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What changed in Pacira BioSciences, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Pacira BioSciences, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+495 added−641 removedSource: 10-K (2024-02-29) vs 10-K (2023-02-28)

Top changes in Pacira BioSciences, Inc.'s 2023 10-K

495 paragraphs added · 641 removed · 367 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

169 edited+57 added−68 removed214 unchanged
Biggest changeUnless terminated earlier pursuant to its terms, the license agreement is effective until July 2033, after which Aratana has the option to extend the agreement for an additional five-year term, subject to certain requirements. Eurofarma Laboratories S.A. In June 2021, we entered into a distribution agreement with Eurofarma for the development and commercialization of EXPAREL in Latin America.
Biggest changeEither party has the right to terminate the license agreement in connection with certain Pacira BioSciences, Inc. | 2023 Form 10-K | Page 16 Table of Content s events and unless terminated earlier pursuant to its terms, the license agreement is effective until July 2033, after which Aratana has the option to extend the agreement for an additional five-year term, subject to certain requirements.
Trademarks and Service Marks Pacira ® , EXPAREL ® , ZILRETTA ® , iovera° ® , the Pacira logo and other trademarks or service marks of Pacira appearing in this Annual Report are the property of Pacira, and when first used in each part of this report, include the ® symbol.
Trademarks and Service Marks Pacira ® , EXPAREL ® , ZILRETTA ® , iovera° ® , the Pacira logo and other trademarks or service marks of Pacira appearing in this Annual Report are the property of Pacira, and when first used in each part of this Annual Report, include the ® symbol.
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.
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 as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in children aged six years or older.
Specifically, the NOPAIN Act covers reimbursement for (i) all non-opioid medications indicated to reduce postoperative pain or produce postsurgical regional analgesia without acting upon the body’s opioid receptors; and (ii) all devices used to deliver a therapy or reduce postoperative pain or produce postsurgical or regional analgesia.
Specifically, the NOPAIN Act covers reimbursement for (i) all non-opioid medications indicated to reduce postoperative pain or produce postsurgical regional analgesia without acting upon the body’s opioid receptors; and (ii) all devices used to deliver a therapy, reduce postoperative pain or produce postsurgical or regional analgesia.
We are deeply invested in the welfare of our patients and employees, the environment and the communities where we live and work. We conduct our operations and manage our product and pipeline programs in a responsible manner and strive to comply with applicable laws, rules and regulations.
We are deeply invested in the welfare of our patients, employees, the environment and the communities where we live and work. We conduct our operations and manage our product and pipeline programs in a responsible manner and strive to comply with applicable laws, rules and regulations.
In our Phase 3 trial as an interscalene brachial plexus nerve block for upper extremity surgeries, EXPAREL: • decreased total opioid consumption by 78% (p • reduced pain scores by 46% versus placebo (p • allowed 13% of patients who received EXPAREL to remain opioid-free for 48 hours after surgery (p In our Phase 3 trial as a femoral nerve block in the adductor canal in patients undergoing total knee arthroplasty, or TKA, EXPAREL: • achieved the primary endpoint by significantly reducing cumulative pain scores from zero to 96 hours after surgery compared with bupivacaine HCl (p • achieved its secondary endpoint with a statistically significant reduction in postsurgical opioid consumption through 96 hours (p In our Phase 3 trial as a sciatic nerve block in the popliteal fossa in patients undergoing bunionectomy, EXPAREL: • achieved the primary endpoint by significantly reducing cumulative pain scores from zero to 96 hours after surgery compared with bupivacaine HCl (p • achieved its secondary endpoints with statistically significant reductions in postsurgical opioid consumption through 96 hours (p EXPAREL can improve patient satisfaction and outcomes.
In our Phase 3 trial as an interscalene brachial plexus nerve block for upper extremity surgeries, EXPAREL: • decreased total opioid consumption by 78% (p • reduced pain scores by 46% versus placebo (p • allowed 13% of patients who received EXPAREL to remain opioid-free for 48 hours after surgery (p In our Phase 3 trial as an adductor canal block in patients undergoing total knee arthroplasty, or TKA, EXPAREL: • achieved the primary endpoint by significantly reducing cumulative pain scores from zero to 96 hours after surgery compared with bupivacaine HCl (p • achieved its secondary endpoint with a statistically significant reduction in postsurgical opioid consumption through 96 hours (p In our Phase 3 trial as a sciatic nerve block in the popliteal fossa in patients undergoing bunionectomy, EXPAREL: • achieved the primary endpoint by significantly reducing cumulative pain scores from zero to 96 hours after surgery compared with bupivacaine HCl (p • achieved its secondary endpoints with statistically significant reductions in postsurgical opioid consumption through 96 hours (p EXPAREL can improve patient satisfaction and outcomes.
We have three commercialized non-opioid treatments: EXPAREL ® (bupivacaine liposome injectable suspension), a long-acting, local analgesic currently approved for postsurgical pain management; ZILRETTA ® (triamcinolone acetonide extended-release injectable suspension), an extended-release, intra-articular, or IA (meaning in the joint), corticosteroid injection indicated for the management of OA knee pain; and iovera° ® , a novel, handheld device for delivering immediate, long-acting, drug-free pain control using precise, controlled doses of cold temperature to a targeted nerve.
We have three commercialized non-opioid treatments: EXPAREL ® (bupivacaine liposome injectable suspension), a long-acting, local analgesic currently approved for postsurgical pain management; ZILRETTA ® (triamcinolone acetonide extended-release injectable suspension), an extended-release, intra-articular, or IA (meaning in the joint), corticosteroid injection indicated for the management of osteoarthritis, or OA, knee pain; and iovera° ® , a novel, handheld device for delivering immediate, long-acting, drug-free pain control using precise, controlled doses of cold temperature to a targeted nerve.
Trade Secrets and Proprietary Information Trade secrets play an important role in protecting our pMVL-based products (including EXPAREL) and pipeline, ZILRETTA and iovera° and provide protection beyond patents and regulatory exclusivity. The scale-up and commercial manufacture of pMVL-based and iovera° products involve processes, custom equipment and in-process and release analytical techniques that we believe are unique to us.
Trade Secrets and Proprietary Information Trade secrets play an important role in protecting our pMVL-based products (including EXPAREL) and pipeline, ZILRETTA and iovera° and provide protection beyond patents and regulatory exclusivity. The scale-up and commercial manufacture of each of our products involve processes, custom equipment and in-process and release analytical techniques that we believe are unique to us.
There are eight new utility and design patent families covering now-commercial and developing next-generation technology, which are issued or pending in the North American, European, Japanese, Chinese and Brazilian markets, which could potentially prevent others from using this now-commercial next-generation cryogenic device until at least 2040 for utility patents and 2046 for design patents.
There are eight utility and design patent families covering now-commercial and developing next-generation technology, which are issued or pending in the North American, European, Japanese, Chinese and Brazilian markets, which could potentially prevent others from using this now-commercial next-generation cryogenic device until at least 2040 for utility patents and 2046 for design patents.
Patents and Patent Applications for our pMVL and pMVL Products In June 2021, the United States Patent and Trademark Office, or USPTO, issued U.S. Patent No. 11,033,495 related to EXPAREL. The patent, “ Manufacturing of Bupivacaine Multivesicular Liposomes ,” claims composition of EXPAREL prepared by the improved manufacturing process. In November 2021, the USPTO issued U.S.
Patents and Patent Applications for our pMVL and pMVL Products In June 2021, the United States Patent and Trademark Office, or USPTO, issued U.S. Patent No. 11,033,495 related to EXPAREL. The patent, “ Manufacturing of Bupivacaine Multivesicular Liposomes ,” claims composition of EXPAREL prepared by an improved manufacturing process. In November 2021, the USPTO issued U.S.
We have also in-licensed intellectual property, owned by the Southwest Research Institute, or SwRI, which gives us exclusive rights to SwRI patents covering our proprietary microsphere manufacturing technology used in the production of ZILRETTA. These patents are scheduled to expire in 2025.
We have also in-licensed intellectual property, owned by the Southwest Research Institute, or SwRI, which gives us exclusive rights to SwRI patents covering our proprietary microsphere manufacturing technology used in the production of ZILRETTA. These patents are scheduled to expire in September 2025.
In April 2022, the USPTO issued U.S. Patent Nos. 11,304,904 and 11,311,486, claiming composition of EXPAREL prepared by the improved manufacturing process and EXPAREL composition, respectively. In June 2022, the USPTO issued U.S. Patent No. 11,357,727, claiming composition of EXPAREL prepared by the improved manufacturing process. In August 2022, the USPTO issued U.S. Patent No. 11,426,348, claiming EXPAREL batch compositions.
In April 2022, the USPTO issued U.S. Patent Nos. 11,304,904 and 11,311,486, claiming composition of EXPAREL prepared by an improved manufacturing process and EXPAREL composition, respectively. In June 2022, the USPTO issued U.S. Patent No. 11,357,727, claiming composition of EXPAREL prepared by an improved manufacturing process. In August 2022, the USPTO issued U.S. Patent No. 11,426,348, claiming EXPAREL batch compositions.
The number of patients taking opioids six weeks after TKA in the control group was three times the number of patients taking opioids in the cryoanalgesia group (14 percent vs. 44 percent, p • Patients in the iovera° group demonstrated a statistically significant reduction in pain scores from their baseline pain scores at 72 hours (p We believe these data validate iovera° as a clinically meaningful non-opioid alternative for patients 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; • 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 ultrasound guidance or an anatomical landmark.
The number of patients taking opioids six weeks after TKA in the control group was three times the number of patients taking opioids in the cryoanalgesia group (14 percent vs. 44 percent, p • Patients in the iovera° group demonstrated a statistically significant reduction in pain scores from their baseline pain scores at 72 hours (p We believe these data validate iovera° as a clinically meaningful non-opioid alternative for patients 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 ultrasound guidance or an anatomical landmark.
We launched EXPAREL in the United Kingdom, or U.K., and select European Union, or E.U., countries in November 2021. Since its initial approval in 2011, more than 12 million patients have been treated with EXPAREL. EXPAREL consists of bupivacaine, an amide-type local anesthetic, encapsulated in our pMVL drug delivery technology, which delivers bupivacaine over time for extended analgesia.
We launched EXPAREL in the United Kingdom, or U.K., and select European Union, or E.U., countries in November 2021. Since its initial approval in 2011, more than 14 million patients have been treated with EXPAREL. EXPAREL consists of bupivacaine, an amide-type local anesthetic, encapsulated in our pMVL drug delivery technology, which delivers bupivacaine over time for extended analgesia.
We funded the cash portion of the purchase price with cash on hand, and the consideration is subject to adjustments based on the estimated fair value of the potential milestone payments. As of December 31, 2022, these contingent value rights could aggregate up to a total of $372.3 million if certain regulatory and commercial milestones are met.
We funded the cash portion of the purchase price with cash on hand, and the consideration is subject to adjustments based on the estimated fair value of the potential milestone payments. As of December 31, 2023, these contingent value rights could aggregate up to a total of $372.3 million if certain regulatory and commercial milestones are met.
Pacira Training Facilities We maintain and operate two training facilities—one in Tampa, Florida and one in Houston, Texas. These sites were constructed with a singular goal in mind: to advance education on best practice techniques to effectively manage acute pain while reducing or eliminating the need for opioids.
Pacira Training Facilities We maintain and operate two Pacira Innovation and Training, or PIT, facilities—one in Tampa, Florida and one in Houston, Texas. These sites were constructed with a singular goal in mind: to advance education on best practice techniques to effectively manage acute pain while reducing or eliminating the need for opioids.
These wholesalers process orders for EXPAREL under a drop-ship program. EXPAREL is delivered directly to end-users without the wholesalers ever taking physical possession of the product. None of our customers of ZILRETTA or iovera° accounted for 10 percent or more of our total revenue for the year ended December 31, 2022.
These wholesalers process orders for EXPAREL under a drop-ship program. EXPAREL is delivered directly to end-users without the wholesalers ever taking physical possession of the product. None of our customers of ZILRETTA or iovera° accounted for 10 percent or more of our total revenue for the year ended December 31, 2023.
Further, we have entered the national phase in Brazil, China, Europe, Japan and the U.S. based on a PCT application covering composition of matter and effective dosages of PCRX-201 in the treatment of OA in humans, which, if granted, are expected to provide protection until 2040.
Further, we have entered the national phase in Brazil, China, Europe, Hong Kong, Japan and the U.S. based on a PCT application covering composition of matter and effective dosages of PCRX-201 in the treatment of OA in humans, which, if granted, are expected to provide protection until 2040.
We launched EXPAREL in the U.K. and targeted E.U. countries in the fourth quarter of 2021. In Latin America, we have a distribution agreement with Eurofarma Laboratories S.A., or Eurofarma, for the development and commercialization of EXPAREL. Eurofarma has the exclusive right to market and distribute EXPAREL in 19 countries in Latin America, including Argentina, Brazil, Colombia and Mexico.
We launched EXPAREL in the U.K. and targeted E.U. countries in 2021. In Latin America, we have a distribution agreement with Eurofarma Laboratories S.A., or Eurofarma, for the development and commercialization of EXPAREL. Eurofarma has the exclusive right to market and distribute EXPAREL in 19 countries in Latin America, including Argentina, Brazil, Colombia and Mexico.
The initial term of the EXPAREL Manufacturing and Supply Agreement is 10 years from the date of FDA approval of the first manufacturing suite, which was received in May 2018. We pay fees to Thermo Fisher for their operation of the manufacturing suites and the amount of EXPAREL produced by Thermo Fisher.
The initial term of the EXPAREL Manufacturing and Supply Agreement is 10 years from the date of FDA approval of the first dedicated manufacturing suite, which was received in May 2018. We pay fees to Thermo Fisher for their operation of the manufacturing suite and the amount of EXPAREL produced by Thermo Fisher.
Any agency or judicial enforcement action could have a material adverse effect on the Company. Regulatory Environment Pharmaceuticals In the U.S., generally the FDA must approve any new drug, including a new use of a previously approved drug, before marketing of the drug occurs in the U.S.
Any agency or judicial enforcement action could have a material adverse effect on us. Regulatory Environment Pharmaceuticals In the U.S., generally the FDA must approve any new drug, including a new use of a previously approved drug, before marketing of the drug occurs in the U.S.
In addition, the Baylor patents related to PCRX-201 are issued in Europe, with an expiry date in 2032, and in Australia, Canada, China, India, Japan and Eurasia with expiry dates in 2033. We are continuing to prosecute one U.S. Baylor patent application related to PCRX-201.
In addition, the BCM patents related to PCRX-201 are issued in Europe, with an expiry date in 2032, and in Australia, Canada, China, India, Japan and Eurasia with expiry dates in 2033. We are continuing to prosecute one U.S. BCM patent application related to PCRX-201.
This process generally involves: Pacira BioSciences, Inc. | 2022 Form 10-K | Page 23 Tab le of Contents • completion of preclinical laboratory and animal testing and formulation studies in compliance with the FDA’s Good Laboratory Practice regulations; • submission to the FDA of an investigational new drug, or IND, application for human clinical testing, which must become effective before human clinical trials may begin for unapproved use in the U.S.; • approval by an independent Institutional Review Board, or IRB, at each clinical trial site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with the FDA’s Good Clinical Practices, or GCP, to establish the safety and efficacy of the proposed drug product for each intended use; • completion of process validation, quality product release and stability; • submission of a New Drug Application, or NDA, to the FDA; • satisfactory completion of an FDA pre-approval inspection of the product’s manufacturing facility or facilities to assess compliance with CGMP requirements and to ensure that the facilities, methods and controls are adequate to preserve the drug’s identity, quality and purity; • satisfactory completion of an FDA advisory committee review, if applicable; and • review and approval by the FDA of the NDA.
This process generally involves: • completion of preclinical laboratory and animal testing and formulation studies in compliance with the FDA’s Good Laboratory Practice regulations; • submission to the FDA of an investigational new drug, or IND, application for human clinical testing, which must become effective before human clinical trials may begin for unapproved use in the U.S.; • approval by an independent Institutional Review Board, or IRB, at each clinical trial site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with the FDA’s Good Clinical Practices, or GCP, to establish the safety and efficacy of the proposed drug product for each intended use; • completion of process validation, quality product release and stability; • submission of a New Drug Application, or NDA, to the FDA; • satisfactory completion of an FDA pre-approval inspection of the product’s manufacturing facility or facilities to assess compliance with CGMP requirements and to ensure that the facilities, methods and controls are adequate to preserve the drug’s identity, quality and purity; Pacira BioSciences, Inc. | 2023 Form 10-K | Page 23 Table of Content s • satisfactory completion of an FDA advisory committee review, if applicable; and • review and approval by the FDA of the NDA.
Co-Production Facilities Thermo Fisher Scientific Pharma Services In April 2014, we and Thermo Fisher entered into a Strategic Co-Production Agreement, Technical Transfer and Service Agreement and Manufacturing and Supply Agreement (the “EXPAREL Manufacturing and Supply Agreement”) to collaborate in the manufacture of EXPAREL.
Co-Production Facilities Thermo Fisher Scientific Pharma Services In April 2014, we entered into a Strategic Co-Production Agreement, Technical Transfer and Service Agreement and Manufacturing and Supply Agreement (the “EXPAREL Manufacturing and Supply Agreement”) with Thermo Fisher Scientific Pharma Services, or Thermo Fisher, to collaborate in the manufacture of EXPAREL.
As of December 31, 2022, we have four granted patents in China, one granted patent in Europe, one granted patent in Japan and one granted patent in Israel, protecting various aspects of the alternative process, including the methods of using the apparatus and the apparatus itself.
As of December 31, 2023, we have four granted patents in China, one granted patent in Europe, one granted patent in Japan and one granted patent in Israel, protecting various aspects of the alternative process, including the methods of using the apparatus and the apparatus itself.
As of December 31, 2022, there are over 13 families of patents and patent applications relating to various aspects of the pMVL drug delivery technology and 29 families of patents and patent applications relating to various aspects of the technology used by iovera°.
As of December 31, 2023, there are over 13 families of patents and patent applications relating to various aspects of the pMVL drug delivery technology and 29 families of patents and patent applications relating to various aspects of the technology used by iovera°.
Currently EXPAREL also competes with elastomeric pumps and catheter devices intended to provide bupivacaine over several days and with off-label combinations of other approved analgesics, called “cocktails”, that are combined by compound pharmacies in an attempt to extend the duration of pain control.
