Shares of Pacira Pharmaceuticals, Inc. (PCRX) soared 11.3% on the news of the pricing of the common stock at an offer price of $64.00 per share.
We note that Pacira initiated a public offering of its common stock worth $100 million earlier in the week.
Pacira expects net proceeds of approximately $96.0 million from the offering after deducting underwriting discounts and commissions and estimated offering expenses.
Moreover, underwriters have been granted an option to purchase an additional 240,000 shares, with a 30-day window to do so. The offering is expected to close by Apr 14, 2014.
We are encouraged by the recent bout of positive news at Pacira. Pacira’s lead drug Exparel, is approved by the U.S. Food and Drug Administration (:FDA) for administration into the surgical site to produce post-surgical analgesia.
Exparel was launched in Apr 2012 and demand has been robust ever since. Net Exparel revenues were $76.2 million in 2013. Since its launch, 2,106 customers have ordered Exparel (data as of Dec 31, 2013).
Pacira recently signed a strategic co-production partnership deal with Patheon. As per the partnership agreement, Exparel will be manufactured and packaged at Patheon’s facility in the U.K. Further, Patheon will construct the dedicated manufacturing suites, install and validate the manufacturing equipments and manufacture Exparel.
Pacira is working to expand the manufacturing capacity of Exparel to meet the growing demand for the drug. Last month, the FDA approved an additional manufacturing suite (Suite C) for Exparel.
The site at Patheon will be designed to mirror the recently approved Suite C manufacturing facility. We expect the company to use the funds for further commercilization of Exparel.
Pacira carries a Zacks Rank #3 (Hold). Investors looking for better-ranked stocks in the pharma sector may consider companies like Salix Pharmaceuticals (SLXP), Sucampo Pharmaceuticals (SCMP) and Immunogen Inc. (IMGN).