On February 28, 2018 Pacira Pharmaceuticals, Inc. (NASDAQ: PCRX) reported financial results for the fourth quarter and full year of 2018 and its outlook for 2019 (Press release, Pacira Pharmaceuticals, FEB 28, 2019, View Source;p=RssLanding&cat=news&id=2389460 [SID1234533797]).
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2018 Financial Highlights
Fourth quarter EXPAREL net product sales of $94.4 million
Full year EXPAREL net product sales of $331.1 million
Fourth quarter GAAP net income of $8.3 million or $0.20 per diluted share
Fourth quarter non-GAAP net income of $19.8 million or $0.47 per diluted share
Full year GAAP net loss of $0.5 million or $0.01 per basic and diluted share
Full year non-GAAP net income of $43.5 million or $1.04 per diluted share
"Pacira had a landmark 2018 with record revenues underscoring the growing marketplace adoption of EXPAREL as a fundamental component of opioid-sparing pain management protocols at influential academic centers and also the success of our brachial plexus nerve block launch," said Dave Stack, chairman and chief executive officer of Pacira. "There is great enthusiasm among a growing number of anesthesiologists who are using regional nerve blocks and field blocks to revolutionize postsurgical pain management and improve patient outcomes. We are also seeing robust growth in new accounts driven primarily by ambulatory, plastic, and oral surgery centers seeking to differentiate their practices by providing patients with an effective, long-acting non-opioid option for managing postsurgical pain. Finally, our significant partnership with Johnson and Johnson continues to drive uptake with EXPAREL being integrated across its world class educational platforms and comprehensive offering of orthopedic procedural solutions. Altogether this strong growth trajectory provides us with a solid operating foundation to support the strategic expansion of our commercial and clinical offering within the non-opioid pain management and regenerative health space."
"This substantial momentum has continued into 2019 and we plan to build on our success by executing on multiple growth opportunities, including expanding the role of EXPAREL as a catalyst for shifting inpatient procedures to the ambulatory setting, and building out our differentiated non-opioid portfolio with innovative products that address the need for improving patients’ journeys along the neural pain pathway. We believe this strategy provides the greatest opportunities to build value in both the near- and long-term," concluded Mr. Stack.
Recent Highlights
EXPAREL manufacturing capacity expansion to meet growing demand. In February 2019, Pacira announced that commercial production of EXPAREL is now underway at a custom suite in Swindon, UK created under the company’s partnership with Thermo Fisher Scientific Pharma Services (formerly Patheon UK Limited). This suite was designed to mirror the company’s existing facility at the Pacira Science Center Campus in San Diego, CA and is expected to double the company’s manufacturing capacity. Through the partnership, the companies are developing a second dedicated suite that is expected to enable another doubling of EXPAREL manufacturing capacity in approximately two years.
Phase 4 EXPAREL study achieves statistically significant reductions in opioid consumption and pain scores in C-Section patients. In January 2019, Pacira announced that its Phase 4 study of EXPAREL in patients undergoing Cesarean section (C-section) achieved its primary endpoint with a statistically significant reduction in total postsurgical opioid consumption through 72 hours (P<0.05). EXPAREL also achieved statistical significance for reduction in pain intensity scores through 72 hours (P<0.05). The full study results will be submitted for publication in peer-reviewed medical literature later this year.
Centers for Medicare and Medicaid Services establish new reimbursement for EXPAREL. In November 2018, the Centers for Medicare and Medicaid Services (CMS) finalized a policy to provide separate Medicare reimbursement for EXPAREL when administered in ambulatory surgical centers (ASCs) through establishment of the product-specific billing code of C9290. This code, which provides payment for EXPAREL at $1.22 per milligram, sets national Medicare reimbursement rates for EXPAREL administered in ASCs. In addition, the American Dental Association published a CDT code (D9613) to report infiltration of a sustained-release therapeutic drug in oral surgery procedures. Both codes became effective on January 1, 2019.