Currently EXPAREL also competes with elastomeric pumps and catheter devices intended to provide bupivacaine over several days and with off-label combinations of other approved analgesics, called “cocktails,” that are combined by compound pharmacies in an attempt to extend the duration of pain control.
Benefits that protect financial wellbeing are also provided, including but not limited to: a paid parental leave benefit, insurance to help protect assets during times of short- and long-term disability, life insurance and accidental death and dismemberment insurance, financial education seminars on savings, debt and other financial topics, access to discounts on a variety of products and services and incentives to engage in a new or maintain a wellbeing activity.
Benefits that protect financial wellbeing are also provided, including but not limited to: a paid parental leave benefit, insurance to help protect assets during times of short- and long-term disability, life insurance and accidental death and dismemberment insurance, critical illness and accident insurance, financial education seminars on savings, debt and other financial topics, access to financial specialists, access to discounts on a variety of products and services and incentives to engage in a new or maintain a wellbeing activity.
We encourage our employees to give back in their communities and offer one paid day off per year to volunteer. We regularly benchmark our rewards programs, adjusting as needed, to ensure our total rewards are competitive. We are committed to paying all our employees a fair and living wage.
We encourage our employees to give back in their communities and offer one paid day off per year to volunteer, through our Community Day benefit. We regularly benchmark our rewards programs, adjusting as needed, to ensure our total rewards are competitive. We are committed to paying all our employees a fair and living wage.
In addition, we maintain a recognition program based on our core values, known as Celebrate , through which we recognize each other’s commitment to making a meaningful difference for our patients and communities and create a shared culture where everyone is responsible for living up to and sustaining our core values.
Furthermore, we maintain a recognition program based on our core values, known as Celebrate , through which we recognize each other’s commitment to making a meaningful difference for our patients and communities and create a shared culture where everyone is responsible for living up to and sustaining our core values.
Pacira BioSciences, Inc. | 2022 Form 10-K | Page 14 Tab le of Contents Our field team, consisting of sales representatives, account managers, scientific and medical affairs personnel and reimbursement and market access professionals, executes on a full range of activities to broaden the use of our non-opioid products for pain management, including: • providing publications and abstracts showing clinical efficacy and safety, health outcomes and review articles; • working in tandem with hospital staff, such as anesthesiologists, surgeons, heads of quality, pharmacists, executives and registered nurses, to provide access and resources for drug utilization or medication use evaluations and health outcomes studies, which provide retrospective and prospective analyses for our hospital customers using their own hospital data to demonstrate the true cost of opioid-based postsurgical pain control; • working with KOLs and advisory boards to address topics of best practice techniques as well as guidelines and protocols for the use of our products, meeting the educational and training needs of our physician, surgeon, anesthesiologist, pharmacist and registered nurse customers; • undertaking education initiatives such as center of excellence programs; preceptorship programs; opioid-sparing and ERAS pain protocols and predictive models for enhanced patient care; interactive discussion forums; patient education platforms leveraging public relations, advocacy partnerships and public affairs efforts where appropriate; web-based training and virtual launch programs; • collaborating with healthcare providers towards improving the knowledge and management of pain in surgical and OA patients with a focus on opioid risk and non-opioid alternatives and engaging our field-based medical teams in system-wide partnerships to address the national opioid epidemic, with a goal of studying alternative postsurgical pain management options that focus on optimization and opioid alternative strategies; and • facilitating reimbursement and the shift of procedures to hospital outpatient and ambulatory surgical center, or ASC, sites of care.
Our customer-facing team, consisting of sales representatives, account managers, scientific and medical affairs personnel and reimbursement and market access professionals, executes on a full range of activities to broaden the use of our non-opioid products for pain management, including: • providing publications and abstracts showing clinical efficacy and safety, health outcomes and review articles; • working in tandem with hospital staff, such as anesthesiologists, surgeons, heads of quality, pharmacists, executives and registered nurses, to provide access and resources for drug utilization or medication use evaluations and health outcomes studies, which provide retrospective and prospective analyses for our hospital customers using their own hospital data to demonstrate the true cost of opioid-based postsurgical pain control; • working with KOLs and advisory boards to address topics of best practice techniques as well as guidelines and protocols for the use of our products, meeting the educational and training needs of our physician, surgeon, anesthesiologist, pharmacist and registered nurse customers; • undertaking education initiatives such as center of excellence programs; preceptorship programs; opioid-sparing and ERAS pain protocols and predictive models for enhanced patient care; interactive discussion forums; patient education platforms leveraging public relations, advocacy partnerships and public affairs efforts where appropriate; web-based training and virtual launch programs; • collaborating with healthcare providers towards improving the knowledge and management of pain in surgical and OA patients with a focus on opioid risk and non-opioid alternatives and engaging our field-based medical teams in system-wide partnerships to address the national opioid epidemic, with a goal of studying alternative postsurgical pain management options that focus on optimization and opioid alternative strategies; and • facilitating reimbursement and the shift of procedures to hospital outpatient and ambulatory surgical center, or ASC, sites of care.
We believe EXPAREL: • provides effective pain control without the need for expensive and difficult-to-use delivery technologies that extend the duration of action for bupivacaine, such as elastomeric pumps, or opioids administered through patient-controlled analgesia, or PCA, when used as part of a multimodal postsurgical pain regimen; • reduces the need for patients to be constrained by elastomeric pumps and PCA systems, which are barriers to earlier ambulation and may introduce catheter-related issues, including infection; and • promotes maintenance of early postsurgical pain management, which may reduce the time spent in the intensive care unit.
We believe EXPAREL: • provides effective pain control without the need for expensive and difficult-to-use delivery technologies that extend the duration of action for bupivacaine, such as elastomeric pumps, or opioids administered through patient-controlled analgesia, or PCA, when used as part of a multimodal postsurgical pain regimen; • reduces the need for patients to be constrained by elastomeric pumps and PCA systems, which are barriers to earlier ambulation and may introduce catheter-related issues, including infection; and • promotes maintenance of early postsurgical pain management, which may reduce the time to discharge.
We are eligible to receive up to $40.0 million upon the achievement of commercial milestones. Aratana is required to pay us a tiered double-digit royalty on certain net sales made in the U.S.
NOCITA is a registered trademark of Aratana. We are eligible to receive up to $40.0 million upon the achievement of commercial milestones. Aratana is required to pay us a tiered double-digit royalty on certain net sales made in the U.S.
We may terminate this agreement upon one month’s notice if a regulatory authority causes the withdrawal of ZILRETTA from the U.S. or any other market that represents 80 percent of our overall sales, or at any time for convenience by providing 24 months’ notice.
We may terminate this agreement upon one month’s notice if a regulatory authority causes the withdrawal of EXPAREL from the U.S. or any other market that represents 80 percent of our overall sales, or at any time for convenience by providing 18 months’ notice.
Our pilot plant suite for early stage clinical product production is located in this building and there is additional space for future expansion opportunities. We also have an approximately 21,000 square foot warehouse that serves as the main CGMP warehouse for our Science Center Campus operations, primarily being used for the storage of production materials.
Our pilot plant suite for early-stage clinical product production is located in this building and there is additional space for future expansion opportunities. We also occupy a 21,000 square-foot warehouse that serves as the main CGMP warehouse for our Science Center Campus operations, primarily being used for the storage of production materials.
ZILRETTA Immediate-release steroids and HA injections are currently the two marketed classes of IA products that compete directly with ZILRETTA. Also available are stem cell and PRP injections, but these require on-site preparation from tissue or blood taken from the patient and have generated questionable efficacy in controlled clinical trials.
ZILRETTA Immediate-release steroids and hyaluronic acid, or HA, injections are currently the two marketed classes of IA products that compete directly with ZILRETTA. Also available are stem cell and platelet rich plasma, or PRP, injections, but these require on-site preparation from tissue or blood taken from the patient and have generated questionable efficacy in controlled clinical trials.
Prior to the Flexion Acquisition, in July 2015, Flexion and Thermo Fisher entered into a Manufacturing and Supply Agreement (the “ZILRETTA Manufacturing and Supply Agreement”) and a Technical Transfer and Service Agreement related to the manufacture of ZILRETTA at the same Thermo Fisher site in Swindon, England where our EXPAREL suites are located.
Prior to the Flexion Acquisition, in July 2015, Flexion and Thermo Fisher entered into a Manufacturing and Supply Agreement (the “ZILRETTA Manufacturing and Supply Agreement”) and a Technical Transfer and Service Agreement related to the manufacture of ZILRETTA at the same Thermo Fisher site in Swindon, England where our EXPAREL suite is located.
Pacira BioSciences, Inc. | 2022 Form 10-K | Page 6 Tab le of Contents Product Portfolio and Product Candidate Pipeline Our current product portfolio and product candidate pipeline, along with anticipated milestones over the next 12 to 18 months, are summarized in the table below: Pacira BioSciences, Inc. | 2022 Form 10-K | Page 7 Tab le of Contents Our Commercial Products EXPAREL (bupivacaine liposome injectable suspension) EXPAREL was approved by the FDA in October 2011 and was commercially launched in the U.S. in April 2012.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 6 Table of Content s Product Portfolio and Product Candidate Pipeline Our current product portfolio and product candidate pipeline, along with anticipated milestones over the next 12 to 18 months, are summarized in the table below: Pacira BioSciences, Inc. | 2023 Form 10-K | Page 7 Table of Content s Our Commercial Products EXPAREL (bupivacaine liposome injectable suspension) EXPAREL was approved by the FDA in October 2011 and was commercially launched in the U.S. in April 2012.
Like other regional field blocks, our anesthesiologist customers see the strong advantages of using brachial plexus blocks as a vehicle for shifting procedures to the outpatient setting by replacing antiquated pumps and catheters, which often become dislodged and prevent a procedure from taking place in a 23-hour site of care.
Like other regional field blocks, anesthesiologists see the strong advantages of using interscalene brachial plexus blocks as a vehicle for shifting procedures to the outpatient setting by replacing antiquated pumps and catheters, which often become dislodged and prevent a procedure from taking place in a 23-hour site of care.
Under the Carlisle Agreement, we pay fees based on the amount of iovera° Smart Tips delivered by Carlisle. Since April 2022, all iovera° Smart Tips are now produced by Carlisle. The Carlisle Agreement may be terminated by either party upon one years’ written notice without cause.
Under the Carlisle Agreement, we pay fees based on the amount of iovera° Smart Tips delivered by Carlisle. Since April 2022, all iovera° Smart Tips have been produced by Carlisle. The Carlisle Agreement may be terminated by either party upon one years’ written notice without cause.
External Innovation In parallel to our internal clinical programs, our business development team is pursuing innovative acquisition targets that are complementary to EXPAREL, ZILRETTA and iovera° and are of great interest to the surgical and anesthesia audiences we are already calling on today.
External Innovation In parallel to our internal clinical programs, we are pursuing innovative acquisition targets that are complementary to EXPAREL, ZILRETTA and iovera° and are of great interest to the surgical and anesthesia audiences we are already calling on today.
Patent Nos. 11,185,506 and 11,179,336, claiming the improved EXPAREL manufacturing process and EXPAREL composition, respectively. Six U.S. patents relating to product and product-by-process in connection with the improved manufacturing process for EXPAREL were issued between March and September 2022, providing additional patent protection through 2041. In March 2022, the USPTO issued U.S. Patent No. 11,278,494, claiming EXPAREL composition.
Patent Nos. 11,185,506 and 11,179,336, claiming an improved EXPAREL manufacturing process and EXPAREL composition, respectively. Eight U.S. patents relating to product and product-by-process in connection with an improved manufacturing process for EXPAREL were issued between March 2022 and November 2023, providing additional patent protection through 2041. In March 2022, the USPTO issued U.S. Patent No. 11,278,494, claiming EXPAREL composition.
If the product is approved by foreign regulatory agencies for sale outside of the U.S., Aratana will be required to pay us a tiered double-digit royalty on such net sales.
If the product is approved by foreign regulatory agencies for sale outside of the U.S., Aratana will be required to pay us a tiered double-digit royalty on such net sales. Royalty rates will be reduced under certain circumstances.
We expect the expanding use of EXPAREL field blocks as the foundation of enhanced recovery protocols across various abdominal and colorectal procedures to continue to be a significant growth driver. Women’s Health There is a significant and growing demand among women for managing pain with non-opioid options.
We expect EXPAREL field blocks will continue to be the foundation of enhanced recovery protocols across various abdominal and colorectal procedures. Women’s Health There is a significant and growing demand among women for managing pain with non-opioid options.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters or holds on post-approval clinical trials; Pacira BioSciences, Inc. | 2022 Form 10-K | Page 27 Tab le of Contents • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; or • injunctions or the imposition of civil or criminal penalties.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters or holds on post-approval clinical trials; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; or • injunctions or the imposition of civil or criminal penalties.
The total consideration included an initial cash payment of $120.0 million, reduced by $1.0 million for post-closing purchase price adjustments and indemnification obligations, plus contingent milestone payments up to an aggregate of $100.0 million of which $43.0 million is available at December 31, 2022. The expiration date for the achievement of the milestones is December 31, 2023.
The total consideration included an initial cash payment of $120.0 million, reduced by $1.0 million for post-closing purchase price adjustments and indemnification obligations, plus contingent milestone payments up to an aggregate of $100.0 million. The expiration date for the achievement of the milestones was December 31, 2023.
Pacira BioSciences, Inc. | 2022 Form 10-K | Page 32 Tab le of Contents Human Capital Pacira Core Values We are a team of dedicated and highly talented professionals focused on driving improved patient outcomes with opioid-reducing strategies. We are an organization built on high ethical standards, an unwavering commitment to patients and transparent communications.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 32 Table of Content s Human Capital Pacira Core Values We are a team of dedicated and highly talented professionals focused on driving improved patient outcomes with opioid-reducing strategies. We are an organization built on high ethical standards, an unwavering commitment to patients and transparent communications.
In 2021 and 2022, we provided support for charitable medical missions in Honduras, Ghana, Zambia, Guatemala, Ecuador, Mexico and India by donating EXPAREL to help support surgeries for patients in need and have also supported the Louisiana State University Opioid Minimization Initiative as well as made a commitment to donate EXPAREL to not-for-profit children’s hospitals each year over the next three years.
Over the past three years we provided support for charitable medical missions in Honduras, Ghana, Zambia, Guatemala, Ecuador, Mexico, India, Guyana, Palau and the Dominican Republic by donating EXPAREL to help support surgeries for patients in need; have supported the Louisiana State University Opioid Minimization Initiative as well as made a three-year commitment beginning in 2022 to donate EXPAREL to not-for-profit children’s hospitals each year.
We expect to initiate a Phase 1 pharmacokinetic study after which we would initiate a registration study to support expansion of the EXPAREL single-dose infiltration label to include patients under six years of age. If successful, we expect this study will support expansion of the EXPAREL labels in the U.S. and E.U.
We are launching a Phase 1 pharmacokinetic study after which we would launch a registration study to support expansion of the EXPAREL single-dose infiltration label to include patients under six years of age. If successful, we expect this study, followed by a Phase 3 study, will support expansion of the EXPAREL labels in the U.S. and E.U.
ZILRETTA is the first and only extended-release, intra-articular therapy for patients with OA knee pain. ZILRETTA uses a proprietary extended-release microsphere technology to slowly and continuously releases triamcinolone acetonide, or TA, a commonly administered, immediate-release corticosteroid into the knee for approximately three months to provide significant pain relief for 12 weeks, with some people experiencing pain relief through 16 weeks.
ZILRETTA uses a proprietary extended-release microsphere technology to slowly and continuously releases triamcinolone acetonide, or TA, a commonly administered, immediate-release corticosteroid into the knee for approximately three months to provide significant pain relief for 12 weeks, with some people experiencing pain relief through 16 weeks.
There is one family of patents and patent applications relating to various aspects of the technology used by ZILRETTA. Patents have been issued in numerous countries, with an emphasis on the North American, European and Japanese markets.
There are two families of patents and patent applications relating to various aspects of the technology used by ZILRETTA. Patents have been issued in numerous countries, with an emphasis on the North American, European and Japanese markets.
Transversus abdominis plane, or TAP, and erector spinae plane blocks represent a significant market where EXPAREL is providing long-acting pain control for abdominal and spinal surgeries and supporting the migration of these procedures to the 23-hour setting.
Abdominal and Colorectal A variety of truncal blocks are used in abdominal and colorectal procedures. Transversus abdominis plane, or TAP, and erector spinae plane blocks represent a significant market where EXPAREL is providing long-acting pain control for abdominal and colorectal surgeries and supporting the migration of these procedures to the 23-hour setting.
Phase 1-Ready CX-011, a small molecule modulator of gp130 formulated as an intra-articular injection designed to slow joint degeneration by mediating IL-6 cytokines Knee OA Genascence Corporation Phase 1b-Ready Adeno-associated virus (AAV) based gene therapy engineered to deliver Interleukin-1 Receptor Antagonist (IL-1Ra) to target cells in joint(s) Knee OA GQ Bio Therapeutics GmbH Preclinical Helper-dependent adenovirus (HDAd) based gene therapy engineered to deliver DNA to target cells in joint(s) and intervertebral disc(s) Knee OA and degenerative disc disease (DDD) Spine BioPharma, LLC Phase 3 SB-01, a 7-amino acid chain peptide that binds to and induces down regulation of transforming growth factor, beta 1 (TGFβ1) Degenerative disc disease (DDD) Sales and Marketing We have built our sales and marketing organization to commercialize our products.
Phase 1-Ready CX-011, a small molecule modulator of gp130 formulated as an intra-articular injection designed to slow joint degeneration by mediating IL-6 cytokines Knee OA Genascence Corporation Phase 1b Adeno-associated virus (AAV) based gene therapy engineered to deliver Interleukin-1 Receptor Antagonist (IL-1Ra) to target cells in joint(s) Knee OA GQ Bio Therapeutics GmbH Preclinical High-capacity adenovirus (HCAd) based gene therapy engineered to deliver DNA to target cells in joint(s) and intervertebral disc(s) Knee OA and degenerative disc disease (DDD) Spine BioPharma, LLC Phase 3 SB-01, a 7-amino acid chain peptide that binds to and induces down regulation of transforming growth factor, beta 1 (TGFβ1) Degenerative disc disease (DDD) Pacira BioSciences, Inc. | 2023 Form 10-K | Page 14 Table of Content s Customer-Facing Organization We have built our sales and marketing organization to commercialize our products.
