Hardik Parikh

Hardik Parikh inquired about the unexpected business development costs incurred in Q4, asking if such one-off expenses related to growing and diversifying the business might become more frequent, and how active Pacira BioSciences plans to be in future business development.

Answer

CEO Frank Lee clarified that the Q4 costs were due to both business development and litigation. He explained that Pacira's capital deployment strategy prioritizes maximizing shareholder value by investing in the core business (commercial medical market access, R&D), pursuing accretive deals for immediate portfolio enhancement, and acquiring de-risked clinical assets in later stages of development. He emphasized the significant positive change in the pipeline over the past year, with ex-U.S. sales, PCRX-2002, and PCRX-201 contributing to the 2030 horizon, all aimed at driving double-digit growth and replenishing the portfolio.

Hardik Parikh asked about the frequency of unexpected business development costs, like those in Q4, and how active Pacira plans to be in future M&A/partnership activities to grow and diversify the business.

Answer

CEO Frank Lee clarified that Q4 costs were for business development and litigation. He stated that Pacira's strategy is to maximize shareholder value by investing in the core business (now relatively flat) and pursuing accretive deals for products that can be immediately integrated, as well as de-risked clinical assets in later stages. He highlighted the significant pipeline growth over the past year, with ex-U.S. sales, PCRX-2002, and PCRX-201 contributing to the 2030 horizon, aligning with the 5x30 objective to build the pipeline and drive double-digit growth.

Hardik Parikh from JPMorgan Chase & Co. asked about the gating factors behind the 6-12 month EXPAREL formulary adoption timeline mentioned in a survey. He also inquired about the balance of the sales team's pitch between educating on the NOPAIN Act versus explaining EXPAREL's clinical benefits.

Answer

CCO Brendan Teehan explained the adoption timeline is driven by facilities confirming reimbursement and waiting for commercial payers to follow CMS's lead. He clarified that while NOPAIN enhances the value proposition, the majority of the sales team's time is focused on EXPAREL's clinical differentiation. CEO Frank Lee added that the IGOR registry data reinforces the product's health economic value.

Hardik Parikh of JPMorgan Chase & Co. questioned the gross margin outlook, asking why the full-year guidance was only reiterated and not raised, given the low single-digit margin benefit from the elimination of the RDF royalty.

Answer

CEO Frank Lee and CFO Shawn Cross acknowledged the favorable royalty ruling and the strong Q1 margin performance. However, Cross explained that they are maintaining the current guidance due to potential quarter-over-quarter manufacturing variability and a desire to assess performance after Q2. Lee added that the company is also monitoring the potential impact of new tariffs, reinforcing their comfort with the current guidance range for now.

Hardik Parikh asked if the higher R&D and operating expense guidance for 2025 represents a new, sustained level of spending or if it is a one-time increase driven by specific events like the PCRX-201 trial enrollment and DTC pilots. He also requested more details on the commercial payers that have adopted NOPAIN-like reimbursement policies.

Answer

CEO Frank Lee characterized the 2025 spending increase as a targeted investment in key catalysts that are expected to deliver a strong return, but he refrained from guiding beyond the current year. Regarding payers, Lee confirmed that a national payer and others have adopted policies similar to NOPAIN, effectively doubling commercial covered lives from approximately 20 million to 40 million. He also noted a significant win with TRICARE, viewing these early commercial successes as highly encouraging.

Hardik Parikh inquired about the design of the oral VK2735 tablet for the upcoming Phase 3 program, specifically whether changes would be made from the 30-milligram increment tablets used in the Phase 2A study.

Answer

Brian Lian, President and CEO, confirmed that based on learnings from the Phase 2 study, Viking plans to reduce both the size and count of the oral tablets for the Phase 3 program.

Hardik Parikh inquired about the design of the oral tablet for the upcoming Phase III program, specifically whether Viking would consider changes from the 30 mg increment tablets used in the Phase IIa study.

Answer

Viking Therapeutics' President and CEO, Brian Lian, confirmed that the company learned a lot from the Phase II study and plans to reduce both the tablet size and count in the upcoming oral Phase III program.

Hardik Parikh asked for Brian Lian's high-level thoughts on the recent Pfizer-MedSera deal and whether a green light for oral VK2735 to proceed to phase 2B or phase 3 could be expected by year-end following the FDA meeting.

Answer

Brian Lian (President and CEO, Viking Therapeutics) declined to comment on other companies' deals. Regarding oral VK2735, he hoped to receive information from the FDA meeting by year-end or January to help make a decision on phase 2B or phase 3, but couldn't confirm final minutes by year-end.

