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Pacira BioSciences, Inc. (NASDAQ:PCRX): A Leader in Non-Opioid Pain Management
Published on September 24, 2024 | Ticker: PCRX

Overview

Pacira BioSciences, Inc. (NASDAQ:PCRX) is the therapeutic area leader in non-opioid pain management, with a mission to provide non-opioid pain management options to as many patients as possible and redefine the role of opioids for rescue therapy only. The company's flagship product, EXPAREL® (bupivacaine liposome injectable suspension), is a long-acting, non-opioid option proven to manage postsurgical pain. EXPAREL has been used to treat over 14 million patients since its initial approval in 2011.

Business Overview

In addition to EXPAREL, Pacira's portfolio includes ZILRETTA® (triamcinolone acetonide extended-release injectable suspension), the first and only extended-release, intra-articular therapy for osteoarthritis (OA) knee pain, and iovera°®, a handheld cryoanalgesia device used to deliver a precise, controlled application of cold temperature to targeted nerves. These highly complementary products provide long-acting, non-opioid therapies that alleviate pain.

Financials

Pacira's financial performance has been strong, with annual revenue reaching $674.98 million in 2023 and net income of $41.96 million. The company generated $154.65 million in annual operating cash flow and $139.49 million in annual free cash flow, demonstrating its ability to convert earnings into cash.

In the first quarter of 2024, Pacira reported total revenues of $345.14 million, a 5% increase compared to the same period in 2023. EXPAREL sales increased 1% to $132.4 million, driven by a 3% volume growth partially offset by contracted discounts related to the company's partnership with Premier. ZILRETTA sales increased 5% to $25.8 million, and iovera° sales improved 25% to $5 million.

Gross margin for the first quarter was 72%, with EXPAREL margins landing within the company's full-year guidance range of 74% to 76%, while ZILRETTA and iovera° margins were below the guided range and negatively impacted consolidated gross margins. Non-GAAP R&D expenses increased 7% to $16.4 million, primarily due to the start-up of a ZILRETTA Phase III study in shoulder OA and an EXPAREL intrathecal trial. Non-GAAP SG&A expenses rose 3% to $63.8 million, largely due to increased professional and legal fees associated with litigation.

Outlook

Looking ahead, Pacira reiterated its full-year 2024 guidance, expecting total revenue of $680 million to $705 million, non-GAAP gross margin of 74% to 76%, non-GAAP R&D expense of $70 million to $80 million, and non-GAAP SG&A expense of $245 million to $265 million.

Growth Drivers

One of the key growth drivers for Pacira is the upcoming implementation of the Non-Opioids Prevent Addiction in the Nation (NOPAIN) Act, which will provide separate Medicare reimbursement for EXPAREL at average sales price plus 6% in outpatient settings beginning in January 2025. This policy change is expected to eliminate the cost barrier and significantly expand patient access to EXPAREL.

Pacira is actively preparing for this opportunity by bolstering its commercial, medical, and market access organizations, as well as partnering with Group Purchasing Organizations (GPOs) like Premier to drive awareness and education among healthcare systems. The company believes the NOPAIN Act presents a substantial opportunity, as it covers approximately 6 million annual CMS procedures in the outpatient setting, split evenly between hospital outpatient departments and ambulatory surgical centers.

In addition to the NOPAIN opportunity, Pacira is focused on expanding the use of EXPAREL in lower extremity nerve block indications, such as adductor canal block and sciatic nerve block in the popliteal fossa, which launched in the first quarter of 2024. These new indications are expected to drive further utilization of EXPAREL within surgeries of the knee, lower leg, and foot and ankle procedures.

Pipeline

The company's pipeline also includes PCRX-201, a novel, intra-articular gene therapy product candidate that produces the anti-inflammatory protein interleukin-1 receptor antagonist (IL-1Ra) for the treatment of OA pain in the knee. In February 2024, PCRX-201 received the FDA's Regenerative Medicine Advanced Therapy (RMAT) designation, the first such designation for a gene therapy product in osteoarthritis. Pacira is currently planning the next steps for the clinical development of PCRX-201, which has the potential to provide long-lasting pain relief and disease modification for patients suffering from OA.

Liquidity

Pacira's financial position remains strong, with $404.2 million in cash, cash equivalents, and available-for-sale investments as of March 31, 2024. The company recently completed a private placement of $287.5 million in aggregate principal amount of 2.125% convertible senior notes due 2029 and used a portion of the proceeds to repurchase $200 million of its 0.750% convertible senior notes due 2025, further strengthening its balance sheet.

In addition, Pacira announced a new $150 million share repurchase program, which underscores the company's confidence in its growth outlook and the belief that its shares offer an attractive investment opportunity given the significant value ahead.

Risks and Challenges

Risks to Pacira's business include the potential for generic competition to EXPAREL, the success of its pipeline candidates, the ability to expand the use of its products in new indications, and the impact of global economic conditions on its operations and supply chain. However, the company's strong market position, diversified product portfolio, and strategic initiatives position it well to navigate these challenges and continue its leadership in the non-opioid pain management space.

Conclusion

Overall, Pacira BioSciences is a well-positioned company in the growing non-opioid pain management market, with a robust product portfolio, a promising pipeline, and a strong financial foundation to support its long-term growth. The upcoming implementation of the NOPAIN Act and the company's efforts to expand the use of its products present significant opportunities for Pacira to further solidify its position as the therapeutic area leader in this important and evolving market.

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