PCRX Q3 2026 earnings call transcript, November 5, 2026

Thank you for the questions.

China specific, we're very, very pleased with the progress that we're making in China with the investments that we've made. You know, we see some policy implementation in China, but we still see very, very good momentum as we go through the year. We expect that to continue as we get into 27 and beyond. I think we're kind of. Uniquely well positioned given the brands that we have, the investments that we've made in certain channels in China, and the overall dynamics of the quality of the affiliate that we have in China. I think we're very well positioned to finish the year strong and move into 27 with some good momentum. I'll turn it over to Paul to get more specific on some of that.

Okay.

Hey, Les.

So just to add to what Scott said, the impact for the quarter was in line with our expectations. I think back in the second quarter, we had talked about the moderating growth. First half of the year, our growth was 16%, 17%. The third quarter was 10% year over year. So it did moderate, you know, to a level that we expected. We currently are seeing some variability in the level of readiness and enforcement of the policy across provinces, which is really preventing us from being precise on what we think the impact is. But as we look into... Q4, consistent with what we said last quarter, we expect Q4 to be a higher impact than Q3 as other provinces come online. So the way I'm thinking about it is the growth will continue to come down, I believe, below the 10% that we had in Q3. But still very, very healthy in Q4. And then more importantly, as we exit the year and go into 27, we still see growth coming from China next year, albeit closer to the historical averages we've had, you know, more in the low to middle, mid single digit range, but very excited about. Uh, about that business. Um, no, I think unless you asked a little bit about X China and just one thing I'd like to point out is the mixed evolution that we're seeing in the United States, uh, moving towards, uh, you know, more complex, higher margin products. You know, we, by the time we get to the end of the year, we will have eight.

complex injectables approved, uh, two respiratory medicines, three, uh, HRT transdermals. Uh, and so we're really working hard to evolve the portfolio in the U S towards, towards higher margin, higher growth, stickier revenue, complex generics. Uh, so we're also very pleased with how, with how we're tracking there.

Hey, Scott, maybe I could just follow up on Les's question a little bit. I wanted to zoom out and just sort of look at the growth so far year to date. I think now you're with the guidance ratio. You're sort of calling for, you know, two percent revenue growth. And if you go back to your analyst day back in March, I think you were sort of comfortable at the time with that two to three percent, you know, sort of base business growth. And, you know, when you look at the year, certainly some things played out, you know, maybe better than you would have expected, like China, maybe some of the value. It launches, you know, clearly on the women's health side, you know, but you also had the facility fire maybe on the negative side. Could you just maybe just give us a little bit of a postmortem, you know, on this year and some of those bigger highlights and what went better and maybe more importantly, what didn't play out like you thought as we think about the exit rate here in 26 heading into 2027. I know you don't want to give guidance, but I'm just kind of curious if you feel better about your base business today, you know, heading into the new year. And then my second question was for leap and I apologize if I missed this in your prepared remarks, but I just wanted to make sure I'm clear on the timing of the beat outs for the latter grill and scenario mod in 27 and, and any high level expectations you might have there. Thanks. And I'll stop there.

Thanks, Glenn.

I'll, I'll say a couple of comments, kick it over to Paul and to Philippe to answer your questions. You know, we're very, very pleased with the momentum that we have so far this year. You take a look at the first nine months of the year, 2% revenue growth, just a little bit above. As we talked about, 6% EBITDA growth, 8% EPS growth relative to prior year. So we're very, very pleased with the progress that we're making towards the goals that we put out earlier this year. Also, when you add Pissera, and hopefully we'll get that acquisition close, and you take a look at 27, our U.S. Innovative Medicines business. We'll be over a billion dollars in 27, likely. And so we're very, very pleased with the progress we're making on the base business overall, adding some interesting innovative components in the U.S., seeing good progress in China, a lot of launches in Japan. I think overall we're very pleased with the momentum we've got in 26 and where we're heading company-wide and with the portfolio. No, in particular, as we move in 27. Paul? Yeah, thanks, Scott. And thanks for the question, Glenn. So if I go back to the beginning of the year, you know, you look at our original guidance, we had guided to about a 3% increase on an operational basis. And the first half of the year, we out. We outperformed that, right? But we had guided in the second quarter that we were going to have the headwind specifically related to the supply issues we were having primarily in Nashek. So if I think about where we were just from a regional or a country-specific place at the beginning of the year, right, we thought North America would be flat, Europe would be...

