Stock to watch: Pacira Biosciences Inc (NASDAQ: PCRX)

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Pacira Biosciences Inc (NASDAQ: PCRX) stock surged 17.99% on 29th June, 2020 but slightly fell over 1.5% on 30th June, 2020 (as of  9:55 am GMT-4; Source: Google finance). The U.S. Food and Drug Administration once again declined to approve its non-opioid painkiller HTX-011 for post-operative pain and sought more data. One of Heron’s biggest competitors for the non-opioid post-surgery painkiller is Pacira Biosciences Inc, whose long-acting Exparel is priced at $180.35 for a 10ml dose and $334.18 for the 20ml dose. The immediate approval of HTX-011 would have meant competition for Pacira BioSciences’ Exparel, since both HTX-011 and Exparel are nonopioid medications are meant to treat postoperative pain. With HTX-011 failing to receive the aaproval from health industry regulators, the investors rushed to load up on shares of Pacira BioSciences

Meanwhile, during the first quarter, the company had posted Exparel’s revenue of $101.3 million, which represents an 11.8% year-over-year increase. Exparel’s revenue is expected to continue to grow, especially given the FDA’s decision to reject Heron’s application for HTX-011 as a treatment for postoperative pain. But if Heron Therapeutics ends up receiving FDA approval for HTX-011 after all, Pacira BioSciences’ stock will come crashing down. The investors need to keep an eye on both of these healthcare stocks in the coming months.

Moreover, the company had ended the first quarter in very strong financial position with approximately $354 million of cash and investments. Total revenues rose by 16% in the first quarter of 2020, which was mainly due to net product sales of EXPAREL. The company’s non-GAAP gross margin for the first quarter of 2020 expanded to 73% compared to 71% in 2019. Non-GAAP research and development expenses rose to $14.6 million in the first quarter of 2020 versus $13.2 million in 2019. The increase was mainly due to increased regulatory activities to support the label and geographic expansion of EXPAREL as well as costs related to the Phase III and Phase IV studies of EXPAREL. The company had reported the non-GAAP net income of $22.8 million in the first quarter of 2020 or $0.53 per diluted share versus $9.3 million or $0.22 per diluted share in 2019.

According to the Centers for Disease Control and Prevention, the FDA has been pushing drugmakers for the development of alternatives to opioid-based painkillers as the United States is struggling with opioid addiction, with prescription opioids involved in 32% of all opioid overdose deaths in 2018.

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