Pacira BioSciences, Inc.
Q3 2013 Earnings Call Transcript

Published: 1 Nov 2013

[Operator:]

Thank you for joining Pacira Pharmaceuticals Third Quarter 2013 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following the formal remarks, Pacira's management team will open the lines for a question-and-answer period. Please be advised that this call is being recorded at the company's request and will be archived on the company's website for two weeks from today's date. At this time, I'd like to introduce Jessica Cho of Pacira Pharmaceuticals. Please go ahead.

[Jessica Cho:]

Thank you and good morning, everyone. Welcome to Pacira's third quarter 2013 financial results conference call. Joining me on the call today from Pacira are Dave Stack, President and Chief Executive Officer and Chairman; and Jim Scibetta, Chief Financial Officer. Before I turn the call over to the management team for their prepared remarks, I would like to remind you that certain remarks made by management during this call about the company's future expectations, plans and prospects including those regarding EXPAREL, production in Suite A and Suite C, approval of Suite C, anticipated fixed cost and gross margins and potential conversion of the company's convertible debt constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the words believe, anticipate, plans, expects, will and similar expressions. Any such forward-looking statements are based on the assumptions that the company believes are reasonable, but are subject to a wide range of risks and uncertainties. Actual results may differ materially from those expressed or implied by such forward-looking statements. Many of these and other risks and uncertainties are described in the Risk Factors section of Pacira's most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and in other filings with the SEC, which are available through the investor section of the Pacira website at www.pacira.com or on the SEC website at www.sec.gov. During the course of this call, we will also refer to certain non-GAAP financial measures including adjusted EPS. Definitions of these non-GAAP financials measures and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the earnings release for the quarter. I'll now turn the call over to Dave.

[Dave Stack:]

