the capacity of a physician to use it in the time that the table that the label enabled.

And so, especially in some places where inventory was placed.

With a specialty distributor or in a scenario, where a dark spot a lot to maximize rebates et cetera.

Cleaning some of that up is what's happening and so.

<unk>.

This is always going to happen in an acquisition. So there's nothing here, that's alarming or troublesome. It's just it's just running the business. It's just tough.

And I think that youre going to see <unk>.

Do better.

Largely just because of the exposure that we're giving that right I mean, the docs that come to the pit to learn about <unk> and to learn about EXPAREL, it's a little bit surprising to us that I would say just to just.

A general number at least half maybe more than half of these guys don't even know what's already is.

So I think given it more exposure.

We will come back with a it won't be a rebate program that will be a discount program, which is much easier for the docs to understand and loan incent them to bring in large quantities and we want them to order it when they need it.

Not order a bunch of it.

And some type of a rebate program.

I think we're doing fine right now February looks.

Okay, and as we clean the rest of these things up and we get these guys more exposure than we will clear any of these hurdles that are in the way and we think that this will be a good growth opportunity this year.

And we're looking at all of these products to grow substantially in this year.

And then as we talk to the FDA about improving the label and we start to shoulder study and there's a number of things that we think we can do to improve this and.

Remember, where EXPAREL is already used extensively in the shoulder.

We're also looking at iron ore in the shoulder. So we've got a lot of context doing clinical research in this part of the body. So we think we're equipped pretty well to handle doing the Niobrara alright.

Shoulder study.

Great. Thank you very much thank.

Thank you.

From Jefferies, We have David Steinberg. Please go ahead.

Thanks, Good morning, I have a <unk>.

For Charlie.

You gave us a pretty clear pathway, both sequencing and sort of peak margins for EXPAREL, but with regard to <unk>.

I think you mentioned about three years to expect mid eighties gross margin there was little unclear and the sequencing and phasing and how you get there could you give us a sense of sort of.

Annual increments and an improvement in gross margin for those two products to get to that peak number.

But David you are on the top of your game because that's exactly right I was a little less specific and there was a reason for that.

And that is.

It's a little more volume dependent.

<unk> and four Dorado, we literally just got the product. So you noticed that in Q4, we had 82% margins and Silverado, which was actually better than I had anticipated I think that was a little higher than normal because nate.

Q4 manufacturing is humming along to make up for the normal shutdown at the end of the year.

So I think youll, let us should have been closer to 80 for the full year and it will get to 85.

I don't know that Theres any prescribed notion other than in the next three years, we will pick up five points I don't think thats.

Anything more specific.

It will change drastically this year 21 was an outlier.

Because we doubled up as we basically.

We're running the relay race, we had an overlapping section of operations in Northern California operations, Southern California operations in Mexico.

More QA activity at all three locations. There was just some additional expenses in addition to investing in the Gen. Two device so.

When you are talking about a $16 million revenue base. It doesn't take much of additional expense to change that margin that margin will go up very noticeably in 'twenty, two and and we will be.

At that point will be on track I think over the next three years for <unk> to make it too so I think.

This is the first time, we've given detail on your than total gross margin and so I suspect you were you were interested to see what some of the other margins were I think maybe the more important lesson is that EXPAREL is already in the high <unk> and is on a nice path to get to the mid <unk> as we were trying to communicate.

Okay. Thanks, Charlie and then Dave a couple of questions for you.

First you mentioned in your prepared remarks that.

Pediatrics, we're doing well in <unk>.

Actually better than you expected I guess on that point could you give us a little color around that and then sort of some quantification I think you had said that pediatric peak sales for EXPAREL could be a range of $100 million and has your thinking changed based on that comment and then finally.

<unk> been on the market for a couple of quarters have you seen any losses at PNT committees and just any color what youre seeing in the field from that product. Thanks.

Yes, Thanks, David.

For pediatrics.

What we what we forecasted.

Was largely off of the adult population and so there is a number of places in pediatric medicine, where physicians are using EXPAREL almost exclusively.

