Good day, and thank you for standing by. Welcome to the Q4 2025 PASIR Biosciences Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Susan Mesko, Head of Investor Relations. Please go ahead.

Thank you. Good afternoon, everyone. Welcome to today's conference call to discuss our fourth quarter and full year 2025 financial results. Joining me are Frank Lee, Chief Executive Officer, Brendan Teehan, Chief Commercial Officer, and Sean Cross, Chief Financial Officer. 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 PASIRO website. 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 earlier this afternoon. With that, I will now turn the call over to Frank Lays.

Thank you, Susan, and good afternoon, everyone, joining today's call. I'm pleased to share Becerra's fourth quarter and full year 2025 results and to reflect on what was truly a transformative year for our company. At Becerra, our mission remains unwavering to deliver innovative non-opioid pain management therapies that transform lives. Everything we do starts with a patient. We're guided by the science, supported by our people, and grounded in a commitment to improve recovery while reducing exposure to opioids. When I look back at where we stood a year ago, the contrast is striking. Entering 2025, the CIRA faced uncertainty with questions around Xporel's long-term exclusivity, inconsistent margins, and limited pipeline visibility. Today, we're a very different company. We have a clear strategic direction, reinvigorated top-line growth, a solidified exclusivity runway, and a significantly expanded patent protection. In addition, we're advancing a promising pipeline that is now entering a data-rich phase. Most importantly, we're a company once again growing with momentum. Our exceptionally dedicated team has helped more than 2.5 million patients. Last year, we achieved 726 million in revenue and delivered the highest gross margins in our history. This progress is a direct result of our 5x30 strategy, which we introduced last year to guide our next chapter of growth. Today, one year later, I'm proud of where we stand. In our aim to help 3 million patients annually by 2030, we're already at 2.5 million and Volume trends in 2025 show we're moving towards our goal of double-digit top-line growth. We are clearly on track for five percentage point improvement in margins over 2024 through enhanced manufacturing efficiencies. We're advancing our goal of five new pipeline programs. This is demonstrated by our progress with PCRX 201, PCRX 2002, and three HCaB-based preclinical programs. Finally, we're targeting five strategic partnerships, JJ MedTech and LG Chem, highlight the caliber of partners joining us on this journey, and we look forward to adding more. In short, the next chapter of this year's growth is no longer conceptual. It is coming into clear focus. Our flagship product, Expiril, delivers solid performance. We're now seeing early durable signs of volume-based growth we achieved in the second half of 2025. As Bryn will highlight later the call. Much of this is driven by a combination of expanding no-paying education and awareness, increasing commercial payer adoption, streamlining product acquisition via GPO contracting, and growing demand across all sites of care. Last year, we exceeded our goal and ended the year with 102 million lives with CMS or commercial coverage outside of the surgical bundle. This achievement demonstrates that payers recognize the value of expanding access to Expiral. It also establishes a foundation for shifting both decision making and utilization patterns. On the IP front, we secured a volume limited settlement with Presenius, giving Expiral runway visibility through 2039. Complementing this, we strengthened our IP estate to 21 patents across two families. This is a dramatic evolution from the single patent we had when the first paragraph four was filed. All of this positions Exparel for sustained steady growth, consistent with the role it plays in the evolution of opioid-sparing post-surgical care. This quarter, we announced significant partnership with LG Chem, a leading healthcare company with deep surgical and orthopedic experience. They will commercialize Expril in select Asia-Pacific countries, beginning with South Korea and Thailand, with regulatory filings anticipated this year. This agreement delivers an upfront payment, transfer pricing, and tiered royalties while opening access to new markets with a proven partner. We are forecasting revenues from this agreement to begin in 2027 and to extend through the life of our patents in the 2040s. Similarly, we expect our partnership, JJ MedTech, to gain traction this year. Their sales force is now fully trained and triples our reach for Zilretta in the U.S. Now turning to our pipeline, the coming year will be pivotal as we enter a data-rich period with key clinical milestones that include an interim analysis for the first half of the year that will inform next steps for our study of Zolretta in shoulder OA. Top line results from IATAVERA study for the treatment of spasticity are expected before the end of the year following a mid-year interim analysis. This is an important opportunity given the significant lack of innovation and patient satisfaction in this debilitating condition and 52-week data from Part A of our Phase II Ascent study of PCRX 201 remain on track for the end of the year. I'd like to highlight PCRX 201 the lead program from our proprietary HCAP platform as it deserves special emphasis. 201 has the potential to revolutionize the OA treatment landscape and be at the forefront of local gene therapy for the masses. It is locally administered, non-integrating, and mechanistically de-risked IL-1 blockade therapy. Our two-part Phase II ASCEND study is assessing safety and tolerability of PCRX 201. Like most Phase II studies, ASCEND is not powered for efficacy. The primary objective is safety, but we'll be looking for efficacy trends as measured by key secondary endpoints. Later this year, we'll report top-line data from Part A of the study, which randomized 49 patients. This is an important study that will yield more valuable insights than a typical Phase II study, since it includes an active steroid comparator. In parallel, we're rapidly establishing a commercial-valuable manufacturing process to enable Part B enrollment to start around mid-year. Part B will enroll approximately 90 patients. We're also planning a Phase II study of PCR-2002 for patients undergoing bunionectomy surgery that we expect to begin later this year. This is our longer-acting, easy-to-administer, ropivacaine-based polymer gel, we believe 2-0-0-2 is highly complementary to Expiril, particularly in procedures where nerve blocks are not ideal. These programs exemplify our portfolio strategy, which is balancing innovative, de-risked assets across acute and musculoskeletal health settings. As Sean will highlight later in the call, we remain disciplined stewards of capital investing in growth and innovation in parallel we return capital shareholders with 150 million dollars of stock repurchases reducing the outstanding shares to 41 million in summary what a difference a year makes across every dimension core to our business strategic clinical commercial financial and operational this year is stronger today than it has ever been we have reinvigorated expiry growth in the U.S., established a foundation for ex-U.S. revenue to begin next year, robust IP supporting a long-term expiry runway, commercial partners of exceptional quality, and a pipeline poised to deliver meaningful data. Collectively all grounded in a clear strategic plan with our 5x30 initiatives. With that, I'd like to turn the call over to Bren to share more details on our fourth quarter commercial performance friend thank you frank and good

