Pacira BioSciences, Inc.

Previous wording

This Quarterly Report on Form 10-Q and certain other communications made by us contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, including, without limitation, statements related to: '5x30', our growth and business strategy, our future outlook, our intellectual property and patent terms, our future growth potential and future financial and operating results and trends, our plans, objectives, expectations (financial or otherwise) and intentions, including our plans with respect to the repayment of our indebtedness, anticipated product portfolio and product development programs, strategic alliances, plans with respect to the Non-Opioids Prevent Addiction in the Nation (“NOPAIN”) Act, the expected cost savings and benefits of a July 2025 reduction in force and any other statements that are not historical facts. For this purpose, any statement that is not a statement of historical fact should be considered a forward-looking statement. We often use the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should,” “will,” “would” and similar expressions to help identify forward-looking statements. We cannot assure you that our estimates, assumptions and expectations will prove to have been correct. Actual results may differ materially from these indicated by such forward-looking statements as a result of various important factors, including risks relating to, among others: the failure to realize the anticipated benefits and synergies from the acquisition of GQ Bio Therapeutics GmbH; risks associated with acquisitions, such as the risk that the businesses will not be integrated successfully, that such integration may be more difficult, time-consuming or costly than expected or that the expected benefits of the transaction will not occur; our manufacturing and supply chain, global and United States, or U.S., economic conditions (including tariffs, inflation and rising interest rates), and our business, including our revenues, financial condition, cash flows and results of operations; the success of our sales and manufacturing efforts in support of the commercialization of EXPAREL® (bupivacaine liposome injectable suspension), ZILRETTA® (triamcinolone acetonide extended-release injectable suspension) and iovera®°; the rate and degree of market acceptance of EXPAREL, ZILRETTA and iovera°; the size and growth of the potential markets for EXPAREL, ZILRETTA and iovera° and our ability to serve those markets; our plans to expand the use of EXPAREL, ZILRETTA and iovera° to additional indications and opportunities, and the timing and success of any related clinical trials for EXPAREL, ZILRETTA, iovera° and any of our other product candidates, including PCRX-201 (enekinragene inzadenovec); the commercial success of EXPAREL, ZILRETTA and iovera°; the related timing…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Quarterly Report on Form 10-Q and certain other communications made by us contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, including, without limitation, statements related to: '5x30', our growth and business strategy, our future outlook, the strength and efficacy of our intellectual property protection and patent terms, our future growth potential and future financial and operating results and trends, our plans, objectives, expectations (financial or otherwise) and intentions, including our plans with respect to the repayment of our indebtedness, anticipated product portfolio and product development programs, strategic alliances, plans with respect to the Non-Opioids Prevent Addiction in the Nation (“NOPAIN”) Act, the expected cost savings and benefits of a July 2025 reduction in force and any other statements that are not historical facts. For this purpose, any statement that is not a statement of historical fact should be considered a forward-looking statement. We often use the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should,” “will,” “would” and similar expressions to help identify forward-looking statements. We cannot assure you that our estimates, assumptions and expectations will prove to have been correct. Actual results may differ materially from these indicated by such forward-looking statements as a result of various important factors, including risks relating to, among others: the failure to realize the anticipated benefits and synergies from the acquisition of GQ Bio Therapeutics GmbH; risks associated with acquisitions, such as the risk that the businesses will not be integrated successfully, that such integration may be more difficult, time-consuming or costly than expected or that the expected benefits of the transaction will not occur; our manufacturing and supply chain, global and United States, or U.S., economic conditions (including tariffs, inflation and rising interest rates), and our business, including our revenues, financial condition, cash flows and results of operations; the success of our sales and manufacturing efforts in support of the commercialization of EXPAREL® (bupivacaine liposome injectable suspension), ZILRETTA® (triamcinolone acetonide extended-release injectable suspension) and iovera®°; the rate and degree of market acceptance of EXPAREL, ZILRETTA and iovera°; the size and growth of the potential markets for EXPAREL, ZILRETTA and iovera° and our ability to serve those markets; our plans to expand the use of EXPAREL, ZILRETTA and iovera° to additional indications and opportunities, and the timing and success of any related clinical trials for EXPAREL, ZILRETTA, iovera° and any of our other product candidates, including PCRX-201 (enekinragene inzadenovec); the commercial success of EXPAREL, …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include items mentioned herein and the matters discussed and referenced in Part I-Item 1A. “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”) and in other reports filed with the SEC.

Current wording

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include items mentioned herein and the matters discussed and referenced in Part I-Item 1A. “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”); in Part II. Item 1A in this Quarterly Report on Form 10-Q and in other reports filed with the SEC.

