Pacira Pharmaceuticals, Inc. Reports Third Quarter 2016 Financial Results
-- Total Net Revenues Up 10% Year-Over-Year --
-- EXPAREL® Net Product Sales Up 9% Year-Over-Year --
-- Conference Call Today at
“EXPAREL revenues continued to grow year-over-year in the third quarter,” said
Recent Highlights
- EXPAREL Launches in Oral Surgery at AAOMS, with Data Demonstrating Safety and Efficacy for Pain Relief in Third Molar Removal: Pacira officially launched EXPAREL in oral surgery at the
American Association of Oral and Maxillofacial Surgeons (AAOMS) annual meeting in September, where the company presented the results from a prospective, randomized, double-blind, placebo-controlled study in third molar (wisdom teeth) extraction. Overall, patients receiving EXPAREL demonstrated a lower mean opioid consumption and significantly lower pain scores at 48 hours in comparison to that of placebo.
Pacira Partners withAmerican College of Surgeons (ACS) inLaunching Educational Program for Patients and Surgeons : Opioids and Surgery: Use, Abuse and Alternatives is an initiative designed to support the rapid dissemination of patient education materials regarding opioids and opioid alternatives, as well as to support the surgeon with evidence-based content, including procedure-specific enhanced recovery protocols, managing pain expectations, non-opioid options, screening programs, discharge education and transition management.
- Key Executive Appointments Enhance Commercial Team: Pacira recently announced the appointment of
Thomas Sluby , Vice President, Sales andMatthew Lehmann , Vice President, Marketing – Emerging Therapies. Mr. Sluby is responsible for overseeing all aspects of sales execution and customer relations, and will work closely with the commercial team on the development and implementation of sales and product strategies for EXPAREL. Mr. Lehmann will be responsible for the development, implementation and execution of market strategies and tactics, initially focusing on the EXPAREL nerve block launch subsequent to approval. Both individuals will report toRobert Weiland , Chief Commercial Officer.
Third Quarter 2016 Financial Results
- EXPAREL net product sales were
$64.9 million in the third quarter of 2016, a 9% increase over the$59.7 million reported for the third quarter of 2015.
- Total revenues were
$68.4 million in the third quarter of 2016, a 10% increase over the$62.2 million reported for the third quarter of 2015. - Total operating expenses were
$89.2 million in the third quarter of 2016, compared to$57.1 million in the third quarter of 2015. Total operating expenses in the third quarter of 2016 include a$21.9 million charge to cost of goods sold to fully reserve$20.7 million for the cost of EXPAREL batches impacted by a routine stability test that did not meet required specifications and$1.2 million for an estimated number of replacement boxes and other related costs. - GAAP net loss was
$22.2 million , or$(0.59) per share (basic and diluted), in the third quarter, compared to GAAP net income of$3.1 million , or$0.08 per share (basic and diluted), in the third quarter of 2015. - Non-GAAP net income was
$8.0 million , or$0.22 per share (basic) and$0.20 per share (diluted), in the third quarter of 2016, compared to non-GAAP net income of$12.9 million , or$0.35 per share (basic) and$0.32 per share (diluted), in the third quarter of 2015.
- Pacira ended the third quarter of 2016 with cash, cash equivalents and short-term investments (“cash”) of
$161.1 million .
- Pacira had 37.3 million basic weighted average shares of common stock outstanding in the third quarter of 2016.
- For non-GAAP measures, Pacira had 40.2 million diluted weighted average shares of common stock outstanding in the third quarter of 2016.
2016 Outlook
Pacira updates its full year 2016 financial guidance as follows:
- EXPAREL net product sales of
$263 million to $268 million , reflecting management’s revised expectation about when its commercial strategies and creation of opioid-sparing collaborations will accelerate sales growth.
- Non-GAAP gross margins of 70% to 73%.
- Non-GAAP research and development (R&D) expense of
$40 million to $50 million . This reduction in guidance reflects significant cost savings in three randomized clinical trials, along with a change in timing of some costs related to the two nerve block trials that the company expects to complete in the first quarter of 2017.
- Non-GAAP selling, general and administrative (SG&A) expense of
$125 million to $135 million .
- Stock-based compensation of
$30 million to $35 million .
