Q3 2022 Pacira Biosciences Inc Earnings Call
Chairman and Chief Executive Officer, Roy Wednesday, the Chief Medical Officer, and Charlie Reinhart, Chief Financial Officer additional members of our executive team will join for today's question answer session. Before we begin let me remind you that this call will include forward looking statements based on current expectations.
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 SEC filings, which are available from the SEC IR website with that I will now turn the call over to Dave.
Thank you Susan good morning, everyone and thank you for joining us I will begin todays discussion with prepared remarks to cover recent business highlights before turning to your questions. We are pleased to report our third quarter results, which were a success across all measures, including revenue growth increased adjusted EBITDA and value creation on our clinical and regulatory front.
The recently reported positive results of our two phase III lower extremity nerve block studies. We are we are poised to deliver several additional near term milestones across our durable opioids bearing portfolio.
Third quarter, EXPAREL sales were $132 $6 million with expanding utilization across all target markets and sites of care and year over year growth of 9%, despite a challenging macro environment.
The third quarter also marked 11 million patients treated with EXPAREL to the United States.
We began to see improvement in year over year X pro growth trends beginning in mid August , culminating with September average daily sales exceeding 2021 by 13%.
<unk> sales combined with operating discipline allowed us to deliver significantly positive adjusted EBITDA of $55 million.
Marking our 20 <unk> consecutive quarter of positive adjusted EBITDA.
We are pleased with this impressive record and the execution of our team in a challenging operating environment. We can unequivocally say that despite these unpredictable market conditions, but seara has consistently delivered.
Throughout the quarter, we continued to invest in key initiatives to further improve gross margins across our space and unique opioids bearing portfolio.
EXPAREL, we are now running test batches for our 200 leader manufacturing suite in San Diego and remain on track for a supplemental new drug application submission in 2023 seeking approval of this new facility, which will be a significant step in improving EXPAREL gross margins.
Our neutral ready to fill line is in <unk>.
Qualification phase, we expect this line to improve future quality and yield to support anticipated growth, Brazil writer finally, our new Io Vera contract manufacturer is now fully online with lower unit costs benefiting margins to support future demand.
Turning now to some more specifics for our <unk> pro franchises regional annulled feature remains our number one top line growth driver and continues to drive the paradigm shifts and patient care with long acting EXPAREL based nerve and field blocks accelerated recovery types and enabling safe day surgeries.
Importantly, we expect additional expansion in the regional analgesic market. Following the recently announced positive trials for lower extremity nerve blocks.
On the reimbursement front, we are supporting legislation such as the no payback to provide Medicare reimbursement for non opioid post surgical pain treatments in outpatient settings and September advocates from 11 States and Washington D. C met with policymakers on Capitol Hill, the voice the importance of this bipartisan legislation.
<unk> passage of no pain would provide CMS reimbursement for 70% of our total addressable market for EXPAREL with commercial and self insured payers expected to follow.
We are also supporting initiatives to provide greater access to non opioids for our military and government employees and retirees through similar language to no pain that would provide coverage to roughly 10 million lives enrolled in tricare.
While it is impossible to predict government action on any with any level of certainty approval for any of these activities would be pure upside to the EXPAREL business the.
The strong level of interest in training programs at our innovation and training center in Tampa underscores the market's eagerness for education and training around EXPAREL based regional approaches year to date, we've had 191 inbound requests from institutions for training of their anesthesia and surgery teams for selected blocks with erector spine eight.
Transfer Pseudomonas plain and pectoralis, the most frequently requested workshops.
There is also a significant growing interest in drug free nerve blocks with Io Vera These educational programs for EXPAREL I Avera also provide increased visibility to expand our <unk> customer base for surgeons seeking an alternative for non opioid office based osteo osteoarthritis treatment options.
Our second innovation in training facility at Houston remains on track to open in December and we expect this facility to have an equally positive impact on expanding EXPAREL in Niobrara expertise among clinicians with a focus on Texas, which is nearly 20% of our EXPAREL business Importantly, we continue to advance our robust patent.
