Pacira Biosciences Inc.
08/05/2025 | Press release | Distributed by Public on 08/05/2025 14:08
Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) and in accordance with the rules and regulations of the United States Securities and Exchange Commission, or SEC.
This Quarterly Report on Form 10-Q and certain other communications made by us contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995, including, without limitation, statements related to: '5x30', our growth and business strategy, our future outlook, our intellectual property and patent terms, our future growth potential and future financial and operating results and trends, our plans, objectives, expectations (financial or otherwise) and intentions, including our plans with respect to the repayment of our indebtedness, anticipated product portfolio and product development programs, strategic alliances, plans with respect to the Non-Opioids Prevent Addiction in the Nation ("NOPAIN") Act, the expected cost savings and benefits of a July 2025 reduction in force and any other statements that are not historical facts. For this purpose, any statement that is not a statement of historical fact should be considered a forward-looking statement. We often use the words "anticipate," "believe," "can," "could," "estimate," "expect," "intend," "may," "plan," "project," "should," "will," "would" and similar expressions to help identify forward-looking statements. We cannot assure you that our estimates, assumptions and expectations will prove to have been correct. Actual results may differ materially from these indicated by such forward-looking statements as a result of various important factors, including risks relating to, among others: the failure to realize the anticipated benefits and synergies from the acquisition of GQ Bio Therapeutics GmbH; risks associated with acquisitions, such as the risk that the businesses will not be integrated successfully, that such integration may be more difficult, time-consuming or costly than expected or that the expected benefits of the transaction will not occur; our manufacturing and supply chain, global and United States, or U.S., economic conditions (including tariffs, inflation and rising interest rates), and our business, including our revenues, financial condition, cash flows and results of operations; the success of our sales and manufacturing efforts in support of the commercialization of EXPAREL®(bupivacaine liposome injectable suspension), ZILRETTA®(triamcinolone acetonide extended-release injectable suspension) and iovera®°; the rate and degree of market acceptance of EXPAREL, ZILRETTA and iovera°; the size and growth of the potential markets for EXPAREL, ZILRETTA and iovera° and our ability to serve those markets; our plans to expand the use of EXPAREL, ZILRETTA and iovera° to additional indications and opportunities, and the timing and success of any related clinical trials for EXPAREL, ZILRETTA, iovera° and any of our other product candidates, including PCRX-201 (enekinragene inzadenovec); the commercial success of EXPAREL, ZILRETTA and iovera°; the related timing and success of U.S. Food and Drug Administration, or FDA, supplemental New Drug Applications, or sNDAs, and premarket notification 510(k)s; the related timing and success of European Medicines Agency, or EMA, Marketing Authorization Applications, or MAAs; our plans to evaluate, develop and pursue additional product candidates utilizing our proprietary multivesicular liposome, or pMVL, drug delivery technology; the approval of the commercialization of our products in other jurisdictions; clinical trials in support of an existing or potential pMVL-based product; our commercialization and marketing capabilities; our ability to successfully complete capital projects; the outcome of any litigation; the recoverability of our deferred tax assets; assumptions associated with contingent consideration payments; assumptions used for estimated future cash flows associated with determining the fair value of the Company and the anticipated funding or benefits of our share repurchase program.
Important factors could cause our actual results to differ materially from those indicated or implied by forward-looking statements, and as such we anticipate that subsequent events and developments will cause our views to change. Except as required by applicable law, we undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and readers should not rely on the forward-looking statements as representing our views as of any date subsequent to the date of the filing of this Quarterly Report on Form 10-Q.
These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include items mentioned herein and the matters discussed and referenced in Part I-Item 1A. "Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, 2024(the "2024 Annual Report") and in other reports filed with the SEC.
Unless the context requires otherwise, references to "Pacira," the "Company," the "Registrant," "our," "us" and "we" in this Quarterly Report on Form 10-Q refer to Pacira BioSciences, Inc. and its subsidiaries.
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 38
Overview
Pacira's mission is to deliver innovative, non-opioid pain therapies to transform the lives of patients. Our long-acting, local analgesic EXPAREL utilizes our unique pMVL drug delivery technology that encapsulates drugs without altering their molecular structure and releases them over a desired period of time. In the U.S., EXPAREL is a long-acting, non-opioid option proven to manage postsurgical pain. EXPAREL is the only product indicated for local analgesia via infiltration in patients aged six years and older and regional analgesia via interscalene brachial plexus nerve block, sciatic nerve block in the popliteal fossa and adductor canal block in adults. In Europe, EXPAREL is approved as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults, and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults and children aged six years and older. We drop-ship EXPAREL directly to end-users based on orders placed to wholesalers or directly to us, and there is no product held by wholesalers. With the acquisition of Flexion Therapeutics, Inc. in November 2021 (the "Flexion Acquisition"), we acquired ZILRETTA, the first and only extended-release, intra-articular, or IA, injectable therapy that can provide major relief for osteoarthritis, or OA, knee pain for three months and has the potential to become an alternative to hyaluronic acid, platelet rich plasma injections or other early intervention treatments. With the acquisition of MyoScience, Inc. in April 2019 (the "MyoScience Acquisition"), we acquired iovera°, a handheld cryoanalgesia device used to deliver a precise, controlled application of cold temperature to targeted nerves, which we sell directly to end users. EXPAREL, ZILRETTA and iovera° are highly complementary products as long-acting, non-opioid therapies that alleviate pain. We are also advancing the development of PCRX-201 (enekinragene inzadenovec), a novel, locally administered gene therapy for the treatment of OA of the knee. PCRX-201 is the lead program from our proprietary high-capacity adenovirus, or HCAd, vector platform, which enables local administration of genetic medicines and has the potential to unlock gene therapy for large prevalent diseases affecting millions of people. In February 2025, we acquired the remaining 81 percent equity interest in GQ Bio Therapeutics GmbH, or GQ Bio (the "GQ Bio Acquisition"), a privately-held biopharmaceutical company, which included the novel HCAd platform, a preclinical portion of HCAd-based assets and research and development talent. For more information on the GQ Bio Acquisition, see Note 3, GQ Bio Therapeutics Acquisition, to our condensed consolidated financial statements included herein.
We expect to continue to pursue the expanded use of EXPAREL, ZILRETTA and iovera° in additional procedures; progress our earlier-stage product candidate pipeline; advance regulatory activities for EXPAREL, ZILRETTA, iovera°, PCRX-201 and our other product candidates; invest in sales and marketing resources for EXPAREL, ZILRETTA and iovera°; expand and enhance our manufacturing capacity for EXPAREL, ZILRETTA and iovera°; invest in products, businesses and technologies; and support legal matters.
Global Economic Conditions, Inflation and Tariffs
Direct and indirect effects of global economic conditions have in the past, and may continue to, negatively impact our business, financial condition and results of operations. Such impacts may include the effect of prolonged periods of inflation or the imposition of tariffs, which could, among other things, result in higher costs for raw materials, equipment and other goods and services; cause patients to defer or cancel medical procedures, thereby adversely impacting our revenues; and negatively impact our suppliers which could result in longer lead-times or the inability to procure a sufficient supply of materials.
While there has been no material impact on our business related to tariffs to date, the current macroeconomic environment remains dynamic and subject to rapid and possibly material changes. For instance, the U.S. government may in the future pause, reimpose or increase tariffs and foreign governments have, and in the future may, impose retaliatory trade protection measures. Our business may be impacted by ongoing risks associated with global macroeconomic conditions, including international relations and trade disputes. For example, and most notably for us, the active pharmaceutical ingredient for both EXPAREL and ZILRETTA are sourced from outside the U.S. In July 2025, the U.S. and the European Union, or E.U., agreed to a trade deal that sets a 15% tariff on imports from the E.U., including branded pharmaceuticals, subject to Section 232 of the Trade Expansion Act of 1962.
