Pacira reports net loss of $7.0 million for quarter ended December 31, 2010

Pacira Pharmaceuticals, Inc.Mar 31 2011

Pacira Pharmaceuticals, Inc. (NASDAQ: PCRX), an emerging specialty pharmaceutical company, today announced financial results for the fourth quarter and full-year ended December 31, 2010, provided an update on the execution of its pre-commercial and launch strategies for EXPAREL™ and established 2011 financial guidance.

"Since our initial public offering in February, we have continued to make significant progress in educating healthcare professionals and other decision makers on the advantages of EXPAREL, including multiple recent data presentations at medical meetings and the formation of several clinical advisory boards led by key opinion leaders," said David Stack, president and chief executive officer of Pacira Pharmaceuticals, Inc.  "We have received encouraging feedback from these health care providers regarding the need for a safe, long-acting, easy to use analgesic to manage postsurgical pain. As we continue to advance our pre-launch strategy, we are planning to conduct a number of health outcomes studies focused on the potential for EXPAREL to control pain with reduced reliance on opioid (morphine) analgesics.  The health outcomes program is designed in collaboration with our acute health care customers in order to define postsurgical patient and procedure needs where reduced opioid (morphine) consumption provides the opportunity for enhanced patient care and hospital economics." 

Financial Highlights

• Net loss for the quarter ended December 31, 2010 was $7.0 million, or $12.27 per share, compared with $9.0 million, or $15.63 per share, for the quarter ended December 31, 2009. Net loss for the year ended December 31, 2010 was $27.1 million, or $47.29 per share, compared with $31.7 million, or $55.32 per common share, for the year ended December 31, 2009.  In February 2011, the company sold 6 million shares of common stock at $7.00 per share in its initial public offering (IPO).  On a pro forma basis, reflecting the issuance of shares of common stock in the IPO, and the conversion of outstanding preferred stock and promissory notes into an aggregate of approximately 10.7 million shares of common stock, net loss per share was $1.58 for the year ended December 31, 2010. As the closing of the IPO occurred in February 2011, it is not included in the fourth quarter 2010 financial results, except in certain designated pro forma calculations.
• Total revenues for the quarter ended December 31, 2010 were $2.2 million compared with $4.3 million for the fourth quarter of 2009. The $2.1 million decrease was primarily attributable to a decline in supply revenue of $1.5 million in the fourth quarter of 2010 that reflects the variable nature of product orders from Pacira's commercial partners and Pacira's practice of running periodic manufacturing campaigns of several lots at a time to increase manufacturing efficiency, which results in supply revenue not falling uniformly within quarters; and a $0.4 million decrease in collaborative licensing and development revenue resulting from lower reimbursable development activity in the fourth quarter of 2010 compared with the same period of 2009.  Total revenues for the year ended December 31, 2010 were $14.6 million compared with $15.0 million for the year ended December 31, 2009. The $0.4 million decrease was primarily due to decreases in collaborative licensing and development revenues of $1.4 million and royalties of $0.3 million, partially offset by an increase in supply revenue of $1.3 million.
• Total operating expenses for the quarter ended December 31, 2010 were $7.9 million compared with $12.1 million for the same period of 2009.  The $4.2 million decrease was primarily attributable to the completion of pivotal Phase 3 placebo controlled studies in 2009.  Total operating expenses for the year ended December 31, 2010 were $36.9 million compared with $43.6 million for the year ended December 31, 2009. The $6.7 million decrease in expenses for the full year was also attributable to the completion of pivotal Phase 3 placebo controlled studies in 2009.
• As of December 31, 2010, Pacira had unrestricted cash and cash equivalents of $26.1 million compared with $7.1 million on December 31, 2009.  As of December 31, 2010, the company had pro forma cash, including the proceeds from the IPO, net of underwriters' discounts and commissions and estimated offering expenses, of $64.6 million.  As the closing of the IPO occurred in February 2011, it is not included in the fourth quarter 2010 financial results, except in certain designated pro forma calculations.

