Q2 2025 Pacira BioSciences Inc Earnings Call
Good day, and thank you for standing by. Welcome to the Pacira BioSciences Q2 2025 Earnings Conference Call. At this time, all participants are in listen-only mode.
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I would now like to hand the conference over to your first Speaker today. Susan Mesko head of investor relations
Please go ahead.
Thank you, good afternoon everyone. Welcome to today's conference call to discuss our second quarter 2025 Financial results. Joining me are Frank Lee chief executive officer, Brendan tahan Chief commercial officer and Sean, cross Chief Financial Officer, Tony Malloy Chief legal and compliance officer is also here for today's question and answer session before we begin, let me remind you that this call will include forward-looking statements subject to the state Safe Harbor, provisions of federal Securities laws.
Pop over to frankly.
Thank you, Susan. And uh, good afternoon everyone.
I'm pleased to report that the first half of 2025 was marked by solid execution across our corporate clinical and Commercial initiatives.
The stage is set for accelerating Topline growth in the second half of the year. And importantly, we delivered several key Milestones to advance our 5530 path to growth and value creation.
To remind you that this plan supports 2 broad strategic imperatives first growing, our strong commercial base business and second is Nancy and Innovative pipeline of potentially transformative assets such as PCR 201.
Noble's second quarter accomplishments include improving Expo performance by 6%. Year-over-year, we achieved volume growth, the highest in 8 quarters.
Strong commercial progress, allowing us to reiterate and narrow our range for Revenue guidance.
Favorable growth. Margins supporting an increase in guidance.
Enhanced capital structure and liquidity.
With a new hundred million dollar revolver.
And significant reduction of debt.
And finally, disciplined and strategic capital allocation with the repurchase of $50 million of common stock.
Brandish on will share more specifics on the quarter shortly.
I'll begin with a high level overview of our commercial portfolio where our 3 best in-class products continue to generate significant cash flow.
Our Flagship product expert. L the first half of 2025 was marked by solid execution, across 3 priorities Market access.
Awareness, and utilization.
We now have a strong base to build on and we're seeing encouraging momentum across key leading indicators for experts.
On the market access front, we continue to advocate for expanded patient, access to opioid, sparing pain, therapies to that end. We're pleased to see a new policy. Outlined by CMS, and its preliminary rule for 2026.
CMS is proposing to completely phase out as inpatient, only list.
Over the next 3 years.
Starting with the removal of hundreds of procedures in 2026.
In parallel, many of these procedures will be added to our list of procedures covered in ambulatory surgical centers.
We believe this will enhance the experimental market opportunity in the outpatient settings.
On the IP front, our legal team secured a favorable re-examination.
Of our 495 patent from the US patent and trademark office.
Importantly, during this process, we amended the patent claims to add volume limitations and to address other issues noted in the New Jersey Court's opinion last year.
The 4955 patent will be reissued shortly and we believe it will be the strongest in our juristic acid family to pass.
In parallel, the team continues to innovate and expand our uric acid gases and ivra patent families with 2 new patents.
Both claims for XRO compositions are listed in the FDA's Orange Book with exclusivity extending into the 2040s.
Shifting gears is a strategic Partnerships. A key component of 5 by 30 with an objective of 5 Partnerships by 2030.
We recently executed a potentially transformative collaboration for Johnson & Johnson MedTech for Zolita.
We believe this was significantly spanned or reach reach and patient access or zero.
The Proven long-lasting benefits of zoreta and distinct mechanisms of action. Make it ideal addition to the JJ medtecs existing portfolio.
Of OA, Pain Solutions.
Because there's no one-size-fits-all approach for treating patients suffering from OA pain, a personalized approach is essential.
With the highly complimentary non-opioid option.
The J&J MedTech team. We better support multiple treatment paths and improve the patient journey.
For Paysera, this collaboration essentially doubles our sales calls for Zo.
Which is promotional responsive product.
It gives us access to a well-established team and extensive customer base.
We believe this will meaningfully accelerate. The zoreta growth trajectory in an efficient manner.
As for growth margins, enhanced manufacturing efficiencies that allowed us to increase our full year guidance.
This is a result of a multi-year investment, you know, 200 liter facilities and Swindon, and San Diego.