Clubfoot, scoliosis and things like that so.

Mediately.

Got.

It was obvious that our forecast was conservative because there were a number of procedures that were included in it at all to be honest with you.

The big.

Enhancement, though is.

We projected that we would have a percentage of the replacement of pumps and catheters and in fact, what we're seeing is that based on the desire of many of the surgeons who have these patients go home on the same day.

They're replacing pumps and catheter totally.

And so I don't think anybody would have believed us if we told us that we were going to replace pumps and catheters totally at a number of big major centers.

But in fact, that's what's happening and we hear docs tell us all the time I hope I never put in another one of those things that in my life.

So.

It's going to be more than $100 million, David I think over time.

Frankly, we haven't changed our long term forecast to make it to improve that in terms of.

How it gets there and when it gets there, but it's $100 million given the pace of what we see is is clearly on the low side.

We were all at radius Children's Hospital again last week and.

The drug is they are fine and all kinds of different ways to use EXPAREL.

Again, maybe.

A bit of a conservative judgment on our part.

But the ability to have a patient have a surgery.

Pediatric patients to have a surgery and to go home from the hospital with mom and dad can't be overestimated in terms of what we're seeing in the marketplace and so.

Sure.

The pace of what's going on in Pediatrics is extraordinary and I mean, even this morning. There were several 10 box and 12 box orders from pediatric hospitals, where a year ago, we would have had.

Maybe a box, but likely none.

So it's doing really well.

Okay.

So all of.

It's unrealized.

That's a short one.

I haven't.

<unk> talked to a couple of people that were for one reason or another tried it.

Nobody has this.

Sided that theyre going to use it.

All the issues that we've raised before.

It smells, it's sticky it's Hugh.

It forms a shell over the sutures, you've got to use a different suture technique.

There've been a couple of.

Issues with.

Infections, especially in the lower extremities.

Yeah.

Honestly, David we've been out in the community a lot in the last couple of weeks.

Haven't not one single customer has brought it up to us.

Fair enough. Thank you.

Thanks Pam.

From Barclays. We have Lushy preside. Please go ahead.

Good morning, and Thanks same question on a couple of questions from me down Charlie.

Firstly as I.

Scientists are not providing revenue guidance, but I appreciate the color on some of the other metrics.

But if I look at where consensus is right now approximately around $15 million with EXPAREL at 575, and then right at around $140 million would you be able to provide some color around days throw some ranges around what put more both on the upside and downside.

And how do you think 2022 will be with regard to your longer term goal that is one.

Secondly, Dave we discussed.

The distributor ratios rounds in radar last month.

Just drill down on that a bit more especially around the rebate inventory and manufacturing issues.

What you are doing currently and what would that mean for the cadence of the rental revenues for the year. Thanks.

Sure.

On the first part on the revenue.

<unk>.

I think if we look at history.

You see you have a pretty good idea and we've been quite honest about it.

<unk> I guess, there's probably a better word about how much we expect the product to grow every year and that is where we are.

I think we have to keep in mind. The fact that we do have lower extremity nerve block and we expect that to be a very big product going forward.

But as we said in our prepared remarks, but largely that.

C section is growing ortho is growing piece is growing we're launching in Europe . So I don't I think that you can expect.

The same kind of outperformance on a percentage basis.

And then you have to think about adding four stride in 2023, and then still a ganglia blocks.

Probably in that same kind of timeframe 2023, so from our perspective alone our longer term guidance.

Is intact.

Changing any there is there are some puts and takes <unk> are growing very rapidly hospitals are not growing at all low single digits.

So as the world goes to <unk>.

The <unk>.

I think basically what we built the forecast off of is happening.

It is slightly accelerated because of Covid, but then.

It gives us a little bit by moving to the ASC and then it takes it back to you by not having.

Staff and not being able to do all the procedures that are facility might be able to handle so I think long term is intact.

<unk>.

I think 140 is too high.

Just.

To put it out there right I mean, they did $100 million to $103 million last year with 12% that in the fourth quarter.