Previous wording

While there has been no material impact on our business related to tariffs to date, the current macroeconomic environment remains dynamic and subject to rapid and possibly material changes. For instance, the U.S. government may in the future pause, reimpose or increase tariffs and foreign governments have, and in the future may, impose retaliatory trade protection measures. Our business may be impacted by ongoing risks associated with global macroeconomic conditions, including international relations and trade disputes. For example, and most notably for us, the active pharmaceutical ingredient for both EXPAREL and ZILRETTA are sourced from outside the U.S. In July 2025, the U.S. and the European Union, or E.U., agreed to a trade deal that sets a 15% tariff on imports from the E.U., including branded pharmaceuticals, subject to Section 232 of the Trade Expansion Act of 1962.

Current wording

While there has been no material impact on our business related to tariffs to date, the current macroeconomic environment remains dynamic and subject to rapid and possibly material changes. For instance, the U.S. government may in the future pause, reimpose or increase tariffs and foreign governments have, and in the future may, impose retaliatory trade protection measures. Our business may be impacted by ongoing risks associated with global macroeconomic conditions, including international relations and trade disputes. For example, and most notably for us, the active pharmaceutical ingredient for both EXPAREL and ZILRETTA are sourced from outside the U.S. In July 2025, the U.S. and the European Union, or E.U., agreed to a trade deal that sets a 15% tariff on most imports from the E.U., including branded pharmaceuticals, and effectively exempts the E.U. from higher tariffs that may be imposed on pharmaceutical imports from other countries pursuant to a pending investigation of such imports under Section 232 of the Trade Expansion Act of 1962. Pharmaceuticals imported from countries outside the E.U. may face higher tariffs, including tariffs that may be imposed pursuant to the pending Section 232 investigation.

Previous wording

Such tariffs imposed by the U.S. and/or other countries that are currently in effect, or anticipated to take effect in the future, could increase our manufacturing and operating expenses in future periods, including the cost to deliver our products to commercial markets, the cost to source raw materials for the manufacturing of our products and the cost of materials used in our research and development activities. The imposition of future tariffs impacting our industry, the magnitude of response by other countries to such tariffs and the length of time such tariffs are in effect may also increase uncertainty and adversely impact our business.

Current wording

Such tariffs imposed by the U.S. and/or other countries that are currently in effect, or may take effect in the future, could increase our manufacturing and operating expenses in future periods, including the cost to deliver our products to commercial markets, the cost to source raw materials for the manufacturing of our products and the cost of materials used in our research and development activities. The imposition of future tariffs impacting our industry, the magnitude of response by other countries to such tariffs and the length of time such tariffs are in effect may also increase uncertainty and adversely impact our business.

Previous wording

•During the second quarter of 2025, the U.S. Patent and Trademark Office, or USPTO, issued U.S. Patent No. 12,318,483 (the ‘483 patent), claiming composition of EXPAREL manufactured by an enhanced process from our large-scale batch process in San Diego, California, which demonstrated a more consistent stability profile as measured by an in-vitro release assay (IVRA). In addition, the USPTO also issued U.S. Patent No. 12,296,047 (the ‘047 patent), claiming EXPAREL composition. We now have 20 EXPAREL patents listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”). The ‘047 patent expires in January 2041 and the ‘483 patent expires in July 2044.

Current wording

•In August 2025, the U.S. Patent and Trademark Office, or USPTO, issued U.S. Patent No. 12,370,142 (the ‘142 patent), claiming composition of EXPAREL manufactured by an enhanced process from our large-scale batch process in San Diego, California, which demonstrated a more consistent stability profile as measured by an in-vitro release assay (IVRA). We now have 21 EXPAREL patents listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”). The ‘142 patent expires in July 2044.

Previous wording

In July 2025, as a result of improving manufacturing efficiencies for EXPAREL, we instituted a reduction in force at our Science Center Campus in San Diego, California. Our enhanced efficiencies were the result of our multi-year investment in two large-scale 200+ liter batch manufacturing suites located in San Diego and Swindon, United Kingdom, which commenced commercial production in 2024 and 2021, respectively. Our two large-scale manufacturing suites are capable of producing bulk EXPAREL volumes that are approximately four-fold greater than our first-generation 45-liter batch manufacturing process, and we believe these larger manufacturing suites provide ample capacity for meeting the growing demand and improving gross margins for EXPAREL through a meaningfully more favorable cost structure and manufacturing yields versus the 45-liter batch process. As a result, and after careful consideration, we decided to decommission our 45-liter EXPAREL batch manufacturing suite located in San Diego and reduce our workforce accordingly.

