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News Release

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Pacira Pharmaceuticals, Inc. Reports First Quarter 2018 Financial Results

-- EXPAREL® net product sales of $74.0 million up 9% over prior year first quarter --
-- Conference call today at 8:30 a.m. ET --

PARSIPPANY, N.J., May 03, 2018 (GLOBE NEWSWIRE) -- Pacira Pharmaceuticals, Inc. (NASDAQ:PCRX) today announced consolidated financial results for the first quarter ended March 31, 2018.

“2018 is off to a terrific start with EXPAREL daily sales volumes accelerating from 6 percent in January to 15 percent in March, as well as a recently expanded label that now includes interscalene brachial plexus block,” said Dave Stack, chairman and chief executive officer of Pacira Pharmaceuticals. “As the only long-acting, single-dose nerve block commercially available, EXPAREL has the potential to eliminate cumbersome delivery technologies, like catheters and pumps, and shift more procedures to the outpatient setting. We believe this expanded label along with our robust educational initiatives and strong coalition of like-minded collaborators, including Johnson & Johnson, will fuel positive sales trends as we continue to drive meaningful change toward eliminating the role of the operating room as a gateway to opioid use and abuse.”

First Quarter 2018 Financial Results

  • EXPAREL net product sales were $74.0 million in the first quarter of 2018, a 9% increase over the $67.7 million reported for the first quarter of 2017.
     
  • Total operating expenses were $81.5 million in the first quarter of 2018, compared to $83.3 million in the first quarter of 2017.
     
  • GAAP net loss was $10.7 million, or $(0.26) per share (basic and diluted), in the first quarter of 2018, compared to a GAAP net loss of $19.9 million, or $(0.52) per share (basic and diluted), in the first quarter of 2017.
     
  • Non-GAAP net income was $0.9 million, or $0.02 per share (basic and diluted) in the first quarter of 2018, compared to a non-GAAP net loss of $7.3 million, or $(0.19) per share (basic and diluted) in the first quarter of 2017.
     
  • Pacira ended the first quarter of 2018 with cash, cash equivalents, short-term and long-term investments (“cash”) of $361.5 million.
     
  • Pacira had 40.7 million basic weighted average shares of common stock outstanding in the first quarter of 2018.
     
  • For non-GAAP measures, Pacira had 41.6 million diluted weighted average shares of common stock outstanding in the first quarter of 2018.

2018 Outlook

Pacira reiterated its full year 2018 financial guidance as follows. Pacira expects:

  • EXPAREL net product sales of $300 million to $310 million.
     
  • Non-GAAP gross margins of 70% to 72%.
     
  • Non-GAAP research and development (R&D) expense of $50 million to $60 million.
     
  • Non-GAAP selling, general and administrative (SG&A) expense of $150 million to $160 million.
     
  • Stock-based compensation of $30 million to $35 million.

See “Non-GAAP Financial Information” and “Reconciliations of GAAP to Non-GAAP 2018 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, May 3, at 8:30 a.m. ET. The call can be accessed by dialing 1-877-845-0779 (domestic) or 1-720-545-0035 (international) ten minutes prior to the start of the call and providing the Conference ID 6585169.

A replay of the call will be available approximately two hours after the completion of the call and can be accessed by dialing 1-855-859-2056 (domestic) or 1-404-537-3406 (international) and providing the Conference ID 6585169. The replay of the call will be available for two weeks from the date of the live call.

The live, listen-only webcast of the conference call can also be accessed by visiting the “Investors & Media” section of the company’s website at investor.pacira.com. A replay of the webcast will be archived on the Pacira website for 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 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 stock-based compensation, amortization of debt discount, loss on early extinguishment of debt and exit costs related to the discontinuation of DepoCyt(e) production.

These measures supplement the company’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 2018 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 the company’s 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 2018 financial guidance for gross margins, R&D expense and SG&A expense.

