Q2 2026 Pacira BioSciences Inc Earnings Call

Operator: Good day, and thank you for standing by. Welcome to Pacira BioSciences Q2 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You'll hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Susan Mesco, Head of Investor Relations. Please go ahead.

Operator: Good day, and thank you for standing by. Welcome to Pacira BioSciences Q2 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You'll hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Susan Mesco, Head of Investor Relations. Please go ahead.

Speaker #1: Good day, and thank you for standing by. Welcome to Pacira BioSciences, second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 11 on your telephone.

Speaker #1: You'll hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.

Speaker #1: I would now like to hand the conference over to your first speaker today, Susan Mesco, Head of Investor Relations. Please go ahead.

Speaker #2: Thank you. Good afternoon, everyone. Welcome to today's conference call to discuss our second quarter 2026 financial results. Joining me are Frank Lee, Chief Executive Officer; Brendan Teehan, Chief Commercial Officer; and Shawn Cross, Chief Financial Officer.

Susan Mesco: Thank you. Good afternoon, everyone. Welcome to today's conference call to discuss our Q2 2026 financial results. Joining me are Frank Lee, Chief Executive Officer, Brendan Teehan, Chief Commercial Officer, and Shawn Cross, Chief Financial Officer. Kristen Williams, Chief Administrative Officer and Secretary, Tony Molloy, Chief Legal Officer, and Jonathan Slonin, Chief Medical Officer, are 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 safe harbor provisions of federal securities laws. Such statements represent our judgment as of today and may involve risks and uncertainties. This may cause our actual results, performance, or achievements to differ materially. For information concerning risk factors that could affect the company, please refer to our filings with the SEC or the Pacira website. Lastly, as a reminder, we will be discussing non-GAAP financial measures on today's call.

Susan Mesco: Thank you. Good afternoon, everyone. Welcome to today's conference call to discuss our Q2 2026 financial results. Joining me are Frank D. Lee, Chief Executive Officer, Brendan Teehan, Chief Commercial Officer, and Shawn Cross, Chief Financial Officer. Kristen Williams, Chief Administrative Officer and Secretary, Antony Molloy, Chief Legal Officer, and Jonathan Slonin, Chief Medical Officer, are 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 safe harbor provisions of federal securities laws. Such statements represent our judgment as of today and may involve risks and uncertainties. This may cause our actual results, performance, or achievements to differ materially. For information concerning risk factors that could affect the company, please refer to our filings with the SEC or the Pacira website. Lastly, as a reminder, we will be discussing non-GAAP financial measures on today's call.

Speaker #2: Kristen Williams, Chief Administrative Officer and Secretary; Tony Malloy, Chief Legal Officer; and Jonathan Sloane, Chief Medical Officer, are also here for today's question-and-answer session.

Speaker #2: Before we begin, let me include forward-looking statements, subject to the safe harbor provisions of federal securities laws. Such statements represent our judgment as of today and may involve risks and uncertainties.

Speaker #2: This may cause our actual results performance or achievements to differ materially. For information concerning risk factors that could affect the company, please refer to our filings with the SEC or the Pacira website.

Speaker #2: Lastly, as a reminder, we will be discussing non-GAAP financial measures on today's call. A description of these metrics, along with our reconciliation to GAAP, can be found in the news release issued this afternoon.

Susan Mesco: A description of these metrics, along with our reconciliation to GAAP, can be found in the news release issued this afternoon. With that, I will now turn the call over to Frank Lee.

Susan Mesco: A description of these metrics, along with our reconciliation to GAAP, can be found in the news release issued this afternoon. With that, I will now turn the call over to Frank Lee.

Speaker #2: With that, I will now turn the call over to Frank Lee.

Speaker #3: Thank you, Susan. And good afternoon to everyone joining today's call. On behalf of the remarkable team here at Pacira, I'm pleased to share our continued progress in executing our 5x30 strategy, and transitioning into a more innovation-driven biopharmaceutical company.

Frank D. Lee: Thank you, Susan, and good afternoon to everyone joining today's call. On behalf of the remarkable team here at Pacira, I'm pleased to share our continued progress in executing our 5x30 strategy and transitioning into a more innovation-driven biopharmaceutical company. Our Q2 performance reflects disciplined execution of our 5x30 strategy, translating into commercial momentum, strong cash generation, pipeline advancement, and high-caliber partnerships. Furthermore, our 5x30 progress was clearly recognized with a decisive shareholder vote for both our strategy and director nominees at our annual meeting in June. Notable Q2 accomplishments include revenues of more than $109 million, even as macroeconomic pressures weighed on certain elective procedures in the hospital setting. Adjusted EBITDA of nearly $50 million. Establishing a scalable, commercially viable US-based manufacturing process for PCRX-201, a testament to our team's clinical development and manufacturing capabilities.

Frank D. Lee: Thank you, Susan, and good afternoon to everyone joining today's call. On behalf of the remarkable team here at Pacira, I'm pleased to share our continued progress in executing our 5x30 strategy and transitioning into a more innovation-driven biopharmaceutical company. Our Q2 performance reflects disciplined execution of our 5x30 strategy, translating into commercial momentum, strong cash generation, pipeline advancement, and high-caliber partnerships. Furthermore, our 5x30 progress was clearly recognized with a decisive shareholder vote for both our strategy and director nominees at our annual meeting in June. Notable Q2 accomplishments include revenues of more than $109 million, even as macroeconomic pressures weighed on certain elective procedures in the hospital setting. Adjusted EBITDA of nearly $50 million. Establishing a scalable, commercially viable US-based manufacturing process for PCRX-201, a testament to our team's clinical development and manufacturing capabilities.

Speaker #3: Our second quarter performance reflects disciplined execution of our 5x30 strategy, translating into commercial momentum, strong cash generation, pipeline advancement, and high-caliber partnerships. Furthermore, our 5x30 progress was clearly recognized through the decisive shareholder vote for both our strategy and director nominees at our annual meeting in June.

Speaker #3: Notable second quarter accomplishments include revenues of more than $109 million even as macroeconomic pressures weighed on certain elective procedures in the hospital setting. Adjusted EBITDA of nearly $50 million, establishing a scalable commercially viable U.S.-based manufacturing process for PCRX 201, a testament to our team's clinical development in manufacturing capabilities.

Speaker #3: Opening enrollment in Part B of our Phase 2 ASCEND study for PCRX-201, completing enrollment in the Iovera registrational study in spasticity, and completing the Iovera divestiture or forming a partnership in spasticity with Zimmer Biomet.

Frank D. Lee: Opening enrollment in Part B of our phase II ASCEND study for PCRX-201. Completing enrollment in iovera registrational study in spasticity, and completing the iovera divestiture on 31 July, and forming a partnership in spasticity with Zimmer Biomet. I'd like to thank the Pacira and Zimmer Biomet teams for working so collaboratively and efficiently over the past 30 days to close this transaction. I look forward to continued partnership with our Zimmer Biomet colleagues going forward. I'll begin with a high-level overview of EXPAREL, and then Brent will cover additional commercial details shortly. EXPAREL continues to increase penetration share across all segments despite softness in certain deferrable soft tissue procedures, which historically wax and wane with macroeconomic conditions. This is particularly notable in inpatient settings where separate reimbursement outside the bundle is not available.

Frank D. Lee: Opening enrollment in Part B of our phase II ASCEND study for PCRX-201. Completing enrollment in iovera registrational study in spasticity, and completing the iovera divestiture on 31 July, and forming a partnership in spasticity with Zimmer Biomet. I'd like to thank the Pacira and Zimmer Biomet teams for working so collaboratively and efficiently over the past 30 days to close this transaction. I look forward to continued partnership with our Zimmer Biomet colleagues going forward. I'll begin with a high-level overview of EXPAREL, and then Brendan will cover additional commercial details shortly. EXPAREL continues to increase penetration share across all segments despite softness in certain deferrable soft tissue procedures, which historically wax and wane with macroeconomic conditions. This is particularly notable in inpatient settings where separate reimbursement outside the bundle is not available.

Speaker #3: You know, I'd like to thank the Pacira and Zimmer Biomet teams for working so collaboratively and efficiently over the past 30 days to close this transaction.

Speaker #3: I look forward to continued partnership with our Zimmer Biomet colleagues going forward. I'll begin with a high-level overview of Exparel, and then Brendan will cover additional commercial details shortly.

Speaker #3: Exparel continues to increase penetration and share across all segments, despite softness in certain deferrable soft tissue procedures, which historically wax and wane with macroeconomic conditions.

Speaker #3: This is particularly notable in inpatient settings where separate reimbursement outside the bundle is not available. Looking ahead, we believe we're well-positioned to continue to outperform the elective surgery market by advancing three key priorities.

Frank D. Lee: Looking ahead, we believe we're well-positioned to continue to outperform the elective surgery market by advancing three key priorities. First, expanding patient access by broadening commercial payer coverage. We recently secured a major win with UnitedHealthcare, now providing separate reimbursement for EXPAREL outside of the surgical bundle. This milestone brings our total covered lives to 150 million at mid-year, and well within reach of our full-year goal of 160 million covered lives. Separately on ZILRETTA, Brent has some great news to share about ZILRETTA coverage on UnitedHealthcare. Second, generating disseminating compelling health economic data to strengthen the EXPAREL value proposition. Here we're also seeing strong momentum with many commercial plans reimbursing significantly higher than CMS. Third, increasing penetration in existing and new accounts while driving expansion within macroeconomic resilient procedures and outpatient sites of care.

Frank D. Lee: Looking ahead, we believe we're well-positioned to continue to outperform the elective surgery market by advancing three key priorities. First, expanding patient access by broadening commercial payer coverage. We recently secured a major win with UnitedHealthcare, now providing separate reimbursement for EXPAREL outside of the surgical bundle. This milestone brings our total covered lives to 150 million at mid-year, and well within reach of our full-year goal of 160 million covered lives. Separately on ZILRETTA, Brendan has some great news to share about ZILRETTA coverage on UnitedHealthcare. Second, generating disseminating compelling health economic data to strengthen the EXPAREL value proposition. Here we're also seeing strong momentum with many commercial plans reimbursing significantly higher than CMS. Third, increasing penetration in existing and new accounts while driving expansion within macroeconomic resilient procedures and outpatient sites of care.