PCRX-201 In December 2017, Flexion acquired the global rights to PCRX-201 from GQ Bio Therapeutics GmbH (formerly named GeneQuine BioTherapeutics GmbH), including a direct exclusive license of certain foundational patents, patent applications, and other proprietary rights owned by the Baylor College of Medicine, or Baylor, that are related to PCRX-201 for human applications.
PCRX-201 In December 2017, Flexion acquired the global rights to PCRX-201 from GQ, including a direct exclusive license of certain foundational patents, patent applications, and other proprietary rights owned by the Baylor College of Medicine, or BCM, that are related to PCRX-201 for human applications.
Initially, the total consideration for the Acquisition was approximately $578.8 million consisting of (i) $448.5 million of cash paid to Flexion shareholders and to settle restricted stock units and certain stock options; (ii) an $85.1 million cash payment of Flexion debt not assumed by us and (iii) $45.2 million of estimated fair value of contingent consideration related to contingent value rights that were issued to Flexion shareholders and certain equity award holders in conjunction with the Flexion Acquisition.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 15 Table of Content s Initially, the total consideration for the Flexion Acquisition was approximately $578.8 million consisting of (i) $448.5 million of cash paid to Flexion shareholders and to settle restricted stock units and certain stock options; (ii) an $85.1 million cash payment of Flexion debt not assumed by us and (iii) $45.2 million of estimated fair value of contingent consideration related to contingent value rights that were issued to Flexion shareholders and certain equity award holders in conjunction with the Flexion Acquisition.
In addition, Eurofarma will be responsible for regulatory filings for EXPAREL in these countries, and recently submitted an application seeking approval in Brazil. We will receive royalties and are also eligible to receive regulatory- and commercial-based milestone payments that are triggered by the achievement of certain events.
In addition, Eurofarma will be responsible for regulatory filings for EXPAREL in these countries. We will receive royalties and are also eligible to receive regulatory- and commercial-based milestone payments that are triggered by the achievement of certain events.
Pacira BioSciences, Inc. | 2022 Form 10-K | Page 33 Tab le of Contents Employee Wellbeing, Health and Safety Pacira is committed to the total wellbeing of our employees and their families. We offer a range of benefits designed to meet individual needs and help employees and their families live healthy lives.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 33 Table of Content s Employee Wellbeing, Health and Safety Pacira is committed to the total wellbeing of our employees and their families. We offer a range of benefits designed to meet individual needs and help employees and their families live healthy lives.
Surgical intervention is typically a last resort for patients suffering from OA of the knee. In one study, the majority of the patients suffering from OA of the knee experienced pain relief up to 150 days after being treated with iovera°.
Some of our strongest data relates directly to the improvement of OA pain of the knee. Surgical intervention is typically a last resort for patients suffering from OA pain of the knee. In one study, the majority of the patients suffering from OA pain of the knee experienced pain relief up to 150 days after being treated with iovera°.
The six core values that underpin everything we do are: • Patients : Their safety and welfare are our top priority at all times • People : Our greatest asset • Passion : We are passionate about what we do • Think : Our thoughts are shared generously • Trust : Building trust is essential • Teamwork : The cornerstone of our business success Corporate Sustainability Report In January 2023, we published our inaugural Corporate Sustainability Report, or CSR, available on our corporate website.
The six core values that underpin everything we do are: • Patients : Their safety and welfare are our top priority at all times • People : Our greatest asset • Passion : We are passionate about what we do • Think : Our thoughts are shared generously • Trust : Building trust is essential • Teamwork : The cornerstone of our business success Corporate Sustainability Report On an annual basis, we publish a Corporate Sustainability Report, or CSR, on our corporate website.
Additionally, as in the U.S., post-approval regulatory requirements, such as those regarding product manufacture, marketing or distribution would apply to any product that is approved in Europe, the U.K., Canada and Latin America, and failure to comply with such obligations could have a material adverse effect on our ability to successfully commercialize any product.
Additionally, as in the U.S., post-approval regulatory requirements, such as those regarding product manufacture, marketing or distribution would apply to any product that is approved in Europe, the U.K., Canada and Latin America, and Pacira BioSciences, Inc. | 2023 Form 10-K | Page 28 Table of Content s failure to comply with such obligations could have a material adverse effect on our ability to successfully commercialize any product.
Studies in an indication after approval are typically referred to as Phase 4 clinical trials. The requirements for drug approval and the clinical trials that approvals are based on are similar in other countries, however each regulatory agency will have differing policies, procedures and processes that we must comply with in each market we wish to sell our products in.
The requirements for drug approval and the clinical trials that approvals are based on are similar in other countries, however each regulatory agency will have differing policies, procedures and processes that we must comply with in each market we wish to sell our products in.
Ketorolac, a non-steroidal anti-inflammatory drug, or NSAID, is also available generically in the U.S. from several manufacturers, and Caldolor (ibuprofen for injection), an NSAID, has been approved by the FDA for pain management and fever in adults.
Ketorolac, an NSAID, is also available generically in the U.S. from several manufacturers, and Caldolor (ibuprofen for injection), an NSAID, has been approved by the FDA for pain management and fever in adults.
We are subject to unannounced inspections by the FDA to determine our compliance with QSRs and other rules and regulations. After a medical device is placed on the market, numerous regulatory requirements apply.
Medical Devices The FDA has broad post‑market and regulatory obligations that we must adhere to. We are subject to unannounced inspections by the FDA to determine our compliance with QSRs and other rules and regulations. After a medical device is placed on the market, numerous regulatory requirements apply.
Healthcare Privacy and Security Laws We may be subject to, or our marketing activities may be limited by, the Health Insurance Portability and Accountability Act, or HIPAA and its implementing regulations, which established uniform standards for certain “covered entities” (healthcare Pacira BioSciences, Inc. | 2022 Form 10-K | Page 31 Tab le of Contents providers, health plans and healthcare clearinghouses) governing the conduct of certain electronic healthcare transactions and protecting the security and privacy of protected health information.
Healthcare Privacy and Security Laws We may be subject to, or our marketing activities may be limited by, the Health Insurance Portability and Accountability Act, or HIPAA and its implementing regulations, which established uniform standards for certain “covered entities” (healthcare providers, health plans and healthcare clearinghouses) governing the conduct of certain electronic healthcare transactions and protecting the security and privacy of protected health information.
Before approving an NDA, the FDA will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with CGMP requirements and are adequate to ensure consistent production of the product within required specifications.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with CGMP requirements and are adequate to ensure consistent production of the product within required specifications. Additionally, the FDA will typically inspect one or more clinical sites to ensure compliance with GCP before approving an NDA.
Similar reporting and pharmacovigilance obligations exist with regulatory agencies outside the U.S. If new safety issues are identified following approval, the FDA can require the NDA sponsor to revise the approved labeling to reflect the new safety information; conduct post-market studies or clinical trials to assess the new safety information and implement a REMS program to mitigate newly identified risks.
If new safety issues are identified following approval, the FDA can require the NDA sponsor to revise the approved labeling to reflect the new safety information; conduct post-market studies or clinical trials to assess the new safety information and implement a REMS program to mitigate newly identified risks.
Employees As of December 31, 2022, we had 715 employees, of which 713 are full-time and two are part-time. All of our employees are based in the U.S. except for 13 employees based in England. None of our employees are represented by a labor union, and we consider our current employee relations to be good.
Employees As of December 31, 2023, we had 712 employees, of which 711 are full-time and one is part-time. All of our employees are based in the U.S. except for 11 employees based in England. None of our employees are represented by a labor union, and we consider our current employee relations to be good.
A sponsor may request that the FDA designate a regenerative medicine advanced therapy concurrently with or at any time after submission of an IND. For example, we intend to seek an RMAT designation from the FDA for PCRX-201.
A sponsor may request that the FDA designate a regenerative medicine advanced therapy concurrently with or at any time after submission of an IND. For example, in February 2024, the FDA granted an RMAT designation for PCRX-201.
The FDA also may approve an NDA contingent on, among other things, changes to proposed labeling, a commitment to conduct one or more post-market studies or clinical trials and the correction of identified manufacturing deficiencies, including the development of adequate controls and specifications.
The FDA also may approve an NDA contingent on, among other things, changes to proposed Pacira BioSciences, Inc. | 2023 Form 10-K | Page 25 Table of Content s labeling, a commitment to conduct one or more post-market studies or clinical trials and the correction of identified manufacturing deficiencies, including the development of adequate controls and specifications.
Failure to comply with these and other statutory and regulatory requirements subjects a manufacturer to possible legal or regulatory action, including warning letters, the seizure or recall of products, injunctions, consent decrees placing Pacira BioSciences, Inc. | 2022 Form 10-K | Page 30 Tab le of Contents significant restrictions on or suspending manufacturing operations and civil and criminal penalties.
Failure to comply with these and other statutory and regulatory requirements subjects a manufacturer to possible legal or regulatory action, including warning letters, the seizure or recall of products, injunctions, consent decrees placing significant restrictions on or suspending manufacturing operations and civil and criminal penalties.
We also have two U.S. patents directed at compositions of matter similar to ZILRETTA, as well as methods of making and using the same, with patent terms into 2031.
The U.S. patents directed to ZILRETTA’s composition of matter and methods of use are listed in the FDA Orange Book. We also have two U.S. patents directed at compositions of matter similar to ZILRETTA, as well as methods of making and using the same, with patent terms into 2031.
We are now using a second, larger-scale dedicated suite that has more than doubled our EXPAREL manufacturing capacity at the Thermo Fisher site. We began commercial production of EXPAREL out of that second suite in August 2021.
We also reimburse Thermo Fisher for certain nominal expenses and additional services. We are now using a second, larger-scale dedicated manufacturing suite that more than doubled our EXPAREL manufacturing capacity at the Thermo Fisher site. We began commercial production of EXPAREL out of that second dedicated manufacturing suite in August 2021.
Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates”—independent contractors or agents of covered entities that receive or obtain protected health information in connection with providing a service on behalf of a covered entity.
Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to Pacira BioSciences, Inc. | 2023 Form 10-K | Page 31 Table of Content s “business associates”—independent contractors or agents of covered entities that receive or obtain protected health information in connection with providing a service on behalf of a covered entity.
Research Development Foundation Pursuant to an agreement with the Research Development Foundation, or RDF, we were 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 us under the Pacira BioSciences, Inc. | 2022 Form 10-K | Page 16 Tab le of Contents agreement remain valid.
Research Development Foundation Pursuant to an agreement with the Research Development Foundation, or RDF, we were 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 us under the agreement remain valid.
For example, we provide access to free biometric screenings, an employee assistance program, or EAP, and host in-person and webinar trainings on stress management and other EAP benefits, access to telemedicine including mental health visits, a health advocate service to help employees and their families navigate the healthcare system, activity challenges and more.
For example, we provide access to free biometric screenings, an employee assistance program, or EAP, and host in-person and webinar trainings on stress management and other EAP benefits, access to telemedicine including mental health visits and confidential counseling sessions for a number of needs, a health advocate service to help employees and their families navigate the healthcare system, a free consultation with an attorney for personal legal matters and discounted legal fees thereafter, activity challenges and more.
The clinical and economic benefits of EXPAREL in total joint arthroplasty procedures have been demonstrated in clinical studies with EXPAREL use associated with significant reductions in opioid consumption, well-controlled pain management, shorter recovery time, same-day discharge to home and high patient satisfaction.
The clinical and economic benefits of EXPAREL in total joint arthroplasty procedures have been demonstrated in clinical studies with EXPAREL use associated with significant reductions in opioid consumption, well-controlled pain management, shorter recovery time, same-day discharge to home and high patient satisfaction. EXPAREL administered as a brachial plexus nerve block is a key and growing part of our business.
Pacira BioSciences, Inc. | 2022 Form 10-K | Page 11 Tab le of Contents Based on the strength of 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.
Based on the strength of 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.
These facilities provide clinicians with flexible, state-of-the-art environments for interactive, hands-on instruction on the latest and most innovative local, regional and field block approaches for managing pain, improving patient care and enabling patient migration to the 23-hour stay environment. Tampa, Florida In October 2020, we opened the Pacira Innovation and Training, or PIT, Center of Tampa.
These facilities provide clinicians with flexible, state-of-the-art environments for interactive, hands-on instruction on the latest and most innovative local, regional and field block approaches for managing pain, improving patient care and enabling patient migration to the 23-hour stay environment.
ZILRETTA is also manufactured using custom equipment and proprietary processes with respect to certain of the formulation and manufacturing techniques related to the TA-formulated PLGA microspheres in ZILRETTA, including those that relate to its precise pharmaceutical release profile.
ZILRETTA is also manufactured using custom equipment and proprietary processes with respect to certain of the formulation and manufacturing Pacira BioSciences, Inc. | 2023 Form 10-K | Page 21 Table of Content s techniques related to the TA-formulated PLGA microspheres in ZILRETTA, including those that relate to its precise pharmaceutical release profile.
Our net product sales of EXPAREL in 2022 were $536.9 million. For the years ended December 31, 2022, 2021 and 2020, net product sales of EXPAREL accounted for 81%, 94% and 96% of our total revenues, respectively.
Our net product sales of EXPAREL were $538.1 million, $536.9 million and $506.5 million for the years ended December 31, 2023, 2022 and 2021, respectively. For the years ended December 31, 2023, 2022 and 2021, net product sales of EXPAREL accounted for 80%, 81% and 94% of our total revenues, respectively.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe cannot guarantee that we will be successful in obtaining the approvals we need from enough P&T committees quickly enough to optimize hospital sales of EXPAREL. Even if we obtain hospital formulary approval for EXPAREL, physicians must still prescribe EXPAREL for its commercialization to be successful.
Biggest changeImplementation of the NOPAIN Act in January 2025, which will provide for separate reimbursement of qualifying non-opioids, like EXPAREL, administered during surgical procedures in the outpatient environment, is a significant policy advancement aimed at alleviating cost concerns for the Medicare population; however, we cannot guarantee that we will be successful in obtaining the approvals we need from enough P&T committees quickly enough to optimize hospital sales of EXPAREL.
If these third parties fail to perform as expected or to comply with legal and regulatory requirements, our ability to commercialize EXPAREL, ZILRETTA and iovera° will be significantly impacted and we may be subject to regulatory sanctions.
If these third parties fail to perform as expected or fail to comply with legal and regulatory requirements, our ability to commercialize EXPAREL, ZILRETTA and iovera° will be significantly impacted and we may be subject to regulatory sanctions.
Our ability to make payments of the principal of, to pay interest on or to refinance our indebtedness, including the Term Loan (as defined below), the 0.750% convertible senior notes due 2025, or 2025 Notes, issued in our private offering completed on July 10, 2020, and Flexion’s 3.375% Convertible Senior Notes due 2024, or Flexion 2024 Notes, and, together with the 2025 Notes, the Notes, each as described below, or to make cash payments in connection with any conversion of the 2025 Notes or Flexion 2024 Notes (if applicable) depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
Our ability to make payments of the principal of, to pay interest on or to refinance our indebtedness, including the TLA Term Loan (as defined below), the 0.750% convertible senior notes due 2025, or 2025 Notes, issued in our private offering completed on July 10, 2020, and Flexion’s 3.375% Convertible Senior Notes due 2024, or Flexion 2024 Notes, and, together with the 2025 Notes, the Notes, each as described below, or to make cash payments in connection with any conversion of the 2025 Notes or Flexion 2024 Notes (if applicable) depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
The Credit Agreement and the Indentures also contain certain restrictive covenants that limit, and in some circumstances prohibit, our ability to, among other things: incur additional debt or issue preferred stock; sell, lease or transfer our assets; pay dividends on, and make other distributions on, or redeem or repurchase, our common stock; make certain capital expenditures and investments; guarantee debt or obligations; create certain liens; enter into transactions with our affiliates; and enter into certain merger, consolidation or other reorganization transactions.
The TLA Credit Agreement and the Indentures also contain certain restrictive covenants that limit, and in some circumstances prohibit, our ability to, among other things: incur additional debt or issue preferred stock; sell, lease or transfer our assets; pay dividends on, and make other distributions on, or redeem or repurchase, our common stock; make certain capital expenditures and investments; guarantee debt or obligations; create certain liens; enter into transactions with our affiliates; and enter into certain merger, consolidation or other reorganization transactions.
The commercial opportunity for iovera° could be significantly harmed if competitors are able to develop and commercialize alternative designs and methods outside the scope of our patents. Furthermore, the earliest patent family for iovera° is scheduled to expire in 2025, thereby opening the door for competitors to copy some of our early technology.
The commercial opportunity for iovera° could be significantly harmed if competitors are able to develop and commercialize alternative designs and methods outside the scope of our patents. Furthermore, the earliest patent family for iovera° is scheduled to expire in December 2025, thereby opening the door for competitors to copy some of our early technology.
If we breach any of these restrictive covenants, the lenders could either refuse to lend funds to us or accelerate the repayment of any outstanding borrowings under the Credit Agreement. We may not have sufficient funds to repay such indebtedness upon a default or be unable to receive a waiver of the default from the lenders.
If we breach any of these restrictive covenants, the lenders could either refuse to lend funds to us or accelerate the repayment of any outstanding borrowings under the TLA Credit Agreement. We may not have sufficient funds to repay such indebtedness upon a default or be unable to receive a waiver of the default from the lenders.
We have obtained limited product liability insurance coverage for our products and our clinical trials with a $10.0 million annual aggregate coverage limit. However, our insurance coverage may not reimburse us, or may not be sufficient to reimburse us, for any expenses or losses we may suffer, including our indemnification obligations to other parties.
We have limited product liability insurance coverage for our products and our clinical trials with a $10.0 million annual aggregate coverage limit. However, our insurance coverage may not reimburse us, or may not be sufficient to reimburse us, for any expenses or losses we may suffer, including our indemnification obligations to other parties.
A breach of any of those restrictive covenants may cause us to be in default under the Credit Agreement and/or the Indentures, and our lenders could foreclose on our assets. Our Credit Agreement requires us to maintain certain financial covenants. A decline in our operating performance could negatively impact our ability to meet these financial covenants.
