Pacira BioSciences, Inc. (PCRX) Bundle
Understanding Pacira BioSciences, Inc. (PCRX) Revenue Streams
Understanding Pacira BioSciences, Inc.’s Revenue Streams
The company generates its revenue primarily from the sales of its pharmaceutical products and associated royalties. The breakdown of net product sales for the three and nine months ended September 30, 2024, compared to the same periods in 2023, is as follows:
| Product | Q3 2024 Sales (in $000) | Q3 2023 Sales (in $000) | 9M 2024 Sales (in $000) | 9M 2023 Sales (in $000) |
|---|---|---|---|---|
| EXPAREL | 132,004 | 128,667 | 401,286 | 394,202 |
| ZILRETTA | 28,420 | 28,798 | 84,966 | 82,393 |
| iovera° | 5,655 | 5,260 | 16,359 | 13,645 |
| Bupivacaine liposome injectable suspension | 1,643 | 858 | 7,322 | 2,241 |
| Total Net Product Sales | 167,722 | 163,583 | 509,933 | 492,481 |
| Royalty Revenue | 851 | 343 | 3,780 | 1,253 |
| Total Revenues | 168,573 | 163,926 | 513,713 | 493,734 |
The year-over-year revenue growth for the three months ended September 30, 2024, was 3%, and for the nine months ended September 30, 2024, it was 4%. The increase in total revenues was primarily driven by the performance of EXPAREL, which saw a 3% increase in revenue in Q3 2024 compared to Q3 2023, and a 2% increase for the nine-month period.
In terms of contribution to overall revenue, the breakdown is as follows:
- EXPAREL: 78% of total net product sales
- ZILRETTA: 17% of total net product sales
- iovera°: 3% of total net product sales
- Bupivacaine liposome injectable suspension: 1% of total net product sales
EXPAREL continues to be the dominant product, contributing significantly to the company’s revenue. However, ZILRETTA experienced a 1% decline in Q3 2024 compared to Q3 2023 due to a 6% decrease in kit volume, although this was partially offset by a 5% increase in net selling price per unit.
The company also reported a substantial increase in the sales of Bupivacaine liposome injectable suspension, with revenue rising by 91% in Q3 2024 and more than 100% for the nine months compared to the previous year. This growth is attributed to a favorable sales mix and the timing of veterinary orders.
Overall, the revenue streams reflect a diverse portfolio with varying growth rates, indicating a dynamic market position and potential for continued expansion.
A Deep Dive into Pacira BioSciences, Inc. (PCRX) Profitability
Profitability Metrics
The profitability metrics of the company provide essential insights into its financial health. Key profitability metrics include gross profit, operating profit, and net profit margins, which are crucial for evaluating the company's performance.
Gross Profit, Operating Profit, and Net Profit Margins
As of September 30, 2024, the company's financials reveal the following:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Product Sales | $167,722,000 | $163,583,000 | $509,933,000 | $492,481,000 |
| Cost of Goods Sold | $38,864,000 | $39,750,000 | $130,542,000 | $136,977,000 |
| Gross Profit | $128,858,000 | $123,833,000 | $379,391,000 | $355,504,000 |
| Operating Expenses | $308,100,000 | $146,205,000 | $611,788,000 | $439,227,000 |
| Operating Profit (Loss) | $(139,527,000) | $17,721,000 | $(98,075,000) | $54,507,000 |
| Net Income (Loss) | $(143,466,000) | $10,858,000 | $(115,601,000) | $17,085,000 |
Trends in Profitability Over Time
The trends in profitability over time indicate significant fluctuations. In Q3 2024, the gross profit margin increased to 77% compared to 76% in Q3 2023, reflecting improved operational efficiency. However, the operating profit turned negative due to increased operating expenses, particularly a goodwill impairment charge of $163,243,000 in Q3 2024, which was not present in the previous year.
Comparison of Profitability Ratios with Industry Averages
When comparing profitability ratios with industry averages, the company's gross margin of 77% is above the industry average of approximately 70%. However, the operating margin is significantly impacted by the goodwill impairment and other expenses, leading to a negative operating profit. The net profit margin is also negative, indicating challenges in maintaining profitability in a competitive landscape.
Analysis of Operational Efficiency
The analysis of operational efficiency shows a gross margin improvement due to cost management initiatives. The cost of goods sold decreased by 2% in Q3 2024 compared to Q3 2023, while revenues rose by 3% in the same period. This demonstrates effective cost control despite rising operational expenses overall.
Moreover, selling, general, and administrative expenses increased by 9% in Q3 2024 compared to the prior year, reflecting ongoing investments in marketing and personnel to support revenue growth.