up 4%, emerging markets up 6%, and JANs down 7%, and greater China up 3%, right? That was the guidance we provided. With the midpoints of our updated guidance, we're now seeing, because of some of the strengths that Scott's really focused on, North America we expect to be... You know, more in the high single-digit range. We see Europe coming in flattish, primarily related to the supply, but there are some other dynamics in the business competition we had talked about on some of our products that are also putting pressure there. Emerging markets in Jan. are going to be low single digit declines now. Again, emerging markets would be supply related. And greater China, we're looking at coming in closer to, you know, kind of the low double digit range as the moderation hits Q4, but with the strength of, you know, the first half we see. So as we look. And I want to really emphasize what Scott's been saying. You know, we are very encouraged and very confident in the business as we look into 27. You know, we're hoping to continue the growth in North America. You know, we haven't talked a lot. about the esterol patch products, but we do see continuing demand there where, you know, as that grows into 27, there's a mix, a positive mix impact to adjusted EBITDA. China, as I mentioned before, we expect some growth to continue there, although back to historical levels. And, you know, and then obviously the Pacira business will come online. We also have, you know, exciting product launches for next year. You know, Gwentlow, we've launched and it just launched October, just started. And we're hoping to get, you know, our approval for fast acting Maloxicam and have that on the market next year.

So a lot of great momentum as we go into 27. The one item I would just point out to keep in mind that we're keeping an eye on is we do have some loss of exclusivities next year, particularly Amitiza, we expect, or there's a potential to lose that mid-year in Japan. And then I. Sulfan Blue is another good product in the U.S. that lost LOE this year. We're going to have a four-year impact next year. So there are a few, you know, kind of headwinds there. But, you know, I think that, I mean, the tailwinds certainly are in our favor overall. Thank you. And Felipe, Saladigrón, Scenermont? Yeah, so Saladigrón, Scenermont are continuing to perform the studies, perform as planned, as expected. We're going to get the results for Scenermont first. It will be in the first half of 27, followed by Saladigrón, also expected in the first half of... 2027. It's an event-driven study, so the precision there is less than for Scenermont, but based on what we're seeing today, that's our expectation to get that data around the first half of 2027. So the studies are performing as expected. I think to point out that is not going in the right direction at this point, and so we look forward to seeing those results early next year.

So we hope. I'm hoping to maximize the long term value of XBRL post 2030. And I also think it's important. You know, I think that the serious talk about this since the original settlement that they entered into, there has been a lot of work done around the IP for that. And additional patents that are out there, et cetera. And so we're very encouraged by that. And, you know, we'll obviously work once we take over the company to defend that position vigorously. Yeah. And relative to the to the HRT market, the transdermal market, we've seen sort of over the last 12. 18 months, an unexpected increase in demand for those products based on a removal of black box warning on HRT. Also, the utilization of GLP-1 products increasing overall, the delayed gastric emptying, making transdermal products much more favorable in the marketplace. And, you know, I think one of the things we've done is work really hard to try. Meet that demand. You know, I've been to the plant personally. Everybody here in this room has been to the plant some multiple times. We're trying to look for solutions. We've moved from 24-5 to 24-7 utilization of that plant. We're adding a packaging line. We're looking for geographic expansion outside of Vermont to other sites. We'll be able to meet the demand. So we see an incredible demand. We've got market-leading products in this area, and we're doing everything we can to increase our supply to help meet that demand overall. I don't know. Corinne, did you want to make those comments?

I was also at the plant last week, and it's extraordinary to see the ethnicity of this plant. And we've been producing patches for decades, and we are really one of the leaders in this area. But what I want to add on the market itself, we see that the demand for estrogen patches will continue to increase into the foreseeable future. Just to give you an idea of how this market is developed. We have in the U.S. an estimated number of 45 million women that are asymptomatic with menopausal symptoms, but only, I would say, less than 30% of them are actually treated with HRT therapy. So there is a very large, untapped market. And as part of our market research that we conducted, with clinicians, we are seeing a very strong willingness to continue to treat these stations, as the FDS, as Scott mentioned, has eliminated the black box warning for these products. So we are very optimistic on the episode. And we'll continue to invest. We see this as being an important growth driver for the company between... 2030, at least. And so, you know, we're going to take advantage of this increasing demand, make the right investments, and continue to be a leader in the space.

Good morning.