A breach of any of those restrictive covenants may cause us to be in default under the TLA Credit Agreement and/or the Indentures, and our lenders could foreclose on our assets. Our TLA Credit Agreement requires us to maintain certain financial covenants. A decline in our operating performance could negatively impact our ability to meet these financial covenants.
Our efforts to successfully commercialize EXPAREL and ZILRETTA are subject to many internal and external challenges and if we cannot overcome these challenges in a timely manner, our future revenues and profits could be materially and adversely impacted. EXPAREL has been a commercialized drug since 2012.
Our efforts to successfully commercialize EXPAREL and ZILRETTA are subject to many internal and external challenges and if we cannot overcome these challenges in a timely manner, our future revenues and profits could be materially and adversely impacted. EXPAREL has been a commercialized drug since April 2012.
We may need to expand our personnel resources in order to manage our operations and sales of EXPAREL, ZILRETTA, iovera° or any of our product candidates or products we acquire. Our management, personnel, systems and facilities currently in place may not be adequate to support this future growth.
We may need to expand our personnel resources in order to manage our operations and sales of EXPAREL, ZILRETTA, iovera° or any of our product candidates or products we acquire or in-license. Our management, personnel, systems and facilities currently in place may not be adequate to support this future growth.
Our operations have been, and may continue to be, impacted by supply chain constraints and raw material shortages, resulting in increased material costs, longer lead times and increased freight costs caused, in part, by the COVID-19 pandemic, the uncertain economic environment and macroeconomic trends.
Our operations have been, and may continue to be, impacted by supply chain constraints and raw material shortages, resulting in increased material costs, longer lead times and increased freight costs caused, in part, by the recent COVID-19 pandemic, the uncertain economic environment and macroeconomic trends.
In the event we are not successful in further developing our marketing and sales infrastructure, we may not be able to continue to successfully commercialize our products, including outside the U.S., which would limit our ability to generate additional product revenues.
In the event we are not successful in further developing our marketing and sales infrastructure, we may not be able to continue to successfully commercialize our products, including markets outside the U.S., which would limit our ability to generate additional product revenues.
We have entered into agreements with third-party service providers to perform a variety of functions related to the sale and distribution of EXPAREL, ZILRETTA and iovera°, key aspects of which are out of our direct control.
We have entered into agreements with third-party service providers to perform a variety of functions related to the manufacture, sale and distribution of EXPAREL, ZILRETTA and iovera°, key aspects of which are out of our direct control.
The Credit Agreement limits—and any credit facility or other agreement that we may enter into may limit our ability to make cash payments at the time of a fundamental change or upon conversion of the Notes.
The TLA Credit Agreement limits—and any credit facility or other agreement that we may enter into may limit our ability to make cash payments at the time of a fundamental change or upon conversion of the Notes.
If we are unable to repay the indebtedness, the lenders could initiate a bankruptcy proceeding or collection proceedings with respect to our assets, all of which secure our indebtedness under the Credit Agreement.
If we are unable to repay the indebtedness, the lenders could initiate a bankruptcy proceeding or collection proceedings with respect to our assets, all of which secure our indebtedness under the TLA Credit Agreement.
Our indebtedness could adversely affect our business, financial condition, and results of operations, as well as the ability to meet payment obligations under our Credit Agreement and the Notes.
Our indebtedness could adversely affect our business, financial condition, and results of operations, as well as the ability to meet payment obligations under our TLA Credit Agreement and the Notes.
A default under the applicable indenture or the fundamental change itself could also lead to a default under agreements governing our Credit Agreement or future indebtedness.
A default under the applicable indenture or the fundamental change itself could also lead to a default under agreements governing our TLA Credit Agreement or future indebtedness.
These service providers provide key services related to customer service support, warehousing and inventory program services, distribution services, contract administration and chargeback processing services, accounts receivable management and cash application services, financial management and information technology services. In addition, our finished goods inventory is stored at three warehouses maintained by two service providers.
These service providers provide key services related to manufacturing our products, customer service support, warehousing and inventory program services, distribution services, contract administration and chargeback processing services, accounts receivable management and cash application services, financial management and information technology services. In addition, our finished goods inventory is stored at three warehouses maintained by two service providers.
Thermo Fisher agreed to undertake certain transfer activities and construction services needed to prepare its facility for the commercial manufacture of ZILRETTA in dedicated manufacturing suites. Flexion provided Thermo Fisher with certain equipment and materials necessary to manufacture ZILRETTA. The Thermo Fisher facilities required regulatory approval prior to any production and manufacturing of EXPAREL and ZILRETTA.
Thermo Fisher agreed to undertake certain transfer activities and construction services needed to prepare its facility for the commercial manufacture of ZILRETTA in dedicated manufacturing suites. Flexion provided Thermo Fisher with certain equipment and materials necessary to manufacture ZILRETTA at this facility. The Thermo Fisher facilities required regulatory approval prior to any production and manufacturing of EXPAREL and ZILRETTA.
We may not be able to hire or retain such personnel at compensation or flexibility levels consistent with our existing policies. We periodically review our compensation levels to ensure they remain competitive and have increased them when we believe market conditions warrant it.
We may not be able to hire or retain such personnel at compensation or flexibility levels consistent with our existing policies. We periodically review our compensation levels and employee benefits to ensure they remain competitive and have increased them when we believe market conditions warrant it.
Our San Diego facility in California, the Thermo Fisher facility in Swindon, England and the Carlisle facility in Tijuana, Mexico are also subject to the risks of a natural or man-made disaster, including earthquakes, floods and fires, or other business disruptions.
Our San Diego facilities in California, the Thermo Fisher facility in Swindon, England and the Carlisle facility in Tijuana, Mexico are also subject to the risks of a natural or man-made disaster, including storms, earthquakes, floods and fires, or other business disruptions.
We may not be able to attract or retain qualified management and commercial, scientific and clinical personnel due to the intense competition for qualified personnel among biotechnology, pharmaceutical, medical device and other businesses, as well as universities, non-profit research organizations and government entities, particularly in and around Tampa, Florida; San Diego, California; northern New Jersey and Houston, Texas.
We may not be able to attract or retain qualified management and commercial, scientific and clinical personnel due to the intense competition for qualified personnel among biotechnology, pharmaceutical, medical device and other businesses, as well as universities, non-profit research organizations and government entities, particularly in and around Tampa, Florida; San Diego, California; northern New Jersey/New York City metro and Houston, Texas.
Competition to hire from this limited talent pool is intense, and we may be unable to hire, train, retain or motivate additional key personnel. Competition for highly skilled personnel, including management and commercial, scientific and clinical personnel, is extremely competitive, particularly in and around Tampa, Florida; San Diego, California; northern New Jersey and Houston, Texas.
Competition to hire from this limited talent pool is intense, and we may be unable to hire, train, retain or motivate additional key personnel. Competition for highly skilled personnel, including management and commercial, scientific and clinical personnel, is extremely competitive, particularly in and around Tampa, Florida; San Diego, California; northern New Jersey/New York City metro and Houston, Texas.
While we permit remote work arrangements, which allows us to recruit employees outside of the geographic areas we operate in, we have experienced—and may continue to experience—some difficulty identifying and hiring qualified personnel, especially as we pursue our growth strategy.
While we offer remote work arrangements, which allows us to recruit employees residing outside of the geographic areas we operate in, we have experienced—and may continue to experience—some difficulty identifying and hiring qualified personnel, especially as we pursue our growth strategy.
Furthermore, a sustained labor shortage, lack of skilled labor, increased turnover or labor cost inflation, caused by the ongoing COVID-19 pandemic or as a result of general macroeconomic factors, could lead to increased costs, which could negatively affect our ability to efficiently operate our overall business and have other adverse effects on our results of operations and financial condition.
Furthermore, a sustained labor shortage, lack of skilled labor, increased turnover or labor cost inflation, such as that initially caused by the COVID-19 pandemic, or as a result of general macroeconomic factors, could lead to increased costs, which could negatively affect our ability to efficiently operate our overall business and have other adverse effects on our results of operations and financial condition.
Thus, courts outside the U.S. are sometimes less willing to protect trade secrets. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how. In order to protect the goodwill associated with our company and product names, we rely on trademark protection for our marks. We have registered the “Pacira”, “EXPAREL”, “ZILRETTA” and “iovera°” marks with the USPTO.
Thus, courts outside the U.S. are sometimes less willing to protect trade secrets. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how. In order to protect the goodwill associated with our company and product names, we rely on trademark protection for our marks. We have registered the “Pacira,” “EXPAREL,” “ZILRETTA” and “iovera°” marks with the USPTO.
We may need to further increase our existing compensation levels in response to competition or labor shortages, which would increase our operating costs and reduce our margins.
We may need to further increase our existing compensation levels and employee benefits in response to competition or labor shortages, which would increase our operating costs and reduce our margins.
Any significant volatility in the price of our common stock may adversely affect our ability to attract or retain highly skilled technical, financial and marketing personnel.
Any significant volatility in the price of our common stock may adversely affect our ability to attract or retain highly skilled and technical personnel.
Our stock could be subject to wide fluctuations in price in response to various factors, including the following: • the commercial success of EXPAREL, ZILRETTA and iovera°; • results of clinical trials of our products, product candidates or those of our competitors; • changes or developments in laws or regulations applicable to our products or product candidates; • introduction of competitive products or technologies; • failure to meet or exceed financial projections we provide to the public; • actual or anticipated variations in quarterly operating results; • failure to meet or exceed the estimates and projections of the investment community; • the perception of the pharmaceutical and medical device industry by the public, legislatures, regulators and the investment community; • regulatory concerns or government actions; • general economic and market conditions and overall fluctuations in U.S. equity markets and the impact of macroeconomic developments, such as general political, health and economic conditions, economic slowdowns, recessions, inflation, rising interest rates and the tightening of credit markets; • increased interest rates and their generally negative effect on U.S. equity markets; • developments concerning our sources of manufacturing supply; • disputes or other developments relating to patents or other proprietary rights; • additions or departures of key scientific or management personnel; • the extent to which we acquire or invest in products, businesses and technologies; • issuances of debt, equity or convertible securities; • changes in the market valuations of similar companies; Pacira BioSciences, Inc. | 2022 Form 10-K | Page 58 Tab le of Contents • evolving investor expectations and concerns regarding environmental, social and corporate governance issues; and • the other factors described in this “Risk Factors” section.
Our stock could be subject to wide fluctuations in price in response to various factors, including the following: • the commercial success of EXPAREL, ZILRETTA and iovera°; • results of clinical trials of our products, product candidates or those of our competitors; • changes or developments in laws or regulations applicable to our products or product candidates; • introduction of competitive products or technologies; • failure to meet or exceed financial projections we provide to the public; • actual or anticipated variations in quarterly operating results; • failure to meet or exceed the estimates and projections of the investment community; • the perception of the pharmaceutical and medical device industry by the public, legislatures, regulators and the investment community; • regulatory concerns or government actions; Pacira BioSciences, Inc. | 2023 Form 10-K | Page 60 Table of Content s • general economic and market conditions and overall fluctuations in U.S. equity markets and the impact of macroeconomic developments, such as general political, health and economic conditions, economic slowdowns, recessions, inflation, rising interest rates and the tightening of credit markets; • increased interest rates and their generally negative effect on U.S. equity markets; • developments concerning our sources of manufacturing supply; • disputes or other developments relating to patents or other proprietary rights; • additions or departures of key scientific or management personnel; • the extent to which we acquire or invest in products, businesses and technologies; • issuances of debt, equity or convertible securities; • changes in the market valuations of similar companies; • evolving investor expectations and concerns regarding environmental, social and corporate governance issues; and • the other factors described in this “ Risk Factors ” section.
Market acceptance of ZILRETTA will depend on a number of factors, including: • the efficacy and safety as demonstrated in clinical trials; • the ability to demonstrate the impact of real-world evidence; • the timing and market introduction of competitive products; • the product label and clinical indications for which the product is approved; • acceptance by physicians, the medical community and patients of the product as a safe and effective treatment; • the ability to distinguish safety and efficacy from existing, less expensive generic alternative therapies; • the convenience of prescribing, administrating and initiating patients on the product; • the potential and perceived advantages or value of the product over alternative treatments; • the cost of treatment in relation to alternative treatments, including any similar generic treatments; • the economics of a buy-and-bill product and discounts and rebates we offer; Pacira BioSciences, Inc. | 2022 Form 10-K | Page 36 Tab le of Contents • the availability of coverage and adequate reimbursement by third-party payers and government authorities to support pricing; • the prevalence and severity of adverse side effects; and • the effectiveness of sales and marketing efforts.
Market acceptance of ZILRETTA will depend on a number of factors, including: • the efficacy and safety as demonstrated in clinical trials; • the ability to demonstrate the impact of real-world evidence; • the timing and market introduction of competitive products; • the product label and clinical indications for which the product is approved; • acceptance by physicians, the medical community and patients of the product as a safe and effective treatment; • the ability to distinguish safety and efficacy from existing, less expensive generic alternative therapies; Pacira BioSciences, Inc. | 2023 Form 10-K | Page 37 Table of Content s • the convenience of prescribing, administrating and initiating patients on the product; • the potential and perceived advantages or value of the product over alternative treatments; • the cost of treatment in relation to alternative treatments, including any similar generic treatments; • the economics of a buy-and-bill product and discounts and rebates we offer; • the availability of coverage and adequate reimbursement by third-party payers and government authorities to support pricing; • the prevalence and severity of adverse side effects; and • the effectiveness of sales and marketing efforts.
Our need to effectively manage our operations, growth and various projects requires that we: • continue the hiring and training of an effective commercial organization for the commercialization of EXPAREL, ZILRETTA and iovera°, and establish appropriate systems, policies and infrastructure to support that organization; • continue to establish and maintain effective relationships with distributors and commercial partners for the promotion and sale of our products; Pacira BioSciences, Inc. | 2022 Form 10-K | Page 39 Tab le of Contents • ensure that our distributors, partners, suppliers, consultants and other service providers successfully carry out their contractual obligations, provide high quality results and meet expected deadlines; • manage our development efforts and clinical trials effectively; • expand our manufacturing capabilities and effectively manage our co-production arrangements with Thermo Fisher and Carlisle; • continue to carry out our own contractual obligations to our licensors and other third parties; and • continue to improve our operational, financial and management controls, reporting systems and procedures.
Our need to effectively manage our operations, growth and various projects requires that we: Pacira BioSciences, Inc. | 2023 Form 10-K | Page 40 Table of Content s • continue the hiring and training of an effective commercial organization for the commercialization of EXPAREL, ZILRETTA and iovera°, and establish appropriate systems, policies and infrastructure to support that organization; • continue to establish and maintain effective relationships with distributors and commercial partners for the promotion and sale of our products; • ensure that our distributors, partners, suppliers, consultants and other service providers successfully carry out their contractual obligations, provide high quality results and meet expected deadlines; • manage our development efforts and clinical trials effectively; • expand our manufacturing capabilities and effectively manage our co-production arrangements with Thermo Fisher and Carlisle; • continue to carry out our own contractual obligations to our licensors and other third parties; and • continue to improve our operational, financial and management controls, reporting systems and procedures.
The degree of market acceptance of EXPAREL also depends on a number of other factors, including: • changes in the standard of care for the targeted indications for EXPAREL, which could reduce the marketing impact of any claims that we can make; • the relative efficacy, convenience and ease of administration of EXPAREL; • the prevalence and severity of adverse events associated with EXPAREL; • the cost of treatment versus economic and clinical benefit, both in absolute terms and in relation to alternative treatments; • the availability of adequate coverage or reimbursement by third parties, such as insurance companies and other healthcare payers, and by government healthcare programs, including Medicare and Medicaid; • the extent and strength of our marketing and distribution of EXPAREL; • the safety, efficacy and other potential advantages over, and availability of, alternative treatments, including, in the case of EXPAREL, a number of products already used to treat pain in the hospital setting; and • distribution and use restrictions imposed by regulatory agencies or to which we agree as part of a mandatory risk evaluation and mitigation strategy or voluntary risk management plan.
The degree of market acceptance of EXPAREL also depends on a number of other factors, including: • changes in the standard of care for the targeted indications for EXPAREL, which could reduce the marketing impact of any claims that we can make; • the relative efficacy, convenience and ease of administration of EXPAREL; • the prevalence and severity of adverse events associated with EXPAREL; • the cost of treatment versus economic and clinical benefit, both in absolute terms and in relation to alternative treatments; • the availability of adequate coverage or reimbursement by third parties, such as insurance companies and other healthcare payers, and by government healthcare programs, including Medicare and Medicaid, although implementation of the NOPAIN Act in January 2025 will provide Medicare coverage for separate reimbursement of qualifying opioids like EXPAREL; • the extent and strength of our marketing and distribution of EXPAREL; • the safety, efficacy and other potential advantages over, and availability of, alternative treatments, including, in the case of EXPAREL, a number of products already used to treat pain in the hospital setting; and • distribution and use restrictions imposed by regulatory agencies or to which we agree as part of a mandatory risk evaluation and mitigation strategy or voluntary risk management plan.
During 2022, sales of EXPAREL accounted for 81% of our total revenue, and we expect EXPAREL sales will remain of primary importance for the foreseeable future. We added ZILRETTA to our product portfolio upon completing the Flexion Acquisition in November 2021 and it accounted for 16% of our total revenue in 2022.
During 2023, sales of EXPAREL accounted for 80% of our total revenue, and we expect EXPAREL sales will remain of primary importance for the foreseeable future. We added ZILRETTA to our product portfolio upon completing the Flexion Acquisition in November 2021 and it accounted for 16% of our total revenue in 2023.
Our ability to effectively generate revenues from EXPAREL and ZILRETTA will depend on our ability to, among other things: • create further market demand for EXPAREL and ZILRETTA through our marketing and sales activities and other arrangements established for their promotion; • train, deploy and support a qualified sales force; • secure formulary approvals for EXPAREL at a substantial number of targeted hospitals and ASCs; • manufacture EXPAREL and ZILRETTA in sufficient quantities in compliance with requirements of regulatory agencies and at acceptable quality and pricing levels in order to meet commercial demand; • implement and maintain agreements with wholesalers and distributors on commercially reasonable terms; • receive adequate levels of coverage and reimbursement for EXPAREL and ZILRETTA from commercial health plans and governmental health programs; • maintain compliance with regulatory requirements; • obtain regulatory approvals for additional indications and geographic expansion for the use of EXPAREL and ZILRETTA; • ensure that our entire supply chain efficiently and consistently delivers EXPAREL and ZILRETTA to our customers; and • maintain and defend our patent protection and regulatory exclusivity for EXPAREL and ZILRETTA.