Current wording

In July 2025, as a result of improving manufacturing efficiencies for EXPAREL, we instituted a reduction in force at our Science Center Campus in San Diego, California. Our enhanced efficiencies were the result of our multi-year investment in two large-scale 200+ liter batch manufacturing suites located in San Diego and Swindon, United Kingdom, which commenced commercial production in 2024 and 2021, respectively. These two large-scale manufacturing suites are capable of producing bulk EXPAREL volumes that are approximately four-fold greater than our 45-liter batch manufacturing process, and we believe these larger manufacturing suites provide ample capacity for meeting the growing demand and improving gross margins for EXPAREL through a meaningfully more favorable cost structure and manufacturing yields versus the 45-liter batch process. As a result, and after careful consideration, we decided to decommission our 45-liter EXPAREL batch manufacturing suite located in San Diego and reduce our workforce accordingly.

Previous wording

The reduction impacted 71 employees or approximately 8% of our total workforce. We currently estimate that we will recognize pre-tax charges to our third quarter 2025 financial results of approximately $2.4 million to $2.8 million related to employee termination benefits, consisting of garden leave and severance, healthcare benefits, and, to a lesser extent, other one-time termination benefits and other costs. In June 2025, we reserved $1.0 million of inventory and recognized $5.5 million of accelerated depreciation expense associated with the decommissioning of the 45-liter manufacturing assets.

Current wording

The reduction impacted 71 employees or approximately 8% of our then-total workforce. As a result, during both the three and nine months ended September 30, 2025, we recognized $3.7 million of employee termination benefit charges which consist of garden leave under California employment law, severance, healthcare benefits, and, to a lesser extent, other one-time termination benefits. In June 2025, we reserved $1.0 million of inventory and recognized $5.5 million of accelerated depreciation expense associated with the decommissioning of the 45-liter manufacturing assets.

Previous wording

This reduction in the workforce is subject to local regulatory requirements and we expect to recognize the majority of these charges in the third quarter of 2025. The reduction in the workforce is anticipated to lead to an annual reduction in operating expenses of approximately $13.0 million, which does not reflect the one-time expenses associated with the workforce reduction. In addition, we may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur in connection with the workforce reduction.

Current wording

This reduction in the workforce is subject to local regulatory requirements and the majority of these charges occurred in the third quarter of 2025. The reduction in the workforce is anticipated to lead to an annual reduction in operating expenses of approximately $13.0 million, which does not reflect the one-time expenses associated with the workforce reduction. In addition, we may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur in connection with the workforce reduction.

Previous wording

We have successfully completed Part 1 of a pediatric study in children aged two to less than six years of age. We are implementing Part 2 of the pediatric study in children aged six months to less than two years of age using the same dosage that was utilized in Part 1.

Current wording

We have successfully completed Part 1 of a pediatric study in children aged two to less than six years of age. We have initiated enrollment for Part 2 of the pediatric study in children aged six months to less than two years of age using the same dosage that was utilized in Part 1.

Previous wording

We are currently sponsoring a prospective, real-world registry called the Innovations in Genicular Outcomes Registry, or IGOR, which is a patient-focused registry governed in collaboration with a steering committee of scientific experts that evaluates clinical, economic- and health-related patient-reported outcomes in patients who have received any treatment for knee OA pain, including TKA, for a minimum of 18 months. A unique feature of IGOR is that if patients receive additional treatments for OA, data capture resets so that outcomes of their treatment journey can be followed over multiple years. Unlike in clinical studies, treatment decisions in IGOR are decided by physicians and patients in a shared decision-making manner rather than being driven by treatment assignment, so that outcomes are truly those from real-world applications. The IGOR registry is tracking outcomes of iovera°, ZILRETTA and EXPAREL, as well as comparator treatments. Early outcomes from IGOR have shown that patients who receive iovera° prior to undergoing TKA experience less pain, improved function and improved sleep for six months after surgery versus patients who do not receive iovera°.

Current wording

We are currently sponsoring a prospective, real-world registry called the Innovations in Genicular Outcomes Registry, or IGOR, which is a patient-focused registry governed in collaboration with a steering committee of scientific experts that evaluates clinical, economic- and health-related patient-reported outcomes in patients who have received any treatment for knee OA pain, including TKA, for a minimum of 18 months. A unique feature of IGOR is that if patients receive additional treatments for OA, data capture resets so that outcomes of their treatment journey can be followed over multiple years. Unlike in clinical studies, treatment decisions in IGOR are decided by physicians and patients in a shared decision-making manner rather than being driven by treatment assignment, so that outcomes are truly those from real-world applications. The IGOR registry is tracking outcomes of iovera°, ZILRETTA and EXPAREL, as well as comparator treatments.

Previous wording

The lifetime risk of developing symptomatic knee OA is 45 percent according to the Arthritis Foundation. The prevalence of symptomatic knee OA increases with each decade of life, with the annual incidence of knee OA being highest between age 55 and 64 years old. There are 14 million individuals in the U.S. who have symptomatic knee OA, and nearly two million are under the age of 45. Surgical intervention is typically a last resort for patients suffering from OA of the knee.

