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 1, 2018
PACIRA PHARMACEUTICALS, 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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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 o
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. o
Item 2.02. Results of Operations and Financial Condition.
On November 1, 2018, Pacira Pharmaceuticals, Inc. issued a press release announcing its results for the third quarter ended September 30, 2018. 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 of Form 8-K 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 No. | Description | |
99.1 | ||
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 PHARMACEUTICALS, INC. (REGISTRANT) | |||
Dated: | November 1, 2018 | By: | /s/ KRISTEN WILLIAMS |
Kristen Williams | |||
Chief Administrative Officer and Secretary | |||
FOR IMMEDIATE RELEASE
NEWS RELEASE
Pacira Pharmaceuticals, Inc. Reports Third Quarter 2018 Financial Results
-- EXPAREL® net product sales of $82.2 million up 23% over prior year third quarter --
-- Full-year EXPAREL net product sales guidance increased to $325 to $330 million --
-- Conference Call Today at 8:30 a.m. ET --
PARSIPPANY, N.J., November 1, 2018 - Pacira Pharmaceuticals, Inc. (NASDAQ: PCRX) today announced consolidated financial results for the third quarter ended September 30, 2018.
“As evident from these financial results, EXPAREL continues to deliver impressive sales growth with physicians having great success delivering targeted, long-acting, opioid-free local or regional analgesia for postsurgical pain in a variety of procedures,” said Dave Stack, chairman and chief executive officer of Pacira Pharmaceuticals. “Specifically we are seeing great enthusiasm around the use of EXPAREL as a brachial plexus nerve block and an increasing number of anesthesiologists incorporating EXPAREL into their suite of postsurgical pain solutions by expanding its use in newer regional anesthesia techniques, such as transverse abdominis, pectoralis and fascial iliaca plane blocks. In addition, our highly successful partnership with Johnson & Johnson remains a key growth driver as we integrate EXPAREL into multiple joint marketing programs, including a new initiative that will feature EXPAREL and TYLENOL as a platform for opioid-free postsurgical pain relief. Overall we are very pleased to be increasing our financial guidance for the second time this year.”
“Looking forward we expect various initiatives to expand access to EXPAREL, particularly the assignment of new ambulatory care and dental reimbursement codes at the beginning of 2019, as well as increasing public and private payer recognition of the need for non-opioid pain relief following surgery.”
Third Quarter 2018 Financial Results
• | EXPAREL net product sales were $82.2 million in the third quarter of 2018, a 23% increase over the $66.8 million reported for the third quarter of 2017. |
• | Total operating expenses were $79.4 million in the third quarter of 2018, compared to $70.9 million in the third quarter of 2017. |
• | GAAP net loss was $0.6 million, or $(0.02) per share (basic and diluted), in the third quarter of 2018, compared to a GAAP net loss of $7.6 million, or $(0.19) per share (basic and diluted), in the third quarter of 2017. |
• | Non-GAAP net income was $12.8 million, or $0.31 per share (basic and diluted) in the third quarter of 2018, compared to non-GAAP net income of $4.4 million, or $0.11 per share (basic and diluted) in the third quarter of 2017. |
• | Pacira ended the third quarter of 2018 with cash, cash equivalents and short-term investments (“cash”) of $386.4 million. |
• | Pacira had 41.0 million basic weighted average shares of common stock outstanding in the third quarter of 2018. |
• | Pacira had 42.0 million diluted weighted average shares of common stock outstanding in the third quarter of 2018. |
2018 Financial Guidance
Today, the company is increasing its full-year 2018 guidance for EXPAREL net product sales and improving its guidance for non-GAAP gross margins. The remainder of the company’s guidance remains unchanged from the ranges previously provided in August 2018. A summary of Pacira's full-year 2018 financial guidance is outlined below.
• | EXPAREL net product sales of $325 million to $330 million. |
• | Non-GAAP gross margins of 74% to 75%. |
• | 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, November 1, at 8:30 a.m. ET. To participate in the conference call, dial 1-877-845-0779 and provide the passcode 1988603. 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 1988603. 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 (loss), non-GAAP net income (loss) 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, stock-based compensation, amortization of debt discount, loss on early extinguishment of debt, exit costs related to the discontinuation of DepoCyt(e) production and loss on an unexercised investment purchase option.
