Document
false0001396814 0001396814 2019-11-07 2019-11-07


 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): November 7, 2019
PACIRA BIOSCIENCES, INC.
(Exact name of registrant as specified in its charter)
Delaware
 
001-35060
 
51-0619477
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)

5 Sylvan Way, Suite 300
Parsippany, New Jersey 07054
(Address and Zip Code of Principal Executive Offices)

(973) 254-3560
(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading symbol
 
Name of each exchange on which registered
Common Stock, par value $0.001 per share
 
PCRX
 
Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
 
 





Item 2.02. Results of Operations and Financial Condition.
 
On November 7, 2019, Pacira BioSciences, Inc. issued a press release announcing its financial results for the third quarter ended September 30, 2019. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
 
The information in this Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
 
Item 9.01. Financial Statements and Exhibits.
Exhibit
Number
 
Description
 
 
 
99.1
 
 
 
 
104
 
Cover Page Interactive Data File (Formatted as Inline XBRL)





SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
PACIRA BIOSCIENCES, INC.
(REGISTRANT)
 
 
 
 
Dated:
November 7, 2019
By:
/s/ KRISTEN WILLIAMS
 
 
 
Kristen Williams
 
 
 
Chief Administrative Officer and Secretary



Exhibit
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=13186823&doc=8
FOR IMMEDIATE RELEASE
NEWS RELEASE

Pacira BioSciences Reports Third Quarter 2019 Financial Results and Business Update

-- Total revenues increased 25 percent over prior year to $104.7 million in third quarter --

-- Conference call today at 8:30 a.m. ET --

PARSIPPANY, N.J., November 7, 2019 - Pacira BioSciences, Inc. (Nasdaq: PCRX), a leading provider of innovative non-opioid pain management options, today reported financial results for the third quarter of 2019.

“This continues to be an outstanding year for Pacira marked by significant growth in our EXPAREL business and by an important and promising asset addition in iovera,” said Dave Stack, chairman and chief executive officer of Pacira BioSciences. “Anesthesia remains a key driver of our business through the increasing use of nerve and field blocks, as well as the accelerating volume of ambulatory procedures. Our Phase 3 EXPAREL label expansion studies are on track with topline results from the pediatric study expected later this year and patient enrollment in the lower extremity nerve block study set to begin soon. We are also advancing Phase 4 studies to expand utilization in high potential procedures, such as cesarean section, spine, and hip fracture. Our significant orthopedic partnership with Johnson & Johnson is solidifying the role of EXPAREL in opioid-sparing protocols that are enabling the shift of painful procedures to the ambulatory setting. On the regulatory front, the team is advancing our strategy to introduce EXPAREL into target markets outside of the U.S. As for iovera°, commercial initiatives are well underway and we are very encouraged by the loyalty of our existing customers and the interest we are generating for new business within large health systems.”

Third Quarter 2019 Financial Results

Total revenues were $104.7 million in the third quarter of 2019, a 25 percent increase over the $83.4 million reported for the third quarter of 2018.
Total net product sales were $104.4 million in the third quarter of 2019, a 26 percent increase over the $82.7 million reported for the third quarter of 2018.
Net product sales of EXPAREL/bupivacaine liposome injectable suspension were $101.7 million in the third quarter of 2019, a 23 percent increase over the $82.7 million reported for the third quarter of 2018.
EXPAREL net product sales were $101.5 million in the third quarter of 2019, compared to $82.2 million in the third quarter of 2018. Sales of bupivacaine liposome injectable suspension to a third-party licensee for use in animals were $0.3 million in the third quarter of 2019, compared to $0.5 million in the third quarter of 2018.
iovera° net product sales during the third quarter of 2019 were $2.6 million. Pacira began recognizing sales of iovera° in April 2019 after completing its acquisition of MyoScience, Inc., a privately held medical technology company.





Total operating expenses were $102.3 million in the third quarter of 2019, compared to $79.4 million in the third quarter of 2018.
GAAP net loss was $6.1 million, or $0.15 per diluted share, in the third quarter of 2019, compared to $0.6 million, or $0.02 per diluted share, in the third quarter of 2018.
Non-GAAP net income was $20.2 million, or $0.48 per diluted share, in the third quarter of 2019, compared to $12.8 million, or $0.31 per diluted share, in the third quarter of 2018.
Pacira ended the third quarter of 2019 with cash, cash equivalents, short-term and long-term investments (“cash”) of $336.2 million. Cash provided by operations was $44.6 million in the nine months ended September 30, 2019, compared to $27.7 million in the nine months ended September 30, 2018.