Such tariffs imposed by the U.S. and/or other countries that are currently in effect, or anticipated to take effect in the future, could increase our manufacturing and operating expenses in future periods, including the cost to deliver our products to commercial markets, the cost to source raw materials for the manufacturing of our products and the cost of materials used in our research and development activities. The imposition of future tariffs impacting our industry, the magnitude of response by other countries to such tariffs and the length of time such tariffs are in effect may also increase uncertainty and adversely impact our business.
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 39
Recent Highlights
•In July 2025, we entered into a credit agreement with Wells Fargo Bank, National Association, as administrative agent, swingline lender and an issuing bank, and certain lenders (the "Credit Agreement"), to, among other things, refinance the $100.0 million indebtedness outstanding under our existing term loan A credit facility and provide ongoing working capital. The Credit Agreement provides for a senior secured revolving credit facility in an aggregate commitment amount of $300.0 million, with a letter of credit sublimit of $10.0 million and swingline loan sublimit of $15.0 million (the "Revolving Credit Facility"). The Revolving Credit Facility is secured by substantially all of our and each of our subsidiary guarantor's assets and matures on July 3, 2030, subject to certain exceptions set forth in the Credit Agreement.
For more information, see Note 9, Debt, to our condensed consolidated financial statements included herein.
•During the second quarter of 2025, the U.S. Patent and Trademark Office, or USPTO, issued U.S. Patent No. 12,318,483 (the '483 patent), claiming composition of EXPAREL manufactured by an enhanced process from our large-scale batch process in San Diego, California, which demonstrated a more consistent stability profile as measured by an in-vitro release assay (IVRA). In addition, the USPTO also issued U.S. Patent No. 12,296,047 (the '047 patent), claiming EXPAREL composition. We now have 20 EXPAREL patents listed in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations (the "Orange Book"). The '047 patent expires in January 2041 and the '483 patent expires in July 2044.
In addition, we secured a favorable reexamination result of U.S. Patent No. 11,033,495 (the '495 patent) from the USPTO. The '495 patent will be reissued with amended claims that strengthen the patent.
•In June 2025, we presented three-year safety and efficacy data of PCRX-201 following a single IA injection for moderate to severe knee OA at the European Alliance of Associations for Rheumatology (EULAR) Annual Congress in Barcelona, Spain. The data show that a single intra-articular injection of PCRX-201 was well tolerated and produced sustained improvements in pain, stiffness, and function through three years in patients with moderate-to-severe OA of the knee. The open-label, Phase 1 trial investigated the safety and efficacy of PCRX-201 administered by ultrasound-guided intra-articular injection in 72 patients aged 30 to 80 who remained in the trial for three years.
•In July 2025, we announced a strategic collaboration with Johnson & Johnson MedTech, or J&J MedTech, to significantly expand the market reach of ZILRETTA, leveraging J&J MedTech's specialized early intervention sales force to co-promote ZILRETTA to existing and new customers. This agreement is expected to significantly expand access and extend reach across a large portion of the seven million IA knee injections administered to patients annually in the U.S.
Science Center Campus Reduction in Force
In July 2025, as a result of improving manufacturing efficiencies for EXPAREL, we instituted a reduction in force at our Science Center Campus in San Diego, California. Our enhanced efficiencies were the result of our multi-year investment in two large-scale 200+ liter batch manufacturing suites located in San Diego and Swindon, United Kingdom, which commenced commercial production in 2024 and 2021, respectively. Our two large-scale manufacturing suites are capable of producing bulk EXPAREL volumes that are approximately four-fold greater than our first-generation 45-liter batch manufacturing process, and we believe these larger manufacturing suites provide ample capacity for meeting the growing demand and improving gross margins for EXPAREL through a meaningfully more favorable cost structure and manufacturing yields versus the 45-liter batch process. As a result, and after careful consideration, we decided to decommission our 45-liter EXPAREL batch manufacturing suite located in San Diego and reduce our workforce accordingly.
The reduction impacted 71 employees or approximately 8% of our total workforce. We currently estimate that we will recognize pre-tax charges to our third quarter 2025 financial results of approximately $2.4 million to $2.8 million related to employee termination benefits, consisting of garden leave and severance, healthcare benefits, and, to a lesser extent, other one-time termination benefits and other costs. In June 2025, we reserved $1.0 million of inventory and recognized $5.5 million of accelerated depreciation expense associated with the decommissioning of the 45-liter manufacturing assets.
This reduction in the workforce is subject to local regulatory requirements and we expect to recognize the majority of these charges in the third quarter of 2025. The reduction in the workforce is anticipated to lead to an annual reduction in operating expenses of approximately $13.0 million, which does not reflect the one-time expenses associated with the workforce reduction. In addition, we may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur in connection with the workforce reduction.
For more information, see Note 18, Subsequent Events,to our condensed consolidated financial statements included herein.
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 40
EXPAREL
In the U.S., EXPAREL is currently indicated for local analgesia via infiltration in patients aged six years and older and regional analgesia via interscalene brachial plexus nerve block, sciatic nerve block in the popliteal fossa, and adductor canal block in adults. Safety and efficacy have not been established in other nerve blocks. In Europe, EXPAREL is approved as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults, and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults and children aged six years and older. We are currently advancing a registration program for EXPAREL in pediatric patients under six years of age.
EXPAREL Clinical Benefits
We believe EXPAREL can replace the use of bupivacaine delivered via elastomeric pumps as the foundation of a multimodal regimen for long-acting postsurgical pain management. Based on our clinical data, EXPAREL:
•provides long-lasting local or regional analgesia;
•is a ready-to-use formulation;
•expands easily with saline or lactated Ringer's solution to reach a desired volume;
•can be administered for local analgesia via infiltration and for regional analgesia via field block, as well as brachial plexus nerve block, sciatic nerve block in the popliteal fossa and adductor canal block; and
•facilitates treatment of a variety of surgical sites.
We believe EXPAREL is a key component of long-acting postsurgical pain management regimens that reduce the need for opioids. Based on the clinical data from our Phase 3 and Phase 4 clinical studies as well as data from retrospective health outcomes studies, EXPAREL significantly reduces opioid usage while improving postsurgical pain management.
We have successfully completed Part 1 of a pediatric study in children aged two to less than six years of age. We are implementing Part 2 of the pediatric study in children aged six months to less than two years of age using the same dosage that was utilized in Part 1.
ZILRETTA
ZILRETTA is the first and only extended-release, single-shot corticosteroid IA injection therapy for OA knee pain. ZILRETTA employs a proprietary, extended-release microsphere technology combining triamcinolone acetonide, or TA, a commonly administered, immediate-release corticosteroid, with a poly lactic-co-glycolic acid, or PLGA, matrix to provide extended pain relief. PLGA is a proven extended-release delivery vehicle that is metabolized to carbon dioxide and water as it releases drug in the IA space and is used in other approved drug products and surgical devices. The ZILRETTA microspheres slowly and continuously release TA into the knee to provide significant pain relief for 12 weeks, with some people experiencing pain relief through 16 weeks. ZILRETTA was approved by the FDA in October 2017 and launched in the U.S. shortly thereafter.
We are advancing a Phase 3 registration study to evaluate the safety and efficacy of ZILRETTA for the management of OA pain of the shoulder. If the study is successful, we plan to seek approval to expand the ZILRETTA label to include OA pain of the shoulder.
