Pacira BioSciences’ 2024 Third Quarter Earnings Missed the Mark

Pacira BioSciences, Inc. reported $168 million in sales and $140 million in operating loss for the quarter ending September 30, 2024, which was below both Wall Street’s expectations and management’s guidance.

Pacira BioSciences Explains and Is Optimistic

Pacira BioSciences’ leadership team—Frank Lee, chief executive officer, Susan Mesco, head of investor relations; Shawn Cross, chief financial officer; Kristen Williams, chief administrative officer; Lauren Riker, senior vice president, finance; and Jonathan Slonin, chief medical officer—recently held the company’s 2024 third quarter earnings call.

Pacira reported that sales for the company’s flagship product EXPAREL grew in the third quarter from $128.7 million in 2023 to $132 million in 2024. Sales of ZILRETTA, Pacira’s time-release corticosteroid came in essentially flat with last year’s $28.8 million at $28.4 million. Finally, iovera° (cold therapy for pain) sales were also flattish at $5.7 million compared to $5.3 million earned in third quarter 2023.

Pacira’s third quarter non-GAAP (Generally Accepted Accounting Principles) gross margin was 78% with an adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of $54.7 million. The company’s full year guidance remained the same.

Lee said, “Since our last call, we’ve continued to make important progress. We’re now aligned and committed to deliver innovative non-opioid pain therapies that transform the lives of patients. It’s a straightforward yet compelling mission that personally resonates with me and our Pacira employees.”

He added, “Underpinning our mission are three guiding principles that we uphold every day: keep the patient at the center, follow the science, and treat our people well.”

Pacira, he said, has reviewed the product and pipeline portfolio and have designed a long-term strategy to grow and innovate in musculoskeletal pain markets, including an expanded utilization of EXPAREL and the continuation of the Phase III trial for ZILRETTA in shoulder osteoarthritis. Successful outcomes could position ZILRETTA as the first and only long-acting steroid for shoulder pain.

Lee said that also in the pipeline is their novel gene therapy PCRX-201 which was designed for the treatment of knee OA. Using a high-capacity adenovirus viral vector, the medication requires only small dosages for the desired effect. So far early study results are promising.

Analysts Pushed for Clarification on Expected Impact of NOPAIN Legislation

Oren Livnat, an analyst with H.C. Wainwright, questioned how prepared Pacira is for Non-Opioids Prevent Addiction in the Nation (NOPAIN) Act changes which encourages healthcare providers to choose nonopioid alternatives for their surgical patients. The latest update requires the Centers for Medicare and Medicaid Services to provide separate Medicare reimbursement for non-opioid treatments.

Lee emphasized the progress already made, a J-code for EXPAREL and expanded reimbursement and inclusion in NOPAIN for both EXPAREL and iovera° but cautioned that the changes probably wouldn’t really take hold until later in 2025 as their customers adjust to the change.

Livnat pushed for a clearer picture of how long the new coverage is expected to last.

Lee explained that they are encouraged by several factors. He said, “First, in the 7-plus years that it’s taken to get this NOPAIN legislation across the line with a tremendous amount of support and advocacy from patient advocacy organizations like Voices for Non-opioid Choices. In that process, what we found is that there is strong bipartisan support for really tackling this opioid issue that’s out there still amongst patients. And so we don’t expect that to change, and we’re going to work very closely with advocacy, as we’ll always do.”

David Amsellem with Piper Sandler asked about the potential impact of more generic liposomal bupivacaine emerging. In August, the U.S. District Court for the District of New Jersey ruled at the company’s ‘495 patent for EXPAREL is not valid.

Lee shared, “First, as we’ve articulated previously to the extent, if and when there is a single generic entrant, there are a number of analogs, and I believe Susan has a study here that she can forward you that shows that typically, there’s some price erosion, 15%, 20%. In that case, as we’ve said before, we consider that competition, and we’ll compete in that space. We don’t believe, as I mentioned earlier, that an at-risk launch is imminent.”

Tejas Wein with Raymond James asked for clarification on what drove the solid growth for the quarter and would that continue to drive growth in 2025.

Riker said, “We are very pleased with our strong third quarter margins, and it exceeded our guided range from 74% to 76%. But on a year-to-date, we believe we’ll still land within that guided range. If you look at it, we came in at 75% on a year-to-date basis. The first half was negatively impacted by ZILRETTA and iovera°. So EXPAREL has been continuing to be strong, and we think that trend will continue.”

Wein also asked what comes next for the 201 program. Slonin said that they are very excited about the potential of the novel gene therapy and were expecting to present their 104-week data soon.

He added, “We’re also really excited about our clinical program as that advances and we kick off the next study at the beginning of next year.”

Lee elaborated even further, “Sometime next year, we will provide better visibility into this next phase of the program. And we think it holds a lot of potential, not only for osteoarthritis, but perhaps other common diseases as well.”