Pacira Pharmaceuticals, Inc. Reports First Quarter 2017 Financial Results
-- EXPAREL® Net Product Sales Up 6% Year-Over-Year --
-- Conference Call Today at
“We’re pleased with our strong first quarter highlighted by important strategic advances and solid revenue growth,” said
Recent Highlights
- Positive results from Phase 4 study of EXPAREL in total knee arthroplasty (TKA). EXPAREL (bupivacaine liposome injectable suspension) achieved statistical significance for its co-primary endpoints of opioid reduction (p=0.0048) and postsurgical pain control (p=0.0381). EXPAREL also achieved statistical significance for key secondary endpoints, including time to first opioid and the percentage of patients who did not require any opioids to treat their postsurgical pain. The trial compared EXPAREL-based local analgesia infiltration to standard bupivacaine-based local analgesia infiltration, each as part of a standard multi-modal analgesic protocol.
- EXPAREL focus of educational programs at
American Academy of Orthopaedic Surgeons Annual Meeting. At theAmerican Academy of Orthopaedic Surgeons Annual Meeting, Pacira and its partnerDePuy Synthes , aJohnson & Johnson company, supported multiple educational programs around the impact of opioids and postsurgical pain management. The companies also hosted innovative virtual reality experiences to demonstrate EXPAREL best practice infiltration technique in total knee arthroplasty. Pacira andDePuy Synthes entered into an agreement inJanuary 2017 to support the promotion, education and training for EXPAREL in orthopedic procedures. - Collaboration with
Trinity Health to decrease opioid use. InMarch 2017 ,Pacira and Trinity Health launched a collaboration focusing on developing standardized procedure-specific enhanced recovery and pain protocols that will include using opioid alternatives when appropriate. The two organizations will also develop educational materials and generate data to track progress. - Gross proceeds of
$345 million from private offering of convertible notes. InMarch 2017 , Pacira completed a private offering of 2.375% convertible senior notes due 2022. The Company incurred approximately$11 million in financing costs and retired approximately$118 million in principal value of its existing 3.25% convertible senior notes due 2019. - New EXPAREL patent extends exclusivity to
December 2021 . InMarch 2017 , the U.S. Patent and Trademark Office issued U.S. Patent 9,585,838. The claims of the patent relate to the production of multivesicular liposomes. This is the third EXPAREL patent listed in the Food and Drug Administration Orange Book.
First Quarter 2017 Financial Results
- EXPAREL net product sales were
$67.7 million in the first quarter of 2017, a 6% increase over the$63.8 million reported for the first quarter of 2016.
- Total revenues were
$69.3 million in the first quarter of 2017, a 6% increase over the$65.5 million reported for the first quarter of 2016.
- Total operating expenses were
$83.3 million in the first quarter of 2017, compared to$67.7 million in the first quarter of 2016.
- GAAP net loss was
$19.9 million , or$(0.52) per share (basic and diluted), in the first quarter of 2017, compared to a GAAP net loss of$3.9 million , or$(0.10) per share (basic and diluted), in the first quarter of 2016.
- Non-GAAP net loss was
$7.3 million , or$(0.19) per share (basic and diluted) in the first quarter of 2017, compared to non-GAAP net income of$5.7 million , or$0.15 per share (basic) and$0.14 per share (diluted), in the first quarter of 2016.
- Pacira ended the first quarter of 2017 with cash, cash equivalents and short-term investments (“cash”) of
$383.7 million .
- Pacira had 38.0 million basic weighted average shares of common stock outstanding in the first quarter of 2017.
2017 Outlook
Pacira reiterated its full year 2017 financial guidance as follows:
- EXPAREL net product sales of
$290 million to $310 million .
- Non-GAAP gross margins of approximately 70%.
- Non-GAAP research and development (R&D) expense of
$50 million to $60 million .
- Non-GAAP selling, general and administrative (SG&A) expense of
$145 million to $155 million .
- Stock-based compensation of
$30 million to $35 million .
See “Non-GAAP Financial Information” and “Reconciliations of GAAP to Non-GAAP 2017 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,
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 4977296. 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 cost of goods sold, non-GAAP gross margins, non-GAAP research and development (R&D) and non-GAAP selling, general and administrative (SG&A) expenses, because such measures exclude stock-based compensation, amortization of debt discount and loss on early extinguishment of debt. These measures supplement our 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 and SG&A outlook for 2017 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 2017 financial guidance for gross margins, R&D and SG&A.