ZILRETTA Clinical Benefits
ZILRETTA combines TA with a proprietary, extended-release microsphere technology to administer extended therapeutic concentrations in the joint and persistent analgesic effect. Based on the strength of both its pivotal and other clinical trials, we believe that ZILRETTA represents an important treatment option for the millions of patients in the U.S. in need of safe and effective extended relief from OA knee pain. The pivotal Phase 3 trial showed that ZILRETTA significantly reduced OA knee pain for 12 weeks, with some people experiencing pain relief through 16 weeks. We believe that ZILRETTA has the potential to become the corticosteroid of choice given its safety and efficacy profile, and the fact that it is the first and only extended-release corticosteroid on the market. In August 2021, the American Association of Orthopaedic Surgeons, or AAOS, updated its evidence-based clinical practice guidelines, finding ZILRETTA can improve patient outcomes over traditional immediate-release corticosteroids.
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 41
iovera°
The iovera° system is a non-opioid, handheld cryoanalgesia device used to deliver precise, controlled doses of cold temperature to targeted nerves. It is FDA 510(k) cleared in the U.S., has a CE mark in the E.U., and is cleared for marketing in Canada for the blocking of pain. We believe that iovera° is highly complementary to EXPAREL and ZILRETTA as a non-opioid therapy that alleviates pain using a non-pharmacological nerve block to disrupt pain signals being transmitted to the brain from the site of injury or surgery. It is also indicated for the relief of pain and symptoms associated with arthritis of the knee for up to 90 days.
iovera° Clinical Benefits
There is a growing body of clinical data demonstrating success with iovera° treatment for a wide range of chronic pain conditions. Some of our strongest data relates directly to the improvement of OA pain of the knee. In a pivotal trial evaluating iovera° for knee OA pain, the majority of the patients suffering from OA pain of the knee experienced pain relief up to 150 days after being treated with iovera°.
Surgical intervention is typically a last resort for patients suffering from knee OA pain. Treatment with iovera° has demonstrated effectiveness for managing pain associated with knee replacements. Specifically, findings demonstrated reductions in opioids, including:
•The daily morphine equivalent consumption in the per protocol group analysis was significantly lower at 72 hours (p<0.05), 6 weeks (p<0.05) and 12 weeks (p<0.05).
•Patients who were administered iovera° were far less likely to take opioids six weeks after surgery. The number of patients taking opioids six weeks after total knee arthroplasty, or TKA, in the control group was three times the number of patients taking opioids in the cryoanalgesia group (14 percent vs. 44 percent, p<0.01).
•Patients in the iovera° group demonstrated a statistically significant reduction in pain scores from their baseline pain scores at 72 hours (p<0.05) and at 12 weeks (p<0.05).
We believe these data validate iovera° as a clinically meaningful non-opioid alternative for patients with knee OA as well as those undergoing TKA, and that iovera° offers the opportunity to provide patients with non-opioid pain control well in advance of any necessary surgical intervention through a number of key product attributes:
•iovera° is safe and effective with immediate pain relief that can last for months as the nerve regenerates over time;
•iovera° is repeatable, with no diminishing effectiveness over time and repeat use;
•The iovera° technology does not risk damage to the surrounding tissue;
•iovera° is a convenient handheld device with a single-use procedure-specific Smart Tip; and
•iovera° can be delivered precisely using imaging guidance or an anatomical landmark.
A study published in 2021 that included 267 patients undergoing TKA (169 who underwent cryoneurolysis with iovera° compared to 98 patients who did not receive iovera° treatment) showed that patients who were treated with iovera° had 51% lower daily morphine milligram equivalents during their hospital stay and a 22% lower mean pain score versus those who were not. In addition, the iovera° group had greater function at discharge, a shorter length of hospital stay and received significantly fewer opioids, including discharge prescriptions at week 2 and week 6 after surgery.
In September 2021, the AAOS updated its evidence-based clinical practice guidelines, reporting that denervation therapy-including cryoneurolysis-may reduce knee pain and improve function in patients with symptomatic OA of the knee.
In December 2024, we received FDA clearance to market a new iovera° Smart Tip designed to access the medial branch nerves to manage chronic low back pain. Millions of Americans suffer from chronic low back pain. It often leads to poor quality of life, disability, lost wages, and persistent prescription opioid use. The first phase of the launch is underway with an initial focus on spine key opinion leaders to gather insights and feedback before expanding to a broader targeted audience. A pilot randomized control trial evaluating iovera° versus radiofrequency ablation for the treatment of lower back pain showed that iovera° had significantly greater improvements in pain and disability and required fewer injections over a year.
Beyond treatment for pain, observational data has been presented at multiple congresses showing effectiveness of iovera° for the treatment of upper limb spasticity over 90 days by targeting motor nerves. We are advancing a registration trial to evaluate the efficacy and safety of iovera° for treating spasticity.
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 42
Innovations in Genicular Outcomes Registry (IGOR)
We are currently sponsoring a prospective, real-world registry called the Innovations in Genicular Outcomes Registry, or IGOR, which is a patient-focused registry governed in collaboration with a steering committee of scientific experts that evaluates clinical, economic- and health-related patient-reported outcomes in patients who have received any treatment for knee OA pain, including TKA, for a minimum of 18 months. A unique feature of IGOR is that if patients receive additional treatments for OA, data capture resets so that outcomes of their treatment journey can be followed over multiple years. Unlike in clinical studies, treatment decisions in IGOR are decided by physicians and patients in a shared decision-making manner rather than being driven by treatment assignment, so that outcomes are truly those from real-world applications. The IGOR registry is tracking outcomes of iovera°, ZILRETTA and EXPAREL, as well as comparator treatments. Early outcomes from IGOR have shown that patients who receive iovera° prior to undergoing TKA experience less pain, improved function and improved sleep for six months after surgery versus patients who do not receive iovera°.
The Osteoarthritis Market
OA is the most common form of arthritis. It is also called degenerative joint disease and occurs most frequently in the hands, hips and knees. With OA, the cartilage within a joint begins to break down and the underlying bone begins to change. These changes usually develop slowly and worsen over time. OA can cause pain, stiffness and swelling. In some cases, it also causes reduced function and disability-some people are no longer able to do daily tasks or work. According to the Centers for Disease Control and Prevention (CDC), OA affects over 32.5 million adults in the U.S.
The lifetime risk of developing symptomatic knee OA is 45 percent according to the Arthritis Foundation. The prevalence of symptomatic knee OA increases with each decade of life, with the annual incidence of knee OA being highest between age 55 and 64 years old. There are 14 million individuals in the U.S. who have symptomatic knee OA, and nearly two million are under the age of 45. Surgical intervention is typically a last resort for patients suffering from OA of the knee.
Clinicians have the flexibility to individualize OA knee pain treatment with either ZILRETTA or a drug-free nerve block with iovera° based on patient factors and preference, physician training, site of care and reimbursement considerations.
The HCAd Vector Platform
Our proprietary HCAd vector platform solves many of the challenges in the field of genetic medicine that have prevented its utilization in treating common diseases like OA. Key features include:
•The HCAd vector is much more efficient at delivering genes into cells compared to many other gene therapies that rely on adenovirus associated virus, or AAV, vectors. As a result, the desired effect can be achieved with much smaller doses;
•The vector used in the HCAd platform can carry up to 30,000 base pairs of DNA, which enables gene therapy with multiple or larger genes compared to AAV vectors; and
•Genetic medicines based on the HCAd platform can be administered locally and have the potential for redosing at therapeutically appropriate intervals.
Lower dose levels and efficient delivery of genes into cells means that thousands of doses can be produced in a single batch. As a result, we expect that any therapies built on the HCAd platform would have a commercially attractive and viable cost of goods profile.
