Pacira BioSciences, Inc 10-Q for FY2025 Q2
Pacira BioSciences, Inc. (PCRX)
10-Q
2025-08-05
For: 2025-06-30
View Original
Added on
April 11, 2026
About this 10-Q
Pacira BioSciences, Inc filed this 10-Q on August 5, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $181.1M
- up 1.7% from $178.02M a year earlier
- Net loss
- $4.85M
- compared with net income of $18.89M a year earlier
- Diluted EPS
- -$0.11
- compared with $0.39 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| (Mark One) | |||||
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the Quarterly Period Ended June 30, 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number: 001-35060
(Exact Name of Registrant as Specified in its Charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
(Address and Zip Code of Principal Executive Offices)
(650 ) 242-8052
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of August 4, 2025, 44,932,721 shares of the registrant’s common stock, $0.001 par value per share, were outstanding.
PACIRA BIOSCIENCES, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2025
TABLE OF CONTENTS
| Page # | ||||||||
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 3
PART I — FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS (Unaudited)
PACIRA BIOSCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
| June 30, 2025 | December 31, 2024 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Short-term available-for-sale investments | |||||||||||
| Accounts receivable, net | |||||||||||
| Inventories, net | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Fixed assets, net | |||||||||||
| Right-of-use assets, net | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Deferred tax assets | |||||||||||
| Investments and other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses | |||||||||||
| Lease liabilities | |||||||||||
| Current portion of convertible senior notes, net | |||||||||||
| Total current liabilities | |||||||||||
| Convertible senior notes, net | |||||||||||
| Long-term debt, net | |||||||||||
| Lease liabilities | |||||||||||
| Contingent consideration | |||||||||||
| Deferred tax liabilities | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (Note 16) | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred stock, par value $ | |||||||||||
Common stock, par value $ | |||||||||||
Treasury stock, at cost, inclusive of excise tax and broker fees, | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive income | |||||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
See accompanying notes to condensed consolidated financial statements.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 4
PACIRA BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Net product sales | $ | $ | $ | $ | |||||||||||||||||||
| Royalty revenue | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Cost of goods sold | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| Amortization of acquired intangible assets | |||||||||||||||||||||||
| Contingent consideration (gains) charges, acquisition-related expenses, restructuring and other | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Income from operations | |||||||||||||||||||||||
| Other (expense) income: | |||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Gain on early extinguishment of debt | |||||||||||||||||||||||
| Other, net | ( | ( | ( | ( | |||||||||||||||||||
| Total other (expense) income, net | ( | ( | |||||||||||||||||||||
| (Loss) income before income taxes | ( | ||||||||||||||||||||||
| Income tax expense | ( | ( | ( | ( | |||||||||||||||||||
| Net (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Net (loss) income per common share: | |||||||||||||||||||||||
| Basic net (loss) income per common share | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Diluted net (loss) income per common share | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 5
PACIRA BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(In thousands)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Net unrealized loss on investments, net of tax | ( | ( | ( | ( | |||||||||||||||||||
| Foreign currency translation adjustments | |||||||||||||||||||||||
| Total other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
| Comprehensive (loss) income | $ | ( | $ | $ | $ | ||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 6
PACIRA BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 2025 AND 2024
(In thousands)
(Unaudited)
| Number of Shares Outstanding | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | ||||||||||||||||||||||||||||||||||||||||||||
| Common Shares | Treasury Shares | Common Stock | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | ( | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Vested restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Common stock withheld for employee withholding tax liabilities on vested restricted stock units | ( | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Common stock issued under employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock, inclusive of excise tax and broker fees | — | ( | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (Note 11) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | ( | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Number of Shares Outstanding | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | ||||||||||||||||||||||||||||||||||||||||||||
| Common Shares | Treasury Shares | Common Stock | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2024 | — | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Vested restricted stock units | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Common stock withheld for employee withholding tax liabilities on vested restricted stock units | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Common stock issued under employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock, inclusive of excise tax | — | ( | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Purchase of capped call transaction, net of tax | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss (Note 11) | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | ( | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 7
PACIRA BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024
(In thousands)
(Unaudited)
| Number of Shares Outstanding | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | ||||||||||||||||||||||||||||||||||||||||||||
| Common Shares | Treasury Shares | Common Stock | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | ( | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Vested restricted stock units | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Common stock withheld for employee withholding tax liabilities on vested restricted stock units | ( | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Common stock issued under employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock, inclusive of excise tax and broker fees | — | ( | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (Note 11) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | ( | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Number of Shares Outstanding | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | ||||||||||||||||||||||||||||||||||||||||||||
| Common Shares | Treasury Shares | Common Stock | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | — | $ | $ | — | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Vested restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Common stock withheld for employee withholding tax liabilities on vested restricted stock units | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Common stock issued under employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock, inclusive of excise tax | — | ( | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Purchase of capped call transaction, net of tax | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss (Note 11) | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | ( | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 8
PACIRA BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Operating activities: | |||||||||||
| Net (loss) income | $ | ( | $ | ||||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||
| Deferred taxes | |||||||||||
| Depreciation of fixed assets and amortization of intangible assets | |||||||||||
| Amortization of debt issuance costs | |||||||||||
| Amortization of debt discount | |||||||||||
| Gain on early extinguishment of debt | ( | ||||||||||
| Stock-based compensation | |||||||||||
| Changes in contingent consideration | ( | ( | |||||||||
| Impairment of investment | |||||||||||
| Other net (gains) losses | ( | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable, net | ( | ||||||||||
| Inventories, net | ( | ||||||||||
| Prepaid expenses and other assets | ( | ( | |||||||||
| Accounts payable | |||||||||||
| Accrued expenses and income taxes payable | ( | ||||||||||
| Other liabilities | ( | ||||||||||
| Net cash provided by operating activities | |||||||||||
| Investing activities: | |||||||||||
| Acquisition of GQ Bio Therapeutics GmbH (net of cash acquired) | ( | ||||||||||
| Purchases of fixed assets | ( | ( | |||||||||
| Purchases of available-for-sale investments | ( | ( | |||||||||
| Sales of available-for-sale investments | |||||||||||
| Purchases of debt investments | ( | ||||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
| Financing activities: | |||||||||||
| Proceeds from shares issued under employee stock purchase plan | |||||||||||
| Payment of employee withholding taxes on restricted stock unit vests | ( | ( | |||||||||
| Purchase of treasury stock, inclusive of broker fees | ( | ( | |||||||||
| Proceeds from 2029 convertible senior notes | |||||||||||
| Repayment of 2024 convertible senior notes | ( | ||||||||||
| Repayment of 2025 convertible senior notes | ( | ||||||||||
| Repayment of Term loan A facility | ( | ( | |||||||||
| Purchase of capped call transactions | ( | ||||||||||
| Payment of debt issuance and financing costs | ( | ||||||||||
| Net cash (used in) provided by financing activities | ( | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | |||||||||||
| Net increase in cash and cash equivalents | |||||||||||
| Cash and cash equivalents, beginning of period | |||||||||||
| Cash and cash equivalents, end of period | $ | $ | |||||||||
See accompanying condensed notes to consolidated financial statements. | |||||||||||
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 9
PACIRA BIOSCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (In thousands) (Unaudited) | |||||||||||
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Supplemental cash flow information: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Net cash paid for income taxes | $ | $ | |||||||||
| Non-cash investing and financing activities: | |||||||||||
| Fixed assets included in accounts payable and accrued liabilities | $ | $ | |||||||||
| Excise tax on share repurchases included in accrued liabilities | $ | $ | |||||||||
See accompanying notes to condensed consolidated financial statements.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 10
PACIRA BIOSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1—DESCRIPTION OF BUSINESS
Pacira BioSciences, Inc. and its subsidiaries (collectively, the “Company” or “Pacira”) delivers innovative, non-opioid pain therapies to transform the lives of patients. The Company’s long-acting, local analgesic, EXPAREL® (bupivacaine liposome injectable suspension), was commercially launched in the United States, or U.S., in April 2012 and approved in select European countries and the United Kingdom, or U.K., in November 2021. EXPAREL utilizes the Company’s proprietary multivesicular liposome, or pMVL, drug delivery technology that encapsulates drugs without altering their molecular structure and releases them over a desired period of time. EXPAREL is currently indicated to produce postsurgical local analgesia via infiltration in patients aged six years and older, and postsurgical regional analgesia via an interscalene brachial plexus block in adults, a sciatic nerve block in the popliteal fossa in adults, and an adductor canal block in adults for postsurgical pain management (the safety and effectiveness of EXPAREL have not been established to produce postsurgical regional analgesia via other nerve blocks besides an interscalene brachial plexus nerve block, a sciatic nerve block in the popliteal fossa, or an adductor canal block). In November 2021, the Company acquired Flexion Therapeutics, Inc., or Flexion (the “Flexion Acquisition”), and added ZILRETTA® (triamcinolone acetonide extended-release injectable suspension) to its product portfolio. ZILRETTA is the first and only extended-release, intra-articular (meaning in the joint) injection indicated for the management of osteoarthritis, or OA, knee pain. In April 2019, the Company added iovera®° to its commercial offering with the acquisition of MyoScience, Inc. (the “MyoScience Acquisition”). The iovera° system is a handheld cryoanalgesia device that delivers immediate, long-acting, drug-free pain control using precise, controlled doses of cold temperature to a targeted nerve. The Company is also advancing the development of PCRX-201 (enekinragene inzadenovec), a novel, locally administered gene therapy for the treatment of OA of the knee. PCRX-201 is the lead program from the Company’s proprietary high-capacity adenovirus, or HCAd, vector platform, which enables local administration of genetic medicines and has the potential to unlock gene therapy for large prevalent diseases affecting millions of people. In February 2025, the Company acquired the remaining 81 percent equity interest in GQ Bio Therapeutics GmbH, or GQ Bio (the “GQ Bio Acquisition”), a privately-held biopharmaceutical company, which included the novel HCAd platform, a preclinical portfolio of HCAd-based assets and research and development talent. For more information on the GQ Bio Acquisition, see Note 3, GQ Bio Therapeutics Acquisition.
Pacira is subject to risks common to companies in similar industries and stages, including, but not limited to, competition from larger companies and potential generic entrants, reliance on revenue from three products, reliance on a limited number of wholesalers, reliance on a limited number of manufacturing sites, new technological innovations, dependence on key personnel, reliance on third-party service providers and sole source suppliers, tariffs, protection of proprietary technology, compliance with government regulations and risks related to cybersecurity.
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the United States Securities and Exchange Commission, for interim reporting. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in complete annual financial statements have been condensed or omitted. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”).
The condensed consolidated financial statements at June 30, 2025, and for the three and six-month periods ended June 30, 2025 and 2024, are unaudited, but include all adjustments (consisting of only normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial information set forth herein in accordance with GAAP. The condensed consolidated balance sheet at December 31, 2024 is derived from the audited consolidated financial statements included in the Company’s 2024 Annual Report. The accounts of wholly-owned subsidiaries are included in the condensed consolidated financial statements. The condensed consolidated financial statements as presented reflect certain reclassifications from previously issued financial statements to conform to the current presentation. Intercompany accounts and transactions have been eliminated in consolidation.
The results of operations for these interim periods are not necessarily indicative of results that may be expected for any other interim periods or for the full year.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 11
Concentration of Major Customers
The table below includes the percentage of revenues comprised by the Company’s three largest wholesalers in each period presented:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Largest wholesaler | |||||||||||||||||||||||
| Second largest wholesaler | |||||||||||||||||||||||
| Third largest wholesaler | |||||||||||||||||||||||
| Total | |||||||||||||||||||||||
Recently Adopted Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The ASU amendment improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on an interim and annual basis. The new segment disclosure requirements apply for entities with a single reportable segment. The Company adopted the standard for its interim and annual reporting which was applied retrospectively for all prior periods presented. The ASU’s amendment is effective for interim periods in fiscal years beginning after December 15, 2024. Refer to Note 17, Segment Information, for more information.
Recent Accounting Pronouncements Not Adopted as of June 30, 2025
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures. The ASU amendment addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The ASU’s amendments are effective for fiscal years beginning after December 15, 2024 and may be adopted on a prospective or retrospective basis. The Company is currently evaluating the impact of adopting ASU 2023-09 on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. The ASU amendment improves financial reporting by requiring public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The ASU’s amendments are effective for annual reporting periods beginning after December 31, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. This ASU amendment can be applied on a prospective basis or retrospectively. The Company is currently evaluating the impact of adopting ASU 2024-03 on its footnote disclosures.
NOTE 3—GQ BIO THERAPEUTICS ACQUISITION
On February 27, 2025, Pacira Therapeutics, Inc., a wholly-owned subsidiary of the Company, executed a securities purchase agreement to acquire the remaining 81 % of GQ Bio for $30.6 million, net of working capital adjustments. Prior to the GQ Bio Acquisition, the Company owned approximately 19 % of GQ Bio.
Included in the securities purchase agreement are payments of $7.8 million related to two employees’ payments to be recognized over three years pursuant to a key employee holdback agreement in increments of 50 %, 30 % and 20 % at each year’s respective anniversary. During the three and six months ended June 30, 2025, the Company accrued key employee holdback expenses of $1.1 million and $1.5 million, respectively. The key employee holdback is subject to continued employment, and therefore the accrued payments are recognized as research and development expense within the condensed consolidated statements of operations.
GQ Bio was a privately-held biopharmaceutical company with a novel, high-capacity, local-delivery platform that makes genetic medicines more efficient and enables the use of large and multiple gene constructs. PCRX-201 is the lead program from this platform. By acquiring GQ Bio, the Company benefits from further developing PCRX-201 and the cost savings associated with no longer being obligated to make milestone and royalty payments, as well as establishing a research and development engine with a dedicated workforce focused on this next-generation of genetic medicine and acquiring a portfolio of preclinical assets.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 12
The following table reconciles the purchase price for the remaining 81 % ownership to the total fair value of the GQ Bio Acquisition (in thousands):
| Fair Value of Purchase Price Consideration | Amount | |||||||
| Cash consideration paid at closing | $ | |||||||
| Indemnification holdback | ||||||||
| Cash payment of GQ Bio Acquisition transaction expenses | ||||||||
| Settlement of previously invested note receivable | ||||||||
| Settlement of pre-existing receivable | ||||||||
Purchase price consideration of | ||||||||
Prior | ||||||||
| Total fair value of the GQ Bio Acquisition | $ | |||||||
The Company has accounted for the GQ Bio Acquisition using the acquisition method of accounting and, accordingly, has included the assets acquired, liabilities assumed and results of operations in its condensed consolidated financial statements from the acquisition date of February 27, 2025. A $5.7 million indemnification holdback established for potential unidentified liabilities will be settled within 18 months from the acquisition date. In conjunction with the GQ Bio Acquisition, the settlement of the Company’s prior equity investment and notes receivable in GQ Bio were part of the fair value of consideration exchanged. See Note 10, Financial Instruments, for additional information.
The preliminary purchase price allocation is based on estimates, assumptions, valuations and other studies which have not yet been finalized. Prior to the finalization of the purchase price allocation, if information becomes available that would indicate it is probable that unknown events had occurred and the amounts can be reasonably estimated, such items will be included in the final purchase price allocation and may change the carrying value of goodwill. The Company is finalizing its valuation of intangible assets, tangible assets, liabilities and tax analyses, and anticipates finalizing the purchase price allocation as the information necessary to complete the analysis is obtained, but no later than one year after the acquisition date.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 13
The following tables set forth the preliminary allocation of the GQ Bio Acquisition purchase price to the estimated fair value of the net assets acquired at the acquisition date (in thousands):
Amounts Recognized at the Acquisition Date (as Previously Reported) (a) | Measurement Period Adjustments (b) | Amounts Recognized at the Acquisition Date (as Adjusted) | ||||||||||||||||||
| ASSETS ACQUIRED | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | |||||||||||||||||
| Accounts receivable | ||||||||||||||||||||
| Prepaid expenses and other assets | ||||||||||||||||||||
| Fixed assets | ||||||||||||||||||||
| Right-of-use assets | ||||||||||||||||||||
| In-process research and development (IPR&D) | ||||||||||||||||||||
| Other noncurrent assets | ||||||||||||||||||||
| Total assets | $ | $ | $ | |||||||||||||||||
| LIABILITIES ASSUMED | ||||||||||||||||||||
| Accounts payable | $ | $ | ( | $ | ||||||||||||||||
| Accrued expenses | ||||||||||||||||||||
| Lease liabilities | ||||||||||||||||||||
| Deferred tax liability | ( | |||||||||||||||||||
| Other liabilities | ||||||||||||||||||||
| Total liabilities | ( | |||||||||||||||||||
| Total identifiable net assets acquired | ||||||||||||||||||||
| Goodwill | ( | |||||||||||||||||||
| Total fair value of the GQ Bio Acquisition | $ | $ | $ | |||||||||||||||||
(a) As previously reported in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2025.
(b) Represents an adjustment to a deferred tax liability, unrecorded liabilities related to pre-acquisition expenses that were paid by the Company in 2025.
The acquired identifiable IPR&D assets were valued from a market participants’ perspective using a multi-period excess earnings methodology (income approach). The IPR&D asset relates to further developing PCRX-201 and the cost savings associated with milestone and royalty payments. The projected cash flows for this IPR&D asset were adjusted for the probability of successful development and commercialization, and were discounted at 20.0 %.
The excess of the purchase price over the fair value of identifiable net assets acquired represents goodwill. This goodwill is primarily attributable to the value in establishing a research and development engine focused on supporting products akin to PCRX-201, assembling a dedicated workforce within a niche industry, obtained preclinical assets, as well as the synergies of merging operations. The acquired goodwill and IPR&D intangible asset are currently not deductible for tax purposes. However, the Company is considering certain tax elections that would allow for the future deduction of the acquired goodwill and IPR&D intangible asset. During the six months ended June 30, 2025, GQ Bio did not earn any revenue.
NOTE 4—REVENUE
Revenue from Contracts with Customers
The Company’s net product sales consist of (i) EXPAREL in the U.S., the European Union, or E.U., and the U.K.; (ii) ZILRETTA in the U.S.; (iii) iovera° in the U.S., Canada and Europe and (iv) sales of its bupivacaine liposome injectable suspension for veterinary use. Royalty revenues are related to a collaborative licensing agreement from the sale of the Company’s bupivacaine liposome injectable suspension for veterinary use. The Company does not consider revenue from sources other than sales of EXPAREL and ZILRETTA to be material sources of its consolidated revenue. As such, the following disclosure is limited to revenue associated with net product sales of EXPAREL and ZILRETTA.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 14
Net Product Sales
The Company sells EXPAREL through a drop-ship program under which orders are processed through wholesalers based on orders of the product placed by end-users, namely hospitals, ambulatory surgery centers and healthcare provider offices. EXPAREL is delivered directly to the end-user without the wholesaler ever taking physical possession of the product. The Company primarily sells ZILRETTA to specialty distributors and specialty pharmacies, who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals. The Company also contracts directly with healthcare providers and intermediaries such as group purchasing organizations, or GPOs. Product revenue is recognized when control of the promised goods are transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods. EXPAREL and ZILRETTA revenue is recorded at the time the products are transferred to the customer.
Revenues from sales of products are recorded net of returns allowances, prompt payment discounts, service fees, government rebates, volume rebates and chargebacks. These reserves are based on estimates of the amounts earned or to be claimed on the related sales. These amounts are treated as variable consideration, estimated and recognized as a reduction of the transaction price at the time of the sale, using the most likely amount method, except for returns, which is based on the expected value method. The Company includes these estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transaction will not occur, or when the uncertainty associated with the variable consideration is resolved.