Hardik Parikh asked for high-level thoughts on the recent Pfizer-Metsera deal and whether a green light for oral VK2735 to proceed to Phase 2b or Phase 3 could be expected by year-end after the FDA meeting.

Answer

Brian Lian (President and CEO, Viking Therapeutics) declined to comment on other companies' deals. Regarding oral VK2735, he hoped to receive information from the FDA meeting by year-end or January to help make a decision on Phase 2b or Phase 3, and to understand any agency concerns about direct transition to Phase 3.

Hardik Parikh of J.P. Morgan asked for details on the specific titration doses used in the ongoing Phase II oral study for cohorts with target doses of 60mg or higher. He also inquired about the potential for the oral program to advance directly to Phase III.

Answer

President & CEO Brian Lian clarified that for doses of 60mg and above, titration occurs in two-week blocks (e.g., 30mg, 60mg, 90mg). Regarding a direct move to Phase III for the oral program, he stated that it is currently unclear and the company needs to evaluate the Phase II data before making a decision.

Hardik Parikh requested an update on the logistical preparations for the Phase III trial of VK2735, asking whether remaining hurdles were regulatory or operational and if there was a risk of the initiation slipping into the third quarter.

Answer

Brian Lian, President and CEO, affirmed the company's plan to initiate the study in the second quarter. He detailed that the preparatory work is primarily logistical, involving a significant effort in managing drug supply, manufacturing, labeling for various titration doses, and preparing clinical sites.

Hardik Parikh asked if studying VK2735 in a type 2 diabetes population was part of the original strategy or a result of FDA feedback. He also inquired if the H2 2025 oral data release would be top-line or a full dataset, and if the amylin candidate could be one previously disclosed.

Answer

CEO Brian Lian clarified that including a separate study in obese subjects with type 2 diabetes is a standard strategy to get glycemic control data into the label. He expects to release top-line data first, with full results later. He also confirmed it is possible the amylin candidate is one that was previously disclosed.

Hardik Parikh sought clarification on whether doses above 100mg for oral VK2735 have been tested and asked for Viking's high-level takeaways from recent competitive data readouts in the obesity space, such as those presented at EASD.

Answer

Executive Brian Lian clarified that the oral dose escalation cohorts went up to 100mg. Regarding the competitive landscape, he expressed continued confidence, stating that recent data from competitors at conferences like EASD did not change their view that Viking possesses two of the best-in-class programs with its injectable and oral formulations.

Hardik Parikh asked if the frequency of R&D collaborations with large pharma, similar to recent deals by peers and Royalty Pharma's past collaborations with Biogen and Merck, will increase as these companies approach patent cycles, and what factors drive these deals from pharma's perspective.

Answer

Pablo Legorreta, CEO and Chairman, stated that the use of royalties to fund trials with big pharma is becoming mainstream, representing a significant opportunity. He confirmed Royalty Pharma evaluates all deals, including the recent Merck transaction, but decided it was not for them, while remaining very active in discussions with other large pharmas for similar funding.

Hardik Parikh asked if the frequency of R&D collaborations with large pharmaceutical companies, similar to past deals with Biogen and Merck, is expected to increase as these companies approach patent cycles. He also sought insight into the factors that drive these types of deals from a pharma company's perspective.

Answer

Pablo Legorreta, CEO and Chairman, confirmed that Royalty Pharma looks at every deal and noted the growing mainstream acceptance of using royalties to fund trials with both biotech and big pharma, indicating a significant and growing opportunity. He mentioned that while Royalty Pharma evaluated a recent Merck deal, it was not for them, but they remain active in discussions with big pharmas for such funding.

Hardik Parikh of JPMorgan Chase & Co. inquired about the impact of recent regulatory and policy uncertainty on the deal-making environment and asked for an update on the Vertex cystic fibrosis arbitration timelines.

Answer

EVP, Vice Chairman Christopher Hite confirmed the deal pipeline remains robust and is not significantly impacted by policy uncertainty, noting a 150% increase in in-depth reviews since 2019. EVP, CFO Terrance Coyne stated there was no new update on the Vertex arbitration but reiterated the company's strong position.

Hardik Parikh inquired about the significance of the recently approved label for Covent fee (KarXT), which notably avoided the typical black box warning seen in other antipsychotics, and how this outcome compares to Royalty Pharma's internal base-case scenario.

Answer

Marshall Urist, EVP, Head of Research and Investments, responded that the company was very pleased with the label, viewing it as a validation of their strategy to invest in products with differentiated efficacy and safety for patient populations with high unmet needs. He added that having the drug in Bristol Myers Squibb's hands is expected to maximize its commercial value, aligning with Royalty Pharma's investment thesis.