These Suite provide ample capacity to meet Demand with more favorable cost structure and manufacture.
Now to a pipeline where we're focused on becoming the therapeutic area leader in muscular, skeletal pain and adjacencies.
These are large markets with high amounts of patient needs.
our 2 registration studies for Zorua in the shoulder OA and I overaa and spasticity are progressing according to plan,
To further solidify. Our leadership and opioid, spurring Innovation. We're advancing Innovations in genicular outcomes, registry or Igor.
Cera designed this comprehensive prospective observational real world study in the interest of science. Not as a health authority obligation
OA is a unique condition that patients live with for decades.
And receive a myriad of pain treatments as their disease progresses.
Ivor's position is to provide in-depth insights into the patient's journey.
And we're capturing clinical and economic data, as well as patient reported outcomes.
Its potential for meaningful insights is better than any known OA registry of its kind.
With over 200 patients enrolled today and growing Igor is now very fruit.
Recent and upcoming Publications, are further reinforcing the value of our products.
In addition, we believe the insights came from Idol, will support much-needed Innovation and new product development for treating the way pain.
2011 is a great example of innovation that we believe has the potential to revolutionize the treatment landscape.
Clinical data continues to underscore the promise and disease-modifying potential of P sharks, 2011, and the HCAd platform.
In June, we presented 3-year follow-up data at the European Alliance of Associations for Rheumatology Congress.
Very few OA studies, reach such a milestone for study duration.
Results showed that a single intraarticular injection of P sharks. 2011 was well tolerated with sustained efficacy through 3 years
In addition, we're making great progress. Enrollment in our Phase 2 Ascend study is on track, with enrollment in Part A expected to conclude by year-end.
Beyond pcrx 2011. We have a promising portfolio of other hcad platforms based assets that may have disease, modifying potential in other muscular skeletal diseases and adjacencies.
We look forward to sharing more as the year progresses.
In summary, this quarter is marked by solid execution and cross-corporate political and commercial initiatives.
As well as delivery of key Milestones, that Advance our 5 by 30 strategy.
With that, I'd like to turn the call over to Brian to share more details on our commercial performance on the second quarter, right?
Thank you, Frank and good afternoon to all joining us today.
I'm excited to share a few highlights of the strong progress. We've been making on the commercial front.
Significant second quarter revenues were driven by improving expired volume growth of 6%. This is a 2-fold. Increase over the 3% year-over-year growth in the first quarter of 2025 and the second quarter of 2024.
As Frank mentioned, during the first half of the year, we were sharply focused on establishing a foundation to support sustainable Topline growth.
We made great strides expanding position and payer awareness around, no pain.
As, you know, this is an important shift in reimbursement, policy and represents a significant opportunity to broaden the xpiral utilization in outpatient procedures.
As expected, we are seeing robust momentum from leading indicators as we head further into the year.
These data reinforce our confidence that xarel is well positioned for steadily improving year-over-year growth as the year progresses.
I'll start with Market access where we've made terrific progress. That is driving change.
Here. We're focusing on highlighting as clinical and economic value to National regional and local commercial plans with real world evidence.
We're excited to report. We are tracking ahead of plan and are maintaining a strong Pace. Expanding our commercial coverage map.
We currently estimate more than 40 million commercial lives. We now have access to XPL via separate reimbursement outside the bundle.
We will continue our efforts to expand access and we are on track to reach 60 million covered commercial lives by the end of this year.
This positions us to exit the year with a total covered population of nearly 100 million lives across both commercial and government payers.
As we gain critical mass of coverage, we're creating increased leverage amongst our practices for broader atrial utilization.
Importantly, our payer progress has been strategic focusing on key markets with high procedural volumes.
We prioritize our top 5 states, which collectively account for roughly 40% of Xarel volumes.
We are steadily expanding coverage and estimate that we will soon have the majority of lives covered in these top states.
Coupled with this progress, we continue to see strong and growing utilization of the Xpiral J-Code with an increasingly favorable payer mix.
We're also utilizing our strategic pricing programs as important tools to expand patient access.
Through these preferential pricing programs Healthcare Systems can afford the opportunity to be at the Forefront of opioid sparing pain management.