Speaker #3: First, expanding patient access by broadening commercial payer coverage. We recently secured a major win with UnitedHealthcare now providing separate reimbursement for Exparel outside of the surgical bundle.

Speaker #3: This milestone brings our total covered lives to 150 million at mid-year, and well within reach of our full-year goal of 160 million covered lives.

Speaker #3: Separately, on Zilretta, Brendan has some great news to share. About Zilretta coverage, on UnitedHealthcare. Second, generating the 7A compelling health economic data to strengthen the Exparel value proposition.

Speaker #3: Here, we're also seeing strong momentum with many commercial plans reimbursing significantly higher than CMS. And third, increasing penetration in existing and new accounts while driving expansion within macroeconomic resilient procedures and outpatient sites of care.

Speaker #3: Turning to lifecycle management, we remain on track to report top-line results from our Phase 3 study of Zilretta in shoulder OA later this year.

Frank D. Lee: Turning to lifecycle management, we remain on track to report top-line results for our phase III study of ZILRETTA in shoulder OA later this year. If approved, ZILRETTA would become the first drug with an FDA-approved indication specifically for shoulder OA. We also recently completed enrollment in our registrational iovera spasticity study and remain on track to report top-line results before year-end. As a reminder, we will collaborate with Zimmer Biomet on advancing the spasticity program. The transaction structure provides us with the opportunity to receive additional compensation, assuming clinical and regulatory success. Beyond our commercial products, our pipeline is entering what we believe will be a catalyst-rich period. We expect top-line data from PCRX-201 later this year and continue to advance PCRX-2002 with phase II development scheduled to begin later this year.

Frank D. Lee: Turning to lifecycle management, we remain on track to report top-line results for our phase III study of ZILRETTA in shoulder OA later this year. If approved, ZILRETTA would become the first drug with an FDA-approved indication specifically for shoulder OA. We also recently completed enrollment in our registrational iovera spasticity study and remain on track to report top-line results before year-end. As a reminder, we will collaborate with Zimmer Biomet on advancing the spasticity program. The transaction structure provides us with the opportunity to receive additional compensation, assuming clinical and regulatory success. Beyond our commercial products, our pipeline is entering what we believe will be a catalyst-rich period. We expect top-line data from PCRX-201 later this year and continue to advance PCRX-2002 with phase II development scheduled to begin later this year.

Speaker #3: If approved, Zilretta would become the first drug with an FDA-approved indication specifically for shoulder OA. We also recently completed enrollment in our registrational Iovera spasticity study and remain on track to report top-line results before year-end.

Speaker #3: As a reminder, we will collaborate with Zimmer Biomed on advancing the spasticity program. The transaction structure provides us with the opportunity to receive additional compensation assuming clinical and regulatory success.

Speaker #3: Beyond our commercial products, our pipeline is entering what we believe will be a catalyst-rich period. We expect top-line data from PCRX 201 later this year, and continue to advance PCRX 2002 with Phase 2 development scheduled to begin later this year.

Speaker #3: PCRX 2002 is a novel hydrogel formulation of ropivicaine designed to provide both rapid onset and long-acting analgesia from a single simple installation into the surgical field.

Frank D. Lee: PCRX-2002 is a novel hydrogel formulation of ropivacaine designed to provide both rapid onset and long-acting analgesia from a single, simple installation into the surgical field. If successful, we believe it has the potential to complement EXPAREL and further strengthen our leadership position in post-surgical pain management. Let me spend a moment on PCRX-201, which we believe has the potential to represent a paradigm shift in the treatment of knee OA. Our scalable commercial manufacturing process is now up and running, and enrollment in Part B of our phase II study is underway. As a reminder, top-line results for Part A are expected later this year. Part A randomized 49 patients to one of three treatment groups, PCRX-201 Dose A, PCRX-201 Dose B, or saline control. All patients received an intra-articular corticosteroid before treatment, allowing the durability of PCRX-201 to be evaluated against the standard of care.

Frank D. Lee: PCRX-2002 is a novel hydrogel formulation of ropivacaine designed to provide both rapid onset and long-acting analgesia from a single, simple installation into the surgical field. If successful, we believe it has the potential to complement EXPAREL and further strengthen our leadership position in post-surgical pain management. Let me spend a moment on PCRX-201, which we believe has the potential to represent a paradigm shift in the treatment of knee OA. Our scalable commercial manufacturing process is now up and running, and enrollment in Part B of our phase II study is underway. As a reminder, top-line results for Part A are expected later this year. Part A randomized 49 patients to one of three treatment groups, PCRX-201 Dose A, PCRX-201 Dose B, or saline control. All patients received an intra-articular corticosteroid before treatment, allowing the durability of PCRX-201 to be evaluated against the standard of care.

Speaker #3: If successful, we believe it has the potential to complement Exparel and further strengthen our leadership position in post-surgical pain management. Let me spend a moment on PCRX-201, which we believe has the potential to represent a paradigm shift in the treatment of NEA.

Speaker #3: Our scalable commercial manufacturing process is now up and running, and enrollment in Part B of our Phase 2 study is underway. As a reminder, top-line results for Part A are expected later this year.

Speaker #3: Part A randomized patients into three treatment groups: PCRX-201 dose A, PCRX-201 dose B, or saline control. All patients received an intra-articular corticosteroid before treatment, allowing the durability of PCRX-201 to be evaluated against the standard of care.

Speaker #3: The primary objective is safety, with secondary efficacy endpoints evaluated at Weeks 38 and 52. We recently received some exciting news for our PCRX-201 program, with the acceptance of a Phase 1 manuscript for publication in the Annals of Rheumatic Diseases.

Frank D. Lee: The primary objective is safety, with secondary efficacy endpoints evaluated at weeks 38 and 52. We recently received some exciting news for our PCRX-201 program with the acceptance of a phase I manuscript for the publication in the Annals of the Rheumatic Diseases, the leading journal in rheumatology. The paper highlights encouraging results from the 72-patient phase I study over 104 weeks. We're also advancing HCAd-based preclinical candidates in degenerative disc disease, dry eye disease, and canine OA. We recently completed a pilot safety study in canine OA. Our pilot efficacy study is now initiating. Finally, the last item I'd like to cover is the important progress we've made executing new partnerships, an important pillar of our strategy. I'll begin with the recently completed divestiture of iovera to Zimmer Biomet. For Pacira, the transaction sharpens our focus as an innovation-driven biopharmaceutical company while improving our margin profile.

Frank D. Lee: The primary objective is safety, with secondary efficacy endpoints evaluated at weeks 38 and 52. We recently received some exciting news for our PCRX-201 program with the acceptance of a phase I manuscript for the publication in the Annals of the Rheumatic Diseases, the leading journal in rheumatology. The paper highlights encouraging results from the 72-patient phase I study over 104 weeks. We're also advancing HCAd-based preclinical candidates in degenerative disc disease, dry eye disease, and canine OA. We recently completed a pilot safety study in canine OA. Our pilot efficacy study is now initiating. Finally, the last item I'd like to cover is the important progress we've made executing new partnerships, an important pillar of our strategy. I'll begin with the recently completed divestiture of iovera to Zimmer Biomet. For Pacira, the transaction sharpens our focus as an innovation-driven biopharmaceutical company while improving our margin profile.

Speaker #3: The leading journal in rheumatology. The paper highlights encouraging results from the 72-patient Phase 1 study over 104 weeks. We're also advancing HCAT-based preclinical candidates in eye disease and canine OA.

Speaker #3: We recently completed a pilot safety study in canine OA, and our pilot efficacy study is now initiating. Finally, the last item I'd like to cover is the important progress we've made executing new partnerships, an important pillar of our strategy.

Speaker #3: I'll begin with the recently completed divestiture of iovera° to Zimmer Biomet for Pacira. The transaction sharpens our focus as an innovation-driven biopharmaceutical company while improving our margin profile.

Speaker #3: Further, it allows us to redirect capital and resources toward higher return growth opportunities aligned with our long-term strategic priorities. We're also excited about this transaction means for patients Zimmer is uniquely positioned to maximize Iovere's global potential for patients through its scale, orthopedic leadership, and strong presence in total need.

Frank D. Lee: Further, it allows us to redirect capital and resources toward higher return growth opportunities aligned with our long-term strategic priorities. We're also excited about this transaction means for patients. Zimmer is uniquely positioned to maximize iovera's global potential for patients through its scale, orthopedic leadership, and strong presence in total knee. On the financial front, Pacira will receive up to $140 million, with $70 million up front and an additional $70 million linked to revenue-based milestones. The structure preserves our participation in iovera's future success in both existing indications and spasticity. We're also pleased to share important progress with LG Chem's recent regulatory filing for EXPAREL in South Korea. This places revenues on track to beginning 2027. As we move forward in the H2 of the year, we plan to provide visibility into additional commercial partnerships outside of the US.

Frank D. Lee: Further, it allows us to redirect capital and resources toward higher return growth opportunities aligned with our long-term strategic priorities. We're also excited about this transaction means for patients. Zimmer is uniquely positioned to maximize iovera's global potential for patients through its scale, orthopedic leadership, and strong presence in total knee. On the financial front, Pacira will receive up to $140 million, with $70 million up front and an additional $70 million linked to revenue-based milestones. The structure preserves our participation in iovera's future success in both existing indications and spasticity. We're also pleased to share important progress with LG Chem's recent regulatory filing for EXPAREL in South Korea. This places revenues on track to beginning 2027. As we move forward in the H2 of the year, we plan to provide visibility into additional commercial partnerships outside of the US.

Speaker #3: On the financial front, Pacira will receive up to $140 million with $70 million upfront and an additional $70 million linked to revenue-based milestones. The structure preserves our participation in Iovere's future success in both existing indications and spasticity.

Speaker #3: We're also pleased to share important progress with LG Chem's recent regulatory filing for Exparel in South Korea. This places revenues on track to beginning 2027, as we move forward in the second half of the year.

