Pacira BioSciences Reports Second Quarter 2020 Financial Results and Business Update
-- EXPAREL average daily sales return to year-over-year growth in month of
-- Conference call today at
“We are very pleased to report that since the peak of the impact from COVID-19 in April, we’ve seen a steady and continued increase in EXPAREL sales. This is a testimony to the resolve of our physician partners who are dedicated to ensuring that patients receive their much-needed surgeries, particularly in the ambulatory setting,” said
“Today, we are in a stronger position than ever as we wind down our partnership with
Second Quarter 2020 Financial Results
- Total revenues were
$75.5 million in the second quarter of 2020, a 26% decrease versus the$102.6 million reported for the second quarter of 2019. - EXPAREL net product sales were
$73.0 million in the second quarter of 2020, a 26% decrease versus the$98.9 million reported for the second quarter of 2019. - Second quarter 2020 iovera° net product sales were
$1.4 million , a 31% decrease versus the$2.0 million reported for the second quarter of 2019. - Sales of bupivacaine liposome injectable suspension to a third-party licensee for use in veterinary practice were
$0.8 million in the second quarter of 2020, compared to$0.9 million in the second quarter of 2019. - Second quarter 2020 royalty revenues were
$0.3 million , compared to$0.8 million in the second quarter of 2019. - Total operating expenses were
$82.7 million in the second quarter of 2020, compared to$97.3 million in the second quarter of 2019. - Research and development (R&D) expenses were
$13.6 million in the second quarter of 2020, compared to$17.8 million in the second quarter of 2019. R&D expenses include$6.1 million and$6.8 million of product development and manufacturing capacity expansion costs in the second quarters of 2020 and 2019, respectively. - Selling, general and administrative (SG&A) expenses were
$43.3 million in the second quarter of 2020, compared to$49.1 million in the second quarter of 2019. - GAAP net loss was
$7.3 million , or$0.17 per share (basic and diluted), in the second quarter of 2020, compared to GAAP net income of$2.7 million , or$0.07 per share (basic) and$0.06 per share (diluted), in the second quarter of 2019. - Non-GAAP net income was
$5.0 million , or$0.12 per share (basic and diluted), in the second quarter of 2020, compared to non-GAAP net income of$17.5 million , or$0.42 per share (basic) and$0.41 per share (diluted), in the second quarter of 2019. - Adjusted EBITDA was
$8.5 million in the second quarter of 2020, versus adjusted EBITDA of$21.9 million in the second quarter of 2019. - Pacira ended the second quarter of 2020 with cash, cash equivalents, short-term and long-term investments (“cash”) of
$335.1 million . Cash used in operations was$15.6 million in the second quarter of 2020, compared to cash provided by operations of$22.8 million in the second quarter of 2019. - Pacira had 42.2 million basic weighted average shares of common stock outstanding in the second quarter of 2020.
- For non-GAAP measures, Pacira had 42.9 million diluted weighted average shares of common stock outstanding in the second quarter of 2020.
See “Non-GAAP Financial Information” below.
Recent Highlights
- Preliminary net product sales for
July 2020 . Today the company also reported preliminary unaudited net product sales of EXPAREL and iovera° of$38.1 million and$0.8 million , respectively, for the month ofJuly 2020 . Given the rapidly changing variables related to the COVID-19 pandemic, the company does not have sufficient visibility to accurately forecast the impact of the pandemic and is currently not providing full-year 2020 financial guidance. In order to provide greater transparency, the company plans to report monthly intra-quarter unaudited net product sales until it has gained sufficient visibility around the impacts of COVID-19.
- FDA acceptance of sNDA for EXPAREL use in pediatric patients. In
August 2020 , Pacira announced theU.S. Food and Drug Administration (FDA) has accepted the submission of its supplemental new drug application (sNDA) seeking expansion of the EXPAREL label to include single-dose infiltration to provide postsurgical analgesia in children aged six and over. The expected action date by the FDA under the Prescription Drug User Fee Act (PDUFA) isMarch 22, 2021 .