New data show EXPAREL significantly reduces opioid use, hospital length of stay and total hospitalization costs following TKA. In November 2018, Pacira announced new data were published in The Journal of Medical Economics on the use of EXPAREL to manage postsurgical pain following total knee arthroplasty (TKA). The findings showed that patients receiving EXPAREL had a significant reduction in opioid use, hospital length of stay (LOS), and total hospitalization costs compared to TKA patients who did not receive EXPAREL. Patients receiving EXPAREL also had increased likelihood to be discharged home rather than a skilled nursing facility.
Fourth Quarter 2018 Financial Results
EXPAREL net product sales were $94.4 million in the fourth quarter of 2018, a 20% increase over the $78.7 million reported for the fourth quarter of 2017.
Total revenues were $95.1 million in the fourth quarter of 2018, a 20% increase over the $79.1 million reported for the fourth quarter of 2017.
Total operating expenses were $82.9 million in the fourth quarter of 2018, compared to $70.6 million in the fourth quarter of 2017.
GAAP net income was $8.3 million, or $0.20 per share (basic and diluted) in the fourth quarter of 2018, compared to GAAP net income of $4.6 million, or $0.11 per share (basic and diluted), in the fourth quarter of 2017.
Non-GAAP net income was $19.8 million, or $0.48 per share (basic) and $0.47 per share (diluted), in the fourth quarter of 2018, compared to non-GAAP net income of $16.0 million, or $0.39 per share (basic) and $0.38 per share (diluted), in the fourth quarter of 2017.
Pacira had 41.1 million basic weighted average shares of common stock outstanding in the fourth quarter of 2018.
Pacira had 42.2 million diluted weighted average shares of common stock outstanding in the fourth quarter of 2018.
Full-Year 2018 Financial Results
EXPAREL net product sales were $331.1 million in 2018, a 17% increase over the $282.9 million reported in 2017.
Total revenues were $337.3 million in 2018, an 18% increase over the $286.6 million reported in 2017.
Total operating expenses were $321.4 million in 2018, compared to $311.6 million in 2017.
GAAP net loss was $0.5 million, or $0.01 per share (basic and diluted) in 2018, compared to a GAAP net loss of $42.6 million, or $1.07 per share (basic and diluted) in 2017.
Non-GAAP net income was $43.5 million, or $1.06 per share (basic) and $1.04 per share (diluted), in 2018, compared to non-GAAP net income of $8.6 million, or $0.22 per share (basic) and $0.21 per share (diluted), in 2017.
Pacira ended 2018 with cash, cash equivalents, short-term and long-term investments ("cash") of $409.3 million.
Pacira had 40.9 million basic weighted average shares of common stock outstanding in 2018.
For non-GAAP measures, Pacira had 41.9 million diluted weighted average shares of common stock outstanding in 2018.
2019 Outlook
Pacira announces its full year 2019 financial guidance as follows. Pacira expects:
EXPAREL net product sales of $400 million to $410 million.
Non-GAAP gross margins of 75% to 76%.
Non-GAAP research and development (R&D) expense of $60 million to $70 million.
Non-GAAP selling, general and administrative (SG&A) expense of $165 million to $175 million.
Stock-based compensation of $30 million to $35 million.
See "Non-GAAP Financial Information" and "Reconciliations of GAAP to Non-GAAP 2019 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, February 28, 2019, at 8:30 a.m. ET. The call can be accessed by dialing 1-877-845-0779 (domestic) or 1-720-545-0035 (international) ten minutes prior to the start of the call and providing the Conference ID 6050757.
A replay of the call will be available approximately two hours after the completion of the call and can be accessed by dialing 1-855-859-2056 (domestic) or 1-404-537-3406 (international) and providing the Conference ID 6050757. The replay of the call will be available for two weeks from the date of the live call.
The live, listen-only webcast of the conference call can also be accessed by visiting the "Investors & Media" section of the company’s website at investor.pacira.com. A replay of the webcast will be archived on the Pacira website for 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, exit costs related to the discontinuation of DepoCyt(e) production and loss on an unexercised investment purchase option.
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 2019 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 2019 financial guidance for gross margins, R&D expense and SG&A expense.