Chargebacks for fees and discounts represent the estimated obligations resulting from contractual commitments to sell products to Department of Veteran Affairs hospitals, participating GPO members, 340B qualified entities and other contracted customers at prices lower than the list price. The 340B Drug Discount Program is a U.S. federal government program that requires participating drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at reduced prices. Customers claim the difference between the amount invoiced and the discounted selling price through a chargeback issued by a wholesaler. Reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and trade receivables, net. Chargeback amounts are determined at the time of sale and the Company generally issues credits for such amounts within weeks of receiving notification from a wholesaler. Reserves for chargebacks consist of anticipated credits the Company expects to issue based on expected units sold and chargebacks that customers have claimed for which credits have not yet been issued.
The calculation for some of these items requires management to make estimates based on sales data, historical return data, contracts, statutory requirements and other related information that may become known in the future. The adequacy of these provisions is reviewed on a quarterly basis.
Accounts Receivable
The majority of accounts receivable arise from product sales and represent amounts due from wholesalers, hospitals, ambulatory surgery centers, specialty distributors, specialty pharmacies and individual physicians. Payment terms generally range from to four months from the date of the transaction, and accordingly, there is no significant financing component.
Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Accounting Standards Codification 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.
At contract inception, the Company assesses the goods promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good that is distinct. When identifying individual performance obligations, the Company considers all goods promised in the contract regardless of whether explicitly stated in the customer contract or implied by customary business practices. The Company’s contracts with customers require it to transfer an individual distinct product, which represents a single performance obligation. The Company’s performance obligation with respect to its product sales is satisfied at a point in time, which transfers control upon delivery of EXPAREL and ZILRETTA to its customers. The Company considers control to have transferred upon delivery because the customer has legal title to the asset, physical possession of the asset has been transferred, the customer has significant risks and rewards of ownership of the asset and the Company has a present right to payment at that time.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 15
Disaggregated Revenue
The following table represents disaggregated net product sales in the periods presented as follows (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net product sales: | |||||||||||||||||||||||
| EXPAREL | $ | $ | $ | $ | |||||||||||||||||||
| ZILRETTA | |||||||||||||||||||||||
| iovera° | |||||||||||||||||||||||
| Bupivacaine liposome injectable suspension | |||||||||||||||||||||||
| Total net product sales | $ | $ | $ | $ | |||||||||||||||||||
NOTE 5—INVENTORIES
The components of inventories, net are as follows (in thousands):
| June 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| Raw materials | $ | $ | |||||||||
| Work-in-process | |||||||||||
| Finished goods | |||||||||||
| Total | $ | $ | |||||||||
In July 2025, the Company announced it decommissioned its 45-liter EXPAREL batch manufacturing suite located at its Science Center Campus in San Diego, California, and reduced its workforce accordingly. As a result, the Company reserved $1.0 million of raw materials during the six months ended June 30, 2025. For more information, see Note 18, Subsequent Events.
NOTE 6—FIXED ASSETS
Fixed assets, net, summarized by major category, consist of the following (in thousands):
| June 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| Machinery and equipment | $ | $ | |||||||||
| Leasehold improvements | |||||||||||
| Computer equipment and software | |||||||||||
| Office furniture and equipment | |||||||||||
| Construction in progress | |||||||||||
| Total | |||||||||||
| Less: accumulated depreciation | ( | ( | |||||||||
| Fixed assets, net | $ | $ | |||||||||
For the three months ended June 30, 2025 and 2024, depreciation expense was $13.0 million and $4.5 million, respectively. For the three months ended June 30, 2025 and 2024, there was none and $0.7 million of capitalized interest on the construction of manufacturing sites, respectively.
For the six months ended June 30, 2025 and 2024, depreciation expense was $19.8 million and $8.6 million, respectively. For the six months ended June 30, 2025 and 2024, there was $0.1 million and $1.4 million of capitalized interest on the construction of manufacturing sites, respectively.
As of June 30, 2025 and December 31, 2024, total fixed assets, net, includes manufacturing process equipment and leasehold improvements located outside of the U.S. in the amount of $50.1 million and $51.1 million, respectively.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 16
As of both June 30, 2025 and December 31, 2024, the Company had asset retirement obligations of $4.2 million, included in accrued expenses and other liabilities on its condensed consolidated balance sheets, for costs associated with returning leased spaces to their original condition upon the termination of certain of its lease agreements.
In July 2025, the Company announced it decommissioned its 45-liter EXPAREL batch manufacturing suite located at its Science Center Campus in San Diego and reduced its workforce accordingly. As a result, the Company recognized $5.5 million of accelerated depreciation expense during the six months ended June 30, 2025. For more information, see Note 18, Subsequent Events.
NOTE 7—LEASES
The Company leases all of its facilities, including its EXPAREL and iovera° handpiece manufacturing facility at its Science Center Campus in San Diego, California. In 2025, the Company moved its principal executive offices to Brisbane, California. The Company also has two embedded leases with Thermo Fisher Scientific Pharma Services in Swindon, U.K. for the production of EXPAREL and ZILRETTA. A portion of the associated monthly base fees have been allocated to the lease components based on a relative fair value basis. As part of the GQ Bio Acquisition in February 2025, the Company’s European offices were assumed and include a research and development lab and offices in Luckenwalde, Germany and administrative offices in Hamburg, Germany and each of Eupen and Liège, Belgium.
The Company had been recognizing sublease income for laboratory space leased in Woburn, Massachusetts from leases that were assumed as part of the Flexion Acquisition. In February 2024, the lease and sublease term concluded for the laboratory space in Woburn, Massachusetts. In April 2025, the lease and sublease term concluded for the office space in Burlington, Massachusetts.
The operating lease costs for the facilities include lease and non-lease components, such as common area maintenance and other common operating expenses, along with executory costs such as insurance and real estate taxes. Total operating lease expense, net is as follows (in thousands):
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Fixed lease costs | $ | $ | $ | $ | ||||||||||||||||||||||
| Variable lease costs | ||||||||||||||||||||||||||
| Sublease income | ( | ( | ( | ( | ||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
Supplemental cash flow information related to operating leases is as follows (in thousands):
| Six Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Cash paid for operating lease liabilities, net of lease incentives | $ | $ | ||||||||||||
| Right-of-use assets recorded in exchange for lease obligations | $ | $ | ||||||||||||
The Company has elected to net the amortization of the right-of-use asset and the reduction of the lease liability principal in other liabilities in the condensed consolidated statements of cash flows.
The Company has measured its operating lease liabilities at an estimated discount rate at which it could borrow on a collateralized basis over the remaining term for each operating lease. The weighted average remaining lease terms and the weighted average discount rates are summarized as follows:
| June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Weighted average remaining lease term | ||||||||||||||
| Weighted average discount rate | % | % | ||||||||||||
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 17
Maturities of the Company’s operating lease liabilities are as follows (in thousands):
| Year | Aggregate Minimum Payments Due | |||||||
| 2025 (remaining six months) | $ | |||||||
| 2026 | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| Thereafter | ||||||||
| Total future lease payments | ||||||||
| Less: imputed interest | ( | |||||||
| Total operating lease liabilities | $ | |||||||
NOTE 8—GOODWILL AND INTANGIBLE ASSETS
Goodwill
The Company’s goodwill arose from the GQ Bio Acquisition in February 2025. The change in the carrying value of the Company’s goodwill is summarized as follows (in thousands):
| Carrying Value | ||||||||
| Balance at December 31, 2023 | $ | |||||||
| Goodwill impairment | ( | |||||||
| Balance at December 31, 2024 | ||||||||
| Goodwill arising from the GQ Bio Acquisition | ||||||||
| Foreign currency adjustments | ||||||||
| Balance at June 30, 2025 | $ | |||||||
Intangible Assets
Intangible assets, net, consists of the in-process research and development, or IPR&D, from the GQ Bio Acquisition and Flexion Acquisition, developed technology from the Flexion Acquisition and MyoScience Acquisition and customer relationships from the MyoScience Acquisition are summarized as follows (dollar amounts in thousands):
| June 30, 2025 | Gross Carrying Value | Foreign Currency Adjustments | Accumulated Amortization | Intangible Assets, Net | Weighted-Average Useful Lives | |||||||||||||||||||||||||||
| Developed technologies | $ | $ | — | $ | ( | $ | ||||||||||||||||||||||||||
| Customer relationships | — | ( | ||||||||||||||||||||||||||||||
| Total finite-lived intangible assets, net | — | ( | ||||||||||||||||||||||||||||||
| Acquired IPR&D | — | |||||||||||||||||||||||||||||||
| Total intangible assets, net | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| December 31, 2024 | Gross Carrying Value | Accumulated Amortization | Intangible Assets, Net | Weighted-Average Useful Lives | ||||||||||||||||||||||||||||
| Developed technologies | $ | $ | ( | $ | ||||||||||||||||||||||||||||
| Customer relationships | ( | |||||||||||||||||||||||||||||||
| Total finite-lived intangible assets, net | ( | |||||||||||||||||||||||||||||||
| Acquired IPR&D | — | |||||||||||||||||||||||||||||||
| Total intangible assets, net | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 18
Amortization expense on intangible assets was $14.3 28.6
Assuming no changes in the gross carrying amount of these intangible assets, the future estimated amortization expense on the finite-lived intangible assets will be $28.6 million for the remaining six months of 2025, $57.3 37.4 million in 2031, $7.9 million in 2032 and $2.2 million in 2033.
NOTE 9—DEBT
The carrying value of the Company’s outstanding debt is summarized as follows (in thousands):
| June 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
Term loan A facility maturing March 2028 (1) | $ | $ | |||||||||
| Total | $ | $ | |||||||||
(1) In July 2025, the Company repaid the indebtedness outstanding under its TLA Credit Agreement (as defined below) and terminated the TLA Credit Agreement concurrently with its entry into the Revolving Credit Facility (as defined below), as discussed in Note 18, Subsequent Events.
(2) The 0.750 % Convertible senior notes matured and were repaid on August 1, 2025.
Revolving Credit Facility
On July 3, 2025, the Company entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, swingline lender and an issuing bank, and certain lenders, to, among other things, retire the indebtedness outstanding under its single-advance term loan A facility and provide ongoing working capital. The Credit Agreement provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate commitment amount of $300.0 million, with a letter of credit sublimit of $10.0 million and swingline loan sublimit of $15.0 million. Upon entering into the Credit Agreement, the Company borrowed $101.0 million under the Revolving Credit Facility.
For more information, see Note 18, Subsequent Events.
2028 Term Loan A Facility
On March 31, 2023, the Company entered into a credit agreement (as amended and/or restated to date, the “TLA Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders. The term loan issued under the TLA Credit Agreement (the “TLA Term Loan”) was issued at a 0.30 % discount and provided for a single-advance term loan A facility in the principal amount of $150.0 million, which was secured by substantially all of the Company’s and any subsidiary guarantor’s assets. The net proceeds of the TLA Term Loan were approximately $149.6 million after deducting an original issue discount of $0.4 million.
On May 8, 2024, the Company, JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders entered into a first amendment (the “First TLA Amendment”) to the TLA Credit Agreement. The First TLA Amendment, among other things, permitted the Company’s share repurchase program and the Capped Call Transactions (as defined and described below).
The total debt composition of the TLA Term Loan was as follows (in thousands):
| June 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
Term loan A facility maturing March 2028 (1) | $ | $ | |||||||||
| Deferred financing costs | ( | ( | |||||||||
| Discount on debt | ( | ( | |||||||||
| Total debt, net of debt discount and deferred financing costs | $ | $ | |||||||||
(1) In July 2025, the Company repaid the indebtedness outstanding under the TLA Credit Agreement and terminated it concurrently with its entry into the Revolving Credit Facility, as discussed in Note 18, Subsequent Events.
The TLA Term Loan was scheduled to mature on March 31, 2028 and the TLA Credit Agreement required quarterly repayments of principal in the amount of $2.8 million which commenced on June 30, 2023 and increased to $3.8 million on March 31, 2025, with an originally stated balloon payment of approximately $85.3 million due at maturity.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 19
The Company could elect to borrow either (i) alternate base rate borrowings or (ii) term benchmark borrowings or daily simple SOFR (as defined in the TLA Credit Agreement) borrowings. Each term loan borrowing that was an alternate base rate borrowing bore interest at a rate per annum equal to (i) the Alternate Base Rate (as defined in the TLA Credit Agreement), plus (ii) a spread based on the Company’s Senior Secured Net Leverage Ratio ranging from 2.00 % to 2.75 %. Each term loan borrowing that was a term benchmark borrowing or daily simple SOFR borrowing bears interest at a rate per annum equal to (i) the Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR (as each is defined in the Credit Agreement), plus (ii) a spread based on the Company’s Senior Secured Net Leverage Ratio ranging from 3.00 % to 3.75 %. During the six months ended June 30, 2025, the Company made $6.6 million of voluntary principal prepayments. During the year ended December 31, 2024, the Company made $11.3 million of voluntary principal prepayments. As of June 30, 2025, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 7.43 %.
As of June 30, 2025, the Company was in compliance with all financial covenants under the TLA Credit Agreement. In July 2025, the Company repaid the indebtedness outstanding under its TLA Credit Agreement and terminated the TLA Credit Agreement concurrently with its entry into the Revolving Credit Facility, which will result in a loss on extinguishment of debt of approximately $0.9 million. For more information, see Note 18, Subsequent Events.
Convertible Senior Notes Due 2029
In May 2024, the Company completed a private placement of $287.5 million in aggregate principal amount of its 2.125 % convertible senior notes due 2029, or 2029 Notes, and entered into an indenture with Computershare Corporate Trust, N.A., or 2029 Indenture, with respect to the 2029 Notes. The 2029 Notes accrue interest at a fixed rate of 2.125 % per year, payable semiannually in arrears on May 15th and November 15th of each year. The 2029 Notes mature on May 15, 2029.
The total debt composition of the 2029 Notes is as follows (in thousands):
| June 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| $ | $ | ||||||||||
| Deferred financing costs | ( | ( | |||||||||
| Total debt, net of deferred financing costs | $ | $ | |||||||||
Holders may convert their 2029 Notes prior to the close of business on the business day immediately preceding November 15, 2028, only if certain circumstances are met, including, but not limited to, if during the previous calendar quarter, the last reported sales price of the Company’s common stock was greater than 130 % of the conversion price then applicable for at least 20 out of the last 30 consecutive trading days of the quarter. During the quarter ended June 30, 2025, the conditions for conversion were not met. On or after November 15, 2028, until the close of business on the second scheduled trading day immediately preceding May 15, 2029, holders may convert their 2029 Notes at any time.
Upon conversion, holders will receive the principal amount of their 2029 Notes and any excess conversion value, calculated based on the per share volume-weighted average price for each of the 50 consecutive trading days during the observation period (as more fully described in the 2029 Indenture). For the principal, the Company will settle in cash per the terms of the 2029 Notes. For any excess conversion value, holders may receive cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s option. The initial conversion rate for the 2029 Notes is 25.2752 shares of common stock per $1,000 principal amount, which is equivalent to an initial conversion price of $39.56 per share of the Company’s common stock. The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. The initial conversion price of the 2029 Notes represents a premium of approximately 32.5 % to the closing sale price of $29.86 per share of the Company’s common stock on the Nasdaq Global Select Market on May 9, 2024, the date that the Company priced the private offering of the 2029 Notes.
As of June 30, 2025, the 2029 Notes had a market price of $979 per $1,000 principal amount. In the event of conversion, holders would forgo all future interest payments, any unpaid accrued interest and the possibility of further stock price appreciation. Upon the receipt of conversion requests, the settlement of the 2029 Notes will be paid pursuant to the terms of the 2029 Indenture. In the event that all of the 2029 Notes are converted, the Company would be required to repay the $287.5 million in principal value in cash, whereas any conversion premium would be required to be repaid in any combination of cash and shares of its common stock (at the Company’s option).
Prior to the close of business on the business day immediately preceding November 15, 2028, the 2029 Notes are convertible only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2024 (and only during such calendar quarter), if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 20
the immediately preceding calendar quarter is equal to or greater than 130 % of the conversion price on each applicable trading day; (2) during the five business-day period after any five consecutive trading-day period (the “measurement period”) in which the trading price per $1,000 principal amount of the 2029 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (3) upon the occurrence of specified corporate events; or (4) upon a Company redemption. On or after November 15, 2028, until the close of business on the second scheduled trading day immediately preceding May 15, 2029, holders of the 2029 Notes may convert all or a portion of their 2029 Notes, at any time. No sinking fund is provided for the 2029 Notes.
On or after May 17, 2027 and on or before the 50 th scheduled trading day immediately before the maturity date, the Company may redeem for cash all or part of the 2029 Notes if (i) the 2029 Notes are “freely tradable” (as defined in the 2029 Indenture) and any accrued and unpaid additional interest has been paid as of the date the Company sends the related notice of the redemption and (ii) the last reported sales price of the Company’s common stock exceeds 130 % of the conversion price then in effect for (1) each of at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related notice of the redemption; and (2) the trading day immediately before the date the Company sends such notice. The redemption price of each 2029 Note to be redeemed will be the principal amount of such 2029 Note, plus accrued and unpaid interest, if any. In addition, calling any 2029 Notes for redemption will constitute a make-whole fundamental change, in which case the conversion rate applicable to those 2029 Notes, if converted in connection with the redemption, will be increased in certain circumstances. Upon the occurrence of a “make-whole fundamental change” (as defined in the 2029 Indenture), subject to a limited exception for certain cash mergers, holders may require the Company to repurchase all or a portion of their 2029 Notes for cash at a price equal to 100 % of the principal amount of the 2029 Notes to be repurchased plus any accrued and unpaid interest.
While the 2029 Notes are currently classified on the Company’s condensed consolidated balance sheet at June 30, 2025 as long-term debt, the future convertibility and resulting balance sheet classification of this liability is monitored at each quarterly reporting date and is analyzed dependent upon market prices of the Company’s common stock during the prescribed measurement periods. In the event that the holders of the 2029 Notes have the election to convert the 2029 Notes at any time during the prescribed measurement period, the 2029 Notes would then be considered a current obligation and classified as such.
On May 9, 2024, in connection with the pricing of the 2029 Notes, and on May 10, 2024, in connection with the exercise in full by the initial purchasers of the 2029 Notes (the “Initial Purchasers”) of their option to purchase additional 2029 Notes, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain of the Initial Purchasers of the 2029 Notes and/or their respective affiliates and/or other financial institutions (the “Option Counterparties”). The Capped Call Transactions are expected to cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2029 Notes, the number of shares of the Company’s common stock underlying the 2029 Notes.
The Capped Call Transactions are expected to reduce the potential dilution to the Company’s common stock upon any conversion of the 2029 Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted 2029 Notes, as the case may be, upon any conversion of the 2029 Notes, with such reduction and/or offset subject to a cap. The cap price of the Capped Call Transactions will initially be approximately $53.75 per share, representing a premium of approximately 80 % over the closing price of $29.86 per share of the Company’s common stock on May 9, 2024, and is subject to certain adjustments under the terms of the Capped Call Transactions. The capped call was recorded as a reduction to additional paid-in capital at its cost of $26.7 million, partially offset by a $6.5 million deferred tax asset.
The Capped Call Transactions are separate transactions entered into by the Company with the Option Counterparties, are not part of the terms of the 2029 Notes and will not affect any holder’s rights under the 2029 Notes. Holders of the 2029 Notes will not have any rights with respect to the Capped Call Transactions.