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 43
Clinical Development Programs
PCRX-201
PCRX-201 is the lead program from our HCAd platform and we believe it underscores its promise for treating common diseases given its encouraging data in OA. PCRX-201 is targeting the IL-1 pathway, which triggers inflammation in response to pathogens and cellular stress. IL-1Ra is a core regulator of this pathway and helps to keep inflammation in balance by turning off the IL-1 pathway when it's not needed. As people get older, their bodies have a more challenging time maintaining that balance resulting in chronic IL-1-driven inflammation that eventually causes joint damage and pain.
After injection of PCRX-201, the HCAd vector enters joint cells and turns them into factories to boost cellular IL-1Ra production, which blocks IL-1 pathway activation to reduce inflammation and pain in the knee. PCRX-201 uses an inflammation-responsive promoter to only produce IL-1Ra when needed, mimicking how the body naturally responds to inflammation. In a Phase 1 proof-of-concept study of patients with moderate to severe OA of the knee, PCRX-201 was well tolerated with improvements in knee pain observed across all doses. The study enrolled 72 patients in two three-dose cohorts: a co-administered IA steroid cohort and a cohort that did not receive a steroid. PCRX-201 was well tolerated, with efficacy observed through at least 52 weeks at all doses and cohorts. The highest level of efficacy was achieved in the co-administered steroid group, which showed a greater percentage of patients with at least a 50% improvement in Western Ontario and McMaster Universities Osteoarthritis Index (WOMAC) pain and stiffness scores, as well as a meaningful improvement in Knee Injury and Osteoarthritis Outcomes Score (KOOS) functional assessment. In all 3 doses, over 70% of patients saw a more than 50% improvement in pain compared to baseline at week 16 and 78. PCRX-201 was well-tolerated with no serious treatment-emergent adverse events related to the treatment or procedure reported regardless of steroid pretreatment or dose level administered. While other therapies typically provide relief for three to six months, PCRX-201 has shown the potential to set a new standard with pain relief lasting at least 2 years from a single injection.
Given these highly encouraging Phase 1 data, we are advancing a Phase 2 clinical study in knee OA. The two-part, multicenter study-known as ASCEND-will involve approximately 135 patients, 45 to 80 years old with painful OA of the knee at a Kellgren-Lawrence (K-L) Grade of 2, 3 or 4. Subjects are randomly assigned to a treatment dose group and stratified by K-L Grade, a semiquantitative method for evaluating the severity of OA on a scale of 0-4.
ASCEND will evaluate two doses of PCRX-201, Dose A is 1.4 x 1010genome copies and Dose B is 1.4 x 1011genome copies. Patients are being randomized 1:1:1 to Dose A, Dose B or saline. All cohorts will receive concurrent pretreatment with an IA corticosteroid (methylprednisolone 40 mg), a technique common in gene therapy dosing to improve tolerability and gene transfer.
Part A of the study will randomize approximately 45 patients and Part B will randomize approximately 90 patients. The drug product used in Part B of the study will be manufactured using our newly developed, suspension-based batch manufacturing process intended for commercial scale-up. We have surpassed 50% enrollment in Part A of the study, and we expect to complete enrollment in Part A of the study before the end of 2025 and report results from a pre-specified interim analysis before the end of 2026.
For both Parts A and B of the study, the primary endpoint is the number and percent of treatment-emergent adverse events, adverse events of special interest, and serious adverse events for PCRX-201 plus steroid pretreatment versus saline plus steroid pretreatment from Week 1 through Week 52. The study's secondary and exploratory endpoints include efficacy assessments such as changes in pain and physical function from baseline at Weeks 38 and 52. Efficacy will be measured using the Numerical Rating Scale (NRS), WOMAC and KOOS. Biomarkers, including structural endpoints, as well as immunogenicity and biodistribution will also be evaluated and all subjects will be followed for 5 years.
PCRX-201 has received Regenerative Medicine Advanced Therapy, or RMAT, designation from the FDA and Advanced Therapy Medicinal Products, or ATMP, designation from the EMA. RMAT and ATMP are regulatory programs designed to expedite the development and review processes for promising therapies targeting a significant unmet need with preliminary clinical evidence indicating that the therapy has the potential to offer a major advantage over existing treatments.
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 44
Product Portfolio and Internal Pipeline
Our current product portfolio and internal product candidate pipeline, along with anticipated milestones over the next 12 to 18 months, are summarized in the table below:
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 45
Results of Operations
Comparison of the Three and Six Months Ended June 30, 2025 and 2024
Revenues
Net product sales consist of sales of (i) EXPAREL in the U.S., E.U., and the United Kingdom; (ii) ZILRETTA in the U.S.; (iii) iovera° in the U.S., Canada and the E.U. and (iv) sales of our bupivacaine liposome injectable suspension product for veterinary use. Royalty revenues are related to a collaborative licensing agreement from the sale of our bupivacaine liposome injectable suspension for veterinary use.
The following table provides information regarding our revenues during the periods indicated, including percent changes (dollar amounts in thousands):
|
Three Months Ended June 30, |
% Increase / (Decrease) |
Six Months Ended June 30, |
% Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Net product sales: | |||||||||||||||||||||||||||||||||||
| EXPAREL | $ | 142,917 | $ | 136,852 | 4% | $ | 279,446 | $ | 269,282 | 4% | |||||||||||||||||||||||||
| ZILRETTA | 31,334 | 30,707 | 2% | 54,672 | 56,546 | (3)% | |||||||||||||||||||||||||||||
| iovera° | 5,588 | 5,674 | (2)% | 10,711 | 10,704 | 0% | |||||||||||||||||||||||||||||
| Bupivacaine liposome injectable suspension | 508 | 3,154 | (84)% | 3,112 | 5,679 | (45)% | |||||||||||||||||||||||||||||
| Total net product sales | 180,347 | 176,387 | 2% | 347,941 | 342,211 | 2% | |||||||||||||||||||||||||||||
| Royalty revenue | 752 | 1,636 | (54)% | 2,081 | 2,929 | (29)% | |||||||||||||||||||||||||||||
| Total revenues | $ | 181,099 | $ | 178,023 | 2% | $ | 350,022 | $ | 345,140 | 1% | |||||||||||||||||||||||||
EXPAREL revenue increased 4% in both the three and six months ended June 30, 2025 versus 2024. Components of the increase included a 6% and 4% increase in gross vial volume in the three and six months ended June 30, 2025 versus 2024, respectively, which was partially offset by a shift in product mix. EXPAREL revenue was also positively impacted by a 1% increase in net selling price per unit in both the three and six months ended June 30, 2025 versus 2024, related to a January 2025 price increase, partially offset by increases in sales-related allowances as a result of group purchasing organization contracting.
ZILRETTA revenue increased 2% in the three months ended June 30, 2025 versus 2024 due to a 4% increase in net selling price per unit, partially offset by a 2% decrease in kit volume. ZILRETTA revenue decreased 3% in the six months ended June 30, 2025 versus 2024 due to a 6% decrease in kit volume, partially offset by a 3% increase in net selling price per unit. Both periods' increase in net selling price per unit is related to a 4% increase in gross selling price per unit, partially offset by higher sales-related allowances. ZILRETTA volume was impacted by the onboarding of a new field-based team to support ZILRETTA after realigning our existing sales force to focus on EXPAREL. This transition impacted sales in 2025 as ZILRETTA is a promotionally sensitive product.
Net product sales of iovera° decreased 2% and was flat in the three and six months ended June 30, 2025 versus 2024, respectively, driven by decreases in Smart Tip net selling prices per unit of 7% and 3%, partially offset by increases in Smart Tip volume of 4% and 2%.