On The Go Front, we're excited to assign our third partnership in the second quarter and it's off to an excellent start.
With this agreement, we now have more than 80% of our Excel business under contracted pricing which is predicated on driving volume growth.
Our pricing strategy is performing according to plan with our contracted business, delivering high single-digit volume growth thus far.
We expect this to accelerate over time and with only a modest impact on net sales dollars.
Switching gears to awareness. Our market research is showing increasing awareness among formulary decision. Makers, namely, surgeons, and anesthesiologists.
As a reminder, it will take time for broader market adoption.
Of those who indicated their facility would adopt. CMS reimbursement, guidelines, approximately 75% reported, implementation could take 6 months to a year
Approximately 60% expressed a willingness to place Expo on, formulary in light of separate reimbursement, with the highest level coming from surgeons and anesthesiologists.
Importantly, these key physician stakeholders are critical voices in driving institutional change with a growing. Number of already taking First Steps, such as the TNT committee meetings, and re-evaluating formulary status.
This research aligns with the real-time XRL utilization data we're seeing in the market.
Faster. Adoption is taking place within Community Hospitals and Ambulatory Surgery centers where we're seeing High single to low double-digit volume growth.
Decision-making in these settings is more streamlined enabling faster adoption to take advantage of the no pain value proposition.
Beyond the early adopters year-over-year growth in the hospital setting has improved from a low single digit percentage to amid single-digit percentage with the academic segment returning to growth.
We've also secured multiple formulary wins at large integrated delivery networks and major National Health Care Systems.
These accounts are delivering an early lift in volumes. After more fully understanding the value of xpel unlocked by no pain.
We expect these Trends to accelerate as expanding commercial coverage. Further, enhances the value proposition and drives policy change.
Turning to our other products. As you may recall, we started the year with a new sales team supporting Zoa and IOA. The team has begun to hit its stride, and we are confident these products are back on track for improving growth as the year progresses.
We look forward to the second half of the year and reporting additional commercial progress on future calls. With that, I will turn the call over to Sean for his review of the financials.
Thank you, Brian.
I'll start with an update on sales and marketing trends.
Second quarter, xpiral sales.
Increase to 142.9 million versus 136.9 million in 2024.
Sales, growth of 4% was driven by improving volume growth of 6%.
Accounting.
Second quarter is over at a sales for 31.3 million versus the 30.7 million reported in 2024.
Looking ahead with our new partnership with J&J Medtech and other programs. We believe the foundation is set for improving growth.
For Iva.
Second quarter sales were 5.6 million compared to 5.7 million in the second quarter of 2024.
Turning to gross margins.
Consolidated, based on our second quarter, non-GAAP gross margin improved to 82% versus 76% last year.
Gross margins continue to benefit from the improved costs and efficiencies of our 2 large scale. Manufacturing, Suites
With these sweets. Now, consistently producing commercial Supply.
We have ample capacity to meet the growing demand for x4l.
As a result, we have decommissioned our first generation 45 L Suite located in San Diego.
And optimized our Workforce accordingly.
We expect these changes will benefit our income statement through a 13 million annual reduction in operating expenses that will begin in the third quarter.
Perdon Gap R&D expense. The second quarter increased to 24.7 million from 18.4 million.
Forwarded last year.
This increase relates to the strong enrollment in part. A of our Phase 2, study of pcrx 2011 as well as expenses associated with the zilretta, Iowa registration of studies
Non-gaap sg&a. Expense came in at 77.2% for the second quarter which is up from 59 million last year.
This increase is largely due to investments in our commercial medical and market access organization, targeted marketing initiatives, and Field Force expansion.
All of this resulted in another quarter of significant adjusted Eva of 54.3 million for the second quarter.
As for the balance sheet, we continue to operate from a position of strength.
In July, we both start our liquidity and financial flexibility with the new 300 million 5-year. Revolving credit facility.
We used an initial draw of approximately 100 million to fully repay our Term Loan a
This new revolver will also benefit interest expense.
With an annualized Savings of 60 basis points. Beginning in 2026.
With no amortization requirements.