So those two numbers nothing about those two numbers would suggest that youre going to grow by 40% or 50% this year.

And so as I've tried to say already the manufacturing issues in terms of manufacturing product with two years of dating is behind US we have that.

What we have to clean up and why it will be hard to give monthly numbers well first of all the way. The current rebate program that we're honoring by the way, while we replace it with our own program.

That program doesn't allow you to actually have a final accounting of the of the numbers until the month is over.

So yes in the quarter is over and so there would be no way for us to give you a monthly accounting there we will hopefully we'll be able to provide some ranges as Charlie said in the context, but there's no way for us to to have a firm handle on exactly that.

In the very short term.

Theres some theres some things in the marketplace that we just are cleaning up relative to dating and some of the way the product was being handled in the marketplace.

But that will all be behind us shortly so.

If you would just think in general terms and you were thinking about our products growing by 20% on an annual basis I think thinking about so rather that same way would put you into the right place.

And the second part of the question Dave.

Yes, the second part around.

Well, it's sort of answered part of that as well right. So what what was being done was a pure rebate.

Great you ordered so many boxes in.

And.

Yes.

And the rebate grew as the number of units grew.

There is a bunch of problems with that from an operating system perspective right.

You, let inventory run out to zero until you can get the big discount or the big rebate at the end of the quarter.

<unk>.

This is a fairly expensive drug at 500, plus dollars a unit so expecting that are our customers, especially in our office based practices are going to order.

Anything close to a 100 boxes all in one order is is just not practical right. We would rather put you in a system, where you will get a discount based on volume and you know what that discount is because it's going to be for at least a year.

And so the hope is then allows you that you would order it when you need it and as we've said before we have people who order EXPAREL three times a week.

You would you would want your customer to order enough inventory, so that theyre going to go through the next 10 days or so.

No that they can order it anytime they needed at the same price rather than running the risk of running out and then having a ton of product and then running the risk of youre going to run out again.

And that's what leads to the.

The center ordering inventory that they are borderline, whether theyre going to use or not right and that's where the data comes in right. If you order a lot of it to get the the total rebate the biggest rebates with 10, but then you don't use it all because of Covid and the fact that patients that come into your office and you end up having inventory that's short dated.

That's out of date, and obviously that we have an obligation and to work with our customers to take that back even if we're not the ones to talk to them and Thats, where we are if that helps you answered yes that was very helpful.

I can just have one final follow up on EXPAREL could you discuss the opportunity to get on high dose going again, and we're already seeing it applications for those.

Yeah, I'll give you a little bit more than that right. So the low dose is really basically what it is is a spinal right and so it will be for.

A very simple way that we can produce pain control in patients where spinal analgesic is currently being used and then the corollary to that then is.

Can we produce a lipid particle that can take more bupivacaine than the current $13 three milligrams.

And.

And EXPAREL and the answer to that is yes, and so we've got a a particle that has roughly 40% more bupivacaine on it and then the way. These things are manufactured we can change the triglyceride component of the product. So that these lipid particles that are more.

Houghton become available to the sensory nerves on a longer term basis and so we think based on the early data that we're going to have at least five days and it looks like it's going to be longer than that and so what we'd be addressing then is.

We hear from from ankle surgeons in foot and ankle surgeons. The three days just isn't enough when you operate on somebody's ankle.

There is a number of.

Facial indications in oncology indications where.

It's an open procedure say youre doing in debridement.

And the Doc would just like to be able to provide.

Longer term of non opioid pain control. If there was some way for them to do that so if you thought about doing a lung resection. For example, youre in there is there someplace that can put this stuff so that the patient would get a week instead of three days. That's the question. We're trying to answer we have the product that we've got to go on and do all the rest of this stuff.

Thank you.

Thanks, a lot.

From Jpmorgan, we have Christopher neighbor. Please go ahead.

Great. Thanks for the questions. So.

So the first one is on the electric procedures shift from Acer PD <unk> PD in the ASC setting and so what key trends youre seeing in this channel and any omicron specific impact that you would note.

Also just going to kind of get a better picture around.