Current wording

The lifetime risk of developing symptomatic knee OA is 45 percent according to the Arthritis Foundation. The prevalence of symptomatic knee OA increases with each decade of life, with the annual incidence of knee OA being highest between age 55 and 64 years old. There are 15 million individuals in the U.S. who have symptomatic knee OA, and nearly two million are under the age of 45. Surgical intervention is typically a last resort for patients suffering from OA of the knee.

Previous wording

Lower dose levels and efficient delivery of genes into cells means that thousands of doses can be produced in a single batch. As a result, we expect that any therapies built on the HCAd platform would have a commercially attractive and viable cost of goods profile.

Current wording

Lower dose levels mean that thousands of doses can be produced in a single batch. As a result, we expect that any therapies built on the HCAd platform would have a commercially attractive and viable cost of goods profile.

Previous wording

After injection of PCRX-201, the HCAd vector enters joint cells and turns them into factories to boost cellular IL-1Ra production, which blocks IL-1 pathway activation to reduce inflammation and pain in the knee. PCRX-201 uses an inflammation-responsive promoter to only produce IL-1Ra when needed, mimicking how the body naturally responds to inflammation. In a Phase 1 proof-of-concept study of patients with moderate to severe OA of the knee, PCRX-201 was well tolerated with improvements in knee pain observed across all doses. The study enrolled 72 patients in two three-dose cohorts: a co-administered IA steroid cohort and a cohort that did not receive a steroid. PCRX-201 was well tolerated, with efficacy observed through at least 52 weeks at all doses and cohorts. The highest level of efficacy was achieved in the co-administered steroid group, which showed a greater percentage of patients with at least a 50% improvement in Western Ontario and McMaster Universities Osteoarthritis Index (WOMAC) pain and stiffness scores, as well as a meaningful improvement in Knee Injury and Osteoarthritis Outcomes Score (KOOS) functional assessment. In all 3 doses, over 70% of patients saw a more than 50% improvement in pain compared to baseline at week 16 and 78. PCRX-201 was well-tolerated with no serious treatment-emergent adverse events related to the treatment or procedure reported regardless of steroid pretreatment or dose level administered. While other therapies typically provide relief for three to six months, PCRX-201 has shown the potential to set a new standard with pain relief lasting at least 2 years from a single injection.

Current wording

After injection of PCRX-201, the HCAd vector enters joint cells and turns them into factories to boost cellular IL-1Ra production, which blocks IL-1 pathway activation to reduce inflammation and pain in the knee. PCRX-201 uses an inflammation-responsive promoter to only produce IL-1Ra when needed, mimicking how the body naturally responds to inflammation. In a Phase 1 proof-of-concept study of patients with moderate to severe OA of the knee, PCRX-201 was well tolerated with improvements in knee pain observed across all doses. The study enrolled 72 patients who were broken into two cohorts. The first cohort received one of three doses of PCRX-201. The second cohort received concurrent pre-treatment with an IA corticosteroid (methylprednisolone 40 mg), a technique common in gene therapy dosing to improve tolerability and gene transfer. PCRX-201 was well tolerated, with efficacy observed through at least 52 weeks at all doses and cohorts. The highest level of efficacy was achieved in the co-administered steroid group, which showed a greater percentage of patients with at least a 50% improvement in Western Ontario and McMaster Universities Osteoarthritis Index (WOMAC) pain and stiffness scores, as well as a meaningful improvement in Knee Injury and Osteoarthritis Outcomes Score (KOOS) functional assessment. In all 3 doses, over 70% of patients saw a 50% or greater improvement in pain compared to baseline at week 16 and 78. PCRX-201 was well-tolerated with no serious treatment-emergent adverse events related to the treatment or procedure reported regardless of steroid pretreatment or dose level administered. While other therapies typically provide relief for three to six months, PCRX-201 has shown the potential to set a new standard with pain relief lasting at least 2 years from a single injection.

Previous wording

ASCEND will evaluate two doses of PCRX-201, Dose A is 1.4 x 1010 genome copies and Dose B is 1.4 x 1011 genome copies. Patients are being randomized 1:1:1 to Dose A, Dose B or saline. All cohorts will receive concurrent pretreatment with an IA corticosteroid (methylprednisolone 40 mg), a technique common in gene therapy dosing to improve tolerability and gene transfer.

Current wording

ASCEND will evaluate two doses of PCRX-201, Dose A is 1.4 x 1010 genome copies and Dose B is 1.4 x 1011 genome copies. Patients are being randomized 1:1:1 to Dose A, Dose B or saline. All cohorts will receive concurrent pretreatment with an IA corticosteroid (methylprednisolone 40 mg).

