Acquisition Overview - PharmaCorp has signed a definitive share purchase agreement to acquire a 100% interest in a PharmaChoice Canada bannered pharmacy business in Ontario for a purchase price of $5,300,000, expected to close around October 1, 2025 [2][3] - The company has also entered into a non-binding letter of intent to acquire two additional pharmacies in Atlantic Canada for an aggregate purchase price of approximately $6,480,000 [4][5] Strategic Importance - This acquisition is a significant milestone for PharmaCorp as it represents the first transaction completed under its charter company structure established earlier in 2025 [3] - The acquisition strategy is supported by a Strategic Alliance Agreement with PharmaChoice Canada, which is expected to enhance the company's growth and operational capabilities [3][8] Financial Details - The funding for the Ontario acquisition will be sourced from cash on hand and available funds under the corporation's credit facility [2] - The proposed acquisition in Atlantic Canada will be financed through a combination of cash, issuance of common shares, and funds from the credit facility [5] Progress on Previous Transactions - PharmaCorp has successfully closed or entered into definitive agreements for three out of four pharmacies previously announced in May 2025, with an aggregate purchase price of approximately $11,100,000 [9] - The fourth transaction, valued at approximately $1,400,000, will not proceed following due diligence [9] Future Outlook - The company remains committed to expanding its national footprint through strategic acquisitions and aims to deliver long-term value to shareholders [8]

Core Viewpoint - PharmaCorp RX Inc. has entered into definitive share purchase agreements to acquire a 100% interest in two PharmaChoice Canada pharmacies in Western Canada for an aggregate purchase price of $3,400,000 [1][2]. Acquisition Details - The purchase price will be satisfied with 75% cash and 25% through the issuance of common shares, with the share price based on the volume weighted average trading price over a specified period [2]. - The acquisitions are expected to close around October 1, 2025, pending customary closing conditions [3]. Strategic Implications - The transactions demonstrate PharmaCorp's capability to execute accretive acquisitions, aligning with its strategic alliance with PharmaChoice Canada [4]. - PharmaCorp currently operates four PharmaChoice Canada pharmacies and plans to continue acquiring more pharmacies under this brand [4].

Core Viewpoint - PharmaCorp Rx Inc. reported strong operational momentum and financial results for Q2 2025, highlighting its national acquisition strategy and growth in pharmacy-level contributions [2][4]. Financial Highlights - The company generated revenues from three operating pharmacies, with same-store sales increasing by 11.3% year-over-year compared to Q2 2024 [8]. - Prescription volumes rose by 3.5% year-over-year, indicating sustained patient engagement [8]. - The net loss for the quarter was attributed to investments in corporate infrastructure and deferred executive compensation from 2024 [5][8]. Operational Update - Key investments were made in systems, personnel, and integration processes to support scalable national growth [5]. - The company completed the acquisition of its fourth pharmacy in Western Canada, enhancing its national footprint [6][8]. Subsequent Events - On August 13, 2025, PharmaCorp entered into a credit agreement with CIBC, providing up to $20.5 million in committed credit facilities to support its acquisition strategy [7]. - A separate $5 million credit facility was established to support the Pharmacist Co-Ownership Program, enabling pharmacists to acquire ownership positions [7]. Pipeline Progress - PharmaCorp is actively working to finalize purchase and sale agreements related to previously announced letters of intent, expecting to close additional transactions in the second half of the year [9]. Company Overview - PharmaCorp Rx Inc. focuses on empowering pharmacists to become equity partners while supporting the continuity of care and succession for retiring pharmacy owners [12]. - The company operates four PharmaChoice Canada bannered pharmacies and aims to acquire more pharmacies under this brand [12].

Core Insights - PharmaCorp RX Inc. has secured a credit agreement with Canadian Imperial Bank of Commerce (CIBC) for up to $20,500,000 in committed credit facilities, which includes a $10,000,000 accordion feature and a $1,000,000 Visa credit facility to support its acquisition strategy and operational expansion [1][4][8] Credit Facilities - The credit facilities consist of a $17,500,000 committed acquisition term facility with a $10,000,000 accordion feature, allowing for increased borrowing capacity as acquisition opportunities arise, and a $3,000,000 committed revolving operating line for working capital [8] - A separate $5,000,000 credit facility is established to support the Pharmacist Co-Ownership Program, aimed at addressing the capital access challenges faced by pharmacists [2][3] Pharmacist Co-Ownership Program - The Pharmacist Co-Ownership Program provides loans to pharmacists wishing to acquire ownership in the PharmaCorp pharmacy where they work, financing up to 100% of their equity investment with competitive rates and repayment terms of up to 15 years [3][4] - This program is designed to remove barriers to ownership and facilitate long-term wealth creation for pharmacists through co-ownership with PharmaCorp [4] Company Operations - PharmaCorp currently operates four PharmaChoice Canada bannered pharmacies and plans to continue acquiring additional PharmaChoice Canada branded pharmacies as they become available [5] - The company is also open to acquiring independently owned non-PharmaChoice Canada bannered pharmacies and will operate them under the PharmaChoice Canada banner post-acquisition [5][6]

Core Insights - PharmaCorp RX Inc. has completed the acquisition of a 100% interest in a pharmacy business in Western Canada for a purchase price of $2,400,000, marking its fourth pharmacy acquisition [1] - The acquisition is part of PharmaCorp's strategic alliance with PharmaChoice Canada Inc. and aims to support pharmacists in their succession and exit strategies while preserving their legacy of care [2] - PharmaCorp currently operates four PharmaChoice bannered pharmacies and plans to continue acquiring both PharmaChoice and independently owned pharmacies across Canada [3] Company Overview - PharmaCorp operates under the TSX Venture Exchange with the symbol PCRX and is focused on expanding its pharmacy operations through strategic acquisitions [3] - The company emphasizes its commitment to helping pharmacy owners transition their businesses while maintaining community care standards [2]

Core Insights - Pacira reported $181.1 million in revenue for Q2 2025, a year-over-year increase of 1.7%, with an EPS of $0.74 compared to $0.89 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $184.23 million, resulting in a surprise of -1.7%, while the EPS exceeded the consensus estimate of $0.72 by +2.78% [1] Revenue Breakdown - Net product sales for iovera were $5.59 million, below the average estimate of $6.12 million, reflecting a year-over-year decline of -1.5% [4] - Net product sales for ZILRETTA reached $31.33 million, slightly above the estimated $31.17 million, marking a +2% increase year-over-year [4] - Net product sales for EXPAREL totaled $142.92 million, compared to the average estimate of $145.83 million, showing a year-over-year growth of +4.4% [4] - Total net product sales amounted to $180.35 million, below the average estimate of $184.5 million, with a year-over-year increase of +2.3% [4] - Net product sales for Bupivacaine liposome injectable suspension were $0.51 million, significantly lower than the estimated $1.64 million, indicating a year-over-year decline of -83.9% [4] - Royalty revenue was reported at $0.75 million, below the estimated $1.42 million, representing a -54% change compared to the previous year [4] Stock Performance - Pacira's shares have returned -1.2% over the past month, while the Zacks S&P 500 composite has increased by +1% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported second quarter EXPAREL sales increased to $142.9 million, up from $136.9 million in 2024, reflecting a 4% sales growth driven by a 6% volume increase [28] - Non-GAAP gross margin improved to 82% from 76% year-over-year, benefiting from improved costs and efficiencies [29] - Adjusted EBITDA for the second quarter was $54.3 million, indicating strong operational performance [31] - Full year revenue guidance was narrowed to $730 million to $750 million, with an increase in non-GAAP gross margin guidance to 78% to 80% from the previous range of 76% to 78% [34] Business Line Data and Key Metrics Changes - EXPAREL achieved 6% year-over-year volume growth, the highest in eight quarters, while ZILRETTA sales increased to $31.3 million from $30.7 million in 2024 [7][28] - Ioverao sales were $5.6 million, slightly down from $5.7 million in 2024 [28] - The company executed $50 million in share repurchases, retiring approximately 2 million shares of common stock [33] Market Data and Key Metrics Changes - The company estimates over 40 million commercial lives now have access to EXPAREL, with a target of reaching 60 million by year-end [20] - The company aims to cover nearly 100 million lives across both commercial and government payers by the end of the year [21] Company Strategy and Development Direction - The company is focused on its "five by thirty" strategy, which includes growing its commercial business and advancing an innovative pipeline [6] - A new partnership with Johnson & Johnson MedTech for ZILRETTA is expected to significantly expand reach and patient access [11] - The company is advancing its pipeline with a focus on musculoskeletal pain and adjacent markets, with ongoing registrational studies for ZILRETTA [13][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sustainable earnings growth driven by improving sales and enhanced gross margins [35] - The company is optimistic about the impact of new CMS reimbursement policies on EXPAREL's market opportunity [8] - Management highlighted the importance of expanding commercial coverage and the positive momentum in outpatient settings [24] Other Important Information - The company has secured a favorable reexamination of its patent, which is expected to strengthen its intellectual property position [9] - The company is focused on disciplined capital allocation, prioritizing growth in its best-in-class business and returning capital to shareholders [33] Q&A Session Summary Question: Commentary on the new partnership with J&J MedTech for ZILRETTA - Management noted that the new partnership is under different circumstances compared to the previous co-promotion with EXPAREL, and it is expected to enhance market access significantly [42] Question: Expectations for impact to gross to net from the third GPO - Management indicated a low single-digit impact on gross to net, with a reasonable modeling of plus or minus 1% [43] Question: Progress on sales force expansion - Management expressed excitement about the sales team's performance and their ability to improve overall performance across all products [45] Question: Gating factors for the six to twelve month adoption timeframe for EXPAREL - Management highlighted that confirmation of reimbursement and the need for commercial payers to follow CMS guidelines are key factors influencing the adoption timeline [81] Question: Update on PCRX201 and recent three-year data - Management reported strong excitement around PCRX201, with positive feedback from investigators and ongoing enrollment in the ASCEND study [64]