Correct.

Procedure volumes.

Across each of those channels.

Growth rates are in those respective markets.

And then maybe for the second question.

Oh.

Could you maybe give a bit more color on the 2022 Opex guidance and the question of deal synergies.

You talked about the 3% target for deal synergies.

Achieving that in 2022, where do you stand versus those initial expectations, what the <unk> guidance, just trying to get a sense of what's baked in there and.

To what extent.

Could there be further upside.

On the Opex guidance, maybe just any more color you can provide on the cadence of opex through the year.

Thanks, Christopher I'll take a shot at the first one and.

And hand, the cellphone Charlie here with this very sophisticated system we've got.

So real specific data and I'll remind everybody that the <unk> data by site of care and by procedure is six months delayed so what I'm sharing with you now is August of 2021 data but.

If we remember August was a horrible month I still think it's all Directionally correct and clearly allows me to answer your question.

With a lot more color, which I think is helpful for everybody.

So if we look at.

Let me see I'm, just going to give myself a second piece of data here. So I don't confuse the heck out of everybody here.

So let me tell you overall.

If you look at all procedures.

Hospitals are.

50 50.

Both.

Orthopedic, what we call harsh bony surgeries and soft tissue surgeries and theyre growing at a mid single digit.

If you look at <unk>.

They are us.

Slight bias towards soft tissue, which is what we would expect given the answer what we tried to talk about on the call. It's about $55 45.

And it's growing by 13%.

And in the ambulatory surgery Center.

It's 75% ortho 25 soft tissue and it has grown by 18%.

So you can see.

A clear bias and what you see inside those numbers Christopher is.

That the insurance companies are.

Actively moving their large painful profitable procedures right. So if you can save 35% on the cost of care. There's a huge difference between doing a 500 dollar hernia and doing a $15000 NIE.

And if you can do a $40000 spine now youre really talking right and so that's what's going on in the marketplace and Thats why you see these soft tissues.

Gravitating more towards <unk> and into the hospital.

So if you have any follow up questions. Please come back I'm going to hand, the phone to Charlie to answer your question on Opex.

Super helpful.

Yeah.

So I think one of the questions you had on Opex was overall timing is that what you were looking for.

<unk> okay.

Okay.

So from a timing perspective, I don't have my quarterly progression in front of me with this phone hiccup. This morning, who are all rushed into one little conference room.

I can get back to you I don't think Theres anything unusual I would just look at past trends.

And expect them to follow probably a similar path and if that's not right I can get back to you.

Just one question right.

I think.

Go ahead go ahead Im sorry.

I was just going to say.

Okay.

I was just going to add.

You said, 3%, 3% was really what we were talking about in terms of gross margin enhancement on an annual basis. The way we think about.

About opex is that.

Net net we think in something in the mid single digit range. So the whole idea of the story here is gross margins heading towards 85.

Revenue.

High teens.

Opex a third of that.

If youre thinking about it in the broadest terms strike rather so I don't want you to think that that 3% was not related to opex. Overall it was related just the gross margin improvement okay.

Yes.

Great and then.

On the Opex front, how much how much does the deal synergies are really captured upfront.

Is there any additional synergies you should be expecting further later data in 2022.

So I have to tell you I am really pleased with the with organization and our quickness with which we've <unk>.

Implemented changes and starting to bring things in so the 2022 guidance includes significant synergies there there might be.

<unk> three $4 million better that we do next year. There are as I mentioned in my script. There are some transitional activities on the G&A side, mostly we have overlapping things for the next six months or so.

As we fully transition, but after that I have to tell you I think we've done a great job with synergies. If you go back and I tried to lay out in my script a path for you guys to follow from a top line margin and synergies perspective and.

What we said when we acquired the company was.

That we expected.

It could be highly accretive and it really needed to capture 30% of our target.

Yes.

Breakeven on this and we have well exceeded that at this point so.

I don't think its going to be significantly different going forward and I am pleased with where we are.

That's great context, maybe one last one for me.

