On February 20, 2020 Pacira BioSciences, Inc. (Nasdaq: PCRX) reported financial results for the fourth quarter and full-year of 2019 and provided 2020 financial guidance (Press release, Pacira Pharmaceuticals, FEB 20, 2020, View Source;991.htm [SID1234554551]).
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"By every measure, 2019 was an outstanding year for Pacira. We are delighted to report record revenues for EXPAREL with our sixth consecutive quarter of more than 20 percent growth," said Dave Stack, chairman and chief executive officer of Pacira BioSciences. "Demand has continued to mount within the anesthesia community as EXPAREL-based nerve and field blocks take hold as institutional protocol. Additionally, we enhanced our non-opioid pain management product portfolio with the addition of iovera° and we are seeing great interest from the marketplace around this innovative system."
"Looking forward, we intend to capitalize on this momentum with robust topline growth that will drive substantial operating leverage and cash flow, providing significant financial flexibility to invest in future growth opportunities. Our mission for 2020 remains steadfast as we continue to propel our global leadership in non-opioid pain management and deliver multiple milestones, including the publication of new data in C-section, label-expansion initiatives for pediatrics and lower extremity nerve block, and the advancement of regulatory activities in Europe, Canada, and China," added Mr. Stack.
2019 Full-Year and Fourth Quarter Financial Highlights
Full-year revenues of $421.0 million and fourth quarter revenues of $122.4 million.
Full-year EXPAREL (bupivacaine liposome injectable suspension) net product sales of $407.9 million and fourth quarter EXPAREL net product sales of $116.9 million.
Full-year iovera° net product sales were $7.9 million and fourth quarter iovera° net product sales of $3.2 million. Pacira began recognizing sales of iovera° in April 2019 after completing its acquisition of MyoScience, Inc., a privately held medical technology company.
Full-year GAAP net loss of $11.0 million or $0.27 per share (basic and diluted).
Full-year non-GAAP net income of $70.7 million or $1.67 per diluted share.
Fourth quarter GAAP net loss of $4.9 million or $0.12 per share (basic and diluted).
Fourth quarter non-GAAP net income of $23.8 million or $0.56 per diluted share.
Recent Highlights
Launch of national regional anesthesia training initiative with Envision Physician Services.
In January 2020, Pacira announced a collaboration with Envision Physician Services to train anesthesiology clinicians on ultrasound-guided regional anesthesia techniques utilizing long-acting local anesthetics like EXPAREL via a series of interactive workshops held across the country. The program supports the ongoing efforts by both organizations to advance the delivery of high-quality, patient-centered care.
EXPAREL achieves primary and key secondary endpoints in Phase 4 CHOICE study in cesarean section patients. In January 2020, Pacira announced that its Phase 4 study of EXPAREL in patients undergoing Cesarean section achieved its primary endpoint with a statistically significant reduction in total postsurgical opioid consumption while maintaining pain scores through 72 hours (P≤0.001). EXPAREL demonstrated statistical significance for the key secondary endpoint of a reduction in the incidence and severity of itching for 72 hours after surgery (P≤0.05). Full study results will be submitted for publication in the peer-reviewed medical literature later this year.
Phase 3 PLAY study of EXPAREL in pediatric patients achieves positive results. In December 2019, Pacira announced positive results from its Phase 3 PLAY study of EXPAREL administered as a single-dose infiltration in pediatric patients undergoing spinal or cardiac surgeries. Overall findings were consistent with the pharmacokinetic and safety profiles for adult patients with no safety concerns identified at a dose of 4 mg/kg. These results will provide the foundation for the company’s supplemental New Drug Application submission in the first half of 2020 to the U.S. Food and Drug Administration (FDA) seeking expansion of the EXPAREL label to include children aged six and over.
Fourth Quarter 2019 Financial Results
Total revenues were $122.4 million in the fourth quarter of 2019, a 29% increase over the $95.1 million reported for the fourth quarter of 2018.
EXPAREL net product sales were $116.9 million in the fourth quarter of 2019, a 24% increase over the $94.4 million reported for the fourth quarter of 2018.
Fourth quarter iovera° net product sales were $3.2 million. Pacira began recognizing sales of iovera° in April 2019 after completing its acquisition of MyoScience, Inc., a privately held medical technology company.
Sales of bupivacaine liposome injectable suspension to a third-party licensee for use in veterinary practice were $1.7 million in the fourth quarter of 2019, compared to $0.3 million in 2018.
Fourth quarter royalty revenue was $0.6 million compared to $0.4 million in 2018.