afternoon to all joining us today i'm very pleased to review the increased commercial momentum achieved in 2025 which reflects both disciplined execution and a clear strategic vision i'll focus today on our flagship product expiral expanding patient and provider access to our best in class, long-acting analgesic was our top priority in 2025. As you know, FASERA has been the driving force behind a multi-year initiative to get the No Pain legislation across the finish line. This underscores our leadership in the space and our patient-focused mission. We're now just past the one-year markup for the rollout of No Pain, and the progress it has yielded is exceeding our expectations. In a recent survey of nearly 750 physicians and pharmacy leaders, 82% view no pain as important for advancing non-opioid stewardship. 92% believe no pain is already contributing to reduced opioid prescribing. And nearly half report changes taking place across protocols, formularies, and prescribing patterns. This research aligns directly with the original intent of no pain, which was to reduce unnecessary opioid exposure around surgery by providing appropriate reimbursement for proven alternatives. We continue to validate these findings with claims data, and the early signals are quite encouraging. The momentum is real. NoPain provided the initial catalyst to begin knocking down the financial barriers that have historically prevented best practice pain management. For decades, bundled reimbursement incentivized the use of cheaper generic approaches that often incorporate opioids increasingly this is no longer the case with no pain we secured separate reimbursement at asp plus six percent for medicare patients in outpatient settings this was a great starting point getting commercial plans to follow suit with access creating reimbursement has helped accelerate change in the market here we've exceeded our internal goal and ended 2025 with 102 million lives with XFIRL coverage outside the surgical bundle. This represents a notable shift in policy for some of the largest payers, including Aetna, Cigna, Tricare, and Humana, among others. We will continue to expand our commercial coverage in 2026 to further broaden access in the months ahead. Our access efforts are strategic, focusing on key markets with high procedural volumes. We have significantly expanded payer coverage in our top five states, which account for roughly 40% of X4L volumes. This directly translates into growth in our fourth quarter volumes, collectively up more than 7% in these markets over 2024. On top of these important reimbursement wins, our strategic pricing programs are delivering results. Through these growth-focused pricing programs, healthcare systems can afford the opportunity to be at the forefront of opioid-sparing pain management. Our contracted business drove high single-digit volume growth in the second half of 2025, doubled the volume growth we saw in the first half of the year. To further expand market access, we are generating real-world data to further highlight the exprial value proposition to payers. We have several health economics and outcomes studies on track for presentation at upcoming congresses, including the Academy of Managed Care Pharmacy, the Orthopedic Research Society, and the American Society of Regional Anesthesia and Pain Medicine. Our initiatives include the comprehensive real-world IGOR registry, which now has more than 3,200 OA patients enrolled and is providing valuable information for Expirel, Zylretta, iovera, as well as other products. These data will help guide best practice for osteoarthritis patients along their treatment journey. In summary, we are encouraged by the progress made establishing a strong foundation in 2025. As a result, Expirel is well positioned to drive steady top-line growth in 2026 and beyond. With that, I'll turn the call over to Sean for his review of the financials. Thank you, Brad. I'll start with an update on sales