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; 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.
###
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 Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
September 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash, cash equivalents and short-term investments | $ | 386,409 | $ | 311,347 | |||
Accounts receivable, net | 34,266 | 31,658 | |||||
Inventories, net | 44,884 | 41,411 | |||||
Prepaid expenses and other current assets | 6,490 | 6,694 | |||||
Total current assets | 472,049 | 391,110 | |||||
Long-term investments | — | 60,047 | |||||
Fixed assets, net | 110,063 | 107,046 | |||||
Goodwill | 62,040 | 55,197 | |||||
Equity investment | 14,146 | 14,146 | |||||
Other assets | 747 | 825 | |||||
Total assets | $ | 659,045 | $ | 628,371 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 13,795 | $ | 14,658 | |||
Accrued expenses and current portion of deferred revenue | 40,359 | 41,159 | |||||
Convertible senior notes (1) | 334 | 324 | |||||
Income taxes payable | 35 | 76 | |||||
Total current liabilities | 54,523 | 56,217 | |||||
Convertible senior notes (2) | 286,893 | 276,173 | |||||
Other liabilities | 16,363 | 16,498 | |||||
Total stockholders’ equity | 301,266 | 279,483 | |||||
Total liabilities and stockholders’ equity | $ | 659,045 | $ | 628,371 | |||
(1) Relates to our 3.25% convertible senior notes due 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 | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net product sales: | |||||||||||||||
EXPAREL | $ | 82,226 | $ | 66,780 | $ | 236,690 | $ | 204,254 | |||||||
Other product sales | 482 | 171 | 1,023 | 1,261 | |||||||||||
Total net product sales | 82,708 | 66,951 | 237,713 | 205,515 | |||||||||||
Collaborative licensing and milestone revenue | — | 26 | 3,000 | 361 | |||||||||||
Royalty revenue | 740 | 358 | 1,450 | 1,676 | |||||||||||
Total revenues | 83,448 | 67,335 | 242,163 | 207,552 | |||||||||||
Operating expenses: | |||||||||||||||
Cost of goods sold | 19,065 | 18,228 | 62,866 | 66,621 | |||||||||||
Research and development | 14,897 | 11,775 | 41,514 | 47,262 | |||||||||||
Selling, general and administrative | 44,179 | 40,644 | 132,619 | 122,316 | |||||||||||
Product discontinuation | 1,259 | 260 | 1,511 | 4,754 | |||||||||||
Total operating expenses | 79,400 | 70,907 | 238,510 | 240,953 | |||||||||||
Income (loss) from operations | 4,048 | (3,572 | ) | 3,653 | (33,401 | ) | |||||||||
Other (expense) income: | |||||||||||||||
Interest income | 1,586 | 1,068 | 4,493 | 2,805 | |||||||||||
Interest expense | (5,642 | ) | (5,127 | ) | (16,195 | ) | (12,942 | ) | |||||||
Loss on early extinguishment of debt | — | — | — | (3,732 | ) | ||||||||||
Other, net | (694 | ) | 79 | (699 | ) | 169 | |||||||||
Total other expense, net | (4,750 | ) | (3,980 | ) | (12,401 | ) | (13,700 | ) | |||||||
Loss before income taxes | (702 | ) | (7,552 | ) | (8,748 | ) | (47,101 | ) | |||||||
Income tax benefit (expense) | 62 | (45 | ) | (8 | ) | (105 | ) | ||||||||
Net loss | $ | (640 | ) | $ | (7,597 | ) | $ | (8,756 | ) | $ | (47,206 | ) | |||
Net loss per share: | |||||||||||||||
Basic and diluted net loss per common share | $ | (0.02 | ) | $ | (0.19 | ) | $ | (0.21 | ) | $ | (1.19 | ) | |||
