Pacira BioSciences Reports Third Quarter 2020 Financial Results and Business Update
-- EXPAREL average daily sales at 110% of the prior year for the third quarter--
-- Conference call today at
“Throughout the third quarter, we continued to make meaningful progress in growing EXPAREL sales despite lingering challenges in the elective surgery market due to the COVID-19 pandemic. The ongoing transition from procedures in the inpatient setting to the 23-hour ambulatory surgical center setting has accelerated because of the pandemic and we expect this trend to continue. The recent opening of our state-of-the art Pacira Innovation and Training Facility in
Third Quarter 2020 Financial Results
- Total revenues were
$117.5 million in the third quarter of 2020, a 12% increase versus the$104.7 million reported for the third quarter of 2019. - EXPAREL net product sales were
$113.7 million in the third quarter of 2020, a 12% increase versus the$101.5 million reported for the third quarter of 2019. - Third quarter 2020 iovera° net product sales were
$2.7 million , a 3% increase versus the$2.6 million reported for the third quarter of 2019. - Sales of bupivacaine liposome injectable suspension to a third-party licensee for use in veterinary practice were
$0.4 million in the third quarter of 2020, compared to$0.3 million in the third quarter of 2019. - Third quarter 2020 royalty revenues were
$0.6 million , compared to$0.3 million in the third quarter of 2019. - Total operating expenses were
$99.9 million in the third quarter of 2020, compared to$102.3 million in the third quarter of 2019. - Research and development (R&D) expenses were
$14.7 million in the third quarter of 2020, compared to$20.3 million in the third quarter of 2019. R&D expenses include$5.6 million and$7.8 million of product development and manufacturing capacity expansion costs in the third quarters of 2020 and 2019, respectively. - Selling, general and administrative (SG&A) expenses were
$52.6 million in the third quarter of 2020, compared to$50.1 million in the third quarter of 2019. - GAAP net income was
$130.1 million , or$3.03 per share (basic) and$2.94 (diluted), in the third quarter of 2020, compared to a GAAP net loss of$6.1 million , or$(0.15) per share (basic and diluted), in the third quarter of 2019. Included in GAAP net income in the third quarter of 2020 was a$124.6 million income tax benefit related to the release of a valuation allowance on deferred tax assets. - Non-GAAP net income was
$29.9 million , or$0.70 per share (basic) and$0.68 (diluted), in the third quarter of 2020, compared to non-GAAP net income of$20.2 million , or$0.48 per share (basic and diluted), in the third quarter of 2019. - Adjusted EBITDA was
$34.2 million in the third quarter of 2020, versus adjusted EBITDA of$24.8 million in the third quarter of 2019. - Pacira ended the third quarter of 2020 with cash, cash equivalents, short-term and long-term investments (“cash”) of
$576.2 million . Cash provided by operations was$39.8 million in the third quarter of 2020, compared to cash provided by operations of$18.4 million in the third quarter of 2019. - Pacira had 42.9 million basic weighted average shares of common stock outstanding in the third quarter of 2020.
- Pacira had 44.3 million diluted weighted average shares of common stock outstanding in the third quarter of 2020.
See “Non-GAAP Financial Information” below.
Recent Highlights
- Launch of state-of-the-art training center dedicated to advancing best practice regional approaches to manage acute pain. In
October 2020 , Pacira announced the grand opening of thePacira Innovation and Training Center ofTampa (the PITT). Designed to advance clinician understanding of the latest local, regional and field block approaches for managing pain, the PITT will provide an unparalleled training environment for healthcare providers working to reduce or eliminate patient exposure to opioids. The PITT is a fully adaptable environment constructed with guidance and input from leaders in the field of regional anesthesia, and is equipped with state-of-the-art technology and audio/visual capabilities to support a full range of educational events from didactic presentations to hands-on workshops.