Bupivacaine liposome injectable suspension revenue decreased 84% and 45% in the three and six months ended June 30, 2025 versus 2024, respectively, due to timing of orders placed. Its related royalties decreased 54% and 29% in the three and six months ended June 30, 2025 versus 2024, respectively, primarily due to both the timing of orders placed for veterinary use and the sales mix of vial sizes.
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 46
The following tables provide a summary of activity with respect to our sales-related allowances and accruals related to EXPAREL and ZILRETTA for the six months ended June 30, 2025 and 2024 (in thousands):
| June 30, 2025 |
Returns Allowances |
Prompt Payment Discounts |
Service Fees |
Volume Rebates and Chargebacks |
Government Rebates |
Total | ||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | 1,600 | $ | 1,308 | $ | 4,875 | $ | 4,863 | $ | 1,707 | $ | 14,353 | ||||||||||||||||||||||||||
| Provision | 702 | 6,918 | 11,189 | 76,044 | 1,813 | 96,666 | ||||||||||||||||||||||||||||||||
| Payments | (267) | (6,838) | (11,320) | (76,113) | (1,815) | (96,353) | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | 2,035 | $ | 1,388 | $ | 4,744 | $ | 4,794 | $ | 1,705 | $ | 14,666 | ||||||||||||||||||||||||||
| June 30, 2024 |
Returns Allowances |
Prompt Payment Discounts |
Service Fees |
Volume Rebates and Chargebacks |
Government Rebates |
Total | ||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | 1,868 | $ | 1,308 | $ | 3,697 | $ | 5,870 | $ | 1,175 | $ | 13,918 | ||||||||||||||||||||||||||
| Provision | 1,014 | 6,199 | 9,985 | 54,533 | 1,334 | 73,065 | ||||||||||||||||||||||||||||||||
| Payments | (664) | (6,287) | (9,850) | (55,058) | (715) | (72,574) | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | 2,218 | $ | 1,220 | $ | 3,832 | $ | 5,345 | $ | 1,794 | $ | 14,409 | ||||||||||||||||||||||||||
Total reductions of gross product sales from sales-related allowances and accruals were $96.7 million and $73.1 million, or 21.7% and 17.6% of gross product sales, for the six months ended June 30, 2025 and 2024, respectively. The overall 4.1% increase in sales-related allowances and accruals as a percentage of gross product sales was primarily related to accruals as a result of higher chargeback-related allowances from expanded contracting efforts.
Cost of Goods Sold
Cost of goods sold primarily relates to the costs to produce, package and deliver our products to customers. These expenses include labor, raw materials, manufacturing overhead and occupancy costs, depreciation of facilities, quality control and engineering. In 2024, the cost of royalty payments were also a component of cost of goods sold.
The following table provides information regarding our cost of goods sold and gross margin during the periods indicated, including percent changes (dollar amounts in thousands):
|
Three Months Ended June 30, |
% Increase / (Decrease) |
Six Months Ended June 30, |
% Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Cost of goods sold | $ | 40,866 | $ | 44,262 | (8)% | $ | 75,172 | $ | 91,678 | (18)% | |||||||||||||||||||||||||
| Gross margin | 77 | % | 75 | % | 79 | % | 73 | % | |||||||||||||||||||||||||||
Gross margin increased two and six percentage points in the three and six months ended June 30, 2025 versus 2024, respectively, primarily due to lower EXPAREL inventory reserves and improved EXPAREL and ZILRETTA product costs due to higher volumes manufactured in order to enhance the level of inventory on hand. These increases were partially offset by accelerated depreciation of fixed assets impacted by the decommissioning of our 45-liter EXPAREL batch manufacturing suite at our Science Center Campus in San Diego, California. For more information, see Note 18, Subsequent Events, to our condensed consolidated financial statements included herein.
Additionally, in April 2025, the U.S. District Court, District of Nevada, concluded we were no longer obligated to pay royalties to the Research Development Foundation for EXPAREL manufactured under our enhanced, larger-scale manufacturing process. As a result, during the six months ended June 30, 2025, no royalty expense was incurred on net product sales of EXPAREL. For more information, see Note 16, Commitments and Contingencies, to our condensed consolidated financial statements included herein.
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 47
Research and Development Expenses
Research and development, or R&D, expenses primarily consist of costs related to clinical trials and related outside services, product development and other R&D costs, including trials that we are conducting to generate new data for EXPAREL, ZILRETTA and iovera°, clinical trials for PCRX-201 and stock-based compensation expense. Clinical and preclinical development expenses include costs for clinical personnel, clinical trials performed by third-parties, toxicology studies, materials and supplies, database management and other third-party fees. Product development and manufacturing capacity expansion expenses include development costs for our products, which include personnel, research equipment, materials and contractor costs for process development and product candidates, development costs related to significant scale-ups of our manufacturing capacity and facility costs for our research space. Regulatory and other expenses include regulatory activities related to unapproved products and indications, medical information and scientific communication expenses, expenses related to our IGOR registry study and related personnel. Stock-based compensation expense relates to the costs of stock option grants, awards of restricted stock units, or RSUs, and our employee stock purchase plan, or ESPP.
The following table provides a breakout of our R&D expenses during the periods indicated, including percent changes (dollar amounts in thousands):
|
Three Months Ended June 30, |
% Increase / (Decrease) |
Six Months Ended June 30, |
% Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Clinical and preclinical development | $ | 14,119 | $ | 8,172 | 73% | $ | 26,726 | $ | 14,518 | 84% | |||||||||||||||||||||||||
| Product development | 7,921 | 7,318 | 8% | 15,999 | 14,713 | 9% | |||||||||||||||||||||||||||||
| Regulatory and other | 2,646 | 2,923 | (9)% | 5,062 | 5,617 | (10)% | |||||||||||||||||||||||||||||
| Key employee holdback | 1,107 | - | N/A | 1,458 | - | N/A | |||||||||||||||||||||||||||||
| Stock-based compensation | 2,407 | 1,925 | 25% | 4,648 | 3,728 | 25% | |||||||||||||||||||||||||||||
| Total research and development expense | $ | 28,200 | $ | 20,338 | 39% | $ | 53,893 | $ | 38,576 | 40% | |||||||||||||||||||||||||
| % of total revenues | 16 | % | 11 | % | 15 | % | 11 | % | |||||||||||||||||||||||||||
Total R&D expense increased 39% and 40% in the three and six months ended June 30, 2025 versus 2024, respectively.
Clinical and preclinical development expense increased 73% and 84% in the three and six months ended June 30, 2025 versus 2024, respectively, due to ongoing site start-up expenses and enrollment in the PCRX-201 Phase 2 ASCEND trial for knee OA, a ZILRETTA shoulder trial, an EXPAREL pediatric trial and an iovera° spasticity trial, as well as additional personnel to support clinical initiatives. We expect to continue investing in our clinical and preclinical development programs throughout 2025.
Product development expense increased 8% and 9% in the three and six months ended June 30, 2025 versus 2024, respectively, attributable to investing in our HCAd platform, primarily for the PCRX-201 program. These increases were partially offset by the completion of pre-commercial scale-up activities of our enhanced, larger-scale EXPAREL manufacturing capacity at our Science Center Campus in San Diego, California, which the FDA approved in February 2024 and was placed into service in July 2024.
Regulatory and other expense decreased 9% and 10% in the three and six months ended June 30, 2025 versus 2024, respectively, due to a realignment of medical communication activities, partially offset by additional sites related to the IGOR registry study.
