Pacira (PCRX) Down 37.2% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Pacira (PCRX). Shares have lost about 37.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Pacira due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Pacira's Q4 Earnings Top Estimates, Revenues In Line

Pacira reported fourth-quarter 2019 earnings of 56 cents per share, surpassing the Zacks Consensus Estimate of 44 cents and increasing from the year-ago figure of 47 cents.

Total revenues also increased 29% from the year-earlier figure of $95.1 million to $122.4 million. Revenues were almost in line with the Zacks Consensus Estimate.

Quarter in Detail

Pacira’s top line mainly comprises product revenues, other product sales and royalty revenues.

Exparel net product sales were $116.9 million, up 24% from $94.4 million in the year-ago quarter.

Expare/bupivacaine liposome injectable suspension sales came in at $1.7 million compared with $0.3 million in the year-ago quarter. Exparel is a liposome injection of bupivacaine, which is indicated for single-dose administration into the surgical site to produce postsurgical analgesia.

The newly-added product iovera system generated sales of $3.2 million in the reported quarter.

We remind investors that in April 2019, Pacira acquired privately-held MyoScience, Inc. Following the buyout, Pacira added the latter’s iovera system to its portfolio, which is highly complementary to Exparel as a non-opioid therapy. Moreover, upon closing of the acquisition, Pacira changed its corporate name to Pacira BioSciences, Inc.

Royalty revenues came in at $0.6 million in the reported quarter, up 50% year over year.

Research and development (R&D) expenses (excluding stock-based compensation) surged 40.8% from the prior year quarter to $18.3 million.

Selling, general and administrative (SG&A) expenses (excluding stock-based compensation) increased 23% year over year to $47.6 million in the reported quarter.

2019 Results

The company posted earnings of $1.67 per share compared with $1.04 in 2018.

Its revenues came in at $421 million, up 25% year over year.

2020 View

The company expects total revenues within $485-$500 million.

Pacira provided its guidance for Exparel sales in 2020 and expects the same in the $465 -$475 million range.

iovera net product sales are expected in the range of $15- $20 million.

Recent Developments

In January 2020, Pacira announced that its phase IV study of Exparel in patients undergoing cesarean section achieved its primary endpoint with a statistically significant reduction in total postsurgical opioid consumption while maintaining pain scores through 72 hours.

In December 2019, Pacira announced positive results from its phase III PLAY study of Exparel administered as a single-dose infiltration in pediatric patients undergoing spinal or cardiac surgeries

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 44% due to these changes.

VGM Scores

Currently, Pacira has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Pacira has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.