Speaker #3: We plan to provide visibility into additional commercial partnerships outside of the U.S. Importantly, we expect XUX revenues to extend through the life of our patents, which provide exclusivity into the 2040s.

Frank D. Lee: Importantly, we expect ex-US revenues to extend through the life of our patents, which provide exclusivity into the 2040s. Taken together, these transactions show how the partnership pillar of 5x30 strategy can extend our reach, improve capital efficiency, and allow us to concentrate resources on our highest priority growth opportunities. Our experience has shown that partnerships with top-tier organizations can generate value beyond the initial agreement by mutually leveraging our scale, expertise, customer relationships, unlocking commercial value for our partnered assets. In parallel, these partnerships create pathways for potential future collaborations across our portfolios. In summary, Pacira exits the Q2 with strong execution of our 5x30 strategy with commercial momentum, a broader market access position, meaningful upcoming pipeline catalysts, and a growing roster of top-tier partners.

Frank D. Lee: Importantly, we expect ex-US revenues to extend through the life of our patents, which provide exclusivity into the 2040s. Taken together, these transactions show how the partnership pillar of 5x30 strategy can extend our reach, improve capital efficiency, and allow us to concentrate resources on our highest priority growth opportunities. Our experience has shown that partnerships with top-tier organizations can generate value beyond the initial agreement by mutually leveraging our scale, expertise, customer relationships, unlocking commercial value for our partnered assets. In parallel, these partnerships create pathways for potential future collaborations across our portfolios. In summary, Pacira exits the Q2 with strong execution of our 5x30 strategy with commercial momentum, a broader market access position, meaningful upcoming pipeline catalysts, and a growing roster of top-tier partners.

Speaker #3: Taken together, these transactions show how the partnership pillar of the 5 by 3 strategy can extend our reach, improve capital efficiency, and allow us to concentrate resources on our highest-priority growth opportunities.

Speaker #3: Our experience has shown that partnerships with top-tier organizations can generate value beyond the initial agreement by mutually leveraging our scale, expertise, customer relationships, and unlocking commercial value for our partnered assets.

Speaker #3: In parallel, these partnerships create pathways for potential future collaborations across our portfolios. In summary, Pacira exits the second quarter with strong execution of our 5-by-30 strategy, with commercial momentum, a broader market access position, meaningful upcoming pipeline catalysts, and a growing roster of top-tier partners.

Speaker #3: With that, I'd like to turn the call over to Brendan to share more details on our second quarter commercial performance. Brendan.

Frank D. Lee: With that, I'd like to turn the call over to Brent to share more details on our Q2 commercial performance. Brent?

Frank D. Lee: With that, I'd like to turn the call over to Brendan to share more details on our Q2 commercial performance. Brendan?

Speaker #2: Thank you, Frank. And good afternoon to all joining us today. During the second quarter, Exparel gained penetration and share across both orthopedic and soft tissue market segments, even as the broader elective surgery market slowed in certain areas.

Brendan Teehan: Thank you, Frank, and good afternoon to all joining us today. During Q2, EXPAREL gained penetration and share across both orthopedic and soft tissue market segments, even as the broader elective surgery market slowed in certain areas. The impact varied by procedure category. While orthopedic procedures were relatively stable, elective soft tissue procedures experienced a slowdown, with more pronounced declines in the hospital inpatient setting. As a reminder, EXPAREL volumes are approximately 60% orthopedic and 40% soft tissue. This dynamic was likely driven by factors including softer consumer healthcare spending and broader economic uncertainty impacting near-term elective soft tissue procedures. EXPAREL's continued penetration and share gains this quarter reinforce our confidence that the brand can deliver durable growth as access expands, procedures migrate to outpatient settings, and customers continue to prioritize opioid-sparing care.

Brendan Teehan: Thank you, Frank, and good afternoon to all joining us today. During Q2, EXPAREL gained penetration and share across both orthopedic and soft tissue market segments, even as the broader elective surgery market slowed in certain areas. The impact varied by procedure category. While orthopedic procedures were relatively stable, elective soft tissue procedures experienced a slowdown, with more pronounced declines in the hospital inpatient setting. As a reminder, EXPAREL volumes are approximately 60% orthopedic and 40% soft tissue. This dynamic was likely driven by factors including softer consumer healthcare spending and broader economic uncertainty impacting near-term elective soft tissue procedures. EXPAREL's continued penetration and share gains this quarter reinforce our confidence that the brand can deliver durable growth as access expands, procedures migrate to outpatient settings, and customers continue to prioritize opioid-sparing care.

Speaker #2: The impact varied by procedure category. While orthopedic procedures were relatively stable, elective soft tissue procedures experienced a slowdown with more pronounced declines in the hospital inpatient setting.

Speaker #2: As a reminder, Exparel volumes are approximately 60% orthopedic and 40% soft tissue. This dynamic was likely driven by factors including softer consumer healthcare spending and broader economic uncertainty impacting near-term elective soft tissue procedures.

Speaker #2: Exparel's continued penetration and share gains this quarter reinforce our confidence that the brand can deliver durable growth as access expands procedures migrate to outpatient settings, and customers continue to prioritize opioid-sparing care.

Speaker #2: We are particularly encouraged by momentum in 23-hour sites of care, as the continued shift towards outpatient surgery and favorable reimbursement dynamics continue to provide a meaningful long-term tailwind for Exparel.

Brendan Teehan: We are particularly encouraged by momentum in 23-hour sites of care as the continued shift towards outpatient surgery and favorable reimbursement dynamics continue to provide a meaningful long-term tailwind for EXPAREL. Another critical area where we continue to make excellent progress is market access. At the beginning of July, we shared that UnitedHealthcare became the latest major national payer to expand coverage for EXPAREL through separate reimbursement outside the surgical bundle. With approximately 40 million covered lives, United is not only the largest health insurer in the US, but also among the most influential. With United and additional recent wins, EXPAREL is now available to well over 150 million covered lives, with separate reimbursement outside the surgical bundle. This represents roughly 50% of all medically insured lives in the US and significant progress towards our year-end goal of 160 million covered lives.

Brendan Teehan: We are particularly encouraged by momentum in 23-hour sites of care as the continued shift towards outpatient surgery and favorable reimbursement dynamics continue to provide a meaningful long-term tailwind for EXPAREL. Another critical area where we continue to make excellent progress is market access. At the beginning of July, we shared that UnitedHealthcare became the latest major national payer to expand coverage for EXPAREL through separate reimbursement outside the surgical bundle. With approximately 40 million covered lives, United is not only the largest health insurer in the US, but also among the most influential. With United and additional recent wins, EXPAREL is now available to well over 150 million covered lives, with separate reimbursement outside the surgical bundle. This represents roughly 50% of all medically insured lives in the US and significant progress towards our year-end goal of 160 million covered lives.

Speaker #2: Another critical area where we continue to make excellent progress is market access. At the beginning of July, we shared that UnitedHealthcare became the latest major national payer to expand coverage for Exparel through separate reimbursement outside the surgical bundle.

Speaker #2: With approximately $40 million covered lives, United is not only the largest health insurer in the U.S. but also among the most influential. With United and additional recent wins, Exparel is now available to well over 150 million covered lives with separate reimbursement outside the surgical bundle.

Speaker #2: This represents roughly 50% of all medically insured lives in the U.S. and significant progress towards our year-end goal of $160 million covered lives. As providers gain visibility into expanding coverage, we anticipate further adoption and utilization for Exparel over time.

Brendan Teehan: As providers gain visibility into expanding coverage, we anticipate further adoption and utilization for EXPAREL over time. We also believe United's decision will encourage additional commercial payers to evaluate similar reimbursement approaches, which could help expand patient access in the future. Looking ahead, our team remains firmly focused on expanding market access through additional commercial coverage, utilizing our growing body of compelling health, economic, and outcomes studies to drive awareness around the EXPAREL value proposition, and broadening utilization within existing and new accounts while increasing demand within new service lines less susceptible to macroeconomic pressures. Turning to ZILRETTA and iovera, both products are performing well with solid growth in the quarter as the commercial investments we made last year are creating lift. For ZILRETTA, we are seeing demonstrated momentum from the Pacira team's focus on promotional impact, along with our J&J partnership.

Brendan Teehan: As providers gain visibility into expanding coverage, we anticipate further adoption and utilization for EXPAREL over time. We also believe United's decision will encourage additional commercial payers to evaluate similar reimbursement approaches, which could help expand patient access in the future. Looking ahead, our team remains firmly focused on expanding market access through additional commercial coverage, utilizing our growing body of compelling health, economic, and outcomes studies to drive awareness around the EXPAREL value proposition, and broadening utilization within existing and new accounts while increasing demand within new service lines less susceptible to macroeconomic pressures. Turning to ZILRETTA and iovera, both products are performing well with solid growth in the quarter as the commercial investments we made last year are creating lift. For ZILRETTA, we are seeing demonstrated momentum from the Pacira team's focus on promotional impact, along with our J&J partnership.

Speaker #2: We also believe United's decision will encourage additional commercial payers to evaluate similar reimbursement approaches, which could help expand patient access in the future. Looking ahead, our team remains firmly focused on expanding market access through additional commercial coverage utilizing our growing body of compelling health economic and outcomes studies to drive awareness around the Exparel value proposition, and broadening utilization within existing and new accounts while increasing demand within new service lines less susceptible to macroeconomic pressures.

Speaker #2: Turning to Zorvolex and iovera°, both products are performing well with solid growth in the quarter, as the commercial investments we made last year are creating lift.

Speaker #2: For Zorvetta, we are seeing demonstrated momentum from the Pacira team's focus on promotional impact, along with our J&J partnership. For Iovera, the Pacira team delivered another stellar quarter, and with the Zimmer transaction now closed, we believe Iovera sits within the ideal portfolio to further unlock its full global potential.

