Pacira(US:PCRX)2023-02-28 20:00Sales Performance - Total net product sales increased by 23% in 2022, reaching $664.2 million compared to $539.0 million in 2021[429]. - EXPAREL net product sales grew by 6% to $536.9 million in 2022, driven by a 5.5% increase in gross vial volume and a 3.6% rise in gross selling price per unit[430]. - ZILRETTA net product sales surged by 100% to $105.5 million in 2022, following its acquisition in November 2021[431]. - iovera° sales decreased by 6% to $15.3 million in 2022, attributed to a delay in product transition and reimbursement policy variations[432]. - Bupivacaine liposome injectable suspension revenue increased by 80% in 2022, primarily due to the sales mix for veterinary use[433]. Cost and Expenses - Cost of goods sold rose by 42% to $199.3 million in 2022, impacting the gross margin which decreased from 74% in 2021 to 70% in 2022[436]. - Total research and development expenses increased by 53% in 2022, reaching $84.8 million compared to $55.5 million in 2021, representing 13% of total revenue[438]. - Clinical and preclinical development expenses surged by 89% in 2022 to $45.6 million, driven by ongoing trials and the completion of two EXPAREL trials[439]. - Product development and manufacturing capacity expansion expenses rose by 27% in 2022 to $24.6 million, primarily due to scaling up EXPAREL manufacturing capacity[440]. - Selling, general and administrative expenses increased by 28% in 2022, totaling $254.5 million, which is 38% of total revenue[445]. - Sales and marketing expenses grew by 31% in 2022 to $145.0 million, influenced by the expansion of the sales force and marketing investments for ZILRETTA and iovera°[446]. - Amortization of acquired intangible assets skyrocketed by 100% in 2022 to $57.3 million, reflecting the first full year post-Flexion Acquisition[450]. Financial Position - As of December 31, 2022, the company had cash and cash equivalents of $325.9 million and working capital of $350.6 million, indicating strong liquidity[460]. - The company recorded an income tax benefit of $2.6 million in 2022, contrasting with an income tax expense of $14.4 million in 2021[459]. - Interest expense increased by 26% in 2022 to $40.0 million, attributed to a $375.0 million Term Loan taken in December 2021[456]. - The company recognized acquisition-related gains of $18.2 million in 2022, primarily due to adjustments in contingent consideration liabilities[451]. Cash Flow - In 2022, net cash provided by operating activities was $145.3 million, an increase of 15.6% from $125.7 million in 2021[464]. - Net cash used in investing activities in 2022 was $225.2 million, significantly higher than $20.8 million in 2021, primarily due to $150.1 million in available-for-sale investment purchases and a $32.0 million milestone payment related to the Pacira acquisition[465][466]. - Net cash used by financing activities in 2022 was $401.5 million, compared to a net cash inflow of $380.7 million in 2021, driven by principal repayments on the Flexion 2024 Notes and 2022 Notes[467][468]. Future Outlook and Plans - The company expects to continue expanding the use of EXPAREL, ZILRETTA, and iovera° in additional procedures and invest in manufacturing capacity[420]. - The company plans to continue expanding the commercialization of its products, including EXPAREL and ZILRETTA, both domestically and internationally[484]. - The company may require additional debt or equity financing to meet future operating and capital requirements, with no committed external sources of funds currently available[479]. Acquisition and Obligations - The Flexion Acquisition in November 2021 involved total consideration of $578.8 million, including an initial cash payment of $428.3 million[423]. - The company anticipates potential milestone payments of up to $372.3 million related to the Flexion acquisition, contingent on achieving certain regulatory and commercial milestones[477][483]. - The company has contractual obligations of $8.6 million due on the 2024 Notes in May 2024 and $402.5 million due on the 2025 Notes in August 2025[480]. - As of December 31, 2022, the maximum remaining potential payments related to contingent consideration from the Flexion Acquisition is $372.3 million[490]. Risk Factors - Accounts receivable are primarily concentrated with four large wholesalers, posing a risk of material adverse impact on financial condition if non-performance occurs[496].