Financial Performance & Strategy - Pacira reported Q2 2025 total revenue of $181 million[42] - The company is transitioning into an innovative biopharmaceutical organization, aiming to lead in musculoskeletal pain and adjacencies[5] - Pacira updated its 2025 total revenue guidance to $730-750 million[42] - Non-GAAP gross margins were 82% in Q2 2025[42], with a new range projected at 78-80%[10] - Adjusted EBITDA for Q2 2025 was $54 million[42] - The company has approximately $270 million in cash and investments[41,42] Product & Pipeline Development - Over 3 million patients are treated per year with Pacira's products[4] - EXPAREL's intellectual property is strengthened with two new patents listed in the FDA's Orange Book, providing exclusivity into 2040+[16] - Two registrational studies for ZILRETTA in shoulder OA and iovera° in spasticity are progressing as planned[20] - The Phase 2 ASCEND Part A study for PCRX-201 has surpassed 50% enrollment[22] Market Access & Commercial Growth - Over 40 million commercial lives have access to EXPAREL via separate reimbursement as of Q2 2025[29], with ~100 million total covered lives expected by year end[29] - The company signed a 3rd GPO in Q2 2025, increasing procedural volumes of EXPAREL business under contract[31]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and related disclosures for the reporting period [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements and comprehensive notes for the quarter and six months ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Cash and cash equivalents | $300,484 | $276,774 | +$23,710 | | Short-term available-for-sale investments | $145,380 | $207,841 | -$62,461 | | Accounts receivable, net | $114,367 | $113,304 | +$1,063 | | Inventories, net | $148,163 | $125,282 | +$22,881 | | Total current assets | $745,613 | $745,130 | +$483 | | Goodwill | $20,300 | $— | +$20,300 | | Total assets | $1,537,262 | $1,553,516 | -$16,254 | | Total current liabilities | $313,164 | $309,920 | +$3,244 | | Total liabilities | $779,495 | $775,168 | +$4,327 | | Total stockholders' equity | $757,767 | $778,348 | -$20,581 | - Total Assets decreased slightly from **$1,553,516 thousand** at December 31, 2024, to **$1,537,262 thousand** at June 30, 2025[9](index=9&type=chunk) - Goodwill increased significantly from **$0** to **$20,300 thousand**, primarily due to the GQ Bio Acquisition[9](index=9&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, expenses, and net income or loss over specific reporting periods | Metric (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net product sales | $180,347 | $176,387 | $347,941 | $342,211 | | Total revenues | $181,099 | $178,023 | $350,022 | $345,140 | | Cost of goods sold | $40,866 | $44,262 | $75,172 | $91,678 | | Research and development | $28,200 | $20,338 | $53,893 | $38,576 | | Selling, general and administrative | $88,578 | $68,126 | $175,354 | $140,152 | | Total operating expenses | $172,600 | $149,783 | $339,533 | $303,688 | | Income from operations | $8,499 | $28,240 | $10,489 | $41,452 | | Total other (expense) income, net | $(10,426) | $8,344 | $(3,710) | $8,772 | | (Loss) income before income taxes | $(1,927) | $36,584 | $6,779 | $50,224 | | Income tax expense | $(2,920) | $(17,698) | $(6,814) | $(22,359) | | Net (loss) income | $(4,847) | $18,886 | $(35) | $27,865 | | Basic net (loss) income per common share | $(0.11) | $0.41 | $(0.00) | $0.60 | | Diluted net (loss) income per common share | $(0.11) | $0.39 | $(0.00) | $0.58 | - The company reported a net loss of **$(4,847) thousand** for the three months ended June 30, 2025, compared to a net income of **$18,886 thousand** for the same period in 2024[12](index=12&type=chunk) - For the six months ended June 30, 2025, the net loss was **$(35) thousand**, a significant decrease from **$27,865 thousand** net income in 2024[12](index=12&type=chunk) - Income from operations decreased substantially by **70%** to **$8,499 thousand** for Q2 2025 (from **$28,240 thousand** in Q2 2024) and by **75%** to **$10,489 thousand** for the six months ended June 30, 2025 (from **$41,452 thousand** in 2024)[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20%28Loss%29%20Income) This statement presents net income or loss alongside other comprehensive income or loss components | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) income | $(4,847) | $18,886 | $(35) | $27,865 | | Net unrealized loss on investments, net of tax | $(45) | $(52) | $(131) | $(160) | | Foreign currency translation adjustments | $2,756 | $5 | $3,850 | $18 | | Total other comprehensive income (loss) | $2,711 | $(47) | $3,719 | $(142) | | Comprehensive (loss) income | $(2,136) | $18,839 | $3,684 | $27,723 | - The company reported a comprehensive loss of **$(2,136) thousand** for the three months ended June 30, 2025, a significant decline from a comprehensive income of **$18,839 thousand** in the prior year period[15](index=15&type=chunk) - Total other comprehensive income was **$2,711 thousand** for Q2 2025, primarily driven by foreign currency translation adjustments of **$2,756 thousand**, contrasting with a loss of **$(47) thousand** in Q2 2024[15](index=15&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This statement outlines changes in the company's equity accounts over specific reporting periods | Metric (in thousands) | December 31, 2024 | June 30, 2025 | | :-------------------- | :---------------- | :------------ | | Common Stock | $47 | $48 | | Treasury Stock | $(25,121) | $(75,515) | | Additional Paid-In Capital | $1,009,435 | $1,035,563 | | Accumulated Deficit | $(206,356) | $(206,391) | | Accumulated Other Comprehensive Income | $343 | $4,062 | | Total Stockholders' Equity | $778,348 | $757,767 | - Total Stockholders' Equity decreased from **$778,348 thousand** at December 31, 2024, to **$757,767 thousand** at June 30, 2025[20](index=20&type=chunk) - Treasury Stock increased significantly from **$(25,121) thousand** at December 31, 2024, to **$(75,515) thousand** at June 30, 2025, reflecting substantial share repurchases[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) income | $(35) | $27,865 | | Net cash provided by operating activities | $47,471 | $102,337 | | Net cash provided by (used in) investing activities | $36,534 | $(30,745) | | Net cash (used in) provided by financing activities | $(60,499) | $22,163 | | Net increase in cash and cash equivalents | $23,710 | $93,755 | | Cash and cash equivalents, end of period | $300,484 | $247,053 | - Net Cash Provided by Operating Activities decreased significantly to **$47,471 thousand** for the six months ended June 30, 2025, from **$102,337 thousand** in the prior year period[23](index=23&type=chunk) - Net Cash Provided by (Used in) Investing Activities shifted from a net outflow of **$(30,745) thousand** in 2024 to a net inflow of **$36,534 thousand** in 2025[23](index=23&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations for the condensed consolidated financial statements [NOTE 1—DESCRIPTION OF BUSINESS](index=11&type=section&id=NOTE%201%E2%80%94DESCRIPTION%20OF%20BUSINESS) This note describes Pacira BioSciences, Inc.'s core business, product portfolio, and strategic acquisitions - Pacira BioSciences, Inc. focuses on innovative, non-opioid pain therapies, with key products including EXPAREL, ZILRETTA, and iovera° cryoanalgesia device[28](index=28&type=chunk) - The company is developing PCRX-201, a gene therapy for OA of the knee, utilizing its proprietary high-capacity adenovirus (HCAd) vector platform[28](index=28&type=chunk) - In February 2025, Pacira acquired the remaining **81%** equity interest in GQ Bio Therapeutics GmbH, gaining the HCAd platform, preclinical assets, and R&D talent[28](index=28&type=chunk) [NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=NOTE%202%E2%80%94SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and policies applied in preparing the financial statements - The interim condensed consolidated financial statements are prepared in accordance with GAAP and SEC rules for interim reporting, with certain information condensed or omitted compared to annual statements[29](index=29&type=chunk) - The financial statements are unaudited but include all necessary normal recurring adjustments[30](index=30&type=chunk) - The December 31, 2024 balance sheet is derived from the audited annual report[30](index=30&type=chunk) [Concentration of Major Customers](index=12&type=section&id=Concentration%20of%20Major%20Customers) This section highlights the company's reliance on a few major wholesalers for a significant portion of its revenue | Wholesaler | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Largest wholesaler | 31% | 34% | 32% | 35% | | Second largest wholesaler | 26% | 22% | 26% | 23% | | Third largest wholesaler | 21% | 19% | 21% | 19% | | Total | 78% | 75% | 79% | 77% | - The company has a high concentration of revenue from its three largest wholesalers, accounting for **78%** of total revenues for the three months ended June 30, 2025 (up from **75%** in 2024) and **79%** for the six months ended June 30, 2025 (up from **77%** in 2024)[32](index=32&type=chunk) [Recently Adopted Accounting Pronouncements](index=12&type=section&id=Recently%20Adopted%20Accounting%20Pronouncements) This section details recently adopted accounting standards and their impact on financial reporting - The company adopted ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures, retrospectively for all prior periods presented[33](index=33&type=chunk) [Recent Accounting Pronouncements Not Adopted as of June 30, 2025](index=12&type=section&id=Recent%20Accounting%20Pronouncements%20Not%20Adopted%20as%20of%20June%2030%2C%202025) This section discusses new accounting pronouncements not yet adopted and their potential future impact - The company is evaluating the impact of ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, effective for fiscal years beginning after December 15, 2024[34](index=34&type=chunk) - The company is also evaluating ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), effective for annual reporting periods beginning after December 31, 2026[35](index=35&type=chunk) [NOTE 3—GQ BIO THERAPEUTICS ACQUISITION](index=12&type=section&id=NOTE%203%E2%80%94GQ%20BIO%20THERAPEUTICS%20ACQUISITION) This note details the acquisition of GQ Bio Therapeutics GmbH and its strategic implications for the company - On February 27, 2025, Pacira acquired the remaining **81%** equity interest in GQ Bio Therapeutics GmbH for **$30.6 million**, net of working capital adjustments[36](index=36&type=chunk) - The acquisition included a novel high-capacity, local-delivery platform for genetic medicines, a preclinical portfolio of HCAd-based assets, and R&D talent, with PCRX-201 as the lead program[38](index=38&type=chunk) Fair Value of Purchase Price Consideration (in thousands) | Fair Value of Purchase Price Consideration (in thousands) | Amount | | :------------------------------------------------------ | :----- | | Cash consideration paid at closing | $17,604 | | Indemnification holdback | $5,676 | | Cash payment of GQ Bio Acquisition transaction expenses | $919 | | Settlement of previously invested note receivable | $5,322 | | Settlement of pre-existing receivable | $1,055 | | Purchase price consideration of 81% of GQ Bio | $30,576 | | Prior 19% equity investment ownership of GQ Bio realized upon business combination | $8,315 | | Total fair value of the GQ Bio Acquisition | $38,891 | [NOTE 4—REVENUE](index=14&type=section&id=NOTE%204%E2%80%94REVENUE) This note provides a breakdown of the company's revenue streams and recognition policies - Net product sales include EXPAREL (U.S., E.U., U.K.), ZILRETTA (U.S.), iovera° (U.S., Canada, Europe), and bupivacaine liposome injectable suspension for veterinary