Frank Lee
Pacira BioSciencesAbout Frank Lee
Frank D. Lee, age 57, has served as Chief Executive Officer of Pacira BioSciences since January 2, 2024 and as a director since 2024. He brings nearly three decades across Genentech, Novartis, and Johnson & Johnson, with an MBA from Wharton and a BS from Vanderbilt . Under Lee’s leadership in 2024, Pacira delivered record revenue of $701.0 million, secured CMS reimbursement/J-code wins for EXPAREL/iovera°, and advanced PCRX-201 with RMAT designation; Adjusted EBITDA rose to $223.9 million while net loss reflected a $163.2 million goodwill impairment .
| Metric | 2023 | 2024 |
|---|---|---|
| Total Revenue ($USD Millions) | $— | $701.0 |
| Adjusted EBITDA ($USD Millions) | $214.5 | $223.9 |
| Net Income (Loss) ($USD Millions) | $41.955 | $(99.560) |
| Notable 2024 Strategic Milestones | — | RMAT for PCRX-201; EXPAREL J-code; NOPAIN Act eligibility; 2029 converts; share repurchase authorization |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Genentech (Roche) | SVP Global Product Strategy (Immunology, Ophthalmology, ID); prior VP HER2 & Oral Oncolytics | 2006–2019 | Oversaw late-stage portfolio strategy and ~$11B global sales; scaled HER2 franchise P&L >$4B and launched neoadjuvant indication in HER2+ EBC . |
| Forma Therapeutics | CEO | 2019–2022 | Pivoted to clinical focus; positioned for $1.1B acquisition by Novo Nordisk . |
| Novartis | Executive Director, Marketing | 2003–2006 | Commercial leadership roles (marketing) . |
| Johnson & Johnson | Sales, Marketing, BD, Product Strategy | 1996–2003 | Progressive commercial and strategy roles . |
| Eli Lilly | Project Mgmt & Process Automation Engineer | 1989–1994 | Early operations/engineering foundation . |
External Roles
| Organization | Role | Years |
|---|---|---|
| Bausch Health Companies | Director | 2024–Present |
| Bolt Biotherapeutics | Director | 2021–2024 |
| Forma Therapeutics | Director | 2019–2022 |
| Therini Bio | Director | 2023–2024 |
| Catamaran Bio | Director | 2022–2024 |
Fixed Compensation
| Component | 2024 |
|---|---|
| Base Salary | $900,000 |
| Target Annual Bonus (% of Salary) | 85% |
| Actual Annual Bonus Paid | $688,500 (company factor 90%) |
| One-time Relocation Payment | $900,000 |
Notes:
- The People & Compensation Committee set the company bonus factor at 90% of target based on 2024 operational/financial performance, with explicit downward discretion for patent litigation impact .
Performance Compensation
Equity Awards and Vesting
| Grant Type | Grant Date | Quantity | Exercise Price | Vesting |
|---|---|---|---|---|
| Stock Options | 1/3/2024 | 692,512 | $32.07 per share | 25% on first anniversary; remainder in equal quarterly installments over 3 years . |
| RSUs | 1/2/2024 | 99,520 | N/A | Four equal annual installments beginning first anniversary . |
| 2024 Equity Grant Fair Values | Amount |
|---|---|
| Options Grant-Date Fair Value | $9,607,331 |
| RSUs Grant-Date Fair Value | $3,184,640 |
- Equity mix for Lee’s new-hire award was ~75% options / 25% RSUs to align realized pay with stock performance .