<unk> around EXPAREL by fortifying, our intellectual property with new patents in extended protection to January 22nd of 2041.
We now have eight patents listed in the FDA Orange book and recently received a notice of allowance for a nice pattern, which we expect will issue very soon with.
With no commercially viable alternative for long lasting non opioid post surgical pain management EXPAREL provides improved patient care as well as a durable revenue stream for continued expansion of our commercial products and robust pipeline.
As a reminder, any generic filer would have to demonstrate that they do not infringe on every claim within eastside patents as well as any future paths.
From a new customer acquisition standpoint last quarter, we discussed the rollout of an agreement with one of the largest faith based private health care systems in the United States. This National Health system operates in 19 states with more than 140 hospitals and approximately 30 ambulatory surgery centers I am pleased to report that EXPAREL is now on formulary at 100% of the <unk>.
Hospitals in this system as a field our nerve block in both adult and pediatric patients since launching this partnership ex proudly has seen a significant increase in ordering accounts within this system and we expect these positive trends to continue.
In gears to pricing with increased manufacturing capacity and improving gross margins. We are now offering 340, <unk> pricing, which opens the opportunity to 5200 accounts that are not currently purchasing EXPAREL under the 340 <unk> program.
This will provide meaningful upside to the business and the opportunity to extend the reach of EXPAREL to uninsured are low income patients two particularly vulnerable populations, where access to opioids sparing regimens is key.
Even when a short acting spinal anaesthesia issue alive.
Breast and plastic surgeons are seeking ways to optimize their protocols to incorporate EXPAREL to manage pain and minimize opioids to ship procedures to the outpatient settings.
We are also seeing growth and interest in rector spine eight blocks for gynecologic oncology procedures to optimize pain management for this patient population, eliminating the use of opioids, which can also downgrade.
Uhm downregulate, the patient's immune system, especially important in oncology procedures.
Our pediatric initiatives center on our educational programs that highlight the pristine safety and efficacy profile of EXPAREL. These.
These programs include the pediatric exchange, which features internationally renown spot leaders who share their insights on their procedure techniques. The a monthly interactive Webinars. We're also seeing increased demand for EXPAREL among pediatric spine clinicians. We believe this advocacy as a direct result of several podium presentations on.
Use of EXPAREL of scoliosis and spine deformity procedures with three positive data presentations at the Scoliosis Research Society annual meeting this past September .
Turning to the oral and maxillofacial marketplace, where we recently announced our initiative was severe than to provide expanded access to EXPAREL for patients undergoing procedures ranging from third molar and full mountain attractions to dentures and implants. This agreement will facilitate easier access to long acting EXPAREL nonopioid pain control.
For over 1800 dental practices within their network. We are working on several similar partnerships across the portfolio and look forward to sharing these with you soon.
Outside the United States, we continue to make slow but steady progress we.
We recently appointed a new general manager for these territories and our team has been further developing the business in securing approval up for EXPAREL access from hospital pharmacy departments, we have a significant opportunity in these markets for EXPAREL to expand rapid recovery after surgery to positively impact the dynamics related to <unk>.
Waiting lists for elective surgery, and the U K and Europe .
We also received formal approval from the European Medicines agency for marketing authorization for an expanded indication of EXPAREL to include using children age six and older.
On a clinical front, we announced positive top line data in September for our two phase III registration studies of EXPAREL for lower extremity nerve block procedures. The first study with a single dose femoral nerve block the abductor canal for total knee arthroplasty and the second was a single dose sciatic nerve block and the Pope popliteal closer for Bunionectomy Bo.
Studies a priest achieve.
Chief primary and secondary endpoints of statistically significant reductions that post surgical pain, an opioid consumption through 96 hours. These.
These data provide a strong support for the supplemental new Douglas drug application, we are planning to submit in the first quarter of 2023 <unk>.
Winston our Chief Medical Officer will provide additional color on these studies and a couple of minutes.