Convertible Senior Notes Due 2025
In July 2020, the Company completed a private placement of $402.5 million in aggregate principal amount of 0.750 % convertible senior notes due 2025, or 2025 Notes, and entered into an indenture with Computershare Corporate Trust, N.A. (formerly Wells Fargo Bank, N.A.), or 2025 Indenture, with respect to the 2025 Notes. The 2025 Notes accrued interest at a fixed rate of 0.750 % per year, which was payable semiannually in arrears on February 1st and August 1st of each year.
In May 2024, the Company used part of the net proceeds from the issuance of the 2029 Notes to repurchase $200.0 million aggregate principal amount of the 2025 Notes in privately negotiated transactions at a discount for $191.4 million in cash (including accrued interest). The partial repurchase of the 2025 Notes resulted in a $7.5 million gain on early extinguishment of debt during the year ended December 31, 2024. The 2025 Notes matured and were repaid on August 1, 2025.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 21
The total debt composition of the 2025 Notes was as follows (in thousands):
| June 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| $ | $ | ||||||||||
| Deferred financing costs | ( | ( | |||||||||
| Total debt, net of deferred financing costs | $ | $ | |||||||||
On August 1, 2025, the 2025 Notes matured and the Company settled the remaining outstanding principal balance of $202.5 million in cash.
Holders were able to convert their 2025 Notes at any time prior to the close of business on the business day immediately preceding February 3, 2025, only under the following circumstances: (i) during any calendar quarter (and only during such calendar quarter), if the last reported sales price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day; (ii) during the five -business day period immediately after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the 2025 Indenture) per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (iii) upon the occurrence of specified corporate events, including a merger or a sale of all or substantially all of the Company’s assets; or (iv) if the Company called the 2025 Notes for redemption, until the close of business on the business day immediately preceding the redemption date. These conditions for conversion were not met prior to February 3, 2025.
As of February 3, 2025, until the close of business on the second scheduled trading day immediately preceding August 1, 2025, holders could have converted their 2025 Notes at any time.
Upon conversion, holders would have received the principal amount of their 2025 Notes and any excess conversion value, calculated based on the per share volume-weighted average price for each of the 40 consecutive trading days during the observation period (as more fully described in the 2025 Indenture). For both the principal and excess conversion value, holders could have received cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s option. The initial conversion rate for the 2025 Notes was 13.9324 shares of common stock per $1,000 principal amount, which was equivalent to an initial conversion price of $71.78 per share of the Company’s common stock. The initial conversion price of the 2025 Notes represented a premium of approximately 32.5 % to the closing sale price of $54.17 per share of the Company’s common stock on the Nasdaq Global Select Market on July 7, 2020, the date that the Company priced the private offering of the 2025 Notes.
As of June 30, 2025, the 2025 Notes had a market price of $993 per $1,000 principal amount.
Convertible Senior Notes Due 2024 Assumed from the Flexion Acquisition
Prior to the Flexion Acquisition, in May 2017, Flexion issued an aggregate of $201.3 million principal amount of 3.375 % convertible senior notes due May 1, 2024 (the “Flexion 2024 Notes”), pursuant to an indenture between Flexion and Computershare Corporate Trust, N.A. (formerly Wells Fargo Bank, N.A.), as trustee (the “Flexion Trustee”), as supplemented by the First Supplemental Indenture, dated as of November 19, 2021, between Flexion and the Flexion Trustee. Interest was payable semi-annually on May 1st and November 1st of each year. Upon the Flexion Acquisition, the principal was assumed and recorded at fair value by the Company.
On January 7, 2022, following the expiration of the offer to purchase, the Company accepted the $192.6 million aggregate principal amount of Flexion 2024 Notes that were validly tendered (and not validly withdrawn). No Flexion 2024 Notes were converted in connection with the Notice. The remaining principal of $8.6 million was repaid at maturity on May 1, 2024.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 22
Interest Expense
The following table sets forth the total interest expense recognized in the periods presented (dollar amounts in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Contractual interest expense | $ | $ | $ | $ | |||||||||||||||||||
| Amortization of debt issuance costs | |||||||||||||||||||||||
| Amortization of debt discount | |||||||||||||||||||||||
Capitalized interest (Note 6) | ( | ( | ( | ||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Effective interest rate on total debt | % | % | % | % | |||||||||||||||||||
NOTE 10—FINANCIAL INSTRUMENTS
Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in the principal or most advantageous market in an orderly transaction. To increase consistency and comparability in fair value measurements, the FASB established a three-level hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of fair value measurements are:
•Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
•Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
•Level 3: Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these items. The fair value of the Company’s convertible senior notes and its TLA Term Loan are calculated utilizing market quotations from an over-the-counter trading market for these notes (Level 2). The fair value of the Company’s acquisition-related contingent consideration is reported at fair value on a recurring basis (Level 3). The carrying amount of equity investments and convertible notes receivable without readily determinable fair values are recorded at cost minus impairment, if any, plus or minus observable price changes of identical or similar investments.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 23
At June 30, 2025, the carrying values and fair values of the following financial assets and liabilities were as follows (in thousands):
| Carrying Value | Fair Value Measurements Using | |||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
| Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis: | ||||||||||||||||||||||||||
| Financial Assets: | ||||||||||||||||||||||||||
| Equity investments | $ | $ | $ | $ | ||||||||||||||||||||||
| Convertible notes receivable | $ | $ | $ | $ | ||||||||||||||||||||||
| Financial Liabilities: | ||||||||||||||||||||||||||
| Acquisition-related contingent consideration | $ | $ | $ | $ | ||||||||||||||||||||||
| Financial Liabilities Measured at Amortized Cost: | ||||||||||||||||||||||||||
| Term loan A facility due March 2028 | $ | $ | $ | $ | ||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
(1) The closing price of the Company’s common stock as reported on the Nasdaq Global Select Market was $23.90 per share on June 30, 2025, compared to a conversion price of $39.56 per share. At June 30, 2025, as the conversion price was above the stock price, the requirements for conversion have not been met.
(2) The 0.750 % Convertible senior notes matured and were repaid on August 1, 2025.
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
Equity and Convertible Note Investments
The Company holds strategic investments in clinical and preclinical stage privately-held biotechnology companies in the form of equity and convertible note investments as follows (in thousands):
| Equity Investments | Convertible Notes Receivable | Total | ||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | |||||||||||||||||
| Foreign currency adjustments | ( | ( | ||||||||||||||||||
Balance at December 31, 2024 | ||||||||||||||||||||
| Purchases | ||||||||||||||||||||
| Impairment | ( | ( | ( | |||||||||||||||||
Realized gain of prior investments (1) | ||||||||||||||||||||
Settled investments (1) | ( | ( | ( | |||||||||||||||||
| Foreign currency adjustments | ( | ( | ||||||||||||||||||
Balance at June 30, 2025 | $ | $ | $ | |||||||||||||||||
(1) In conjunction with the GQ Bio Acquisition, the settlement of the Company’s prior equity investment and notes receivable were part of the fair value of consideration exchanged. Upon acquiring the remaining 81 % ownership interest in GQ Bio, the Company remeasured its previously held equity interest to its acquisition-date fair value. The $4.2 million gain resulting from the equity investment was recognized as other, net within the condensed consolidated statement of operations. In settling the notes receivable, the Company recognized $1.7 million in interest income. See Note 3, GQ Bio Therapeutics Acquisition, for information on the GQ Bio Acquisition.
During the three and six months ended June 30, 2025, an impairment of an equity investment and convertible note receivable totaling $11.0
In June 2025, the Company invested $1.3 million in a convertible note receivable related to one of its existing early-stage strategic investments.
Acquisition-Related Contingent Consideration
The Company has recognized contingent consideration related to the Flexion Acquisition in the amount of $17.2 million and $20.2 million as of June 30, 2025 and December 31, 2024, respectively.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 24
The Company’s contingent consideration obligations are recorded at their estimated fair values and are revalued each reporting period if and until the related contingencies are resolved. The Company has measured the fair value of its contingent consideration using a Monte Carlo simulation. These inputs include, as applicable, estimated forecasts of revenue and costs and the discount rates used to calculate the present value of estimated future payments. Significant changes may increase or decrease the probabilities of achieving the related commercial and regulatory events, shorten or lengthen the time required to achieve such events, or increase or decrease estimated forecasts.
In November 2021, the Company completed the Flexion Acquisition, which provided for contingent consideration related to contingent value rights that were issued to Flexion shareholders and certain equity award holders which could aggregate up to a total of $372.3 million if certain regulatory and commercial milestones are met. The aggregate amount was initially $425.5 million prior to the Company’s September 2022 decision to formally discontinue further development of Flexion’s investigational product candidate, PCRX-301. The Company’s obligation to make milestone payments is limited to those milestones achieved through December 31, 2030, and are to be paid within 60 days of the end of the fiscal quarter of achievement. During the three and six months ended June 30, 2025, the Company recognized contingent consideration gains of $0.4 million and $3.0 million, respectively, due to revisions to the latest discount rates. During the three months ended June 30, 2024, the Company recognized a contingent consideration charge of $1.5 million primarily due to revisions to the latest discount rates. During the six months ended June 30, 2024, the Company recognized a contingent consideration gain of $2.3 million primarily due to an adjustment reflecting the probability of achieving the remaining regulatory milestone under the Flexion Acquisition by the milestone expiration date. These adjustments were recorded within contingent consideration (gains) charges, acquisition-related expenses, restructuring and other in the condensed consolidated statements of operations. At June 30, 2025, the weighted average discount rate was 7.9 %.
The following table includes the key assumptions used in the valuation of the Company’s contingent consideration:
| Assumption | Ranges Utilized as of June 30, 2025 | |||||||
| Discount rates | ||||||||
| Probability of payment for remaining regulatory milestone | ||||||||
The change in the Company’s contingent consideration recorded at fair value using Level 3 measurements is as follows (in thousands):
| Contingent Consideration Fair Value | ||||||||
Balance at December 31, 2023 | $ | |||||||
| Fair value adjustments and accretion | ( | |||||||
Balance at December 31, 2024 | ||||||||
| Fair value adjustments and accretion | ( | |||||||
Balance at June 30, 2025 | $ | |||||||
Available-for-Sale Investments
Short-term investments consist of asset-backed securities collateralized by credit card receivables, investment grade commercial paper and corporate, federal agency, government and Yankee bonds with maturities greater than three months, but less than one year. Net unrealized gains and losses (excluding credit losses, if any) from the Company’s short-term investments are reported in other comprehensive (loss) income. At June 30, 2025 and December 31, 2024, all of the Company’s short-term investments are classified as available-for-sale investments and are determined to be Level 2 instruments, with the exception of U.S. government bonds, which are measured at fair value using standard industry models with observable inputs. The fair value of the commercial paper is measured based on a standard industry model that uses the three-month U.S. Treasury bill rate as an observable input. The fair value of the asset-backed securities and corporate bonds is principally measured or corroborated by trade data for identical issues in which related trading activity is not sufficiently frequent to be considered a Level 1 input or that of comparable securities. The fair value of U.S. government bonds is based on level 1 trading activity. At the time of purchase, all available-for-sale investments had an “A” or better rating by Standard & Poor’s.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 25
The following summarizes the Company’s short-term available-for-sale investments at June 30, 2025 and December 31, 2024 (in thousands):
June 30, 2025 Investments | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value (Level 2) | ||||||||||||||||||||||||||||
| Current: | ||||||||||||||||||||||||||||||||
| Asset-backed securities | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Commercial paper | ( | |||||||||||||||||||||||||||||||
| Corporate bonds | ( | |||||||||||||||||||||||||||||||
| Yankee bond | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
December 31, 2024 Investments | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value (Level 2) | ||||||||||||||||||||||||||||
| Current: | ||||||||||||||||||||||||||||||||
| Asset-backed securities | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Commercial paper | ( | |||||||||||||||||||||||||||||||
| Corporate bonds | ( | |||||||||||||||||||||||||||||||
| U.S. federal agency bonds | ||||||||||||||||||||||||||||||||
| Yankee bond | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
At June 30, 2025, there were no investments available for sale that were materially less than their amortized cost.
The Company elects to recognize its interest receivable separate from its available-for-sale investments. At June 30, 2025 and December 31, 2024, the interest receivable from its available-for-sale investments recognized in prepaid expenses and other current assets was $0.4 million and $0.5 million, respectively.
Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term and long-term available-for-sale investments and accounts receivable. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. Such amounts may exceed federally-insured limits.
As of June 30, 2025, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 34 %, 21 % and 16 %. At December 31, 2024, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 34 %, 18 % and 16 %. For additional information regarding the Company’s wholesalers, see Note 2, Summary of Significant Accounting Policies. EXPAREL and ZILRETTA revenues are primarily derived from major wholesalers and specialty distributors that generally have significant cash resources. The Company performs ongoing credit evaluations of its customers as warranted and generally does not require collateral. Allowances for credit losses on the Company’s accounts receivable are maintained based on historical payment patterns, current and estimated future economic conditions, aging of accounts receivable and its write-off history. As of June 30, 2025 and December 31, 2024, there were $0.5 million and $0.4 million of allowances for credit losses on the Company’s accounts receivable, respectively.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 26
NOTE 11—STOCKHOLDERS’ EQUITY
Accumulated Other Comprehensive Income
The following tables illustrate the changes in the balances of the Company’s accumulated other comprehensive income for the periods presented (in thousands):
| Net Unrealized Gain (Loss) From Available-For-Sale Investments | Unrealized Foreign Currency Translation | Accumulated Other Comprehensive Income | ||||||||||||||||||
Balance at December 31, 2024 | $ | $ | $ | |||||||||||||||||
| Net unrealized loss on investments, net of tax | ( | — | ( | |||||||||||||||||
| Foreign currency translation adjustments | — | |||||||||||||||||||
Balance at June 30, 2025 | $ | $ | $ | |||||||||||||||||
| Net Unrealized Gain (Loss) From Available-For-Sale Investments | Unrealized Foreign Currency Translation | Accumulated Other Comprehensive Income | ||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | |||||||||||||||||
Net unrealized loss on investments, net of tax (1) | ( | — | ( | |||||||||||||||||
| Foreign currency translation adjustments | — | |||||||||||||||||||
Balance at June 30, 2024 | $ | ( | $ | $ | ||||||||||||||||
Share Repurchase Programs
On May 7, 2024, the Company announced that its Board of Directors approved a share repurchase program which authorized the Company to repurchase up to an aggregate of $150.0 million of its outstanding common stock. On May 9, 2024, concurrently with the pricing of the offering of the 2029 Notes, the Company entered into separate privately negotiated agreements with certain of the initial purchasers of the 2029 Notes or their respective affiliates and/or certain other financial institutions to repurchase 837,240 shares of the Company’s common stock for a total cost of $25.1 million, inclusive of $0.1 million of accrued excise tax. The repurchase occurred on May 10, 2024.
On April 17, 2025, the Company announced that its Board of Directors approved a new share repurchase program, which replaced the previously authorized share repurchase program and was effective immediately, which authorizes the Company to repurchase up to an aggregate of $300.0 million of its outstanding common stock. Repurchases under this program may be made at management’s discretion on the open market or through privately negotiated transactions. The share repurchase program may be suspended or discontinued at any time by the Company and has an expiration date of December 31, 2026. During the six months ended June 30, 2025, the Company repurchased 1,955,589 shares of its common stock through open market transactions for $50.4 million which included less than $0.1 million of broker fees and was inclusive of $0.4 million of accrued excise tax. Refer to Part II Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of this Quarterly Report on Form 10-Q for more information.
Repurchases of the Company’s common stock are accounted for at cost and recorded as treasury stock. The broker fees incurred and excise tax on repurchases of the Company’s common stock are recorded as a cost of acquiring treasury stock. Any reissued treasury stock will be accounted for at average cost. Gains or losses on reissued treasury stock arising from the difference between the average cost and the fair value of the award will be recorded in additional paid-in capital.
In addition to the Company’s share repurchase plan, during the six months ended June 30, 2025, the Company withheld 210,108 shares of its common stock to cover employee tax withholding obligations on restricted stock unit vests for $5.5 million. All shares of common stock withheld to cover employee tax withholding obligations are retired and are done so pursuant to the terms of the Company’s stock incentive plans and related equity grant agreements rather than the Company’s share repurchase plan.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 27
NOTE 12—STOCK PLANS
Stock Incentive Plans
The Pacira BioSciences, Inc. Amended and Restated 2011 Stock Incentive Plan, or 2011 Plan, was originally adopted by its board of directors and approved by its stockholders in June 2011 and was amended and restated in June 2014, June 2016, June 2019, June 2021, June 2023 and June 2025. The June 2025 amendment and restatement and approval by the Company’s stockholders increased the number of shares of common stock authorized for issuance as equity awards under the 2011 Plan by 2,500,000 shares, which allows for the granting of incentive stock options, non-statutory stock options, restricted stock units and other stock-based awards.
In April 2014, the Company’s board of directors approved and adopted the Company’s 2014 Inducement Plan (the “2014 Inducement Plan”), pursuant to which awards could be made to new employees under the 2014 Inducement Plan for up to 175,000 shares of the Company’s common stock as a material inducement to such persons entering into employment with the Company. In December 2023, the board of directors, upon recommendation of the people and compensation committee of the board of directors (the “P&C Committee”), adopted the Pacira BioSciences, Inc. Amended and Restated 2014 Inducement Plan (as amended and restated, the “First A&R Inducement Plan”) such that, among other things, an additional 642,093 shares of the Company’s common stock were reserved for issuance. In September 2024, the board of directors, upon the recommendation of the P&C Committee, adopted the Pacira BioSciences, Inc. Amended and Restated 2014 Inducement Plan (as amended and restated, the “Second A&R Inducement Plan”) to add an additional 707,907 shares of the Company’s common stock to bring the total amount of shares reserved for issuance under the Inducement Plan to 1,525,000 . In January 2025, the board of directors, upon the recommendation of the P&C Committee, adopted the Pacira BioSciences, Inc. Amended and Restated 2014 Inducement Plan (as amended and restated to date, the “Inducement Plan”) to add an additional 785,000 shares of the Company’s common stock to bring the total amount of shares reserved for issuance under the Inducement Plan to 2,310,000 , of which 250,007 shares remain available for issuance as of June 30, 2025, and extend the term of the Inducement Plan such that it will now expire on January 18, 2035.
The Inducement Plan allows for the granting of nonstatutory stock options, restricted stock awards and other stock-based awards, and was adopted by the board of directors without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Stock Market Listing Rules. In accordance with this rule, awards under the Inducement Plan may only be made to an employee who has not previously been an employee or member of the board of directors or the board of directors of any parent or subsidiary, or following a bona fide period of non-employment by the Company or a parent or subsidiary, if he or she is granted such award in connection with his or her commencement of employment with the Company or a subsidiary and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary.
Inducement Awards
From time to time, the board of directors, upon recommendation of the P&C Committee, has approved individually negotiated grants of options and restricted stock units for certain of the Company’s officers in connection with their respective appointments, in each case, pursuant to the inducement plan in effect at such time.