Maybe more on the M&A and the business development side. So I realize that you guys are just completed reflection deal, but I think you guys talked about being active and we've seen a pretty meaningful pullback in valuations for both early stage and commercial stage companies.

Maybe maybe any opportunities you're seeing for acquisitions, either on chronic or acute pain space.

And then maybe what's the profile of the asset.

That that you guys would be looking to acquire.

Yes, Thanks Christopher.

They are really falling into two buckets.

There is there is things like spine biopharma whether.

Theyre looking into degenerative disc disease, where the seven amino acid peptide that we think can turn off the degenerative process.

Those kinds of assets are meaningful.

We've made an investment in that company and there is a target profile and hopefully on attainment of that type of profile that would be further activity.

The nature of what you are talking about right. There is a number of places where.

We're working with folks on.

Different products for neuropathic pain score.

Yes.

For recalcitrant pain.

We have a whole bunch of different team opportunities. Some are very broad like diabetic neuropathy or <unk>.

Peripheral neuropathy and some of them are highly specific like specific spine types of pain, and so Rob and his team are active across a broad spectrum of opportunities.

I would agree with your comment on pricing as it relates to commercial resources are commercial assets.

I haven't seen anybody in the private side say that their asset isn't going to change the way, we practice medicine in the world and they're worth.

A lot more than anybody thats been around the block for 10 minutes thinks there were so.

The private market in my view needs needs a lot of thoughtful reflection on what their assets are actually worth in this economy.

Most of the stuff that we're working at is in that environment and folks are still very proud of their assets.

And so we'll have to see where that goes but.

The majority of deals that we don't do.

Because of just a crazy valuation than.

People that are pre manned comparing themselves to a product that's on the market.

In terms of the market cap of the company I mean, it's just crazy stuff Christopher.

It's unwieldy in some cases.

Great.

That's super helpful context, I appreciate you guys taking my questions.

Good good thank you for the question.

And.

And from <unk> Securities, We have Craig Frazier. Please go ahead.

Good morning, folks and thanks for taking the questions.

On the pediatric market can be doing more in terms of sales calls or marketing spend to drive user or would you say the pediatric effort is pretty well resource for now and then on <unk>. When do you expect to have visibility on the regulatory pathway for asbestos the indication.

Yes.

Yes, Thanks, Greg.

So.

<unk>.

I mean, if you put additional resource out there youre always going to get some additional revenue. The question is whether it's.

Whether its profitable revenue or whether youre just turning revenue.

I think we have to be careful here.

And so we launched with a team of nurses.

All.

Hospital critical care nurses, ICU pediatric ICU nurses et cetera, and we were very careful to let the the leaders in pediatric pain control talk to their constituents their fellows and their residents and staff about.

How theyre going to use this and how they're going to replace pumps and catheters and things like that so.

The sales force is has been turned on and I guess since August now early September maybe the bigger sales force has been working with the community hospitals and the smaller centers.

But I think the number of educators that we've got and the number of Kols key opinion leaders that we've got in each of the specific disease categories.

Suggest that the right way to do this is to take our time and to do it very well so that we have but we don't put any little guys in harm's way so.

We are happy with the pace I think.

As Dax continue to use EXPAREL in different ways for different procedures and invent new blocks for how we can do things in kids that might be a little bit different than adults.

I think if we weren't any faster Greg we would run the risk of cutting our legs off long term I think the best thing for us to do is keep doing what we're doing and training people and making sure that a hospital is fully prepared to use.

EXPAREL anti aware all of our products basically but the question here is largely around peds.

And so I don't know if you got anything to add to that ill. Let me come back let me answer the second part of the question, which I can't remember what was the second.

Oh, yes, fastest regulatory well, what I'm going to get I'm going to give the phone the ROI Winston who is our chief Medical officer, who is here with us and he can answer both those questions.

Good and thanks for the question, so I think starting with the regulatory pathway for specificity.

In the middle of discussions with the FDA right now on exactly what that is is keep in mind I have era has a very very broad label at this point.

It's really only a small addition, because it's the same process it's treating it.

