On February 24, 2022 Pacira BioSciences, Inc. (Nasdaq: PCRX), the industry leader in its commitment to non-opioid pain management and regenerative health solutions, reported financial results for the fourth quarter and full-year of 2021 (Press release, Pacira Pharmaceuticals, FEB 24, 2022, View Source;991.htm [SID1234609030]).
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"The acquisition of Flexion Therapeutics combined with record EXPAREL sales resulted in a pivotal year for Pacira, allowing us to enter 2022 in the strongest financial position in our company’s history," said David Stack, chairman and chief executive officer of Pacira. "Despite challenges in the marketplace due to COVID-19, we continue to deliver strong results and remain bullish in our long-term expectations for growth."
"We were delighted to recently achieve a significant milestone as we marked our ten millionth patient treated with EXPAREL since launch. Further energized by this accomplishment, we remain committed to ongoing innovation in all areas of our business including new indications, line extensions, and design improvements to better serve patients and the healthcare providers who treat them while remaining at the forefront of the non-opioid pain management field."
2021 Full-Year and Fourth Quarter Financial Highlights
Full-year revenues of $541.5 million and fourth quarter revenues of $159.2 million.
Full-year GAAP net income of $42.0 million or $0.95 per share (basic) and $0.92 (diluted).
Fourth quarter GAAP net loss of $5.1 million or $0.12 per share (basic and diluted).
Full-year adjusted EBITDA of $204.0 million and fourth quarter adjusted EBITDA of $69.3 million.
Recent Business Highlights
New EXPAREL Patents. Pacira recently received Notices of Allowance from the United States Patent and Trademark Office for four EXPAREL patents that have been examined and will issue. Two patents claim chemical composition of EXPAREL and two claim product-by-process. After issuance, Pacira will submit these patents for listing in the FDA Approved Drug Products with Therapeutic Equivalence Evaluations (the Orange Book). After listing, the Orange Book will have a total of six EXPAREL patents each with an expiration date of January 22, 2041.
$375 Million Term Loan B Facility. In December 2021, Pacira entered into a $375 million Senior Secured Term Loan B Facility. The company believes this successful debt offering validates its financial strength.
Completion of Flexion Therapeutics Acquisition. In November 2021, Pacira expanded its leadership position in non-opioid pain management with the acquisition of Flexion Therapeutics. With the closing, Pacira added ZILRETTA (triamcinolone acetonide extended-release injectable suspension) to its commercial offering. ZILRETTA is the first and only FDA-approved treatment for osteoarthritis (OA) knee pain utilizing extended-release microsphere technology.
Fourth Quarter 2021 Financial Results
Total revenues were $159.2 million in the fourth quarter of 2021, a 22% increase over the $131.0 million reported for the fourth quarter of 2020.
EXPAREL net product sales were $139.9 million in the fourth quarter of 2021, a 12% increase over the $125.3 million reported for the fourth quarter of 2020.
ZILRETTA net product sales were $12.7 million in the fourth quarter of 2021. The company began recognizing ZILRETTA sales upon completing its acquisition of Flexion in November 2021.
Fourth quarter 2021 iovera° net product sales were $4.9 million, a 102% increase versus the $2.4 million reported in the fourth quarter of 2020.
Total operating expenses were $155.0 million in the fourth quarter of 2021, compared to $112.2 million in the fourth quarter of 2020. The fourth quarter of 2021 included $40.7 million of acquisition-related charges, product discontinuation and other, primarily driven by $39.2 million of severance and other employee related costs, investment banking, legal and other professional fees, third-party services and other one-time charges associated with the acquisition of Flexion. The fourth quarter of 2021 also included $5.7 million of amortization for acquired intangible assets associated with the acquisition of Flexion.
Research and development (R&D) expenses were $15.5 million in the fourth quarter of 2021, compared to $15.3 million in the fourth quarter of 2020. The company’s R&D expenses included $5.3 million and $5.2 million of product development and manufacturing capacity expansion costs in the fourth quarters of 2021 and 2020, respectively.
Selling, general and administrative (SG&A) expenses were $52.2 million in the fourth quarter of 2021, compared to $52.8 million in the fourth quarter of 2020.
GAAP net loss was $5.1 million, or $0.12 per share (basic and diluted), in the fourth quarter of 2021, compared to GAAP net income of $14.5 million, or $0.33 per share (basic) and $0.32 per share (diluted), in the fourth quarter of 2020.