- Preliminary net product sales for
September 2020 . InOctober 2020 , Pacira reported preliminary unaudited net product sales of EXPAREL and iovera° of$39.5 million and$1.1 million , respectively, for the month ofSeptember 2020 . In order to provide greater transparency, the company will continue to report monthly intra-quarter unaudited net product sales until it has gained enough visibility around the impacts of COVID-19.
- Positive CHMP opinion for EXPAREL for the treatment of postsurgical pain. In
September 2020 , Pacira announced the European Medicines Agency’s (EMA)Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion recommending marketing authorization for EXPAREL for postsurgical analgesia. The CHMP is a scientific committee of the EMA that reviews medical product applications on their scientific and clinical merit. The CHMP positive opinion was based on the results of four pivotal Phase 3 studies that demonstrated improvements in pain reduction and opioid use.
- Collaboration with IPG to reduce postsurgical opioid prescribing and surgical procedure costs. In
September 2020 , IPG, the industry-leading provider of surgical cost management solutions, and Pacira announced a collaboration to reduce postsurgical opioid prescribing and surgical procedure costs across the IPG national health plan and provider network. Through this partnership, IPG will offer reimbursement for EXPAREL to its health plan provider clients across the country to further support its mission to bring high quality, cost-effective surgical solutions to theU.S. healthcare market. Pacira will work alongside IPG to provide education and training to ensure consistent, positive outcomes are achieved across procedures, clinicians, and provider facilities.
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 5997369. 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, trends, 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 payment to
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.
(Tables to Follow)
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
2020 |
2019 |
||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 125,244 | $ | 78,228 | |||
Short-term investments | 406,881 | 213,722 | |||||
Accounts receivable, net | 46,143 | 47,530 | |||||
Inventories, net | 68,542 | 58,296 | |||||
Prepaid expenses and other current assets | 11,710 | 10,781 | |||||
Total current assets | 658,520 | 408,557 | |||||
Long-term investments | 44,062 | 64,798 | |||||
Fixed assets, net | 125,527 | 104,681 | |||||
Right-of-use assets, net | 76,047 | 38,124 | |||||
99,547 | 99,547 | ||||||
Intangible assets, net | 98,487 | 104,387 | |||||
Deferred tax assets | 104,122 | — | |||||
Equity investment and other assets | 13,957 | 10,971 | |||||
Total assets | $ | 1,220,269 | $ | 831,065 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 13,008 | $ | 12,799 | |||
Accrued expenses | 60,403 | 70,427 | |||||
Lease liabilities | 7,455 | 4,935 | |||||
Contingent consideration | 5,406 | 18,179 | |||||
Income taxes payable | — | 1,333 | |||||
Total current liabilities | 86,272 | 107,673 | |||||
Convertible senior notes | 456,464 | 306,045 | |||||
Lease liabilities | 72,448 | 40,938 | |||||
Contingent consideration | 16,176 | 19,963 | |||||
Other liabilities | 4,219 | 1,502 | |||||
Total stockholders’ equity | 584,690 | 354,944 | |||||
Total liabilities and stockholders’ equity | $ | 1,220,269 | $ | 831,065 | |||
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
Net product sales: | |||||||||||||||||||