Stock-Based Compensation
The Company recognized stock-based compensation expense in the periods presented as follows (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Cost of goods sold | $ | $ | $ | $ | ||||||||||||||||||||||
| Research and development | ||||||||||||||||||||||||||
| Selling, general and administrative | ||||||||||||||||||||||||||
| Contingent consideration (gains) charges, acquisition-related expenses, restructuring and other | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
| Stock-based compensation from: | ||||||||||||||||||||||||||
| Stock options | $ | $ | $ | $ | ||||||||||||||||||||||
| Restricted stock units | ||||||||||||||||||||||||||
| Employee stock purchase plan share options | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 28
Equity Awards
The following tables contain information about the Company’s stock option and restricted stock unit, or RSU, activity for the six months ended June 30, 2025:
| Stock Options | Number of Stock Options | Weighted Average Exercise Price (Per Share) | ||||||||||||
Outstanding at December 31, 2024 | $ | |||||||||||||
| Granted | ||||||||||||||
| Forfeited | ( | |||||||||||||
| Expired | ( | |||||||||||||
Outstanding at June 30, 2025 | ||||||||||||||
| Restricted Stock Units | Number of Restricted Stock Units | Weighted Average Grant Date Fair Value (Per Share) | ||||||||||||
Unvested at December 31, 2024 | $ | |||||||||||||
| Granted | ||||||||||||||
| Vested | ( | |||||||||||||
| Forfeited | ( | |||||||||||||
Unvested at June 30, 2025 | ||||||||||||||
The weighted average fair value of stock options granted during the six months ended June 30, 2025 was $13.81 per share. The fair values of stock options granted were estimated using the Black-Scholes option valuation model with the following weighted average assumptions:
| Black-Scholes Weighted Average Assumption | Six Months Ended June 30, 2025 | |||||||
| Expected dividend yield | ||||||||
| Risk-free interest rate | ||||||||
| Expected volatility | ||||||||
| Expected term of options | ||||||||
Employee Stock Purchase Plan
The Company’s Amended and Restated 2014 Employee Stock Purchase Plan, or ESPP, features two six-month offering periods per year, running from January 1 to June 30 and July 1 to December 31. Under the ESPP, employees may elect to contribute after-tax earnings to purchase shares at 85 % of the closing fair market value of the Company’s common stock on either the offering date or the purchase date, whichever is lesser. During the six months ended June 30, 2025, 100,728 shares were purchased and issued through the ESPP.
NOTE 13—NET (LOSS) INCOME PER COMMON SHARE
Basic net (loss) income per common share is calculated by dividing the net (loss) income attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted net (loss) income per common share is calculated by dividing the net (loss) income attributable to common shares by the weighted average number of common shares outstanding plus dilutive potential common shares outstanding during the period.
Potential common shares include the shares of common stock issuable upon the exercise of outstanding stock options, the vesting of RSUs and the purchase of shares from the ESPP (using the treasury stock method), if applicable. Potential common shares associated with convertible senior notes are treated under the if-converted method. Adjustments are made to the diluted net (loss) income per common share calculation as if the Company had converted the convertible senior notes on the first day of each period presented. Adjustments to the numerator are made to add back the interest expense associated with the convertible senior notes on a post-tax basis. Adjustments to the denominator reflect the number of shares assumed to be convertible at the beginning of the period.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 29
Potential common shares are excluded from the diluted net (loss) income per common share computation to the extent they would be antidilutive.
The following table sets forth the computation of basic and diluted net (loss) income per common share for the three and six months ended June 30, 2025 and 2024 (in thousands, except per common share amounts):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net (loss) income—basic | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| 2025 Notes if-converted method adjustment | |||||||||||||||||||||||
| Adjusted net (loss) income—diluted | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average common shares outstanding—basic | |||||||||||||||||||||||
| Computation of diluted securities: | |||||||||||||||||||||||
| 2025 Notes if-converted method adjustment | |||||||||||||||||||||||
| Dilutive effect of RSUs | |||||||||||||||||||||||
| Dilutive effect of ESPP share options | |||||||||||||||||||||||
| Weighted average common shares outstanding—diluted | |||||||||||||||||||||||
| Net income per common share: | |||||||||||||||||||||||
| Basic net (loss) income per common share | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Diluted net (loss) income per common share | $ | ( | $ | $ | ( | $ | |||||||||||||||||
The following table summarizes the outstanding stock options, RSUs, ESPP share options and convertible senior notes that were excluded from the diluted net (loss) income per common share calculation because the effects of including these potential shares were antidilutive in the periods presented (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Weighted average number of stock options | |||||||||||||||||||||||
| 2025 Notes | |||||||||||||||||||||||
| Weighted average number of RSUs | |||||||||||||||||||||||
| Weighted average ESPP share options | |||||||||||||||||||||||
| Total | |||||||||||||||||||||||
NOTE 14—INCOME TAXES
(Loss) income before income taxes and income tax expense are as follows (dollar amounts in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (Loss) income before income taxes: | |||||||||||||||||||||||
| Domestic | $ | ( | $ | $ | $ | ||||||||||||||||||
| Foreign | ( | ( | |||||||||||||||||||||
| Total (loss) income before income taxes | $ | ( | $ | $ | $ | ||||||||||||||||||
| Income tax expense | $ | $ | $ | $ | |||||||||||||||||||
| Effective tax rate | ( | % | % | % | % | ||||||||||||||||||
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 30
The Company’s income tax expense represents the estimated annual effective tax rate applied to the year-to-date operating results, adjusted for certain discrete tax items.
The Company’s effective tax rate for the three and six months ended June 30, 2025 was primarily impacted by costs related to non-deductible stock-based compensation, non-deductible executive compensation and a non-U.S. valuation allowance.
The Company’s effective tax rate for the three and six months ended June 30, 2024 include costs related to non-deductible stock-based compensation, primarily related to expired stock options, and non-deductible executive compensation, partially offset by tax credits
As of both June 30, 2025 and December 31, 2024, the Company had an income tax payable balance of $5.1 0.9 million and $0.7 million, respectively, of current income taxes payable that is included in accrued expenses within the condensed consolidated balance sheet.
The income tax provision for the year ended December 31, 2025 may be impacted by recent federal legislation known as the One Big Beautiful Bill Act. See Note 18, Subsequent Events, for more information.
NOTE 15—CONTINGENT CONSIDERATION (GAINS) CHARGES, ACQUISITION-RELATED EXPENSES, RESTRUCTURING AND OTHER
Contingent consideration (gains) charges, acquisition-related expenses, restructuring and other for the six months ended June 30, 2025 and 2024 summarized below (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Contingent consideration (gains) charges | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Restructuring charges | |||||||||||||||||||||||
| Acquisition-related expenses | |||||||||||||||||||||||
| Legal settlement | |||||||||||||||||||||||
| Total contingent consideration (gains) charges, acquisition-related expenses, restructuring and other | $ | $ | $ | $ | |||||||||||||||||||
Flexion Acquisition Contingent Consideration
The Company recognized gains of $0.4 million and $3.0 million related to contingent consideration arising from the Flexion Acquisition during the three and six months ended June 30, 2025, respectively. The Company recognized $1.5 million of charges and $2.3 million of gains related to contingent consideration during the three and six months ended June 30, 2024, respectively. See Note 10, Financial Instruments, for information regarding the method and key assumptions used in the fair value measurements of contingent consideration and more information regarding the changes in fair value.
Restructuring Charges
In February 2024, the Company initiated a restructuring plan designed to ensure it is well positioned for long-term growth. The restructuring plan included: (i) reshaping the executive team, (ii) reallocating efforts and resources from its ex-U.S. and certain early-stage development programs to its U.S. commercial portfolio in the U.S. market and (iii) reprioritizing investments to enhance key commercial capabilities and expand EXPAREL utilization. The Company recognized $1.0 million and $6.5 million of restructuring charges for the three and six months ended June 30, 2024, respectively, related to employee termination benefits, such as the acceleration of share-based compensation, severance, and, to a lesser extent, other employment-related termination costs, as well as contract termination costs.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 31
The Company’s restructuring charges, including the beginning and ending liability balances, are summarized below (in thousands):
Employee Termination Benefits (1) | Contract Termination Costs | Total | |||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | ||||||||||||||
| Charges incurred | |||||||||||||||||
| Cash payments made / settled | ( | ( | ( | ||||||||||||||
| Balance at December 31, 2024 | |||||||||||||||||
| Cash payments made / settled | ( | ( | ( | ||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ||||||||||||||
(1) During the year ended December 31, 2024, there was $ | |||||||||||||||||
In July 2025, the Company announced it decommissioned its 45-liter EXPAREL batch manufacturing suite located at its Science Center Campus in San Diego, California and reduced its workforce accordingly. Refer to Note 18, Subsequent Events, for information on this restructuring.
Acquisition-Related Expenses
The Company recognized acquisition-related expenses of $1.0 million and $2.5 million during the three and six months ended June 30, 2025, respectively. These costs primarily related to third-party services and legal fees associated with the GQ Bio Acquisition. See Note 3, GQ Bio Therapeutics Acquisition, for more information.
The Company recognized acquisition-related expenses of $0.2 million and $0.4 million during the three and six months ended June 30, 2024, respectively. These costs primarily related to vacant and underutilized Flexion leases that were assumed from the Flexion Acquisition.
Legal Settlement
The Company recognized $7.0 million of costs during the six months ended June 30, 2025 related to the legal settlement of the patent infringement suits against eVenus, Jiangsu Hengrui and Fresenius (each as defined below). For more information, see Note 16, Commitments and Contingencies.
NOTE 16—COMMITMENTS AND CONTINGENCIES
Legal Proceedings
From time to time, the Company has been and may again become involved in legal proceedings arising in the ordinary course of its business, including those related to its patents and intellectual property, product liability and government investigations. Except as described below, the Company is not presently a party to any legal proceedings that it believes to be material, and is not aware of any pending or threatened litigation against the Company which it believes could have a material adverse effect on its business, operating results, financial condition or cash flows. The Company is not in a position to assess the likelihood of any potential losses or adverse effect on its financial condition or to estimate the amount or range of potential losses, if any, from the following actions at this time.
MyoScience Milestone Litigation
In August 2020, the Company and its subsidiary, Pacira CryoTech, Inc. (“Pacira CryoTech”), filed a lawsuit in the Court of Chancery of the State of Delaware against Fortis Advisors LLC (“Fortis”), solely in its capacity as representative for the former securityholders of MyoScience, Inc. and certain other defendants, seeking declaratory judgment with respect to certain terms of the merger agreement for the MyoScience Acquisition (the “MyoScience Merger Agreement”), specifically related to the achievement of certain milestone payments under the MyoScience Merger Agreement. In October 2020, Fortis filed an answer and counterclaim against the Company and Pacira CryoTech seeking to recover certain milestone payments under the MyoScience Merger Agreement.
A trial was conducted in September 2023. In January 2025, the Court issued its decision, finding that the disputed milestones were not met and therefore granted judgment to the Company in full. In March 2025, the Company filed a motion to recover attorney fees, and the parties subsequently agreed to settle the amount of expenses owed to the Company, whereby Fortis agreed to pay the Company $5.2 million and waived its rights to appeal the decision. A final judgment and order was
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 32
entered in April 2025. The $5.2 million payment received was accounted for as a recovery of losses and recorded against selling, general and administrative expense in the six months ended June 30, 2025 within the condensed consolidated statement of operations, consistent to where the previous expenses were recorded.
eVenus Pharmaceutical Laboratories Litigations
In October 2021, December 2021, April 2023 and May 2024, the Company received Notice Letters advising that eVenus Pharmaceutical Laboratories, Inc., or eVenus, of Princeton, New Jersey, submitted to the United States Food and Drug Administration, or FDA, an Abbreviated New Drug Application, or ANDA with a Paragraph IV certification seeking authorization for the manufacturing and marketing of a generic bupivacaine liposome injectable suspension in the U.S. prior to the expiration of certain of the Company’s U.S. patents.
Beginning in November 2021, the Company filed various patent infringement suits against eVenus, its parent company (Jiangsu Hengrui Pharmaceuticals, Co. Ltd., or Jiangsu Hengrui) and Fresenius Kabi USA, LLC, or Fresenius, (together, the “ANDA filers”) in the U.S. District Court for the District of New Jersey asserting infringement of U.S. Patent No. 11,033,495 (the ‘495 patent) (21-cv-19829), U.S. Patent No. 11,179,336 (the ‘336 patent) (22-cv-00718), U.S. Patent No. 11,426,348 (the ‘348 patent) (23-cv-02367), U.S. Patent Nos. 11,819,574 (the ‘574 patent) and 11,819,575 (the ‘575 patent) (24-cv-06294), and U.S. Patent No. 11,925,706 (the ‘706 patent) (24-cv-07680). In December 2024, the Company filed a patent infringement suit against Fresenius and Jiangsu Hengrui in the Northern District of Illinois (24-cv-12416) asserting that the ANDA products will infringe U.S. Patent No. 12,156,940 (the ‘940 patent). Also in December 2024, the ANDA filers filed an action for declaratory judgment of non-infringement and invalidity with respect to the ‘940 patent in the District Court of New Jersey (24-cv-11014).
On April 7, 2025, the Company, along with its operating subsidiary, Pacira Pharmaceuticals, Inc., entered into a settlement agreement with the ANDA filers with respect to the litigations noted above. Pursuant to the settlement agreement, the ANDA filers will be enjoined from marketing a generic bupivacaine liposome injectable suspension before the expiration of the patents-in-suit, except as provided for in the settlement agreement, as described below. In settlement of all outstanding claims in the litigations, the Company agreed to provide the ANDA filers with a license to the Company’s patents required to manufacture and sell certain volume-limited amounts of a generic bupivacaine liposome injectable suspension in the U.S. beginning on a confidential date that is sometime in early 2030. While the agreed-upon volume-limited percentages are confidential, they begin at a high single-digit percentage of the total volumes distributed in the U.S. market and increase gradually in each 12-month period following the volume-limited entry date until reaching a percentage in the low thirties in 2033 and increasing modestly in each of the next two 12-month periods before reaching a maximum percentage in the high thirties of the total volumes distributed in the U.S. for the final three years of the agreement. In addition, the Company has agreed to provide the ANDA filers with a license to its patents required to manufacture and sell an unlimited quantity of a generic bupivacaine liposome injectable suspension in the U.S. beginning on a confidential date in 2039. In addition, in recognition of the Company’s expected savings with respect to, among other things, the avoidance of fees, costs, time and resources associated with continuing the litigations, the Company paid the ANDA filers $7.0 million. This legal settlement cost was recorded within contingent consideration (gains) charges, acquisition-related expenses, restructuring and other in the six months ended June 30, 2025 in the Company’s condensed consolidated statement of operations.
Argentum Request for Ex Parte Reexamination of ‘495 Patent
On October 3, 2024, Argentum Pharmaceuticals LLC, or Argentum, filed a Request for Ex Parte Reexamination of the ‘495 patent. Specifically, Argentum alleged that claims 1, 7 and 8 of the ‘495 patent are obvious and cite to U.S. Patent No. 9,585,838 (the ‘838 patent) and the Physician’s Desk Reference in support of its allegation. In response, the Company submitted rebuttal evidence, certain claim amendments, and new claims. Claim 7 was withdrawn from the reexamination due to the finality of the judgment in the eVenus litigation, and claim 1 was canceled. The USPTO agreed with the Company’s position and issued a Notice of Intent to Issue Ex Parte Reexamination Certificate on June 23, 2025, which indicated the allowability of amended claim 8 and new claims 23-110. Claims 2-6 and 9-22 of the ‘495 Patent were not subject to reexamination. The Company expects the Reexamination Certificate to issue in the second half of the year.
Securities Class Action
On January 13, 2025, Leandro Alvarez filed a putative class action on behalf of Company shareholders between August 2, 2023 and August 8, 2024 against the Company and certain of its officers, in the District Court of New Jersey (25-cv-322). The complaint alleges that the Company made materially false and misleading statements and/or concealed material adverse facts concerning EXPAREL patents. The case is in the pleadings stage and the Company is unable to predict the outcome of this litigation at this time.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 33
Shareholder Derivative Action
On June 16, 2025, a Shareholder Derivative suit, Young v. Lee, et al, was filed in the District of New Jersey (25-cv-11841). The complaint alleges that certain officers and members of the Company’s board of directors breached their fiduciary duties by making materially false and misleading statements and/or concealed material adverse facts concerning EXPAREL patents. The Company has not yet been served, and the Company is unable to predict the outcome of this litigation at this time.
Research Development Foundation
Pursuant to an agreement with the Research Development Foundation, or RDF, the Company was required to pay RDF a low single-digit royalty on the collection of revenues from certain products for as long as certain patents assigned to the Company under the agreement remain valid. RDF has the right to terminate the agreement for an uncured material breach by the Company, in connection with its bankruptcy or insolvency or if it directly or indirectly opposes or disputes the validity of the assigned patent rights. The Company’s ‘495 patent was issued on June 15, 2021. Thereafter, RDF asserted that the issuance of that patent extends the Company’s royalty obligations under the agreement until 2041. The Company believes that the royalty period under the agreement ended on December 24, 2021 with the expiration of the ‘838 patent. Because of the disagreement over the interpretation of the agreement, in December 2021, the Company filed a declaratory judgment lawsuit in the U.S. District Court for the District of Nevada (21-cv-02241). The lawsuit sought a declaration from the court that the Company owed no royalties to RDF with respect to its EXPAREL product after December 24, 2021.
In August 2023, the U.S. District Court, District of Nevada granted the Company’s motion for partial summary judgment in respect to the Company’s claim for a declaration that it no longer owes royalties for EXPAREL made under its 45-liter batch manufacturing process as of December 24, 2021. A trial as to whether royalties were owed on EXPAREL made under the Company’s enhanced, larger-scale manufacturing process was conducted in September 2024. In April 2025, the Court issued judgment in favor of the Company. As a result, the low single-digit royalty that the Company had been paying RDF is eliminated, and the Company sought repayment of up to $23.1 million, plus interest, from RDF, representing the royalties that the Company paid to RDF under protest on the collection of revenues of EXPAREL that occurred after December 24, 2021.
In June 2025, the U.S. District Court for the District of Nevada issued judgment in favor of the company declaring that RDF is required to repay Pacira $23.1 million in royalties on EXPAREL sales that were previously paid under protest. The Nevada Court also awarded Pacira an additional interest payment of $5.2 million in statutory interest on the royalties paid under protest. In July 2025, the Company received the $28.3 million cash payment and will recognize the amount in its condensed consolidated financial statements in the third quarter of 2025 when the cash related to the judgment was received by the Company.
Other Commitments and Contingencies
Johnson & Johnson MedTech
In July 2025, the Company entered into a co-promotion agreement (the “J&J Agreement”), with Johnson & Johnson MedTech, or J&J MedTech, to market and promote the use of ZILRETTA for OA knee pain in the U.S. J&J MedTech’s specialized early intervention sales force will extend the reach of ZILRETTA beyond orthopedic practices, into multiple new physician specialties, including sports medicine, osteopathy, pain management and rheumatology.
Under the J&J Agreement, J&J MedTech is the exclusive third-party co-promoter for ZILRETTA in the U.S. The initial term of the J&J Agreement extends through 2031 with an option to extend under mutual agreement.
The Company will continue to recognize all revenue from sales of ZILRETTA. As compensation for its promotional efforts, for the first 12 months of the J&J Agreement the Company will pay J&J MedTech a minimum monthly commission. For the remaining term of the agreement, Pacira will pay a tier-based commission with higher commission percentages earned at higher annual ZILRETTA sales levels. J&J MedTech will receive a tiered commission ranging from low single digits to double digits.
