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Pacira BioSciences, Inc. (PCRX)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $168.9M, up 1% year over year but below Wall Street consensus; GAAP EPS was $0.10 while non-GAAP diluted EPS was $0.62, delivering an EPS beat vs consensus, and adjusted EBITDA of $44.1M was solid despite transition-related headwinds in ZILRETTA and iovera° sales .
  • EXPAREL net sales rose to $136.5M with ~7% average daily volume growth (60 selling days vs 62 last year), supported by early NOPAIN reimbursement adoption; consolidated non-GAAP gross margin improved sharply to 81% aided by manufacturing efficiencies and elimination of the RDF royalty .
  • Management reiterated full-year 2025 guidance (revenue $725–$765M; non-GAAP GM 76–78%) and authorized a $300M share repurchase program through 2026, underscoring confidence in cash generation and long-term IP runway to 2039 via the EXPAREL settlement .
  • Stock narrative catalysts: NOPAIN-driven adoption ramp into H2, margin accretion from RDF royalty removal, IP clarity (volume-limited generic entry and exclusivity runway), and PCRX-201 Phase 2 progress with two-year efficacy data presented at OARSI .

What Went Well and What Went Wrong

What Went Well

  • EXPAREL momentum: net sales $136.5M; ~7% average daily volume growth despite fewer selling days; early signs of NOPAIN uptake in community hospitals/ASCs and new/re-activated accounts up >30% .
  • Margin expansion: non-GAAP gross margin reached 81% (vs 72% YoY), benefiting from enhanced San Diego large-scale manufacturing and RDF royalty elimination (low single-digit benefit to EXPAREL) .
  • Strategic clarity and capital return: IP settlement extends EXPAREL exclusivity runway to 2039; Board authorized $300M buyback through 2026, reinforcing confidence and valuation support .

Management quotes:

  • “The favorable settlement of our EXPAREL patent litigation... Our recently established EXPAREL exclusivity runway extends to 2039...” — CEO Frank D. Lee .
  • “We had a recent win in the Nevada court that will benefit future EXPAREL gross margins by low single-digit percentage by eliminating RDF royalties.” — CFO Shawn Cross .
  • “First quarter average daily EXPAREL sales and volumes were both up by approximately 7%... more than double the low single-digit year-over-year growth rate...” — CEO Frank D. Lee .

What Went Wrong

  • Revenue miss vs consensus and soft ZILRETTA/iovera° sales: ZILRETTA $23.3M (down YoY) and iovera° $5.1M were impacted by sales force restructuring; broader NOPAIN adoption in large IDNs will take time .
  • Higher OpEx: SG&A rose to $86.8M and R&D to $25.3M on commercial investments and PCRX-201 Phase 2 start-up costs; GAAP net income fell to $4.8M from $9.0M YoY .
  • Sequential revenue down vs Q4 seasonality and fewer selling days; EBITDA (GAAP) below consensus, though adjusted EBITDA was strong .

Financial Results

Key P&L and Margin Metrics

MetricQ1 2024Q4 2024Q1 2025
Total Revenues ($USD Millions)$167.1 $187.3 $168.9
GAAP EPS ($)$0.19 $0.34 diluted / $0.35 basic $0.10
Non-GAAP Diluted EPS ($)$0.62 $0.91 $0.62
GAAP Gross Margin %72% 79% 80%
Non-GAAP Gross Margin %72% 79% 81%
EBITDA ($USD Millions)$31.5 $45.9 $27.6
Adjusted EBITDA ($USD Millions)$44.6 $62.5 $44.1
Cash from Operations ($USD Millions)$49.1 $33.1 $35.5

Estimate comparison (Wall Street consensus via S&P Global):

  • Q1 2025 Revenue: $175.9M estimate* vs $168.9M actual → bold miss .
  • Q1 2025 EPS (Primary): $0.60 estimate* vs $0.62 actual → bold beat .
  • Q1 2025 EBITDA: $41.3M estimate* vs $27.6M actual (GAAP EBITDA) → bold miss .
    Values marked with * retrieved from S&P Global.

Segment Net Product Sales

Segment ($USD Millions)Q1 2024Q4 2024Q1 2025
EXPAREL$132.4 $147.7 $136.5
ZILRETTA$25.8 $33.1 $23.3
iovera°$5.0 $6.5 $5.1
Bupivacaine Liposome to Licensees$2.5 $0.0 $2.6
Total Net Product Sales$165.8 $187.3 $167.6
Royalty Revenue$1.3 $0.0 $1.3

KPIs and Balance Sheet

KPIQ1 2024Q4 2024Q1 2025
EXPAREL Avg Daily Volume Growth YoYn/an/a~7%
Selling Days62 n/a60
Cash & Equivalents ($M)n/a$276.8 $283.6
Short-term Investments ($M)n/a$207.8 $210.0
“Cash” (Cash + ST Investments) ($M)n/a~$484.6 ~$493.6
Diluted Wtd Avg Shares (GAAP) (M)52.2 49.0 46.5