Previous wording

Part A of the study will randomize approximately 45 patients and Part B will randomize approximately 90 patients. The drug product used in Part B of the study will be manufactured using our newly developed, suspension-based batch manufacturing process intended for commercial scale-up. We have surpassed 50% enrollment in Part A of the study, and we expect to complete enrollment in Part A of the study before the end of 2025 and report results from a pre-specified interim analysis before the end of 2026.

Current wording

Part A of the study randomized approximately 45 patients and Part B will randomize approximately 90 patients. The drug product used in Part B of the study will be manufactured using our newly developed, suspension-based batch manufacturing process intended for commercial scale-up. We recently achieved our enrollment target for Part A of the study and expect to report results from a pre-specified interim analysis before the end of 2026.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

Current wording

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

Previous wording

Net product sales consist of sales of (i) EXPAREL in the U.S., E.U., and the United Kingdom; (ii) ZILRETTA in the U.S.; (iii) iovera° in the U.S., Canada and the E.U. and (iv) sales of our bupivacaine liposome injectable suspension product for veterinary use. Royalty revenues are related to a collaborative licensing agreement from the sale of our bupivacaine liposome injectable suspension for veterinary use.

Current wording

Net product sales consist of sales of (i) EXPAREL in the U.S., E.U., and the United Kingdom, or U.K.; (ii) ZILRETTA in the U.S.; (iii) iovera° in the U.S., Canada, the E.U., and the U.K. and (iv) sales of our bupivacaine liposome injectable suspension product for veterinary use. Royalty revenues are related to a collaborative licensing agreement from the sale of our bupivacaine liposome injectable suspension for veterinary use.

Previous wording

EXPAREL revenue increased 4% in both the three and six months ended June 30, 2025 versus 2024. Components of the increase included a 6% and 4% increase in gross vial volume in the three and six months ended June 30, 2025 versus 2024, respectively, which was partially offset by a shift in product mix. EXPAREL revenue was also positively impacted by a 1% increase in net selling price per unit in both the three and six months ended June 30, 2025 versus 2024, related to a January 2025 price increase, partially offset by increases in sales-related allowances as a result of group purchasing organization contracting.

Current wording

EXPAREL revenue increased 6% and 5% in the three and nine months ended September 30, 2025 versus 2024, respectively. Components of the increase included a 9% and 6% increase in gross vial volume in the three and nine months ended September 30, 2025 versus 2024, respectively, partially offset by a shift in product mix and decreases in net selling price per unit in both the three and nine months ended September 30, 2025 versus 2024. The decrease in net selling price per unit relates to increases in sales-related allowances as a result of group purchasing organization contracting, partially offset by a January 2025 price increase.

Previous wording

ZILRETTA revenue increased 2% in the three months ended June 30, 2025 versus 2024 due to a 4% increase in net selling price per unit, partially offset by a 2% decrease in kit volume. ZILRETTA revenue decreased 3% in the six months ended June 30, 2025 versus 2024 due to a 6% decrease in kit volume, partially offset by a 3% increase in net selling price per unit. Both periods’ increase in net selling price per unit is related to a 4% increase in gross selling price per unit, partially offset by higher sales-related allowances. ZILRETTA volume was impacted by the onboarding of a new field-based team to support ZILRETTA after realigning our existing sales force to focus on EXPAREL. This transition impacted sales in 2025 as ZILRETTA is a promotionally sensitive product.

Current wording

ZILRETTA revenue increased 2% in the three months ended September 30, 2025 versus 2024 due to a 1% increase in net selling price per unit and a 1% increase in kit volume. ZILRETTA revenue decreased 2% in the nine months ended September 30, 2025 versus 2024 due to a 4% decrease in kit volume, partially offset by a 2% increase in net selling price per unit. Both periods’ increase in net selling price per unit is related to a 4% increase in gross selling price per unit, partially offset by higher sales-related allowances. For the nine months ended September 30, 2025, ZILRETTA volume was impacted by the onboarding of a new field-based team to support ZILRETTA after realigning our existing sales force to focus on EXPAREL. This transition impacted sales in 2025 as ZILRETTA is a promotionally sensitive product.

Previous wording

Net product sales of iovera° decreased 2% and was flat in the three and six months ended June 30, 2025 versus 2024, respectively, driven by decreases in Smart Tip net selling prices per unit of 7% and 3%, partially offset by increases in Smart Tip volume of 4% and 2%.

Current wording

Net product sales of iovera° increased 14% and 5% in the three and nine months ended September 30, 2025 versus 2024, respectively, driven by increases in Smart Tip volume of 16% and 7%, partially offset by decreases in Smart Tip net selling price of 1% and 2%.

Previous wording

Bupivacaine liposome injectable suspension revenue decreased 84% and 45% in the three and six months ended June 30, 2025 versus 2024, respectively, due to timing of orders placed. Its related royalties decreased 54% and 29% in the three and six months ended June 30, 2025 versus 2024, respectively, primarily due to both the timing of orders placed for veterinary use and the sales mix of vial sizes.