Thanks, Jessica. Good morning, everyone, and thank you for joining us today. Our novel treatment for postsurgical pain, EXPAREL, continues to be the primary focus of Pacira today. EXPAREL was launched commercially in the United States in April 2012 and we continue to driver on the promise of pain management with reduced reliance on opioids. As you know, EXPAREL is the first and only long-acting multivesicular liposome local anesthetic for use in the peri or postsurgical setting. We utilize our proprietary DepoFoam technology to provide local analgesia for up to 72 hours. Now halfway through the second year of launch with robust quarter-over-quarter growth and increasing market penetration, we continue to build upon the EXPAREL brand through clinical trials, commercial initiatives, talented surgical specialty and strategic partnerships that support EXPAREL use among key hospitals, ambulatory surgery audiences as well as the expansion of the current label. The third quarter of 2013 represented another quarter of upward growth for EXPAREL. We reported net sales of $20 million for EXPAREL, up 32% from the $15.2 million in the previous quarter. We also announced 297 new customers in the third quarter, an average of 23 new customers per week. As of the end of the third quarter, 1,732 distinct customers have ordered EXPAREL since launch, a 21% increase over Q2. In addition to the breadth of new customers adopting EXPAREL, we continue to see growth within hospitals which adopted the product earlier in the launch with 165 total hospitals ordering more than $100,000 worth of EXPAREL, a 65% increase from Q2. Overall, we continue to build momentum in the third quarter not only within our existing customer base, but also across surgical specialties and hospitals as a result of our surgery and anesthesia customers expanding their use in new customer settings and institutions. Our initial launch audience of colorectal, general and plastic surgeons with whom we saw a real opportunity to change the standard of care to a non-opioid EXPAREL base postsurgical pain platform continues to represent the majority of our market demand. In Q3, EXPAREL continued to be used in open and laparoscopic procedures in the abdomen and perineal areas, while plastic surgery uptake has grown from initial success in the cosmetic retail market to reconstruct the surgery procedures performed in the in-patient hospital setting. At launch, formulary approvals with restrictions have been commonplace, but we saw Q2's steady trend of early adopters removing existing restrictions in addition to new formulary approvals without restrictions, accelerated by our traction with TAP infiltration and orthopedic initiatives. TAP, short for procedures where customers infiltrate EXPAREL into the transversus abdominis plane under ultrasound guidance has importantly widen the EXPAREL audience from surgeons to anesthesiologists in support of a reduced opioid pain management strategy. Orthopedics remains a source of rapid adoption in growth with hip and knee procedures expanding to spine, foot and ankle, hand, wrist and trauma surgery. In addition, the success of EXPAREL and the Department of Defense institutions has been an important – has been important in many geographies as the first opportunity for surgeons to utilize EXPAREL and take their experience back to institution in their local area. This is an example of how success of EXPAREL to control pain and a reduced opioid environment has provided an important driver for EXPAREL; discussion in the surgeons' lounge where EXPAREL users spread by word of mouth their experiences from physician to physician and from institution to institution. Several catalysts and initiatives contributed to these trends. To repeat the success of the Q2 simulcast on TAP infiltration and bariatric procedures attended by over 700 healthcare professionals, we rebroadcast the simulcast and made this program available on the web. To remind everyone, since infiltration technique is important in maximizing the benefit of EXPAREL, these simulcast programs are critical elements in our educational initiative since this video media allows key opinion leading physicians to demonstrate and share their specific best practice technique to a large number of interested healthcare professionals. Based on the success of these programs, last week we organized a similar simulcast on orthopedics focusing on orthopedic procedures including spine where we hosted more than 600 healthcare professionals who attended to learn about how their peers are adopting EXPAREL. Additionally, our series of soft tissue advisory meetings serves as an interactive forum for learning through shared feedback from soft tissue surgeons who are using EXPAREL regarding best practices and help outcomes data. We also attended several national congresses in the third quarter specializing in anesthesia, surgery, nursing and pharmacy, including the New York School of Regional Anesthesia, Health Connect Partners Reverse EXPO where we held an advisory meeting, The American Society of Anesthesia where we held the product theater where leading anesthesiologists shared several cases on the use of EXPAREL and TAP infiltration, the American College of Surgeons where we also held the product theater where hernia and colorectal cases using EXPAREL were presented, The American Society of Plastic Surgeons where we presented an abstract on EXPAREL used in cosmetic breast procedures and held an inviting advisory meeting on reconstructive surgery and The American Society for Pain Management Nursing where we sponsored the keynote address delivered by a nationally renowned speaker. Additionally, we continue to build on our strong momentum in the orthopedic and spine market through collaborative partnerships. This month we entered into a promotional arrangement with CrossLink Bioscience, an Atlanta based orthopedic device distributor. This five-year partnership allows us to collaborate with several hundred orthopedic distributor representatives in select geographies in the United States with the ability to add additional geographies and/or distributors, if required, upon mutual agreement. CrossLink will be compensated on a variable cost basis depending on performance and designated hospitals and geographies reported monthly to Pacira. We have mutual termination rates with Pacira having the right to terminate after three years, subject to certain terms and conditions. Let me provide some color on the strategic importance of this relationship to Pacira and EXPAREL. As you have heard, the orthopedic community is very interested in EXPAREL and the potential to reduce opioids which can translate into improved time re-ambulation, shorter length of stay and improved patient satisfaction. This customer also has a different relationship with industry. In orthopedics, it is typical for a device representative to be in most every case. Pacira could not hire and train as rapidly as orthopedics was seeking training and educational support, and as a drug company we do not have the same level of OR access as the device manufacturers. Given the long-lasting relationships between orthopedic physicians and the device industry, the most efficient way for Pacira to support EXPAREL with this customer was through the strategic partnership with CrossLink, and we've signed this agreement based on the success of the earlier pilot program. We also recently published clinical results of another of our Phase 4 IMPROVE studies, a series of prospective studies assessing the differences in postsurgical opioid use and help economic outcomes between patients receiving an EXPAREL-based multimodal regimen for postsurgical pain control versus the standard opioid-based approach. The open-label multicenter ileostomy reversal study showed a 2.1 day