Brendan Teehan: For iovera, the Pacira team delivered another stellar quarter, and with the Zimmer transaction now closed, we believe iovera sits within the ideal portfolio to further unlock its full global potential. Separately, on the payer front, beyond the positive coverage of EXPAREL, UnitedHealthcare has placed ZILRETTA on its preferred drug list. Importantly, this eliminates any prior authorization requirements, which is a key advantage versus competing early OA interventions. In summary, we are pleased with H1 of the year and believe we are well positioned for sustainable top-line growth for the remainder of the year and beyond. I'd like to now turn the call over to Shawn for his financial review.

Brendan Teehan: For iovera, the Pacira team delivered another stellar quarter, and with the Zimmer transaction now closed, we believe iovera sits within the ideal portfolio to further unlock its full global potential. Separately, on the payer front, beyond the positive coverage of EXPAREL, UnitedHealthcare has placed ZILRETTA on its preferred drug list. Importantly, this eliminates any prior authorization requirements, which is a key advantage versus competing early OA interventions. In summary, we are pleased with H1 of the year and believe we are well positioned for sustainable top-line growth for the remainder of the year and beyond. I'd like to now turn the call over to Shawn for his financial review.

Speaker #2: Separately on the payer front, beyond the positive coverage of Exparel, UnitedHealthcare has placed Zorvolex on its preferred drug list. Importantly, this eliminates any prior authorization requirements, which is a key advantage versus competing early OA interventions.

Speaker #2: In summary, we are pleased with the first half of the year and believe we are well positioned for sustainable top-line growth for the remainder of the year and beyond.

Speaker #2: I'd like to now turn the call over to Shawn for his financial review.

Speaker #3: Thank you, Brendan. We'll start with an update on revenue and margin trends. Second quarter, total revenues were $192.4 million, representing a 6% increase over the second quarter of 2025.

Shawn Cross: Thank you, Brent. We'll start with an update on revenue and margin trends. Q2 total revenues were $192.4 million, representing a 6% increase over Q2 2025.

Shawn Cross: Thank you, Brendan. We'll start with an update on revenue and margin trends. Q2 total revenues were $192.4 million, representing a 6% increase over Q2 2025.

Speaker #3: Exparel remains a significant source of revenue, with net sales increasing by 3% to $147.8 million, versus $142.9 million in 2025. Volume growth of approximately 4% was partially offset by a shift in vial mix and discounting from our third GPO, which went live mid-2025.

Shawn Cross: EXPAREL remains a significant source of revenue, with net sales increasing by 3%, to $147.8 million versus $142.9 million in 2025. Volume growth of approximately 4% was partially offset by a shift in volume mix and discounting from our third GPO, which went live mid-2025. As we move forward for the remainder of 2026, we expect the delta between volume and revenue growth to narrow with the recent lapping of the third GPO. For ZILRETTA, Q2 sales grew by 4% to $32.6 million versus $31.3 million reported in 2025. As Frank mentioned, this was largely attributable to the growth initiatives implemented last year, including our dedicated ZILRETTA sales force. For iovera, sales increased by 21% to $6.8 million, compared to $5.6 million in Q2 2025. Again, this was largely attributable to growth initiatives implemented last year.

Shawn Cross: EXPAREL remains a significant source of revenue, with net sales increasing by 3%, to $147.8 million versus $142.9 million in 2025. Volume growth of approximately 4% was partially offset by a shift in volume mix and discounting from our third GPO, which went live mid-2025. As we move forward for the remainder of 2026, we expect the delta between volume and revenue growth to narrow with the recent lapping of the third GPO. For ZILRETTA, Q2 sales grew by 4% to $32.6 million versus $31.3 million reported in 2025. As Frank mentioned, this was largely attributable to the growth initiatives implemented last year, including our dedicated ZILRETTA sales force. For iovera, sales increased by 21% to $6.8 million, compared to $5.6 million in Q2 2025. Again, this was largely attributable to growth initiatives implemented last year.

Speaker #3: As we move forward for the remainder of 2026, we expect the delta between volume and revenue growth to narrow with the recent lapping of the third GPO.

Speaker #3: For Zorrette, second quarter sales grew by 4% to $32.6 million versus $31.3 million reported in 2025. As Brendan mentioned, this was largely attributable to the growth initiatives implemented last year, including our dedicated Zorrette sales force. For Iovere, sales increased by 21% to $6.8 million compared to $5.6 million in the second quarter of 2025.

Speaker #3: Again, this was largely attributable to growth initiatives implemented last year. Turning to gross margins, on a consolidated basis, our second quarter non-GAAP gross margin was in line with our expectations at 78% versus an 82% for last year.

Shawn Cross: Turning to gross margins, on a consolidated basis, our Q2 non-GAAP gross margin was in line with our expectations at 78%, versus 82% for last year. For non-GAAP R&D expense, Q2 increased to $27.1 million from $24.7 million last year. This increase relates to our advancing phase II study of PCRX-201, as well as our label expansion studies, all of which are on track for top-line readouts at year-end. In addition, we're supporting three promising HCAd-based preclinical programs. Non-GAAP SG&A expense came in at $81.3 million for Q2 versus $77.2 million last year. This increase relates to non-recurring costs specific to the contested election of directors at our 2026 annual meeting of stockholders. All of this resulted in GAAP net income of $4.7 million or $0.12 per basic diluted share. Another quarter of significant adjusted EBITDA of approximately $48.7 million.

Shawn Cross: Turning to gross margins, on a consolidated basis, our Q2 non-GAAP gross margin was in line with our expectations at 78%, versus 82% for last year. For non-GAAP R&D expense, Q2 increased to $27.1 million from $24.7 million last year. This increase relates to our advancing phase II study of PCRX-201, as well as our label expansion studies, all of which are on track for top-line readouts at year-end. In addition, we're supporting three promising HCAd-based preclinical programs. Non-GAAP SG&A expense came in at $81.3 million for Q2 versus $77.2 million last year. This increase relates to non-recurring costs specific to the contested election of directors at our 2026 annual meeting of stockholders. All of this resulted in GAAP net income of $4.7 million or $0.12 per basic diluted share. Another quarter of significant adjusted EBITDA of approximately $48.7 million.

Speaker #3: For non-GAAP R&D expense, the second quarter increased to $27.1 million, from $24.7 million last year. This increase relates to our advancing phase two study of PCRX201, as well as our label expansion studies all of which are on track for top-line readouts at year-end.

Speaker #3: In addition, we're supporting three promising HCAD-based preclinical programs. Non-GAAP SG&A expense came in at $81.3 million for the second quarter versus $77.2 million last year.

Speaker #3: This increase relates to non-recurring costs specific to the contested election of directors at our 2026 annual meeting of stockholders. All of this resulted in GAAP net income of $4.7 million or $0.12 per basic diluted share, and another quarter of significant adjusted EBITDA of approximately $48.7 million.

Speaker #3: As for the balance sheet, we continue to be in a position of strength with $251 billion in cash and investments, which will be further enhanced by a $70 million upfront payment related to the closing of the Zimmer transaction.

Shawn Cross: As for the balance sheet, we continue to be in a position of strength with $251 million in cash flow investments, which will be further enhanced by a $70 million upfront payment related to the closing of the Zimmer transaction. With a strong balance sheet and a business that is producing significant operating cash flow, we believe we are well equipped to advance our 5x30 growth strategy and create shareholder value. That brings us to our full-year guidance for 2026, where we are updating the following ranges to adjust for the closing of the Zimmer transaction. The total revenue range is now $735 to $760 million versus our previously guided range of $745 to $770 million. For SG&A, we are now guiding to $310 to $330 million versus our previously guided range of $320 to $340 million.

Shawn Cross: As for the balance sheet, we continue to be in a position of strength with $251 million in cash flow investments, which will be further enhanced by a $70 million upfront payment related to the closing of the Zimmer transaction. With a strong balance sheet and a business that is producing significant operating cash flow, we believe we are well equipped to advance our 5x30 growth strategy and create shareholder value. That brings us to our full-year guidance for 2026, where we are updating the following ranges to adjust for the closing of the Zimmer transaction. The total revenue range is now $735 to 760 million versus our previously guided range of $745 to 770 million. For SG&A, we are now guiding to $310 to 330 million versus our previously guided range of $320 to $40 million.

Speaker #3: With a strong balance sheet and a business that is producing significant operating cash flow, we believe we are well equipped to advance our 5-by-30 growth strategy and create shareholder value.

Speaker #3: That brings us to our full-year guidance for 2026, where we are updating the following ranges to adjust for the closing of the Zimmer transaction.

Speaker #3: The total revenue range is now $735 to $760 million, versus our previously guided range of $745 to $770 million. For SG&A, we are now guiding to $310 to $330 million, versus our previously guided range of $320 to $340 million.

Shawn Cross: Lastly, stock-based compensation, $54 to $59 million versus our previously guided range of $54 to $62 million. For all remaining items, we are reiterating our previously guided ranges as follows. EXPAREL net product sales of $600 to $620 million. With respect to quarterly trends, we anticipate the remainder of 2026 will largely follow historical patterns, with the Q4 being our largest dollar contributor. For ZILRETTA, our guidance assumes the remainder of 2026 will be largely in line with 2025. While we are encouraged by the recent quarterly performance, we will wait to gain more visibility before updating growth assumptions. The final component of our 2026 revenue guidance relates to approximately $7 million in expected revenues from our licensing agreement for the veterinary market. Non-GAAP gross margin of 77% to 79%.

Shawn Cross: Lastly, stock-based compensation, $54 to 59 million versus our previously guided range of $54 to 62 million. For all remaining items, we are reiterating our previously guided ranges as follows. EXPAREL net product sales of $600 to 620 million. With respect to quarterly trends, we anticipate the remainder of 2026 will largely follow historical patterns, with the Q4 being our largest dollar contributor. For ZILRETTA, our guidance assumes the remainder of 2026 will be largely in line with 2025. While we are encouraged by the recent quarterly performance, we will wait to gain more visibility before updating growth assumptions. The final component of our 2026 revenue guidance relates to approximately $7 million in expected revenues from our licensing agreement for the veterinary market. Non-GAAP gross margin of 77% to 79%.