use[46](index=46&type=chunk) - Revenue is recognized when control of promised goods is transferred to the customer, net of returns, discounts, fees, rebates, and chargebacks, which are estimated as variable consideration[49](index=49&type=chunk) [Disaggregated Revenue](index=16&type=section&id=Disaggregated%20Revenue) This table presents a detailed breakdown of net product sales by individual product lines | Net Product Sales (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | EXPAREL | $142,917 | $136,852 | $279,446 | $269,282 | | ZILRETTA | $31,334 | $30,707 | $54,672 | $56,546 | | iovera° | $5,588 | $5,674 | $10,711 | $10,704 | | Bupivacaine liposome injectable suspension | $508 | $3,154 | $3,112 | $5,679 | | Total net product sales | $180,347 | $176,387 | $347,941 | $342,211 | - EXPAREL net product sales increased by **4%** for both the three and six months ended June 30, 2025, compared to 2024[55](index=55&type=chunk) - ZILRETTA net product sales increased by **2%** for the three months ended June 30, 2025, but decreased by **3%** for the six months ended June 30, 2025[55](index=55&type=chunk) [NOTE 5—INVENTORIES](index=16&type=section&id=NOTE%205%E2%80%94INVENTORIES) This note details the composition and valuation of the company's inventory balances | Component (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Raw materials | $40,932 | $50,800 | | Work-in-process | $11,080 | $27,384 | | Finished goods | $96,151 | $47,098 | | Total | $148,163 | $125,282 | - Total inventories, net, increased to **$148,163 thousand** at June 30, 2025, from **$125,282 thousand** at December 31, 2024[56](index=56&type=chunk) - In July 2025, the company decommissioned its 45-liter EXPAREL batch manufacturing suite, resulting in a **$1.0 million** raw materials reserve during the six months ended June 30, 2025[56](index=56&type=chunk) [NOTE 6—FIXED ASSETS](index=16&type=section&id=NOTE%206%E2%80%94FIXED%20ASSETS) This note provides information on the company's property, plant, and equipment, including depreciation | Category (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Machinery and equipment | $173,729 | $160,643 | | Leasehold improvements | $97,408 | $86,034 | | Computer equipment and software | $25,232 | $23,473 | | Office furniture and equipment | $1,952 | $1,952 | | Construction in progress | $9,632 | $27,996 | | Total | $307,953 | $300,098 | | Less: accumulated depreciation | $(152,775) | $(132,929) | | Fixed assets, net | $155,178 | $167,169 | - Fixed assets, net, decreased to **$155,178 thousand** at June 30, 2025, from **$167,169 thousand** at December 31, 2024[57](index=57&type=chunk) - The company recognized **$5.5 million** of accelerated depreciation expense during the six months ended June 30, 2025, due to the decommissioning of its 45-liter EXPAREL batch manufacturing suite[61](index=61&type=chunk) [NOTE 7—LEASES](index=17&type=section&id=NOTE%207%E2%80%94LEASES) This note describes the company's lease arrangements and associated expenses - The company leases all its facilities, including manufacturing sites in San Diego and Swindon, U.K., and new principal executive offices in Brisbane, California[62](index=62&type=chunk) - European offices in Germany and Belgium were assumed as part of the GQ Bio Acquisition in February 2025[62](index=62&type=chunk) - Total operating lease expense, net, for the three months ended June 30, 2025, was **$3,789 thousand** (up from **$3,688 thousand** in 2024), and for the six months, it was **$7,573 thousand** (up from **$7,548 thousand** in 2024)[64](index=64&type=chunk) [NOTE 8—GOODWILL AND INTANGIBLE ASSETS](index=18&type=section&id=NOTE%208%E2%80%94GOODWILL%20AND%20INTANGIBLE%20ASSETS) This note details the company's goodwill and other intangible assets, including changes from acquisitions | Intangible Assets (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Developed technologies, net | $362,426 | $391,066 | | Customer relationships, net | $34 | $38 | | Acquired IPR&D | $60,103 | $34,866 | | Total intangible assets, net | $422,563 | $425,970 | - Goodwill increased from **$0** at December 31, 2024, to **$20,300 thousand** at June 30, 2025, primarily due to the GQ Bio Acquisition (**$18,099 thousand**) and foreign currency adjustments[67](index=67&type=chunk) - Acquired In-Process Research and Development (IPR&D) increased to **$60,103 thousand** at June 30, 2025, from **$34,866 thousand** at December 31, 2024, due to the GQ Bio Acquisition[68](index=68&type=chunk) [NOTE 9—DEBT](index=19&type=section&id=NOTE%209%E2%80%94DEBT) This note outlines the company's outstanding debt obligations and recent financing activities | Debt (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Term loan A facility maturing March 2028 | $97,828 | $104,211 | | 2.125% Convertible senior notes due May 2029 | $280,267 | $279,334 | | 0.750% Convertible senior notes due August 2025 | $202,397 | $201,776 | | Total | $580,492 | $585,321 | - Total outstanding debt decreased slightly to **$580,492 thousand** at June 30, 2025, from **$585,321 thousand** at December 31, 2024[71](index=71&type=chunk) - In July 2025, the company entered into a new **$300.0 million** senior secured revolving credit facility, replacing the TLA Credit Agreement[72](index=72&type=chunk)[173](index=173&type=chunk) [NOTE 10—FINANCIAL INSTRUMENTS](index=24&type=section&id=NOTE%2010%E2%80%94FINANCIAL%20INSTRUMENTS) This note provides disclosures on the fair value and carrying amounts of the company's financial instruments | Financial Instrument (in thousands) | Carrying Value (June 30, 2025) | Fair Value (Level 2) (June 30, 2025) | | :---------------------------------- | :----------------------------- | :----------------------------------- | | Term loan A facility due March 2028 | $97,828 | $98,256 | | 2.125% convertible senior notes due 2029 | $280,267 | $281,419 | | 0.750% convertible senior notes due 2025 | $202,397 | $201,113 | - An impairment of an equity investment and convertible note receivable totaling **$11.0 million** was recorded in other, net, during the three and six months ended June 30, 2025[101](index=101&type=chunk) - Acquisition-related contingent consideration decreased to **$17,209 thousand** at June 30, 2025, from **$20,241 thousand** at December 31, 2024, due to fair value adjustments[102](index=102&type=chunk)[106](index=106&type=chunk) [NOTE 11—STOCKHOLDERS' EQUITY](index=28&type=section&id=NOTE%2011%E2%80%94STOCKHOLDERS%27%20EQUITY) This note details changes in stockholders' equity, including share repurchases and comprehensive income components | Accumulated Other Comprehensive Income (in thousands) | December 31, 2024 | June 30, 2025 | | :---------------------------------------------------- | :---------------- | :------------ | | Net Unrealized Gain (Loss) From Available For-Sale Investments | $190 | $59 | | Unrealized Foreign Currency Translation | $153 | $4,003 | | Total Accumulated Other Comprehensive Income | $343 | $4,062 | - Accumulated other comprehensive income increased to **$4,062 thousand** at June 30, 2025, from **$343 thousand** at December 31, 2024, primarily due to foreign currency translation adjustments[114](index=114&type=chunk) - In April 2025, the Board approved a new share repurchase program authorizing up to **$300.0 million** of common stock repurchases, replacing the previous **$150.0 million** program[116](index=116&type=chunk) [NOTE 12—STOCK PLANS](index=29&type=section&id=NOTE%2012%E2%80%94STOCK%20PLANS) This note describes the company's stock-based compensation plans and related expenses | Stock-Based Compensation (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock options | $4,309 | $5,796 | $8,749 | $12,525 | | Restricted stock units | $10,681 | $6,517 | $20,287 | $12,727 | | Employee stock purchase plan share options | $482 | $211 | $989 | $423 | | Total | $15,472 | $12,524 | $30,025 | $25,675 | - The 2011 Stock Incentive Plan was amended in June 2025, increasing authorized shares for equity awards by **2,500,000**[120](index=120&type=chunk) - Total stock-based compensation expense increased by **25%** to **$15,472 thousand** for the three months ended June 30, 2025, and by **25%** to **$30,025 thousand** for the six months ended June 30, 2025, compared to 2024[124](index=124&type=chunk) [NOTE 13—NET (LOSS) INCOME PER COMMON SHARE](index=30&type=section&id=NOTE%2013%E2%80%94NET%20%28LOSS%29%20INCOME%20PER%20COMMON%20SHARE) This note presents the calculation of basic and diluted net income or loss per common share | Metric (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) income—basic | $(4,847) | $18,886 | $(35) | $27,865 | | Adjusted net (loss) income—diluted | $(4,847) | $19,648 | $(35) | $29,655 | | Weighted average common shares outstanding—basic | 45,459 | 46,174 | 45,867 | 46,337 | | Weighted average common shares outstanding—diluted | 45,459 | 50,539 | 45,867 | 51,366 | | Basic net (loss) income per common share | $(0.11) | $0.41 | $(0.00) | $0.60 | | Diluted net (loss) income per common share | $(0.11) | $0.39 | $(0.00) | $0.58 | - Basic net (loss) income per common share was **$(0.11)** for Q2 2025 (down from **$0.41** in Q2 2024) and **$(0.00)** for the six months ended June 30, 2025 (down from **$0.60** in 2024)[129](index=129&type=chunk) - For Q2 2025, **14,483 thousand** potential common shares were excluded from diluted EPS as they were antidilutive, compared to **8,615 thousand** in Q2 2024[129](index=129&type=chunk) [NOTE 14—INCOME TAXES](index=31&type=section&id=NOTE%2014%E2%80%94INCOME%20TAXES) This note provides details on the company's income tax expense, effective tax rate, and related components | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Domestic (Loss) income before income taxes | $(4,214) | $36,996 | $6,459 | $50,653 | | Foreign (Loss) income before income taxes | $2,287 | $(412) | $320 | $(429) | | Total (loss) income before income taxes | $(1,927) | $36,584 | $6,779 | $50,224 | | Income tax expense | $2,920 | $17,698 | $6,814 | $22,359 | | Effective tax rate | (152)% | 48% | 101% | 45% | - Income tax expense for Q2 2025 was **$2,920 thousand**, down **84%** from **$17,698 thousand** in Q2 2024[130](index=130&type=chunk) - For the six months, it was **$6,814 thousand**, down **70%** from **$22,359 thousand** in 2024[130](index=130&type=chunk) - The effective tax rate for 2025 was primarily impacted by non-deductible stock-based compensation, non-deductible executive compensation, and a non-U.S. valuation allowance[131](index=131&type=chunk) [NOTE 15—CONTINGENT CONSIDERATION (GAINS) CHARGES, ACQUISITION-RELATED EXPENSES, RESTRUCTURING AND OTHER](index=32&type=section&id=NOTE%2015%E2%80%94CONTINGENT%20CONSIDERATION%20%28GAINS%29%20CHARGES%2C%20ACQUISITION-RELATED%20EXPENSES%2C%20RESTRUCTURING%20AND%20OTHER) This note details various non-recurring charges and gains, including acquisition-related costs and legal settlements | Category (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Contingent consideration (gains) charges | $(357) | $1,509 | $(3,032) | $(2,297) | | Restructuring charges | $— | $996 | $— | $6,531 | | Acquisition-related expenses | $991 | $230 | $2,502 | $404 | | Legal settlement | $— | $— | $7,000 | $— | | Total | $634 | $2,735 | $6,470 | $4,638 | - Total net charges decreased by **77%** to **$634 thousand** for Q2 2025 but increased by **39%** to **$6,470 thousand** for the six months ended June 30, 2025[134](index=134&type=chunk) - A **$7.0 million** legal settlement cost was recognized during the six months ended June 30, 2025, related to patent infringement suits[134](index=134&type=chunk)[142](index=142&type=chunk) [NOTE 16—COMMITMENTS AND CONTINGENCIES](index=33&type=section&id=NOTE%2016%E2%80%94COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's significant contractual commitments, legal proceedings, and contingent liabilities - In April 2025, the company settled patent infringement suits against ANDA filers, agreeing to license generic bupivacaine liposome injectable suspension starting in early 2030 for volume-limited amounts, and unlimited quantities in 2039[149](index=149&type=chunk) - A **$7.0 million** payment was made to the ANDA filers[149](index=149&type=chunk) - In June 2025, the U.S. District Court for the District of Nevada ruled that the Research Development Foundation (RDF) must repay Pacira **$23.1 million** in royalties on EXPAREL sales, plus **$5.2 million** in statutory interest, which was received in July 2025[155](index=155&type=chunk) - In July 2025, Pacira entered a co-promotion agreement with Johnson & Johnson MedTech (J&J MedTech) to expand ZILRETTA's market reach in the U.S., with Pacira paying tiered commissions[156](index=156&type=chunk)[158](index=158&type=chunk) [NOTE 17—SEGMENT INFORMATION](index=36&type=section&id=NOTE%2017%E2%80%94SEGMENT%20INFORMATION) This note explains the company's operating segments and how performance is evaluated by management - The company operates as a single business segment focused on non-opioid pain management and regenerative health solutions, managed at a consolidated level by the Chief Executive Officer (CODM)[168](index=168&type=chunk) - GAAP net income is the key measure used by the CODM to evaluate performance, allocate resources, and forecast financial results[169](index=169&type=chunk) Expense Category (in thousands) | Expense Category (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Adjusted cost of goods sold | $32,663 | $43,003 | $65,253 | $89,291 | | Adjusted research and development | $24,686 | $18,413 | $47,787 | $34,848 | | Adjusted selling and marketing | $50,964 | $39,047 | $106,535 | $78,482 | | Adjusted general and administrative | $26,231 | $19,937 | $46,840 | $44,266 | | Stock-based compensation | $15,472 | $12,524 | $30,025 | $25,675 | | Amortization of acquired intangible assets | $14,322 | $14,322 | $28,644 | $28,644 | | Changes in the fair value of contingent consideration | $(357) | $1,509 | $(3,032) | $(2,297) | | Other | $8,619 | $1,028 | $17,481 | $4,779 | | Total operating expenses | $172,600 | $149,783 | $339,533 | $303,688 | [NOTE 18—SUBSEQUENT EVENTS](index=37&type=section&id=NOTE%2018%E2%80%94SUBSEQUENT%20EVENTS) This note discloses significant events that occurred after the reporting period but before the financial statements were issued - On July 3, 2025, the company entered into a new **$300.0 million** senior secured revolving credit facility with Wells Fargo Bank, replacing the existing Term Loan A facility[172](index=172&type=chunk)[173](index=173&type=chunk)[176](index=176&type=chunk) - **$101.0 million** was borrowed under this new facility[176](index=176&type=chunk) - On August 1, 2025, the **0.750%** Convertible Senior Notes due 2025 matured, and the remaining **$202.5 million** principal balance was settled in cash[179](index=179&type=chunk) - In July 2025, the company initiated a workforce reduction impacting **71** employees (**8%** of total workforce) and decommissioned its 45-liter EXPAREL manufacturing suite due to improved efficiencies from larger-scale suites[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and future outlook [Overview](index=40&type=section&id=Overview) This section provides a high-level summary of Pacira's mission, product portfolio, and strategic objectives - Pacira's mission is to deliver innovative, non-opioid pain therapies, with key products EXPAREL, ZILRETTA, and iovera° forming a complementary portfolio[192](index=192&type=chunk) - The company is advancing PCRX-201, a gene therapy for OA of the knee, from its proprietary HCAd vector platform, enhanced by the GQ Bio Acquisition in February 2025[192](index=192&type=chunk) - Future plans include expanding product use, progressing the pipeline, advancing regulatory activities, investing in sales/marketing, enhancing manufacturing, and supporting legal matters[193](index=193&type=chunk) [Global Economic Conditions, Inflation and Tariffs](index=40&type=section&id=Global%20Economic%20Conditions%2C%20Inflation%20and%20Tariffs) This section discusses the potential impact of macroeconomic factors on the company's business and operations - Global economic conditions, including inflation and tariffs, may negatively impact the business by increasing costs for raw materials, equipment, and services, and potentially causing patients to defer medical procedures[194](index=194&type=chunk) - The active pharmaceutical ingredients for EXPAREL and ZILRETTA are sourced internationally, making the company susceptible to tariffs[195](index=195&type=chunk) - A July 2025 trade deal between the U.S. and E.U. sets a **15%** tariff on E.U. imports, including branded pharmaceuticals, which could increase manufacturing and operating expenses[195](index=195&type=chunk)[196](index=196&type=chunk) [Recent Highlights](index=41&type=section&id=Recent%20Highlights) This section summarizes key corporate developments and achievements during the reporting period - In July 2025, the company entered into a new **$300.0 million** senior secured revolving credit facility, refinancing its existing term loan A facility[198](index=198&type=chunk) - The USPTO issued two new EXPAREL patents, '483 (composition from enhanced large-scale process, expires July 2044) and '047 (EXPAREL composition, expires January 2041), bringing the total Orange Book listed patents to **20**[198](index=198&type=chunk) - In July 2025, a strategic collaboration with Johnson & Johnson MedTech was announced to expand ZILRETTA's market reach in the U.S.[203](index=203&type=chunk) [Science Center Campus Reduction in Force](index=41&type=section&id=Science%20Center%20Campus%20Reduction%20in%20Force) This section details the recent workforce reduction and its anticipated impact on operating expenses - In July 2025, Pacira initiated a workforce reduction at its San Diego Science Center Campus, impacting **71** employees (approximately **8%** of the total workforce)[199](index=199&type=chunk)[200](index=200&type=chunk) - This reduction is a result of improved manufacturing efficiencies from two large-scale 200+ liter EXPAREL batch manufacturing suites, which are four-fold greater in capacity than the decommissioned 45-liter suite[199](index=199&type=chunk) - Pre-tax employee termination benefit charges of approximately **$2.4 million** to **$2.8 million** are estimated for Q3 2025, with an anticipated annual reduction in operating expenses of approximately **$13.0 million**[200](index=200&type=chunk)[201](index=201&type=chunk) [EXPAREL](index=42&type=section&id=EXPAREL) This section provides an overview of EXPAREL, its indications, and ongoing development programs - EXPAREL is a long-acting, non-opioid local analgesic indicated for postsurgical local analgesia via infiltration in patients aged six years and older, and regional analgesia via specific nerve blocks in adults in the U.S.[204](index=204&type=chunk) - The company is advancing a registration program for EXPAREL in pediatric patients under six years of age, having completed Part 1 of a study in children aged two to less than six years[204](index=204&type=chunk)[206](index=206&type=chunk) - Clinical data indicates EXPAREL significantly reduces opioid usage while improving postsurgical pain management[205](index=205&type=chunk) [ZILRETTA](index=42&type=section&id=ZILRETTA) This section describes ZILRETTA, its therapeutic use for osteoarthritis knee pain, and label expansion efforts - ZILRETTA is the first and only extended-release, single-shot corticosteroid intra-articular (IA) injection therapy for osteoarthritis (OA) knee pain, providing relief for up to **12-16 weeks**[207](index=207&type=chunk) - The company is conducting a Phase 3 registration study to evaluate ZILRETTA for OA pain of the shoulder, aiming to expand its label[208](index=208&type=chunk) - The American Association of Orthopaedic Surgeons (AAOS) updated its guidelines in August 2021, finding ZILRETTA can improve patient outcomes over traditional immediate-release corticosteroids[209](index=209&type=chunk) [iovera°](index=43&type=section&id=iovera%C2%B0) This section introduces the iovera° cryoanalgesia device, its clearances, and clinical applications - The iovera° system is a non-opioid, handheld cryoanalgesia device cleared by FDA (510(k)), with a CE mark in the E.U., and cleared in Canada for blocking pain[211](index=211&type=chunk) - Clinical data shows iovera° treatment for knee OA pain provided relief up to **150 days** and reduced opioid consumption and pain scores in patients undergoing Total Knee Arthroplasty (TKA)[212](index=212&type=chunk)[213](index=213&type=chunk) - In December 2024, FDA clearance was received for a new iovera° Smart Tip for chronic low back pain, with a pilot trial showing greater improvements than radiofrequency ablation[215](index=215&type=chunk) [Innovations in Genicular Outcomes Registry (IGOR)](index=44&type=section&id=Innovations%20in%20Genicular%20Outcomes%20Registry%20%28IGOR%29) This section describes a real-world registry evaluating outcomes for knee osteoarthritis treatments - IGOR is a prospective, real-world registry sponsored by Pacira, evaluating clinical, economic, and health-related patient-reported outcomes for knee OA treatments, including TKA, over a minimum of **18 months**[218](index=218&type=chunk) - Early IGOR outcomes indicate that patients receiving iovera° prior to TKA experienced less pain, improved function, and better sleep for **six months** post-surgery compared to those who did not[218](index=218&type=chunk) [The Osteoarthritis Market](index=44&type=section&id=The%20Osteoarthritis%20Market) This section provides an overview of the prevalence and impact of osteoarthritis in the U.S. - Osteoarthritis (OA) is the most common form of arthritis, affecting over **32.5 million** adults in the U.S., causing pain, stiffness, swelling, and reduced function[219](index=219&type=chunk) - The lifetime risk of symptomatic knee OA is **45%**, with **14 million** individuals in the U.S. having symptomatic knee OA, nearly **two million** of whom are under **45**[220](index=220&type=chunk) [The HCAd Vector Platform](index=44&type=section&id=The%20HCAd%20Vector%20Platform) This section details Pacira's proprietary high-capacity adenovirus vector platform for genetic medicines - Pacira's proprietary High-Capacity Adenovirus (HCAd) vector platform addresses challenges in genetic medicine for common diseases like OA[222](index=222&type=chunk) - Key features include high efficiency in delivering genes into cells, capacity to carry up to **30,000 base pairs** of DNA, and potential for local administration and redosing[222](index=222&type=chunk)[223](index=223&type=chunk) [Clinical Development Programs](index=45&type=section&id=Clinical%20Development%20Programs) This section outlines the company's clinical pipeline, including the lead program PCRX-201 for knee OA - PCRX-201, the lead program from the HCAd platform, targets the IL-1 pathway to reduce inflammation and pain in OA of the knee by boosting cellular IL-1Ra production[224](index=224&type=chunk) - Phase 1 data for PCRX-201 showed it was well tolerated with sustained improvements in knee pain, stiffness, and function for at least **2 years** from a single injection[225](index=225&type=chunk) - A Phase 2 clinical study (ASCEND) for knee OA is underway, involving approximately **135** patients across two doses of PCRX-201 or saline, with concurrent IA corticosteroid pretreatment[226](index=226&type=chunk)[227](index=227&type=chunk) [Product Portfolio and Internal Pipeline](index=46&type=section&id=Product%20Portfolio%20and%20Internal%20Pipeline) This section summarizes the company's commercial products and pipeline candidates