Current wording

Bupivacaine liposome injectable suspension revenue increased 64% in the three months ended and decreased 21% in the nine months ended September 30, 2025 versus 2024, respectively, due to timing of orders placed by our commercial partner for veterinary use. Its related royalties increased 73% in the three months ended and decreased 6% in the nine months ended September 30, 2025 versus 2024, respectively, primarily due to both the timing of orders and the sales mix of vial sizes.

Previous wording

The following tables provide a summary of activity with respect to our sales-related allowances and accruals related to EXPAREL and ZILRETTA for the six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following tables provide a summary of activity with respect to our sales-related allowances and accruals related to EXPAREL and ZILRETTA for the nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

Total reductions of gross product sales from sales-related allowances and accruals were $96.7 million and $73.1 million, or 21.7% and 17.6% of gross product sales, for the six months ended June 30, 2025 and 2024, respectively. The overall 4.1% increase in sales-related allowances and accruals as a percentage of gross product sales was primarily related to accruals as a result of higher chargeback-related allowances from expanded contracting efforts.

Current wording

Total reductions of gross product sales from sales-related allowances and accruals were $150.0 million and $108.8 million, or 22.1% and 17.6% of gross product sales, for the nine months ended September 30, 2025 and 2024, respectively. The overall 4.5% increase in sales-related allowances and accruals as a percentage of gross product sales was primarily related to accruals as a result of higher chargeback-related allowances from expanded contracting efforts.

Previous wording

Cost of goods sold primarily relates to the costs to produce, package and deliver our products to customers. These expenses include labor, raw materials, manufacturing overhead and occupancy costs, depreciation of facilities, quality control and engineering. In 2024, the cost of royalty payments were also a component of cost of goods sold.

Current wording

Cost of goods sold primarily relates to the costs to produce, package and deliver our products to customers. These expenses include labor, raw materials, manufacturing overhead and occupancy costs, depreciation of facilities, quality control and engineering.

Previous wording

Gross margin increased two and six percentage points in the three and six months ended June 30, 2025 versus 2024, respectively, primarily due to lower EXPAREL inventory reserves and improved EXPAREL and ZILRETTA product costs due to higher volumes manufactured in order to enhance the level of inventory on hand. These increases were partially offset by accelerated depreciation of fixed assets impacted by the decommissioning of our 45-liter EXPAREL batch manufacturing suite at our Science Center Campus in San Diego, California. For more information, see Note 18, Subsequent Events, to our condensed consolidated financial statements included herein.

Current wording

Gross margin increased four percentage points in both the three and nine months ended September 30, 2025 versus 2024, due to lower EXPAREL inventory reserves and improved ZILRETTA product costs due to higher volumes manufactured in order to enhance the level of inventory on hand. The increase in the three months ended September 30, 2025 versus 2024 was partially offset by higher EXPAREL product cost as a result of lower production volumes. The increase in the nine months ended September 30, 2025 versus 2024 was partially offset by accelerated depreciation of fixed assets impacted by the decommissioning of our 45-liter EXPAREL batch manufacturing suite at our Science Center Campus in San Diego, California. For more information, see Note 6, Fixed Assets, to our condensed consolidated financial statements included herein.

Previous wording

Additionally, in April 2025, the U.S. District Court, District of Nevada, concluded we were no longer obligated to pay royalties to the Research Development Foundation for EXPAREL manufactured under our enhanced, larger-scale manufacturing process. As a result, during the six months ended June 30, 2025, no royalty expense was incurred on net product sales of EXPAREL. For more information, see Note 16, Commitments and Contingencies, to our condensed consolidated financial statements included herein.

Current wording

Additionally, in April 2025, the U.S. District Court, District of Nevada, concluded we were no longer obligated to pay royalties to the Research Development Foundation, or RDF, for EXPAREL manufactured under our enhanced, larger-scale manufacturing process. As a result, during the nine months ended September 30, 2025, no royalty expense was incurred on net product sales of EXPAREL. For more information, see Note 16, Commitments and Contingencies, to our condensed consolidated financial statements included herein.

Previous wording

Research and development, or R&D, expenses primarily consist of costs related to clinical trials and related outside services, product development and other R&D costs, including trials that we are conducting to generate new data for EXPAREL, ZILRETTA and iovera°, clinical trials for PCRX-201 and stock-based compensation expense. Clinical and preclinical development expenses include costs for clinical personnel, clinical trials performed by third-parties, toxicology studies, materials and supplies, database management and other third-party fees. Product development and manufacturing capacity expansion expenses include development costs for our products, which include personnel, research equipment, materials and contractor costs for process development and product candidates, development costs related to significant scale-ups of our manufacturing capacity and facility costs for our research space. Regulatory and other expenses include regulatory activities related to unapproved products and indications, medical information and scientific communication expenses, expenses related to our IGOR registry study and related personnel. Stock-based compensation expense relates to the costs of stock option grants, awards of restricted stock units, or RSUs, and our employee stock purchase plan, or ESPP.