Cash Long-Term Incentive Plan (LTIP) – 2024 Structure and Outcomes
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout |
|---|---|---|---|---|---|---|
| Net Revenue | 50% | 95% of target ($662.2m) | 100% ($697.0m) | 105% ($731.9m) | 99.0% ($689.9m) | 89.8% |
| Adjusted EBITDA | 50% | 90% of target ($210.6m) | 100% ($234.0m) | 110% ($257.4m) | 96.0% ($224.7m) | 80.2% |
| Relative TSR (vs S&P Pharma Select) | Multiplier | — | — | — | 12th percentile | 100% |
| LTIP Target Award | Payout % | Earned Payout ($) | Vesting |
|---|---|---|---|
| $762,900 (85% of base) | 85.0% | $648,240 | 3-year vesting; cash payable within 60 days after vesting through 12/31/2028, subject to continued employment (death/disability exceptions) . |
Compensation Governance Features
- Pay-for-performance philosophy; stock ownership guidelines; clawback policy; double-trigger CIC benefits; anti-hedging/anti-pledging; no excise tax gross-ups; no option repricing without shareholder approval .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 243,739 shares beneficially owned; includes 216,410 options exercisable within 60 days of April 17, 2025; <1% of outstanding shares . |
| CEO Ownership Guideline | 6x annual base salary; 5-year compliance window; measurement on 30-day average closing price each July 30; executives must retain ≥50% net after-tax shares until compliant . |
| Compliance Status | All current NEOs and directors were compliant or within phase-in during 2024 . |
| Hedging/Pledging | Prohibited for directors, officers, employees; limited pledge exception requires CFO approval and capacity to repay without resort to pledged securities . |
| Insider Trading Policy | Filed as Exhibit 19 to 2024 10-K; robust controls and coverage . |
Employment Terms
| Scenario | Cash Severance | Bonus Treatment | Healthcare | Equity Acceleration |
|---|---|---|---|---|
| Termination without Cause / Resignation for Good Reason (non-CIC) | 18 months salary continuation | Lump sum equal to 150% of current Targeted Incentive Bonus | 18 months (COBRA-like) | Immediate vesting of portion that would vest over 12 months following termination (options & time-based RSUs), subject to release . |
| Double-Trigger Change of Control (CIC + qualifying termination within 30 days before/12 months after) | 24 months salary continuation | Lump sum equal to 200% of current Targeted Incentive Bonus | 24 months (COBRA-like) | Immediate vesting of all outstanding unvested options & time-based RSUs, subject to release . |
- Agreements are “at will” and condition severance on non-competition/confidentiality compliance and execution of a general release .
- Clawback policy effective October 2, 2023; applies to incentive-based compensation for current/former officers over prior three completed fiscal years in the event of a material restatement .
Board Governance
- Board Service: Class II director nominee; director since 2024; term proposed through 2028 .
- Committee Roles: None; CEO is not independent; 8 of 9 directors independent; independent chair since January 2025 (Laura Brege) .
- Board Meetings: 12 meetings in 2024; each director attended ≥75% of board and committee meetings .
- Leadership Structure: Chair and CEO roles separated; independent sessions of non-employee directors at each regular meeting .
- Director Compensation: Company did not compensate Lee for board service in 2024 .
Director Compensation (for Lee)
| Category | 2024 |
|---|---|
| Board Fees (Cash) | $0 |
| Director Equity Grants | $0 |
Performance & Track Record Highlights (2024 under Lee)
- Record revenues of $701.0 million, driven by EXPAREL ($549.0m), ZILRETTA ($118.1m), and iovera° ($22.8m) .
- CMS product-specific J-code for EXPAREL; NOPAIN Act eligibility confirmed for EXPAREL and iovera° .
- RMAT designation for PCRX-201; 510(k) clearance for iovera° Smart Tip for chronic low back pain .
- Capital allocation: $287.5m 2.125% 2029 converts; $200m repurchase of 2025 converts; share repurchase authorization increased to $300m in April 2025 .
- 5x30 strategy introduced: Patients, product revenue CAGR, gross margin +500 bps vs 2024, five novel programs, five partnerships by 2030 .
Compensation Peer Group & Shareholder Feedback
- 2024 peer group (e.g., ACAD, ALKS, EXEL, HALO, IONS, SRPT, UTHR); Pacira positioned ~69th percentile on projected 2023 revenue and ~28th percentile market cap at approval time .
- Cash compensation targeted to the 50th percentile; equity also targeted to 50th; total LTI between 50th–75th including cash LTIP .
- 2024 Say-on-Pay approved by over 90% of votes cast; board recommends annual say-on-pay frequency .
Equity Plan & Dilution Considerations
- Seeking approval to add 2,500,000 shares to the 2011 Stock Incentive Plan for one year’s needs; features include no evergreen, no repricing, minimum one-year vesting (5% carve-out), and director award cap [$1m] .
- As of April 1, 2025, outstanding awards plus reserve equate to 21.4% of shares outstanding pre-request; would be 27.6% post-request; rationale includes underwater options and talent acquisition/retention .
Investment Implications
- Alignment: New-hire option-heavy mix (75%) and cash LTIP with a 3-year vesting tail tie realized pay to long-term performance, while ownership guidelines and anti-hedging/pledging enhance alignment .
- Retention: Significant initial equity grants with multi-year vesting and LTIP cash deferral through 2028 create strong retention hooks during strategic transformation (5x30) .
- Selling Pressure: RSU installments and option anniversaries could introduce event-driven supply; however, insider policy restrictions and ownership guidelines mitigate aggressive hedging or pledging behavior .
- Governance Risk: Dual role concerns are mitigated by independent chair, majority-independent board, and robust committee oversight; change-of-control protections are double-trigger and subject to clawback .
- Dilution vs Talent: The 2.5 million-share equity plan request balances dilution risk with the need to recruit/retain industry talent amid underwater legacy options; ongoing share repurchase authorization may offset dilution in aggregate .