Our ability to effectively generate revenues from EXPAREL and ZILRETTA will depend on our ability to, among other things: • create further market demand for EXPAREL and ZILRETTA through our marketing and sales activities and other arrangements established for their promotion; • train, deploy and support a qualified sales force; • secure formulary approvals for EXPAREL at a substantial number of targeted hospitals and ASCs; • manufacture EXPAREL and ZILRETTA in sufficient quantities in compliance with requirements of regulatory agencies and at acceptable quality and pricing levels in order to meet commercial demand; • implement and maintain agreements with wholesalers and distributors on commercially reasonable terms; • appropriately prepare the market to take advantage of EXPAREL reimbursement for Medicare patients receiving surgery in the outpatient setting beginning in 2025; • receive adequate levels of coverage and reimbursement for EXPAREL and ZILRETTA from commercial health plans and governmental health programs; • maintain compliance with regulatory requirements; • obtain regulatory approvals for additional indications and geographic expansion for the use of EXPAREL and ZILRETTA; • ensure that our entire supply chain efficiently and consistently delivers EXPAREL and ZILRETTA to our customers; and • maintain and defend our patent protection and regulatory exclusivity for EXPAREL and ZILRETTA.
These litigations are in their early stages, and we are unable to predict their outcome at this time. The patents and the patent applications that we have covering our iovera° products are primarily limited to specific handheld cryogenic needle devices that are cooled by a cryogen and methods for applying cryotherapy to nerve tissue using the cryogenic devices.
We are unable to predict the outcome of these litigations at this time. The patents and the patent applications that we have covering our iovera° products are primarily limited to specific handheld cryogenic needle devices that are cooled by a cryogen and methods for applying cryotherapy to nerve tissue using the cryogenic devices.
For example: • we may not have been the first to make the inventions covered by each of our pending patent applications and issued patents; • we may not have been the first to file patent applications for these inventions; Pacira BioSciences, Inc. | 2022 Form 10-K | Page 53 Tab le of Contents • others may independently develop similar or alternative technologies or duplicate any of our product candidates or technologies; • it is possible that none of the pending patent applications will result in issued patents; • the issued patents covering our product candidates may not provide a basis for commercially viable active products, may not provide us with any competitive advantages, may not have sufficient scope or strength to protect the technologies they were intended to protect or may be challenged by third parties; • others may design around our patent claims to produce competitive products that fall outside the scope of our patents; • we may not develop or in-license additional proprietary technologies that are patentable; • patents of others may have an adverse effect on our business; or • competitors may infringe our patents and we may not have adequate resources to enforce our patents.
For example: • we may not have been the first to make the inventions covered by each of our pending patent applications and issued patents; • we may not have been the first to file patent applications for these inventions; • others may independently develop similar or alternative technologies or duplicate any of our product candidates or technologies; • it is possible that none of the pending patent applications will result in issued patents; • the issued patents covering our product candidates may not provide a basis for commercially viable active products, may not provide us with any competitive advantages, may not have sufficient scope or strength to protect the technologies they were intended to protect or may be challenged by third parties; • others may design around our patent claims to produce competitive products that fall outside the scope of our patents; • we may not develop or in-license additional proprietary technologies that are patentable; • patents of others may have an adverse effect on our business; or • competitors may infringe our patents and we may not have adequate resources to enforce our patents.
Our stock price is volatile, and from February 3, 2011, the first day of trading of our common stock, to February 27, 2023, the trading prices of our stock have ranged from $6.16 to $121.95 per share.
Our stock price is volatile, and from February 3, 2011, the first day of trading of our common stock, to February 28, 2024, the trading prices of our stock have ranged from $6.16 to $121.95 per share.
We may need to increase the size of our organization and effectively manage our sales force, and we may experience difficulties in managing growth. As of December 31, 2022, we had 715 employees.
We may need to increase the size of our organization and effectively manage our sales force, and we may experience difficulties in managing growth. As of December 31, 2023, we had 712 employees.
In April 2015, we received a subpoena from the U.S. Department of Justice, U.S. Attorney’s Office for the District of New Jersey, requiring the production of a broad range of documents pertaining to marketing and promotional practices related to EXPAREL. In July 2020, we formally entered into settlement agreements that resolved all outstanding investigations and claims by the U.S.
Attorney’s Office for the District of New Jersey, requiring the production of a broad range of documents pertaining to marketing and promotional practices related to EXPAREL. In July 2020, we formally entered into settlement agreements that resolved all outstanding investigations and claims by the U.S.
Patent No. 11,179,336 (the ’336 patent). eVenus further alleges in the Notice Letter that both the ’495 patent and the ’336 patent are invalid and/or not infringed. Pacira BioSciences, Inc. | 2022 Form 10-K | Page 52 Tab le of Contents In February 2022, we filed a second patent infringement suit against eVenus and its parent company in the U.S.
Patent No. 11,179,336 (the ’336 patent). eVenus further alleges in the Notice Letter that both the ’495 patent and the ’336 patent are invalid and/or not infringed. Pacira BioSciences, Inc. | 2023 Form 10-K | Page 54 Table of Content s In February 2022, we filed a second patent infringement suit against eVenus and its parent company in the U.S.
Undesirable side effects caused by our products or any product candidate could also result in the inclusion of unfavorable information in our product labeling, imposition of distribution or use restrictions, a requirement to conduct post-market studies or to implement a Pacira BioSciences, Inc. | 2022 Form 10-K | Page 48 Tab le of Contents risk evaluation and mitigation strategy, denial, suspension or withdrawal of regulatory approval by the FDA or other regulatory authorities for any or all targeted indications, and in turn prevent us from commercializing and generating revenues from the sale of EXPAREL, ZILRETTA, iovera° or any product candidate.
Undesirable side effects caused by our products or any product candidate could also result in the inclusion of unfavorable information in our product labeling, imposition of distribution or use restrictions, a requirement to conduct post-market studies or to implement a risk evaluation and mitigation strategy, denial, suspension or withdrawal of regulatory approval by the FDA or other regulatory authorities for any or all targeted indications, and in turn prevent us from commercializing and generating revenues from the sale of EXPAREL, ZILRETTA, iovera° or any product candidate.
If the FDA or any other regulatory agency requires us to provide additional clinical or preclinical data for EXPAREL, ZILRETTA or iovera°, the indications for which these products were Pacira BioSciences, Inc. | 2022 Form 10-K | Page 51 Tab le of Contents approved may be limited or there may be specific warnings or limitations on dosing, and our efforts to commercialize EXPAREL, ZILRETTA or iovera° may be otherwise adversely impacted.
If the FDA or any other regulatory agency requires us to provide Pacira BioSciences, Inc. | 2023 Form 10-K | Page 53 Table of Content s additional clinical or preclinical data for EXPAREL, ZILRETTA or iovera°, the indications for which these products were approved may be limited or there may be specific warnings or limitations on dosing, and our efforts to commercialize EXPAREL, ZILRETTA or iovera° may be otherwise adversely impacted.
Pacira BioSciences, Inc. | 2022 Form 10-K | Page 50 Tab le of Contents If the government or third-party payers fail to provide adequate coverage and payment rates for EXPAREL, ZILRETTA, iovera° or any future products, or if hospitals or ASCs choose to use alternative therapies that are less expensive, our revenue and prospects for profitability will be limited.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 52 Table of Content s If the government or third-party payers fail to provide adequate coverage and payment rates for EXPAREL, ZILRETTA, iovera° or any future products, or if hospitals or ASCs choose to use alternative therapies that are less expensive, our revenue and prospects for profitability will be limited.
Failure to adequately produce and timely ship our products to customers could lead to lost potential revenue, failure to meet customer demand and strained relationships with customers—including wholesalers.
Failure to adequately procure raw materials or equipment or produce and timely ship our products to customers could lead to lost potential revenue, failure to meet customer demand and strained relationships with our customers—including wholesalers.
Regardless of merit or eventual outcome, liability claims may result in: • loss of revenue from decreased demand for our products and/or product candidates; • impairment of our business reputation or financial stability; • costs of any related litigation; Pacira BioSciences, Inc. | 2022 Form 10-K | Page 40 Tab le of Contents • substantial monetary awards to patients or other claimants; • diversion of management attention; • withdrawal of clinical trial participants and potential termination of clinical trial sites or entire clinical programs; and • the inability to commercialize our products and/or product candidates.
Regardless of merit or eventual outcome, liability claims may result in: • loss of revenue from decreased demand for our products and/or product candidates; • impairment of our business reputation or financial stability; • costs of any related litigation; • substantial monetary awards to patients or other claimants; • diversion of management attention; • withdrawal of clinical trial participants and potential termination of clinical trial sites or entire clinical programs; and • the inability to commercialize our products and/or product candidates.
While we have anticipated and budgeted for additional capital expenditures associated with the Thermo Fisher Pacira BioSciences, Inc. | 2022 Form 10-K | Page 42 Tab le of Contents suites for both EXPAREL and ZILRETTA, if the Thermo Fisher suites do not maintain their regulatory approvals (or fail to receive any additional regulatory approvals that may be needed in the future), this could have a material adverse effect on our business, financial position and results of operations.
While we have anticipated and budgeted for additional capital expenditures associated with the Thermo Fisher suites for both EXPAREL and ZILRETTA, if the Thermo Fisher suites do not maintain their regulatory approvals (or fail to receive any additional regulatory approvals that may be needed in the future), this could have a material adverse effect on our business, financial position and results of operations.
We may be able to incur substantial additional indebtedness in the future. Although certain of the agreements governing our existing indebtedness contain restrictions on the incurrence of additional indebtedness and entering into certain types of other transactions, these restrictions are subject to a number of qualifications and exceptions, including compliance with various financial conditions.
Although certain of the agreements governing our existing indebtedness contain restrictions on the incurrence of additional indebtedness and entering into certain types of other transactions, these restrictions are subject to a number of qualifications and exceptions, including compliance with various financial conditions. Additional indebtedness incurred in compliance with our existing debt instruments could be substantial.
A third-party may assert a claim that one of our marks is confusingly similar to its mark, and such claims or the failure to timely register a mark or objections by the FDA or other regulatory agency could force us to select a new name for one of our product candidates, which could cause us to incur additional expense or delay the commercialization of such product.
A third-party may assert a claim that one of our marks is confusingly similar to its mark, and such claims or the failure to timely register a mark or Pacira BioSciences, Inc. | 2023 Form 10-K | Page 56 Table of Content s objections by the FDA or other regulatory agency could force us to select a new name for one of our product candidates, which could cause us to incur additional expense or delay the commercialization of such product.
Therefore, we may experience delays, additional or unexpected costs and other adverse events in connection with our capacity expansion projects, including those associated with potential delays in the procurement of manufacturing equipment required to manufacture EXPAREL or ZILRETTA.
In addition, the procurement time for the equipment that we use to manufacture EXPAREL and ZILRETTA requires long lead times. Therefore, we may experience delays, additional or unexpected costs and other adverse events in connection with our capacity expansion projects, including those associated with potential delays in the procurement of manufacturing equipment required to manufacture EXPAREL or ZILRETTA.
A hospital’s P&T committee typically governs all matters pertaining to the use of medications within the institution, including the review of medication formulary data and recommendations for the appropriate use of drugs within the institution to the medical Pacira BioSciences, Inc. | 2022 Form 10-K | Page 35 Tab le of Contents staff.
A Pacira BioSciences, Inc. | 2023 Form 10-K | Page 36 Table of Content s hospital’s P&T committee typically governs all matters pertaining to the use of medications within the institution, including the review of medication formulary data and recommendations for the appropriate use of drugs within the institution to the medical staff.
In addition, any significant litigation in the future, regardless of its merits, could divert management’s attention from our operations and result in substantial legal fees. In addition, if our stock price is volatile, we may become involved in additional securities class action lawsuits in the future.
In addition, any significant litigation in the future, regardless of its merits, could divert management’s attention and resources from our operations that are needed to successfully run our business and also result in substantial legal fees. In addition, if our stock price is volatile, we may become involved in securities class action lawsuits in the future.
EXPAREL also faces competition from currently marketed non-opioid products such as bupivacaine, marcaine, ropivacaine and other anesthetics/analgesics, all of which are also used in the treatment of postsurgical pain and are available as either oral tablets, injectable dosage forms or administered using novel delivery systems.
EXPAREL also faces competition from currently marketed non-opioid products such as bupivacaine, marcaine, ropivacaine and other Pacira BioSciences, Inc. | 2023 Form 10-K | Page 38 Table of Content s anesthetics/analgesics, all of which are also used in the treatment of postsurgical pain and are available as either oral tablets, injectable dosage forms or administered using novel delivery systems.
We may not receive regulatory approval for any of our product candidates, or the approval may be delayed for various reasons, including successful challenges to the FDA’s interpretation of Section 505(b)(2), which would have a material adverse effect on our business and financial condition.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 49 Table of Content s We may not receive regulatory approval for any of our product candidates, or the approval may be delayed for various reasons, including successful challenges to the FDA’s interpretation of Section 505(b)(2), which would have a material adverse effect on our business and financial condition.
If we fail to manufacture our products in sufficient quantities and at acceptable quality and pricing levels, or to fully comply with CGMP regulations, we may face delays in the commercialization of these products or be unable to meet market demand, and may lose potential revenues.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 42 Table of Content s If we fail to manufacture our products in sufficient quantities and at acceptable quality and pricing levels, or to fully comply with CGMP regulations, we may face delays in the commercialization of these products or be unable to meet market demand, and may lose potential revenues.
According to these regulations, companies may not promote drugs or medical devices for “off-label” uses—that is—uses that are not consistent with the product’s labeling and that differ from those that were approved by the FDA, EMA, MHRA or other regulatory agency. For example, the FDA-approved label for EXPAREL does not include an indication in obstetrical paracervical block anesthesia.
According to these regulations, companies may not promote drugs or medical devices for “off-label” uses—that is—uses that are not consistent with the product’s labeling and that differ from those that were approved by the FDA, EMA, MHRA or other regulatory agency.
Any such failure could have a material adverse effect on our financial condition and operations. We purchase certain raw materials and equipment from various suppliers in order to manufacture our products. The acquisition of certain materials may require considerable lead times, and our ability to source such materials is also dependent on logistics providers.
We purchase certain raw materials and equipment from various suppliers in order to manufacture our products. The acquisition of certain materials may require considerable lead times, and our ability to source such materials is also dependent on logistics providers.
Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management’s attention from the operation of our business and damage our reputation. The design, development, manufacture, supply and distribution of our products are highly regulated and technically complex.
Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management’s attention from the operation of our business and damage our reputation.
While it is our intention to pay the principal in cash, upon conversion of the Notes we will be required to make cash payments for each $1,000 in principal amount Pacira BioSciences, Inc. | 2022 Form 10-K | Page 56 Tab le of Contents of Notes converted of at least the lesser of $1,000 and the sum of the daily conversion values.
While it is our intention to pay the principal in cash, upon conversion of the Notes we will be required to make cash payments for each $1,000 in principal amount of Notes converted of at least the lesser of $1,000 and the sum of the daily conversion values.
Additionally, our subsidiaries had no indebtedness (excluding trade payables, intercompany liabilities and income tax-related liabilities). Our Credit Agreement and the Indentures each impose significant operating and financial restrictions on us and certain of our subsidiaries, which may prevent us from capitalizing on business opportunities.
See Note 11, Debt , to our consolidated financial statements included herein for more information. Additionally, our subsidiaries had no indebtedness (excluding trade payables, intercompany liabilities and income tax-related liabilities). Our TLA Credit Agreement and the Indentures each impose significant operating and financial restrictions on us and certain of our subsidiaries, which may prevent us from capitalizing on business opportunities.
Although we believe that our safety procedures for handling and disposing of these materials comply with the standards prescribed by these laws and regulations, we cannot eliminate the risk of accidental contamination or injury from these materials or unintended failure to comply with these laws and regulations.
Although we believe that our safety procedures for handling and disposing of these materials comply with the standards prescribed by these laws and regulations, we cannot eliminate the risk of accidental contamination or injury from these materials or unintended failure to Pacira BioSciences, Inc. | 2023 Form 10-K | Page 46 Table of Content s comply with these laws and regulations.
As part of the settlement, we Pacira BioSciences, Inc. | 2022 Form 10-K | Page 47 Tab le of Contents admitted to no wrongdoing and explicitly denied the Plaintiffs’ allegations. We have been given assurances that this concluded the investigation that originated from the U.S. Department of Justice subpoena in April 2015.
As part of the settlement, we admitted to no wrongdoing and explicitly denied the Plaintiffs’ allegations. We have been given assurances that this concluded the investigation that originated from the U.S. Department of Justice subpoena in April 2015.
We may not have the ability to raise the funds necessary to settle conversions of the Notes in cash to the extent elected or to repurchase the Notes upon a fundamental change, and our future indebtedness may contain limitations on our ability to pay cash upon conversion of the Notes or limitations on our ability to repurchase the Notes.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 58 Table of Content s We may not have the ability to raise the funds necessary to settle conversions of the Notes in cash to the extent elected or to repurchase the Notes upon a fundamental change, and our future indebtedness may contain limitations on our ability to pay cash upon conversion of the Notes or limitations on our ability to repurchase the Notes.
As the global impact of COVID-19 continues, we may experience additional disruptions that could severely impact our supply chain, which would disrupt our clinical trials and commercialization efforts.
We may also experience additional disruptions that could severely impact our supply chain, such as those caused by the COVID-19 pandemic, which would disrupt our clinical trials and commercialization efforts.
If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring indebtedness or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time.
If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring indebtedness or obtaining additional equity capital on terms that may be onerous or highly dilutive.
If we are unable to timely achieve and maintain satisfactory production yields and quality, whether through our internal manufacturing capabilities or arrangements with contract manufacturers, our relationships with customers and our reputation may be harmed and our revenues could decrease.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 43 Table of Content s If we are unable to timely achieve and maintain satisfactory production yields and quality, whether through our internal manufacturing capabilities or arrangements with contract manufacturers, our relationships with customers and our reputation may be harmed and our revenues could decrease.
Pacira BioSciences, Inc. | 2022 Form 10-K | Page 54 Tab le of Contents If we are sued for infringing the intellectual property rights of third parties, it will be costly and time consuming, and an unfavorable outcome in any litigation would harm our business.