See “Non-GAAP Financial Information” and “Reconciliations of GAAP to Non-GAAP 2016 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,
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 12896365. 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) and non-GAAP selling, general and administrative (SG&A) expenses, because such measures exclude stock-based compensation, amortization of debt discount, loss on extinguishment of debt, a termination fee with
About Pacira
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 http://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/hcp/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 and our other products; 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
(Tables to Follow)
Pacira Pharmaceuticals, Inc. | |||||||
Condensed Consolidated Balance Sheets | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
September 30, 2016 |
December 31, 2015 |
||||||
ASSETS | |||||||
Current assets: | |||||||
Cash, cash equivalents and short-term investments | $ | 161,128 | $ | 158,965 | |||
Accounts receivable, net | 26,765 | 25,855 | |||||
Inventories, net | 37,476 | 61,645 | |||||
Prepaid expenses and other current assets | 10,075 | 6,117 | |||||
Total current assets | 235,444 | 252,582 | |||||
Long-term investments | — | 13,462 | |||||
Fixed assets, net | 100,388 | 90,324 | |||||
Goodwill | 44,670 | 30,880 | |||||
Intangible assets, net | — | 81 | |||||
Other assets | 651 | 406 | |||||
Total assets | $ | 381,153 | $ | 387,735 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 7,287 | $ | 8,739 | |||
Accrued expenses | 31,077 | 35,375 | |||||
Convertible senior notes * | 107,563 | 104,040 | |||||
Current portion of deferred revenue | 822 | 1,426 | |||||
Income taxes payable | 82 | 208 | |||||
Total current liabilities | 146,831 | 149,788 | |||||
Deferred revenue | 7,617 | 8,082 | |||||
Other liabilities | 12,557 | 11,473 | |||||
Total stockholders’ equity | 214,148 | 218,392 | |||||
Total liabilities and stockholders’ equity | $ | 381,153 | $ | 387,735 |
* The convertible senior notes are contractually due in 2019. However, because of certain conditions that were met during the three months ended September 30, 2016, the note holders can convert any time during the quarter ended December 31, 2016.
Pacira Pharmaceuticals, Inc. | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net product sales: | |||||||||||||||
EXPAREL | $ | 64,869 | $ | 59,729 | $ | 194,374 | $ | 172,657 | |||||||
DepoCyt(e) and other product sales | 1,250 | 1,421 | 3,935 | 3,640 | |||||||||||
Total net product sales | 66,119 | 61,150 | 198,309 | 176,297 | |||||||||||
Collaborative licensing and milestone revenue | 1,357 | 357 | 3,069 | 1,069 | |||||||||||
Royalty revenue | 879 | 706 | 2,091 | 2,310 | |||||||||||
Total revenues | 68,355 | 62,213 | 203,469 | 179,676 | |||||||||||
Operating expenses: | |||||||||||||||
Cost of goods sold | 43,152 | 15,901 | 86,483 | 52,409 | |||||||||||
Research and development | 9,754 | 5,893 | 28,609 | 15,509 | |||||||||||
Selling, general and administrative | 36,314 | 35,310 | 117,940 | 101,490 | |||||||||||
Total operating expenses | 89,220 | 57,104 | 233,032 | 169,408 | |||||||||||
Income (loss) from operations | (20,865 | ) | 5,109 | (29,563 | ) | 10,268 | |||||||||
Other (expense) income: | |||||||||||||||
Interest income | 346 | 171 | 923 | 504 | |||||||||||
Interest expense | (1,601 | ) | (1,905 | ) | (5,203 | ) | (5,842 | ) | |||||||
Loss on early extinguishment of debt | — | — | — | (51 | ) | ||||||||||
Royalty interest obligation | — | — | — | (71 | ) | ||||||||||
Other, net | (8 | ) | (8 | ) | (8 | ) | (82 | ) | |||||||
Total other expense, net | (1,263 | ) | (1,742 | ) | (4,288 | ) | (5,542 | ) | |||||||
Income (loss) before income taxes | (22,128 | ) | 3,367 | (33,851 | ) | 4,726 | |||||||||
Income tax expense | (36 | ) | (281 | ) | (126 | ) | (372 | ) | |||||||
Net income (loss) | $ | (22,164 | ) | $ | 3,086 | $ | (33,977 | ) | $ | 4,354 | |||||