reduction in hospital stay, $2,800 in cost savings and a 92 milligram reduction in opioid consumption from 112 milligrams of morphine required to achieve pain control to 20 milligrams in the EXPAREL group. As more and more surgeons and anesthesiologists gain experience with EXPAREL, the ongoing paradigm shift from Pacira sponsored studies to not Pacira sponsored independent studies using EXPAREL has increased. Along those lines, we announced last month key findings from an open-label study conducted by Dr. Brandon Broome from Steadman Hawkins Clinic of the Carolinas as the principal investigator and Ian Backlund [ph] of the Hawkins Foundation presented at the 7th Annual Marshall Steele Orthopedic and Spine Summit. The study reported better pain management, improved knee flexion and ambulation, shorter hospital stay and decreased overall costs and increased patient satisfaction in total knee arthroplasty patients when EXPAREL was infiltrated at the basis of a multimodal regimen for postsurgical pain control versus a catheter-based femoral nerve block with local anesthetic. More recently, open-label findings on EXPAREL local infiltration versus bupivacaine injection in anterior total hip arthroplasty patients were presented at the ICJR in Houston. This study was presented by Dr. Ben Domb as the principal investigator at the American Hip Institute in Chicago. EXPAREL patients showed a 43% reduction in opioid on day one with a 65% increase in the number of patients who ambulated on the day of surgery and reduced length of stay in the hospital. Finally, our early success amongst spine surgeons has resulted in Pacira being awarded first place in the 2013 Spine Tech Awards, which you will hear more about in the coming months. Looking ahead to the next few quarters, we expect a number of value drivers to continue to sponsor the growth of EXPAREL. By the end of the year, we expect several TAP infiltration studies and robotic prostatectomy, myomectomy, ventral hernia and bariatric surgery patients to be published. Other upcoming publications improved the Phase 4 IMPROVE study and laparoscopic colectomy, the EXCLAIM trial which evaluated EXPAREL used in patients undergoing common aesthetic plastic surgery procedures and the third of the retrospective analyses assessing the health economics of opioid-related adverse effects with data from a local integrated delivery hospital system defining the patient populations who are known to be most problematic when opioids are used as the platform for postsurgical pain control. Turning to upcoming posters and presentations, data will be presented on fascia iliaca block in hip fracture patients at the American Society of Regional Anesthesia or ASRA and in DIEP flap breast reconstruction study using EXPAREL-based enhanced care pathway at both the American Society for Reconstructive Microsurgery and the Plastic Surgery Research Council. To provide guidance on the best practice of EXPAREL and TAP infiltration, we are enrolling patients for our Phase 4 trial in lower abdominal soft tissue surgeries. The focus of this program is to assess the timing of the procedure as well as the dose and volume of EXPAREL, while measuring the opioid-sparing opportunity. We expect to have data from this trial by the end of 2013 or early 2014. Looking even further ahead, we are starting to see growing excitement from our anesthesiology customers over the potential use of EXPAREL in nerve block once approved. Our Phase 1 nerve block trial has been published in anesthesia and analgesia and is currently available as an e-publication and will be in the November print issue. An accompanying editorial discusses the enormous potential for a depot local anesthetic for this indication. Also, a study overview of EXPAREL use and potential utility in peripheral nerve blocks and epidural administration to manage postoperative pain was made available last week as an e-publication ahead of print as an expert opinion in the journal Pharmacotherapy. We expect the pivotal Phase 3 femoral nerve block study in total knee arthroplasty to complete enrollment by year's end or early next year keeping us on track for a sNDA submission date for a nerve block indication in Q2 2014. Although the Phase 3 intercostal nerve block posteriolateral thoracotomy trial did not meet its primary efficacy endpoint, we will use the safety data from this trial and the expected safety and efficacy data from our ongoing Phase 3 portion of the femoral nerve block study for the sNDA. Recall, we had a positive Phase 2 interim analysis from the femoral nerve block trial last quarter and according to the U.S. Food and Drug Administration end of Phase 2 meeting, we require a single trial meeting its primary endpoint to gain approval for the nerve block indication. Unlike the intercostal block trial, the femoral nerve block trial will be conducted in U.S. centers only where procedures will be performed by anesthesiologists under ultrasound guidance. In order to fully resource the growing number of customers and procedures, the need for instilling best practice and proper training for our product like EXPAREL remains essential. As we referenced earlier in this discussion regarding our simulcast initiatives, efficacy depends on precise technique per procedure type, which in turn directly influences patient satisfaction, and increasingly important driver of hospital reimbursement through the CMS HCAHPS program. For this reason and in response to rising acute care demand, the scientific and medical affairs team of nurses, Pharm.D.s and physicians from last quarter's reported headcount of around 40 will grow to an expected 50 to 55 over the next two years. These customer-touching resources will service as both our soft tissue and orthopedic market. Our fuel-based sales force of surgical account specialists will remain steady at around 70 this year with approximately 10 to 15 additional FTEs added per year in 2014 and 2015. Equipped with this built out of resources and alongside to several hundred orthopedic representatives previously mentioned, we believe that we will be well positioned to respond to our customers' needs by providing real-time access to educational tools, care pathways, technique videos, preceptorships and centers of excellence programs to maximize the value of EXPAREL for a broad spectrum of surgical models. On the supply side, we have been producing more EXPAREL than we are selling for some time and we expect to have ample inventory from our current manufacturing facility to take us well through the projected timeline for FDA approval of our new manufacturing facility expected to be around the end of Q1 2014. With the approval, we will have the capacity to produce over $400 million worth of EXPAREL. We are also currently assessing strategic options for manufacturing capacity expansion with additional facilities to meet anticipated future demand for EXPAREL. We are pleased with our pattern of success so far. The subsequent quarters will signal an exciting time for Pacira in which we continue laying the groundwork for the Pacira brand. Up until now, the pillars of our commercial strategy have been twofold, make EXPAREL and sell EXPAREL. What started out as a market opportunity in hemorrhoidectomies, bunionectomies and colectomies has evolved into a blockbuster platform across a broad range of surgical specialties and audiences with an increasingly solid and growing foothold in the marketplace, we are excited to take the step towards the next stage of growth as we look internally to explore additional EXPAREL indications and access DepoFoam-based pipeline candidates. We look forward to updating you on these activities over the next few quarters. With that, I'll turn the call over to Jim for a review of the third quarter financials and manufacturing.

