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Pacira Focuses on Lead Candidate Exparel's Label Expansion

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We issued an updated report on Pacira Pharmaceuticals, Inc. (PCRX - Free Report) on Apr 11.

Pacira’s share price shows that the company has outperformed the Zacks classified Medical Drugs industry year to date. The stock rose 43.8% as against the industry’s fall of 0.1%.

Currently, Pacira has two products – Exparel and DepoCyt(e) in its portfolio.

Exparel – the company’s lead candidate – is a liposome injection of bupivacaine, which is indicated for single-dose administration into the surgical site to produce postsurgical analgesia. In fact, demand for Exparel has been strong since its launch in Apr 2012, driven by growth within existing accounts along with increasing acceptance by major hospitals and orthopedic centers as it continues to be used in orthopedic procedures. Moreover, continued adoption of Exparel for transversus abdominis plane (TAP), infiltration procedures for abdominal and genitourinary surgeries is expected to boost sales. The company is currently looking for partners to expand its geographical footprint for Exparel. In 2017, the company plans to initiate a series of phase IV trials in soft tissue procedures. These will include a C-Section trial with a two-point transverse abdominis plane infiltration, or TAP, with Exparel added to the standard of care, a colorectal trial evaluating a four-point TAP with Exparel as part of an Enhanced Recovery After Surgery, or ERAS, protocol and a breast reconstruction trial. These trials will evaluate opioid use and postsurgical pain control, as well as a number of additional efficacy, safety and health economic outcomes.

Additionally, Pacira collaborated with DePuy Synthes to expand use of Exparel across a broad range of surgical procedures, significantly.

In fact, the company’s efforts to expand the label of Exparel for boosting sales in oral surgery and chronic pain seem to be encouraging. In Sep 2016, Pacira had launched Exparel to the oral surgeon community to treat pain following oral and maxillofacial procedures. The company launched Exparel to the oral and maxillofacial market by introducing a 133 mg dose contained in a 10 ml vial for use in patients undergoing third molar (wisdom teeth) extractions. In 2017, the company expects to introduce the 133 mg dose into the hospital and ambulatory surgery marketplaces. In Apr 2016, the company had also initiated a randomized controlled study on Exparel for total knee arthroplasty (TKA).

Again, in Mar 2017, the company announced positive top-line data from its phase IV study on Exparel in TKA. The study met its co-primary endpoints for postsurgical pain and opioid reduction against an active comparator – bupivacaine.

Moving ahead, Pacira is looking to expand Exparel's label in the animal health market as well.

However, the company is heavily dependent on Exparel for growth, which accounts for a significant chunk of its revenues. Hence, a decline in Exparel sales will adversely impact the company's top line. Although the company is working on a potential label expansion of the drug, any unfavorable response from the FDA could materially hurt the stock. We are also concerned about the lack of other late-stage candidates in the company’s pipeline.

Pacira is not new to pipeline setbacks. The company already suffered a major blow in Mar 2015, when it received a Complete Response Letter (CRL) from the FDA for its supplemental New Drug Application (sNDA) for Exparel. The company was seeking to expand the use of Exparel in nerve block to provide postsurgical analgesia. However, following a meeting with the FDA, Pacira initiated additional phase III studies and expects to resubmit an sNDA in the second quarter of 2017. Any similar setbacks are likely to impact the company’s shares adversely.

Still, Exparel competes with non-opioid products such as bupivacaine, marcaine, ropivacaine and other anesthetics/analgesics.  All of these are used in the treatment of postsurgical pain and are available as either oral tablets, injectable dosage forms or administered using novel delivery systems.

Zacks Rank & Stocks to Consider

Pacira currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Heska Corporation , Retrophin, Inc. and Galena Biopharma, Inc. , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Heska’s earnings estimates moved up from $1.53 to $1.65 for 2017 and from $1.90 to $2.01 for 2018, over the last 60 days. The company posted a positive earnings surprise in all of the last four quarters, with an average beat of 291.54%. Its share price increased 43.8% year to date.

Retrophin’s loss estimates narrowed from 85 cents to 72 cents for 2017 and from 67 cents to 53 cents for 2018, over the last 30 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 80.55%.  

Galena Biopharma‘s loss estimates narrowed from $2.27 to 58 cents for 2017 and from $92 cents to 73 cents for 2018, over the last 60 days. The company posted a positive earnings surprise in two of the four trailing quarters with an average beat of 53.83%.  

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