Pacira Pharmaceuticals, Inc.

10578 Science Center Drive
Suite 125
San Diego, CA 92121
(858) 625 2424

5 Sylvan Way
Parsippany, NJ 07054
(973) 254 3560

TAKING CARE OF PATIENTS, TODAY AND TOMORROW

News Release

Pacira Pharmaceuticals, Inc. Reports First Quarter 2016 Financial Results

-- Total Net Revenues Up 12 Percent Year-Over-Year --
-- EXPAREL® Net Revenues Up 14 Percent Year-Over-Year --
-- Conference Call Today at 9 a.m. ET --

PARSIPPANY, N.J., May 02, 2016 (GLOBE NEWSWIRE) -- Pacira Pharmaceuticals, Inc. (NASDAQ:PCRX) today provided updates on EXPAREL® (bupivacaine liposome injectable suspension) for postsurgical pain in the United States and announced consolidated financial results for the first quarter ended March 31, 2016.

“With immense leverage across our organization from manufacturing to financials, we began our aggressive investment in the future growth of Pacira in the first quarter of 2016,” said Dave Stack, Chief Executive Officer and Chairman. “In this short amount of time, we were able to enhance our executive team with two important hires, initiate two Phase 3 studies for the EXPAREL nerve block indication and initiate a randomized controlled trial in total knee arthroplasty to establish best practice for best outcomes with EXPAREL. As we prepare for our oral surgery launch later this year, we look forward to further investments in the expanded use of EXPAREL and development of pipeline opportunities.”

Recent Highlights

  • Key Executive Appointments to Support Company’s Future Growth: Pacira recently announced the appointment of two key executives to the Pacira management team. As Chief Financial Officer, Charles A. Reinhart III will be responsible for all financial and capital market activities, including accounting, financial reporting, financial planning and analysis and investor relations. He will succeed former Chief Financial Officer Jim Scibetta, who will continue to serve as President, and will report to Dave Stack. As Chief Commercial Officer, Robert Weiland will oversee commercial activities for EXPAREL, which include marketing, sales, national accounts, training and commercial operations and analytics. He will report to Jim Scibetta

  • Initiation of Important Clinical Studies for EXPAREL: Pacira initiated two Phase 3 clinical trials that will serve as the basis of the supplemental New Drug Application (sNDA) to be filed for EXPAREL use in nerve block to provide postsurgical analgesia. One study will assess brachial plexus block with EXPAREL in patients undergoing total shoulder arthroplasty or rotator cuff repair. The second study will evaluate femoral nerve block with EXPAREL for patients undergoing total knee arthroplasty. Pacira also initiated a randomized controlled trial comparing local infiltration analgesia with EXPAREL to local infiltration analgesia without EXPAREL in total knee arthroplasty. This study is intended to provide a procedure-specific protocol on appropriate technique and administration for producing optimal outcomes with EXPAREL.

First Quarter 2016 Financial Results

  • EXPAREL net product revenues were $63.8 million in the first quarter of 2016, compared to $56.0 million in the first quarter of 2015.
     
  • Total revenues were $65.5 million in the first quarter of 2016, compared to $58.3 million in the first quarter of 2015.
     
  • Total operating expenses were $67.7 million in the first quarter of 2016, compared to $55.0 million in the first quarter of 2015.
     
  • GAAP net loss was $3.9 million, or $(0.10) per share (basic and diluted), in the first quarter of 2016, compared to GAAP net income of $1.3 million, or $0.03 per share (basic and diluted), in the first quarter of 2015.
     
  • Non-GAAP net income was $5.7 million, or $0.15 per share (basic) and $0.14 per share (diluted), in the first quarter of 2016, compared to non-GAAP net income of $9.8 million, or $0.27 per share (basic) and $0.23 per share (diluted), in the first quarter of 2015.
     
  • Pacira ended the first quarter of 2016 with cash and cash equivalents, short-term investments and long-term investments (“cash”) of $163.5 million.
     