- Issuance of
$402.5 million aggregate principal amount of 0.750% convertible senior notes due 2025. InJuly 2020 , Pacira issued$402.5 million in aggregate principal amount of convertible senior notes due 2025 in a private placement. Pacira used approximately$211.1 million of the net proceeds to repurchase$185.0 million aggregate principal amount of its outstanding 2.375% Convertible Senior Notes due 2022. Pacira intends to use the remainder of the net proceeds from the offering for general corporate purposes, including working capital, research and development expenditures and the license or acquisition of complementary products and/or technologies.
- Conclusion of EXPAREL agreement with
DePuy Synthes . InJuly 2020 , Pacira announced the conclusion of its agreement withDePuy Synthes Sales Inc. to jointly market and promote the use of EXPAREL for orthopedic procedures inthe United States . Under this collaboration, which began inJanuary 2017 ,DePuy Synthes field representatives, specializing in joint reconstruction, spine, sports medicine, trauma and cranio-maxillofacial procedures, collaborate with the Pacira field teams to support EXPAREL use and education in orthopedic surgical settings. In addition to partnering withDePuy Synthes in support of orthopedic surgical procedures, Pacira field representatives have remained the overall EXPAREL account managers and commercial leads for soft tissue surgeons, anesthesiologists, and ambulatory surgery centers.
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,
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 3276818. 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
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 2020 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, including adjusted EBITDA.
About
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 impact of the worldwide COVID-19 (Coronavirus) pandemic and related global economic conditions on our business and results of operations; the cost and timing of an early termination
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.
payment to
(Tables to Follow)
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
2020 |
2019 |
||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash, cash equivalents and short-term investments | $ | 326,792 | $ | 291,950 | |||
| Accounts receivable, net | 44,013 | 47,530 | |||||
| Inventories, net | 66,690 | 58,296 | |||||
| Prepaid expenses and other current assets | 18,328 | 10,781 | |||||
| Total current assets | 455,823 | 408,557 | |||||
| Long-term investments | 8,261 | 64,798 | |||||
| Fixed assets, net | 113,297 | 104,681 | |||||
| Right-of-use assets, net | 77,799 | 38,124 | |||||
| 99,547 | 99,547 | ||||||
| Intangible assets, net | 100,454 | 104,387 | |||||
| Equity investment and other assets | 10,930 | 10,971 | |||||
| Total assets | $ | 866,111 | $ | 831,065 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 9,160 | $ | 12,799 | |||
| Accrued expenses | 47,684 | 70,427 | |||||
| Lease liabilities | 7,620 | 4,935 | |||||
| Contingent consideration | 4,504 | 18,179 | |||||
| Income taxes payable | 1,615 | 1,333 | |||||
| Total current liabilities | 70,583 | 107,673 | |||||
| Convertible senior notes | 314,182 | 306,045 | |||||
| Lease liabilities | 73,888 | 40,938 | |||||
| Contingent consideration | 16,326 | 19,963 | |||||
| Other liabilities | 2,984 | 1,502 | |||||
| Total stockholders’ equity | 388,148 | 354,944 | |||||
| Total liabilities and stockholders’ equity | $ | 866,111 | $ | 831,065 | |||
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