Guidance Changes

MetricPeriodPrevious Guidance (Q4 2024)Current Guidance (Q1 2025)Change
Total Revenue ($M)FY 2025$725–$765 $725–$765 Maintained
Non-GAAP Gross Margin %FY 202576–78 76–78 Maintained
Non-GAAP R&D Expense ($M)FY 2025$90–$105 $90–$105 Maintained
Non-GAAP SG&A Expense ($M)FY 2025$290–$320 $290–$320 Maintained
Stock-based Compensation ($M)FY 2025$56–$61 $56–$61 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q3 2024; Q-1: Q4 2024)Current Period (Q1 2025)Trend
NOPAIN adoption and reimbursementFinal CMS rule recognized EXPAREL/iovera° eligibility; new EXPAREL J-code (effective 1/1/25) Early positive indicators in community hospitals/ASCs; >30% increase in new/re-activated accounts; awareness rising; larger IDN wins expected H2 Improving adoption, H2 acceleration expected
Margins and manufacturingNon-GAAP GM ~78–79%; San Diego enhanced process; seasonality Non-GAAP GM 81%; RDF royalty eliminated (low single-digit EXPAREL margin benefit) Margin expansion underway
EXPAREL IP and competitionQ3 goodwill impairment after patent events and generic approval headlines Settlement with Fresenius sets volume-limited generic entry; runway to 2039; no pricing restrictions/tech transfer IP clarity, reduced overhang
ZILRETTA/iovera° commercial executionSolid Q4 ZILRETTA ($33.1M) and iovera° ($6.5M) Transition to dedicated sales teams caused temporary softness; programs to broaden Medicare usage and value-based contracts Temporary headwinds; recovery expected
PCRX-201 pipeline2-year Phase 1 efficacy data cited, program building Phase 2 ASCEND dosing underway; 2-year data presented at OARSI; immunogenicity readouts and 3-year follow-up planned Advancing; growing external validation
Tariffs/macroNot highlightedNo material impact expected; majority IP/manufacturing in U.S.; monitoring developments Low risk currently

Management Commentary

  • Strategic focus: “We started the year by introducing our 5x30 path to value creation... accelerating growth in our strong commercial base and advancing an innovative pipeline...” — CEO Frank D. Lee .
  • IP settlement impact: “The agreement recognizes the strength of the EXPAREL IP... exclusivity runway extending to 2039... volume limited with no pricing restrictions...” — CEO Frank D. Lee .
  • NOPAIN progress: “First quarter average daily EXPAREL sales and volumes were both up ~7%... more than double the low single-digit YoY growth rate...” — CEO Frank D. Lee .
  • Margin drivers: “Gross margins continue to benefit from improved costs and efficiencies of our enhanced larger-scale manufacturing... Nevada court win eliminates RDF royalties.” — CFO Shawn Cross .
  • Capital allocation: “Board authorized a new $300M share repurchase program... significant disconnect in current valuation.” — CFO Shawn Cross .

Q&A Highlights

  • NOPAIN adoption curve: Early traction in community hospitals/ASCs due to fewer decision-makers; formulary wins at IDNs building, with broader impact expected in H2 .
  • Gross margin guidance and RDF royalty: Low single-digit benefit to EXPAREL margins; minor impact in Q1, more meaningful go-forward; guidance to be reassessed after Q2 .
  • Pricing and GPOs: Q1 growth driven by volume; expect mid-single-digit price impact as GPO agreements roll in; lapping dynamics into fall .
  • Payer mix: Outpatient HOPD skews more to Medicare; ASC principally commercial (two-thirds to three-quarters) .
  • PCRX-201 adoption expectations: Clinicians view ≥1-year durability as “transformative”; enthusiasm tied to multi-year efficacy data .

Estimates Context

  • Q1 2025 vs consensus:
    • Revenue $168.9M actual vs $175.9M estimate* → bold miss .
    • EPS (Primary) $0.62 actual vs $0.60 estimate* → bold beat .
    • EBITDA $27.6M actual (GAAP) vs $41.3M estimate* → bold miss .
  • Adjusted EBITDA ($44.1M) exceeded the EBITDA consensus figure, but consensus appears to reference GAAP EBITDA, underscoring the importance of non-GAAP reconciliation when evaluating run-rate profitability .
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: NOPAIN is an H2 ramp story; expect sequential improvement as claims cycle data and IDN formulary decisions catch up. Margin tailwind from RDF royalty elimination adds leverage to sales growth .
  • Estimate reset: Revenue miss likely driven by temporary ZILRETTA/iovera° sales force transition and two fewer selling days; EPS beat reflects stronger gross margin. Expect models to calibrate mix and OpEx trajectory .
  • Structural advantages: IP settlement and extended runway reduce the EXPAREL overhang; volume-limited generic entry structure preserves pricing and operational control .
  • Capital returns: $300M buyback through 2026 provides valuation support and signals confidence in cash generation and long-term outlook .
  • Pipeline optionality: PCRX-201 continues to show multi-year efficacy; Phase 2 underway with upcoming immunogenicity and 3-year follow-up readouts that could re-rate medium-term growth optionality .
  • Watch items: H2 utilization trends in ASCs/HOPDs; GPO pricing impact (mid-single-digit) on EXPAREL; SG&A discipline vs commercial investments; potential tariff developments (currently low risk) .
  • Trading lens: EPS resilience and margin expansion vs revenue recovery cadence should drive near-term sentiment; catalysts include Q2 margin update, evidence of broader NOPAIN adoption, and additional PCRX-201 data .

Values marked with * retrieved from S&P Global.