Pacira BioSciences Reports Full-Year and Fourth Quarter 2022 Financial Results

On February 28, 2023 Pacira BioSciences, Inc. (Nasdaq: PCRX), the industry leader in its commitment to non-opioid pain management and regenerative health solutions, reported financial results for the fourth quarter and full-year of 2022 (Filing, 8-K, Pacira Pharmaceuticals, FEB 28, 2023, View Source [SID1234627870]).

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"2022 was a solid year for Pacira as we posted record revenue and significant adjusted EBITDA, recently surpassed our twelve millionth patient with EXPAREL, and advanced our product portfolio into new and exciting indications," said Dave Stack, chairman and chief executive officer of Pacira BioSciences. "We enter 2023 in a strong position with significant and durable cash flows that we believe will allow us to leverage our balance sheet to self-fund our growth and expansion. In the coming year we expect to achieve a variety of value-driving milestones including growing product revenue, developing new indications for our commercial offering, advancing our clinical pipeline, improving gross margins, increasing cash flow, and pre-paying significant portions of our term loan B debt, which would further strengthen our balance sheet."

"The need for non-opioid pain management remains a global imperative and our continued progress further solidifies our leadership role in this important work," added Mr. Stack.
2022 Full-Year and Fourth Quarter Financial Highlights
•Full-year revenues of $666.8 million and fourth quarter revenues of $172.0 million.
•Full-year GAAP net income of $15.9 million or $0.35 per basic share and $0.34 per diluted share.
•Fourth quarter GAAP net loss of $10.1 million or $0.22 per basic and diluted share.
•Full-year adjusted EBITDA of $212.7 million and fourth quarter adjusted EBITDA of $58.8 million.
See "Non-GAAP Financial Information" below.
Recent Business Highlights
•Second Innovation and Training Center Opened in Houston. In January 2023, Pacira opened its second Innovation and Training Center in Houston. This state-of-the-art facility features a 125-seat adaptive lecture hall, broadcast studio and both wet and dry lab space for cadaver and other interactive workshops, as well as advanced ultrasound machines equipped with artificial intelligence training software. The Company believes this training center is core to developing

physician thought leaders and community-based clinicians wanting to stay at the forefront of opioid-sparing pain management.
•Supplemental New Drug Application Submitted for EXPAREL. In January 2023, Pacira submitted its supplemental New Drug Application, or sNDA, to the U.S. Food and Drug Administration seeking expansion of the EXPAREL label to include sciatic nerve blocks in the popliteal fossa and femoral nerve blocks in the adductor canal. The sNDA is supported by two successful Phase 3 studies in which EXPAREL achieved statistically significant reductions in postsurgical pain control and opioid consumption through 96 hours compared with bupivacaine HCl.
•New Data Support Cryoneurolysis, or Cold Therapy, as Potential Spasticity Treatment. In January 2023, investigators presented three datasets supporting cryoneurolysis, or cold therapy, as a potential future treatment strategy for managing spasticity. The data were presented at the Annual Meeting of Academic Physiatrists in Anaheim. Pacira is preparing to initiate a registration study evaluating its iovera° cryoneurolysis system as a treatment for spasticity. The iovera° system is commercially available as an innovative pain relief treatment. It uses extreme cold to stop nerves from sending pain signals to the brain, the effect is immediate, and can last 90 days.
•New ZILRETTA Data to be Presented at Osteoarthritic Research Society World Congress. In March 2023, investigators will present the results of a Phase 2 study comparing ZILRETTA to immediate-release triamcinolone in patients with osteoarthritis of the knee and Type 2 diabetes. The data will be presented at the Osteoarthritic Research Society World Congress in Denver.
Fourth Quarter 2022 Financial Results
•Total revenues were $172.0 million in the fourth quarter of 2022, an 8% increase over the $159.2 million reported for the fourth quarter of 2021.
•EXPAREL net product sales were $138.0 million in the fourth quarter of 2022, a 1% decrease versus the $139.9 million reported for the fourth quarter of 2021.
•ZILRETTA net product sales were $28.0 million in the fourth quarter of 2022, a 121% increase over the $12.7 million reported for the fourth quarter of 2021. The company began recognizing ZILRETTA sales upon completing its acquisition of Flexion in November 2021.
•Fourth quarter 2022 iovera° net product sales were $4.6 million, a 7% decrease versus the $4.9 million reported in the fourth quarter of 2021.
•Sales of bupivacaine liposome injectable suspension to third-party licensees were $1.0 million in the fourth quarter of 2022, versus the $1.1 million reported for the fourth quarter of 2021.
•Fourth quarter royalty and collaborative licensing and milestone revenues were $0.4 million in 2022 versus $0.6 million in 2021.
•Total operating expenses were $181.8 million in the fourth quarter of 2022, versus the $155.0 million reported for the fourth quarter of 2021. Included in operating expenses in 2022 was a $26.1 million impairment of acquired in-process research and development.
•Research and development (R&D) expenses were $17.5 million in the fourth quarter of 2022, compared to $15.5 million in the fourth quarter of 2021. The company’s R&D expenses included $7.3 million and $5.3 million of product development and manufacturing capacity expansion costs in the fourth quarters of 2022 and 2021, respectively.
•Selling, general and administrative (SG&A) expenses were $64.0 million in the fourth quarter of 2022, compared to $52.2 million in the fourth quarter of 2021.

