On August 8, 2019 Pacira BioSciences, Inc. (Nasdaq: PCRX), a leading provider of innovative non-opioid pain management options, reported financial results for the second quarter of 2019 (Press release, Pacira Pharmaceuticals, AUG 8, 2019, View Source;991.htm [SID1234538430]).

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"During the second quarter, we made meaningful progress across key areas including commercial, clinical and corporate. We delivered yet another quarter of outstanding results highlighted by continued strong top-line growth, the addition of the novel ioverao system to our commercial offering, and the enhancement of our leadership team with the addition of Max Reinhardt as our newly appointed President," said Dave Stack, chairman and chief executive officer of Pacira BioSciences. "We continue to see robust growth for EXPAREL (bupivacaine liposome injectable suspension) with growing penetration across a wide-range of soft tissue and orthopedic procedures and the shifting of inpatient procedures to the ambulatory setting through the expanding utilization of EXPAREL-based opioid-sparing protocols."

"Looking ahead, EXPAREL continues to be well positioned for long-term market leadership as the only opioid-free, long-acting, local and regional analgesic approved for infiltration, field blocks and interscalene brachial plexus nerve block. We are also pleased with the progress we have made integrating ioverao into our commercial offering, which is expected to deliver accelerating accretion beginning in the second half of 2020." added Mr. Stack.

Second Quarter 2019 Financial Results

Total revenues were $102.6 million in the second quarter of 2019, a 22 percent increase over the $84.1 million reported for the second quarter of 2018.

Total net product sales were $101.8 million in the second quarter of 2019, a 26 percent increase over the $80.7 million reported for the second quarter of 2018.

Net product sales of EXPAREL/bupivacaine liposome injectable suspension were $99.8 million in the second quarter of 2019, a 24 percent increase over the $80.7 million reported for the second quarter of 2018.

EXPAREL net product sales were $98.9 million in the second quarter of 2019, compared to $80.4 million in the second quarter of 2018. Sales of bupivacaine liposome injectable

suspension to a third-party licensee for use in animals were $0.9 million in the second quarter of 2019, compared to $0.3 million in the second quarter of 2018.

iovera° net product sales during the second quarter of 2019 were $2.0 million. Pacira began recognizing sales of iovera° in April 2019 after completing its acquisition of MyoScience, Inc., a privately held medical technology company.

Total operating expenses were $97.3 million in the second quarter of 2019, compared to $77.6 million in the second quarter of 2018.

GAAP net income was $2.7 million, or $0.06 per diluted share, in the second quarter of 2019, compared to $2.6 million, or $0.06 per diluted share, in the second quarter of 2018.

Non-GAAP net income was $17.5 million, or $0.41 per diluted share, in the second quarter of 2019, compared to $9.9 million, or $0.24 per diluted share, in the second quarter of 2018.

Pacira ended the second quarter of 2019 with cash, cash equivalents, short-term and long-term investments ("cash") of $317.6 million. Cash provided by operations was $22.8 million in the second quarter of 2019, compared to $13.7 million in the second quarter of 2018.

See "Non-GAAP Financial Information" and "Reconciliation of GAAP to Non-GAAP 2019 Financial Guidance" below.

Recent Business Highlights

Validation of EXPAREL Marketing Authorization Application from European Medicines Agency. In June, Pacira announced that the company’s Marketing Authorization Application (MAA) for EXPAREL for postsurgical analgesia was validated by the European Medicines Agency (EMA). With this validation, the Pacira application is complete and the EMA Committee for Medicinal Products for Human Use will now begin the review procedure with an opinion expected in the second half of 2020.

Appointment of former Johnson & Johnson executive, Max Reinhardt, as President. In June, Pacira announced the appointment of Max Reinhardt as the company’s president. Mr. Reinhardt will report to Dave Stack, chairman and chief executive officer of Pacira, and be responsible for overseeing all commercial and medical affairs functions at Pacira. Mr. Stack will maintain leadership of the overall Pacira corporate strategy.

New analysis shows use of EXPAREL associated with improved clinical and economic outcomes following hip replacement surgery. In June, Pacira announced new data on the use of EXPAREL following total hip arthroplasty (THA). The findings show that patients receiving EXPAREL had a significant reduction in opioid use, hospital length of stay and total hospitalization costs compared to THA patients who did not receive the product. The results were published in The Journal of Medical Economics.

Publication of pivotal study of EXPAREL as a single-dose interscalene brachial plexus nerve block in patients undergoing shoulder surgery. In June, Pacira announced the publication of its multinational Phase 3 study supporting the efficacy and safety of EXPAREL as a single-injection interscalene plexus nerve block in patients undergoing total shoulder arthroplasty or rotator cuff repair. The data, which provided the basis for FDA approval for this indication, were published in Pain Medicine.

Phase 4 study demonstrates superiority of EXPAREL plus bupivacaine versus bupivacaine alone in Cesarean Section procedures. In May 2019, Pacira announced full results from its Phase 4 study of EXPAREL administered via TAP field block in patients undergoing C-Section. EXPAREL achieved its primary endpoint with a statistically significant reduction in total postsurgical opioid consumption through 72 hours. EXPAREL also achieved statistical significance for reduction in pain intensity scores through 72 hours.

2019 Financial Guidance

Pacira updated its guidance for selling, general and administrative (SG&A) expense and reiterated its remaining guidance. For the full year 2019, the company currently expects:

EXPAREL net product sales in the range of $400 million to $410 million.

iovera° net product sales in the range of $8 million to $10 million.

Non-GAAP gross margins in the range of 75% to 76%.

Non-GAAP research and development (R&D) expense in the range of $60 million to $70 million.

Non-GAAP SG&A expense in the range of $180 million to $190 million versus the company’s previously guided range of $165 million to $175 million. Non-GAAP SG&A guidance was increased primarily due to the inclusion of commercial infrastructure costs for iovera°.

Stock-based compensation in the range of $30 million to $35 million.