[Jim Scibetta:]

Thanks, Dave. Good morning, everyone. As Dave noted, our EXPAREL revenue for the quarter was $20 million, a robust 32% increase over the previous quarter Q2. Let me frame why we are more than pleased with this performance. First, in the short 18-month history of our launch, really the only puzzling period for us was the comparable period a year ago, Q3 2012, when we felt that the summer seasonality combined with the short amount of selling days in September resulted in a less robust performance against our internal standards. So we were cautious about the possible impact of exogenous factors in Q3 that might impede our growth, but in fact the growth was very healthy. And the predominant factor driving it was simply the increasingly broad awareness of the value of the EXPAREL brand. In addition, we look at the growth curves of the most successful hospital-based products, which tend to be more linear but also far more enduring than non-hospital launches. In terms of sales, the EXPAREL results in Q3, the sixth quarter of launch, is right in line with the sixth quarter of the launch of the industry's standard bearer for hospital-based products that went on to become an $800 million brand, while the EXPAREL growth rate is materially higher in this comparable sixth launch quarter. Year-to-date 2013, EXPAREL sales are now up to $45.7 million. Our annual run rate of sales implied from the Q3 results, in other words our rolling four-quarter sales without any growth is at $80 million. And while we don't disclose monthly or weekly numbers, we experienced growth throughout the quarter. So we exited Q3 with an annualized run rate north of $80 million. Our gross to net off of the $285 per vial price has remained at approximately 5%. And our sales and reorders would suggest that by the end of Q3 over 200,000 patients have been treated with EXPAREL since launch. And we're just getting started as evidenced by our overall market share of approximately 0.5%. So we are very hopeful that we have a major brand in our hands. Total revenue for the third quarter of 2013 was 23.3 million aided by 3 million of DepoCyt(e) product and royalty revenue as we continue to resupply our marketing partners with products for the marketplace. With respect to the sales data tracking services, we continue to caution against relying on either quarterly or monthly numbers as reported which have led to incorrect conclusions and distorted trends. Total operating expenses were 36.1 million for the quarter. Given the significance of EXPAREL cost of goods and gross margins on our profitability in 2015 and beyond, I want to spend a minute putting the Q3 results and expected results for the next several quarters into that broader context. We have guided to the notion of a 75% to 80% gross margin when producing at scale in Suite A and Suite C, which we expect to be doing as early as late 2014. The story between now and then while we expect to be in the process of getting Suite C approved and then ramping up production towards its full scale is a little more nuanced. First, the facts. Our Q3 cost of goods sold for the company was 14.8 million, up from 10.2 million in the previous quarter and our gross margin was 34% compared to 37% in Q2. These numbers and trends do not run counter to my previous messages on gross margin guidance. Let me explain. A portion of the reported COGS number is higher, of course, because of higher sales for both EXPAREL and DepoCyt(e) in line with what you would expect. But in addition, and compounding the gross margin trend line, we produced batches on the Suite C skids in Q3, generating data in preparation for the Suite C prior approval supplement submission that are being fully costed against our fixed manufacturing expense and immediately expensed in the quarter rather than capitalized into the inventory like our Suite A batches. Absent this phenomenon, our gross margin would have been higher than last quarter's 37%. In Q4, we will also be costing and expensing some Suite C batches and then around the end of the year, we expect to begin producing Suite C commercial batches at risk which will get capitalized in the inventory and can be sold after we receive approval. Upon approval of Suite C, we will work toward production at scale gradually not overnight, so the 75% to 80% gross margin number won't happen right at approval but we do expect to be running at full capacity for the latter part of 2014. But again, I'd take you back to the most pertinent and fairly simple math. When Suite A and Suite C are both online, fully staffed with depreciation being the expense line and operating at full capacity, we expect to have annual fixed cost of approximately 50 million to 60 million, variable cost of about 10% and production capacity of approximately 400 million. And this should generate the combined Suite A and Suite C gross margin outlook of 75% to 80%. We spent 6 million on R&D in the quarter most of which was for EXPAREL pivotal nerve block studies. It was higher than Q2 mostly due to the 1.2 million increase in stock-based comp driven by our higher stock price. SG&A expenses were 15.3 million, up only slightly quarter-over-quarter reflecting an increase in scientific and medical affairs personnel as well as commissions associated with our ortho promotional partner CrossLink. Net loss for the quarter was 14.8 million or $0.44 per share based on 33.4 million weighted average shares outstanding. As you may have seen in our press release, we've begun to report non-GAAP net loss and EPS this quarter where we adjust for non-cash items in order to provide what we believe is a clearer picture on our financial performance. Non-GAAP loss was 10 million or $0.30 per share after deducting stock-based compensation of 3.8 million and a discount accretion on the convertible debt of 1 million. While EPS isn't a big factor for us today, we believe it is customary and will be helpful in 2014 and beyond when the focus is on quarter-over-quarter profitability growth reflecting our operating activities. As of September 30, we had 33.5 million shares of common stock outstanding. On the balance sheet you'll note that the reclassification of the convertible debt, the $98 million number from long-term debt to short-term debt. This accounting share results from the fact that debt holders have a contingent conversion rate that was met in the quarter; specifically, that our stock traded 130% above the $24.82 conversion price for at least 20 of the last 30 consecutive days of the quarter. However, importantly, we do not anticipate under any foreseeable circumstance that investors will pursue a natural conversion under this provision. We've been advised by market experts before we did the deal and confirmed recently that the trading value of the notes will remain higher than the conversion value, owing to remaining coupons on the debt, also remaining time value associated with our stock price volatility going forward. We ended the quarter with approximately $84 million of cash. Cash used from operations was a little less than 10 million for the quarter along with 4.7 million of CapEx, mostly attributable to Suite C and construction of a new state-of-the-art warehouse. I'll reiterate that we expect our cash position to be sufficient and our current cash to be sufficient to get us to cash flow positive, and then we expect to be cash flow positive at some point in 2014. I'll now turn the call back to Dave.