About Pacira
About EXPAREL®
EXPAREL (bupivacaine liposome injectable suspension) is currently indicated for single-dose infiltration into the surgical site to produce postsurgical analgesia. The product combines bupivacaine with DepoFoam®, a proven product delivery technology that delivers medication over a desired time period. EXPAREL represents the first and only multivesicular liposome local anesthetic that can be utilized in the peri- or postsurgical setting. By utilizing the DepoFoam platform, a single dose of EXPAREL delivers bupivacaine over time, providing significant reductions in cumulative pain score with up to a 45 percent decrease in opioid consumption; the clinical benefit of the opioid reduction was not demonstrated. Additional information is available at www.EXPAREL.com.
Important Safety Information
EXPAREL is contraindicated in obstetrical paracervical block anesthesia. EXPAREL has not been studied for use in patients younger than 18 years of age. Non-bupivacaine-based local anesthetics, including lidocaine, may cause an immediate release of bupivacaine from EXPAREL if administered together locally. The administration of EXPAREL may follow the administration of lidocaine after a delay of 20 minutes or more. Other formulations of bupivacaine should not be administered within 96 hours following administration of EXPAREL. Monitoring of cardiovascular and neurological status, as well as vital signs should be performed during and after injection of EXPAREL as with other local anesthetic products. Because amide-type local anesthetics, such as bupivacaine, are metabolized by the liver, EXPAREL should be used cautiously in patients with hepatic disease. Patients with severe hepatic disease, because of their inability to metabolize local anesthetics normally, are at a greater risk of developing toxic plasma concentrations. In clinical trials, the most common adverse reactions (incidence greater-than or equal to 10%) following EXPAREL administration were nausea, constipation, and vomiting.
Please see the full Prescribing Information for more details available at http://www.exparel.com/pdf/EXPAREL_Prescribing_Information.pdf.
Forward Looking Statements
Any statements in this press release about our future expectations, plans, outlook and prospects, and other statements containing the words “believes,” “anticipates,” “plans,” “estimates,” “expects,” “intends,” “may” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including risks relating to: the success of our sales and manufacturing efforts in support of the commercialization of EXPAREL; the rate and degree of market acceptance of EXPAREL and our other products; the size and growth of the potential markets for EXPAREL and our ability to serve those markets; our plans to expand the use of EXPAREL to additional indications and opportunities, and the timing and success of any related clinical trials; the related timing and success of
(Tables to Follow)
| Pacira Pharmaceuticals, Inc. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| March 31, 2017 |
December 31, 2016 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash, cash equivalents and short-term investments | $ | 383,699 | $ | 172,597 | ||||
| Accounts receivable, net | 27,702 | 29,937 | ||||||
| Inventories, net | 30,311 | 31,278 | ||||||
| Prepaid expenses and other current assets | 6,252 | 9,277 | ||||||
| Total current assets | 447,964 | 243,089 | ||||||
| Fixed assets, net | 102,571 | 101,016 | ||||||
| Goodwill | 48,829 | 46,737 | ||||||
| Other assets | 598 | 624 | ||||||
| Total assets | $ | 599,962 | $ | 391,466 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 9,373 | $ | 7,511 | ||||
| Accrued expenses | 34,900 | 36,666 | ||||||
| Convertible senior notes (1) | 759 | — | ||||||
| Current portion of deferred revenue | 520 | 595 | ||||||
| Income taxes payable | 96 | 66 | ||||||
| Total current liabilities | 45,648 | 44,838 | ||||||
| Deferred revenue | 7,357 | 7,487 | ||||||
| Other liabilities | 10,332 | 11,427 | ||||||
| Convertible senior notes (2) | 265,992 | 108,738 | ||||||
| Total stockholders’ equity | 270,633 | 218,976 | ||||||
| Total liabilities and stockholders’ equity | $ | 599,962 | $ | 391,466 | ||||
| (1) $759 thousand relates to our 3.25% convertible senior notes due 2019. These notes are classified as current at March 31, 2017 because the note holders can convert any time during the quarter ended June 30, 2017. These convertible senior notes were classified as non-current at December 31, 2016. | ||||||||
