Pacira Q1 2025: Adjusted Earnings Hold Steady Amid Revenue Growth and Strategic Shifts

Pacira BioSciences (NASDAQ: PCRX) reported first-quarter 2025 results that underscored the resilience of its core product, EXPAREL, while revealing ongoing challenges in secondary offerings and execution. With adjusted earnings per share (EPS) holding steady at $0.62 diluted (unchanged from Q1 2024) and revenue rising to $164.9 million, the company is navigating a mix of operational headwinds and strategic opportunities. Here’s a deep dive into the numbers and their implications for investors.

Key Financial Takeaways

Pacira’s Q1 performance was driven by its flagship product, EXPAREL, which saw sales climb 3.1% year-over-year to $136.5 million, fueled by a 7% increase in average daily sales. This growth aligns with Pacira’s focus on expanding reimbursement for EXPAREL through its “No Pain” program, which aims to secure coverage for 18 million outpatient procedures. Meanwhile, ZILRETTA sales dipped 9.6% to $23.3 million, reflecting ongoing struggles with its sales force transition and reimbursement hurdles.

Non-GAAP metrics highlighted operational efficiency:
- Gross margin expanded to 81%, up from 72% in Q1 2024, thanks to lower manufacturing costs and the elimination of royalties for EXPAREL.
- Adjusted EBITDA rose to $44.1 million, up from $39.3 million in the prior year.

However, elevated expenses cast a shadow:
- SG&A costs surged to $76.2 million, up 19% year-over-year, driven by investments in commercial infrastructure and market access.
- R&D spending jumped to $23.1 million, reflecting Pacira’s push into gene therapy via its acquisition of GQ Bio.

Challenges and Risks

1. ZILRETTA’s Decline: The drop in ZILRETTA sales raises concerns about execution in secondary markets. Management attributed the slide to a “transition-related headwind” but provided no concrete timeline for recovery.
2. NOPAIN Adoption Lag: While Pacira anticipates traction for its reimbursement program in late 2025, Medicare coverage remains uneven. Over 75% of ASC cases are commercially insured, but hospital systems face logistical delays.
3. Pricing Pressures: EXPAREL’s pricing remained flat, and group purchasing organization (GPO) contracts could reduce revenue by mid-single digits in coming quarters.

Strategic Shifts and Long-Term Vision

Pacira’s Q1 results are best viewed through the lens of its “5x30” growth strategy, which prioritizes expanding its non-opioid pain portfolio and leveraging its gene therapy platform. Key highlights include:
- Patent Milestones: A settlement extended EXPAREL’s exclusivity to 2039, and the FDA added its 18th patent to the Orange Book, shielding it from generic competition.
- Gene Therapy Pipeline: The acquisition of GQ Bio’s HCAD platform positions Pacira to tackle osteoarthritis with PCRX-201, a therapy in Phase 2 trials. Early data from the ASCEND study (expected late 2025) could unlock a multi-billion-dollar market.
- Share Buybacks: A new $300 million repurchase program underscores management’s confidence in Pacira’s undervalued stock and cash reserves ($494 million).

Guidance and Market Outlook

For 2025, Pacira reiterated revenue guidance of $725–765 million, with non-GAAP gross margins expected to remain robust at 76–78%. Despite the Q1 revenue miss (falling short of the $175.6 million estimate), analysts remain cautiously optimistic. Key catalysts ahead include:
- NOPAIN adoption rates in Q3/Q4 2025.
- PCRX-201 data from the ASCEND trial.
- ZILRETTA sales recovery or strategic divestment.

Conclusion: A Mixed Bag with Long-Term Upside

Pacira’s Q1 results are a reminder that growth in biopharma is rarely linear. While near-term challenges—such as ZILRETTA’s decline and elevated expenses—weigh on short-term performance, the company’s long-term prospects are strengthened by:
- EXPAREL’s dominance: With a 7% sales boost and 2039 patent expiry, it remains the engine of cash flow.
- Strategic acquisitions: The GQ Bio deal and gene therapy pipeline position Pacira to diversify beyond local anesthetics.
- Balance sheet strength: A $494 million cash pile and aggressive buyback program signal resilience in volatile markets.

Investors should focus on execution against 2025 guidance and PCRX-201’s clinical progress. If Pacira can stabilize ZILRETTA and accelerate NOPAIN adoption, its stock—currently trading near $24—could rebound strongly. However, failure to address these risks could keep the stock range-bound. For now, Pacira remains a high-reward, high-risk play on the future of non-opioid pain management.

Final Take: Pacira’s Q1 results highlight the trade-off between short-term hiccups and long-term ambition. With a solid foundation and innovative pipeline, it’s a stock worth watching closely as 2025 unfolds.