The Company’s History: A Legacy of Innovation
Pacira BioSciences, Inc. (PCRX) is a leading specialty pharmaceutical company dedicated to developing and commercializing innovative, non-opioid pain management solutions. With a focus on transforming patients’ lives, Pacira has established a diverse portfolio of commercial-stage and pipeline products that address a wide range of surgical and chronic pain conditions.
Pacira was founded in 2006, with a mission to develop novel, non-opioid pain management therapies. The company’s flagship product, EXPAREL, was approved by the FDA in 2011 and has since become a mainstay in post-surgical pain management, providing long-lasting, local analgesia without the risks associated with opioids. In 2019, Pacira further expanded its portfolio with the acquisition of MyoScience, adding the iovera system, a cryoanalgesia device that delivers immediate, long-acting, drug-free pain control. Most recently, in 2021, the company acquired Flexion Therapeutics, securing the rights to ZILRETTA, the first and only extended-release, intra-articular injection for the management of osteoarthritis knee pain.
EXPAREL, the company’s lead product, was commercially launched in the United States in 2012 and later approved in select European countries and the United Kingdom in 2021. This innovative product utilizes Pacira’s proprietary multivesicular liposome drug delivery technology to produce a long-acting, local analgesic. Since its initial approval, EXPAREL has been used to treat over 15 million patients, demonstrating its significant impact on pain management.
Throughout its history, Pacira has faced and overcome various challenges in getting its products approved and commercially launched. For EXPAREL, the company had to navigate the complex FDA approval process and then work diligently to educate healthcare providers on the benefits of its non-opioid pain management solution. The acquisitions of MyoScience and Flexion presented integration challenges as Pacira incorporated new products and teams into its organization.
Despite these obstacles, Pacira has achieved numerous milestones. The company has successfully expanded the label for EXPAREL to include additional indications, such as local analgesia via infiltration in patients aged 6 years and older, and regional analgesia via interscalene brachial plexus nerve block, sciatic nerve block in the popliteal fossa, and adductor canal block in adults. These label expansions have broadened the product’s applicability and potential market reach.
Financial Strength and Resilience
Pacira BioSciences has demonstrated impressive financial performance in recent years. As of the latest reported quarter (Q3 2024), the company had total revenues of $168.6 million, a 3% increase from $163.93 million in the same period in the prior year. This growth was driven by strong performance across Pacira’s key product lines, including a 3% increase in EXPAREL net product sales to $132 million, a 1% decrease in ZILRETTA net product sales to $28.4 million, and an 8% increase in iovera net product sales to $5.7 million.
The company’s financial position remains robust, with a cash and investments balance of over $450 million as of September 30, 2024. Specifically, Pacira reported cash and cash equivalents of $245.97 million at the end of Q3 2024. This ample liquidity provides Pacira with the resources to continue investing in its pipeline, pursue strategic initiatives, and navigate any potential market challenges. The company’s non-GAAP gross margin for Q3 2024 was 78%, reflecting the strong profitability of its product portfolio.
For the full year 2023, Pacira reported revenue of $674.98 million, net income of $41.95 million, operating cash flow of $154.65 million, and free cash flow of $139.49 million. In Q3 2024, the company reported a net loss of $143.47 million, primarily due to a $163.24 million goodwill impairment charge. Despite this, operating cash flow increased to $53.92 million from $40.87 million in Q3 2023, and free cash flow improved to $49.83 million from $35.79 million in the same period.
Pacira’s financial health is further evidenced by its liquidity metrics. As of September 30, 2024, the company reported a debt-to-equity ratio of 0.7835, a current ratio of 2.25, and a quick ratio of 1.89. These figures indicate a strong balance sheet and the ability to meet short-term obligations.
For the full year 2024, Pacira is reiterating its guidance of total revenue between $680 million to $705 million, non-GAAP gross margins of 74% to 76%, non-GAAP R&D expense of $70 million to $80 million, non-GAAP SG&A expense of $245 million to $265 million, and stock-based compensation of $50 million to $55 million.