The Company and J&J MedTech have mutual termination rights under the J&J Agreement, subject to certain terms, conditions and advance notice requirements, provided that the Company or J&J MedTech generally may not terminate the J&J Agreement, without cause, within one year of the effective date of the J&J Agreement. The Company also has additional unilateral termination rights under certain circumstances. The J&J Agreement contains customary representations, warranties, covenants and confidentiality provisions, as well as mutual indemnification obligations. J&J MedTech is also subject to certain obligations and restrictions, including required compliance with certain laws and regulations and the Company’s policies, in connection with fulfilling their obligations under the J&J Agreement.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 34
Pediatric Trial Commitments
The FDA, as a condition of EXPAREL approval, has required the Company to study EXPAREL for infiltration and as a brachial plexus block in pediatric patients. The Company was granted deferrals for the required pediatric trials until after the indications were approved in adults. Similarly, in Europe, the Company agreed with the European Medicines Agency, or EMA, on a Pediatric Investigation Plan as a prerequisite for submitting a Marketing Authorization Application (MAA) in the E.U. Despite the U.K.’s withdrawal from the E.U., the agreed pediatric plan is applicable in the U.K.
The Company has received notification from both the FDA and EMA that its pediatric studies requirement had been waived for the indications of brachial plexus interscalene nerve block, lower extremity nerve block, sciatic nerve block in the popliteal fossa and adductor canal block indications to produce postsurgical regional analgesia in pediatric patients. The Company is still working with the FDA, EMA and Medicines and Healthcare Regulatory Agency (MHRA) to finalize the regulatory pathways for its remaining pediatric commitments.
The Company has successfully completed Part 1 of a pediatric study in children aged two to less than six years of age. As a result, the Company is implementing Part 2 of the pediatric study in children aged six months to less than two years of age using the same dosage that was utilized in Part 1.
Contingent Milestone Payments
Refer to Note 10, Financial Instruments, for information on potential contingent milestone payments related to the Flexion Acquisition.
PCRX-201
PCRX-201 (enekinragene inzadenovec) is a novel, locally administered gene therapy vector platform product candidate that boosts cellular production of the anti-inflammatory protein interleukin-1 receptor antagonist (IL-1Ra) for treating OA pain in the knee and was added to the Company’s portfolio as part of the Flexion Acquisition in November 2021.
In 2017, in an agreement between The Baylor College of Medicine, or BCM, and GQ Bio, the Company (through the Flexion Acquisition) became the direct licensee of certain underlying BCM patents and other proprietary rights related to PCRX-201. The license agreement grants the Company an exclusive, royalty-bearing, world-wide right and license under its patent and other proprietary rights directly related to PCRX-201. The license agreement with BCM includes a low single-digit royalty on net product sales of PCRX-201. Milestone payments range from $0.1 million up to $0.6 million based on the completion of a Phase 1 FDA trial up to a Phase 3 clinical trial.
In February 2024, the FDA granted a Regenerative Medicine Advanced Therapy (RMAT) designation to PCRX-201 for the treatment of OA pain of the knee.
Purchase Obligations
In July 2025, the Company entered into a non-cancelable contractual commitment of approximately $4.0 million and $5.5 million in 2025 and 2026, respectively.
NOTE 17—SEGMENT INFORMATION
The Company is managed and operated as a single business focused on the development, manufacture, marketing, distribution and sale of non-opioid pain management and regenerative health solutions. The Company is managed by a single management team, and consistent with its organizational structure, the Chief Executive Officer—who is the Company’s chief operating decision maker, or CODM—manages and allocates resources at a consolidated level. Accordingly, the Company views its business as one operating segment and one reportable segment to evaluate its performance, allocate resources, set operational targets and forecast its future financial results.
The key measure of the Company is GAAP net income. The CODM uses this measure to evaluate its performance, allocate resources, set operational targets and forecast its future financial results.
There are significant expense categories and amounts that are regularly provided to the CODM. These expense categories differ from what is disclosed in the Company’s financial results. The table below reconciles the significant expense categories provided to the CODM to the Company’s expenses as disclosed under GAAP (in thousands):
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 35
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Adjusted cost of goods sold | |||||||||||||||||||||||
| Adjusted research and development | |||||||||||||||||||||||
| Adjusted selling and marketing | |||||||||||||||||||||||
| Adjusted general and administrative | |||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||
| Amortization of acquired intangible assets | |||||||||||||||||||||||
| Changes in the fair value of contingent consideration | ( | ( | ( | ||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Total other (expense) income, net | ( | ( | |||||||||||||||||||||
| (Loss) income before income taxes | ( | ||||||||||||||||||||||
| Income tax expense | ( | ( | ( | ( | |||||||||||||||||||
| Net (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
For information on the Company’s fixed assets located outside of the U.S., refer to Note 6, Fixed Assets.
NOTE 18—SUBSEQUENT EVENTS
Debt
Revolving Credit Facility
On July 3, 2025, the Company entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, swingline lender and an issuing bank, and certain lenders, to, among other things, refinance the indebtedness outstanding under the Company’s TLA Credit Agreement and provide ongoing working capital.
The Credit Agreement provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate commitment amount of $300.0 million, with a letter of credit sublimit of $10.0 million and swingline loan sublimit of $15.0 million. The credit facility is secured by substantially all of the Company’s and each subsidiary guarantor’s assets and is scheduled to mature on July 3, 2030, subject to certain exceptions set forth in the Credit Agreement. Subject to certain conditions, the Company may, at any time, on one or more occasions, add one or more new classes of term facilities and/or increase the principal amount of any existing class of term loans by requesting one or more incremental term facilities in an aggregate principal amount not to exceed the greater of $225.0 million and 100 % of Consolidated Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) (as defined in the Credit Agreement).
Each revolving loan borrowing which is an alternate base rate borrowing will bear interest at a rate per annum equal to (i) a base rate, plus (ii) a spread based on the Company’s Senior Secured Net Leverage Ratio (as defined in the Credit Agreement) ranging from 1.50 % to 2.25 %. Each revolving loan borrowing which is a term benchmark borrowing or daily simple SOFR (as defined in the Credit Agreement) borrowing will bear interest at a rate per annum equal to (i) a forward-looking term rate based on SOFR or a rate determined by reference to the daily simple SOFR, plus (ii) a spread based on the Company’s Senior Secured Net Leverage Ratio ranging from 2.50 % to 3.25 %.
The Credit Agreement also contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions.
The Company incurred financing fees of approximately $2.1 million which will be recorded as a noncurrent other asset on the Company’s condensed consolidated balance sheet in the third quarter of 2025. The financing fees will be amortized over the term of the Credit Agreement.
Upon entering into the Credit Agreement, the Company borrowed $101.0 million under the Revolving Credit Facility.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 36
Termination of the 2028 Term Loan A Facility
On July 3, 2025, the Company used a portion of the $300.0 million of Revolving Credit Facility to repay the remaining indebtedness outstanding under the TLA Credit Agreement, which consisted of $98.8 million and its final interest payment of $0.1 million, and terminated the TLA Credit Agreement. The Company did not incur any prepayment penalties or fees in connection with the termination of the TLA Credit Agreement. The prepayment resulted will result in a loss on extinguishment of debt of approximately $0.9 million which will be recognized during the three months ended September 30, 2025.
Maturity and Repayment of the Convertible Senior Notes Due 2025
On August 1, 2025, the 2025 Notes matured and the Company settled the remaining outstanding principal balance of $202.5 million in cash.
Restructuring
On July 9, 2025, as a result of improving manufacturing efficiencies for EXPAREL, the Company instituted a reduction in force at the Company’s Science Center Campus in San Diego, California. The Company’s enhanced efficiencies are the result of its multi-year investment in two large-scale 200+ liter batch manufacturing suites located in San Diego and Swindon, U.K., which commenced commercial production in 2024 and 2021, respectively.
The Company’s two large-scale manufacturing suites are capable of producing bulk EXPAREL volumes that are approximately four-fold greater than the Company’s first-generation 45-liter batch manufacturing process. The Company believes these larger manufacturing suites provide ample capacity for meeting the growing demand and improving gross margins for EXPAREL through a meaningfully more favorable cost structure and manufacturing yields versus the 45-liter batch process. As a result, the Company decommissioned its 45-liter EXPAREL batch manufacturing suite located in San Diego and reduce its workforce accordingly.
The reduction impacted 71 employees or approximately 8 % of the Company’s total workforce. The Company currently estimates that it will recognize pre-tax employee termination benefit charges during the three months ended September 30, 2025, in a range of approximately $2.4 million to $2.8 million cash-based charges, under Accounting Standards Codification 420—Liabilities for Exit or Restructuring Activities. These employee termination benefits consist of garden leave under California employment law, severance, healthcare benefits, and, to a lesser extent, other one-time termination benefits.
This reduction in the workforce is subject to local regulatory requirements which the Company expects to recognize the majority in the third quarter of 2025. In addition, the Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur in connection with the workforce reduction.
As noted in Note 5, Inventories, and Note 6, Fixed Assets, the Company reserved $1.0 million of inventory and recognized $5.5 million of accelerated depreciation expense during the six months ended June 30, 2025 associated with the decommission of the 45-liter manufacturing assets.
U.S. Tax Reform
In July 2025, federal legislation known as the One Big Beautiful Bill Act (the “OBBBA”) was enacted, resulting in changes to U.S. federal income tax law. Significant provisions of the OBBBA include the permanent extension of certain provisions of the 2017 Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. In accordance with Accounting Standards Codification 740, Income Taxes, the Company is required to recognize the effect of the tax law changes in the period of enactment, such as remeasuring its estimated U.S. deferred tax assets and liabilities. The Company is in the process of assessing the impacts from the OBBBA on its income tax positions and its consolidated financial statements.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 37
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) and in accordance with the rules and regulations of the United States Securities and Exchange Commission, or SEC.
This Quarterly Report on Form 10-Q and certain other communications made by us contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, including, without limitation, statements related to: '5x30', our growth and business strategy, our future outlook, our intellectual property and patent terms, our future growth potential and future financial and operating results and trends, our plans, objectives, expectations (financial or otherwise) and intentions, including our plans with respect to the repayment of our indebtedness, anticipated product portfolio and product development programs, strategic alliances, plans with respect to the Non-Opioids Prevent Addiction in the Nation (“NOPAIN”) Act, the expected cost savings and benefits of a July 2025 reduction in force and any other statements that are not historical facts. For this purpose, any statement that is not a statement of historical fact should be considered a forward-looking statement. We often use the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should,” “will,” “would” and similar expressions to help identify forward-looking statements. We cannot assure you that our estimates, assumptions and expectations will prove to have been correct. Actual results may differ materially from these indicated by such forward-looking statements as a result of various important factors, including risks relating to, among others: the failure to realize the anticipated benefits and synergies from the acquisition of GQ Bio Therapeutics GmbH; risks associated with acquisitions, such as the risk that the businesses will not be integrated successfully, that such integration may be more difficult, time-consuming or costly than expected or that the expected benefits of the transaction will not occur; our manufacturing and supply chain, global and United States, or U.S., economic conditions (including tariffs, inflation and rising interest rates), and our business, including our revenues, financial condition, cash flows and results of operations; the success of our sales and manufacturing efforts in support of the commercialization of EXPAREL® (bupivacaine liposome injectable suspension), ZILRETTA® (triamcinolone acetonide extended-release injectable suspension) and iovera®°; the rate and degree of market acceptance of EXPAREL, ZILRETTA and iovera°; the size and growth of the potential markets for EXPAREL, ZILRETTA and iovera° and our ability to serve those markets; our plans to expand the use of EXPAREL, ZILRETTA and iovera° to additional indications and opportunities, and the timing and success of any related clinical trials for EXPAREL, ZILRETTA, iovera° and any of our other product candidates, including PCRX-201 (enekinragene inzadenovec); the commercial success of EXPAREL, ZILRETTA and iovera°; the related timing and success of U.S. Food and Drug Administration, or FDA, supplemental New Drug Applications, or sNDAs, and premarket notification 510(k)s; the related timing and success of European Medicines Agency, or EMA, Marketing Authorization Applications, or MAAs; our plans to evaluate, develop and pursue additional product candidates utilizing our proprietary multivesicular liposome, or pMVL, drug delivery technology; the approval of the commercialization of our products in other jurisdictions; clinical trials in support of an existing or potential pMVL-based product; our commercialization and marketing capabilities; our ability to successfully complete capital projects; the outcome of any litigation; the recoverability of our deferred tax assets; assumptions associated with contingent consideration payments; assumptions used for estimated future cash flows associated with determining the fair value of the Company and the anticipated funding or benefits of our share repurchase program.
Important factors could cause our actual results to differ materially from those indicated or implied by forward-looking statements, and as such we anticipate that subsequent events and developments will cause our views to change. Except as required by applicable law, we undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and readers should not rely on the forward-looking statements as representing our views as of any date subsequent to the date of the filing of this Quarterly Report on Form 10-Q.
These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include items mentioned herein and the matters discussed and referenced in Part I-Item 1A. “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”) and in other reports filed with the SEC.
Unless the context requires otherwise, references to “Pacira,” the “Company,” the “Registrant,” “our,” “us” and “we” in this Quarterly Report on Form 10-Q refer to Pacira BioSciences, Inc. and its subsidiaries.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 38
Overview
Pacira’s mission is to deliver innovative, non-opioid pain therapies to transform the lives of patients. Our long-acting, local analgesic EXPAREL utilizes our unique pMVL drug delivery technology that encapsulates drugs without altering their molecular structure and releases them over a desired period of time. In the U.S., EXPAREL is a long-acting, non-opioid option proven to manage postsurgical pain. EXPAREL is the only product indicated for local analgesia via infiltration in patients aged six years and older and regional analgesia via interscalene brachial plexus nerve block, sciatic nerve block in the popliteal fossa and adductor canal block in adults. In Europe, EXPAREL is approved as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults, and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults and children aged six years and older. We drop-ship EXPAREL directly to end-users based on orders placed to wholesalers or directly to us, and there is no product held by wholesalers. With the acquisition of Flexion Therapeutics, Inc. in November 2021 (the “Flexion Acquisition”), we acquired ZILRETTA, the first and only extended-release, intra-articular, or IA, injectable therapy that can provide major relief for osteoarthritis, or OA, knee pain for three months and has the potential to become an alternative to hyaluronic acid, platelet rich plasma injections or other early intervention treatments. With the acquisition of MyoScience, Inc. in April 2019 (the “MyoScience Acquisition”), we acquired iovera°, a handheld cryoanalgesia device used to deliver a precise, controlled application of cold temperature to targeted nerves, which we sell directly to end users. EXPAREL, ZILRETTA and iovera° are highly complementary products as long-acting, non-opioid therapies that alleviate pain. We are also advancing the development of PCRX-201 (enekinragene inzadenovec), a novel, locally administered gene therapy for the treatment of OA of the knee. PCRX-201 is the lead program from our proprietary high-capacity adenovirus, or HCAd, vector platform, which enables local administration of genetic medicines and has the potential to unlock gene therapy for large prevalent diseases affecting millions of people. In February 2025, we acquired the remaining 81 percent equity interest in GQ Bio Therapeutics GmbH, or GQ Bio (the “GQ Bio Acquisition”), a privately-held biopharmaceutical company, which included the novel HCAd platform, a preclinical portion of HCAd-based assets and research and development talent. For more information on the GQ Bio Acquisition, see Note 3, GQ Bio Therapeutics Acquisition, to our condensed consolidated financial statements included herein.
We expect to continue to pursue the expanded use of EXPAREL, ZILRETTA and iovera° in additional procedures; progress our earlier-stage product candidate pipeline; advance regulatory activities for EXPAREL, ZILRETTA, iovera°, PCRX-201 and our other product candidates; invest in sales and marketing resources for EXPAREL, ZILRETTA and iovera°; expand and enhance our manufacturing capacity for EXPAREL, ZILRETTA and iovera°; invest in products, businesses and technologies; and support legal matters.
Global Economic Conditions, Inflation and Tariffs
Direct and indirect effects of global economic conditions have in the past, and may continue to, negatively impact our business, financial condition and results of operations. Such impacts may include the effect of prolonged periods of inflation or the imposition of tariffs, which could, among other things, result in higher costs for raw materials, equipment and other goods and services; cause patients to defer or cancel medical procedures, thereby adversely impacting our revenues; and negatively impact our suppliers which could result in longer lead-times or the inability to procure a sufficient supply of materials.
While there has been no material impact on our business related to tariffs to date, the current macroeconomic environment remains dynamic and subject to rapid and possibly material changes. For instance, the U.S. government may in the future pause, reimpose or increase tariffs and foreign governments have, and in the future may, impose retaliatory trade protection measures. Our business may be impacted by ongoing risks associated with global macroeconomic conditions, including international relations and trade disputes. For example, and most notably for us, the active pharmaceutical ingredient for both EXPAREL and ZILRETTA are sourced from outside the U.S. In July 2025, the U.S. and the European Union, or E.U., agreed to a trade deal that sets a 15% tariff on imports from the E.U., including branded pharmaceuticals, subject to Section 232 of the Trade Expansion Act of 1962.
Such tariffs imposed by the U.S. and/or other countries that are currently in effect, or anticipated to take effect in the future, could increase our manufacturing and operating expenses in future periods, including the cost to deliver our products to commercial markets, the cost to source raw materials for the manufacturing of our products and the cost of materials used in our research and development activities. The imposition of future tariffs impacting our industry, the magnitude of response by other countries to such tariffs and the length of time such tariffs are in effect may also increase uncertainty and adversely impact our business.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 39
Recent Highlights
•In July 2025, we entered into a credit agreement with Wells Fargo Bank, National Association, as administrative agent, swingline lender and an issuing bank, and certain lenders (the “Credit Agreement”), to, among other things, refinance the $100.0 million indebtedness outstanding under our existing term loan A credit facility and provide ongoing working capital. The Credit Agreement provides for a senior secured revolving credit facility in an aggregate commitment amount of $300.0 million, with a letter of credit sublimit of $10.0 million and swingline loan sublimit of $15.0 million (the “Revolving Credit Facility”). The Revolving Credit Facility is secured by substantially all of our and each of our subsidiary guarantor’s assets and matures on July 3, 2030, subject to certain exceptions set forth in the Credit Agreement.
For more information, see Note 9, Debt, to our condensed consolidated financial statements included herein.
•During the second quarter of 2025, the U.S. Patent and Trademark Office, or USPTO, issued U.S. Patent No. 12,318,483 (the ‘483 patent), claiming composition of EXPAREL manufactured by an enhanced process from our large-scale batch process in San Diego, California, which demonstrated a more consistent stability profile as measured by an in-vitro release assay (IVRA). In addition, the USPTO also issued U.S. Patent No. 12,296,047 (the ‘047 patent), claiming EXPAREL composition. We now have 20 EXPAREL patents listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”). The ‘047 patent expires in January 2041 and the ‘483 patent expires in July 2044.
In addition, we secured a favorable reexamination result of U.S. Patent No. 11,033,495 (the ‘495 patent) from the USPTO. The ‘495 patent will be reissued with amended claims that strengthen the patent.
•In June 2025, we presented three-year safety and efficacy data of PCRX-201 following a single IA injection for moderate to severe knee OA at the European Alliance of Associations for Rheumatology (EULAR) Annual Congress in Barcelona, Spain. The data show that a single intra-articular injection of PCRX-201 was well tolerated and produced sustained improvements in pain, stiffness, and function through three years in patients with moderate-to-severe OA of the knee. The open-label, Phase 1 trial investigated the safety and efficacy of PCRX-201 administered by ultrasound-guided intra-articular injection in 72 patients aged 30 to 80 who remained in the trial for three years.
•In July 2025, we announced a strategic collaboration with Johnson & Johnson MedTech, or J&J MedTech, to significantly expand the market reach of ZILRETTA, leveraging J&J MedTech’s specialized early intervention sales force to co-promote ZILRETTA to existing and new customers. This agreement is expected to significantly expand access and extend reach across a large portion of the seven million IA knee injections administered to patients annually in the U.S.
