Doma Perpetual's 5.7% Stake in Pacira Biosciences: A Catalyst for Governance Change or Strategic Alignment?

In the world of biopharmaceuticals, where innovation and intellectual property reign supreme, Pacira BioSciences has long positioned itself as a leader in non-opioid pain management. But the company's recent trajectory has drawn the attention of one of the most formidable activist investor groups in the industry: Doma Perpetual Capital Management. With a 5.7% stake in Pacira—equivalent to 2.7 million shares—Doma Perpetual, alongside the John Templeton Foundation and Pedro Escudero, has signaled a clear intent to influence the company's governance and strategic direction. The question now is whether this investment will catalyze meaningful change or align with Pacira's existing roadmap.

Strategic Significance of the Investment

Doma Perpetual's stake in Pacira is no small feat. The group spent over $67.8 million to accumulate its position, with the John Templeton Foundation's recent purchases in August 2025—acquiring 735,549 shares at prices ranging from $21.78 to $22.77—highlighting a coordinated and aggressive accumulation strategy. This level of capital deployment suggests a long-term commitment to shaping Pacira's future. The filing explicitly states the intent to “influence the Issuer,” a phrase that, while non-committal, leaves the door open for governance interventions if performance metrics fall short.

For context, Pacira's recent financials are robust. In Q2 2025, the company reported $181.1 million in revenue, driven by its flagship product EXPAREL and the recent expansion of ZILRETTA through a co-promotion deal with Johnson & Johnson. Its $300 million revolving credit facility and extended patent protections (through 2044) provide a strong foundation for growth. Yet, despite these positives, Doma Perpetual's stake—now the largest in Pacira's history—signals a belief that the company's current trajectory may not fully unlock shareholder value.

Governance Dynamics and Shareholder Activism

Pacira's governance structure has historically emphasized transparency and long-term value creation. CEO Frank Lee, a seasoned biopharma executive, has overseen a strategic pivot toward innovation, including the Phase 2 ASCEND trial for PCRX-201 and a focus on manufacturing efficiency. However, Doma Perpetual's past activism—most notably its 2024 proxy contest—reveals a different narrative. At that time, the group criticized Pacira's board for a decade of underperformance, arguing that the stock had lost 76% of its value since 2015 while the S&P 500 gained 167%.

The current 5.7% stake, however, appears more measured. Doma Perpetual has not yet pushed for a board overhaul or hostile takeovers, instead nominating three director candidates—Joseph Kromholz, Philip Pucciarelli, and Eric de Armas—to bring expertise in IP law, healthcare finance, and capital allocation. These nominees could strengthen Pacira's governance if their focus aligns with the company's 5x30 growth strategy, which aims to treat 3 million patients annually by 2030. Yet, their presence also introduces a risk of friction, particularly if Doma Perpetual's emphasis on aggressive buybacks or capital return strategies clashes with Pacira's R&D-driven approach.

Alignment or Disruption?

The key to understanding Doma Perpetual's influence lies in its stated flexibility. While the group has not outlined specific plans, it reserves the right to pursue mergers, management changes, or operational restructuring if Pacira's performance “underperforms.” This conditional stance suggests a pragmatic approach: Doma Perpetual is not seeking to destabilize Pacira but to act as a check on its management.

Pacira's recent actions—such as its $300 million share repurchase program and $28.3 million legal settlement—demonstrate a willingness to return capital to shareholders. These moves may satisfy Doma Perpetual's short-term demands while preserving room for innovation. However, the group's focus on IP battles and risk mitigation could pressure Pacira to prioritize short-term stability over long-term R&D bets, particularly in the context of its gene therapy pipeline for osteoarthritis.

Investment Implications

For investors, Doma Perpetual's stake represents both an opportunity and a risk. On one hand, the group's financial muscle and governance expertise could enhance Pacira's accountability and strategic clarity. On the other, its conditional activism introduces uncertainty, especially if the company's stock stumbles. The recent proxy contest and board nomination process will be critical litmus tests for Pacira's ability to balance activist demands with its long-term vision.

Conclusion

Doma Perpetual's 5.7% stake in Pacira BioSciences is a strategic bet on the company's potential, not a death knell for its current leadership. While the group's influence could drive governance improvements and capital discipline, its conditional activism means the outcome hinges on Pacira's ability to execute its 5x30 plan. For now, the market should watch closely as the proxy contest unfolds, but the company's strong financials and patent portfolio suggest it has the tools to navigate this activist challenge without sacrificing its innovation-driven trajectory. Investors with a long-term horizon may find Pacira's current valuation—and its alignment with Doma Perpetual's cautious optimism—compelling, provided the company can maintain its focus on both growth and governance.