| Net product sales: | |||||||||||||||||||
| EXPAREL | $ | 73,046 | $ | 98,868 | $ | 174,315 | $ | 189,482 | |||||||||||
| Bupivacaine liposome injectable suspension | 775 | 921 | 1,981 | 1,213 | |||||||||||||||
| Total EXPAREL / bupivacaine liposome injectable suspension net product sales |
73,821 | 99,789 | 176,296 | 190,695 | |||||||||||||||
| iovera° | 1,395 | 2,035 | 3,665 | 2,035 | |||||||||||||||
| Total net product sales | 75,216 | 101,824 | 179,961 | 192,730 | |||||||||||||||
| Royalty revenue | 289 | 780 | 1,228 | 1,187 | |||||||||||||||
| Total revenues | 75,505 | 102,604 | 181,189 | 193,917 | |||||||||||||||
| Operating expenses: | |||||||||||||||||||
| Cost of goods sold | 22,305 | 25,201 | 52,037 | 52,505 | |||||||||||||||
| Research and development | 13,620 | 17,827 | 29,440 | 32,210 | |||||||||||||||
| Selling, general and administrative | 43,342 | 49,126 | 88,122 | 96,431 | |||||||||||||||
| Amortization of acquired intangible assets | 1,967 | 1,770 | 3,933 | 1,770 | |||||||||||||||
| Acquisition-related charges (gains) and product discontinuation, net |
1,418 | 3,405 | (2,290 | ) | 4,647 | ||||||||||||||
| Total operating expenses | 82,652 | 97,329 | 171,242 | 187,563 | |||||||||||||||
| Income (loss) from operations | (7,147 | ) | 5,275 | 9,947 | 6,354 | ||||||||||||||
| Other (expense) income: | |||||||||||||||||||
| Interest income | 1,323 | 1,817 | 2,911 | 3,973 | |||||||||||||||
| Interest expense | (5,456 | ) | (5,878 | ) | (11,477 | ) | (11,691 | ) | |||||||||||
| Other, net | 3,969 | (87 | ) | (136 | ) | (26 | ) | ||||||||||||
| Total other expense, net | (164 | ) | (4,148 | ) | (8,702 | ) | (7,744 | ) | |||||||||||
| Income (loss) before income taxes | (7,311 | ) | 1,127 | 1,245 | (1,390 | ) | |||||||||||||
| Income tax benefit (expense) | 42 | 1,603 | (356 | ) | 1,349 | ||||||||||||||
| Net income (loss) | $ | (7,269 | ) | $ | 2,730 | $ | 889 | $ | (41 | ) | |||||||||
| Net income (loss) per share: | |||||||||||||||||||
| Basic net income (loss) per common share | $ | (0.17 | ) | $ | 0.07 | $ | 0.02 | $ | (0.00 | ) | |||||||||
| Diluted net income (loss) per common share | $ | (0.17 | ) | $ | 0.06 | $ | 0.02 | $ | (0.00 | ) | |||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||
| Basic | 42,221 | 41,384 | 42,126 | 41,312 | |||||||||||||||
| Diluted | 42,221 | 42,345 | 42,861 | 41,312 | |||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands, except per share amounts)
(unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
| GAAP net income (loss) | $ | (7,269 | ) | $ | 2,730 | $ | 889 | $ | (41 | ) | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Acquisition-related charges (gains) and product discontinuation, net |
1,418 | 3,405 | (2,290 | ) | 4,647 | ||||||||||||||
| Stock-based compensation | 9,222 | 7,783 | 18,070 | 15,217 | |||||||||||||||
| Amortization of debt discount | 3,660 | 3,405 | 7,254 | 6,749 | |||||||||||||||
| Amortization of acquired intangible assets | 1,967 | 1,770 | 3,933 | 1,770 | |||||||||||||||
| Recognition of step-up basis in inventory from acquisition | — | 220 | — | 220 | |||||||||||||||
| Income tax benefit in connection with acquisition | — | (1,828 | ) | — | (1,828 | ) | |||||||||||||
| Gain on investment | (3,979 | ) | — | (8 | ) | — | |||||||||||||
| Total Non-GAAP adjustments | 12,288 | 14,755 | 26,959 | 26,775 | |||||||||||||||
| Non-GAAP net income | $ | 5,019 | $ | 17,485 | $ | 27,848 | $ | 26,734 | |||||||||||
| GAAP basic net income (loss) per common share | $ | (0.17 | ) | $ | 0.07 | $ | 0.02 | $ | (0.00 | ) | |||||||||