Science Center Campus Reduction in Force
In July 2025, as a result of improving manufacturing efficiencies for EXPAREL, we instituted a reduction in force at our Science Center Campus in San Diego, California. Our enhanced efficiencies were the result of our multi-year investment in two large-scale 200+ liter batch manufacturing suites located in San Diego and Swindon, United Kingdom, which commenced commercial production in 2024 and 2021, respectively. Our two large-scale manufacturing suites are capable of producing bulk EXPAREL volumes that are approximately four-fold greater than our first-generation 45-liter batch manufacturing process, and we believe these larger manufacturing suites provide ample capacity for meeting the growing demand and improving gross margins for EXPAREL through a meaningfully more favorable cost structure and manufacturing yields versus the 45-liter batch process. As a result, and after careful consideration, we decided to decommission our 45-liter EXPAREL batch manufacturing suite located in San Diego and reduce our workforce accordingly.
The reduction impacted 71 employees or approximately 8% of our total workforce. We currently estimate that we will recognize pre-tax charges to our third quarter 2025 financial results of approximately $2.4 million to $2.8 million related to employee termination benefits, consisting of garden leave and severance, healthcare benefits, and, to a lesser extent, other one-time termination benefits and other costs. In June 2025, we reserved $1.0 million of inventory and recognized $5.5 million of accelerated depreciation expense associated with the decommissioning of the 45-liter manufacturing assets.
This reduction in the workforce is subject to local regulatory requirements and we expect to recognize the majority of these charges in the third quarter of 2025. The reduction in the workforce is anticipated to lead to an annual reduction in operating expenses of approximately $13.0 million, which does not reflect the one-time expenses associated with the workforce reduction. In addition, we may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur in connection with the workforce reduction.
For more information, see Note 18, Subsequent Events, to our condensed consolidated financial statements included herein.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 40
EXPAREL
In the U.S., EXPAREL is currently indicated for local analgesia via infiltration in patients aged six years and older and regional analgesia via interscalene brachial plexus nerve block, sciatic nerve block in the popliteal fossa, and adductor canal block in adults. Safety and efficacy have not been established in other nerve blocks. In Europe, EXPAREL is approved as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults, and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults and children aged six years and older. We are currently advancing a registration program for EXPAREL in pediatric patients under six years of age.
EXPAREL Clinical Benefits
We believe EXPAREL can replace the use of bupivacaine delivered via elastomeric pumps as the foundation of a multimodal regimen for long-acting postsurgical pain management. Based on our clinical data, EXPAREL:
•provides long-lasting local or regional analgesia;
•is a ready-to-use formulation;
•expands easily with saline or lactated Ringer’s solution to reach a desired volume;
•can be administered for local analgesia via infiltration and for regional analgesia via field block, as well as brachial plexus nerve block, sciatic nerve block in the popliteal fossa and adductor canal block; and
•facilitates treatment of a variety of surgical sites.
We believe EXPAREL is a key component of long-acting postsurgical pain management regimens that reduce the need for opioids. Based on the clinical data from our Phase 3 and Phase 4 clinical studies as well as data from retrospective health outcomes studies, EXPAREL significantly reduces opioid usage while improving postsurgical pain management.
We have successfully completed Part 1 of a pediatric study in children aged two to less than six years of age. We are implementing Part 2 of the pediatric study in children aged six months to less than two years of age using the same dosage that was utilized in Part 1.
ZILRETTA
ZILRETTA is the first and only extended-release, single-shot corticosteroid IA injection therapy for OA knee pain. ZILRETTA employs a proprietary, extended-release microsphere technology combining triamcinolone acetonide, or TA, a commonly administered, immediate-release corticosteroid, with a poly lactic-co-glycolic acid, or PLGA, matrix to provide extended pain relief. PLGA is a proven extended-release delivery vehicle that is metabolized to carbon dioxide and water as it releases drug in the IA space and is used in other approved drug products and surgical devices. The ZILRETTA microspheres slowly and continuously release TA into the knee to provide significant pain relief for 12 weeks, with some people experiencing pain relief through 16 weeks. ZILRETTA was approved by the FDA in October 2017 and launched in the U.S. shortly thereafter.
We are advancing a Phase 3 registration study to evaluate the safety and efficacy of ZILRETTA for the management of OA pain of the shoulder. If the study is successful, we plan to seek approval to expand the ZILRETTA label to include OA pain of the shoulder.
ZILRETTA Clinical Benefits
ZILRETTA combines TA with a proprietary, extended-release microsphere technology to administer extended therapeutic concentrations in the joint and persistent analgesic effect. Based on the strength of both its pivotal and other clinical trials, we believe that ZILRETTA represents an important treatment option for the millions of patients in the U.S. in need of safe and effective extended relief from OA knee pain. The pivotal Phase 3 trial showed that ZILRETTA significantly reduced OA knee pain for 12 weeks, with some people experiencing pain relief through 16 weeks. We believe that ZILRETTA has the potential to become the corticosteroid of choice given its safety and efficacy profile, and the fact that it is the first and only extended-release corticosteroid on the market. In August 2021, the American Association of Orthopaedic Surgeons, or AAOS, updated its evidence-based clinical practice guidelines, finding ZILRETTA can improve patient outcomes over traditional immediate-release corticosteroids.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 41
iovera°
The iovera° system is a non-opioid, handheld cryoanalgesia device used to deliver precise, controlled doses of cold temperature to targeted nerves. It is FDA 510(k) cleared in the U.S., has a CE mark in the E.U., and is cleared for marketing in Canada for the blocking of pain. We believe that iovera° is highly complementary to EXPAREL and ZILRETTA as a non-opioid therapy that alleviates pain using a non-pharmacological nerve block to disrupt pain signals being transmitted to the brain from the site of injury or surgery. It is also indicated for the relief of pain and symptoms associated with arthritis of the knee for up to 90 days.
iovera° Clinical Benefits
There is a growing body of clinical data demonstrating success with iovera° treatment for a wide range of chronic pain conditions. Some of our strongest data relates directly to the improvement of OA pain of the knee. In a pivotal trial evaluating iovera° for knee OA pain, the majority of the patients suffering from OA pain of the knee experienced pain relief up to 150 days after being treated with iovera°.
Surgical intervention is typically a last resort for patients suffering from knee OA pain. Treatment with iovera° has demonstrated effectiveness for managing pain associated with knee replacements. Specifically, findings demonstrated reductions in opioids, including:
•The daily morphine equivalent consumption in the per protocol group analysis was significantly lower at 72 hours (p<0.05), 6 weeks (p<0.05) and 12 weeks (p<0.05).
•Patients who were administered iovera° were far less likely to take opioids six weeks after surgery. The number of patients taking opioids six weeks after total knee arthroplasty, or TKA, in the control group was three times the number of patients taking opioids in the cryoanalgesia group (14 percent vs. 44 percent, p<0.01).
•Patients in the iovera° group demonstrated a statistically significant reduction in pain scores from their baseline pain scores at 72 hours (p<0.05) and at 12 weeks (p<0.05).
We believe these data validate iovera° as a clinically meaningful non-opioid alternative for patients with knee OA as well as those undergoing TKA, and that iovera° offers the opportunity to provide patients with non-opioid pain control well in advance of any necessary surgical intervention through a number of key product attributes:
•iovera° is safe and effective with immediate pain relief that can last for months as the nerve regenerates over time;
•iovera° is repeatable, with no diminishing effectiveness over time and repeat use;
•The iovera° technology does not risk damage to the surrounding tissue;
•iovera° is a convenient handheld device with a single-use procedure-specific Smart Tip; and
•iovera° can be delivered precisely using imaging guidance or an anatomical landmark.
A study published in 2021 that included 267 patients undergoing TKA (169 who underwent cryoneurolysis with iovera° compared to 98 patients who did not receive iovera° treatment) showed that patients who were treated with iovera° had 51% lower daily morphine milligram equivalents during their hospital stay and a 22% lower mean pain score versus those who were not. In addition, the iovera° group had greater function at discharge, a shorter length of hospital stay and received significantly fewer opioids, including discharge prescriptions at week 2 and week 6 after surgery.
In September 2021, the AAOS updated its evidence-based clinical practice guidelines, reporting that denervation therapy—including cryoneurolysis—may reduce knee pain and improve function in patients with symptomatic OA of the knee.
In December 2024, we received FDA clearance to market a new iovera° Smart Tip designed to access the medial branch nerves to manage chronic low back pain. Millions of Americans suffer from chronic low back pain. It often leads to poor quality of life, disability, lost wages, and persistent prescription opioid use. The first phase of the launch is underway with an initial focus on spine key opinion leaders to gather insights and feedback before expanding to a broader targeted audience. A pilot randomized control trial evaluating iovera° versus radiofrequency ablation for the treatment of lower back pain showed that iovera° had significantly greater improvements in pain and disability and required fewer injections over a year.
Beyond treatment for pain, observational data has been presented at multiple congresses showing effectiveness of iovera° for the treatment of upper limb spasticity over 90 days by targeting motor nerves. We are advancing a registration trial to evaluate the efficacy and safety of iovera° for treating spasticity.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 42
Innovations in Genicular Outcomes Registry (IGOR)
We are currently sponsoring a prospective, real-world registry called the Innovations in Genicular Outcomes Registry, or IGOR, which is a patient-focused registry governed in collaboration with a steering committee of scientific experts that evaluates clinical, economic- and health-related patient-reported outcomes in patients who have received any treatment for knee OA pain, including TKA, for a minimum of 18 months. A unique feature of IGOR is that if patients receive additional treatments for OA, data capture resets so that outcomes of their treatment journey can be followed over multiple years. Unlike in clinical studies, treatment decisions in IGOR are decided by physicians and patients in a shared decision-making manner rather than being driven by treatment assignment, so that outcomes are truly those from real-world applications. The IGOR registry is tracking outcomes of iovera°, ZILRETTA and EXPAREL, as well as comparator treatments. Early outcomes from IGOR have shown that patients who receive iovera° prior to undergoing TKA experience less pain, improved function and improved sleep for six months after surgery versus patients who do not receive iovera°.
The Osteoarthritis Market
OA is the most common form of arthritis. It is also called degenerative joint disease and occurs most frequently in the hands, hips and knees. With OA, the cartilage within a joint begins to break down and the underlying bone begins to change. These changes usually develop slowly and worsen over time. OA can cause pain, stiffness and swelling. In some cases, it also causes reduced function and disability—some people are no longer able to do daily tasks or work. According to the Centers for Disease Control and Prevention (CDC), OA affects over 32.5 million adults in the U.S.
The lifetime risk of developing symptomatic knee OA is 45 percent according to the Arthritis Foundation. The prevalence of symptomatic knee OA increases with each decade of life, with the annual incidence of knee OA being highest between age 55 and 64 years old. There are 14 million individuals in the U.S. who have symptomatic knee OA, and nearly two million are under the age of 45. Surgical intervention is typically a last resort for patients suffering from OA of the knee.
Clinicians have the flexibility to individualize OA knee pain treatment with either ZILRETTA or a drug-free nerve block with iovera° based on patient factors and preference, physician training, site of care and reimbursement considerations.
The HCAd Vector Platform
Our proprietary HCAd vector platform solves many of the challenges in the field of genetic medicine that have prevented its utilization in treating common diseases like OA. Key features include:
•The HCAd vector is much more efficient at delivering genes into cells compared to many other gene therapies that rely on adenovirus associated virus, or AAV, vectors. As a result, the desired effect can be achieved with much smaller doses;
•The vector used in the HCAd platform can carry up to 30,000 base pairs of DNA, which enables gene therapy with multiple or larger genes compared to AAV vectors; and
•Genetic medicines based on the HCAd platform can be administered locally and have the potential for redosing at therapeutically appropriate intervals.
Lower dose levels and efficient delivery of genes into cells means that thousands of doses can be produced in a single batch. As a result, we expect that any therapies built on the HCAd platform would have a commercially attractive and viable cost of goods profile.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 43
Clinical Development Programs
PCRX-201
PCRX-201 is the lead program from our HCAd platform and we believe it underscores its promise for treating common diseases given its encouraging data in OA. PCRX-201 is targeting the IL-1 pathway, which triggers inflammation in response to pathogens and cellular stress. IL-1Ra is a core regulator of this pathway and helps to keep inflammation in balance by turning off the IL-1 pathway when it’s not needed. As people get older, their bodies have a more challenging time maintaining that balance resulting in chronic IL-1-driven inflammation that eventually causes joint damage and pain.
After injection of PCRX-201, the HCAd vector enters joint cells and turns them into factories to boost cellular IL-1Ra production, which blocks IL-1 pathway activation to reduce inflammation and pain in the knee. PCRX-201 uses an inflammation-responsive promoter to only produce IL-1Ra when needed, mimicking how the body naturally responds to inflammation. In a Phase 1 proof-of-concept study of patients with moderate to severe OA of the knee, PCRX-201 was well tolerated with improvements in knee pain observed across all doses. The study enrolled 72 patients in two three-dose cohorts: a co-administered IA steroid cohort and a cohort that did not receive a steroid. PCRX-201 was well tolerated, with efficacy observed through at least 52 weeks at all doses and cohorts. The highest level of efficacy was achieved in the co-administered steroid group, which showed a greater percentage of patients with at least a 50% improvement in Western Ontario and McMaster Universities Osteoarthritis Index (WOMAC) pain and stiffness scores, as well as a meaningful improvement in Knee Injury and Osteoarthritis Outcomes Score (KOOS) functional assessment. In all 3 doses, over 70% of patients saw a more than 50% improvement in pain compared to baseline at week 16 and 78. PCRX-201 was well-tolerated with no serious treatment-emergent adverse events related to the treatment or procedure reported regardless of steroid pretreatment or dose level administered. While other therapies typically provide relief for three to six months, PCRX-201 has shown the potential to set a new standard with pain relief lasting at least 2 years from a single injection.
Given these highly encouraging Phase 1 data, we are advancing a Phase 2 clinical study in knee OA. The two-part, multicenter study—known as ASCEND—will involve approximately 135 patients, 45 to 80 years old with painful OA of the knee at a Kellgren-Lawrence (K-L) Grade of 2, 3 or 4. Subjects are randomly assigned to a treatment dose group and stratified by K-L Grade, a semiquantitative method for evaluating the severity of OA on a scale of 0-4.
ASCEND will evaluate two doses of PCRX-201, Dose A is 1.4 x 1010 genome copies and Dose B is 1.4 x 1011 genome copies. Patients are being randomized 1:1:1 to Dose A, Dose B or saline. All cohorts will receive concurrent pretreatment with an IA corticosteroid (methylprednisolone 40 mg), a technique common in gene therapy dosing to improve tolerability and gene transfer.
Part A of the study will randomize approximately 45 patients and Part B will randomize approximately 90 patients. The drug product used in Part B of the study will be manufactured using our newly developed, suspension-based batch manufacturing process intended for commercial scale-up. We have surpassed 50% enrollment in Part A of the study, and we expect to complete enrollment in Part A of the study before the end of 2025 and report results from a pre-specified interim analysis before the end of 2026.
For both Parts A and B of the study, the primary endpoint is the number and percent of treatment-emergent adverse events, adverse events of special interest, and serious adverse events for PCRX-201 plus steroid pretreatment versus saline plus steroid pretreatment from Week 1 through Week 52. The study’s secondary and exploratory endpoints include efficacy assessments such as changes in pain and physical function from baseline at Weeks 38 and 52. Efficacy will be measured using the Numerical Rating Scale (NRS), WOMAC and KOOS. Biomarkers, including structural endpoints, as well as immunogenicity and biodistribution will also be evaluated and all subjects will be followed for 5 years.
PCRX-201 has received Regenerative Medicine Advanced Therapy, or RMAT, designation from the FDA and Advanced Therapy Medicinal Products, or ATMP, designation from the EMA. RMAT and ATMP are regulatory programs designed to expedite the development and review processes for promising therapies targeting a significant unmet need with preliminary clinical evidence indicating that the therapy has the potential to offer a major advantage over existing treatments.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 44
Product Portfolio and Internal Pipeline
Our current product portfolio and internal product candidate pipeline, along with anticipated milestones over the next 12 to 18 months, are summarized in the table below:
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 45
Results of Operations
Comparison of the Three and Six Months Ended June 30, 2025 and 2024
Revenues
Net product sales consist of sales of (i) EXPAREL in the U.S., E.U., and the United Kingdom; (ii) ZILRETTA in the U.S.; (iii) iovera° in the U.S., Canada and the E.U. and (iv) sales of our bupivacaine liposome injectable suspension product for veterinary use. Royalty revenues are related to a collaborative licensing agreement from the sale of our bupivacaine liposome injectable suspension for veterinary use.
The following table provides information regarding our revenues during the periods indicated, including percent changes (dollar amounts in thousands):
| Three Months Ended June 30, | % Increase / (Decrease) | Six Months Ended June 30, | % Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Net product sales: | |||||||||||||||||||||||||||||||||||
| EXPAREL | $ | 142,917 | $ | 136,852 | 4% | $ | 279,446 | $ | 269,282 | 4% | |||||||||||||||||||||||||
| ZILRETTA | 31,334 | 30,707 | 2% | 54,672 | 56,546 | (3)% | |||||||||||||||||||||||||||||
| iovera° | 5,588 | 5,674 | (2)% | 10,711 | 10,704 | 0% | |||||||||||||||||||||||||||||
| Bupivacaine liposome injectable suspension | 508 | 3,154 | (84)% | 3,112 | 5,679 | (45)% | |||||||||||||||||||||||||||||
| Total net product sales | 180,347 | 176,387 | 2% | 347,941 | 342,211 | 2% | |||||||||||||||||||||||||||||
| Royalty revenue | 752 | 1,636 | (54)% | 2,081 | 2,929 | (29)% | |||||||||||||||||||||||||||||
| Total revenues | $ | 181,099 | $ | 178,023 | 2% | $ | 350,022 | $ | 345,140 | 1% | |||||||||||||||||||||||||
EXPAREL revenue increased 4% in both the three and six months ended June 30, 2025 versus 2024. Components of the increase included a 6% and 4% increase in gross vial volume in the three and six months ended June 30, 2025 versus 2024, respectively, which was partially offset by a shift in product mix. EXPAREL revenue was also positively impacted by a 1% increase in net selling price per unit in both the three and six months ended June 30, 2025 versus 2024, related to a January 2025 price increase, partially offset by increases in sales-related allowances as a result of group purchasing organization contracting.
ZILRETTA revenue increased 2% in the three months ended June 30, 2025 versus 2024 due to a 4% increase in net selling price per unit, partially offset by a 2% decrease in kit volume. ZILRETTA revenue decreased 3% in the six months ended June 30, 2025 versus 2024 due to a 6% decrease in kit volume, partially offset by a 3% increase in net selling price per unit. Both periods’ increase in net selling price per unit is related to a 4% increase in gross selling price per unit, partially offset by higher sales-related allowances. ZILRETTA volume was impacted by the onboarding of a new field-based team to support ZILRETTA after realigning our existing sales force to focus on EXPAREL. This transition impacted sales in 2025 as ZILRETTA is a promotionally sensitive product.
Net product sales of iovera° decreased 2% and was flat in the three and six months ended June 30, 2025 versus 2024, respectively, driven by decreases in Smart Tip net selling prices per unit of 7% and 3%, partially offset by increases in Smart Tip volume of 4% and 2%.