Could be treating the same nerves, even just for a different purpose. So we feel that the.

The 500 10-K pathway is fairly well defined for this.

We feel it'll take one relatively small study and we're in the planning stages of that now we have.

A lot of engage kols, who are guiding us on what that really looks like for us.

I always hate to throw out a timeline, but I do think youre going to see a lot of very fast progress in spasticity and we have a lot of interest already in the community since the Investor day.

Several months ago.

We find it to be one of the most frequently asked questions. We have and it's surprising to me to see how many people whether it's.

Elderly friends and relatives with strokes that have have specificity as a byproduct of that or or families with kids with cerebral palsy, who now are going to have a treatment modality that is.

Really ground.

A groundbreaking so so we're on it and we're engaged and I would expect by this by the next earnings call to have a lot of very specific granularity on that.

Yeah. So piece continues to grow at a rapid rate we have.

Several collaborative studies now starting one with the Cleveland clinic looking at major spine surgeries for kids with scoliosis.

One of the leaders in doing that and another one with.

Shriners Children's hospital, which.

Could go throughout all of their campuses and then.

We have a meeting which was postponed by the FDA because they're I guess, they're overwhelmed with everything going on but we have a meeting towards the end of March to define the regulatory pathway for the expansion of the pediatric label down to.

Hope somewhere around six months old.

To include nerve block and all those kids I think in pediatrics, the combination of lower extremity nerve blocks and the rest of these tissue plane blocks like tap and particularly erector spine. A really are the pathways that people are using now and if you look at the literature there is.

Almost a week doesn't go by where someone doesn't publish application report about using EXPAREL for some new indication.

In pediatrics, which is very exciting to us and the major pediatric centers, Texas children's the largest children's hospital in the world.

Has now come online as a user in multiple treatment modalities and I think we're going to see it.

Because we're the leaders in the community go everybody follows.

And Greg I would just close that ROI raised an important topic for I think everybody on the call to at least have a frame of reference on we've had several of our FDA meetings delayed for.

All the different things that they're going through.

And the same kind of staff shortages that we've that we've referenced in other places so.

It's very difficult to pick to figure out what the timeline is when it's very difficult to know exactly when you're going to be able to meet with the FDA. So.

Just something else to keep in the back of your mind.

As we go forward.

So okay.

Thank you.

Thanks, Mike.

Thank you and we'll now turn it back to Dave stack, Chairman and CEO for closing comments.

Thank you Bryan I'd like to thank all of you for participating and listening to today's conference call. We look forward to keeping you updated on our progress next up for US at the Barclays Conference next month, Thank you all and stay well goodbye.

Thank you ladies and gentlemen. This concludes today's conference. Thank you for joining you may now disconnect.

[music].

Good morning, and welcome to the fourth quarter 2021, <unk> Biosciences, Inc. Earnings Conference call. My name is Brandon and I'll be your operator for today at this time all participants are in a listen only mode. Later, we will conduct a question and answer session during which you may dial star. One if you have a question I will now turn the call over to Susan <unk> head of Investor.

Our relations and Susan you may begin.

Thank you Brandon and good morning, everyone. Welcome to today's conference call to discuss our fourth quarter and full year 2021 financial results. Joining me on today's call, our Gamestop, Chairman and Chief Executive Officer, and Charlie Reinhart, Chief Financial Officer before we begin let me remind you that today's call will include forward looking statements based on CRU.

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 website. One last piece of housekeeping local Internet went down this one.

And instead of the Sierra team is participating via cellular device, we ask for your patience. The sound quality is limited at any point with that I will now turn the call over to Dave stack. Thank.

Thank you Susan good morning, everyone and thank you for joining us we'd like to devote most of the time today to your questions. So I'll begin today's discussion with a brief prepared remarks that cover recent business highlights we remain proud of our team as they continue to perform and deliver both for our patients and our investors. The progress we made throughout 2021 positions us.

For even greater success in 2022, we have a series of value driving milestones in the year ahead, and we couldnt be more excited for the future of this era we.