In addition, we recently repaid, our August 2025 convertible notes with cash on hand,
Taking this into account along with RDS repayment of the xro royalties. We ended the quarter when Pro for a cash and Investments of approximately 270 million
with a business that is producing significant. Operating cash flow. We are well equipped to advance our fly by Theory strategy and create shareholder value.
We are also taking a disciplined approach to capital allocation.
Where we are focusing on 3 areas?
First accelerating growth in our best-in-class, based business.
Second advancing an Innovative pipeline to become the leader in muscular, skeletal pain and adjacencies.
And, third, opportunistically returning capital to shareholders.
During the second quarter, we executed 50 million dollars in share repurchases retired. Approximately 2 million shares of common stock.
This is an addition to the 25th executed last year.
To remind you, we have approximately 250 million dollars remaining under our current buyback authorization which runs through the end of 2026.
We will continue to be opportunistic with stock repurchases given what we believe is a significant disconnect in our Market valuation.
As we execute 5 by 30, we expect to prioritize the creed of opportunities that benefit operating markets to enhance shareholder value.
That brings us to our full year P&L guidance for 2025.
Today, we are narrowing our range for full-year revenue guidance to $730 million to $750 million.
in addition, we are increasing our guidance for non-gaap gross margins to 78 to 80%
Our previous range of 76 to 78%.
2025 margins benefited from increased manufacturing, efficiencies.
And the elimination for XFL royalty, obligation.
We remain. Well, positioned to achieve our 5-year goal of steadily expanding margins with the 5 percentage Point improvement over 2024.
We are reiterating all of our other Financial guidance ranges as follows.
Non-GAAP R&D expense of $90 million to $105 million.
Non-GAAP SCNA expense of $290 to $320 million; stock-based compensation of $56 to $61 million.
and lastly for those modeling ibida to expect our full year 2025 depreciation expense to be approximately 35 million
Looking ahead with the commercial Investments we've made we expect to achieve sustainable earnings growth driven by improving sales.
Enhance gross margins and stabilizing operating expenses.
In addition, opportunistic stock repurchases and reductions in share count further enhance.
And with that, I'll turn the call back to Frank.
Thank you, Sean.
In closing, I want to thank our entire team for their strong execution and dedication throughout the first half of the year.
We've already achieved meaningful Milestones. That Advance our 5 by 30 strategy and position us for sustainable success.
With this foundation in place.
For entering the second half of the year with strong momentum and a clear focus on further accelerating growth.
Thank you again for joining us today and for your continued support and confidence in our mission.
With that operator, great open to call for questions.
Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you'll need to press *1, 1 on your telephone and wait for your name to be announced to withdraw your question. Please press *1, 1 again.
Please stand by while we compile the Q&A roster.
Our first question comes from Les soloski with truist Securities. Your line is open.
Uh, good evening, thank you for taking our questions. Um, I have a couple, uh, first maybe could you provide some, uh, commentary around the new partnership with J&J Medtech on villetta. And how does that compare to the previous co-promote with uh, J&J on xarel and then as a follow-up, uh, what are the economics on this partnership? And you know what, assumptions can we derive from the strategy? Any, uh, figurative commentary would be helpful. Um, my second question is around the, the third GPO, what are the expectations for impact to, uh, growth to net? Um,
And then a couple more just progress on the sales for expansion and maybe one for Sean. I appreciate the commentary around the expected savings on the consolidation of plants, but how do we kind of view the gross margin outlook into the second half and then into next year? Thank you.
Thanks Les for the question as frankly here. Hey, first of all, let me just say before we jump into this and I'll turn to uh, Sean and, and Brent for some commentary here that I have to say, I'm really proud of the team on executing on all fronts here across the entirety of the business, you know, whether it's, uh, growth and revenue, its margins pipeline, IP, Etc. There's a lot of activity that happened this year, and that, that it's a strong foundation for growth going forward. Uh, so let me just comment a little bit, uh, about the J&J partnership. And then I'll turn to, uh, I'll turn to Sean for gross and meds and uh, some commentary about gross margin and then maybe a little bit about the sales force. So just at a high level, just to remind everybody that the J&J partnership previously was for expert 1 and that was prior to the to co uh, and during CO as we all know, the Dynamics change. So, prior to that, I was very successful partnership. And so,
The events of Co led to the discontinuation of that particular partnership but we've always appreciated J&J's capabilities and and partnership there. So this particular partnership is now was Zora, which is a very different setting under different circumstances. So that says a high level overview, uh, Sean, maybe you could speak to gross Nets and gross margins as uh,
Asset less SS sure. Happy to. So the the gross in Net's, pretty simple. It's loosen the digit.