Net income (loss) per share: | |||||||||||||||
Basic net income (loss) per common share | $ | (0.59 | ) | $ | 0.08 | $ | (0.91 | ) | $ | 0.12 | |||||
Diluted net income (loss) per common share | $ | (0.59 | ) | $ | 0.08 | $ | (0.91 | ) | $ | 0.11 | |||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 37,312 | 36,663 | 37,171 | 36,460 | |||||||||||
Diluted | 37,312 | 41,043 | 37,171 | 41,422 |
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, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
GAAP net income (loss) | $ | (22,164 | ) | $ | 3,086 | $ | (33,977 | ) | $ | 4,354 | |||||
Non-GAAP adjustments: | |||||||||||||||
Stock-based compensation | 7,361 | 8,826 | 23,516 | 23,640 | |||||||||||
Inventory and related reserves (1) | 21,949 | — | 21,949 | — | |||||||||||
Loss on early extinguishment of debt | — | — | — | 51 | |||||||||||
Amortization of debt discount | 1,022 | 1,022 | 3,066 | 3,080 | |||||||||||
CrossLink contract termination fee | (122 | ) | — | 7,062 | — | ||||||||||
Total Non-GAAP adjustments | 30,210 | 9,848 | 55,593 | 26,771 | |||||||||||
Non-GAAP net income | $ | 8,046 | $ | 12,934 | $ | 21,616 | $ | 31,125 | |||||||
GAAP basic net income (loss) per common share | $ | (0.59 | ) | $ | 0.08 | $ | (0.91 | ) | $ | 0.12 | |||||
GAAP diluted net income (loss) per common share | $ | (0.59 | ) | $ | 0.08 | $ | (0.91 | ) | $ | 0.11 | |||||
Non-GAAP basic net income per common share | $ | 0.22 | $ | 0.35 | $ | 0.58 | $ | 0.85 | |||||||
Non-GAAP diluted net income per common share | $ | 0.20 | $ | 0.32 | $ | 0.53 | $ | 0.75 | |||||||
Weighted average common shares outstanding - basic | 37,312 | 36,663 | 37,171 | 36,460 | |||||||||||
Weighted average common shares outstanding - diluted | 40,246 | 41,043 | 40,744 | 41,422 | |||||||||||
Cost of goods sold reconciliation: | |||||||||||||||
GAAP cost of goods sold | $ | 43,152 | $ | 15,901 | $ | 86,483 | $ | 52,409 | |||||||
Stock-based compensation | (1,627 | ) | (1,690 | ) | (4,786 | ) | (4,379 | ) | |||||||
Inventory and related reserves (1) | (21,949 | ) | — | (21,949 | ) | — | |||||||||
Non-GAAP cost of goods sold | $ | 19,576 | $ | 14,211 | $ | 59,748 | $ | 48,030 | |||||||
Research and development reconciliation: | |||||||||||||||
GAAP research and development | $ | 9,754 | $ | 5,893 | $ | 28,609 | $ | 15,509 | |||||||
Stock-based compensation | (690 | ) | (1,070 | ) | (2,598 | ) | (3,140 | ) | |||||||
Non-GAAP research and development | $ | 9,064 | $ | 4,823 | $ | 26,011 | $ | 12,369 | |||||||
Selling, general and administrative reconciliation: | |||||||||||||||
GAAP selling, general and administrative | $ | 36,314 | $ | 35,310 | $ | 117,940 | $ | 101,490 | |||||||
Stock-based compensation | (5,044 | ) | (6,066 | ) | (16,132 | ) | (16,121 | ) | |||||||
CrossLink contract termination fee | 122 | — | (7,062 | ) | — | ||||||||||
Non-GAAP selling, general and administrative | $ | 31,392 | $ | 29,244 | $ | 94,746 | $ | 85,369 |
(1) - In the third quarter of 2016, the Company recorded a
Pacira Pharmaceuticals, Inc. | ||||||||||||
Reconciliation of GAAP to Non-GAAP 2016 Financial Guidance | ||||||||||||
(dollars in millions) | ||||||||||||
GAAP to Non-GAAP Guidance | GAAP | Stock-Based Compensation |
Other Charges |
Non-GAAP | ||||||||
EXPAREL net product sales | $263 to $268 | — | — | $263 to $268 | ||||||||
Gross margin * | 60% to 63% | 2 | % | 8 | % | 70% to 73% | ||||||
Research and development expense | $43 to $54 | $3 to $4 | — | $40 to $50 | ||||||||
Selling, general and administrative expense | $152 to $166 | $20 to $24 | $ | 7 | $125 to $135 | |||||||
Stock-based compensation | $30 to $35 | — | — | $30 to $35 |
* The gross margin calculation excludes collaborative licensing and milestone revenue.
Company Contact:Pacira Pharmaceuticals, Inc. Jessica Cho , (973) 254-3574 jessica.cho@pacira.com Media Contact: Coyne Public RelationsAlyssa Schneider , (973) 588-2270 aschneider@coynepr.com