Shares of Pacira Pharmaceuticals, Inc. (PCRX - Free Report) decreased 3.5% on Friday following the company’s third-quarter earnings release the day before.
However, so far this year, Pacira stock has gained 10.2% against the industry’s decline of 4.4%.
The company delivered third-quarter 2018 earnings of 31 cents per share, surpassing the Zacks Consensus Estimate of 7 cents and the year-ago bottom line of 11 cents.
Revenues increased 23.9% year over year to $83.4 million, beating the Zacks Consensus Estimate of $79 million and the year-ago figure of $67 million. Exparel sales came in at $82.2 million for the third quarter of 2018, rising 23% year over year. On an average, Exparel sales rose 6% sequentially.
Quarter in Detail
Pacira’s top line comprises product revenues, other product sales plus royalty revenues. Royalty revenues more than doubled to $0.74 million in the reported quarter.
Research and development (R&D) expenses (excluding the impact of stock-based compensation) were up 25.8% to $13.7 million. This increase in R&D expenses was due to the scale-up of the company’s manufacturing capacity in Swindon.
Selling, general and administrative (SG&A) expenses increased 11.8% to $38.3 million because of an expanded public affairs campaign focused on improving access to non-opioid options and expenses related to the launch of Exparel for brachial plexus nerve block.
Pacira’s collaboration with Aetna has been lucrative. 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.
In October, Aetna announced that it will reimburse select ambulatory surgical centers (ASCs) for the use of Exparel as part of a pilot program in Florida and New Jersey.
Pacira is also developing Exparel for its use in pain management with respect to various other surgeries and is also expanding its label to address complications in pediatric patient population.
Notably, Pacira’s partnership with Johnson & Johnson (JNJ - Free Report) is a positive move as the latter regularly opens doors to new hospital systems for the former where it previously did not have any access.
Pacira raised its guidance for Exparel sales in 2018 and expects it to be in the range of $325-$330 million. The previous view was in the band of $320-$325 million.
The company expects R&D expenses (excluding stock-based compensation) to be within $50-$60 million while SG&A expenses (excluding stock-based compensation) are anticipated in the $150-$160 million range. Also, stock-based compensation is projected between $30 million and $35 million. All these remain unchanged from the last reported quarter’s forecast.
Zacks Rank & Stocks to Consider
Pacira currently carries Zacks Rank #3 (Hold). Two better-ranked stocks in the healthcare sector are Gilead Sciences, Inc. (GILD - Free Report) and Alexion Pharmaceuticals, Inc. (ALXN - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Gilead Sciences’ earnings estimates have been revised 4.4% upward for 2018 and 4.2% for 2019 over the past 60 days.
Alexion’s earnings estimates have moved 4.3% north for 2018 and 1.5% for 2019 over the past 60 days. The stock has inched up 2.8% so far this year.
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