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Pacira (PCRX) Q2 Earnings and Revenues Surpass Estimates

Zacks Equity Research

Pacira BioSciences, Inc. PCRX delivered second-quarter 2019 earnings of 41 cents per share, surpassing the Zacks Consensus Estimate of 34 cents and also the year-ago bottom line of 24 cents.

Total revenues increased 22% year over year to $102.6 million, beating the Zacks Consensus Estimate of $100 million as well as the year-earlier number of $84 million. Exparel sales came in at $99.8, rising 24% year over year while the same rose 10.2% sequentially.

Newly added product iovera system generated sales of $2 million in the reported quarter.

We would like to remind investors that in April 2019, Pacira acquired the privately held MyoScience, Inc. following which the former added the latter’s iovera system to its portfolio, which is highly complementary to Exparel as a non-opioid therapy. Moreover, upon closing, Pacira changed its corporate name to Pacira BioSciences, Inc.

Despite an encouraging earnings result, shares of Pacira were down almost 3.4% following its announcement on Thursday Aug 8. In fact, the stock has lost 1.5% so far this year against the industry’s rally of 7.5%.

Quarter in Detail

Pacira’s top line mainly comprises product revenues, other product sales plus royalty revenues. Royalty revenues came in at $0.78 million in the reported quarter, up 100% year over year.

Research and development (R&D) expenses (excluding stock-based compensation) surged 46.9% to $16.6 million.

Selling, general and administrative (SG&A) expenses (excluding stock-based compensation) increased 11.7% to $43.8 million in the reported quarter.

Recent Developments

In June this year, Pacira announced that the European Medicines Agency (EMA) has accepted its Marketing Authorization Application (MAA), seeking an approval for Exparel (bupivacaine liposome injectable suspension) as a medicine for postsurgical analgesia. This validation confirmed that the MAA submission is ready for the formal review process by the regulatory agency.

Pacira expects a decision from the Committee for Medicinal Products for Human Use (CHMP) in the second half of 2020.

In the same month, Pacira announced results from a new analysis on Exparel for patients undergoing elective third molar extraction with at least one bony mandibular tooth. Data showed that patients who received Exparel were significantly prescribed fewer opioids compared with those who did not receive the product.

Earlier in May, Pacira announced that its phase IV study, which evaluated Exparel plus bupivacaine HCl compared with bupivacaine HCl alone, achieved the primary endpoint with a statistically significant reduction in total postsurgical opioid consumption through 72 hours. The Exparel combo was administered via transversus abdominis plane (TAP) field block in patients undergoing Cesarean section (C-section).

Meanwhile, Pacira is also developing Exparel for its usage in pain management pertaining to various other surgeries and is also extending its label to address complications in pediatric patient population. On second-quarter conference call, management stated that the pediatric study called PLAY is progressing well according to plan and are actively enrolling patients. The company remains on track to complete this study later this year.

There are currently no approved alternatives to opioids for tackling severe post-surgical pain in pediatric patients.

Notably, Pacira has a partnership pact with Johnson & Johnson JNJ wherein the latter continues to support the uptake of Exparel with the help of its world class educational programs and orthopedic procedural solutions for Pacira.

2019 Outlook

Pacira provided its guidance for Exparel sales in 2019 and expects the same in the $400-$410 million range. This is unchanged from the last reported quarter’s projection levels.

Pacira also expects iovera net product sales to be in the range of $8- $10 million.

Pacira BioSciences, Inc. Price, Consensus and EPS Surprise

Pacira Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Pacira BioSciences, Inc. price-consensus-eps-surprise-chart | Pacira BioSciences, Inc. Quote

Zacks Rank & Stocks to Consider

Pacira currently carries a Zacks Rank #3 (Hold). Better-ranked stocks from the same sector inlcude Zoetis Inc. ZTS and Aclaris Therapeutics, Inc. ACRS, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zoetis’ earnings estimates have been revised 0.6% upward for 2019 and 1% for 2020 over the past 60 days. The stock has soared 45% year to date.

Aclaris’ loss per share estimates have been narrowed 3.7% for 2019 and 11.1% for 2020 over the past 60 days.

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