EXPAREL | $ | 113,714 | $ | 101,456 | $ | 288,029 | $ | 290,938 | |||||||||||
Bupivacaine liposome injectable suspension | 449 | 255 | 2,430 | 1,468 | |||||||||||||||
Total EXPAREL / bupivacaine liposome injectable suspension net product sales |
114,163 | 101,711 | 290,459 | 292,406 | |||||||||||||||
iovera° | 2,726 | 2,639 | 6,391 | 4,674 | |||||||||||||||
Total net product sales | 116,889 | 104,350 | 296,850 | 297,080 | |||||||||||||||
Royalty revenue | 595 | 335 | 1,823 | 1,522 | |||||||||||||||
Total revenues | 117,484 | 104,685 | 298,673 | 298,602 | |||||||||||||||
Operating expenses: | |||||||||||||||||||
Cost of goods sold | 29,993 | 22,304 | 82,031 | 74,809 | |||||||||||||||
Research and development | 14,651 | 20,255 | 44,090 | 52,466 | |||||||||||||||
Selling, general and administrative | 52,561 | 50,128 | 140,683 | 146,559 | |||||||||||||||
Amortization of acquired intangible assets | 1,967 | 1,967 | 5,900 | 3,736 | |||||||||||||||
Acquisition-related charges (gains) and product discontinuation, net | 692 | 7,618 | (1,599 | ) | 12,266 | ||||||||||||||
Total operating expenses | 99,864 | 102,272 | 271,105 | 289,836 | |||||||||||||||
Income from operations | 17,620 | 2,413 | 27,568 | 8,766 | |||||||||||||||
Other (expense) income: | |||||||||||||||||||
Interest income | 1,025 | 1,736 | 3,936 | 5,709 | |||||||||||||||
Interest expense | (7,132 | ) | (5,940 | ) | (18,609 | ) | (17,631 | ) | |||||||||||
Loss on early extinguishment of debt | (8,071 | ) | — | (8,071 | ) | — | |||||||||||||
Other, net | 2,708 | (4,025 | ) | 2,571 | (4,051 | ) | |||||||||||||
Total other expense, net | (11,470 | ) | (8,229 | ) | (20,173 | ) | (15,973 | ) | |||||||||||
Income (loss) before income taxes | 6,150 | (5,816 | ) | 7,395 | (7,207 | ) | |||||||||||||
Income tax benefit (expense) | 123,969 | (271 | ) | 123,613 | 1,079 | ||||||||||||||
Net income (loss) | $ | 130,119 | $ | (6,087 | ) | $ | 131,008 | $ | (6,128 | ) | |||||||||
Net income (loss) per share: | |||||||||||||||||||
Basic net income (loss) per common share | $ | 3.03 | $ | (0.15 | ) | $ | 3.09 | $ | (0.15 | ) | |||||||||
Diluted net income (loss) per common share | $ | 2.94 | $ | (0.15 | ) | $ | 3.02 | $ | (0.15 | ) | |||||||||
Weighted average common shares outstanding: | |||||||||||||||||||
Basic | 42,928 | 41,645 | 42,393 | 41,423 | |||||||||||||||
Diluted | 44,275 | 41,645 | 43,333 | 41,423 | |||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands, except per share amounts)
(unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
GAAP net income (loss) | $ | 130,119 | $ | (6,087 | ) | $ | 131,008 | $ | (6,128 | ) | |||||||||
Non-GAAP adjustments: | |||||||||||||||||||
Acquisition-related charges (gains) and product discontinuation, net | 692 | 7,618 | (1,599 | ) | 12,266 | ||||||||||||||
Stock-based compensation | 10,954 | 9,244 | 29,024 | 24,461 | |||||||||||||||
Loss on early extinguishment of debt | 8,071 | — | 8,071 | — | |||||||||||||||
Amortization of debt discount | 5,430 | 3,467 | 12,684 | 10,216 | |||||||||||||||
Amortization of acquired intangible assets | 1,967 | 1,967 | 5,900 | 3,736 | |||||||||||||||
Recognition of step-up basis in inventory from acquisition | — | — | — | 220 | |||||||||||||||
Income tax benefit in connection with acquisition | — | — | — | (1,828 | ) | ||||||||||||||
(Gain) loss on investment and other non-operating income, net | (2,771 | ) | 3,957 | (2,779 | ) | 3,957 | |||||||||||||
Release of valuation allowance on deferred tax assets | (124,572 | ) | — | (124,572 | ) | — | |||||||||||||