First of all, from an EBITDA perspective… You know, if you take a look at the momentum in the business and Pissera and other things, we're not going to guide 27 here at all. But, you know, what you're talking about, the numbers you're talking about are certainly in the ballpark of where we may be going. I think we're making tremendous progress relative to those 2030 targets and hopefully we'll be able to… to hit them well ahead of time. So, again, you know, your thinking is in the ballpark, I think, here. You know, we don't want to guide 27 until we get through the year, obviously, and look at all the puts and takes and what's going on in the year. But, you know, given the momentum and given to Sarah and given some of those things going on, I think you're in the relative neighborhood. Yeah, so two questions on scenario mode. So, yes, the pooled analysis is pre-specified as part of the SAP. Again, there's a number of endpoints that are of particular relevance for this pooling strategy. In particular, around opioid steroid sparing, where pooling the two studies together may give us enough of a sample size to be fully powered for the analysis. So, but all endpoints will be looked at as each. Individual study, but also as pool study, as you pointed out, these two studies are identical and can be pulled together. In terms of the interferon-1 high, I think there are different techniques to look at and classify interferon-1.

They all lead to the same results, however, and so whether you pull two, three, four different types of genes together, when we look at retrospectively, when we look at the data, it leads to the same results of who's interferon-1 high versus who's not. These techniques do not make a difference. At the end of the day, we used the Phase II B care data to determine the cutoff. It is clearly there's a separation between interferon-1 high and interferon-1 low patient based on that cutoff. So, we do not anticipate to miss many patients that would be interferon-1 low, but potentially responders. So, the short answer is that no matter which technique you use to determine interferon-1 high, it leads to similar results.

No Pain Act, are there any clear volume shifts towards non-opioid protocols, and how would this impact your pricing and launch strategy? Thank you. So, thank you for the question. I'll turn it over to Corinne for more detailed response.

Right. So, thank you very much for your question. So, for FedSech and Miloxicam, of course, we fight for no pain. I think what's important to note here is that no pain has an impact and is very beneficial for inpatient hospital patients, right? But our strategy with FedSech and Miloxicam is to really focus... on the setting, more of the retail settings. Of course, we're going to focus on, you know, post-operative pain, but mostly in the outpatient setting and as well as non-operative pain. So that's now no pain is important. And we are focused on this as well. And relative to your question on pricing, you know, we're obviously exploring a bunch of different pricing models, looking at a number of different pricing points, matching them up with strategy to get early penetration to the marketplace. But, you know, we don't make any final pricing decisions. Understand the fullness of the label and all the specifics around the label. So we're working on that. We're not in a position to get too specific until we see final label and make some final decisions in that case.

Thanks, Jason.

Yes, absolutely. That product is very. Difficult to manufacture. And we did, you know, did look at it as, as we were working through diligence. I will say, you know, as of now, there's, we're not counting on, you know, any issues that generics may have. However, we are, you know, are very aware that the product is. And, you know, is something that that could potentially be upside in the future. But certainly, we're not going to rely on that. We're going to assume if somebody has approval, that they'll be able to manufacture and deliver the volumes that. I think these are difficult to make and difficult to get approval. As well, because showing sameness is difficult for these products. So, not every generic company will be able to get it approved and make a product like this. On the Silatogra question, I think the way we're looking at the pen is that... We'll get a shelf life that will be anywhere around between close to two years, but that will require basically a new pen close to once a year for patients. So, patients will have to renew their pen or pens every... every year. I think if you look at the dynamics we see for other emergency treatment, patients typically need more than one pen. They need two to three pens at one time. So, I think we're...that's part of the expectation. That's what we're going to need for Selatogrel. Anything else on that topic you want to bring, Corinne?

Maybe I'm going to add a point on the value of Selatogrel. You know, your very transport of APPLANE might not apply here because the technical context and the value drivers are vastly different. So Selatogrel given the cardiovascular outcome benefit that we expect and that we would consider as part of the value proposition of the product. So we will establish an episode-based value framework that will be linked to the reduction of the severity of... of the outcome and we will be able to measure as part of our value dossier the measurable healthcare system efficiencies that will be driven by the early administration of Seattle. You know, you make an interesting point on the number of devices that an individual will... over a lifetime, and I had a, just a personal story, I had a near-anaphylactic, near-fatal anaphylactic reaction in my mid-30s, and I've probably owned 50 EpiPens to this point. So, modeling that gets very difficult, and the average patient certainly won't own 50, but just... You know, particularly with something as serious as anaphylaxis, or in this case acute MI, patients, and there's some quality of life data that we're going to be talking about coming out, patients feel much better to be able to have a device that they can take positive action if they have another event. You know, we're working on all these models. A lot of patients will have more than one device, someone in the car, other things, and then you need to renew the device over time.