Current wording

Research and development, or R&D, expenses primarily consist of costs related to clinical trials and related outside services, product development and other R&D costs, including trials that we are conducting to generate new data for EXPAREL, ZILRETTA and iovera°, clinical trials for PCRX-201 and stock-based compensation expense. Clinical and preclinical development expenses include costs for clinical personnel, clinical trials performed by third-parties, toxicology studies, materials and supplies, database management and other third-party fees. Product development and manufacturing capacity expansion expenses include development costs for our products, which include personnel, research equipment, materials and contractor costs for process development and product candidates, development costs related to significant scale-ups of our manufacturing capacity and facility costs for our research space. Regulatory and other expenses include regulatory activities related to unapproved products and indications, medical information and scientific communication expenses, expenses related to our IGOR registry study and related personnel. Stock-based compensation expense relates to the costs of stock option grants, awards of restricted stock units, or RSUs, and our employee stock purchase plan, or ESPP. Additionally, as part of the GQ Bio Acquisition, expenses related to a key employee holdback are also included in R&D.

Previous wording

Total R&D expense increased 39% and 40% in the three and six months ended June 30, 2025 versus 2024, respectively.

Current wording

Total R&D expense increased 36% and 38% in the three and nine months ended September 30, 2025 versus 2024, respectively.

Previous wording

Clinical and preclinical development expense increased 73% and 84% in the three and six months ended June 30, 2025 versus 2024, respectively, due to ongoing site start-up expenses and enrollment in the PCRX-201 Phase 2 ASCEND trial for knee OA, a ZILRETTA shoulder trial, an EXPAREL pediatric trial and an iovera° spasticity trial, as well as additional personnel to support clinical initiatives. We expect to continue investing in our clinical and preclinical development programs throughout 2025.

Current wording

Clinical and preclinical development expense increased 55% and 74% in the three and nine months ended September 30, 2025 versus 2024, respectively, due to ongoing site start-up expenses and enrollment in the PCRX-201 Phase 2 ASCEND trial for knee OA and an iovera° spasticity trial, as well as additional personnel to support clinical initiatives. For the three months ended September 30, 2025 versus 2024, these increases were partially offset by an enrollment pause in a ZILRETTA shoulder trial pending Institutional Review Board (IRB) approval of a protocol amendment, as well as an enrollment pause between cohort 1 and cohort 2 in an EXPAREL pediatric trial. For the nine months ended September 30, 2025 versus 2024, increases include site start-up of and ongoing enrollment in the ZILRETTA shoulder trial, partially offset by the winding down of a PCRX-201 Phase 1 trial for knee OA.

Previous wording

Product development expense increased 8% and 9% in the three and six months ended June 30, 2025 versus 2024, respectively, attributable to investing in our HCAd platform, primarily for the PCRX-201 program. These increases were partially offset by the completion of pre-commercial scale-up activities of our enhanced, larger-scale EXPAREL manufacturing capacity at our Science Center Campus in San Diego, California, which the FDA approved in February 2024 and was placed into service in July 2024.

Current wording

Product development expense decreased 5% in the three months ended September 30, 2025 versus 2024 attributable to ZILRETTA development costs that were incurred in the prior year to develop a manufacturing fill line that was placed into service in 2025. Product development expense increased 4% in the nine months ended September 30, 2025 versus 2024, attributable to investing in our HCAd platform, primarily for the PCRX-201 program. These increases were partially offset by the completion of pre-commercial scale-up activities of our enhanced, larger-scale EXPAREL manufacturing capacity at our Science Center Campus in San Diego, California. This manufacturing suite was approved by the FDA in February 2024 and placed into service in July 2024.

Previous wording

Regulatory and other expense decreased 9% and 10% in the three and six months ended June 30, 2025 versus 2024, respectively, due to a realignment of medical communication activities, partially offset by additional sites related to the IGOR registry study.

Current wording

Regulatory and other expense increased 57% and 7% in the three and nine months ended September 30, 2025 versus 2024, respectively, due to a realignment of medical communication activities, as well as additional subjects enrolled in the IGOR registry study.

Previous wording

During the three and six months ended June 30, 2025, we accrued $1.1 million and $1.5 million, respectively, related to a key employee holdback. As part of the GQ Bio Acquisition, $7.8 million related to two employees’ payments will be recognized over three years pursuant to a key employee holdback agreement in increments of 50%, 30% and 20% at each year’s respective anniversary.