Diversified Product Portfolio and Expanding Addressable Markets
Pacira’s product portfolio covers a diverse range of pain management solutions, each addressing specific surgical and chronic pain needs. EXPAREL, the company’s flagship product, has established itself as a leading non-opioid alternative for postsurgical pain management, with a growing number of approved indications, including local analgesia via infiltration in patients aged six years and older, as well as regional analgesia via interscalene brachial plexus nerve block, sciatic nerve block in the popliteal fossa, and adductor canal block in adults. In Europe, EXPAREL is approved as a brachial plexus block or femoral nerve block for post-operative pain in adults, and as a field block for somatic post-operative pain from small- to medium-sized surgical wounds in adults and children aged six years and older.
In 2021, Pacira expanded its portfolio with the acquisition of ZILRETTA, the first and only extended-release, intra-articular injection approved for the management of osteoarthritis knee pain. This acquisition provided the company with a complementary product that addresses a significant unmet need, as osteoarthritis affects over 32.5 million adults in the U.S. alone. Pacira is currently conducting a Phase 3 registrational study to evaluate the safety and efficacy of ZILRETTA for the management of osteoarthritis pain of the shoulder, which, if successful, could further expand the product’s addressable market.
The iovera system, acquired through the MyoScience acquisition in 2019, is a non-opioid, cryoanalgesia device that delivers immediate, long-acting, drug-free pain control. Pacira is currently sponsoring a registry study, the Innovations in Genicular Outcomes Registry (iGOR), which is evaluating the clinical, economic, and health-related patient-reported outcomes in patients who have received any treatment for knee osteoarthritis pain, including those who have undergone total knee arthroplasty and received iovera treatment.
In addition to its commercial-stage products, Pacira has a promising pipeline of early-stage product candidates, including PCRX-201, a novel, locally administered gene therapy for the treatment of osteoarthritis of the knee. PCRX-201 has already demonstrated encouraging results in a Phase 1 proof-of-concept study, with patients experiencing sustained improvements in pain, stiffness, and function for up to 104 weeks following a single injection. In February 2024, the FDA granted PCRX-201 a Regenerative Medicine Advanced Therapy (RMAT) designation, underscoring the potential of this innovative approach to address a significant unmet need in the treatment of osteoarthritis.
Navigating the Evolving Regulatory and Reimbursement Landscape
Pacira has been actively engaged in navigating the evolving regulatory and reimbursement landscape to ensure its products are accessible to patients in need. In October 2024, the company announced that the Centers for Medicare and Medicaid Services (CMS) had established a permanent product-specific Healthcare Common Procedure Coding System (HCPCS) J-code for EXPAREL, effective January 1, 2025. This new J-code is expected to standardize and streamline billing and reimbursement for EXPAREL, making it more readily accessible to healthcare providers and patients.
Furthermore, in November 2024, CMS confirmed that both EXPAREL and iovera qualify as eligible non-opioid pain management products under the Non-Opioids Prevent Addiction in the Nation (NOPAIN) Act. Beginning January 1, 2025, hospital outpatient departments and ambulatory surgical centers that use these products will receive additional Medicare reimbursement, further enhancing the value proposition for healthcare providers and patients.
These regulatory and reimbursement milestones are crucial for Pacira as it continues to drive adoption of its non-opioid pain management solutions and address the ongoing opioid epidemic. By ensuring appropriate reimbursement and access, the company is well-positioned to expand the reach of its innovative therapies and improve patient outcomes.
Navigating Legal Challenges and Protecting Intellectual Property
Pacira has faced legal challenges related to its intellectual property, most notably the recent ruling by the U.S. District Court for the District of New Jersey that found one of the company’s patents (U.S. Patent No. 11,033,495) to be invalid. The company has stated that it remains steadfast in its belief in the strength and validity of its intellectual property and that it is considering its legal options, including pursuing an appellate review.