Speaker #3: Stock-based compensation of $54 to $59 million, versus our previously guided range of $54 to $62 million. For all remaining items, we are reiterating our previously guided range as follows: EXPAREL net product sales of $600 to $620 million. With respect to quarterly trends, we anticipate the remainder of 2026 will largely follow historical patterns, with the fourth quarter being our largest dollar contributor.

Speaker #3: For Zoretta, our guidance assumes the remainder of 2026 will be largely in line with 2025. While we are encouraged by the recent quarterly performance, we will wait to gain more visibility before updating growth assumptions.

Speaker #3: The final component of our 2026 revenue guidance relates to approximately $7 million in expected revenues from our licensing agreement for the veterinary market. Non-GAAP gross margin of $77 to $79%, with respect to quarterly cadence, we expect the next quarter to continue to benefit from the sale of lower-cost Exparel inventory to fall within our guided range.

Shawn Cross: With respect to quarterly cadence, we expect the next quarter to continue to benefit from the sale of lower-cost EXPAREL inventory to fall within our guided range. For the Q4, we expect margins to be slightly below our full-year range due to the sale of higher-cost inventory, as well as shutdown-related costs and other expenses. Non-GAAP R&D expense of $105 to $115 million. With the recent initiation of Part B of our phase II ASCEND study of PCRX-201, certain EXPAREL and ZILRETTA product development efforts, we expect an uptick in R&D expense in the Q4. Lastly, for those modeling adjusted EBITDA, we expect our 2026 depreciation expense to be approximately $30 million. With a focused business model, durable cash flows supported by EXPAREL and ZILRETTA, and a pipeline entering a catalyst-rich period, we believe Pacira is exceptionally well positioned for the future.

Shawn Cross: With respect to quarterly cadence, we expect the next quarter to continue to benefit from the sale of lower-cost EXPAREL inventory to fall within our guided range. For the Q4, we expect margins to be slightly below our full-year range due to the sale of higher-cost inventory, as well as shutdown-related costs and other expenses. Non-GAAP R&D expense of $105 to $115 million. With the recent initiation of Part B of our phase II ASCEND study of PCRX-201, certain EXPAREL and ZILRETTA product development efforts, we expect an uptick in R&D expense in the Q4. Lastly, for those modeling adjusted EBITDA, we expect our 2026 depreciation expense to be approximately $30 million. With a focused business model, durable cash flows supported by EXPAREL and ZILRETTA, and a pipeline entering a catalyst-rich period, we believe Pacira is exceptionally well positioned for the future.

Speaker #3: For the fourth quarter, we expect margins to be slightly below our full-year range due to the sale of higher-cost inventory as well as shutdown-related costs and other expenses.

Speaker #3: Non-GAAP R&D expense of $105 to $115 million. With the recent initiation of Part B of our phase two Ascend study of PCRX201, certain Exparel and Zoretta product development efforts, we expect an uptick in R&D expense in the fourth quarter.

Speaker #3: And lastly, for those modeling adjusted EBITDA, we expect our 2026 depreciation expense to be approximately $30 million. The focused business model durable cash flows supported by Exparel and Zoretta and a pipeline entering a catalyst-rich period, we believe this year is exceptionally well positioned for the future.

Speaker #3: With that, I'll turn the call back to Frank.

Shawn Cross: With that, I'll turn the call back to Frank.

Shawn Cross: With that, I'll turn the call back to Frank.

Speaker #1: Thanks, Shawn. As we discussed this morning, our second quarter reflects clear progress against our 5 by 30 strategy. We delivered solid financial performance, formed key partnerships, and advanced multiple value-driving pipeline programs.

Frank D. Lee: Thanks, Shawn. As we discussed this morning, our Q2 reflects clear progress against our 5x30 strategy. We delivered solid financial performance, formed key partnerships, and advanced multiple value-driving pipeline programs. I'm excited about the H2 of the year in the base business and in our upcoming pipeline catalysts. With that, we're ready to open up the call for questions. Operator?

Frank D. Lee: Thanks, Shawn. As we discussed this morning, our Q2 reflects clear progress against our 5x30 strategy. We delivered solid financial performance, formed key partnerships, and advanced multiple value-driving pipeline programs. I'm excited about the H2 of the year in the base business and in our upcoming pipeline catalysts. With that, we're ready to open up the call for questions. Operator?

Speaker #1: I'm excited about the second half of the year, both in the base business and with our upcoming pipeline catalysts. So, with that, we're ready to open up the call for questions.

Speaker #1: Alfred?

Speaker #2: Yes, thank you. At this time, we'll conduct the question-and-answer session as mentioned. And as a reminder, to ask a question, you'll need to press star 11 on your telephone for your name to be announced.

Operator: Yes. Thank you. At this time, we'll conduct the question-and-answer session as mentioned. As a reminder, to ask a question, you'll need to press *11 on your telephone for your name to be announced. To withdraw your question, please press *11 again. Please stand by while we compile our Q&A roster. Your first question comes from the line of Dennis Ding with Jefferies. Your line is now open

Operator: Yes. Thank you. At this time, we'll conduct the question-and-answer session as mentioned. As a reminder, to ask a question, you'll need to press star one one on your telephone for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile our Q&A roster. Your first question comes from the line of Dennis Ding with Jefferies. Your line is now open

Speaker #2: To withdraw your question, please press star 11 again. Please stand by while we compile our Q&A roster. Your first question comes from the line of Dennis Ding with Jefferies, your line is now open.

Speaker #4: Hey, guys. Thanks for taking my question. I have two, if I may. So, number one, on NO PAIN—is there risk of this expiring at the end of 2027?

Dennis Ding: Hey, guys. Thanks for taking my question. I have two, if I may. Number one, on NOPAIN Act, is there a risk of this expiring at the end of 2027? I guess, what are the logistics here to renewing this, if there's any particular bill that we should be focused on, or do you think this would be tacked onto a larger bill? Number two, you guys reiterated EXPAREL guidance despite Q2 being a little bit soft. I guess talk about your confidence in navigating these broader macro dynamics around consumer spending. I guess, what's going to be the driver of growth here? Do you still expect NOPAIN Act-driven volume acceleration in the H2, or is that going to be tougher to achieve because of the macro dynamics you mentioned? Thanks so much.

Dennis Ding: Hey, guys. Thanks for taking my question. I have two, if I may. Number one, on NOPAIN Act, is there a risk of this expiring at the end of 2027? I guess, what are the logistics here to renewing this, if there's any particular bill that we should be focused on, or do you think this would be tacked onto a larger bill? Number two, you guys reiterated EXPAREL guidance despite Q2 being a little bit soft. I guess talk about your confidence in navigating these broader macro dynamics around consumer spending. I guess, what's going to be the driver of growth here? Do you still expect NOPAIN Act-driven volume acceleration in the H2, or is that going to be tougher to achieve because of the macro dynamics you mentioned? Thanks so much.

Speaker #4: And I guess, what are the logistics here to renewing this? And if there's any particular build that we should be focused on, or do you think this would be tacked onto a larger bill?

Speaker #4: And then, number two, you guys reiterated Exparel guidance despite Q2 being a little bit soft. So I guess talk about your confidence in navigating these broader macro dynamics around consumer spending.

Speaker #4: And I guess, what's going to be the driver of growth here? And do you still expect no pain-driven volume acceleration in the second half, or is that going to be tougher to achieve because of the macro dynamics you mentioned?

Speaker #4: Thanks so much.

Speaker #5: Hey, Dennis. Frank Lee here. Thanks for the question. So on the first one about no pain, Exparel, you may have some thoughts here, and I'll turn it over to Tony, our general counsel and head of government relations.

Frank D. Lee: Hey, Dennis. Frank Lee here. Thanks for the question. On the first one about No Pain, EXPAREL, maybe some thoughts here, I'll turn it over to Tony, our General Counsel and head of government relations. First off, as we step back, as we know at present, it's due to expire/be re-upped at the end of last year. I'm sorry, next year. We're making very good progress, as you just heard from Brendan, in terms of what we're doing around commercial payers. The fact that we've got United on board is a real win. For those of you who've been around payers, United is the benchmark. We're really pleased by that and all the health economic data that supports inclusion in payers going forward. Bottom line there is what I'm saying is that commercial payers are picking it up.

Frank D. Lee: Hey, Dennis. Frank D. Lee here. Thanks for the question. On the first one about No Pain, EXPAREL, maybe some thoughts here, I'll turn it over to Tony, our General Counsel and head of government relations. First off, as we step back, as we know at present, it's due to expire/be re-upped at the end of last year. I'm sorry, next year. We're making very good progress, as you just heard from Brendan, in terms of what we're doing around commercial payers. The fact that we've got United on board is a real win. For those of you who've been around payers, United is the benchmark. We're really pleased by that and all the health economic data that supports inclusion in payers going forward. Bottom line there is what I'm saying is that commercial payers are picking it up.

Speaker #5: First off, as we step back, as we know, at present, it's due to expire or be re-upped at the end of last year—I'm sorry, next year.

Speaker #5: And we're making very good progress, as you've just heard from Brendan, in terms of what we're doing around commercial payers. And the fact that we've got United on board is a real win.

Speaker #5: For those of you who've been around payers, United is the benchmark. And so we're really pleased by that. And all the health economic data that supports inclusion in payers going forward.

Speaker #5: So, bottom line there, what I'm saying is that commercial payers are picking it up. There's a clear health economic story. And so, let me just turn it over to Tony to talk a little bit about NO PAIN, which is specifically for PMS patients in the outpatient setting.

Frank D. Lee: There's a clear health economic story. Let me just turn it over to Tony to talk a little bit about No Pain, which is specifically for CMS patients in the outpatient setting. Tony? Yeah.

Frank D. Lee: There's a clear health economic story. Let me just turn it over to Tony to talk a little bit about No Pain, which is specifically for CMS patients in the outpatient setting. Tony? Yeah.

Speaker #5: So, Tony.

Speaker #4: Okay. Thanks, Frank. We're working we're actually trying or working with two paths. We're working directly with CMS, who has the ability to provide the basically, the same reimbursement that no pain does through its annual rulemaking cycle.