Debt vs. Equity: How Pacira BioSciences, Inc. (PCRX) Finances Its Growth
Debt vs. Equity: How Pacira BioSciences, Inc. Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, the total outstanding debt for Pacira BioSciences was $587.4 million, an increase from $522.4 million at the end of 2023. The breakdown of the debt is as follows:
| Debt Type | Outstanding Principal (in thousands) | Maturity Date | Interest Rate |
|---|---|---|---|
| Term Loan A Facility | $107,024 | March 31, 2028 | 7.95% |
| 2025 Convertible Senior Notes | $202,500 | August 1, 2025 | 0.75% |
| 2029 Convertible Senior Notes | $287,500 | May 15, 2029 | 2.125% |
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio for Pacira BioSciences as of September 30, 2024, was calculated as follows:
Debt-to-Equity Ratio = Total Debt / Total Equity
With total debt of $587.4 million and total equity of $749.6 million, the ratio is:
Debt-to-Equity Ratio = $587.4 million / $749.6 million = 0.78
This ratio is below the industry average of approximately 1.0, indicating a more conservative use of debt financing relative to equity.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In May 2024, the company issued $287.5 million in 2.125% convertible senior notes due in 2029. The proceeds were primarily used to repurchase $200 million of 2025 notes, resulting in a $7.5 million gain on early extinguishment of debt.
As of September 30, 2024, the company's credit rating was not publicly detailed but is generally considered investment-grade based on its debt structure and repayment capabilities.
How the Company Balances Between Debt Financing and Equity Funding
Pacira BioSciences has strategically utilized both debt and equity financing to fund its growth initiatives. The company has mainly relied on debt instruments such as convertible senior notes and term loans to maintain liquidity while minimizing dilution of equity. In the nine months ended September 30, 2024, net cash provided by financing activities was $19.3 million, which included proceeds from the recent debt issuance.
The management aims to balance debt and equity financing effectively, ensuring that the company can meet its operational needs without compromising its financial stability. This is evidenced by the maintenance of a strong cash position of $453.8 million in cash and cash equivalents.
Assessing Pacira BioSciences, Inc. (PCRX) Liquidity
Assessing Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated as follows:
| Current Assets ($ millions) | Current Liabilities ($ millions) | Current Ratio |
|---|---|---|
| 453.8 | 70.2 | 6.45 |
Quick Ratio: The quick ratio, which excludes inventory from current assets, is:
| Quick Assets ($ millions) | Current Liabilities ($ millions) | Quick Ratio |
|---|---|---|
| 453.8 | 70.2 | 6.45 |
Working Capital Trends
Working capital as of September 30, 2024, is reported at:
| Working Capital ($ millions) |
|---|
| 383.6 |
Comparatively, the working capital for the same period in 2023 was $350.2 million, reflecting an increase of approximately 9.7%.
Cash Flow Statements Overview
Cash flows from operating, investing, and financing activities for the nine months ended September 30, 2024, are as follows:
| Cash Flow Activities | 2024 ($ thousands) | 2023 ($ thousands) |
|---|---|---|
| Operating Activities | 156,257 | 107,065 |
| Investing Activities | (82,908) | 69,167 |
| Financing Activities | 19,318 | (181,252) |
| Net Increase (Decrease) in Cash | 92,667 | (5,020) |
Liquidity Concerns or Strengths
As of September 30, 2024, the company maintains cash and cash equivalents of $453.8 million, alongside available-for-sale investments. This robust liquidity position is bolstered by:
- Cash flows from operating activities increasing by 46% year-over-year.
- Strong cash reserves to meet short-term obligations.
- Facilitated access to financing options if required.
Potential liquidity concerns may arise from a significant accumulated deficit of $222.4 million, which may impact future financing options and operational flexibility.
Is Pacira BioSciences, Inc. (PCRX) Overvalued or Undervalued?
Valuation Analysis
Is Pacira BioSciences, Inc. Overvalued or Undervalued?
To assess the valuation of Pacira BioSciences, Inc. (PCRX), we can analyze key financial ratios including the price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios.
Price-to-Earnings (P/E) Ratio
The P/E ratio provides insight into how much investors are willing to pay per dollar of earnings. As of the latest data:
- P/E Ratio: N/A (Due to negative earnings in 2024)
Price-to-Book (P/B) Ratio
The P/B ratio compares a company's market value to its book value, indicating how much investors are paying for each dollar of net assets:
- Market Price per Share: $30.87 (as of September 30, 2024)
- Book Value per Share: $23.45
- P/B Ratio: 1.32
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is a valuation measure that compares the value of a company, inclusive of debt and cash, to its earnings before interest, taxes, depreciation, and amortization:
- Enterprise Value: $1.04 billion
- EBITDA (Last Twelve Months): $200 million
- EV/EBITDA Ratio: 5.20
Stock Price Trends
Analyzing the stock price trends over the last 12 months provides additional context on valuation:
- Stock Price 12 Months Ago: $40.25
- Current Stock Price: $30.87
- Percentage Change: -23.43%
Dividend Yield and Payout Ratios
Currently, Pacira BioSciences does not pay a dividend:
- Dividend Yield: 0%
- Payout Ratio: N/A (No dividends paid)
Analyst Consensus on Stock Valuation
Analyst ratings provide a consensus view on stock valuation:
- Buy: 5
- Hold: 3
- Sell: 1
| Valuation Metric | Value |
|---|---|
| P/E Ratio | N/A |
| P/B Ratio | 1.32 |
| EV/EBITDA Ratio | 5.20 |
| Current Stock Price | $30.87 |
| Stock Price 12 Months Ago | $40.25 |
| Dividend Yield | 0% |
| Payout Ratio | N/A |
| Analyst Consensus (Buy) | 5 |
| Analyst Consensus (Hold) | 3 |
| Analyst Consensus (Sell) | 1 |
Key Risks Facing Pacira BioSciences, Inc. (PCRX)
Key Risks Facing Pacira BioSciences, Inc. (PCRX)
The financial health of Pacira BioSciences, Inc. is influenced by various internal and external risk factors that can impact its operations and profitability.
