Pacira Raises Wall Street Expectations of a New Blockbuster Painkiller
The last time Xconomy checked in with Pacira Pharmaceuticals (NASDAQ: PCRX), in early 2009, the company was laying off a third of its workforce in the wake of a disappointing clinical trial of Exparel, a treatment for post-surgical pain. Pacira was capital-constrained because the market for life-sciences IPOs was all but dead. And the future was far from certain for the company, which has corporate offices in Parsippany, NJ, and manufacturing and R&D operations in San Diego.
Fast-forward two years and it’s pretty clear Pacira’s fortunes have changed, so much so that the company was able to pull off an IPO in February. Pacira’s executives have been busy presenting data on its pain treatment, most recently at a medical meeting on May 17, when they announced positive results in patients undergoing hemorrhoid surgery. Pacira’s stock is now trading at $10.30—a 47 percent premium to its offering price, and a clear signal that Wall Street fully expects the FDA to approve the pain treatment by its scheduled PDUFA date of July 28.
The main conference room in Pacira‘s Parsippany headquarters bears a sign reading “Exparel War Room”—a fitting description of what the company has been through in the years leading up to, and including, the IPO. “This is the hardest thing I ever did in my life,” declares CEO Dave Stack, a pharmaceutical industry veteran and partner at MPM Capital, who did stints at The Medicines Company, Innovex, and others before being brought in to lead Pacira’s turnaround in 2007.
Pacira was originally DepoTech, a San Diego company that developed a controlled-release drug-delivery technology called DepoFoam. UK-based SkyePharma acquired DepoTech in 1998, but struggled to manage the asset, Stack says, so a syndicate of venture capitalists bought it in 2007 and reformed it as Pacira.
The VCs—MPM, HBM BioVentures, OrbiMed Advisors, and Sanderling Ventures—chose Stack to run Pacira primarily because of his track record. At The Medicine’s Company, Stack and his team developed a marketing plan for the blood thinner bivalirudin (Angiomax) that entailed going into large hospital chains and reviewing the charts of patients who had been given heparin—a cheap and well-accepted alternative to the newer product. Stack and nine cohorts (all of whom are now at Pacira) determined a set of characteristics that could predict which patients were most likely to develop bleeding incidents from heparin that would keep them in the hospital for several extra days. “We wrote algorithms that allowed hospital computers to flag patients” who were most likely to respond badly to heparin, Stack explains. “Then they could say, ‘We should be using Angiomax instead.’”
It worked: bivalirudin turned into a $400 million-a-year product.
Stack has developed a similar plan for marketing Exparel, which is a long-acting version of the pain drug bupivacaine. After major surgeries, bupivacaine is commonly injected into the tissues surrounding the surgical wound. It typically provides pain relief for about eight hours, after which patients are given opioids such as morphine, which can cause serious … Next Page »