Total Non-GAAP adjustments | (100,229 | ) | 26,253 | (73,271 | ) | 53,028 | |||||||||||||
Non-GAAP net income | $ | 29,890 | $ | 20,166 | $ | 57,737 | $ | 46,900 | |||||||||||
GAAP basic net income (loss) per common share | $ | 3.03 | $ | (0.15 | ) | $ | 3.09 | $ | (0.15 | ) | |||||||||
GAAP diluted net income (loss) per common share | $ | 2.94 | $ | (0.15 | ) | $ | 3.02 | $ | (0.15 | ) | |||||||||
Non-GAAP basic net income per common share | $ | 0.70 | $ | 0.48 | $ | 1.36 | $ | 1.13 | |||||||||||
Non-GAAP diluted net income per common share | $ | 0.68 | $ | 0.48 | $ | 1.33 | $ | 1.11 | |||||||||||
Weighted average common shares outstanding - basic | 42,928 | 41,645 | 42,393 | 41,423 | |||||||||||||||
Weighted average common shares outstanding - diluted | 44,275 | 42,404 | 43,333 | 42,289 | |||||||||||||||
Cost of goods sold reconciliation: | |||||||||||||||||||
GAAP cost of goods sold | $ | 29,993 | $ | 22,304 | $ | 82,031 | $ | 74,809 | |||||||||||
Recognition of step-up basis in inventory from acquisition | — | — | — | (220 | ) | ||||||||||||||
Stock-based compensation | (1,546 | ) | (1,243 | ) | (4,050 | ) | (3,490 | ) | |||||||||||
Non-GAAP cost of goods sold | $ | 28,447 | $ | 21,061 | $ | 77,981 | $ | 71,099 | |||||||||||
Research and development reconciliation: | |||||||||||||||||||
GAAP research and development | $ | 14,651 | $ | 20,255 | $ | 44,090 | $ | 52,466 | |||||||||||
Stock-based compensation | (1,401 | ) | (1,297 | ) | (3,944 | ) | (3,772 | ) | |||||||||||
Non-GAAP research and development | $ | 13,250 | $ | 18,958 | $ | 40,146 | $ | 48,694 | |||||||||||
Selling, general and administrative reconciliation: | |||||||||||||||||||
GAAP selling, general and administrative | $ | 52,561 | $ | 50,128 | $ | 140,683 | $ | 146,559 | |||||||||||
Stock-based compensation | (8,007 | ) | (6,704 | ) | (21,030 | ) | (17,199 | ) | |||||||||||
Non-GAAP selling, general and administrative | $ | 44,554 | $ | 43,424 | $ | 119,653 | $ | 129,360 | |||||||||||
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA (Non-GAAP)
(in thousands)
(unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
GAAP net income (loss) | $ | 130,119 | $ | (6,087 | ) | $ | 131,008 | $ | (6,128 | ) | |||||||||
Interest income | (1,025 | ) | (1,736 | ) | (3,936 | ) | (5,709 | ) | |||||||||||
Interest expense (1) | 7,132 | 5,940 | 18,609 | 17,631 | |||||||||||||||
Income tax (benefit) expense (2) (3) | (123,969 | ) | 271 | (123,613 | ) | (1,079 | ) | ||||||||||||
Depreciation expense | 3,070 | 3,638 | 8,947 | 10,750 | |||||||||||||||
Amortization of acquired intangible assets | 1,967 | 1,967 | 5,900 | 3,736 | |||||||||||||||
EBITDA | 17,294 | 3,993 | 36,915 | 19,201 | |||||||||||||||
Other adjustments: | |||||||||||||||||||
Acquisition-related charges (gains) and product discontinuation, net | 692 | 7,618 | (1,599 | ) | 12,266 | ||||||||||||||
Stock-based compensation | 10,954 | 9,244 | 29,024 | 24,461 | |||||||||||||||
Loss on early extinguishment of debt | 8,071 | — | 8,071 | — | |||||||||||||||
Recognition of step-up basis in inventory from acquisition | — | — | — | 220 | |||||||||||||||
(Gain) loss on investment and other non-operating income, net | (2,771 | ) | 3,957 | (2,779 | ) | 3,957 | |||||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 34,240 | $ | 24,812 | $ | 69,632 | $ | 60,105 |
(1) Includes amortization of debt discount
(2) Includes an income tax benefit in connection with the
(3) Includes the reversal of a deferred tax valuation allowance in the third quarter of 2020
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