[Dave Stack:]

Thanks, Jim. Thank you, everybody, for joining us today. We appreciate your support – I'm sorry. I'd like to turn the call back over to Benny. Benny, are you around for Q&A?

[Operator:]

Thank you. (Operator Instructions). Okay, we have a question that comes from Rich Lau from Wedbush Securities. Please go ahead.

[Richard Lau:]

Morning, guys, and congrats on another solid quarter. First question is on your new customer adds. While still a very solid number there, slightly slower than the rate you guys saw in Q2. Is that a function more or less of timing of P&T committees, or how should we think about this?

[Dave Stack:]

I'll go back to the beginning, Richard. Our launch has been focused on – our initial launch program was focused on roughly a 100 hospitals that do around 20% of the surgeries and the 500 hospitals, they do a little over 50% of the surgeries. So I think it maybe even a different notion than what you're talking about. I mean our growth really is from word of mouth from the places where we've spent a lot of time and resource educating and training and it's those surgeons and anesthesiologists going to other hospitals where they practice. I think eventually, Richard, we're just going to run out of major centers that have significant ORs that are capable of being trained to use a product such as EXPAREL. So I would tell you frankly we're surprised from this side that it's still as high as it is and then we've got at the end of the third quarter, over 1,700 customers who have not only provided P&T access to the product but ordered the product, which is our definition of a customer as you know. So I think you're going to have to see it go down just because there just aren't that many places that we're targeting for use. And as we've talked on these calls several times, we have way more access than we need in order to meet our objectives for this year and next year. So our focus is really on educating, training and making this product available to as many patients as we can in places where we have access rather than spending our resource trying to convert folks where there might be some obstacle for whatever reason.