If we are sued for infringing the intellectual property rights of third parties, it will be costly and time consuming, and an unfavorable outcome in any litigation would harm our business.
Subject to the limits contained in the Credit Agreement and the Indentures, we may be able to incur substantial additional debt from time to time. If we do so, the risks related to our level of debt could increase.
See Note 11, Debt , to our consolidated financial statements included herein for more information. Subject to the limits contained in the TLA Credit Agreement and the Indentures, we may be able to incur substantial additional debt from time to time. If we do so, the risks related to our level of debt could increase.
Our future growth depends—in part—on our ability to identify, develop, acquire or in-license products and if we do not successfully identify, develop, acquire or in-license related product candidates or integrate them into our operations, we may have limited growth opportunities.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 45 Table of Content s Our future growth depends—in part—on our ability to identify, develop, acquire or in-license products and if we do not successfully identify, develop, acquire or in-license related product candidates or integrate them into our operations, we may have limited growth opportunities.
Even if we were able to find another CRO to perform a preclinical test or clinical trial, any material delay in a test or clinical trial may result in significant additional expenditures that could adversely affect our operating results. Events such as these may also delay regulatory approval for our drug candidates or our ability to commercialize our products.
Even if we were able to find another CRO to perform a preclinical test or clinical trial, any material delay in a test or clinical trial may result in significant additional expenditures that could adversely affect our operating results.
We are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling, release and disposal of, and exposure to, these hazardous Pacira BioSciences, Inc. | 2022 Form 10-K | Page 44 Tab le of Contents materials. Violation of these laws and regulations could lead to substantial fines and penalties.
We are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling, release and disposal of, and exposure to, these hazardous materials. Violation of these laws and regulations could lead to substantial fines and penalties.
We cannot be certain that these side effects and others will not be observed in the future, or that regulatory authorities will not require additional trials or impose more severe labeling restrictions due to these side effects or other concerns.
We cannot be certain that these side effects and others will not be observed in the future, or that regulatory Pacira BioSciences, Inc. | 2023 Form 10-K | Page 50 Table of Content s authorities will not require additional trials or impose more severe labeling restrictions due to these side effects or other concerns.
If we were forced to find a replacement CRO to perform any of our preclinical testing or clinical trials, we may not be able to find a suitable replacement on favorable terms, if at all.
If we were forced to find a replacement CRO to perform any of our preclinical testing or clinical trials, we may not be able to find a Pacira BioSciences, Inc. | 2023 Form 10-K | Page 47 Table of Content s suitable replacement on favorable terms, if at all.
Additional indebtedness incurred in compliance with our existing debt instruments could be substantial. To the extent new debt is added to our current debt levels, the substantial leverage risks described in the immediately preceding risk factor would increase.
To the extent new debt is added to our current debt levels, the substantial leverage risks described in the immediately preceding risk factor would increase.
The marketing, labeling, advertising and promotion of prescription drugs and medical devices is strictly regulated. These regulations include standards and restrictions for direct-to-consumer advertising, industry-sponsored scientific and educational activities, promotional activities involving the internet and off-label promotion.
These regulations include standards and restrictions for direct-to-consumer advertising, industry-sponsored scientific and educational activities, promotional activities involving the internet and off-label promotion.
In Europe, manufacturers qualify for 8 years of data exclusivity upon marketing authorization approval and an additional two years of market exclusivity, for a total of 10 years of regulatory exclusivity. Our earliest patent family for iovera° is scheduled to expire in 2025.
In Europe, manufacturers qualify for 8 years of data exclusivity upon marketing authorization approval and an additional two years of market exclusivity, for a total of 10 years of regulatory exclusivity.
In addition, the facilities used to manufacture, store and distribute our products are subject to inspection by regulatory authorities at any time to determine compliance with applicable regulations.
We, along with our third-party providers, must comply with all applicable regulatory requirements of the FDA and foreign regulatory authorities. In addition, the facilities used to manufacture, store and distribute our products are subject to inspection by regulatory authorities at any time to determine compliance with applicable regulations.
Further, we believe that future coverage and reimbursement will likely be subject to increased restrictions both in the U.S. and in international markets, as federal, state and foreign governments continue to propose and pass new legislation designed to reduce or contain the cost of healthcare.
Further, barring separate reimbursement for qualifying non-opioids administered to Medicare surgical patients in the outpatient setting as mandated by NOPAIN beginning in January 2025, we believe that future coverage and reimbursement will likely be subject to increased restrictions both in the U.S. and in international markets, as federal, state and foreign governments continue to propose and pass new legislation designed to reduce or contain the cost of healthcare.
In July 2022, we submitted a letter to HK Tainuo associated with this license agreement seeking a mutual decision to end the licensing agreement and made a $13.0 million termination payment to HK Tainuo in January 2023.
In July 2022, we submitted a letter to HK Tainuo associated with this license agreement seeking a mutual decision to end the licensing agreement and made a $13.0 million termination payment to HK Tainuo in January 2023. For more information, see Note 20, Commitments and Contingencies , to our consolidated financial statements included herein.
Pacira BioSciences, Inc. | 2022 Form 10-K | Page 45 Tab le of Contents Our dependence on contract research organizations could result in delays in and additional costs for our drug development efforts. We may rely on CROs to perform preclinical testing and clinical trials for drug candidates that we choose to develop without a collaborator.
Our dependence on contract research organizations could result in delays in and additional costs for our drug or medical device development efforts. We may rely on CROs to perform preclinical testing and clinical trials for drug or medical device candidates that we choose to develop without a collaborator.
We may seek additional distribution arrangements in the future, including arrangements with third-party distributors to commercialize and sell our products in certain foreign countries.
There can be no assurance that such distributors and promoters will be successful in marketing and promoting our products. We may seek additional distribution arrangements in the future, including arrangements with third-party distributors to commercialize and sell our products in certain foreign countries.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs part of the Flexion Acquisition, we assumed leases for approximately 42,000 square feet of office space in Burlington, Massachusetts under a lease that expires in April 2025 and is being partially subleased and approximately 5,300 square feet of laboratory space in Woburn, Massachusetts under a lease that expires in February 2024 and is being fully subleased.
Biggest changeAs part of the Flexion Acquisition, we assumed leases for approximately 42,000 square feet of office space in Burlington, Massachusetts under a lease that expires in April 2025 and is being partially subleased.
The Houston Pacira Innovation and Training Center in Houston, Texas, is an approximately 19,000 square-foot facility similar to the PIT of Tampa, but that also features advanced ultrasound machines equipped with artificial intelligence, 3-D training software and professional medical lighting and in-ceiling cameras, both wet and dry laboratory space and a 125-seat lecture hall.
The PIT of Houston, in Houston, Texas, is an approximately 19,000 square-foot facility similar to the PIT of Tampa, but that also features advanced ultrasound machines equipped with artificial intelligence, 3-D training software and professional medical lighting and in-ceiling cameras, both wet and dry laboratory space and a 125-seat lecture hall.
We also may add new facilities or expand existing facilities as we add employees, expand our geographic markets and if demand for EXPAREL, ZILRETTA and iovera° increases and we believe that suitable additional or substitute space will be available as needed to accommodate any such expansion of our operations. Item 3. Legal Proceedings For information related to Item 3.
We also may add new facilities or expand existing facilities as we add employees, expand our geographic markets and if demand for EXPAREL, ZILRETTA and iovera° increases and we believe that suitable additional or substitute space will be available as needed to accommodate any such expansion of our operations.
The Pacira Innovation and Training center at Tampa in Tampa, Florida, is an approximately 13,000 square-foot facility that supports a full range of educational events to advance clinician understanding of the latest local, regional and field block approaches for managing pain and reducing or eliminating exposure to opioids.
Our PIT of Tampa in Tampa, Florida, is an approximately 13,000 square-foot facility that supports a full range of educational events to advance clinician understanding of the latest local, regional and field block approaches for managing pain and reducing or eliminating exposure to opioids.
Removed
Legal Proceedings, refer to Note 20, Commitments and Contingencies , to our consolidated financial statements included herein. Item 4. Mine Safety Disclosures Not applicable. Pacira BioSciences, Inc. | 2022 Form 10-K | Page 68 Tab le of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(PCRX) $ 100.00 $ 94.24 $ 99.23 $ 131.08 $ 131.81 $ 84.58 Nasdaq Composite Index (^IXIC) $ 100.00 $ 96.12 $ 129.97 $ 186.69 $ 226.63 $ 151.61 Nasdaq Biotechnology Index (^NBI) $ 100.00 $ 90.68 $ 112.81 $ 141.78 $ 140.88 $ 125.52 S&P Pharmaceuticals Select Index (^SPSIPH) $ 100.00 $ 84.29 $ 105.16 $ 119.45 $ 106.02 $ 94.15 Dividend Policy We have never declared or paid any dividends on our common stock.
Biggest change(PCRX) $ 100.00 $ 105.30 $ 139.10 $ 139.87 $ 89.75 $ 70.39 Nasdaq Composite Index (^IXIC) $ 100.00 $ 135.23 $ 194.24 $ 235.78 $ 157.74 $ 205.57 Nasdaq Biotechnology Index (^NBI) $ 100.00 $ 124.41 $ 156.36 $ 155.37 $ 138.42 $ 127.49 S&P Pharmaceuticals Select Index (^SPSIPH) $ 100.00 $ 124.75 $ 141.71 $ 125.78 $ 111.70 $ 100.63 Dividend Policy We have never declared or paid any dividends on our common stock.
Comparison of Five-Year Cumulative Total Returns Among Pacira BioSciences, Inc., the Nasdaq Composite Index, the Nasdaq Biotechnology Index and the S&P Pharmaceuticals Select Index Cumulative Total Return as of December 31, 2017 2018 2019 2020 2021 2022 Pacira BioSciences, Inc.
Comparison of Five-Year Cumulative Total Returns Among Pacira BioSciences, Inc., the Nasdaq Composite Index, the Nasdaq Biotechnology Index and the S&P Pharmaceuticals Select Index Cumulative Total Return as of December 31, 2018 2019 2020 2021 2022 2023 Pacira BioSciences, Inc.
The number of record holders is based on the actual number of holders registered on the books of our transfer agent and does not reflect the substantially greater amount of holders of shares in “street name”, whose shares are held of record by banks, brokers and other financial institutions.
The number of record holders is based on the actual number of holders registered on the books of our transfer agent and does not reflect the substantially greater amount of holders of shares in “street name,” whose shares are held of record by banks, brokers and other financial institutions.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed and traded under the ticker symbol “PCRX” on the Nasdaq Global Select Market. As of February 27, 2023, we had 11 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed and traded under the ticker symbol “PCRX” on the Nasdaq Global Select Market. As of February 28, 2024, we had 11 holders of record of our common stock.
Performance Graph The following graph shows the value of an investment of $100.00 made on December 29, 2017—the last trading day of 2017—in each of Pacira BioSciences, Inc. (PCRX), the Nasdaq Composite Index (^IXIC), the Nasdaq Biotechnology Index (^NBI) and the S&P Pharmaceuticals Select Index (^SPSIPH).
Performance Graph The following graph shows the value of an investment of $100.00 made on December 31, 2018—the last trading day of 2018—in each of Pacira BioSciences, Inc. (PCRX), the Nasdaq Composite Index (^IXIC), the Nasdaq Biotechnology Index (^NBI) and the S&P Pharmaceuticals Select Index (^SPSIPH).
Pacira BioSciences, Inc. | 2022 Form 10-K | Page 69 Tab le of Contents Item 6. Reserved
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 72 Table of Content s Item 6. Reserved

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSee Note 12, Financial Instruments , to our consolidated financial statements included herein for more information; • the impact of the COVID-19 pandemic and global economic conditions, including the volume and delays of suspended elective surgical procedures, clinical trials, longer lead-times, an inability to secure a sufficient supply of materials and the inflationary impact on the cost of materials; • the timing of and extent to which the holders of our Notes elect to convert their Notes and the timing of principal and interest payments on our Term Loan; Pacira BioSciences, Inc. | 2022 Form 10-K | Page 78 Tab le of Contents • the timing and impact of increases to the variable interest rate on our Term Loan borrowings in accordance with the terms of the Credit Agreement; • the costs and our ability to successfully continue to expand the commercialization of EXPAREL, ZILRETTA and iovera°, including outside of the U.S.; • the cost and timing of expanding and maintaining our manufacturing facilities, including the current EXPAREL capacity expansion project at our Science Center Campus in San Diego, California and a ZILRETTA capital project at the Thermo Fisher site in Swindon, England; • the cost and timing of additional strategic investments, including additional investments under existing agreements; • the costs related to legal and regulatory issues; • the impact of inflation on our product costs, supply chain, operating expenses and business strategy; • the costs of performing additional clinical trials for our products, including the additional pediatric trials required by the FDA and EMA as a condition of approval of EXPAREL; • 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; and • the extent to which we acquire or invest in products, businesses and technologies.
Biggest changeSee Note 5, Flexion Acquisition , and Note 12, Financial Instruments , to our consolidated financial statements included herein for more information; • the impact of global economic conditions—including the impact of inflation—on our product, material and labor costs, supply chain, longer lead-times, an inability to secure a sufficient supply of materials, our operating expenses and our business strategy; • the timing of and extent to which the holders of our Notes elect to convert their Notes, the timing of principal and interest payments on our TLA Term Loan and the timing and impact of increases to the variable interest rate on our TLA Term Loan borrowings in accordance with the terms of the TLA Credit Agreement; • the costs and our ability to successfully continue to expand the commercialization of EXPAREL, ZILRETTA and iovera°, including markets outside of the U.S.; • the cost and timing of expanding and maintaining our manufacturing facilities; • the cost and timing of additional strategic investments, including additional investments under existing agreements; • the costs related to legal and regulatory matters; • the costs of performing additional clinical trials for our products, including the additional pediatric trials required by the FDA and EMA as a condition of the approval of EXPAREL; • 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; and • the extent to which we acquire or invest in products, businesses and technologies.
With the acquisition of MyoScience, Inc. (the “MyoScience Acquisition” ) in April 2019, 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 the iovera° system are highly complementary products as long-acting, non-opioid therapies that alleviate pain.
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 the iovera° system are highly complementary products as long-acting, non-opioid therapies that alleviate pain.
Product development and manufacturing capacity expansion expenses include development costs for our products, which include personnel, 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.
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.
In 2022, we recognized an impairment of $26.1 million for an acquired in-process research and development intangible asset related to ZILRETTA for the treatment of an OA pain of the shoulder based on the amount its previous carrying value exceeded its fair value. See Note 9, Goodwill and Intangible Assets , for more information.
In 2022, we recognized an impairment of $26.1 million for an acquired in-process research and development intangible asset related to ZILRETTA for the treatment of OA pain of the shoulder based on the amount its previous carrying value exceeded its fair value. See Note 9, Goodwill and Intangible Assets , for more information.
Investing Activities In 2022, net cash used in investing activities was $225.2 million, which reflected $150.1 million of available-for-sale investment purchases (net of maturities), a $32.0 million contingent consideration milestone payment that had been achieved in the fourth quarter of 2021 associated with our 2007 acquisition of Pacira Pharmaceuticals, Inc. from Skyepharma, purchases of fixed assets of $30.1 million for fill lines for our products and equipment for an EXPAREL capacity expansion project at our Science Center Campus in San Diego, California and purchases of equity and debt investments of $13.0 million of investments in external complementary development stage product candidates.
In 2022, net cash used in investing activities was $225.2 million, which reflected $150.1 million of available-for-sale investment purchases (net of maturities), a $32.0 million contingent consideration milestone payment that had been achieved in the fourth quarter of 2021 associated with our 2007 acquisition of Pacira Pharmaceuticals, Inc. from Skyepharma, purchases of fixed assets of $30.1 million for fill lines for our products and equipment for an EXPAREL capacity expansion project at our Science Center Campus in San Diego, California and purchases of equity and debt investments of $13.0 million in external complementary development stage product candidates.
See Note 11, Debt , to our consolidated financial statements included herein for further discussion of the Term Loan. 2025 Convertible Senior Notes In July 2020, we completed a private placement of $402.5 million in aggregate principal amount of our 2025 Notes, and entered into an indenture with respect to the 2025 Notes.
See Note 11, Debt , to our consolidated financial statements included herein for further discussion of the TLB Term Loan. 2025 Convertible Senior Notes In July 2020, we completed a private placement of $402.5 million in aggregate principal amount of our 2025 Notes, and entered into an indenture with respect to the 2025 Notes.
Regulatory and other expenses include regulatory activities related to unapproved products and indications, medical information expenses 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.
Regulatory and other expenses include regulatory activities related to unapproved products and indications, medical information expenses, registry expenses 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 complete Management’s Discussion and Analysis of Financial Condition and Results of Operations for year-to-year comparisons between 2021 and 2020 and other discussions of 2020 items can be found within Part II , Item 7 , to our Annual Report for the year ended December 31, 2021, filed with the SEC on February 28, 2022 , which is available on the SEC’s website at www.sec.gov and our corporate website at www.pacira.com.
The complete Management’s Discussion and Analysis of Financial Condition and Results of Operations for year-to-year comparisons between 2022 and 2021 and other discussions of 2021 items can be found within Part II , Item 7 , to our Annual Report for the year ended December 31, 2022, filed with the SEC on February 28, 2023 , which is available on the SEC’s website at www.sec.gov and our corporate website at www.pacira.com.
The 2025 Notes accrue interest at a fixed rate of 0.750% per annum, payable semiannually in arrears on February 1 and August 1 of each year. The 2025 Notes mature on August 1, 2025. At December 31, 2022, the outstanding principal on the 2025 Notes was $402.5 million.
The 2025 Notes accrue interest at a fixed rate of 0.750% per annum, payable semiannually in arrears on February 1 and August 1 of each year. The 2025 Notes mature on August 1, 2025. At December 31, 2023, the outstanding principal on the 2025 Notes was $402.5 million.
We have omitted discussion of the year ended December 31, 2020 (the earliest of the three years covered by our consolidated financial statements presented in this Annual Report) as permitted by SEC regulations.
We have omitted discussion of the year ended December 31, 2021 (the earliest of the three years covered by our consolidated financial statements presented in this Annual Report) as permitted by SEC regulations.