About Pacira

Pacira Pharmaceuticals, Inc. (NASDAQ:PCRX) is a specialty pharmaceutical company dedicated to advancing and improving postsurgical outcomes for acute care practitioners and their patients. The company’s flagship product, EXPAREL® (bupivacaine liposome injectable suspension), is redefining pain management after surgery as an opioid-free alternative indicated for single-dose infiltration into the surgical site to produce postsurgical analgesia. 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. 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. 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

EXPAREL is contraindicated in obstetrical paracervical block anesthesia. Adverse reactions reported with an incidence greater than or equal to 10% following EXPAREL administration via infiltration were nausea, constipation, and vomiting; adverse reactions reported with an incidence greater than or equal to 10% following EXPAREL administration via interscalene brachial plexus nerve block were nausea, pyrexia, and constipation. If EXPAREL and other non-bupivacaine local anesthetics, including lidocaine, are administered at the same site, there may be an immediate release of bupivacaine from EXPAREL. Therefore, EXPAREL may be administered to the same site 20 minutes after injecting lidocaine. EXPAREL is not recommended to be used in the following patient population: patients <18 years old  and/or pregnant patients. Because amide-type local anesthetics, such as bupivacaine, are metabolized by the liver, EXPAREL should be used cautiously in patients with hepatic disease.

Warnings and Precautions Specific to EXPAREL

Avoid additional use of local anesthetics within 96 hours following administration of EXPAREL. EXPAREL is not recommended for the following types or routes of administration: epidural, intrathecal, regional nerve blocks other than interscalene brachial plexus nerve block, or intravascular or intra-articular use. The potential sensory and/or motor loss with EXPAREL is temporary and varies in degree and duration depending on the site of injection and dosage administered and may last for up to 5 days, as seen in clinical trials.

Warnings and Precautions for Bupivacaine-Containing Products

Central Nervous System (CNS) Reactions: There have been reports of adverse neurologic reactions with the use of local anesthetics. These include persistent anesthesia and paresthesia. CNS reactions are characterized by excitation and/or depression.

Cardiovascular System Reactions: Toxic blood concentrations depress cardiac conductivity and excitability which may lead to dysrhythmias, sometimes leading to death.

Allergic Reactions: Allergic-type reactions (eg, anaphylaxis and angioedema) are rare and may occur as a result of hypersensitivity to the local anesthetic or to other formulation ingredients.

Chondrolysis: There have been reports of chondrolysis (mostly in the shoulder joint) following intra-articular infusion of local anesthetics, which is an unapproved use.

Forward Looking Statements

Any statements in this press release about the company’s future expectations, plans, outlook and prospects, and other statements containing the words “believes,” “anticipates,” “plans,” “estimates,” “expects,” “intends,” “may” 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 and the company’s other products; 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 related timing and success of United States Food and Drug Administration supplemental New Drug Applications; the outcome of the U.S. Department of Justice inquiry; the company’s plans to evaluate, develop and pursue additional DepoFoam-based product candidates; clinical trials in support of an existing or potential DepoFoam-based product; the company’s commercialization and marketing capabilities; the company’s and Patheon UK Limited’s ability to successfully and timely construct dedicated EXPAREL manufacturing suites; 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 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.

 
(Tables to Follow)
 
 
Pacira Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
  March 31,
 2018
  December 31,
 2017
ASSETS      
Current assets:      
  Cash, cash equivalents and short-term investments $ 339,788     $ 311,347  
  Accounts receivable, net 31,203     31,658  
  Inventories, net 40,043     41,411  
  Prepaid expenses and other current assets 7,700     6,694  
    Total current assets 418,734     391,110  
Long-term investments 21,683     60,047  
Fixed assets, net 109,225     107,046  
Goodwill 57,490     55,197  
Equity investment 14,146     14,146  
Other assets 759     825  
    Total assets $ 622,037     $ 628,371  
       
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
  Accounts payable $ 14,913     $ 14,658  
  Accrued expenses and current portion of deferred revenue 33,017     41,159  
  Convertible senior notes (1) 327     324  
  Income taxes payable 111     76  
    Total current liabilities 48,368     56,217  
Convertible senior notes (2) 279,685     276,173  
Other liabilities 15,463     16,498  
Total stockholders’ equity 278,521     279,483  
  Total liabilities and stockholders’ equity $ 622,037     $ 628,371  
               
 
(1) Relates to our 3.25% convertible senior notes due 2019 that are not currently convertible but mature on February 1, 2019.
(2) Relates to our 2.375% convertible senior notes due 2022 that are not currently convertible.
 