And again, I've never even had a second anaphylactic reaction myself, but I still have owned, you know, 40 to 50 EpiPens during the course of the last 30 years. I think the other point to highlight is the fact that the risk of recurring... ...MI is much higher within the first six months of the first MI, but it doesn't go away, right? So it stays then over time. So the need to carry the pen doesn't go away five, six, ten years post the first MI, right? That's also data that we'll be emphasizing as we get closer to launch.

So, David, thank you very much for the questions. We don't own Pissera at this point in time, nor do we own XBRL. So I'm not going to get into specific strategies in which we want to employ to change the trajectory of that growth line. I don't think that would be appropriate. At this point in time, however, we have looked very, very deeply at the product. We think there are things that we can do to, you know, continue the growth rate, see a less, not as much of a mature growth rate, but continue to expand that growth rate and do some things to really sort of accelerate the XBRL growth over the next few years. We feel very confident. We get into specifics at all. I think one of the other things which is underestimated is the positive synergy of this transaction on fast-acting Moloxcam, non-opioid pain group, very experienced group, doing very well with the products, with both products, Zoretta and XBRL, and I think they have... some capabilities. For me, the acquisition was not just about two important assets in XBRL and Zalreda that are in the market, accretive, growing, high margin, but also the capabilities that we're acquiring when we bring the group into our group. We're very, very excited about Pissera, the capabilities that they bring. The ability of them to help us really launch TASVAC and Miloxicam in a better way. And really help us reach our potential with TASVAC and Miloxicam.

I think we're very impressed with the infrastructure that they have in the United States, their ability to reach hospitals, ASCs and ambulatory surgical centers. But also, you know, having self-force in retail as well. So it's a very strong addition for us, and it will accelerate our capabilities as we prepare for the launch of TASVAC and Miloxicam. So there was a pipeline question, Philippe? Yes, on 2002, your question, I think, again, we don't own... these assets yet, but we certainly did due diligence around them. The pipeline was not the main driver for this acquisition. That being said, I think there's a number of assets within that pipeline that are very interesting and have significant potential. You asked specifically about 2002. I think we see it as interesting because of the hydrogel technology and the long release time, much longer effect potentially than existing drugs on the market. Also around the ease of administration, I think is particularly important for these product nights early. Phase two is just starting. So once we get the data, we'll revisit everything, right? But we'll make decisions based on data going forward for this pipeline. And so once that data comes... Then we'll get a better sense of the potential for these assets specifically.

Thanks, Luke.

Question. I think from a capital allocation perspective, we don't see any changes in our capital allocation priorities. We're going to continue to pay a dividend, buy back shares, and continue to do business development over the next, you know, three to five years. We bought back shares already this year. We may even do some more this year as we go forward. We'll be opportunistic in how we do that. But we don't see any changes in our capital allocations. strategy at all. In terms of BD, we'll continue to do BD. We're continuing to look for things that are creative in market. We can be good owners of that are going to add to our growth profile going forward. So we're going to do all those things and we're going to have sufficient cash to be able to do that over the next three, five years between now and 2030. Buy back shares, pay the dividend and do BD that makes sense.

Thanks for the question, Dan.

I'll kick it over to Corinne for a response. Yes, Dan.

So, Lisa, I think that, as I said, it's a very large, untapped market. There is now much more ease in prescribing hormonal replacement therapies coming from clinicians. And women are being made aware that, you know, they can now have access to patches and also other formulations of Estradio. And progesterone for relieving their menopausal symptoms. So, potentially, this market is large. Can we say exactly where it's going to go? I can only say that the foreseeable future is going to go. Just to give you some data on our products, our patches, we expect that they are going to go. We're going to reach 1.5 million women this year in 26, and we're going to add in 27 another million of women using our patches. So we are very encouraged by this. I think it's wonderful to see that this market is opening up again, right, because it's been now 10 years. about the possibility of treating women with menopausal symptoms. And we are going back to labels of prescriptions that we experienced back in 2002, 20 years, 2002.