Announces a small tuck-in (iovera) for alleviating pain post TKA

Research evidence excerpt

Announces a small tuck-in (iovera) for alleviating pain post TKA

Flash Note Health Care | Medical Supplies & Devices

June 30, 2026

Zimmer Biomet Holdings, Inc. Vijay Kumar Kevin Joaquin 212-653-9033 212-446-9493

ZBH | $91.24 Vijay.Kumar@EvercoreISI.com kevin.joaquin@evercoreisi.com

Outperform | Target Price/Base Case: $120.00 Nicholas Whalen, CFA Daniel Markowitz

Commentary 646-225-6027 212-812-2936

Nicholas.Whalen@evercoreISI.com Daniel.Markowitz@evercoreISI.com

This morning, PCRX announced an agreement to divest its iovera business to ZBH. Under the agreement, PCRX

will receive up to $140M, ($70M upfront and up to $70M in revenue-based milestone payments) through December

31, 2031. See below for a summary and our takes:

Summary:

• Iovera is an FDA-cleared, drug-free cryoneurolysis device that uses targeted cold therapy to temporarily

interrupt peripheral nerve signaling for pain relief, incl for knee osteoarthritis

• Generated ~$24.2M in revs in FY25 & grew ~6%

• The companies will collaborate on the spasticity program, with PCRX eligible for milestone payments upon

regulatory approval

• ZBH will acquire all rights to develop, manufacture, and commercialize the iovera business

• The transaction is expected to close in 3Q26, subject to customary closing conditions

Our Takes:

• From a financial standpoint, the deal is immaterial….we think it could add ~1c in the first 12 mon post close

(GM are lower and current OM are below ZBH corporate)

• The deal includes rev-based milestone payments, including 18.5M at the low end (if iovera achieves 50M revs

by 2031) to 28M at the high end (if iovera hits 70M in sales)

• Strategically, it makes sense…iovera is used for alleviating pain post TKA (knee replacement), which fits it with

ZBH given its leading presence in knee implants