  • Pacira had 37.0 million basic and 41.1 million diluted weighted average shares of common stock outstanding in the first quarter of 2016.

2016 Outlook

Pacira affirms that it expects the following operating expenses for 2016:

  • Non-GAAP research and development (R&D) expense of $60 million to $70 million.

  • Non-GAAP selling, general and administrative (SG&A) expense of $125 million to $135 million.

  • Stock-based compensation expense of $35 million to $40 million.

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, Monday, May 2, 2016, at 9 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 54803652.

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 54803652. 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), non-GAAP net income, because such measures exclude stock-based compensation and amortization of debt discount. These measures supplement our financial results prepared in accordance with GAAP. Pacira management uses these measures to better analyze its financial results, estimate its future R&D, SG&A and stock-based compensation outlook for 2016 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 net income measures are also unlikely to be comparable with non-GAAP disclosures released by other companies. See a reconciliation of non-GAAP net income to GAAP net income (loss) below.

About Pacira

Pacira Pharmaceuticals, Inc. (NASDAQ:PCRX) is a specialty pharmaceutical company focused on the clinical and commercial development of new products that meet the needs of acute care practitioners and their patients. The company’s flagship product, EXPAREL® (bupivacaine liposome injectable suspension), indicated for single-dose infiltration into the surgical site to produce postsurgical analgesia, was commercially launched in the United States in April 2012. EXPAREL and two other products have successfully utilized 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. Additional information about Pacira is available at www.pacira.com

About EXPAREL®

EXPAREL (bupivacaine liposome injectable suspension) is currently indicated for single-dose infiltration into the surgical site to produce postsurgical 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 score with up to a 45 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. EXPAREL has not been studied for use in patients younger than 18 years of age. Non-bupivacaine-based local anesthetics, including lidocaine, may cause an immediate release of bupivacaine from EXPAREL if administered together locally. The administration of EXPAREL may follow the administration of lidocaine after a delay of 20 minutes or more. Other formulations of bupivacaine should not be administered within 96 hours following administration of EXPAREL. Monitoring of cardiovascular and neurological status, as well as vital signs should be performed during and after injection of EXPAREL as with other local anesthetic products. Because amide-type local anesthetics, such as bupivacaine, are metabolized by the liver, EXPAREL should be used cautiously in patients with hepatic disease. Patients with severe hepatic disease, because of their inability to metabolize local anesthetics normally, are at a greater risk of developing toxic plasma concentrations. In clinical trials, the most common adverse reactions (incidence greater-than or equal to 10%) following EXPAREL administration were nausea, constipation, and vomiting.

Please see the full Prescribing Information for more details available at http://www.exparel.com/pdf/EXPAREL_Prescribing_Information.pdf.

Forward Looking Statements

Any statements in this press release about our 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 our 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 our ability to serve those markets; our 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; our plans to evaluate, develop and pursue additional DepoFoam-based product candidates; clinical studies in support of an existing or potential DepoFoam-based product; our plans to continue to manufacture and provide support services for our commercial partners who have licensed DepoCyt(e); our commercialization and marketing capabilities; our and Patheon UK Limited’s ability to successfully and timely construct dedicated EXPAREL manufacturing suites; and other factors discussed in the “Risk Factors” of our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and in other filings that we periodically make with the SEC. In addition, the forward-looking statements included in this press release represent our views as of the date of this press release. Important factors could cause our actual results to differ materially from those indicated or implied by forward-looking statements, and as such we anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

(Tables to Follow)


Pacira Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
 
  March 31,
 2016
  December 31,
 2015
ASSETS      
Current assets:      
Cash, cash equivalents and short-term investments $ 150,021     $ 158,965  
Accounts receivable, net 25,901     25,855  
Inventories, net 63,744     61,645  
Prepaid expenses and other current assets 8,959     6,117  
Total current assets 248,625     252,582  
Long-term investments 13,470     13,462  
Fixed assets, net 95,846     90,324  
Goodwill 32,784     30,880  
Intangibles, net     81  
Other assets 481     406  
Total assets $ 391,206     $ 387,735  
       