Anthony Molloy: Thanks, Frank. We're working with two paths. We're working directly with CMS, who has the ability to provide basically the same reimbursement that NOPAIN Act does through its annual rulemaking cycle. We're also working with Congress. We would expect similar to last time that this would be tacked on and be part of a larger bill. We're not anticipating it being a standalone legislation. The reality is these things usually happen when they need to happen and not earlier. We're anticipating something towards the end of next year.

Anthony Molloy: Thanks, Frank. We're working with two paths. We're working directly with CMS, who has the ability to provide basically the same reimbursement that NOPAIN Act does through its annual rulemaking cycle. We're also working with Congress. We would expect similar to last time that this would be tacked on and be part of a larger bill. We're not anticipating it being a standalone legislation. The reality is these things usually happen when they need to happen and not earlier. We're anticipating something towards the end of next year.

Speaker #4: And then we're also working with Congress. We would expect, similar to last time, that this would be tacked on and be part of a larger bill.

Speaker #4: We're not anticipating it being a standalone legislation. And the reality is, these things usually happen when they need to happen, and not earlier. So we're anticipating something towards the end of next year.

Speaker #5: Okay. Thanks, Tony. And then, Dennis, you had asked about Q2. So just maybe some high-level thoughts here, and I'll turn it over to Brendan for some additional commentary.

Frank D. Lee: Okay. Thanks, Tony. Dennis, you had asked about Q2, just maybe some high-level thoughts here, and I'll turn it over to Brendan for some additional commentary. Just at a high level, just to make sure we're super clear on this, is we're optimistic about H2. The reason is that as Brendan mentioned, we've increased penetration across all segments. That's very important. Again, as I mentioned in my comments, these sorts of procedures in the inpatient setting that are more deferrable tend to wax and wane with macroeconomic conditions. With that, let me turn it to Brendan for his additional thoughts here.

Frank D. Lee: Okay. Thanks, Tony. Dennis, you had asked about Q2, just maybe some high-level thoughts here, and I'll turn it over to Brendan for some additional commentary. Just at a high level, just to make sure we're super clear on this, is we're optimistic about H2. The reason is that as Brendan mentioned, we've increased penetration across all segments. That's very important. Again, as I mentioned in my comments, these sorts of procedures in the inpatient setting that are more deferrable tend to wax and wane with macroeconomic conditions. With that, let me turn it to Brendan for his additional thoughts here.

Speaker #5: And just at a high level, just to make sure we're super clear on this, is we're optimistic about the second half. And the reason is, is that as Brendan mentioned, we've increased penetration across all segments.

Speaker #5: So that's very important. And again, as I mentioned in my comments, these sorts of procedures in the inpatient setting that are more deferrable tend to wax and wane with macroeconomic conditions.

Speaker #5: So I mean, with that, let me turn it to Brendan for his additional thoughts here.

Speaker #3: Yes. Thanks for the question, Dennis, and Frank gives good commentary there. In the second half, we're focused on several I think key and important growth drivers.

Brendan Teehan: Thanks for the question, Dennis, and Frank gives good commentary there. In H2, we're focused on several key and important growth drivers. The first is the rapidly growing ASC and HOPD segments, both of which are outpacing the broader hospital market for us. We can and will increase our breadth of coverage there to cover those procedures that are taking place. The second is this, what I would call payer tipping point. UnitedHealthcare, as Frank pointed out, is a substantial addition. Even since the UnitedHealthcare contract, we've had several other payers come on board, pushing us well beyond the 150 million patient range. That, to us, is an encouraging sign of where everything is headed. Finally, we take a lot of confidence in both the penetration and share that we've been able to generate.

Brendan Teehan: Thanks for the question, Dennis, and Frank gives good commentary there. In H2, we're focused on several key and important growth drivers. The first is the rapidly growing ASC and HOPD segments, both of which are outpacing the broader hospital market for us. We can and will increase our breadth of coverage there to cover those procedures that are taking place. The second is this, what I would call payer tipping point. UnitedHealthcare, as Frank pointed out, is a substantial addition. Even since the UnitedHealthcare contract, we've had several other payers come on board, pushing us well beyond the 150 million patient range. That, to us, is an encouraging sign of where everything is headed. Finally, we take a lot of confidence in both the penetration and share that we've been able to generate.

Speaker #3: The first is the rapidly growing ASC and hospital outpatient segments, both of which are outpacing the broader hospital market for us. We can and will increase our breadth of coverage there, to cover those procedures that are taking place.

Speaker #3: The second is this, what I would call a payer tipping point. UnitedHealthcare, as Frank pointed out, is a substantial addition. Even since the UnitedHealthcare contract, we've had several other payers come on board, pushing us well beyond the 150 million patient range.

Speaker #3: That, to us, is an encouraging sign of where everything is headed. And then finally, we take a lot of confidence in the in both the penetration and share that we've been able to generate.

Speaker #3: It is significantly outpacing the total available market near term, and we expect that to continue long term. That, coupled with our health economics and outcomes research data—which is an expanding evidence package that demonstrates that Exparel is well worth the price for the substantial cost that it offsets—gives us a lot of confidence, both near term and longer term.

Brendan Teehan: It is significantly outpacing the total available market near term. We expect with these additional payer wins, it will continue long term. That, coupled with our health economics and outcomes research data, which is an expanding evidence package that demonstrates that EXPAREL is well worth the price for the substantial cost that it offsets, give us a lot of confidence both near term and longer term.

Brendan Teehan: It is significantly outpacing the total available market near term. We expect with these additional payer wins, it will continue long term. That, coupled with our health economics and outcomes research data, which is an expanding evidence package that demonstrates that EXPAREL is well worth the price for the substantial cost that it offsets, give us a lot of confidence both near term and longer term.

Speaker #5: Thanks, Brendan. And just one last thought here, Dennis, is that as a reminder, these commercial payer wins are very important in the outpatient setting, where Exparel is reimbursed outside the bundle separately.

Frank D. Lee: Thanks, Brendan. Just one last thought here, Dennis, is that as a reminder, these commercial payer wins are very important in the outpatient setting where EXPAREL is reimbursed outside the bundle separately. As we've talked about before in commercial payer settings, the reimbursement, that is the remittance, is substantially higher versus the CMS reimbursement. We've got a good tailwind there.

Frank D. Lee: Thanks, Brendan. Just one last thought here, Dennis, is that as a reminder, these commercial payer wins are very important in the outpatient setting where EXPAREL is reimbursed outside the bundle separately. As we've talked about before in commercial payer settings, the reimbursement, that is the remittance, is substantially higher versus the CMS reimbursement. We've got a good tailwind there.

Speaker #5: And as we've talked about for in commercial payer settings, the reimbursement that is a remittance is substantially higher versus the CMS reimbursement. So we've got a good tailwind there.

Speaker #3: Perfect. Thanks so much.

Dennis Ding: Perfect. Thanks so much.

Dennis Ding: Perfect. Thanks so much.

Speaker #1: Thank you. Your next question comes from the line of Serge Belanger with Needham. Your line is now open.

Operator: Thank you. Your next question comes to the line of Serge Belanger with Needham. Your line is now open.

Operator: Thank you. Your next question comes to the line of Serge Belanger with Needham. Your line is now open.

Speaker #6: Hi, good afternoon. Thanks for taking my questions. I have a follow-up on Exparel. Volume growth was 4%, which is a bit of a step-down from prior quarters.

Serge Belanger: Hi, good afternoon. Thanks for taking my question. I guess just a follow-up on EXPAREL. Volume growth of 4%, a bit of a step down from the prior quarters. I'm just curious if the softness that you've seen in Q2 has continued into Q3 and could continue later in the summer. Now that you've divested iovera, just curious if that kind of changes your appetite for BD and adding additional assets to the portfolio. Thanks.

Serge Belanger: Hi, good afternoon. Thanks for taking my question. I guess just a follow-up on EXPAREL. Volume growth of 4%, a bit of a step down from the prior quarters. I'm just curious if the softness that you've seen in Q2 has continued into Q3 and could continue later in the summer. Now that you've divested iovera, just curious if that kind of changes your appetite for BD and adding additional assets to the portfolio. Thanks.

Speaker #6: I'm just curious if the softness that you've seen in the second quarter has continued into the third quarter, and if it could continue later in the summer?

Speaker #6: And then, now that you've divested Iovera, just curious if that kind of changes your appetite for BD and adding additional assets to the portfolio.

Speaker #6: Thanks.

Speaker #5: Okay. Hey, Serge, thanks for the question. So, the first one was around Q2 and what are we seeing in Q3. I'd say it's early days.

Frank D. Lee: Hey, Serge, thanks for the question. The first one was around Q2 and what are we seeing in Q3. I'd say it's early days, and as Brent mentioned, what we're really excited about is that in the outpatient setting, in places where we have a tailwind from a commercial payer perspective, we're seeing it substantially outperform the marketplace. Stay tuned. Our business is focused on growth going forward in those macro resilient procedure types. Again, our penetration has increased across all these segments. We'll see how long-lasting the cycle is. As I mentioned, these kinds of procedures in the inpatient setting, where it's not reimbursed separately outside of the bundle, tend to wax and wane historically. Second question was around iovera divestiture and what that means from a BD perspective.

Frank D. Lee: Hey, Serge, thanks for the question. The first one was around Q2 and what are we seeing in Q3. I'd say it's early days, and as Brendan mentioned, what we're really excited about is that in the outpatient setting, in places where we have a tailwind from a commercial payer perspective, we're seeing it substantially outperform the marketplace. Stay tuned. Our business is focused on growth going forward in those macro resilient procedure types. Again, our penetration has increased across all these segments. We'll see how long-lasting the cycle is. As I mentioned, these kinds of procedures in the inpatient setting, where it's not reimbursed separately outside of the bundle, tend to wax and wane historically. Second question was around iovera divestiture and what that means from a BD perspective.

Speaker #5: And as Brendan mentioned, what we're really excited about is that in the outpatient setting, in places where we have a tailwind from a commercial payer perspective, we're seeing it substantially outperform the marketplace.

Speaker #5: And so, stay tuned. Our business is focused on growth going forward in those macro-resilient procedure types. And again, our penetration has increased across all these segments.