Weighted average common shares outstanding: | |||||||||||||||
Basic and diluted | 40,995 | 40,463 | 40,833 | 39,540 | |||||||||||
Pacira Pharmaceuticals, 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, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
GAAP net loss | $ | (640 | ) | $ | (7,597 | ) | $ | (8,756 | ) | $ | (47,206 | ) | |||
Non-GAAP adjustments: | |||||||||||||||
Milestone revenue (1) | — | — | (3,000 | ) | — | ||||||||||
Stock-based compensation | 8,108 | 8,663 | 23,539 | 23,407 | |||||||||||
Loss on early extinguishment of debt | — | — | — | 3,732 | |||||||||||
Amortization of debt discount | 3,228 | 3,003 | 9,512 | 7,365 | |||||||||||
Product discontinuation costs | 1,259 | 332 | 1,511 | 5,334 | |||||||||||
Loss on unexercised investment purchase option (2) | 854 | — | 854 | — | |||||||||||
Total Non-GAAP adjustments | 13,449 | 11,998 | 32,416 | 39,838 | |||||||||||
Non-GAAP net income (loss) | $ | 12,809 | $ | 4,401 | $ | 23,660 | $ | (7,368 | ) | ||||||
GAAP basic and diluted net loss per common share | $ | (0.02 | ) | $ | (0.19 | ) | $ | (0.21 | ) | $ | (1.19 | ) | |||
Non-GAAP basic net income (loss) per common share | $ | 0.31 | $ | 0.11 | $ | 0.58 | $ | (0.19 | ) | ||||||
Non-GAAP diluted net income (loss) per common share | $ | 0.31 | $ | 0.11 | $ | 0.57 | $ | (0.19 | ) | ||||||
Weighted average common shares outstanding - basic | 40,995 | 40,463 | 40,833 | 39,540 | |||||||||||
Weighted average common shares outstanding - diluted | 41,974 | 41,386 | 41,752 | 39,540 | |||||||||||
Cost of goods sold reconciliation: | |||||||||||||||
GAAP cost of goods sold | $ | 19,065 | $ | 18,228 | $ | 62,866 | $ | 66,621 | |||||||
Stock-based compensation | (1,179 | ) | (1,502 | ) | (3,431 | ) | (4,272 | ) | |||||||
Product discontinuation inventory | — | (72 | ) | — | (580 | ) | |||||||||
Non-GAAP cost of goods sold | $ | 17,886 | $ | 16,654 | $ | 59,435 | $ | 61,769 | |||||||
Research and development reconciliation: | |||||||||||||||
GAAP research and development | $ | 14,897 | $ | 11,775 | $ | 41,514 | $ | 47,262 | |||||||
Stock-based compensation | (1,122 | ) | (824 | ) | (2,770 | ) | (2,128 | ) | |||||||
Non-GAAP research and development | $ | 13,775 | $ | 10,951 | $ | 38,744 | $ | 45,134 | |||||||
Selling, general and administrative reconciliation: | |||||||||||||||
GAAP selling, general and administrative | $ | 44,179 | $ | 40,644 | $ | 132,619 | $ | 122,316 | |||||||
Stock-based compensation | (5,807 | ) | (6,337 | ) | (17,338 | ) | (17,007 | ) | |||||||
Non-GAAP selling, general and administrative | $ | 38,372 | $ | 34,307 | $ | 115,281 | $ | 105,309 | |||||||
(1) Represents a $3.0 million upfront payment earned under our agreement with Nuance Biotech Co. Ltd. for the development and commercialization of EXPAREL in China.
(2) Represents a $0.9 million loss on an unexercised investment purchase option.
Pacira Pharmaceuticals, Inc.
Reconciliation of GAAP to Non-GAAP 2018 Financial Guidance
(dollars in millions)
(unaudited)
GAAP to Non-GAAP Guidance | GAAP | Stock-Based Compensation and Other | Non-GAAP | |||
EXPAREL net product sales | $325 to $330 | — | — | |||
Gross margin | 73% to 74% | Approx. 1% | 74% to 75% | |||
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 | — | — | |||