Pacira(PCRX) - 2025 Q2 - Quarterly Results

News Release Overview Second Quarter 2025 Financial Highlights 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 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][7] - Secured a new $300 million five-year revolving credit facility, enhancing liquidity, financial flexibility, and capital allocation capabilities[7] - Entered into a co-promotion agreement with Johnson & Johnson MedTech, significantly expanding ZILRETTA's market coverage[7] - Optimized labor structure through large-scale EXPAREL manufacturing process improvements, expected to enhance gross margins and enable efficient inventory management[7] - 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] - EXPAREL patent portfolio strengthened with new patents ('047 and '483) expected to provide protection until 2041 and 2044 respectively[7] Second Quarter 2025 Financial Results Revenue Performance by Product 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] Operating Expenses 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 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 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] - 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] 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 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][11] - As of June 30, 2025, $250.0 million remained under the existing share repurchase authorization, which expires on December 31, 2026[11] 2025 Financial Guidance 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 Explanation of Non-GAAP Measures 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] - 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][17] Reconciliation of GAAP to Non-GAAP Net Income 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][54][58][59] Reconciliation of GAAP to Non-GAAP Operating Expenses and Margins 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 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 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] Inducement Grants Under Nasdaq Listing Rule 5635(c)(4) 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] - 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] - 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] About Pacira and Products Company Overview 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] - The company has three commercial non-opioid therapeutic products: EXPAREL, ZILRETTA, and iovera°[22] - Advancing the development of PCRX-201 (enekinragene inzadenovec), a novel locally administered gene therapy for osteoarthritis[22] About EXPAREL (bupivacaine liposome injectable suspension) 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] - 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] - 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] About ZILRETTA (triamcinolone acetonide extended-release injectable suspension) 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] - 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] - 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][28] - 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] About iovera° 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] - 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] - 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] About PCRX-201 and the High-capacity Adenovirus Vector Platform 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][37] - 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] - 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] - 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][42] Forward-Looking Statements 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] - 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][43] Investor and Media Contacts 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] - Media Contact: Sara Marino, Phone: (973) 370-5430, Email: sara.marino@pacira.com[44] Financial Statements (Tables) Condensed Consolidated Balance Sheets 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 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) 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] - 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] - $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] - 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] - 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] - 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] - 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][64]