and margin trends. Fourth quarter X4L sales increased to 155.8 million versus 147.7 million in 2024. Volume growth of approximately 7% was partially offset by a shift in biomix and discounting from our third GPO going live, with each having a roughly equal impact. As we move forward in 2026, we expect the delta between volume and revenue growth in the first half of the year to be similar to the second half of 2025 and then narrow after we anniversary our third GPO agreement mid-year. Fourth quarter Zaretta sales were $33 million, essentially flat versus 2024. For Iovera, fourth quarter sales grew to $7 million versus $6.5 million in 2024. Turning to gross margins, on a consolidated basis, our fourth quarter non-GAAP gross margin improved to 80% versus 79% last year. 2025 gross margins benefited from better-than-expected yields from both of our enhanced, larger-scale 200-liter X4L facilities. These higher production volumes resulted in lower per unit costs. This performance benefited costs of goods sold but also placed us ahead of our six-month inventory target. As a result, we have adjusted production volumes accordingly and anticipate exiting this year at our targeted inventory and steady-state production. Going forward, through our continuous improvement initiatives, we expect a steady increase in annual gross margins over time. This places us on track for achieving our 5 by 30 objective for a 5 percentage point improvement by 2030 over the 76% non-GAAP gross margins reported in 2024. For non-GAAP R&D expense, the fourth quarter increased to $34.4 million from $22.0 million reported last year. This increase relates to the $5 million upfront payment to AmicaThera for the in-licensing of PCRX2002, our Advancing Phase II Development Program for PCRX201, as well as expenses associated with the Zilretta and Iovera Registrational Studies. Non-GAAP SG&A expense came in at $91.9 million from the fourth quarter, which is up from $70.6 million in the fourth quarter of 2024. Fourth quarter SG&A was impacted by unanticipated costs associated with business development due diligence and litigation. As for the balance sheet, we exited the fourth quarter in a position of strength with $238 million cash and investments. With a business that is producing significant operating cash flow, we believe we are well equipped to advance our 5 by 30 strategy and create shareholder value. With respect to capital deployment, we will continue to to maintain a disciplined and strategic approach focusing on three key areas. First, driving top-line growth by leveraging our existing commercial infrastructure. Second, advancing an innovative pipeline and becoming the leader in musculoskeletal pain and adjacencies. We are prioritizing accretive in-market assets to leverage our established commercial footprint and de-risked clinical stage programs. And third, opportunistically returning capital to shareholders. During the fourth quarter, we executed an additional $50 million in share repurchases. As a result, we retired approximately 2 million shares of common stock and reduced outstanding shares to approximately 41 million as of year end. To remind you, as of December 31st, we have $150 million remaining on our share buyback authorization which runs through the end of this year we will continue to be opportunistic for stock repurchases given what we believe is a significant disconnect in our market valuation going forward we will continue to be highly strategic balancing favorable operating margins while advancing our 5 by 30 strategy that brings us to our full year financial guidance for 2026 as follows. Total revenue of $745 to $770 million. For Exparel, sales of $600 to $620 million. As Bren mentioned, we believe the brand is well positioned for a steady cadence of growth in 2026 and beyond. With respect to quarterly trends, we expect 2026 to largely follow historical patterns. In terms of percentage contribution to full-year exprial sales dollars, we expect the first quarter to be approximately one percentage point lower than the previous few years due to the impact of January and February storms. For the remainder of the year, we expect the second and third quarters to be evenly balanced, and the fourth quarter to remain in line with prior year's trends as the highest contributor to the full-year sales dollars. Lastly, as a reminder, while the fourth quarter is typically EXPIREL's strongest in terms of dollars, it is not always the highest in terms of year-over-year growth percentage. For ZILRETA and IOVERA, we are currently assuming 2026 will be in line with 2025. As we gain more visibility into our J&J partnership and other ZILRETA and IOVERA initiatives taking hold, we will update accordingly. The final component of our Our 2026 Revenue Guidance relates to $7 million in revenues expected from our Expo Licensing Agreement for the Veterinary Market, non-GAAP gross margins of 77% to 79%. With respect to quarterly cadence, we expect the first three quarters' margins to benefit from sales of lower-cost inventory. For the fourth quarter, we expect margins to be 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. At the midpoint, this represents a 5% increase over 2025 and aligns with our 5x30 strategy to transition into an innovative biopharmaceutical company. Non-GAAP SG&A expense of $320 to $340 million. At the midpoint, this is a slight increase over 2025, as we are now leveraging our existing commercial infrastructure, which is well-equipped to support growth. Stock-based compensation of $54 million to $62 million. And lastly, for those modeling adjusted EBITDA, we expect our 2026 depreciation expense to be approximately $30 million. With that, I'll turn the call back to Frank.