Current wording

During the three and nine months ended September 30, 2025, we accrued $1.2 million and $2.6 million, respectively, related to a key employee holdback. As part of the GQ Bio Acquisition, $7.8 million related to two employees’ payments will be recognized over three years pursuant to a key employee holdback agreement in increments of 50%, 30% and 20% at each year’s respective anniversary.

Previous wording

Stock-based compensation expense increased 25% in each of the three and six months ended June 30, 2025 versus 2024, primarily due to increased R&D personnel as well as the shifting of our annual equity grant to the first quarter in 2025.

Current wording

Stock-based compensation expense increased 30% and 26% in the three and nine months ended September 30, 2025 versus 2024, respectively, primarily due to increased R&D personnel as well as the shifting of our annual equity grant to the first quarter in 2025.

Previous wording

Total selling, general and administrative expense increased 30% and 25% in the three and six months ended June 30, 2025 versus 2024, respectively.

Current wording

Total selling, general and administrative expense increased 23% and 25% in the three and nine months ended September 30, 2025 versus 2024, respectively.

Previous wording

Sales and marketing expense increased 31% and 36% in the three and six months ended June 30, 2025 versus 2024, respectively, driven by investing in programs to drive awareness and education for our customers and enhance our marketing, market access and reimbursement teams and value creation to enhance key commercial capabilities and expand EXPAREL utilization. We also expanded the size of our sales force in the second half of 2024 in order to better extend our reach on each of our commercial products.

Current wording

Sales and marketing expense increased 35% and 36% in the three and nine months ended September 30, 2025 versus 2024, respectively, driven by investing in programs to drive awareness and education for our customers and enhance our marketing, market access and reimbursement teams and value creation to enhance key commercial capabilities and expand EXPAREL utilization. We also expanded the size of our sales force in the second half of 2024 in order to better extend our reach on each of our commercial products.

Previous wording

General and administrative expense increased 30% and 4% in the three and six months ended June 30, 2025 versus 2024, respectively, primarily driven by third-party investor relations advisory services, as well as an increased headcount in the business development, legal and information technology departments. In addition, the increase in the six months ended June 30, 2025 versus 2024 was partially offset by a recovery of legal expenses in the first quarter of 2025.

Current wording

General and administrative expense increased 5% in both the three and nine months ended September 30, 2025 versus 2024 primarily driven by increased headcount in the business development and other administrative departments. In addition, the increase in the nine months ended September 30, 2025 versus 2024 was partially offset by a recovery of legal expenses in the first quarter of 2025.

Previous wording

Stock-based compensation expense increased 29% and 31% for the three and six months ended June 30, 2025 versus 2024, respectively, primarily due to equity grants provided to new executive officers as well as the shifting of our annual equity grant to the first quarter starting in 2025.

Current wording

Stock-based compensation expense increased 11% and 24% for the three and nine months ended September 30, 2025 versus 2024, respectively, primarily due to equity grants provided to new executive officers as well as the shifting of our annual equity grant to the first quarter starting in 2025.

Previous wording

The following table provides a summary of the costs related to the contingent consideration (gains) charges, acquisition-related expenses, restructuring and other during the periods indicated, including percent changes (dollar amounts in thousands):

Current wording

The following table provides a summary of the costs related to the contingent consideration charges (gains), acquisition-related expenses, restructuring and other during the periods indicated, including percent changes (dollar amounts in thousands):

Previous wording

Total contingent consideration (gains) charges, acquisition-related expenses, restructuring and other included net charges that decreased 77% in the three months ended June 30, 2025 versus 2024. Total contingent consideration (gains) charges, acquisition-related expenses, restructuring and other included net charges that increased 39% in the six months ended June 30, 2025 versus 2024.

Current wording

During the three and nine months ended September 30, 2025, total contingent consideration charges (gains), acquisition-related expenses, restructuring and other included net charges of $6.8 million and $13.3 million, respectively. During the three and nine months ended September 30, 2024, total contingent consideration charges (gains), acquisition-related expenses, restructuring and other included net gains of $1.8 million and net charges of $2.9 million, respectively.

Previous wording

During the three months ended June 30, 2024, we recognized a contingent consideration charge of $1.5 million primarily due to revisions to the latest discount rates. During the six months ended June 30, 2024, we recognized a contingent consideration gain of $2.3 million primarily due to an adjustment reflecting the probability of achieving the remaining regulatory milestone under the Flexion Acquisition by the milestone expiration date.

Current wording

During the three months ended September 30, 2025, we recognized contingent consideration charges of $0.6 million due revisions to the latest discount rates, partially offset by a reduction in the sales forecast through the milestone expiration date of December 31, 2030. During the nine months ended September 30, 2025, we recognized contingent consideration gains of $2.4 million due to revisions to the latest discount rates.