Pacira Wins FDA Approval of Pain Drug, Cushioning Pain of 3Q Loss
Parsippany, N.J-based Pacira Pharmaceuticals (NASDAQ: PCRX) announced today that the FDA approved its long-acting form of a pain drug called bupivacaine, which Pacira brands as Exparel. The approval marked a positive end to a bruising drug-development saga that began a dozen years ago. It also brightened up Pacira’s otherwise so-so third-quarter earnings, which the company also announced today. It said sales in the quarter dropped to $4 million from $4.5 million in the same quarter a year ago, and the quarterly loss widened to $9.5 million from $7.9 million.
Pacira—which maintains corporate offices in New Jersey and manufacturing and R&D operations in San Diego—expects to launch its new product in January to treat post-surgical pain. The company said in a statement today that the FDA approval was sufficiently broad to support an aggressive rollout to hospitals. The company also said that as part of a deal it formed in September, Durham, N.C.-based Quintiles will provide 63 salespeople to market the pain product.
Pacira started life as DepoTech, a San Diego company that developed a controlled-release drug-delivery technology called DepoFoam, which is part of the drug the FDA approved today. UK-based SkyePharma acquired DepoTech in 1998, but failed to manage it successfully, so a group of venture capitalists bought it in 2007 and reformed it as Pacira. Those VCs—MPM, HBM BioVentures, OrbiMed Advisors, and Sanderling Ventures—brought on board Dave Stack to run Pacira, primarily because of his success at The Medicines Company, where he helped turn the blood thinner bivalirudin (Angiomax) into a $400-million-a-year product.
When Xconomy met with Stack last May, he talked with us in a conference room bearing a sign that said “Exparel War Room,” which seemed fitting considering that he called the drug “the hardest thing I ever did in my life.” Indeed, getting to FDA approval wasn’t easy. In 2009, Pacira laid off a third of its workforce when the drug failed an early trial. Pacira pulled off an IPO in February of this year, raising $42 million, but the share price of $7 was about half of what Stack was expecting.
The company had expected to hear from the FDA on its bupivacaine product in July, but because the agency had requested additional information from Pacira, it extended the decision date by three months. Pacira’s shares dropped from $15 in late May to $9.56 as the FDA deadline approached. The stock went on a wild ride Friday as shareholders waited for the FDA news, zooming from a high of $11.10 to a low of $9.30 before settling to close at $10.18.
Pacira said today it expects revenues of $14 to $16 million for the year—about flat with last year’s results. Analysts on average expect the company to pull in revenues of $45 million next year.
Pacira’s shares were up 17 percent to $11.96 in pre-market trading today.