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Pacira (PCRX) Posts Earnings in Q3, Revenues Lag Estimates

Zacks

Pacira Pharmaceuticals, Inc. PCRX reported third-quarter 2017 earnings of 11 cents per share (including the impact of stock-based compensation) comparing favorably with the Zacks Consensus Estimate of a loss of 4 cents. However, earnings were lower than 20 cents recorded a year ago.

Revenues declined 1.5% year over year to $67.3 million and missed the Zacks Consensus Estimate of $69 million. The downturn was due to the discontinuation of DepoCyt(e), and lower collaborative licensing and milestone revenues. However, Exparel sales were $66.8 million in the quarter, up 2.9% year over year. Sales of the drug were up despite fewer selling days and hurricanes in the Southern United States, a region which account for approximately 20% of the drug’s business.

So far this year, Pacira’s share price has increased 27% compared with the industry’s gain of 1.5%.


Quarter in Detail

Pacira’s top line comprises product revenues, collaborative licensing and milestone revenues, and royalty revenues. DepoCyt(e) and other product revenues came in at $0.2 million, down 86.3%.

Collaborative licensing and milestone revenues were down 98.1% to $0.03 million. Also, royalty revenues were $0.4 million, down 59.3%.

Nevertheless, research and development (R&D) expenses ((including the impact of stock-based compensation) were up 20.8% to $11 million while selling, general and administrative (SG&A) expenses increased 9.3% to $34.3 million.

Recent Developments

In October 2017, the FDA accepted the company’s resubmission of thesupplemental new drug application (sNDA) to expand the label for Exparel for including administration via nerve block for prolonged regional analgesia. The FDA has set an action date of Apr 6, 2018.

In September, Pacira announced a nationwide collaboration with Aetna and the American Association of Oral and Maxillofacial Surgeons (AAOMS). The partnership is aimed at reducing the number of opioid tablets prescribed to patients associated with impacted wisdom teeth extraction through the utilization of Exparel to provide prolonged non-opioid postsurgical pain control.


2017 Outlook

Pacira provided its guidance for 2017. It projects Exparel sales to be in the range of $280 million to $285 million narrowed from 290 million to $310 million, projected earlier. The company, however, reiterated is financial guidance and expects R&D expenses (excluding stock-based compensation) to be in the band of $50 million to $60 million. SG&A expenses (excluding stock based compensation are anticipated to be in the $145-$155 million range. Also, stock-based compensation is expected to be between $30 million and $35 million.

Zacks Rank & Stocks to Consider

Pacira carries a Zacks Rank #3 (Hold). Some better-ranked health care stocks in the same space include Ligand Pharmaceuticals Incorporated LGND, Exelixis, Inc. EXEL and Adaptimmune Therapeutics plc ADAP. While Ligand sports a Zacks Rank #1 (Strong Buy), Exelixis and Adaptimmune carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates have moved up $3.68 to $3.70 for 2018 over the last 30 days. The company pulled off positive earnings surprises in two of the trailing four quarters, with an average beat of 6.19%. The share price of the company has increased 44.7% year to date.

Exelixis’ earnings per share estimates have moved up from 26 cents to 45 cents for 2017 and from 63 cents to 70 cents for 2018 over the last 30 days. The company delivered positive earnings surprises in all of the trailing four quarters, with an average beat of 572.92%. The share price of the company has increased 77% year to date.

Adaptimmune’s loss per share estimates have narrowed from 96 cents to 76 cents for 2017 and from 90 cents to 75 cents for 2018 over the last 60 days. The company came up with positive earnings surprises in two of the trailing four quarters, with an average beat of 24.79%. The share price of the company has increased 101.9% year to date.

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