Impact plus, or minus 1% is a reasonable.
modeling but that's um, pretty straightforward and then with regard to gross margin outlook for a second half and um, into next year, as we discussed the the teams, doing a great job and we benefited from, you know, increased production efficiencies
And, um, uh, I am very proud of the team so that we could raise the full year margin guidance to a range of 78% to 80%.
And, um, we'll provide another update in Q3 as things progress. And just as a reminder, there can be pretty significant quarter-over-quarter.
Of variations, you know, 1 bad batch in a quarter. You take a charge for that quarter but based upon
How the team is doing. We're we're confident that we'll, uh, in terms of raising the range to 78 to 80% and then going into next year. There's a plan for just Relentless continuous Improvement, um, at manufacturing sites. And so, that's something again. We'll provide an update later, but, um,
But the the goal is to 5% Improvement and as for our 5 by 30 plan and um, that continuous Improvement will continue into next year.
Thanks, Sean. So, um, Brian, maybe you want to talk about Salesforce expansion.
Yeah, sure it's, uh, thanks for the question. Uh, we are excited about the focus. We're able to provide to all 3 of our assets. Um, we have a team in zoa and Iowa that have now, gotten more and more experience with their target audience. I think they're hitting their stride, and, uh, beginning to, uh, improve in our overall, uh, our overall performance there. Equally excited about what we're seeing with exper. Not only in terms of what we've seen for, no P. Execution, but also significant for
Ary wins, both at IDMS and UH, large health care systems.
Um, and I think we're also bolstered by uh, improving, uh, commercial coverage as you heard from my prepared comments.
Thanks, Brian. So the last part of it, unless you had asked about the economics of JJ Medtech, we're not going to go into details here. But what we can say is, number one, it's reflected in the guidance, and we expect this to be beneficial in 2026.
Very helpful. Thank you.
Next question comes from Sears Bellinger with nem in company.
Hi. This is John on for surge today. Uh, thanks for taking my question. Um, just a quick 1 regarding surgery, volumes. Uh, can you just give us a little bit of color on on what you saw on the second quarter? And um then what you're seeing I guess to the, to the first month, the third quarter and
Uh, in which section and in which settings do you think you're seeing the most traction at this time? Thanks.
Uh, thanks, John. Uh, we can't go into specifics about how this quarter started, and so they'll have to wait till the next quarter about that. But I'm going to turn to Brand here to talk a little bit about what we're seeing in volumes over the course of the first half here.
For sure. Um, and actually, I'm encouraged by what we've seen for xpiral volumes in light of what the broader Market has looked like, for us, at least the most recent data points we've seen would suggest that surgery. Outpatient, uh, case volumes are are slightly down in, uh, the second quarter versus the same time last year and I see, uh, more inpatient surgery, uh, kind of flat comparatively speaking that said, uh, to have seen the progress that we have in the hobdy Ambulatory Surgery, centers is very encouraging.
Great. And, um, if I could just have a quick follow-up, uh, you mentioned having 40 million commercial lives um under having Excel access and looking to get to 60 million by the end of the year. Um, I'm and then a 100 million of uh total lives covered across commercial and government providers, uh, just curious where where the focus might be in terms of making gains, you know, throughout the remainder of this year and then into next year
Uh, sure. Thanks for the question. Uh, John and I would say that we've been as strategic as we can be with, uh, especially regional plans. We're trying to align as best we possibly can our surgical volumes and opportunity with, uh, those large regional payer plans.
Mint from CMS but um, a preponderance of their commercial lives being covered as well.
John, let me just add to that. That um I have to say that. I'm very pleased with what progress we've made.
Um on the commercial payer front probably Market access, you know as we had talked about before, no pain was actually enacted. Getting commercial Affairs to adopt sooner rather than later was important. And and oftentimes this can take years and so really, uh, probably the market access to what they've accomplished. This is the head of our plans. And, uh, I think to the extent that we get our Target, uh, into the year of 100 billion total,
That'll be a really great accomplishment.
