On Tuesday, Truist Securities reaffirmed its Buy rating and $45.00 price target on the stock. Pacira Pharmaceuticals (NASDAQ:), even as the company faced a potential challenge from the FDA’s approval of a generic version of its lead drug, eVenus Pharmaceutical’s Exparel.
Despite the approval, Truist Securities anticipates that eVenus will not be able to launch its generic product until at least the late 2030s due to ongoing patent litigation.
Pacira Pharmaceuticals, whose shares fell 20% today compared to a 1% decline on the XBI, is currently involved in a patent infringement lawsuit against eVenus, a subsidiary of Jiangsu Hengrui Medicine Company (600276-CN; NR).
The ‘495 patent trial, which began on February 14, 2024, is expected to result in a ruling by August 1, 2024. If eVenus were to receive a favorable ruling, an appeal by Pacira could result in an additional 30-month stay.
Exparel is a significant contributor to Pacira’s revenue, accounting for approximately 79% of the company’s estimated revenue for 2024. Truist Securities suggests that the current market reaction to the FDA approval may be overdone and advises investors to stay the course.
The firm also notes that the approval does not equate to eVenus’ ability to launch the product commercially, as the company has faced previous issues with the FDA regarding deficiencies in its manufacturing facilities.
In addition to the ‘495 patent, Pacira has filed additional patents that eVenus would have to challenge. To market a generic version of Exparel before the original patent expires in 2041, eVenus would have to successfully challenge all existing and newly issued patents. Truist Securities expects that an agreement on the timing of exclusivity will likely be reached, potentially allowing for a generic launch around 2039-2040.
Truist Securities remains firm despite the possibility that eVenus will launch its product “at risk,” which could lead to a damages suit from Pacira. The firm compares the situation to a similar case in which the FDA approved a generic of Norwich’s Xifaxan, but the company is unable to launch it due to ongoing litigation, mirroring the situation facing Pacira and eVenus.
In other recent news, Pacira BioSciences, Inc. reported first quarter 2024 revenue of $149 million, with Exparel sales of $118 million, slightly below consensus estimates. The company launched a private placement of $250 million of convertible senior notes due 2029, with expected net proceeds of approximately $242 million.
Management changes are underway, including the hiring of a new Chief Commercial Officer (CCO) and Chief Business Officer (CBO). In addition, Dr. Gary Pace has decided to retire from the Company’s Board of Directors, effective June 30, 2024, and will enter into a consulting agreement with Pacira.
As part of recent developments, the Annual Meeting resulted in the election of four Class I directors and the ratification of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024.
Analysts at RBC Capital Markets, Barclays, JMP Securities and Piper Sandler have given Pacira various ratings, with price targets ranging from $38.00 to $57.00. The company’s revenue is expected to grow nearly 10% annually and reach approximately $1.25 billion by 2030.
These recent developments reflect ongoing changes in Pacira’s operations and strategic direction, and it is important for investors to keep an eye on these updates.
InvestingPro Insights
Amid the uncertainty surrounding Pacira Pharmaceuticals’ patent litigation, investors can find solace in some of the company’s underlying financial metrics. According to InvestingPro data, Pacira’s market capitalization stands at a solid $1 billion, with a forward-looking price-to-earnings ratio of 21.04, suggesting that the market is confident in its earnings potential. The company’s gross profit margin for the trailing twelve months to Q1 2024 remains high at 61.8%, indicating strong operational efficiency.
InvestingPro Tips highlights that analysts predict Pacira will be profitable this year, and the company has been profitable over the past twelve months. Additionally, the valuation implies a strong free cash flow performance, which can be a signal of the company’s ability to generate cash and potentially reinvest in its business or pay down debt.
Investors looking for deeper analysis and additional tips from InvestingPro can explore more information at https://www.investing.com/pro/PCRX, where 7 more tips are listed to help them make informed investment decisions. Don’t forget to use the coupon code News 24 to get up to 10% off an annual Pro subscription and an annual or bi-annual Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information, please see our terms and conditions.