Certain defined terms have been brought forward from Part I of this Annual Report. This section of this Annual Report discusses year-to-year comparisons between 2022 and 2021, as well as other discussions of 2022 and 2021 items.
Certain defined terms have been brought forward from Part I of this Annual Report. This section of this Annual Report discusses year-to-year comparisons between 2023 and 2022, as well as other discussions of 2023 and 2022 items.
Financing Activities In 2022, net cash used by financing activities was $401.5 million, which consisted of a $192.6 million principal repayment of the Flexion 2024 Notes as part of a repurchase offer to the holders of the Flexion 2024 Notes that was triggered by the Flexion Acquisition, $157.0 million to settle the 2022 Notes that matured on April 1, 2022 and $78.1 million of payments of Term Loan principal that included a principal prepayment of $50.0 million, partially offset by $24.4 million of proceeds from the exercise of stock options and $3.0 million from the issuance of common stock through our ESPP.
In 2022, net cash used in financing activities was $401.5 million, which consisted of a $192.6 million principal repayment of the Flexion 2024 Notes as part of a repurchase offer to the holders of the Flexion 2024 Notes that was triggered by the Flexion Acquisition, $157.0 million to settle our 2.375% convertible senior notes that matured on April 1, 2022 and $78.1 million of payments of TLB Term Loan principal that included a principal prepayment of $50.0 million, partially offset by $24.4 million of proceeds from the exercise of stock options and $3.0 million from the issuance of common stock through our ESPP.
Contingent Consideration Subsequent to an acquisition, we measure contingent consideration arrangements at fair value for each period with changes in fair value recognized in the consolidated statements of operations as acquisition-related charges (gains), impairment and other. Changes in contingent consideration can result from changes in the assumed achievement and timing of estimated sales, costs of goods sold and regulatory approvals.
Contingent Consideration Subsequent to an acquisition, we measure contingent consideration arrangements at fair value for each period with changes in fair value recognized in the consolidated statements of operations as contingent consideration (gains) charges, acquisition-related charges and other. Changes in contingent consideration can result from changes in the assumed achievement and timing of estimated sales and regulatory approvals.
(the “Flexion Acquisition”) in November 2021, we acquired ZILRETTA ® (triamcinolone acetonide extended-release injectable suspension), the first and only extended-release, intra-articular therapy that can provide major relief for OA knee pain for three months and has the potential to become an alternative to hyaluronic acid, or HA, and platelet rich plasma, or PRP, injections or other early intervention treatments.
With the acquisition of Flexion Therapeutics, Inc. in November 2021 (the “Flexion Acquisition”), we acquired ZILRETTA ® (triamcinolone acetonide extended-release injectable suspension), the first and only extended-release, intra-articular therapy that can provide major relief for OA knee pain for three months and has the potential to become an alternative to hyaluronic acid, or HA, and platelet rich plasma, or PRP, injections or other early intervention treatments.
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.
We include 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.
The impact of a hypothetical 10 percent increase in the forecasted annual growth rates would have increased the value of our contingent consideration liability associated with the Flexion Acquisition as of December 31, 2022 by $5.8 million.
The impact of a hypothetical 10 percent increase in the forecasted annual growth rates would have increased the value of our contingent consideration liability associated with the Flexion Acquisition as of December 31, 2023 by $5.7 million.
Our future use of operating cash and capital requirements will depend on many forward-looking factors, including, but not limited to, the following: • the cost and timing of the potential Flexion milestone payments in connection with the Flexion Acquisition, which could be up to an aggregate of $372.3 million if certain regulatory and commercial milestones are met.
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 stockholders, which could be up to an aggregate of $372.3 million if certain regulatory and commercial milestones are met.
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 Term Loan and our Notes, and any conversions of our Notes through the next 12 months.
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 TLA Term Loan, Flexion 2024 Notes and 2025 Notes (collectively, the “Notes”) through the next 12 months.
The following table includes the key assumptions used in the valuation of our contingent consideration milestones: Assumption Flexion Ranges Utilized as of December 31, 2022 Discount rates 14.90% to 15.10% Probability of payment for achievement of regulatory milestones 0% to 12.50% Projected year of achieving or expiration of regulatory milestones 2030 The maximum remaining potential payments related to contingent consideration from the Flexion Acquisition is $372.3 million as of December 31, 2022.
The following table includes the key assumptions used in the valuation of our contingent consideration milestones: Assumption Flexion Ranges Utilized as of December 31, 2023 Discount rates 7.9% to 9.7% Probability of payment for achievement of regulatory milestones 0% to 12.5% Projected year of achieving or expiration of regulatory milestones 2030 The maximum remaining potential payments related to contingent consideration from the Flexion Acquisition is $372.3 million as of December 31, 2023.
Since its initial approval in 2011, more than 12 million patients have been treated with EXPAREL. 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.
Since its initial approval in 2011, more than 14 million patients have been treated with EXPAREL. 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.
Income Tax (Benefit) Expense The following table provides information regarding our income tax (benefit) expense during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2022 2021 Income tax (benefit) expense $ (2,607) $ 14,424 N/A Effective tax rate (20)% 26% We recorded an income tax benefit of $2.6 million for the year ended December 31, 2022 and income tax expense of $14.4 million for the year ended December 31, 2021.
Income Tax Expense (Benefit) The following table provides information regarding our income tax expense (benefit) during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2023 2022 Income tax expense (benefit) $ 19,746 $ (2,607) N/A Effective tax rate 32% (20)% We recorded income tax expense of $19.7 million for the year ended December 31, 2023 and an income tax benefit of $2.6 million for the year ended December 31, 2022.
As of December 31, 2022, we had net minimum commitments of $93.8 million, of which $14.0 million is due in 2023. For more information, refer to Note 8, Leases , to our consolidated financial statements included herein.
As of December 31, 2023, we had net minimum commitments of $78.6 million, of which $13.0 million is due in 2024. For more information, refer to Note 8, Leases , to our consolidated financial statements included herein.
We have approximately $5.2 million of minimum, non-cancelable contractual commitments for the purchase of certain raw materials as of December 31, 2022, of which $2.7 million is due within one year, and the remaining $2.5 million is due in one to two years.
We have approximately $14.2 million of minimum, non-cancelable contractual commitments for the purchase of certain raw materials as of December 31, 2023, of which $7.7 million is due within one year, and the remaining $6.5 million is due in one to two years. As of December 31, 2023, we had $4.9 million of other minimum, non-cancelable contractual commitments.
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 December 31, 2022, we had an accumulated deficit of $148.8 million, cash and cash equivalents and available-for-sale investments of $325.9 million and working capital of $350.6 million.
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 revenue. As of December 31, 2023, we had an accumulated deficit of $106.8 million, cash and cash equivalents and available-for-sale investments of $281.0 million and working capital of $412.6 million.
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.
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.
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.
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, Pacira BioSciences, Inc. | 2023 Form 10-K | Page 76 Table of Content s tax and consulting services.
At December 31, 2022, the outstanding principal on the Flexion 2024 Notes was $8.6 million. See Note 11, Debt , to our consolidated financial statements included herein for further discussion.
In January 2022, we repurchased $192.6 million aggregate principal amount of the Flexion 2024 Notes. At December 31, 2023, the outstanding principal on the Flexion 2024 Notes was $8.6 million. See Note 11, Debt , to our consolidated financial statements included herein for further discussion.
Overview Pacira is the industry leader in our commitment to non-opioid pain management and providing a non-opioid option to as many patients as possible to redefine the role of opioids as rescue therapy only. We are also developing innovative interventions to address debilitating conditions involving the sympathetic nervous system, such as cardiac electrical storm, chronic pain and spasticity.
Overview As the therapeutic area leader in non-opioid pain management, our stated corporate mission is providing non-opioid pain management options to as many patients as possible and redefining the role of opioids for rescue therapy only. We are also developing innovative interventions to address debilitating conditions involving the sympathetic nervous system, such as cardiac electrical storm, chronic pain and spasticity.
For more information, see Note 5, Flexion Acquisition , to our consolidated financial statements included herein.
For more information, see Note 5, Flexion Acquisition, and Note 9, Goodwill and Intangible Assets , to our consolidated financial statements included herein.
Additional negative impacts may also arise that we are unable to foresee. The nature and extent of such impacts will depend on future developments, which are highly uncertain and cannot be predicted.
The current macroeconomic environment remains dynamic and subject to rapid and possibly material changes. Additional negative impacts may also arise that we are unable to foresee. The nature and extent of such impacts will depend on future developments, which are highly uncertain and cannot be predicted.
As part of the Flexion Acquisition, there are up to $372.3 million in potential payments if all regulatory and commercial milestones are met. The aggregate amount was previously $425.5 million prior to our September 2022 decision to formally discontinue further development of PCRX-301. For more information, see Note 5, Flexion Acquisition , to our consolidated financial statements included herein.
As part of the Flexion Acquisition, there are up to $372.3 million in potential payments if all regulatory and commercial milestones are met. The aggregate amount was previously $425.5 million prior to our September 2022 decision to formally discontinue further development of PCRX-301, an investigational product candidate.
The remaining interest payments on the Term Loan are approximately $115.4 million based on the current interest rate. In the normal course of business, we enter into various lease agreements for manufacturing, research and development and corporate activities, which are typically classified as operating leases under the provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 842, Leases .
In the normal course of business, we enter into various lease agreements for manufacturing, research and development and corporate activities, which are typically classified as operating leases under the provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 842, Leases .
Contractual Obligations We had two convertible senior notes outstanding as of December 31, 2022, for which $8.6 million in aggregate principal amount is due on the 2024 Notes in May 2024 and $402.5 million in aggregate principal amount is due on our 2025 Notes in August 2025.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 82 Table of Content s Contractual Obligations We had two convertible senior notes outstanding as of December 31, 2023, for which $8.6 million in aggregate principal amount is due on the Flexion 2024 Notes in May 2024 and $402.5 million in aggregate principal amount is due on our 2025 Notes in August 2025.
In addition, we have approximately $73.3 million of minimum, non-cancelable contractual commitments for contract manufacturing services as of December 31, 2022, of which $18.3 million is due within one year, and the remaining $55.0 million is due in one to three years.
In addition, we have approximately $71.4 million of minimum, non-cancelable contractual commitments for contract manufacturing services as of December 31, 2023, of which $21.1 million is due within one year, and the remaining $50.3 million is due in one to five years.
Summary of Cash Flows The following table summarizes our cash flows from operating, investing and financing activities for the years ended December 31, 2022 and 2021 (in thousands): Year Ended December 31, Consolidated Statements of Cash Flows Data: 2022 2021 Net cash provided by (used in): Operating activities $ 145,274 $ 125,717 Investing activities (225,185) (20,790) Financing activities (401,528) 380,694 Net (decrease) increase in cash and cash equivalents $ (481,439) $ 485,621 Operating Activities In 2022, net cash provided by operating activities was $145.3 million compared to $125.7 million in 2021.
Summary of Cash Flows The following table summarizes our cash flows from operating, investing and financing activities for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, Consolidated Statements of Cash Flows Data: 2023 2022 Net cash provided by (used in): Operating activities $ 154,649 $ 145,274 Investing activities 77,541 (225,185) Financing activities (183,031) (401,528) Net increase (decrease) in cash and cash equivalents $ 49,159 $ (481,439) Operating Activities In 2023, net cash provided by operating activities was $154.6 million compared to $145.3 million in 2022.
The effective tax rate of 26% for the year ended December 31, 2021 differed from the U.S. statutory tax rate of 21% due to non-deductible expenses and valuation allowances recorded against capital loss carryforwards, partially offset by stock-based compensation deductions and tax credits.
The effective tax rate of 32% for the year ended December 31, 2023 differed from the U.S. statutory tax rate of 21% primarily due to non-deductible stock-based and executive compensation and non-U.S. valuation allowances, partially offset by tax credits.
Liquidity and Capital Resources Since our inception in 2006, we have devoted most of our cash resources to manufacturing, research and development and selling, general and administrative activities related to the development and commercialization of EXPAREL.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 79 Table of Content s Liquidity and Capital Resources Since our inception in 2006, we have devoted most of our cash resources to manufacturing, research and development and selling, general and administrative activities related to the development and commercialization of EXPAREL.
Equity Financings From our inception in December 2006 through December 31, 2022, we have raised $344.5 million of net proceeds from the sale of common stock and other equity securities via public offerings.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 80 Table of Content s Equity Financings From our inception in December 2006 through December 31, 2023, we have raised $344.5 million of net proceeds from the sale of common stock and other equity securities via public offerings.
Results of Operations Comparison of the Years Ended December 31, 2022 and 2021 Revenues Net product sales consist of sales of (i) EXPAREL in the U.S., E.U. and U.K.; (ii) ZILRETTA in the U.S.; (iii) iovera° in the U.S., Canada and the E.U.; (iv) sales of, and royalties on, our bupivacaine liposome injectable suspension primarily for veterinary use and (v) license fees and milestone payments.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 74 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 Revenues Net product sales consist of sales of (i) EXPAREL in the U.S., E.U. and U.K.; (ii) ZILRETTA in the U.S.; (iii) iovera° in the U.S., Canada and Europe and (iv) sales of, and royalties on, our bupivacaine liposome injectable suspension for veterinary use.
Our long-acting, local analgesic EXPAREL ® (bupivacaine liposome injectable suspension) was commercially launched in April 2012. 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.
Our long-acting, local analgesic EXPAREL ® (bupivacaine liposome injectable suspension) 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.
The following table provides a breakout of our research and development expenses during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2022 2021 Clinical and preclinical development $ 45,615 $ 24,138 89% Product development and manufacturing capacity expansion 24,635 19,352 27% Regulatory and other 7,953 6,590 21% Stock-based compensation 6,594 5,465 21% Total research and development expense $ 84,797 $ 55,545 53% % of total revenue 13% 10% Total research and development expense increased 53% in 2022 as compared to 2021.
The following table provides a breakout of our research and development expenses during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2023 2022 Clinical and preclinical development $ 24,471 $ 45,615 (46)% Product development and manufacturing capacity expansion 33,365 24,635 35% Regulatory and other 9,727 7,953 22% Stock-based compensation 8,694 6,594 32% Total research and development expense $ 76,257 $ 84,797 (10)% % of total revenue 11% 13% Total research and development expense decreased 10% in 2023 as compared to 2022.
For more information, See Note 11, Debt, to our consolidated financial statements herein. Interest income significantly increased in 2022 versus 2021 due to overall investment balances and higher interest rates. Other, net expense for 2022 included a $10.0 million impairment of an equity investment.
For more information, See Note 11, Debt, to our consolidated financial statements herein. Interest income significantly increased in 2023 versus 2022 due to higher interest rates and overall investment balances.
The Credit Agreement also contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions. As of December 31, 2022, the Company was in compliance with all financial covenants under the Credit Agreement. At December 31, 2022, we had $296.9 million in outstanding borrowings under the Term Loan.
The TLA Credit Agreement also contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions. As of December 31, 2023, we were in compliance with all financial covenants under the TLA Credit Agreement.
In 2021, we recognized acquisition-related charges of $39.9 million. These charges were primarily driven by severance and other employee related costs, investment banking, legal and other professional fees, third-party services and other one-time charges associated with the Flexion Acquisition.
In 2022, we recognized acquisition-related charges of $11.2 million related to severance and other employee related costs, legal and other professional fees, third-party services and other one-time charges associated with the Flexion Acquisition.
The following table provides information regarding selling, general and administrative expenses during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2022 2021 Sales and marketing $ 144,996 $ 111,022 31% General and administrative 73,989 57,433 29% Stock-based compensation 35,531 30,890 15% Total selling, general and administrative expenses $ 254,516 $ 199,345 28% % of total revenue 38% 37% Total selling, general and administrative expenses increased 28% in 2022 as compared 2021.
The following table provides information regarding selling, general and administrative expenses during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2023 2022 Sales and marketing $ 153,040 $ 144,996 6% General and administrative 82,737 73,989 12% Stock-based compensation 33,664 35,531 (5)% Total selling, general and administrative expenses $ 269,441 $ 254,516 6% % of total revenue 40% 38% Total selling, general and administrative expenses increased 6% in 2023 as compared to 2022.
We expect that our cash 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. In March 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law in response to the COVID-19 pandemic.
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.
The impact of a hypothetical 100 basis point increase in the discount rate would have reduced the value of our contingent consideration liability associated with the Flexion Acquisition as of December 31, 2022 by $1.4 million.
The impact of a hypothetical 100 basis point increase in the discount rate would have reduced the value of our contingent consideration liability associated with the Flexion Acquisition as of December 31, 2023 by $1.2 million. Recent Accounting Pronouncements See Note 3, Recent Accounting Pronouncements , to our consolidated financial statements included herein for further discussion of recent accounting pronouncements.
Pacira BioSciences, Inc. | 2022 Form 10-K | Page 77 Tab le of Contents Debt 2026 Term Loan B Facility In December 2021, we entered into the $375.0 million Term Loan which is secured by substantially all of the Company’s and any subsidiary guarantor’s assets and is scheduled to mature on December 7, 2026, subject to certain exceptions set forth in the Credit Agreement.
See Note 11, Debt, to our consolidated financial statements included herein for further discussion. 2026 Term Loan B Facility In December 2021, we entered into the $375.0 million TLB Term Loan which was secured by substantially all of the Company’s and any subsidiary guarantor’s assets and was scheduled to mature on December 7, 2026, subject to certain exceptions set forth in the TLB Credit Agreement.
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, royalty payments, quality control and engineering.
These expenses include labor, raw materials, manufacturing overhead and occupancy costs, depreciation of facilities, royalty payments, quality control and engineering.
Bupivacaine liposome injectable suspension revenue increased 80% in 2022 versus 2021, and its related royalties increased 9%, primarily due to the sales mix of vial sizes of orders placed for veterinary use.
Bupivacaine liposome injectable suspension revenue decreased 48% in 2023 versus 2022, and its related royalties increased 2%, primarily due to the sales mix of vial sizes and the timing of orders placed for veterinary use. Cost of Goods Sold Cost of goods sold primarily relates to the costs to produce, package and deliver our products to customers.
Each term loan borrowing which is a term benchmark borrowing bears interest at a variable rate per annum equal to (i) the Adjusted Term SOFR Rate (as defined in the Credit Agreement) subject to a 0.75% floor plus (ii) 7.00%.
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%.
