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Pacira Up on Narrower-than-Expected Loss, Revenue Beat in Q2

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Pacira Pharmaceuticals, Inc.’s (PCRX) shares have been inching up since the company reported a narrower-than-expected loss for the second quarter of 2014. Shares, which were up 4.7% immediately after the release of second-quarter results, increased another 4.3% in the following trading session. Overall, shares were up 9.2%.

Pacira’s second-quarter 2014 loss of 14 cents per share was well below the Zacks Consensus Estimate of a loss of 24 cents and the year-ago loss of 42 cents per share.

Second-quarter revenues soared 175.2% year over year to $47.2 million, surpassing the Zacks Consensus Estimate of $42 million. This increase in revenues is primarily due to higher demand.

The Quarter in Detail

Pacira’s net revenues comprise product revenues, collaborative licensing and development revenues and royalty revenues. Exparel revenues were $44.9 million, up 195.4% from the year-ago quarter, primarily driven by higher demand for the drug. Collaboration and license agreement revenues and royalty revenues were $0.3 million (up 32.5%) and $0.8 million (up 30.5%), respectively.

Research and development (R&D) expenses increased 7.4% to $5.2 million from the year-ago quarter. Selling, general and administrative expenses increased 76.4% year over year to $24.8 million.

Till date, 2815 customers ordered Exparel since its launch, with 469 customers each ordering the product worth more than $100,000. In the reported quarter, Pacira gained 363 new customers who ordered Exparel. The company reported an average of 28 new accounts per week in the reported quarter.

Meanwhile, Pacira is working on the label expansion of Exparel. The company is currently seeking FDA approval for Exparel for femoral nerve-block in total knee arthroplasty with a response due by Mar 5, 2015.

Our Take

We are encouraged by Exparel’s performance and pleased with Pacira’s efforts to expands the product’s label. Exparel should continue exhibiting strong growth. Meanwhile, we expect 2015 to be a catalyst rich year for Pacira as the company has an important regulatory event in Mar 2015 and also intends to file an investigational new drug application for one of its candidates in that year.

Pacira carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Actelion Ltd. (ALIOF), Enzo Biochem Inc. (ENZ) and Endocyte, Inc. (ECYT). All these stocks sport a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on ALIOF
Read the Full Research Report on ENZ
Read the Full Research Report on ECYT
Read the Full Research Report on PCRX

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