Thank you, Sean. I'm incredibly proud of our team and energized by the opportunities ahead. While we made great progress in 2025, I'm even more excited about 2026. As I've said before, this is a year of Bacera, a year in which we bring bold ideas by energy and commitment to transforming what's possible in non-opioid pain management. With that, we're ready to open up the call for questions. Operator?

As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster.

First question comes from Dennis Ding with Jeffries. Your line is open.

Hi, this is Andrea on for Dennis. Thanks for taking our questions. I had a quick one around the OA readout. in terms of trends and efficacy that you're talking about what exactly do you think constitute a clinically meaningful signal there provided that we are not expecting a stat sig thank you thanks for the question Cindy with

regard to I believe you mentioned PCR201 part a trial that will read out at the of the year and uh just to remind folks we enroll 49 patients in that trial and we expect to report the results near year end and so with that said you know i'm going to turn it over to jonathan slonen our chief medical officer to take you through the endpoints that we're actually going to be reporting out on and then i'll provide some additional context so jonathan thank you frank

So, like most Phase II studies, ASCEND is not powered for efficacy, so the primary focus of this study is safety, but we are actually also looking at important efficacy trends measured by key secondary endpoints, and so we're going to take a look at endpoints related to pain, stiffness, and function. Examples are NRS pain scores. We're going to look at WOMAC for pain and stiffness, and functional indicators using COOS and ABLs. So we will be looking at that data. Remember, it's a two-part study. The first part of 45 patients that you referred to are already enrolled, and we will have top-line data at the end of the year. around safety and trends for our inputs.