[Richard Lau:]

Okay, great. Thanks for that. And one more question just on your manufacturing. I guess you guys said that you still expect it to be approved in Q1 of next year. Can you maybe go into a little bit more details in terms of what steps you guys still need to complete before the FDA comes in to inspect it?

[Dave Stack:]

Yes, I'll go first and I'll ask Jim to comment. There's a formal process, Richard, that is a four-month PDUFA cycle and we will file a formal application and that will trigger the four-month cycle from the FDA. Where we need to be to meet all of the timelines that come with the end of the first quarter is probably the most appropriate way to couch it. But I think what's more important to us frankly is that we've got sufficient inventory to take us well beyond that date even if there is some delay for whatever environmental reason from the regulators. So I don't know, Jim, anything you want to add to that?

[Jim Scibetta:]

I mean the only thing I would add is that just as a reminder that what we're asking or seeking approval for is a manufacturing line that is at the same scale as the current approved line [indiscernible] in the same manufacturing facility. So the bar is – you have to put that in context relative to other approval processes that folks pursue.

[Richard Lau:]

Okay, great. Thanks for taking my question.

[Dave Stack:]

Thanks, Richard.

[Operator:]

Thank you. Next question comes from David Amsellem from Piper Jaffray. Please go ahead.

[David Amsellem:]

Thanks. Wanted to start with a question on the bupivacaine recalls and shortages. We've seen some recalls of lots of Marcaine, Hospira being one example. Bupivacaine is on the shortage list. So I guess given that backdrop, has that been in any way helpful to your order flow on EXPAREL?

[Dave Stack:]

David, it certainly hasn't hurt but I can't tell you that I think it's been materially helpful. I think it does help us in some places where pharmacy has bupivacaine in short supply and does not want to use that supply to fill elastomeric pumps. But I don't think that that is materially important to the growth of the product in the last couple of quarters to be perfectly honest.

[David Amsellem:]

Okay. And then just on the manufacturing, I know that you're going to be making product out of both suites. But longer term is the plan eventually to make all product out of Suite C? And then as you think about peak sales, which is a good bit higher than the 400 million capacity that you cited, can you give us some sort of timelines on other steps you're putting in place to get your capacity beyond that 400 million longer term? Thanks.

[Dave Stack:]

Thanks, David. And this I think is an appropriate place for me rather than confusing the issue to just ask Jim to comment.

[Jim Scibetta:]

Sure. So as you pointed out, I mean our planning horizon certainly expects peak sales above the capacity that we think we'll have approved with Suite C. So in the – as we've said previously, we'll manufacture our product pretty much 24x7 in Suite A and Suite C to create as much runway toward the next need for capacity expansion. We've got a great situation with growth in our product here, and we're going to make sure that we manufacture it to supply that product. And it's easier to slow down production in the long run, so – if we ever had to do that, so we're just going to – in 2014 we're going to get Suite C online and we're going to make product in both Suite A and Suite C to build inventory to bridge us to the longer period. And then we're – as Dave mentioned in his remarks, we're in a planning cycle now and I think we'll be able to provide a little more information on that in the coming quarters. But we're looking at different alternatives for different capacity in different places. And I think at this point we're just – what we can say is that we're ahead of the schedule in terms of our planning horizon to be able to have something in place a couple of years down the road when we think we'll need additional capacity beyond what we'll have right now.

[David Amsellem:]

Okay. Thanks.

[Dave Stack:]

Thank you, David.

[Operator:]

Thank you. There are no further questions. I'll now pass over to Dave. Thank you.

[Dave Stack:]

Thanks, Benny. Thank you, everyone, for joining us today. We appreciate your support and help and look forward to reporting updates on EXPAREL as we go forward. We'd also like to note that coming up we'll be presenting at the Goldman Sachs U.S. Emerging and Small and Mid Cap Growth Conference in New York City on November 14 and at the Jefferies 2013 Global Healthcare Conference in London on November 21. We'll also be attending the Brean Capital Life Sciences Summit in New York City on November 25. Thank you very much and we look forward to doing good things going forward. Thanks for all your help.

[Operator:]

Ladies and gentlemen, that concludes our call for today. You may now disconnect.