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Pacira (PCRX) Rides High on Robust Exparel Performance

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On Aug 21, we issued an updated research report on Pacira Pharmaceuticals, Inc. (PCRX - Free Report) . The company’s top line mainly comprises contribution from its sole marketed product, Exparel.

In the past six months, shares of Pacira have surged 44.5% against the industry’s decrease of 0.2%.

Exparel is a liposome injection of bupivacaine, indicated for a single-dose administration into the surgical site to produce postsurgical analgesia. Growth in drug sales is primarily attributed to expanding the adoption of Exparel as a non-opioid pain management therapy in various surgical procedures.

Meanwhile, Pacira’s efforts to expand Exparel's label are encouraging. The company projects Exparel sales to be in the range of $320-$325 million in 2018. The company upped its guidance with second-quarter results.

Notably, in April, the FDA approved Pacira’s supplemental new drug application (sNDA), seeking the label expansion of Exparel to include administration via nerve block for prolonged regional analgesia. Pacira along with partner Johnson & Johnson (JNJ - Free Report) is focusing on the launch of Exparel for the expanded indication.

With this label expansion, Exparel is set to be the first long-acting, single-dose nerve block available for patients undergoing upper extremity surgeries such as total shoulder arthroplasty or rotator cuff repair.

Pacira is also conducting a phase IV study of Exparel on spinal fusion surgery. The company is also launching a series of phase IV trials on soft tissue procedures. These programs will assess Exparel as part of its multimodal protocol for C-section, colon cancer and breast reconstruction surgery. The company is currently enrolling patients in the study and its data is expected later in 2018.

Pacira is also looking to expand Exparel's label in the animal health market. In 2012, the company signed a licensing agreement with Aratana for the development and commercialization of Exparel for animal health indications. Expansion into the animal health market will diversify Exparel's franchise and boost its commercial potential.

The company has one promising early-stage asset, based on its DepoFoam technology. DepoMeloxicam I, a nonsteroidal anti-inflammatory

 agent, is being evaluated for postsurgical analgesia. The company has submitted an investigational new drug application and subsequently, plans to initiate a phase I analysis on DepoMLX in 2018.

In June, Pacira inked an agreement with China-based Nuance for the development and commercialization of Exparel in China. Per the deal, Pacira will receive $3 million as upfront payment upon closing the transaction and will also be eligible for an additional $55 million in regulatory and sales milestone payments.

Pacira’s collaboration with Aetna is a positive move as well. The latter provides a separate reimbursement for Exparel as well as its online DocFind directory to help its members identify surgeons, who are committed to offering non-opioid options like Exparel for postsurgical pain.

However, Pacira is heavily dependent on Exparel for growth, which is concerning. Hence, a decline in Exparel sales will adversely impact the company's top line.

Zacks Rank & Stocks to Consider

 

Pacira sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the healthcare sector include Gilead Sciences, Inc. (GILD - Free Report) and Illumina, Inc. (ILMN - Free Report) , both carrying a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead Sciences’ earnings estimates have been moved 7.7% north for 2018 and 2.2% for 2019 over the past 60 days. The stock has inched up 2.3% year to date.

Illumina’s earnings estimates have been raised 11.1% for 2018 and 8.7% for 2019 over the past 60 days. The stock has soared 51.7% so far this year.

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