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $ 10,484     $ 8,739  
Accrued expenses 29,067     35,375  
Convertible senior notes (*) 105,215     104,040  
Current portion of deferred revenue 1,275     1,426  
Income taxes payable 98     208  
Total current liabilities 146,139     149,788  
Deferred revenue 7,877     8,082  
Other liabilities 11,020     11,473  
Total stockholders’ equity 226,170     218,392  
Total liabilities and stockholders’ equity $ 391,206     $ 387,735  
 
(*) The convertible senior notes are contractually due in 2019. However, because of certain conditions that were met during the three months ended March 31, 2016, the note holders can convert any time during the quarter ended June 30, 2016.



Pacira Pharmaceuticals, Inc.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share amounts)
 
  Three Months Ended
  March 31,
  2016   2015
Net product sales:      
EXPAREL $ 63,752     $ 55,951  
DepoCyt(e) 750     1,135  
Total net product sales 64,502     57,086  
Collaborative licensing and milestone revenue 356     356  
Royalty revenue 616     874  
Total revenues   65,474       58,316  
       
Operating expenses:      
Cost of goods sold 20,278     17,580  
Research and development 9,493     5,967  
Selling, general and administrative 37,957     31,428  
Total operating expenses 67,728     54,975  
Income (loss) from operations (2,254 )   3,341  
       
Other (expense) income:      
Interest income 252     155  
Interest expense (1,868 )   (1,996 )
Royalty interest obligation     (71 )
Other, net 48     (117 )
Total other expense, net (1,568 )   (2,029 )
Income (loss) before income taxes (3,822 )   1,312  
Income tax expense (32 )   (52 )
Net income (loss) $ (3,854 )   $ 1,260  
       
Net income (loss) per share:      
Basic and diluted net income (loss) per common share   $ (0.10 )   $ 0.03  
Weighted average common shares outstanding:      
Basic 37,020     36,235  
Diluted 37,020     41,779  



Pacira Pharmaceuticals, Inc.
Reconciliation of GAAP to Non-GAAP Financial Information
(unaudited)
(in thousands, except per share amounts)
 
  Three Months Ended
  March 31,
  2016   2015
       
GAAP net income (loss) $ (3,854 )   $ 1,260  
       
Non-GAAP adjustments:      
Stock-based compensation 8,490     7,517  
Non-cash debt discount amortization 1,022     1,035  
Total Non-GAAP adjustments 9,512     8,552  
       
Non-GAAP net income $ 5,658     $ 9,812  
       
GAAP basic and diluted net income (loss) per common share $ (0.10 )   $ 0.03  
       
Non-GAAP basic net income per common share $ 0.15     $ 0.27  
Non-GAAP diluted net income per common share $ 0.14     $ 0.23  
       
Weighted average common shares outstanding - basic 37,020     36,235  
Weighted average common shares outstanding - diluted 41,144     41,779  
       
Cost of goods sold reconciliation:      
GAAP cost of goods sold $ 20,278     $ 17,580  
Stock-based compensation expense (1,549 )   (1,103 )
Non-GAAP cost of goods sold $ 18,729     $ 16,477  
       
Research and development reconciliation:      
GAAP research and development $ 9,493     $ 5,967  
Stock-based compensation expense (893 )   (1,510 )
Non-GAAP research and development $ 8,600     $ 4,457  
       
Selling, general and administrative reconciliation:      
GAAP selling, general and administrative $ 37,957     $ 31,428  
Stock-based compensation expense (6,048 )   (4,904 )
Non-GAAP selling, general and administrative $ 31,909     $ 26,524  
Company Contact:
Pacira Pharmaceuticals, Inc.
Jessica Cho, (973) 254-3574
jessica.cho@pacira.com
           
Media Contact:
Coyne Public Relations
Alyssa Schneider, (973) 588-2270
aschneider@coynepr.com

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Pacira Pharmaceuticals, Inc

Contact Investor Relations:
Susan Mesco
(973) 451-4030
Susan.Mesco@pacira.com


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