Okay, thank you.
Our next question comes from Gary nachman with Raymond James,
Hey guys. This is Dennis Resnik on for Gary, knockan for taking our questions. So first, you've previously talked about expanding the current Suite of products, X us with a partner. So can you provide an update on how those conversations are going? What are you looking for in a partner? When do you think a deal could materialize? Um, and would you look for a partner for all 3 products at once? Or would you go 1 by 1? And then I've got a couple of follow-ups. Thank you.
Thanks, Dennis, uh, really good questions that indeed. Uh, we believe that our markets outside, the US with meaningful opportunity, for all of our products, uh, of course, uh, the initial Focus. Uh, you know, certainly our Flagship product expert will, but Zora and I Vera potential there as well. So we're making good progress. And, uh, if you think about our 5 by 30 goal of having 5 Partnerships, uh, in this time frame, uh, we think we're well on track. Uh, so I can't give you any specific dates. But what, what I can tell you is that there's been very good interest and as we think about potential strategic Partners they would, of course, uh, be leaders in their field at meaningful penetration and portfolio, uh, and values that are aligned with ours. So those are some of the things that we look for. And uh, you know, the good news is I think that there are, uh, meaningful Partners out there and so we'll keep you apprised of, uh, how things are progressing. But I can tell you now that we're active,
In the process. Uh, and that we're pleased with the kind of dialogue, we're having.
That's great. And then if I met uh ask for some more color on piece RX 2011 and the recent 3 year data, kind of any call, you can give about the significance of it and the feedback from the poster presentations. And then on the ongoing Phase 2, it's nice to see the enrollment going so well, could you just remind us, how many total sites you plan on having, um, and the split between how many
In the US versus XTS. Thanks.
Yeah, thanks for the question, 201. I have to tell you, it's been very good excitement about 2011, as we all know, uh, there's been a lack of innovation in in broadly, the OA and the knee space. And, you know, a big reason why we have in essence breakthrough status for uh Gene therapies, the rmat designation. So the data that we recently presented, we're a 3 year data uh and as I mentioned in my comments there are very few studies that follow patients uh with OA, the knee out to 3 years and we're seeing still a very good response. Uh, very good safety, profile, and data that we've observed, of course, is an open label study and uh, we'll know a lot more uh, as we uh, progress and report on our Ascend study. So, uh, to answer your question about the
Response from investigators, thought leaders, Etc. On 2011, there's been a lot of great excitement about that 1 uh number 1. Number 2 is that as we think about the the Sin City uh we haven't provided all the specifics about number of sites Etc. But what we can tell you is that there are 3 arms uh and 1 is the control, is the steroid control and then 2 other arms that are the steroid plus pcrx 2011. And so we're uh more than halfway uh through our enrollment as progressing very very well. And so
Expect to be completed by the end of this year for part A and then Part B will start next year. So, bottom line is, we'll have, uh, some initial data as we've talked about before from part A sometime towards the end of 26 early, 27 in that time frame.
Great. Thanks so much. And congrats on all the progress.
Thank you.
Our next question comes from Douglas Mame, with RBC Capital markets,
Yeah.
Everyone my question just has to do with the the guidance, um, so that you tightened it uh, 7:30 to 7:50 now. But what I'm curious about is, um, back in q1. When you were looking at these numbers and you had a wider range.
Uh, what is it? That's changed, that's moved. You away from, let's say the upper end the 750 to 765. Is it more price? Or is it? Uh no pain and the uh discussions that you're having with payers, uh, a little slower than you anticipated Jew. Just curious about, uh, that
Thanks for the question, Douglas. Uh, you know, obviously I have a launch of something like this. There, there are uncertainties and and of course, we provide a, a guidance range where we thought was reasonable. Uh, it all comes down to just some of the fundamentals that we talked about and with brand address, which is
Market access to what extent could we get?