During the three and six months ended June 30, 2025, we accrued $1.1 million and $1.5 million, respectively, related to a key employee holdback. As part of the GQ Bio Acquisition, $7.8 million related to two employees' payments will be recognized over three years pursuant to a key employee holdback agreement in increments of 50%, 30% and 20% at each year's respective anniversary.
Stock-based compensation expense increased 25% in each of the three and six months ended June 30, 2025 versus 2024, primarily due to increased R&D personnel as well as the shifting of our annual equity grant to the first quarter in 2025.
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 48
Selling, General and Administrative Expenses
Sales and marketing expenses primarily consist of compensation and benefits for our sales force and personnel that support our sales, marketing, medical and scientific affairs operations, expenses related to health outcome communications, provider-level market access, patient reimbursement support and customer educational programs. General and administrative expenses consist of compensation and benefits for legal, finance, regulatory activities related to approved products and indications, compliance, information technology, human resources, business development, executive management and other supporting personnel. It also includes professional fees for legal, audit, tax and consulting services. Stock-based compensation expense relates to the costs of stock option grants, RSU awards and our ESPP.
The following table provides information regarding our selling, general and administrative expenses during the periods indicated, including percent changes (dollar amounts in thousands):
|
Three Months Ended June 30, |
% Increase / (Decrease) |
Six Months Ended June 30, |
% Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Sales and marketing | $ | 50,964 | $ | 39,047 | 31% | $ | 106,535 | $ | 78,482 | 36% | |||||||||||||||||||||||||
| General and administrative | 26,231 | 20,231 | 30% | 46,840 | 44,837 | 4% | |||||||||||||||||||||||||||||
| Stock-based compensation | 11,383 | 8,848 | 29% | 21,979 | 16,833 | 31% | |||||||||||||||||||||||||||||
| Total selling, general and administrative expense | $ | 88,578 | $ | 68,126 | 30% | $ | 175,354 | $ | 140,152 | 25% | |||||||||||||||||||||||||
| % of total revenues | 49 | % | 38 | % | 50 | % | 41 | % | |||||||||||||||||||||||||||
Total selling, general and administrative expense increased 30% and 25% in the three and six months ended June 30, 2025 versus 2024, respectively.
Sales and marketing expense increased 31% and 36% in the three and six months ended June 30, 2025 versus 2024, respectively, driven by investing in programs to drive awareness and education for our customers and enhance our marketing, market access and reimbursement teams and value creation to enhance key commercial capabilities and expand EXPAREL utilization. We also expanded the size of our sales force in the second half of 2024 in order to better extend our reach on each of our commercial products.
General and administrative expense increased 30% and 4% in the three and six months ended June 30, 2025 versus 2024, respectively, primarily driven by third-party investor relations advisory services, as well as an increased headcount in the business development, legal and information technology departments. In addition, the increase in the six months ended June 30, 2025 versus 2024 was partially offset by a recovery of legal expenses in the first quarter of 2025.
Stock-based compensation expense increased 29% and 31% for the three and six months ended June 30, 2025 versus 2024, respectively, primarily due to equity grants provided to new executive officers as well as the shifting of our annual equity grant to the first quarter starting in 2025.
Amortization of Acquired Intangible Assets
The following table provides a summary of the amortization of acquired intangible assets during the periods indicated, including percent changes (dollar amounts in thousands):
|
Three Months Ended June 30, |
% Increase / (Decrease) |
Six Months Ended June 30, |
% Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | $ | 14,322 | $ | 14,322 | -% | $ | 28,644 | $ | 28,644 | -% | |||||||||||||||||||||||||
As part of the Flexion Acquisition and the MyoScience Acquisition, we acquired intangible assets consisting of developed technology intangible assets and customer relationships, with estimated useful lives between 9 and 14 years. For more information, see Note 8, Goodwill and Intangible Assets, to our condensed consolidated financial statements included herein.
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 49
Contingent Consideration (Gains) Charges, Acquisition-related Expenses, Restructuring and Other
The following table provides a summary of the costs related to the contingent consideration (gains) charges, acquisition-related expenses, restructuring and other during the periods indicated, including percent changes (dollar amounts in thousands):
|
Three Months Ended June 30, |
% Increase / (Decrease) |
Six Months Ended June 30, |
% Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Contingent consideration (gains) charges | $ | (357) | $ | 1,509 | N/A | $ | (3,032) | $ | (2,297) | 32% | |||||||||||||||||||||||||
| Restructuring charges | - | 996 | (100)% | - | 6,531 | (100)% | |||||||||||||||||||||||||||||
| Acquisition-related expenses | 991 | 230 | 100+% | 2,502 | 404 | 100+% | |||||||||||||||||||||||||||||
| Legal settlement | - | - | N/A | 7,000 | - | N/A | |||||||||||||||||||||||||||||
| Total contingent consideration (gains) charges, acquisition-related expenses, restructuring and other | $ | 634 | $ | 2,735 | (77)% | $ | 6,470 | $ | 4,638 | 39% | |||||||||||||||||||||||||
Total contingent consideration (gains) charges, acquisition-related expenses, restructuring and other included net charges that decreased 77% in the three months ended June 30, 2025 versus 2024. Total contingent consideration (gains) charges, acquisition-related expenses, restructuring and other included net charges that increased 39% in the six months ended June 30, 2025 versus 2024.
During the three and six months ended June 30, 2025, we recognized contingent consideration gains of $0.4 million and $3.0 million, respectively, primarily due to revisions to the latest discount rates.
During the three months ended June 30, 2024, we recognized a contingent consideration charge of $1.5 million primarily due to revisions to the latest discount rates. During the six months ended June 30, 2024, we recognized a contingent consideration gain of $2.3 million primarily due to an adjustment reflecting the probability of achieving the remaining regulatory milestone under the Flexion Acquisition by the milestone expiration date.
During the three and six months ended June 30, 2024, we recognized restructuring charges of $1.0 million and $6.5 million, respectively, related to employee termination benefits, such as the acceleration of share-based compensation, severance, and, to a lesser extent, other employment-related termination costs, as well as contract termination costs.
During the three and six months ended June 30, 2025, we recognized acquisition-related expenses of $1.0 million and $2.5 million, respectively, primarily related to third-party services and legal fees associated with the GQ Bio Acquisition.
During the six months ended June 30, 2025, we recognized legal settlement costs of $7.0 million related to the settlement of the patent infringement suits against Fresenius Kabi USA, LLC, eVenus Pharmaceuticals Laboratories, Inc. and Jiangsu Hengrui Pharmaceuticals Co., Ltd.
For more information, see Note 3, GQ Bio Therapeutics Acquisition, Note 10, Financial Instruments,Note 15, Contingent Consideration (Gains) Charges, Acquisition-related Expenses, Restructuring and Other and Note 16, Commitments and Contingencies,to our condensed consolidated financial statements included herein.
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 50
Other (Loss) Income, Net
The following table provides information regarding other income, net during the periods indicated, including percent changes (dollar amounts in thousands):
|
Three Months Ended June 30, |
% Increase / (Decrease) |
Six Months Ended June 30, |
% Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Interest income | $ | 5,008 | $ | 4,749 | 5% | $ | 11,903 | $ | 8,652 | 38% | |||||||||||||||||||||||||
| Interest expense | (4,695) | (3,884) | 21% | (9,275) | (7,200) | 29% | |||||||||||||||||||||||||||||
| Gain on early extinguishment of debt | - | 7,518 | (100)% | - | 7,518 | (100)% | |||||||||||||||||||||||||||||
| Other, net | (10,739) | (39) | 100+% | (6,338) | (198) | 100+% | |||||||||||||||||||||||||||||
| Total other (loss) income, net | $ | (10,426) | $ | 8,344 | N/A | $ | (3,710) | $ | 8,772 | N/A | |||||||||||||||||||||||||
Total other loss, net was $10.4 million and $3.7 million in the three and six months ended June 30, 2025, respectively. Total other income, net was $8.3 million and $8.8 million in the three and six months ended June 30, 2024, respectively.
