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Why Is Pacira (PCRX) Down 6% Since Last Earnings Report?

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It has been about a month since the last earnings report for Pacira (PCRX - Free Report) . Shares have lost about 6% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Pacira’s Q4 Earnings Match Estimates, Revenues Fall

Pacira BioSciences, Inc. reported fourth-quarter 2022 adjusted earnings of 80 cents per share which is on par with the Zacks Consensus Estimate. The company reported adjusted earnings of 97 cents per share in the year-ago quarter.

Total revenues increased 8% to $172 million in the fourth quarter of 2022 from the year-ago figure of $159.2 million, owing to a continuous strong uptake of the lead drug, Exparel. The top line missed the Zacks Consensus Estimate of $174 million.

Quarter in Detail

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

Exparel net product sales were $138 million, down from $139.9 million generated in the year-ago quarter, missing the Zacks Consensus Estimate of $144 million. Sales of the drug increased by 4% on a sequential basis.

Exparel/bupivacaine liposome injectable suspension sales came in at $1 million in the reported quarter compared with the $1.1 million reported in the year-ago quarter. Exparel is a liposome injection of bupivacaine indicated for a single-dose administration into the surgical site for post-surgical pain management.

Iovera system generated sales worth $4.6 million in the fourth quarter of 2022, reflecting a decrease of 7% year over year.

Net product sales from Zilretta were $28 million in the fourth quarter of 2022, witnessing an increase of 121% over the $12.7 million recorded in the year-ago quarter. Pacira completed the acquisition of Flexion Therapeutics in November 2021, following which, the former began recognizing Zilretta sales.

Royalty revenues came in at $0.4 million in the reported quarter, which declined 33.3% from $0.6 million reported in the year-ago quarter.

Research and development (R&D) expenses (excluding stock-based compensation) increased 14.9% year over year to $15.7 million.

Selling, general and administrative (SG&A) expenses (excluding stock-based compensation) increased 22.6% year over year to $54.7 million in the reported quarter.

2022 Results

Revenues in 2022 came in at $666.8 million, up 23% year over year, but just fell short of the Zacks Consensus Estimate of $667.03 million.

Pacira reported adjusted earnings of $2.59 per share compared with adjusted earnings of $3.00 per share in 2021 and on par with the Zacks Consensus Estimate.

2023 Financial Guidance

Rolling into 2023, Parica expects Exparel net product sales to be in the range of $570 million to $580 million, Zilretta net product sales in the range of $115 million to $125 million and iovera net product sales in the range of $17 million to $20 million.

For 2023, adjusted R&D expenses are expected to be in the $70 million to $80 million range, while adjusted SG&A expenses are anticipated to be in the band of $220 million to $230 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -32.08% due to these changes.

VGM Scores

Currently, Pacira has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Pacira has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.


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