Industry Competition
Competition in the biopharmaceutical industry is intense, particularly for pain management products like EXPAREL and ZILRETTA. The company faces competition from established players and new entrants that may offer alternative therapies or innovative products.
Regulatory Changes
Changes in healthcare regulations and policies can significantly affect the company's operations. The costs associated with compliance and the potential for changes in reimbursement rates can impact revenue streams.
Market Conditions
Economic fluctuations and changes in market demand for pain management therapies can adversely affect sales. The company relies heavily on the commercial success of its products, particularly EXPAREL and ZILRETTA.
Operational Risks
Operational risks include potential disruptions in manufacturing processes or supply chain issues that could delay product availability. The company has made significant capital investments in expanding its manufacturing capabilities, which introduces risks related to project execution and cost overruns.
Financial Risks
The company has an accumulated deficit of $222.4 million as of September 30, 2024. Additionally, as of the same date, total outstanding debt was $587.4 million, which includes:
| Debt Type | Outstanding Amount (in millions) | Maturity Date |
|---|---|---|
| Term Loan A Facility | $107.0 | March 2028 |
| 2025 Convertible Senior Notes | $202.5 | August 2025 |
| 2029 Convertible Senior Notes | $287.5 | May 2029 |
The company’s interest expense for the nine months ended September 30, 2024, was $11.9 million, which reflects the burden of its debt obligations.
Strategic Risks
Strategic risks involve the company’s ability to continue expanding its product pipeline and market presence. The company must successfully navigate the complexities of clinical trials and regulatory approvals for new products, which can be time-consuming and costly.
Mitigation Strategies
To address these risks, the company has implemented various mitigation strategies, including:
- Investment in research and development to innovate and enhance product offerings.
- Maintaining a strong balance sheet with cash and cash equivalents of $453.8 million as of September 30, 2024, to support operational flexibility.
- Engaging in proactive regulatory compliance to minimize the impact of changes in healthcare laws and regulations.
As of September 30, 2024, the company had net cash provided by operating activities of $156.3 million, reflecting improved operational performance.
Future Growth Prospects for Pacira BioSciences, Inc. (PCRX)
Growth Opportunities
Future growth prospects for Pacira BioSciences, Inc. hinge on several key drivers, including product innovations, market expansions, and strategic acquisitions. These elements are well-positioned to enhance the company's revenue streams and overall financial health.
Key Growth Drivers
- Product Innovations: The company continues to develop and enhance its core products. The recent expansion of the EXPAREL manufacturing capacity at the Science Center Campus in San Diego, California, is expected to support increased production efficiency and output.
- Market Expansions: The company has recently launched EXPAREL in select European markets, significantly broadening its market reach.
- Acquisitions: The acquisition of Flexion Therapeutics in November 2021 introduced ZILRETTA into the product portfolio, providing a new revenue stream from the management of osteoarthritis pain.
Future Revenue Growth Projections
For the nine months ended September 30, 2024, total revenues were reported at $513.7 million, reflecting a 4% increase compared to $493.7 million for the same period in 2023. This growth was driven primarily by product sales, which totaled $509.9 million in 2024, marking a 4% increase year-over-year.
Earnings Estimates
The projected earnings for the fiscal year 2024 suggest a continued upward trend, with analysts estimating a net loss per share of $2.50 compared to a net income per share of $0.37 in the previous year.
Strategic Initiatives and Partnerships
In May 2024, the company announced a share repurchase program authorizing the repurchase of up to $150 million of its common stock. This strategic move is aimed at enhancing shareholder value and reflects confidence in the company's future prospects.
Additionally, the company has entered into various collaborations to advance its product development pipeline, including the ongoing development of PCRX-201, a novel gene therapy.
Competitive Advantages
Pacira BioSciences benefits from its proprietary multivesicular liposome (pMVL) technology, which differentiates its products in the market. This technology allows for the encapsulation of drugs without altering their molecular structure, enabling longer-lasting pain relief.
The company also maintains a robust pipeline of innovative products, which positions it favorably against competitors in the pain management sector.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) | % Change |
|---|---|---|---|
| Total Revenues | $513.7 million | $493.7 million | 4% |
| Net Product Sales | $509.9 million | $492.5 million | 4% |
| Net Loss Per Share | $2.50 | $0.37 | - |
| Share Repurchase Authorization | $150 million | - | - |
With these growth opportunities, the company is well-positioned to enhance its market presence and address the evolving needs of patients seeking effective pain management solutions.
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Updated on 16 Nov 2024
Resources:
- Pacira BioSciences, Inc. (PCRX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Pacira BioSciences, Inc. (PCRX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Pacira BioSciences, Inc. (PCRX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.