Total operating expenses were $120.7 million in the fourth quarter of 2019, compared to $82.9 million in the fourth quarter of 2018.
Research and development (R&D) expenses were $19.7 million in the fourth quarter of 2019, compared to $14.2 million in the fourth quarter of 2018. The company’s R&D expenses include $8.7 million and $6.5 million of product development and manufacturing capacity expansion costs in the fourth quarters of 2019 and 2018, respectively.
Selling, general and administrative (SG&A) expenses were $54.2 million in the fourth quarter of 2019, compared to $44.6 million in the fourth quarter of 2018.
GAAP net loss was $4.9 million, or $0.12 per share (basic and diluted) in the fourth quarter of 2019, compared to GAAP net income of $8.3 million, or $0.20 per share (basic and diluted), in the fourth quarter of 2018.
Non-GAAP net income was $23.8 million, or $0.57 per share (basic) and $0.56 per share (diluted), in the fourth quarter of 2019, compared to non-GAAP net income of $19.8 million, or $0.48 per share (basic) and $0.47 per share (diluted), in the fourth quarter of 2018.
Pacira had 41.8 million basic weighted average shares of common stock outstanding in the fourth quarter of 2019.
For non-GAAP measures, Pacira had 42.6 million diluted weighted average shares of common stock outstanding in the fourth quarter of 2019.
Full-Year 2019 Financial Results
Total revenues were $421.0 million in 2019, a 25% increase over the $337.3 million reported in 2018.
EXPAREL net product sales were $407.9 million in 2019, a 23% increase over the $331.1 million reported in 2018.
Full-year iovera° net product sales were $7.9 million. Pacira began recognizing sales of iovera° in April 2019 after completing its acquisition of MyoScience, Inc., a privately held medical technology company.
Sales of bupivacaine liposome injectable suspension to a third-party licensee for use in veterinary practice were $3.2 million in 2019, compared to $1.3 million in 2018.
Full-year royalty revenue was $2.1 million compared to $1.9 million in 2018.
Total operating expenses were $410.5 million in 2019, compared to $321.4 million in 2018.
Research and development (R&D) expenses were $72.1 million in 2019, compared to $55.7 million in 2018. The company’s R&D expenses include $29.7 million and $28.5 million of product development and manufacturing capacity expansion costs in 2019 and 2018, respectively.
Selling, general and administrative (SG&A) expenses were $200.8 million in 2019, compared to $177.3 million in 2018.
GAAP net loss was $11.0 million, or $0.27 per share (basic and diluted) in 2019, compared to a GAAP net loss of $0.5 million, or $0.01 per share (basic and diluted) in 2018.
Non-GAAP net income was $70.7 million, or $1.70 per share (basic) and $1.67 per share (diluted), in 2019, compared to non-GAAP net income of $43.5 million, or $1.06 per share (basic) and $1.04 per share (diluted), in 2018.
Pacira ended 2019 with cash, cash equivalents, short-term and long-term investments ("cash") of $356.7 million. Cash provided by operations was $70.5 million in 2019, compared to $48.9 million in 2018.
Pacira had 41.5 million basic weighted average shares of common stock outstanding in 2019.
For non-GAAP measures, Pacira had 42.4 million diluted weighted average shares of common stock outstanding in 2019.
2020 Outlook
Pacira announces its full-year 2020 financial guidance as follows. Pacira expects:
Total revenues to be between $485 million and $500 million
EXPAREL net product sales to be between $465 million and $475 million;
iovera° net product sales to be between $15 million and $20 million;
Non-GAAP gross margins to be between 76% and 78%;
Non-GAAP research and development (R&D) expense to be between $60 million to $70 million;
Non-GAAP selling, general and administrative (SG&A) expense to be between $180 million and $190 million; and
Stock-based compensation to be between $35 million and $40 million.
See "Non-GAAP Financial Information" and "Reconciliations of GAAP to Non-GAAP 2020 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 20, 2020, at 8:30 a.m. ET. To participate in the conference call, dial 1-877-845-0779 and provide the passcode 8765839. 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 8765839. 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, non-GAAP net income 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; acquisition-related charges, product discontinuation costs and other expense; stock-based compensation; amortization of debt discount; amortization of acquired intangible assets; an income tax benefit and step-up in basis of inventory in connection with the acquisition of MyoScience, Inc.; and loss on investment and other non-operating income.
These measures supplement Pacira’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 2020 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 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, and a reconciliation of our GAAP to non-GAAP 2020 financial guidance for gross margins, R&D expense and SG&A expense.