And so let me just add on to that. Thank you, Jonathan, that just to remind folks, this one has an active comparator. So we do have a short-acting steroid on board, and certainly we have some context in terms of how short-acting steroids respond in various studies in addition to having some data from our IVOR registry that we talked about earlier. so we'll be able to look at some of those trends but again I want to reiterate what Jonathan said this is primarily a safety study it's not power for efficacy but we intend to look at the endpoints that Jonathan just

articulated got it and just a quick follow-up do you expect a certain in do you have an internal bar of the numerical separation on some of these endpoints or is it just really looking for separation yeah thanks for that i i think again

i i think this is just uh primarily more for safety and trends and so we have at least some i would say context from our phase one study that i believe you're familiar with and we have some context from our igor registry and other studies that have reported out on short-acting steroids so So, again, the trial is not power for efficacy, but we can put the data in sort of that context.

Okay.

Thank you. Our next question comes from Douglas Sow with H.C. Your line is open.

Good afternoon. Thanks for taking the questions. Just first, just curious if we can hear some perspective, you know, in terms of the guidance in particular on XFIRL, you know, what are the factors that could lead you to sort of come in at the higher end of the range, as well as maybe some of the potential sort of factors that could sort of bring you to the lower end of the range? And then I have a follow-up on the 201 study.

Sure. Let me provide a little bit of highlights here and then turn it over to Bren. And first off, I'm really proud of what the team's able to accomplish this past year and really standing up a commercial medical market access powerhouse. And you can see how that's paid off for us in terms of the growth that we demonstrated in volume in the second half of the year versus first half, as well as the number of lives now that we have covered outside of the bundle. And so, I'm encouraged by where we are. I expect a steady cadence of growth going forward. And so, let me turn to Brent for some additional commentary.

Yeah, thanks for the question and well aligned with the response. I think we're performing very well. We have positioned ourselves for that steady growth, and this is a great starting point in terms of guidance. I think it also provides us with a little bit of opportunity for upside or downside developments from a market perspective. I think Sean made some comments about, you know, first quarter and some interesting storm dynamics, which always have some implications to a product that is driven by procedures taking place, particularly elective procedures. But other than that, I think our investments are showing promise and are paying off, and I think our leading indicators reinforce that confidence.

Doug, you have a second question?

Yeah. And then just on 201, you know, we'll obviously get that initial data. And, you know, it's not, as you said, sort of powered for efficacy. I'm just curious, is there anything that you could learn just in combination with the phase one data that looks so compelling and obviously the duration looks so promising as well that could sort of lead you to sort of maybe accelerate the program in any way, you know, into sort of a registrational phase?

Yeah, thanks for that. So let me step back here a little bit for context. stuff, you know, certainly this platform is a very exciting platform, the HCaF platform. And as we all know, this is a locally administered gene therapy. So this could be the first gene therapy for the masses, as we talked about, as opposed to gene therapy that's systemic for rare disease. So we're excited about this program. We're encouraged by the phase one results. From a Phase II perspective, what we're excited about is, as Jonathan mentioned, we have planned for 45 patients, but we actually enrolled 49, and we did that ahead of schedule. And so, that's a good sign, and as we think about, as we progress through the course of the year, as I mentioned, we'll report these data towards the end of the year. And I want to come back to safety is our primary objective with looking at trends, given what we know about how short-acting steroids respond from various data sets, including our IGOR data set, and certainly we have our longer-acting Zolretta as context as well. And again, as context, difficult to compare across studies, but the Phase I study, as you mentioned was compelling with 72 patients that we've now uh followed up with at three years and so uh given all that we'll take all that into stock um and uh report out at the end of the year and just to remind that phase two part b is scheduled to start enrolling mid this year with commercially viable product and so this is important and our target is to enroll about 90 patients there and uh that those data along with the part a data will certainly inform how we proceed um in terms of a accelerated fashion base case fashion etc for the remainder of the development program so um what i'm encouraged about is as you know we have our MAT designation, which provides us the opportunity to regularly communicate with the FDA, and I would say so far the discussions have been constructed.

Great. Thank you so much.

Thank you.

Our next question comes from Les Salewski with Truist Securities. Your line is open.