Bupivacaine liposome injectable suspension revenue decreased 84% and 45% in the three and six months ended June 30, 2025 versus 2024, respectively, due to timing of orders placed. Its related royalties decreased 54% and 29% in the three and six months ended June 30, 2025 versus 2024, respectively, primarily due to both the timing of orders placed for veterinary use and the sales mix of vial sizes.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 46
The following tables provide a summary of activity with respect to our sales-related allowances and accruals related to EXPAREL and ZILRETTA for the six months ended June 30, 2025 and 2024 (in thousands):
| June 30, 2025 | Returns Allowances | Prompt Payment Discounts | Service Fees | Volume Rebates and Chargebacks | Government Rebates | Total | ||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | 1,600 | $ | 1,308 | $ | 4,875 | $ | 4,863 | $ | 1,707 | $ | 14,353 | ||||||||||||||||||||||||||
| Provision | 702 | 6,918 | 11,189 | 76,044 | 1,813 | 96,666 | ||||||||||||||||||||||||||||||||
| Payments | (267) | (6,838) | (11,320) | (76,113) | (1,815) | (96,353) | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | 2,035 | $ | 1,388 | $ | 4,744 | $ | 4,794 | $ | 1,705 | $ | 14,666 | ||||||||||||||||||||||||||
| June 30, 2024 | Returns Allowances | Prompt Payment Discounts | Service Fees | Volume Rebates and Chargebacks | Government Rebates | Total | ||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | 1,868 | $ | 1,308 | $ | 3,697 | $ | 5,870 | $ | 1,175 | $ | 13,918 | ||||||||||||||||||||||||||
| Provision | 1,014 | 6,199 | 9,985 | 54,533 | 1,334 | 73,065 | ||||||||||||||||||||||||||||||||
| Payments | (664) | (6,287) | (9,850) | (55,058) | (715) | (72,574) | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | 2,218 | $ | 1,220 | $ | 3,832 | $ | 5,345 | $ | 1,794 | $ | 14,409 | ||||||||||||||||||||||||||
Total reductions of gross product sales from sales-related allowances and accruals were $96.7 million and $73.1 million, or 21.7% and 17.6% of gross product sales, for the six months ended June 30, 2025 and 2024, respectively. The overall 4.1% increase in sales-related allowances and accruals as a percentage of gross product sales was primarily related to accruals as a result of higher chargeback-related allowances from expanded contracting efforts.
Cost of Goods Sold
Cost of goods sold primarily relates to the costs to produce, package and deliver our products to customers. These expenses include labor, raw materials, manufacturing overhead and occupancy costs, depreciation of facilities, quality control and engineering. In 2024, the cost of royalty payments were also a component of cost of goods sold.
The following table provides information regarding our cost of goods sold and gross margin during the periods indicated, including percent changes (dollar amounts in thousands):
| Three Months Ended June 30, | % Increase / (Decrease) | Six Months Ended June 30, | % Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Cost of goods sold | $ | 40,866 | $ | 44,262 | (8)% | $ | 75,172 | $ | 91,678 | (18)% | |||||||||||||||||||||||||
| Gross margin | 77 | % | 75 | % | 79 | % | 73 | % | |||||||||||||||||||||||||||
Gross margin increased two and six percentage points in the three and six months ended June 30, 2025 versus 2024, respectively, primarily due to lower EXPAREL inventory reserves and improved EXPAREL and ZILRETTA product costs due to higher volumes manufactured in order to enhance the level of inventory on hand. These increases were partially offset by accelerated depreciation of fixed assets impacted by the decommissioning of our 45-liter EXPAREL batch manufacturing suite at our Science Center Campus in San Diego, California. For more information, see Note 18, Subsequent Events, to our condensed consolidated financial statements included herein.
Additionally, in April 2025, the U.S. District Court, District of Nevada, concluded we were no longer obligated to pay royalties to the Research Development Foundation for EXPAREL manufactured under our enhanced, larger-scale manufacturing process. As a result, during the six months ended June 30, 2025, no royalty expense was incurred on net product sales of EXPAREL. For more information, see Note 16, Commitments and Contingencies, to our condensed consolidated financial statements included herein.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 47
Research and Development Expenses
Research and development, or R&D, expenses primarily consist of costs related to clinical trials and related outside services, product development and other R&D costs, including trials that we are conducting to generate new data for EXPAREL, ZILRETTA and iovera°, clinical trials for PCRX-201 and stock-based compensation expense. Clinical and preclinical development expenses include costs for clinical personnel, clinical trials performed by third-parties, toxicology studies, materials and supplies, database management and other third-party fees. Product development and manufacturing capacity expansion expenses include development costs for our products, which include personnel, research equipment, materials and contractor costs for process development and product candidates, development costs related to significant scale-ups of our manufacturing capacity and facility costs for our research space. Regulatory and other expenses include regulatory activities related to unapproved products and indications, medical information and scientific communication expenses, expenses related to our IGOR registry study and related personnel. Stock-based compensation expense relates to the costs of stock option grants, awards of restricted stock units, or RSUs, and our employee stock purchase plan, or ESPP.
The following table provides a breakout of our R&D expenses during the periods indicated, including percent changes (dollar amounts in thousands):
| Three Months Ended June 30, | % Increase / (Decrease) | Six Months Ended June 30, | % Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Clinical and preclinical development | $ | 14,119 | $ | 8,172 | 73% | $ | 26,726 | $ | 14,518 | 84% | |||||||||||||||||||||||||
| Product development | 7,921 | 7,318 | 8% | 15,999 | 14,713 | 9% | |||||||||||||||||||||||||||||
| Regulatory and other | 2,646 | 2,923 | (9)% | 5,062 | 5,617 | (10)% | |||||||||||||||||||||||||||||
| Key employee holdback | 1,107 | — | N/A | 1,458 | — | N/A | |||||||||||||||||||||||||||||
| Stock-based compensation | 2,407 | 1,925 | 25% | 4,648 | 3,728 | 25% | |||||||||||||||||||||||||||||
| Total research and development expense | $ | 28,200 | $ | 20,338 | 39% | $ | 53,893 | $ | 38,576 | 40% | |||||||||||||||||||||||||
| % of total revenues | 16 | % | 11 | % | 15 | % | 11 | % | |||||||||||||||||||||||||||
Total R&D expense increased 39% and 40% in the three and six months ended June 30, 2025 versus 2024, respectively.
Clinical and preclinical development expense increased 73% and 84% in the three and six months ended June 30, 2025 versus 2024, respectively, due to ongoing site start-up expenses and enrollment in the PCRX-201 Phase 2 ASCEND trial for knee OA, a ZILRETTA shoulder trial, an EXPAREL pediatric trial and an iovera° spasticity trial, as well as additional personnel to support clinical initiatives. We expect to continue investing in our clinical and preclinical development programs throughout 2025.
Product development expense increased 8% and 9% in the three and six months ended June 30, 2025 versus 2024, respectively, attributable to investing in our HCAd platform, primarily for the PCRX-201 program. These increases were partially offset by the completion of pre-commercial scale-up activities of our enhanced, larger-scale EXPAREL manufacturing capacity at our Science Center Campus in San Diego, California, which the FDA approved in February 2024 and was placed into service in July 2024.
Regulatory and other expense decreased 9% and 10% in the three and six months ended June 30, 2025 versus 2024, respectively, due to a realignment of medical communication activities, partially offset by additional sites related to the IGOR registry study.
During the three and six months ended June 30, 2025, we accrued $1.1 million and $1.5 million, respectively, related to a key employee holdback. As part of the GQ Bio Acquisition, $7.8 million related to two employees’ payments will be recognized over three years pursuant to a key employee holdback agreement in increments of 50%, 30% and 20% at each year’s respective anniversary.
Stock-based compensation expense increased 25% in each of the three and six months ended June 30, 2025 versus 2024, primarily due to increased R&D personnel as well as the shifting of our annual equity grant to the first quarter in 2025.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 48
Selling, General and Administrative Expenses
Sales and marketing expenses primarily consist of compensation and benefits for our sales force and personnel that support our sales, marketing, medical and scientific affairs operations, expenses related to health outcome communications, provider-level market access, patient reimbursement support and customer educational programs. General and administrative expenses consist of compensation and benefits for legal, finance, regulatory activities related to approved products and indications, compliance, information technology, human resources, business development, executive management and other supporting personnel. It also includes professional fees for legal, audit, tax and consulting services. Stock-based compensation expense relates to the costs of stock option grants, RSU awards and our ESPP.
The following table provides information regarding our selling, general and administrative expenses during the periods indicated, including percent changes (dollar amounts in thousands):
| Three Months Ended June 30, | % Increase / (Decrease) | Six Months Ended June 30, | % Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Sales and marketing | $ | 50,964 | $ | 39,047 | 31% | $ | 106,535 | $ | 78,482 | 36% | |||||||||||||||||||||||||
| General and administrative | 26,231 | 20,231 | 30% | 46,840 | 44,837 | 4% | |||||||||||||||||||||||||||||
| Stock-based compensation | 11,383 | 8,848 | 29% | 21,979 | 16,833 | 31% | |||||||||||||||||||||||||||||
| Total selling, general and administrative expense | $ | 88,578 | $ | 68,126 | 30% | $ | 175,354 | $ | 140,152 | 25% | |||||||||||||||||||||||||
| % of total revenues | 49 | % | 38 | % | 50 | % | 41 | % | |||||||||||||||||||||||||||
Total selling, general and administrative expense increased 30% and 25% in the three and six months ended June 30, 2025 versus 2024, respectively.
Sales and marketing expense increased 31% and 36% in the three and six months ended June 30, 2025 versus 2024, respectively, driven by investing in programs to drive awareness and education for our customers and enhance our marketing, market access and reimbursement teams and value creation to enhance key commercial capabilities and expand EXPAREL utilization. We also expanded the size of our sales force in the second half of 2024 in order to better extend our reach on each of our commercial products.
General and administrative expense increased 30% and 4% in the three and six months ended June 30, 2025 versus 2024, respectively, primarily driven by third-party investor relations advisory services, as well as an increased headcount in the business development, legal and information technology departments. In addition, the increase in the six months ended June 30, 2025 versus 2024 was partially offset by a recovery of legal expenses in the first quarter of 2025.
Stock-based compensation expense increased 29% and 31% for the three and six months ended June 30, 2025 versus 2024, respectively, primarily due to equity grants provided to new executive officers as well as the shifting of our annual equity grant to the first quarter starting in 2025.
Amortization of Acquired Intangible Assets
The following table provides a summary of the amortization of acquired intangible assets during the periods indicated, including percent changes (dollar amounts in thousands):
| Three Months Ended June 30, | % Increase / (Decrease) | Six Months Ended June 30, | % Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | $ | 14,322 | $ | 14,322 | —% | $ | 28,644 | $ | 28,644 | —% | |||||||||||||||||||||||||
As part of the Flexion Acquisition and the MyoScience Acquisition, we acquired intangible assets consisting of developed technology intangible assets and customer relationships, with estimated useful lives between 9 and 14 years. For more information, see Note 8, Goodwill and Intangible Assets, to our condensed consolidated financial statements included herein.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 49
Contingent Consideration (Gains) Charges, Acquisition-related Expenses, Restructuring and Other
The following table provides a summary of the costs related to the contingent consideration (gains) charges, acquisition-related expenses, restructuring and other during the periods indicated, including percent changes (dollar amounts in thousands):
| Three Months Ended June 30, | % Increase / (Decrease) | Six Months Ended June 30, | % Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Contingent consideration (gains) charges | $ | (357) | $ | 1,509 | N/A | $ | (3,032) | $ | (2,297) | 32% | |||||||||||||||||||||||||
| Restructuring charges | — | 996 | (100)% | — | 6,531 | (100)% | |||||||||||||||||||||||||||||
| Acquisition-related expenses | 991 | 230 | 100+% | 2,502 | 404 | 100+% | |||||||||||||||||||||||||||||
| Legal settlement | — | — | N/A | 7,000 | — | N/A | |||||||||||||||||||||||||||||
| Total contingent consideration (gains) charges, acquisition-related expenses, restructuring and other | $ | 634 | $ | 2,735 | (77)% | $ | 6,470 | $ | 4,638 | 39% | |||||||||||||||||||||||||
Total contingent consideration (gains) charges, acquisition-related expenses, restructuring and other included net charges that decreased 77% in the three months ended June 30, 2025 versus 2024. Total contingent consideration (gains) charges, acquisition-related expenses, restructuring and other included net charges that increased 39% in the six months ended June 30, 2025 versus 2024.
During the three and six months ended June 30, 2025, we recognized contingent consideration gains of $0.4 million and $3.0 million, respectively, primarily due to revisions to the latest discount rates.
During the three months ended June 30, 2024, we recognized a contingent consideration charge of $1.5 million primarily due to revisions to the latest discount rates. During the six months ended June 30, 2024, we recognized a contingent consideration gain of $2.3 million primarily due to an adjustment reflecting the probability of achieving the remaining regulatory milestone under the Flexion Acquisition by the milestone expiration date.
During the three and six months ended June 30, 2024, we recognized restructuring charges of $1.0 million and $6.5 million, respectively, related to employee termination benefits, such as the acceleration of share-based compensation, severance, and, to a lesser extent, other employment-related termination costs, as well as contract termination costs.
During the three and six months ended June 30, 2025, we recognized acquisition-related expenses of $1.0 million and $2.5 million, respectively, primarily related to third-party services and legal fees associated with the GQ Bio Acquisition.
During the six months ended June 30, 2025, we recognized legal settlement costs of $7.0 million related to the settlement of the patent infringement suits against Fresenius Kabi USA, LLC, eVenus Pharmaceuticals Laboratories, Inc. and Jiangsu Hengrui Pharmaceuticals Co., Ltd.
For more information, see Note 3, GQ Bio Therapeutics Acquisition, Note 10, Financial Instruments, Note 15, Contingent Consideration (Gains) Charges, Acquisition-related Expenses, Restructuring and Other and Note 16, Commitments and Contingencies, to our condensed consolidated financial statements included herein.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 50
Other (Loss) Income, Net
The following table provides information regarding other income, net during the periods indicated, including percent changes (dollar amounts in thousands):
| Three Months Ended June 30, | % Increase / (Decrease) | Six Months Ended June 30, | % Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Interest income | $ | 5,008 | $ | 4,749 | 5% | $ | 11,903 | $ | 8,652 | 38% | |||||||||||||||||||||||||
| Interest expense | (4,695) | (3,884) | 21% | (9,275) | (7,200) | 29% | |||||||||||||||||||||||||||||
| Gain on early extinguishment of debt | — | 7,518 | (100)% | — | 7,518 | (100)% | |||||||||||||||||||||||||||||
| Other, net | (10,739) | (39) | 100+% | (6,338) | (198) | 100+% | |||||||||||||||||||||||||||||
| Total other (loss) income, net | $ | (10,426) | $ | 8,344 | N/A | $ | (3,710) | $ | 8,772 | N/A | |||||||||||||||||||||||||
Total other loss, net was $10.4 million and $3.7 million in the three and six months ended June 30, 2025, respectively. Total other income, net was $8.3 million and $8.8 million in the three and six months ended June 30, 2024, respectively.
Interest income increased 5% and 38% in the three and six months ended June 30, 2025 versus 2024, respectively, due to higher overall investment balances as well as interest realized on a GQ Bio note receivable investment we had made prior to the GQ Bio Acquisition.
Interest expense increased 21% and 29% in the three and six months ended June 30, 2025 versus 2024, respectively, primarily due to issuing the 2029 Notes (as defined below) in May 2024, partially offset by lower outstanding principal associated with the TLA Term Loan (as defined below). For more information, see Note 9, Debt, to our condensed consolidated financial statements included herein.
In the three and six months ended June 30, 2024, we recognized a $7.5 million gain on early extinguishment of debt in conjunction with the repurchase of $200.0 million principal of our 2025 Notes (as defined below). The partial repurchase of the 2025 Notes was completed with our net proceeds from the issuance of the 2029 Notes.
The $10.7 million and $6.3 million other net loss during the three and six months ended June 30, 2025 was primarily driven by an impairment of an equity investment and convertible note receivable totaling $11.0 million. For the six months ended June 30, 2025, the other net loss was partially offset by a realized gain associated with a previously acquired equity investment in GQ Bio that increased in fair value resulting from the GQ Bio Acquisition. For more information, see Note 10, Financial Instruments, and Note 3, GQ Bio Therapeutics Acquisition, to our condensed consolidated financial statements included herein.
Income Tax Expense
The following table provides information regarding our income tax expense during the periods indicated, including percent changes (dollar amounts in thousands):
| Three Months Ended June 30, | % Increase / (Decrease) | Six Months Ended June 30, | % Increase / (Decrease) | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Income tax expense | $ | 2,920 | $ | 17,698 | (84)% | $ | 6,814 | $ | 22,359 | (70)% | |||||||||||||||||||||||||
| Effective tax rate | (152) | % | 48 | % | 101 | % | 45 | % | |||||||||||||||||||||||||||
The effective tax rates were (152)% and 101% for the three and six months ended June 30, 2025, respectively. The effective tax rates were 48% and 45% for the three and six months ended June 30, 2024, respectively. Income tax expense represents the estimated annual effective tax rate applied to the year-to-date operating results adjusted for certain discrete tax items.
The effective tax rate for the three and six months ended June 30, 2025 is primarily impacted by costs related to non-deductible stock-based compensation, non-deductible executive compensation and a non-U.S. valuation allowance. The effective tax rates for the three and six months ended June 30, 2024 include costs related to non-deductible stock-based
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 51
compensation, primarily related to expired stock options, and non-deductible executive compensation, partially offset by tax credits.
Liquidity and Capital Resources
Since our inception in 2006, we have devoted most of our cash resources to manufacturing, R&D and selling, general and administrative activities related to the development and commercialization of EXPAREL. In addition, we acquired ZILRETTA as part of the Flexion Acquisition in November 2021 and iovera° as part of the MyoScience Acquisition in April 2019. We are primarily dependent on the commercial success of EXPAREL and ZILRETTA. We have financed our operations primarily with the proceeds from the sale of convertible senior notes and other debt, common stock, product sales and collaborative licensing and milestone revenue. As of June 30, 2025, we had an accumulated deficit of $206.4 million, cash and cash equivalents and available-for-sale investments of $445.9 million and working capital of $432.4 million.
We expect that our cash and cash equivalents and available-for-sale investments on hand will be adequate to cover our short-term liquidity needs, and that we would be able to access other sources of financing should the need arise.
Summary of Cash Flows
The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated (in thousands):
| Six Months Ended June 30, | ||||||||||||||
| Condensed Consolidated Statements of Cash Flows Data: | 2025 | 2024 | ||||||||||||
| Net cash provided by (used in): | ||||||||||||||
| Operating activities | $ | 47,471 | $ | 102,337 | ||||||||||
| Investing activities | 36,534 | (30,745) | ||||||||||||
| Financing activities | (60,499) | 22,163 | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 204 | — | ||||||||||||
| Net increase in cash and cash equivalents | $ | 23,710 | $ | 93,755 | ||||||||||
Operating Activities
During the six months ended June 30, 2025, net cash provided by operating activities was $47.5 million, compared to $102.3 million during the six months ended June 30, 2024. The decrease of $54.9 million was attributable to increased operating expenses driven by investing in programs to drive awareness and education for our customers and enhance our marketing, market access and reimbursement teams as well as increased clinical and preclinical expenses as we continue to invest in our pipeline development and a higher investment in inventory, partially offset by improvements in gross margin.