See “Non-GAAP Financial Information” below.

Recent Business Highlights
Appointment of Chris Christie to board of directors. In September, Pacira announced the appointment of Christopher J. Christie to its board of directors. Mr. Christie served as the 55th Governor of the State of New Jersey from January 2010 to January 2018. During these two successful terms, Christie significantly raised public consciousness around the acceleration of opioid and other drug-related deaths. His administration mandated new approaches to address the stigma around drug addiction and focused on making treatments more broadly available.
Enrollment completion in multicenter registration study of EXPAREL in pediatric patients In September, Pacira announced completion of enrollment in its Phase 3 study of EXPAREL administered as a single-dose infiltration in pediatric patients aged six to less than 17 years undergoing spinal or cardiac surgeries. Pacira expects these study results to provide the foundation for a supplemental New Drug Application submission to the U.S. Food and Drug Administration (FDA) seeking expansion of the EXPAREL label to include children aged six and over.

2019 Financial Guidance
Pacira reiterated its full year 2019 financial guidance as follows:

EXPAREL net product sales in the range of $400 million to $410 million.
iovera° net product sales in the range of $8 million to $10 million.
Non-GAAP gross margins in the range of 75% to 76%.
Non-GAAP research and development (R&D) expense in the range of $60 million to $70 million.
Non-GAAP SG&A expense in the range of $180 million to $190 million.
Stock-based compensation in the range of $30 million to $35 million.

See “Reconciliation of GAAP to Non-GAAP 2019 Financial Guidance” below.



Today’s Conference Call and Webcast Reminder

The Pacira management team will host a conference call to discuss the company’s financial results and recent developments today, Thursday, November 7, 2019, at 8:30 a.m. ET. To participate in the conference call, dial 1-877-845-0779 and provide the passcode 8077145. International callers may dial 1-720-545-0035 and use the same passcode. In addition, a live audio of the conference call will be available as a webcast. Interested parties can access the event through the “Events” page on the Pacira website at investor.pacira.com.

For those unable to participate in the live call, a replay will be available at 1-855-859-2056 (domestic) or 1-404-537-3406 (international) using the passcode 8077145. The replay of the call will be available for one week from the date of the live call. The webcast will be available on the Pacira website for approximately two weeks following the call.

Non-GAAP Financial Information

This press release contains financial measures that do not comply with U.S. generally accepted accounting principles (GAAP), such as non-GAAP net income, non-GAAP net income per share, non-GAAP cost of goods sold, non-GAAP gross margins, non-GAAP research and development (R&D) expense and non-GAAP selling, general and administrative (SG&A) expense, because such measures exclude milestone revenue; acquisition-related charges and product discontinuation costs; stock-based compensation; amortization of debt discount; amortization of acquired intangible assets; an income tax benefit and step-up in basis of inventory in connection with the acquisition of MyoScience, Inc.; and loss on investment and other non-operating income.

These measures supplement Pacira’s financial results prepared in accordance with GAAP. Pacira management uses these measures to better analyze its financial results, estimate its future cost of goods sold, gross margins, R&D expense and SG&A expense outlook for 2019 and to help make managerial decisions. In management’s opinion, these non-GAAP measures are useful to investors and other users of our financial statements by providing greater transparency into the operating performance at Pacira and its future outlook. Such measures should not be deemed to be an alternative to GAAP requirements or a measure of liquidity for Pacira. Non-GAAP measures are also unlikely to be comparable with non-GAAP disclosures released by other companies. See the tables below for a reconciliation of GAAP to non-GAAP measures, and a reconciliation of our GAAP to non-GAAP 2019 financial guidance for gross margins, R&D expense and SG&A expense.

About Pacira BioSciences

Pacira BioSciences, Inc. (Nasdaq: PCRX) is a leading provider of non-opioid pain management and regenerative health solutions dedicated to advancing and improving outcomes for health care practitioners and their patients. The company’s long-acting local analgesic, EXPAREL® (bupivacaine liposome injectable suspension) was commercially launched in the United States in April 2012. EXPAREL utilizes DepoFoam®, a unique and proprietary product delivery technology that encapsulates drugs without altering their molecular structure, and releases them over a desired period of time. In April 2019, Pacira acquired the iovera° system, a handheld cryoanalgesia device used to deliver precise, controlled doses of cold temperature only to targeted nerves. To learn more



about Pacira, including the corporate mission to reduce overreliance on opioids, visit www.pacira.com.