We also have a number of near term value creation programs for Io Vera with additional smart tips for spying and low back pain as well as a very exciting program for the treatment of specificity as well as the pain of specificity, Brazil Reta, we will launch political programs for the treatment of diabetic patients with osteoarthritis knee pain as well as a shoulder arthroplasty trial.
Right well comment on these programs as well.
We continued to advance our proprietary multiple particular liposome pipeline, we expect to complete our phase one study of our EXPAREL program for interest equal administration in the first quarter of 2023.
We also expect to initiate initiate trials for multi particular, lithosol dexamethasone formulation and low back pain in the second quarter of 2023 as well as our 20 milligram, mostly particular liposome bupivacaine formulation as a nerve block or fuel blocked for longer lasting pain and chronic pain in the third quarter of 2023.
Turning to our earlier stage acquired assets. We recently finished analysing data from our phase one studies of PCR X two O one and P. C. R X three O one, which we acquired as part of reflection transaction.
Two O. One is a novel and try our tequila gene therapy product candidate that provides I'll, one or a for osteoarthritis three O. One is a locally administered may have one seven inhibitor product candidate formulated for extended release and a thermal sensitive hydrogels.
Due to a lack of clinical efficacy formulation challenges and commercial by ability. We have made the strategic decision to no longer pursue the clinical development of three O. One.
Based upon very compelling initial phase one efficacy and safety data for two O. One we are working with the investigators and scheduling an F. D. A meeting to discuss the regulatory password forward for osteoarthritis of the knee.
A very important and exciting addition to our durable nonopioid painted pipeline.
In addition to this exciting progress taking place within our earlier stage pipeline. We also have several important near term low risk expansion opportunities within our commercial portfolio to improve patient care for pain management and regenerative health.
Now I'd like to turn the call over to write Winston our Chief Medical officer to summarize some of these key value, creating milestones that we expect to deliver in the next year right.
Thanks Day. This is an exciting time not only for us if the Sarah but for the many patients providers and payers seeking safe and effective opioid free options for pain management.
I'll start with lower extremity nerve losses date mentioned are two registration studies. We're both successful in our most recent reported study sciatic nerve block in the popliteal fossa patients who received a single dose X roadblock has significantly lower pain scores and required significantly fewer opioid fantasia.
<unk>, who received a bupivacaine blocked for the 96 hours after surgery. These.
These results were highly.
Significant with P values of less than 0.00001 expertise demonstrated statistical and clinically meaningful superiority in terms of opioid free patients versus if you put <unk>.
In our study is ephemeral nerve block in the abductor canal for patients undergoing total knee arthroplasty. The extra parallel group also achieve significantly lower pain scores, while requiring significantly fewer opioids versus bupivacaine for the 96 hours. After surgery. These data were also highly significant with a fever.
Value of less than 0.01.
As for next steps will be submitting an S N da to the FDA for expansion of our label to include both sciatic and femoral nerve block and the Doctor came out with the submission date in the first quarter of next year. We are planning for approval in the fourth quarter of 2023. These.
These studies clearly demonstrate four days of clinically meaningful reductions in both pain and opioids versus the active comparator bupivacaine.
We believe adding these two additional nerve block indications to our label will significantly extend our reach into surgeries are the knee media lower leg and ankle representing in excess of $3 million additional annual procedures. We are now working with key opinion leaders to publish these data to deliver strong evidence in the literature.
And implement them into practice guidelines for EXPAREL as a single dose nerve block in lower extremity procedures.
On the pediatric front, we now have alignment with the F. D. A N <unk> regarding next steps for adding patients zero to six years of age to R. U S N E labels.
The study is expected to begin next year and will involve three age based cohorts, we look forward to minimizing exposure to opioids for this vulnerable population.
Turning till Zilretta, we're preparing to launch to label expansion studies next year. The first will be a study in diabetics with knee osteoarthritis and we'll compare zilretta two immediate release triamcinolone acetonide. After analyzing the data from a section study previously completed we believe there is tremendous.