Good evening. Thank you for taking my questions. Frank, perhaps when taking in the 5x30 plan into consideration, could you help us bridge the double-digit revenue growth target versus the just-introduced mid-single-digit growth for 2026? And then specifically for XPREL, would you frame the 6% growth for this year as conservative, or does it reflect specific headwinds you're already seeing in 4Q or 1Q? And I have a follow-up.

Sure. And let me address the second question first. As Brent mentioned, we're confident about what we've done here in 2025 as a good indicator of what we're going to do in 2026. And you know what? It's a good starting point. And it's, I think, a good place to start, given what we believe is a relatively soft market in terms of elective procedures. So, So it gives us an opportunity and room for any upside or downside as the year progresses in the elective procedure market. So I want to really reiterate that. Secondly, as we think about now 5 by 30, as I articulated earlier on, we're making very good progress towards 5 by 30. And I would think about what we've done in the second half of last year, what we've committed to this year. And as we move forward, as we move forward, I would expect that we'll continue to drive broader access in terms of, you know, covered lives outside of the bundle. I would expect that we would extend our reach for both ExpoRail and Zolretta further through partnerships, as we've talked about. And in addition, starting in 2027, we will have contribution from ex-U.S. sales of ex-Baryl. And so, as I articulated, we signed with a very strong partner in Asia Pacific, LG Tim. And we intend to sign additional partnerships outside of the U.S. where it makes sense. And those contributions will also help with top line group. So I would say I would summarize it that way in terms of not only the core growth, but through partnerships, both here in the U.S. as well as ex-U.S., which allows us to extend our reach in a very efficient way.

Thank you. As a follow-up, you've reached 100 million lives now, and, you know, noted implementation of reimbursement takes some time. But it does appear that sentiment around Expel is high on the positive side. So, from the feedback you're getting, is the barrier more on the adoption, the clinical adoption rather than reimbursement that you're seeing? Thank you.

So, let me provide a little bit of context, and I'll turn it over to Bren here. I have to tell you, I'm really proud of the team in terms of what we've been able to do. We reported 102 million lives covered outside of the bundle. this is an important distinction now covered outside of the bundle because it's a much higher number if you just say covered so this is outside the bundle and what we're seeing is really encouraging signs that this momentum will continue and that our customers are able to code and get reimbursed in ways that make a lot of sense for the patient and to the institution so bren let me turn it over to you

For sure. Thanks. Very good question. Very proud that we've gotten by the end of the fourth quarter to 102 million lives. That number has already climbed to about 110 million within the first month of 2026, and we have no intention of stopping and looking to get as many lives covered outside the surgical bundle as possible. I'd also note that the accumulation of those covered lives has taken time. No pain was an excellent start. If you watch our cadence throughout 2025, it was really the addition of those commercial lives that started to gain attention of more of those economic stakeholders, especially in the second half of the year and something we intend to capitalize on in 2026. So I would say it's a function of time on the one hand and then getting the attention of economic stakeholders, particularly thinking about the difference in cost recovery for XPRL outside the surgical bundle, which will be a key priority moving forward.

Yeah, thank you, Brennan. And I'll just add on top of that, you know, I think historically, and this is the sphere of the No Pain Act, is my sense is that, folks, there was not a lot of debate about which products are good for the patient, But the financial barriers were real, both in terms of product acquisition as well as remittance reimbursement. So on the product acquisition side, as we've mentioned, we've now signed GPO contracts. The last of them will lap mid this year, so that provides performance-driven incentives there to acquire the product. And then on the remittance side, reimbursement, we're really pleased to see that, of course, Medicare provides ASP plus 6% in terms of reimbursement, but if we take a look at what the commercial setting provides, it's often much higher than that. So clinicians are able to choose the right product and now it makes financial sense