Interest income increased 5% and 38% in the three and six months ended June 30, 2025 versus 2024, respectively, due to higher overall investment balances as well as interest realized on a GQ Bio note receivable investment we had made prior to the GQ Bio Acquisition.
Interest expense increased 21% and 29% in the three and six months ended June 30, 2025 versus 2024, respectively, primarily due to issuing the 2029 Notes (as defined below) in May 2024, partially offset by lower outstanding principal associated with the TLA Term Loan (as defined below). For more information, see Note 9, Debt, to our condensed consolidated financial statements included herein.
In the three and six months ended June 30, 2024, we recognized a $7.5 million gain on early extinguishment of debt in conjunction with the repurchase of $200.0 million principal of our 2025 Notes (as defined below). The partial repurchase of the 2025 Notes was completed with our net proceeds from the issuance of the 2029 Notes.
The $10.7 million and $6.3 million other net loss during the three and six months ended June 30, 2025 was primarily driven by an impairment of an equity investment and convertible note receivable totaling $11.0 million. For the six months ended June 30, 2025, the other net loss was partially offset by a realized gain associated with a previously acquired equity investment in GQ Bio that increased in fair value resulting from the GQ Bio Acquisition. For more information, see Note 10, Financial Instruments, and Note 3, GQ Bio Therapeutics Acquisition, to our condensed consolidated financial statements included herein.
Income Tax Expense
The following table provides information regarding our income tax expense during the periods indicated, including percent changes (dollar amounts in thousands):
|
Three Months Ended June 30, |
% Increase / (Decrease) |
Six Months Ended June 30, |
% Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Income tax expense | $ | 2,920 | $ | 17,698 | (84)% | $ | 6,814 | $ | 22,359 | (70)% | |||||||||||||||||||||||||
| Effective tax rate | (152) | % | 48 | % | 101 | % | 45 | % | |||||||||||||||||||||||||||
The effective tax rates were (152)% and 101% for the three and six months ended June 30, 2025, respectively. The effective tax rates were 48% and 45% for the three and six months ended June 30, 2024, respectively. Income tax expense represents the estimated annual effective tax rate applied to the year-to-date operating results adjusted for certain discrete tax items.
The effective tax rate for the three and six months ended June 30, 2025 is primarily impacted by costs related to non-deductible stock-based compensation, non-deductible executive compensation and a non-U.S. valuation allowance. The effective tax rates for the three and six months ended June 30, 2024 include costs related to non-deductible stock-based
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 51
compensation, primarily related to expired stock options, and non-deductible executive compensation, partially offset by tax credits.
Liquidity and Capital Resources
Since our inception in 2006, we have devoted most of our cash resources to manufacturing, R&D and selling, general and administrative activities related to the development and commercialization of EXPAREL. In addition, we acquired ZILRETTA as part of the Flexion Acquisition in November 2021 and iovera° as part of the MyoScience Acquisition in April 2019. We are primarily dependent on the commercial success of EXPAREL and ZILRETTA. We have financed our operations primarily with the proceeds from the sale of convertible senior notes and other debt, common stock, product sales and collaborative licensing and milestone revenue. As of June 30, 2025, we had an accumulated deficit of $206.4 million, cash and cash equivalents and available-for-sale investments of $445.9 million and working capital of $432.4 million.
We expect that our cash and cash equivalents and available-for-sale investments on hand will be adequate to cover our short-term liquidity needs, and that we would be able to access other sources of financing should the need arise.
Summary of Cash Flows
The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated (in thousands):
|
Six Months Ended June 30, |
||||||||||||||
| Condensed Consolidated Statements of Cash Flows Data: | 2025 | 2024 | ||||||||||||
| Net cash provided by (used in): | ||||||||||||||
| Operating activities | $ | 47,471 | $ | 102,337 | ||||||||||
| Investing activities | 36,534 | (30,745) | ||||||||||||
| Financing activities | (60,499) | 22,163 | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 204 | - | ||||||||||||
| Net increase in cash and cash equivalents | $ | 23,710 | $ | 93,755 | ||||||||||
Operating Activities
During the six months ended June 30, 2025, net cash provided by operating activities was $47.5 million, compared to $102.3 million during the six months ended June 30, 2024. The decrease of $54.9 million was attributable to increased operating expenses driven by investing in programs to drive awareness and education for our customers and enhance our marketing, market access and reimbursement teams as well as increased clinical and preclinical expenses as we continue to invest in our pipeline development and a higher investment in inventory, partially offset by improvements in gross margin.
Investing Activities
During the six months ended June 30, 2025, net cash provided by investing activities was $36.5 million, which reflected $65.7 million of inflows from available-for-sale investment sales (net of purchases), partially offset by $16.7 million related to the cash consideration for the GQ Bio Acquisition (net of cash acquired), as well as $11.2 million of capital expenditures for manufacturing product fill lines and the build-out of our new corporate headquarters in Brisbane, California,
During the six months ended June 30, 2024, net cash used in investing activities was $30.7 million, which reflected $26.3 million of outflows from available-for-sale investment purchases (net of sales), as well as $4.4 million of capital expenditures for manufacturing product fill lines and for an EXPAREL capacity expansion project at our Science Center Campus in San Diego, California.
Financing Activities
During the six months ended June 30, 2025, net cash used in financing activities was $60.5 million, which primarily consisted of $50.0 million in purchases of treasury stock under a new $300.0 million share repurchase program authorized by our board of directors in April 2025, $6.6 million voluntary prepayments associated with the TLA Term Loan, as well as $5.5 million to withhold shares of common stock to cover employee tax withholding obligations on restricted stock unit vests. For more information, see Note 11, Stockholders' Equity, to our condensed consolidated financial statements included herein and Part II Item 2. Unregistered Sales of Equity Securities and Use of Proceedsof this Quarterly Report on Form 10-Q. There were also $1.6 million of proceeds from the issuance of common stock through our ESPP.
Pacira BioSciences, Inc. | Q2 2025Form 10-Q | Page 52
During the six months ended June 30, 2024, net cash provided by financing activities was $22.2 million, which primarily consisted of $287.5 million in proceeds from the issuance of the 2029 Notes. We used the majority of the proceeds from the 2029 Notes to make a partial repurchase of the 2025 Notes in the amount of $191.0 million, enter into a capped call transaction for $26.7 million, repurchase $25.0 million of treasury stock, and pay debt issuance and financing costs of $9.4 million. Additionally, we paid the remaining $8.6 million of 3.375% convertible senior notes due 2024 assumed from the Flexion Acquisition upon their maturity and made $5.6 million of voluntary prepayments associated with the TLA Term Loan. There were also $1.4 million of proceeds from the issuance of common stock through our ESPP.
See Note 9, Debt, to our condensed consolidated financial statements included herein for further discussion of the TLA Term Loan.
Debt
Revolving Credit Facility
On July 3, 2025, we entered into a credit agreement (the "Credit Agreement") with Wells Fargo Bank, National Association, as administrative agent, swingline lender and an issuing bank, and certain lenders, to, among other things, refinance the indebtedness outstanding under our TLA Credit Agreement (as defined below) and provide ongoing working capital. The Credit Agreement provides for a senior secured revolving credit facility (the "Revolving Credit Facility") in an aggregate commitment amount of $300.0 million, with a letter of credit sublimit of $10.0 million and swingline loan sublimit of $15.0 million. The credit facility is secured by substantially all of our and each subsidiary guarantor's assets and matures on July 3, 2030, subject to certain exceptions set forth in the Credit Agreement. Subject to certain conditions, we may, at any time, on one or more occasions, add one or more new classes of term facilities and/or increase the principal amount of any existing class of term loans by requesting one or more incremental term facilities in an aggregate principal amount not to exceed the greater of $225.0 million and 100% of Consolidated EBITDA (as defined in the Credit Agreement).