This opportunity and providing the diabetic and pre diabetic community and ensure articulate steroids that improves efficacy and is significantly safer with reduced <unk>. We are also finalizing our protocol to study zilretta and shoulder osteoarthritis after receiving positive feedback from key opinion leaders.
This study could make Zoe rather the first and only approved steroid for Houston shoulders, we expect to complete the diabetes trial in 2023 and the shoulder trial in the first half of 2024.
These studies will establish Loretta as the gold standard in patients with diabetes for both knee and shoulder by demonstrating superiority versus immediate release triamcinolone acetonide.
Importantly, these two studies may also provide incremental opportunity for enhancing zilretta commercial reimbursement.
We also significantly advanced our regulatory registration activities fire very and specificity in September we met with the FDA and now have clarity on study design a pathway to approve for Io Vera as a treatment for specificity. The study will evaluate <unk> versus sham in adult patients and is on.
Track to launch in early 2023 with enrollment to conclude before the end of the year to support a five 10-K marketing approval to remind you pain associated with specificity is already currently on label and we started educating physicians specialists around the potential value by of error in this study.
We believe using my old era to treat specificity will completely disrupt the current treatment paradigm.
Bringing tremendous relief to patients and value creation for <unk> shareholders.
Lastly for Io Vera we recently completed enrollment in the study evaluating alvero as immediate branch cloth to treat low back pain and expect to report data and launch the new smart tip in 2023.
With that I'll turn the call over to Charlie for his financial highlights.
Thank you <unk> good morning, everyone I'll start with an update on sales and marketing trends.
Starting with EXPAREL, we had a solid quarter with year over year increase in sales of 90%. Despite challenging market conditions to date, we have not seen any impact from new market entrants on our EXPAREL based business or our ability to generate new business, which is not surprising given the role <unk> plays in facilitating the markets on.
Going shipped to regional analgesia, an outpatient sites chair.
With more than 11 million patients treated in the U S. A well established safety and efficacy profile and a significant exclusivity runway providing significant barriers to entry. We continue to have great confidence in the long term market leadership for X Brown.
<unk> continues to be a meaningful addition to the pursuer portfolio with third quarter sales $26.5 million. We continue to expect improving surrender sales trends as we brought in education and awareness around its value in treating patients with unique <unk> such as diabetic patients.
<unk> now that the rollout of the gentoo devices underway and we continued to transition of our customer base to this improved device, we expect demand in sales growth gain momentum going forward.
We're also remain optimistic in the <unk> opportunity, new indications, such as spastic and medium branch blocks, where we're making new clinical investments.
Trying to gross margins on a consolidated basis, our third quarter total non-GAAP gross margin percentage was 72%, which is comprised of non-GAAP gross margins of 74% for EXPAREL, 76% per cell ran up and 35% Fry Rivera.
<unk> gross margins include an estimate of the plan cost to replace current generation, one hand held devices with the new gentoo device.
Third quarter Zilretta markets were impacted by the timing of one failed manufacturing life, which aligns with our full year expectations, excluding deslatte third quarter, Zoe rest of non-GAAP margins would've exceeded 90%.
Lastly, in the third quarter extra margins were impacted by supply chain quality issues several lock failures caused by faulty.
As well as write offs of certain backup parts previously purchase to mitigate potential COVID-19 related supply chain risk.
These charges were specific to the third quarter with no impact on the lives that were released.
Looking ahead, we expect fourth quarter margins to rebound in the high seventies, resulting in full year margins one to $2, it's better than 2021, and then resume a 2% to three <unk> per year improvement until we reach full year total gross margins in the mid 80% range.
While we are currently not providing 2022 revenuer gross margin guidance given continued market uncertainties, we remain committed to the transparency of reporting preliminary monthly product sales to share intercourse trends with you we.
We will consider adjusting this practice for all three products as visibility improves.
Turning to expenses third quarter of non-GAAP , R&D expense $17.6 million, reflecting ongoing investments in our clinical stage pipeline.