Investing Activities
During the six months ended June 30, 2025, net cash provided by investing activities was $36.5 million, which reflected $65.7 million of inflows from available-for-sale investment sales (net of purchases), partially offset by $16.7 million related to the cash consideration for the GQ Bio Acquisition (net of cash acquired), as well as $11.2 million of capital expenditures for manufacturing product fill lines and the build-out of our new corporate headquarters in Brisbane, California,
During the six months ended June 30, 2024, net cash used in investing activities was $30.7 million, which reflected $26.3 million of outflows from available-for-sale investment purchases (net of sales), as well as $4.4 million of capital expenditures for manufacturing product fill lines and for an EXPAREL capacity expansion project at our Science Center Campus in San Diego, California.
Financing Activities
During the six months ended June 30, 2025, net cash used in financing activities was $60.5 million, which primarily consisted of $50.0 million in purchases of treasury stock under a new $300.0 million share repurchase program authorized by our board of directors in April 2025, $6.6 million voluntary prepayments associated with the TLA Term Loan, as well as $5.5 million to withhold shares of common stock to cover employee tax withholding obligations on restricted stock unit vests. For more information, see Note 11, Stockholders' Equity, to our condensed consolidated financial statements included herein and Part II Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of this Quarterly Report on Form 10-Q. There were also $1.6 million of proceeds from the issuance of common stock through our ESPP.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 52
During the six months ended June 30, 2024, net cash provided by financing activities was $22.2 million, which primarily consisted of $287.5 million in proceeds from the issuance of the 2029 Notes. We used the majority of the proceeds from the 2029 Notes to make a partial repurchase of the 2025 Notes in the amount of $191.0 million, enter into a capped call transaction for $26.7 million, repurchase $25.0 million of treasury stock, and pay debt issuance and financing costs of $9.4 million. Additionally, we paid the remaining $8.6 million of 3.375% convertible senior notes due 2024 assumed from the Flexion Acquisition upon their maturity and made $5.6 million of voluntary prepayments associated with the TLA Term Loan. There were also $1.4 million of proceeds from the issuance of common stock through our ESPP.
See Note 9, Debt, to our condensed consolidated financial statements included herein for further discussion of the TLA Term Loan.
Debt
Revolving Credit Facility
On July 3, 2025, we entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, swingline lender and an issuing bank, and certain lenders, to, among other things, refinance the indebtedness outstanding under our TLA Credit Agreement (as defined below) and provide ongoing working capital. The Credit Agreement provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate commitment amount of $300.0 million, with a letter of credit sublimit of $10.0 million and swingline loan sublimit of $15.0 million. The credit facility is secured by substantially all of our and each subsidiary guarantor’s assets and matures on July 3, 2030, subject to certain exceptions set forth in the Credit Agreement. Subject to certain conditions, we may, at any time, on one or more occasions, add one or more new classes of term facilities and/or increase the principal amount of any existing class of term loans by requesting one or more incremental term facilities in an aggregate principal amount not to exceed the greater of $225.0 million and 100% of Consolidated EBITDA (as defined in the Credit Agreement).
Each revolving loan borrowing which is an alternate base rate borrowing will bear interest at a rate per annum equal to (i) a base rate, plus (ii) a spread based on our Senior Secured Net Leverage Ratio (as defined in the Credit Agreement) ranging from 1.50% to 2.25%. Each revolving loan borrowing which is a term benchmark borrowing or daily simple SOFR (as defined in the Credit Agreement) borrowing will bear interest at a rate per annum equal to (i) a forward-looking term rate based on SOFR or a rate determined by reference to the daily simple SOFR, plus (ii) a spread based on our Senior Secured Net Leverage Ratio ranging from 2.50% to 3.25%.
The Credit Agreement also contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions.
Upon entering into the Credit Agreement, we borrowed $101.0 million under the Revolving Credit Facility.
2028 Term Loan A Facility
On March 31, 2023, we entered into a credit agreement (as amended to date, the “TLA Credit Agreement”). The term loan issued under the TLA Credit Agreement (the “TLA Term Loan”) was issued at a 0.30% discount and provides for a single-advance term loan A facility in the principal amount of $150.0 million, which was secured by substantially all of our and any subsidiary guarantor’s assets. We could elect to borrow either (i) alternate base rate borrowings or (ii) term benchmark borrowings or daily simple SOFR (as defined in the TLA Credit Agreement) borrowings. Each term loan borrowing which is an alternate base rate borrowing bears interest at a rate per annum equal to (i) the Alternate Base Rate (as defined in the TLA Credit Agreement), plus (ii) a spread based on our Senior Secured Net Leverage Ratio ranging from 2.00% to 2.75%. Each term loan borrowing which is a term benchmark borrowing or daily simple SOFR borrowing bears interest at a rate per annum equal to (i) the Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR (as each is defined in the TLA Credit Agreement), plus (ii) a spread based on our Senior Secured Net Leverage Ratio ranging from 3.00% to 3.75%. During the six months ended June 30, 2025, we made $6.6 million of voluntary principal prepayments. During the year ended December 31, 2024, we made $11.3 million of voluntary principal prepayments. As of June 30, 2025, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 7.43%.
As of June 30, 2025, we were in compliance with all financial covenants under the TLA Credit Agreement. In July 2025, we repaid the indebtedness outstanding under our TLA Credit Agreement and terminated the TLA Credit Agreement concurrently with our entry into the Revolving Credit Facility, which resulted in a loss on extinguishment of debt of approximately $0.9 million. The TLA Credit Agreement had a maturity date of March 31, 2028. For more information, see Note 9, Debt, and Note 18, Subsequent Events, to our condensed consolidated financial statements included herein for further discussion.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 53
2029 Convertible Senior Notes
In May 2024, we completed a private placement of $287.5 million in aggregate principal amount of our 2.125% convertible senior notes due 2029, or 2029 Notes, and entered into an indenture with respect to the 2029 Notes. The 2029 Notes accrue interest at a fixed rate of 2.125% per year, payable semiannually in arrears on May 15th and November 15th of each year. The 2029 Notes mature on May 15, 2029.
At June 30, 2025, all $287.5 million of principal was outstanding on the 2029 Notes. See Note 9, Debt, to our condensed consolidated financial statements included herein for further discussion.
2025 Convertible Senior Notes
In July 2020, we completed a private placement of $402.5 million in aggregate principal amount of our 0.750% convertible senior notes due 2025, or 2025 Notes, and entered into an indenture with respect to the 2025 Notes. The 2025 Notes accrued interest at a fixed rate of 0.750% per annum, which was payable semiannually in arrears on February 1st and August 1st of each year.
In May 2024, we used part of the net proceeds from the issuance of the 2029 Notes to repurchase $200.0 million aggregate principal amount of the 2025 Notes in privately negotiated transactions at a discount for $191.4 million in cash (including accrued interest). The partial repurchase of the 2025 Notes resulted in a $7.5 million gain on early extinguishment of debt.
At June 30, 2025, the outstanding principal on the 2025 Notes was $202.5 million, and on August 1, 2025, the 2025 Notes matured and we settled the remaining outstanding principal balance of $202.5 million in cash. See Note 9, Debt, to our condensed consolidated financial statements included herein for further discussion.
Future Capital Requirements
We believe that our existing cash and cash equivalents, available-for-sale investments and cash received from product sales will be sufficient to enable us to fund our operating expenses, capital expenditure requirements and payment of the interest and principal on our Revolving Credit Facility and 2029 Notes through the next 12 months. Our future use of operating cash and capital requirements will depend on many forward-looking factors, including, but not limited to:
•the cost and timing of the potential milestone payments to former Flexion Therapeutics, Inc. stockholders, which could be up to an aggregate of $372.3 million if certain regulatory and commercial milestones are met. See Note 10, Financial Instruments, to our condensed consolidated financial statements included herein for more information;
•the impact of global economic conditions—including the impact of inflation and tariffs—on our products, material and labor costs, supply chain, longer lead-times, an inability to procure a sufficient supply of materials, our operating expenses and our business strategy;
•the timing of and extent to which the holders of our 2029 Notes elect to convert their 2029 Notes, and the amount of borrowings and interest payments on our Revolving Credit Facility;
•the costs and our ability to successfully continue to expand the commercialization of EXPAREL, ZILRETTA and iovera°;
•the cost and timing of expanding and maintaining our manufacturing facilities and capabilities;
•the cost and timing of additional strategic investments, including additional investments under existing agreements;
•the costs related to legal and regulatory matters, including those to develop and defend our intellectual property;
•the costs of performing additional clinical trials for our products and product candidates, including the additional pediatric trials required by the FDA and EMA as a condition of the approval of EXPAREL and clinical trials for PCRX-201;
•the costs for the development and commercialization of other product candidates;
•the costs and timing of future payments under our employee benefit plans, including but not limited to our cash long-term incentive plan and non-qualified deferred compensation plan;
•the extent to which we acquire or invest in products, businesses and technologies; and
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 54
•the timing and the number of shares of our common stock either repurchased through our $300.0 million share repurchase program announced in April 2025, which has an expiration date of December 31, 2026 or withheld to cover employee tax withholding obligations on restricted stock unit vests.
We may require additional debt or equity financing to meet our future operating and capital requirements. We have no committed external sources of funds, and additional equity or debt financing may not be available on acceptable terms, if at all. In particular, capital market disruptions or negative economic conditions may hinder our access to capital.
Critical Accounting Estimates
For a description of critical accounting policies that affect our significant judgments and estimates used in the preparation of our consolidated financial statements, refer to our 2024 Annual Report. There have been no significant changes to our critical accounting policies nor any recently issued accounting pronouncements that are expected to have a material impact on our financial results since December 31, 2024.
Contractual Obligations
In July 2025, we entered into a non-cancelable contractual commitment of approximately $4.0 million and $5.5 million in 2025 and 2026, respectively.
Except as set forth above, there have been no material changes in our contractual obligations relating to our indebtedness, lease obligations and purchase obligations from those reported in our 2024 Annual Report. For more information on our contractual obligations and commercial commitments, see Part II, Item 7 in our 2024 Annual Report.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The primary objective of our cash equivalents and investment activities is to preserve principal while at the same time maximizing the income that we receive from our investments without significantly increasing risk. We invest in corporate bonds, commercial paper, asset-backed securities and U.S. Treasury and other government agency notes for purposes other than trading which are reported at fair value. These securities are subject to interest rate risk and credit risk. This means that a change in prevailing interest rates may cause the fair value of the investment to fluctuate. For example, if we hold a security that was issued with a fixed interest rate at the then-prevailing rate and the interest rate later rises, we expect that the fair value of our investment will decline. A hypothetical 100 basis point increase in interest rates would have reduced the fair value of our available-for-sale securities at June 30, 2025 by approximately $0.3 million.
The fair value of our 2025 Notes was impacted by both the fair value of our common stock and interest rate fluctuations. As of June 30, 2025, the estimated fair value of the 2025 Notes was $993 per $1,000 principal amount. See Note 9, Debt, to our condensed consolidated financial statements included herein for further discussion of our 2025 Notes, which bore interest at a fixed rate. At June 30, 2025, $202.5 million of principal remained outstanding on the 2025 Notes. On August 1, 2025, the 2025 Notes matured and we settled the remaining outstanding principal balance of $202.5 million cash. For more information, see Note 18, Subsequent Events.
The fair value of our 2029 Notes is impacted by both the fair value of our common stock and interest rate fluctuations. As of June 30, 2025, the estimated fair value of the 2029 Notes was $979 per $1,000 principal amount. See Note 9, Debt, to our condensed consolidated financial statements included herein for further discussion of our 2029 Notes, which bear interest at a fixed rate. At June 30, 2025, $287.5 million of principal remains outstanding on the 2029 Notes.
The TLA Term Loan provided for a single-advance term loan in the principal amount of $150.0 million and was scheduled to mature on March 31, 2028. Each term loan borrowing that was a term benchmark borrowing or daily simple SOFR borrowing bore interest at a rate per annum equal to (i) the Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR (as each is defined in the TLA Credit Agreement), plus (ii) a spread based on our Senior Secured Net Leverage Ratio ranging from 3.00% to 3.75%. At June 30, 2025, the outstanding principal on the TLA Term Loan was $98.8 million. As of June 30, 2025, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 7.43%. In July 2025, we repaid the indebtedness outstanding under our TLA Credit Agreement and terminated the TLA Credit Agreement concurrently with our entry into the new Revolving Credit Facility. For more information, see Note 18, Subsequent Events.
We have agreements with certain vendors and partners that operate in foreign jurisdictions. The more significant transactions are primarily denominated in the U.S. Dollar, subject to an annual adjustment based on changes in currency exchange rates.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 55
Additionally, our accounts receivable are primarily concentrated with four large wholesalers of pharmaceutical products. In the event of non-performance or non-payment, there may be a material adverse impact on our financial condition, results of operations or net cash flow.
Item 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Exchange Act, our management, including our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. As defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, disclosure controls and procedures are controls and other procedures which are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2025.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including the Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 56
PART II — OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
For information related to Item 1. Legal Proceedings, refer to Note 16, Commitments and Contingencies, to our
condensed consolidated financial statements included herein.
Item 1A. RISK FACTORS
You should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our 2024 Annual Report, which could materially affect our business, financial condition, cash flows or future results. There have been no material changes in our risk factors included in our 2024 Annual Report. The risks described in our 2024 Annual Report are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Purchases of Equity Securities by the Registrant
The following table provides information on our share repurchases during the quarter ended June 30, 2025:
| Issuer Purchases of Equity Securities | ||||||||||||||||||||||||||
| Period | Total Number of Shares Purchased | Average Price Paid Per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (1) | ||||||||||||||||||||||
| April 1, 2025 – April 30, 2025 | — | $ | — | — | $ | 300,000,000 | ||||||||||||||||||||
| May 1, 2025 – May 31, 2025 | 1,955,589 | $ | 25.59 | 1,955,589 | $ | 249,999,997 | ||||||||||||||||||||
| June 1, 2025 –June 30, 2025 | — | $ | — | — | $ | 249,999,997 | ||||||||||||||||||||
| Total | 1,955,589 | $ | 25.59 | 1,955,589 | $ | 249,999,997 | ||||||||||||||||||||
(1) The average price paid per shares excludes less than $0.1 million of broker fees and $0.4 million of excise tax incurred on share repurchases for the three months ended June 30, 2025. The remaining authorization outstanding for repurchases of common stock also excludes broker fees and the excise tax incurred.
(2) Our Board of Directors has authorized the repurchase of common stock under a share repurchase program adopted and announced in April 2025. The share repurchase program authorizes the Company to purchase up to an aggregate of $300.0 million of the Company’s outstanding common stock. Repurchases under this program may be made at management’s discretion on the open market or through privately negotiated transactions, including plans that comply with Rule 10b5-1 under the Exchange Act. The share repurchase program may be suspended or discontinued at any time by the Company and has an expiration date of December 31, 2026.
The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including our stock price, corporate and regulatory requirements, tax implications, restrictions under our debt obligations, other uses for capital, impacts on the value of remaining shares, and market and economic conditions.
Refer to Note 11, Stockholders’ Equity, to our condensed consolidated financial statements included herein for more information on our share repurchases.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 57
Item 5. OTHER INFORMATION
Rule 10b5-1 Trading Plans
The following table shows the “Rule 10b5-1 trading arrangements” and “non-Rule 10b5-1 trading arrangements” (as each term is defined in Item 408(a) of Regulation S-K) adopted by our directors and executive officers during the quarter ended June 30, 2025. No trading arrangements were terminated
| Trading Arrangement | ||||||||||||||||||||
| Name and Position | Action | Date | Rule 10b5-1* | Non-Rule 10b5-1** | Total Number of Shares to be Sold | Expiration Date | ||||||||||||||
| x | ||||||||||||||||||||
| x | To Be Determined (1) | |||||||||||||||||||
| x | To Be Determined (1) (2) | |||||||||||||||||||
* Intended to satisfy the affirmative defense of Rule 10b5-1(c).
** Not intended to satisfy the affirmative defense of Rule 10b5-1(c).
(1) The aggregate number of shares to be sold pursuant to the trading arrangements listed above are dependent on the amount of tax withholding required upon the vesting of restricted stock units, and, therefore, is indeterminable at this time.
(2) Includes shares to be sold which are scheduled to be purchased through the Company’s employee stock purchase plan on December 31, 2025.
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 58
Item 6. EXHIBITS
The exhibits listed below are filed or furnished as part of this report.
| Exhibit Number | Description | |||||||
| Settlement Agreement, dated April 7, 2025, by and between Pacira BioSciences, Inc. and Pacira Pharmaceuticals, Inc. with Fresenius Kabi USA, LLC, eVenus Pharmaceutical Laboratories Inc., and Jiangsu Hengrui Pharmaceuticals Co., Ltd. (f/k/a Jiangsu Hengrui Medicine Co., Ltd.).(1) †† ## | ||||||||
| Amended and Restated 2011 Stock Incentive Plan.(2)*** | ||||||||
| Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.* | ||||||||
| Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.* | ||||||||
| Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** | ||||||||
| 101 | The following materials from the Quarterly Report on Form 10-Q of Pacira BioSciences, Inc. for the quarter ended June 30, 2025, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Comprehensive (Loss) Income; (iv) the Condensed Consolidated Statements of Stockholders’ Equity; (v) the Condensed Consolidated Statements of Cash Flows; and (vi) the Condensed Notes to Consolidated Financial Statements.* | |||||||
| 104 | Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101). | |||||||
| * | Filed herewith. | |||||||
| ** | Furnished herewith. | |||||||
| *** | Denotes management contract or compensatory plan or arrangement. | |||||||
†† | Certain portions of the exhibit have been omitted pursuant to Rule 601(b)(10) of Regulation S-K. The omitted information (i) is not material and (ii) is the type that the Registrant treats as private or confidential. | |||||||
| (1) | Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, filed on May 8, 2025. | |||||||
| (2) | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on June 13, 2025. | |||||||
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 59
SIGNATURES | ||
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PACIRA BIOSCIENCES, INC. (REGISTRANT) | ||||||||||||||
| Date: | August 5, 2025 | By: | /s/ FRANK D. LEE | |||||||||||
| Frank D. Lee | ||||||||||||||
| Chief Executive Officer and Director | ||||||||||||||
| (Principal Executive Officer) | ||||||||||||||
| Date: | August 5, 2025 | By: | /s/ SHAWN M. CROSS | |||||||||||
| Shawn M. Cross | ||||||||||||||
| Chief Financial Officer | ||||||||||||||
| (Principal Financial Officer) | ||||||||||||||
Pacira BioSciences, Inc. | Q2 2025 Form 10-Q | Page 60
Exhibit 31.1
CERTIFICATION
I, Frank D. Lee, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Pacira BioSciences, Inc. (the “Registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
| Date: | August 5, 2025 | /s/ FRANK D. LEE | ||||||
| Frank D. Lee | ||||||||
| Chief Executive Officer and Director | ||||||||
| (Principal Executive Officer) | ||||||||
Exhibit 31.2
CERTIFICATION
I, Shawn M. Cross certify that:
1.I have reviewed this quarterly report on Form 10-Q of Pacira BioSciences, Inc. (the “Registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
| Date: | August 5, 2025 | /s/ SHAWN M. CROSS | ||||||
| Shawn M. Cross | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
Exhibit 32.1
CERTIFICATIONS OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned certifies that this Quarterly Report on Form 10-Q of Pacira BioSciences, Inc. for the quarter ended June 30, 2025, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of Pacira BioSciences, Inc. at the dates and for the periods indicated.
| Date: | August 5, 2025 | /s/ FRANK D. LEE | ||||||
| Frank D. Lee | ||||||||
| Chief Executive Officer and Director | ||||||||
| (Principal Executive Officer) | ||||||||
| Date: | August 5, 2025 | /s/ SHAWN M. CROSS | ||||||
| Shawn M. Cross | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||