At December 31, 2010 there were approximately 575,000 shares of common stock outstanding.  As of March 31, 2011, reflecting the issuance of shares of common stock in the IPO, and the conversion of outstanding preferred stock and promissory notes, approximately 17.2 million shares of common stock were outstanding.

Full Year 2011 Financial Guidance

Pacira currently expects to achieve the following financial results for the full-year ending December 31, 2011:

• Excluding the impact of potential sales of EXPAREL should it be approved by the U.S. Food and Drug Administration (FDA) in the third quarter of 2011 and commercialized by Pacira in the fourth quarter of 2011, revenue is expected to range between $14 and $16 million in 2011.  Revenue expectations include anticipated DepoCyt and DepoDur supply revenue and royalties, and collaborative licensing and development revenues resulting from DepoFoam based partnerships.
• Excluding the impact of any future partnerships, asset monetizations or other cash generating activities unrelated to its current operations, Pacira expects cash used in operating activities and for the purchase of fixed assets used in investing activities ("cash burn") to be approximately $30 million cumulatively through the third quarter of 2011.  Based upon the assumption of FDA approval for EXPAREL in the third quarter of 2011 and EXPAREL commercialization in the fourth quarter of 2011, Pacira expects cash burn in the fourth quarter of 2011 to be approximately $25 million, which would include a $10 million milestone payment to Skye Pharmaceuticals due upon the first commercial sale of EXPAREL.  

Recent Developments

• Presented new Phase 3 EXPAREL data at two medical meetings: Data from Pacira's Phase 3 multicenter, randomized, double-blind, parallel group, placebo-controlled bunionectomy trial was presented at the 2011 American Academy of Orthopaedic Surgeons (AAOS) Annual Meeting and the Orthopaedic Research Society's 57th Annual Meeting.  The data demonstrated that the median time to first use of opioid rescue medication was 7.2 hours for patients treated with EXPAREL compared with 4.3 hours for patients on placebo (p<0.0001) and that patients treated with EXPAREL had comparable safety in wound healing and significantly improved efficacy in pain reduction compared to patients treated with placebo.  Pacira's poster at AAOS was awarded the best poster in the "foot and ankle" category.  Data from this Phase 3 trial was included in the new drug application (NDA) accepted for filing by the FDA in December 2010.
• Presented new Phase 1 study data on subjects with hepatic impairment: Data from Pacira's Phase 1 study evaluating EXPAREL in subjects with moderate, stable hepatic impairment was presented at the 2011 American Society for Clinical Pharmacology and Therapeutics 112th Annual Meeting.  Results from the Phase 1 open-label, parallel group volunteer study demonstrated that the differences in plasma exposure of EXPAREL between subjects with moderate, stable hepatic impairment compared to subjects with normal hepatic function were small and unlikely to require a dose adjustment of EXPAREL. Data from this Phase 3 trial was also included in the new drug application (NDA) accepted for filing by the FDA in December 2010.
• Acceptance of EXPAREL NDA filing: In December 2010, the FDA accepted Pacira's NDA filing for EXPAREL, a long-acting bupivacaine for postsurgical pain management.  The FDA also notified Pacira that its Prescription Drug User Fee Act (PDUFA) target date is July, 28, 2011.  Data from Pacira's two Phase 3 clinical trials in hemorrhoidectomy and bunionectomy, respectively, were included in the NDA filing.  

If granted a broad postsurgical pain label by the FDA, Pacira would be positioned to address a U.S. market opportunity of approximately 25 million infiltration and elastomeric bag procedures per year. Based upon the current PDUFA date and potential FDA approval timeline, Pacira plans to commercialize EXPAREL in the U.S. in the fourth quarter of 2011. Beyond infiltration, the company expects to develop EXPAREL for use in nerve block and epidural administration procedures, which collectively represent an additional 14 million annual opportunities per year.  Pacira believes there are multiple product opportunities for EXPAREL in the future as well as significant potential for its DepoFoam® technology platform, which supports an additional pipeline of development assets and partnering opportunities.