•GAAP net loss was $10.1 million, or $0.22 per basic and diluted share in the fourth quarter of 2022, compared to a GAAP net loss of $5.1 million, or $0.12 per basic and diluted share in the fourth quarter of 2021.
•Non-GAAP net income was $37.0 million, or $0.81 per basic share and $0.80 per diluted share in the fourth quarter of 2022, compared to non-GAAP net income of $44.4 million, or $0.99 per basic share and $0.97 per diluted share in the fourth quarter of 2021.
•Adjusted EBITDA was $58.8 million in the fourth quarter of 2022, a 15% decrease compared to $69.3 million in the fourth quarter of 2021.
•Pacira ended the fourth quarter of 2022 with cash, cash equivalents and available-for-sale investments ("cash") of $325.9 million. Cash provided by operations was $42.0 million in the fourth quarter of 2022, compared to $23.2 million in the fourth quarter of 2021.
•Pacira had 45.9 million basic and diluted weighted average shares of common stock outstanding in the fourth quarter of 2022.
•For non-GAAP measures, Pacira had 46.3 million diluted weighted average shares of common stock outstanding in the fourth quarter of 2022.
See "Non-GAAP Financial Information" below.
Full-Year 2022 Financial Results

•Total revenues were $666.8 million in 2022, a 23% increase over the $541.5 million reported in 2021.
•EXPAREL net product sales were $536.9 million in 2022, a 6% increase over the $506.5 million reported in 2021.
•ZILRETTA net product sales were $105.5 million in 2022. The company began recognizing ZILRETTA sales upon completing its acquisition of Flexion in November 2021.
•Full-year iovera° net product sales were $15.3 million, a 6% decrease over the $16.2 million reported in 2021.
•Full-year sales of bupivacaine liposome injectable suspension to third-party licensees were $6.5 million in 2022, versus the $3.6 million reported in 2021.
•Full-year royalty and collaborative licensing and milestone revenues sales were $2.7 million in 2022, versus the $2.6 million reported in 2021.
•Total operating expenses were $606.8 million in 2022, compared to $451.6 million in 2021.
•R&D expenses were $84.8 million in 2022, compared to $55.5 million in 2021. The company’s R&D expenses include $24.6 million and $19.4 million of product development and manufacturing capacity expansion costs in 2022 and 2021, respectively.
•Selling, general and administrative (SG&A) expenses were $254.5 million in 2022, compared to $199.3 million in 2021.
•GAAP net income was $15.9 million, or $0.35 per basic share and $0.34 per diluted share in 2022, compared to GAAP net income of $42.0 million, or $0.95 per basic share and $0.92 per diluted share in 2021.

•Non-GAAP net income was $120.7 million, or $2.65 per basic share and $2.59 per diluted share in 2022, compared to non-GAAP net income of $136.7 million, or $3.09 per basic share and $3.00 per diluted share in 2021.
•Adjusted EBITDA was $212.7 million in 2022, a 4% increase over $204.0 million in 2021.
•Cash provided by operations was $145.3 million in 2022, compared to $125.7 million in 2021.
•Pacira had 45.5 million basic and 46.5 million diluted weighted average shares of common stock outstanding in 2022.
See "Non-GAAP Financial Information" below.
2023 Financial Guidance
Today the company is providing full-year 2023 financial guidance as follows:
•EXPAREL net product sales of $570 million to $580 million;
•ZILRETTA net product sales of $115 million to $125 million;
•iovera° net product sales of $17 million to $20 million;
•Non-GAAP Gross margin of 76% to 78%;
•Non-GAAP R&D expense of $70 million to $80 million;
•Non-GAAP SG&A expense of $220 million to $230 million; and
•Stock-based compensation of $51 million to $54 million.
See "Non-GAAP Financial Information" 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, Tuesday, February 28, 2023, at 8:30 a.m. ET. For listeners who wish to participate in the question-and-answer session via telephone, please pre-register at investor.pacira.com/upcoming-events. All registrants will receive dial-in information and a PIN allowing them to access the live call. In addition, a live audio of the conference call will be available as a webcast. Interested parties can access the event through the "Events" page on the Pacira website at investor.pacira.com.

For those unable to participate in the live call, a replay of the webcast will be available on the Pacira website for approximately 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 gross margin, non-GAAP cost of goods sold, non-GAAP research and development (R&D) expense, non-GAAP selling, general and administrative (SG&A) expense, non-GAAP net income, non-GAAP net income per common share, non-GAAP weighted average diluted common shares outstanding, EBITDA (earnings before interest, taxes, depreciation and amortization) and adjusted EBITDA, because these non-GAAP financial measures exclude the impact of items that management believes affect comparability or underlying business trends.

These measures supplement the company’s financial results prepared in accordance with GAAP. Pacira management uses these measures to estimate its future cost of goods sold, R&D expense and SG&A expense outlook and to better analyze its financial results and 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 ongoing operating performance of Pacira and its 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.