Today, we are we rent reiterating our full year non-GAAP R&D expense guidance of $75 million to $85 million.
Our third quarter non-GAAP SG&A expense was $52 million.
Currently expect full year non-GAAP SG&A expense to come in at the low end of our guided range of 220 $230 million.
Interest expense was nine $9 million for the third quarter of 2022 to.
To remind you most of the interest expense relates to our term loan the financing, which is a floating interest rate a sofa plus 700 basis points. The remainder of interest expense primarily related to our convertible notes for modeling purposes going forward based on current interest rates interest expense will be approximately $10 million per.
Sure.
Other expense was $10.6 million for the quarter and includes a 10 million dollar impairment charge for an equity investment.
Turning to taxes are gap P&L includes a third quarter tax expense of $2.8 million, which translates into a gap effective tax rate of 133%.
This was driven by permanent differences related to expenses not allow for tax purposes, namely the operating loss of our U S. R X U S business and the right off of the equity investment.
For non-GAAP purposes are adjusted results reflect an effective tax rate of 29% for the third quarter and 27% year to date, we expect effective tax rate for our full year adjusted net income for 2022 of 26%.
And lastly, despite challenging market conditions, we delivered or another quarter of significantly positive adjusted EBITDA of $55 million and.
In summary, Sir continues to operate from a position of financial strength.
Despite ongoing headwinds we continue to deliver impressive financial results and remain bullish on our five year plan per year over year top line growth in the mid teens in 2023 and beyond gross margin improvements to the mid 80% range modest year over year increase in operating expenses and and.
And adjusted EBITDA margins exceed 50%.
That continues our prepared remarks I'd like to now turn the call over to the awkward.
Greater begin our Q&A session operator.
Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press Star One line on your telephone and wait for your name to be announced please stand by while we compile the Q&A roster.
Our first question comes from Gregory rank of RBC capital markets. Gregory Your line is open.
Great. Thanks, Good morning, Dave and team. Thanks for taking my question and congrats on all the progress.
Gay then maybe more of a question for Charlie.
Well, we appreciate all the color about the.
The business as you look to fourth quarter and of course, 20th 23, and while understanding you will maintain the status quo on on the pre reporting and.
Appreciating the the uncertainty with the larger dynamics I'm just curious how are you thinking about the process for getting comfortable with predictability and for forecasting and a greater increments beyond beyond monthly what are those pushes and pulls him how would that process be influenced with with the evolving dynamics there.
Thank you very much.
Thanks for the question Greg.
You know what we see in the market still is is just not predictable and what we've seen and even if we talk about recent.
Recent bumps.
We will have a very strong week, followed by a week that is not what we were expecting followed by a strong weak and so what we're really looking for in terms of improving the outlook is just some consistency on the on the weekly numbers. So that we can feel like we can give a number with salt.
Some certainty that we are able to predict what's going to happen in the short term in itself.
You know, we like given out the monthly numbers that does foster a good <unk>.
Discussion and exchange with the with the analyst community, we would really very much like to be.
Be providing annual guidance for revenue, but right now.
I can't tell you, Greg that I that I would be comfortable and if we were we would have to come with very conservative numbers.
Just because Monday to Monday, just to give you. An example over the last two weeks the delta of difference between those two Mondays was 40%.
And so you know the weeks end up being the.
The first couple of weeks in October we're we're not strong at all after a very strong September and then we had a really good last two weeks in October so I don't know how to carry that forward in an appropriate way to to give us some confidence to the market. When we just see this continued variability everything's growing everything's.
Doing fine the business is strong it is.
Just not predictable on a week to week basis.
No that that that makes it a great deal of <unk>, we appreciate that and maybe if I could they have just sneak on and on Io Vera and that's certainly nice to see some of the progress adjourn too of course, and you mentioned specificity and the expansion there when we think about and I'm very contribution longer term.
<unk> N as you had laid out nicely the the longer term.
Top line to 2030 across the various aspects of the business now how does how does either a factor into that I do recall seeing that uhm, the collective opportunity I think and.
