Pacira's third quarter total revenues decrease to $4.0 million

Pacira Pharmaceuticals, Inc.Oct 31 2011

Pacira Pharmaceuticals, Inc. (Nasdaq: PCRX), an emerging specialty pharmaceutical company, today announced financial results for the third quarter ended September 30, 2011 and provided an update on the U.S. Food and Drug Administration's (FDA) approval of EXPAREL™ (bupivacaine liposome injectable suspension) and the commercial strategy to support the product launch.

"With the broad postsurgical pain management label granted by the FDA, we are well positioned to execute our commercial strategy for EXPAREL," said Dave Stack, president and chief executive officer of Pacira Pharmaceuticals, Inc. "Over the past several months, our entire organization has diligently focused on completing the pre-commercial activities necessary to prepare EXPAREL for launch. During this time, we have strengthened our relationships with clinicians and hospitals, presented data demonstrating the efficacy, safety and utility of EXPAREL and completed retrospective health outcomes studies highlighting the economic benefits of reducing opioid use in postsurgical pain management regimens. With these accomplishments as a platform, we believe we are on track for a successful hospital launch of EXPAREL in January 2012, focused on abdominal soft tissue surgeries typically performed by colorectal surgeons, general surgeons and OB/GYNs."

EXPAREL Commercial Strategy

The company has previously announced its intention to launch EXPAREL into the broad hospital market in early 2012.  By the time of launch, Pacira expects to have achieved the following:

• Final analysis of its retrospective health outcomes research studies, which demonstrate that in certain patient populations, opioid-based pain management often leads to patient care and economic challenges. The first of these data sets will be presented at the American Society of Health-System Pharmacists (ASHP) annual meeting in December in New Orleans.
• Initiated patient enrollment for its prospective health outcomes clinical study programs—conducted in partnership with its integrated health system customers—to evaluate the benefits of incorporating EXPAREL into the postsurgical pain management protocols in customer hospitals.
• Hired its 63-person sales force through its agreement with Quintiles who will cover more than 81 percent of the target market, which includes abdominal soft tissue surgeries, plastic surgeries such as breast augmentation and abdominoplasty and elastomeric pump replacement initiatives. Pacira recently hired regional sales directors who will oversee the hiring and training of these representatives, as well as work with the commercial team to target key hospital surgical customers for rapid formulary adoption.
• Developed key educational initiatives, such as center of excellence programs, preceptorship programs and web-based training focused on plastic surgery and elastomeric pump replacement audiences.

"Based upon our January launch timeline, we are moving forward with our strategy to build out a sales team that we believe can cover more than 81 percent of the hospital soft tissue surgery market," continued Mr. Stack. "This team will also be focused on assisting our commercial team with accelerating the formulary process at key hospitals and gaining momentum within the plastic surgery market, where there are lower formulary approval requirements. Additionally, we expect to maintain a high level of activity with new peer-reviewed data publications and presentations at key medical meetings, which we believe will help further support an accelerated formulary approval strategy. We are excited about the interest and support for EXPAREL to date, and with our recent FDA approval we believe we are in a strong position to bring a new, much-needed postsurgical pain management therapeutic to the market."

Recent Developments

• Published our bunionectomy data in Advances in Therapy and a review article in Pain Management. In October 2011, Pacira published an article in the peer-reviewed journal Pain Management evaluating the use of DepoFoam^® in the treatment of postsurgical pain.
• Presented two podium presentations at the American College of Surgeons (ACS) 97th Annual Clinical Congress. In October 2011, Pacira presented new data introducing the potential for pharmacoeconomic benefits with EXPAREL at ACS in San Francisco. In addition, a second podium presentation highlighting a meta-analysis of the pain and opioid reduction observed across several clinical trials comparing EXPAREL to bupivacaine HCl was presented.
• Presented two posters at the 2011 Annual Meeting of the American College of Clinical Pharmacy (ACCP). In October 2011, Pacira presented new comparative data highlighting the pain control and opioid reduction observed in clinical trials of  EXPAREL compared with bupivacaine HCl, as well as pharmacokinetic data at ACCP in Pittsburgh.
• Presented two posters at the 2011 Annual Meeting of the American Society of Anesthesiologists (ASA). In October 2011, Pacira also presented two similar posters at ASA in Chicago, which focused on the pharmacokinetics and reduction in opioid-related adverse events observed in patients treated with EXPAREL.
• Presented at the Annual Scientific Assembly of the American Society of Plastic Surgeons (ASPS). In September 2011, EXPAREL was featured in the "Hot Topics in Plastic Surgery" panel at ASPS in Denver. In addition, new data demonstrating the long-term safety profile of EXPAREL following breast augmentation using silicone implants were presented during an oral session at ASPS.
• Expanded commercial team infrastructure. In August 2011, Pacira announced that it had entered into agreements with Quintiles Commercial US, Inc. (Quintiles) and Integrated Commercialization Services, Inc. (ICS) to support the anticipated launch of EXPAREL.
• Presented at the 38th Annual Meeting & Exposition of the Controlled Release Society (CRS). In August 2011, Pacira presented new preclinical data evaluating the safety of DepoFoam, the Pacira proprietary, extended-release drug delivery technology, during two podium sessions at CRS in National Harbor, Md.

Financial Highlights

• Net loss for the third quarter ended September 30, 2011 was $9.5 million, or $0.55 per share (based on 17.2 million weighted average shares outstanding), compared with $7.9 million, or $13.77 per share, for the quarter ended September 30, 2010 (based on 0.6 million weighted average shares outstanding). The difference in the number of weighted average shares outstanding primarily resulted from the Pacira initial public offering (IPO) in February 2011, as well as the conversion of all preferred stock and the principal and accrued interest on certain notes into common stock upon closing of the IPO.
• Total revenues for the quarter ended September 30, 2011 were $4.0 million compared with $4.5 million for the third quarter of 2010. The decrease was primarily attributable to a $1.1 million decline in supply revenue which reflects fewer lot sales to Pacira's commercial partners. This was offset by a $0.6 million increase in collaborative licensing and development revenue which was principally driven by activities performed under the license agreement Pacira has with Novo Nordisk that was executed in the first quarter of 2011.
• Total operating expenses for the quarter ended September 30, 2011 were $12.7 million compared with $11.0 million for the same period of 2010. The $1.7 million increase was primarily attributable to expenses related to pre-commercialization activities performed in anticipation of the launch of EXPAREL.
• As of September 30, 2011, Pacira had unrestricted cash, cash equivalents and short term investments of $37.1 million compared with $26.1 million on December 31, 2010.
• Cash used in operating activities and for the purchase of fixed assets used in investing activities ("cash burn") was approximately $27 million for the nine months ended September 30, 2011.  

Full Year 2011 Financial Guidance

• Pacira is reiterating its revenue expectations for 2011 and currently expects to achieve revenue in the range of $14 to $16 million for the full-year ending December 31, 2011.  This revenue expectation excludes the impact of potential sales of EXPAREL.
• Pacira is also reiterating that its expectation for cash burn for the fourth quarter of 2011 is approximately $15 million. This cash burn expectation includes a $2 million development milestone due from Novo Nordisk A/S under the agreement announced in January 2011.  As a result, Pacira expects to exit 2011 with approximately $22 million in unrestricted cash, cash equivalents and short-term investments.