About EXPAREL® 

EXPAREL (bupivacaine liposome injectable suspension) is indicated for single-dose infiltration in adults to produce postsurgical local analgesia and as an interscalene brachial plexus nerve block to produce postsurgical regional analgesia. Safety and efficacy have not been established in other nerve blocks. The product combines bupivacaine with DepoFoam®, a proven product delivery technology that delivers medication over a desired time period. EXPAREL represents the first and only multivesicular liposome local anesthetic that can be utilized in the peri- or postsurgical setting. By utilizing the DepoFoam platform, a single dose of EXPAREL delivers bupivacaine over time, providing significant reductions in cumulative pain scores with up to a 78 percent decrease in opioid consumption; the clinical benefit of the opioid reduction was not demonstrated. Additional information is available at www.EXPAREL.com.

Important Safety Information for Patients
EXPAREL should not be used in obstetrical paracervical block anesthesia.
In studies where EXPAREL was injected into the wound, the most common side effects were nausea, constipation, and vomiting.
In studies where EXPAREL was injected near a nerve, the most common side effects were nausea, fever, and constipation.
EXPAREL is not recommended to be used in patients younger than 18 years old or in pregnant women.
Tell your healthcare provider if you have liver disease, since this may affect how the active ingredient (bupivacaine) in EXPAREL is eliminated from your body.
EXPAREL should not be injected into the spine, joints, or veins.
The active ingredient in EXPAREL:
Can affect your nervous system and your cardiovascular system
May cause an allergic reaction
May cause damage if injected into your joints.




About iovera°

The iovera° system is used to destroy tissue during surgical procedures by applying freezing cold. It can also be used to produce lesions in peripheral nervous tissue by the application of cold to the selected site for the blocking of pain. It is also indicated for the relief of pain and symptoms associated with osteoarthritis of the knee for up to 90 days. In one study, the majority of the patients suffering from osteoarthritis of the knee experienced pain and system relief beyond 150 days.1 The iovera° system’s “1×90” Smart Tip configuration (indicating one needle which is 90 mm long) can also facilitate target nerve location by conducting electrical nerve stimulation from a separate nerve stimulator. The iovera° system is not indicated for treatment of central nervous system tissue.

Important Safety Information

The iovera° system is contraindicated for use in patients with the following: Cryoglobulinemia; Paroxysmal cold hemoglobinuria; cold urticaria; Raynaud’s disease; open and/or infected wounds at or near the treatment line. Potential complications: As with any surgical treatment that uses needle-based therapy, there is potential for temporary site-specific reactions, including but not limited to: bruising (ecchymosis); swelling (edema); inflammation and/or redness (erythema); pain and/or tenderness; altered sensation (localized dysesthesia). Typically, these reactions resolve with no physician intervention. Patients may help the healing process by applying ice packs to the affected sites, and by taking over-the counter analgesics.

Forward-Looking Statements

Any statements in this press release about the company’s future expectations, plans, outlook, projections and prospects, and other statements containing the words “believes,” “anticipates,” “plans,” “estimates,” “expects,” “intends,” “may,” “will,” “would,” “could,” “can” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including risks relating to: the success of the company’s sales and manufacturing efforts in support of the commercialization of EXPAREL; the rate and degree of market acceptance of EXPAREL; the size and growth of the potential markets for EXPAREL and the company’s ability to serve those markets; the company’s plans to expand the use of EXPAREL to additional indications and opportunities, and the timing and success of any related clinical trials; the ability to realize anticipated benefits and synergies from the acquisition of MyoScience; the ability to successfully integrate iovera° and any other future acquisitions into the company’s existing business; the commercial success of iovera° and other factors discussed in the “Risk Factors” of the company’s most recent Annual Report on Form 10-K and in other filings that the company periodically makes with the SEC. In addition, the forward-looking statements included in this press release represent the company’s views as of the date of this press release. Important factors could cause actual results to differ materially from those indicated


1Radnovich, R. et al. “Cryoneurolysis to treat the pain and symptoms of knee osteoarthritis: a multicenter, randomized, double-blind, sham-controlled trial.” Osteoarthritis and Cartilage (2017) p1-10.



or implied by forward-looking statements, and as such the company anticipates that subsequent events and developments will cause its views to change. However, while the company may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the company’s views as of any date subsequent to the date of this press release.