| GAAP diluted net income (loss) per common share | $ | (0.17 | ) | $ | 0.06 | $ | 0.02 | $ | (0.00 | ) | |||||||||
| Non-GAAP basic net income per common share | $ | 0.12 | $ | 0.42 | $ | 0.66 | $ | 0.65 | |||||||||||
| Non-GAAP diluted net income per common share | $ | 0.12 | $ | 0.41 | $ | 0.65 | $ | 0.63 | |||||||||||
| Weighted average common shares outstanding - basic | 42,221 | 41,384 | 42,126 | 41,312 | |||||||||||||||
| Weighted average common shares outstanding - diluted | 42,937 | 42,345 | 42,861 | 42,231 | |||||||||||||||
| Cost of goods sold reconciliation: | |||||||||||||||||||
| GAAP cost of goods sold | $ | 22,305 | $ | 25,201 | $ | 52,037 | $ | 52,505 | |||||||||||
| Recognition of step-up basis in inventory from acquisition | — | (220 | ) | — | (220 | ) | |||||||||||||
| Stock-based compensation | (1,284 | ) | (1,156 | ) | (2,503 | ) | (2,247 | ) | |||||||||||
| Non-GAAP cost of goods sold | $ | 21,021 | $ | 23,825 | $ | 49,534 | $ | 50,038 | |||||||||||
| Research and development reconciliation: | |||||||||||||||||||
| GAAP research and development | $ | 13,620 | $ | 17,827 | $ | 29,440 | $ | 32,210 | |||||||||||
| Stock-based compensation | (1,357 | ) | (1,257 | ) | (2,544 | ) | (2,475 | ) | |||||||||||
| Non-GAAP research and development | $ | 12,263 | $ | 16,570 | $ | 26,896 | $ | 29,735 | |||||||||||
| Selling, general and administrative reconciliation: | |||||||||||||||||||
| GAAP selling, general and administrative | $ | 43,342 | $ | 49,126 | $ | 88,122 | $ | 96,431 | |||||||||||
| Stock-based compensation | (6,581 | ) | (5,370 | ) | (13,023 | ) | (10,495 | ) | |||||||||||
| Non-GAAP selling, general and administrative | $ | 36,761 | $ | 43,756 | $ | 75,099 | $ | 85,936 | |||||||||||
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
(in thousands)
(unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
| GAAP net income (loss) | $ | (7,269 | ) | $ | 2,730 | $ | 889 | $ | (41 | ) | |||||||||
| Interest income | (1,323 | ) | (1,817 | ) | (2,911 | ) | (3,973 | ) | |||||||||||
| Interest expense (1) | 5,456 | 5,878 | 11,477 | 11,691 | |||||||||||||||
| Income tax (benefit) expense (2) | (42 | ) | (1,603 | ) | 356 | (1,349 | ) | ||||||||||||
| Depreciation expense | 3,023 | 3,512 | 5,877 | 7,111 | |||||||||||||||
| Amortization of acquired intangible assets | 1,967 | 1,770 | 3,933 | 1,770 | |||||||||||||||
| EBITDA | 1,812 | 10,470 | 19,621 | 15,209 | |||||||||||||||
| Other adjustments: | |||||||||||||||||||
| Acquisition-related charges (gains) and product discontinuation, net |
1,418 | 3,405 | (2,290 | ) | 4,647 | ||||||||||||||
| Stock-based compensation | 9,222 | 7,783 | 18,070 | 15,217 | |||||||||||||||
| Recognition of step-up basis in inventory from acquisition |
— | 220 | — | 220 | |||||||||||||||
| Gain on investment | (3,979 | ) | — | (8 | ) | — | |||||||||||||
| Adjusted EBITDA (non-GAAP) | $ | 8,473 | $ | 21,878 | $ | 35,393 | $ | 35,293 | |||||||||||
(1) Includes amortization of debt discount
(2) Includes an income tax benefit in connection with the
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) includes GAAP to non-GAAP adjustments that reflect how the Company’s management analyzes its financial results. The adjusted EBITDA figures presented here are unlikely to be comparable with adjusted EBITDA disclosures released by other companies.
Investor Contact:Susan Mesco , (973) 451-4030 susan.mesco@pacira.com Media Contact:Coyne Public Relations Alyssa Schneider , (973) 588-2270 aschneider@coynepr.com
Source: Pacira BioSciences