In your past presentations about in excess of 200 million I'm. Just curious if you had any updated thoughts on those targets. Thanks.
Yes, yes, thank you Greg.
You know when we when we bought the Io Vera system from miles science, we talked about $200 million of the initial indications that we had.
You know I don't think it'll be a surprise to anybody that we launched this product twice with a dedicated small dedicated sales team and ran into Covid both times.
So it has not been a straight line and it certainly has not gone as planned.
Right now what we see with Iowa Vera is.
Very significant interest in the marketplace.
And to be quite candid, Greg from places that we never predicted what we gave the first indication of $200 million of total value.
So what we see with I'll Vera is there is a very.
<unk>.
Bible marketplace for blocking the pain signal from a surgical wound or from some sort of pain to the brain what the investigators in the marketplace. If taught US is that there is an even more viable marketplace or blocking the pain signal and aberrate brain signals from the brain to a body part.
And so the treatment of spastic becomes well I don't Wanna give you the wrong impression. So we have a number of indications for the use of Io Vera and pain.
Charlie and Roy both touched on immediate branch block, where we have a separate check that we are now in human.
Investigations, where we could turn the pain sigoloff for spying surgeries and spying and for low back pain, and we will continue to develop this product ads for what we originally bought with a with a better.
Nation of the device, which frankly perform fine in.
Clinical testing, but when we got it out in the marketplace and the guys tried to have it go around curves and stuff like that didn't work very well so the new devices much more predictable and much more consistent in terms of reliability for our customers and that support.
When we look at the pain of specificity, that's coming from a marketplace. Greg that basically is demanding that we teach them how to turn the pain signal off and the spastic indications for several months and so the AD boards that we've had have basically come back to us and said I'm label for the pain of stasis.
City and that will allow us to be trained on the device and trained on the techniques. While we study the treatment of spastic and as Roy outlined earlier, we think that is a relatively modest sized trial against a sham. So that we can get an indication as a five 10-K device in a relatively short timeframe while we're.
We then move onto studying the drugs or studying the device in comparative trials. So.
I would tell you know and the five year plan without.
Violating any guidance or giving any specific numbers I would tell you our expectations for Io Vera are well beyond the $200 million that we had when we bought the asset for TK and peripheral ebay.
A long answer to a fairly simple question, but I think it is important because there's a lot going on with Io Vera and it's really interesting that when Paul Wisden gives a talk anywhere in the world. We know about it within hours that people are calling and then what the units and I wanted to be trained on how to use these devote this device.
And you know below what we just talked about spastic the world experts in stellate ganglia blockade are very interested in how they turn off of pain signal again and abhorrent.
Re signal to the different parts of the body studied indication will be cardiac dysrhythmias.
But there's a lot of applications to calm we're turning off a brain signal.
Four months turns out they have all kinds of positive implications for patient care going forward.
Thank you.
One moment, while our next question Atlanta.
Our next question comes from search Bellinger at anytime.
Alright your line is open.
Hey, good morning.
Question for for data to start off.
To drill down on your prior answer regarding the continuing volatility in the market.
Just give us a little color. What do you think is driving that volatility is it still staffing shortages and and whether or not your.
T as in H O P. Neither operating at capacity.
Yeah, it's primarily staffing shortages search.
And you know when we talk to.
C E o's.
People, who are running hospitals and ambulatory surgery centers.
Staffing both for our ends and for certain areas of the country. Anesthesiologists is is basically limiting the number of procedures. They can do.
And the answer to your question is we do see some.
A modest improvement and afcs, an opening on weekends and having longer hours for things like spine surgery and knee surgery were and are built and an ability to have nursing coverage for the past year was really the the reason that they were cutting off those surgical procedures earlier in the day that would be normal practice.
We are not back to normal.
And you know we are I mean, we see the same numbers that other people see.
We get the Accuser report every Friday afternoon, I would tell you search just to add a little color having had dinner with two hospital C. E. O's in the last 10 days and talking to clinicians every day. There is nobody in this marketplace that would tell you that elective surgeries are back to where they were before COVID-19.