We ended the year in a strong position with a diversified portfolio of unique safe best in class products that support health care provider's ability to provide low or no opioid therapies to improve patient experiences along the neuro pain pathway.

Our achievements in 2021 highlighted by growing EXPAREL sales the acquisition of collection and an exciting pipeline of innovation that have captured or that are in place to seara in the forefront of opioid sparing pain management.

<unk> provides us with a highly complementary commercial asset for the treatment of osteoarthritis.

Pain, while also increasing our presence in chronic pain.

With more than $100 million in sales in 2021, and a significant potential for an even greater contribution moving forward. So that it gives us great confidence in its long term prospects as a high potential durable product for <unk>.

Importantly, this acquisition Diversifies, our revenue stream enhances our topline and we believe that will provide meaningful synergies as we expect to drive substantial near and long term accretion to our cash flows and earnings turning now to the progress we made with EXPAREL I'll start with the recent achievement of very exciting miles.

Very exciting milestone over 10 million patients have been treated with EXPAREL since launch in the United States alone.

Our team achieved record EXPAREL sales of $570 million 507, I'm, sorry, $1 billion with adjusted EBITDA margins of 37% in 2021, marking our eighth consecutive year of positive adjusted EBITDA. These are important accomplishments as we have been reiterating EXPAREL based <unk>.

<unk> are enabling the regional anesthesia Revolution, which is our number one growth driver regional anesthesiologists are developing new blocks protecting old blocks and using imaging to ensure successful patient outcomes are state of the art training innovation facility is supporting this market transition with real time best practice knowledge.

Transfer and is helping accelerate the surgical migration to outpatient sites of care.

In addition throughout 2021, we significantly fortified Rx per our IP estate with two new Orange book composition patents that are now listed in the FDA Orange book.

Recently, we received four new notices of allowance from the U S. Patent trademark office. These are all composition patents that we will submit to the four Orange book listing after which there will be a total of six EXPAREL patents listed in the Orange book with expiration dates of January 'twenty.

2041.

Interestingly pediatric spine is triggering a halo effect and adult procedures spine surgeons are a tight knit group of like minded surgeons and the technique for an erector spine. A block is the same for children and adults. This provides us with an opportunity to establish EXPAREL ESP regional blocks as the cornerstone.

Best practice enhanced recovery pathways for both adult and pediatric spine surgeries.

<unk>.

This is key and will factor into our ability to gain traction in this important market without having to expand our call points and should help simplify market access.

And rapidly expanding EXPAREL penetration, we see significant opportunity for continued growth.

Further positive experience and outcomes in C section procedures are driving demand and gynecologic oncology and breast procedures as we all know mothers are the Ceos of the household and a positive birth experience with EXPAREL will drive a lifetime of opioid sparing decision, making for other procedures.

<unk> based multimodal <unk> protocols.

In addition to the success of our growing EXPAREL and <unk> franchises. We are also making great strides with our <unk> franchise.

The only cryotherapy option available in a handheld design, allowing it to be used in a variety of institutional settings in environments, where you could not use the previously available console based cryo analgesia systems.

In 2021, we launched <unk> with our partner in Canada, and with <unk> resources in the UK and EU. We also use last year as an opportunity does that design a more user friendly next generation device and develop additional smart tips for new indications, we now have a specific tip ready for human pilot studies.

Our medial branch block as a treatment for chronic low back pain we.

We are also preparing to evaluate <unk> as a treatment for spasticity, which represents a very significant long term opportunity.

Enrollment is progressing in our two phase III low it's low extract lower extremity nerve block studies for EXPAREL for the strides studies.

Covid related delays in the fourth quarter of last year has shifted the expected timing of our NDA submission to the fourth quarter of 2022, we believe the lower extremity nerve block label is at least as significant as the upper extremity extremity market with around 3 million procedures, a year and an addressable market of approximately $100 million.

So <unk> the first and only FDA approved treatment for osteoarthritis knee pain, we are focusing on three areas of development in 2022, and we'll be meeting with the <unk>.

Q4 2021 Pacira Biosciences Inc Earnings Call

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