Each revolving loan borrowing which is an alternate base rate borrowing will bear interest at a rate per annum equal to (i) a base rate, plus (ii) a spread based on our Senior Secured Net Leverage Ratio (as defined in the Credit Agreement) ranging from 1.50% to 2.25%. Each revolving loan borrowing which is a term benchmark borrowing or daily simple SOFR (as defined in the Credit Agreement) borrowing will bear interest at a rate per annum equal to (i) a forward-looking term rate based on SOFR or a rate determined by reference to the daily simple SOFR, plus (ii) a spread based on our Senior Secured Net Leverage Ratio ranging from 2.50% to 3.25%.
The Credit Agreement also contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions.
Upon entering into the Credit Agreement, we borrowed $101.0 million under the Revolving Credit Facility.
2028 Term Loan A Facility
On March 31, 2023, we entered into a credit agreement (as amended to date, the "TLA Credit Agreement"). The term loan issued under the TLA Credit Agreement (the "TLA Term Loan") was issued at a 0.30% discount and provides for a single-advance term loan A facility in the principal amount of $150.0 million, which was secured by substantially all of our and any subsidiary guarantor's assets. We could elect to borrow either (i) alternate base rate borrowings or (ii) term benchmark borrowings or daily simple SOFR (as defined in the TLA Credit Agreement) borrowings. Each term loan borrowing which is an alternate base rate borrowing bears interest at a rate per annum equal to (i) the Alternate Base Rate (as defined in the TLA Credit Agreement), plus (ii) a spread based on our Senior Secured Net Leverage Ratio ranging from 2.00% to 2.75%. Each term loan borrowing which is a term benchmark borrowing or daily simple SOFR borrowing bears interest at a rate per annum equal to (i) the Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR (as each is defined in the TLA Credit Agreement), plus (ii) a spread based on our Senior Secured Net Leverage Ratio ranging from 3.00% to 3.75%. During the six months ended June 30, 2025, we made $6.6 million of voluntary principal prepayments. During the year ended December 31, 2024, we made $11.3 million of voluntary principal prepayments. As of June 30, 2025, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 7.43%.
As of June 30, 2025, we were in compliance with all financial covenants under the TLA Credit Agreement. In July 2025, we repaid the indebtedness outstanding under our TLA Credit Agreement and terminated the TLA Credit Agreement concurrently with our entry into the Revolving Credit Facility, which resulted in a loss on extinguishment of debt of approximately $0.9 million. The TLA Credit Agreement had a maturity date of March 31, 2028. For more information, see Note 9, Debt, and Note 18, Subsequent Events, to our condensed consolidated financial statements included herein for further discussion.
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2029 Convertible Senior Notes
In May 2024, we completed a private placement of $287.5 million in aggregate principal amount of our 2.125% convertible senior notes due 2029, or 2029 Notes, and entered into an indenture with respect to the 2029 Notes. The 2029 Notes accrue interest at a fixed rate of 2.125% per year, payable semiannually in arrears on May 15thand November 15thof each year. The 2029 Notes mature on May 15, 2029.
At June 30, 2025, all $287.5 million of principal was outstanding on the 2029 Notes. See Note 9, Debt, to our condensed consolidated financial statements included herein for further discussion.
2025 Convertible Senior Notes
In July 2020, we completed a private placement of $402.5 million in aggregate principal amount of our 0.750% convertible senior notes due 2025, or 2025 Notes, and entered into an indenture with respect to the 2025 Notes. The 2025 Notes accrued interest at a fixed rate of 0.750% per annum, which was payable semiannually in arrears on February 1stand August 1stof each year.
In May 2024, we used part of the net proceeds from the issuance of the 2029 Notes to repurchase $200.0 million aggregate principal amount of the 2025 Notes in privately negotiated transactions at a discount for $191.4 million in cash (including accrued interest). The partial repurchase of the 2025 Notes resulted in a $7.5 million gain on early extinguishment of debt.
At June 30, 2025, the outstanding principal on the 2025 Notes was $202.5 million, and on August 1, 2025, the 2025 Notes matured and we settled the remaining outstanding principal balance of $202.5 million in cash. See Note 9, Debt, to our condensed consolidated financial statements included herein for further discussion.
Future Capital Requirements
We believe that our existing cash and cash equivalents, available-for-sale investments and cash received from product sales will be sufficient to enable us to fund our operating expenses, capital expenditure requirements and payment of the interest and principal on our Revolving Credit Facility and 2029 Notes through the next 12 months. Our future use of operating cash and capital requirements will depend on many forward-looking factors, including, but not limited to:
•the cost and timing of the potential milestone payments to former Flexion Therapeutics, Inc. stockholders, which could be up to an aggregate of $372.3 million if certain regulatory and commercial milestones are met. See Note 10, Financial Instruments, to our condensed consolidated financial statements included herein for more information;
•the impact of global economic conditions-including the impact of inflation and tariffs-on our products, material and labor costs, supply chain, longer lead-times, an inability to procure a sufficient supply of materials, our operating expenses and our business strategy;
•the timing of and extent to which the holders of our 2029 Notes elect to convert their 2029 Notes, and the amount of borrowings and interest payments on our Revolving Credit Facility;
•the costs and our ability to successfully continue to expand the commercialization of EXPAREL, ZILRETTA and iovera°;
•the cost and timing of expanding and maintaining our manufacturing facilities and capabilities;
•the cost and timing of additional strategic investments, including additional investments under existing agreements;
•the costs related to legal and regulatory matters, including those to develop and defend our intellectual property;
•the costs of performing additional clinical trials for our products and product candidates, including the additional pediatric trials required by the FDA and EMA as a condition of the approval of EXPAREL and clinical trials for PCRX-201;
•the costs for the development and commercialization of other product candidates;
•the costs and timing of future payments under our employee benefit plans, including but not limited to our cash long-term incentive plan and non-qualified deferred compensation plan;
•the extent to which we acquire or invest in products, businesses and technologies; and
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•the timing and the number of shares of our common stock either repurchased through our $300.0 million share repurchase program announced in April 2025, which has an expiration date of December 31, 2026 or withheld to cover employee tax withholding obligations on restricted stock unit vests.
We may require additional debt or equity financing to meet our future operating and capital requirements. We have no committed external sources of funds, and additional equity or debt financing may not be available on acceptable terms, if at all. In particular, capital market disruptions or negative economic conditions may hinder our access to capital.
Critical Accounting Estimates
For a description of critical accounting policies that affect our significant judgments and estimates used in the preparation of our consolidated financial statements, refer to our 2024 Annual Report. There have been no significant changes to our critical accounting policies nor any recently issued accounting pronouncements that are expected to have a material impact on our financial results since December 31, 2024.
Contractual Obligations
In July 2025, we entered into a non-cancelable contractual commitment of approximately $4.0 million and $5.5 million in 2025 and 2026, respectively.
Except as set forth above, there have been no material changes in our contractual obligations relating to our indebtedness, lease obligations and purchase obligations from those reported in our 2024 Annual Report. For more information on our contractual obligations and commercial commitments, see Part II, Item 7 in our 2024 Annual Report.
Pacira Biosciences Inc. published this content on August 05, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on August 05, 2025 at 20:12 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]