 
Pacira Pharmaceuticals, Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
 
  Three Months Ended
  March 31,
  2018   2017
 Net product sales:      
  EXPAREL $ 74,034     $ 67,701  
  DepoCyt(e) and other product sales 253     724  
 Total net product sales 74,287     68,425  
 Collaborative licensing and milestone revenue     206  
 Royalty revenue 320     652  
  Total revenues 74,607     69,283  
       
Operating expenses:      
  Cost of goods sold 22,885     24,581  
  Research and development 14,378     16,632  
  Selling, general and administrative 44,191     42,120  
  Product discontinuation 90      
    Total operating expenses 81,544     83,333  
Loss from operations (6,937 )   (14,050 )
       
Other (expense) income:      
  Interest income 1,374     514  
  Interest expense (5,157 )   (2,589 )
  Loss on early extinguishment of debt     (3,721 )
  Other, net 75     10  
    Total other expense, net (3,708 )   (5,786 )
Loss before income taxes (10,645 )   (19,836 )
  Income tax expense (35 )   (30 )
Net loss $ (10,680 )   $ (19,866 )
       
Net loss per share:      
  Basic and diluted net loss per common share $ (0.26 )   $ (0.52 )
Weighted average common shares outstanding:      
  Basic and diluted 40,707     37,998  
           


 
Pacira Pharmaceuticals, Inc.
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands, except per share amounts)
(unaudited)
 
  Three Months Ended
  March 31,
  2018   2017
GAAP net loss $ (10,680 )   $ (19,866 )
       
Non-GAAP adjustments:      
  Stock-based compensation 8,385     7,400  
  Loss on early extinguishment of debt     3,721  
  Amortization of debt discount 3,113     1,411  
  Product discontinuation costs 90      
  Total Non-GAAP adjustments 11,588     12,532  
       
Non-GAAP net income (loss) $ 908     $ (7,334 )
       
GAAP basic and diluted net loss per common share $ (0.26 )   $ (0.52 )
       
Non-GAAP basic and diluted net income (loss) per common share $ 0.02     $ (0.19 )
       
Weighted average common shares outstanding - basic 40,707     37,998  
Weighted average common shares outstanding - diluted 41,593     37,998  
       
Cost of goods sold reconciliation:      
GAAP cost of goods sold $ 22,885     $ 24,581  
  Stock-based compensation (1,207 )   (1,375 )
Non-GAAP cost of goods sold $ 21,678     $ 23,206  
       
Research and development reconciliation:      
GAAP research and development $ 14,378     $ 16,632  
  Stock-based compensation (697 )   (658 )
Non-GAAP research and development $ 13,681     $ 15,974  
       
Selling, general and administrative reconciliation:      
GAAP selling, general and administrative $ 44,191     $ 42,120  
  Stock-based compensation (6,481 )   (5,367 )
Non-GAAP selling, general and administrative $ 37,710     $ 36,753  
               


 
Pacira Pharmaceuticals, Inc.
Reconciliation of GAAP to Non-GAAP 2018 Financial Guidance
(dollars in millions)
 
GAAP to Non-GAAP Guidance   GAAP   Stock-Based
Compensation
and Other
  Non-GAAP
EXPAREL net product sales   $300 to $310    
Gross margin   68% to 70%   Approx. 2%   70% to 72%
Research and development expense   $53 to $64   $3 to $4   $50 to $60
Selling, general and administrative expense   $172 to $184   $22 to $24   $150 to $160
Stock-based compensation   $30 to $35    

 

(2) Relates to our 2.375% convertible senior notes due 2022 that are not currently convertible.

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

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Pacira Pharmaceuticals, Inc.