with anticipated milestones - The company's product portfolio includes commercialized products EXPAREL, ZILRETTA, and iovera°, along with the clinical development candidate PCRX-201[231](index=231&type=chunk) - The report includes a table summarizing the current product portfolio and internal product candidate pipeline, along with anticipated milestones over the next **12 to 18 months**[231](index=231&type=chunk)[232](index=232&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) This section details the financial performance for the three and six months ended June 30, 2025, compared to prior periods [Revenues](index=47&type=section&id=Revenues) This section analyzes the company's total revenues and net product sales by individual product lines | Revenue (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | EXPAREL | $142,917 | $136,852 | $279,446 | $269,282 | | ZILRETTA | $31,334 | $30,707 | $54,672 | $56,546 | | iovera° | $5,588 | $5,674 | $10,711 | $10,704 | | Bupivacaine liposome injectable suspension | $508 | $3,154 | $3,112 | $5,679 | | Total net product sales | $180,347 | $176,387 | $347,941 | $342,211 | | Royalty revenue | $752 | $1,636 | $2,081 | $2,929 | | Total revenues | $181,099 | $178,023 | $350,022 | $345,140 | - Total revenues increased by **2%** to **$181,099 thousand** for Q2 2025 and by **1%** to **$350,022 thousand** for the six months ended June 30, 2025, compared to the prior year periods[235](index=235&type=chunk) - EXPAREL revenue increased **4%** in both periods, driven by a **6%** (Q2) and **4%** (six months) increase in gross vial volume and a **1%** increase in net selling price per unit[235](index=235&type=chunk) [Cost of Goods Sold](index=48&type=section&id=Cost%20of%20Goods%20Sold) This section discusses the cost of goods sold and its impact on gross margin | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of goods sold | $40,866 | $44,262 | $75,172 | $91,678 | | Gross margin | 77% | 75% | 79% | 73% | - Cost of goods sold decreased by **8%** to **$40,866 thousand** for Q2 2025 and by **18%** to **$75,172 thousand** for the six months ended June 30, 2025, compared to the prior year periods[242](index=242&type=chunk) - The improvements in gross margin were primarily due to lower EXPAREL inventory reserves and improved product costs from higher manufacturing volumes, partially offset by accelerated depreciation from the decommissioning of the 45-liter EXPAREL manufacturing suite[242](index=242&type=chunk) [Research and Development Expenses](index=49&type=section&id=Research%20and%20Development%20Expenses) This section details the company's R&D expenditures across various clinical and product development programs | R&D Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Clinical and preclinical development | $14,119 | $8,172 | $26,726 | $14,518 | | Product development | $7,921 | $7,318 | $15,999 | $14,713 | | Regulatory and other | $2,646 | $2,923 | $5,062 | $5,617 | | Key employee holdback | $1,107 | $— | $1,458 | $— | | Stock-based compensation | $2,407 | $1,925 | $4,648 | $3,728 | | Total research and development expense | $28,200 | $20,338 | $53,893 | $38,576 | | % of total revenues | 16% | 11% | 15% | 11% | - Total R&D expense increased by **39%** to **$28,200 thousand** for Q2 2025 and by **40%** to **$53,893 thousand** for the six months ended June 30, 2025, compared to the prior year periods[246](index=246&type=chunk) - Clinical and preclinical development expense increased significantly by **73%** (Q2) and **84%** (six months), driven by ongoing site start-up and enrollment in PCRX-201 Phase 2, ZILRETTA shoulder, EXPAREL pediatric, and iovera° spasticity trials, plus additional personnel[247](index=247&type=chunk) [Selling, General and Administrative Expenses](index=50&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) This section analyzes the company's SG&A expenses, including sales, marketing, and administrative costs | SG&A Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Sales and marketing | $50,964 | $39,047 | $106,535 | $78,482 | | General and administrative | $26,231 | $20,231 | $46,840 | $44,837 | | Stock-based compensation | $11,383 | $8,848 | $21,979 | $16,833 | | Total selling, general and administrative expense | $88,578 | $68,126 | $175,354 | $140,152 | | % of total revenues | 49% | 38% | 50% | 41% | - Total selling, general and administrative (SG&A) expense increased by **30%** to **$88,578 thousand** for Q2 2025 and by **25%** to **$175,354 thousand** for the six months ended June 30, 2025, compared to the prior year periods[254](index=254&type=chunk) - Sales and marketing expense increased by **31%** (Q2) and **36%** (six months), driven by investments in customer awareness, education programs, and expansion of the sales force[255](index=255&type=chunk) [Amortization of Acquired Intangible Assets](index=50&type=section&id=Amortization%20of%20Acquired%20Intangible%20Assets) This section reports the amortization expense related to acquired intangible assets | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Amortization of acquired intangible assets | $14,322 | $14,322 | $28,644 | $28,644 | - Amortization expense for acquired intangible assets remained constant at **$14,322 thousand** for both the three months ended June 30, 2025 and 2024[258](index=258&type=chunk) [Contingent Consideration (Gains) Charges, Acquisition-related Expenses, Restructuring and Other](index=51&type=section&id=Contingent%20Consideration%20%28Gains%29%20Charges%2C%20Acquisition-related%20Expenses%2C%20Restructuring%20and%20Other) This section details non-recurring charges and gains impacting operating expenses | Category (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Contingent consideration (gains) charges | $(357) | $1,509 | $(3,032) | $(2,297) | | Restructuring charges | $— | $996 | $— | $6,531 | | Acquisition-related expenses | $991 | $230 | $2,502 | $404 | | Legal settlement | $— | $— | $7,000 | $— | | Total | $634 | $2,735 | $6,470 | $4,638 | - Total net charges decreased by **77%** to **$634 thousand** for Q2 2025 but increased by **39%** to **$6,470 thousand** for the six months ended June 30, 2025[259](index=259&type=chunk) - A **$7.0 million** legal settlement cost was recognized during the six months ended June 30, 2025, related to patent infringement suits[264](index=264&type=chunk) [Other (Loss) Income, Net](index=52&type=section&id=Other%20%28Loss%29%20Income%2C%20Net) This section explains the components of other income and expense, including interest and impairment charges | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest income | $5,008 | $4,749 | $11,903 | $8,652 | | Interest expense | $(4,695) | $(3,884) | $(9,275) | $(7,200) | | Gain on early extinguishment of debt | $— | $7,518 | $— | $7,518 | | Other, net | $(10,739) | $(39) | $(6,338) | $(198) | | Total other (loss) income, net | $(10,426) | $8,344 | $(3,710) | $8,772 | - Total other (loss) income, net, shifted from income to a loss of **$(10,426) thousand** for Q2 2025 and **$(3,710) thousand** for the six months ended June 30, 2025[267](index=267&type=chunk) - An **$11.0 million** impairment of an equity investment and convertible note receivable was the primary driver of the **$10.7 million** (Q2) and **$6.3 million** (six months) other net loss in 2025[271](index=271&type=chunk) [Income Tax Expense](index=52&type=section&id=Income%20Tax%20Expense) This section discusses the company's income tax expense and effective tax rate | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax expense | $2,920 | $17,698 | $6,814 | $22,359 | | Effective tax rate | (152)% | 48% | 101% | 45% | - Income tax expense decreased by **84%** to **$2,920 thousand** for Q2 2025 and by **70%** to **$6,814 thousand** for the six months ended June 30, 2025, compared to the prior year periods[272](index=272&type=chunk) - The effective tax rate was **(152)%** for Q2 2025 and **101%** for the six months ended June 30, 2025, significantly different from **48%** and **45%** in 2024, respectively[272](index=272&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, sources of funding, and future capital requirements [Summary of Cash Flows](index=53&type=section&id=Summary%20of%20Cash%20Flows) This section provides a summary of cash flows from operating, investing, and financing activities | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $47,471 | $102,337 | | Net cash provided by (used in) investing activities | $36,534 | $(30,745) | | Net cash (used in) provided by financing activities | $(60,499) | $22,163 | | Net increase in cash and cash equivalents | $23,710 | $93,755 | - Net cash provided by operating activities decreased to **$47,471 thousand** for the six months ended June 30, 2025, from **$102,337 thousand** in 2024[277](index=277&type=chunk) - Net cash used in financing activities shifted to an outflow of **$(60,499) thousand** in 2025, from an inflow of **$22,163 thousand** in 2024[277](index=277&type=chunk) [Operating Activities](index=53&type=section&id=Operating%20Activities) This section details the cash generated or used by the company's core business operations - Net cash provided by operating activities decreased by **$54.9 million** to **$47.5 million** for the six months ended June 30, 2025, compared to **$102.3 million** in the prior year[278](index=278&type=chunk) - The decrease was attributed to increased operating expenses from investments in customer awareness, marketing, market access, and reimbursement teams, as well as higher clinical and preclinical expenses for pipeline development, and a higher investment in inventory[278](index=278&type=chunk) [Investing Activities](index=53&type=section&id=Investing%20Activities) This section outlines cash flows related to the purchase and sale of investments and capital expenditures - Net cash provided by investing activities was **$36.5 million** for the six months ended June 30, 2025, a significant shift from net cash used of **$30.7 million** in 2024[279](index=279&type=chunk) - The 2025 inflow reflected **$65.7 million** from available-for-sale investment sales (net of purchases), partially offset by **$16.7 million** for the GQ Bio Acquisition and **$11.2 million** in capital expenditures[279](index=279&type=chunk) [Financing Activities](index=53&type=section&id=Financing%20Activities) This section describes cash flows associated with debt, equity transactions, and share repurchases - Net cash used in financing activities was **$60.5 million** for the six months ended June 30, 2025, a shift from **$22.2 million** provided in 2024[280](index=280&type=chunk)[281](index=281&type=chunk) - The 2025 outflow primarily consisted of **$50.0 million** in treasury stock purchases under the new **$300.0 million** share repurchase program, **$6.6 million** in voluntary prepayments on the TLA Term Loan, and **$5.5 million** for employee tax withholding on restricted stock unit vests[280](index=280&type=chunk) [Debt](index=54&type=section&id=Debt) This section provides details on the company's debt instruments, refinancing, and repayment activities - On July 3, 2025, the company entered into a new **$300.0 million** senior secured revolving credit facility, replacing the TLA Credit Agreement, and borrowed **$101.0 million**[283](index=283&type=chunk)[285](index=285&type=chunk) - The TLA Term Loan, with **$98.8 million** outstanding at June 30, 2025, was repaid and terminated in July 2025, resulting in a **$0.9 million** loss on extinguishment of debt[287](index=287&type=chunk) - The 2025 Convertible Senior Notes, with **$202.5 million** principal outstanding at June 30, 2025, matured and were settled in cash on August 1, 2025[290](index=290&type=chunk) [Future Capital Requirements](index=55&type=section&id=Future%20Capital%20Requirements) This section discusses the company's anticipated