Speaker #5: So we'll see how long-lasting the cycle is. As I mentioned, these kinds of procedures in the inpatient setting, where it's not reimbursed separately outside of the bundle, tend to wax and wane historically.

Speaker #5: So second question was around Iovera divestiture and what that means from a BD perspective. So first of all, let me just say that the team did a remarkable job of getting us here.

Frank D. Lee: First of all, let me just say that the team did a remarkable job of getting us here. As you know, initially, we started out with partnership discussions with Zimmer Biomet, and this matured into a very thorough process where we believe we have the right person, right group of people and company taking this asset forward, not only in the US, but outside the US. It was closed this past Friday, 31 July, with tremendous effort, and I'm very confident that this team is the right team, that is Zimmer Biomet, to maximize the value of iovera, both here in the US and outside of the US. Separately, with respect to BD, as Shawn has reiterated many times, we're going to be very thoughtful about maximizing shareholder value and returns in our capital allocation.

Frank D. Lee: First of all, let me just say that the team did a remarkable job of getting us here. As you know, initially, we started out with partnership discussions with Zimmer Biomet, and this matured into a very thorough process where we believe we have the right person, right group of people and company taking this asset forward, not only in the US, but outside the US. It was closed this past Friday, 31 July, with tremendous effort, and I'm very confident that this team is the right team, that is Zimmer Biomet, to maximize the value of iovera, both here in the US and outside of the US. Separately, with respect to BD, as Shawn has reiterated many times, we're going to be very thoughtful about maximizing shareholder value and returns in our capital allocation.

Speaker #5: And as you know, initially we started out with partnership discussions with Zimmer Biomet, and this matured into a very thorough process where we believe we have the right person, the right group of people, and company taking this asset forward, not only in the US but also outside the US.

Speaker #5: So it was closed this past Friday, July 31st, with a tremendous effort. And I'm very, very confident that this team is the right team that is Zimmer Biomet to maximize the value of Iovera both here in the US and outside of the US.

Speaker #5: Separately, with respect to BD, as Shawn has reiterated many times, we're going to be very, very thoughtful about maximizing shareholder value and returns. And our capital allocation.

Speaker #5: So we'll be looking very carefully at that. But our strategy, as we've articulated before, is to focus on those things that could be accretive in the near term and to take very careful, calculated—I would say, risk-managed—approaches to the pipeline.

Frank D. Lee: We'll be looking very carefully at that, but our strategy, as we've articulated before, is to focus on those things that could be accretive in the near term, and take very careful, calculated, I would say, risk-managed approaches to the pipeline. That hasn't changed. We'll continue to make sure that our capital allocation is consistent with the way we've behaved, going forward to maximize shareholder value.

Frank D. Lee: We'll be looking very carefully at that, but our strategy, as we've articulated before, is to focus on those things that could be accretive in the near term, and take very careful, calculated, I would say, risk-managed approaches to the pipeline. That hasn't changed. We'll continue to make sure that our capital allocation is consistent with the way we've behaved, going forward to maximize shareholder value.

Speaker #5: So that hasn't changed. And so we'll continue to make sure that our capital allocation is consistent with the way we behaved going forward to maximize shareholder value.

Speaker #6: Thank you.

Serge Belanger: Thank you.

Serge Belanger: Thank you.

Frank D. Lee: I guess one last thing that I'd add is that now we are very clear-minded about being a pharmaceutical company as opposed to being a pharmaceutical and med tech company, which, as we've talked about before, is very different. I think this focus will help us execute even better going forward.

Speaker #5: And I guess one last thing that I'd add is that now we are a very clear-minded about being a pharmaceutical company as opposed to being a pharmaceutical and medtech company.

Frank D. Lee: I guess one last thing that I'd add is that now we are very clear-minded about being a pharmaceutical company as opposed to being a pharmaceutical and med tech company, which, as we've talked about before, is very different. I think this focus will help us execute even better going forward.

Speaker #5: Which, as we've talked about before, is very different. And I think this focus will help us execute even better going forward.

Speaker #1: Thank you. Your last question comes from Line of Heartache Parek with JP Morgan. Your line is now open.

Operator: Thank you. Your last question comes from the line of Hardik Parikh with JPMorgan. Your line is now open.

Operator: Thank you. Your last question comes from the line of Hardik Parikh with JPMorgan. Your line is now open.

Speaker #5: Hey, everybody. Thanks for that question. I just have a two-part one. Well, first is just kind of building off some of the earlier questions.

Hardik Parikh: Hey, everybody. Thanks for the question. Two part one. Well, first is just kind of building off some of the earlier questions. To achieve your kind of implied H2 guide for EXPAREL, what have you assumed about the macro headwinds? Do you need a recovery to meet that guide? Then the second part is, you guys have utilized the partnership model in ZILRETTA. Could you envision yourself partnering in the US with EXPAREL with a distributor model? Thank you.

Hardik Parikh [Equity Research: Hey, everybody. Thanks for the question. Two part one. Well, first is just kind of building off some of the earlier questions. To achieve your kind of implied H2 guide for EXPAREL, what have you assumed about the macro headwinds? Do you need a recovery to meet that guide? Then the second part is, you guys have utilized the partnership model in ZILRETTA. Could you envision yourself partnering in the US with EXPAREL with a distributor model? Thank you.

Speaker #5: To achieve your kind of implied second-half guide for Exparel, what have you assumed about the macro headwinds? Do you need a recovery to meet that guide?

Speaker #5: And then the second part is, you guys have utilized the partnership model in Zilretta. Could you envision yourself partnering in the US with Exparel with a distributor model?

Speaker #5: Thank you.

Speaker #3: So thanks for the question. You asked about whether a quote of recovery is needed. What we're basing our growth and numbers on is continued in terms of what we see right now in the softness.

Frank D. Lee: Hardik, thanks for the question. You asked about whether a quote, "A recovery is needed." What we're basing our growth and numbers on is continued, in terms of what we see right now in the softness, and really growing in the places where we can grow. As Brent articulated very clearly, we've had very good success in the outpatient setting, in those procedures that are macro resilient. You can see that we've had some substantial commercial payer wins that are directly applicable in those kind of settings. Again, as you know that in an inpatient setting, EXPAREL is not reimbursed separately outside of the bundle. That's what we've assumed, and we've seen good results as we've focused our business toward those segments of our business. In terms of the partnering model, I want to step back a little bit.

Frank D. Lee: Hardik, thanks for the question. You asked about whether a quote, "A recovery is needed." What we're basing our growth and numbers on is continued, in terms of what we see right now in the softness, and really growing in the places where we can grow. As Brendan articulated very clearly, we've had very good success in the outpatient setting, in those procedures that are macro resilient. You can see that we've had some substantial commercial payer wins that are directly applicable in those kind of settings. Again, as you know that in an inpatient setting, EXPAREL is not reimbursed separately outside of the bundle. That's what we've assumed, and we've seen good results as we've focused our business toward those segments of our business. In terms of the partnering model, I want to step back a little bit.

Speaker #3: And really growing in the places where we can grow. As Brendan articulated very clearly, we've had a very good success in the outpatient setting.

Speaker #3: In those procedures that are macro-resilient, and you can see that we've had some substantial commercial payer wins that are directly applicable in those kind of settings.

Speaker #3: So again, as you know, that in an inpatient setting, Exparel is not reimbursed separately outside of the bundle. And so that's what we've assumed.

Speaker #3: And we've seen good results. As we've focused our business toward that those segments of our business. In terms of the partnering model, I want to step back a little bit.

Speaker #3: As we've articulated in our 5x30, partnerships are very important. And to date, we've signed some very good partnerships. We've signed LG Chem, we've signed Johnson & Johnson, and now with Zimmer Biomet, a partnership for spasticity.

Frank D. Lee: As we've articulated in our 5x30, partnerships are very important. To date, we've signed some very good partnerships. We've signed LG Chem, we've signed Johnson & Johnson, and now with Zimmer Biomet, a partnership for spasticity. We remain open-minded about how we can cost-effectively and efficiently get our products out to our customers, both here in the US and outside the US. We remain very open-minded about that. We will certainly always have our direct field forces and support. If the question is, would we want to, at some point, consider partnership of EXPAREL to extend our reach, that's certainly within the realm of possibility, but we'd have to do that in a way that's very cost-effective and returns value to both organizations. One of the ways we've done that is ex-US, as you can see with our LG Chem partnership.

Frank D. Lee: As we've articulated in our 5x30, partnerships are very important. To date, we've signed some very good partnerships. We've signed LG Chem, we've signed Johnson & Johnson, and now with Zimmer Biomet, a partnership for spasticity. We remain open-minded about how we can cost-effectively and efficiently get our products out to our customers, both here in the US and outside the US. We remain very open-minded about that. We will certainly always have our direct field forces and support. If the question is, would we want to, at some point, consider partnership of EXPAREL to extend our reach, that's certainly within the realm of possibility, but we'd have to do that in a way that's very cost-effective and returns value to both organizations. One of the ways we've done that is ex-US, as you can see with our LG Chem partnership.

Speaker #3: So we remain open-minded about how we can cost-effectively and efficiently get our products out to our customers both here in the US and outside the US.

Speaker #3: So we remain very open-minded about that. We will certainly always have our direct field forces and support, but if the question is, would we want to at some point consider partnership of Exparel to extend our reach?

Speaker #3: That's certainly within the realm of possibility. But we'd have to do that in a way that's very cost-effective and returns value to both organizations.

Speaker #3: And one of the ways we've done that is XUS. As you can see, with our LG Chem partnership and the good news there is, as I mentioned, they have already filed now in South Korea and we were going to see the fruits of that labor in terms of revenue come to us in 2027.

Frank D. Lee: The good news there is, as I mentioned, they have already filed now in South Korea, and we are going to see the fruits of that labor in terms of revenue come to us in 2027.

Frank D. Lee: The good news there is, as I mentioned, they have already filed now in South Korea, and we are going to see the fruits of that labor in terms of revenue come to us in 2027.

Speaker #3: Thank you.

Brendan Teehan: Thank you.

