On August 2, 2018 Pacira Pharmaceuticals, Inc. (NASDAQ: PCRX) reported consolidated financial results for the second quarter ended June 30, 2018 (Press release, Pacira Pharmaceuticals, AUG 2, 2018, View Source;p=irol-newsArticle&ID=2361688 [SID1234528322]).
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"The first half of 2018 was marked by tremendous progress as our EXPAREL growth strategy is taking hold and driving robust topline results," said Dave Stack, chairman and chief executive officer of Pacira. "These positive results reflect the growing role of EXPAREL as an integral component of multimodal pain management due to its tremendous flexibility around dosing, volume expansion, and admixing. EXPAREL allows physicians to deliver long-acting, opioid-free local or regional analgesia using individualized approaches for both small and large procedures. We are seeing a high level of engagement and enthusiasm around our expanded label that now includes brachial plexus nerve block and an uptick in the successful use of EXPAREL as a field block for soft tissue procedures. Our partnered Johnson and Johnson accounts are delivering impressive results in the orthopedic space with significant room for expansion in key procedures, such as spine, shoulder and hip fractures. Across all aspects of the business, we are very pleased with the market dynamics and our ability to increase our full-year sales guidance for EXPAREL."
Highlights and Recent Events
Licensing agreement with Nuance Biotech for EXPAREL in China. Pacira and Nuance Biotech Co. Ltd, a China-based specialty pharmaceutical company, entered into an agreement to advance the development and commercialization of EXPAREL in China.
Collaboration with Aetna now highlighting providers offering opioid alternatives, including EXPAREL. Aetna began updating its online provider directory, DocFind, to help members easily identify surgeons who are committed to offering opioid alternatives, including EXPAREL.
MEDNAX National Medical Group and Pacira launched national initiative to minimize opioid use after cesarean surgery. Pacira and MEDNAX launched a partnership to address the ongoing use of opioids during and after cesarean surgery by launching a national collaborative aimed at implementing an Enhanced Recovery after Cesarean Surgery (ERACS) program.
Second Quarter 2018 Financial Results
EXPAREL net product sales were $80.4 million in the second quarter of 2018, a 15% increase over the $69.8 million reported for the second quarter of 2017.
Total operating expenses were $77.6 million in the second quarter of 2018, compared to $86.7 million in the second quarter of 2017.
GAAP net income was $2.6 million, or $0.06 per share (basic and diluted), in the second quarter of 2018, compared to a GAAP net loss of $19.7 million, or $(0.49) per share (basic and diluted), in the second quarter of 2017.
Non-GAAP net income was $9.9 million, or $0.24 per share (basic and diluted) in the second quarter of 2018, compared to a non-GAAP net loss of $4.4 million, or $(0.11) per share (basic and diluted) in the second quarter of 2017.
Pacira ended the second quarter of 2018 with cash, cash equivalents, short-term and long-term investments ("cash") of $372.9 million.
Pacira had 40.8 million basic weighted average shares of common stock outstanding in the second quarter of 2018.
Pacira had 41.7 million diluted weighted average shares of common stock outstanding in the second quarter of 2018.
2018 Outlook
Pacira increased its full year 2018 financial guidance for EXPAREL net product sales and updated its remaining full-year 2018 financial guidance as follows:
EXPAREL net product sales of $320 million to $325 million.
Non-GAAP gross margins of 72% to 74%.
Non-GAAP research and development (R&D) expense of $50 million to $60 million.
Non-GAAP selling, general and administrative (SG&A) expense of $150 million to $160 million.
Stock-based compensation of $30 million to $35 million.
See "Non-GAAP Financial Information" and "Reconciliations of GAAP to Non-GAAP 2018 Financial Guidance" below.
Today’s Conference Call and Webcast Reminder
The Pacira management team will host a conference call to discuss the company’s financial results and recent developments today, Thursday, August 2, at 8:30 a.m. ET. To participate in the conference call, dial 1-877-845-0779 and provide the passcode 5387259. International callers may dial 1-720-545-0035 and use the same passcode. In addition, a live audio of the conference call will be available as a webcast. Interested parties can access the event through the "Events" page on the Pacira website at investor.pacira.com.
For those unable to participate in the live call, a replay will be available at 1-855-859-2056 (domestic) or 1-404-537-3406 (international) using the passcode 5387259. The replay of the call will be available for one week from the date of the live call. The webcast will be available on the Pacira website for approximately two weeks following the call.
Non-GAAP Financial Information
This press release contains financial measures that do not comply with U.S. generally accepted accounting principles (GAAP), such as non-GAAP net income (loss), non-GAAP net income (loss) per share, non-GAAP cost of goods sold, non-GAAP gross margins, non-GAAP research and development (R&D) expense and non-GAAP selling, general and administrative (SG&A) expense, because such measures exclude milestone revenue, stock-based compensation, amortization of debt discount, loss on early extinguishment of debt and exit costs related to the discontinuation of DepoCyt(e) production.
These measures supplement the company’s financial results prepared in accordance with GAAP. Pacira management uses these measures to better analyze its financial results, estimate its future cost of goods sold, gross margins, R&D expense and SG&A expense outlook for 2018 and to help make managerial decisions. In management’s opinion, these non-GAAP measures are useful to investors and other users of our financial statements by providing greater transparency into the operating performance at Pacira and the company’s future outlook. Such measures should not be deemed to be an alternative to GAAP requirements or a measure of liquidity for Pacira. Non-GAAP measures are also unlikely to be comparable with non-GAAP disclosures released by other companies. See the tables below for a reconciliation of GAAP to non-GAAP measures, and a reconciliation of our GAAP to non-GAAP 2018 financial guidance for gross margins, R&D expense and SG&A expense.