capital needs and funding strategies - The company believes existing cash, cash equivalents, available-for-sale investments, and product sales will fund operating expenses, capital expenditures, and debt payments for the next **12 months**[291](index=291&type=chunk) - Future capital needs depend on potential milestone payments (up to **$372.3 million** for Flexion Acquisition), global economic conditions (inflation, tariffs), timing of 2029 Notes conversions, and costs for commercialization, manufacturing, R&D, legal matters, and share repurchases[291](index=291&type=chunk) - Additional debt or equity financing may be required, but availability on acceptable terms is not guaranteed, especially with capital market disruptions[292](index=292&type=chunk) [Critical Accounting Estimates](index=56&type=section&id=Critical%20Accounting%20Estimates) This section highlights key accounting estimates and their potential impact on financial reporting - There have been no significant changes to the company's critical accounting policies or material impacts from recently issued accounting pronouncements since December 31, 2024[293](index=293&type=chunk) [Contractual Obligations](index=56&type=section&id=Contractual%20Obligations) This section outlines the company's significant contractual commitments and obligations - In July 2025, the company entered into a non-cancelable contractual commitment of approximately **$4.0 million** in 2025 and **$5.5 million** in 2026[294](index=294&type=chunk) - No other material changes in contractual obligations (indebtedness, lease obligations, purchase obligations) were reported since the 2024 Annual Report[294](index=294&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, primarily interest rate and credit risks [Interest Rate Risk](index=56&type=section&id=Interest%20Rate%20Risk) This section analyzes the company's exposure to fluctuations in interest rates on its investments and debt - The company's cash equivalents and investments are subject to interest rate risk; a hypothetical **100 basis point** increase in interest rates would reduce the fair value of available-for-sale securities by approximately **$0.3 million** at June 30, 2025[295](index=295&type=chunk) - The fair value of the 2025 Notes (matured August 1, 2025) and 2029 Notes (fixed rate, **$287.5 million** outstanding) are impacted by common stock fair value and interest rate fluctuations[296](index=296&type=chunk)[297](index=297&type=chunk) - The TLA Term Loan (variable interest rate, **$98.8 million** outstanding at June 30, 2025) was repaid and terminated in July 2025, replaced by a new Revolving Credit Facility[298](index=298&type=chunk) [Credit Risk](index=57&type=section&id=Credit%20Risk) This section discusses the risks associated with customer concentration and potential non-payment - The company's accounts receivable are primarily concentrated with four large wholesalers of pharmaceutical products[300](index=300&type=chunk) - Non-performance or non-payment by these major customers could have a material adverse impact on the company's financial condition, results of operations, or net cash flow[300](index=300&type=chunk) [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=57&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms management's assessment of the effectiveness of disclosure controls and procedures - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[302](index=302&type=chunk) [Changes in Internal Control over Financial Reporting](index=57&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes to internal control over financial reporting during the quarter - There have been no changes in internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[303](index=303&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=57&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) This section acknowledges the inherent limitations of any control system in preventing all errors or fraud - Management acknowledges that no control system can prevent or detect all errors and fraud, providing only reasonable, not absolute, assurance[304](index=304&type=chunk) - Limitations include resource constraints, faulty judgments, breakdowns from simple errors, and circumvention by individual acts, collusion, or management override[304](index=304&type=chunk) [PART II. OTHER INFORMATION](index=58&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section includes additional information not covered in the financial statements, such as legal matters and equity transactions [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to detailed disclosures regarding the company's legal and regulatory matters [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) This section confirms no material changes to the company's previously disclosed risk factors [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activities and equity security transactions [Purchases of Equity Securities by the Registrant](index=58&type=section&id=Purchases%20of%20Equity%20Securities%20by%20the%20Registrant) This table summarizes the company's common stock repurchases during the quarter | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs | | :----------------------------- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------------------- | :--------------------------------------------------------------------------------------- | | April 1, 2025 – April 30, 2025 | — | $— | — | $300,000,000 | | May 1, 2025 – May 31, 2025 | 1,955,589 | $25.59 | 1,955,589 | $249,999,997 | | June 1, 2025 –June 30, 2025 | — | $— | — | $249,999,997 | | Total | 1,955,589 | $25.59 | 1,955,589 | $249,999,997 | - During May 2025, the company repurchased **1,955,589** shares of its common stock at an average price of **$25.59** per share, totaling approximately **$50.0 million**[308](index=308&type=chunk) - This repurchase was part of a **$300.0 million** share repurchase program authorized in April 2025, which replaced a previous program and expires on December 31, 2026[308](index=308&type=chunk) [Item 3. Defaults Upon Senior Securities](index=58&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms no defaults on senior securities during the reporting period [Item 4. Mine Safety Disclosures](index=58&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) This section provides disclosures on Rule 10b5-1 trading plans adopted by company insiders [Rule 10b5-1 Trading Plans](index=59&type=section&id=Rule%2010b5-1%20Trading%20Plans) This table lists Rule 10b5-1 trading arrangements adopted by directors and executive officers | Name and Position | Action | Date | Rule 10b5-1 | Non-Rule 10b5-1 | Total Number of Shares to be Sold | Expiration Date | | :---------------- | :----- | :--------- | :---------- | :-------------- | :-------------------------------- | :-------------- | | Abraham Ceesay Director | Adopt | 6/3/2025 | x | | 2,354 | 9/4/2025 | | Shawn M. Cross Chief Financial Officer | Adopt | 6/9/2025 | x | | To Be Determined (1) | 5/29/2026 | | Lauren Riker Principal Accounting Officer | Adopt | 6/13/2025 | x | | To Be Determined (1) (2) | 2/3/2026 | - During Q2 2025, Abraham Ceesay (Director), Shawn M. Cross (CFO), and Lauren Riker (Principal Accounting Officer) adopted Rule 10b5-1 trading arrangements[314](index=314&type=chunk) - The number of shares to be sold by the CFO and Principal Accounting Officer is "To Be Determined," as it depends on tax withholding requirements upon RSU vesting[314](index=314&type=chunk)[315](index=315&type=chunk) [Item 6. Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or furnished as part of the quarterly report [Signatures](index=61&type=section&id=Signatures) This section contains the official certifications by the company's principal executive and financial officers - The report is signed by Frank D. Lee, Chief Executive Officer and Director, and Shawn M. Cross, Chief Financial Officer, on August 5, 2025[321](index=321&type=chunk)

[News Release Overview](index=1&type=section&id=1.%20News%20Release%20Overview) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=1.1.%20Second%20Quarter%202025%20Financial%20Highlights) Pacira BioSciences reported robust Q2 2025 financial results, achieving **$181.1 million** in total revenue, a GAAP net loss, but positive adjusted EBITDA and non-GAAP net income Second Quarter 2025 Financial Highlights | Metric | Amount (million dollars) | | :----------------------------------- | :-------------- | | Total Revenue | 181.1 | | EXPAREL Net Product Sales | 142.9 | | ZILRETTA Net Product Sales | 31.3 | | iovera° Net Product Sales | 5.6 | | GAAP Net Loss | (4.8) | | GAAP Loss Per Share (Basic and Diluted) | (0.11) | | Adjusted EBITDA | 54.3 | | Non-GAAP Net Income | 36.0 | | Non-GAAP EPS (Basic and Diluted) | 0.79 / 0.74 | | Common Stock Repurchased | 2.0 million shares ($50.0 million) | [Recent Business Highlights Meaningfully Advance 5x30 Growth Strategy](index=1&type=section&id=1.2.%20Recent%20Business%20Highlights%20Meaningfully%20Advance%205x30%20Growth%20Strategy) Pacira made significant progress in its 5x30 growth strategy, including PCRX-201 Phase II study advancement, securing a new $300 million credit facility, expanding ZILRETTA market reach, optimizing EXPAREL production, receiving a favorable court ruling, and strengthening the EXPAREL patent portfolio - Enrollment for Part A of the Phase II ASCEND study of PCRX-201 for knee osteoarthritis has exceeded **50%**, with completion expected by the end of 2025[5](index=5&type=chunk)[7](index=7&type=chunk) - Secured a new **$300 million** five-year revolving credit facility, enhancing liquidity, financial flexibility, and capital allocation capabilities[7](index=7&type=chunk) - Entered into a co-promotion agreement with Johnson & Johnson MedTech, significantly expanding ZILRETTA's market coverage[7](index=7&type=chunk) - Optimized labor structure through large-scale EXPAREL manufacturing process improvements, expected to enhance gross margins and enable efficient inventory management[7](index=7&type=chunk) - Received a favorable court ruling requiring Research and Development Foundation (RDF) to reimburse Pacira **$23.1 million** in EXPAREL royalties plus **$5.2 million** in statutory interest, totaling **$28.3 million**[7](index=7&type=chunk) - EXPAREL patent portfolio strengthened with new patents ('047 and '483) expected to provide protection until **2041** and **2044** respectively[7](index=7&type=chunk) [Second Quarter 2025 Financial Results](index=3&type=section&id=2.%20Second%20Quarter%202025%20Financial%20Results) [Revenue Performance by Product](index=3&type=section&id=2.1.%20Revenue%20Performance%20by%20Product) Total revenue for Q2 2025 was **$181.1 million**, a slight increase from Q2 2024, with EXPAREL net product sales growing **4.4%**, ZILRETTA sales remaining stable, and iovera° and bupivacaine liposome injectable suspension sales slightly decreasing Revenue Performance by Product | Metric | Q2 2025 (million dollars) | Q2 2024 (million dollars) | YoY Change (million dollars) | YoY Change (%) | | :----------------------------------- | :-------------------------- | :-------------------------- | :------------------- | :------------- | | Total Revenue | 181.1 | 178.0 | 3.1 | 1.7% | | EXPAREL Net Product Sales | 142.9 | 136.9 | 6.0 | 4.4% | | ZILRETTA Net Product Sales | 31.3 | 30.7 | 0.6 | 2.0% | | iovera° Net Product Sales | 5.6 | 5.7 | (0.1) | -1.8% | | Bupivacaine Liposome Injectable Suspension Sales | 0.5 | 3.2 | (2.7) | -84.4% | - EXPAREL achieved a **6%** volume growth in Q2 2025, partially offset by vial mix changes and discounts related to new GPO partnerships[10](index=10&type=chunk) [Operating Expenses](index=3&type=section&id=2.2.