###

Investor Contact:
Susan Mesco, (973) 451-4030
susan.mesco@pacira.com
    
Media Contact:
Coyne Public Relations
Alyssa Schneider, (973) 588-2270
aschneider@coynepr.com



(Tables to Follow)



Pacira BioSciences, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
September 30,
2019
 
December 31,
2018
ASSETS
 

 
 

Current assets:
 

 
 

     Cash, cash equivalents and short-term investments
$
265,644

 
$
383,454

     Accounts receivable, net
42,573

 
38,000

     Inventories, net
60,238

 
48,569

     Prepaid expenses and other current assets
10,392

 
7,946

          Total current assets
378,847

 
477,969

Long-term investments
70,577

 
25,871

Fixed assets, net
104,856

 
108,670

Right-of-use assets, net
35,756

 

Goodwill
99,547

 
62,040

Intangible assets, net
106,354

 

Equity investment and other assets
11,552

 
14,803

          Total assets
$
807,489

 
$
689,353

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 

 
 

Current liabilities:
 

 
 

     Accounts payable
$
16,064

 
$
14,368

     Accrued expenses
61,002

 
45,865

     Lease liabilities
5,043

 

     Convertible senior notes (1)

 
338

     Contingent consideration
13,591

 

     Income taxes payable
138

 
90

          Total current liabilities
95,838

 
60,661

Convertible senior notes (2)
302,081

 
290,592

Lease liabilities
38,882

 

Contingent consideration
22,206

 

Other liabilities
2,320

 
16,874

Total stockholders’ equity
346,162

 
321,226

          Total liabilities and stockholders’ equity
$
807,489

 
$
689,353

 
(1) Relates to our 3.25% convertible senior notes due 2019 that matured on February 1, 2019.
(2) Relates to our 2.375% convertible senior notes due 2022 that are not currently convertible.




Pacira BioSciences, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2019
 
2018
 
2019
 
2018
 Net product sales:
 
 
 
 
 
 
 
      EXPAREL
$
101,456

 
$
82,226

 
$
290,938

 
$
236,690

      Bupivacaine liposome injectable suspension
255

 
482

 
1,468

 
1,023

      Total EXPAREL / bupivacaine liposome
injectable suspension net product sales
101,711

 
82,708

 
292,406

 
237,713

      iovera°
2,639

 

 
4,674

 

 Total net product sales
104,350

 
82,708

 
297,080

 
237,713

 Collaborative licensing and milestone revenue

 

 

 
3,000

 Royalty revenue
335

 
740

 
1,522

 
1,450

      Total revenues
104,685

 
83,448

 
298,602

 
242,163

 
 
 
 
 
 
 
 
Operating expenses:
 

 
 

 


 
 

     Cost of goods sold
22,304

 
19,065

 
74,809

 
62,866

     Research and development
20,255

 
14,897

 
52,466

 
41,514

     Selling, general and administrative
50,128

 
44,179

 
146,559

 
132,619

     Amortization of acquired intangible assets
1,967

 

 
3,736

 

     Acquisition-related charges and
product discontinuation, net
7,618

 
1,259

 
12,266

 
1,511

          Total operating expenses
102,272

 
79,400

 
289,836

 
238,510

Income from operations
2,413

 
4,048

 
8,766

 
3,653

 
 
 
 
 
 
 
 
Other (expense) income:
 

 
 

 
 

 
 

     Interest income
1,736

 
1,586

 
5,709

 
4,493

     Interest expense
(5,940
)
 
(5,642
)
 
(17,631
)
 
(16,195
)
     Other, net
(4,025
)
 
(694
)
 
(4,051
)
 
(699
)
          Total other expense, net
(8,229
)
 
(4,750
)
 
(15,973
)
 
(12,401
)
Loss before income taxes
(5,816
)
 
(702
)
 
(7,207
)
 
(8,748
)
     Income tax (expense) benefit
(271
)
 
62

 
1,079

 
(8
)
Net loss
$
(6,087
)
 
$
(640
)
 
$
(6,128
)
 
$
(8,756
)
 
 
 
 
 
 
 
 
Net loss per share:
 

 
 

 
 

 
 