Pacira BioSciences, Inc. | 2022 Form 10-K | Page 75 Tab le of Contents Other Expense, Net The following table provides information regarding other expense, net during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2022 2021 Interest expense $ (39,976) $ (31,750) 26% Interest income 4,542 896 100% + Other, net (11,288) (2,666) 100% + Total other expense, net $ (46,722) $ (33,520) 39% Total other expense, net increased 39% in 2022 versus 2021.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 78 Table of Content s Other Expense, Net The following table provides information regarding other expense, net during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2023 2022 Interest expense $ (20,306) $ (39,976) (49)% Interest income 11,444 4,542 100% + Loss on early extinguishment of debt (16,926) — N/A Other, net (186) (11,288) (98)% Total other expense, net $ (25,974) $ (46,722) (44)% Total other expense, net decreased 44% in 2023 versus 2022.
The Credit Agreement requires us to, among other things, maintain (i) a first lien net leverage ratio, determined as of the last day of any fiscal quarter, of no greater than 1.75 to 1.00 and (ii) liquidity, at any time, of at least $150.0 million.
The TLA Credit Agreement requires us to, among other things, maintain (i) a Senior Secured Net Leverage Ratio (as defined in the TLA Credit Agreement), determined as of the last day of each fiscal quarter, of no greater than 3.00 to 1.00 and (ii) a Fixed Charge Coverage Ratio (as defined in the TLA Credit Agreement), determined as of the last day of each fiscal quarter, of no less than 1.50 to 1.00.
The Flexion 2024 Notes have a maturity date of May 1, 2024, are unsecured, and accrue interest at a rate of 3.375% per annum, payable semi-annually on May 1 and November 1 of each year. In January 2022, we repurchased $192.6 million aggregate principal amount of the Flexion 2024 Notes.
The Flexion 2024 Notes have a maturity date of May 1, 2024, are unsecured, and accrue interest at a rate Pacira BioSciences, Inc. | 2023 Form 10-K | Page 81 Table of Content s of 3.375% per annum, payable semi-annually on May 1 and November 1 of each year.
Acquisition-Related Charges (Gains), Impairment and Other The following table provides a summary of the costs related to the Flexion Acquisition, MyoScience Acquisition, commercial agreements, termination costs and other activities during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2022 2021 Acquisition-related (gains) charges $ (18,231) $ 39,911 N/A Impairment of acquired in-process research & development 26,134 — N/A Other 3,000 3,000 —% Total acquisition-related charges (gains), impairment and other $ 10,903 $ 42,911 (75)% In 2022, we recognized acquisition-related gains of $18.2 million.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 77 Table of Content s Contingent Consideration (Gains) Charges, Acquisition-related Charges and Other The following table provides a summary of the costs related to contingent consideration, restructuring charges, acquisition-related charges and other activities during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2023 2022 Contingent consideration gains $ (3,424) $ (29,476) (88)% Acquisition-related charges 1,963 11,245 (83)% Impairment of acquired in-process research & development — 26,134 (100)% Other 1,109 3,000 (63)% Total contingent consideration (gains) charges, acquisition-related charges and other $ (352) $ 10,903 N/A In 2023, we recognized contingent consideration gains of $3.4 million due to a decrease in the fair value of the Flexion contingent consideration.
Pacira BioSciences, Inc. | 2022 Form 10-K | Page 79 Tab le of Contents Critical Accounting Estimates We have based our Management’s Discussion and Analysis of our Financial Condition and Results of Operations on our financial statements that have been prepared in accordance with GAAP in the U.S.
For more information, see Note 5, Flexion Acquisition , to our consolidated financial statements included herein. Critical Accounting Estimates We have based our Management’s Discussion and Analysis of our Financial Condition and Results of Operations on our financial statements that have been prepared in accordance with GAAP in the U.S.
Historically, adjustments to these estimates to reflect actual results or updated expectations have not been material. The summary of activity with respect to our sales related allowances and accruals for the years ended December 31, 2022, 2021 and 2020 appears in Note 4, Revenue , to our consolidated financial statements included herein.
Pacira BioSciences, Inc. | 2023 Form 10-K | Page 83 Table of Content s The summary of activity with respect to our sales related allowances and accruals for the years ended December 31, 2023, 2022 and 2021 appears in Note 4, Revenue , to our consolidated financial statements included herein.
These gains were primarily driven by reductions in acquisition contingent consideration liabilities due to adjustments to forecasts for the applicable period during which the Flexion contingent consideration may be achieved under the Flexion Merger Agreement and due to the reduced probability of meeting the MyoScience contingent consideration milestones by December 31, 2023—the expiration date for achieving those milestones .
In 2022, we recognized contingent consideration gains of $29.5 million primarily due to adjustments to near-term forecasts for the earnout period of the Flexion contingent consideration and a gain due to the reduced probability of meeting the MyoScience contingent consideration milestones by December 31, 2023—the expiration date for achieving those milestones .
Product development and manufacturing capacity expansion expense increased 27% in 2022 versus 2021 mainly attributable to the significant scale-up of our EXPAREL manufacturing capacity at our Science Center Campus in San Diego, California.
Product development and manufacturing capacity expansion expense increased 35% in 2023 versus 2022, primarily attributable to new product development costs related to PCRX-201 and the continued significant scale-up activities of our EXPAREL manufacturing capacity at our Science Center Campus in San Diego, California, for which an sNDA for a 200-liter EXPAREL manufacturing suite was approved by the FDA in February 2024.
The following table provides information regarding our revenues during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2022 2021 Net product sales: EXPAREL $ 536,899 $ 506,515 6% ZILRETTA (1) 105,517 12,683 100% + iovera° 15,258 16,162 (6)% Bupivacaine liposome injectable suspension 6,476 3,606 80% Total net product sales 664,150 538,966 23% Royalty revenue 2,673 2,442 9% Collaborative licensing and milestone revenue — 125 (100)% Total revenues $ 666,823 $ 541,533 23% (1) ZILRETTA net product sales for the year ended December 31, 2021 were attributable to the period beginning November 19, 2021, the date of the Flexion Acquisition.
The following table provides information regarding our revenues during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2023 2022 Net product sales: EXPAREL $ 538,120 $ 536,899 0% ZILRETTA 111,098 105,517 5% iovera° 19,685 15,258 29% Bupivacaine liposome injectable suspension 3,342 6,476 (48)% Total net product sales 672,245 664,150 1% Royalty revenue 2,733 2,673 2% Total revenues $ 674,978 $ 666,823 1% EXPAREL revenue remained flat in 2023 compared to 2022, primarily due to an increase in gross vial volume of 4% versus 2022 and reduced by 1% due to a shift in sales mix.
The Company may elect to borrow either alternate base rate borrowings or term benchmark borrowings. Each term loan borrowing which is an alternate base rate borrowing bears interest at a variable rate per annum equal to the Alternate Base Rate (as defined in the Credit Agreement) subject to a 1.75% floor, plus 6.00%.
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%.
Clinical and preclinical development expense increased 89% in 2022 versus 2021 due to ongoing expenses and completion of two EXPAREL lower extremity nerve block trials in bunionectomy and TKA, ongoing trials for the product candidates acquired as part of the Flexion Acquisition and toxicology studies for product development candidates.
Clinical and preclinical development expense decreased 46% in 2023 versus 2022 due to the completion of two EXPAREL lower extremity nerve block trials in bunionectomy and TKA in the third quarter of 2022 and toxicology studies that are near completion for product candidates, partially offset by start-up costs for the EXPAREL intrathecal, ZILRETTA shoulder and iovera° spasticity trials.
The remaining interest payments on our Notes is $9.4 million, of which an estimated $3.3 million is due in 2023. We also have a Term Loan with $296.9 million in outstanding principal with contractually obligated principal payments of $37.5 million in each of 2023 and 2024, $42.2 million in 2025 and $179.7 million in 2026.
The remaining interest payments on our Notes is $6.1 million, of which an estimated $3.1 million is due in 2024. We also have the TLA Term Loan with $116.6 million in outstanding principal. Due to voluntary principal prepayments of $30.6 million made during the year ended December 31, 2023, we are not contractually obligated to make principal payments in 2024.
The following table provides information regarding cost of goods sold and gross margin during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2022 2021 Cost of goods sold $ 199,295 $ 140,255 42% Gross margin 70% 74% Gross margin decreased four percentage points in 2022 as compared to 2021 due to higher inventory reserves, accelerated depreciation for certain machinery and equipment for which no future economic benefit was identified and the ZILRETTA step-up of fixed assets and inventory to fair value in accordance with purchase accounting, partially offset by unplanned downtime in the prior period.
The following table provides information regarding cost of goods sold and gross margin during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2023 2022 Cost of goods sold $ 184,669 $ 199,295 (7)% Gross margin 73% 70% Gross margin increased three percentage points in 2023 as compared to 2022 mainly due to lower inventory reserves, accelerated depreciation recorded in 2022 for certain machinery and equipment and lower royalty expense as discussed below, partially offset by a lower net selling price for EXPAREL largely as a result of enrolling in the 340B drug pricing program.
In the U.S., EXPAREL is the only opioid-free, long-acting local and regional analgesic approved for infiltration, field blocks and interscalene brachial plexus nerve block to produce local or regional postsurgical analgesia. EXPAREL is also approved for infiltration in pediatric patients aged six years and older in the U.S.
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.
Other, net expense for 2021 included a realized loss on the sale of an equity investment in the amount of $2.6 million.
Other, net expense for 2022 included a $10.0 million impairment of an equity investment.
It remains unclear how long it will take the elective surgery market to normalize or if restrictions on elective procedures will recur due to future COVID-19 variants or otherwise. Direct and indirect effects of the pandemic and global economic conditions have and may continue to negatively impact our business, financial condition and results of operations.
Global Economic Conditions and Inflation 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.
Pacira BioSciences, Inc. | 2022 Form 10-K | Page 74 Tab le of Contents Amortization of Acquired Intangible Assets The following table provides a summary of the amortization of acquired intangible assets during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2022 2021 Amortization of acquired intangible assets $ 57,288 $ 13,553 100% + Amortization of acquired intangible assets increased substantially in 2022 versus 2021 due to 2022 being the first full year after the completion of the Flexion Acquisition.
Amortization of Acquired Intangible Assets The following table provides a summary of the amortization of acquired intangible assets during the years indicated, including percent changes (dollar amounts in thousands): Year Ended December 31, % Increase / (Decrease) 2023 2022 Amortization of acquired intangible assets $ 57,288 $ 57,288 —% 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.
We are continuing our marketing investment in our products, which includes educational initiatives and programs related to the impact of opioids and postsurgical pain management and our national advocacy campaign designed to educate patients about non-opioid treatment options. Additionally, we continued our investment in clinician training in the use of EXPAREL and iovera° at our PIT of Tampa.
Sales and marketing expense increased 6% in 2023 compared to 2022, driven by an increase in marketing investments in our products, including marketing EXPAREL’s newly approved indication for use as a lower extremity nerve block, educational initiatives and programs related to the impact of opioids and postsurgical pain management and our national advocacy campaign designed to educate patients about non-opioid treatment options.
In 2021, net cash provided by financing activities was $380.7 million, which consisted of net proceeds from the Term Loan of $359.2 million, the exercise of stock options of $23.8 million and $2.8 million from the issuance of shares through our ESPP.
Financing Activities In 2023, net cash used in financing activities was $183.0 million, which consisted of a $296.9 million repayment of TLB Term Loan principal as well as a $5.8 million prepayment penalty in connection with the retirement of the TLB Term Loan facility and $33.4 million repayments of TLA Term Loan principal, partially offset by the net proceeds from the TLA Term Loan of $149.6 million, $2.8 million from the issuance of common stock through our ESPP and proceeds from the exercise of stock options of $1.9 million.
These gains were partially offset by severance and other employee related costs, legal and other professional fees, third-party services and other one-time charges associated with the Flexion Acquisition. For more information, see Note 12, Financial Instruments and Note 18, Acquisition-related Charges (Gains), Impairment and Other , to our consolidated financial statements included herein.
See Note 20, Commitments and Contingencies , to our consolidated financial statements included herein for more information. For more information, see Note 18, Contingent Consideration (Gains) Charges, Acquisition-related Charges and Other , to our consolidated financial statements included herein.
In 2022, we recognized expense of $3.0 million related to the termination of a license agreement. See Note 20, Commitments and Contingencies , to our consolidated financial statements included herein for more information. In 2021, we agreed to a mutual termination of our development and commercialization agreement with Nuance Biotech Co.
For more information, see Note 20, Commitments and Contingencies , to our consolidated financial statements included herein.
Stock-based compensation increased 15% in 2022 versus 2021, primarily due to the number of equity awards outstanding for selling, general and administrative personnel and accelerated stock-based compensation expense.
Stock-based compensation increased 32% in 2023 versus 2022 primarily due to the acceleration of stock compensation awards related to a terminated executive in 2023.
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Pacira BioSciences, Inc. | 2022 Form 10-K | Page 70 Tab le of Contents Flexion Acquisition In November 2021, we completed the Flexion Acquisition pursuant to the Flexion Merger Agreement, under which Flexion became our wholly owned subsidiary and added ZILRETTA, a non-opioid corticosteroid that employs a proprietary microsphere technology to provide extended pain relief, to our commercial offering.
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Pacira BioSciences, Inc. | 2023 Form 10-K | Page 73 Table of Content s Recent Highlights • In December 2023, our Board of Directors appointed Frank D. Lee as Chief Executive Officer and a member of the Board. Mr.
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The addition of ZILRETTA to our innovative non-opioid product portfolio directly aligns with our mission to provide an opioid alternative to as many patients as possible and address medical needs along the neural pain pathway.
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Lee brings more than three decades of global experience and a strong track record of product development and commercial leadership success across a wide range of therapeutic areas within the biotech and pharmaceutical industry.
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The total consideration of $578.8 million included an initial payment of $428.3 million which represented $8.50 in cash per share of Flexion common stock, $20.2 million paid to settle restricted stock units and in-the-money stock options, an $85.1 million cash payment of Flexion debt not assumed by us and $45.2 million in contingent consideration representing the fair value of contingent value rights, or CVRs, that were issued in conjunction with the Flexion Acquisition.
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Most recently he served as Chief Executive Officer and member of the board of directors of Forma Therapeutics, Inc., or Forma, from March 2019 through its acquisition by Novo Nordisk A/S in October 2022. During his tenure at Forma, Mr.
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The Flexion Merger Agreement provided for one non-tradeable CVR per share of Flexion common stock as well as one CVR per share for certain Flexion equity awards.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+3 added−2 removed2 unchanged
Biggest changeDollar, subject to an annual adjustment based on changes in currency exchange rates. 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 8.
Biggest changeWe 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. Additionally, our accounts receivable are primarily concentrated with three large wholesalers of pharmaceutical products.
As a result of the Flexion Acquisition and as discussed in more detail in Note 11, Debt , to our consolidated financial statements included herein, any future conversion rights for the 2024 Notes are subject to the occurrence of any future events giving rise to such conversion rights under the indenture governing the 2024 Notes.
As a result of the Flexion Acquisition and as discussed in more detail in Note 11, Debt , to our consolidated financial statements included herein, any future conversion rights for the Flexion 2024 Notes are subject to the occurrence of any future events giving rise to such conversion rights under the indenture governing the Flexion 2024 Notes.
As of December 31, 2022, the estimated fair value of the 2025 Notes was $908 per $1,000 principal amount. See Note 11, Debt , to our consolidated financial statements included herein for further discussion of our 2025 Notes, which bears interest at a fixed rate.
As of December 31, 2023, the estimated fair value of the 2025 Notes was $924 per $1,000 principal amount. See Note 11, Debt , to our consolidated financial statements included herein for further discussion of our 2025 Notes, which bears interest at a fixed rate.
Treasury and other government agency notes, 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 principal amount of the investment to fluctuate.
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 principal amount of the investment to fluctuate.
At December 31, 2022, all $402.5 million of principal remains outstanding on the 2025 Notes and $8.6 million of principal remains outstanding on the 2024 Notes.
At December 31, 2023, all $402.5 million of principal remains outstanding on the 2025 Notes and $8.6 million of principal remains outstanding on the Flexion 2024 Notes.
A hypothetical 100 basis point increase in interest rates would have reduced the fair value of our available-for-sale securities at December 31, 2022 by approximately $1.3 million. The fair value of our 2025 Notes is impacted by both the fair value of our common stock and interest rate fluctuations.
A hypothetical 100 basis point increase in interest rates would have reduced the fair value of our available-for-sale securities at December 31, 2023 by approximately $0.5 million. The fair value of our Notes is impacted by both the fair value of our common stock and interest rate fluctuations.
Upon issuance, the Term Loan provided for a single-advance term loan in the principal amount of $375.0 million and is scheduled to mature on December 7, 2026.
The TLA Term Loan provides for a single-advance term loan in the principal amount of $150.0 million and is scheduled to mature on March 31, 2028.
Financial Statements and Supplementary Data Our consolidated financial statements required by this item, together with the report of our independent registered public accounting firm, begin on page F-1 of this Annual Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
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 8. Financial Statements and Supplementary Data Our consolidated financial statements required by this item, together with the report of our independent registered public accounting firm, begin on page F-1 of this Annual Report.
Each term loan borrowing which is a term benchmark borrowing bears interest at a variable rate per annum equal to (i) the Adjusted Term SOFR rate (as defined in the Credit Agreement) subject to a 0.75% floor plus (ii) 7.00%. At December 31, 2022, we had $296.9 million in outstanding borrowings under the Term Loan.
Each term loan borrowing that 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%.
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Each term loan borrowing which is an alternate base rate borrowing bears interest at a variable rate per annum equal to the Alternate Base Rate (as defined in the Credit Agreement) subject to a 1.75% floor, plus 6.00%.
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At December 31, 2023, the outstanding principal on the TLA Term Loan was $116.6 million. As of December 31, 2023, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 8.46%.
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A hypothetical 100 basis point increase in interest rates would have increased interest expense during the year ended December 31, 2022 by approximately $3.6 million. We have agreements with certain vendors and partners that operate in foreign jurisdictions. The more significant transactions are primarily denominated in the U.S.
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A Pacira BioSciences, Inc. | 2023 Form 10-K | Page 84 Table of Content s hypothetical 100 basis point increase in interest rates would increase interest expense over the next 12 months by approximately $1.2 million, based on the balances outstanding for these borrowings as of December 31, 2023.
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.

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