Okay.
You talk a little bit about targeting three or four at the hospital maybe.
Let me just.
Tell us a little bit about what that represented confirms the Tam for <unk> and what's the process and potential timeline capturing that opportunity.
So we started rolling it out bid last month surge in the response has been actually impressive we've got several dozen people could've ordered already.
You know there is roughly while there's over a thousand accounts who purchase EXPAREL.
But who don't buy it through the 340 B program, who are current customers and then there's another 5000, who are not customers and so you know we have a.
And innovate and innovation team and a deal desk and they are primarily working with the field forced to handle these inquiries as they come in.
So that we can make sure we get all the appropriate information and we and we contract with these hospitals for 340 feet. So.
It started out primarily with people that are that are using EXPAREL and we'll just purchase it under this different program under the guidelines of that program and that's not a surprise and then over the next few months we.
We expect that the number of these hospitals that are not currently purchasing EXPAREL at all will come online.
You know, it's it's I mean, our expectations urge is that this is a.
A very viable opportunity of and just to add a little color to the timing.
We now have the 200 liter facility.
When we have another 200 leader facility in San Diego's it'll be producing product as we go through 2023 that gives us the capacity to be able to make these kinds of changes and.
And we also by the way are part of the 340 B program through Zilretta. So the company already is in a position where it staffing US 340 b opportunity. So it made sense at this time too.
To add.
EXPAREL on the backside of that.
Okay.
Thanks search.
One moment, while our next question is loaded.
Our next question comes from Gary Nachman at the Ammo capital markets. Gary Your line is open.
Hey, guys good morning.
Okay can you quantify a bit with EXPAREL, how much you've been penetrating and women's health and also with P.
You think good uptake their relative to your expectations are you seeing any challenges in those markets, maybe just talk about that a little bit and then how much would lower extremity nerve block help you in terms of the market opportunity relative to the upper extremity nerve block is it all the same anesthesiologist would be doing that.
And do you think it would be adopted relatively quickly if you'll get that indication.
Yep. Thanks, Gary So you know.
Let me, let me take them separately, so we got approval for.
For Pediatrics in April of 19, and so you know where we were where we focus was on the 64 biggest.
Pediatric hospitals in America, and we've made good progress there care, it's been largely around Ah you.
You know some some special situations, largely scoliosis and spine surgery and in the Shriners system around things like cleft pallet and club foot and things like that in the immediate upped.
Uptake was around scenarios, where these kids would have been exposed to opioids repeatedly over a period of the next few years Rafe because they're the kind of surgical procedures that require you know more than one visit to the O R.
What we see now is that that's expanding and we have people who are working with there the teams and requesting that we teach them about appendicitis and.
Different chest surgeries and the driver and I'm not sure we fully understood. This Gary is really same day surgery that their impedes even more than in adults. There is a desire to treat these patients on a short term basis, but there was a real concern about whether mom and dad could actually.
We handle the pain profile.
Without the extensive use of opioids in that first post surgical life. So a number of centers are working on protocols.
And you know need to get a little bit of experience. So that they have some confidence that the blocks, if they're using and the infiltration that they're doing is actually going to provide.
Ah pain control for that first post surgical life for all the obvious reasons right.
And women's health, a little bit of a different situation.
It is obstetrics and places like.
MD Anderson and Mayo and Cleveland are leading the way here.
What we see is when we trained these folks.
And generally it's around C section here, that's the the motivator here is a shorter term stay for a land.
Obstetric surgery, right mom and baby don't Wanna be in a COVID-19 environment, and we still don't have a system, where we can do it on an outpatient basis, but we do have systems, where we could shorten the stay which is the best we can do today and what people are really interested if and when we trained these folks you see a pre.
<unk> significant halo into tech blocks or mastectomies and.
You know plastic surgeries associated with reconstruction breast reconstructions of things like that so.
It's it's a process. It's you know it's continuing to grow.