Despite this setback, Pacira remains confident in its ability to protect its innovative therapies. The company has built a strong portfolio of patents and is actively pursuing additional intellectual property protections. It is important to note that for a generic competitor to be commercially successful, they would need to overcome all of Pacira’s patents, not just the single patent in question.
Pacira’s legal strategy is comprehensive, and the company is prepared to take the necessary steps to defend its interests and protect the long-term value of its product portfolio. The company’s commitment to innovation and its track record of successfully navigating regulatory and legal challenges instill confidence in its ability to overcome this obstacle and continue delivering value to shareholders.
Strong Leadership and Experienced Management Team
Pacira BioSciences is led by a seasoned management team with extensive experience in the pharmaceutical industry. In October 2024, the company appointed Shawn Cross as its new Chief Financial Officer, bringing more than 25 years of global financial and operational biopharmaceutical leadership experience to the organization.
Under the guidance of Chief Executive Officer Frank D. Lee, Pacira has maintained a clear focus on its mission to transform the lives of patients through innovative, non-opioid pain management solutions. The company’s leadership team has demonstrated a strong track record of executing strategic initiatives, navigating regulatory and legal challenges, and delivering consistent financial performance.
Pacira’s experienced management team, coupled with its diversified product portfolio, robust financial position, and commitment to innovation, position the company well to capitalize on the growing demand for non-opioid pain management solutions and drive long-term shareholder value.
Industry Trends and Market Opportunity
Pacira BioSciences operates in the rapidly growing non-opioid pain management market, which is driven by the increasing need for alternatives to opioids and the rising prevalence of musculoskeletal conditions such as osteoarthritis. The global non-opioid pain therapeutics market is expected to grow at a compound annual growth rate (CAGR) of 5.8% from 2023 to 2030, presenting significant opportunities for companies like Pacira that are at the forefront of developing innovative pain management solutions.
The company’s diverse product portfolio, which includes EXPAREL, ZILRETTA, and iovera, addresses various aspects of pain management across different indications and patient populations. This diversification allows Pacira to capture a larger share of the growing market and mitigate risks associated with reliance on a single product.
Furthermore, the ongoing opioid crisis has heightened awareness among healthcare providers, patients, and policymakers about the need for effective, non-addictive pain management options. This shift in mindset creates a favorable environment for the adoption of Pacira’s products and supports the company’s long-term growth prospects.
Geographic Expansion and Market Reach
While Pacira’s primary market is the United States, the company has been expanding its geographic footprint, particularly with EXPAREL. The product is now approved and sold in select European countries and the United Kingdom, in addition to its established presence in the U.S. market. This international expansion provides Pacira with additional growth opportunities and helps diversify its revenue streams.
ZILRETTA and iovera are currently sold primarily in the United States, but there may be potential for international expansion in the future, subject to regulatory approvals and market conditions. The company’s strategic focus on key geographic markets allows it to allocate resources effectively and maximize the commercial potential of its product portfolio.
Conclusion
Pacira BioSciences is at the forefront of the non-opioid pain management revolution, delivering a diverse portfolio of commercial-stage and pipeline products that address a wide range of surgical and chronic pain conditions. With a strong financial foundation, a commitment to innovation, and an experienced management team, the company is well-positioned to capitalize on the growing demand for its therapies and continue transforming the lives of patients.
Despite the recent legal setback, Pacira remains steadfast in its belief in the strength and validity of its intellectual property and is actively pursuing its legal options to protect its market position. The company’s diversified product portfolio, expanding addressable markets, and ongoing regulatory and reimbursement initiatives provide a solid foundation for long-term growth and value creation.
As Pacira BioSciences continues to execute on its strategic priorities, investors should closely monitor the company’s progress in navigating the evolving market landscape, advancing its pipeline, and delivering innovative, non-opioid pain management solutions that address the significant unmet needs of patients worldwide. With its strong financial performance, robust product portfolio, and favorable industry trends, Pacira is well-positioned to maintain its leadership in the non-opioid pain management space and deliver sustainable growth in the years to come.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.