Commercial payers, uh, to come on board a law with now, this new CMS reimbursement enough so that we have tipping points in certain Geographic areas where the majority of patients. Let's say are covered under this new approach to reimburse xpiral, that's when meaningful change really happens. And so without having uh, some initial data we had to provide that kind of a range
And now we have better certainty. As we've now got a half the year, uh, under our belt. And so that's why I think we can provide this more narrow range. So, uh, the midpoint hasn't changed. And if that's your question, uh, of course, uh, but I think it's really about, you know, Market access about tipping point where the majority of patients are covered under this, this kind of reimbursement. Uh, and then, of course, after that, we'll be driving awareness and utilization because access is available for the majority of patients.
Okay. And then just as a follow up um the J&J deal does look good on Zora and I'm curious as we go into 2026. Um, what in particular where do you think that they're going to be able to add the greatest value? Um, to the product and I'll leave it there. Thank you.
And thanks. I'm, I'm going to look over here to Brent. Thanks for that.
Yeah, just just to re reiterate, uh, we're thrilled to have this opportunity. Uh, I spent the first half of my career at J&J and it's wonderful to be partners with them again here. Um, as Frank, uh, shared his prepared comments, this essentially doubles our ability, uh, to reach our audience with a promotional sensitive product like, uh, zilretta and beyond that. Uh, Jane Jay has a great deal of experience in the space and a broader uh, customer base than we were originally calling.
With Silvera. So uh, coming into play in much more prominence are groups like sports medicine, some of the pain management centers and uh, in particular rheumatologists, all of that. I think uh, expands our messaging for Zorua to an audience that that needs to know that they have an option Beyond, uh, the hawse many of which are not able to give more than, uh, ones or twice in a year. So it's really a nice complement to their portfolio and a very logical product to have in their bag for the uh, for the 08 treatment Journey.
Excellent, thank you.
Thank you, Douglas.
Our next question comes from hardik perrick with JP Morgan.
Hey, thanks for the question today. And thanks for the update, Frank and team. Uh, I had a couple questions. Uh, first is just wondering, uh, you you mentioned that survey you guys had done and you're talking about the organizations who plan to add Expo to the formulas. They could take 6 to 12 months, to start adopting. I just wondering, did you get any more color from that survey in terms of what are the gating factors that kind of lead to that 6 to 12 months time frame. And then the second part is when your sales teams are you know, pitching to various stakeholders qualitatively. How much of the discussion is on educating on, no pain versus explaining. The benefits of expel relative to Alternatives. Thank you.
Believe is coming. They also understand that CMS.
While that, uh, accounts for a significant, a significant number of procedures, it's about a third of the total. So they want to see will commercial follow uh follow that plan. So as we've been updating every with every earnings call, we want to put increasing points on the board for, uh, commercial coverage outside of the bundle as that becomes reality, and a variety of geographic areas. We see uh, increasing numbers of payers, come on board with um, with extra our reimbursement, outside the bundle.
And then uh, just speaking about how uh, we speak about xpiral. Let's play. Let's let's be clear. We are, you know, obviously excited about what no pain means in terms of the value. Proposition the enhanced value proposition for xpro but the majority of our time is spent explaining what differentiates xpro from Alternatives and why it leads to the types of outcomes that that our patients deserve. And I think you'll, uh, see more of that in the second half of the year as we look to amplify that message and make sure that patients caregivers and Physicians understand what makes uh xrl the best choice for procedures for which it's approved.
Thanks Brandon. Let me just add to that that um,
Regard to the health economic value proposition, so important, uh, in these settings, uh, increasingly important as we go forward. And, uh, as we step back, uh, I mentioned, uh, that we have 2500 patients in this Igor registry that follows patients through their OA of the knee journey. And we think that's going to provide some really great insights into not only the value of our products. But, uh, some other products that are used in this setting and give us again better confidence that we'll be able to provide more patients access to our medicines.
Thank you for the caller.
And this concludes the question and answer session, I would now like to turn it back to Susan for closing remarks.
Thank you Sean and thanks to all on the call for your questions and time. Today we're energized by the opportunities that had and remain focused on executing our 5 by 30 growth strategy with discipline and purpose as we move through the remainder of the year. We are confident in our ability to build on our momentum and position to Sierra for long-term success. Thank you again for your continued support and be well
Thank you for your participation. In today's conference, this does conclude the program. You may now disconnect