Non-GAAP net income was $44.4 million, or $0.99 per share (basic) and $0.97 per share (diluted), in the fourth quarter of 2021, compared to non-GAAP net income of $38.8 million, or $0.89 per share (basic) and $0.87 per share (diluted), in the fourth quarter of 2020.
Adjusted EBITDA was $69.3 million in the fourth quarter of 2021, a 61% increase over $42.9 million in the fourth quarter of 2020.
Pacira had 44.6 million basic weighted average shares of common stock outstanding in the fourth quarter of 2021.
For non-GAAP measures, Pacira had 45.5 million diluted weighted average shares of common stock outstanding in the fourth quarter of 2021.
Full-Year 2021 Financial Results
Total revenues were $541.5 million in 2021, a 26% increase over the $429.6 million reported in 2020.
EXPAREL net product sales were $506.5 million in 2021, a 23% increase over the $413.3 million reported in 2020.
ZILRETTA net product sales were $12.7 million in 2021. The company began recognizing ZILRETTA sales upon completing its acquisition of Flexion in November 2021.
Full-year iovera° net product sales were $16.2 million, an 83% increase over the $8.8 million reported in 2020.
Total operating expenses were $451.6 million in 2021, compared to $383.3 million in 2020. 2021 included $42.9 million of acquisition-related charges, product discontinuation and other, primarily driven by $40.2 million of severance and other employee related costs, investment banking, legal and other professional fees, third-party services and other one-time charges associated with the acquisition of Flexion. 2021 also included $5.7 million of amortization for acquired intangible assets associated with the acquisition of Flexion.
R&D expenses were $55.5 million in 2021, compared to $59.4 million in 2020. The company’s R&D expenses include $19.4 million and $23.5 million of product development and manufacturing capacity expansion costs in 2021 and 2020, respectively.
SG&A expenses were $199.3 million in 2021, compared to $193.5 million in 2020.
GAAP net income was $42.0 million, or $0.95 per share (basic) and $0.92 per share (diluted) in 2021, compared to GAAP net income of $145.5 million, or $3.41 per share (basic) and $3.33 per share (diluted) in 2020. Included in GAAP net income in 2020 was a $126.6 million income tax benefit related to the release of a valuation allowance on deferred tax assets.
Non-GAAP net income was $136.7 million, or $3.09 per share (basic) and $3.00 per share (diluted), in 2021, compared to non-GAAP net income of $96.6 million, or $2.26 per share (basic) and $2.21 per share (diluted), in 2020.
Adjusted EBITDA was $204.0 million in 2021, a 81% increase over $112.6 million in 2020.
Pacira had 44.3 million basic and 45.6 million diluted weighted average shares of common stock outstanding in 2021.
See "Non-GAAP Financial Information" below.
2022 Financial Guidance
The company’s product sales continue to be impacted by COVID-19, which has caused significant postponement or suspension in the scheduling of elective surgical procedures resulting from public health guidance and government directives. Given the continued uncertainty around COVID-19 and the pace of recovery for the elective surgery market, the company is currently not providing revenue or gross margin guidance. To provide greater transparency, Pacira is reporting monthly intra-quarter unaudited net product sales for EXPAREL and iovera° until it has gained enough visibility around the impacts of COVID-19. Pacira is also providing weekly EXPAREL utilization and elective surgery data within its investor presentation, which is accessible at investor.pacira.com. Pacira is currently not reporting preliminary monthly ZILRETTA net product sales as the required adjustments for certain product rebate programs are calculated after the end of the quarter.
Today the company is providing full-year 2022 operating expense guidance as follows:
Non-GAAP R&D expense of $75 million to $85 million;
Non-GAAP SG&A expense of $220 million to $230 million; and
Stock-based compensation of $40 million to $45 million.
See "Non-GAAP Financial Information" 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, February 24, 2022, at 8:30 a.m. ET. To participate in the conference call, dial 1-888-771-4371 and provide the passcode 50282786. International callers may dial 1-847-585-4405 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 of 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, non-GAAP net income per common share, non-GAAP cost of goods sold, non-GAAP research and development (R&D) expense, non-GAAP selling, general and administrative (SG&A) expense, EBITDA (earnings before interest, taxes, depreciation and amortization) and adjusted EBITDA, because these non-GAAP financial measures exclude the impact of items that management believes affect comparability or underlying business trends.
These measures supplement the company’s financial results prepared in accordance with GAAP. Pacira management uses these measures to estimate its future cost of goods sold, R&D expense and SG&A expense outlook for 2022 and to better analyze its financial results and 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 of Pacira and its 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.