Idols were not dissatisfied with it here, but it's in the it's in the mix of all the other things that are going on in the marketplace.
It's our hospital customers.
Financially or.
Golf position staffing.
Staffing remains a major issue and so there's a lot of things going on here. So I would say given the environment that we've launched into I think we're very happy with.
9% growth so far this year and women's health and pediatrics are both the significant part of that.
Lower extremity nerve block is a little bit clearer.
And I say that because.
In many situations and I would tell you in my old situation.
The hospital pharmacy or a young an anesthesiologist is looking for F. D. A approval before they're willing to use a new product.
Very different than it was 10 years ago, when the docks, where using a product because they knew at work now they're looking for the cover of an F. D. A approval. So when we look at lower extremity nerve block our business is footing. The ankle is relatively makes it I mean, it's it's providing an opportunity there for 90.
Six hours of pain control is really in advance here and we think that that's a that's a viable alternative.
A 10-C C dose and etcetera Canal block actually minutes mimics best practice in the marketplace today.
The folks that are doing 15, 18 procedures are all doing 10 ml abductor canal blocks and then they're doing another 10 ml as a period articulate injection into the into the <unk>.
Posterior capsule.
And into the periosteum itself in many cases, they are still using a 20 ml dose, Tennessee sees into the canal and then tendency seeds to cover the posteriorly capsule pain.
And so you know it's.
And the opportunity size is Roy pointed out there's 3 million procedures in the lower extremity just to be very clear EXPAREL is already used in roughly 300000 of those cases, so the delta new opportunity is roughly 2.7 million patients and this will go much quicker than peds are lower extremity.
Nerve block because the marketplace is already using EXPAREL as a 10 ml dose and the abductor Canal. This will take the opportunity for pharmacy to say, it's not available because it's not approved and some of the younger folks who actually are looking to the FDA for guidance will also be able to use the products. So this will go much faster than the other reference procedures, we add.
Okay. That's that's really helpful. If I could just squeeze one more quick one <unk> for current news how much of it is already being used with diabetic patients I know that's something that previous company had talked about is there any awareness of the potential benefit there with diabetic so I'm just curious.
You know how how important you think having that diabetic data will be to accelerate that product.
It's very surprising Gary how little understanding of the glycemic spikes that are being caused by IR triamcinolone Acetonide. It's just it's very well understood by the endocrinologists and the folks who are helping US right. These protocols are actually treating these diabetic patients when they end up in the ICU.
Because of these slides semic spice.
Even our kols, even some of the folks that are most.
Friendly to the company and help us with all of our protocols had no idea that this was a clinical issue in the marketplace. So.
We think it's quite important and when the docks have seen the data they've said well Hell. This is crazy I'm going to start treating my diabetic patients.
Especially because we have a J code right. So they can treat in the office to have a J code. It's a it's an easy way out for them.
Relative to all the displacement in that marketplace because of the Haa issues at some of the other things that are going on so.
You know we think that this is going to be this is going to be really important for patient care and just to put a stamp on it here about 30% of the patients who are.
Who have adult away the pain, who would who are part of the medical system and being treated by physicians are diabetics. So it's a big number.
It's millions.
Yeah, Okay, great. Thanks, Dave.
Okay.
Thank you for your questions at this time I would like to turn it back to David <unk>, Chairman and C. L for closing remarks.
Thank you Amber.
So all on a call today for your questions and your time as you can see we're making great progress on all fronts. In 2022 is setting the stage for an even more exciting 2023 and beyond moving forward with EXPAREL continuing to drive significant endurable operating cash flows, we're well positioned for near and long term value creation by growing our commercial portfolio through increased market penetration in new indications.
<unk> and enhance reimbursement, while simultaneously advancing new product development opportunities the global acknowledgement of the need for a non opioid pain management is unequivocal and our leadership position in this field offers us significant and growing opportunities for years to come we look forward to keep you updated on our progress next for us.
As the Jeffries conference in London, and the Piper Conference in New York. Thank you stay well bye for now.
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