     Basic and diluted net loss per common share
$
(0.15
)
 
$
(0.02
)
 
$
(0.15
)
 
$
(0.21
)
Weighted average common shares outstanding:
 

 
 

 
 

 
 

     Basic and diluted
41,645

 
40,995

 
41,423

 
40,833





Pacira BioSciences, Inc.
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands, except per share amounts)
(unaudited)
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2019
 
2018
 
2019
 
2018
GAAP net loss
$
(6,087
)
 
$
(640
)
 
$
(6,128
)
 
$
(8,756
)
 
 
 
 
 
 
 
 
Non-GAAP adjustments:
 
 
 
 
 
 
 
     Milestone revenue

 

 

 
(3,000
)
     Acquisition-related charges and product discontinuation, net
7,618

 
1,259

 
12,266

 
1,511

     Stock-based compensation
9,244

 
8,108

 
24,461

 
23,539

     Amortization of debt discount
3,467

 
3,228

 
10,216

 
9,512

     Amortization of acquired intangible assets
1,967

 

 
3,736

 

     Income tax benefit in connection with acquisition

 

 
(1,828
)
 

     Recognition of step-up basis in inventory from acquisition

 

 
220

 

     Loss on investment and other non-operating income, net
3,957

 
854

 
3,957

 
854

          Total Non-GAAP adjustments
26,253

 
13,449

 
53,028

 
32,416

 
 
 
 
 
 
 
 
Non-GAAP net income
$
20,166

 
$
12,809

 
$
46,900

 
$
23,660

 
 
 
 
 
 
 
 
GAAP basic and diluted net loss per common share
$
(0.15
)
 
$
(0.02
)
 
$
(0.15
)
 
$
(0.21
)
 
 
 
 
 
 
 
 
Non-GAAP basic net income per common share
$
0.48

 
$
0.31

 
$
1.13

 
$
0.58

Non-GAAP diluted net income per common share
$
0.48

 
$
0.31

 
$
1.11

 
$
0.57

 
 
 
 
 
 
 
 
Weighted average common shares outstanding - basic
41,645

 
40,995

 
41,423

 
40,833

Weighted average common shares outstanding - diluted
42,404

 
41,974

 
42,289

 
41,752

 
 
 
 
 
 
 
 
Cost of goods sold reconciliation:
 
 
 
 
 
 
 
GAAP cost of goods sold
$
22,304

 
$
19,065

 
$
74,809

 
$
62,866

     Recognition of step-up basis in inventory from acquisition

 

 
(220
)
 

     Stock-based compensation
(1,243
)
 
(1,179
)
 
(3,490
)
 
(3,431
)
Non-GAAP cost of goods sold
$
21,061

 
$
17,886

 
$
71,099

 
$
59,435

 
 
 
 
 
 
 
 
Research and development reconciliation:
 
 
 
 
 
 
 
GAAP research and development
$
20,255

 
$
14,897

 
$
52,466

 
$
41,514

     Stock-based compensation
(1,297
)
 
(1,122
)
 
(3,772
)
 
(2,770
)
Non-GAAP research and development
$
18,958

 
$
13,775

 
$
48,694

 
$
38,744

 
 
 
 
 
 
 
 
Selling, general and administrative reconciliation:
 
 
 
 
 
 
 
GAAP selling, general and administrative
$
50,128

 
$
44,179

 
$
146,559

 
$
132,619

     Stock-based compensation
(6,704
)
 
(5,807
)
 
(17,199
)
 
(17,338
)
Non-GAAP selling, general and administrative
$
43,424

 
$
38,372

 
$
129,360

 
$
115,281




Pacira BioSciences, Inc.
Reconciliation of GAAP to Non-GAAP 2019 Financial Guidance
(dollars in millions)
(unaudited)
GAAP to Non-GAAP Guidance
 
GAAP
 
Stock-Based Compensation
and Other
 
Non-GAAP
EXPAREL net product sales
 
$400 to $410
 
 
iovera° net product sales (1)
 
$8 to $10
 
 
Gross margin
 
74% to 75%
 
Approx. 1%
 
75% to 76%
Research and development expense
 
$65 to $76
 
$5 to $6
 
$60 to $70
Selling, general and administrative expense
 
$202 to $214
 
$22 to $24
 
$180 to $190
Stock-based compensation
 
$30 to $35
 
 

(1) From the April 9, 2019 acquisition date onward.