%20Operating%20Expenses) Total operating expenses significantly increased to **$172.6 million** in Q2 2025, primarily driven by substantial growth in R&D and SG&A expenses Operating Expenses | Metric | Q2 2025 (million dollars) | Q2 2024 (million dollars) | YoY Change (million dollars) | YoY Change (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :------------------- | :------------- | | Total Operating Expenses | 172.6 | 149.8 | 22.8 | 15.2% | | Research and Development (R&D) Expenses | 28.2 | 20.3 | 7.9 | 38.9% | | Selling, General and Administrative (SG&A) Expenses | 88.6 | 68.1 | 20.5 | 30.1% | [Net Income and EPS](index=3&type=section&id=2.3.%20Net%20Income%20and%20EPS) In Q2 2025, the company reported a GAAP net loss of **$4.8 million**, compared to a net income of **$18.9 million** in the prior year, with non-GAAP net income also decreasing from **$44.2 million** to **$36.0 million** Net Income and EPS | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----------------------------------- | :------------- | :------------- | :--------- | | GAAP Net (Loss) Income | $(4.8)M | $18.9M | $(23.7)M | | GAAP (Loss) Earnings Per Share (Basic) | $(0.11) | $0.41 | $(0.52) | | GAAP (Loss) Earnings Per Share (Diluted) | $(0.11) | $0.39 | $(0.50) | | Non-GAAP Net Income | $36.0M | $44.2M | $(8.2)M | | Non-GAAP Earnings Per Share (Basic) | $0.79 | $0.96 | $(0.17) | | Non-GAAP Earnings Per Share (Diluted) | $0.74 | $0.89 | $(0.15) | [Cash and Liquidity](index=3&type=section&id=2.4.%20Cash%20and%20Liquidity) As of Q2 2025, Pacira held **$445.9 million** in cash, cash equivalents, and available-for-sale investments, with a pro forma cash balance of approximately **$270.0 million** after convertible note repayment and royalty receipt, while adjusted EBITDA decreased by **12.6%** year-over-year - As of the end of Q2 2025, cash, cash equivalents, and available-for-sale investments totaled **$445.9 million**[10](index=10&type=chunk) - After repaying **$202.5 million** in convertible senior notes due August 1, 2025, and receiving **$28.3 million** in EXPAREL royalties, the company's pro forma cash balance is approximately **$270.0 million**[10](index=10&type=chunk) Adjusted EBITDA | Metric | Q2 2025 (million dollars) | Q2 2024 (million dollars) | YoY Change (million dollars) | YoY Change (%) | | :-------------- | :-------------------------- | :-------------------------- | :------------------- | :------------- | | Adjusted EBITDA | 54.3 | 62.1 | (7.8) | -12.6% | [Share Repurchase Program](index=4&type=section&id=3.%20Share%20Repurchase%20Program) In Q2 2025, Pacira repurchased **2.0 million** shares of common stock for **$50.0 million** through open market transactions, with **$250.0 million** remaining under the existing authorization expiring December 31, 2026 - Repurchased **2.0 million** shares of common stock at a cost of **$50.0 million** in Q2 2025[6](index=6&type=chunk)[11](index=11&type=chunk) - As of June 30, 2025, **$250.0 million** remained under the existing share repurchase authorization, which expires on December 31, 2026[11](index=11&type=chunk) [2025 Financial Guidance](index=4&type=section&id=4.%202025%20Financial%20Guidance) Pacira updated its full-year 2025 financial guidance, narrowing the total revenue range and raising the non-GAAP gross margin guidance, while reaffirming other non-GAAP expense guidance 2025 Financial Guidance | Metric | Previous Guidance | Updated Guidance | Change | | :-------------------- | :---------------- | :--------------- | :--- | | Total Revenue | $725 million to $765 million | $730 million to $750 million | Narrowed | | Non-GAAP Gross Margin | 76% to 78% | 78% to 80% | Increased | | Non-GAAP R&D Expenses | N/A | $90 million to $105 million | Reaffirmed | | Non-GAAP SG&A Expenses | N/A | $290 million to $320 million | Reaffirmed | | Stock-Based Compensation Expense | N/A | $56 million to $61 million | Reaffirmed | [Non-GAAP Financial Information](index=4&type=section&id=5.%20Non-GAAP%20Financial%20Information) [Explanation of Non-GAAP Measures](index=4&type=section&id=5.1.%20Explanation%20of%20Non-GAAP%20Measures) This section explains Pacira's use of non-GAAP financial measures, such as non-GAAP gross margin, net income, and adjusted EBITDA, to supplement GAAP results by excluding items management believes affect comparability or underlying business trends, providing investors with more transparent operational performance and future outlook - Non-GAAP financial measures exclude items management believes affect comparability or underlying business trends, such as non-GAAP gross margin, non-GAAP net income, and adjusted EBITDA[14](index=14&type=chunk) - Management uses these non-GAAP metrics to better analyze financial results, forecast future costs and expenses, and aid management decisions, providing greater transparency for investors[15](index=15&type=chunk)[17](index=17&type=chunk) [Reconciliation of GAAP to Non-GAAP Net Income](index=13&type=section&id=5.2.%20Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Net%20Income) This section provides a detailed reconciliation of GAAP to non-GAAP net income, showing adjustments for Q2 and year-to-date 2025 and 2024, including stock-based compensation, acquisition-related costs, and manufacturing suite decommissioning, to derive non-GAAP net income and EPS Reconciliation of GAAP to Non-GAAP Net Income | Metric | Q2 2025 (thousand dollars) | Q2 2024 (thousand dollars) | | :----------------------------------- | :------------------------ | :------------------------ | | GAAP Net (Loss) Income | (4,847) | 18,886 | | Total Non-GAAP Adjustments | 40,836 | 25,344 | | Non-GAAP Net Income | 35,989 | 44,230 | | Non-GAAP Basic EPS | 0.79 | 0.96 | | Non-GAAP Diluted EPS | 0.74 | 0.89 | - Key adjustment items include stock-based compensation expense, acquisition-related costs, manufacturing suite decommissioning costs, and the tax impact of non-GAAP adjustments[50](index=50&type=chunk)[54](index=54&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) [Reconciliation of GAAP to Non-GAAP Operating Expenses and Margins](index=15&type=section&id=5.3.%20Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Operating%20Expenses%20and%20Margins) This section details the reconciliation of GAAP to non-GAAP cost of goods sold, gross margin, R&D expenses, and SG&A expenses, showing non-GAAP gross margin reached **82%** in Q2 2025, higher than GAAP's **77%** Reconciliation of GAAP to Non-GAAP Operating Expenses and Margins | Metric | Q2 2025 (thousand dollars) | Q2 2024 (thousand dollars) | | :-------------------------- | :------------------------ | :------------------------ | | GAAP Cost of Goods Sold | 40,866 | 44,262 | | Non-GAAP Cost of Goods Sold | 32,663 | 43,003 | | GAAP Gross Margin Percentage | 77 % | 75 % | | Non-GAAP Gross Margin Percentage | 82 % | 76 % | | GAAP R&D Expenses | 28,200 | 20,338 | | Non-GAAP R&D Expenses | 24,686 | 18,413 | | GAAP SG&A Expenses | 88,578 | 68,126 | | Non-GAAP SG&A Expenses | 77,195 | 58,984 | [Reconciliation of GAAP Net Income to Adjusted EBITDA](index=16&type=section&id=5.4.%20Reconciliation%20of%20GAAP%20Net%20Income%20to%20Adjusted%20EBITDA) This section provides a reconciliation of GAAP net income to adjusted EBITDA, showing adjusted EBITDA for Q2 2025 was **$54.3 million**, lower than **$62.1 million** in the same period of 2024 Reconciliation of GAAP Net Income to Adjusted EBITDA | Metric | Q2 2025 (thousand dollars) | Q2 2024 (thousand dollars) | | :----------------------------------- | :------------------------ | :------------------------ | | GAAP Net (Loss) Income | (4,847) | 18,886 | | EBITDA | 25,082 | 54,582 | | Adjusted EBITDA | 54,323 | 62,125 | [Reconciliation of GAAP to Non-GAAP 2025 Financial Guidance](index=17&type=section&id=5.5.%20Reconciliation%20of%20GAAP%20to%20Non-GAAP%202025%20Financial%20Guidance) This section provides a reconciliation of GAAP to non-GAAP metrics within the 2025 financial guidance, with key adjustments involving stock-based compensation, decommissioning of 45-liter EXPAREL batch manufacturing suites, and key employee retention costs related to the GQ Bio acquisition Reconciliation of GAAP to Non-GAAP 2025 Financial Guidance | Metric | GAAP Guidance | Non-GAAP Adjustment Impact | Non-GAAP Guidance | | :-------------------------- | :----------- | :--------------- | :----------- | | Gross Margin | 76% to 78% | Approximately 2% | 78% to 80% | | R&D Expenses | $101 million to $118 million | $11 million to $13 million | $90 million to $105 million | | SG&A Expenses | $331 million to $366 million | $41 million to $46 million | $290 million to $320 million | - GAAP to non-GAAP adjustments primarily involve stock-based compensation, decommissioning of 45-liter EXPAREL batch manufacturing suites, and key employee retention costs related to the GQ Bio acquisition[72](index=72&type=chunk) [Inducement Grants Under Nasdaq Listing Rule 5635(c)(4)](index=5&type=section&id=6.%20Inducement%20Grants%20Under%20Nasdaq%20Listing%20Rule%205635%28c%29%284%29) On August 4, 2025, Pacira granted inducement awards to 32 new employees as a material inducement for their employment, including stock options and restricted stock units, approved by the Board's Compensation Committee - On August 4, 2025, the company granted inducement awards to **32** new employees[18](index=18&type=chunk) - **18** employees received stock options for a total of **36,100** shares of common stock, and **32** employees received restricted stock units for a total of **61,500** shares of common stock[19](index=19&type=chunk) - Stock options have a **10-year** term with a four-year vesting schedule and an exercise price of **$22.94** per share; restricted stock units vest in four equal annual installments beginning August 1, 2026[20](index=20&type=chunk) [About Pacira and Products](index=5&type=section&id=7.%20About%20Pacira%20and%20Products) [Company Overview](index=5&type=section&id=7.1.%20Company%20Overview) Pacira is dedicated to providing innovative non-opioid pain management therapies, with three commercial products: EXPAREL, ZILRETTA, and iovera°, and is developing the gene therapy PCRX-201 for osteoarthritis - Pacira is dedicated to providing innovative non-opioid pain management therapies to improve patients' lives[22](index=22&type=chunk) - The company has three commercial non-opioid therapeutic products: EXPAREL, ZILRETTA, and iovera°[22](index=22&type=chunk) - Advancing the development of PCRX-201 (enekinragene inzadenovec), a novel locally administered gene therapy for osteoarthritis[22](index=22&type=chunk) [About EXPAREL (bupivacaine liposome injectable suspension)](index=5&type=section&id=7.2.%20About%20EXPAREL%20%28bupivacaine%20liposome%20injectable%20suspension%29) EXPAREL is a long-acting local analgesic used for postoperative pain management via infiltration and specific nerve blocks, utilizing multivesicular liposome technology for sustained drug release, significantly reducing pain and opioid consumption, with specific indications and important safety information - EXPAREL is indicated for single-dose infiltration to produce local analgesia in patients **6 years of age and older**, and as a nerve block for regional analgesia in adults for postsurgical pain management[23](index=23&type=chunk) - The product combines bupivacaine and multivesicular liposomes, releasing the drug over time, significantly reducing cumulative pain scores and potentially decreasing opioid consumption by up to **78%**[24](index=24&type=chunk) - Important safety information includes not for obstetric paracervical block anesthesia, common side effects like nausea, constipation, and vomiting, and precautions regarding neurological and cardiovascular effects[25](index=25&type=chunk) [About ZILRETTA (triamcinolone acetonide extended-release injectable suspension)](index=6&type=section&id=7.3.