Hardik Parikh [Equity Research: Thank you.

Speaker #5: Thanks, Hardik.

Frank D. Lee: Thanks, Hardy.

Frank D. Lee: Thanks, Hardik.

Speaker #1: Thank you. The next question comes to a line of Sahil Dingra with RBC Capital Markets. Your line is now open.

Operator: Thank you. The next question comes from the line of Sahil Dhingra with RBC Capital Markets. Your line is now open.

Operator: Thank you. The next question comes from the line of Sahil Dhingra with RBC Capital Markets. Your line is now open.

Speaker #6: Hi. Good afternoon. This is Sahil for Dagmi. I have two questions. First is on the expedited volume growth. Could you expand what was the ASC versus HOCT versus community hospital split in terms of the volume growth?

Sahil Dhingra: Hi, good afternoon. This is Sahil for Dagmar. I have two questions. First is on the EXPAREL volume growth. Could you expand what was the ASC versus HOPD versus community hospital split in terms of the volume growth? Are larger IDNs finally moving the needle, or is the growth still concentrated in the ASCs and the community hospitals?

Sahil Dhingra: Hi, good afternoon. This is Sahil for Dagmar. I have two questions. First is on the EXPAREL volume growth. Could you expand what was the ASC versus HOPD versus community hospital split in terms of the volume growth? Are larger IDNs finally moving the needle, or is the growth still concentrated in the ASCs and the community hospitals?

Speaker #6: And are larger IDNs finally moving the needle, or is the growth still concentrated in the ASCs and the community hospitals?

Speaker #5: Well, thanks for the question, Sahil. And let me address it briefly, and I'll turn it over to Brendan for some additional commentary. With regard to the breakout of the Exparel volume, as you've asked, we typically don't break it out that way.

Frank D. Lee: Well, thanks for the question, Sahil, and let me address it briefly and I'll turn it over to Bren for some additional commentary. With regard to the breakout of the EXPAREL volume, as you've asked, we typically don't break it out that way, so we don't have those data to provide to you. With respect to the contribution and growth of IDNs versus other parts of our business, I'm going to turn it over to Bren for his thoughts here.

Frank D. Lee: Well, thanks for the question, Sahil, and let me address it briefly and I'll turn it over to Bren for some additional commentary. With regard to the breakout of the EXPAREL volume, as you've asked, we typically don't break it out that way, so we don't have those data to provide to you. With respect to the contribution and growth of IDNs versus other parts of our business, I'm going to turn it over to Brendan for his thoughts here.

Speaker #5: So we don't have those data to provide to you. With respect to the contribution and growth of IDNs versus other parts of our business, I'm going to turn it over to Brendan for his thoughts here.

Speaker #3: Yes, Sahil. Thanks for the question. And I'm confident that our the split of our business probably is reflective of other things you've heard in the second quarter.

Brendan Teehan: Yes, Sahil, thanks for the question, and I'm confident that the split of our business probably is reflective of other things you've heard in the Q2. There are two dynamics that we have to take into account. One is the migration of procedures to the outpatient setting, and particularly to ASCs. The hospital volumes, I think, in general, are down, but they're further impacted, I would say, by this deferred elective soft tissue procedure dynamic. EXPAREL volumes were still significantly higher than what we saw for hospital procedures. In ASCs, which were modestly up for total available market, I would say that we significantly outpaced that in the ASC setting.

Brendan Teehan: Yes, Sahil, thanks for the question, and I'm confident that the split of our business probably is reflective of other things you've heard in the Q2. There are two dynamics that we have to take into account. One is the migration of procedures to the outpatient setting, and particularly to ASCs. The hospital volumes, I think, in general, are down, but they're further impacted, I would say, by this deferred elective soft tissue procedure dynamic. EXPAREL volumes were still significantly higher than what we saw for hospital procedures. In ASCs, which were modestly up for total available market, I would say that we significantly outpaced that in the ASC setting.

Speaker #3: There are two dynamics that we have to take into account. One is the migration of procedures to the outpatient setting, particularly to ASCs.

Speaker #3: So hospital volumes, I think in general, are down, but they're further impacted, I would say, by this elective deferred elective soft tissue procedure dynamic.

Speaker #3: So, Exparel volumes were still significantly higher than what we saw for hospital procedures. In ASCs, which were modestly up for total available market, I would say that we significantly outpaced that in the ASC setting.

Speaker #3: Which is another reason, given the reimbursement that we've just discussed, multiple payer wins including UnitedHealthcare in that space that we feel confident in our ability to continue to capitalize on both the migration of procedures to that particular site of care but also the value proposition for Exparel there.

Brendan Teehan: Which is another reason, given the reimbursement that we've just discussed, multiple payer wins, including UnitedHealthcare in that space, that we feel confident in our ability to continue to capitalize on both the migration of procedures to that particular site of care, but also the value proposition for EXPAREL there.

Brendan Teehan: Which is another reason, given the reimbursement that we've just discussed, multiple payer wins, including UnitedHealthcare in that space, that we feel confident in our ability to continue to capitalize on both the migration of procedures to that particular site of care, but also the value proposition for EXPAREL there.

Speaker #5: Thanks, Sahil, for the question. Go ahead. Anything else?

Frank D. Lee: Thanks, Sahil, for the question. Anything else?

Frank D. Lee: Thanks, Sahil, for the question. Anything else?

Speaker #6: Yeah. My next question is on the PCRx201 part A timing. Can you tighten the year-end timeline for us? And will the data be disclosed at the medical meeting, or will it be a standalone disclosure?

Sahil Dhingra: Yeah. My next question is on the PCRX201 Part A timing. Can you tighten the year-end timeline for us? Will the data be disclosed at a medical meeting, or will it be a standalone disclosure? Thank you.

Sahil Dhingra: Yeah. My next question is on the PCRX201 Part A timing. Can you tighten the year-end timeline for us? Will the data be disclosed at a medical meeting, or will it be a standalone disclosure? Thank you.

Speaker #6: Thank you.

Speaker #5: Yes, Sahil. Thanks for the question. So let me step back here. I’m very excited about the upcoming catalyst as we go through the second half of the year.

Frank D. Lee: Yes, Sahil. Thanks for the question. Let me step back here. I'm very excited about the upcoming catalysts as we go through the H2 of the year. Certainly, the catalysts include, as I mentioned earlier, number one, the spasticity data registrational study with iovera. Number two, the ZILRETTA shoulder OA data, which is, again, another registrational study. Number three, as you mentioned, PCRX201 Part A. With that Part A piece, I'm going to turn it over to Jonathan here, our Chief Medical Officer, to talk a little bit about your question, and you had asked about timing and some other things. Jonathan.

Frank D. Lee: Yes, Sahil. Thanks for the question. Let me step back here. I'm very excited about the upcoming catalysts as we go through the H2 of the year. Certainly, the catalysts include, as I mentioned earlier, number one, the spasticity data registrational study with iovera. Number two, the ZILRETTA shoulder OA data, which is, again, another registrational study. Number three, as you mentioned, PCRX201 Part A. With that Part A piece, I'm going to turn it over to Jonathan here, our Chief Medical Officer, to talk a little bit about your question, and you had asked about timing and some other things. Jonathan.

Speaker #5: And certainly, the catalysts include as I mentioned earlier, number one, the spasticity data, registrational study with Iovera. Number two, the Zilreta shoulder OA data, which is, again, another registrational study.

Speaker #5: And number three, as you mentioned, PCRx201 part A. So with that, part A piece, I'm going to turn it over to Jonathan here, our chief medical officer to talk a little bit about your question and you had asked about timing and some other things.

Speaker #5: So Jonathan.

Speaker #6: Thank you. So yeah, our plan is at the end of the year, we're going to have these three readouts top line readouts of part A, remember that part A is the first part of our two-part phase two trial and will provide insights and power for safety and we will look for some efficacy trends.

Jonathan Slonin: Thank you. Yeah, our plan is, at the end of the year, we're going to have these three top-line readouts on Part A. Remember that Part A is the first part of our two-part phase II trial, and will provide insights and power for safety, and we will look for some efficacy trends. We estimate reporting those top-line results at the end of the year, and we'll continue throughout 2027 to report additional data sets.

Jonathan Slonin: Thank you. Yeah, our plan is, at the end of the year, we're going to have these three top-line readouts on Part A. Remember that Part A is the first part of our two-part phase II trial, and will provide insights and power for safety, and we will look for some efficacy trends. We estimate reporting those top-line results at the end of the year, and we'll continue throughout 2027 to report additional data sets.

Speaker #6: We estimate reporting those top line results at the end of the year and we'll continue throughout 2027 to report additional data sets okay. Thank you.

Sahil Dhingra: Okay. Thank you.

Sahil Dhingra: Okay. Thank you.

Operator: Okay. Thank you. I'm showing no further questions at this time. I would now like to turn it back to Susan Mesco for closing remarks.

Operator: Okay. Thank you. I'm showing no further questions at this time. I would now like to turn it back to Susan Mesco for closing remarks.

Speaker #1: Great. Thank you. I'm showing no further questions at this time. It would now like to turn it back to Susan Mesco for closing remarks.

Speaker #2: Thank you, Kathy. And thanks to everyone on the call for your questions and time today. We are excited about the opportunities that lie ahead for us throughout the remainder of the year.

Susan Mesco: Thank you, Kathy, thanks to all on the call for your questions and time today. We are excited about the opportunities that lie ahead for us. Throughout the remainder of the year, we will continue to ensure we are well-positioned for long-term success by executing our 5 by 30 plan to advance our mission. Thank you, be well.

Susan Mesco: Thank you, Kathy, thanks to all on the call for your questions and time today. We are excited about the opportunities that lie ahead for us. Throughout the remainder of the year, we will continue to ensure we are well-positioned for long-term success by executing our 5 by 30 plan to advance our mission. Thank you, be well.

Speaker #2: We will continue to ensure we are well positioned for long-term success by executing our 5 by 30 plan to advance our mission. Thank you and be well.

Operator: Thank you. This does conclude the program, and you may now disconnect.

Operator: Thank you. This does conclude the program, and you may now disconnect.