| (2) At March 31, 2017, $266.0 million relates to our 2.375% convertible senior notes due 2022 that are not currently convertible. $108.7 million at December 31, 2016 relates to our 3.25% convertible senior notes due 2019 that are now current liabilities as explained in footnote 1 above. | ||||||||
| Pacira Pharmaceuticals, Inc. | ||||||||
| Consolidated Statements of Operations | ||||||||
| (in thousands, except per share amounts) | ||||||||
| (unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2017 | 2016 | |||||||
| Net product sales: | ||||||||
| EXPAREL | $ | 67,701 | $ | 63,752 | ||||
| DepoCyt(e) and other product sales | 724 | 750 | ||||||
| Total net product sales | 68,425 | 64,502 | ||||||
| Collaborative licensing and milestone revenue | 206 | 356 | ||||||
| Royalty revenue | 652 | 616 | ||||||
| Total revenues | 69,283 | 65,474 | ||||||
| Operating expenses: | ||||||||
| Cost of goods sold | 24,581 | 20,278 | ||||||
| Research and development | 16,632 | 9,493 | ||||||
| Selling, general and administrative | 42,120 | 37,957 | ||||||
| Total operating expenses | 83,333 | 67,728 | ||||||
| Loss from operations | (14,050 | ) | (2,254 | ) | ||||
| Other (expense) income: | ||||||||
| Interest income | 514 | 252 | ||||||
| Interest expense | (2,589 | ) | (1,868 | ) | ||||
| Loss on early extinguishment of debt (1) | (3,721 | ) | — | |||||
| Other, net | 10 | 48 | ||||||
| Total other expense, net | (5,786 | ) | (1,568 | ) | ||||
| Loss before income taxes | (19,836 | ) | (3,822 | ) | ||||
| Income tax expense | (30 | ) | (32 | ) | ||||
| Net loss | $ | (19,866 | ) | $ | (3,854 | ) | ||
| Net loss per share: | ||||||||
| Basic and diluted net loss per common share | $ | (0.52 | ) | $ | (0.10 | ) | ||
| Weighted average common shares outstanding: | ||||||||
| Basic and diluted | 37,998 | 37,020 | ||||||
| (1) Amount relates to the loss on early extinguishment from our repurchase of $117.7 million of principal amount of our 3.25% convertible senior notes due 2019. | ||||||||
| Pacira Pharmaceuticals, Inc. | ||||||||
| Reconciliation of GAAP to Non-GAAP Financial Information | ||||||||
| (in thousands, except per share amounts) | ||||||||
| (unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2017 | 2016 | |||||||
| GAAP net loss | $ | (19,866 | ) | $ | (3,854 | ) | ||
| Non-GAAP adjustments: | ||||||||
| Stock-based compensation | 7,400 | 8,490 | ||||||
| Loss on early extinguishment of debt | 3,721 | — | ||||||
| Amortization of debt discount | 1,411 | 1,022 | ||||||
| Total Non-GAAP adjustments | 12,532 | 9,512 | ||||||
| Non-GAAP net income (loss) | $ | (7,334 | ) | $ | 5,658 | |||
| GAAP basic and diluted net loss per common share | $ | (0.52 | ) | $ | (0.10 | ) | ||
| Non-GAAP basic net income (loss) per common share | $ | (0.19 | ) | $ | 0.15 | |||
| Non-GAAP diluted net income (loss) per common share | $ | (0.19 | ) | $ | 0.14 | |||
| Weighted average common shares outstanding - basic | 37,998 | 37,020 | ||||||
| Weighted average common shares outstanding - diluted | 37,998 | 41,144 | ||||||
| Cost of goods sold reconciliation: | ||||||||
| GAAP cost of goods sold | $ | 24,581 | $ | 20,278 | ||||
| Stock-based compensation | (1,375 | ) | (1,549 | ) | ||||
| Non-GAAP cost of goods sold | $ | 23,206 | $ | 18,729 | ||||
| Research and development reconciliation: | ||||||||
| GAAP research and development | $ | 16,632 | $ | 9,493 | ||||
| Stock-based compensation | (658 | ) | (893 | ) | ||||
| Non-GAAP research and development | $ | 15,974 | $ | 8,600 | ||||
| Selling, general and administrative reconciliation: | ||||||||
| GAAP selling, general and administrative | $ | 42,120 | $ | 37,957 | ||||
| Stock-based compensation | (5,367 | ) | (6,048 | ) | ||||
| Non-GAAP selling, general and administrative | $ | 36,753 | $ | 31,909 | ||||
| Pacira Pharmaceuticals, Inc. | ||||||
| Reconciliation of GAAP to Non-GAAP 2017 Financial Guidance | ||||||
| (dollars in millions) | ||||||
| GAAP to Non-GAAP Guidance | GAAP | Stock-Based Compensation |
Non-GAAP | |||
| EXPAREL net product sales | $290 to $310 | — | — | |||
| Gross margin | Approx. 68% | Approx. 2% | Approx. 70% | |||
| Research and development expense | $52 to $64 | $2 to $4 | $50 to $60 | |||
| Selling, general and administrative expense | $167 to $180 | $22 to $25 | $145 to $155 | |||
| Stock-based compensation | $30 to $35 | — | — | |||
Investor Contact:Susan Mesco , (973) 451-4030 susan.mesco@pacira.com Media Contact: Coyne Public RelationsAlyssa Schneider , (973) 588-2270 aschneider@coynepr.com