for their institutions as well. Thank you. Our next question comes from Serge

Bellinger with Needham & Company. Your line is open. Hi, this is John on for surge today. Thanks for taking our question. Just one for us today. I wanted to touch on Zilreda and the J&J MedTech partnership. Just curious what you think, if any, headwinds were that led to the relatively flat performance in 25 and what you may be looking for in 26 that could provide some confidence in establishing a growth profile now that the J&J team is fully active. Yeah, thank you for the question, John. Let me provide a little bit of context and then turn it over to Brent about what we expect going forward. As you'll know, back in 2025, as part of our prioritization and really building a commercial medical market access powerhouse, we said we're going to prioritize X-Beryl. So that's what we did, and we focused on X-Beryl. and we restructured the sales forces accordingly to stand up a separate sales force for Zolretta and a separate sales force for Ayovera. So that caused some disruption, and that was impacting sales. So that's some of the context behind that. And certainly for Johnson & Johnson now, we spent last year training the team and getting them up to speed. And so let me turn it over to Brynn to talk about sort of, you know, how we think about 2026.

Yeah, thank you, Frank, and great question. I would describe the latter half of 2025 as a time where both of our organizations were kind of forming our plans on a local level for the teams. And please remember that while they expand our footprint, they also have – J&J has as many as five or six counterparts that would cross paths with Pacira. So, just making sure that we were well-coordinated and our messaging was important. We now have – entering 2026 – clear growth objectives for our partner for the year, and they've added that to their incentive compensation plan, which is super critical. We also have appropriate target selection where J&J will take the primary lead on the accounts where they have existing relationships. And they now have, for the first time ever, and I think a very important time in their company's lifecycle, a clinically strong complement to the visco supplements in Zolretta and a solution where they often have not had one. And that, coupled with what Zylreda offers in terms of consistent reimbursement versus what has been super relatively variable, I would say, on the visco-supplement side, provides a very strong complementary asset that we are optimistic in 2026. Once we gain a little traction, we'll start to show the fruits of that partnership.

Thank you.

Our next question comes from Hardik Parikh with J.P. Morgan. Your line is up.

Hey, guys. Thank you for the time today. I was just wondering, I know in 4Q you guys said you had some unexpected business development costs. As you guys try to grow and diversify the business, can we think of that as maybe happening more often and kind of having some of these kind of one-off business development types of deals? I just wanted to see how active you guys think you'll be going forward. Thank you.

Thanks for the question, Hardik. And as Sean articulated, those were due to not only business development, but for some litigation as well. And so, just to step back a little bit, as Sean mentioned, you know, our priority is to really think about how we maximize overall shareholder value. And part of that is how do we invest in the business for our core. And as you can see from the guidance, that's largely done as we think about, you know, what we do for commercial medical market access. and that's going to be relatively flat, as Sean mentioned. And now slowly we're investing in R&D. And at some point it makes sense to think about, as Sean mentioned, accretive deals that could be products that could be dropped into the bag today. That would be accretive, that we could provide synergies, and that would make a lot of sense. So, I think that's an important priority for us and do that in a very disciplined way, as well as to think about what are those de-risked clinical assets that are in later stages of development that we have expertise and we could carry further. So, that's how we think about it because it's important to think about how we replenish our portfolio and to drive sales. And what I'm really pleased about is if you think about our pipeline now versus just a year ago it's quite changed so now as we think about that 2030 and beyond horizon we have the following we have xus sales of our products we have the amicathera 143 now called pcrx202 in that time frame we also have pcrx201 you know in that around 2030 type of time frame And so as we look at how we continue to build our business, we'll drive against that five-by-30 objective of putting more things in the pipeline, but also ensuring that we grow double digits.

Thank you.

Thank you. I'm showing no further questions at this time.

I would now like to turn it back to Susan Mesko for closing remarks.

Thank you, Danny, and thanks to all on the call for your questions and time today. We're excited about the opportunities ahead and remain focused on executing our 5 by 30 growth strategy with discipline and purpose. As we move through 2026, we are confident in our ability to build on our momentum and position PASIRA for long-term success. Thank you again for your continued support and be well.

This concludes today's conference call. Thank you for participating. You may now disconnect.