%20About%20ZILRETTA%20%28triamcinolone%20acetonide%20extended-release%20injectable%20suspension%29) ZILRETTA, approved by the US FDA in 2017, is the first and only extended-release intra-articular therapy for knee osteoarthritis (OA) pain, using proprietary microsphere technology to provide pain relief for up to 12 to 16 weeks, with specific indications, contraindications, and warnings - ZILRETTA received US FDA approval on October 6, 2017, as the first and only extended-release intra-articular therapy for osteoarthritis knee pain[26](index=26&type=chunk) - The product uses proprietary microsphere technology, combining triamcinolone acetonide with a PLGA matrix, to significantly reduce OA knee pain for **12 weeks**, with some patients experiencing relief for up to **16 weeks**[26](index=26&type=chunk) - Indicated for intra-articular injection for the management of OA knee pain; contraindicated in patients hypersensitive to triamcinolone acetonide, corticosteroids, or any component of the product[27](index=27&type=chunk)[28](index=28&type=chunk) - Warnings and precautions include not administering via epidural, intrathecal, intravenous, or other routes, and potential for serious neurological adverse reactions and joint infection/damage[33](index=33&type=chunk) [About iovera°](index=7&type=section&id=7.4.%20About%20iovera%C2%B0) The iovera° system uses cryoanalgesia to treat peripheral nerves, providing immediate pain relief without drugs for up to 90 days, with specific indications and important safety information - The iovera° system uses the body's natural response to cold, delivering precisely controlled doses of cold to targeted nerves for immediate, drug-free pain relief lasting up to **90 days**[31](index=31&type=chunk) - iovera° is indicated for use in blocking and/or relieving pain by creating a lesion in peripheral nerve tissue, but not for treating central nervous system tissue[32](index=32&type=chunk) - Contraindications include cryoglobulinemia, paroxysmal cold hemoglobinuria, Raynaud's disease, or open/infected wounds near the treatment site; potential side effects include bruising, swelling, inflammation, local pain, and altered sensation[39](index=39&type=chunk) [About PCRX-201 and the High-capacity Adenovirus Vector Platform](index=8&type=section&id=7.5.%20About%20PCRX-201%20and%20the%20High-capacity%20Adenovirus%20Vector%20Platform) PCRX-201 is a novel gene therapy based on the company's proprietary high-capacity adenovirus vector platform, currently in Phase II study for knee osteoarthritis, addressing challenges in gene therapy for common diseases with efficient gene delivery, large payload capacity, local and re-dosing potential, and attractive cost-effectiveness - PCRX-201 (enekinragene inzadenovec) is a novel gene therapy based on the company's proprietary high-capacity adenovirus vector platform, currently in the Phase II ASCEND study for knee osteoarthritis[35](index=35&type=chunk)[37](index=37&type=chunk) - Phase I study data showed PCRX-201 provided sustained improvement in knee pain, stiffness, and function for **two years** after local administration, with a favorable safety profile[36](index=36&type=chunk) - PCRX-201 has received Regenerative Medicine Advanced Therapy (RMAT) designation from the US FDA and Advanced Therapy Medicinal Product (ATMP) designation from the European Medicines Agency[36](index=36&type=chunk) - Key features of the high-capacity adenovirus (HCAd) vector platform include efficient gene delivery, ability to carry up to **30,000** base pairs of DNA, potential for local administration and re-dosing, and a commercially attractive cost structure[38](index=38&type=chunk)[42](index=42&type=chunk) [Forward-Looking Statements](index=9&type=section&id=8.%20Forward-Looking%20Statements) This section outlines Pacira's forward-looking statements regarding future expectations, plans, growth strategies, financial outlook, product development, and potential risks, emphasizing that actual results may differ materially due to various important factors - Any statements in this press release regarding Pacira's future expectations, plans, trends, outlook, projections, and prospects constitute forward-looking statements[41](index=41&type=chunk) - Actual results may differ materially from those indicated or implied by forward-looking statements due to various important factors, including acquisition integration risks, manufacturing and supply chain issues, global economic conditions, product market acceptance, clinical trial success rates, and litigation outcomes[41](index=41&type=chunk)[43](index=43&type=chunk) [Investor and Media Contacts](index=10&type=section&id=9.%20Investor%20and%20Media%20Contacts) This section provides detailed contact information for Pacira BioSciences' investor relations and media contacts - Investor Contact: Susan Mesco, Phone: (973) 451-4030, Email: susan.mesco@pacira.com[44](index=44&type=chunk) - Media Contact: Sara Marino, Phone: (973) 370-5430, Email: sara.marino@pacira.com[44](index=44&type=chunk) [Financial Statements (Tables)](index=11&type=section&id=10.%20Financial%20Statements%20%28Tables%29) [Condensed Consolidated Balance Sheets](index=11&type=section&id=10.1.%20Condensed%20Consolidated%20Balance%20Sheets) This section presents the unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, detailing the company's assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets | | June 30, 2025 (thousand dollars) | December 31, 2024 (thousand dollars) | | :----------------------------------- | :------------------------ | :------------------------ | | **ASSETS** | | | | Cash and cash equivalents | 300,484 | 276,774 | | Short-term available-for-sale investments | 145,380 | 207,841 | | Accounts receivable, net | 114,367 | 113,304 | | Inventories, net | 148,163 | 125,282 | | Prepaid expenses and other current assets | 37,219 | 21,929 | | **Total current assets** | **745,613** | **745,130** | | Property and equipment, net | 155,178 | 167,169 | | Operating lease right-of-use assets, net | 46,528 | 49,222 | | Goodwill | 20,300 | — | | Intangible assets, net | 422,563 | 425,970 | | Deferred tax assets | 128,270 | 130,376 | | Investments and other assets | 18,810 | 35,649 | | **Total assets** | **1,537,262** | **1,553,516** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | **Current liabilities** | | | | Accounts payable | 30,124 | 19,133 | | Accrued expenses | 71,023 | 80,124 | | Lease liabilities | 9,620 | 8,887 | | Convertible senior notes, current portion, net | 202,397 | 201,776 | | **Total current liabilities** | **313,164** | **309,920** | | Convertible senior notes, net | 280,267 | 279,334 | | Long-term debt, net | 97,828 | 104,211 | | Lease liabilities | 41,291 | 44,645 | | Contingent consideration | 17,209 | 20,241 | | Deferred tax liabilities | 4,583 | — | | Other liabilities | 25,153 | 16,817 | | **Total stockholders' equity** | **757,767** | **778,348** | | **Total liabilities and stockholders' equity** | **1,537,262** | **1,553,516** | [Condensed Consolidated Statements of Operations](index=12&type=section&id=10.2.%20Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025, and 2024, detailing the company's revenue, operating expenses, net income, and earnings per share Condensed Consolidated Statements of Operations | | Q2 2025 (thousand dollars) | Q2 2024 (thousand dollars) | H1 2025 (thousand dollars) | H1 2024 (thousand dollars) | | :----------------------------------- | :------------------------ | :------------------------ | :---------------------- | :---------------------- | | **Net product sales:** | | | | | | EXPAREL | 142,917 | 136,852 | 279,446 | 269,282 | | ZILRETTA | 31,334 | 30,707 | 54,672 | 56,546 | | iovera° | 5,588 | 5,674 | 10,711 | 10,704 | | Bupivacaine liposome injectable suspension | 508 | 3,154 | 3,112 | 5,679 | | **Total net product sales** | **180,347** | **176,387** | **347,941** | **342,211** | | Royalty revenue | 752 | 1,636 | 2,081 | 2,929 | | **Total revenue** | **181,099** | **178,023** | **350,022** | **345,140** | | **Operating expenses:** | | | | | | Cost of goods sold | 40,866 | 44,262 | 75,172 | 91,678 | | Research and development expenses | 28,200 | 20,338 | 53,893 | 38,576 | | Selling, general and administrative expenses | 88,578 | 68,126 | 175,354 | 140,152 | | Amortization of acquired intangible assets | 14,322 | 14,322 | 28,644 | 28,644 | | Contingent consideration (gain) expense, acquisition-related costs, restructuring and other | 634 | 2,735 | 6,470 | 4,638 | | **Total operating expenses** | **172,600** | **149,783** | **339,533** | **303,688** | | **Operating income** | **8,499** | **28,240** | **10,489** | **41,452** | | **Other (expense) income:** | | | | | | Interest income | 5,008 | 4,749 | 11,903 | 8,652 | | Interest expense | (4,695) | (3,884) | (9,275) | (7,200) | | Gain on early extinguishment of debt | — | 7,518 | — | 7,518 | | Other, net | (10,739) | (39) | (6,338) | (198) | | **Total other (expense) income, net** | **(10,426)** | **8,344** | **(3,710)** | **8,772** | | **(Loss) income before income taxes** | **(1,927)** | **36,584** | **6,779** | **50,224** | | Income tax expense | (2,920) | (17,698) | (6,814) | (22,359) | | **Net (loss) income** | **(4,847)** | **18,886** | **(35)** | **27,865** | | **Net (loss) income per common share:** | | | | | | Basic net (loss) income per common share | (0.11) | 0.41 | (0.00) | 0.60 | | Diluted net (loss) income per common share | (0.11) | 0.39 | (0.00) | 0.58 | | **Weighted-average common shares outstanding:** | | | | | | Basic | 45,459 | 46,174 | 45,867 | 46,337 | | Diluted | 45,459 | 50,539 | 45,867 | 51,366 | [Reconciliation of GAAP to Non-GAAP Financial Information (Detailed Notes)](index=14&type=section&id=10.3.%20Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Information%20%28Detailed%20Notes%29) This section provides detailed notes for the reconciliation of GAAP to non-GAAP financial information, explaining the nature of non-GAAP adjustments including restructuring costs, acquisition-related expenses, legal settlements, key employee retention, CEO transition costs, and manufacturing suite decommissioning, along with tax impacts and differences in diluted weighted-average common shares calculations - Restructuring costs are primarily related to a restructuring plan initiated in **2024** to optimize the company for long-term growth, including employee termination benefits and severance[52](index=52&type=chunk) - Acquisition-related costs primarily relate to third-party services and legal fees for the **2025** acquisition of GQ Bio Therapeutics GmbH, and in **2024**, to vacant and underutilized leases assumed from the Flexion Therapeutics, Inc. acquisition[54](index=54&type=chunk) - **$7.0 million** in legal settlement costs were recognized in the first half of **2025**, related to patent infringement litigation against Fresenius Kabi USA, LLC and others[55](index=55&type=chunk) - Key employee retention costs are part of Pacira Therapeutics, Inc.'s acquisition of the remaining **81%** interest in GQ Bio, with **$7.8 million** in expenses to be recognized over **three years**[56](index=56&type=chunk) - In Q2 2025, the company recognized **$5.5 million** in accelerated depreciation of fixed assets and **$1.0 million** in raw material reserves due to the decommissioning of its 45-liter EXPAREL batch manufacturing suites and related workforce reductions[58](index=58&type=chunk) - The tax impact of non-GAAP adjustments is calculated by applying statutory tax rates or a zero tax rate, excluding discrete tax benefits and expenses[59](index=59&type=chunk) - In Q2 2025, 0.75% convertible senior notes, stock options, restricted stock units, and employee stock purchase plan stock options were excluded from GAAP diluted net income per share calculation as they were anti-dilutive, but were dilutive in the non-GAAP calculation[63](index=63&type=chunk)[64](index=64&type=chunk)